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





                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)

                            CHAMBER ACTION
              Senate                               House
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 4                                                                

 5                                           ORIGINAL STAMP BELOW

 6

 7

 8

 9

10                                                                

11  Representative(s) Cosgrove offered the following:

12

13         Amendment (with title amendment) 

14         On page 1, between lines 27 and 28, of the bill

15

16  insert:

17         Section 2.  Subsection (2) of section 627.351, Florida

18  Statutes, is amended to read:

19         627.351  Insurance risk apportionment plans.--

20         (2)  HURRICANE WINDSTORM INSURANCE RISK

21  APPORTIONMENT.--

22         (a)  Agreements may be made among property insurers

23  with respect to the equitable apportionment among them of

24  insurance which may be afforded applicants who are in good

25  faith entitled to, but are unable to procure, such insurance

26  through ordinary methods; and such insurers may agree among

27  themselves on the use of reasonable rate modifications for

28  such insurance. Such agreements and rate modifications shall

29  be subject to the applicable provisions of this chapter.

30         (b)  The department shall require all insurers holding

31  a certificate of authority to transact property insurance on a

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  direct basis in this state, other than joint underwriting

 2  associations and other entities formed pursuant to this

 3  section, to provide hurricane windstorm coverage to applicants

 4  from areas determined to be eligible pursuant to paragraph (c)

 5  who in good faith are entitled to, but are unable to procure,

 6  such coverage through ordinary means; or it shall adopt a

 7  reasonable plan or plans for the equitable apportionment or

 8  sharing among such insurers of hurricane windstorm coverage,

 9  which may include formation of an association for this

10  purpose. As used in this subsection, the term "property

11  insurance" means insurance on real or personal property, as

12  defined in s. 624.604, including insurance for fire,

13  industrial fire, allied lines, farmowners multiperil,

14  homeowners' multiperil, commercial multiperil, and mobile

15  homes, and including liability coverages on all such

16  insurance, but excluding inland marine as defined in s.

17  624.607(3) and excluding vehicle insurance as defined in s.

18  624.605(1)(a) other than insurance on mobile homes used as

19  permanent dwellings. The department shall adopt rules that

20  provide a formula for the recovery and repayment of any

21  deferred assessments.

22         1.  For the purpose of this section, properties

23  eligible for such hurricane windstorm coverage are defined as

24  dwellings, buildings, and other structures, including mobile

25  homes which are used as dwellings and which are tied down in

26  compliance with mobile home tie-down requirements prescribed

27  by the Department of Highway Safety and Motor Vehicles

28  pursuant to s. 320.8325, and the contents of all such

29  properties. An applicant or policyholder is eligible for

30  coverage only if an offer of coverage cannot be obtained by or

31  for the applicant or policyholder from an admitted insurer at

                                  2

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  approved rates.

 2         2.a.(I)  All insurers required to be members of such

 3  association shall participate in its writings, expenses, and

 4  losses. Surplus of the association shall be retained for the

 5  payment of claims and shall not be distributed to the member

 6  insurers. Such participation by member insurers shall be in

 7  the proportion that the net direct premiums of each member

 8  insurer written for property insurance in this state during

 9  the preceding calendar year bear to the aggregate net direct

10  premiums for property insurance of all member insurers, as

11  reduced by any credits for voluntary writings, in this state

12  during the preceding calendar year. For the purposes of this

13  subsection, the term "net direct premiums" means direct

14  written premiums for property insurance, reduced by premium

15  for liability coverage and for the following if included in

16  allied lines: rain and hail on growing crops; livestock;

17  association direct premiums booked; National Flood Insurance

18  Program direct premiums; and similar deductions specifically

19  authorized by the plan of operation and approved by the

20  department. A member's participation shall begin on the first

21  day of the calendar year following the year in which it is

22  issued a certificate of authority to transact property

23  insurance in the state and shall terminate 1 year after the

24  end of the calendar year during which it no longer holds a

25  certificate of authority to transact property insurance in the

26  state. The commissioner, after review of annual statements,

27  other reports, and any other statistics that the commissioner

28  deems necessary, shall certify to the association the

29  aggregate direct premiums written for property insurance in

30  this state by all member insurers.

