HOUSE AMENDMENT
    hbd-02                              Bill No. SB 1220, 2nd Eng.
    Amendment No. ___ (for drafter's use only)
                            CHAMBER ACTION
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11  Representative(s) Brown offered the following:
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13         Amendment (with title amendment) 
14         On page 41, line 17, of the bill
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16  insert:  
17         Section 33.  Paragraph (b) of subsection (2) of section
18  627.351, Florida Statutes, is amended to read:
19         627.351  Insurance risk apportionment plans.--
20         (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
21         (b)  The department shall require all insurers holding
22  a certificate of authority to transact property insurance on a
23  direct basis in this state, other than joint underwriting
24  associations and other entities formed pursuant to this
25  section, to provide windstorm coverage to applicants from
26  areas determined to be eligible pursuant to paragraph (c) who
27  in good faith are entitled to, but are unable to procure, such
28  coverage through ordinary means; or it shall adopt a
29  reasonable plan or plans for the equitable apportionment or
30  sharing among such insurers of windstorm coverage, which may
31  include formation of an association for this purpose. As used
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    File original & 9 copies    05/02/01                          
    hbd0007                     10:45 am         01220-0005-352607

HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 in this subsection, the term "property insurance" means 2 insurance on real or personal property, as defined in s. 3 624.604, including insurance for fire, industrial fire, allied 4 lines, farmowners multiperil, homeowners' multiperil, 5 commercial multiperil, and mobile homes, and including 6 liability coverages on all such insurance, but excluding 7 inland marine as defined in s. 624.607(3) and excluding 8 vehicle insurance as defined in s. 624.605(1)(a) other than 9 insurance on mobile homes used as permanent dwellings. The 10 department shall adopt rules that provide a formula for the 11 recovery and repayment of any deferred assessments. 12 1. For the purpose of this section, properties 13 eligible for such windstorm coverage are defined as dwellings, 14 buildings, and other structures, including mobile homes which 15 are used as dwellings and which are tied down in compliance 16 with mobile home tie-down requirements prescribed by the 17 Department of Highway Safety and Motor Vehicles pursuant to s. 18 320.8325, and the contents of all such properties. An 19 applicant or policyholder is eligible for coverage only if an 20 offer of coverage cannot be obtained by or for the applicant 21 or policyholder from an admitted insurer at approved rates. 22 2.a.(I) All insurers required to be members of such 23 association shall participate in its writings, expenses, and 24 losses. Surplus of the association shall be retained for the 25 payment of claims and shall not be distributed to the member 26 insurers. Such participation by member insurers shall be in 27 the proportion that the net direct premiums of each member 28 insurer written for property insurance in this state during 29 the preceding calendar year bear to the aggregate net direct 30 premiums for property insurance of all member insurers, as 31 reduced by any credits for voluntary writings, in this state 2 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 during the preceding calendar year. For the purposes of this 2 subsection, the term "net direct premiums" means direct 3 written premiums for property insurance, reduced by premium 4 for liability coverage and for the following if included in 5 allied lines: rain and hail on growing crops; livestock; 6 association direct premiums booked; National Flood Insurance 7 Program direct premiums; and similar deductions specifically 8 authorized by the plan of operation and approved by the 9 department. A member's participation shall begin on the first 10 day of the calendar year following the year in which it is 11 issued a certificate of authority to transact property 12 insurance in the state and shall terminate 1 year after the 13 end of the calendar year during which it no longer holds a 14 certificate of authority to transact property insurance in the 15 state. The commissioner, after review of annual statements, 16 other reports, and any other statistics that the commissioner 17 deems necessary, shall certify to the association the 18 aggregate direct premiums written for property insurance in 19 this state by all member insurers. 20 (II) The plan of operation shall provide for a board 21 of directors consisting of the Insurance Consumer Advocate 22 appointed under s. 627.0613, 1 consumer representative 23 appointed by the Insurance Commissioner, 1 consumer 24 representative appointed by the Governor, and 12 additional 25 members appointed as specified in the plan of operation. One 26 of the 12 additional members shall be elected by the domestic 27 companies of this state on the basis of cumulative weighted 28 voting based on the net direct premiums of domestic companies 29 in this state. Nothing in the 1997 amendments to this 30 paragraph terminates the existing board or the terms of any 31 members of the board. 