October 21, 2019
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625745
  Amendment
Bill No. CS/CS/SB 2860
Amendment No. 625745
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.  This act may be cited as the "Homeowner's Bill
8of Rights Act."
9     Section 2.  Section 215.5595, Florida Statutes, is amended
10to read:
11     215.5595  Insurance Capital Build-Up Incentive Program.--
12     (1)  Upon entering the 2008 2006 hurricane season, the
13Legislature finds that:
14     (a)  The losses in this state Florida from eight hurricanes
15in 2004 and 2005 have seriously strained the resources of both
16the voluntary insurance market and the public sector mechanisms
17of Citizens Property Insurance Corporation and the Florida
18Hurricane Catastrophe Fund.
19     (b)  Private reinsurance is much less available and at a
20significantly greater cost to residential property insurers as
21compared to 1 year ago, particularly for amounts below the
22insurer's retention or retained losses that must be paid before
23reimbursement is provided by the Florida Hurricane Catastrophe
24Fund.
25     (c)  The Office of Insurance Regulation has reported that
26the insolvency of certain insurers may be imminent.
27     (d)  Hurricane forecast experts predict that the 2006
28hurricane season will be an active hurricane season and that the
29Atlantic and Gulf Coast regions face an active hurricane cycle
30of 10 to 20 years or longer.
31     (b)(e)  Citizens Property Insurance Corporation has over
321.2 million policies in force, has the largest market share of
33any insurer writing residential property insurer in the state,
34and faces the threat of a catastrophic loss that The number of
35cancellations or nonrenewals of residential property insurance
36policies is expected to increase and the number of new
37residential policies written in the voluntary market are likely
38to decrease, causing increased policy growth and exposure to the
39state insurer of last resort, Citizens Property Insurance
40Corporation, and threatening to increase the deficit of the
41corporation, currently estimated to be over $1.7 billion. This
42deficit must be funded by assessments against insurers and
43policyholders, unless otherwise funded by the state. The program
44has a substantial positive effect on the depopulation efforts of
45Citizens Property Insurance Corporation since companies
46participating in the program have removed over 199,000 policies
47from the corporation. Companies participating in the program
48have issued a significant number of new policies, thereby
49keeping an estimated 480,000 new policies out of the
50corporation.
51     (c)(f)  Policyholders are subject to high increased
52premiums and assessments that are increasingly making such
53coverage unaffordable and that may force policyholders to sell
54their homes and even leave the state.
55     (d)(g)  The increased risk to the public sector and private
56sector continues to pose poses a serious threat to the economy
57of this state, particularly the building and financing of
58residential structures, and existing mortgages may be placed in
59default.
60     (h)  The losses from 2004 and 2005, combined with the
61expectation that the increase in hurricane activity will
62continue for the foreseeable future, have caused both insurers
63and reinsurers to limit the capital they are willing to commit
64to covering the hurricane risk in Florida; attracting new
65capital to the Florida market is a critical priority; and
66providing a low-cost source of capital would enable insurers to
67write additional residential property insurance coverage and act
68to mitigate premium increases.
69     (e)(i)  Appropriating state funds to be exchanged for used
70as surplus notes issued by for residential property insurers,
71under conditions requiring the insurer to contribute additional
72private sector capital and to write a minimum level of premiums
73for residential hurricane coverage, is a valid and important
74public purpose.
75     (f)  Extending the Insurance Capital Build-up Incentive
76Program will provide an incentive for investors to commit
77additional capital to Florida's residential insurance market.
78     (2)  The purpose of this section is to provide funds in
79exchange for surplus notes to be issued by to new or existing
80authorized residential property insurers under the Insurance
81Capital Build-Up Incentive Program administered by the State
82Board of Administration, under the following conditions:
83     (a)  The amount of state funds provided in exchange for a
84the surplus note to for any insurer or insurer group, other than
85an insurer writing only manufactured housing policies, may not
86exceed $25 million or 20 percent of the total amount of funds
87appropriated for available under the program, whichever is
88greater. The amount of the surplus note for any insurer or
89insurer group writing residential property insurance covering
90only manufactured housing may not exceed $7 million.
91     (b)  On or after April 1, 2008, the insurer must contribute
92an amount of new capital to its surplus which is at least equal
93to the amount of the surplus note and must apply to the board by
94September 1, 2008 July 1, 2006. If an insurer applies after
95September 1, 2008 July 1, 2006, but before June 1, 2009 2007,
96the amount of the surplus note is limited to one-half of the new
97capital that the insurer contributes to its surplus, except that
98an insurer writing only manufactured housing policies is
99eligible to receive a surplus note of up to $7 million. For
100purposes of this section, new capital must be in the form of
101cash or cash equivalents as specified in s. 625.012(1).
102     (c)  The insurer's surplus, new capital, and the surplus
103note must total at least $50 million, except for insurers
104writing residential property insurance covering only
105manufactured housing. The insurer's surplus, new capital, and
106the surplus note must total at least $14 million for insurers
107writing only residential property insurance covering
108manufactured housing policies as provided in paragraph (a).
109     (d)  The insurer must commit to increase its writings of
110residential property insurance, including the peril of wind, and
111to meet meeting a minimum writing ratio of net written premium
112to surplus of at least 1:1 for the first calendar year after
113receiving the state funds or renegotiation of the surplus note,
1141.5:1 for the second calendar year, and 2:1 for the remaining
115term of the surplus note. Alternatively, the insurer must meet a
116minimum writing ratio of gross written premium to surplus of at
117least 3:1 for the first calendar year after receiving the state
118funds or renegotiation of the surplus note, 4.5:1 for the second
119calendar year, and 6:1 for the remaining term of the surplus
120note. The writing ratios, which shall be determined by the
121Office of Insurance Regulation and certified quarterly to the
122board. For this purpose, the term "premium" "net written
123premium" means net written premium for residential property
124insurance in this state Florida, including the peril of wind,
125and "surplus" means the new capital and surplus note refers to
126the entire surplus of the insurer. An insurer that makes an
127initial application after July 1, 2008, must also commit to
128writing at least 15 percent of its net or gross written premium
129for new policies, not including renewal premiums, for policies
130taken out of Citizens Property Insurance Corporation, during
131each of the first 3 years after receiving the state funds in
132exchange for the surplus note, which shall be determined by the
133Office of Insurance Regulation and certified annually to the
134board. The insurer must also commit to maintaining a level of
135surplus and reinsurance sufficient to cover in excess of its 1-
136in-100 year probable maximum loss, as determined by a hurricane
137loss model accepted by the Florida Commission on Hurricane Loss
138Projection Methodology, which shall be determined by the Office
139of Insurance Regulation and certified annually to the board. If
140the board determines that the insurer has failed to meet any of
141the requirements of this paragraph required ratio is not
142maintained during the term of the surplus note, the board may
143increase the interest rate, accelerate the repayment of interest
144and principal, or shorten the term of the surplus note, subject
145to approval by the Commissioner of Insurance of payments by the
146insurer of principal and interest as provided in paragraph (f).
147     (e)  If the requirements of this section are met, the board
148may approve an application by an insurer for funds in exchange
149for issuance of a surplus note, unless the board determines that
150the financial condition of the insurer and its business plan for
151writing residential property insurance in Florida places an
152unreasonably high level of financial risk to the state of
153nonpayment in full of the interest and principal. The board
154shall consult with the Office of Insurance Regulation and may
155contract with independent financial and insurance consultants in
156making this determination.
157     (f)  The surplus note must be repayable to the state with a
158term of 20 years. The surplus note shall accrue interest on the
159unpaid principal balance at a rate equivalent to the 10-year
160U.S. Treasury Bond rate, require the payment only of interest
161during the first 3 years, and include such other terms as
162approved by the board. The board may charge late fees up to 5
163percent for late payments or other late remittances. Payment of
164principal, or interest, or late fees by the insurer on the
165surplus note must be approved by the Commissioner of Insurance,
166who shall approve such payment unless the commissioner
167determines that such payment will substantially impair the
168financial condition of the insurer. If such a determination is
169made, the commissioner shall approve such payment that will not
170substantially impair the financial condition of the insurer.
171     (g)  The total amount of funds available for the program is
172limited to the amount appropriated by the Legislature for this
173purpose. If the amount of surplus notes requested by insurers
174exceeds the amount of funds available, the board may prioritize
175insurers that are eligible and approved, with priority for
176funding given to insurers writing only manufactured housing
177policies, regardless of the date of application, based on the
178financial strength of the insurer, the viability of its proposed
179business plan for writing additional residential property
180insurance in the state, and the effect on competition in the
181residential property insurance market. Between insurers writing
182residential property insurance covering manufactured housing,
183priority shall be given to the insurer writing the highest
184percentage of its policies covering manufactured housing.
185     (h)  The board may allocate portions of the funds available
186for the program and establish dates for insurers to apply for
187surplus notes from such allocation which are earlier than the
188dates established in paragraph (b).
189     (h)(i)  Notwithstanding paragraph (d), a newly formed
190manufactured housing insurer that is eligible for a surplus note
191under this section shall meet the premium to surplus ratio
192provisions of s. 624.4095.
193     (i)(j)  As used in this section, "an insurer writing only
194manufactured housing policies" includes:
195     1.  A Florida domiciled insurer that begins writing
196personal lines residential manufactured housing policies in
197Florida after March 1, 2007, and that removes a minimum of
19850,000 policies from Citizens Property Insurance Corporation
199without accepting a bonus, provided at least 25 percent of its
200policies cover manufactured housing. Such an insurer may count
201any funds above the minimum capital and surplus requirement that
202were contributed into the insurer after March 1, 2007, as new
203capital under this section.
204     2.  A Florida domiciled insurer that writes at least 40
205percent of its policies covering manufactured housing in
206Florida.
207     (3)  As used in this section, the term:
208     (a)  "Board" means the State Board of Administration.
209     (b)  "Program" means the Insurance Capital Build-Up
210Incentive Program established by this section.
211     (4)  The state funds provided to the insurer in exchange
212for the A surplus note provided to an insurer pursuant to this
213section are is considered borrowed surplus an asset of the
214insurer pursuant to s. 628.401 s. 625.012.
215     (5)  If an insurer that receives funds in exchange for
216issuance of a surplus note pursuant to this section is rendered
217insolvent, the state is a class 3 creditor pursuant to s.
218631.271 for the unpaid principal and interest on the surplus
219note.
220     (6)  The board shall adopt rules prescribing the
221procedures, administration, and criteria for approving the
222applications of insurers to receive funds in exchange for
223issuance of surplus notes pursuant to this section, which may be
224adopted pursuant to the procedures for emergency rules of
225chapter 120. Otherwise, actions and determinations by the board
226pursuant to this section are exempt from chapter 120.
227     (7)  The board shall invest and reinvest the funds
228appropriated for the program in accordance with s. 215.47 and
229consistent with board policy.
230     (8)  Costs and fees incurred by the board in administering
231this program, including fees for investment services, shall be
232paid from funds appropriated by the Legislature for this
233program, but are limited to 1 percent of the amount
234appropriated.
235     (9)  The board shall submit a report to the President of
236the Senate and the Speaker of the House of Representatives by
237February 1 of each year as to the results of the program and
238each insurer's compliance with the terms of its surplus note.
239     (10)  The amendments to this section enacted in 2008 do not
240affect the terms or conditions of the surplus notes that were
241approved prior to January 1, 2008. However, the board may
242renegotiate the terms of any surplus note issued by an insurer
243prior to January 2008 under this program upon the agreement of
244the insurer and the board and consistent with the requirements
245of this section as amended in 2008.
246     (11)  On January 15, 2009, the State Board of
247Administration shall transfer to Citizens Property Insurance
248Corporation any funds that have not been committed or reserved
249for insurers approved to receive such funds under the program,
250from the funds that were transferred from Citizens Property
251Insurance Corporation in 2008-2009 for such purposes.
252     Section 3.  Subsection (6) is added to section, 624.3161,
253Florida Statutes, to read:
254     624.3161  Market conduct examinations.--
255     (6)  Based on the findings of a market conduct examination
256that an insurer has exhibited a pattern or practice of willful
257violations of an unfair insurance trade practice related to
258claims-handling which caused harm to policyholders, as
259prohibited by s. 626.9541(1)(i), the office may order an insurer
260pursuant to chapter 120 to file its claims-handling practices
261and procedures related to that line of insurance with the office
262for review and inspection, to be held by the office for the
263following 36-month period. Such claims-handling practices and
264procedures are public records and are not trade secrets or
265otherwise exempt from the provisions of s. 119.07(1). As used in
266this section, "claims-handling practices and procedures" are any
267policies, guidelines, rules, protocols, standard operating
268procedures, instructions, or directives that govern or guide how
269and the manner in which an insured's claims for benefits under
270any policy will be processed.
271     Section 4.  Subsections (2) and (3) of section 624.4211,
272Florida Statutes, are amended to read:
273     624.4211  Administrative fine in lieu of suspension or
274revocation.--
275     (2)  With respect to any nonwillful violation, such fine
276may shall not exceed $5,000 $2,500 per violation. In no event
277shall such fine exceed an aggregate amount of $20,000 $10,000
278for all nonwillful violations arising out of the same action. If
279When an insurer discovers a nonwillful violation, the insurer
280shall correct the violation and, if restitution is due, make
281restitution to all affected persons. Such restitution shall
282include interest at 12 percent per year from either the date of
283the violation or the date of inception of the affected person's
284policy, at the insurer's option. The restitution may be a credit
285against future premiums due provided that the interest
286accumulates shall accumulate until the premiums are due. If the
287amount of restitution due to any person is $50 or more and the
288insurer wishes to credit it against future premiums, it shall
289notify such person that she or he may receive a check instead of
290a credit. If the credit is on a policy that which is not
291renewed, the insurer shall pay the restitution to the person to
292whom it is due.
293     (3)  With respect to any knowing and willful violation of a
294lawful order or rule of the office or commission or a provision
295of this code, the office may impose a fine upon the insurer in
296an amount not to exceed $40,000 $20,000 for each such violation.
297In no event shall such fine exceed an aggregate amount of
298$200,000 $100,000 for all knowing and willful violations arising
299out of the same action. In addition to such fines, the such
300insurer shall make restitution when due in accordance with the
301provisions of subsection (2).
302     Section 5.  Section 624.4213, Florida Statutes, is created
303to read:
304     624.4213  Trade secret documents.--
305     (1)  If any person who is required to submit documents or
306other information to the office or department pursuant to the
307Insurance Code or by rule or order of the office, department, or
308commission claims that such submission contains a trade secret,
309such person may file with the office or department a notice of
310trade secret as provided in this section. Failure to do so
311constitutes a waiver of any claim by such person that the
312document or information is a trade secret.
313     (a)  Each page of such document or specific portion of a
314document claimed to be a trade secret must be clearly marked as
315"trade secret."
316     (b)  All material marked as a trade secret must be
317separated from all non-trade secret material, such as being
318submitted in a separate envelope clearly marked as "trade
319secret."
320     (c)  In submitting a notice of trade secret to the office
321or department, the submitting party must include an affidavit
322certifying under oath to the truth of the following statements
323concerning all documents or information that are claimed to be
324trade secrets:
325     1.  [I consider/My company considers] this information a
326trade secret that has value and provides an advantage or an
327opportunity to obtain an advantage over those who do not know or
328use it.
329     2.  [I have/My company has] taken measures to prevent the
330disclosure of the information to anyone other that those who
331have been selected to have access for limited purposes, and [I
332intend/my company intends] to continue to take such measures.
333     3.  The information is not, and has not been, reasonably
334obtainable without [my/our] consent by other persons by use of
335legitimate means.
336     4.  The information is not publicly available elsewhere.
337     (2)  If the office or department receives a public-records
338request for a document or information that is marked and
339certified as a trade secret, the office or department shall
340promptly notify the person that certified the document as a
341trade secret. The notice shall inform such person that he or she
342or his or her company has 30 days following receipt of such
343notice to file an action in circuit court seeking a
344determination whether the document in question contains trade
345secrets and an order barring public disclosure of the document.
346If that person or company files an action within 30 days after
347receipt of notice of the public-records request, the office or
348department may not release the documents pending the outcome of
349the legal action. The failure to file an action within 30 days
350constitutes a waiver of any claim of confidentiality and the
351office or department shall release the document as requested.
352     (3)  The office or department may disclose a trade secret,
353together with the claim that it is a trade secret, to an officer
354or employee of another governmental agency whose use of the
355trade secret is within the scope of his or her employment.
356     Section 6. Section 624.4305, Florida Statutes, is created
357to read:
358     624.4305  Nonrenewal of residential property insurance
359policies.--Any insurer planning to nonrenew more than 10,000
360residential property insurance policies in this state within a
36112-month period shall give notice in writing to the Office of
362Insurance Regulation for informational purposes 90 days before
363the issuance of any notices of nonrenewal. The notice provided
364to the office must set forth the insurer's reasons for such
365action, the effective dates of nonrenewal, and any arrangements
366made for other insurers to offer coverage to affected
367policyholders.
368     Section 7.  Subsection (2) of section 626.9521, Florida
369Statutes, is amended to read:
370     626.9521  Unfair methods of competition and unfair or
371deceptive acts or practices prohibited; penalties.--
372     (2)  Any person who violates any provision of this part
373shall be subject to a fine in an amount not greater than $5,000
374$2,500 for each nonwillful violation and not greater than
375$40,000 $20,000 for each willful violation. Fines under this
376subsection imposed against an insurer may not exceed an
377aggregate amount of $20,000 $10,000 for all nonwillful
378violations arising out of the same action or an aggregate amount
379of $200,000 $100,000 for all willful violations arising out of
380the same action. The fines authorized by this subsection may be
381imposed in addition to any other applicable penalty.
382     Section 8.  Paragraph (i) of subsection (1) of section
383626.9541, Florida Statutes, is amended to read:
384     626.9541  Unfair methods of competition and unfair or
385deceptive acts or practices defined.--
386     (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
387ACTS.--The following are defined as unfair methods of
388competition and unfair or deceptive acts or practices:
389     (i)  Unfair claim settlement practices.--
390     1.  Attempting to settle claims on the basis of an
391application, when serving as a binder or intended to become a
392part of the policy, or any other material document which was
393altered without notice to, or knowledge or consent of, the
394insured;
395     2.  A material misrepresentation made to an insured or any
396other person having an interest in the proceeds payable under
397such contract or policy, for the purpose and with the intent of
398effecting settlement of such claims, loss, or damage under such
399contract or policy on less favorable terms than those provided
400in, and contemplated by, such contract or policy; or
401     3.  Committing or performing with such frequency as to
402indicate a general business practice any of the following:
403     a.  Failing to adopt and implement standards for the proper
404investigation of claims;
405     b.  Misrepresenting pertinent facts or insurance policy
406provisions relating to coverages at issue;
407     c.  Failing to acknowledge and act promptly upon
408communications with respect to claims;
409     d.  Denying claims without conducting reasonable
410investigations based upon available information;
411     e.  Failing to affirm or deny full or partial coverage of
412claims, and, as to partial coverage, the dollar amount or extent
413of coverage, or failing to provide a written statement that the
414claim is being investigated, upon the written request of the
415insured within 30 days after proof-of-loss statements have been
416completed;
417     f.  Failing to promptly provide a reasonable explanation in
418writing to the insured of the basis in the insurance policy, in
419relation to the facts or applicable law, for denial of a claim
420or for the offer of a compromise settlement;
421     g.  Failing to promptly notify the insured of any
422additional information necessary for the processing of a claim;
423or
424     h.  Failing to clearly explain the nature of the requested
425information and the reasons why such information is necessary.
426     4.  Failing to pay undisputed amounts of partial or full
427benefits owed under first-party property insurance policies  
428within 90 days after an insurer receives notice of a residential  
429property insurance claim, determines the amounts of partial or  
430full benefits, and agrees to coverage, unless payment of the
431undisputed benefits is prevented by an act of God, prevented by
432the impossibility of performance, or due to actions by the
433insured or claimant that constitute fraud, lack of cooperation,
434or intentional misrepresentation regarding the claim for which
435benefits are owed.
