HB 1353 2003
1	A bill to be entitled
2	An act relating to the Florida Hurricane Catastrophe Fund;
3	amending s. 215.555, F.S.; revising definitions; including
4	certain accounts, formerly certain associations, within
5	the Citizens Property Insurance Corporation; including the
6	Citizens Property Insurance Corporation within the
7	operation of certain definitions; authorizing the State
8	Board of Administration to charge interest on delinquent
9	remittances to the Florida Hurricane Catastrophe Fund;
10	expanding the insurers eligible for exemptions from
11	certain reimbursement contract and premium provisions
12	authorized by the board under certain circumstances;
13	revising a reimbursement contract requirement; revising
14	emergency assessment authority of the board relating to
15	service of certain debt obligations; revising
16	requirements, procedures, and limitations; providing
17	responsibilities of surplus lines agents and the Florida
18	Surplus Lines Service Office; revising powers and duties
19	of the board; providing an effective date.
20
21	Be It Enacted by the Legislature of the State of Florida:
22
23	Section 1. Paragraph (c) of subsection (2), subsection
24	(3), paragraphs (c) and (d) of subsection (4), subsection (6),
25	and paragraphs (a) and (c) of subsection (7) of section 215.555,
26	Florida Statutes, are amended, and paragraphs (n) and (o) are
27	added to subsection (2) of said section, to read:
28	215.555 Florida Hurricane Catastrophe Fund.--
29	(2) DEFINITIONS.--As used in this section:
30	(c) "Covered policy" means any insurance policy covering
31	residential property in this state, including, but not limited
32	to, any homeowner's, mobile home owner's, farm owner's,
33	condominium association, condominium unit owner's, tenant's, or
34	apartment building policy, or any other policy covering a
35	residential structure or its contents issued by any authorized
36	insurer, including the Citizen’s Property Insurance Corporation
37	andany joint underwriting association or similar entity created
38	pursuant to law. The term "covered policy" includes any
39	collateral protection insurance policy covering personal
40	residences which protects both the borrower's and the lender's
41	financial interests, in an amount at least equal to the coverage
42	for the dwelling in place under the lapsed homeowner's policy,
43	if such policy can be accurately reported as required in
44	subsection (5). Additionally, covered policies include policies
45	covering the peril of wind removed from the Citizen’s Property
46	Insurance Corporationthe Florida Residential Property and
47	Casualty Joint Underwriting Association, created pursuant to s.
48	627.351(6), or from the Florida Windstorm Underwriting
49	Association, created pursuant to s. 627.351(2),by an authorized
50	insurer under the terms and conditions of an executed assumption
51	agreement between the authorized insurer and the Citizen’s
52	Property Insurance Corporationeither such association. Each
53	assumption agreement between the Citizen’s Property Insurance
54	Corporationeither associationand such authorized insurer must
55	be approved by the Office of Insurance Regulation within the
56	Florida Department of Financial ServicesInsuranceprior to the
57	effective date of the assumption, and the OfficeDepartmentof
58	Insurance Regulationmust provide written notification to the
59	board within 15 working days after such approval. "Covered
60	policy" does not include any policy that excludes wind coverage
61	or hurricane coverage or any reinsurance agreement and does not
62	include any policy otherwise meeting this definition which is
63	issued by a surplus lines insurer or a reinsurer. Policies
64	which, based upon sound actuarial principles, require individual
65	ratemaking may be excluded by type or category as covered
66	policies by rule if the actuarial soundness of the fund is not
67	jeopardized.
68	(n) “Citizens Property Insurance Corporation” or
69	“Citizens” means the entity created pursuant to s. 627.351(6),
70	and includes both the High Risk Account, formerly the Florida
71	Windstorm Underwriting Association, and the Personal Lines and
72	Commercial Lines Accounts, formerly the Florida Residential
73	Property and Casualty Joint Underwriting Association.
74	(o) “Corporation” means the Florida Hurricane Catastrophe
75	Fund Finance Corporation created in paragraph (6)(d).
76	(p) “Pledged revenues” means all or any portion of
77	revenues to be derived from reimbursement premiums under
78	subsection (5) of from emergency assessments under paragraph
79	(6)(b)., as determined by the board.