3 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 (III) The plan of operation shall provide a formula 2 whereby a company voluntarily providing windstorm coverage in 3 affected areas will be relieved wholly or partially from 4 apportionment of a regular assessment pursuant to 5 sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II). 6 (IV) A company which is a member of a group of 7 companies under common management may elect to have its 8 credits applied on a group basis, and any company or group may 9 elect to have its credits applied to any other company or 10 group. 11 (V) There shall be no credits or relief from 12 apportionment to a company for emergency assessments collected 13 from its policyholders under sub-sub-subparagraph d.(III). 14 (VI) The plan of operation may also provide for the 15 award of credits, for a period not to exceed 3 years, from a 16 regular assessment pursuant to sub-sub-subparagraph d.(I) or 17 sub-sub-subparagraph d.(II) as an incentive for taking 18 policies out of the Residential Property and Casualty Joint 19 Underwriting Association. In order to qualify for the 20 exemption under this sub-sub-subparagraph, the take-out plan 21 must provide that at least 40 percent of the policies removed 22 from the Residential Property and Casualty Joint Underwriting 23 Association cover risks located in Dade, Broward, and Palm 24 Beach Counties or at least 30 percent of the policies so 25 removed cover risks located in Dade, Broward, and Palm Beach 26 Counties and an additional 50 percent of the policies so 27 removed cover risks located in other coastal counties, and 28 must also provide that no more than 15 percent of the policies 29 so removed may exclude windstorm coverage. With the approval 30 of the department, the association may waive these geographic 31 criteria for a take-out plan that removes at least the lesser 4 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 of 100,000 Residential Property and Casualty Joint 2 Underwriting Association policies or 15 percent of the total 3 number of Residential Property and Casualty Joint Underwriting 4 Association policies, provided the governing board of the 5 Residential Property and Casualty Joint Underwriting 6 Association certifies that the take-out plan will materially 7 reduce the Residential Property and Casualty Joint 8 Underwriting Association's 100-year probable maximum loss from 9 hurricanes. With the approval of the department, the board 10 may extend such credits for an additional year if the insurer 11 guarantees an additional year of renewability for all policies 12 removed from the Residential Property and Casualty Joint 13 Underwriting Association, or for 2 additional years if the 14 insurer guarantees 2 additional years of renewability for all 15 policies removed from the Residential Property and Casualty 16 Joint Underwriting Association. 17 b. Assessments to pay deficits in the association 18 under this subparagraph shall be included as an appropriate 19 factor in the making of rates as provided in s. 627.3512. 20 c. The Legislature finds that the potential for 21 unlimited deficit assessments under this subparagraph may 22 induce insurers to attempt to reduce their writings in the 23 voluntary market, and that such actions would worsen the 24 availability problems that the association was created to 25 remedy. It is the intent of the Legislature that insurers 26 remain fully responsible for paying regular assessments and 27 collecting emergency assessments for any deficits of the 28 association; however, it is also the intent of the Legislature 29 to provide a means by which assessment liabilities may be 30 amortized over a period of years. 31 d.(I) When the deficit incurred in a particular 5 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 calendar year is 10 percent or less of the aggregate statewide 2 direct written premium for property insurance for the prior 3 calendar year for all member insurers, the association shall 4 levy an assessment on member insurers in an amount equal to 5 the deficit. 6 (II) When the deficit incurred in a particular 7 calendar year exceeds 10 percent of the aggregate statewide 8 direct written premium for property insurance for the prior 9 calendar year for all member insurers, the association shall 10 levy an assessment on member insurers in an amount equal to 11 the greater of 10 percent of the deficit or 10 percent of the 12 aggregate statewide direct written premium for property 13 insurance for the prior calendar year for member insurers. Any 14 remaining deficit shall be recovered through emergency 15 assessments under sub-sub-subparagraph (III). 16 (III) Upon a determination by the board of directors 17 that a deficit exceeds the amount that will be recovered 18 through regular assessments on member insurers, pursuant to 19 sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the 20 board shall levy, after verification by the department, 21 emergency assessments to be collected by member insurers and 22 by underwriting associations created pursuant to this section 23 which write property insurance, upon issuance or renewal of 24 property insurance policies other than National Flood 25 Insurance policies in the year or years following levy of the 26 regular assessments. The amount of the emergency assessment 27 collected in a particular year shall be a uniform percentage 28 of that year's direct written premium for property insurance 29 for all member insurers and underwriting associations, 30 excluding National Flood Insurance policy premiums, as 31 annually determined by the board and verified