May 22, 2019
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870297
  Amendment
Bill No. CS/CS/SB 2860
Amendment No. 870297
CHAMBER ACTION
Senate House
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1Representatives Ross and Reagan offered the following:
2
3     Substitute Amendment for Amendment (439287) to Senate Bill
4(with title amendment)
5     Remove everything after the enacting clause and insert:
6
7     Section 1.  Section 215.5595, Florida Statutes, is amended
8to read:
9     215.5595  Insurance Capital Build-Up Incentive Program.--
10     (1)  Upon entering the 2008 2006 hurricane season, the
11Legislature finds that:
12     (a)  The losses in this state Florida from eight hurricanes
13in 2004 and 2005 have seriously strained the resources of both
14the voluntary insurance market and the public sector mechanisms
15of Citizens Property Insurance Corporation and the Florida
16Hurricane Catastrophe Fund.
17     (b)  Private reinsurance is much less available and at a
18significantly greater cost to residential property insurers as
19compared to 1 year ago, particularly for amounts below the
20insurer's retention or retained losses that must be paid before
21reimbursement is provided by the Florida Hurricane Catastrophe
22Fund.
23     (c)  The Office of Insurance Regulation has reported that
24the insolvency of certain insurers may be imminent.
25     (d)  Hurricane forecast experts predict that the 2006
26hurricane season will be an active hurricane season and that the
27Atlantic and Gulf Coast regions face an active hurricane cycle
28of 10 to 20 years or longer.
29     (b)(e)  Citizens Property Insurance Corporation has over
301.2 million policies in force, has the largest market share of
31any insurer writing residential property insurer in the state,
32and faces the threat of a catastrophic loss that The number of
33cancellations or nonrenewals of residential property insurance
34policies is expected to increase and the number of new
35residential policies written in the voluntary market are likely
36to decrease, causing increased policy growth and exposure to the
37state insurer of last resort, Citizens Property Insurance
38Corporation, and threatening to increase the deficit of the
39corporation, currently estimated to be over $1.7 billion. This
40deficit must be funded by assessments against insurers and
41policyholders, unless otherwise funded by the state. The program
42has a substantial positive effect on the depopulation efforts of
43Citizens Property Insurance Corporation since companies
44participating in the program have removed over 199,000 policies
45from the corporation. Companies participating in the program
46have issued a significant number of new policies, thereby
47keeping an estimated 480,000 new policies out of the
48corporation.
49     (c)(f)  Policyholders are subject to high increased
50premiums and assessments that are increasingly making such
51coverage unaffordable and that may force policyholders to sell
52their homes and even leave the state.
53     (d)(g)  The increased risk to the public sector and private
54sector continues to pose poses a serious threat to the economy
55of this state, particularly the building and financing of
56residential structures, and existing mortgages may be placed in
57default.
58     (h)  The losses from 2004 and 2005, combined with the
59expectation that the increase in hurricane activity will
60continue for the foreseeable future, have caused both insurers
61and reinsurers to limit the capital they are willing to commit
62to covering the hurricane risk in Florida; attracting new
63capital to the Florida market is a critical priority; and
64providing a low-cost source of capital would enable insurers to
65write additional residential property insurance coverage and act
66to mitigate premium increases.
67     (e)(i)  Appropriating state funds to be exchanged for used
68as surplus notes issued by for residential property insurers,
69under conditions requiring the insurer to contribute additional
70private sector capital and to write a minimum level of premiums
71for residential hurricane coverage, is a valid and important
72public purpose.
73     (f)  Extending the Insurance Capital Build-up Incentive
74Program will provide an incentive for investors to commit
75additional capital to Florida's residential insurance market.
76     (2)  The purpose of this section is to provide funds in
77exchange for surplus notes to be issued by to new or existing
78authorized residential property insurers under the Insurance
79Capital Build-Up Incentive Program administered by the State
80Board of Administration, under the following conditions:
81     (a)  The amount of state funds provided in exchange for a
82the surplus note to for any insurer or insurer group, other than
83an insurer writing only manufactured housing policies, may not
84exceed $25 million or 20 percent of the total amount of funds
85appropriated for available under the program, whichever is
86greater. The amount of the surplus note for any insurer or
87insurer group writing residential property insurance covering
88only manufactured housing may not exceed $7 million.
89     (b)  On or after April 1, 2008, the insurer must contribute
90an amount of new capital to its surplus which is at least equal
91to the amount of the surplus note and must apply to the board by
92September 1, 2008 July 1, 2006. If an insurer applies after
93September 1, 2008 July 1, 2006, but before June 1, 2009 2007,
94the amount of the surplus note is limited to one-half of the new
95capital that the insurer contributes to its surplus, except that
96an insurer writing only manufactured housing policies is
97eligible to receive a surplus note of up to $7 million. For
98purposes of this section, new capital must be in the form of
99cash or cash equivalents as specified in s. 625.012(1).
100     (c)  The insurer's surplus, new capital, and the surplus
101note must total at least $50 million, except for insurers
102writing residential property insurance covering only
103manufactured housing. The insurer's surplus, new capital, and
104the surplus note must total at least $14 million for insurers
105writing only residential property insurance covering
106manufactured housing policies as provided in paragraph (a).
107     (d)  The insurer must commit to increase its writings of
108residential property insurance, including the peril of wind, and
109to meet meeting a minimum writing ratio of net written premium
110to surplus of at least 1:1 for the first calendar year after
111receiving the state funds or renegotiation of the surplus note,
1121.5:1 for the second calendar year, and 2:1 for the remaining
113term of the surplus note. Alternatively, the insurer must meet a
114minimum writing ratio of gross written premium to surplus of at
115least 3:1 for the first calendar year after receiving the state
116funds or renegotiation of the surplus note, 4.5:1 for the second
117calendar year, and 6:1 for the remaining term of the surplus
118note. The writing ratios, which shall be determined by the
119Office of Insurance Regulation and certified quarterly to the
120board. For this purpose, the term "premium" "net written
121premium" means net written premium for residential property
122insurance in this state Florida, including the peril of wind,
123and "surplus" means the new capital and surplus note refers to
124the entire surplus of the insurer. An insurer that makes an
125initial application after July 1, 2008, must also commit to
126writing at least 15 percent of its net or gross written premium
127for new policies, not including renewal premiums, for policies
128taken out of Citizens Property Insurance Corporation, during
129each of the first 3 years after receiving the state funds in
130exchange for the surplus note, which shall be determined by the
131Office of Insurance Regulation and certified annually to the
132board. The office may determine that an insurer meets the
133requirement for taking policies out the corporation, by written
134notice to the board, upon a finding that the insurer made offers
135of coverage to policyholders of the corporation which would have
136resulted in meeting this requirement had the policyholders
137accepted the offer. The insurer must also commit to maintaining
138a level of surplus and reinsurance sufficient to cover in excess
139of its 1-in-100 year probable maximum loss, as determined by a
140hurricane loss model accepted by the Florida Commission on
141Hurricane Loss Projection Methodology, which shall be determined
142by the Office of Insurance Regulation and certified annually to
143the board. If the board determines that the insurer has failed
144to meet any of the requirements of this paragraph required ratio
145is not maintained during the term of the surplus note, the board
146may increase the interest rate, accelerate the repayment of
147interest and principal, or shorten the term of the surplus note,
148subject to approval by the Commissioner of Insurance of payments
149by the insurer of principal and interest as provided in
150paragraph (f).
151     (e)  If the requirements of this section are met, the board
152may approve an application by an insurer for funds in exchange
153for issuance of a surplus note, unless the board determines that
154the financial condition of the insurer and its business plan for
155writing residential property insurance in Florida places an
156unreasonably high level of financial risk to the state of
157nonpayment in full of the interest and principal. The board
158shall consult with the Office of Insurance Regulation and may
159contract with independent financial and insurance consultants in
160making this determination.
161     (f)  The surplus note must be repayable to the state with a
162term of 20 years. The surplus note shall accrue interest on the
163unpaid principal balance at a rate equivalent to the 10-year
164U.S. Treasury Bond rate, require the payment only of interest
165during the first 3 years, and include such other terms as
166approved by the board. The board may charge late fees up to 5
167percent for late payments or other late remittances. Payment of
168principal, or interest, or late fees by the insurer on the
169surplus note must be approved by the Commissioner of Insurance,
170who shall approve such payment unless the commissioner
171determines that such payment will substantially impair the
172financial condition of the insurer. If such a determination is
173made, the commissioner shall approve such payment that will not
174substantially impair the financial condition of the insurer.
175     (g)  The total amount of funds available for the program is
176limited to the amount appropriated by the Legislature for this
177purpose. If the amount of surplus notes requested by insurers
178exceeds the amount of funds available, the board may prioritize
179insurers that are eligible and approved, with priority for
180funding given to insurers writing only manufactured housing
181policies, regardless of the date of application, based on the
182financial strength of the insurer, the viability of its proposed
183business plan for writing additional residential property
184insurance in the state, and the effect on competition in the
185residential property insurance market. Between insurers writing
186residential property insurance covering manufactured housing,
187priority shall be given to the insurer writing the highest
188percentage of its policies covering manufactured housing.
189     (h)  The board may allocate portions of the funds available
190for the program and establish dates for insurers to apply for
191surplus notes from such allocation which are earlier than the
192dates established in paragraph (b).
193     (h)(i)  Notwithstanding paragraph (d), a newly formed
194manufactured housing insurer that is eligible for a surplus note
195under this section shall meet the premium to surplus ratio
196provisions of s. 624.4095.
197     (i)(j)  As used in this section, "an insurer writing only
198manufactured housing policies" includes:
199     1.  A Florida domiciled insurer that begins writing
200personal lines residential manufactured housing policies in
201Florida after March 1, 2007, and that removes a minimum of
20250,000 policies from Citizens Property Insurance Corporation
203without accepting a bonus, provided at least 25 percent of its
204policies cover manufactured housing. Such an insurer may count
205any funds above the minimum capital and surplus requirement that
206were contributed into the insurer after March 1, 2007, as new
207capital under this section.
208     2.  A Florida domiciled insurer that writes at least 40
209percent of its policies covering manufactured housing in
210Florida.
211     (3)  As used in this section, the term:
212     (a)  "Board" means the State Board of Administration.
213     (b)  "Program" means the Insurance Capital Build-Up
214Incentive Program established by this section.
215     (4)  The state funds provided to the insurer in exchange
216for the A surplus note provided to an insurer pursuant to this
217section are is considered borrowed surplus an asset of the
218insurer pursuant to s. 628.401 s. 625.012.
219     (5)  If an insurer that receives funds in exchange for
220issuance of a surplus note pursuant to this section is rendered
221insolvent, the state is a class 3 creditor pursuant to s.
222631.271 for the unpaid principal and interest on the surplus
223note.
224     (6)  The board shall adopt rules prescribing the
225procedures, administration, and criteria for approving the
226applications of insurers to receive funds in exchange for
227issuance of surplus notes pursuant to this section, which may be
228adopted pursuant to the procedures for emergency rules of
229chapter 120. Otherwise, actions and determinations by the board
230pursuant to this section are exempt from chapter 120.
231     (7)  The board shall invest and reinvest the funds
232appropriated for the program in accordance with s. 215.47 and
233consistent with board policy.
234     (8)  Costs and fees incurred by the board in administering
235this program, including fees for investment services, shall be
236paid from funds appropriated by the Legislature for this
237program, but are limited to 1 percent of the amount
238appropriated.
239     (9)  The board shall submit a report to the President of
240the Senate and the Speaker of the House of Representatives by
241February 1 of each year as to the results of the program and
242each insurer's compliance with the terms of its surplus note.
243     (10)  The amendments to this section enacted in 2008 do not
244affect the terms or conditions of the surplus notes that were
245approved prior to January 1, 2008. However, the board may
246renegotiate the terms of any surplus note issued by an insurer
247prior to January 2008 under this program upon the agreement of
248the insurer and the board and consistent with the requirements
249of this section as amended in 2008.
250     Section 2.  Subsection (6) is added to section 624.3161,
251Florida Statutes, to read:
252     624.3161  Market conduct examinations.--
253     (6)  Based on the findings of a market conduct examination
254that an insurer has exhibited a pattern or practice of willful
255violations of an unfair insurance trade practice related to
256claims-handling which caused harm to policyholders, as
257prohibited by s. 626.9541(1)(i), the office, after a proceeding
258under ss. 120.569 and 120.57(1), may require an insurer to file
259its claims-handling practices and procedures related to that
260line of insurance with the office for review and inspection, to
261be held by the office for the following 36-month period. Such
262claims-handling practices and procedures are public records and
263are not trade secrets or otherwise exempt from the provisions of
264s. 119.07(1). As used in this section, "claims-handling
265practices and procedures" are any policies, guidelines, rules,
266protocols, standard operating procedures, instructions, or
267directives that govern or guide how and the manner in which an
268insured's claims for benefits under any policy will be
269processed.
270     Section 3.  Subsections (2) and (3) of section 624.4211,
271Florida Statutes, are amended to read:
272     624.4211  Administrative fine in lieu of suspension or
273revocation.--
274     (2)  With respect to any nonwillful violation, such fine
275may shall not exceed $5,000 $2,500 per violation. In no event
276shall such fine exceed an aggregate amount of $20,000 $10,000
277for all nonwillful violations arising out of the same action. If
278When an insurer discovers a nonwillful violation, the insurer
279shall correct the violation and, if restitution is due, make
280restitution to all affected persons. Such restitution shall
281include interest at 12 percent per year from either the date of
282the violation or the date of inception of the affected person's
283policy, at the insurer's option. The restitution may be a credit
284against future premiums due provided that the interest
285accumulates shall accumulate until the premiums are due. If the
286amount of restitution due to any person is $50 or more and the
287insurer wishes to credit it against future premiums, it shall
288notify such person that she or he may receive a check instead of
289a credit. If the credit is on a policy that which is not
290renewed, the insurer shall pay the restitution to the person to
291whom it is due.
292     (3)  With respect to any knowing and willful violation of a
293lawful order or rule of the office or commission or a provision
294of this code, the office may impose a fine upon the insurer in
295an amount not to exceed $40,000 $20,000 for each such violation.
296In no event shall such fine exceed an aggregate amount of
297$200,000 $100,000 for all knowing and willful violations arising
298out of the same action. In addition to such fines, the such
299insurer shall make restitution when due in accordance with the
300provisions of subsection (2).
301     Section 4.  Section 624.4213, Florida Statutes, is created
302to read:
303     624.4213  Trade secret documents.--
304     (1)  If any person who is required to submit documents or
305other information to the office or department pursuant to the
306Insurance Code or by rule or order of the office, department, or
307commission claims that such submission contains a trade secret,
308such person may file with the office or department a notice of
309trade secret as provided in this section. Failure to do so
310constitutes a waiver of any claim by such person that the
311document or information is a trade secret.
312     (a)  Each page of such document or specific portion of a
313document claimed to be a trade secret must be clearly marked as
314"trade secret."
315     (b)  All material marked as a trade secret must be
316separated from all non-trade secret material, such as being
317submitted in a separate envelope clearly marked as "trade
318secret."
319     (c)  In submitting a notice of trade secret to the office
320or department, the submitting party must include an affidavit
321certifying under oath to the truth of the following statements
322concerning all documents or information that are claimed to be
323trade secrets:
324     1.  [I consider/My company considers] this information a
325trade secret that has value and provides an advantage or an
326opportunity to obtain an advantage over those who do not know or
327use it.
328     2.  [I have/My company has] taken measures to prevent the
329disclosure of the information to anyone other that those who
330have been selected to have access for limited purposes, and [I
331intend/my company intends] to continue to take such measures.
332     3.  The information is not, and has not been, reasonably
333obtainable without [my/our] consent by other persons by use of
334legitimate means.
335     4.  The information is not publicly available elsewhere.
336     (2)  If the office or department receives a public-records
337request for a document or information that is marked and
338certified as a trade secret, the office or department shall
339promptly notify the person that certified the document as a
340trade secret. The notice shall inform such person that he or she
341or his or her company has 30 days following receipt of such
342notice to file an action in circuit court seeking a
343determination whether the document in question contains trade
344secrets and an order barring public disclosure of the document.
345If that person or company files an action within 30 days after
346receipt of notice of the public-records request, the office or
347department may not release the documents pending the outcome of
348the legal action. The failure to file an action within 30 days
349constitutes a waiver of any claim of confidentiality and the
350office or department shall release the document as requested.
351     (3)  The office or department may disclose a trade secret,
352together with the claim that it is a trade secret, to an officer
353or employee of another governmental agency whose use of the
354trade secret is within the scope of his or her employment.
355     Section 5. Section 624.4305, Florida Statutes, is created
356to read:
357     624.4305  Nonrenewal of residential property insurance
358policies.--Any insurer planning to nonrenew more than 10,000
359residential property insurance policies in this state within a
36012-month period shall give notice in writing to the Office of
361Insurance Regulation for informational purposes 90 days before
362the issuance of any notices of nonrenewal. The notice provided
363to the office must set forth the insurer's reasons for such
364action, the effective dates of nonrenewal, and any arrangements
365made for other insurers to offer coverage to affected
366policyholders.
367     Section 6.  Subsection (2) of section 626.9521, Florida
368Statutes, is amended to read:
369     626.9521  Unfair methods of competition and unfair or
370deceptive acts or practices prohibited; penalties.--
371     (2)  Any person who violates any provision of this part
372shall be subject to a fine in an amount not greater than $5,000
373$2,500 for each nonwillful violation and not greater than
374$40,000 $20,000 for each willful violation. Fines under this
375subsection imposed against an insurer may not exceed an
376aggregate amount of $20,000 $10,000 for all nonwillful
377violations arising out of the same action or an aggregate amount
378of $200,000 $100,000 for all willful violations arising out of
379the same action. The fines authorized by this subsection may be
380imposed in addition to any other applicable penalty.
381     Section 7.  Section 627.0612, Florida Statutes, is amended
382to read:
383     627.0612  Administrative proceedings in rating
384determinations.--
385     (1)  In any proceeding to determine whether rates, rating
386plans, or other matters governed by this part comply with the
387law, the appellate court shall set aside a final order of the
388office if the office has violated s. 120.57(1)(k) by
389substituting its findings of fact for findings of an
390administrative law judge which were supported by competent
391substantial evidence.
392     (2)  In an administrative hearing to determine whether an
393insurer's rates, rating schedules, rating manuals, premium
394credits, discount schedules, surcharge schedules, or changes
395thereto, for property insurance comply with the law, in addition
396to any other findings of fact, findings on the following matters
397shall be considered findings of fact:
398     (a)  Whether a factor or factors used in a rate filing or
399applied by the office is consistent with standard actuarial
400techniques or practices or are otherwise based on reasonable
401actuarial judgment.
402     (b)  Whether a factor for underwriting profit and
403contingencies is reasonable or excessive.
404     (c)  Whether the cost of reinsurance is reasonable or
405excessive.
406     (d)  Whether a factor or factors used in a rate filing or
407applied by the office demonstrate that a rate is excessive,
408inadequate or unfairly discriminatory.
409     (3)  In an administrative hearing to determine whether an
410insurer's rates, rating schedules, rating manuals, premium
411credits, discount schedules, surcharge schedules, or changes
412thereto, for property insurance comply with the law, an order
413may be entered that approves, modifies, or rejects the requested
414change. An order modifying the requested rate change shall
415recommend such change as is supported by the record in the case.
