Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
CHAMBER ACTION
Senate House
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11 The Committee on Banking and Insurance (Garcia) recommended
12 the following amendment:
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14 Senate Amendment (with directory and title amendments)
15 On page 12, line 14, through
16 page 16, line 17, delete those lines
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18 and insert:
19 (a) General provisions.--
20 1. Upon the occurrence of a hurricane and a
21 determination that the moneys in the fund are or will be
22 insufficient to pay reimbursement at the levels promised in
23 the reimbursement contracts, the board may take the necessary
24 steps under paragraph (c) or paragraph (d) for the issuance of
25 revenue bonds for the benefit of the fund. The proceeds of
26 such revenue bonds may be used to make reimbursement payments
27 under reimbursement contracts; to refinance or replace
28 previously existing borrowings or financial arrangements; to
29 pay interest on bonds; to fund reserves for the bonds; to pay
30 expenses incident to the issuance or sale of any bond issued
31 under this section, including costs of validating, printing,
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 and delivering the bonds, costs of printing the official
2 statement, costs of publishing notices of sale of the bonds,
3 and related administrative expenses; or for such other
4 purposes related to the financial obligations of the fund as
5 the board may determine. The term of the bonds may not exceed
6 30 years. The board may pledge or authorize the corporation to
7 pledge all or a portion of all revenues under subsection (5)
8 and under paragraph (b) to secure such revenue bonds and the
9 board may execute such agreements between the board and the
10 issuer of any revenue bonds and providers of other financing
11 arrangements under paragraph (7)(b) as the board deems
12 necessary to evidence, secure, preserve, and protect such
13 pledge. If reimbursement premiums received under subsection
14 (5) or earnings on such premiums are used to pay debt service
15 on revenue bonds, such premiums and earnings shall be used
16 only after the use of the moneys derived from assessments
17 under paragraph (b). The funds, credit, property, or taxing
18 power of the state or political subdivisions of the state
19 shall not be pledged for the payment of such bonds. The board
20 may also enter into agreements under paragraph (c) or
21 paragraph (d) for the purpose of issuing revenue bonds in the
22 absence of a hurricane upon a determination that such action
23 would maximize the ability of the fund to meet future
24 obligations.
25 2. The Legislature finds and declares that the
26 issuance of bonds under this subsection is for the public
27 purpose of paying the proceeds of the bonds to insurers,
28 thereby enabling insurers to pay the claims of policyholders
29 to assure that policyholders are able to pay the cost of
30 construction, reconstruction, repair, restoration, and other
31 costs associated with damage to property of policyholders of
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 covered policies after the occurrence of a hurricane. Revenue
2 bonds may not be issued under this subsection until validated
3 under chapter 75. The validation of at least the first
4 obligations incurred pursuant to this subsection shall be
5 appealed to the Supreme Court, to be handled on an expedited
6 basis.
7 (b) Emergency assessments.--
8 1. If the board determines that the amount of revenue
9 produced under subsection (5) is insufficient to fund the
10 obligations, costs, and expenses of the fund and the
11 corporation, including repayment of revenue bonds and that
12 portion of the debt service coverage not met by reimbursement
13 premiums, the board shall direct the Office of Insurance
14 Regulation to levy, by order, an emergency assessment on
15 direct premiums for all property and casualty lines of
16 business in this state, including property and casualty
17 business of surplus lines insurers regulated under part VIII
18 of chapter 626, but not including any workers' compensation
19 premiums or medical malpractice premiums. As used in this
20 subsection, the term "property and casualty business" includes
21 all lines of business identified on Form 2, Exhibit of
22 Premiums and Losses, in the annual statement required of
23 authorized insurers by s. 624.424 and any rule adopted under
24 this section, except for those lines identified as accident
25 and health insurance and except for policies written under the
26 National Flood Insurance Program. The assessment shall be
27 specified as a percentage of direct written future premium
28 collections and is subject to annual adjustments by the board
29 to reflect changes in premiums subject to assessments
30 collected under this subparagraph in order to meet debt
31 obligations. The same percentage shall apply to all policies
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 in lines of business subject to the assessment issued or
2 renewed during the 12-month period beginning on the effective
3 date of the assessment.
4 2. A premium is not subject to an annual assessment
5 under this paragraph in excess of 6 percent of premium with
6 respect to obligations arising out of losses attributable to
7 any one contract year, and a premium is not subject to an
8 aggregate annual assessment under this paragraph in excess of
9 10 percent of premium. An annual assessment under this
10 paragraph shall continue as long as until the revenue bonds
11 issued with respect to which the assessment was imposed are
12 outstanding, including any bonds the proceeds of which were
13 used to refund the revenue bonds, unless adequate provision
14 has been made for the payment of the bonds under the documents
15 authorizing issuance of the bonds.