by the 6 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 department. The department shall verify the arithmetic 2 calculations involved in the board's determination within 30 3 days after receipt of the information on which the 4 determination was based. Notwithstanding any other provision 5 of law, each member insurer and each underwriting association 6 created pursuant to this section shall collect emergency 7 assessments from its policyholders without such obligation 8 being affected by any credit, limitation, exemption, or 9 deferment. The emergency assessments so collected shall be 10 transferred directly to the association on a periodic basis as 11 determined by the association. The aggregate amount of 12 emergency assessments levied under this sub-sub-subparagraph 13 in any calendar year may not exceed the greater of 10 percent 14 of the amount needed to cover the original deficit, plus 15 interest, fees, commissions, required reserves, and other 16 costs associated with financing of the original deficit, or 10 17 percent of the aggregate statewide direct written premium for 18 property insurance written by member insurers and underwriting 19 associations for the prior year, plus interest, fees, 20 commissions, required reserves, and other costs associated 21 with financing the original deficit. The board may pledge the 22 proceeds of the emergency assessments under this 23 sub-sub-subparagraph as the source of revenue for bonds, to 24 retire any other debt incurred as a result of the deficit or 25 events giving rise to the deficit, or in any other way that 26 the board determines will efficiently recover the deficit. The 27 emergency assessments under this sub-sub-subparagraph shall 28 continue as long as any bonds issued or other indebtedness 29 incurred with respect to a deficit for which the assessment 30 was imposed remain outstanding, unless adequate provision has 31 been made for the payment of such bonds or other indebtedness 7 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 pursuant to the document governing such bonds or other 2 indebtedness. Emergency assessments collected under this 3 sub-sub-subparagraph are not part of an insurer's rates, are 4 not premium, and are not subject to premium tax, fees, or 5 commissions; however, failure to pay the emergency assessment 6 shall be treated as failure to pay premium. 7 (IV) Each member insurer's share of the total regular 8 assessments under sub-sub-subparagraph (I) or 9 sub-sub-subparagraph (II) shall be in the proportion that the 10 insurer's net direct premium for property insurance in this 11 state, for the year preceding the assessment bears to the 12 aggregate statewide net direct premium for property insurance 13 of all member insurers, as reduced by any credits for 14 voluntary writings for that year. 15 (V) If regular deficit assessments are made under 16 sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by 17 the Residential Property and Casualty Joint Underwriting 18 Association under sub-subparagraph (6)(b)3.a. or 19 sub-subparagraph (6)(b)3.b., the association shall levy upon 20 the association's policyholders, as part of its next rate 21 filing, or by a separate rate filing solely for this purpose, 22 a market equalization surcharge in a percentage equal to the 23 total amount of such regular assessments divided by the 24 aggregate statewide direct written premium for property 25 insurance for member insurers for the prior calendar year. 26 Market equalization surcharges under this sub-sub-subparagraph 27 are not considered premium and are not subject to commissions, 28 fees, or premium taxes; however, failure to pay a market 29 equalization surcharge shall be treated as failure to pay 30 premium. 31 e. The governing body of any unit of local government, 8 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 any residents of which are insured under the plan, may issue 2 bonds as defined in s. 125.013 or s. 166.101 to fund an 3 assistance program, in conjunction with the association, for 4 the purpose of defraying deficits of the association. In order 5 to avoid needless and indiscriminate proliferation, 6 duplication, and fragmentation of such assistance programs, 7 any unit of local government, any residents of which are 8 insured by the association, may provide for the payment of 9 losses, regardless of whether or not the losses occurred 10 within or outside of the territorial jurisdiction of the local 11 government. Revenue bonds may not be issued until validated 12 pursuant to chapter 75, unless a state of emergency is 13 declared by executive order or proclamation of the Governor 14 pursuant to s. 252.36 making such findings as are necessary to 15 determine that it is in the best interests of, and necessary 16 for, the protection of the public health, safety, and general 17 welfare of residents of this state and the protection and 18 preservation of the economic stability of insurers operating 19 in this state, and declaring it an essential public purpose to 20 permit certain municipalities or counties to issue bonds as 21 will provide relief to claimants and policyholders of the 22 association and insurers responsible for apportionment of plan 23 losses. Any such unit of local government may enter into such 24 contracts with the association and with any other entity 25 created pursuant to this subsection as are necessary to carry 26 out this paragraph. Any bonds issued under this 27 sub-subparagraph shall be payable from and secured by moneys 28 received