31         (II)  The plan of operation shall provide for a board

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  of directors consisting of the Insurance Consumer Advocate

 2  appointed under s. 627.0613, four 1 consumer representatives

 3  representative appointed by the Insurance Commissioner, four 1

 4  consumer representatives representative appointed by the

 5  Governor, and six 12 additional members appointed as specified

 6  in the plan of operation. One of the six 12 additional members

 7  shall be elected by the domestic companies of this state on

 8  the basis of cumulative weighted voting based on the net

 9  direct premiums of domestic companies in this state. Nothing

10  in the 1997 amendments to this paragraph terminates the

11  existing board or the terms of any members of the board.

12         (III)  The plan of operation shall provide a formula

13  whereby a company voluntarily providing hurricane windstorm

14  coverage in affected areas will be relieved wholly or

15  partially from apportionment of a regular assessment pursuant

16  to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

17         (IV)  A company which is a member of a group of

18  companies under common management may elect to have its

19  credits applied on a group basis, and any company or group may

20  elect to have its credits applied to any other company or

21  group.

22         (V)  There shall be no credits or relief from

23  apportionment to a company for emergency assessments collected

24  from its policyholders under sub-sub-subparagraph d.(III).

25         (VI)  The plan of operation may also provide for the

26  award of credits, for a period not to exceed 3 years, from a

27  regular assessment pursuant to sub-sub-subparagraph d.(I) or

28  sub-sub-subparagraph d.(II) as an incentive for taking

29  policies out of the Residential Property and Casualty Joint

30  Underwriting Association.  In order to qualify for the

31  exemption under this sub-sub-subparagraph, the take-out plan

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  must provide that at least 40 percent of the policies removed

 2  from the Residential Property and Casualty Joint Underwriting

 3  Association cover risks located in Dade, Broward, and Palm

 4  Beach Counties or at least 30 percent of the policies so

 5  removed cover risks located in Dade, Broward, and Palm Beach

 6  Counties and an additional 50 percent of the policies so

 7  removed cover risks located in other coastal counties, and

 8  must also provide that no more than 15 percent of the policies

 9  so removed may exclude hurricane windstorm coverage.  With the

10  approval of the department, the association may waive these

11  geographic criteria for a take-out plan that removes at least

12  the lesser of 100,000 Residential Property and Casualty Joint

13  Underwriting Association policies or 15 percent of the total

14  number of Residential Property and Casualty Joint Underwriting

15  Association policies, provided the governing board of the

16  Residential Property and Casualty Joint Underwriting

17  Association certifies that the take-out plan will materially

18  reduce the Residential Property and Casualty Joint

19  Underwriting Association's 100-year probable maximum loss from

20  hurricanes.  With the approval of the department, the board

21  may extend such credits for an additional year if the insurer

22  guarantees an additional year of renewability for all policies

23  removed from the Residential Property and Casualty Joint

24  Underwriting Association, or for 2 additional years if the

25  insurer guarantees 2 additional years of renewability for all

26  policies removed from the Residential Property and Casualty

27  Joint Underwriting Association.

28         b.  Assessments to pay deficits in the association

29  under this subparagraph shall be included as an appropriate

30  factor in the making of rates as provided in s. 627.3512.

31         c.  The Legislature finds that the potential for

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  unlimited deficit assessments under this subparagraph may

 2  induce insurers to attempt to reduce their writings in the

 3  voluntary market, and that such actions would worsen the

 4  availability problems that the association was created to

 5  remedy. It is the intent of the Legislature that insurers

 6  remain fully responsible for paying regular assessments and

 7  collecting emergency assessments for any deficits of the

 8  association; however, it is also the intent of the Legislature

 9  to provide a means by which assessment liabilities may be

10  amortized over a period of years.

11         d.(I)  When the deficit incurred in a particular

12  calendar year is 10 percent or less of the aggregate statewide

13  direct written premium for property insurance for the prior

14  calendar year for all member insurers, the association shall

15  levy an assessment on member insurers in an amount equal to

16  the deficit.

17         (II)  When the deficit incurred in a particular

18  calendar year exceeds 10 percent of the aggregate statewide

19  direct written premium for property insurance for the prior

20  calendar year for all member insurers, the association shall

21  levy an assessment on member insurers in an amount equal to

22  the greater of 10 percent of the deficit or 10 percent of the

23  aggregate statewide direct written premium for property

24  insurance for the prior calendar year for member insurers. Any

25  remaining deficit shall be recovered through emergency

26  assessments under sub-sub-subparagraph (III).

