Amendment
Bill No. 7225

Amendment No. 074037

CHAMBER ACTION
Senate		House
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1	Representative(s) Ross offered the following:
2
3	Amendment (with directory and title amendments)
4	Remove everything after the enacting clause, and insert:
5	Section 1.  Paragraph (d) of subsection (2), paragraphs
6	(b), (c), and (d) of subsection (4), paragraph (b) of subsection
7	(5), and paragraphs (a) and (b) of subsection (6) of section
8	215.555, Florida Statutes, are amended, and paragraph (e) is
9	added to subsection (5) of that section, to read:
10	215.555  Florida Hurricane Catastrophe Fund.--
11	(2)  DEFINITIONS.--As used in this section:
12	(d)  "Losses" means direct incurred losses under covered
13	policies, which shall include losses for additional living
14	expenses not to exceed 40 percent of the insured value of a
15	residential structure or its contents and shall exclude loss
16	adjustment expenses. "Losses" does not include losses for fair
17	rental value, loss of rent or rental income use, or business
18	interruption losses.
19	(4)  REIMBURSEMENT CONTRACTS.--
20	(b)1.  The contract shall contain a promise by the board to
21	reimburse the insurer for 45 percent, 75 percent, or 90 percent
22	of its losses from each covered event in excess of the insurer's
23	retention, plus 5 percent of the reimbursed losses to cover loss
24	adjustment expenses.
25	2.  The insurer must elect one of the percentage coverage
26	levels specified in this paragraph and may, upon renewal of a
27	reimbursement contract, elect a lower percentage coverage level
28	if no revenue bonds issued under subsection (6) after a covered
29	event are outstanding, or elect a higher percentage coverage
30	level, regardless of whether or not revenue bonds are
31	outstanding. All members of an insurer group must elect the same
32	percentage coverage level. Any joint underwriting association,
33	risk apportionment plan, or other entity created under s.
34	627.351 must elect the 90-percent coverage level.
35	3.  The contract shall provide that reimbursement amounts
36	shall not be reduced by reinsurance paid or payable to the
37	insurer from other sources.
38	4.  Notwithstanding any other provision contained in this
39	section, the board shall make available to insurers qualifying
40	as limited apportionment companies under s. 627.351(6)(c)14. a
41	contract which cedes to the fund, after retention, an amount of
42	up to $1 million. The rate to be charged for this coverage shall
43	be 50 percent rate-on-line which includes one prepaid
44	reinstatement. The minimum retention level that a carrier must
45	retain is 30 percent of surplus as of June 1, 2006. This
46	coverage shall be in addition to all other coverage which may be
47	provided under this section. This provision shall expire May 31,
48	2007.
49	(c)1.  The contract shall also provide that the obligation
50	of the board with respect to all contracts covering a particular
51	contract year shall not exceed the actual claims-paying capacity
52	of the fund up to a limit of $15 billion for that contract year
53	adjusted based upon the reported exposure from the prior
54	contract year to reflect the percentage growth in exposure to
55	the fund for covered policies since 2003, provided the dollar
56	growth in the limit may not increase in any year by an amount
57	greater than the dollar growth of the cash balance of the fund
58	as of December 31 as defined by rule which occurred over the
59	prior calendar year.
60	2.  In May before the start of the upcoming contract year
61	and in October during the contract year, the board shall publish
62	in the Florida Administrative Weekly a statement of the fund's
63	estimated borrowing capacity and the projected balance of the
64	fund as of December 31. After the end of each calendar year, the
65	board shall notify insurers of the estimated borrowing capacity
66	and the balance of the fund as of December 31 to provide
67	insurers with data necessary to assist them in determining their
68	retention and projected payout from the fund for loss
69	reimbursement purposes. In conjunction with the development of
70	the premium formula, as provided for in subsection (5), the
71	board shall publish factors or multiples that assist insurers in
72	determining their retention and projected payout for the next
73	contract year. For all regulatory and reinsurance purposes, an
74	insurer may calculate its projected payout from the fund as its
75	share of the total fund premium for the current contract year
76	multiplied by the sum of the projected balance of the fund as of
77	December 31 and the estimated borrowing capacity for that
78	contract year as reported under this subparagraph.