by the association from assessments under this 29 subparagraph, and assigned and pledged to or on behalf of the 30 unit of local government for the benefit of the holders of 31 such bonds. The funds, credit, property, and taxing power of 9 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 the state or of the unit of local government shall not be 2 pledged for the payment of such bonds. If any of the bonds 3 remain unsold 60 days after issuance, the department shall 4 require all insurers subject to assessment to purchase the 5 bonds, which shall be treated as admitted assets; each insurer 6 shall be required to purchase that percentage of the unsold 7 portion of the bond issue that equals the insurer's relative 8 share of assessment liability under this subsection. An 9 insurer shall not be required to purchase the bonds to the 10 extent that the department determines that the purchase would 11 endanger or impair the solvency of the insurer. The authority 12 granted by this sub-subparagraph is additional to any bonding 13 authority granted by subparagraph 6. 14 3. The plan shall also provide that any member with a 15 surplus as to policyholders of $25 $20 million or less writing 16 25 percent or more of its total countrywide property insurance 17 premiums in this state may petition the department, within the 18 first 90 days of each calendar year, to qualify as a limited 19 apportionment company. The apportionment of such a member 20 company in any calendar year for which it is qualified shall 21 not exceed its gross participation, which shall not be 22 affected by the formula for voluntary writings. In no event 23 shall a limited apportionment company be required to 24 participate in any apportionment of losses pursuant to 25 sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) 26 in the aggregate which exceeds $50 million after payment of 27 available plan funds in any calendar year. However, a limited 28 apportionment company shall collect from its policyholders any 29 emergency assessment imposed under sub-sub-subparagraph 30 2.d.(III). The plan shall provide that, if the department 31 determines that any regular assessment will result in an 10 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 impairment of the surplus of a limited apportionment company, 2 the department may direct that all or part of such assessment 3 be deferred. However, there shall be no limitation or 4 deferment of an emergency assessment to be collected from 5 policyholders under sub-sub-subparagraph 2.d.(III). 6 4. The plan shall provide for the deferment, in whole 7 or in part, of a regular assessment of a member insurer under 8 sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), 9 but not for an emergency assessment collected from 10 policyholders under sub-sub-subparagraph 2.d.(III), if, in the 11 opinion of the commissioner, payment of such regular 12 assessment would endanger or impair the solvency of the member 13 insurer. In the event a regular assessment against a member 14 insurer is deferred in whole or in part, the amount by which 15 such assessment is deferred may be assessed against the other 16 member insurers in a manner consistent with the basis for 17 assessments set forth in sub-sub-subparagraph 2.d.(I) or 18 sub-sub-subparagraph 2.d.(II). 19 5.a. The plan of operation may include deductibles and 20 rules for classification of risks and rate modifications 21 consistent with the objective of providing and maintaining 22 funds sufficient to pay catastrophe losses. 23 b. The association may require arbitration of a rate 24 filing under s. 627.062(6). It is the intent of the 25 Legislature that the rates for coverage provided by the 26 association be actuarially sound and not competitive with 27 approved rates charged in the admitted voluntary market such 28 that the association functions as a residual market mechanism 29 to provide insurance only when the insurance cannot be 30 procured in the voluntary market. The plan of operation shall 31 provide a mechanism to assure that, beginning no later than 11 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 January 1, 1999, the rates charged by the association for each 2 line of business are reflective of approved rates in the 3 voluntary market for hurricane coverage for each line of 4 business in the various areas eligible for association 5 coverage. 6 c. The association shall provide for windstorm 7 coverage on residential properties in limits up to $10 million 8 for commercial lines residential risks and up to $1 million 9 for personal lines residential risks. If coverage with the 10 association is sought for a residential risk valued in excess 11 of these limits, coverage shall be available to the risk up to 12 the replacement cost or actual cash value of the property, at 13 the option of the insured, if coverage for the risk cannot be 14 located in the authorized market. The association must accept 15 a commercial lines residential risk with limits above $10 16 million or a personal lines residential risk with limits above 17 $1 million if coverage is not available in the authorized 18 market. The association may write coverage above the limits 19 specified in this subparagraph with or without facultative or 20 other reinsurance coverage, as the association determines 21 appropriate. 