Florida Senate - 2012                                    SB 1372
       
       
       
       By Senator Alexander
       
       
       
       
       17-01156-12                                           20121372__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Hurricane Catastrophe
    3         Fund; amending s. 215.555, F.S.; revising the
    4         definitions of “retention” and “corporation”;
    5         providing for calculation of an insurer’s
    6         reimbursement premium and retention under the
    7         reimbursement contract; revising coverage levels
    8         available under the reimbursement contract; revising
    9         aggregate coverage limits; providing for the phase-in
   10         of changes to coverage levels and limits; revising the
   11         cash build-up factor included in reimbursement
   12         premiums; providing for phase-in; reducing maximum
   13         allowable emergency assessments; changing the name of
   14         the Florida Hurricane Catastrophe Fund Finance
   15         Corporation; repealing provisions related to temporary
   16         emergency options for additional coverage; terminating
   17         the temporary increase in coverage limits option at
   18         the end of the 2011-2012 contract year; limiting to
   19         the 2012-2013 contract year provisions relating to the
   20         TICL options addendum, TICL reimbursement premiums,
   21         and the claims-paying capacity of the fund, to
   22         conform; amending s. 627.0629, F.S.; conforming a
   23         cross-reference; providing an effective date.
   24  
   25  Be It Enacted by the Legislature of the State of Florida:
   26  
   27         Section 1. Paragraphs (e) and (n) of subsection (2),
   28  paragraphs (b) and (c) of subsection (4), paragraph (b) of
   29  subsection (5), paragraphs (b) and (d) of subsection (6), and
   30  subsections (16), (17), and (18) of section 215.555, Florida
   31  Statutes, are amended to read:
   32         215.555 Florida Hurricane Catastrophe Fund.—
   33         (2) DEFINITIONS.—As used in this section:
   34         (e) “Retention” means the amount of losses below which an
   35  insurer is not entitled to reimbursement from the fund. An
   36  insurer’s retention shall be calculated as follows:
   37         1.a. The board shall calculate and report to each insurer
   38  the retention multiples for that year.
   39         (I) For the contract year beginning June 1, 2005, the
   40  retention multiple shall be equal to $4.5 billion divided by the
   41  total estimated reimbursement premium for the contract year; for
   42  subsequent years, up to and including the 2012-2013 contract
   43  year, the retention multiple shall be equal to $4.5 billion,
   44  adjusted based upon the reported exposure for the contract year
   45  occurring 2 years before the particular contract year to reflect
   46  the percentage growth in exposure to the fund for covered
   47  policies since 2004, divided by the total estimated
   48  reimbursement premium for the contract year.
   49         (II) For the contract year beginning June 1, 2013, the
   50  retention multiple shall be equal to $8 billion divided by the
   51  total estimated reimbursement premium for the contract year. For
   52  subsequent years, the retention multiple shall be equal to $8
   53  billion, adjusted based upon the reported exposure for the
   54  contract year occurring 2 years before the particular contract
   55  year to reflect the percentage growth in exposure to the fund
   56  for covered policies since 2011, divided by the total
   57  reimbursement premium for the contract year.
   58         b. For the 2012-2013 contract year, total reimbursement
   59  premium for purposes of the calculation under this subparagraph
   60  shall be estimated using the assumption that all insurers have
   61  selected the 90-percent coverage level.
   62         c. In order to implement the phase-in of reduced coverage
   63  levels as provided in paragraph (4)(b), total reimbursement
   64  premium for purposes of the calculation under this subparagraph
   65  shall be estimated using the following assumptions:
   66         (I) For the 2013-2014 contract year, the assumption is that
   67  all insurers have selected the 85-percent coverage level.
   68         (II) For the 2014-2015 contract year, the assumption is
   69  that all insurers have selected the 80-percent coverage level.
   70         (III) For the 2015-2016 contract year and subsequent
   71  contract years, the assumption is that all insurers have
   72  selected the 75-percent coverage level.
   73         2. The retention multiple as determined under subparagraph
   74  1. shall be adjusted to reflect the coverage level elected by
   75  the insurer.
   76         a. For an insurer electing the maximum coverage level
   77  available under paragraph (4)(b) for a particular contract year
   78  For insurers electing the 90-percent coverage level, the
   79  adjusted retention multiple is 100 percent of the amount
   80  determined under subparagraph 1.
   81         b. In order to implement the phase-in of reduced coverage
   82  levels as provided in paragraph (4)(b), for an insurer electing
   83  a coverage level other than the maximum coverage level, the
   84  adjusted retention multiple is as follows:
   85         (I) With respect to the 2012-2013 contract year, for an
   86  insurer For insurers electing the 75-percent coverage level, the
   87  retention multiple is 90/75ths 120 percent of the amount
   88  determined under subparagraph 1., and for an insurer For
   89  insurers electing the 45-percent coverage level, the adjusted
   90  retention multiple is 90/45ths 200 percent of the amount
   91  determined under subparagraph 1.
   92         (II) With respect to the 2013-2014 contract year, for an
   93  insurer electing the 75-percent coverage level, the retention
   94  multiple is 85/75ths of the amount determined under subparagraph
   95  1., and for an insurer electing the 45-percent coverage level,
   96  the retention multiple is 85/45ths of the amount determined
   97  under subparagraph 1.
   98         (III) With respect to the 2014-2015 contract year, for an
   99  insurer electing the 75-percent coverage level, the retention
  100  multiple is 80/75ths of the amount determined under subparagraph
  101  1., and for an insurer electing the 45-percent coverage level,
  102  the retention multiple is 80/45ths of the amount determined
  103  under subparagraph 1.
  104         (IV) With respect to the 2015-2016 contract year and
  105  subsequent contract years, for an insurer electing the 75
  106  percent coverage level, the retention multiple is the amount
  107  determined under subparagraph 1., and for an insurer electing
  108  the 45-percent coverage level, the retention multiple is
  109  75/45ths of the amount determined under subparagraph 1.
  110         3. An insurer shall determine its provisional retention by
  111  multiplying its provisional reimbursement premium by the
  112  applicable adjusted retention multiple and shall determine its
  113  actual retention by multiplying its actual reimbursement premium
  114  by the applicable adjusted retention multiple.
  115         4. For insurers who experience multiple covered events
  116  causing loss during the contract year, beginning June 1, 2005,
  117  each insurer’s full retention shall be applied to each of the
  118  covered events causing the two largest losses for that insurer.