416     Section 8.  Paragraphs (a), (b), and (g) of subsection
417(2),subsection (6), and paragraph (a) of subsection (9) of
418section 627.062, Florida Statutes, are amended to read:
419     627.062  Rate standards.--
420     (2)  As to all such classes of insurance:
421     (a)  Insurers or rating organizations shall establish and
422use rates, rating schedules, or rating manuals to allow the
423insurer a reasonable rate of return on such classes of insurance
424written in this state. A copy of rates, rating schedules, rating
425manuals, premium credits or discount schedules, and surcharge
426schedules, and changes thereto, shall be filed with the office
427under one of the following procedures except as provided in
428subparagraph 3.:
429     1.  If the filing is made at least 90 days before the
430proposed effective date and the filing is not implemented during
431the office's review of the filing and any proceeding and
432judicial review, then such filing shall be considered a "file
433and use" filing. In such case, the office shall finalize its
434review by issuance of a notice of intent to approve or a notice
435of intent to disapprove within 90 days after receipt of the
436filing. The notice of intent to approve and the notice of intent
437to disapprove constitute agency action for purposes of the
438Administrative Procedure Act. Requests for supporting
439information, requests for mathematical or mechanical
440corrections, or notification to the insurer by the office of its
441preliminary findings shall not toll the 90-day period during any
442such proceedings and subsequent judicial review. The rate shall
443be deemed approved if the office does not issue a notice of
444intent to approve or a notice of intent to disapprove within 90
445days after receipt of the filing.
446     2.  If the filing is not made in accordance with the
447provisions of subparagraph 1., such filing shall be made as soon
448as practicable, but no later than 30 days after the effective
449date, and shall be considered a "use and file" filing. An
450insurer making a "use and file" filing is potentially subject to
451an order by the office to return to policyholders portions of
452rates found to be excessive, as provided in paragraph (h).
453     3.  For all property insurance filings made or submitted
454after January 25, 2007, but before December 31, 2009 2008, an
455insurer seeking a rate that is greater than the rate most
456recently approved by the office shall make a "file and use"
457filing. This subparagraph applies to property insurance only.
458For purposes of this subparagraph, motor vehicle collision and
459comprehensive coverages are not considered to be property
460coverages.
461     (b)  Upon receiving a rate filing, the office shall review
462the rate filing to determine if a rate is excessive, inadequate,
463or unfairly discriminatory. In making that determination, the
464office shall, in accordance with generally accepted and
465reasonable actuarial techniques, consider the following factors:
466     1.  Past and prospective loss experience within and without
467this state.
468     2.  Past and prospective expenses.
469     3.  The degree of competition among insurers for the risk
470insured.
471     4.  Investment income reasonably expected by the insurer,
472consistent with the insurer's investment practices, from
473investable premiums anticipated in the filing, plus any other
474expected income from currently invested assets representing the
475amount expected on unearned premium reserves and loss reserves.
476The commission may adopt rules using utilizing reasonable
477techniques of actuarial science and economics to specify the
478manner in which insurers shall calculate investment income
479attributable to such classes of insurance written in this state
480and the manner in which such investment income shall be used to
481calculate in the calculation of insurance rates. Such manner
482shall contemplate allowances for an underwriting profit factor
483and full consideration of investment income which produce a
484reasonable rate of return; however, investment income from
485invested surplus may shall not be considered.
486     5.  The reasonableness of the judgment reflected in the
487filing.
488     6.  Dividends, savings, or unabsorbed premium deposits
489allowed or returned to Florida policyholders, members, or
490subscribers.
491     7.  The adequacy of loss reserves.
492     8.  The cost of reinsurance. The office shall not
493disapprove a rate as excessive solely due to the insurer having
494obtained catastrophic reinsurance to cover the insurer's
495estimated 250-year probable maximum loss or any lower level of
496loss.
497     9.  Trend factors, including trends in actual losses per
498insured unit for the insurer making the filing.
499     10.  Conflagration and catastrophe hazards, if applicable.
500     11.  Projected hurricane losses, if applicable, which must
501be estimated using a model or method found to be acceptable or
502reliable by the Florida Commission on Hurricane Loss Projection
503Methodology, and as further provided in s. 627.0628.
504     12.11.  A reasonable margin for underwriting profit and
505contingencies. For that portion of the rate covering the risk of
506hurricanes and other catastrophic losses for which the insurer
507has not purchased reinsurance and has exposed its capital and
508surplus to such risk, the office must approve a rating factor
509that provides the insurer a reasonable rate of return that is
510commensurate with such risk.
511     13.12.  The cost of medical services, if applicable.
512     14.13.  Other relevant factors which impact upon the
513frequency or severity of claims or upon expenses.
514     (g)  The office may at any time review a rate, rating
515schedule, rating manual, or rate change; the pertinent records
516of the insurer; and market conditions. If the office finds on a
517preliminary basis that a rate may be excessive, inadequate, or
518unfairly discriminatory, the office shall initiate proceedings
519to disapprove the rate and shall so notify the insurer. However,
520the office may not disapprove as excessive any rate for which it
521has given final approval or which has been deemed approved for a
522period of 1 year after the effective date of the filing unless
523the office finds that a material misrepresentation or material
524error was made by the insurer or was contained in the filing.
525Upon being so notified, the insurer or rating organization
526shall, within 60 days, file with the office all information
527which, in the belief of the insurer or organization, proves the
528reasonableness, adequacy, and fairness of the rate or rate
529change. The office shall issue a notice of intent to approve or
530a notice of intent to disapprove pursuant to the procedures of
531paragraph (a) within 90 days after receipt of the insurer's
532initial response. In such instances and in any administrative
533proceeding relating to the legality of the rate, the insurer or
534rating organization shall carry the burden of proof by a
535preponderance of the evidence to show that the rate is not
536excessive, inadequate, or unfairly discriminatory. After the
537office notifies an insurer that a rate may be excessive,
538inadequate, or unfairly discriminatory, unless the office
539withdraws the notification, the insurer shall not alter the rate
540except to conform with the office's notice until the earlier of
541120 days after the date the notification was provided or 180
542days after the date of the implementation of the rate. The
543office may, subject to chapter 120, disapprove without the 60-
544day notification any rate increase filed by an insurer within
545the prohibited time period or during the time that the legality
546of the increased rate is being contested.
547
548The provisions of this subsection shall not apply to workers'
549compensation and employer's liability insurance and to motor
550vehicle insurance.
551     (6)(a)  If an insurer requests an administrative hearing
552pursuant to s. 120.57 related to a rate filing under this
553section, the director of the Division of Administrative Hearings
554shall expedite the hearing and assign an administrative law
555judge who shall commence the hearing within 30 days after the
556receipt of the formal request and shall enter a recommended  
557order within 30 days after the hearing or within 30 days after
558receipt of the hearing transcript by the administrative law
559judge, whichever is later. Each party shall be allowed 10 days
560in which to submit written exceptions to the recommended order.
561The office shall enter a final order within 30 days after the
562entry of the recommended order. The provisions of this paragraph
563may be waived upon stipulation of all parties.
564     (b)  Upon entry of a final order, the insurer may request a
565expedited appellate review pursuant to the Florida Rules of
566Appellate Procedure. It is the intent of the Legislature that
567the First District Court of Appeal grant an insurer's request
568for an expedited appellate review.
569     (a)  After any action with respect to a rate filing that
570constitutes agency action for purposes of the Administrative
571Procedure Act, except for a rate filing for medical malpractice,
572an insurer may, in lieu of demanding a hearing under s. 120.57,
573require arbitration of the rate filing. However, the arbitration
574option provision in this subsection does not apply to a rate
575filing that is made on or after the effective date of this act
576until January 1, 2009. Arbitration shall be conducted by a board
577of arbitrators consisting of an arbitrator selected by the
578office, an arbitrator selected by the insurer, and an arbitrator
579selected jointly by the other two arbitrators. Each arbitrator
580must be certified by the American Arbitration Association. A
581decision is valid only upon the affirmative vote of at least two
582of the arbitrators. No arbitrator may be an employee of any
583insurance regulator or regulatory body or of any insurer,
584regardless of whether or not the employing insurer does business
585in this state. The office and the insurer must treat the
586decision of the arbitrators as the final approval of a rate
587filing. Costs of arbitration shall be paid by the insurer.
588     (b)  Arbitration under this subsection shall be conducted
589pursuant to the procedures specified in ss. 682.06-682.10.
590Either party may apply to the circuit court to vacate or modify
591the decision pursuant to s. 682.13 or s. 682.14. The commission
592shall adopt rules for arbitration under this subsection, which
593rules may not be inconsistent with the arbitration rules of the
594American Arbitration Association as of January 1, 1996.
595     (c)  Upon initiation of the arbitration process, the
596insurer waives all rights to challenge the action of the office
597under the Administrative Procedure Act or any other provision of
598law; however, such rights are restored to the insurer if the
599arbitrators fail to render a decision within 90 days after
600initiation of the arbitration process.
601     (9)(a)  Effective March 1, 2007, The chief executive
602officer or chief financial officer of a property insurer and the
603chief actuary of a property insurer must certify under oath and
604subject to the penalty of perjury, on a form approved by the
605commission, the following information, which must accompany a
606rate filing:
607     1.  The signing officer and actuary have reviewed the rate
608filing;
609     2.  Based on the signing officer's and actuary's knowledge,
610the rate filing does not contain any untrue statement of a
611material fact or omit to state a material fact necessary in
612order to make the statements made, in light of the circumstances
613under which such statements were made, not misleading;
614     3.  Based on the signing officer's and actuary's knowledge,
615the information and other factors described in paragraph (2)(b),
616including, but not limited to, investment income, fairly present
617in all material respects the basis of the rate filing for the
618periods presented in the filing; and
619     4.  Based on the signing officer's and actuary's knowledge,
620the rate filing reflects all premium savings that are reasonably
621expected to result from legislative enactments and are in
622accordance with generally accepted and reasonable actuarial
623techniques.
624     Section 9.  Paragraph (c) of subsection (1) and paragraph
625(c) of subsection (3) of section 627.0628, Florida Statutes, are
626amended, and paragraph (e) is added to subsection (1) of that
627section, to read:
628     627.0628  Florida Commission on Hurricane Loss Projection
629Methodology; public records exemption; public meetings
630exemption.--
631     (1)  LEGISLATIVE FINDINGS AND INTENT.--
632     (c)  It is the intent of the Legislature to create the
633Florida Commission on Hurricane Loss Projection Methodology as a
634panel of experts to provide the most actuarially sophisticated
635guidelines and standards for projection of hurricane losses
636possible, given the current state of actuarial science. It is
637the further intent of the Legislature that such standards and
638guidelines must be used by the State Board of Administration in
639developing reimbursement premium rates for the Florida Hurricane
640Catastrophe Fund, and, subject to paragraph (3)(c), must may be
641used by insurers in rate filings under s. 627.062 unless the way
642in which such standards and guidelines were applied by the
643insurer was erroneous, as shown by a preponderance of the
644evidence.
645     (e)  The Legislature finds that the authority to take final
646agency action with respect to insurance ratemaking is vested in
647the Office of Insurance Regulation and the Financial Services
648Commission, and that the processes, standards, and guidelines of
649the Florida Commission on Hurricane Loss Projection Methodology
650do not constitute final agency action or statements of general
651applicability that implement, interpret, or prescribe law or
652policy; accordingly, chapter 120 does not apply to the
653processes, standards, and guidelines of the Florida Commission
654on Hurricane Loss Projection Methodology.
655     (3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
656     (c)  With respect to a rate filing under s. 627.062, an
657insurer must may employ and may not modify or adjust actuarial
658methods, principles, standards, models, or output ranges found
659by the commission to be accurate or reliable in determining to
660determine hurricane loss factors for use in a rate filing and in
661determining probable maximum loss levels for reinsurance costs
662included in a rate filing under s. 627.062; except as provided
663in s. 627.062(2)(b)12., the use of any other model is reasonable
664if the insurer provides justification that establishes by a
665preponderance of the evidence that such use is reasonable and
666consistent with actuarial standards of practice. Such findings
667and factors are admissible and relevant in consideration of a
668rate filing by the office or in any arbitration or
669administrative or judicial review only if the office and the
670consumer advocate appointed pursuant to s. 627.0613 have access
671to all of the assumptions and factors that were used in
672developing the actuarial methods, principles, standards, models,
673or output ranges, and are not precluded from disclosing such
674information in a rate proceeding. In any rate hearing under s.
675120.57 or in any arbitration proceeding under s. 627.062(6), the
676hearing officer, judge, or arbitration panel may determine
677whether the office and the consumer advocate were provided with
678access to all of the assumptions and factors that were used in
679developing the actuarial methods, principles, standards, models,
680or output ranges and to determine their admissibility.
681     Section 10.  Subsection (1) of section 627.0629, Florida
682Statutes, is amended to read:
683     627.0629  Residential property insurance; rate filings.--
684     (1)(a)  It is the intent of the Legislature that insurers
685must provide savings to consumers who install or implement
686windstorm damage mitigation techniques, alterations, or
687solutions to their properties to prevent windstorm losses. A
688rate filing for residential property insurance must include
689actuarially reasonable discounts, credits, or other rate
690differentials, or appropriate reductions in deductibles, for
691properties on which fixtures or construction techniques
692demonstrated to reduce the amount of loss in a windstorm have
693been installed or implemented. The fixtures or construction
694techniques shall include, but not be limited to, fixtures or
695construction techniques which enhance roof strength, roof
696covering performance, roof-to-wall strength, wall-to-floor-to-
697foundation strength, opening protection, and window, door, and
698skylight strength. Credits, discounts, or other rate
699differentials, or appropriate reductions in deductibles, for
700fixtures and construction techniques which meet the minimum
701requirements of the Florida Building Code must be included in
702the rate filing. All insurance companies must make a rate filing
703which includes the credits, discounts, or other rate
704differentials or reductions in deductibles by February 28, 2003.
705By July 1, 2007, the office shall reevaluate the discounts,
706credits, other rate differentials, and appropriate reductions in
707deductibles for fixtures and construction techniques that meet
708the minimum requirements of the Florida Building Code, based
709upon actual experience or any other loss relativity studies
710available to the office. The office shall determine the
711discounts, credits, other rate differentials, and appropriate
712reductions in deductibles that reflect the full actuarial value
713of such revaluation, which may be used by insurers in rate
714filings.
715     (b)  By February 1, 2011, the Office of Insurance
716Regulation, in consultation with the Department of Financial
717Services and the Department of Community Affairs, shall develop
718and make publicly available a proposed method for insurers to
719establish discounts, credits, or other rate differentials for
720hurricane mitigation measures which directly correlate to the
721numerical rating assigned to a structure pursuant to the uniform
722home grading scale adopted by the Financial Services Commission
723pursuant to s. 215.55865, including any proposed changes to the
724uniform home grading scale. By October 1, 2011, the commission
725shall adopt rules requiring insurers to make rate filings for
726residential property insurance which revise insurers' discounts,
727credits, or other rate differentials for hurricane mitigation
728measures so that such rate differentials correlate directly to
729the uniform home grading scale. The rules may include such
730changes to the uniform home grading scale as the commission
731determines are necessary, and may specify the minimum required
732discounts, credits, or other rate differentials. Such rate
733differentials must be consistent with generally accepted
734actuarial principles and wind-loss mitigation studies. The rules
735shall allow a period of at least 2 years after the effective
736date of the revised mitigation discounts, credits, or other rate
737differentials for a property owner to obtain an inspection or
738otherwise qualify for the revised credit, during which time the
739insurer shall continue to apply the mitigation credit that was
740applied immediately prior to the effective date of the revised
741credit.
742     Section 11.  Subsection (2) and paragraphs (a), (b), (c),
743(m), (p), (w), (dd), and (ee) of subsection (6) of section
744627.351, Florida Statutes, are amended, and new paragraph (ff)
745is added to that subsection, to read:
746     627.351  Insurance risk apportionment plans.--
747     (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
748     (b)  The department shall require all insurers holding a
749certificate of authority to transact property insurance on a
750direct basis in this state, other than joint underwriting
751associations and other entities formed pursuant to this section,
752to provide windstorm coverage to applicants from areas
753determined to be eligible pursuant to paragraph (c) who in good
754faith are entitled to, but are unable to procure, such coverage
755through ordinary means; or it shall adopt a reasonable plan or
756plans for the equitable apportionment or sharing among such
757insurers of windstorm coverage, which may include formation of
758an association for this purpose. As used in this subsection, the
759term "property insurance" means insurance on real or personal
760property, as defined in s. 624.604, including insurance for
761fire, industrial fire, allied lines, farmowners multiperil,
762homeowners' multiperil, commercial multiperil, and mobile homes,
763and including liability coverages on all such insurance, but
764excluding inland marine as defined in s. 624.607(3) and
765excluding vehicle insurance as defined in s. 624.605(1)(a) other
766than insurance on mobile homes used as permanent dwellings. The
767department shall adopt rules that provide a formula for the
768recovery and repayment of any deferred assessments.
769     1.  For the purpose of this section, properties eligible
770for such windstorm coverage are defined as dwellings, buildings,
771and other structures, including mobile homes which are used as
772dwellings and which are tied down in compliance with mobile home
773tie-down requirements prescribed by the Department of Highway
774Safety and Motor Vehicles pursuant to s. 320.8325, and the
775contents of all such properties. An applicant or policyholder is
776eligible for coverage only if an offer of coverage cannot be
777obtained by or for the applicant or policyholder from an
778admitted insurer at approved rates.
779     2.a.(I)  All insurers required to be members of such
780association shall participate in its writings, expenses, and
781losses. Surplus of the association shall be retained for the
782payment of claims and shall not be distributed to the member
783insurers. Such participation by member insurers shall be in the
784proportion that the net direct premiums of each member insurer
785written for property insurance in this state during the
786preceding calendar year bear to the aggregate net direct
787premiums for property insurance of all member insurers, as
788reduced by any credits for voluntary writings, in this state
789during the preceding calendar year. For the purposes of this
790subsection, the term "net direct premiums" means direct written
791premiums for property insurance, reduced by premium for
792liability coverage and for the following if included in allied
793lines: rain and hail on growing crops; livestock; association
794direct premiums booked; National Flood Insurance Program direct
795premiums; and similar deductions specifically authorized by the
796plan of operation and approved by the department. A member's
797participation shall begin on the first day of the calendar year
798following the year in which it is issued a certificate of
799authority to transact property insurance in the state and shall
800terminate 1 year after the end of the calendar year during which
801it no longer holds a certificate of authority to transact
802property insurance in the state. The commissioner, after review
803of annual statements, other reports, and any other statistics
804that the commissioner deems necessary, shall certify to the
805association the aggregate direct premiums written for property
806insurance in this state by all member insurers.
807     (II)  Effective July 1, 2002, the association shall operate
808subject to the supervision and approval of a board of governors
809who are the same individuals that have been appointed by the
810Treasurer to serve on the board of governors of the Citizens
811Property Insurance Corporation.
812     (III)  The plan of operation shall provide a formula
813whereby a company voluntarily providing windstorm coverage in
814affected areas will be relieved wholly or partially from
815apportionment of a regular assessment pursuant to sub-sub-
816subparagraph d.(I) or sub-sub-subparagraph d.(II).
817     (IV)  A company which is a member of a group of companies
818under common management may elect to have its credits applied on
819a group basis, and any company or group may elect to have its
820credits applied to any other company or group.
821     (V)  There shall be no credits or relief from apportionment
822to a company for emergency assessments collected from its
823policyholders under sub-sub-subparagraph d.(III).