22 d. The plan of operation must provide objective 23 criteria and procedures, approved by the department, to be 24 uniformly applied for all applicants in determining whether an 25 individual risk is so hazardous as to be uninsurable. In 26 making this determination and in establishing the criteria and 27 procedures, the following shall be considered: 28 (I) Whether the likelihood of a loss for the 29 individual risk is substantially higher than for other risks 30 of the same class; and 31 (II) Whether the uncertainty associated with the 12 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 individual risk is such that an appropriate premium cannot be 2 determined. 3 4 The acceptance or rejection of a risk by the association 5 pursuant to such criteria and procedures must be construed as 6 the private placement of insurance, and the provisions of 7 chapter 120 do not apply. 8 e. The policies issued by the association must provide 9 that if the association obtains an offer from an authorized 10 insurer to cover the risk at its approved rates under either a 11 standard policy including wind coverage or, if consistent with 12 the insurer's underwriting rules as filed with the department, 13 a basic policy including wind coverage, the risk is no longer 14 eligible for coverage through the association. Upon 15 termination of eligibility, the association shall provide 16 written notice to the policyholder and agent of record stating 17 that the association policy must be canceled as of 60 days 18 after the date of the notice because of the offer of coverage 19 from an authorized insurer. Other provisions of the insurance 20 code relating to cancellation and notice of cancellation do 21 not apply to actions under this sub-subparagraph. 22 f. Association policies and applications must include 23 a notice that the association policy could, under this 24 section, be replaced with a policy issued by an authorized 25 insurer that does not provide coverage identical to the 26 coverage provided by the association. The notice shall also 27 specify that acceptance of association coverage creates a 28 conclusive presumption that the applicant or policyholder is 29 aware of this potential. 30 6.a. The plan of operation may authorize the formation 31 of a private nonprofit corporation, a private nonprofit 13 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 unincorporated association, a partnership, a trust, a limited 2 liability company, or a nonprofit mutual company which may be 3 empowered, among other things, to borrow money by issuing 4 bonds or by incurring other indebtedness and to accumulate 5 reserves or funds to be used for the payment of insured 6 catastrophe losses. The plan may authorize all actions 7 necessary to facilitate the issuance of bonds, including the 8 pledging of assessments or other revenues. 9 b. Any entity created under this subsection, or any 10 entity formed for the purposes of this subsection, may sue and 11 be sued, may borrow money; issue bonds, notes, or debt 12 instruments; pledge or sell assessments, market equalization 13 surcharges and other surcharges, rights, premiums, contractual 14 rights, projected recoveries from the Florida Hurricane 15 Catastrophe Fund, other reinsurance recoverables, and other 16 assets as security for such bonds, notes, or debt instruments; 17 enter into any contracts or agreements necessary or proper to 18 accomplish such borrowings; and take other actions necessary 19 to carry out the purposes of this subsection. The association 20 may issue bonds or incur other indebtedness, or have bonds 21 issued on its behalf by a unit of local government pursuant to 22 subparagraph (g)2., in the absence of a hurricane or other 23 weather-related event, upon a determination by the association 24 subject to approval by the department that such action would 25 enable it to efficiently meet the financial obligations of the 26 association and that such financings are reasonably necessary 27 to effectuate the requirements of this subsection. Any such 28 entity may accumulate reserves and retain surpluses as of the 29 end of any association year to provide for the payment of 30 losses incurred by the association during that year or any 31 future year. The association shall incorporate and continue 14 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 the plan of operation and articles of agreement in effect on 2 the effective date of chapter 76-96, Laws of Florida, to the 3 extent that it is not inconsistent with chapter 76-96, and as 4 subsequently modified consistent with chapter 76-96. The board 5 of directors and officers currently serving shall continue to 6 serve until their successors are duly qualified as provided 7 under the plan. The assets and obligations of the plan in 8 effect immediately prior to the effective date of chapter 9 76-96 shall be construed to be the assets and obligations of 10 the successor plan created herein. 11 c. In recognition of s. 10, Art. I of the State 12 Constitution, prohibiting the impairment of obligations of 13 contracts, it is the intent of the Legislature that no action 14 be taken whose purpose is to impair any bond indenture or 15 financing agreement or any revenue source committed by 16 contract to such bond or other indebtedness issued or incurred 17 by the association or any other entity created under this 18 subsection. 19 7. On such coverage, an agent's remuneration shall be 20 that amount of money payable to the agent by the terms of his 21 or her contract with the company with which the business is 22 placed. However, no commission will be paid on that portion of 23 the premium which is in excess of the standard premium of that 24 company. 