436     Section 9.  Section 627.0612, Florida Statutes, is amended
437to read:
438     627.0612  Administrative proceedings in rating
439determinations.--
440     (1)  In any proceeding to determine whether rates, rating
441plans, or other matters governed by this part comply with the
442law, the appellate court shall set aside a final order of the
443office if the office has violated s. 120.57(1)(k) by
444substituting its findings of fact for findings of an
445administrative law judge which were supported by competent
446substantial evidence.
447     (2)  In an administrative hearing to determine whether an
448insurer's rates, rating schedules, rating manuals, premium
449credits, discount schedules, surcharge schedules, or changes
450thereto, for property insurance comply with the law, in addition
451to any other findings of fact, findings on the following matters
452shall be considered findings of fact:
453     (a)  Whether a factor or factors used in a rate filing or
454applied by the office is consistent with standard actuarial
455techniques or practices or are otherwise based on reasonable
456actuarial judgment.
457     (b)  Whether a factor for underwriting profit and
458contingencies is reasonable or excessive.
459     (c)  Whether the cost of reinsurance is reasonable or
460excessive.
461     (3)  In an administrative hearing to determine whether an
462insurer's rates, rating schedules, rating manuals, premium
463credits, discount schedules, surcharge schedules, or changes
464thereto, for property insurance comply with the law, a
465recommended order may be entered that approves, modifies, or
466rejects the requested change. A recommended order modifying the
467requested rate change shall recommend such change as is
468supported by the record in the case.
469     Section 10.  Paragraphs (a), (b), and (g) of subsection
470(2), subsection (6), and paragraph (a) of subsection (9) of
471section 627.062, Florida Statutes, are amended to read:
472     627.062  Rate standards.--
473     (2)  As to all such classes of insurance:
474     (a)  Insurers or rating organizations shall establish and
475use rates, rating schedules, or rating manuals to allow the
476insurer a reasonable rate of return on such classes of insurance
477written in this state. A copy of rates, rating schedules, rating
478manuals, premium credits or discount schedules, and surcharge
479schedules, and changes thereto, shall be filed with the office
480under one of the following procedures except as provided in
481subparagraph 3.:
482     1.  If the filing is made at least 90 days before the
483proposed effective date and the filing is not implemented during
484the office's review of the filing and any proceeding and
485judicial review, then such filing shall be considered a "file
486and use" filing. In such case, the office shall finalize its
487review by issuance of a notice of intent to approve or a notice
488of intent to disapprove within 90 days after receipt of the
489filing. The notice of intent to approve and the notice of intent
490to disapprove constitute agency action for purposes of the
491Administrative Procedure Act. Requests for supporting
492information, requests for mathematical or mechanical
493corrections, or notification to the insurer by the office of its
494preliminary findings shall not toll the 90-day period during any
495such proceedings and subsequent judicial review. The rate shall
496be deemed approved if the office does not issue a notice of
497intent to approve or a notice of intent to disapprove within 90
498days after receipt of the filing.
499     2.  If the filing is not made in accordance with the
500provisions of subparagraph 1., such filing shall be made as soon
501as practicable, but no later than 30 days after the effective
502date, and shall be considered a "use and file" filing. An
503insurer making a "use and file" filing is potentially subject to
504an order by the office to return to policyholders portions of
505rates found to be excessive, as provided in paragraph (h).
506     3.  For all property insurance filings made or submitted
507after January 25, 2007, but before December 31, 2009 2008, an
508insurer seeking a rate that is greater than the rate most
509recently approved by the office shall make a "file and use"
510filing. This subparagraph applies to property insurance only.
511For purposes of this subparagraph, motor vehicle collision and
512comprehensive coverages are not considered to be property
513coverages.
514     (b)  Upon receiving a rate filing, the office shall review
515the rate filing to determine if a rate is excessive, inadequate,
516or unfairly discriminatory. In making that determination, the
517office shall, in accordance with generally accepted and
518reasonable actuarial techniques, consider the following factors:
519     1.  Past and prospective loss experience within and without
520this state.
521     2.  Past and prospective expenses.
522     3.  The degree of competition among insurers for the risk
523insured.
524     4.  Investment income reasonably expected by the insurer,
525consistent with the insurer's investment practices, from
526investable premiums anticipated in the filing, plus any other
527expected income from currently invested assets representing the
528amount expected on unearned premium reserves and loss reserves.
529The commission may adopt rules using utilizing reasonable
530techniques of actuarial science and economics to specify the
531manner in which insurers shall calculate investment income
532attributable to such classes of insurance written in this state
533and the manner in which such investment income shall be used to
534calculate in the calculation of insurance rates. Such manner
535shall contemplate allowances for an underwriting profit factor
536and full consideration of investment income which produce a
537reasonable rate of return; however, investment income from
538invested surplus may shall not be considered.
539     5.  The reasonableness of the judgment reflected in the
540filing.
541     6.  Dividends, savings, or unabsorbed premium deposits
542allowed or returned to Florida policyholders, members, or
543subscribers.
544     7.  The adequacy of loss reserves.
545     8.  The cost of reinsurance. The office shall not
546disapprove a rate as excessive solely due to the insurer having
547obtained catastrophic reinsurance to cover the insurer's
548estimated 250-year probable maximum loss or any lower level of
549loss.
550     9.  Trend factors, including trends in actual losses per
551insured unit for the insurer making the filing.
552     10.  Conflagration and catastrophe hazards, if applicable.
553     11.  Projected hurricane losses, if applicable, which must
554be estimated using a model or method found to be acceptable or
555reliable by the Florida Commission on Hurricane Loss Projection
556Methodology, and as further provided in s. 627.0628.
557     12.11.  A reasonable margin for underwriting profit and
558contingencies. For that portion of the rate covering the risk of
559hurricanes and other catastrophic losses for which the insurer
560has not purchased reinsurance and has exposed its capital and
561surplus to such risk, the office must approve a rating factor
562that provides the insurer a reasonable rate of return that is
563commensurate with such risk.
564     13.12.  The cost of medical services, if applicable.
565     14.13.  Other relevant factors which impact upon the
566frequency or severity of claims or upon expenses.
567     (g)  The office may at any time review a rate, rating
568schedule, rating manual, or rate change; the pertinent records
569of the insurer; and market conditions. If the office finds on a
570preliminary basis that a rate may be excessive, inadequate, or
571unfairly discriminatory, the office shall initiate proceedings
572to disapprove the rate and shall so notify the insurer. However,
573the office may not disapprove as excessive any rate for which it
574has given final approval or which has been deemed approved for a
575period of 1 year after the effective date of the filing unless
576the office finds that a material misrepresentation or material
577error was made by the insurer or was contained in the filing.
578Upon being so notified, the insurer or rating organization
579shall, within 60 days, file with the office all information
580which, in the belief of the insurer or organization, proves the
581reasonableness, adequacy, and fairness of the rate or rate
582change. The office shall issue a notice of intent to approve or
583a notice of intent to disapprove pursuant to the procedures of
584paragraph (a) within 90 days after receipt of the insurer's
585initial response. In such instances and in any administrative
586proceeding relating to the legality of the rate, the insurer or
587rating organization shall carry the burden of proof by a
588preponderance of the evidence to show that the rate is not
589excessive, inadequate, or unfairly discriminatory. After the
590office notifies an insurer that a rate may be excessive,
591inadequate, or unfairly discriminatory, unless the office
592withdraws the notification, the insurer shall not alter the rate
593except to conform with the office's notice until the earlier of
594120 days after the date the notification was provided or 180
595days after the date of the implementation of the rate. The
596office may, subject to chapter 120, disapprove without the 60-
597day notification any rate increase filed by an insurer within
598the prohibited time period or during the time that the legality
599of the increased rate is being contested.
600
601The provisions of this subsection shall not apply to workers'
602compensation and employer's liability insurance and to motor
603vehicle insurance.
604     (6)(a)  If an insurer requests an administrative hearing
605pursuant to s. 120.57 related to a rate filing under this
606section, the director of the Division of Administrative Hearings
607shall expedite the hearing and assign an administrative law
608judge who shall commence the hearing within 30 days after the
609receipt of the formal request and shall enter a recommended  
610order within 30 days after the hearing or within 30 days after
611receipt of the hearing transcript by the administrative law
612judge, whichever is later. Each party shall be allowed 10 days
613in which to submit written exceptions to the recommended order.
614The office shall enter a final order within 30 days after the
615entry of the recommended order. The provisions of this paragraph
616may be waived upon stipulation of all parties.
617     (b)  Upon entry of a final order, the insurer may request a
618expedited appellate review pursuant to the Florida Rules of
619Appellate Procedure. It is the intent of the Legislature that
620the First District Court of Appeal grant an insurer's request
621for an expedited appellate review.
622     (a)  After any action with respect to a rate filing that
623constitutes agency action for purposes of the Administrative
624Procedure Act, except for a rate filing for medical malpractice,
625an insurer may, in lieu of demanding a hearing under s. 120.57,
626require arbitration of the rate filing. However, the arbitration
627option provision in this subsection does not apply to a rate
628filing that is made on or after the effective date of this act
629until January 1, 2009. Arbitration shall be conducted by a board
630of arbitrators consisting of an arbitrator selected by the
631office, an arbitrator selected by the insurer, and an arbitrator
632selected jointly by the other two arbitrators. Each arbitrator
633must be certified by the American Arbitration Association. A
634decision is valid only upon the affirmative vote of at least two
635of the arbitrators. No arbitrator may be an employee of any
636insurance regulator or regulatory body or of any insurer,
637regardless of whether or not the employing insurer does business
638in this state. The office and the insurer must treat the
639decision of the arbitrators as the final approval of a rate
640filing. Costs of arbitration shall be paid by the insurer.
641     (b)  Arbitration under this subsection shall be conducted
642pursuant to the procedures specified in ss. 682.06-682.10.
643Either party may apply to the circuit court to vacate or modify
644the decision pursuant to s. 682.13 or s. 682.14. The commission
645shall adopt rules for arbitration under this subsection, which
646rules may not be inconsistent with the arbitration rules of the
647American Arbitration Association as of January 1, 1996.
648     (c)  Upon initiation of the arbitration process, the
649insurer waives all rights to challenge the action of the office
650under the Administrative Procedure Act or any other provision of
651law; however, such rights are restored to the insurer if the
652arbitrators fail to render a decision within 90 days after
653initiation of the arbitration process.
654     (9)(a)  Effective March 1, 2007, The chief executive
655officer or chief financial officer of a property insurer and the
656chief actuary of a property insurer must certify under oath and
657subject to the penalty of perjury, on a form approved by the
658commission, the following information, which must accompany a
659rate filing:
660     1.  The signing officer and actuary have reviewed the rate
661filing;
662     2.  Based on the signing officer's and actuary's knowledge,
663the rate filing does not contain any untrue statement of a
664material fact or omit to state a material fact necessary in
665order to make the statements made, in light of the circumstances
666under which such statements were made, not misleading;
667     3.  Based on the signing officer's and actuary's knowledge,
668the information and other factors described in paragraph (2)(b),
669including, but not limited to, investment income, fairly present
670in all material respects the basis of the rate filing for the
671periods presented in the filing; and
672     4.  Based on the signing officer's and actuary's knowledge,
673the rate filing reflects all premium savings that are reasonably
674expected to result from legislative enactments and are in
675accordance with generally accepted and reasonable actuarial
676techniques.
677     Section 11.  Paragraph (c) of subsection (1) and subsection
678(3) of section 627.0628, Florida Statutes, are amended, and
679paragraph (e) is added to subsection (1) of that section, to
680read:
681     627.0628  Florida Commission on Hurricane Loss Projection
682Methodology; public records exemption; public meetings
683exemption.--
684     (1)  LEGISLATIVE FINDINGS AND INTENT.--
685     (c)  It is the intent of the Legislature to create the
686Florida Commission on Hurricane Loss Projection Methodology as a
687panel of experts to provide the most actuarially sophisticated
688guidelines and standards for projection of hurricane losses
689possible, given the current state of actuarial science. It is
690the further intent of the Legislature that such standards and
691guidelines must be used by the State Board of Administration in
692developing reimbursement premium rates for the Florida Hurricane
693Catastrophe Fund, and, subject to paragraph (3)(c), must may be
694used by insurers in rate filings under s. 627.062 unless the way
695in which such standards and guidelines were applied by the
696insurer was erroneous, as shown by a preponderance of the
697evidence.
698     (e)  The Legislature finds that the authority to take final
699agency action with respect to insurance ratemaking is vested in
700the Office of Insurance Regulation and the Financial Services
701Commission, and that the processes, standards, and guidelines of
702the Florida Commission on Hurricane Loss Projection Methodology
703do not constitute final agency action or statements of general
704applicability that implement, interpret, or prescribe law or
705policy; accordingly, chapter 120 does not apply to the
706processes, standards, and guidelines of the Florida Commission
707on Hurricane Loss Projection Methodology.
708     (3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
709     (a)  The commission shall consider any actuarial methods,
710principles, standards, models, or output ranges that have the
711potential for improving the accuracy of or reliability of the
712hurricane loss projections used in residential property
713insurance rate filings. The commission shall, from time to time,
714adopt findings as to the accuracy or reliability of particular
715methods, principles, standards, models, or output ranges.
716     (b)  The commission shall consider any actuarial methods,
717principles, standards, or models that have the potential for
718improving the accuracy of or reliability of projecting probable  
719maximum loss levels. The commission shall adopt findings as to
720the accuracy or reliability of particular methods, principles,
721standards, or models related to probable maximum loss
722calculations.
723     (c)(b)  In establishing reimbursement premiums for the
724Florida Hurricane Catastrophe Fund, the State Board of
725Administration must, to the extent feasible, employ actuarial
726methods, principles, standards, models, or output ranges found
727by the commission to be accurate or reliable.
728     (d)(c)  With respect to a rate filing under s. 627.062, an
729insurer shall may employ and may not modify or adjust actuarial
730methods, principles, standards, models, or output ranges found
731by the commission to be accurate or reliable in determining to
732determine hurricane loss factors for use in a rate filing under
733s. 627.062. An insurer shall employ and may not modify or adjust
734models found by the commission to be accurate or reliable in
735determining probable maximum loss levels pursuant to paragraph
736(b) with respect to a rate filing under s. 627.062 made more
737than 60 days after the commission has made such findings. Such
738findings and factors are admissible and relevant in
739consideration of a rate filing by the office or in any
740arbitration or administrative or judicial review only if the
741office and the consumer advocate appointed pursuant to s.
742627.0613 have access to all of the assumptions and factors that
743were used in developing the actuarial methods, principles,
744standards, models, or output ranges, and are not precluded from
745disclosing such information in a rate proceeding. In any rate
746hearing under s. 120.57 or in any arbitration proceeding under
747s. 627.062(6), the hearing officer, judge, or arbitration panel
748may determine whether the office and the consumer advocate were
749provided with access to all of the assumptions and factors that
750were used in developing the actuarial methods, principles,
751standards, models, or output ranges and to determine their
752admissibility.
753     (e)(d)  The commission shall adopt revisions to previously
754adopted actuarial methods, principles, standards, models, or
755output ranges at least annually.
756     (f)(e)1.  A trade secret, as defined in s. 812.081, that is
757used in designing and constructing a hurricane loss model and
758that is provided pursuant to this section, by a private company,
759to the commission, office, or consumer advocate appointed
760pursuant to s. 627.0613, is confidential and exempt from s.
761119.07(1) and s. 24(a), Art. I of the State Constitution.
762     2.  That portion of a meeting of the commission or of a
763rate proceeding on an insurer's rate filing at which a trade
764secret made confidential and exempt by this paragraph is
765discussed is exempt from s. 286.011 and s. 24(b), Art. I of the
766State Constitution.
767     3.  This paragraph is subject to the Open Government Sunset
768Review Act of 1995 in accordance with s. 119.15, and shall stand
769repealed on October 2, 2010, unless reviewed and saved from
770repeal through reenactment by the Legislature.
771     Section 12.  Subsection (1) of section 627.0629, Florida
772Statutes, is amended to read:
773     627.0629  Residential property insurance; rate filings.--
774     (1)(a)  It is the intent of the Legislature that insurers
775must provide savings to consumers who install or implement
776windstorm damage mitigation techniques, alterations, or
777solutions to their properties to prevent windstorm losses. A
778rate filing for residential property insurance must include
779actuarially reasonable discounts, credits, or other rate
780differentials, or appropriate reductions in deductibles, for
781properties on which fixtures or construction techniques
782demonstrated to reduce the amount of loss in a windstorm have
783been installed or implemented. The fixtures or construction
784techniques shall include, but not be limited to, fixtures or
785construction techniques which enhance roof strength, roof
786covering performance, roof-to-wall strength, wall-to-floor-to-
787foundation strength, opening protection, and window, door, and
788skylight strength. Credits, discounts, or other rate
789differentials, or appropriate reductions in deductibles, for
790fixtures and construction techniques which meet the minimum
791requirements of the Florida Building Code must be included in
792the rate filing. All insurance companies must make a rate filing
793which includes the credits, discounts, or other rate
794differentials or reductions in deductibles by February 28, 2003.
795By July 1, 2007, the office shall reevaluate the discounts,
796credits, other rate differentials, and appropriate reductions in
797deductibles for fixtures and construction techniques that meet
798the minimum requirements of the Florida Building Code, based
799upon actual experience or any other loss relativity studies
800available to the office. The office shall determine the
801discounts, credits, other rate differentials, and appropriate
802reductions in deductibles that reflect the full actuarial value
803of such revaluation, which may be used by insurers in rate
804filings.
805     (b)  By February 1, 2011, the Office of Insurance
806Regulation, in consultation with the Department of Financial
807Services and the Department of Community Affairs, shall develop
808and make publicly available a proposed method for insurers to
809establish discounts, credits, or other rate differentials for
810hurricane mitigation measures which directly correlate to the
811numerical rating assigned to a structure pursuant to the uniform
812home grading scale adopted by the Financial Services Commission
813pursuant to s. 215.55865, including any proposed changes to the
814uniform home grading scale. By October 1, 2011, the commission
815shall adopt rules requiring insurers to make rate filings for
816residential property insurance which revise insurers' discounts,
817credits, or other rate differentials for hurricane mitigation
818measures so that such rate differentials correlate directly to
819the uniform home grading scale. The rules may include such
820changes to the uniform home grading scale as the commission
821determines are necessary, and may specify the minimum required
822discounts, credits, or other rate differentials. Such rate
823differentials must be consistent with generally accepted
824actuarial principles and wind-loss mitigation studies. The rules
825shall allow a period of at least 2 years after the effective
826date of the revised mitigation discounts, credits, or other rate
827differentials for a property owner to obtain an inspection or
828otherwise qualify for the revised credit, during which time the
829insurer shall continue to apply the mitigation credit that was
830applied immediately prior to the effective date of the revised
831credit.
832     Section 13.  Subsection (2) and paragraphs (a), (b), (c),
833(m), (p), (w), (dd), (ee), and (ff) of subsection (6) of section
834627.351, Florida Statutes, are amended to read:
835     627.351  Insurance risk apportionment plans.--
836     (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
837     (b)  The department shall require all insurers holding a
838certificate of authority to transact property insurance on a
839direct basis in this state, other than joint underwriting
840associations and other entities formed pursuant to this section,
841to provide windstorm coverage to applicants from areas
842determined to be eligible pursuant to paragraph (c) who in good
843faith are entitled to, but are unable to procure, such coverage
844through ordinary means; or it shall adopt a reasonable plan or
845plans for the equitable apportionment or sharing among such
846insurers of windstorm coverage, which may include formation of
847an association for this purpose. As used in this subsection, the
848term "property insurance" means insurance on real or personal
849property, as defined in s. 624.604, including insurance for
850fire, industrial fire, allied lines, farmowners multiperil,
851homeowners' multiperil, commercial multiperil, and mobile homes,
852and including liability coverages on all such insurance, but
853excluding inland marine as defined in s. 624.607(3) and
854excluding vehicle insurance as defined in s. 624.605(1)(a) other
855than insurance on mobile homes used as permanent dwellings. The
856department shall adopt rules that provide a formula for the
857recovery and repayment of any deferred assessments.