  119  For each other covered event resulting in losses, the insurer’s
  120  retention shall be reduced to one-third of the full retention.
  121  The reimbursement contract shall provide for the reimbursement
  122  of losses for each covered event based on the full retention
  123  with adjustments made to reflect the reduced retentions on or
  124  after January 1 of the contract year provided the insurer
  125  reports its losses as specified in the reimbursement contract.
  126         (n) “Corporation” means the State Board of Administration
  127  Florida Hurricane Catastrophe Fund Finance Corporation created
  128  in paragraph (6)(d).
  129         (4) REIMBURSEMENT CONTRACTS.—
  130         (b)1.a. The contract shall contain a promise by the board
  131  to reimburse the insurer for a specified percentage 45 percent,
  132  75 percent, or 90 percent of its losses from each covered event
  133  in excess of the insurer’s retention, plus 5 percent of the
  134  reimbursed losses to cover loss adjustment expenses.
  135         b. The available coverage levels are as follows:
  136         (I) For the 2012-2013 contract year, 90 percent, 75
  137  percent, and 45 percent.
  138         (II) For the 2013-2014 contract year, 85 percent, 75
  139  percent, and 45 percent.
  140         (III) For the 2014-2015 contract year, 80 percent, 75
  141  percent, and 45 percent.
  142         (IV) For the 2015-2016 contract year and subsequent
  143  contract years, 75 percent and 45 percent.
  144         2.a. The insurer must elect one of the percentage coverage
  145  levels specified in this paragraph and may, upon renewal of a
  146  reimbursement contract, elect a lower percentage coverage level
  147  if no revenue bonds issued under subsection (6) after a covered
  148  event are outstanding, or elect a higher percentage coverage
  149  level, regardless of whether or not revenue bonds are
  150  outstanding. All members of an insurer group must elect the same
  151  percentage coverage level. Any joint underwriting association,
  152  risk apportionment plan, or other entity created under s.
  153  627.351 must elect the maximum 90-percent coverage level
  154  available under subparagraph 1.
  155         b. In order to implement the phase-in of reduced coverage
  156  levels as provided in subparagraph 1., and notwithstanding any
  157  provisions of sub-subparagraph a. to the contrary, if revenue
  158  bonds issued under subsection (6) after a covered event are
  159  outstanding and the insurer has elected the maximum coverage
  160  level available under subparagraph 1., the insurer must, upon
  161  renewal of the reimbursement contract, elect the maximum
  162  coverage level available under subparagraph 1. for the renewal
  163  contract year.
  164         3. The contract shall provide that reimbursement amounts
  165  shall not be reduced by reinsurance paid or payable to the
  166  insurer from other sources.
  167         4. Notwithstanding any other provision contained in this
  168  section, the board shall make available to insurers that
  169  purchased coverage provided by this subparagraph in 2008,
  170  insurers qualifying as limited apportionment companies under s.
  171  627.351(6)(c), and insurers that have been approved to
  172  participate in the Insurance Capital Build-Up Incentive Program
  173  pursuant to s. 215.5595 a contract or contract addendum that
  174  provides an additional amount of reimbursement coverage of up to
  175  $10 million. The premium to be charged for this additional
  176  reimbursement coverage shall be 50 percent of the additional
  177  reimbursement coverage provided, which shall include one prepaid
  178  reinstatement. The minimum retention level that an eligible
  179  participating insurer must retain associated with this
  180  additional coverage layer is 30 percent of the insurer’s surplus
  181  as of December 31, 2008, for the 2009-2010 contract year; as of
  182  December 31, 2009, for the 2010-2011 contract year; and as of
  183  December 31, 2010, for the 2011-2012 contract year. This
  184  coverage shall be in addition to all other coverage that may be
  185  provided under this section. The coverage provided by the fund
  186  under this subparagraph shall be in addition to the claims
  187  paying capacity as defined in subparagraph (c)1., but only with
  188  respect to those insurers that select the additional coverage
  189  option and meet the requirements of this subparagraph. The
  190  claims-paying capacity with respect to all other participating
  191  insurers and limited apportionment companies that do not select
  192  the additional coverage option shall be limited to their
  193  reimbursement premium’s proportionate share of the actual
  194  claims-paying capacity otherwise defined in subparagraph (c)1.
  195  and as provided for under the terms of the reimbursement
  196  contract. The optional coverage retention as specified shall be
  197  accessed before the mandatory coverage under the reimbursement
  198  contract, but once the limit of coverage selected under this
  199  option is exhausted, the insurer’s retention under the mandatory
  200  coverage will apply. This coverage will apply and be paid
  201  concurrently with mandatory coverage. This subparagraph expires
  202  on May 31, 2012.
  203         (c)1. The contract shall also provide that the obligation
  204  of the board with respect to all contracts covering a particular
  205  contract year shall not exceed the actual claims-paying capacity
  206  of the fund up to the limit specified in this subparagraph.
  207         a. For the 2012-2013 contract year, the limit is $17
  208  billion.
  209         b. For the 2013-2014 contract year, the limit is $15.5
  210  billion.
  211         c. For the 2014-2015 contract year, the limit is $14
  212  billion.
  213         d. For the 2015-2016 contract year and subsequent contract
  214  years, the limit is $12 billion.
  215         e. For contract years after the 2015-2016 contract year, if
  216  a limit of $17 billion for that contract year, unless the board
  217  determines that there is sufficient estimated claims-paying
  218  capacity to provide $12 $17 billion of capacity for the current
  219  contract year and an additional $12 $17 billion of capacity for
  220  subsequent contract years. If the board makes such a
  221  determination, the estimated claims-paying capacity for the
  222  particular contract year shall be determined by adding to the
  223  $12 $17 billion limit one-half of the fund’s estimated claims
  224  paying capacity in excess of $24 $34 billion. However, the
  225  dollar growth in the limit may not increase in any year by an
  226  amount greater than the dollar growth of the balance of the fund
  227  as of December 31, less any premiums or interest attributable to
  228  optional coverage, as defined by rule, which occurred over the
  229  prior calendar year.