27         (III)  Upon a determination by the board of directors

28  that a deficit exceeds the amount that will be recovered

29  through regular assessments on member insurers, pursuant to

30  sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the

31  board shall levy, after verification by the department,

                                  6

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  emergency assessments to be collected by member insurers and

 2  by underwriting associations created pursuant to this section

 3  which write property insurance, upon issuance or renewal of

 4  property insurance policies other than National Flood

 5  Insurance policies in the year or years following levy of the

 6  regular assessments. The amount of the emergency assessment

 7  collected in a particular year shall be a uniform percentage

 8  of that year's direct written premium for property insurance

 9  for all member insurers and underwriting associations,

10  excluding National Flood Insurance policy premiums, as

11  annually determined by the board and verified by the

12  department. The department shall verify the arithmetic

13  calculations involved in the board's determination within 30

14  days after receipt of the information on which the

15  determination was based. Notwithstanding any other provision

16  of law, each member insurer and each underwriting association

17  created pursuant to this section shall collect emergency

18  assessments from its policyholders without such obligation

19  being affected by any credit, limitation, exemption, or

20  deferment.  The emergency assessments so collected shall be

21  transferred directly to the association on a periodic basis as

22  determined by the association. The aggregate amount of

23  emergency assessments levied under this sub-sub-subparagraph

24  in any calendar year may not exceed the greater of 10 percent

25  of the amount needed to cover the original deficit, plus

26  interest, fees, commissions, required reserves, and other

27  costs associated with financing of the original deficit, or 10

28  percent of the aggregate statewide direct written premium for

29  property insurance written by member insurers and underwriting

30  associations for the prior year, plus interest, fees,

31  commissions, required reserves, and other costs associated

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  with financing the original deficit. The board may pledge the

 2  proceeds of the emergency assessments under this

 3  sub-sub-subparagraph as the source of revenue for bonds, to

 4  retire any other debt incurred as a result of the deficit or

 5  events giving rise to the deficit, or in any other way that

 6  the board determines will efficiently recover the deficit. The

 7  emergency assessments under this sub-sub-subparagraph shall

 8  continue as long as any bonds issued or other indebtedness

 9  incurred with respect to a deficit for which the assessment

10  was imposed remain outstanding, unless adequate provision has

11  been made for the payment of such bonds or other indebtedness

12  pursuant to the document governing such bonds or other

13  indebtedness. Emergency assessments collected under this

14  sub-sub-subparagraph are not part of an insurer's rates, are

15  not premium, and are not subject to premium tax, fees, or

16  commissions; however, failure to pay the emergency assessment

17  shall be treated as failure to pay premium.

18         (IV)  Each member insurer's share of the total regular

19  assessments under sub-sub-subparagraph (I) or

20  sub-sub-subparagraph (II) shall be in the proportion that the

21  insurer's net direct premium for property insurance in this

22  state, for the year preceding the assessment bears to the

23  aggregate statewide net direct premium for property insurance

24  of all member insurers, as reduced by any credits for

25  voluntary writings for that year.

26         (V)  If regular deficit assessments are made under

27  sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by

28  the Residential Property and Casualty Joint Underwriting

29  Association under sub-subparagraph (6)(b)3.a. or

30  sub-subparagraph (6)(b)3.b., the association shall levy upon

31  the association's policyholders, as part of its next rate

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  filing, or by a separate rate filing solely for this purpose,

 2  a market equalization surcharge in a percentage equal to the

 3  total amount of such regular assessments divided by the

 4  aggregate statewide direct written premium for property

 5  insurance for member insurers for the prior calendar year.

 6  Market equalization surcharges under this sub-sub-subparagraph

 7  are not considered premium and are not subject to commissions,

 8  fees, or premium taxes; however, failure to pay a market

 9  equalization surcharge shall be treated as failure to pay

10  premium.

11         e.  The governing body of any unit of local government,

12  any residents of which are insured under the plan, may issue

13  bonds as defined in s. 125.013 or s. 166.101 to fund an

14  assistance program, in conjunction with the association, for

15  the purpose of defraying deficits of the association. In order

16  to avoid needless and indiscriminate proliferation,

17  duplication, and fragmentation of such assistance programs,

18  any unit of local government, any residents of which are

19  insured by the association, may provide for the payment of

20  losses, regardless of whether or not the losses occurred

21  within or outside of the territorial jurisdiction of the local

22  government. Revenue bonds may not be issued until validated

23  pursuant to chapter 75, unless a state of emergency is

24  declared by executive order or proclamation of the Governor

25  pursuant to s. 252.36 making such findings as are necessary to

26  determine that it is in the best interests of, and necessary

27  for, the protection of the public health, safety, and general

28  welfare of residents of this state and the protection and

29  preservation of the economic stability of insurers operating

30  in this state, and declaring it an essential public purpose to

31  permit certain municipalities or counties to issue bonds as

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  will provide relief to claimants and policyholders of the