824     (VI)  The plan of operation may also provide for the award
825of credits, for a period not to exceed 3 years, from a regular
826assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
827subparagraph d.(II) as an incentive for taking policies out of
828the Residential Property and Casualty Joint Underwriting
829Association. In order to qualify for the exemption under this
830sub-sub-subparagraph, the take-out plan must provide that at
831least 40 percent of the policies removed from the Residential
832Property and Casualty Joint Underwriting Association cover risks
833located in Dade, Broward, and Palm Beach Counties or at least 30
834percent of the policies so removed cover risks located in Dade,
835Broward, and Palm Beach Counties and an additional 50 percent of
836the policies so removed cover risks located in other coastal
837counties, and must also provide that no more than 15 percent of
838the policies so removed may exclude windstorm coverage. With the
839approval of the department, the association may waive these
840geographic criteria for a take-out plan that removes at least
841the lesser of 100,000 Residential Property and Casualty Joint
842Underwriting Association policies or 15 percent of the total
843number of Residential Property and Casualty Joint Underwriting
844Association policies, provided the governing board of the
845Residential Property and Casualty Joint Underwriting Association
846certifies that the take-out plan will materially reduce the
847Residential Property and Casualty Joint Underwriting
848Association's 100-year probable maximum loss from hurricanes.
849With the approval of the department, the board may extend such
850credits for an additional year if the insurer guarantees an
851additional year of renewability for all policies removed from
852the Residential Property and Casualty Joint Underwriting
853Association, or for 2 additional years if the insurer guarantees
8542 additional years of renewability for all policies removed from
855the Residential Property and Casualty Joint Underwriting
856Association.
857     b.  Assessments to pay deficits in the association under
858this subparagraph shall be included as an appropriate factor in
859the making of rates as provided in s. 627.3512.
860     c.  The Legislature finds that the potential for unlimited
861deficit assessments under this subparagraph may induce insurers
862to attempt to reduce their writings in the voluntary market, and
863that such actions would worsen the availability problems that
864the association was created to remedy. It is the intent of the
865Legislature that insurers remain fully responsible for paying
866regular assessments and collecting emergency assessments for any
867deficits of the association; however, it is also the intent of
868the Legislature to provide a means by which assessment
869liabilities may be amortized over a period of years.
870     d.(I)  When the deficit incurred in a particular calendar
871year is 10 percent or less of the aggregate statewide direct
872written premium for property insurance for the prior calendar
873year for all member insurers, the association shall levy an
874assessment on member insurers in an amount equal to the deficit.
875     (II)  When the deficit incurred in a particular calendar
876year exceeds 10 percent of the aggregate statewide direct
877written premium for property insurance for the prior calendar
878year for all member insurers, the association shall levy an
879assessment on member insurers in an amount equal to the greater
880of 10 percent of the deficit or 10 percent of the aggregate
881statewide direct written premium for property insurance for the
882prior calendar year for member insurers. Any remaining deficit
883shall be recovered through emergency assessments under sub-sub-
884subparagraph (III).
885     (III)  Upon a determination by the board of directors that
886a deficit exceeds the amount that will be recovered through
887regular assessments on member insurers, pursuant to sub-sub-
888subparagraph (I) or sub-sub-subparagraph (II), the board shall
889levy, after verification by the department, emergency
890assessments to be collected by member insurers and by
891underwriting associations created pursuant to this section which
892write property insurance, upon issuance or renewal of property
893insurance policies other than National Flood Insurance policies
894in the year or years following levy of the regular assessments.
895The amount of the emergency assessment collected in a particular
896year shall be a uniform percentage of that year's direct written
897premium for property insurance for all member insurers and
898underwriting associations, excluding National Flood Insurance
899policy premiums, as annually determined by the board and
900verified by the department. The department shall verify the
901arithmetic calculations involved in the board's determination
902within 30 days after receipt of the information on which the
903determination was based. Notwithstanding any other provision of
904law, each member insurer and each underwriting association
905created pursuant to this section shall collect emergency
906assessments from its policyholders without such obligation being
907affected by any credit, limitation, exemption, or deferment. The
908emergency assessments so collected shall be transferred directly
909to the association on a periodic basis as determined by the
910association. The aggregate amount of emergency assessments
911levied under this sub-sub-subparagraph in any calendar year may
912not exceed the greater of 10 percent of the amount needed to
913cover the original deficit, plus interest, fees, commissions,
914required reserves, and other costs associated with financing of
915the original deficit, or 10 percent of the aggregate statewide
916direct written premium for property insurance written by member
917insurers and underwriting associations for the prior year, plus
918interest, fees, commissions, required reserves, and other costs
919associated with financing the original deficit. The board may
920pledge the proceeds of the emergency assessments under this sub-
921sub-subparagraph as the source of revenue for bonds, to retire
922any other debt incurred as a result of the deficit or events
923giving rise to the deficit, or in any other way that the board
924determines will efficiently recover the deficit. The emergency
925assessments under this sub-sub-subparagraph shall continue as
926long as any bonds issued or other indebtedness incurred with
927respect to a deficit for which the assessment was imposed remain
928outstanding, unless adequate provision has been made for the
929payment of such bonds or other indebtedness pursuant to the
930document governing such bonds or other indebtedness. Emergency
931assessments collected under this sub-sub-subparagraph are not
932part of an insurer's rates, are not premium, and are not subject
933to premium tax, fees, or commissions; however, failure to pay
934the emergency assessment shall be treated as failure to pay
935premium.
936     (IV)  Each member insurer's share of the total regular
937assessments under sub-sub-subparagraph (I) or sub-sub-
938subparagraph (II) shall be in the proportion that the insurer's
939net direct premium for property insurance in this state, for the
940year preceding the assessment bears to the aggregate statewide
941net direct premium for property insurance of all member
942insurers, as reduced by any credits for voluntary writings for
943that year.
944     (V)  If regular deficit assessments are made under sub-sub-
945subparagraph (I) or sub-sub-subparagraph (II), or by the
946Residential Property and Casualty Joint Underwriting Association
947under sub-subparagraph (6)(b)3.a. or sub-subparagraph
948(6)(b)3.b., the association shall levy upon the association's
949policyholders, as part of its next rate filing, or by a separate
950rate filing solely for this purpose, a market equalization
951surcharge in a percentage equal to the total amount of such
952regular assessments divided by the aggregate statewide direct
953written premium for property insurance for member insurers for
954the prior calendar year. Market equalization surcharges under
955this sub-sub-subparagraph are not considered premium and are not
956subject to commissions, fees, or premium taxes; however, failure
957to pay a market equalization surcharge shall be treated as
958failure to pay premium.
959     e.  The governing body of any unit of local government, any
960residents of which are insured under the plan, may issue bonds
961as defined in s. 125.013 or s. 166.101 to fund an assistance
962program, in conjunction with the association, for the purpose of
963defraying deficits of the association. In order to avoid
964needless and indiscriminate proliferation, duplication, and
965fragmentation of such assistance programs, any unit of local
966government, any residents of which are insured by the
967association, may provide for the payment of losses, regardless
968of whether or not the losses occurred within or outside of the
969territorial jurisdiction of the local government. Revenue bonds
970may not be issued until validated pursuant to chapter 75, unless
971a state of emergency is declared by executive order or
972proclamation of the Governor pursuant to s. 252.36 making such
973findings as are necessary to determine that it is in the best
974interests of, and necessary for, the protection of the public
975health, safety, and general welfare of residents of this state
976and the protection and preservation of the economic stability of
977insurers operating in this state, and declaring it an essential
978public purpose to permit certain municipalities or counties to
979issue bonds as will provide relief to claimants and
980policyholders of the association and insurers responsible for
981apportionment of plan losses. Any such unit of local government
982may enter into such contracts with the association and with any
983other entity created pursuant to this subsection as are
984necessary to carry out this paragraph. Any bonds issued under
985this sub-subparagraph shall be payable from and secured by
986moneys received by the association from assessments under this
987subparagraph, and assigned and pledged to or on behalf of the
988unit of local government for the benefit of the holders of such
989bonds. The funds, credit, property, and taxing power of the
990state or of the unit of local government shall not be pledged
991for the payment of such bonds. If any of the bonds remain unsold
99260 days after issuance, the department shall require all
993insurers subject to assessment to purchase the bonds, which
994shall be treated as admitted assets; each insurer shall be
995required to purchase that percentage of the unsold portion of
996the bond issue that equals the insurer's relative share of
997assessment liability under this subsection. An insurer shall not
998be required to purchase the bonds to the extent that the
999department determines that the purchase would endanger or impair
1000the solvency of the insurer. The authority granted by this sub-
1001subparagraph is additional to any bonding authority granted by
1002subparagraph 6.
1003     3.  The plan shall also provide that any member with a
1004surplus as to policyholders of $20 million or less writing 25
1005percent or more of its total countrywide property insurance
1006premiums in this state may petition the department, within the
1007first 90 days of each calendar year, to qualify as a limited
1008apportionment company. The apportionment of such a member
1009company in any calendar year for which it is qualified shall not
1010exceed its gross participation, which shall not be affected by
1011the formula for voluntary writings. In no event shall a limited
1012apportionment company be required to participate in any
1013apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1014or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1015$50 million after payment of available plan funds in any
1016calendar year. However, a limited apportionment company shall
1017collect from its policyholders any emergency assessment imposed
1018under sub-sub-subparagraph 2.d.(III). The plan shall provide
1019that, if the department determines that any regular assessment
1020will result in an impairment of the surplus of a limited
1021apportionment company, the department may direct that all or
1022part of such assessment be deferred. However, there shall be no
1023limitation or deferment of an emergency assessment to be
1024collected from policyholders under sub-sub-subparagraph
10252.d.(III).
1026     4.  The plan shall provide for the deferment, in whole or
1027in part, of a regular assessment of a member insurer under sub-
1028sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1029not for an emergency assessment collected from policyholders
1030under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1031commissioner, payment of such regular assessment would endanger
1032or impair the solvency of the member insurer. In the event a
1033regular assessment against a member insurer is deferred in whole
1034or in part, the amount by which such assessment is deferred may
1035be assessed against the other member insurers in a manner
1036consistent with the basis for assessments set forth in sub-sub-
1037subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1038     5.a.  The plan of operation may include deductibles and
1039rules for classification of risks and rate modifications
1040consistent with the objective of providing and maintaining funds
1041sufficient to pay catastrophe losses.
1042     b.  The association may require arbitration of a rate
1043filing under s. 627.062(6). It is the intent of the Legislature
1044that the rates for coverage provided by the association be
1045actuarially sound and not competitive with approved rates
1046charged in the admitted voluntary market such that the
1047association functions as a residual market mechanism to provide
1048insurance only when the insurance cannot be procured in the
1049voluntary market. The plan of operation shall provide a
1050mechanism to assure that, beginning no later than January 1,
10511999, the rates charged by the association for each line of
1052business are reflective of approved rates in the voluntary
1053market for hurricane coverage for each line of business in the
1054various areas eligible for association coverage.
1055     c.  The association shall provide for windstorm coverage on
1056residential properties in limits up to $10 million for
1057commercial lines residential risks and up to $1 million for
1058personal lines residential risks. If coverage with the
1059association is sought for a residential risk valued in excess of
1060these limits, coverage shall be available to the risk up to the
1061replacement cost or actual cash value of the property, at the
1062option of the insured, if coverage for the risk cannot be
1063located in the authorized market. The association must accept a
1064commercial lines residential risk with limits above $10 million
1065or a personal lines residential risk with limits above $1
1066million if coverage is not available in the authorized market.
1067The association may write coverage above the limits specified in
1068this subparagraph with or without facultative or other
1069reinsurance coverage, as the association determines appropriate.
1070     d.  The plan of operation must provide objective criteria
1071and procedures, approved by the department, to be uniformly
1072applied for all applicants in determining whether an individual
1073risk is so hazardous as to be uninsurable. In making this
1074determination and in establishing the criteria and procedures,
1075the following shall be considered:
1076     (I)  Whether the likelihood of a loss for the individual
1077risk is substantially higher than for other risks of the same
1078class; and
1079     (II)  Whether the uncertainty associated with the
1080individual risk is such that an appropriate premium cannot be
1081determined.
1082
1083The acceptance or rejection of a risk by the association
1084pursuant to such criteria and procedures must be construed as
1085the private placement of insurance, and the provisions of
1086chapter 120 do not apply.
1087     e.  If the risk accepts an offer of coverage through the
1088market assistance program or through a mechanism established by
1089the association, either before the policy is issued by the
1090association or during the first 30 days of coverage by the
1091association, and the producing agent who submitted the
1092application to the association is not currently appointed by the
1093insurer, the insurer shall:
1094     (I)  Pay to the producing agent of record of the policy,
1095for the first year, an amount that is the greater of the
1096insurer's usual and customary commission for the type of policy
1097written or a fee equal to the usual and customary commission of
1098the association; or
1099     (II)  Offer to allow the producing agent of record of the
1100policy to continue servicing the policy for a period of not less
1101than 1 year and offer to pay the agent the greater of the
1102insurer's or the association's usual and customary commission
1103for the type of policy written.
1104
1105If the producing agent is unwilling or unable to accept
1106appointment, the new insurer shall pay the agent in accordance
1107with sub-sub-subparagraph (I). Subject to the provisions of s.
1108627.3517, the policies issued by the association must provide
1109that if the association obtains an offer from an authorized
1110insurer to cover the risk at its approved rates under either a
1111standard policy including wind coverage or, if consistent with
1112the insurer's underwriting rules as filed with the department, a
1113basic policy including wind coverage, the risk is no longer
1114eligible for coverage through the association. Upon termination
1115of eligibility, the association shall provide written notice to
1116the policyholder and agent of record stating that the
1117association policy must be canceled as of 60 days after the date
1118of the notice because of the offer of coverage from an
1119authorized insurer. Other provisions of the insurance code
1120relating to cancellation and notice of cancellation do not apply
1121to actions under this sub-subparagraph.
1122     f.  When the association enters into a contractual
1123agreement for a take-out plan, the producing agent of record of
1124the association policy is entitled to retain any unearned
1125commission on the policy, and the insurer shall:
1126     (I)  Pay to the producing agent of record of the
1127association policy, for the first year, an amount that is the
1128greater of the insurer's usual and customary commission for the
1129type of policy written or a fee equal to the usual and customary
1130commission of the association; or
1131     (II)  Offer to allow the producing agent of record of the
1132association policy to continue servicing the policy for a period
1133of not less than 1 year and offer to pay the agent the greater
1134of the insurer's or the association's usual and customary
1135commission for the type of policy written.
1136
1137If the producing agent is unwilling or unable to accept
1138appointment, the new insurer shall pay the agent in accordance
1139with sub-sub-subparagraph (I).
1140     6.a.  The plan of operation may authorize the formation of
1141a private nonprofit corporation, a private nonprofit
1142unincorporated association, a partnership, a trust, a limited
1143liability company, or a nonprofit mutual company which may be
1144empowered, among other things, to borrow money by issuing bonds
1145or by incurring other indebtedness and to accumulate reserves or
1146funds to be used for the payment of insured catastrophe losses.
1147The plan may authorize all actions necessary to facilitate the
1148issuance of bonds, including the pledging of assessments or
1149other revenues.
1150     b.  Any entity created under this subsection, or any entity
1151formed for the purposes of this subsection, may sue and be sued,
1152may borrow money; issue bonds, notes, or debt instruments;
1153pledge or sell assessments, market equalization surcharges and
1154other surcharges, rights, premiums, contractual rights,
1155projected recoveries from the Florida Hurricane Catastrophe
1156Fund, other reinsurance recoverables, and other assets as
1157security for such bonds, notes, or debt instruments; enter into
1158any contracts or agreements necessary or proper to accomplish
1159such borrowings; and take other actions necessary to carry out
1160the purposes of this subsection. The association may issue bonds
1161or incur other indebtedness, or have bonds issued on its behalf
1162by a unit of local government pursuant to subparagraph (6)(p)2.,
1163in the absence of a hurricane or other weather-related event,
1164upon a determination by the association subject to approval by
1165the department that such action would enable it to efficiently
1166meet the financial obligations of the association and that such
1167financings are reasonably necessary to effectuate the
1168requirements of this subsection. Any such entity may accumulate
1169reserves and retain surpluses as of the end of any association
1170year to provide for the payment of losses incurred by the
1171association during that year or any future year. The association
1172shall incorporate and continue the plan of operation and
1173articles of agreement in effect on the effective date of chapter
117476-96, Laws of Florida, to the extent that it is not
1175inconsistent with chapter 76-96, and as subsequently modified
1176consistent with chapter 76-96. The board of directors and
1177officers currently serving shall continue to serve until their
1178successors are duly qualified as provided under the plan. The
1179assets and obligations of the plan in effect immediately prior
1180to the effective date of chapter 76-96 shall be construed to be
1181the assets and obligations of the successor plan created herein.
1182     c.  In recognition of s. 10, Art. I of the State
1183Constitution, prohibiting the impairment of obligations of
1184contracts, it is the intent of the Legislature that no action be
1185taken whose purpose is to impair any bond indenture or financing
1186agreement or any revenue source committed by contract to such
1187bond or other indebtedness issued or incurred by the association
1188or any other entity created under this subsection.
1189     7.  On such coverage, an agent's remuneration shall be that
1190amount of money payable to the agent by the terms of his or her
1191contract with the company with which the business is placed.
1192However, no commission will be paid on that portion of the
1193premium which is in excess of the standard premium of that
1194company.
1195     8.  Subject to approval by the department, the association
1196may establish different eligibility requirements and operational
1197procedures for any line or type of coverage for any specified
1198eligible area or portion of an eligible area if the board
1199determines that such changes to the eligibility requirements and
1200operational procedures are justified due to the voluntary market
1201being sufficiently stable and competitive in such area or for
1202such line or type of coverage and that consumers who, in good
1203faith, are unable to obtain insurance through the voluntary
1204market through ordinary methods would continue to have access to
1205coverage from the association. When coverage is sought in
1206connection with a real property transfer, such requirements and
1207procedures shall not provide for an effective date of coverage
1208later than the date of the closing of the transfer as
1209established by the transferor, the transferee, and, if
1210applicable, the lender.
1211     9.  Notwithstanding any other provision of law:
1212     a.  The pledge or sale of, the lien upon, and the security
1213interest in any rights, revenues, or other assets of the
1214association created or purported to be created pursuant to any
1215financing documents to secure any bonds or other indebtedness of
1216the association shall be and remain valid and enforceable,
1217notwithstanding the commencement of and during the continuation
1218of, and after, any rehabilitation, insolvency, liquidation,
1219bankruptcy, receivership, conservatorship, reorganization, or
1220similar proceeding against the association under the laws of
1221this state or any other applicable laws.
1222     b.  No such proceeding shall relieve the association of its
1223obligation, or otherwise affect its ability to perform its
1224obligation, to continue to collect, or levy and collect,
1225assessments, market equalization or other surcharges, projected
1226recoveries from the Florida Hurricane Catastrophe Fund,
1227reinsurance recoverables, or any other rights, revenues, or
1228other assets of the association pledged.
1229     c.  Each such pledge or sale of, lien upon, and security
1230interest in, including the priority of such pledge, lien, or
1231security interest, any such assessments, emergency assessments,
1232market equalization or renewal surcharges, projected recoveries
1233from the Florida Hurricane Catastrophe Fund, reinsurance
1234recoverables, or other rights, revenues, or other assets which
1235are collected, or levied and collected, after the commencement
1236of and during the pendency of or after any such proceeding shall
1237continue unaffected by such proceeding.