  230         2. In May and October of the contract year, the board shall
  231  publish in the Florida Administrative Weekly a statement of the
  232  fund’s estimated borrowing capacity, the fund’s estimated
  233  claims-paying capacity, and the projected balance of the fund as
  234  of December 31. After the end of each calendar year, the board
  235  shall notify insurers of the estimated borrowing capacity,
  236  estimated claims-paying capacity, and the balance of the fund as
  237  of December 31 to provide insurers with data necessary to assist
  238  them in determining their retention and projected payout from
  239  the fund for loss reimbursement purposes. In conjunction with
  240  the development of the premium formula, as provided for in
  241  subsection (5), the board shall publish factors or multiples
  242  that assist insurers in determining their retention and
  243  projected payout for the next contract year. For all regulatory
  244  and reinsurance purposes, an insurer may calculate its projected
  245  payout from the fund as its share of the total fund premium for
  246  the current contract year multiplied by the sum of the projected
  247  balance of the fund as of December 31 and the estimated
  248  borrowing capacity for that contract year as reported under this
  249  subparagraph.
  250         (5) REIMBURSEMENT PREMIUMS.—
  251         (b)1. The State Board of Administration shall select an
  252  independent consultant to develop a formula for determining the
  253  actuarially indicated premium to be paid to the fund. The
  254  formula shall specify, for each zip code or other limited
  255  geographical area, the amount of premium to be paid by an
  256  insurer for each $1,000 of insured value under covered policies
  257  in that zip code or other area. In establishing premiums, the
  258  board shall consider the coverage elected under paragraph (4)(b)
  259  and any factors that tend to enhance the actuarial
  260  sophistication of ratemaking for the fund, including
  261  deductibles, type of construction, type of coverage provided,
  262  relative concentration of risks, and other such factors deemed
  263  by the board to be appropriate.
  264         2. The formula must provide for a cash build-up factor as
  265  specified in this subparagraph. For the 2009-2010 contract year,
  266  the factor is 5 percent. For the 2010-2011 contract year, the
  267  factor is 10 percent.
  268         a. For the 2011-2012 contract year, the factor is 15
  269  percent.
  270         b. For the 2012-2013 contract year, the factor is 20
  271  percent.
  272         c. For the 2013-2014 contract year and thereafter, the
  273  factor is 25 percent.
  274         d. For the 2014-2015 contract year, the factor is 30
  275  percent.
  276         e. For the 2015-2016 contract year, the factor is 35
  277  percent.
  278         f. For the 2016-2017 contract year, the factor is 40
  279  percent.
  280         g. For the 2017-2018 contract year, the factor is 45
  281  percent.
  282         h. For the 2018-2019 contract year and subsequent contract
  283  years, the factor is 50 percent.
  284         3. The formula may provide for a procedure to determine the
  285  premiums to be paid by new insurers that begin writing covered
  286  policies after the beginning of a contract year, taking into
  287  consideration when the insurer starts writing covered policies,
  288  the potential exposure of the insurer, the potential exposure of
  289  the fund, the administrative costs to the insurer and to the
  290  fund, and any other factors deemed appropriate by the board. The
  291  formula must be approved by unanimous vote of the board. The
  292  board may, at any time, revise the formula pursuant to the
  293  procedure provided in this paragraph.
  294         (6) REVENUE BONDS.—
  295         (b) Emergency assessments—
  296         1. If the board determines that the amount of revenue
  297  produced under subsection (5) is insufficient to fund the
  298  obligations, costs, and expenses of the fund and the
  299  corporation, including repayment of revenue bonds and that
  300  portion of the debt service coverage not met by reimbursement
  301  premiums, the board shall direct the Office of Insurance
  302  Regulation to levy, by order, an emergency assessment on direct
  303  premiums for all property and casualty lines of business in this
  304  state, including property and casualty business of surplus lines
  305  insurers regulated under part VIII of chapter 626, but not
  306  including any workers’ compensation premiums or medical
  307  malpractice premiums. As used in this subsection, the term
  308  “property and casualty business” includes all lines of business
  309  identified on Form 2, Exhibit of Premiums and Losses, in the
  310  annual statement required of authorized insurers by s. 624.424
  311  and any rule adopted under this section, except for those lines
  312  identified as accident and health insurance and except for
  313  policies written under the National Flood Insurance Program. The
  314  assessment shall be specified as a percentage of direct written
  315  premium and is subject to annual adjustments by the board in
  316  order to meet debt obligations. The same percentage shall apply
  317  to all policies in lines of business subject to the assessment
  318  issued or renewed during the 12-month period beginning on the
  319  effective date of the assessment.
  320         2.a. A premium is not subject to an annual assessment under
  321  this paragraph in excess of 6 percent of premium with respect to
  322  obligations arising out of losses attributable to any one
  323  contract year prior to the 2015-2016 contract year, and a
  324  premium is not subject to an aggregate annual assessment under
  325  this paragraph in excess of 10 percent of premium if all of the
  326  losses that generated the obligations were attributable to
  327  contract years prior to the 2015-2016 contract year. An annual
  328  assessment under this paragraph shall continue as long as the
  329  revenue bonds issued with respect to which the assessment was
  330  imposed are outstanding, including any bonds the proceeds of
  331  which were used to refund the revenue bonds, unless adequate
  332  provision has been made for the payment of the bonds under the
  333  documents authorizing issuance of the bonds.
  334         b. Except as provided in sub-subparagraph a., a premium is
  335  not subject to an annual assessment under this paragraph in
  336  excess of 5 percent of premium with respect to obligations
  337  arising out of losses attributable to any one contract year, and
  338  a premium is not subject to an aggregate annual assessment under
  339  this paragraph in excess of 8 percent of premium. An annual
  340  assessment under this paragraph shall continue as long as the
  341  revenue bonds issued with respect to which the assessment was
  342  imposed are outstanding, including any bonds the proceeds of
  343  which were used to refund the revenue bonds, unless adequate
  344  provision has been made for the payment of the bonds under the
  345  documents authorizing issuance of the bonds.
  346         3. Emergency assessments shall be collected from
  347  policyholders. Emergency assessments shall be remitted by
  348  insurers as a percentage of direct written premium for the
  349  preceding calendar quarter as specified in the order from the
  350  Office of Insurance Regulation. The office shall verify the
  351  accurate and timely collection and remittance of emergency
  352  assessments and shall report the information to the board in a
  353  form and at a time specified by the board. Each insurer
  354  collecting assessments shall provide the information with
  355  respect to premiums and collections as may be required by the
  356  office to enable the office to monitor and verify compliance
  357  with this paragraph.
