House Bill 0477
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Florida House of Representatives - 2000 HB 477
By Representative Cosgrove
1 A bill to be entitled
2 An act relating to the Florida Windstorm
3 Underwriting Association; amending s. 627.351,
4 F.S.; limiting application of insurance risk of
5 the Florida Windstorm Underwriting Association
6 to hurricanes only; revising the membership of
7 the board of directors under the association's
8 plan of operation; requiring the plan to
9 provide for an insured's choice of actual cash
10 value or full replacement cost of certain
11 losses; specifying a rate limitation; requiring
12 the association's plan to provide for credits
13 for certain actions or alternative coverages;
14 requiring the Department of Insurance to
15 declare certain areas or counties ineligible
16 for coverage through the plan under certain
17 circumstances; limiting the time of eligibility
18 for coverage under the association's plan;
19 providing an effective date.
20
21 Be It Enacted by the Legislature of the State of Florida:
22
23 Section 1. Subsection (2) of section 627.351, Florida
24 Statutes, is amended to read:
25 627.351 Insurance risk apportionment plans.--
26 (2) HURRICANE WINDSTORM INSURANCE RISK
27 APPORTIONMENT.--
28 (a) Agreements may be made among property insurers
29 with respect to the equitable apportionment among them of
30 insurance which may be afforded applicants who are in good
31 faith entitled to, but are unable to procure, such insurance
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1 through ordinary methods; and such insurers may agree among
2 themselves on the use of reasonable rate modifications for
3 such insurance. Such agreements and rate modifications shall
4 be subject to the applicable provisions of this chapter.
5 (b) The department shall require all insurers holding
6 a certificate of authority to transact property insurance on a
7 direct basis in this state, other than joint underwriting
8 associations and other entities formed pursuant to this
9 section, to provide hurricane windstorm coverage to applicants
10 from areas determined to be eligible pursuant to paragraph (c)
11 who in good faith are entitled to, but are unable to procure,
12 such coverage through ordinary means; or it shall adopt a
13 reasonable plan or plans for the equitable apportionment or
14 sharing among such insurers of hurricane windstorm coverage,
15 which may include formation of an association for this
16 purpose. As used in this subsection, the term "property
17 insurance" means insurance on real or personal property, as
18 defined in s. 624.604, including insurance for fire,
19 industrial fire, allied lines, farmowners multiperil,
20 homeowners' multiperil, commercial multiperil, and mobile
21 homes, and including liability coverages on all such
22 insurance, but excluding inland marine as defined in s.
23 624.607(3) and excluding vehicle insurance as defined in s.
24 624.605(1)(a) other than insurance on mobile homes used as
25 permanent dwellings. The department shall adopt rules that
26 provide a formula for the recovery and repayment of any
27 deferred assessments.
28 1. For the purpose of this section, properties
29 eligible for such hurricane windstorm coverage are defined as
30 dwellings, buildings, and other structures, including mobile
31 homes which are used as dwellings and which are tied down in
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1 compliance with mobile home tie-down requirements prescribed
2 by the Department of Highway Safety and Motor Vehicles
3 pursuant to s. 320.8325, and the contents of all such
4 properties. An applicant or policyholder is eligible for
5 coverage only if an offer of coverage cannot be obtained by or
6 for the applicant or policyholder from an admitted insurer at
7 approved rates.
8 2.a.(I) All insurers required to be members of such
9 association shall participate in its writings, expenses, and
10 losses. Surplus of the association shall be retained for the
11 payment of claims and shall not be distributed to the member
12 insurers. Such participation by member insurers shall be in
13 the proportion that the net direct premiums of each member
14 insurer written for property insurance in this state during
15 the preceding calendar year bear to the aggregate net direct
16 premiums for property insurance of all member insurers, as
17 reduced by any credits for voluntary writings, in this state
18 during the preceding calendar year. For the purposes of this
19 subsection, the term "net direct premiums" means direct
20 written premiums for property insurance, reduced by premium
21 for liability coverage and for the following if included in
22 allied lines: rain and hail on growing crops; livestock;
23 association direct premiums booked; National Flood Insurance
24 Program direct premiums; and similar deductions specifically
25 authorized by the plan of operation and approved by the
26 department. A member's participation shall begin on the first
27 day of the calendar year following the year in which it is
28 issued a certificate of authority to transact property
29 insurance in the state and shall terminate 1 year after the
30 end of the calendar year during which it no longer holds a
31 certificate of authority to transact property insurance in the
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1 state. The commissioner, after review of annual statements,
2 other reports, and any other statistics that the commissioner
3 deems necessary, shall certify to the association the
4 aggregate direct premiums written for property insurance in
5 this state by all member insurers.