80	(3) FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There is
81	created the Florida Hurricane Catastrophe Fund to be
82	administered by the State Board of Administration. Moneys in the
83	fund may not be expended, loaned, or appropriated except to pay
84	obligations of the fund arising out of reimbursement contracts
85	entered into under subsection (4), payment of debt service on
86	revenue bonds issued under subsection (6), costs of the
87	mitigation program under subsection (7), costs of procuring
88	reinsurance, and costs of administration of the fund. The board
89	shall invest the moneys in the fund pursuant to ss. 215.44-
90	215.52. Except as otherwise provided in this section, earnings
91	from all investments shall be retained in the fund. The board
92	may employ or contract with such staff and professionals as the
93	board deems necessary for the administration of the fund. The
94	board may adopt such rules as are reasonable and necessary to
95	implement this section and may specify interest on any
96	delinquent remittances. Such rules must conform to the
97	Legislature's specific intent in establishing the fund as
98	expressed in subsection (1), must enhance the fund's potential
99	ability to respond to claims for covered events, must contain
100	general provisions so that the rules can be applied with
101	reasonable flexibility so as to accommodate insurers in
102	situations of an unusual nature or where undue hardship may
103	result, except that such flexibility may not in any way impair,
104	override, supersede, or constrain the public purpose of the
105	fund, and must be consistent with sound insurance practices. The
106	board may, by rule, provide for the exemption from subsections
107	(4) and (5) of insurers writing covered policies with less than
108	$3 million$500,000in aggregate exposure for covered policies,
109	which exposure results in a de minimis reimbursement premium, if
110	the exemption does not affect the actuarial soundness of the
111	fund.
112	(4) REIMBURSEMENT CONTRACTS.--
113	(c)1. The contract shall also provide that the obligation
114	of the board with respect to all contracts covering a particular
115	contract year shall not exceed the actual claims-paying capacity
116	of the fund up to a limit of $11 billion for that contract year
117	adjusted based upon the reported exposure from the prior
118	contract year to reflect the percentage growth in exposure to
119	the fund for covered policies since 2002, unless the board
120	determines that there is sufficient estimated claims-paying
121	capacity to provide $11 billion of capacity for the current
122	contract year and an additional $11 billion of capacity for
123	subsequent contract years. Upon such determination being made,
124	the estimated claims-paying capacity for the current contract
125	year shall be determined by adding to the $11 billion limit one-
126	half of the fund's estimated claims-paying capacity in excess of
127	$22 billion.
128	2. The contract shall require the board to annually notify
129	insurers of the fund's estimated borrowing capacity for the next
130	contract year, the projected year-end balance of the fund, and
131	the insurer's estimated share of total reimbursement premium to
132	be paid to the fund. For all regulatory and reinsurance
133	purposes, an insurer may calculate its projected payout from the
134	fund as its share of the total fund premium for the current
135	contract year multiplied by the sum of the projected year-end
136	fund balance and the estimated borrowing capacity for that
137	contract year as reported under this paragraph. In May and
138	October of each year, the board shall publish in the Florida
139	Administrative Weekly a statement of the fund's estimated
140	borrowing capacity and the projected year-end balance of the
141	fund for the current contract year.
142	(d)1. For purposes of determining potential liability and
143	to aid in the sound administration of the fund, the contract
144	shall require each insurer to report such insurer's losses from
145	each covered event on an interim basis, as directed by the
146	board. The contract shall require the insurer to report to the
147	board no later than December 31 of each year, and quarterly
148	thereafter, its reimbursable losses from covered events for the
149	year. The contract shall require the board to determine and pay,
150	as soon as practicable after receiving these reports of
151	reimbursable losses, the initial amount of reimbursement due and
152	adjustments to this amount based on later loss information. The
153	adjustments to reimbursement amounts shall require the board to
154	pay, or the insurer to return, amounts reflecting the most
155	recent calculation of losses.