  358         4. With respect to assessments of surplus lines premiums,
  359  each surplus lines agent shall collect the assessment at the
  360  same time as the agent collects the surplus lines tax required
  361  by s. 626.932, and the surplus lines agent shall remit the
  362  assessment to the Florida Surplus Lines Service Office created
  363  by s. 626.921 at the same time as the agent remits the surplus
  364  lines tax to the Florida Surplus Lines Service Office. The
  365  emergency assessment on each insured procuring coverage and
  366  filing under s. 626.938 shall be remitted by the insured to the
  367  Florida Surplus Lines Service Office at the time the insured
  368  pays the surplus lines tax to the Florida Surplus Lines Service
  369  Office. The Florida Surplus Lines Service Office shall remit the
  370  collected assessments to the fund or corporation as provided in
  371  the order levied by the Office of Insurance Regulation. The
  372  Florida Surplus Lines Service Office shall verify the proper
  373  application of such emergency assessments and shall assist the
  374  board in ensuring the accurate and timely collection and
  375  remittance of assessments as required by the board. The Florida
  376  Surplus Lines Service Office shall annually calculate the
  377  aggregate written premium on property and casualty business,
  378  other than workers’ compensation and medical malpractice,
  379  procured through surplus lines agents and insureds procuring
  380  coverage and filing under s. 626.938 and shall report the
  381  information to the board in a form and at a time specified by
  382  the board.
  383         5.a. Any assessment authority not used for a particular
  384  contract year may be used for a subsequent contract year. If,
  385  for a subsequent contract year, the board determines that the
  386  amount of revenue produced under subsection (5) is insufficient
  387  to fund the obligations, costs, and expenses of the fund and the
  388  corporation, including repayment of revenue bonds and that
  389  portion of the debt service coverage not met by reimbursement
  390  premiums, the board shall direct the Office of Insurance
  391  Regulation to levy an emergency assessment up to an amount not
  392  exceeding the amount of unused assessment authority from a
  393  previous contract year or years, plus an additional 4 percent,
  394  if provided that the assessments in the aggregate do not exceed
  395  the limits specified in subparagraph 2. and all of the losses
  396  that generated the obligations were attributable to contract
  397  years prior to the 2015-2016 contract year.
  398         b. Except as provided in sub-subparagraph a., any
  399  assessment authority not used for a particular contract year may
  400  be used for a subsequent contract year. If, for a subsequent
  401  contract year, the board determines that the amount of revenue
  402  produced under subsection (5) is insufficient to fund the
  403  obligations, costs, and expenses of the fund and the
  404  corporation, including repayment of revenue bonds and that
  405  portion of the debt service coverage not met by reimbursement
  406  premiums, the board shall direct the Office of Insurance
  407  Regulation to levy an emergency assessment up to an amount not
  408  exceeding the amount of unused assessment authority from a
  409  previous contract year or years, plus an additional 3 percent,
  410  if the assessments in the aggregate do not exceed the limits
  411  specified in subparagraph 2.
  412         6. The assessments otherwise payable to the corporation
  413  under this paragraph shall be paid to the fund unless and until
  414  the Office of Insurance Regulation and the Florida Surplus Lines
  415  Service Office have received from the corporation and the fund a
  416  notice, which shall be conclusive and upon which they may rely
  417  without further inquiry, that the corporation has issued bonds
  418  and the fund has no agreements in effect with local governments
  419  under paragraph (c). On or after the date of the notice and
  420  until the date the corporation has no bonds outstanding, the
  421  fund shall have no right, title, or interest in or to the
  422  assessments, except as provided in the fund’s agreement with the
  423  corporation.
  424         7. Emergency assessments are not premium and are not
  425  subject to the premium tax, to the surplus lines tax, to any
  426  fees, or to any commissions. An insurer is liable for all
  427  assessments that it collects and must treat the failure of an
  428  insured to pay an assessment as a failure to pay the premium. An
  429  insurer is not liable for uncollectible assessments.
  430         8. When an insurer is required to return an unearned
  431  premium, it shall also return any collected assessment
  432  attributable to the unearned premium. A credit adjustment to the
  433  collected assessment may be made by the insurer with regard to
  434  future remittances that are payable to the fund or corporation,
  435  but the insurer is not entitled to a refund.
  436         9. When a surplus lines insured or an insured who has
  437  procured coverage and filed under s. 626.938 is entitled to the
  438  return of an unearned premium, the Florida Surplus Lines Service
  439  Office shall provide a credit or refund to the agent or such
  440  insured for the collected assessment attributable to the
  441  unearned premium prior to remitting the emergency assessment
  442  collected to the fund or corporation.
  443         10. The exemption of medical malpractice insurance premiums
  444  from emergency assessments under this paragraph is repealed May
  445  31, 2013, and medical malpractice insurance premiums shall be
  446  subject to emergency assessments attributable to loss events
  447  occurring in the contract years commencing on June 1, 2013.
  448         (d) State Board of Administration Florida Hurricane
  449  Catastrophe Fund Finance Corporation.—
  450         1. In addition to the findings and declarations in
  451  subsection (1), the Legislature also finds and declares that:
  452         a. The public benefits corporation created under this
  453  paragraph will provide a mechanism necessary for the cost
  454  effective and efficient issuance of bonds. This mechanism will
  455  eliminate unnecessary costs in the bond issuance process,
  456  thereby increasing the amounts available to pay reimbursement
  457  for losses to property sustained as a result of hurricane
  458  damage.
  459         b. The purpose of such bonds is to fund reimbursements
  460  through the Florida Hurricane Catastrophe Fund to pay for the
  461  costs of construction, reconstruction, repair, restoration, and
  462  other costs associated with damage to properties of
  463  policyholders of covered policies due to the occurrence of a
  464  hurricane.
  465         c. The efficacy of the financing mechanism will be enhanced
  466  by the corporation’s ownership of the assessments, by the
  467  insulation of the assessments from possible bankruptcy
  468  proceedings, and by covenants of the state with the
  469  corporation’s bondholders.
  470         2.a. There is created a public benefits corporation, which
  471  is an instrumentality of the state, to be known as the State
  472  Board of Administration Florida Hurricane Catastrophe Fund
  473  Finance Corporation.
  474         b. The corporation shall operate under a five-member board
  475  of directors consisting of the Governor or a designee, the Chief
  476  Financial Officer or a designee, the Attorney General or a
  477  designee, the director of the Division of Bond Finance of the
  478  State Board of Administration, and the Chief Operating Officer
  479  senior employee of the State Board of Administration responsible
  480  for operations of the Florida Hurricane Catastrophe Fund.