1238     d.  As used in this subsection, the term "financing
1239documents" means any agreement, instrument, or other document
1240now existing or hereafter created evidencing any bonds or other
1241indebtedness of the association or pursuant to which any such
1242bonds or other indebtedness has been or may be issued and
1243pursuant to which any rights, revenues, or other assets of the
1244association are pledged or sold to secure the repayment of such
1245bonds or indebtedness, together with the payment of interest on
1246such bonds or such indebtedness, or the payment of any other
1247obligation of the association related to such bonds or
1248indebtedness.
1249     e.  Any such pledge or sale of assessments, revenues,
1250contract rights or other rights or assets of the association
1251shall constitute a lien and security interest, or sale, as the
1252case may be, that is immediately effective and attaches to such
1253assessments, revenues, contract, or other rights or assets,
1254whether or not imposed or collected at the time the pledge or
1255sale is made. Any such pledge or sale is effective, valid,
1256binding, and enforceable against the association or other entity
1257making such pledge or sale, and valid and binding against and
1258superior to any competing claims or obligations owed to any
1259other person or entity, including policyholders in this state,
1260asserting rights in any such assessments, revenues, contract, or
1261other rights or assets to the extent set forth in and in
1262accordance with the terms of the pledge or sale contained in the
1263applicable financing documents, whether or not any such person
1264or entity has notice of such pledge or sale and without the need
1265for any physical delivery, recordation, filing, or other action.
1266     f.  There shall be no liability on the part of, and no
1267cause of action of any nature shall arise against, any member
1268insurer or its agents or employees, agents or employees of the
1269association, members of the board of directors of the
1270association, or the department or its representatives, for any
1271action taken by them in the performance of their duties or
1272responsibilities under this subsection. Such immunity does not
1273apply to actions for breach of any contract or agreement
1274pertaining to insurance, or any willful tort.
1275     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1276     (a)1.  It is the public purpose of this subsection to
1277ensure the existence of an orderly market for property insurance
1278for Floridians and Florida businesses. The Legislature finds
1279that private insurers are unwilling or unable to provide
1280affordable property insurance coverage in this state to the
1281extent sought and needed. The absence of affordable property
1282insurance threatens the public health, safety, and welfare and
1283likewise threatens the economic health of the state. The state
1284therefore has a compelling public interest and a public purpose
1285to assist in assuring that property in the state is insured and
1286that it is insured at affordable rates so as to facilitate the
1287remediation, reconstruction, and replacement of damaged or
1288destroyed property in order to reduce or avoid the negative
1289effects otherwise resulting to the public health, safety, and
1290welfare, to the economy of the state, and to the revenues of the
1291state and local governments which are needed to provide for the
1292public welfare. It is necessary, therefore, to provide
1293affordable property insurance to applicants who are in good
1294faith entitled to procure insurance through the voluntary market
1295but are unable to do so. The Legislature intends by this
1296subsection that affordable property insurance be provided and
1297that it continue to be provided, as long as necessary, through
1298Citizens Property Insurance Corporation, a government entity
1299that is an integral part of the state, and that is not a private
1300insurance company. To that end, Citizens Property Insurance
1301Corporation shall strive to increase the availability of
1302affordable property insurance in this state, while achieving
1303efficiencies and economies, and while providing service to
1304policyholders, applicants, and agents which is no less than the
1305quality generally provided in the voluntary market, for the
1306achievement of the foregoing public purposes. Because it is
1307essential for this government entity to have the maximum
1308financial resources to pay claims following a catastrophic
1309hurricane, it is the intent of the Legislature that Citizens
1310Property Insurance Corporation continue to be an integral part
1311of the state and that the income of the corporation be exempt
1312from federal income taxation and that interest on the debt
1313obligations issued by the corporation be exempt from federal
1314income taxation.
1315     2.  The Residential Property and Casualty Joint
1316Underwriting Association originally created by this statute
1317shall be known, as of July 1, 2002, as the Citizens Property
1318Insurance Corporation. The corporation shall provide insurance
1319for residential and commercial property, for applicants who are
1320in good faith entitled, but are unable, to procure insurance
1321through the voluntary market. The corporation shall operate
1322pursuant to a plan of operation approved by order of the
1323Financial Services Commission. The plan is subject to continuous
1324review by the commission. The commission may, by order, withdraw
1325approval of all or part of a plan if the commission determines
1326that conditions have changed since approval was granted and that
1327the purposes of the plan require changes in the plan. The
1328corporation shall continue to operate pursuant to the plan of
1329operation approved by the Office of Insurance Regulation until
1330October 1, 2006. For the purposes of this subsection,
1331residential coverage includes both personal lines residential
1332coverage, which consists of the type of coverage provided by
1333homeowner's, mobile home owner's, dwelling, tenant's,
1334condominium unit owner's, and similar policies, and commercial
1335lines residential coverage, which consists of the type of
1336coverage provided by condominium association, apartment
1337building, and similar policies.
1338     3.  For the purposes of this subsection, the term
1339"homestead property" means:
1340     a.  Property that has been granted a homestead exemption
1341under chapter 196;
1342     b.  Property for which the owner has a current, written
1343lease with a renter for a term of at least 7 months and for
1344which the dwelling is insured by the corporation for $200,000 or
1345less;
1346     c.  An owner-occupied mobile home or manufactured home, as
1347defined in s. 320.01, which is permanently affixed to real
1348property, is owned by a Florida resident, and has been granted a
1349homestead exemption under chapter 196 or, if the owner does not
1350own the real property, the owner certifies that the mobile home
1351or manufactured home is his or her principal place of residence;
1352     d.  Tenant's coverage;
1353     e.  Commercial lines residential property; or
1354     f.  Any county, district, or municipal hospital; a hospital
1355licensed by any not-for-profit corporation qualified under s.
1356501(c)(3) of the United States Internal Revenue Code; or a
1357continuing care retirement community that is certified under
1358chapter 651 and that receives an exemption from ad valorem taxes
1359under chapter 196.
1360     4.  For the purposes of this subsection, the term
1361"nonhomestead property" means property that is not homestead
1362property.
1363     3.5.  Effective January 1, 2009, a personal lines
1364residential structure that has a dwelling replacement cost of $2
1365$1 million or more, or a single condominium unit that has a
1366combined dwelling and content replacement cost of $2 $1 million
1367or more is not eligible for coverage by the corporation. Such
1368dwellings insured by the corporation on December 31, 2008, may
1369continue to be covered by the corporation until the end of the
1370policy term. However, such dwellings that are insured by the
1371corporation and become ineligible for coverage due to the
1372provisions of this subparagraph may reapply and obtain coverage
1373in the high-risk account and be considered "nonhomestead
1374property" if the property owner provides the corporation with a
1375sworn affidavit from one or more insurance agents, on a form
1376provided by the corporation, stating that the agents have made
1377their best efforts to obtain coverage and that the property has
1378been rejected for coverage by at least one authorized insurer
1379and at least three surplus lines insurers. If such conditions
1380are met, the dwelling may be insured by the corporation for up
1381to 3 years, after which time the dwelling is ineligible for
1382coverage. The office shall approve the method used by the
1383corporation for valuing the dwelling replacement cost for the
1384purposes of this subparagraph. If a policyholder is insured by
1385the corporation prior to being determined to be ineligible
1386pursuant to this subparagraph and such policyholder files a
1387lawsuit challenging the determination, the policyholder may
1388remain insured by the corporation until the conclusion of the
1389litigation.
13906.  For properties constructed on or after January 1, 2009,
1391the corporation may not insure any property located within 2,500
1392feet landward of the coastal construction control line created
1393pursuant to s. 161.053 unless the property meets the
1394requirements of the code-plus building standards developed by
1395the Florida Building Commission.
13964.7.  It is the intent of the Legislature that
1397policyholders, applicants, and agents of the corporation receive
1398service and treatment of the highest possible level but never
1399less than that generally provided in the voluntary market. It
1400also is intended that the corporation be held to service
1401standards no less than those applied to insurers in the
1402voluntary market by the office with respect to responsiveness,
1403timeliness, customer courtesy, and overall dealings with
1404policyholders, applicants, or agents of the corporation.
1405     5.8.  Effective January 1, 2009, a personal lines
1406residential structure that is located in the "wind-borne debris
1407region," as defined in s. 1609.2, International Building Code
1408(2006), and that has an insured value on the structure of
1409$750,000 or more is not eligible for coverage by the corporation
1410unless the structure has opening protections as required under
1411the Florida Building Code for a newly constructed residential
1412structure in that area. A residential structure shall be deemed
1413to comply with the requirements of this subparagraph if it has
1414shutters or opening protections on all openings and if such
1415opening protections complied with the Florida Building Code at
1416the time they were installed.
1417     (b)1.  All insurers authorized to write one or more subject
1418lines of business in this state are subject to assessment by the
1419corporation and, for the purposes of this subsection, are
1420referred to collectively as "assessable insurers." Insurers
1421writing one or more subject lines of business in this state
1422pursuant to part VIII of chapter 626 are not assessable
1423insurers, but insureds who procure one or more subject lines of
1424business in this state pursuant to part VIII of chapter 626 are
1425subject to assessment by the corporation and are referred to
1426collectively as "assessable insureds." An authorized insurer's
1427assessment liability shall begin on the first day of the
1428calendar year following the year in which the insurer was issued
1429a certificate of authority to transact insurance for subject
1430lines of business in this state and shall terminate 1 year after
1431the end of the first calendar year during which the insurer no
1432longer holds a certificate of authority to transact insurance
1433for subject lines of business in this state.
1434     2.a.  All revenues, assets, liabilities, losses, and
1435expenses of the corporation shall be divided into three separate
1436accounts as follows:
1437     (I)  A personal lines account for personal residential
1438policies issued by the corporation or issued by the Residential
1439Property and Casualty Joint Underwriting Association and renewed
1440by the corporation that provide comprehensive, multiperil
1441coverage on risks that are not located in areas eligible for
1442coverage in the Florida Windstorm Underwriting Association as
1443those areas were defined on January 1, 2002, and for such
1444policies that do not provide coverage for the peril of wind on
1445risks that are located in such areas;
1446     (II)  A commercial lines account for commercial residential
1447and commercial nonresidential policies issued by the corporation
1448or issued by the Residential Property and Casualty Joint
1449Underwriting Association and renewed by the corporation that
1450provide coverage for basic property perils on risks that are not
1451located in areas eligible for coverage in the Florida Windstorm
1452Underwriting Association as those areas were defined on January
14531, 2002, and for such policies that do not provide coverage for
1454the peril of wind on risks that are located in such areas; and
1455     (III)  A high-risk account for personal residential
1456policies and commercial residential and commercial
1457nonresidential property policies issued by the corporation or
1458transferred to the corporation that provide coverage for the
1459peril of wind on risks that are located in areas eligible for
1460coverage in the Florida Windstorm Underwriting Association as
1461those areas were defined on January 1, 2002. Subject to the
1462approval of a business plan by the Financial Services Commission
1463and Legislative Budget Commission as provided in this sub-sub-
1464subparagraph, but no earlier than March 31, 2007, The
1465corporation may offer policies that provide multiperil coverage
1466and the corporation shall continue to offer policies that
1467provide coverage only for the peril of wind for risks located in
1468areas eligible for coverage in the high-risk account. In issuing
1469multiperil coverage, the corporation may use its approved policy
1470forms and rates for the personal lines account. An applicant or
1471insured who is eligible to purchase a multiperil policy from the
1472corporation may purchase a multiperil policy from an authorized
1473insurer without prejudice to the applicant's or insured's
1474eligibility to prospectively purchase a policy that provides
1475coverage only for the peril of wind from the corporation. An
1476applicant or insured who is eligible for a corporation policy
1477that provides coverage only for the peril of wind may elect to
1478purchase or retain such policy and also purchase or retain
1479coverage excluding wind from an authorized insurer without
1480prejudice to the applicant's or insured's eligibility to
1481prospectively purchase a policy that provides multiperil
1482coverage from the corporation. It is the goal of the Legislature
1483that there would be an overall average savings of 10 percent or
1484more for a policyholder who currently has a wind-only policy
1485with the corporation, and an ex-wind policy with a voluntary
1486insurer or the corporation, and who then obtains a multiperil
1487policy from the corporation. It is the intent of the Legislature
1488that the offer of multiperil coverage in the high-risk account
1489be made and implemented in a manner that does not adversely
1490affect the tax-exempt status of the corporation or
1491creditworthiness of or security for currently outstanding
1492financing obligations or credit facilities of the high-risk
1493account, the personal lines account, or the commercial lines
1494account. By March 1, 2007, the corporation shall prepare and
1495submit for approval by the Financial Services Commission and
1496Legislative Budget Commission a report detailing the
1497corporation's business plan for issuing multiperil coverage in
1498the high-risk account. The business plan shall be approved or
1499disapproved within 30 days after receipt, as submitted or
1500modified and resubmitted by the corporation. The business plan
1501must include: the impact of such multiperil coverage on the
1502corporation's financial resources, the impact of such multiperil
1503coverage on the corporation's tax-exempt status, the manner in
1504which the corporation plans to implement the processing of
1505applications and policy forms for new and existing
1506policyholders, the impact of such multiperil coverage on the
1507corporation's ability to deliver customer service at the high
1508level required by this subsection, the ability of the
1509corporation to process claims, the ability of the corporation to
1510quote and issue policies, the impact of such multiperil coverage
1511on the corporation's agents, the impact of such multiperil
1512coverage on the corporation's existing policyholders, and the
1513impact of such multiperil coverage on rates and premium. The
1514high-risk account must also include quota share primary
1515insurance under subparagraph (c)2. The area eligible for
1516coverage under the high-risk account also includes the area
1517within Port Canaveral, which is bordered on the south by the
1518City of Cape Canaveral, bordered on the west by the Banana
1519River, and bordered on the north by Federal Government property.
1520     b.  The three separate accounts must be maintained as long
1521as financing obligations entered into by the Florida Windstorm
1522Underwriting Association or Residential Property and Casualty
1523Joint Underwriting Association are outstanding, in accordance
1524with the terms of the corresponding financing documents. When
1525the financing obligations are no longer outstanding, in
1526accordance with the terms of the corresponding financing
1527documents, the corporation may use a single account for all
1528revenues, assets, liabilities, losses, and expenses of the
1529corporation. Consistent with the requirement of this
1530subparagraph and prudent investment policies that minimize the
1531cost of carrying debt, the board shall exercise its best efforts
1532to retire existing debt or to obtain approval of necessary
1533parties to amend the terms of existing debt, so as to structure
1534the most efficient plan to consolidate the three separate
1535accounts into a single account. By February 1, 2007, the board
1536shall submit a report to the Financial Services Commission, the
1537President of the Senate, and the Speaker of the House of
1538Representatives which includes an analysis of consolidating the
1539accounts, the actions the board has taken to minimize the cost
1540of carrying debt, and its recommendations for executing the most
1541efficient plan.
1542     c.  Creditors of the Residential Property and Casualty
1543Joint Underwriting Association and of the accounts specified in
1544sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1545and recourse to, the accounts referred to in sub-sub-
1546subparagraphs a.(I) and (II) and shall have no claim against, or
1547recourse to, the account referred to in sub-sub-subparagraph
1548a.(III). Creditors of the Florida Windstorm Underwriting
1549Association shall have a claim against, and recourse to, the
1550account referred to in sub-sub-subparagraph a.(III) and shall
1551have no claim against, or recourse to, the accounts referred to
1552in sub-sub-subparagraphs a.(I) and (II).
1553     d.  Revenues, assets, liabilities, losses, and expenses not
1554attributable to particular accounts shall be prorated among the
1555accounts.
1556     e.  The Legislature finds that the revenues of the
1557corporation are revenues that are necessary to meet the
1558requirements set forth in documents authorizing the issuance of
1559bonds under this subsection.
1560     f.  No part of the income of the corporation may inure to
1561the benefit of any private person.
1562     3.  With respect to a deficit in an account:
1563     a.  After accounting for the Citizens policyholder
1564surcharge imposed under sub-subparagraph i., when the remaining
1565projected deficit incurred in a particular calendar year is not
1566greater than 6 10 percent of the aggregate statewide direct
1567written premium for the subject lines of business for the prior
1568calendar year, the entire deficit shall be recovered through
1569regular assessments of assessable insurers under paragraph (p)
1570and assessable insureds.
1571     b.  After accounting for the Citizens policyholder
1572surcharge imposed under sub-subparagraph i., when the remaining
1573projected deficit incurred in a particular calendar year exceeds
15746 10 percent of the aggregate statewide direct written premium
1575for the subject lines of business for the prior calendar year,
1576the corporation shall levy regular assessments on assessable
1577insurers under paragraph (p) and on assessable insureds in an
1578amount equal to the greater of 6 10 percent of the deficit or 6
157910 percent of the aggregate statewide direct written premium for
1580the subject lines of business for the prior calendar year. Any
1581remaining deficit shall be recovered through emergency
1582assessments under sub-subparagraph d.
1583     c.  Each assessable insurer's share of the amount being
1584assessed under sub-subparagraph a. or sub-subparagraph b. shall
1585be in the proportion that the assessable insurer's direct
1586written premium for the subject lines of business for the year
1587preceding the assessment bears to the aggregate statewide direct
1588written premium for the subject lines of business for that year.
1589The assessment percentage applicable to each assessable insured
1590is the ratio of the amount being assessed under sub-subparagraph
1591a. or sub-subparagraph b. to the aggregate statewide direct
1592written premium for the subject lines of business for the prior
1593year. Assessments levied by the corporation on assessable
1594insurers under sub-subparagraphs a. and b. shall be paid as
1595required by the corporation's plan of operation and paragraph
1596(p). notwithstanding any other provision of this subsection, the
1597aggregate amount of a regular assessment for a deficit incurred
1598in a particular calendar year shall be reduced by the estimated
1599amount to be received by the corporation from the Citizens
1600policyholder surcharge under subparagraph (c)10. and the amount
1601collected or estimated to be collected from the assessment on
1602Citizens policyholders pursuant to sub-subparagraph i.
1603Assessments levied by the corporation on assessable insureds
1604under sub-subparagraphs a. and b. shall be collected by the
1605surplus lines agent at the time the surplus lines agent collects
1606the surplus lines tax required by s. 626.932 and shall be paid
1607to the Florida Surplus Lines Service Office at the time the
1608surplus lines agent pays the surplus lines tax to the Florida
1609Surplus Lines Service Office. Upon receipt of regular
1610assessments from surplus lines agents, the Florida Surplus Lines
1611Service Office shall transfer the assessments directly to the
1612corporation as determined by the corporation.