156	2. In determining reimbursements pursuant to this
157	subsection, the contract shall provide that the board shall:
158	a. First reimburse insurers writing covered policies,
159	which insurers are in full compliance with this section and have
160	petitioned the Office ofDepartment of Insurance Regulationand
161	qualified as limited apportionment companies under s.
162	627.351(2)(b)3. The amount of such reimbursement shall be the
163	lesser of $10 million or an amount equal to 10 times the
164	insurer's reimbursement premium for the current year. The amount
165	of reimbursement paid under this sub-subparagraph may not exceed
166	the full amount of reimbursement promised in the reimbursement
167	contract. This sub-subparagraph does not apply with respect to
168	any contract year in which the year-end projected cash balance
169	of the fund, exclusive of any bonding capacity of the fund,
170	exceeds $2 billion. Only one member of any insurer group may
171	receive reimbursement under this sub-subparagraph.
172	b. Next pay to each insurer such insurer's projected
173	payout, which is the amount of reimbursement it is owed, up to
174	an amount equal to the insurer's share of the actual premium
175	paid for that contract year, multiplied by the actual claims-
176	paying capacity available for that contract year; provided,
177	entities created pursuant to s. 627.351 shall be further
178	reimbursed in accordance with sub-subparagraph c.
179	c. Thereafter, establish, based on reimbursable losses,
180	the prorated reimbursement level at the highest level for which
181	any remaining fund balance or bond proceeds are sufficient to
182	reimburse entities created pursuant to s. 627.351 for losses
183	exceeding the amounts payable pursuant to sub-subparagraph b.
184	for the current contract year.
185	(6) REVENUE BONDS.--
186	(a) General provisions.--
187	1. Upon the occurrence of a hurricane and a determination
188	that the moneys in the fund are or will be insufficient to pay
189	reimbursement at the levels promised in the reimbursement
190	contracts, the board may take the necessary steps under
191	paragraph (c)(b) or paragraph (d)(c)for the issuance of revenue
192	bonds for the benefit of the fund. The proceeds of such revenue
193	bonds may be used to make reimbursement payments under
194	reimbursement contracts; to refinance or replace previously
195	existing borrowings or financial arrangements; to pay interest
196	on bonds; to fund reserves for the bonds; to pay expenses
197	incident to the issuance or sale of any bond issued under this
198	section, including costs of validating, printing, and delivering
199	the bonds, costs of printing the official statement, costs of
200	publishing notices of sale of the bonds, and related
201	administrative expenses; or for such other purposes related to
202	the financial obligations of the fund as the board may
203	determine. The term of the bonds may not exceed 30 years. The
204	board may pledge or authorize the corporation to pledge all or a
205	portion of all revenues under subsection (5) and under paragraph
206	(b)subparagraph 3.to secure such revenue bonds and the board
207	may execute such agreements between the board and the issuer of
208	any revenue bonds and providers of other financing arrangements
209	under paragraph (7)(b) as the board deems necessary to evidence,
210	secure, preserve, and protect such pledge. If reimbursement
211	premiums received under subsection (5) or earnings on such
212	premiums are used to pay debt service on revenue bonds, such
213	premiums and earnings shall be used only after the use of the
214	moneys derived from assessments under paragraph (b)subparagraph
215	3. The funds, credit, property, or taxing power of the state or
216	political subdivisions of the state shall not be pledged for the
217	payment of such bonds. The board may also enter into agreements
218	under paragraph (c)(b) or paragraph (d)(c)for the purpose of
219	issuing revenue bonds in the absence of a hurricane upon a
220	determination that such action would maximize the ability of the
221	fund to meet future obligations.
222	2. The Legislature finds and declares that the issuance of
223	bonds under this subsection is for the public purpose of paying
224	the proceeds of the bonds to insurers, thereby enabling insurers
225	to pay the claims of policyholders to assure that policyholders
226	are able to pay the cost of construction, reconstruction,
227	repair, restoration, and other costs associated with damage to
228	property of policyholders of covered policies after the
229	occurrence of a hurricane. Revenue bonds may not be issued under
230	this subsection until validated under chapter 75. The validation
231	of at least the first obligations incurred pursuant to this
232	subsection shall be appealed to the Supreme Court, to be handled
233	on an expedited basis.