  481         c. The corporation has all of the powers of corporations
  482  under chapter 607 and under chapter 617, subject only to the
  483  provisions of this subsection.
  484         d. The corporation may issue bonds and engage in such other
  485  financial transactions as are necessary to provide sufficient
  486  funds to achieve the purposes of this section.
  487         e. The corporation may invest in any of the investments
  488  authorized under s. 215.47.
  489         f. There shall be no liability on the part of, and no cause
  490  of action shall arise against, any board members or employees of
  491  the corporation for any actions taken by them in the performance
  492  of their duties under this paragraph.
  493         3.a. In actions under chapter 75 to validate any bonds
  494  issued by the corporation, the notice required by s. 75.06 shall
  495  be published only in Leon County and in two newspapers of
  496  general circulation in the state, and the complaint and order of
  497  the court shall be served only on the State Attorney of the
  498  Second Judicial Circuit.
  499         b. The state hereby covenants with holders of bonds of the
  500  corporation that the state will not repeal or abrogate the power
  501  of the board to direct the Office of Insurance Regulation to
  502  levy the assessments and to collect the proceeds of the revenues
  503  pledged to the payment of such bonds as long as any such bonds
  504  remain outstanding unless adequate provision has been made for
  505  the payment of such bonds pursuant to the documents authorizing
  506  the issuance of such bonds.
  507         4. The bonds of the corporation are not a debt of the state
  508  or of any political subdivision, and neither the state nor any
  509  political subdivision is liable on such bonds. The corporation
  510  does not have the power to pledge the credit, the revenues, or
  511  the taxing power of the state or of any political subdivision.
  512  The credit, revenues, or taxing power of the state or of any
  513  political subdivision shall not be deemed to be pledged to the
  514  payment of any bonds of the corporation.
  515         5.a. The property, revenues, and other assets of the
  516  corporation; the transactions and operations of the corporation
  517  and the income from such transactions and operations; and all
  518  bonds issued under this paragraph and interest on such bonds are
  519  exempt from taxation by the state and any political subdivision,
  520  including the intangibles tax under chapter 199 and the income
  521  tax under chapter 220. This exemption does not apply to any tax
  522  imposed by chapter 220 on interest, income, or profits on debt
  523  obligations owned by corporations other than the State Board of
  524  Administration Florida Hurricane Catastrophe Fund Finance
  525  Corporation.
  526         b. All bonds of the corporation shall be and constitute
  527  legal investments without limitation for all public bodies of
  528  this state; for all banks, trust companies, savings banks,
  529  savings associations, savings and loan associations, and
  530  investment companies; for all administrators, executors,
  531  trustees, and other fiduciaries; for all insurance companies and
  532  associations and other persons carrying on an insurance
  533  business; and for all other persons who are now or may hereafter
  534  be authorized to invest in bonds or other obligations of the
  535  state and shall be and constitute eligible securities to be
  536  deposited as collateral for the security of any state, county,
  537  municipal, or other public funds. This sub-subparagraph shall be
  538  considered as additional and supplemental authority and shall
  539  not be limited without specific reference to this sub
  540  subparagraph.
  541         6. The corporation and its corporate existence shall
  542  continue until terminated by law; however, no such law shall
  543  take effect as long as the corporation has bonds outstanding
  544  unless adequate provision has been made for the payment of such
  545  bonds pursuant to the documents authorizing the issuance of such
  546  bonds. Upon termination of the existence of the corporation, all
  547  of its rights and properties in excess of its obligations shall
  548  pass to and be vested in the state.
  549         7. The State Board of Administration Finance Corporation is
  550  for all purposes the successor to the Florida Hurricane
  551  Catastrophe Fund Finance Corporation.
  552         (16) TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL COVERAGE.—
  553         (a) Findings and intent.
  554         1. The Legislature finds that:
  555         a. Because of temporary disruptions in the market for
  556  catastrophic reinsurance, many property insurers were unable to
  557  procure reinsurance for the 2006 hurricane season with an
  558  attachment point below the insurers’ respective Florida
  559  Hurricane Catastrophe Fund attachment points, were unable to
  560  procure sufficient amounts of such reinsurance, or were able to
  561  procure such reinsurance only by incurring substantially higher
  562  costs than in prior years.
  563         b. The reinsurance market problems were responsible, at
  564  least in part, for substantial premium increases to many
  565  consumers and increases in the number of policies issued by the
  566  Citizens Property Insurance Corporation.
  567         c. It is likely that the reinsurance market disruptions
  568  will not significantly abate prior to the 2007 hurricane season.
  569         2. It is the intent of the Legislature to create a
  570  temporary emergency program, applicable to the 2007, 2008, and
  571  2009 hurricane seasons, to address these market disruptions and
  572  enable insurers, at their option, to procure additional coverage
  573  from the Florida Hurricane Catastrophe Fund.
  574         (b) Applicability of other provisions of this section.—All
  575  provisions of this section and the rules adopted under this
  576  section apply to the program created by this subsection unless
  577  specifically superseded by this subsection.
  578         (c) Optional coverage.—For the contract year commencing
  579  June 1, 2007, and ending May 31, 2008, the contract year
  580  commencing June 1, 2008, and ending May 31, 2009, and the
  581  contract year commencing June 1, 2009, and ending May 31, 2010,
  582  the board shall offer for each of such years the optional
  583  coverage as provided in this subsection.
  584         (d) Additional definitions.—As used in this subsection, the
  585  term:
  586         1. “TEACO options” means the temporary emergency additional
  587  coverage options created under this subsection.
  588         2. “TEACO insurer” means an insurer that has opted to
  589  obtain coverage under the TEACO options in addition to the
  590  coverage provided to the insurer under its reimbursement
  591  contract.
  592         3. “TEACO reimbursement premium” means the premium charged
  593  by the fund for coverage provided under the TEACO options.
  594         4. “TEACO retention” means the amount of losses below which
  595  a TEACO insurer is not entitled to reimbursement from the fund
  596  under the TEACO option selected. A TEACO insurer’s retention
  597  options shall be calculated as follows:
  598         a. The board shall calculate and report to each TEACO
  599  insurer the TEACO retention multiples. There shall be three
  600  TEACO retention multiples for defining coverage. Each multiple
  601  shall be calculated by dividing $3 billion, $4 billion, or $5
  602  billion by the total estimated mandatory FHCF reimbursement
  603  premium assuming all insurers selected the 90-percent coverage
  604  level.