1613     d.  Upon a determination by the board of governors that a
1614deficit in an account exceeds the amount that will be recovered
1615through regular assessments under sub-subparagraph a. or sub-
1616subparagraph b., plus the amount that is expected to be
1617recovered through surcharges under sub-subparagraph i., as to
1618the remaining projected deficit the board shall levy, after
1619verification by the office, emergency assessments, for as many
1620years as necessary to cover the deficits, to be collected by
1621assessable insurers and the corporation and collected from
1622assessable insureds upon issuance or renewal of policies for
1623subject lines of business, excluding National Flood Insurance
1624policies. The amount of the emergency assessment collected in a
1625particular year shall be a uniform percentage of that year's
1626direct written premium for subject lines of business and all
1627accounts of the corporation, excluding National Flood Insurance
1628Program policy premiums, as annually determined by the board and
1629verified by the office. The office shall verify the arithmetic
1630calculations involved in the board's determination within 30
1631days after receipt of the information on which the determination
1632was based. Notwithstanding any other provision of law, the
1633corporation and each assessable insurer that writes subject
1634lines of business shall collect emergency assessments from its
1635policyholders without such obligation being affected by any
1636credit, limitation, exemption, or deferment. Emergency
1637assessments levied by the corporation on assessable insureds
1638shall be collected by the surplus lines agent at the time the
1639surplus lines agent collects the surplus lines tax required by
1640s. 626.932 and shall be paid to the Florida Surplus Lines
1641Service Office at the time the surplus lines agent pays the
1642surplus lines tax to the Florida Surplus Lines Service Office.
1643The emergency assessments so collected shall be transferred
1644directly to the corporation on a periodic basis as determined by
1645the corporation and shall be held by the corporation solely in
1646the applicable account. The aggregate amount of emergency
1647assessments levied for an account under this sub-subparagraph in
1648any calendar year may, at the discretion of the board of
1649governors, be less than but may not exceed the greater of 10
1650percent of the amount needed to cover the original deficit, plus
1651interest, fees, commissions, required reserves, and other costs
1652associated with financing of the original deficit, or 10 percent
1653of the aggregate statewide direct written premium for subject
1654lines of business and for all accounts of the corporation for
1655the prior year, plus interest, fees, commissions, required
1656reserves, and other costs associated with financing the original
1657deficit.
1658     e.  The corporation may pledge the proceeds of assessments,
1659projected recoveries from the Florida Hurricane Catastrophe
1660Fund, other insurance and reinsurance recoverables, policyholder
1661surcharges and other surcharges, and other funds available to
1662the corporation as the source of revenue for and to secure bonds
1663issued under paragraph (p), bonds or other indebtedness issued
1664under subparagraph (c)3., or lines of credit or other financing
1665mechanisms issued or created under this subsection, or to retire
1666any other debt incurred as a result of deficits or events giving
1667rise to deficits, or in any other way that the board determines
1668will efficiently recover such deficits. The purpose of the lines
1669of credit or other financing mechanisms is to provide additional
1670resources to assist the corporation in covering claims and
1671expenses attributable to a catastrophe. As used in this
1672subsection, the term "assessments" includes regular assessments
1673under sub-subparagraph a., sub-subparagraph b., or subparagraph
1674(p)1. and emergency assessments under sub-subparagraph d.
1675Emergency assessments collected under sub-subparagraph d. are
1676not part of an insurer's rates, are not premium, and are not
1677subject to premium tax, fees, or commissions; however, failure
1678to pay the emergency assessment shall be treated as failure to
1679pay premium. The emergency assessments under sub-subparagraph d.
1680shall continue as long as any bonds issued or other indebtedness
1681incurred with respect to a deficit for which the assessment was
1682imposed remain outstanding, unless adequate provision has been
1683made for the payment of such bonds or other indebtedness
1684pursuant to the documents governing such bonds or other
1685indebtedness.
1686     f.  As used in this subsection for purposes of any deficit
1687incurred on or after January 25, 2007, the term "subject lines
1688of business" means insurance written by assessable insurers or
1689procured by assessable insureds for all property and casualty
1690lines of business in this state, but not including workers'
1691compensation or medical malpractice. As used in the sub-
1692subparagraph, the term "property and casualty lines of business"
1693includes all lines of business identified on Form 2, Exhibit of
1694Premiums and Losses, in the annual statement required of
1695authorized insurers by s. 624.424 and any rule adopted under
1696this section, except for those lines identified as accident and
1697health insurance and except for policies written under the
1698National Flood Insurance Program or the Federal Crop Insurance
1699Program. For purposes of this sub-subparagraph, the term
1700"workers' compensation" includes both workers' compensation
1701insurance and excess workers' compensation insurance.
1702     g.  The Florida Surplus Lines Service Office shall
1703determine annually the aggregate statewide written premium in
1704subject lines of business procured by assessable insureds and
1705shall report that information to the corporation in a form and
1706at a time the corporation specifies to ensure that the
1707corporation can meet the requirements of this subsection and the
1708corporation's financing obligations.
1709     h.  The Florida Surplus Lines Service Office shall verify
1710the proper application by surplus lines agents of assessment
1711percentages for regular assessments and emergency assessments
1712levied under this subparagraph on assessable insureds and shall
1713assist the corporation in ensuring the accurate, timely
1714collection and payment of assessments by surplus lines agents as
1715required by the corporation.
1716     i.  If a deficit is incurred in any account in 2008 or
1717thereafter, the board of governors shall levy a Citizens
1718policyholder surcharge an immediate assessment against the
1719premium of each nonhomestead property policyholder in all
1720accounts of the corporation, as a uniform percentage of the
1721premium of the policy of up to 10 percent of such premium, which
1722funds shall be used to offset the deficit. If this assessment is
1723insufficient to eliminate the deficit, the board of governors
1724shall levy an additional assessment against all policyholders of
1725the corporation for a 12-month period, which shall be collected
1726at the time of issuance or renewal of a policy, as a uniform
1727percentage of the premium for the policy of up to 15 10 percent
1728of such premium, which funds shall be used to further offset the
1729deficit. Citizens policyholder surcharges under this sub-
1730subparagraph are not considered premium and are not subject to
1731commissions, fees, or premium taxes. However, failure to pay
1732such surcharges shall be treated as failure to pay premium.
1733     j.  If the amount of any assessments or surcharges
1734collected from corporation policyholders, assessable insurers or
1735their policyholders, or assessable insureds exceeds the amount
1736of the deficits, such excess amounts shall be remitted to and
1737retained by the corporation in a reserve to be used by the
1738corporation, as determined by the board of governors and
1739approved by the office, to pay claims or reduce any past,
1740present, or future plan-year deficits or to reduce outstanding
1741debt. The board of governors shall maintain separate accounting
1742records that consolidate data for nonhomestead properties,
1743including, but not limited to, number of policies, insured
1744values, premiums written, and losses. The board of governors
1745shall annually report to the office and the Legislature a
1746summary of such data.
1747     (c)  The plan of operation of the corporation:
1748     1.  Must provide for adoption of residential property and
1749casualty insurance policy forms and commercial residential and
1750nonresidential property insurance forms, which forms must be
1751approved by the office prior to use. The corporation shall adopt
1752the following policy forms:
1753     a.  Standard personal lines policy forms that are
1754comprehensive multiperil policies providing full coverage of a
1755residential property equivalent to the coverage provided in the
1756private insurance market under an HO-3, HO-4, or HO-6 policy.
1757     b.  Basic personal lines policy forms that are policies
1758similar to an HO-8 policy or a dwelling fire policy that provide
1759coverage meeting the requirements of the secondary mortgage
1760market, but which coverage is more limited than the coverage
1761under a standard policy.
1762     c.  Commercial lines residential and nonresidential policy
1763forms that are generally similar to the basic perils of full
1764coverage obtainable for commercial residential structures and
1765commercial nonresidential structures in the admitted voluntary
1766market.
1767     d.  Personal lines and commercial lines residential
1768property insurance forms that cover the peril of wind only. The
1769forms are applicable only to residential properties located in
1770areas eligible for coverage under the high-risk account referred
1771to in sub-subparagraph (b)2.a.
1772     e.  Commercial lines nonresidential property insurance
1773forms that cover the peril of wind only. The forms are
1774applicable only to nonresidential properties located in areas
1775eligible for coverage under the high-risk account referred to in
1776sub-subparagraph (b)2.a.
1777     f.  The corporation may adopt variations of the policy
1778forms listed in sub-subparagraphs a.-e. that contain more
1779restrictive coverage.
1780     2.a.  Must provide that the corporation adopt a program in
1781which the corporation and authorized insurers enter into quota
1782share primary insurance agreements for hurricane coverage, as
1783defined in s. 627.4025(2)(a), for eligible risks, and adopt
1784property insurance forms for eligible risks which cover the
1785peril of wind only. As used in this subsection, the term:
1786     (I)  "Quota share primary insurance" means an arrangement
1787in which the primary hurricane coverage of an eligible risk is
1788provided in specified percentages by the corporation and an
1789authorized insurer. The corporation and authorized insurer are
1790each solely responsible for a specified percentage of hurricane
1791coverage of an eligible risk as set forth in a quota share
1792primary insurance agreement between the corporation and an
1793authorized insurer and the insurance contract. The
1794responsibility of the corporation or authorized insurer to pay
1795its specified percentage of hurricane losses of an eligible
1796risk, as set forth in the quota share primary insurance
1797agreement, may not be altered by the inability of the other
1798party to the agreement to pay its specified percentage of
1799hurricane losses. Eligible risks that are provided hurricane
1800coverage through a quota share primary insurance arrangement
1801must be provided policy forms that set forth the obligations of
1802the corporation and authorized insurer under the arrangement,
1803clearly specify the percentages of quota share primary insurance
1804provided by the corporation and authorized insurer, and
1805conspicuously and clearly state that neither the authorized
1806insurer nor the corporation may be held responsible beyond its
1807specified percentage of coverage of hurricane losses.
1808     (II)  "Eligible risks" means personal lines residential and
1809commercial lines residential risks that meet the underwriting
1810criteria of the corporation and are located in areas that were
1811eligible for coverage by the Florida Windstorm Underwriting
1812Association on January 1, 2002.
1813     b.  The corporation may enter into quota share primary
1814insurance agreements with authorized insurers at corporation
1815coverage levels of 90 percent and 50 percent.
1816     c.  If the corporation determines that additional coverage
1817levels are necessary to maximize participation in quota share
1818primary insurance agreements by authorized insurers, the
1819corporation may establish additional coverage levels. However,
1820the corporation's quota share primary insurance coverage level
1821may not exceed 90 percent.
1822     d.  Any quota share primary insurance agreement entered
1823into between an authorized insurer and the corporation must
1824provide for a uniform specified percentage of coverage of
1825hurricane losses, by county or territory as set forth by the
1826corporation board, for all eligible risks of the authorized
1827insurer covered under the quota share primary insurance
1828agreement.
1829     e.  Any quota share primary insurance agreement entered
1830into between an authorized insurer and the corporation is
1831subject to review and approval by the office. However, such
1832agreement shall be authorized only as to insurance contracts
1833entered into between an authorized insurer and an insured who is
1834already insured by the corporation for wind coverage.
1835     f.  For all eligible risks covered under quota share
1836primary insurance agreements, the exposure and coverage levels
1837for both the corporation and authorized insurers shall be
1838reported by the corporation to the Florida Hurricane Catastrophe
1839Fund. For all policies of eligible risks covered under quota
1840share primary insurance agreements, the corporation and the
1841authorized insurer shall maintain complete and accurate records
1842for the purpose of exposure and loss reimbursement audits as
1843required by Florida Hurricane Catastrophe Fund rules. The
1844corporation and the authorized insurer shall each maintain
1845duplicate copies of policy declaration pages and supporting
1846claims documents.
1847     g.  The corporation board shall establish in its plan of
1848operation standards for quota share agreements which ensure that
1849there is no discriminatory application among insurers as to the
1850terms of quota share agreements, pricing of quota share
1851agreements, incentive provisions if any, and consideration paid
1852for servicing policies or adjusting claims.
1853     h.  The quota share primary insurance agreement between the
1854corporation and an authorized insurer must set forth the
1855specific terms under which coverage is provided, including, but
1856not limited to, the sale and servicing of policies issued under
1857the agreement by the insurance agent of the authorized insurer
1858producing the business, the reporting of information concerning
1859eligible risks, the payment of premium to the corporation, and
1860arrangements for the adjustment and payment of hurricane claims
1861incurred on eligible risks by the claims adjuster and personnel
1862of the authorized insurer. Entering into a quota sharing
1863insurance agreement between the corporation and an authorized
1864insurer shall be voluntary and at the discretion of the
1865authorized insurer.
1866     3.  May provide that the corporation may employ or
1867otherwise contract with individuals or other entities to provide
1868administrative or professional services that may be appropriate
1869to effectuate the plan. The corporation shall have the power to
1870borrow funds, by issuing bonds or by incurring other
1871indebtedness, and shall have other powers reasonably necessary
1872to effectuate the requirements of this subsection, including,
1873without limitation, the power to issue bonds and incur other
1874indebtedness in order to refinance outstanding bonds or other
1875indebtedness. The corporation may, but is not required to, seek
1876judicial validation of its bonds or other indebtedness under
1877chapter 75. The corporation may issue bonds or incur other
1878indebtedness, or have bonds issued on its behalf by a unit of
1879local government pursuant to subparagraph (p)2., in the absence
1880of a hurricane or other weather-related event, upon a
1881determination by the corporation, subject to approval by the
1882office, that such action would enable it to efficiently meet the
1883financial obligations of the corporation and that such
1884financings are reasonably necessary to effectuate the
1885requirements of this subsection. The corporation is authorized
1886to take all actions needed to facilitate tax-free status for any
1887such bonds or indebtedness, including formation of trusts or
1888other affiliated entities. The corporation shall have the
1889authority to pledge assessments, projected recoveries from the
1890Florida Hurricane Catastrophe Fund, other reinsurance
1891recoverables, market equalization and other surcharges, and
1892other funds available to the corporation as security for bonds
1893or other indebtedness. In recognition of s. 10, Art. I of the
1894State Constitution, prohibiting the impairment of obligations of
1895contracts, it is the intent of the Legislature that no action be
1896taken whose purpose is to impair any bond indenture or financing
1897agreement or any revenue source committed by contract to such
1898bond or other indebtedness.
1899     4.a.  Must require that the corporation operate subject to
1900the supervision and approval of a board of governors consisting
1901of eight individuals who are residents of this state, from
1902different geographical areas of this state. The Governor, the
1903Chief Financial Officer, the President of the Senate, and the
1904Speaker of the House of Representatives shall each appoint two
1905members of the board. At least one of the two members appointed
1906by each appointing officer must have demonstrated expertise in
1907insurance. The Chief Financial Officer shall designate one of
1908the appointees as chair. All board members serve at the pleasure
1909of the appointing officer. All members of the board of governors
1910are subject to removal at will by the officers who appointed
1911them. All board members, including the chair, must be appointed
1912to serve for 3-year terms beginning annually on a date
1913designated by the plan. Any board vacancy shall be filled for
1914the unexpired term by the appointing officer. The Chief
1915Financial Officer shall appoint a technical advisory group to
1916provide information and advice to the board of governors in
1917connection with the board's duties under this subsection. The
1918executive director and senior managers of the corporation shall
1919be engaged by the board and serve at the pleasure of the board.
1920Any executive director appointed on or after July 1, 2006, is
1921subject to confirmation by the Senate. The executive director is
1922responsible for employing other staff as the corporation may
1923require, subject to review and concurrence by the board.
1924     b.  The board shall create a Market Accountability Advisory
1925Committee to assist the corporation in developing awareness of
1926its rates and its customer and agent service levels in
1927relationship to the voluntary market insurers writing similar
1928coverage. The members of the advisory committee shall consist of
1929the following 11 persons, one of whom must be elected chair by
1930the members of the committee: four representatives, one
1931appointed by the Florida Association of Insurance Agents, one by
1932the Florida Association of Insurance and Financial Advisors, one
1933by the Professional Insurance Agents of Florida, and one by the
1934Latin American Association of Insurance Agencies; three
1935representatives appointed by the insurers with the three highest
1936voluntary market share of residential property insurance
1937business in the state; one representative from the Office of
1938Insurance Regulation; one consumer appointed by the board who is
1939insured by the corporation at the time of appointment to the
1940committee; one representative appointed by the Florida
1941Association of Realtors; and one representative appointed by the
1942Florida Bankers Association. All members must serve for 3-year
1943terms and may serve for consecutive terms. The committee shall
1944report to the corporation at each board meeting on insurance
1945market issues which may include rates and rate competition with
1946the voluntary market; service, including policy issuance, claims
1947processing, and general responsiveness to policyholders,
1948applicants, and agents; and matters relating to depopulation.
1949     5.  Must provide a procedure for determining the
1950eligibility of a risk for coverage, as follows:
1951     a.  Subject to the provisions of s. 627.3517, with respect
1952to personal lines residential risks, if the risk is offered
1953coverage from an authorized insurer at the insurer's approved
1954rate under either a standard policy including wind coverage or,
1955if consistent with the insurer's underwriting rules as filed
1956with the office, a basic policy including wind coverage, for a
1957new application to the corporation for coverage, the risk is not
1958eligible for any policy issued by the corporation unless the
1959premium for coverage from the authorized insurer is more than 15
1960percent greater than the premium for comparable coverage from
1961the corporation. If the risk is not able to obtain any such
1962offer, the risk is eligible for either a standard policy
1963including wind coverage or a basic policy including wind
1964coverage issued by the corporation; however, if the risk could
1965not be insured under a standard policy including wind coverage
1966regardless of market conditions, the risk shall be eligible for
1967a basic policy including wind coverage unless rejected under
1968subparagraph 9. However, with regard to a policyholder of the
1969corporation or a policyholder removed from the corporation
1970through an assumption agreement until the end of the assumption
1971period, the policyholder remains eligible for coverage from the
1972corporation regardless of any offer of coverage from an
1973authorized insurer or surplus lines insurer. The corporation
1974shall determine the type of policy to be provided on the basis
1975of objective standards specified in the underwriting manual and
1976based on generally accepted underwriting practices.
1977     (I)  If the risk accepts an offer of coverage through the
1978market assistance plan or an offer of coverage through a
1979mechanism established by the corporation before a policy is
1980issued to the risk by the corporation or during the first 30
1981days of coverage by the corporation, and the producing agent who
1982submitted the application to the plan or to the corporation is
1983not currently appointed by the insurer, the insurer shall:
1984     (A)  Pay to the producing agent of record of the policy,
1985for the first year, an amount that is the greater of the
1986insurer's usual and customary commission for the type of policy
1987written or a fee equal to the usual and customary commission of
1988the corporation; or
1989     (B)  Offer to allow the producing agent of record of the
1990policy to continue servicing the policy for a period of not less
1991than 1 year and offer to pay the agent the greater of the
1992insurer's or the corporation's usual and customary commission
1993for the type of policy written.
1994
1995If the producing agent is unwilling or unable to accept
1996appointment, the new insurer shall pay the agent in accordance
1997with sub-sub-sub-subparagraph (A).
1998     (II)  When the corporation enters into a contractual
1999agreement for a take-out plan, the producing agent of record of
2000the corporation policy is entitled to retain any unearned
2001commission on the policy, and the insurer shall:
2002     (A)  Pay to the producing agent of record of the
2003corporation policy, for the first year, an amount that is the
2004greater of the insurer's usual and customary commission for the
2005type of policy written or a fee equal to the usual and customary
2006commission of the corporation; or
2007     (B)  Offer to allow the producing agent of record of the
2008corporation policy to continue servicing the policy for a period
2009of not less than 1 year and offer to pay the agent the greater
2010of the insurer's or the corporation's usual and customary
2011commission for the type of policy written.
2012
2013If the producing agent is unwilling or unable to accept
2014appointment, the new insurer shall pay the agent in accordance
2015with sub-sub-sub-subparagraph (A).