234	(b)3.Emergency assessments.--If the board determines
235	that the amount of revenue produced under subsection (5) is
236	insufficient to fund the obligations, costs, and expenses of the
237	fund and the corporation, including repayment of revenue bonds,
238	the board shall direct the OfficeDepartment of Insurance
239	Regulationto levy an emergency assessment on each insurer
240	writing property and casualty business in this state, referred
241	to in this subsection as an assessable insurer, and on those
242	insureds procuring one or more lines of property and casualty
243	business in this state pursuant to part VIII of chapter 626,
244	referred to in this subsection as assessable insureds.
245	1. Pursuant to the emergency assessment, each such
246	assessableinsurer shall pay to the corporation by July 1 of
247	each year an amount set by the board not exceeding 32percent
248	of its gross direct written premium for the prior year from all
249	property and casualty business in this state except for workers'
250	compensation, except that, if the Governor has declared a state
251	of emergency under s. 252.36 due to the occurrence of a covered
252	event, the amount of the assessment for the contract year may be
253	increased to an amount not exceeding 54percent of such
254	premium.
255	2.a. Pursuant to the emergency assessment, each such
256	assessable insured shall pay an amount set by the board not
257	exceeding 3 percent of the gross written premium each year for
258	all property and casualty business procured in this state except
259	workers' compensation, provided, however, if the Governor has
260	declared a state of emergency under s. 252.36 due to the
261	occurrence of a covered event, the amount of the assessment for
262	the contract year may be increased to an amount not exceeding 5
263	percent of such premium.
264	b. The emergency assessment on each such assessable
265	insured shall be collected by the surplus lines agent at the
266	time such agent collects the surplus lines tax required by s.
267	626.932 and shall be remitted by the agent to the Florida
268	Surplus Lines Service Office created pursuant to s. 626.921 at
269	the time the agent pays the surplus lines tax to the Florida
270	Surplus Lines Service Office. The emergency assessment on each
271	assessable insured procuring coverage and filing under s.
272	626.938 shall be remitted by the insured to the Florida Surplus
273	Lines Service Office at the time the insured pays the surplus
274	lines tax to the Florida Surplus Lines Service Office. The
275	emergency assessments collected shall be transferred to the
276	corporation or to the fund pursuant to subparagraph 5. on a
277	periodic basis as determined by the board. The Florida Surplus
278	Lines Service Office shall verify the proper application by
279	surplus lines agents of the emergency assessments and shall
280	assist the board in ensuring the accurate, timely collection and
281	payment of assessments by surplus lines agents as required by
282	the board. The Florida Surplus Lines Service Office shall
283	determine annually the aggregate written premium on property and
284	casualty business, except workers' compensation, procured by
285	assessable insureds and shall report such information to the
286	board in a form and at a time specified by the board to ensure
287	that the fund and the corporation can meet their financing
288	obligations.
289	3.Any assessment authority not used for the contract year
290	may be used for a subsequent contract year. If, for a subsequent
291	contract year, the board determines that the amount of revenue
292	produced under subsection (5) is insufficient to fund the
293	obligations, costs, and expenses of the fund and the
294	corporation, including repayment of revenue bonds for that
295	contract year, the board shall direct the OfficeDepartmentof
296	Insurance Regulationto levy an emergency assessment up to an
297	amount not exceeding the amount of unused assessment authority
298	from a previous contract year or years, plus an additional 32
299	percent if the Governor has declared a state of emergency under
300	s. 252.36 due to the occurrence of a covered event. Any
301	assessment authority not used for the contract year may be used
302	for a subsequent contract year. As used in this subsection, the
303	term "property and casualty business" includes all lines of
304	business identified on Form 2, Exhibit of Premiums and Losses,
305	in the annual statement required of authorized insurersby s.