  605         b. The TEACO retention multiples as determined under sub
  606  subparagraph a. shall be adjusted to reflect the coverage level
  607  elected by the insurer. For insurers electing the 90-percent
  608  coverage level, the adjusted retention multiple is 100 percent
  609  of the amount determined under sub-subparagraph a. For insurers
  610  electing the 75-percent coverage level, the retention multiple
  611  is 120 percent of the amount determined under sub-subparagraph
  612  a. For insurers electing the 45-percent coverage level, the
  613  adjusted retention multiple is 200 percent of the amount
  614  determined under sub-subparagraph a.
  615         c. An insurer shall determine its provisional TEACO
  616  retention by multiplying its estimated mandatory FHCF
  617  reimbursement premium by the applicable adjusted TEACO retention
  618  multiple and shall determine its actual TEACO retention by
  619  multiplying its actual mandatory FHCF reimbursement premium by
  620  the applicable adjusted TEACO retention multiple.
  621         d. For TEACO insurers who experience multiple covered
  622  events causing loss during the contract year, the insurer’s full
  623  TEACO retention shall be applied to each of the covered events
  624  causing the two largest losses for that insurer. For other
  625  covered events resulting in losses, the TEACO option does not
  626  apply and the insurer’s retention shall be one-third of the full
  627  retention as calculated under paragraph (2)(e).
  628         5. “TEACO addendum” means an addendum to the reimbursement
  629  contract reflecting the obligations of the fund and TEACO
  630  insurers under the program created by this subsection.
  631         6. “FHCF” means the Florida Hurricane Catastrophe Fund.
  632         (e) TEACO addendum.
  633         1. The TEACO addendum shall provide for reimbursement of
  634  TEACO insurers for covered events occurring during the contract
  635  year, in exchange for the TEACO reimbursement premium paid into
  636  the fund under paragraph (f). Any insurer writing covered
  637  policies has the option of choosing to accept the TEACO addendum
  638  for any of the 3 contract years that the coverage is offered.
  639         2. The TEACO addendum shall contain a promise by the board
  640  to reimburse the TEACO insurer for 45 percent, 75 percent, or 90
  641  percent of its losses from each covered event in excess of the
  642  insurer’s TEACO retention, plus 5 percent of the reimbursed
  643  losses to cover loss adjustment expenses. The percentage shall
  644  be the same as the coverage level selected by the insurer under
  645  paragraph (4)(b).
  646         3. The TEACO addendum shall provide that reimbursement
  647  amounts shall not be reduced by reinsurance paid or payable to
  648  the insurer from other sources.
  649         4. The TEACO addendum shall also provide that the
  650  obligation of the board with respect to all TEACO addenda shall
  651  not exceed an amount equal to two times the difference between
  652  the industry retention level calculated under paragraph (2)(e)
  653  and the $3 billion, $4 billion, or $5 billion industry TEACO
  654  retention level options actually selected, but in no event may
  655  the board’s obligation exceed the actual claims-paying capacity
  656  of the fund plus the additional capacity created in paragraph
  657  (g). If the actual claims-paying capacity and the additional
  658  capacity created under paragraph (g) fall short of the board’s
  659  obligations under the reimbursement contract, each insurer’s
  660  share of the fund’s capacity shall be prorated based on the
  661  premium an insurer pays for its mandatory reimbursement coverage
  662  and the premium paid for its optional TEACO coverage as each
  663  such premium bears to the total premiums paid to the fund times
  664  the available capacity.
  665         5. The priorities, schedule, and method of reimbursements
  666  under the TEACO addendum shall be the same as provided under
  667  subsection (4).
  668         6. A TEACO insurer’s maximum reimbursement for a single
  669  event shall be equal to the product of multiplying its mandatory
  670  FHCF premium by the difference between its FHCF retention
  671  multiple and its TEACO retention multiple under the TEACO option
  672  selected and by the coverage selected under paragraph (4)(b),
  673  plus an additional 5 percent for loss adjustment expenses. A
  674  TEACO insurer’s maximum reimbursement under the TEACO option
  675  selected for a TEACO insurer’s two largest events shall be twice
  676  its maximum reimbursement for a single event.
  677         (f) TEACO reimbursement premiums.
  678         1. Each TEACO insurer shall pay to the fund, in the manner
  679  and at the time provided in the reimbursement contract for
  680  payment of reimbursement premiums, a TEACO reimbursement premium
  681  calculated as specified in this paragraph.
  682         2. The insurer’s TEACO reimbursement premium associated
  683  with the $3 billion retention option shall be equal to 85
  684  percent of a TEACO insurer’s maximum reimbursement for a single
  685  event as calculated under subparagraph (e)6. The TEACO
  686  reimbursement premium associated with the $4 billion retention
  687  option shall be equal to 80 percent of a TEACO insurer’s maximum
  688  reimbursement for a single event as calculated under
  689  subparagraph (e)6. The TEACO premium associated with the $5
  690  billion retention option shall be equal to 75 percent of a TEACO
  691  insurer’s maximum reimbursement for a single event as calculated
  692  under subparagraph (e)6.
  693         (g) Effect on claims-paying capacity of the fund.—For the
  694  contract term commencing June 1, 2007, the contract year
  695  commencing June 1, 2008, and the contract term beginning June 1,
  696  2009, the program created by this subsection shall increase the
  697  claims-paying capacity of the fund as provided in subparagraph
  698  (4)(c)1. by an amount equal to two times the difference between
  699  the industry retention level calculated under paragraph (2)(e)
  700  and the $3 billion industry TEACO retention level specified in
  701  sub-subparagraph (d)4.a. The additional capacity shall apply
  702  only to the additional coverage provided by the TEACO option and
  703  shall not otherwise affect any insurer’s reimbursement from the
  704  fund.
  705         (16)(17) TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.—
  706         (a) Findings and intent.—
  707         1. The Legislature finds that:
  708         a. Because of temporary disruptions in the market for
  709  catastrophic reinsurance, many property insurers were unable to
  710  procure sufficient amounts of reinsurance for the 2006 hurricane
  711  season or were able to procure such reinsurance only by
  712  incurring substantially higher costs than in prior years.
  713         b. The reinsurance market problems were responsible, at
  714  least in part, for substantial premium increases to many
  715  consumers and increases in the number of policies issued by
  716  Citizens Property Insurance Corporation.
  717         c. It is likely that the reinsurance market disruptions
  718  will not significantly abate prior to the 2007 hurricane season.