 2  association and insurers responsible for apportionment of plan

 3  losses. Any such unit of local government may enter into such

 4  contracts with the association and with any other entity

 5  created pursuant to this subsection as are necessary to carry

 6  out this paragraph. Any bonds issued under this

 7  sub-subparagraph shall be payable from and secured by moneys

 8  received by the association from assessments under this

 9  subparagraph, and assigned and pledged to or on behalf of the

10  unit of local government for the benefit of the holders of

11  such bonds. The funds, credit, property, and taxing power of

12  the state or of the unit of local government shall not be

13  pledged for the payment of such bonds. If any of the bonds

14  remain unsold 60 days after issuance, the department shall

15  require all insurers subject to assessment to purchase the

16  bonds, which shall be treated as admitted assets; each insurer

17  shall be required to purchase that percentage of the unsold

18  portion of the bond issue that equals the insurer's relative

19  share of assessment liability under this subsection. An

20  insurer shall not be required to purchase the bonds to the

21  extent that the department determines that the purchase would

22  endanger or impair the solvency of the insurer. The authority

23  granted by this sub-subparagraph is additional to any bonding

24  authority granted by subparagraph 6.

25         3.  The plan shall also provide that any member with a

26  surplus as to policyholders of $20 million or less writing 25

27  percent or more of its total countrywide property insurance

28  premiums in this state may petition the department, within the

29  first 90 days of each calendar year, to qualify as a limited

30  apportionment company. The apportionment of such a member

31  company in any calendar year for which it is qualified shall

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  not exceed its gross participation, which shall not be

 2  affected by the formula for voluntary writings. In no event

 3  shall a limited apportionment company be required to

 4  participate in any apportionment of losses pursuant to

 5  sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II)

 6  in the aggregate which exceeds $50 million after payment of

 7  available plan funds in any calendar year. However, a limited

 8  apportionment company shall collect from its policyholders any

 9  emergency assessment imposed under sub-sub-subparagraph

10  2.d.(III). The plan shall provide that, if the department

11  determines that any regular assessment will result in an

12  impairment of the surplus of a limited apportionment company,

13  the department may direct that all or part of such assessment

14  be deferred. However, there shall be no limitation or

15  deferment of an emergency assessment to be collected from

16  policyholders under sub-sub-subparagraph 2.d.(III).

17         4.  The plan shall provide for the deferment, in whole

18  or in part, of a regular assessment of a member insurer under

19  sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II),

20  but not for an emergency assessment collected from

21  policyholders under sub-sub-subparagraph 2.d.(III), if, in the

22  opinion of the commissioner, payment of such regular

23  assessment would endanger or impair the solvency of the member

24  insurer. In the event a regular assessment against a member

25  insurer is deferred in whole or in part, the amount by which

26  such assessment is deferred may be assessed against the other

27  member insurers in a manner consistent with the basis for

28  assessments set forth in sub-sub-subparagraph 2.d.(I) or

29  sub-sub-subparagraph 2.d.(II).

30         5.a.  The plan of operation may include deductibles and

31  rules for classification of risks and rate modifications

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  consistent with the objective of providing and maintaining

 2  funds sufficient to pay catastrophe losses.

 3         b.  The association may require arbitration of a rate

 4  filing under s. 627.062(6). It is the intent of the

 5  Legislature that the rates for coverage provided by the

 6  association be actuarially sound and not competitive with

 7  approved rates charged in the admitted voluntary market such

 8  that the association functions as a residual market mechanism

 9  to provide insurance only when the insurance cannot be

10  procured in the voluntary market.  The plan of operation shall

11  provide a mechanism to assure that, beginning no later than

12  January 1, 1999, the rates charged by the association for each

13  line of business are reflective of approved rates in the

14  voluntary market for hurricane coverage for each line of

15  business in the various areas eligible for association

16  coverage.