858     1.  For the purpose of this section, properties eligible
859for such windstorm coverage are defined as dwellings, buildings,
860and other structures, including mobile homes which are used as
861dwellings and which are tied down in compliance with mobile home
862tie-down requirements prescribed by the Department of Highway
863Safety and Motor Vehicles pursuant to s. 320.8325, and the
864contents of all such properties. An applicant or policyholder is
865eligible for coverage only if an offer of coverage cannot be
866obtained by or for the applicant or policyholder from an
867admitted insurer at approved rates.
868     2.a.(I)  All insurers required to be members of such
869association shall participate in its writings, expenses, and
870losses. Surplus of the association shall be retained for the
871payment of claims and shall not be distributed to the member
872insurers. Such participation by member insurers shall be in the
873proportion that the net direct premiums of each member insurer
874written for property insurance in this state during the
875preceding calendar year bear to the aggregate net direct
876premiums for property insurance of all member insurers, as
877reduced by any credits for voluntary writings, in this state
878during the preceding calendar year. For the purposes of this
879subsection, the term "net direct premiums" means direct written
880premiums for property insurance, reduced by premium for
881liability coverage and for the following if included in allied
882lines: rain and hail on growing crops; livestock; association
883direct premiums booked; National Flood Insurance Program direct
884premiums; and similar deductions specifically authorized by the
885plan of operation and approved by the department. A member's
886participation shall begin on the first day of the calendar year
887following the year in which it is issued a certificate of
888authority to transact property insurance in the state and shall
889terminate 1 year after the end of the calendar year during which
890it no longer holds a certificate of authority to transact
891property insurance in the state. The commissioner, after review
892of annual statements, other reports, and any other statistics
893that the commissioner deems necessary, shall certify to the
894association the aggregate direct premiums written for property
895insurance in this state by all member insurers.
896     (II)  Effective July 1, 2002, the association shall operate
897subject to the supervision and approval of a board of governors
898who are the same individuals that have been appointed by the
899Treasurer to serve on the board of governors of the Citizens
900Property Insurance Corporation.
901     (III)  The plan of operation shall provide a formula
902whereby a company voluntarily providing windstorm coverage in
903affected areas will be relieved wholly or partially from
904apportionment of a regular assessment pursuant to sub-sub-
905subparagraph d.(I) or sub-sub-subparagraph d.(II).
906     (IV)  A company which is a member of a group of companies
907under common management may elect to have its credits applied on
908a group basis, and any company or group may elect to have its
909credits applied to any other company or group.
910     (V)  There shall be no credits or relief from apportionment
911to a company for emergency assessments collected from its
912policyholders under sub-sub-subparagraph d.(III).
913     (VI)  The plan of operation may also provide for the award
914of credits, for a period not to exceed 3 years, from a regular
915assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
916subparagraph d.(II) as an incentive for taking policies out of
917the Residential Property and Casualty Joint Underwriting
918Association. In order to qualify for the exemption under this
919sub-sub-subparagraph, the take-out plan must provide that at
920least 40 percent of the policies removed from the Residential
921Property and Casualty Joint Underwriting Association cover risks
922located in Dade, Broward, and Palm Beach Counties or at least 30
923percent of the policies so removed cover risks located in Dade,
924Broward, and Palm Beach Counties and an additional 50 percent of
925the policies so removed cover risks located in other coastal
926counties, and must also provide that no more than 15 percent of
927the policies so removed may exclude windstorm coverage. With the
928approval of the department, the association may waive these
929geographic criteria for a take-out plan that removes at least
930the lesser of 100,000 Residential Property and Casualty Joint
931Underwriting Association policies or 15 percent of the total
932number of Residential Property and Casualty Joint Underwriting
933Association policies, provided the governing board of the
934Residential Property and Casualty Joint Underwriting Association
935certifies that the take-out plan will materially reduce the
936Residential Property and Casualty Joint Underwriting
937Association's 100-year probable maximum loss from hurricanes.
938With the approval of the department, the board may extend such
939credits for an additional year if the insurer guarantees an
940additional year of renewability for all policies removed from
941the Residential Property and Casualty Joint Underwriting
942Association, or for 2 additional years if the insurer guarantees
9432 additional years of renewability for all policies removed from
944the Residential Property and Casualty Joint Underwriting
945Association.
946     b.  Assessments to pay deficits in the association under
947this subparagraph shall be included as an appropriate factor in
948the making of rates as provided in s. 627.3512.
949     c.  The Legislature finds that the potential for unlimited
950deficit assessments under this subparagraph may induce insurers
951to attempt to reduce their writings in the voluntary market, and
952that such actions would worsen the availability problems that
953the association was created to remedy. It is the intent of the
954Legislature that insurers remain fully responsible for paying
955regular assessments and collecting emergency assessments for any
956deficits of the association; however, it is also the intent of
957the Legislature to provide a means by which assessment
958liabilities may be amortized over a period of years.
959     d.(I)  When the deficit incurred in a particular calendar
960year is 10 percent or less of the aggregate statewide direct
961written premium for property insurance for the prior calendar
962year for all member insurers, the association shall levy an
963assessment on member insurers in an amount equal to the deficit.
964     (II)  When the deficit incurred in a particular calendar
965year exceeds 10 percent of the aggregate statewide direct
966written premium for property insurance for the prior calendar
967year for all member insurers, the association shall levy an
968assessment on member insurers in an amount equal to the greater
969of 10 percent of the deficit or 10 percent of the aggregate
970statewide direct written premium for property insurance for the
971prior calendar year for member insurers. Any remaining deficit
972shall be recovered through emergency assessments under sub-sub-
973subparagraph (III).
974     (III)  Upon a determination by the board of directors that
975a deficit exceeds the amount that will be recovered through
976regular assessments on member insurers, pursuant to sub-sub-
977subparagraph (I) or sub-sub-subparagraph (II), the board shall
978levy, after verification by the department, emergency
979assessments to be collected by member insurers and by
980underwriting associations created pursuant to this section which
981write property insurance, upon issuance or renewal of property
982insurance policies other than National Flood Insurance policies
983in the year or years following levy of the regular assessments.
984The amount of the emergency assessment collected in a particular
985year shall be a uniform percentage of that year's direct written
986premium for property insurance for all member insurers and
987underwriting associations, excluding National Flood Insurance
988policy premiums, as annually determined by the board and
989verified by the department. The department shall verify the
990arithmetic calculations involved in the board's determination
991within 30 days after receipt of the information on which the
992determination was based. Notwithstanding any other provision of
993law, each member insurer and each underwriting association
994created pursuant to this section shall collect emergency
995assessments from its policyholders without such obligation being
996affected by any credit, limitation, exemption, or deferment. The
997emergency assessments so collected shall be transferred directly
998to the association on a periodic basis as determined by the
999association. The aggregate amount of emergency assessments
1000levied under this sub-sub-subparagraph in any calendar year may
1001not exceed the greater of 10 percent of the amount needed to
1002cover the original deficit, plus interest, fees, commissions,
1003required reserves, and other costs associated with financing of
1004the original deficit, or 10 percent of the aggregate statewide
1005direct written premium for property insurance written by member
1006insurers and underwriting associations for the prior year, plus
1007interest, fees, commissions, required reserves, and other costs
1008associated with financing the original deficit. The board may
1009pledge the proceeds of the emergency assessments under this sub-
1010sub-subparagraph as the source of revenue for bonds, to retire
1011any other debt incurred as a result of the deficit or events
1012giving rise to the deficit, or in any other way that the board
1013determines will efficiently recover the deficit. The emergency
1014assessments under this sub-sub-subparagraph shall continue as
1015long as any bonds issued or other indebtedness incurred with
1016respect to a deficit for which the assessment was imposed remain
1017outstanding, unless adequate provision has been made for the
1018payment of such bonds or other indebtedness pursuant to the
1019document governing such bonds or other indebtedness. Emergency
1020assessments collected under this sub-sub-subparagraph are not
1021part of an insurer's rates, are not premium, and are not subject
1022to premium tax, fees, or commissions; however, failure to pay
1023the emergency assessment shall be treated as failure to pay
1024premium.
1025     (IV)  Each member insurer's share of the total regular
1026assessments under sub-sub-subparagraph (I) or sub-sub-
1027subparagraph (II) shall be in the proportion that the insurer's
1028net direct premium for property insurance in this state, for the
1029year preceding the assessment bears to the aggregate statewide
1030net direct premium for property insurance of all member
1031insurers, as reduced by any credits for voluntary writings for
1032that year.
1033     (V)  If regular deficit assessments are made under sub-sub-
1034subparagraph (I) or sub-sub-subparagraph (II), or by the
1035Residential Property and Casualty Joint Underwriting Association
1036under sub-subparagraph (6)(b)3.a. or sub-subparagraph
1037(6)(b)3.b., the association shall levy upon the association's
1038policyholders, as part of its next rate filing, or by a separate
1039rate filing solely for this purpose, a market equalization
1040surcharge in a percentage equal to the total amount of such
1041regular assessments divided by the aggregate statewide direct
1042written premium for property insurance for member insurers for
1043the prior calendar year. Market equalization surcharges under
1044this sub-sub-subparagraph are not considered premium and are not
1045subject to commissions, fees, or premium taxes; however, failure
1046to pay a market equalization surcharge shall be treated as
1047failure to pay premium.
1048     e.  The governing body of any unit of local government, any
1049residents of which are insured under the plan, may issue bonds
1050as defined in s. 125.013 or s. 166.101 to fund an assistance
1051program, in conjunction with the association, for the purpose of
1052defraying deficits of the association. In order to avoid
1053needless and indiscriminate proliferation, duplication, and
1054fragmentation of such assistance programs, any unit of local
1055government, any residents of which are insured by the
1056association, may provide for the payment of losses, regardless
1057of whether or not the losses occurred within or outside of the
1058territorial jurisdiction of the local government. Revenue bonds
1059may not be issued until validated pursuant to chapter 75, unless
1060a state of emergency is declared by executive order or
1061proclamation of the Governor pursuant to s. 252.36 making such
1062findings as are necessary to determine that it is in the best
1063interests of, and necessary for, the protection of the public
1064health, safety, and general welfare of residents of this state
1065and the protection and preservation of the economic stability of
1066insurers operating in this state, and declaring it an essential
1067public purpose to permit certain municipalities or counties to
1068issue bonds as will provide relief to claimants and
1069policyholders of the association and insurers responsible for
1070apportionment of plan losses. Any such unit of local government
1071may enter into such contracts with the association and with any
1072other entity created pursuant to this subsection as are
1073necessary to carry out this paragraph. Any bonds issued under
1074this sub-subparagraph shall be payable from and secured by
1075moneys received by the association from assessments under this
1076subparagraph, and assigned and pledged to or on behalf of the
1077unit of local government for the benefit of the holders of such
1078bonds. The funds, credit, property, and taxing power of the
1079state or of the unit of local government shall not be pledged
1080for the payment of such bonds. If any of the bonds remain unsold
108160 days after issuance, the department shall require all
1082insurers subject to assessment to purchase the bonds, which
1083shall be treated as admitted assets; each insurer shall be
1084required to purchase that percentage of the unsold portion of
1085the bond issue that equals the insurer's relative share of
1086assessment liability under this subsection. An insurer shall not
1087be required to purchase the bonds to the extent that the
1088department determines that the purchase would endanger or impair
1089the solvency of the insurer. The authority granted by this sub-
1090subparagraph is additional to any bonding authority granted by
1091subparagraph 6.
1092     3.  The plan shall also provide that any member with a
1093surplus as to policyholders of $20 million or less writing 25
1094percent or more of its total countrywide property insurance
1095premiums in this state may petition the department, within the
1096first 90 days of each calendar year, to qualify as a limited
1097apportionment company. The apportionment of such a member
1098company in any calendar year for which it is qualified shall not
1099exceed its gross participation, which shall not be affected by
1100the formula for voluntary writings. In no event shall a limited
1101apportionment company be required to participate in any
1102apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1103or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1104$50 million after payment of available plan funds in any
1105calendar year. However, a limited apportionment company shall
1106collect from its policyholders any emergency assessment imposed
1107under sub-sub-subparagraph 2.d.(III). The plan shall provide
1108that, if the department determines that any regular assessment
1109will result in an impairment of the surplus of a limited
1110apportionment company, the department may direct that all or
1111part of such assessment be deferred. However, there shall be no
1112limitation or deferment of an emergency assessment to be
1113collected from policyholders under sub-sub-subparagraph
11142.d.(III).
1115     4.  The plan shall provide for the deferment, in whole or
1116in part, of a regular assessment of a member insurer under sub-
1117sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1118not for an emergency assessment collected from policyholders
1119under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1120commissioner, payment of such regular assessment would endanger
1121or impair the solvency of the member insurer. In the event a
1122regular assessment against a member insurer is deferred in whole
1123or in part, the amount by which such assessment is deferred may
1124be assessed against the other member insurers in a manner
1125consistent with the basis for assessments set forth in sub-sub-
1126subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1127     5.a.  The plan of operation may include deductibles and
1128rules for classification of risks and rate modifications
1129consistent with the objective of providing and maintaining funds
1130sufficient to pay catastrophe losses.
1131     b.  The association may require arbitration of a rate
1132filing under s. 627.062(6). It is the intent of the Legislature
1133that the rates for coverage provided by the association be
1134actuarially sound and not competitive with approved rates
1135charged in the admitted voluntary market such that the
1136association functions as a residual market mechanism to provide
1137insurance only when the insurance cannot be procured in the
1138voluntary market. The plan of operation shall provide a
1139mechanism to assure that, beginning no later than January 1,
11401999, the rates charged by the association for each line of
1141business are reflective of approved rates in the voluntary
1142market for hurricane coverage for each line of business in the
1143various areas eligible for association coverage.
1144     c.  The association shall provide for windstorm coverage on
1145residential properties in limits up to $10 million for
1146commercial lines residential risks and up to $1 million for
1147personal lines residential risks. If coverage with the
1148association is sought for a residential risk valued in excess of
1149these limits, coverage shall be available to the risk up to the
1150replacement cost or actual cash value of the property, at the
1151option of the insured, if coverage for the risk cannot be
1152located in the authorized market. The association must accept a
1153commercial lines residential risk with limits above $10 million
1154or a personal lines residential risk with limits above $1
1155million if coverage is not available in the authorized market.
1156The association may write coverage above the limits specified in
1157this subparagraph with or without facultative or other
1158reinsurance coverage, as the association determines appropriate.
1159     d.  The plan of operation must provide objective criteria
1160and procedures, approved by the department, to be uniformly
1161applied for all applicants in determining whether an individual
1162risk is so hazardous as to be uninsurable. In making this
1163determination and in establishing the criteria and procedures,
1164the following shall be considered:
1165     (I)  Whether the likelihood of a loss for the individual
1166risk is substantially higher than for other risks of the same
1167class; and
1168     (II)  Whether the uncertainty associated with the
1169individual risk is such that an appropriate premium cannot be
1170determined.
1171
1172The acceptance or rejection of a risk by the association
1173pursuant to such criteria and procedures must be construed as
1174the private placement of insurance, and the provisions of
1175chapter 120 do not apply.
1176     e.  If the risk accepts an offer of coverage through the
1177market assistance program or through a mechanism established by
1178the association, either before the policy is issued by the
1179association or during the first 30 days of coverage by the
1180association, and the producing agent who submitted the
1181application to the association is not currently appointed by the
1182insurer, the insurer shall:
1183     (I)  Pay to the producing agent of record of the policy,
1184for the first year, an amount that is the greater of the
1185insurer's usual and customary commission for the type of policy
1186written or a fee equal to the usual and customary commission of
1187the association; or
1188     (II)  Offer to allow the producing agent of record of the
1189policy to continue servicing the policy for a period of not less
1190than 1 year and offer to pay the agent the greater of the
1191insurer's or the association's usual and customary commission
1192for the type of policy written.
1193
1194If the producing agent is unwilling or unable to accept
1195appointment, the new insurer shall pay the agent in accordance
1196with sub-sub-subparagraph (I). Subject to the provisions of s.
1197627.3517, the policies issued by the association must provide
1198that if the association obtains an offer from an authorized
1199insurer to cover the risk at its approved rates under either a
1200standard policy including wind coverage or, if consistent with
1201the insurer's underwriting rules as filed with the department, a
1202basic policy including wind coverage, the risk is no longer
1203eligible for coverage through the association. Upon termination
1204of eligibility, the association shall provide written notice to
1205the policyholder and agent of record stating that the
1206association policy must be canceled as of 60 days after the date
1207of the notice because of the offer of coverage from an
1208authorized insurer. Other provisions of the insurance code
1209relating to cancellation and notice of cancellation do not apply
1210to actions under this sub-subparagraph.
1211     f.  When the association enters into a contractual
1212agreement for a take-out plan, the producing agent of record of
1213the association policy is entitled to retain any unearned
1214commission on the policy, and the insurer shall:
1215     (I)  Pay to the producing agent of record of the
1216association policy, for the first year, an amount that is the
1217greater of the insurer's usual and customary commission for the
1218type of policy written or a fee equal to the usual and customary
1219commission of the association; or
1220     (II)  Offer to allow the producing agent of record of the
1221association policy to continue servicing the policy for a period
1222of not less than 1 year and offer to pay the agent the greater
1223of the insurer's or the association's usual and customary
1224commission for the type of policy written.
1225
1226If the producing agent is unwilling or unable to accept
1227appointment, the new insurer shall pay the agent in accordance
1228with sub-sub-subparagraph (I).
1229     6.a.  The plan of operation may authorize the formation of
1230a private nonprofit corporation, a private nonprofit
1231unincorporated association, a partnership, a trust, a limited
1232liability company, or a nonprofit mutual company which may be
1233empowered, among other things, to borrow money by issuing bonds
1234or by incurring other indebtedness and to accumulate reserves or
1235funds to be used for the payment of insured catastrophe losses.
1236The plan may authorize all actions necessary to facilitate the
1237issuance of bonds, including the pledging of assessments or
1238other revenues.
1239     b.  Any entity created under this subsection, or any entity
1240formed for the purposes of this subsection, may sue and be sued,
1241may borrow money; issue bonds, notes, or debt instruments;
1242pledge or sell assessments, market equalization surcharges and
1243other surcharges, rights, premiums, contractual rights,
1244projected recoveries from the Florida Hurricane Catastrophe
1245Fund, other reinsurance recoverables, and other assets as
1246security for such bonds, notes, or debt instruments; enter into
1247any contracts or agreements necessary or proper to accomplish
1248such borrowings; and take other actions necessary to carry out
1249the purposes of this subsection. The association may issue bonds
1250or incur other indebtedness, or have bonds issued on its behalf
1251by a unit of local government pursuant to subparagraph (6)(p)2.,
1252in the absence of a hurricane or other weather-related event,
1253upon a determination by the association subject to approval by
1254the department that such action would enable it to efficiently
1255meet the financial obligations of the association and that such
1256financings are reasonably necessary to effectuate the
1257requirements of this subsection. Any such entity may accumulate
1258reserves and retain surpluses as of the end of any association
1259year to provide for the payment of losses incurred by the
1260association during that year or any future year. The association
1261shall incorporate and continue the plan of operation and
1262articles of agreement in effect on the effective date of chapter
126376-96, Laws of Florida, to the extent that it is not
1264inconsistent with chapter 76-96, and as subsequently modified
1265consistent with chapter 76-96. The board of directors and
1266officers currently serving shall continue to serve until their
1267successors are duly qualified as provided under the plan. The
1268assets and obligations of the plan in effect immediately prior
1269to the effective date of chapter 76-96 shall be construed to be
1270the assets and obligations of the successor plan created herein.
1271     c.  In recognition of s. 10, Art. I of the State
1272Constitution, prohibiting the impairment of obligations of
1273contracts, it is the intent of the Legislature that no action be
1274taken whose purpose is to impair any bond indenture or financing
1275agreement or any revenue source committed by contract to such
1276bond or other indebtedness issued or incurred by the association
1277or any other entity created under this subsection.
1278     7.  On such coverage, an agent's remuneration shall be that
1279amount of money payable to the agent by the terms of his or her
1280contract with the company with which the business is placed.