306	624.424 and any rules adopted under such section, except for
307	those lines identified as accident and health insurance. The
308	annual assessments under this subparagraph shall continue as
309	long as the revenue bonds issued with respect to which the
310	assessment was imposed are outstanding, unless adequate
311	provision has been made for the payment of such bonds pursuant
312	to the documents authorizing issuance of the bonds. An
313	assessable insurer or assessable insuredshall not at any time
314	be subject to aggregate annual assessments under this
315	subparagraph of more than 32percent of premium, except that in
316	the case of a declared emergency, an assessable insurer or
317	assessable insuredshall not at any time be subject to aggregate
318	annual assessments under this subparagraph of more than 86
319	percent of premium; provided, no more than 54percent may be
320	assessed for obligations arising due to losses inany one
321	contract year.
322	4.Any rate filing or portion of a rate filing reflecting
323	a rate change attributable entirely to the assessment levied
324	under this paragraphsubparagraphshall be deemed approved when
325	made, subject to the authority of the OfficeDepartmentof
326	Insurance Regulationto require actuarial justification as to
327	the adequacy of any rate at any time. If the rate filing
328	reflects only a rate change attributable to the assessment under
329	this paragraph, the filing may consist of a certification so
330	stating.
331	5.The assessments otherwise payable to the corporation
332	pursuant to this paragraphsubparagraphshall be paid instead to
333	the fund unless and until the OfficeDepartment of Insurance
334	Regulation and the Florida Surplus Lines Service Office havehas
335	received from the corporation and the fund a notice, which shall
336	be conclusive and upon which theythe Department of Insurance
337	may rely without further inquiry, that the corporation has
338	issued bonds and the fund has no agreements in effect with local
339	governments pursuant to paragraph (c)(b). On or after the date
340	of such notice and until such date as the corporation has no
341	bonds outstanding, the fund shall have no right, title, or
342	interest in or to the assessments, except as provided in the
343	fund's agreements with the corporation.
344	6. Emergency assessments are not premium and are not
345	subject to premium or surplus lines tax, fees, or commissions,
346	however, the failure by an assessable insured to pay an
347	emergency assessment shall be treated as a failure to pay
348	premium.
349	(c)(b)Revenue bond issuance through counties or
350	municipalities.--
351	1. If the board elects to enter into agreements with local
352	governments for the issuance of revenue bonds for the benefit of
353	the fund, the board shall enter into such contracts with one or
354	more local governments, including agreements providing for the
355	pledge of revenues, as are necessary to effect such issuance.
356	The governing body of a county or municipality is authorized to
357	issue bonds as defined in s. 125.013 or s. 166.101 from time to
358	time to fund an assistance program, in conjunction with the
359	Florida Hurricane Catastrophe Fund, for the purposes set forth
360	in this section or for the purpose of paying the costs of
361	construction, reconstruction, repair, restoration, and other
362	costs associated with damage to properties of policyholders of
363	covered policies due to the occurrence of a hurricane by
364	assuring that policyholders located in this state are able to
365	recover claims under property insurance policies after a covered
366	event.
367	2. In order to avoid needless and indiscriminate
368	proliferation, duplication, and fragmentation of such assistance
369	programs, any local government may provide for the payment of
370	fund reimbursements, regardless of whether or not the losses for
371	which reimbursement is made occurred within or outside of the
372	territorial jurisdiction of the local government.
373	3. The state hereby covenants with holders of bonds issued
374	under this paragraph that the state will not repeal or abrogate
375	the power of the board to direct the OfficeDepartmentof
376	Insurance Regulationto levy the assessments and to collect the
377	proceeds of the revenues pledged to the payment of such bonds as
378	long as any such bonds remain outstanding unless adequate
379	provision has been made for the payment of such bonds pursuant
380	to the documents authorizing the issuance of such bonds.
381	4. There shall be no liability on the part of, and no
382	cause of action shall arise against any members or employees of
383	the governing body of a local government for any actions taken
384	by them in the performance of their duties under this paragraph.