6 (II) The plan of operation shall provide for a board
7 of directors consisting of the Insurance Consumer Advocate
8 appointed under s. 627.0613, four 1 consumer representatives
9 representative appointed by the Insurance Commissioner, four 1
10 consumer representatives representative appointed by the
11 Governor, and six 12 additional members appointed as specified
12 in the plan of operation. One of the six 12 additional members
13 shall be elected by the domestic companies of this state on
14 the basis of cumulative weighted voting based on the net
15 direct premiums of domestic companies in this state. Nothing
16 in the 1997 amendments to this paragraph terminates the
17 existing board or the terms of any members of the board.
18 (III) The plan of operation shall provide a formula
19 whereby a company voluntarily providing hurricane windstorm
20 coverage in affected areas will be relieved wholly or
21 partially from apportionment of a regular assessment pursuant
22 to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).
23 (IV) A company which is a member of a group of
24 companies under common management may elect to have its
25 credits applied on a group basis, and any company or group may
26 elect to have its credits applied to any other company or
27 group.
28 (V) There shall be no credits or relief from
29 apportionment to a company for emergency assessments collected
30 from its policyholders under sub-sub-subparagraph d.(III).
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1 (VI) The plan of operation may also provide for the
2 award of credits, for a period not to exceed 3 years, from a
3 regular assessment pursuant to sub-sub-subparagraph d.(I) or
4 sub-sub-subparagraph d.(II) as an incentive for taking
5 policies out of the Residential Property and Casualty Joint
6 Underwriting Association. In order to qualify for the
7 exemption under this sub-sub-subparagraph, the take-out plan
8 must provide that at least 40 percent of the policies removed
9 from the Residential Property and Casualty Joint Underwriting
10 Association cover risks located in Dade, Broward, and Palm
11 Beach Counties or at least 30 percent of the policies so
12 removed cover risks located in Dade, Broward, and Palm Beach
13 Counties and an additional 50 percent of the policies so
14 removed cover risks located in other coastal counties, and
15 must also provide that no more than 15 percent of the policies
16 so removed may exclude hurricane windstorm coverage. With the
17 approval of the department, the association may waive these
18 geographic criteria for a take-out plan that removes at least
19 the lesser of 100,000 Residential Property and Casualty Joint
20 Underwriting Association policies or 15 percent of the total
21 number of Residential Property and Casualty Joint Underwriting
22 Association policies, provided the governing board of the
23 Residential Property and Casualty Joint Underwriting
24 Association certifies that the take-out plan will materially
25 reduce the Residential Property and Casualty Joint
26 Underwriting Association's 100-year probable maximum loss from
27 hurricanes. With the approval of the department, the board
28 may extend such credits for an additional year if the insurer
29 guarantees an additional year of renewability for all policies
30 removed from the Residential Property and Casualty Joint
31 Underwriting Association, or for 2 additional years if the
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1 insurer guarantees 2 additional years of renewability for all
2 policies removed from the Residential Property and Casualty
3 Joint Underwriting Association.
4 b. Assessments to pay deficits in the association
5 under this subparagraph shall be included as an appropriate
6 factor in the making of rates as provided in s. 627.3512.
7 c. The Legislature finds that the potential for
8 unlimited deficit assessments under this subparagraph may
9 induce insurers to attempt to reduce their writings in the
10 voluntary market, and that such actions would worsen the
11 availability problems that the association was created to
12 remedy. It is the intent of the Legislature that insurers
13 remain fully responsible for paying regular assessments and
14 collecting emergency assessments for any deficits of the
15 association; however, it is also the intent of the Legislature
16 to provide a means by which assessment liabilities may be
17 amortized over a period of years.
18 d.(I) When the deficit incurred in a particular
19 calendar year is 10 percent or less of the aggregate statewide
20 direct written premium for property insurance for the prior
21 calendar year for all member insurers, the association shall
22 levy an assessment on member insurers in an amount equal to
23 the deficit.