1281However, no commission will be paid on that portion of the
1282premium which is in excess of the standard premium of that
1283company.
1284     8.  Subject to approval by the department, the association
1285may establish different eligibility requirements and operational
1286procedures for any line or type of coverage for any specified
1287eligible area or portion of an eligible area if the board
1288determines that such changes to the eligibility requirements and
1289operational procedures are justified due to the voluntary market
1290being sufficiently stable and competitive in such area or for
1291such line or type of coverage and that consumers who, in good
1292faith, are unable to obtain insurance through the voluntary
1293market through ordinary methods would continue to have access to
1294coverage from the association. When coverage is sought in
1295connection with a real property transfer, such requirements and
1296procedures shall not provide for an effective date of coverage
1297later than the date of the closing of the transfer as
1298established by the transferor, the transferee, and, if
1299applicable, the lender.
1300     9.  Notwithstanding any other provision of law:
1301     a.  The pledge or sale of, the lien upon, and the security
1302interest in any rights, revenues, or other assets of the
1303association created or purported to be created pursuant to any
1304financing documents to secure any bonds or other indebtedness of
1305the association shall be and remain valid and enforceable,
1306notwithstanding the commencement of and during the continuation
1307of, and after, any rehabilitation, insolvency, liquidation,
1308bankruptcy, receivership, conservatorship, reorganization, or
1309similar proceeding against the association under the laws of
1310this state or any other applicable laws.
1311     b.  No such proceeding shall relieve the association of its
1312obligation, or otherwise affect its ability to perform its
1313obligation, to continue to collect, or levy and collect,
1314assessments, market equalization or other surcharges, projected
1315recoveries from the Florida Hurricane Catastrophe Fund,
1316reinsurance recoverables, or any other rights, revenues, or
1317other assets of the association pledged.
1318     c.  Each such pledge or sale of, lien upon, and security
1319interest in, including the priority of such pledge, lien, or
1320security interest, any such assessments, emergency assessments,
1321market equalization or renewal surcharges, projected recoveries
1322from the Florida Hurricane Catastrophe Fund, reinsurance
1323recoverables, or other rights, revenues, or other assets which
1324are collected, or levied and collected, after the commencement
1325of and during the pendency of or after any such proceeding shall
1326continue unaffected by such proceeding.
1327     d.  As used in this subsection, the term "financing
1328documents" means any agreement, instrument, or other document
1329now existing or hereafter created evidencing any bonds or other
1330indebtedness of the association or pursuant to which any such
1331bonds or other indebtedness has been or may be issued and
1332pursuant to which any rights, revenues, or other assets of the
1333association are pledged or sold to secure the repayment of such
1334bonds or indebtedness, together with the payment of interest on
1335such bonds or such indebtedness, or the payment of any other
1336obligation of the association related to such bonds or
1337indebtedness.
1338     e.  Any such pledge or sale of assessments, revenues,
1339contract rights or other rights or assets of the association
1340shall constitute a lien and security interest, or sale, as the
1341case may be, that is immediately effective and attaches to such
1342assessments, revenues, contract, or other rights or assets,
1343whether or not imposed or collected at the time the pledge or
1344sale is made. Any such pledge or sale is effective, valid,
1345binding, and enforceable against the association or other entity
1346making such pledge or sale, and valid and binding against and
1347superior to any competing claims or obligations owed to any
1348other person or entity, including policyholders in this state,
1349asserting rights in any such assessments, revenues, contract, or
1350other rights or assets to the extent set forth in and in
1351accordance with the terms of the pledge or sale contained in the
1352applicable financing documents, whether or not any such person
1353or entity has notice of such pledge or sale and without the need
1354for any physical delivery, recordation, filing, or other action.
1355     f.  There shall be no liability on the part of, and no
1356cause of action of any nature shall arise against, any member
1357insurer or its agents or employees, agents or employees of the
1358association, members of the board of directors of the
1359association, or the department or its representatives, for any
1360action taken by them in the performance of their duties or
1361responsibilities under this subsection. Such immunity does not
1362apply to actions for breach of any contract or agreement
1363pertaining to insurance, or any willful tort.
1364     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1365     (a)1.  It is the public purpose of this subsection to
1366ensure the existence of an orderly market for property insurance
1367for Floridians and Florida businesses. The Legislature finds
1368that private insurers are unwilling or unable to provide
1369affordable property insurance coverage in this state to the
1370extent sought and needed. The absence of affordable property
1371insurance threatens the public health, safety, and welfare and
1372likewise threatens the economic health of the state. The state
1373therefore has a compelling public interest and a public purpose
1374to assist in assuring that property in the state is insured and
1375that it is insured at affordable rates so as to facilitate the
1376remediation, reconstruction, and replacement of damaged or
1377destroyed property in order to reduce or avoid the negative
1378effects otherwise resulting to the public health, safety, and
1379welfare, to the economy of the state, and to the revenues of the
1380state and local governments which are needed to provide for the
1381public welfare. It is necessary, therefore, to provide
1382affordable property insurance to applicants who are in good
1383faith entitled to procure insurance through the voluntary market
1384but are unable to do so. The Legislature intends by this
1385subsection that affordable property insurance be provided and
1386that it continue to be provided, as long as necessary, through
1387Citizens Property Insurance Corporation, a government entity
1388that is an integral part of the state, and that is not a private
1389insurance company. To that end, Citizens Property Insurance
1390Corporation shall strive to increase the availability of
1391affordable property insurance in this state, while achieving
1392efficiencies and economies, and while providing service to
1393policyholders, applicants, and agents which is no less than the
1394quality generally provided in the voluntary market, for the
1395achievement of the foregoing public purposes. Because it is
1396essential for this government entity to have the maximum
1397financial resources to pay claims following a catastrophic
1398hurricane, it is the intent of the Legislature that Citizens
1399Property Insurance Corporation continue to be an integral part
1400of the state and that the income of the corporation be exempt
1401from federal income taxation and that interest on the debt
1402obligations issued by the corporation be exempt from federal
1403income taxation.
1404     2.  The Residential Property and Casualty Joint
1405Underwriting Association originally created by this statute
1406shall be known, as of July 1, 2002, as the Citizens Property
1407Insurance Corporation. The corporation shall provide insurance
1408for residential and commercial property, for applicants who are
1409in good faith entitled, but are unable, to procure insurance
1410through the voluntary market. The corporation shall operate
1411pursuant to a plan of operation approved by order of the
1412Financial Services Commission. The plan is subject to continuous
1413review by the commission. The commission may, by order, withdraw
1414approval of all or part of a plan if the commission determines
1415that conditions have changed since approval was granted and that
1416the purposes of the plan require changes in the plan. The
1417corporation shall continue to operate pursuant to the plan of
1418operation approved by the Office of Insurance Regulation until
1419October 1, 2006. For the purposes of this subsection,
1420residential coverage includes both personal lines residential
1421coverage, which consists of the type of coverage provided by
1422homeowner's, mobile home owner's, dwelling, tenant's,
1423condominium unit owner's, and similar policies, and commercial
1424lines residential coverage, which consists of the type of
1425coverage provided by condominium association, apartment
1426building, and similar policies.
1427     3.  For the purposes of this subsection, the term
1428"homestead property" means:
1429     a.  Property that has been granted a homestead exemption
1430under chapter 196;
1431     b.  Property for which the owner has a current, written
1432lease with a renter for a term of at least 7 months and for
1433which the dwelling is insured by the corporation for $200,000 or
1434less;
1435     c.  An owner-occupied mobile home or manufactured home, as
1436defined in s. 320.01, which is permanently affixed to real
1437property, is owned by a Florida resident, and has been granted a
1438homestead exemption under chapter 196 or, if the owner does not
1439own the real property, the owner certifies that the mobile home
1440or manufactured home is his or her principal place of residence;
1441     d.  Tenant's coverage;
1442     e.  Commercial lines residential property; or
1443     f.  Any county, district, or municipal hospital; a hospital
1444licensed by any not-for-profit corporation qualified under s.
1445501(c)(3) of the United States Internal Revenue Code; or a
1446continuing care retirement community that is certified under
1447chapter 651 and that receives an exemption from ad valorem taxes
1448under chapter 196.
1449     4.  For the purposes of this subsection, the term
1450"nonhomestead property" means property that is not homestead
1451property.
1452     3.5.  Effective January 1, 2009, a personal lines
1453residential structure that has a dwelling replacement cost of $2
1454$1 million or more, or a single condominium unit that has a
1455combined dwelling and content replacement cost of $2 $1 million
1456or more is not eligible for coverage by the corporation. Such
1457dwellings insured by the corporation on December 31, 2008, may
1458continue to be covered by the corporation until the end of the
1459policy term. However, such dwellings that are insured by the
1460corporation and become ineligible for coverage due to the
1461provisions of this subparagraph may reapply and obtain coverage
1462in the high-risk account and be considered "nonhomestead
1463property" if the property owner provides the corporation with a
1464sworn affidavit from one or more insurance agents, on a form
1465provided by the corporation, stating that the agents have made
1466their best efforts to obtain coverage and that the property has
1467been rejected for coverage by at least one authorized insurer
1468and at least three surplus lines insurers. If such conditions
1469are met, the dwelling may be insured by the corporation for up
1470to 3 years, after which time the dwelling is ineligible for
1471coverage. The office shall approve the method used by the
1472corporation for valuing the dwelling replacement cost for the
1473purposes of this subparagraph. If a policyholder is insured by
1474the corporation prior to being determined to be ineligible
1475pursuant to this subparagraph and such policyholder files a
1476lawsuit challenging the determination, the policyholder may
1477remain insured by the corporation until the conclusion of the
1478litigation.
1479     6.  For properties constructed on or after January 1, 2009,
1480the corporation may not insure any property located within 2,500
1481feet landward of the coastal construction control line created
1482pursuant to s. 161.053 unless the property meets the
1483requirements of the code-plus building standards developed by
1484the Florida Building Commission.
1485     4.7.  It is the intent of the Legislature that
1486policyholders, applicants, and agents of the corporation receive
1487service and treatment of the highest possible level but never
1488less than that generally provided in the voluntary market. It
1489also is intended that the corporation be held to service
1490standards no less than those applied to insurers in the
1491voluntary market by the office with respect to responsiveness,
1492timeliness, customer courtesy, and overall dealings with
1493policyholders, applicants, or agents of the corporation.
1494     5.8.  Effective January 1, 2009, a personal lines
1495residential structure that is located in the "wind-borne debris
1496region," as defined in s. 1609.2, International Building Code
1497(2006), and that has an insured value on the structure of
1498$750,000 or more is not eligible for coverage by the corporation
1499unless the structure has opening protections as required under
1500the Florida Building Code for a newly constructed residential
1501structure in that area. A residential structure shall be deemed
1502to comply with the requirements of this subparagraph if it has
1503shutters or opening protections on all openings and if such
1504opening protections complied with the Florida Building Code at
1505the time they were installed. Effective January 1, 2010, for
1506personal lines residential property insured by the corporation
1507that is located in the wind-borne debris region and has an
1508insured value on the structure of $500,000 or more, a
1509prospective purchaser of any such residential property must be
1510provided by the seller a written disclosure that contains the
1511structure's windstorm mitigation rating based on the uniform
1512home grading scale adopted under s. 215.55865. Such rating shall
1513be provided to the purchaser at or before the time the purchaser
1514executes a contract for sale and purchase.
1515     (b)1.  All insurers authorized to write one or more subject
1516lines of business in this state are subject to assessment by the
1517corporation and, for the purposes of this subsection, are
1518referred to collectively as "assessable insurers." Insurers
1519writing one or more subject lines of business in this state
1520pursuant to part VIII of chapter 626 are not assessable
1521insurers, but insureds who procure one or more subject lines of
1522business in this state pursuant to part VIII of chapter 626 are
1523subject to assessment by the corporation and are referred to
1524collectively as "assessable insureds." An authorized insurer's
1525assessment liability shall begin on the first day of the
1526calendar year following the year in which the insurer was issued
1527a certificate of authority to transact insurance for subject
1528lines of business in this state and shall terminate 1 year after
1529the end of the first calendar year during which the insurer no
1530longer holds a certificate of authority to transact insurance
1531for subject lines of business in this state.
1532     2.a.  All revenues, assets, liabilities, losses, and
1533expenses of the corporation shall be divided into three separate
1534accounts as follows:
1535     (I)  A personal lines account for personal residential
1536policies issued by the corporation or issued by the Residential
1537Property and Casualty Joint Underwriting Association and renewed
1538by the corporation that provide comprehensive, multiperil
1539coverage on risks that are not located in areas eligible for
1540coverage in the Florida Windstorm Underwriting Association as
1541those areas were defined on January 1, 2002, and for such
1542policies that do not provide coverage for the peril of wind on
1543risks that are located in such areas;
1544     (II)  A commercial lines account for commercial residential
1545and commercial nonresidential policies issued by the corporation
1546or issued by the Residential Property and Casualty Joint
1547Underwriting Association and renewed by the corporation that
1548provide coverage for basic property perils on risks that are not
1549located in areas eligible for coverage in the Florida Windstorm
1550Underwriting Association as those areas were defined on January
15511, 2002, and for such policies that do not provide coverage for
1552the peril of wind on risks that are located in such areas; and
1553     (III)  A high-risk account for personal residential
1554policies and commercial residential and commercial
1555nonresidential property policies issued by the corporation or
1556transferred to the corporation that provide coverage for the
1557peril of wind on risks that are located in areas eligible for
1558coverage in the Florida Windstorm Underwriting Association as
1559those areas were defined on January 1, 2002. Subject to the
1560approval of a business plan by the Financial Services Commission
1561and Legislative Budget Commission as provided in this sub-sub-
1562subparagraph, but no earlier than March 31, 2007, The
1563corporation may offer policies that provide multiperil coverage
1564and the corporation shall continue to offer policies that
1565provide coverage only for the peril of wind for risks located in
1566areas eligible for coverage in the high-risk account. In issuing
1567multiperil coverage, the corporation may use its approved policy
1568forms and rates for the personal lines account. An applicant or
1569insured who is eligible to purchase a multiperil policy from the
1570corporation may purchase a multiperil policy from an authorized
1571insurer without prejudice to the applicant's or insured's
1572eligibility to prospectively purchase a policy that provides
1573coverage only for the peril of wind from the corporation. An
1574applicant or insured who is eligible for a corporation policy
1575that provides coverage only for the peril of wind may elect to
1576purchase or retain such policy and also purchase or retain
1577coverage excluding wind from an authorized insurer without
1578prejudice to the applicant's or insured's eligibility to
1579prospectively purchase a policy that provides multiperil
1580coverage from the corporation. It is the goal of the Legislature
1581that there would be an overall average savings of 10 percent or
1582more for a policyholder who currently has a wind-only policy
1583with the corporation, and an ex-wind policy with a voluntary
1584insurer or the corporation, and who then obtains a multiperil
1585policy from the corporation. It is the intent of the Legislature
1586that the offer of multiperil coverage in the high-risk account
1587be made and implemented in a manner that does not adversely
1588affect the tax-exempt status of the corporation or
1589creditworthiness of or security for currently outstanding
1590financing obligations or credit facilities of the high-risk
1591account, the personal lines account, or the commercial lines
1592account. By March 1, 2007, the corporation shall prepare and
1593submit for approval by the Financial Services Commission and
1594Legislative Budget Commission a report detailing the
1595corporation's business plan for issuing multiperil coverage in
1596the high-risk account. The business plan shall be approved or
1597disapproved within 30 days after receipt, as submitted or
1598modified and resubmitted by the corporation. The business plan
1599must include: the impact of such multiperil coverage on the
1600corporation's financial resources, the impact of such multiperil
1601coverage on the corporation's tax-exempt status, the manner in
1602which the corporation plans to implement the processing of
1603applications and policy forms for new and existing
1604policyholders, the impact of such multiperil coverage on the
1605corporation's ability to deliver customer service at the high
1606level required by this subsection, the ability of the
1607corporation to process claims, the ability of the corporation to
1608quote and issue policies, the impact of such multiperil coverage
1609on the corporation's agents, the impact of such multiperil
1610coverage on the corporation's existing policyholders, and the
1611impact of such multiperil coverage on rates and premium. The
1612high-risk account must also include quota share primary
1613insurance under subparagraph (c)2. The area eligible for
1614coverage under the high-risk account also includes the area
1615within Port Canaveral, which is bordered on the south by the
1616City of Cape Canaveral, bordered on the west by the Banana
1617River, and bordered on the north by Federal Government property.
1618     b.  The three separate accounts must be maintained as long
1619as financing obligations entered into by the Florida Windstorm
1620Underwriting Association or Residential Property and Casualty
1621Joint Underwriting Association are outstanding, in accordance
1622with the terms of the corresponding financing documents. When
1623the financing obligations are no longer outstanding, in
1624accordance with the terms of the corresponding financing
1625documents, the corporation may use a single account for all
1626revenues, assets, liabilities, losses, and expenses of the
1627corporation. Consistent with the requirement of this
1628subparagraph and prudent investment policies that minimize the
1629cost of carrying debt, the board shall exercise its best efforts
1630to retire existing debt or to obtain approval of necessary
1631parties to amend the terms of existing debt, so as to structure
1632the most efficient plan to consolidate the three separate
1633accounts into a single account. By February 1, 2007, the board
1634shall submit a report to the Financial Services Commission, the
1635President of the Senate, and the Speaker of the House of
1636Representatives which includes an analysis of consolidating the
1637accounts, the actions the board has taken to minimize the cost
1638of carrying debt, and its recommendations for executing the most
1639efficient plan.
1640     c.  Creditors of the Residential Property and Casualty
1641Joint Underwriting Association and of the accounts specified in
1642sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1643and recourse to, the accounts referred to in sub-sub-
1644subparagraphs a.(I) and (II) and shall have no claim against, or
1645recourse to, the account referred to in sub-sub-subparagraph
1646a.(III). Creditors of the Florida Windstorm Underwriting
1647Association shall have a claim against, and recourse to, the
1648account referred to in sub-sub-subparagraph a.(III) and shall
1649have no claim against, or recourse to, the accounts referred to
1650in sub-sub-subparagraphs a.(I) and (II).
1651     d.  Revenues, assets, liabilities, losses, and expenses not
1652attributable to particular accounts shall be prorated among the
1653accounts.
1654     e.  The Legislature finds that the revenues of the
1655corporation are revenues that are necessary to meet the
1656requirements set forth in documents authorizing the issuance of
1657bonds under this subsection.
1658     f.  No part of the income of the corporation may inure to
1659the benefit of any private person.
1660     3.  With respect to a deficit in an account:
1661     a.  After accounting for the Citizens policyholder
1662surcharge imposed under sub-subparagraph i., when the remaining
1663projected deficit incurred in a particular calendar year is not
1664greater than 6 10 percent of the aggregate statewide direct
1665written premium for the subject lines of business for the prior
1666calendar year, the entire deficit shall be recovered through
1667regular assessments of assessable insurers under paragraph (p)
1668and assessable insureds.
1669     b.  After accounting for the Citizens policyholder
1670surcharge imposed under sub-subparagraph i., when the remaining
1671projected deficit incurred in a particular calendar year exceeds
16726 10 percent of the aggregate statewide direct written premium
1673for the subject lines of business for the prior calendar year,
1674the corporation shall levy regular assessments on assessable
1675insurers under paragraph (p) and on assessable insureds in an
1676amount equal to the greater of 6 10 percent of the deficit or 6
167710 percent of the aggregate statewide direct written premium for
1678the subject lines of business for the prior calendar year. Any
1679remaining deficit shall be recovered through emergency
1680assessments under sub-subparagraph d.
1681     c.  Each assessable insurer's share of the amount being
1682assessed under sub-subparagraph a. or sub-subparagraph b. shall
1683be in the proportion that the assessable insurer's direct
1684written premium for the subject lines of business for the year
1685preceding the assessment bears to the aggregate statewide direct
1686written premium for the subject lines of business for that year.