  719         2. It is the intent of the Legislature to create options
  720  for insurers to purchase a temporary increased coverage limit
  721  above the statutorily determined limit in subparagraph (4)(c)1.,
  722  applicable for the 2007, 2008, 2009, 2010, 2011, 2012, and 2013
  723  hurricane season seasons, to address market disruptions and
  724  enable insurers, at their option, to procure additional coverage
  725  from the Florida Hurricane Catastrophe Fund.
  726         (b) Applicability of other provisions of this section.—All
  727  provisions of this section and the rules adopted under this
  728  section apply to the coverage created by this subsection unless
  729  specifically superseded by provisions in this subsection.
  730         (c) Optional coverage.—For the 2009-2010, 2010-2011, 2011
  731  2012, 2012-2013, and 2013-2014 contract year years, the board
  732  shall offer, for each of such years, the optional coverage as
  733  provided in this subsection.
  734         (d) Additional definitions.—As used in this subsection, the
  735  term:
  736         1. “FHCF” means Florida Hurricane Catastrophe Fund.
  737         2. “FHCF reimbursement premium” means the premium paid by
  738  an insurer for its coverage as a mandatory participant in the
  739  FHCF, but does not include additional premiums for optional
  740  coverages.
  741         3. “Payout multiple” means the number or multiple created
  742  by dividing the statutorily defined claims-paying capacity as
  743  determined in subparagraph (4)(c)1. by the aggregate
  744  reimbursement premiums paid by all insurers estimated or
  745  projected as of calendar year-end.
  746         4. “TICL” means the temporary increase in coverage limit.
  747         5. “TICL options” means the temporary increase in coverage
  748  options created under this subsection.
  749         6. “TICL insurer” means an insurer that has opted to obtain
  750  coverage under the TICL options addendum in addition to the
  751  coverage provided to the insurer under its FHCF reimbursement
  752  contract.
  753         7. “TICL reimbursement premium” means the premium charged
  754  by the fund for coverage provided under the TICL option.
  755         8. “TICL coverage multiple” means the coverage multiple
  756  when multiplied by an insurer’s reimbursement premium that
  757  defines the temporary increase in coverage limit.
  758         9. “TICL coverage” means the coverage for an insurer’s
  759  losses above the insurer’s statutorily determined claims-paying
  760  capacity based on the claims-paying limit in subparagraph
  761  (4)(c)1., which an insurer selects as its temporary increase in
  762  coverage from the fund under the TICL options selected. A TICL
  763  insurer’s increased coverage limit options shall be calculated
  764  as follows:
  765         a. The board shall calculate and report to each TICL
  766  insurer the TICL coverage multiples based on 12 options for
  767  increasing the insurer’s FHCF coverage limit. Each TICL coverage
  768  multiple shall be calculated by dividing $1 billion, $2 billion,
  769  $3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8
  770  billion, $9 billion, $10 billion, $11 billion, or $12 billion by
  771  the total estimated aggregate FHCF reimbursement premiums for
  772  the 2007-2008 contract year, and the 2008-2009 contract year.
  773         b. For the 2009-2010 contract year, the board shall
  774  calculate and report to each TICL insurer the TICL coverage
  775  multiples based on 10 options for increasing the insurer’s FHCF
  776  coverage limit. Each TICL coverage multiple shall be calculated
  777  by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  778  billion, $6 billion, $7 billion, $8 billion, $9 billion, and $10
  779  billion by the total estimated aggregate FHCF reimbursement
  780  premiums for the 2009-2010 contract year.
  781         c. For the 2010-2011 contract year, the board shall
  782  calculate and report to each TICL insurer the TICL coverage
  783  multiples based on eight options for increasing the insurer’s
  784  FHCF coverage limit. Each TICL coverage multiple shall be
  785  calculated by dividing $1 billion, $2 billion, $3 billion, $4
  786  billion, $5 billion, $6 billion, $7 billion, and $8 billion by
  787  the total estimated aggregate FHCF reimbursement premiums for
  788  the contract year.
  789         d. For the 2011-2012 contract year, the board shall
  790  calculate and report to each TICL insurer the TICL coverage
  791  multiples based on six options for increasing the insurer’s FHCF
  792  coverage limit. Each TICL coverage multiple shall be calculated
  793  by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  794  billion, and $6 billion by the total estimated aggregate FHCF
  795  reimbursement premiums for the 2011-2012 contract year.
  796         a.e. For the 2012-2013 contract year, the board shall
  797  calculate and report to each TICL insurer the TICL coverage
  798  multiples based on four options for increasing the insurer’s
  799  FHCF coverage limit. Each TICL coverage multiple shall be
  800  calculated by dividing $1 billion, $2 billion, $3 billion, and
  801  $4 billion by the total estimated aggregate FHCF reimbursement
  802  premiums for the 2012-2013 contract year.
  803         f. For the 2013-2014 contract year, the board shall
  804  calculate and report to each TICL insurer the TICL coverage
  805  multiples based on two options for increasing the insurer’s FHCF
  806  coverage limit. Each TICL coverage multiple shall be calculated
  807  by dividing $1 billion and $2 billion by the total estimated
  808  aggregate FHCF reimbursement premiums for the 2013-2014 contract
  809  year.
  810         b.g. The TICL insurer’s increased coverage shall be the
  811  FHCF reimbursement premium multiplied by the TICL coverage
  812  multiple. In order to determine an insurer’s total limit of
  813  coverage, an insurer shall add its TICL coverage multiple to its
  814  payout multiple. The total shall represent a number that, when
  815  multiplied by an insurer’s FHCF reimbursement premium for a
  816  given reimbursement contract year, defines an insurer’s total
  817  limit of FHCF reimbursement coverage for that reimbursement
  818  contract year.
  819         10. “TICL options addendum” means an addendum to the
  820  reimbursement contract reflecting the obligations of the fund
  821  and insurers selecting an option to increase an insurer’s FHCF
  822  coverage limit.
  823         (e) TICL options addendum.—
  824         1. The TICL options addendum shall provide for
  825  reimbursement of TICL insurers for covered events occurring
  826  during the 2009-2010, 2010-2011, 2011-2012, 2012-2013, and 2013
  827  2014 contract year years in exchange for the TICL reimbursement
  828  premium paid into the fund under paragraph (f) based on the TICL
  829  coverage available and selected for each respective contract
  830  year. Any insurer writing covered policies has the option of
  831  selecting an increased limit of coverage under the TICL options
  832  addendum and shall select such coverage at the time that it
  833  executes the FHCF reimbursement contract.