24 (II) When the deficit incurred in a particular
25 calendar year exceeds 10 percent of the aggregate statewide
26 direct written premium for property insurance for the prior
27 calendar year for all member insurers, the association shall
28 levy an assessment on member insurers in an amount equal to
29 the greater of 10 percent of the deficit or 10 percent of the
30 aggregate statewide direct written premium for property
31 insurance for the prior calendar year for member insurers. Any
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1 remaining deficit shall be recovered through emergency
2 assessments under sub-sub-subparagraph (III).
3 (III) Upon a determination by the board of directors
4 that a deficit exceeds the amount that will be recovered
5 through regular assessments on member insurers, pursuant to
6 sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the
7 board shall levy, after verification by the department,
8 emergency assessments to be collected by member insurers and
9 by underwriting associations created pursuant to this section
10 which write property insurance, upon issuance or renewal of
11 property insurance policies other than National Flood
12 Insurance policies in the year or years following levy of the
13 regular assessments. The amount of the emergency assessment
14 collected in a particular year shall be a uniform percentage
15 of that year's direct written premium for property insurance
16 for all member insurers and underwriting associations,
17 excluding National Flood Insurance policy premiums, as
18 annually determined by the board and verified by the
19 department. The department shall verify the arithmetic
20 calculations involved in the board's determination within 30
21 days after receipt of the information on which the
22 determination was based. Notwithstanding any other provision
23 of law, each member insurer and each underwriting association
24 created pursuant to this section shall collect emergency
25 assessments from its policyholders without such obligation
26 being affected by any credit, limitation, exemption, or
27 deferment. The emergency assessments so collected shall be
28 transferred directly to the association on a periodic basis as
29 determined by the association. The aggregate amount of
30 emergency assessments levied under this sub-sub-subparagraph
31 in any calendar year may not exceed the greater of 10 percent
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1 of the amount needed to cover the original deficit, plus
2 interest, fees, commissions, required reserves, and other
3 costs associated with financing of the original deficit, or 10
4 percent of the aggregate statewide direct written premium for
5 property insurance written by member insurers and underwriting
6 associations for the prior year, plus interest, fees,
7 commissions, required reserves, and other costs associated
8 with financing the original deficit. The board may pledge the
9 proceeds of the emergency assessments under this
10 sub-sub-subparagraph as the source of revenue for bonds, to
11 retire any other debt incurred as a result of the deficit or
12 events giving rise to the deficit, or in any other way that
13 the board determines will efficiently recover the deficit. The
14 emergency assessments under this sub-sub-subparagraph shall
15 continue as long as any bonds issued or other indebtedness
16 incurred with respect to a deficit for which the assessment
17 was imposed remain outstanding, unless adequate provision has
18 been made for the payment of such bonds or other indebtedness
19 pursuant to the document governing such bonds or other
20 indebtedness. Emergency assessments collected under this
21 sub-sub-subparagraph are not part of an insurer's rates, are
22 not premium, and are not subject to premium tax, fees, or
23 commissions; however, failure to pay the emergency assessment
24 shall be treated as failure to pay premium.
25 (IV) Each member insurer's share of the total regular
26 assessments under sub-sub-subparagraph (I) or
27 sub-sub-subparagraph (II) shall be in the proportion that the
28 insurer's net direct premium for property insurance in this
29 state, for the year preceding the assessment bears to the
30 aggregate statewide net direct premium for property insurance
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1 of all member insurers, as reduced by any credits for
2 voluntary writings for that year.
3 (V) If regular deficit assessments are made under
4 sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by
5 the Residential Property and Casualty Joint Underwriting
6 Association under sub-subparagraph (6)(b)3.a. or
7 sub-subparagraph (6)(b)3.b., the association shall levy upon
8 the association's policyholders, as part of its next rate
9 filing, or by a separate rate filing solely for this purpose,
10 a market equalization surcharge in a percentage equal to the
11 total amount of such regular assessments divided by the
12 aggregate statewide direct written premium for property
13 insurance for member insurers for the prior calendar year.
14 Market equalization surcharges under this sub-sub-subparagraph
15 are not considered premium and are not subject to commissions,
16 fees, or premium taxes; however, failure to pay a market
17 equalization surcharge shall be treated as failure to pay
18 premium.