1687The assessment percentage applicable to each assessable insured
1688is the ratio of the amount being assessed under sub-subparagraph
1689a. or sub-subparagraph b. to the aggregate statewide direct
1690written premium for the subject lines of business for the prior
1691year. Assessments levied by the corporation on assessable
1692insurers under sub-subparagraphs a. and b. shall be paid as
1693required by the corporation's plan of operation and paragraph
1694(p). notwithstanding any other provision of this subsection, the
1695aggregate amount of a regular assessment for a deficit incurred
1696in a particular calendar year shall be reduced by the estimated
1697amount to be received by the corporation from the Citizens
1698policyholder surcharge under subparagraph (c)10. and the amount
1699collected or estimated to be collected from the assessment on
1700Citizens policyholders pursuant to sub-subparagraph i.
1701Assessments levied by the corporation on assessable insureds
1702under sub-subparagraphs a. and b. shall be collected by the
1703surplus lines agent at the time the surplus lines agent collects
1704the surplus lines tax required by s. 626.932 and shall be paid
1705to the Florida Surplus Lines Service Office at the time the
1706surplus lines agent pays the surplus lines tax to the Florida
1707Surplus Lines Service Office. Upon receipt of regular
1708assessments from surplus lines agents, the Florida Surplus Lines
1709Service Office shall transfer the assessments directly to the
1710corporation as determined by the corporation.
1711     d.  Upon a determination by the board of governors that a
1712deficit in an account exceeds the amount that will be recovered
1713through regular assessments under sub-subparagraph a. or sub-
1714subparagraph b., plus the amount that is expected to be
1715recovered through surcharges under sub-subparagraph i., as to
1716the remaining projected deficit the board shall levy, after
1717verification by the office, emergency assessments, for as many
1718years as necessary to cover the deficits, to be collected by
1719assessable insurers and the corporation and collected from
1720assessable insureds upon issuance or renewal of policies for
1721subject lines of business, excluding National Flood Insurance
1722policies. The amount of the emergency assessment collected in a
1723particular year shall be a uniform percentage of that year's
1724direct written premium for subject lines of business and all
1725accounts of the corporation, excluding National Flood Insurance
1726Program policy premiums, as annually determined by the board and
1727verified by the office. The office shall verify the arithmetic
1728calculations involved in the board's determination within 30
1729days after receipt of the information on which the determination
1730was based. Notwithstanding any other provision of law, the
1731corporation and each assessable insurer that writes subject
1732lines of business shall collect emergency assessments from its
1733policyholders without such obligation being affected by any
1734credit, limitation, exemption, or deferment. Emergency
1735assessments levied by the corporation on assessable insureds
1736shall be collected by the surplus lines agent at the time the
1737surplus lines agent collects the surplus lines tax required by
1738s. 626.932 and shall be paid to the Florida Surplus Lines
1739Service Office at the time the surplus lines agent pays the
1740surplus lines tax to the Florida Surplus Lines Service Office.
1741The emergency assessments so collected shall be transferred
1742directly to the corporation on a periodic basis as determined by
1743the corporation and shall be held by the corporation solely in
1744the applicable account. The aggregate amount of emergency
1745assessments levied for an account under this sub-subparagraph in
1746any calendar year may, at the discretion of the board of
1747governors, be less than but may not exceed the greater of 10
1748percent of the amount needed to cover the original deficit, plus
1749interest, fees, commissions, required reserves, and other costs
1750associated with financing of the original deficit, or 10 percent
1751of the aggregate statewide direct written premium for subject
1752lines of business and for all accounts of the corporation for
1753the prior year, plus interest, fees, commissions, required
1754reserves, and other costs associated with financing the original
1755deficit.
1756     e.  The corporation may pledge the proceeds of assessments,
1757projected recoveries from the Florida Hurricane Catastrophe
1758Fund, other insurance and reinsurance recoverables, policyholder
1759surcharges and other surcharges, and other funds available to
1760the corporation as the source of revenue for and to secure bonds
1761issued under paragraph (p), bonds or other indebtedness issued
1762under subparagraph (c)3., or lines of credit or other financing
1763mechanisms issued or created under this subsection, or to retire
1764any other debt incurred as a result of deficits or events giving
1765rise to deficits, or in any other way that the board determines
1766will efficiently recover such deficits. The purpose of the lines
1767of credit or other financing mechanisms is to provide additional
1768resources to assist the corporation in covering claims and
1769expenses attributable to a catastrophe. As used in this
1770subsection, the term "assessments" includes regular assessments
1771under sub-subparagraph a., sub-subparagraph b., or subparagraph
1772(p)1. and emergency assessments under sub-subparagraph d.
1773Emergency assessments collected under sub-subparagraph d. are
1774not part of an insurer's rates, are not premium, and are not
1775subject to premium tax, fees, or commissions; however, failure
1776to pay the emergency assessment shall be treated as failure to
1777pay premium. The emergency assessments under sub-subparagraph d.
1778shall continue as long as any bonds issued or other indebtedness
1779incurred with respect to a deficit for which the assessment was
1780imposed remain outstanding, unless adequate provision has been
1781made for the payment of such bonds or other indebtedness
1782pursuant to the documents governing such bonds or other
1783indebtedness.
1784     f.  As used in this subsection for purposes of any deficit
1785incurred on or after January 25, 2007, the term "subject lines
1786of business" means insurance written by assessable insurers or
1787procured by assessable insureds for all property and casualty
1788lines of business in this state, but not including workers'
1789compensation or medical malpractice. As used in the sub-
1790subparagraph, the term "property and casualty lines of business"
1791includes all lines of business identified on Form 2, Exhibit of
1792Premiums and Losses, in the annual statement required of
1793authorized insurers by s. 624.424 and any rule adopted under
1794this section, except for those lines identified as accident and
1795health insurance and except for policies written under the
1796National Flood Insurance Program or the Federal Crop Insurance
1797Program. For purposes of this sub-subparagraph, the term
1798"workers' compensation" includes both workers' compensation
1799insurance and excess workers' compensation insurance.
1800     g.  The Florida Surplus Lines Service Office shall
1801determine annually the aggregate statewide written premium in
1802subject lines of business procured by assessable insureds and
1803shall report that information to the corporation in a form and
1804at a time the corporation specifies to ensure that the
1805corporation can meet the requirements of this subsection and the
1806corporation's financing obligations.
1807     h.  The Florida Surplus Lines Service Office shall verify
1808the proper application by surplus lines agents of assessment
1809percentages for regular assessments and emergency assessments
1810levied under this subparagraph on assessable insureds and shall
1811assist the corporation in ensuring the accurate, timely
1812collection and payment of assessments by surplus lines agents as
1813required by the corporation.
1814     i.  If a deficit is incurred in any account in 2008 or
1815thereafter, the board of governors shall levy a Citizens
1816policyholder surcharge an immediate assessment against the
1817premium of each nonhomestead property policyholder in all
1818accounts of the corporation, as a uniform percentage of the
1819premium of the policy of up to 10 percent of such premium, which
1820funds shall be used to offset the deficit. If this assessment is
1821insufficient to eliminate the deficit, the board of governors
1822shall levy an additional assessment against all policyholders of
1823the corporation for a 12-month period, which shall be collected
1824at the time of issuance or renewal of a policy, as a uniform
1825percentage of the premium for the policy of up to 15 10 percent
1826of such premium, which funds shall be used to further offset the
1827deficit. Citizens policyholder surcharges under this sub-
1828subparagraph are not considered premium and are not subject to
1829commissions, fees, or premium taxes. However, failure to pay
1830such surcharges shall be treated as failure to pay premium.
1831     j.  If the amount of any assessments or surcharges
1832collected from corporation policyholders, assessable insurers or
1833their policyholders, or assessable insureds exceeds the amount
1834of the deficits, such excess amounts shall be remitted to and
1835retained by the corporation in a reserve to be used by the
1836corporation, as determined by the board of governors and
1837approved by the office, to pay claims or reduce any past,
1838present, or future plan-year deficits or to reduce outstanding
1839debt. The board of governors shall maintain separate accounting
1840records that consolidate data for nonhomestead properties,
1841including, but not limited to, number of policies, insured
1842values, premiums written, and losses. The board of governors
1843shall annually report to the office and the Legislature a
1844summary of such data.
1845     (c)  The plan of operation of the corporation:
1846     1.  Must provide for adoption of residential property and
1847casualty insurance policy forms and commercial residential and
1848nonresidential property insurance forms, which forms must be
1849approved by the office prior to use. The corporation shall adopt
1850the following policy forms:
1851     a.  Standard personal lines policy forms that are
1852comprehensive multiperil policies providing full coverage of a
1853residential property equivalent to the coverage provided in the
1854private insurance market under an HO-3, HO-4, or HO-6 policy.
1855     b.  Basic personal lines policy forms that are policies
1856similar to an HO-8 policy or a dwelling fire policy that provide
1857coverage meeting the requirements of the secondary mortgage
1858market, but which coverage is more limited than the coverage
1859under a standard policy.
1860     c.  Commercial lines residential and nonresidential policy
1861forms that are generally similar to the basic perils of full
1862coverage obtainable for commercial residential structures and
1863commercial nonresidential structures in the admitted voluntary
1864market.
1865     d.  Personal lines and commercial lines residential
1866property insurance forms that cover the peril of wind only. The
1867forms are applicable only to residential properties located in
1868areas eligible for coverage under the high-risk account referred
1869to in sub-subparagraph (b)2.a.
1870     e.  Commercial lines nonresidential property insurance
1871forms that cover the peril of wind only. The forms are
1872applicable only to nonresidential properties located in areas
1873eligible for coverage under the high-risk account referred to in
1874sub-subparagraph (b)2.a.
1875     f.  The corporation may adopt variations of the policy
1876forms listed in sub-subparagraphs a.-e. that contain more
1877restrictive coverage.
1878     2.a.  Must provide that the corporation adopt a program in
1879which the corporation and authorized insurers enter into quota
1880share primary insurance agreements for hurricane coverage, as
1881defined in s. 627.4025(2)(a), for eligible risks, and adopt
1882property insurance forms for eligible risks which cover the
1883peril of wind only. As used in this subsection, the term:
1884     (I)  "Quota share primary insurance" means an arrangement
1885in which the primary hurricane coverage of an eligible risk is
1886provided in specified percentages by the corporation and an
1887authorized insurer. The corporation and authorized insurer are
1888each solely responsible for a specified percentage of hurricane
1889coverage of an eligible risk as set forth in a quota share
1890primary insurance agreement between the corporation and an
1891authorized insurer and the insurance contract. The
1892responsibility of the corporation or authorized insurer to pay
1893its specified percentage of hurricane losses of an eligible
1894risk, as set forth in the quota share primary insurance
1895agreement, may not be altered by the inability of the other
1896party to the agreement to pay its specified percentage of
1897hurricane losses. Eligible risks that are provided hurricane
1898coverage through a quota share primary insurance arrangement
1899must be provided policy forms that set forth the obligations of
1900the corporation and authorized insurer under the arrangement,
1901clearly specify the percentages of quota share primary insurance
1902provided by the corporation and authorized insurer, and
1903conspicuously and clearly state that neither the authorized
1904insurer nor the corporation may be held responsible beyond its
1905specified percentage of coverage of hurricane losses.
1906     (II)  "Eligible risks" means personal lines residential and
1907commercial lines residential risks that meet the underwriting
1908criteria of the corporation and are located in areas that were
1909eligible for coverage by the Florida Windstorm Underwriting
1910Association on January 1, 2002.
1911     b.  The corporation may enter into quota share primary
1912insurance agreements with authorized insurers at corporation
1913coverage levels of 90 percent and 50 percent.
1914     c.  If the corporation determines that additional coverage
1915levels are necessary to maximize participation in quota share
1916primary insurance agreements by authorized insurers, the
1917corporation may establish additional coverage levels. However,
1918the corporation's quota share primary insurance coverage level
1919may not exceed 90 percent.
1920     d.  Any quota share primary insurance agreement entered
1921into between an authorized insurer and the corporation must
1922provide for a uniform specified percentage of coverage of
1923hurricane losses, by county or territory as set forth by the
1924corporation board, for all eligible risks of the authorized
1925insurer covered under the quota share primary insurance
1926agreement.
1927     e.  Any quota share primary insurance agreement entered
1928into between an authorized insurer and the corporation is
1929subject to review and approval by the office. However, such
1930agreement shall be authorized only as to insurance contracts
1931entered into between an authorized insurer and an insured who is
1932already insured by the corporation for wind coverage.
1933     f.  For all eligible risks covered under quota share
1934primary insurance agreements, the exposure and coverage levels
1935for both the corporation and authorized insurers shall be
1936reported by the corporation to the Florida Hurricane Catastrophe
1937Fund. For all policies of eligible risks covered under quota
1938share primary insurance agreements, the corporation and the
1939authorized insurer shall maintain complete and accurate records
1940for the purpose of exposure and loss reimbursement audits as
1941required by Florida Hurricane Catastrophe Fund rules. The
1942corporation and the authorized insurer shall each maintain
1943duplicate copies of policy declaration pages and supporting
1944claims documents.
1945     g.  The corporation board shall establish in its plan of
1946operation standards for quota share agreements which ensure that
1947there is no discriminatory application among insurers as to the
1948terms of quota share agreements, pricing of quota share
1949agreements, incentive provisions if any, and consideration paid
1950for servicing policies or adjusting claims.
1951     h.  The quota share primary insurance agreement between the
1952corporation and an authorized insurer must set forth the
1953specific terms under which coverage is provided, including, but
1954not limited to, the sale and servicing of policies issued under
1955the agreement by the insurance agent of the authorized insurer
1956producing the business, the reporting of information concerning
1957eligible risks, the payment of premium to the corporation, and
1958arrangements for the adjustment and payment of hurricane claims
1959incurred on eligible risks by the claims adjuster and personnel
1960of the authorized insurer. Entering into a quota sharing
1961insurance agreement between the corporation and an authorized
1962insurer shall be voluntary and at the discretion of the
1963authorized insurer.
1964     3.  May provide that the corporation may employ or
1965otherwise contract with individuals or other entities to provide
1966administrative or professional services that may be appropriate
1967to effectuate the plan. The corporation shall have the power to
1968borrow funds, by issuing bonds or by incurring other
1969indebtedness, and shall have other powers reasonably necessary
1970to effectuate the requirements of this subsection, including,
1971without limitation, the power to issue bonds and incur other
1972indebtedness in order to refinance outstanding bonds or other
1973indebtedness. The corporation may, but is not required to, seek
1974judicial validation of its bonds or other indebtedness under
1975chapter 75. The corporation may issue bonds or incur other
1976indebtedness, or have bonds issued on its behalf by a unit of
1977local government pursuant to subparagraph (p)2., in the absence
1978of a hurricane or other weather-related event, upon a
1979determination by the corporation, subject to approval by the
1980office, that such action would enable it to efficiently meet the
1981financial obligations of the corporation and that such
1982financings are reasonably necessary to effectuate the
1983requirements of this subsection. The corporation is authorized
1984to take all actions needed to facilitate tax-free status for any
1985such bonds or indebtedness, including formation of trusts or
1986other affiliated entities. The corporation shall have the
1987authority to pledge assessments, projected recoveries from the
1988Florida Hurricane Catastrophe Fund, other reinsurance
1989recoverables, market equalization and other surcharges, and
1990other funds available to the corporation as security for bonds
1991or other indebtedness. In recognition of s. 10, Art. I of the
1992State Constitution, prohibiting the impairment of obligations of
1993contracts, it is the intent of the Legislature that no action be
1994taken whose purpose is to impair any bond indenture or financing
1995agreement or any revenue source committed by contract to such
1996bond or other indebtedness.
1997     4.a.  Must require that the corporation operate subject to
1998the supervision and approval of a board of governors consisting
1999of eight individuals who are residents of this state, from
2000different geographical areas of this state. The Governor, the
2001Chief Financial Officer, the President of the Senate, and the
2002Speaker of the House of Representatives shall each appoint two
2003members of the board. At least one of the two members appointed
2004by each appointing officer must have demonstrated expertise in
2005insurance. The Chief Financial Officer shall designate one of
2006the appointees as chair. All board members serve at the pleasure
2007of the appointing officer. All members of the board of governors
2008are subject to removal at will by the officers who appointed
2009them. All board members, including the chair, must be appointed
2010to serve for 3-year terms beginning annually on a date
2011designated by the plan. Any board vacancy shall be filled for
2012the unexpired term by the appointing officer. The Chief
2013Financial Officer shall appoint a technical advisory group to
2014provide information and advice to the board of governors in
2015connection with the board's duties under this subsection. The
2016executive director and senior managers of the corporation shall
2017be engaged by the board and serve at the pleasure of the board.
2018Any executive director appointed on or after July 1, 2006, is
2019subject to confirmation by the Senate. The executive director is
2020responsible for employing other staff as the corporation may
2021require, subject to review and concurrence by the board.
2022     b.  The board shall create a Market Accountability Advisory
2023Committee to assist the corporation in developing awareness of
2024its rates and its customer and agent service levels in
2025relationship to the voluntary market insurers writing similar
2026coverage. The members of the advisory committee shall consist of
2027the following 11 persons, one of whom must be elected chair by
2028the members of the committee: four representatives, one
2029appointed by the Florida Association of Insurance Agents, one by
2030the Florida Association of Insurance and Financial Advisors, one
2031by the Professional Insurance Agents of Florida, and one by the
2032Latin American Association of Insurance Agencies; three
2033representatives appointed by the insurers with the three highest
2034voluntary market share of residential property insurance
2035business in the state; one representative from the Office of
2036Insurance Regulation; one consumer appointed by the board who is
2037insured by the corporation at the time of appointment to the
2038committee; one representative appointed by the Florida
2039Association of Realtors; and one representative appointed by the
2040Florida Bankers Association. All members must serve for 3-year
2041terms and may serve for consecutive terms. The committee shall
2042report to the corporation at each board meeting on insurance
2043market issues which may include rates and rate competition with
2044the voluntary market; service, including policy issuance, claims
2045processing, and general responsiveness to policyholders,
2046applicants, and agents; and matters relating to depopulation.
2047     5.  Must provide a procedure for determining the
2048eligibility of a risk for coverage, as follows:
2049     a.  Subject to the provisions of s. 627.3517, with respect
2050to personal lines residential risks, if the risk is offered
2051coverage from an authorized insurer at the insurer's approved
2052rate under either a standard policy including wind coverage or,
2053if consistent with the insurer's underwriting rules as filed
2054with the office, a basic policy including wind coverage, for a
2055new application to the corporation for coverage, the risk is not
2056eligible for any policy issued by the corporation unless the
2057premium for coverage from the authorized insurer is more than 15
2058percent greater than the premium for comparable coverage from
2059the corporation. If the risk is not able to obtain any such
2060offer, the risk is eligible for either a standard policy
2061including wind coverage or a basic policy including wind
2062coverage issued by the corporation; however, if the risk could
2063not be insured under a standard policy including wind coverage
2064regardless of market conditions, the risk shall be eligible for
2065a basic policy including wind coverage unless rejected under
2066subparagraph 9. However, with regard to a policyholder of the
2067corporation or a policyholder removed from the corporation
2068through an assumption agreement until the end of the assumption
2069period, the policyholder remains eligible for coverage from the
2070corporation regardless of any offer of coverage from an
2071authorized insurer or surplus lines insurer. The corporation
2072shall determine the type of policy to be provided on the basis
2073of objective standards specified in the underwriting manual and
2074based on generally accepted underwriting practices.
2075     (I)  If the risk accepts an offer of coverage through the
2076market assistance plan or an offer of coverage through a
2077mechanism established by the corporation before a policy is
2078issued to the risk by the corporation or during the first 30
2079days of coverage by the corporation, and the producing agent who
2080submitted the application to the plan or to the corporation is
2081not currently appointed by the insurer, the insurer shall:
2082     (A)  Pay to the producing agent of record of the policy,
2083for the first year, an amount that is the greater of the
2084insurer's usual and customary commission for the type of policy
2085written or a fee equal to the usual and customary commission of
2086the corporation; or
2087     (B)  Offer to allow the producing agent of record of the
2088policy to continue servicing the policy for a period of not less
2089than 1 year and offer to pay the agent the greater of the
2090insurer's or the corporation's usual and customary commission
2091for the type of policy written.