2016     b.  With respect to commercial lines residential risks, for
2017a new application to the corporation for coverage, if the risk
2018is offered coverage under a policy including wind coverage from
2019an authorized insurer at its approved rate, the risk is not
2020eligible for any policy issued by the corporation unless the
2021premium for coverage from the authorized insurer is more than 15
2022percent greater than the premium for comparable coverage from
2023the corporation. If the risk is not able to obtain any such
2024offer, the risk is eligible for a policy including wind coverage
2025issued by the corporation. However, with regard to a
2026policyholder of the corporation or a policyholder removed from
2027the corporation through an assumption agreement until the end of
2028the assumption period, the policyholder remains eligible for
2029coverage from the corporation regardless of any offer of
2030coverage from an authorized insurer or surplus lines insurer.
2031     (I)  If the risk accepts an offer of coverage through the
2032market assistance plan or an offer of coverage through a
2033mechanism established by the corporation before a policy is
2034issued to the risk by the corporation or during the first 30
2035days of coverage by the corporation, and the producing agent who
2036submitted the application to the plan or the corporation is not
2037currently appointed by the insurer, the insurer shall:
2038     (A)  Pay to the producing agent of record of the policy,
2039for the first year, an amount that is the greater of the
2040insurer's usual and customary commission for the type of policy
2041written or a fee equal to the usual and customary commission of
2042the corporation; or
2043     (B)  Offer to allow the producing agent of record of the
2044policy to continue servicing the policy for a period of not less
2045than 1 year and offer to pay the agent the greater of the
2046insurer's or the corporation's usual and customary commission
2047for the type of policy written.
2048
2049If the producing agent is unwilling or unable to accept
2050appointment, the new insurer shall pay the agent in accordance
2051with sub-sub-sub-subparagraph (A).
2052     (II)  When the corporation enters into a contractual
2053agreement for a take-out plan, the producing agent of record of
2054the corporation policy is entitled to retain any unearned
2055commission on the policy, and the insurer shall:
2056     (A)  Pay to the producing agent of record of the
2057corporation policy, for the first year, an amount that is the
2058greater of the insurer's usual and customary commission for the
2059type of policy written or a fee equal to the usual and customary
2060commission of the corporation; or
2061     (B)  Offer to allow the producing agent of record of the
2062corporation policy to continue servicing the policy for a period
2063of not less than 1 year and offer to pay the agent the greater
2064of the insurer's or the corporation's usual and customary
2065commission for the type of policy written.
2066
2067If the producing agent is unwilling or unable to accept
2068appointment, the new insurer shall pay the agent in accordance
2069with sub-sub-sub-subparagraph (A).
2070     c.  For purposes of determining comparable coverage under
2071sub-subparagraphs a. and b., the comparison shall be based on
2072those forms and coverages that are reasonably comparable. The
2073corporation may rely on a determination of comparable coverage
2074and premium made by the producing agent who submits the
2075application to the corporation, made in the agent's capacity as
2076the corporation's agent. A comparison may be made solely of the
2077premium with respect to the main building or structure only on
2078the following basis: the same coverage A or other building
2079limits; the same percentage hurricane deductible that applies on
2080an annual basis or that applies to each hurricane for commercial
2081residential property; the same percentage of ordinance and law
2082coverage, if the same limit is offered by both the corporation
2083and the authorized insurer; the same mitigation credits, to the
2084extent the same types of credits are offered both by the
2085corporation and the authorized insurer; the same method for loss
2086payment, such as replacement cost or actual cash value, if the
2087same method is offered both by the corporation and the
2088authorized insurer in accordance with underwriting rules; and
2089any other form or coverage that is reasonably comparable as
2090determined by the board. If an application is submitted to the
2091corporation for wind-only coverage in the high-risk account, the
2092premium for the corporation's wind-only policy plus the premium
2093for the ex-wind policy that is offered by an authorized insurer
2094to the applicant shall be compared to the premium for multiperil
2095coverage offered by an authorized insurer, subject to the
2096standards for comparison specified in this subparagraph. If the
2097corporation or the applicant requests from the authorized
2098insurer a breakdown of the premium of the offer by types of
2099coverage so that a comparison may be made by the corporation or
2100its agent and the authorized insurer refuses or is unable to
2101provide such information, the corporation may treat the offer as
2102not being an offer of coverage from an authorized insurer at the
2103insurer's approved rate.
2104     6.  Must include rules for classifications of risks and
2105rates therefor.
2106     7.  Must provide that if premium and investment income for
2107an account attributable to a particular calendar year are in
2108excess of projected losses and expenses for the account
2109attributable to that year, such excess shall be held in surplus
2110in the account. Such surplus shall be available to defray
2111deficits in that account as to future years and shall be used
2112for that purpose prior to assessing assessable insurers and
2113assessable insureds as to any calendar year.
2114     8.  Must provide objective criteria and procedures to be
2115uniformly applied for all applicants in determining whether an
2116individual risk is so hazardous as to be uninsurable. In making
2117this determination and in establishing the criteria and
2118procedures, the following shall be considered:
2119     a.  Whether the likelihood of a loss for the individual
2120risk is substantially higher than for other risks of the same
2121class; and
2122     b.  Whether the uncertainty associated with the individual
2123risk is such that an appropriate premium cannot be determined.
2124
2125The acceptance or rejection of a risk by the corporation shall
2126be construed as the private placement of insurance, and the
2127provisions of chapter 120 shall not apply.
2128     9.  Must provide that the corporation shall make its best
2129efforts to procure catastrophe reinsurance at reasonable rates,
2130to cover its projected 100-year probable maximum loss as
2131determined by the board of governors.
2132     10.  Must provide that in the event of regular deficit
2133assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2134(b)3.b., in the personal lines account, the commercial lines
2135residential account, or the high-risk account, the corporation
2136shall levy upon corporation policyholders in its next rate
2137filing, or by a separate rate filing solely for this purpose, a
2138Citizens policyholder surcharge arising from a regular
2139assessment in such account in a percentage equal to the total
2140amount of such regular assessments divided by the aggregate
2141statewide direct written premium for subject lines of business
2142for the prior calendar year. For purposes of calculating the
2143Citizens policyholder surcharge to be levied under this
2144subparagraph, the total amount of the regular assessment to
2145which this surcharge is related shall be determined as set forth
2146in subparagraph (b)3., without deducting the estimated Citizens
2147policyholder surcharge. Citizens policyholder surcharges under
2148this subparagraph are not considered premium and are not subject
2149to commissions, fees, or premium taxes; however, failure to pay
2150a market equalization surcharge shall be treated as failure to
2151pay premium.
2152     10.11.  The policies issued by the corporation must provide
2153that, if the corporation or the market assistance plan obtains
2154an offer from an authorized insurer to cover the risk at its
2155approved rates, the risk is no longer eligible for renewal
2156through the corporation, except as otherwise provided in this
2157subsection.
2158     11.12.  Corporation policies and applications must include
2159a notice that the corporation policy could, under this section,
2160be replaced with a policy issued by an authorized insurer that
2161does not provide coverage identical to the coverage provided by
2162the corporation. The notice shall also specify that acceptance
2163of corporation coverage creates a conclusive presumption that
2164the applicant or policyholder is aware of this potential.
2165     12.13.  May establish, subject to approval by the office,
2166different eligibility requirements and operational procedures
2167for any line or type of coverage for any specified county or
2168area if the board determines that such changes to the
2169eligibility requirements and operational procedures are
2170justified due to the voluntary market being sufficiently stable
2171and competitive in such area or for such line or type of
2172coverage and that consumers who, in good faith, are unable to
2173obtain insurance through the voluntary market through ordinary
2174methods would continue to have access to coverage from the
2175corporation. When coverage is sought in connection with a real
2176property transfer, such requirements and procedures shall not
2177provide for an effective date of coverage later than the date of
2178the closing of the transfer as established by the transferor,
2179the transferee, and, if applicable, the lender.
2180     13.14.  Must provide that, with respect to the high-risk
2181account, any assessable insurer with a surplus as to
2182policyholders of $25 million or less writing 25 percent or more
2183of its total countrywide property insurance premiums in this
2184state may petition the office, within the first 90 days of each
2185calendar year, to qualify as a limited apportionment company. A
2186regular assessment levied by the corporation on a limited
2187apportionment company for a deficit incurred by the corporation
2188for the high-risk account in 2006 or thereafter may be paid to
2189the corporation on a monthly basis as the assessments are
2190collected by the limited apportionment company from its insureds
2191pursuant to s. 627.3512, but the regular assessment must be paid
2192in full within 12 months after being levied by the corporation.
2193A limited apportionment company shall collect from its
2194policyholders any emergency assessment imposed under sub-
2195subparagraph (b)3.d. The plan shall provide that, if the office
2196determines that any regular assessment will result in an
2197impairment of the surplus of a limited apportionment company,
2198the office may direct that all or part of such assessment be
2199deferred as provided in subparagraph (p)4. However, there shall
2200be no limitation or deferment of an emergency assessment to be
2201collected from policyholders under sub-subparagraph (b)3.d.
2202     14.15.  Must provide that the corporation appoint as its
2203licensed agents only those agents who also hold an appointment
2204as defined in s. 626.015(3) with an insurer who at the time of
2205the agent's initial appointment by the corporation is authorized
2206to write and is actually writing personal lines residential
2207property coverage, commercial residential property coverage, or
2208commercial nonresidential property coverage within the state.
2209     15.16.  Must provide, by July 1, 2007, a premium payment
2210plan option to its policyholders which allows at a minimum for
2211quarterly and semiannual payment of premiums. A monthly payment
2212plan may, but is not required to, be offered.
2213     16.17.  Must limit coverage on mobile homes or manufactured
2214homes built prior to 1994 to actual cash value of the dwelling
2215rather than replacement costs of the dwelling.
2216     17.18.  May provide such limits of coverage as the board
2217determines, consistent with the requirements of this subsection.
2218     18.19.  May require commercial property to meet specified
2219hurricane mitigation construction features as a condition of
2220eligibility for coverage.
2221     (m)1.  Rates for coverage provided by the corporation shall
2222be actuarially sound and subject to the requirements of s.
2223627.062, except as otherwise provided in this paragraph. The
2224corporation shall file its recommended rates with the office at
2225least annually. The corporation shall provide any additional
2226information regarding the rates which the office requires. The
2227office shall consider the recommendations of the board and issue
2228a final order establishing the rates for the corporation within
222945 days after the recommended rates are filed. The corporation
2230may not pursue an administrative challenge or judicial review of
2231the final order of the office.
2232     2.  In addition to the rates otherwise determined pursuant
2233to this paragraph, the corporation shall impose and collect an
2234amount equal to the premium tax provided for in s. 624.509 to
2235augment the financial resources of the corporation.
2236     3.  After the public hurricane loss-projection model under
2237s. 627.06281 has been found to be accurate and reliable by the
2238Florida Commission on Hurricane Loss Projection Methodology,
2239that model shall serve as the minimum benchmark for determining
2240the windstorm portion of the corporation's rates. This
2241subparagraph does not require or allow the corporation to adopt
2242rates lower than the rates otherwise required or allowed by this
2243paragraph.
2244     4.  The rate filings for the corporation which were
2245approved by the office and which took effect January 1, 2007,
2246are rescinded, except for those rates that were lowered. As soon
2247as possible, the corporation shall begin using the lower rates
2248that were in effect on December 31, 2006, and shall provide
2249refunds to policyholders who have paid higher rates as a result
2250of that rate filing. The rates in effect on December 31, 2006,
2251shall remain in effect for the 2007 and 2008 calendar years
2252except for any rate change that results in a lower rate. The
2253next rate change that may increase rates shall take effect
2254January 1, 2009, pursuant to a new rate filing recommended by
2255the corporation and established by the office, subject to the
2256requirements of this paragraph.
2257     5.a.  Beginning on January 15, 2009, and each year
2258thereafter, the corporation must make a recommended actuarially
2259sound rate filing for each personal and commercial line of
2260business it writes, to be effective no earlier than July 1,
22612009.
2262     b.  For the 36-month period beginning with the effective
2263date for each of the rate filings made by the corporation on
2264January 15, 2009, the rates established by the office for the
2265corporation for its personal residential multiperil policies,
2266its commercial residential multiperil policies, and its
2267commercial nonresidential multiperil policies may not result in
2268an overall average statewide premium increase of more than 10
2269percent or an increase for any single policyholder of more than
227010 percent, during the first 12-month period, and may not result
2271in an overall average statewide premium increase of more than 10
2272percent, or an increase for any single policyholder of more than
227310 percent, during each of the two subsequent 12-month periods,
2274excluding coverage changes and surcharges.
2275     c.  For the 36-month period beginning with the effective
2276date for the rate filings made by the corporation on January 15,
22772009, the rates established by the office for the corporation
2278for its personal residential wind-only policies, its commercial
2279residential wind-only policies, and its commercial
2280nonresidential wind-only policies may not result in an overall
2281average statewide premium increase of more than 10 percent, or
2282an increase for any single policyholder of more than 10 percent,
2283during the first 12-month period, and may not result in an
2284overall average statewide premium increase of more than 10
2285percent, or an increase for any single policyholder of more than
228610 percent, during each of the two subsequent 12-month periods,
2287excluding coverage changes and surcharges.
2288     (p)1.  The corporation shall certify to the office its
2289needs for annual assessments as to a particular calendar year,
2290and for any interim assessments that it deems to be necessary to
2291sustain operations as to a particular year pending the receipt
2292of annual assessments. Upon verification, the office shall
2293approve such certification, and the corporation shall levy such
2294annual or interim assessments. Such assessments shall be
2295prorated as provided in paragraph (b). The corporation shall
2296take all reasonable and prudent steps necessary to collect the
2297amount of assessment due from each assessable insurer,
2298including, if prudent, filing suit to collect such assessment.
2299If the corporation is unable to collect an assessment from any
2300assessable insurer, the uncollected assessments shall be levied
2301as an additional assessment against the assessable insurers and
2302any assessable insurer required to pay an additional assessment
2303as a result of such failure to pay shall have a cause of action
2304against such nonpaying assessable insurer. Assessments shall be
2305included as an appropriate factor in the making of rates. The
2306failure of a surplus lines agent to collect and remit any
2307regular or emergency assessment levied by the corporation is
2308considered to be a violation of s. 626.936 and subjects the
2309surplus lines agent to the penalties provided in that section.
2310     2.  The governing body of any unit of local government, any
2311residents of which are insured by the corporation, may issue
2312bonds as defined in s. 125.013 or s. 166.101 from time to time
2313to fund an assistance program, in conjunction with the
2314corporation, for the purpose of defraying deficits of the
2315corporation. In order to avoid needless and indiscriminate
2316proliferation, duplication, and fragmentation of such assistance
2317programs, any unit of local government, any residents of which
2318are insured by the corporation, may provide for the payment of
2319losses, regardless of whether or not the losses occurred within
2320or outside of the territorial jurisdiction of the local
2321government. Revenue bonds under this subparagraph may not be
2322issued until validated pursuant to chapter 75, unless a state of
2323emergency is declared by executive order or proclamation of the
2324Governor pursuant to s. 252.36 making such findings as are
2325necessary to determine that it is in the best interests of, and
2326necessary for, the protection of the public health, safety, and
2327general welfare of residents of this state and declaring it an
2328essential public purpose to permit certain municipalities or
2329counties to issue such bonds as will permit relief to claimants
2330and policyholders of the corporation. Any such unit of local
2331government may enter into such contracts with the corporation
2332and with any other entity created pursuant to this subsection as
2333are necessary to carry out this paragraph. Any bonds issued
2334under this subparagraph shall be payable from and secured by
2335moneys received by the corporation from emergency assessments
2336under sub-subparagraph (b)3.d., and assigned and pledged to or
2337on behalf of the unit of local government for the benefit of the
2338holders of such bonds. The funds, credit, property, and taxing
2339power of the state or of the unit of local government shall not
2340be pledged for the payment of such bonds. If any of the bonds
2341remain unsold 60 days after issuance, the office shall require
2342all insurers subject to assessment to purchase the bonds, which
2343shall be treated as admitted assets; each insurer shall be
2344required to purchase that percentage of the unsold portion of
2345the bond issue that equals the insurer's relative share of
2346assessment liability under this subsection. An insurer shall not
2347be required to purchase the bonds to the extent that the office
2348determines that the purchase would endanger or impair the
2349solvency of the insurer.
2350     3.a.  The corporation shall adopt one or more programs
2351subject to approval by the office for the reduction of both new
2352and renewal writings in the corporation. Beginning January 1,
23532008, any program the corporation adopts for the payment of
2354bonuses to an insurer for each risk the insurer removes from the
2355corporation shall comply with s. 627.3511(2) and may not exceed
2356the amount referenced in s. 627.3511(2) for each risk removed.
2357The corporation may consider any prudent and not unfairly
2358discriminatory approach to reducing corporation writings, and
2359may adopt a credit against assessment liability or other
2360liability that provides an incentive for insurers to take risks
2361out of the corporation and to keep risks out of the corporation
2362by maintaining or increasing voluntary writings in counties or
2363areas in which corporation risks are highly concentrated and a
2364program to provide a formula under which an insurer voluntarily
2365taking risks out of the corporation by maintaining or increasing
2366voluntary writings will be relieved wholly or partially from
2367assessments under sub-subparagraphs (b)3.a. and b. However, any
2368"take-out bonus" or payment to an insurer must be conditioned on
2369the property being insured for at least 5 years by the insurer,
2370unless canceled or nonrenewed by the policyholder. If the policy
2371is canceled or nonrenewed by the policyholder before the end of
2372the 5-year period, the amount of the take-out bonus must be
2373prorated for the time period the policy was insured. When the
2374corporation enters into a contractual agreement for a take-out
2375plan, the producing agent of record of the corporation policy is
2376entitled to retain any unearned commission on such policy, and
2377the insurer shall either:
2378     (I)  Pay to the producing agent of record of the policy,
2379for the first year, an amount which is the greater of the
2380insurer's usual and customary commission for the type of policy
2381written or a policy fee equal to the usual and customary
2382commission of the corporation; or
2383     (II)  Offer to allow the producing agent of record of the
2384policy to continue servicing the policy for a period of not less
2385than 1 year and offer to pay the agent the insurer's usual and
2386customary commission for the type of policy written. If the
2387producing agent is unwilling or unable to accept appointment by
2388the new insurer, the new insurer shall pay the agent in
2389accordance with sub-sub-subparagraph (I).
2390     b.  Any credit or exemption from regular assessments
2391adopted under this subparagraph shall last no longer than the 3
2392years following the cancellation or expiration of the policy by
2393the corporation. With the approval of the office, the board may
2394extend such credits for an additional year if the insurer
2395guarantees an additional year of renewability for all policies
2396removed from the corporation, or for 2 additional years if the
2397insurer guarantees 2 additional years of renewability for all
2398policies so removed.
2399     c.  There shall be no credit, limitation, exemption, or
2400deferment from emergency assessments to be collected from
2401policyholders pursuant to sub-subparagraph (b)3.d.
2402     4.  The plan shall provide for the deferment, in whole or
2403in part, of the assessment of an assessable insurer, other than
2404an emergency assessment collected from policyholders pursuant to
2405sub-subparagraph (b)3.d., if the office finds that payment of
2406the assessment would endanger or impair the solvency of the
2407insurer. In the event an assessment against an assessable
2408insurer is deferred in whole or in part, the amount by which
2409such assessment is deferred may be assessed against the other
2410assessable insurers in a manner consistent with the basis for
2411assessments set forth in paragraph (b).