385	(d)(c)Florida Hurricane Catastrophe Fund Finance
386	Corporation.--
387	1. In addition to the findings and declarations in
388	subsection (1), the Legislature also finds and declares that:
389	a. The public benefits corporation created under this
390	paragraph will provide a mechanism necessary for the cost-
391	effective and efficient issuance of bonds. This mechanism will
392	eliminate unnecessary costs in the bond issuance process,
393	thereby increasing the amounts available to pay reimbursement
394	for losses to property sustained as a result of hurricane
395	damage.
396	b. The purpose of such bonds is to fund reimbursements
397	through the Florida Hurricane Catastrophe Fund to pay for the
398	costs of construction, reconstruction, repair, restoration, and
399	other costs associated with damage to properties of
400	policyholders of covered policies due to the occurrence of a
401	hurricane.
402	c. The efficacy of the financing mechanism will be
403	enhanced by the corporation's ownership of the assessments, by
404	the insulation of the assessments from possible bankruptcy
405	proceedings, and by covenants of the state with the
406	corporation's bondholders.
407	2.a. There is created a public benefits corporation, which
408	is an instrumentality of the state, to be known as the Florida
409	Hurricane Catastrophe Fund Finance Corporation.
410	b. The corporation shall operate under a five-member board
411	of directors consisting of the Governor or a designee, the
412	Comptroller or a designee, the Treasurer or a designee, the
413	director of the Division of Bond Finance of the State Board of
414	Administration, and the chief operating officer of the Florida
415	Hurricane Catastrophe Fund.
416	c. The corporation has all of the powers of corporations
417	under chapter 607 and under chapter 617, subject only to the
418	provisions of this subsection.
419	d. The corporation may issue bonds and engage in such
420	other financial transactions as are necessary to provide
421	sufficient funds to achieve the purposes of this section.
422	e. The corporation may invest in any of the investments
423	authorized under s. 215.47.
424	f. There shall be no liability on the part of, and no
425	cause of action shall arise against, any board members or
426	employees of the corporation for any actions taken by them in
427	the performance of their duties under this paragraph.
428	3.a. In actions under chapter 75 to validate any bonds
429	issued by the corporation, the notice required by s. 75.06 shall
430	be published only in Leon County and in two newspapers of
431	general circulation in the state, and the complaint and order of
432	the court shall be served only on the State Attorney of the
433	Second Judicial Circuit.
434	b. The state hereby covenants with holders of bonds of the
435	corporation that the state will not repeal or abrogate the power
436	of the board to direct the OfficeDepartment of Insurance
437	Regulationto levy the assessments and to collect the proceeds
438	of the revenues pledged to the payment of such bonds as long as
439	any such bonds remain outstanding unless adequate provision has
440	been made for the payment of such bonds pursuant to the
441	documents authorizing the issuance of such bonds.
442	4. The bonds of the corporation are not a debt of the
443	state or of any political subdivision, and neither the state nor
444	any political subdivision is liable on such bonds. The
445	corporation does not have the power to pledge the credit, the
446	revenues, or the taxing power of the state or of any political
447	subdivision. The credit, revenues, or taxing power of the state
448	or of any political subdivision shall not be deemed to be
449	pledged to the payment of any bonds of the corporation.
450	5.a. The property, revenues, and other assets of the
451	corporation; the transactions and operations of the corporation
452	and the income from such transactions and operations; and all
453	bonds issued under this paragraph and interest on such bonds are
454	exempt from taxation by the state and any political subdivision,
455	including the intangibles tax under chapter 199 and the income
456	tax under chapter 220. This exemption does not apply to any tax
457	imposed by chapter 220 on interest, income, or profits on debt
458	obligations owned by corporations other than the Florida
459	Hurricane Catastrophe Fund Finance Corporation.
460	b. All bonds of the corporation shall be and constitute
461	legal investments without limitation for all public bodies of
462	this state; for all banks, trust companies, savings banks,
463	savings associations, savings and loan associations, and
464	investment companies; for all administrators, executors,
465	trustees, and other fiduciaries; for all insurance companies and
466	associations and other persons carrying on an insurance
467	business; and for all other persons who are now or may hereafter
468	be authorized to invest in bonds or other obligations of the
469	state and shall be and constitute eligible securities to be
470	deposited as collateral for the security of any state, county,
471	municipal, or other public funds. This sub-subparagraph shall be
472	considered as additional and supplemental authority and shall
473	not be limited without specific reference to this sub-
474	subparagraph.