2092
2093If the producing agent is unwilling or unable to accept
2094appointment, the new insurer shall pay the agent in accordance
2095with sub-sub-sub-subparagraph (A).
2096     (II)  When the corporation enters into a contractual
2097agreement for a take-out plan, the producing agent of record of
2098the corporation policy is entitled to retain any unearned
2099commission on the policy, and the insurer shall:
2100     (A)  Pay to the producing agent of record of the
2101corporation policy, for the first year, an amount that is the
2102greater of the insurer's usual and customary commission for the
2103type of policy written or a fee equal to the usual and customary
2104commission of the corporation; or
2105     (B)  Offer to allow the producing agent of record of the
2106corporation policy to continue servicing the policy for a period
2107of not less than 1 year and offer to pay the agent the greater
2108of the insurer's or the corporation's usual and customary
2109commission for the type of policy written.
2110
2111If the producing agent is unwilling or unable to accept
2112appointment, the new insurer shall pay the agent in accordance
2113with sub-sub-sub-subparagraph (A).
2114     b.  With respect to commercial lines residential risks, for
2115a new application to the corporation for coverage, if the risk
2116is offered coverage under a policy including wind coverage from
2117an authorized insurer at its approved rate, the risk is not
2118eligible for any policy issued by the corporation unless the
2119premium for coverage from the authorized insurer is more than 15
2120percent greater than the premium for comparable coverage from
2121the corporation. If the risk is not able to obtain any such
2122offer, the risk is eligible for a policy including wind coverage
2123issued by the corporation. However, with regard to a
2124policyholder of the corporation or a policyholder removed from
2125the corporation through an assumption agreement until the end of
2126the assumption period, the policyholder remains eligible for
2127coverage from the corporation regardless of any offer of
2128coverage from an authorized insurer or surplus lines insurer.
2129     (I)  If the risk accepts an offer of coverage through the
2130market assistance plan or an offer of coverage through a
2131mechanism established by the corporation before a policy is
2132issued to the risk by the corporation or during the first 30
2133days of coverage by the corporation, and the producing agent who
2134submitted the application to the plan or the corporation is not
2135currently appointed by the insurer, the insurer shall:
2136     (A)  Pay to the producing agent of record of the policy,
2137for the first year, an amount that is the greater of the
2138insurer's usual and customary commission for the type of policy
2139written or a fee equal to the usual and customary commission of
2140the corporation; or
2141     (B)  Offer to allow the producing agent of record of the
2142policy to continue servicing the policy for a period of not less
2143than 1 year and offer to pay the agent the greater of the
2144insurer's or the corporation's usual and customary commission
2145for the type of policy written.
2146
2147If the producing agent is unwilling or unable to accept
2148appointment, the new insurer shall pay the agent in accordance
2149with sub-sub-sub-subparagraph (A).
2150     (II)  When the corporation enters into a contractual
2151agreement for a take-out plan, the producing agent of record of
2152the corporation policy is entitled to retain any unearned
2153commission on the policy, and the insurer shall:
2154     (A)  Pay to the producing agent of record of the
2155corporation policy, for the first year, an amount that is the
2156greater of the insurer's usual and customary commission for the
2157type of policy written or a fee equal to the usual and customary
2158commission of the corporation; or
2159     (B)  Offer to allow the producing agent of record of the
2160corporation policy to continue servicing the policy for a period
2161of not less than 1 year and offer to pay the agent the greater
2162of the insurer's or the corporation's usual and customary
2163commission for the type of policy written.
2164
2165If the producing agent is unwilling or unable to accept
2166appointment, the new insurer shall pay the agent in accordance
2167with sub-sub-sub-subparagraph (A).
2168     c.  For purposes of determining comparable coverage under
2169sub-subparagraphs a. and b., the comparison shall be based on
2170those forms and coverages that are reasonably comparable. The
2171corporation may rely on a determination of comparable coverage
2172and premium made by the producing agent who submits the
2173application to the corporation, made in the agent's capacity as
2174the corporation's agent. A comparison may be made solely of the
2175premium with respect to the main building or structure only on
2176the following basis: the same coverage A or other building
2177limits; the same percentage hurricane deductible that applies on
2178an annual basis or that applies to each hurricane for commercial
2179residential property; the same percentage of ordinance and law
2180coverage, if the same limit is offered by both the corporation
2181and the authorized insurer; the same mitigation credits, to the
2182extent the same types of credits are offered both by the
2183corporation and the authorized insurer; the same method for loss
2184payment, such as replacement cost or actual cash value, if the
2185same method is offered both by the corporation and the
2186authorized insurer in accordance with underwriting rules; and
2187any other form or coverage that is reasonably comparable as
2188determined by the board. If an application is submitted to the
2189corporation for wind-only coverage in the high-risk account, the
2190premium for the corporation's wind-only policy plus the premium
2191for the ex-wind policy that is offered by an authorized insurer
2192to the applicant shall be compared to the premium for multiperil
2193coverage offered by an authorized insurer, subject to the
2194standards for comparison specified in this subparagraph. If the
2195corporation or the applicant requests from the authorized
2196insurer a breakdown of the premium of the offer by types of
2197coverage so that a comparison may be made by the corporation or
2198its agent and the authorized insurer refuses or is unable to
2199provide such information, the corporation may treat the offer as
2200not being an offer of coverage from an authorized insurer at the
2201insurer's approved rate.
2202     6.  Must include rules for classifications of risks and
2203rates therefor.
2204     7.  Must provide that if premium and investment income for
2205an account attributable to a particular calendar year are in
2206excess of projected losses and expenses for the account
2207attributable to that year, such excess shall be held in surplus
2208in the account. Such surplus shall be available to defray
2209deficits in that account as to future years and shall be used
2210for that purpose prior to assessing assessable insurers and
2211assessable insureds as to any calendar year.
2212     8.  Must provide objective criteria and procedures to be
2213uniformly applied for all applicants in determining whether an
2214individual risk is so hazardous as to be uninsurable. In making
2215this determination and in establishing the criteria and
2216procedures, the following shall be considered:
2217     a.  Whether the likelihood of a loss for the individual
2218risk is substantially higher than for other risks of the same
2219class; and
2220     b.  Whether the uncertainty associated with the individual
2221risk is such that an appropriate premium cannot be determined.
2222
2223The acceptance or rejection of a risk by the corporation shall
2224be construed as the private placement of insurance, and the
2225provisions of chapter 120 shall not apply.
2226     9.  Must provide that the corporation shall make its best
2227efforts to procure catastrophe reinsurance at reasonable rates,
2228to cover its projected 100-year probable maximum loss as
2229determined by the board of governors.
2230     10.  Must provide that in the event of regular deficit
2231assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2232(b)3.b., in the personal lines account, the commercial lines
2233residential account, or the high-risk account, the corporation
2234shall levy upon corporation policyholders in its next rate
2235filing, or by a separate rate filing solely for this purpose, a
2236Citizens policyholder surcharge arising from a regular
2237assessment in such account in a percentage equal to the total
2238amount of such regular assessments divided by the aggregate
2239statewide direct written premium for subject lines of business
2240for the prior calendar year. For purposes of calculating the
2241Citizens policyholder surcharge to be levied under this
2242subparagraph, the total amount of the regular assessment to
2243which this surcharge is related shall be determined as set forth
2244in subparagraph (b)3., without deducting the estimated Citizens
2245policyholder surcharge. Citizens policyholder surcharges under
2246this subparagraph are not considered premium and are not subject
2247to commissions, fees, or premium taxes; however, failure to pay
2248a market equalization surcharge shall be treated as failure to
2249pay premium.
2250     10.11.  The policies issued by the corporation must provide
2251that, if the corporation or the market assistance plan obtains
2252an offer from an authorized insurer to cover the risk at its
2253approved rates, the risk is no longer eligible for renewal
2254through the corporation, except as otherwise provided in this
2255subsection.
2256     11.12.  Corporation policies and applications must include
2257a notice that the corporation policy could, under this section,
2258be replaced with a policy issued by an authorized insurer that
2259does not provide coverage identical to the coverage provided by
2260the corporation. The notice shall also specify that acceptance
2261of corporation coverage creates a conclusive presumption that
2262the applicant or policyholder is aware of this potential.
2263     12.13.  May establish, subject to approval by the office,
2264different eligibility requirements and operational procedures
2265for any line or type of coverage for any specified county or
2266area if the board determines that such changes to the
2267eligibility requirements and operational procedures are
2268justified due to the voluntary market being sufficiently stable
2269and competitive in such area or for such line or type of
2270coverage and that consumers who, in good faith, are unable to
2271obtain insurance through the voluntary market through ordinary
2272methods would continue to have access to coverage from the
2273corporation. When coverage is sought in connection with a real
2274property transfer, such requirements and procedures shall not
2275provide for an effective date of coverage later than the date of
2276the closing of the transfer as established by the transferor,
2277the transferee, and, if applicable, the lender.
2278     13.14.  Must provide that, with respect to the high-risk
2279account, any assessable insurer with a surplus as to
2280policyholders of $25 million or less writing 25 percent or more
2281of its total countrywide property insurance premiums in this
2282state may petition the office, within the first 90 days of each
2283calendar year, to qualify as a limited apportionment company. A
2284regular assessment levied by the corporation on a limited
2285apportionment company for a deficit incurred by the corporation
2286for the high-risk account in 2006 or thereafter may be paid to
2287the corporation on a monthly basis as the assessments are
2288collected by the limited apportionment company from its insureds
2289pursuant to s. 627.3512, but the regular assessment must be paid
2290in full within 12 months after being levied by the corporation.
2291A limited apportionment company shall collect from its
2292policyholders any emergency assessment imposed under sub-
2293subparagraph (b)3.d. The plan shall provide that, if the office
2294determines that any regular assessment will result in an
2295impairment of the surplus of a limited apportionment company,
2296the office may direct that all or part of such assessment be
2297deferred as provided in subparagraph (p)4. However, there shall
2298be no limitation or deferment of an emergency assessment to be
2299collected from policyholders under sub-subparagraph (b)3.d.
2300     14.15.  Must provide that the corporation appoint as its
2301licensed agents only those agents who also hold an appointment
2302as defined in s. 626.015(3) with an insurer who at the time of
2303the agent's initial appointment by the corporation is authorized
2304to write and is actually writing personal lines residential
2305property coverage, commercial residential property coverage, or
2306commercial nonresidential property coverage within the state.
2307     15.16.  Must provide, by July 1, 2007, a premium payment
2308plan option to its policyholders which allows at a minimum for
2309quarterly and semiannual payment of premiums. A monthly payment
2310plan may, but is not required to, be offered.
2311     16.17.  Must limit coverage on mobile homes or manufactured
2312homes built prior to 1994 to actual cash value of the dwelling
2313rather than replacement costs of the dwelling.
2314     17.18.  May provide such limits of coverage as the board
2315determines, consistent with the requirements of this subsection.
2316     18.19.  May require commercial property to meet specified
2317hurricane mitigation construction features as a condition of
2318eligibility for coverage.
2319     (m)1.  Rates for coverage provided by the corporation shall
2320be actuarially sound and subject to the requirements of s.
2321627.062, except as otherwise provided in this paragraph. The
2322corporation shall file its recommended rates with the office at
2323least annually. The corporation shall provide any additional
2324information regarding the rates which the office requires. The
2325office shall consider the recommendations of the board and issue
2326a final order establishing the rates for the corporation within
232745 days after the recommended rates are filed. The corporation
2328may not pursue an administrative challenge or judicial review of
2329the final order of the office.
2330     2.  In addition to the rates otherwise determined pursuant
2331to this paragraph, the corporation shall impose and collect an
2332amount equal to the premium tax provided for in s. 624.509 to
2333augment the financial resources of the corporation.
2334     3.  After the public hurricane loss-projection model under
2335s. 627.06281 has been found to be accurate and reliable by the
2336Florida Commission on Hurricane Loss Projection Methodology,
2337that model shall serve as the minimum benchmark for determining
2338the windstorm portion of the corporation's rates. This
2339subparagraph does not require or allow the corporation to adopt
2340rates lower than the rates otherwise required or allowed by this
2341paragraph.
2342     4.  The rate filings for the corporation which were
2343approved by the office and which took effect January 1, 2007,
2344are rescinded, except for those rates that were lowered. As soon
2345as possible, the corporation shall begin using the lower rates
2346that were in effect on December 31, 2006, and shall provide
2347refunds to policyholders who have paid higher rates as a result
2348of that rate filing. The rates in effect on December 31, 2006,
2349shall remain in effect for the 2007 and 2008 calendar years
2350except for any rate change that results in a lower rate. The
2351next rate change that may increase rates shall take effect
2352January 1, 2009, pursuant to a new rate filing recommended by
2353the corporation and established by the office, subject to the
2354requirements of this paragraph.
2355     5.  Beginning on July 15, 2009, and each year thereafter,
2356the corporation must make a recommended actuarially sound rate
2357filing for each personal and commercial line of business it
2358writes, to be effective no earlier than January 1, 2010.
2359     (p)1.  The corporation shall certify to the office its
2360needs for annual assessments as to a particular calendar year,
2361and for any interim assessments that it deems to be necessary to
2362sustain operations as to a particular year pending the receipt
2363of annual assessments. Upon verification, the office shall
2364approve such certification, and the corporation shall levy such
2365annual or interim assessments. Such assessments shall be
2366prorated as provided in paragraph (b). The corporation shall
2367take all reasonable and prudent steps necessary to collect the
2368amount of assessment due from each assessable insurer,
2369including, if prudent, filing suit to collect such assessment.
2370If the corporation is unable to collect an assessment from any
2371assessable insurer, the uncollected assessments shall be levied
2372as an additional assessment against the assessable insurers and
2373any assessable insurer required to pay an additional assessment
2374as a result of such failure to pay shall have a cause of action
2375against such nonpaying assessable insurer. Assessments shall be
2376included as an appropriate factor in the making of rates. The
2377failure of a surplus lines agent to collect and remit any
2378regular or emergency assessment levied by the corporation is
2379considered to be a violation of s. 626.936 and subjects the
2380surplus lines agent to the penalties provided in that section.
2381     2.  The governing body of any unit of local government, any
2382residents of which are insured by the corporation, may issue
2383bonds as defined in s. 125.013 or s. 166.101 from time to time
2384to fund an assistance program, in conjunction with the
2385corporation, for the purpose of defraying deficits of the
2386corporation. In order to avoid needless and indiscriminate
2387proliferation, duplication, and fragmentation of such assistance
2388programs, any unit of local government, any residents of which
2389are insured by the corporation, may provide for the payment of
2390losses, regardless of whether or not the losses occurred within
2391or outside of the territorial jurisdiction of the local
2392government. Revenue bonds under this subparagraph may not be
2393issued until validated pursuant to chapter 75, unless a state of
2394emergency is declared by executive order or proclamation of the
2395Governor pursuant to s. 252.36 making such findings as are
2396necessary to determine that it is in the best interests of, and
2397necessary for, the protection of the public health, safety, and
2398general welfare of residents of this state and declaring it an
2399essential public purpose to permit certain municipalities or
2400counties to issue such bonds as will permit relief to claimants
2401and policyholders of the corporation. Any such unit of local
2402government may enter into such contracts with the corporation
2403and with any other entity created pursuant to this subsection as
2404are necessary to carry out this paragraph. Any bonds issued
2405under this subparagraph shall be payable from and secured by
2406moneys received by the corporation from emergency assessments
2407under sub-subparagraph (b)3.d., and assigned and pledged to or
2408on behalf of the unit of local government for the benefit of the
2409holders of such bonds. The funds, credit, property, and taxing
2410power of the state or of the unit of local government shall not
2411be pledged for the payment of such bonds. If any of the bonds
2412remain unsold 60 days after issuance, the office shall require
2413all insurers subject to assessment to purchase the bonds, which
2414shall be treated as admitted assets; each insurer shall be
2415required to purchase that percentage of the unsold portion of
2416the bond issue that equals the insurer's relative share of
2417assessment liability under this subsection. An insurer shall not
2418be required to purchase the bonds to the extent that the office
2419determines that the purchase would endanger or impair the
2420solvency of the insurer.
2421     3.a.  The corporation shall adopt one or more programs
2422subject to approval by the office for the reduction of both new
2423and renewal writings in the corporation. Beginning January 1,
24242008, any program the corporation adopts for the payment of
2425bonuses to an insurer for each risk the insurer removes from the
2426corporation shall comply with s. 627.3511(2) and may not exceed
2427the amount referenced in s. 627.3511(2) for each risk removed.
2428The corporation may consider any prudent and not unfairly
2429discriminatory approach to reducing corporation writings, and
2430may adopt a credit against assessment liability or other
2431liability that provides an incentive for insurers to take risks
2432out of the corporation and to keep risks out of the corporation
2433by maintaining or increasing voluntary writings in counties or
2434areas in which corporation risks are highly concentrated and a
2435program to provide a formula under which an insurer voluntarily
2436taking risks out of the corporation by maintaining or increasing
2437voluntary writings will be relieved wholly or partially from
2438assessments under sub-subparagraphs (b)3.a. and b. However, any
2439"take-out bonus" or payment to an insurer must be conditioned on
2440the property being insured for at least 5 years by the insurer,
2441unless canceled or nonrenewed by the policyholder. If the policy
2442is canceled or nonrenewed by the policyholder before the end of
2443the 5-year period, the amount of the take-out bonus must be
2444prorated for the time period the policy was insured. When the
2445corporation enters into a contractual agreement for a take-out
2446plan, the producing agent of record of the corporation policy is
2447entitled to retain any unearned commission on such policy, and
2448the insurer shall either:
2449     (I)  Pay to the producing agent of record of the policy,
2450for the first year, an amount which is the greater of the
2451insurer's usual and customary commission for the type of policy
2452written or a policy fee equal to the usual and customary
2453commission of the corporation; or
2454     (II)  Offer to allow the producing agent of record of the
2455policy to continue servicing the policy for a period of not less
2456than 1 year and offer to pay the agent the insurer's usual and
2457customary commission for the type of policy written. If the
2458producing agent is unwilling or unable to accept appointment by
2459the new insurer, the new insurer shall pay the agent in
2460accordance with sub-sub-subparagraph (I).
2461     b.  Any credit or exemption from regular assessments
2462adopted under this subparagraph shall last no longer than the 3
2463years following the cancellation or expiration of the policy by
2464the corporation. With the approval of the office, the board may
2465extend such credits for an additional year if the insurer
2466guarantees an additional year of renewability for all policies
2467removed from the corporation, or for 2 additional years if the
2468insurer guarantees 2 additional years of renewability for all
2469policies so removed.
2470     c.  There shall be no credit, limitation, exemption, or
2471deferment from emergency assessments to be collected from
2472policyholders pursuant to sub-subparagraph (b)3.d.
2473     4.  The plan shall provide for the deferment, in whole or
2474in part, of the assessment of an assessable insurer, other than
2475an emergency assessment collected from policyholders pursuant to
2476sub-subparagraph (b)3.d., if the office finds that payment of
2477the assessment would endanger or impair the solvency of the
2478insurer. In the event an assessment against an assessable
2479insurer is deferred in whole or in part, the amount by which
2480such assessment is deferred may be assessed against the other
2481assessable insurers in a manner consistent with the basis for
2482assessments set forth in paragraph (b).
2483     5.  Effective July 1, 2007, in order to evaluate the costs
2484and benefits of approved take-out plans, if the corporation pays
2485a bonus or other payment to an insurer for an approved take-out
2486plan, it shall maintain a record of the address or such other
2487identifying information on the property or risk removed in order
2488to track if and when the property or risk is later insured by
2489the corporation.
2490     6.  Any policy taken out, assumed, or removed from the
2491corporation is, as of the effective date of the take-out,
2492assumption, or removal, direct insurance issued by the insurer
2493and not by the corporation, even if the corporation continues to
2494service the policies. This subparagraph applies to policies of
2495the corporation and not policies taken out, assumed, or removed
2496from any other entity.