2412     5.  Effective July 1, 2007, in order to evaluate the costs
2413and benefits of approved take-out plans, if the corporation pays
2414a bonus or other payment to an insurer for an approved take-out
2415plan, it shall maintain a record of the address or such other
2416identifying information on the property or risk removed in order
2417to track if and when the property or risk is later insured by
2418the corporation.
2419     6.  Any policy taken out, assumed, or removed from the
2420corporation is, as of the effective date of the take-out,
2421assumption, or removal, direct insurance issued by the insurer
2422and not by the corporation, even if the corporation continues to
2423service the policies. This subparagraph applies to policies of
2424the corporation and not policies taken out, assumed, or removed
2425from any other entity.
2426     (w)1.  The following records of the corporation are
2427confidential and exempt from the provisions of s. 119.07(1) and
2428s. 24(a), Art. I of the State Constitution:
2429     a.  Underwriting files, except that a policyholder or an
2430applicant shall have access to his or her own underwriting
2431files. Confidential and exempt underwriting file records may
2432also be released to other governmental agencies upon written
2433request and demonstration of need; such records held by the
2434receiving agency remain confidential and exempt as provided
2435herein.
2436     b.  Claims files, until termination of all litigation and
2437settlement of all claims arising out of the same incident,
2438although portions of the claims files may remain exempt, as
2439otherwise provided by law. Confidential and exempt claims file
2440records may be released to other governmental agencies upon
2441written request and demonstration of need; such records held by
2442the receiving agency remain confidential and exempt as provided
2443for herein.
2444     c.  Records obtained or generated by an internal auditor
2445pursuant to a routine audit, until the audit is completed, or if
2446the audit is conducted as part of an investigation, until the
2447investigation is closed or ceases to be active. An investigation
2448is considered "active" while the investigation is being
2449conducted with a reasonable, good faith belief that it could
2450lead to the filing of administrative, civil, or criminal
2451proceedings.
2452     d.  Matters reasonably encompassed in privileged attorney-
2453client communications.
2454     e.  Proprietary information licensed to the corporation
2455under contract and the contract provides for the confidentiality
2456of such proprietary information.
2457     f.  All information relating to the medical condition or
2458medical status of a corporation employee which is not relevant
2459to the employee's capacity to perform his or her duties, except
2460as otherwise provided in this paragraph. Information that which
2461is exempt shall include, but is not limited to, information
2462relating to workers' compensation, insurance benefits, and
2463retirement or disability benefits.
2464     g.  Upon an employee's entrance into the employee
2465assistance program, a program to assist any employee who has a
2466behavioral or medical disorder, substance abuse problem, or
2467emotional difficulty which affects the employee's job
2468performance, all records relative to that participation shall be
2469confidential and exempt from the provisions of s. 119.07(1) and
2470s. 24(a), Art. I of the State Constitution, except as otherwise
2471provided in s. 112.0455(11).
2472     h.  Information relating to negotiations for financing,
2473reinsurance, depopulation, or contractual services, until the
2474conclusion of the negotiations.
2475     i.  Minutes of closed meetings regarding underwriting
2476files, and minutes of closed meetings regarding an open claims
2477file until termination of all litigation and settlement of all
2478claims with regard to that claim, except that information
2479otherwise confidential or exempt by law shall will be redacted.
2480     2.  If When an authorized insurer is considering
2481underwriting a risk insured by the corporation, relevant
2482underwriting files and confidential claims files may be released
2483to the insurer provided the insurer agrees in writing, notarized
2484and under oath, to maintain the confidentiality of such files.
2485If When a file is transferred to an insurer that file is no
2486longer a public record because it is not held by an agency
2487subject to the provisions of the public records law.
2488Underwriting files and confidential claims files may also be
2489released to staff of and the board of governors of the market
2490assistance plan established pursuant to s. 627.3515, who must
2491retain the confidentiality of such files, except such files may
2492be released to authorized insurers that are considering assuming
2493the risks to which the files apply, provided the insurer agrees
2494in writing, notarized and under oath, to maintain the
2495confidentiality of such files. Finally, the corporation or the
2496board or staff of the market assistance plan may make the
2497following information obtained from underwriting files and
2498confidential claims files available to licensed general lines
2499insurance agents: name, address, and telephone number of the
2500residential property owner or insured; location of the risk;
2501rating information; loss history; and policy type. The receiving
2502licensed general lines insurance agent must retain the
2503confidentiality of the information received.
2504     3.  A policyholder who has filed suit against the
2505corporation has the right to discover the contents of his or her
2506own claims file to the same extent that discovery of such
2507contents would be available from a private insurer in litigation
2508as provided by the Florida Rules of Civil Procedure, the Florida
2509Evidence Code, and other applicable law. Pursuant to subpoena, a
2510third party has the right to discover the contents of an
2511insured's or applicant's underwriting or claims file to the same
2512extent that discovery of such contents would be available from a
2513private insurer by subpoena as provided by the Florida Rules of
2514Civil Procedure, the Florida Evidence Code, and other applicable
2515law, and subject to any confidentiality protections requested by
2516the corporation and agreed to by the seeking party or ordered by
2517the court. The corporation may release confidential underwriting
2518and claims file contents and information as it deems necessary
2519and appropriate to underwrite or service insurance policies and
2520claims, subject to any confidentiality protections deemed
2521necessary and appropriate by the corporation.
2522     4.2.  Portions of meetings of the corporation are exempt
2523from the provisions of s. 286.011 and s. 24(b), Art. I of the
2524State Constitution wherein confidential underwriting files or
2525confidential open claims files are discussed. All portions of
2526corporation meetings which are closed to the public shall be
2527recorded by a court reporter. The court reporter shall record
2528the times of commencement and termination of the meeting, all
2529discussion and proceedings, the names of all persons present at
2530any time, and the names of all persons speaking. No portion of
2531any closed meeting shall be off the record. Subject to the
2532provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2533notes of any closed meeting shall be retained by the corporation
2534for a minimum of 5 years. A copy of the transcript, less any
2535exempt matters, of any closed meeting wherein claims are
2536discussed shall become public as to individual claims after
2537settlement of the claim.
2538     (dd)1.  For policies subject to nonrenewal as a result of
2539the risk being no longer eligible for coverage due to being
2540valued at $1 million or more, the corporation shall, directly or
2541through the market assistance plan, make information from
2542confidential underwriting and claims files of policyholders
2543available only to licensed general lines agents who register
2544with the corporation to receive such information according to
2545the following procedures:
2546     2.  By August 1, 2006, the corporation shall provide such
2547policyholders who are not eligible for renewal the opportunity
2548to request in writing, within 30 days after the notification is
2549sent, that information from their confidential underwriting and
2550claims files not be released to licensed general lines agents
2551registered pursuant to this paragraph.
2552     3.  By August 1, 2006, the corporation shall make available
2553to licensed general lines agents the registration procedures to
2554be used to obtain confidential information from underwriting and
2555claims files for such policies not eligible for renewal. As a
2556condition of registration, the corporation shall require the
2557licensed general lines agent to attest that the agent has the
2558experience and relationships with authorized or surplus lines
2559carriers to attempt to offer replacement coverage for such
2560policies.
2561     4.  By September 1, 2006, the corporation shall make
2562available through a secured website to licensed general lines
2563agents registered pursuant to this paragraph application,
2564rating, loss history, mitigation, and policy type information
2565relating to such policies not eligible for renewal and for which
2566the policyholder has not requested the corporation withhold such
2567information. The registered licensed general lines agent may use
2568such information to contact and assist the policyholder in
2569securing replacement policies, and the agent may disclose to the
2570policyholder that such information was obtained from the
2571corporation.
2572     (dd)(ee)  The assets of the corporation may be invested and
2573managed by the State Board of Administration.
2574     (ee)(ff)  The office may establish a pilot program to offer
2575optional sinkhole coverage in one or more counties or other
2576territories of the corporation for the purpose of implementing
2577s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2578Florida. Under the pilot program, the corporation is not
2579required to issue a notice of nonrenewal to exclude sinkhole
2580coverage upon the renewal of existing policies, but may exclude
2581such coverage using a notice of coverage change.
2582     (ff)  The corporation shall report claims data and
2583histories to a consumer reporting agency, as defined by the
2584federal Fair Credit Reporting Act, 15 U.S.C. 1681 et seq., that
2585maintains a national database of similar data for use in
2586connection with the underwriting of insurance involving a
2587consumer.
2588     Section 12.  Paragraph (b) of subsection (2) of section
2589627.4133, Florida Statutes, is amended to read:
2590     627.4133  Notice of cancellation, nonrenewal, or renewal
2591premium.--
2592     (2)  With respect to any personal lines or commercial
2593residential property insurance policy, including, but not
2594limited to, any homeowner's, mobile home owner's, farmowner's,
2595condominium association, condominium unit owner's, apartment
2596building, or other policy covering a residential structure or
2597its contents:
2598     (b)  The insurer shall give the named insured written
2599notice of nonrenewal, cancellation, or termination at least 100
2600days prior to the effective date of the nonrenewal,
2601cancellation, or termination. However, the insurer shall give at
2602least 100 days' written notice, or written notice by June 1,
2603whichever is earlier, for any nonrenewal, cancellation, or
2604termination that would be effective between June 1 and November
260530. The notice must include the reason or reasons for the
2606nonrenewal, cancellation, or termination, except that:
2607     1.  The insurer shall give the named insured written notice
2608of nonrenewal, cancellation, or termination at least 180 days
2609prior to the effective date of the nonrenewal, cancellation, or
2610termination for a named insured whose residential structure has
2611been insured by that insurer or an affiliated insurer for at
2612least a 5-year period immediately prior to date of the written
2613notice.
2614     2.1.  When cancellation is for nonpayment of premium, at
2615least 10 days' written notice of cancellation accompanied by the
2616reason therefor shall be given. As used in this subparagraph,
2617the term "nonpayment of premium" means failure of the named
2618insured to discharge when due any of her or his obligations in
2619connection with the payment of premiums on a policy or any
2620installment of such premium, whether the premium is payable
2621directly to the insurer or its agent or indirectly under any
2622premium finance plan or extension of credit, or failure to
2623maintain membership in an organization if such membership is a
2624condition precedent to insurance coverage. "Nonpayment of
2625premium" also means the failure of a financial institution to
2626honor an insurance applicant's check after delivery to a
2627licensed agent for payment of a premium, even if the agent has
2628previously delivered or transferred the premium to the insurer.
2629If a dishonored check represents the initial premium payment,
2630the contract and all contractual obligations shall be void ab
2631initio unless the nonpayment is cured within the earlier of 5
2632days after actual notice by certified mail is received by the
2633applicant or 15 days after notice is sent to the applicant by
2634certified mail or registered mail, and if the contract is void,
2635any premium received by the insurer from a third party shall be
2636refunded to that party in full.
2637     3.2.  When such cancellation or termination occurs during
2638the first 90 days during which the insurance is in force and the
2639insurance is canceled or terminated for reasons other than
2640nonpayment of premium, at least 20 days' written notice of
2641cancellation or termination accompanied by the reason therefor
2642shall be given except where there has been a material
2643misstatement or misrepresentation or failure to comply with the
2644underwriting requirements established by the insurer.
2645     4.3.  The requirement for providing written notice of
2646nonrenewal by June 1 of any nonrenewal that would be effective
2647between June 1 and November 30 does not apply to the following
2648situations, but the insurer remains subject to the requirement
2649to provide such notice at least 100 days prior to the effective
2650date of nonrenewal:
2651     a.  A policy that is nonrenewed due to a revision in the
2652coverage for sinkhole losses and catastrophic ground cover
2653collapse pursuant to s. 627.730, as amended by s. 30, chapter
26542007-1, Laws of Florida.
2655     b.  A policy that is nonrenewed by Citizens Property
2656Insurance Corporation, pursuant to s. 627.351(6), for a policy
2657that has been assumed by an authorized insurer offering
2658replacement or renewal coverage to the policyholder.
2659
2660After the policy has been in effect for 90 days, the policy
2661shall not be canceled by the insurer except when there has been
2662a material misstatement, a nonpayment of premium, a failure to
2663comply with underwriting requirements established by the insurer
2664within 90 days of the date of effectuation of coverage, or a
2665substantial change in the risk covered by the policy or when the
2666cancellation is for all insureds under such policies for a given
2667class of insureds. This paragraph does not apply to individually
2668rated risks having a policy term of less than 90 days.
2669     Section 13.  Effective January 1, 2011, section 689.262,
2670Florida Statutes, is created to read:
2671     689.262  Sale of residential property; disclosure of
2672windstorm mitigation rating.--A purchaser of residential
2673property must be informed of the windstorm mitigation rating of
2674the structure, based on the uniform home grading scale adopted
2675pursuant to s. 215.55865. The rating must be included in the
2676contract for sale or as a separate document attached to the
2677contract for sale. The Financial Services Commission may adopt
2678rules, consistent with other state laws, to administer this
2679section, including the form of the disclosure and the
2680requirements for the windstorm mitigation inspection or report
2681that is required for purposes of determining the rating.
2682     Section 14.  (1)  By December 15, 2008, Citizens Property
2683Insurance Corporation shall transfer $250 million to the General
2684Revenue Fund if the combined surplus of each account as defined
2685in s. 627.351(6), Florida Statutes, exceeds $1 billion. The
2686board of governors of Citizens Property Insurance Corporation
2687must make a reasonable estimate of such surplus on or after
2688December 1, 2008, and no later than December 14, 2008, using
2689generally accepted actuarial and accounting practices,
2690recognizing that audited financial statements will not yet be
2691available.
2692     (2)  Beginning July 1, 2009, the board shall make quarterly
2693transfers of any interest earned prior to the issuance of any
2694surplus notes, interest paid, and principal repaid to the state
2695for any surplus notes issued by the program after December 1,
26962008, to Citizens Property Insurance Corporation, provided such
2697surplus notes were funded exclusively by an appropriation to the
2698program by the Legislature for the 2008-2009 fiscal year. The
2699corporation shall credit each account as defined in s.
2700627.351(6) in a pro rata manner for the funds removed from each
2701account to make the transfer required by subsection (11).
2702     Section 15.  Citizens Property Insurance Corporation may
2703not use any amendments made to s. 215.5595, Florida Statutes, by
2704this act or any transfer of funds authorized by this act as
2705justification or cause in seeking any rate or assessment
2706increase.
2707     Section 16.  Subsection (3) is added to section 627.06281,
2708Florida Statutes, to read:
2709     627.06281  Public hurricane loss projection model;
2710reporting of data by insurers.--
2711     (3)(a)  A residential property insurer may have access to
2712and use the public hurricane loss projection model, including
2713all assumptions and factors and all detailed loss results, for
2714the purpose of calculating rate indications in a rate filing and
2715for analytical purposes, including any analysis or evaluation of
2716the model required under actuarial standards of practice.
2717     (b)  By January 1, 2009, the office shall establish by rule
2718a fee schedule for access to and the use of the model. The fee
2719schedule must be reasonably calculated to cover only the actual
2720costs of providing access to and the use of the model.
2721     Section 17.  Section 627.0655, Florida Statutes, is amended
2722to read:
2723     627.0655  Policyholder loss or expense-related premium
2724discounts.--An insurer or person authorized to engage in the
2725business of insurance in this state may include, in the premium
2726charged an insured for any policy, contract, or certificate of
2727insurance, a discount based on the fact that another policy,
2728contract, or certificate of any type has been purchased by the
2729insured from the same insurer or insurer group, the Citizens
2730Property Insurance Corporation created under s. 627.351(6) if
2731the same insurance agent is servicing both policies, or an
2732insurer that has removed the policy from the Citizens Property
2733Insurance Corporation if the same insurance agent is servicing
2734both policies.
2735     Section 18.  (1)  The Citizens Property Insurance
2736Corporation Mission Review Task Force is created to analyze and
2737compile available data and to develop a report setting forth the
2738statutory and operational changes needed to return Citizens
2739Property Insurance Corporation to its former role as a state-
2740created, noncompetitive residual market mechanism that provides
2741property insurance coverage to risks that are otherwise entitled
2742but unable to obtain such coverage in the private insurance
2743market. The task force shall submit a report to the Governor,
2744the President of the Senate, and the Speaker of the House of
2745Representatives by January 31, 2009. At a minimum, the task
2746force shall analyze and evaluate relevant and applicable
2747information and data and develop recommendations concerning:
2748     (a)  The nature of Citizens Property Insurance
2749Corporation's role in providing property insurance coverage only
2750if such coverage is not available from private insurers.
2751     (b)  The ability of the admitted market to offer policies
2752to those consumers formerly insured through Citizens Property
2753Insurance Corporation. This consideration shall include, but not
2754be limited to, the availability of private market reinsurance
2755and coverage through the Florida Hurricane Catastrophe Fund, the
2756general adequacy of the admitted market's current rates, and the
2757capacity of the industry to offer policies to former Citizens
2758Property Insurance Corporation policyholders within existing
2759writing ratio limitations.
2760     (c)  The appropriate relationship of rates charged by
2761Citizens Property Insurance Corporation to rates charged by
2762private insurers, with due consideration for the corporation's
2763role as a noncompetitive residual market mechanism.
2764     (d)  The relationships between the exposure of Citizens
2765Property Insurance Corporation to catastrophic hurricane losses,
2766the corporation's history of purchasing inadequate or no
2767reinsurance coverage, and the corporation's lack of adequate
2768capital to meet its potential claim obligations without
2769incurring large deficits.
2770     (e)  The adverse effects on the people and the economy of
2771this state of the large, multiyear deficit assessments by
2772Citizens Property Insurance Corporation that may be levied on
2773businesses and households in this state, and steps that can be
2774taken to reduce those effects.
2775     (f)  The operational implications of the variation in the
2776number of policies in force over time in Citizens Property
2777Insurance Corporation and the merits of outsourcing some or all
2778of its operational responsibilities.
2779     (g)  Changes in the mission and operations of Citizens
2780Property Insurance Corporation to reduce or eliminate any
2781adverse effect such mission and operations may be having on the
2782promotion of sound and economic growth and development of the
2783coastal areas of this state.
2784     (h)  Appropriate and consistent geographic boundaries of
2785the high-risk account.
2786     (2)  The task force shall be composed of 19 members as
2787follows:
2788     (a)  Three members appointed by the Speaker of the House of
2789Representatives.
2790     (b)  Three members appointed by the President of the
2791Senate.
2792     (c)  Four members appointed by the Governor who are not
2793employed by or professionally affiliated with an insurance
2794company or a subsidiary of an insurance company, at least two of
2795whom must be consumer advocates or members of a consumer
2796advocacy organization or agency.
2797     (d)  Nine members appointed as representatives of private
2798insurance companies as follows:
2799     1.  Two members representing two separate insurance
2800companies that each provide at least 150,000 homeowner's
2801insurance policies in this state at the time of the creation of
2802the task force.
2803     2.  Two members representing two separate insurance
2804companies that each provide fewer than 150,000 homeowner's
2805insurance policies in this state at the time of the creation of
2806the task force.
2807     3.  Two members representing two separate insurance
2808companies among the 10 insurance companies writing the greatest
2809amount of commercial multiperil insurance premium in this state
2810at the time of the creation of the task force.
2811     4.  Three members appointed by the Chief Financial Officer
2812representing insurance agents in this state.
2813
2814Of each pair of members appointed under subparagraphs 1., 2.,
2815and 3., one shall be appointed by the President of the Senate
2816and one by the Speaker of the House of Representatives.
2817     (3)  The task force shall conduct research, hold public
2818meetings, receive testimony, employ consultants and
2819administrative staff, and undertake other activities determined
2820by its members to be necessary to complete its responsibilities.