19 e. The governing body of any unit of local government,
20 any residents of which are insured under the plan, may issue
21 bonds as defined in s. 125.013 or s. 166.101 to fund an
22 assistance program, in conjunction with the association, for
23 the purpose of defraying deficits of the association. In order
24 to avoid needless and indiscriminate proliferation,
25 duplication, and fragmentation of such assistance programs,
26 any unit of local government, any residents of which are
27 insured by the association, may provide for the payment of
28 losses, regardless of whether or not the losses occurred
29 within or outside of the territorial jurisdiction of the local
30 government. Revenue bonds may not be issued until validated
31 pursuant to chapter 75, unless a state of emergency is
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1 declared by executive order or proclamation of the Governor
2 pursuant to s. 252.36 making such findings as are necessary to
3 determine that it is in the best interests of, and necessary
4 for, the protection of the public health, safety, and general
5 welfare of residents of this state and the protection and
6 preservation of the economic stability of insurers operating
7 in this state, and declaring it an essential public purpose to
8 permit certain municipalities or counties to issue bonds as
9 will provide relief to claimants and policyholders of the
10 association and insurers responsible for apportionment of plan
11 losses. Any such unit of local government may enter into such
12 contracts with the association and with any other entity
13 created pursuant to this subsection as are necessary to carry
14 out this paragraph. Any bonds issued under this
15 sub-subparagraph shall be payable from and secured by moneys
16 received by the association from assessments under this
17 subparagraph, and assigned and pledged to or on behalf of the
18 unit of local government for the benefit of the holders of
19 such bonds. The funds, credit, property, and taxing power of
20 the state or of the unit of local government shall not be
21 pledged for the payment of such bonds. If any of the bonds
22 remain unsold 60 days after issuance, the department shall
23 require all insurers subject to assessment to purchase the
24 bonds, which shall be treated as admitted assets; each insurer
25 shall be required to purchase that percentage of the unsold
26 portion of the bond issue that equals the insurer's relative
27 share of assessment liability under this subsection. An
28 insurer shall not be required to purchase the bonds to the
29 extent that the department determines that the purchase would
30 endanger or impair the solvency of the insurer. The authority
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1 granted by this sub-subparagraph is additional to any bonding
2 authority granted by subparagraph 6.
3 3. The plan shall also provide that any member with a
4 surplus as to policyholders of $20 million or less writing 25
5 percent or more of its total countrywide property insurance
6 premiums in this state may petition the department, within the
7 first 90 days of each calendar year, to qualify as a limited
8 apportionment company. The apportionment of such a member
9 company in any calendar year for which it is qualified shall
10 not exceed its gross participation, which shall not be
11 affected by the formula for voluntary writings. In no event
12 shall a limited apportionment company be required to
13 participate in any apportionment of losses pursuant to
14 sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II)
15 in the aggregate which exceeds $50 million after payment of
16 available plan funds in any calendar year. However, a limited
17 apportionment company shall collect from its policyholders any
18 emergency assessment imposed under sub-sub-subparagraph
19 2.d.(III). The plan shall provide that, if the department
20 determines that any regular assessment will result in an
21 impairment of the surplus of a limited apportionment company,
22 the department may direct that all or part of such assessment
23 be deferred. However, there shall be no limitation or
24 deferment of an emergency assessment to be collected from
25 policyholders under sub-sub-subparagraph 2.d.(III).
26 4. The plan shall provide for the deferment, in whole
27 or in part, of a regular assessment of a member insurer under
28 sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II),
29 but not for an emergency assessment collected from
30 policyholders under sub-sub-subparagraph 2.d.(III), if, in the
31 opinion of the commissioner, payment of such regular
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1 assessment would endanger or impair the solvency of the member
2 insurer. In the event a regular assessment against a member
3 insurer is deferred in whole or in part, the amount by which
4 such assessment is deferred may be assessed against the other
5 member insurers in a manner consistent with the basis for
6 assessments set forth in sub-sub-subparagraph 2.d.(I) or
7 sub-sub-subparagraph 2.d.(II).
8 5.a. The plan of operation may include deductibles and
9 rules for classification of risks and rate modifications
10 consistent with the objective of providing and maintaining
11 funds sufficient to pay catastrophe losses.
12 b. The association may require arbitration of a rate
13 filing under s. 627.062(6). It is the intent of the
14 Legislature that the rates for coverage provided by the
15 association be actuarially sound and not competitive with
16 approved rates charged in the admitted voluntary market such
17 that the association functions as a residual market mechanism
18 to provide insurance only when the insurance cannot be
19 procured in the voluntary market. The plan of operation shall
20 provide a mechanism to assure that, beginning no later than
21 January 1, 1999, the rates charged by the association for each
22 line of business are reflective of approved rates in the
23 voluntary market for hurricane coverage for each line of
24 business in the various areas eligible for association
25 coverage.