  834         2. The TICL addendum shall contain a promise by the board
  835  to reimburse the TICL insurer for 45 percent, 75 percent, or 90
  836  percent of its losses from each covered event in excess of the
  837  insurer’s retention, plus 5 percent of the reimbursed losses to
  838  cover loss adjustment expenses. The percentage shall be the same
  839  as the coverage level selected by the insurer under paragraph
  840  (4)(b).
  841         3. The TICL addendum shall provide that reimbursement
  842  amounts shall not be reduced by reinsurance paid or payable to
  843  the insurer from other sources.
  844         4. The priorities, schedule, and method of reimbursements
  845  under the TICL addendum shall be the same as provided under
  846  subsection (4).
  847         (f) TICL reimbursement premiums.—Each TICL insurer shall
  848  pay to the fund, in the manner and at the time provided in the
  849  reimbursement contract for payment of reimbursement premiums, a
  850  TICL reimbursement premium determined as specified in subsection
  851  (5), except that a cash build-up factor does not apply to the
  852  TICL reimbursement premiums. However, the TICL reimbursement
  853  premium shall be increased in the 2009-2010 contract year by a
  854  factor of two, in the 2010-2011 contract year by a factor of
  855  three, in the 2011-2012 contract year by a factor of four, in
  856  the 2012-2013 contract year by a factor of five, and in the
  857  2013-2014 contract year by a factor of six.
  858         (g) Effect on claims-paying capacity of the fund.—For the
  859  2009-2010, 2010-2011, 2011-2012, 2012-2013, and 2013-2014
  860  contract year years, the program created by this subsection
  861  shall increase the claims-paying capacity of the fund as
  862  provided in subparagraph (4)(c)1. by an amount not to exceed $4
  863  $12 billion and shall depend on the TICL coverage options
  864  available and selected for the specified contract year and the
  865  number of insurers that select the TICL optional coverage. The
  866  additional capacity shall apply only to the additional coverage
  867  provided under the TICL options and shall not otherwise affect
  868  any insurer’s reimbursement from the fund if the insurer chooses
  869  not to select the temporary option to increase its limit of
  870  coverage under the FHCF.
  871         (17)(18) FACILITATION OF INSURERS’ PRIVATE CONTRACT
  872  NEGOTIATIONS BEFORE THE START OF THE HURRICANE SEASON.—
  873         (a) In addition to the legislative findings and intent
  874  provided elsewhere in this section, the Legislature finds that:
  875         1.a. Because a regular session of the Legislature begins
  876  approximately 3 months before the start of a contract year and
  877  ends approximately 1 month before the start of a contract year,
  878  participants in the fund always face the possibility that
  879  legislative actions will change the coverage provided or offered
  880  by the fund with only a few days or weeks of advance notice.
  881         b. The timing issues described in sub-subparagraph a. can
  882  create uncertainties and disadvantages for the residential
  883  property insurers that are required to participate in the fund
  884  when such insurers negotiate for the procurement of private
  885  reinsurance or other sources of capital.
  886         c. Providing participating insurers with a greater degree
  887  of certainty regarding the coverage provided or offered by the
  888  fund and more time to negotiate for the procurement of private
  889  reinsurance or other sources of capital will enable the
  890  residential property insurance market to operate with greater
  891  stability.
  892         d. Increased stability in the residential property
  893  insurance market serves a primary purpose of the fund and
  894  benefits Florida consumers by enabling insurers to operate more
  895  economically. In years when reinsurance and capital markets are
  896  experiencing a capital shortage, the last-minute rush by
  897  insurers only weeks before the start of the hurricane season to
  898  procure adequate coverage in order to meet their capital
  899  requirements can result in higher costs that are passed on to
  900  Florida consumers. However, if more time is available,
  901  residential property insurers should experience greater
  902  competition for their business with a corresponding beneficial
  903  effect for Florida consumers.
  904         2. It is the intent of the Legislature to provide insurers
  905  with the terms and conditions of the reimbursement contract well
  906  in advance of the insurers’ need to finalize their procurement
  907  of private reinsurance or other sources of capital, and thereby
  908  improve insurers’ negotiating position with reinsurers and other
  909  sources of capital.
  910         3. It is also the intent of the Legislature that the board
  911  publish the fund’s maximum statutory limit of coverage and the
  912  fund’s total retention early enough that residential property
  913  insurers can have the opportunity to better estimate their
  914  coverage from the fund.
  915         (b) The board shall adopt the reimbursement contract for a
  916  particular contract year by February 1 of the immediately
  917  preceding contract year. However, the reimbursement contract
  918  shall be adopted as soon as possible in advance of the 2010-2011
  919  contract year.
  920         (c) Insurers writing covered policies shall execute the
  921  reimbursement contract by March 1 of the immediately preceding
  922  contract year, and the contract shall have an effective date as
  923  defined in paragraph (2)(o).
  924         (d) The board shall publish in the Florida Administrative
  925  Weekly the maximum statutory adjusted capacity for the mandatory
  926  coverage for a particular contract year, the maximum statutory
  927  coverage for any optional coverage for the particular contract
  928  year, and the aggregate fund retention used to calculate
  929  individual insurer’s retention multiples for the particular
  930  contract year no later than January 1 of the immediately
  931  preceding contract year.
  932         Section 2. Subsection (5) of section 627.0629, Florida
  933  Statutes, is amended to read:
  934         627.0629 Residential property insurance; rate filings.—
  935         (5) In order to provide an appropriate transition period,
  936  an insurer may implement an approved rate filing for residential
  937  property insurance over a period of years. Such insurer must
  938  provide an informational notice to the office setting out its
  939  schedule for implementation of the phased-in rate filing. The
  940  insurer may include in its rate the actual cost of private
  941  market reinsurance that corresponds to available coverage of the
  942  Temporary Increase in Coverage Limits, TICL, from the Florida
  943  Hurricane Catastrophe Fund. The insurer may also include the
  944  cost of reinsurance to replace the TICL reduction implemented
  945  pursuant to s. 215.555(16)(d)9 s. 215.555(17)(d)9. However, this
  946  cost for reinsurance may not include any expense or profit load
  947  or result in a total annual base rate increase in excess of 10
  948  percent.
  949         Section 3. This act shall take effect upon becoming a law.