25 8. Subject to approval by the department, the 26 association may establish different eligibility requirements 27 and operational procedures for any line or type of coverage 28 for any specified eligible area or portion of an eligible area 29 if the board determines that such changes to the eligibility 30 requirements and operational procedures are justified due to 31 the voluntary market being sufficiently stable and competitive 15 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 in such area or for such line or type of coverage and that 2 consumers who, in good faith, are unable to obtain insurance 3 through the voluntary market through ordinary methods would 4 continue to have access to coverage from the association. When 5 coverage is sought in connection with a real property 6 transfer, such requirements and procedures shall not provide 7 for an effective date of coverage later than the date of the 8 closing of the transfer as established by the transferor, the 9 transferee, and, if applicable, the lender. 10 9. Notwithstanding any other provision of law: 11 a. The pledge or sale of, the lien upon, and the 12 security interest in any rights, revenues, or other assets of 13 the association created or purported to be created pursuant to 14 any financing documents to secure any bonds or other 15 indebtedness of the association shall be and remain valid and 16 enforceable, notwithstanding the commencement of and during 17 the continuation of, and after, any rehabilitation, 18 insolvency, liquidation, bankruptcy, receivership, 19 conservatorship, reorganization, or similar proceeding against 20 the association under the laws of this state or any other 21 applicable laws. 22 b. No such proceeding shall relieve the association of 23 its obligation, or otherwise affect its ability to perform its 24 obligation, to continue to collect, or levy and collect, 25 assessments, market equalization or other surcharges, 26 projected recoveries from the Florida Hurricane Catastrophe 27 Fund, reinsurance recoverables, or any other rights, revenues, 28 or other assets of the association pledged. 29 c. Each such pledge or sale of, lien upon, and 30 security interest in, including the priority of such pledge, 31 lien, or security interest, any such assessments, emergency 16 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 assessments, market equalization or renewal surcharges, 2 projected recoveries from the Florida Hurricane Catastrophe 3 Fund, reinsurance recoverables, or other rights, revenues, or 4 other assets which are collected, or levied and collected, 5 after the commencement of and during the pendency of or after 6 any such proceeding shall continue unaffected by such 7 proceeding. 8 d. As used in this subsection, the term "financing 9 documents" means any agreement, instrument, or other document 10 now existing or hereafter created evidencing any bonds or 11 other indebtedness of the association or pursuant to which any 12 such bonds or other indebtedness has been or may be issued and 13 pursuant to which any rights, revenues, or other assets of the 14 association are pledged or sold to secure the repayment of 15 such bonds or indebtedness, together with the payment of 16 interest on such bonds or such indebtedness, or the payment of 17 any other obligation of the association related to such bonds 18 or indebtedness. 19 e. Any such pledge or sale of assessments, revenues, 20 contract rights or other rights or assets of the association 21 shall constitute a lien and security interest, or sale, as the 22 case may be, that is immediately effective and attaches to 23 such assessments, revenues, contract, or other rights or 24 assets, whether or not imposed or collected at the time the 25 pledge or sale is made. Any such pledge or sale is effective, 26 valid, binding, and enforceable against the association or 27 other entity making such pledge or sale, and valid and binding 28 against and superior to any competing claims or obligations 29 owed to any other person or entity, including policyholders in 30 this state, asserting rights in any such assessments, 31 revenues, contract, or other rights or assets to the extent 17 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607
HOUSE AMENDMENT hbd-02 Bill No. SB 1220, 2nd Eng. Amendment No. ___ (for drafter's use only) 1 set forth in and in accordance with the terms of the pledge or 2 sale contained in the applicable financing documents, whether 3 or not any such person or entity has notice of such pledge or 4 sale and without the need for any physical delivery, 5 recordation, filing, or other action. 6 f. There shall be no liability on the part of, and no 7 cause of action of any nature shall arise against, any member 8 insurer or its agents or employees, agents or employees of the 9 association, members of the board of directors of the 10 association, or the department or its representatives, for any 11 action taken by them in the performance of their duties or 12 responsibilities under this subsection. Such immunity does not 13 apply to actions for breach of any contract or agreement 14 pertaining to insurance, or any willful tort. 15 16 17 ================ T I T L E A M E N D M E N T =============== 18 And the title is amended as follows: 19 On page 4, line 5, 20 21 after the semicolon insert: 22 amending s. 627.351, F.S., relating to risk 23 apportionment plans; revising surplus 24 requirements to qualify as a limited 25 apportionment company; 26 27 28 29 30 31 18 File original & 9 copies 05/02/01 hbd0007 10:45 am 01220-0005-352607