26 c. The association shall provide for hurricane
27 windstorm coverage on residential properties in limits up to
28 $10 million for commercial lines residential risks and up to
29 $1 million for personal lines residential risks. If coverage
30 with the association is sought for a residential risk valued
31 in excess of these limits, coverage shall be available to the
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1 risk up to the replacement cost or actual cash value of the
2 property, at the option of the insured, if coverage for the
3 risk cannot be located in the authorized market. The
4 association must accept a commercial lines residential risk
5 with limits above $10 million or a personal lines residential
6 risk with limits above $1 million if coverage is not available
7 in the authorized market. The association may write coverage
8 above the limits specified in this subparagraph with or
9 without facultative or other reinsurance coverage, as the
10 association determines appropriate.
11 d. The plan of operation must provide objective
12 criteria and procedures, approved by the department, to be
13 uniformly applied for all applicants in determining whether an
14 individual risk is so hazardous as to be uninsurable. In
15 making this determination and in establishing the criteria and
16 procedures, the following shall be considered:
17 (I) Whether the likelihood of a loss for the
18 individual risk is substantially higher than for other risks
19 of the same class; and
20 (II) Whether the uncertainty associated with the
21 individual risk is such that an appropriate premium cannot be
22 determined.
23
24 The acceptance or rejection of a risk by the association
25 pursuant to such criteria and procedures must be construed as
26 the private placement of insurance, and the provisions of
27 chapter 120 do not apply.
28 e. The plan of operation must provide for an insured's
29 choice of full replacement cost or actual cash value for all
30 covered losses, at a cost of no more than the approved rate of
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1 the authorized insurer with the highest percentage of market
2 share.
3 f.e. The policies issued by the association must
4 provide that if the association obtains an offer from an
5 authorized insurer to cover the risk at its approved rates
6 under either a standard policy including hurricane wind
7 coverage or, if consistent with the insurer's underwriting
8 rules as filed with the department, a basic policy including
9 hurricane wind coverage, the risk is no longer eligible for
10 coverage through the association. Upon termination of
11 eligibility, the association shall provide written notice to
12 the policyholder and agent of record stating that the
13 association policy must be canceled as of 60 days after the
14 date of the notice because of the offer of coverage from an
15 authorized insurer. Other provisions of the insurance code
16 relating to cancellation and notice of cancellation do not
17 apply to actions under this sub-subparagraph.
18 g.f. Association policies and applications must
19 include a notice that the association policy could, under this
20 section, be replaced with a policy issued by an authorized
21 insurer that does not provide coverage identical to the
22 coverage provided by the association. The notice shall also
23 specify that acceptance of association coverage creates a
24 conclusive presumption that the applicant or policyholder is
25 aware of this potential.
26 h. The plan shall provide for granting credits against
27 premiums for policies issued by the association for:
28 (I) Separate flood insurance.
29 (II) Separating out any peril other than hurricane
30 that might otherwise be covered under policies issued by the
31 association.
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1 (III) Mitigation of loss from damage resulting from a
2 hurricane.
3
4 6.a. The plan of operation may authorize the formation
5 of a private nonprofit corporation, a private nonprofit
6 unincorporated association, a partnership, a trust, a limited
7 liability company, or a nonprofit mutual company which may be
8 empowered, among other things, to borrow money by issuing
9 bonds or by incurring other indebtedness and to accumulate
10 reserves or funds to be used for the payment of insured
11 catastrophe losses. The plan may authorize all actions
12 necessary to facilitate the issuance of bonds, including the
13 pledging of assessments or other revenues.