16 3. Emergency assessments shall be collected from
17 policyholders. Emergency assessments shall be remitted by
18 insurers as a percentage of direct written premium for the
19 preceding calendar quarter as specified in the order from the
20 Office of Insurance Regulation. With respect to each insurer
21 collecting premiums that are subject to the assessment, the
22 insurer shall collect the assessment at the same time as it
23 collects the premium payment for each policy and shall remit
24 the assessment collected to the fund or corporation as
25 provided in the order issued by the Office of Insurance
26 Regulation. The office shall verify the accurate and timely
27 collection and remittance of emergency assessments and shall
28 report the information to the board in a form and at a time
29 specified by the board. Each insurer collecting assessments
30 shall provide the information with respect to premiums and
31 collections as may be required by the office to enable the
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 office to monitor and verify compliance with this paragraph.
2 4. With respect to assessments of surplus lines
3 premiums, each surplus lines agent shall collect the
4 assessment at the same time as the agent collects the surplus
5 lines tax required by s. 626.932, and the surplus lines agent
6 shall remit the assessment to the Florida Surplus Lines
7 Service Office created by s. 626.921 at the same time as the
8 agent remits the surplus lines tax to the Florida Surplus
9 Lines Service Office. The emergency assessment on each insured
10 procuring coverage and filing under s. 626.938 shall be
11 remitted by the insured to the Florida Surplus Lines Service
12 Office at the time the insured pays the surplus lines tax to
13 the Florida Surplus Lines Service Office. The Florida Surplus
14 Lines Service Office shall remit the collected assessments to
15 the fund or corporation as provided in the order levied by the
16 Office of Insurance Regulation. The Florida Surplus Lines
17 Service Office shall verify the proper application of such
18 emergency assessments and shall assist the board in ensuring
19 the accurate and timely collection and remittance of
20 assessments as required by the board. The Florida Surplus
21 Lines Service Office shall annually calculate the aggregate
22 written premium on property and casualty business, other than
23 workers' compensation and medical malpractice, procured
24 through surplus lines agents and insureds procuring coverage
25 and filing under s. 626.938 and shall report the information
26 to the board in a form and at a time specified by the board.
27 5. Any assessment authority not used for a particular
28 contract year may be used for a subsequent contract year. If,
29 for a subsequent contract year, the board determines that the
30 amount of revenue produced under subsection (5) is
31 insufficient to fund the obligations, costs, and expenses of
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 the fund and the corporation, including repayment of revenue
2 bonds and that portion of the debt service coverage not met by
3 reimbursement premiums, the board shall direct the Office of
4 Insurance Regulation to levy an emergency assessment up to an
5 amount not exceeding the amount of unused assessment authority
6 from a previous contract year or years, plus an additional 4
7 percent provided that the assessments in the aggregate do not
8 exceed the limits specified in subparagraph 2.
9 6. The assessments otherwise payable to the
10 corporation under this paragraph shall be paid to the fund
11 unless and until the Office of Insurance Regulation and the
12 Florida Surplus Lines Service Office have received from the
13 corporation and the fund a notice, which shall be conclusive
14 and upon which they may rely without further inquiry, that the
15 corporation has issued bonds and the fund has no agreements in
16 effect with local governments under paragraph (c). On or after
17 the date of the notice and until the date the corporation has
18 no bonds outstanding, the fund shall have no right, title, or
19 interest in or to the assessments, except as provided in the
20 fund's agreement with the corporation.
21 7. Emergency assessments are not premium and are not
22 subject to the premium tax, to the surplus lines tax, to any
23 fees, or to any commissions. An insurer is liable for all
24 assessments that it collects and must treat the failure of an
25 insured to pay an assessment as a failure to pay the premium.
26 An insurer is not liable for uncollectible assessments.
27 8. When an insurer is required to return an unearned
28 premium, it shall also return any collected assessment
29 attributable to the unearned premium. A credit adjustment to
30 the collected assessment may be made by the insurer with
31 regard to future remittances that are payable to the fund or
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. PCS for SB 1980 (070118)
Barcode 304604
1 corporation, but the insurer is not entitled to a refund.
2 9. When a surplus lines insured or an insured who has
3 procured coverage and filed under s. 626.938 is entitled to
4 the return of an unearned premium, the Florida Surplus Lines
5 Service Office shall provide a credit or refund to the agent
6 or such insured for the collected assessment attributable to
7 the unearned premium prior to remitting the emergency
8 assessment collected to the fund or corporation.
9 10. The exemption of medical malpractice insurance
10 premiums from emergency assessments under this paragraph is
11 repealed May 31, 2007, and medical malpractice insurance
12 premiums shall be subject to emergency assessments
13 attributable to loss events occurring in the contract years
14 commencing on June 1, 2007.
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17 ==== D I R E C T O R Y C L A U S E A M E N D M E N T ====
18 And the directory clause is amended as follows:
19 On page 8, lines 20 and 21, delete those lines
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21 and insert: paragraph (b) of subsection (5), and paragraphs
22 (a) and (b) of subsection (6) of section 215.555, Florida
23 Statutes, are
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26 ================ T I T L E A M E N D M E N T ===============
27 And the title is amended as follows:
28 On page 1, line 6, after the semicolon,
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30 insert:
31 deleting a requirement that bonds be validated;
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