17         c.  The association shall provide for hurricane

18  windstorm coverage on residential properties in limits up to

19  $10 million for commercial lines residential risks and up to

20  $1 million for personal lines residential risks. If coverage

21  with the association is sought for a residential risk valued

22  in excess of these limits, coverage shall be available to the

23  risk up to the replacement cost or actual cash value of the

24  property, at the option of the insured, if coverage for the

25  risk cannot be located in the authorized market. The

26  association must accept a commercial lines residential risk

27  with limits above $10 million or a personal lines residential

28  risk with limits above $1 million if coverage is not available

29  in the authorized market.  The association may write coverage

30  above the limits specified in this subparagraph with or

31  without facultative or other reinsurance coverage, as the

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  association determines appropriate.

 2         d.  The plan of operation must provide objective

 3  criteria and procedures, approved by the department, to be

 4  uniformly applied for all applicants in determining whether an

 5  individual risk is so hazardous as to be uninsurable. In

 6  making this determination and in establishing the criteria and

 7  procedures, the following shall be considered:

 8         (I)  Whether the likelihood of a loss for the

 9  individual risk is substantially higher than for other risks

10  of the same class; and

11         (II)  Whether the uncertainty associated with the

12  individual risk is such that an appropriate premium cannot be

13  determined.

14

15  The acceptance or rejection of a risk by the association

16  pursuant to such criteria and procedures must be construed as

17  the private placement of insurance, and the provisions of

18  chapter 120 do not apply.

19         e.  The plan of operation must provide for an insured's

20  choice of full replacement cost or actual cash value for all

21  covered losses, at a cost of no more than the approved rate of

22  the authorized insurer with the highest percentage of market

23  share.

24         f.e.  The policies issued by the association must

25  provide that if the association obtains an offer from an

26  authorized insurer to cover the risk at its approved rates

27  under either a standard policy including hurricane wind

28  coverage or, if consistent with the insurer's underwriting

29  rules as filed with the department, a basic policy including

30  hurricane wind coverage, the risk is no longer eligible for

31  coverage through the association. Upon termination of

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  eligibility, the association shall provide written notice to

 2  the policyholder and agent of record stating that the

 3  association policy must be canceled as of 60 days after the

 4  date of the notice because of the offer of coverage from an

 5  authorized insurer. Other provisions of the insurance code

 6  relating to cancellation and notice of cancellation do not

 7  apply to actions under this sub-subparagraph.

 8         g.f.  Association policies and applications must

 9  include a notice that the association policy could, under this

10  section, be replaced with a policy issued by an authorized

11  insurer that does not provide coverage identical to the

12  coverage provided by the association. The notice shall also

13  specify that acceptance of association coverage creates a

14  conclusive presumption that the applicant or policyholder is

15  aware of this potential.

16         h.  The plan shall provide for granting credits against

17  premiums for policies issued by the association for:

18         (I)  Separate flood insurance.

19         (II)  Separating out any peril other than hurricane

20  that might otherwise be covered under policies issued by the

21  association.

22         (III)  Mitigation of loss from damage resulting from a

23  hurricane.

24

25         6.a.  The plan of operation may authorize the formation

26  of a private nonprofit corporation, a private nonprofit

27  unincorporated association, a partnership, a trust, a limited

28  liability company, or a nonprofit mutual company which may be

29  empowered, among other things, to borrow money by issuing

30  bonds or by incurring other indebtedness and to accumulate

31  reserves or funds to be used for the payment of insured

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  catastrophe losses. The plan may authorize all actions

 2  necessary to facilitate the issuance of bonds, including the

 3  pledging of assessments or other revenues.

 4         b.  Any entity created under this subsection, or any

 5  entity formed for the purposes of this subsection, may sue and

 6  be sued, may borrow money; issue bonds, notes, or debt

 7  instruments; pledge or sell assessments, market equalization

 8  surcharges and other surcharges, rights, premiums, contractual

 9  rights, projected recoveries from the Florida Hurricane

10  Catastrophe Fund, other reinsurance recoverables, and other

11  assets as security for such bonds, notes, or debt instruments;

12  enter into any contracts or agreements necessary or proper to

13  accomplish such borrowings; and take other actions necessary

14  to carry out the purposes of this subsection. The association

15  may issue bonds or incur other indebtedness, or have bonds

16  issued on its behalf by a unit of local government pursuant to

17  subparagraph (g)2., in the absence of a hurricane or other

18  weather-related event, upon a determination by the association

19  subject to approval by the department that such action would

20  enable it to efficiently meet the financial obligations of the

21  association and that such financings are reasonably necessary

22  to effectuate the requirements of this subsection. Any such

23  entity may accumulate reserves and retain surpluses as of the

24  end of any association year to provide for the payment of

25  losses incurred by the association during that year or any

26  future year. The association shall incorporate and continue

27  the plan of operation and articles of agreement in effect on

28  the effective date of chapter 76-96, Laws of Florida, to the

29  extent that it is not inconsistent with chapter 76-96, and as

30  subsequently modified consistent with chapter 76-96. The board

31  of directors and officers currently serving shall continue to

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  serve until their successors are duly qualified as provided