14 b. Any entity created under this subsection, or any
15 entity formed for the purposes of this subsection, may sue and
16 be sued, may borrow money; issue bonds, notes, or debt
17 instruments; pledge or sell assessments, market equalization
18 surcharges and other surcharges, rights, premiums, contractual
19 rights, projected recoveries from the Florida Hurricane
20 Catastrophe Fund, other reinsurance recoverables, and other
21 assets as security for such bonds, notes, or debt instruments;
22 enter into any contracts or agreements necessary or proper to
23 accomplish such borrowings; and take other actions necessary
24 to carry out the purposes of this subsection. The association
25 may issue bonds or incur other indebtedness, or have bonds
26 issued on its behalf by a unit of local government pursuant to
27 subparagraph (g)2., in the absence of a hurricane or other
28 weather-related event, upon a determination by the association
29 subject to approval by the department that such action would
30 enable it to efficiently meet the financial obligations of the
31 association and that such financings are reasonably necessary
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1 to effectuate the requirements of this subsection. Any such
2 entity may accumulate reserves and retain surpluses as of the
3 end of any association year to provide for the payment of
4 losses incurred by the association during that year or any
5 future year. The association shall incorporate and continue
6 the plan of operation and articles of agreement in effect on
7 the effective date of chapter 76-96, Laws of Florida, to the
8 extent that it is not inconsistent with chapter 76-96, and as
9 subsequently modified consistent with chapter 76-96. The board
10 of directors and officers currently serving shall continue to
11 serve until their successors are duly qualified as provided
12 under the plan. The assets and obligations of the plan in
13 effect immediately prior to the effective date of chapter
14 76-96 shall be construed to be the assets and obligations of
15 the successor plan created herein.
16 c. In recognition of s. 10, Art. I of the State
17 Constitution, prohibiting the impairment of obligations of
18 contracts, it is the intent of the Legislature that no action
19 be taken whose purpose is to impair any bond indenture or
20 financing agreement or any revenue source committed by
21 contract to such bond or other indebtedness issued or incurred
22 by the association or any other entity created under this
23 subsection.
24 7. On such coverage, an agent's remuneration shall be
25 that amount of money payable to the agent by the terms of his
26 or her contract with the company with which the business is
27 placed. However, no commission will be paid on that portion of
28 the premium which is in excess of the standard premium of that
29 company.
30 8. Subject to approval by the department, the
31 association may establish different eligibility requirements
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1 and operational procedures for any line or type of coverage
2 for any specified eligible area or portion of an eligible area
3 if the board determines that such changes to the eligibility
4 requirements and operational procedures are justified due to
5 the voluntary market being sufficiently stable and competitive
6 in such area or for such line or type of coverage and that
7 consumers who, in good faith, are unable to obtain insurance
8 through the voluntary market through ordinary methods would
9 continue to have access to coverage from the association. When
10 coverage is sought in connection with a real property
11 transfer, such requirements and procedures shall not provide
12 for an effective date of coverage later than the date of the
13 closing of the transfer as established by the transferor, the
14 transferee, and, if applicable, the lender.
15 9. Notwithstanding any other provision of law:
16 a. The pledge or sale of, the lien upon, and the
17 security interest in any rights, revenues, or other assets of
18 the association created or purported to be created pursuant to
19 any financing documents to secure any bonds or other
20 indebtedness of the association shall be and remain valid and
21 enforceable, notwithstanding the commencement of and during
22 the continuation of, and after, any rehabilitation,
23 insolvency, liquidation, bankruptcy, receivership,
24 conservatorship, reorganization, or similar proceeding against
25 the association under the laws of this state or any other
26 applicable laws.
27 b. No such proceeding shall relieve the association of
28 its obligation, or otherwise affect its ability to perform its
29 obligation, to continue to collect, or levy and collect,
30 assessments, market equalization or other surcharges,
31 projected recoveries from the Florida Hurricane Catastrophe
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1 Fund, reinsurance recoverables, or any other rights, revenues,
2 or other assets of the association pledged.
3 c. Each such pledge or sale of, lien upon, and
4 security interest in, including the priority of such pledge,
5 lien, or security interest, any such assessments, emergency
6 assessments, market equalization or renewal surcharges,
7 projected recoveries from the Florida Hurricane Catastrophe
8 Fund, reinsurance recoverables, or other rights, revenues, or
9 other assets which are collected, or levied and collected,
10 after the commencement of and during the pendency of or after
11 any such proceeding shall continue unaffected by such
12 proceeding.
13 d. As used in this subsection, the term "financing
14 documents" means any agreement, instrument, or other document
15 now existing or hereafter created evidencing any bonds or
16 other indebtedness of the association or pursuant to which any
17 such bonds or other indebtedness has been or may be issued and
18 pursuant to which any rights, revenues, or other assets of the
19 association are pledged or sold to secure the repayment of
20 such bonds or indebtedness, together with the payment of
21 interest on such bonds or such indebtedness, or the payment of
22 any other obligation of the association related to such bonds
23 or indebtedness.
