HB 721

1	A bill to be entitled
2	An act relating to the Citizens Property Insurance
3	Corporation; amending s. 627.351, F.S.; deleting a
4	provision expressing legislative intent; deleting certain
5	reporting requirements of the board of governors of the
6	corporation relating to losses from wind-only coverage and
7	the quota share program; deleting certain duties of the
8	board relating to reduction of boundaries of certain areas
9	eligible for certain coverage under certain circumstances;
10	providing an effective date.
11
12	Be It Enacted by the Legislature of the State of Florida:
13
14	Section 1.  Paragraphs (o), (p), (q), and (r) of subsection
15	(6) of section 627.351, Florida Statutes, are amended to read:
16	627.351  Insurance risk apportionment plans.--
17	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
18	(o)  It is the intent of the Legislature that the
19	amendments to this subsection enacted in 2002 should, over time,
20	reduce the probable maximum windstorm losses in the residual
21	markets and should reduce the potential assessments to be levied
22	on property insurers and policyholders statewide. In furtherance
23	of this intent:
24	1.  The board shall, on or before February 1 of each year,
25	provide a report to the President of the Senate and the Speaker
26	of the House of Representatives showing the reduction or
27	increase in the 100-year probable maximum loss attributable to
28	wind-only coverages and the quota share program under this
29	subsection combined, as compared to the benchmark 100-year
30	probable maximum loss of the Florida Windstorm Underwriting
31	Association. For purposes of this paragraph, the benchmark 100-
32	year probable maximum loss of the Florida Windstorm Underwriting
33	Association shall be the calculation dated February 2001 and
34	based on November 30, 2000, exposures. In order to ensure
35	comparability of data, the board shall use the same methods for
36	calculating its probable maximum loss as were used to calculate
37	the benchmark probable maximum loss.
38	2.  Beginning February 1, 2007, if the report under
39	subparagraph 1. for any year indicates that the 100-year
40	probable maximum loss attributable to wind-only coverages and
41	the quota share program combined does not reflect a reduction of
42	at least 25 percent from the benchmark, the board shall reduce
43	the boundaries of the high-risk area eligible for wind-only
44	coverages under this subsection in a manner calculated to reduce
45	such probable maximum loss to an amount at least 25 percent
46	below the benchmark.
47	3.  Beginning February 1, 2012, if the report under
48	subparagraph 1. for any year indicates that the 100-year
49	probable maximum loss attributable to wind-only coverages and
50	the quota share program combined does not reflect a reduction of
51	at least 50 percent from the benchmark, the boundaries of the
52	high-risk area eligible for wind-only coverages under this
53	subsection shall be reduced by the elimination of any area that
54	is not seaward of a line 1,000 feet inland from the Intracoastal
55	Waterway.
56	(o)(p)  In enacting the provisions of this section, the
57	Legislature recognizes that both the Florida Windstorm
58	Underwriting Association and the Residential Property and
59	Casualty Joint Underwriting Association have entered into
60	financing arrangements that obligate each entity to service its
61	debts and maintain the capacity to repay funds secured under
62	these financing arrangements. It is the intent of the
63	Legislature that nothing in this section be construed to
64	compromise, diminish, or interfere with the rights of creditors
65	under such financing arrangements. It is further the intent of
66	the Legislature to preserve the obligations of the Florida
67	Windstorm Underwriting Association and Residential Property and
68	Casualty Joint Underwriting Association with regard to
69	outstanding financing arrangements, with such obligations
70	passing entirely and unchanged to the corporation and,
71	specifically, to the applicable account of the corporation. So
72	long as any bonds, notes, indebtedness, or other financing
73	obligations of the Florida Windstorm Underwriting Association or
74	the Residential Property and Casualty Joint Underwriting
75	Association are outstanding, under the terms of the financing
76	documents pertaining to them, the governing board of the
77	corporation shall have and shall exercise the authority to levy,
78	charge, collect, and receive all premiums, assessments,
79	surcharges, charges, revenues, and receipts that the
80	associations had authority to levy, charge, collect, or receive
81	under the provisions of subsection (2) and this subsection,
82	respectively, as they existed on January 1, 2002, to provide
83	moneys, without exercise of the authority provided by this
84	subsection, in at least the amounts, and by the times, as would
85	be provided under those former provisions of subsection (2) or
86	this subsection, respectively, so that the value, amount, and
87	collectability of any assets, revenues, or revenue source
88	pledged or committed to, or any lien thereon securing such
89	outstanding bonds, notes, indebtedness, or other financing
90	obligations will not be diminished, impaired, or adversely
91	affected by the amendments made by this act and to permit
92	compliance with all provisions of financing documents pertaining
93	to such bonds, notes, indebtedness, or other financing
94	obligations, or the security or credit enhancement for them, and
95	any reference in this subsection to bonds, notes, indebtedness,
96	financing obligations, or similar obligations, of the
97	corporation shall include like instruments or contracts of the
98	Florida Windstorm Underwriting Association and the Residential
99	Property and Casualty Joint Underwriting Association to the
100	extent not inconsistent with the provisions of the financing
101	documents pertaining to them.
102	(p)(q)  The corporation shall not require the securing of
103	flood insurance as a condition of coverage if the insured or
104	applicant executes a form approved by the office affirming that
105	flood insurance is not provided by the corporation and that if
106	flood insurance is not secured by the applicant or insured in
107	addition to coverage by the corporation, the risk will not be
108	covered for flood damage. A corporation policyholder electing
109	not to secure flood insurance and executing a form as provided
110	herein making a claim for water damage against the corporation
111	shall have the burden of proving the damage was not caused by
112	flooding. Notwithstanding other provisions of this subsection,
113	the corporation may deny coverage to an applicant or insured who
114	refuses to execute the form described herein.
115	(q)(r)  A salaried employee of the corporation who performs
116	policy administration services subsequent to the effectuation of
117	a corporation policy is not required to be licensed as an agent
118	under the provisions of s. 626.112.
119	Section 2.  This act shall take effect July 1, 2006.

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