2497     (w)1.  The following records of the corporation are
2498confidential and exempt from the provisions of s. 119.07(1) and
2499s. 24(a), Art. I of the State Constitution:
2500     a.  Underwriting files, except that a policyholder or an
2501applicant shall have access to his or her own underwriting
2502files. Confidential and exempt underwriting file records may
2503also be released to other governmental agencies upon written
2504request and demonstration of need; such records held by the
2505receiving agency remain confidential and exempt as provided
2506herein.
2507     b.  Claims files, until termination of all litigation and
2508settlement of all claims arising out of the same incident,
2509although portions of the claims files may remain exempt, as
2510otherwise provided by law. Confidential and exempt claims file
2511records may be released to other governmental agencies upon
2512written request and demonstration of need; such records held by
2513the receiving agency remain confidential and exempt as provided
2514for herein.
2515     c.  Records obtained or generated by an internal auditor
2516pursuant to a routine audit, until the audit is completed, or if
2517the audit is conducted as part of an investigation, until the
2518investigation is closed or ceases to be active. An investigation
2519is considered "active" while the investigation is being
2520conducted with a reasonable, good faith belief that it could
2521lead to the filing of administrative, civil, or criminal
2522proceedings.
2523     d.  Matters reasonably encompassed in privileged attorney-
2524client communications.
2525     e.  Proprietary information licensed to the corporation
2526under contract and the contract provides for the confidentiality
2527of such proprietary information.
2528     f.  All information relating to the medical condition or
2529medical status of a corporation employee which is not relevant
2530to the employee's capacity to perform his or her duties, except
2531as otherwise provided in this paragraph. Information that which
2532is exempt shall include, but is not limited to, information
2533relating to workers' compensation, insurance benefits, and
2534retirement or disability benefits.
2535     g.  Upon an employee's entrance into the employee
2536assistance program, a program to assist any employee who has a
2537behavioral or medical disorder, substance abuse problem, or
2538emotional difficulty which affects the employee's job
2539performance, all records relative to that participation shall be
2540confidential and exempt from the provisions of s. 119.07(1) and
2541s. 24(a), Art. I of the State Constitution, except as otherwise
2542provided in s. 112.0455(11).
2543     h.  Information relating to negotiations for financing,
2544reinsurance, depopulation, or contractual services, until the
2545conclusion of the negotiations.
2546     i.  Minutes of closed meetings regarding underwriting
2547files, and minutes of closed meetings regarding an open claims
2548file until termination of all litigation and settlement of all
2549claims with regard to that claim, except that information
2550otherwise confidential or exempt by law shall will be redacted.
2551     2.  If When an authorized insurer is considering
2552underwriting a risk insured by the corporation, relevant
2553underwriting files and confidential claims files may be released
2554to the insurer provided the insurer agrees in writing, notarized
2555and under oath, to maintain the confidentiality of such files.
2556If When a file is transferred to an insurer that file is no
2557longer a public record because it is not held by an agency
2558subject to the provisions of the public records law.
2559Underwriting files and confidential claims files may also be
2560released to staff of and the board of governors of the market
2561assistance plan established pursuant to s. 627.3515, who must
2562retain the confidentiality of such files, except such files may
2563be released to authorized insurers that are considering assuming
2564the risks to which the files apply, provided the insurer agrees
2565in writing, notarized and under oath, to maintain the
2566confidentiality of such files. Finally, the corporation or the
2567board or staff of the market assistance plan may make the
2568following information obtained from underwriting files and
2569confidential claims files available to licensed general lines
2570insurance agents: name, address, and telephone number of the
2571residential property owner or insured; location of the risk;
2572rating information; loss history; and policy type. The receiving
2573licensed general lines insurance agent must retain the
2574confidentiality of the information received.
2575     3.  A policyholder who has filed suit against the
2576corporation has the right to discover the contents of his or her
2577own claims file to the same extent that discovery of such
2578contents would be available from a private insurer in litigation
2579as provided by the Florida Rules of Civil Procedure, the Florida
2580Evidence Code, and other applicable law. Pursuant to subpoena, a
2581third party has the right to discover the contents of an
2582insured's or applicant's underwriting or claims file to the same
2583extent that discovery of such contents would be available from a
2584private insurer by subpoena as provided by the Florida Rules of
2585Civil Procedure, the Florida Evidence Code, and other applicable
2586law, and subject to any confidentiality protections requested by
2587the corporation and agreed to by the seeking party or ordered by
2588the court. The corporation may release confidential underwriting
2589and claims file contents and information as it deems necessary
2590and appropriate to underwrite or service insurance policies and
2591claims, subject to any confidentiality protections deemed
2592necessary and appropriate by the corporation.
2593     4.2.  Portions of meetings of the corporation are exempt
2594from the provisions of s. 286.011 and s. 24(b), Art. I of the
2595State Constitution wherein confidential underwriting files or
2596confidential open claims files are discussed. All portions of
2597corporation meetings which are closed to the public shall be
2598recorded by a court reporter. The court reporter shall record
2599the times of commencement and termination of the meeting, all
2600discussion and proceedings, the names of all persons present at
2601any time, and the names of all persons speaking. No portion of
2602any closed meeting shall be off the record. Subject to the
2603provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2604notes of any closed meeting shall be retained by the corporation
2605for a minimum of 5 years. A copy of the transcript, less any
2606exempt matters, of any closed meeting wherein claims are
2607discussed shall become public as to individual claims after
2608settlement of the claim.
2609     (dd)1.  For policies subject to nonrenewal as a result of
2610the risk being no longer eligible for coverage due to being
2611valued at $1 million or more, the corporation shall, directly or
2612through the market assistance plan, make information from
2613confidential underwriting and claims files of policyholders
2614available only to licensed general lines agents who register
2615with the corporation to receive such information according to
2616the following procedures:
2617     2.  By August 1, 2006, the corporation shall provide such
2618policyholders who are not eligible for renewal the opportunity
2619to request in writing, within 30 days after the notification is
2620sent, that information from their confidential underwriting and
2621claims files not be released to licensed general lines agents
2622registered pursuant to this paragraph.
2623     3.  By August 1, 2006, the corporation shall make available
2624to licensed general lines agents the registration procedures to
2625be used to obtain confidential information from underwriting and
2626claims files for such policies not eligible for renewal. As a
2627condition of registration, the corporation shall require the
2628licensed general lines agent to attest that the agent has the
2629experience and relationships with authorized or surplus lines
2630carriers to attempt to offer replacement coverage for such
2631policies.
2632     4.  By September 1, 2006, the corporation shall make
2633available through a secured website to licensed general lines
2634agents registered pursuant to this paragraph application,
2635rating, loss history, mitigation, and policy type information
2636relating to such policies not eligible for renewal and for which
2637the policyholder has not requested the corporation withhold such
2638information. The registered licensed general lines agent may use
2639such information to contact and assist the policyholder in
2640securing replacement policies, and the agent may disclose to the
2641policyholder that such information was obtained from the
2642corporation.
2643     (dd)(ee)  The assets of the corporation may be invested and
2644managed by the State Board of Administration.
2645     (ee)(ff)  The office may establish a pilot program to offer
2646optional sinkhole coverage in one or more counties or other
2647territories of the corporation for the purpose of implementing
2648s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2649Florida. Under the pilot program, the corporation is not
2650required to issue a notice of nonrenewal to exclude sinkhole
2651coverage upon the renewal of existing policies, but may exclude
2652such coverage using a notice of coverage change.
2653     Section 14.  Paragraph (b) of subsection (2) of section
2654627.4133, Florida Statutes, is amended to read:
2655     627.4133  Notice of cancellation, nonrenewal, or renewal
2656premium.--
2657     (2)  With respect to any personal lines or commercial
2658residential property insurance policy, including, but not
2659limited to, any homeowner's, mobile home owner's, farmowner's,
2660condominium association, condominium unit owner's, apartment
2661building, or other policy covering a residential structure or
2662its contents:
2663     (b)  The insurer shall give the named insured written
2664notice of nonrenewal, cancellation, or termination at least 100
2665days prior to the effective date of the nonrenewal,
2666cancellation, or termination. However, the insurer shall give at
2667least 100 days' written notice, or written notice by June 1,
2668whichever is earlier, for any nonrenewal, cancellation, or
2669termination that would be effective between June 1 and November
267030. The notice must include the reason or reasons for the
2671nonrenewal, cancellation, or termination, except that:
2672     1.  The insurer shall give the named insured written notice
2673of nonrenewal, cancellation, or termination at least 180 days
2674prior to the effective date of the nonrenewal, cancellation, or
2675termination for a named insured whose residential structure has
2676been insured by that insurer or an affiliated insurer for at
2677least a 5-year period immediately prior to date of the written
2678notice.
2679     2.1.  When cancellation is for nonpayment of premium, at
2680least 10 days' written notice of cancellation accompanied by the
2681reason therefor shall be given. As used in this subparagraph,
2682the term "nonpayment of premium" means failure of the named
2683insured to discharge when due any of her or his obligations in
2684connection with the payment of premiums on a policy or any
2685installment of such premium, whether the premium is payable
2686directly to the insurer or its agent or indirectly under any
2687premium finance plan or extension of credit, or failure to
2688maintain membership in an organization if such membership is a
2689condition precedent to insurance coverage. "Nonpayment of
2690premium" also means the failure of a financial institution to
2691honor an insurance applicant's check after delivery to a
2692licensed agent for payment of a premium, even if the agent has
2693previously delivered or transferred the premium to the insurer.
2694If a dishonored check represents the initial premium payment,
2695the contract and all contractual obligations shall be void ab
2696initio unless the nonpayment is cured within the earlier of 5
2697days after actual notice by certified mail is received by the
2698applicant or 15 days after notice is sent to the applicant by
2699certified mail or registered mail, and if the contract is void,
2700any premium received by the insurer from a third party shall be
2701refunded to that party in full.
2702     3.2.  When such cancellation or termination occurs during
2703the first 90 days during which the insurance is in force and the
2704insurance is canceled or terminated for reasons other than
2705nonpayment of premium, at least 20 days' written notice of
2706cancellation or termination accompanied by the reason therefor
2707shall be given except where there has been a material
2708misstatement or misrepresentation or failure to comply with the
2709underwriting requirements established by the insurer.
2710     4.3.  The requirement for providing written notice of
2711nonrenewal by June 1 of any nonrenewal that would be effective
2712between June 1 and November 30 does not apply to the following
2713situations, but the insurer remains subject to the requirement
2714to provide such notice at least 100 days prior to the effective
2715date of nonrenewal:
2716     a.  A policy that is nonrenewed due to a revision in the
2717coverage for sinkhole losses and catastrophic ground cover
2718collapse pursuant to s. 627.730, as amended by s. 30, chapter
27192007-1, Laws of Florida.
2720     b.  A policy that is nonrenewed by Citizens Property
2721Insurance Corporation, pursuant to s. 627.351(6), for a policy
2722that has been assumed by an authorized insurer offering
2723replacement or renewal coverage to the policyholder.
2724
2725After the policy has been in effect for 90 days, the policy
2726shall not be canceled by the insurer except when there has been
2727a material misstatement, a nonpayment of premium, a failure to
2728comply with underwriting requirements established by the insurer
2729within 90 days of the date of effectuation of coverage, or a
2730substantial change in the risk covered by the policy or when the
2731cancellation is for all insureds under such policies for a given
2732class of insureds. This paragraph does not apply to individually
2733rated risks having a policy term of less than 90 days.
2734     Section 15.  Effective January 1, 2011, section 689.262,
2735Florida Statutes, is created to read:
2736     689.262  Sale of residential property; disclosure of
2737windstorm mitigation rating.--A purchaser of residential
2738property that is located in the wind-borne debris region, as
2739defined in s. 1609.2 of the International Building Code(2006),  
2740must be informed of the windstorm mitigation rating of the
2741structure, based on the uniform home grading scale adopted
2742pursuant to s. 215.55865. The rating must be included in the
2743contract for sale or as a separate document attached to the
2744contract for sale. The Financial Services Commission may adopt
2745rules, consistent with other state laws, to administer this
2746section, including the form of the disclosure and the
2747requirements for the windstorm mitigation inspection or report
2748that is required for purposes of determining the rating.
2749     Section 16.  (1)  By December 15, 2008, Citizens Property
2750Insurance Corporation shall transfer $250 million to the General
2751Revenue Fund, from the personal lines account and the commercial
2752lines account only, if the combined surplus of the personal
2753lines account and commercial lines account as defined in s.
2754627.351(6), Florida Statutes, exceeds $1 billion. The board of
2755governors of Citizens Property Insurance Corporation must make a
2756reasonable estimate of such surplus on or after December 1,
27572008, and no later than December 14, 2008, using generally
2758accepted actuarial and accounting practices, recognizing that
2759audited financial statements will not yet be available.
2760     (2)  Beginning July 1, 2009, the board shall make quarterly
2761transfers of any interest earned prior to the issuance of any
2762surplus notes, interest paid, and principal repaid to the state
2763for any surplus notes issued by the program after December 1,
27642008, to Citizens Property Insurance Corporation, provided such
2765surplus notes were funded exclusively by an appropriation to the
2766program by the Legislature for the 2008-2009 fiscal year. The
2767corporation shall credit each account as defined in s.
2768627.351(6) in a pro rata manner for the funds removed from each
2769account to make the transfer required by subsection (1).
2770     (3)  On July 1, 2009, the State Board of Administration
2771shall transfer to Citizens Property Insurance Corporation any  
2772funds that have not been committed or reserved for insurers
2773approved to receive such funds under the program from the funds
2774that were appropriated from the corporation in 2008-2009 for
2775such purposes.
2776     Section 17.  Citizens Property Insurance Corporation may
2777not use any amendments made to s. 215.5595, Florida Statutes, by
2778this act or any transfer of funds authorized by this act as
2779justification or cause in seeking any rate or assessment
2780increase.
2781     Section 18.  Subsection (3) is added to section 627.06281,
2782Florida Statutes, to read:
2783     627.06281  Public hurricane loss projection model;
2784reporting of data by insurers.--
2785     (3)(a)  A residential property insurer may have access to
2786and use the public hurricane loss projection model, including
2787all assumptions and factors and all detailed loss results, for
2788the purpose of calculating rate indications in a rate filing and
2789for analytical purposes, including any analysis or evaluation of
2790the model required under actuarial standards of practice.
2791     (b)  By January 1, 2009, the office shall establish by rule
2792a fee schedule for access to and the use of the model. The fee
2793schedule must be reasonably calculated to cover only the actual
2794costs of providing access to and the use of the model.
2795     Section 19.  Section 627.0655, Florida Statutes, is amended
2796to read:
2797     627.0655  Policyholder loss or expense-related premium
2798discounts.--An insurer or person authorized to engage in the
2799business of insurance in this state may include, in the premium
2800charged an insured for any policy, contract, or certificate of
2801insurance, a discount based on the fact that another policy,
2802contract, or certificate of any type has been purchased by the
2803insured from the same insurer or insurer group, the Citizens
2804Property Insurance Corporation created under s. 627.351(6) if
2805the same insurance agent is servicing both policies, or an
2806insurer that has removed the policy from the Citizens Property
2807Insurance Corporation if the same insurance agent is servicing
2808both policies.
2809     Section 20.  (1)  The Citizens Property Insurance
2810Corporation Mission Review Task Force is created to analyze and
2811compile available data and to develop a report setting forth the
2812statutory and operational changes needed to return Citizens
2813Property Insurance Corporation to its former role as a state-
2814created, noncompetitive residual market mechanism that provides
2815property insurance coverage to risks that are otherwise entitled
2816but unable to obtain such coverage in the private insurance
2817market. The task force shall submit a report to the Governor,
2818the President of the Senate, and the Speaker of the House of
2819Representatives by January 31, 2009. At a minimum, the task
2820force shall analyze and evaluate relevant and applicable
2821information and data and develop recommendations concerning:
2822     (a)  The nature of Citizens Property Insurance
2823Corporation's role in providing property insurance coverage only
2824if such coverage is not available from private insurers.
2825     (b)  The ability of the admitted market to offer policies
2826to those consumers formerly insured through Citizens Property
2827Insurance Corporation. This consideration shall include, but not
2828be limited to, the availability of private market reinsurance
2829and coverage through the Florida Hurricane Catastrophe Fund and
2830the capacity of the industry to offer policies to former
2831Citizens Property Insurance Corporation policyholders within
2832existing writing ratio limitations.
2833     (c)  The relationship of rates charged by Citizens Property
2834Insurance Corporation to rates charged by private insurers, with
2835due consideration for the corporation's role as a noncompetitive
2836residual market mechanism.
2837     (d)  The relationships between the exposure of Citizens
2838Property Insurance Corporation to catastrophic hurricane losses,
2839the corporation's history of purchasing any reinsurance
2840coverage, and the corporation's capital capacity to meet its
2841potential claim obligations without incurring large deficits.
2842     (e)  The projected assessments on all policies required to
2843offset the lack of capitol to pay claims.
2844     (f)  The projections under paragraph (e) shall be specific
2845to losses of $3 billion, $12 billion, and $23 billion caused by
2846a storm or a group of storms in any given year.
2847     (g)  The operational implications of the variation in the
2848number of policies in force over time in Citizens Property
2849Insurance Corporation and the merits of outsourcing some or all
2850of its operational responsibilities.
2851     (h)  Changes in the mission and operations of Citizens
2852Property Insurance Corporation to reduce or eliminate any
2853adverse effect such mission and operations may be having on the
2854promotion of sound and economic growth and development of the
2855coastal areas of this state.
2856     (i)  Appropriate and consistent geographic boundaries of
2857the high-risk account.
2858     (j)  The rankings, by county, of the average approved rates
2859in Citizens Property Insurance Corporation and any savings
2860associated with policyholder choice in selecting Citizens.
2861     (2)  The task force shall be composed of 11 members as
2862follows:
2863     (a)  Two members appointed by the Speaker of the House of
2864Representatives.
2865     1.  One member representing a property and casualty
2866residential insurer that provides at least 150,000 homeowner's
2867insurance policies in this state at the time of the creation of
2868the task force.
2869     2.  One member representing a surplus lines insurance
2870company.
2871     (b)  Two members appointed by the President of the
2872Senate.
2873     1.  One member representing a property and casualty
2874commercial non-residential insurer.
2875     2.  One member representing a property and casualty
2876residential insurer with fewer than 150,000 homeowner's policies
2877in this state at the time of the creation of the task force.
2878     (c)  Three members appointed by the Governor who are not
2879employed by or professionally affiliated with an insurance
2880company or a subsidiary of an insurance company, at least one of
2881whom must be consumer advocates or members of a consumer
2882advocacy organization or agency.
2883     (d)  Two members appointed by the Chief Financial Officer
2884representing insurance agents in this state.
2885     (e)  One member representing Citizens Property Insurance
2886Corporation selected by Citizens Chairman of the Board.
2887     (f)  The Commissioner of Insurance Regulation or his or her
2888designee.
2889     (3)  The task force shall conduct research, hold public
2890meetings, receive testimony, employ consultants and
2891administrative staff, and undertake other activities determined
2892by its members to be necessary to complete its responsibilities.
2893Citizens Property Insurance Corporation shall have appropriate
2894senior staff attend task force meetings, shall respond to
2895requests for testimony and data by the task force, shall
2896otherwise cooperate with the task force, and shall provide
2897funding for the necessary costs of implementing the provisions
2898of this section.
2899     (4)  A member of the task force may not delegate his or her
2900attendance or voting power to a designee.
2901     (5)  Members of the task force shall serve without
2902compensation but are entitled to receive reimbursement for
2903travel and per diem as provided in s. 112.061, Florida Statutes.
2904     (6)  The appointments to the task force must be completed
2905within 30 calendar days after the effective date of this act,
2906and the task force must hold its initial meeting within 1 month
2907after appointment of all members. The task force shall expire no
2908later than 60 calendar days after submission of the report
2909required in subsection (1).
2910     Section 21.  The Chief Financial Officer shall provide a
2911report on the economic impact on the state of a 1-in-100-year
2912hurricane to the Governor, the President of the Senate, and the
2913Speaker of the House of Representatives by March 1 of each year.