475	6. The corporation and its corporate existence shall
476	continue until terminated by law; however, no such law shall
477	take effect as long as the corporation has bonds outstanding
478	unless adequate provision has been made for the payment of such
479	bonds pursuant to the documents authorizing the issuance of such
480	bonds. Upon termination of the existence of the corporation, all
481	of its rights and properties in excess of its obligations shall
482	pass to and be vested in the state.
483	(e)(d)Protection of bondholders.--
484	1. As long as the corporation has any bonds outstanding,
485	neither the fund nor the corporation shall have the authority to
486	file a voluntary petition under chapter 9 of the federal
487	Bankruptcy Code or such corresponding chapter or sections as may
488	be in effect, from time to time, and neither any public officer
489	nor any organization, entity, or other person shall authorize
490	the fund or the corporation to be or become a debtor under
491	chapter 9 of the federal Bankruptcy Code or such corresponding
492	chapter or sections as may be in effect, from time to time,
493	during any such period.
494	2. The state hereby covenants with holders of bonds of the
495	corporation that the state will not limit or alter the denial of
496	authority under this paragraph or the rights under this section
497	vested in the fund or the corporation to fulfill the terms of
498	any agreements made with such bondholders or in any way impair
499	the rights and remedies of such bondholders as long as any such
500	bonds remain outstanding unless adequate provision has been made
501	for the payment of such bonds pursuant to the documents
502	authorizing the issuance of such bonds.
503	3. Notwithstanding any other provision of law, any pledge
504	of or other security interest in revenue, money, accounts,
505	contract rights, general intangibles, or other personal property
506	made or created by the fund or the corporation shall be valid,
507	binding, and perfected from the time such pledge is made or
508	other security interest attaches without any physical delivery
509	of the collateral or further act and the lien of any such pledge
510	or other security interest shall be valid, binding, and
511	perfected against all parties having claims of any kind in tort,
512	contract, or otherwise against the fund or the corporation
513	irrespective of whether or not such parties have notice of such
514	claims. No instrument by which such a pledge or security
515	interest is created nor any financing statement need be recorded
516	or filed.
517	(7) ADDITIONAL POWERS AND DUTIES.--
518	(a) The board may procure reinsurance from reinsurers
519	acceptable to the Office of Insurance Regulationapproved under
520	s. 624.610for the purpose of maximizing the capacity of the
521	fund.
522	(c) Each fiscal year, the Legislature shall appropriate
523	from the investment income of the Florida Hurricane Catastrophe
524	Fund an amount no less than $10 million and no more than 35
525	percent of the investment income based upon the most recent
526	fiscal year-end audited financial statementsfrom the prior
527	fiscal yearfor the purpose of providing funding for local
528	governments, state agencies, public and private educational
529	institutions, and nonprofit organizations to support programs
530	intended to improve hurricane preparedness, reduce potential
531	losses in the event of a hurricane, provide research into means
532	to reduce such losses, educate or inform the public as to means
533	to reduce hurricane losses, assist the public in determining the
534	appropriateness of particular upgrades to structures or in the
535	financing of such upgrades, or protect local infrastructure from
536	potential damage from a hurricane. Moneys shall first be
537	available for appropriation under this paragraph in fiscal year
538	1997-1998. Moneys in excess of the $10 million specified in this
539	paragraph shall not be available for appropriation under this
540	paragraph if the State Board of Administration finds that an
541	appropriation of investment income from the fund would
542	jeopardize the actuarial soundness of the fund.
543	Section 2. This act shall take effect upon becoming a law.