2821Citizens Property Insurance Corporation shall have appropriate
2822senior staff attend task force meetings, shall respond to
2823requests for testimony and data by the task force, shall
2824otherwise cooperate with the task force, and shall provide
2825funding for the necessary costs of implementing the provisions
2826of this section.
2827     (4)  A member of the task force may not delegate his or her
2828attendance or voting power to a designee.
2829     (5)  Members of the task force shall serve without
2830compensation but are entitled to receive reimbursement for
2831travel and per diem as provided in s. 112.061, Florida Statutes.
2832     (6)  The appointments to the task force must be completed
2833within 30 calendar days after the effective date of this act,
2834and the task force must hold its initial meeting within 1 month
2835after appointment of all members. The task force shall expire no
2836later than 60 calendar days after submission of the report
2837required in subsection (1).
2838     Section 19.  Section 627.0621, Florida Statutes, is created
2839to read:
2840     627.0621  Transparency in rate regulation.--
2841     (1)  DEFINITIONS.-As used in this section, the term:
2842     (a)  "Rate Filing" means any original or amended rate
2843filing required or authorized under s. 627.062, s. 627.0651, or
2844chapter 2007-1, Laws of Florida.
2845     (b)  "Recommendation" means any proposed, preliminary, or
2846final recommendation from an office actuary reviewing a rate
2847filing with respect to the issue of approval or disapproval of
2848the rate filing or with respect to rate indications that the
2849office would consider acceptable.
2850     (2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2851INFORMATION.--With respect to any rate filing made on after July
28521, 2008, the office shall provide the following information on a
2853publicly accessible Internet website:
2854     (a)  The overall rate change requested by the insurer.
2855     (b)  All assumptions made by the office's actuaries.
2856     (c)  A statement describing any assumptions or methods that
2857deviate from the actuarial standards of practice of the Casualty
2858Actuarial Society or the American Academy of Actuaries,
2859including an explanation of the nature, rationale, and effect of
2860the deviation.
2861     (d)  All recommendations made by any office actuary who
2862reviewed the rate filing.
2863     (e)  Certification by the office's actuary under oath and
2864subject to the penalty of perjury that, based on the actuary's
2865knowledge, his or her recommendations did not contain any untrue
2866statement of a material fact or omit to state a material fact
2867necessary to make a recommendation and, in light of the
2868circumstances under which such recommendation was made, was not
2869misleading.
2870     (f)  The overall rate change approved by the office.
2871     (3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--In any
2872administrative or judicial proceeding relating to a rate filing,
2873attorney-client privilege and work product exemptions from
2874disclosure do not apply to communications, including
2875communications with office attorneys or records prepared by or
2876at the direction of an office attorney, except when conditions
2877of paragraphs (a) and (b) have been met:
2878     (a)  The communication or record reflects a mental
2879impression, conclusion, litigation strategy, or legal theory of
2880the attorney or office.
2881     (b)  The communication or record was prepared after the
2882initiation of an action in a court of competent jurisdiction or
2883after the filing of a request for a proceeding under ss. 120.569  
2884and 120.57.
2885
2886Work product privilege claims that do not meet the conditions of
2887paragraphs (a) and (b) shall be deemed waived.
2888     Section 20.  Paragraph (b) of subsection (4) of section
2889215.555, Florida Statutes, is amended to read:
2890     215.555  Florida Hurricane Catastrophe Fund.--
2891     (4)  REIMBURSEMENT CONTRACTS.--
2892     (b)1.  The contract shall contain a promise by the board to
2893reimburse the insurer for 45 percent, 75 percent, or 90 percent
2894of its losses from each covered event in excess of the insurer's
2895retention, plus 5 percent of the reimbursed losses to cover loss
2896adjustment expenses.
2897     2.  The insurer must elect one of the percentage coverage
2898levels specified in this paragraph and may, upon renewal of a
2899reimbursement contract, elect a lower percentage coverage level
2900if no revenue bonds issued under subsection (6) after a covered
2901event are outstanding, or elect a higher percentage coverage
2902level, regardless of whether or not revenue bonds are
2903outstanding. All members of an insurer group must elect the same
2904percentage coverage level. Any joint underwriting association,
2905risk apportionment plan, or other entity created under s.
2906627.351 must elect the 90-percent coverage level.
2907     3.  The contract shall provide that reimbursement amounts
2908shall not be reduced by reinsurance paid or payable to the
2909insurer from other sources.
2910     4.  Notwithstanding any other provision contained in this
2911section, the board shall make available to insurers that
2912purchased coverage provided by this subparagraph in 2007 2006,
2913insurers qualifying as limited apportionment companies under s.
2914627.351(6)(c), and insurers that have been were approved to
2915participate in 2006 or that are approved in 2007 for the
2916Insurance Capital Build-Up Incentive Program pursuant to s.
2917215.5595, a contract or contract addendum that provides an
2918additional amount of reimbursement coverage of up to $10
2919million. The premium to be charged for this additional
2920reimbursement coverage shall be 50 percent of the additional
2921reimbursement coverage provided, which shall include one prepaid
2922reinstatement. The minimum retention level that an eligible
2923participating insurer must retain associated with this
2924additional coverage layer is 30 percent of the insurer's surplus
2925as of December 31, 2007 2006. This coverage shall be in addition
2926to all other coverage that may be provided under this section.
2927The coverage provided by the fund under this subparagraph shall
2928be in addition to the claims-paying capacity as defined in
2929subparagraph (c)1., but only with respect to those insurers that
2930select the additional coverage option and meet the requirements
2931of this subparagraph. The claims-paying capacity with respect to
2932all other participating insurers and limited apportionment
2933companies that do not select the additional coverage option
2934shall be limited to their reimbursement premium's proportionate
2935share of the actual claims-paying capacity otherwise defined in
2936subparagraph (c)1. and as provided for under the terms of the
2937reimbursement contract. Coverage provided in the reimbursement
2938contract shall will not be affected by the additional premiums
2939paid by participating insurers exercising the additional
2940coverage option allowed in this subparagraph. This subparagraph
2941expires on May 31, 2009 2008.
2942     Section 21.  Subsection (1) of section 627.0613, Florida
2943Statutes, is amended to read:
2944     627.0613  Consumer advocate.--The Chief Financial Officer
2945must appoint a consumer advocate who must represent the general
2946public of the state before the department and the office. The
2947consumer advocate must report directly to the Chief Financial
2948Officer, but is not otherwise under the authority of the
2949department or of any employee of the department. The consumer
2950advocate has such powers as are necessary to carry out the
2951duties of the office of consumer advocate, including, but not
2952limited to, the powers to:
2953     (1)  Recommend to the department or office, by petition,
2954the commencement of any proceeding or action; appear in any
2955proceeding or action before the department or office; or appear
2956in any proceeding before the Division of Administrative Hearings
2957or arbitration panel specified in s. 627.062(6) relating to
2958subject matter under the jurisdiction of the department or
2959office.
2960     Section 22.  Subsections (1) and (2) of section 627.712,
2961Florida Statutes, are amended to read:
2962     627.712  Residential windstorm coverage required;
2963availability of exclusions for windstorm or contents.--
2964     (1)  An insurer issuing a residential property insurance
2965policy must provide windstorm coverage. Except as provided in
2966paragraph (2)(c), this section subsection does not apply with
2967respect to risks that are eligible for wind-only coverage from
2968Citizens Property Insurance Corporation under s. 627.351(6).
2969     (2)  A property insurer must make available, at the option
2970of the policyholder, an exclusion of windstorm coverage.
2971     (a)  The coverage may be excluded only if:
2972     (a)1.  When the policyholder is a natural person, the
2973policyholder personally writes and provides to the insurer the
2974following statement in his or her own handwriting and signs his
2975or her name, which must also be signed by every other named
2976insured on the policy, and dated: "I do not want the insurance
2977on my (home/mobile home/condominium unit) to pay for damage from
2978windstorms. I will pay those costs. My insurance will not."
2979     2.  When the policyholder is other than a natural person,
2980the policyholder provides to the insurer on the policyholder's
2981letterhead the following statement that must be signed by the
2982policyholder's authorized representative and dated: "  (Name of
2983entity)   does not want the insurance on its   (type of
2984structure)   to pay for damage from windstorms.   (Name of
2985entity)   will be responsible for these costs.   (Name of
2986entity's)   insurance will not."
2987     (b)  If the structure insured by the policy is subject to a
2988mortgage or lien, the policyholder must provide the insurer with
2989a written statement from the mortgageholder or lienholder
2990indicating that the mortgageholder or lienholder approves the
2991policyholder electing to exclude windstorm coverage or hurricane
2992coverage from his or her or its property insurance policy.
2993     (c)  If the residential structure is eligible for wind-only
2994coverage from Citizens Property Insurance Corporation, an
2995insurer nonrenewing a policy and issuing a replacement policy,
2996or issuing a new policy, that does not provide wind coverage
2997shall provide a notice to the mortgageholder or lienholder
2998indicating the policyholder has elected coverage that does not
2999cover wind.
3000     Section 23.  Except as otherwise expressly provided in this
3001act, this act shall take effect July 1, 2008.
3002
3003
3004
3005
-----------------------------------------------------
3006
T I T L E  A M E N D M E N T
3007     Remove the entire title and insert:
3008
A bill to be entitled
3009An act relating to insurance; amending s. 215.5595, F.S.;
3010revising legislative findings; providing for an appropriation of
3011state funds in exchange for surplus notes issued by residential
3012property insurers under the program; revising the conditions and
3013requirements for providing funds to insurers under the program;
3014requiring a commitment by the insurer to meet minimum premium-
3015to-surplus writing ratios for residential property insurance and
3016for taking policies out of Citizens Property Insurance
3017Corporation; requiring insurers to commit to maintaining certain
3018levels of surplus and reinsurance; authorizing the State Board
3019of Administration to charge a fee for late payments; providing
3020for payment of costs and fees incurred by the board in
3021administering the program from funds appropriated to the
3022program, subject to a specified limit; requiring the board to
3023submit an annual report to the Legislature on the program and
3024insurer compliance with certain requirements; providing that
3025amendments made by the act do not affect the terms of surplus
3026notes approved prior to a specified date; authorizing the State
3027Board of Administration and an insurer to renegotiate such terms
3028consistent with such amendments; amending s. 624.3161, F.S.;
3029authorizing the Office of Insurance Regulation to require an
3030insurer to file its claims handling practices and procedures as
3031a public record based on findings of a market conduct
3032examination; amending s. 624.4211, F.S.; increasing the maximum
3033amounts of administrative fines that may be imposed upon an
3034insurer by the Office of Insurance Regulation for nonwillful and
3035willful violations of an order or rule of the office or any
3036provision of the Florida Insurance Code; creating s. 624.4213,
3037F.S.; specifying requirements for submission of a document or
3038information to the Office of Insurance Regulation or the
3039Department of Financial Services in order for a person to claim
3040that the document is a trade secret; requiring each page or
3041portion to be labeled as a trade secret and be separated from
3042non-trade secret material; requiring the submitting party to
3043include an affidavit certifying certain information about the
3044documents claimed to be trade secrets; requiring the office or
3045department to notify persons who submit trade secret documents
3046of any public-records request and the opportunity to file a
3047court action to bar disclosure; specifying conditions for the
3048office to retain or release such documents; creating s.
3049624.4305, F.S.; requiring that an insurer planning to nonrenew
3050more than a specified number of residential property insurance
3051polices notify the Office of Insurance Regulation and obtain
3052approval for such nonrenewals; specifying procedures for
3053issuance of such notice; amending s. 626.9521, F.S.; increasing
3054the maximum fines that may be imposed by the office or
3055department for nonwillful and willful violations of state law
3056regarding unfair methods of competition and unfair or deceptive
3057acts or practices related to insurance; amending s. 627.0612,
3058F.S.; providing criteria for administrative hearings to
3059determine whether an insurer's property insurance rates, rating
3060manuals, premium credits, discount schedules, and surcharge
3061schedules comply with the law; providing for entry of certain  
3062orders; amending s. 627.062, F.S.; requiring that an insurer
3063seeking a rate for property insurance that is greater than the
3064rate most recently approved by the Office of Insurance
3065Regulation make a "file and use" filing for all such rate
3066filings made after a specified date; revising the factors the
3067office must consider in reviewing a rate filing; prohibiting the
3068Office of Insurance Regulation from disapproving as excessive a
3069rate solely because the insurer obtained reinsurance covering a
3070specified probably maximum loss; allowing the office to
3071disapprove a rate as excessive within 1 year after the rate has
3072been approved under certain conditions related to nonrenewal of
3073policies by the insurer; requiring the Division of
3074Administrative Hearings to expedite a hearing request by an
3075insurer and for the administrative law judge to commence the
3076hearing within a specified time; authorizing an insurer to
3077request an expedited appellate review pursuant to the Florida
3078Rules of Appellate Procedure; expressing legislative intent for
3079an expedited appellate review; revising provisions relating to
3080the submission of a disputed rate filing, other than a rate
3081filing for medical malpractice insurance, to an arbitration
3082panel in lieu of an administrative hearing if the rate is filed
3083before a specified date; deleting provisions relating to
3084mandatory arbitration in lieu of certain hearings; amending s.
3085627.0628, F.S.; providing legislative findings relating to final
3086agency action for insurance ratemaking; requiring that with
3087respect to rate filings, insurers must use actuarial methods or
3088models found to be accurate or reliable by the Florida
3089Commission on Hurricane Loss Projection Methodology; providing
3090for use of other models under certain circumstances; deleting
3091the requirement for the Office of Insurance Regulation and the
3092Consumer Advocate to have access to all assumptions of a
3093hurricane loss model in order for a model that has been found to
3094be accurate and reliable by the Florida Commission on Hurricane
3095Loss Projection Methodology to be admissible in a rate
3096proceeding; deleting cross-references to conform to changes made
3097by the act; amending s. 627.0629, F.S.; requiring that the
3098Office of Insurance Regulation develop and make publicly
3099available before a specified deadline a proposed method for
3100insurers to establish windstorm mitigation premium discounts
3101that correlate to the uniform home rating scale; requiring that
3102the Financial Services Commission adopt rules before a specified
3103deadline; requiring insurers to make rate filings pursuant to
3104such method; authorizing the commission to make changes by rule
3105to the uniform home grading scale and specify by rule the
3106minimum required discounts, credits, or other rate
3107differentials; requiring that such rate differentials be
3108consistent with generally accepted actuarial principles and wind
3109loss mitigation studies; amending s. 627.351, F.S., relating to
3110Citizens Property Insurance Corporation; deleting a provision to
3111conform to changes made in the act; deleting provisions defining
3112the terms "homestead property" and "nonhomestead property";
3113increasing threshold replacement costs of certain structures for
3114eligibility for coverage by the corporation; deleting
3115requirements for certain properties to meeting building code
3116plus requirements as a condition of eligibility for coverage by
3117the corporation; deleting outdated provisions requiring the
3118corporation to submit a report for approval of offering
3119multiperil coverage; revising threshold amounts of deficits
3120incurred in a calendar year on which the decision to levy
3121assessments and the types of such assessments are based;
3122revising the formula used to calculate shares of assessments
3123owed by certain assessable insureds; requiring that the board of
3124governors make certain determinations before levying emergency
3125assessments; providing the board of governors with discretion to
3126set the amount of an emergency assessment within specified
3127limits; requiring the board of governors to levy a Citizens
3128policyholder surcharge under certain conditions; increasing the
3129amount of the surcharge; deleting a provision requiring the levy
3130of an immediate assessment against certain policyholders under
3131such conditions; requiring that funds collected from the levy of
3132such surcharges be used for certain purposes; providing that
3133such surcharges are not considered premium and are not subject
3134to commissions, fees, or premium taxes; requiring that the
3135failure to pay such surcharges be treated as failure to pay
3136premium; requiring that the amount of any assessment or
3137surcharge which exceeds the amount of deficits be remitted to
3138and used by the corporation for specified purposes; deleting
3139provisions requiring that the plan of operation of the
3140corporation provide for the levy of a Citizens policyholder
3141surcharge if regular deficit assessments are levied as a result
3142of deficits in certain accounts; deleting provisions related to
3143the calculation, classification, and nonpayment of such
3144surcharge; requiring that the corporation make an annual filing
3145for each personal or commercial line of business it writes,
3146beginning on a specified date; limiting the overall average
3147statewide premium increase and the increase for an individual
3148policyholder to a specified amount for rates established for
3149certain policies during a specified period; deleting a provision
3150requiring an insurer to purchase bonds that remain unsold;  
3151deleting provisions requiring the corporation to make certain
3152confidential underwriting and claims files available to agents
3153to conform to changes made by the act relating to ineligibility
3154of certain dwellings; clarifying the right of certain parties to
3155discover underwriting and claims file records; authorizing the
3156corporation to release such records as it deems necessary;
3157requiring the corporation to report certain information to a
3158consumer reporting agency; amending s. 627.4133, F.S.; requiring
3159insurers to provide written notice of certain cancellations,
3160nonrenewals, or terminations; creating s. 689.262, F.S.;
3161requiring a purchaser of residential property to be presented
3162with the windstorm mitigation rating of the structure;
3163authorizing the Financial Services Commission to adopt rules;
3164requiring Citizens Property Insurance Corporation to transfer
3165funds to the General Revenue Fund if the losses due to a
3166hurricane do not exceed a specified amount; requiring the board
3167of governors of Citizens Property Insurance Corporation to make
3168a reasonable estimate of such losses by a certain date;
3169requiring the board to make quarterly transfers of funds to the
3170corporation under certain circumstances; requiring the
3171corporation to credit certain accounts for funds removed to make
3172certain transfers; prohibiting Citizens Property Insurance
3173Corporation from using certain statutory changes or authorized
3174transfers of funds as justification or cause to seek any rate or
3175assessment increase; amending s. 627.06281, F.S.; providing for
3176residential property insurers to have access to and use a public
3177hurricane loss projection model; requiring the office to
3178establish a fee schedule for such model access and use; amending
3179s. 627.0655, F.S.; expanding application of policyholder loss or
3180expense-related premium discounts; creating the Citizens
3181Property Insurance Corporation Mission Review Task Force;
3182providing purposes; requiring a report; providing report
3183requirements; providing for appointment of members; providing
3184responsibilities; specifying service without compensation;
3185providing for reimbursement of per diem and travel expenses;
3186providing meeting requirements; requiring the corporation to
3187assist the task force; providing for the expiration of the task
3188force; requiring the Chief Financial Officer to provide a report
3189on the economic impact on the state of certain hurricanes;
3190providing report requirements; creating s. 627.0621, F.S.;
3191providing requirements for transparency in rate regulation;
3192providing definitions; providing for a website for public access
3193to rate filing information; providing requirements; providing
3194for application of public meeting requirements; specifying
3195nonapplication of attorney-client or work-product privileges to
3196certain communications in certain administrative or judicial
3197proceedings under certain circumstances; specifying criteria;
3198providing for waiver of such privileges under certain
3199circumstances; amending s. 215.555, F.S.; extending for an
3200additional year the offer of reimbursement coverage for
3201specified insurers; revising the qualifying criteria for such
3202insurers; revising provisions to conform; amending s. 627.0613,
3203F.S.; deleting cross-references to conform to changes made by
3204the act; amending s. 627.712, F.S.; requiring insurers to
3205provide notice to mortgageholders or lienholders of certain
3206policies not providing wind coverage for certain structures;
3207providing effective dates.
3208


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