 2  under the plan. The assets and obligations of the plan in

 3  effect immediately prior to the effective date of chapter

 4  76-96 shall be construed to be the assets and obligations of

 5  the successor plan created herein.

 6         c.  In recognition of s. 10, Art. I of the State

 7  Constitution, prohibiting the impairment of obligations of

 8  contracts, it is the intent of the Legislature that no action

 9  be taken whose purpose is to impair any bond indenture or

10  financing agreement or any revenue source committed by

11  contract to such bond or other indebtedness issued or incurred

12  by the association or any other entity created under this

13  subsection.

14         7.  On such coverage, an agent's remuneration shall be

15  that amount of money payable to the agent by the terms of his

16  or her contract with the company with which the business is

17  placed. However, no commission will be paid on that portion of

18  the premium which is in excess of the standard premium of that

19  company.

20         8.  Subject to approval by the department, the

21  association may establish different eligibility requirements

22  and operational procedures for any line or type of coverage

23  for any specified eligible area or portion of an eligible area

24  if the board determines that such changes to the eligibility

25  requirements and operational procedures are justified due to

26  the voluntary market being sufficiently stable and competitive

27  in such area or for such line or type of coverage and that

28  consumers who, in good faith, are unable to obtain insurance

29  through the voluntary market through ordinary methods would

30  continue to have access to coverage from the association. When

31  coverage is sought in connection with a real property

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  transfer, such requirements and procedures shall not provide

 2  for an effective date of coverage later than the date of the

 3  closing of the transfer as established by the transferor, the

 4  transferee, and, if applicable, the lender.

 5         9.  Notwithstanding any other provision of law:

 6         a.  The pledge or sale of, the lien upon, and the

 7  security interest in any rights, revenues, or other assets of

 8  the association created or purported to be created pursuant to

 9  any financing documents to secure any bonds or other

10  indebtedness of the association shall be and remain valid and

11  enforceable, notwithstanding the commencement of and during

12  the continuation of, and after, any rehabilitation,

13  insolvency, liquidation, bankruptcy, receivership,

14  conservatorship, reorganization, or similar proceeding against

15  the association under the laws of this state or any other

16  applicable laws.

17         b.  No such proceeding shall relieve the association of

18  its obligation, or otherwise affect its ability to perform its

19  obligation, to continue to collect, or levy and collect,

20  assessments, market equalization or other surcharges,

21  projected recoveries from the Florida Hurricane Catastrophe

22  Fund, reinsurance recoverables, or any other rights, revenues,

23  or other assets of the association pledged.

24         c.  Each such pledge or sale of, lien upon, and

25  security interest in, including the priority of such pledge,

26  lien, or security interest, any such assessments, emergency

27  assessments, market equalization or renewal surcharges,

28  projected recoveries from the Florida Hurricane Catastrophe

29  Fund, reinsurance recoverables, or other rights, revenues, or

30  other assets which are collected, or levied and collected,

31  after the commencement of and during the pendency of or after

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  any such proceeding shall continue unaffected by such

 2  proceeding.

 3         d.  As used in this subsection, the term "financing

 4  documents" means any agreement, instrument, or other document

 5  now existing or hereafter created evidencing any bonds or

 6  other indebtedness of the association or pursuant to which any

 7  such bonds or other indebtedness has been or may be issued and

 8  pursuant to which any rights, revenues, or other assets of the

 9  association are pledged or sold to secure the repayment of

10  such bonds or indebtedness, together with the payment of

11  interest on such bonds or such indebtedness, or the payment of

12  any other obligation of the association related to such bonds

13  or indebtedness.