24 e. Any such pledge or sale of assessments, revenues,
25 contract rights or other rights or assets of the association
26 shall constitute a lien and security interest, or sale, as the
27 case may be, that is immediately effective and attaches to
28 such assessments, revenues, contract, or other rights or
29 assets, whether or not imposed or collected at the time the
30 pledge or sale is made. Any such pledge or sale is effective,
31 valid, binding, and enforceable against the association or
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Florida House of Representatives - 2000 HB 477
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1 other entity making such pledge or sale, and valid and binding
2 against and superior to any competing claims or obligations
3 owed to any other person or entity, including policyholders in
4 this state, asserting rights in any such assessments,
5 revenues, contract, or other rights or assets to the extent
6 set forth in and in accordance with the terms of the pledge or
7 sale contained in the applicable financing documents, whether
8 or not any such person or entity has notice of such pledge or
9 sale and without the need for any physical delivery,
10 recordation, filing, or other action.
11 f. There shall be no liability on the part of, and no
12 cause of action of any nature shall arise against, any member
13 insurer or its agents or employees, agents or employees of the
14 association, members of the board of directors of the
15 association, or the department or its representatives, for any
16 action taken by them in the performance of their duties or
17 responsibilities under this subsection. Such immunity does not
18 apply to actions for breach of any contract or agreement
19 pertaining to insurance, or any willful tort.
20 (c) The provisions of paragraph (b) are applicable
21 only with respect to:
22 1. Those areas that were eligible for coverage under
23 this subsection on April 9, 1993; or
24 2. Any county or area as to which the department,
25 after public hearing, finds that the following criteria exist:
26 a. Due to the lack of hurricane windstorm insurance
27 coverage in the county or area so affected, economic growth
28 and development is being deterred or otherwise stifled in such
29 county or area, mortgages are in default, and financial
30 institutions are unable to make loans;
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CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2000 HB 477
141-492A-00
1 b. The county or area so affected has adopted and is
2 enforcing the structural requirements of the State Minimum
3 Building Codes, as defined in s. 553.73, for new construction
4 and has included adequate minimum floor elevation requirements
5 for structures in areas subject to inundation; and
6 c. Extending hurricane windstorm insurance coverage to
7 such county or area is consistent with and will implement and
8 further the policies and objectives set forth in applicable
9 state laws, rules, and regulations governing coastal
10 management, coastal construction, comprehensive planning,
11 beach and shore preservation, barrier island preservation,
12 coastal zone protection, and the Coastal Zone Protection Act
13 of 1985.
14
15 Any time after the department has determined that the criteria
16 referred to in this subparagraph do not exist with respect to
17 any county or area of the state, the department shall it may,
18 after a subsequent public hearing, declare that such county or
19 area is no longer eligible for hurricane windstorm coverage
20 through the plan.
21 (d) For the purpose of evaluating whether the criteria
22 of paragraph (c) are met, such criteria shall be applied as
23 the situation would exist if policies had not been written by
24 the Florida Residential Property and Casualty Joint
25 Underwriting Association and property insurance for such
26 policyholders was not available.
27 (e) Notwithstanding the provisions of subparagraph
28 (c)2. or paragraph (d), eligibility shall not be extended to
29 any area that was not eligible on March 1, 1997, except that
30 the department may act with respect to any petition on which a
31 hearing was held prior to May 9, 1997.
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CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2000 HB 477
141-492A-00
1 (f) After October 1, 2000, and notwithstanding any
2 other provision of this subsection, no area or county shall be
3 eligible for hurricane coverage through the plan for more than
4 2 consecutive years. Any area or county which wishes to
5 remain eligible for hurricane coverage through the plan after
6 the expiration of any such period of eligibility shall
7 petition the department for a redetermination of eligibility
8 for such coverage under this subsection.
9 Section 2. This act shall take effect October 1, 2000.
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12 HOUSE SUMMARY
13
Revises provisions relating to the Florida Windstorm
14 Underwriting Association to:
15
Limit application of insurance risk of the association to
16 hurricanes only.
17
Revise the membership of the board of directors of the
18 association.
19
Limit coverage under the association's plan to
20 replacement cost.
21
Require the association's plan to provide for credits for
22 flood insurance, separating out related perils, and
mitigation of loss.
23
24 Require the Department of Insurance to declare as
ineligible for coverage through the plan areas or
25 counties which no longer meet eligibility criteria.
26
Limit the time of eligibility for coverage under the
27 association's plan.
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