2914The report shall include an estimate of the short-term and long-
2915term fiscal impacts of such a storm on Citizens Property
2916Insurance Corporation, the Florida Hurricane Catastrophe Fund,
2917the private insurance and reinsurance markets, the state
2918economy, and the state debt. The report shall also include an
2919analysis of the average premium increase to fund a 1-in-100-year
2920hurricane event and list the average cost, in both a percentage
2921and dollar amount, impact to consumers on a county-level basis.
2922The report may also include recommendations by the Chief
2923Financial Officer for preparing for such a hurricane and
2924reducing the economic impact of such a hurricane on the state.
2925In preparing the analysis, the Chief Financial Officer shall
2926coordinate with and obtain data from the Office of Insurance
2927Regulation, Citizens Property Insurance Corporation, the Florida
2928Hurricane Catastrophe Fund, the Florida Commission on Hurricane
2929Loss Projection Methodology, the State Board of Administration,
2930the Office of Economic and Demographic Research, and other state
2931agencies.
2932     Section 22.  Section 627.0621, Florida Statutes, is created
2933to read:
2934     627.0621  Transparency in rate regulation.--
2935     (1)  DEFINITIONS.--As used in this section, the term:
2936     (a)  "Rate filing" means any original or amended rate
2937residential property insurance filing.
2938     (b)  "Recommendation" means any proposed, preliminary, or
2939final recommendation from an office actuary reviewing a rate
2940filing with respect to the issue of approval or disapproval of
2941the rate filing or with respect to rate indications that the
2942office would consider acceptable.
2943     (2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2944INFORMATION.--With respect to any rate filing made on after July
29451, 2008, the office shall provide the following information on a
2946publicly accessible Internet website:
2947     (a)  The overall rate change requested by the insurer.
2948     (b)  All assumptions made by the office's actuaries.
2949     (c)  A statement describing any assumptions or methods that
2950deviate from the actuarial standards of practice of the Casualty
2951Actuarial Society or the American Academy of Actuaries,
2952including an explanation of the nature, rationale, and effect of
2953the deviation.
2954     (d)  All recommendations made by any office actuary who
2955reviewed the rate filing.
2956     (e)  Certification by the office's actuary that, based on
2957the actuary's knowledge, his or her recommendations are
2958consistent with accepted actuarial principles.
2959     (f)  The overall rate change approved by the office.
2960     (3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--It is the
2961intent of the Legislature that the principles of the public
2962records and open meetings laws apply to the assertion of
2963attorney-client privilege and work product confidentiality by
2964the office in connection with a challenge to its actions on a
2965rate filing. Therefore, in any administrative or judicial
2966proceeding relating to a rate filing, attorney-client privilege
2967and work product exemptions from disclosure do not apply to
2968communications with office attorneys or records prepared by or
2969at the direction of an office attorney, except when the
2970conditions of paragraphs (a) and (b) have been met:
2971     (a)  The communication or record reflects a mental
2972impression, conclusion, litigation strategy, or legal theory of
2973the attorney or office that was prepared exclusively for civil
2974or criminal litigation or adversarial administrative
2975proceedings.
2976     (b)  The communication occurred or the record was prepared
2977after the initiation of an action in a court of competent
2978jurisdiction, after the issuance of a notice of intent to deny a
2979rate filing, or after the filing of a request for a proceeding
2980under ss. 120.569 and 120.57.
2981     Section 23.  Paragraph (b) of subsection (4) of section
2982215.555, Florida Statutes, is amended to read:
2983     215.555  Florida Hurricane Catastrophe Fund.--
2984     (4)  REIMBURSEMENT CONTRACTS.--
2985     (b)1.  The contract shall contain a promise by the board to
2986reimburse the insurer for 45 percent, 75 percent, or 90 percent
2987of its losses from each covered event in excess of the insurer's
2988retention, plus 5 percent of the reimbursed losses to cover loss
2989adjustment expenses.
2990     2.  The insurer must elect one of the percentage coverage
2991levels specified in this paragraph and may, upon renewal of a
2992reimbursement contract, elect a lower percentage coverage level
2993if no revenue bonds issued under subsection (6) after a covered
2994event are outstanding, or elect a higher percentage coverage
2995level, regardless of whether or not revenue bonds are
2996outstanding. All members of an insurer group must elect the same
2997percentage coverage level. Any joint underwriting association,
2998risk apportionment plan, or other entity created under s.
2999627.351 must elect the 90-percent coverage level.
3000     3.  The contract shall provide that reimbursement amounts
3001shall not be reduced by reinsurance paid or payable to the
3002insurer from other sources.
3003     4.  Notwithstanding any other provision contained in this
3004section, the board shall make available to insurers that
3005purchased coverage provided by this subparagraph in 2007 2006,
3006insurers qualifying as limited apportionment companies under s.
3007627.351(6)(c), and insurers that have been were approved to
3008participate in 2006 or that are approved in 2007 for the
3009Insurance Capital Build-Up Incentive Program pursuant to s.
3010215.5595, a contract or contract addendum that provides an
3011additional amount of reimbursement coverage of up to $10
3012million. The premium to be charged for this additional
3013reimbursement coverage shall be 50 percent of the additional
3014reimbursement coverage provided, which shall include one prepaid
3015reinstatement. The minimum retention level that an eligible
3016participating insurer must retain associated with this
3017additional coverage layer is 30 percent of the insurer's surplus
3018as of December 31, 2007 2006. This coverage shall be in addition
3019to all other coverage that may be provided under this section.
3020The coverage provided by the fund under this subparagraph shall
3021be in addition to the claims-paying capacity as defined in
3022subparagraph (c)1., but only with respect to those insurers that
3023select the additional coverage option and meet the requirements
3024of this subparagraph. The claims-paying capacity with respect to
3025all other participating insurers and limited apportionment
3026companies that do not select the additional coverage option
3027shall be limited to their reimbursement premium's proportionate
3028share of the actual claims-paying capacity otherwise defined in
3029subparagraph (c)1. and as provided for under the terms of the
3030reimbursement contract. Coverage provided in the reimbursement
3031contract shall will not be affected by the additional premiums
3032paid by participating insurers exercising the additional
3033coverage option allowed in this subparagraph. This subparagraph
3034expires on May 31, 2009 2008.
3035     Section 24.  Subsection (1) of section 627.0613, Florida
3036Statutes, is amended to read:
3037     627.0613  Consumer advocate.--The Chief Financial Officer
3038must appoint a consumer advocate who must represent the general
3039public of the state before the department and the office. The
3040consumer advocate must report directly to the Chief Financial
3041Officer, but is not otherwise under the authority of the
3042department or of any employee of the department. The consumer
3043advocate has such powers as are necessary to carry out the
3044duties of the office of consumer advocate, including, but not
3045limited to, the powers to:
3046     (1)  Recommend to the department or office, by petition,
3047the commencement of any proceeding or action; appear in any
3048proceeding or action before the department or office; or appear
3049in any proceeding before the Division of Administrative Hearings
3050or arbitration panel specified in s. 627.062(6) relating to
3051subject matter under the jurisdiction of the department or
3052office.
3053     Section 25.  Subsections (1) and (2) of section 627.712,
3054Florida Statutes, are amended to read:
3055     627.712  Residential windstorm coverage required;
3056availability of exclusions for windstorm or contents.--
3057     (1)  An insurer issuing a residential property insurance
3058policy must provide windstorm coverage. Except as provided in
3059paragraph (2)(c), this section subsection does not apply with
3060respect to risks that are eligible for wind-only coverage from
3061Citizens Property Insurance Corporation under s. 627.351(6).
3062     (2)  A property insurer must make available, at the option
3063of the policyholder, an exclusion of windstorm coverage.
3064     (a)  The coverage may be excluded only if:
3065     (a)1.  When the policyholder is a natural person, the
3066policyholder personally writes and provides to the insurer the
3067following statement in his or her own handwriting and signs his
3068or her name, which must also be signed by every other named
3069insured on the policy, and dated: "I do not want the insurance
3070on my (home/mobile home/condominium unit) to pay for damage from
3071windstorms. I will pay those costs. My insurance will not."
3072     2.  When the policyholder is other than a natural person,
3073the policyholder provides to the insurer on the policyholder's
3074letterhead the following statement that must be signed by the
3075policyholder's authorized representative and dated: "  (Name of
3076entity)   does not want the insurance on its   (type of
3077structure)   to pay for damage from windstorms.   (Name of
3078entity)   will be responsible for these costs.   (Name of
3079entity's)   insurance will not."
3080     (b)  If the structure insured by the policy is subject to a
3081mortgage or lien, the policyholder must provide the insurer with
3082a written statement from the mortgageholder or lienholder
3083indicating that the mortgageholder or lienholder approves the
3084policyholder electing to exclude windstorm coverage or hurricane
3085coverage from his or her or its property insurance policy.
3086     (c)  If the residential structure is eligible for wind-only
3087coverage from Citizens Property Insurance Corporation, an
3088insurer nonrenewing a policy and issuing a replacement policy,
3089or issuing a new policy, that does not provide wind coverage
3090shall provide a notice to the mortgageholder or lienholder
3091indicating the policyholder has elected coverage that does not
3092cover wind.
3093     Section 26.  The provisions of this act shall supersede and
3094control over any conflicting provisions adopted in House Bill
30955057, 2008 Regular Session, to the extent of such conflict, if
3096that bill becomes a law.
3097     Section 27.  Except as otherwise expressly provided in this
3098act, this act shall take effect July 1, 2008.
3099
3100
3101
3102
3103
3104
-----------------------------------------------------
3105
T I T L E  A M E N D M E N T
3106     Remove the entire title and insert:
3107
A bill to be entitled
3108An act relating to insurance; providing a short title; amending
3109s. 215.5595, F.S.; revising legislative findings; providing for
3110an appropriation of state funds in exchange for surplus notes
3111issued by residential property insurers under the program;
3112revising the conditions and requirements for providing funds to
3113insurers under the program; requiring a commitment by the
3114insurer to meet minimum premium-to-surplus writing ratios for
3115residential property insurance and for taking policies out of
3116Citizens Property Insurance Corporation; requiring insurers to
3117commit to maintaining certain levels of surplus and reinsurance;
3118authorizing the State Board of Administration to charge a fee
3119for late payments; providing for payment of costs and fees
3120incurred by the board in administering the program from funds
3121appropriated to the program, subject to a specified limit;
3122requiring the board to submit an annual report to the
3123Legislature on the program and insurer compliance with certain
3124requirements; providing that amendments made by the act do not
3125affect the terms of surplus notes approved prior to a specified
3126date; authorizing the State Board of Administration and an
3127insurer to renegotiate such terms consistent with such
3128amendments; requiring the State Board of Administration to
3129transfer to Citizens Property Insurance Corporation certain
3130uncommitted or unreserved funds; amending s. 624.3161, F.S.;
3131authorizing the Office of Insurance Regulation to require an
3132insurer to file its claims handling practices and procedures as
3133a public record based on findings of a market conduct
3134examination; amending s. 624.4211, F.S.; increasing the maximum
3135amounts of administrative fines that may be imposed upon an
3136insurer by the Office of Insurance Regulation for nonwillful and
3137willful violations of an order or rule of the office or any
3138provision of the Florida Insurance Code; creating s. 624.4213,
3139F.S.; specifying requirements for submission of a document or
3140information to the Office of Insurance Regulation or the
3141Department of Financial Services in order for a person to claim
3142that the document is a trade secret; requiring each page or
3143portion to be labeled as a trade secret and be separated from
3144non-trade secret material; requiring the submitting party to
3145include an affidavit certifying certain information about the
3146documents claimed to be trade secrets; requiring the office or
3147department to notify persons who submit trade secret documents
3148of any public-records request and the opportunity to file a
3149court action to bar disclosure; specifying conditions for the
3150office to retain or release such documents; creating s.
3151624.4305, F.S.; requiring that an insurer planning to nonrenew
3152more than a specified number of residential property insurance
3153policies notify the Office of Insurance Regulation and obtain
3154approval for such nonrenewals; specifying procedures for
3155issuance of such notice; amending s. 626.9521, F.S.; increasing
3156the maximum fines that may be imposed by the office or
3157department for nonwillful and willful violations of state law
3158regarding unfair methods of competition and unfair or deceptive
3159acts or practices related to insurance; amending s. 626.9541,
3160F.S.; specifying an additional unfair claims settlement
3161practice; amending s. 627.0612, F.S.; providing criteria for
3162administrative hearings to determine whether an insurer's
3163property insurance rates, rating manuals, premium credits,
3164discount schedules, and surcharge schedules comply with the law;
3165providing for entry of certain  orders; amending s. 627.062,
3166F.S.; requiring that an insurer seeking a rate for property
3167insurance that is greater than the rate most recently approved
3168by the Office of Insurance Regulation make a "file and use"
3169filing for all such rate filings made after a specified date;
3170revising the factors the office must consider in reviewing a
3171rate filing; prohibiting the Office of Insurance Regulation from
3172disapproving as excessive a rate solely because the insurer
3173obtained reinsurance covering a specified probably maximum loss;
3174allowing the office to disapprove a rate as excessive within 1
3175year after the rate has been approved under certain conditions
3176related to nonrenewal of policies by the insurer; requiring the
3177Division of Administrative Hearings to expedite a hearing
3178request by an insurer and for the administrative law judge to
3179commence the hearing within a specified time; authorizing an
3180insurer to request an expedited appellate review pursuant to the
3181Florida Rules of Appellate Procedure; expressing legislative
3182intent for an expedited appellate review; revising provisions
3183relating to the submission of a disputed rate filing, other than
3184a rate filing for medical malpractice insurance, to an
3185arbitration panel in lieu of an administrative hearing if the
3186rate is filed before a specified date; deleting provisions
3187relating to mandatory arbitration in lieu of certain hearings;
3188amending s. 627.0628, F.S.; providing legislative findings
3189relating to final agency action for insurance ratemaking;
3190requiring the Financial Services Commission to consider and
3191adopt findings relating to certain actuarial models, principles,
3192standards, or models for certain maximum loss level
3193calculations; requiring that with respect to rate filings,
3194insurers must use actuarial methods or models found to be
3195accurate or reliable by the Florida Commission on Hurricane Loss
3196Projection Methodology; deleting the requirement for the Office
3197of Insurance Regulation and the Consumer Advocate to have access
3198to all assumptions of a hurricane loss model in order for a
3199model that has been found to be accurate and reliable by the
3200Florida Commission on Hurricane Loss Projection Methodology to
3201be admissible in a rate proceeding; deleting cross-references to
3202conform to changes made by the act; amending s. 627.0629, F.S.;
3203requiring that the Office of Insurance Regulation develop and
3204make publicly available before a specified deadline a proposed
3205method for insurers to establish windstorm mitigation premium
3206discounts that correlate to the uniform home rating scale;
3207requiring that the Financial Services Commission adopt rules
3208before a specified deadline; requiring insurers to make rate
3209filings pursuant to such method; authorizing the commission to
3210make changes by rule to the uniform home grading scale and
3211specify by rule the minimum required discounts, credits, or
3212other rate differentials; requiring that such rate differentials
3213be consistent with generally accepted actuarial principles and
3214wind loss mitigation studies; amending s. 627.351, F.S.,
3215relating to Citizens Property Insurance Corporation; deleting a
3216provision to conform to changes made in the act; deleting
3217provisions defining the terms "homestead property" and
3218"nonhomestead property"; increasing threshold replacement costs
3219of certain structures for eligibility for coverage by the
3220corporation; deleting requirements for certain properties to
3221meeting building code plus requirements as a condition of
3222eligibility for coverage by the corporation; decreasing the
3223value at which certain structures are eligible for coverage;
3224requiring written disclosure of windstorm mitigation ratings for
3225certain structures; deleting outdated provisions requiring the
3226corporation to submit a report for approval of offering
3227multiperil coverage; revising threshold amounts of deficits
3228incurred in a calendar year on which the decision to levy
3229assessments and the types of such assessments are based;
3230revising the formula used to calculate shares of assessments
3231owed by certain assessable insureds; requiring that the board of
3232governors make certain determinations before levying emergency
3233assessments; providing the board of governors with discretion to
3234set the amount of an emergency assessment within specified
3235limits; requiring the board of governors to levy a Citizens
3236policyholder surcharge under certain conditions; increasing the
3237amount of the surcharge; deleting a provision requiring the levy
3238of an immediate assessment against certain policyholders under
3239such conditions; requiring that funds collected from the levy of
3240such surcharges be used for certain purposes; providing that
3241such surcharges are not considered premium and are not subject
3242to commissions, fees, or premium taxes; requiring that the
3243failure to pay such surcharges be treated as failure to pay
3244premium; requiring that the amount of any assessment or
3245surcharge which exceeds the amount of deficits be remitted to
3246and used by the corporation for specified purposes; deleting
3247provisions requiring that the plan of operation of the
3248corporation provide for the levy of a Citizens policyholder
3249surcharge if regular deficit assessments are levied as a result
3250of deficits in certain accounts; deleting provisions related to
3251the calculation, classification, and nonpayment of such
3252surcharge; requiring that the corporation make an annual filing
3253for each personal or commercial line of business it writes,
3254beginning on a specified date; deleting a provision requiring an
3255insurer to purchase bonds that remain unsold; deleting
3256provisions requiring the corporation to make certain
3257confidential underwriting and claims files available to agents
3258to conform to changes made by the act relating to ineligibility
3259of certain dwellings; clarifying the right of certain parties to
3260discover underwriting and claims file records; authorizing the
3261corporation to release such records as it deems necessary;  
3262amending s. 627.4133, F.S.; requiring insurers to provide
3263written notice of certain cancellations, nonrenewals, or
3264terminations; creating s. 689.262, F.S.; requiring a purchaser
3265of residential property in wind-borne debris regions to be
3266presented with the windstorm mitigation rating of the structure;
3267authorizing the Financial Services Commission to adopt rules;
3268requiring Citizens Property Insurance Corporation to transfer
3269funds to the General Revenue Fund if the losses due to a
3270hurricane do not exceed a specified amount; requiring the board
3271of governors of Citizens Property Insurance Corporation to make
3272a reasonable estimate of such losses by a certain date;
3273requiring the board to make quarterly transfers of funds to the
3274corporation under certain circumstances; requiring the
3275corporation to credit certain accounts for funds removed to make
3276certain transfers; requiring the State Board of Administration
3277to transfer to Citizens Property Insurance Corporation certain
3278uncommitted or unreserved funds under certain circumstances;  
3279prohibiting Citizens Property Insurance Corporation from using
3280certain statutory changes or authorized transfers of funds as
3281justification or cause to seek any rate or assessment increase;
3282amending s. 627.06281, F.S.; providing for residential property
3283insurers to have access to and use a public hurricane loss
3284projection model; requiring the office to establish a fee
3285schedule for such model access and use; amending s. 627.0655,
3286F.S.; expanding application of policyholder loss or expense-
3287related premium discounts; creating the Citizens Property
3288Insurance Corporation Mission Review Task Force; providing
3289purposes; requiring a report; providing report requirements;
3290providing for appointment of members; providing
3291responsibilities; specifying service without compensation;
3292providing for reimbursement of per diem and travel expenses;
3293providing meeting requirements; requiring the corporation to
3294assist the task force; providing for the expiration of the task
3295force; requiring the Chief Financial Officer to provide a report
3296on the economic impact on the state of certain hurricanes;
3297providing report requirements; creating s. 627.0621, F.S.;
3298providing requirements for transparency in rate regulation;
3299providing definitions; providing for a website for public access
3300to rate filing information; providing requirements; providing
3301for application of public meeting requirements; specifying
3302nonapplication of attorney-client or work-product privileges to
3303certain communications in certain administrative or judicial
3304proceedings under certain circumstances; specifying criteria;
3305amending s. 215.555, F.S.; extending for an additional year the
3306offer of reimbursement coverage for specified insurers; revising
3307the qualifying criteria for such insurers; revising provisions
3308to conform; amending s. 627.0613, F.S.; deleting cross-
3309references to conform to changes made by the act; amending s.
3310627.712, F.S.; requiring insurers to provide notice to
3311mortgageholders or lienholders of certain policies not providing
3312wind coverage for certain structures; providing for provisions
3313of the act to supersede and control over conflicting provisions
3314of House Bill 5057; providing effective dates.


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