14         e.  Any such pledge or sale of assessments, revenues,

15  contract rights or other rights or assets of the association

16  shall constitute a lien and security interest, or sale, as the

17  case may be, that is immediately effective and attaches to

18  such assessments, revenues, contract, or other rights or

19  assets, whether or not imposed or collected at the time the

20  pledge or sale is made. Any such pledge or sale is effective,

21  valid, binding, and enforceable against the association or

22  other entity making such pledge or sale, and valid and binding

23  against and superior to any competing claims or obligations

24  owed to any other person or entity, including policyholders in

25  this state, asserting rights in any such assessments,

26  revenues, contract, or other rights or assets to the extent

27  set forth in and in accordance with the terms of the pledge or

28  sale contained in the applicable financing documents, whether

29  or not any such person or entity has notice of such pledge or

30  sale and without the need for any physical delivery,

31  recordation, filing, or other action.

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1         f.  There shall be no liability on the part of, and no

 2  cause of action of any nature shall arise against, any member

 3  insurer or its agents or employees, agents or employees of the

 4  association, members of the board of directors of the

 5  association, or the department or its representatives, for any

 6  action taken by them in the performance of their duties or

 7  responsibilities under this subsection. Such immunity does not

 8  apply to actions for breach of any contract or agreement

 9  pertaining to insurance, or any willful tort.

10         (c)  The provisions of paragraph (b) are applicable

11  only with respect to:

12         1.  Those areas that were eligible for coverage under

13  this subsection on April 9, 1993; or

14         2.  Any county or area as to which the department,

15  after public hearing, finds that the following criteria exist:

16         a.  Due to the lack of hurricane windstorm insurance

17  coverage in the county or area so affected, economic growth

18  and development is being deterred or otherwise stifled in such

19  county or area, mortgages are in default, and financial

20  institutions are unable to make loans;

21         b.  The county or area so affected has adopted and is

22  enforcing the structural requirements of the State Minimum

23  Building Codes, as defined in s. 553.73, for new construction

24  and has included adequate minimum floor elevation requirements

25  for structures in areas subject to inundation; and

26         c.  Extending hurricane windstorm insurance coverage to

27  such county or area is consistent with and will implement and

28  further the policies and objectives set forth in applicable

29  state laws, rules, and regulations governing coastal

30  management, coastal construction, comprehensive planning,

31  beach and shore preservation, barrier island preservation,

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  coastal zone protection, and the Coastal Zone Protection Act

 2  of 1985.

 3

 4  Any time after the department has determined that the criteria

 5  referred to in this subparagraph do not exist with respect to

 6  any county or area of the state, the department shall it may,

 7  after a subsequent public hearing, declare that such county or

 8  area is no longer eligible for hurricane windstorm coverage

 9  through the plan.

10         (d)  For the purpose of evaluating whether the criteria

11  of paragraph (c) are met, such criteria shall be applied as

12  the situation would exist if policies had not been written by

13  the Florida Residential Property and Casualty Joint

14  Underwriting Association and property insurance for such

15  policyholders was not available.

16         (e)  Notwithstanding the provisions of subparagraph

17  (c)2. or paragraph (d), eligibility shall not be extended to

18  any area that was not eligible on March 1, 1997, except that

19  the department may act with respect to any petition on which a

20  hearing was held prior to May 9, 1997.

21         (f)  After October 1, 2000, and notwithstanding any

22  other provision of this subsection, no area or county shall be

23  eligible for hurricane coverage through the plan for more than

24  2 consecutive years.  Any area or county which wishes to

25  remain eligible for hurricane coverage through the plan after

26  the expiration of any such period of eligibility shall

27  petition the department for a redetermination of eligibility

28  for such coverage under this subsection.

29

30

31

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                                                   HOUSE AMENDMENT

                                                  Bill No. HB 1655

    Amendment No.     (for drafter's use only)





 1  ================ T I T L E   A M E N D M E N T ===============

 2  And the title is amended as follows:

 3         On page 1, line 6,

 4

 5  after the semicolon insert:

 6         amending s. 627.351, F.S.; limiting application

 7         of insurance risk of the Florida Windstorm

 8         Underwriting Association to hurricanes only;

 9         revising the membership of the board of

10         directors under the association's plan of

11         operation; requiring the plan to provide for an

12         insured's choice of actual cash value or full

13         replacement cost of certain losses; specifying

14         a rate limitation; requiring the association's

15         plan to provide for credits for certain actions

16         or alternative coverages; requiring the

17         Department of Insurance to declare certain

18         areas or counties ineligible for coverage

19         through the plan under certain circumstances;

20         limiting the time of eligibility for coverage

21         under the association's plan;

22

23

24

25

26

27

28

29

30

31

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