79	(d)1.  For purposes of determining potential liability and
80	to aid in the sound administration of the fund, the contract
81	shall require each insurer to report such insurer's losses from
82	each covered event on an interim basis, as directed by the
83	board. The contract shall require the insurer to report to the
84	board no later than December 31 of each year, and quarterly
85	thereafter, its reimbursable losses from covered events for the
86	year. The contract shall require the board to determine and pay,
87	as soon as practicable after receiving these reports of
88	reimbursable losses, the initial amount of reimbursement due and
89	adjustments to this amount based on later loss information. The
90	adjustments to reimbursement amounts shall require the board to
91	pay, or the insurer to return, amounts reflecting the most
92	recent calculation of losses.
93	2.  In determining reimbursements pursuant to this
94	subsection, the contract shall provide that the board shall:
95	a.  First reimburse insurers writing covered policies,
96	which insurers are in full compliance with this section and have
97	petitioned the Office of Insurance Regulation and qualified as
98	limited apportionment companies under s. 627.351(2)(b)3. The
99	amount of such reimbursement shall be the lesser of $10 million
100	or an amount equal to 10 times the insurer's reimbursement
101	premium for the current year. The amount of reimbursement paid
102	under this sub-subparagraph may not exceed the full amount of
103	reimbursement promised in the reimbursement contract. This sub-
104	subparagraph does not apply with respect to any contract year in
105	which the year-end projected cash balance of the fund, exclusive
106	of any bonding capacity of the fund, exceeds $2 billion. Only
107	one member of any insurer group may receive reimbursement under
108	this sub-subparagraph.
109	a.b.  Next Pay to each insurer such insurer's projected
110	payout, which is the amount of reimbursement it is owed, up to
111	an amount equal to the insurer's share of the actual premium
112	paid for that contract year, multiplied by the actual claims-
113	paying capacity available for that contract year; provided,
114	entities created pursuant to s. 627.351 shall be further
115	reimbursed in accordance with sub-subparagraph b. c.
116	b.c.  Thereafter, establish the prorated reimbursement
117	level at the highest level for which any remaining fund balance
118	or bond proceeds are sufficient to reimburse entities created
119	pursuant to s. 627.351 based on reimbursable losses exceeding
120	the amounts payable pursuant to sub-subparagraph a. b. for the
121	current contract year.
122	(5)  REIMBURSEMENT PREMIUMS.--
123	(b)  The State Board of Administration shall select an
124	independent consultant to develop a formula for determining the
125	actuarially indicated premium to be paid to the fund. The
126	formula shall specify, for each zip code or other limited
127	geographical area, the amount of premium to be paid by an
128	insurer for each $1,000 of insured value under covered policies
129	in that zip code or other area. In establishing premiums, the
130	board shall consider the coverage elected under paragraph (4)(b)
131	and any factors that tend to enhance the actuarial
132	sophistication of ratemaking for the fund, including
133	deductibles, type of construction, type of coverage provided,
134	relative concentration of risks, a factor providing for more
135	rapid cash buildup in the fund until the fund capacity for a
136	single hurricane season is fully funded, and other such factors
137	deemed by the board to be appropriate. The formula may provide
138	for a procedure to determine the premiums to be paid by new
139	insurers that begin writing covered policies after the beginning
140	of a contract year, taking into consideration when the insurer
141	starts writing covered policies, the potential exposure of the
142	insurer, the potential exposure of the fund, the administrative
143	costs to the insurer and to the fund, and any other factors
144	deemed appropriate by the board. The formula shall include a
145	factor of 25 percent of the fund's actuarially indicated premium
146	in order to provide for more rapid cash buildup in the fund. The
147	formula must be approved by unanimous vote of the board. The
148	board may, at any time, revise the formula pursuant to the
149	procedure provided in this paragraph.
150	(e)  For purposes of paragraph (c), if the corporation
151	assumes or otherwise provides coverage for policies of insurers
152	placed in liquidation under chapter 631 pursuant to s.
153	627.351(6)(m)5., the corporation shall notify the board of its
154	insured values with respect to such policies within 60 days
155	after such assumption or other coverage transaction and the fund
156	shall treat such policies as having been in effect as of June 30
157	of that year. For purposes of subsection (4), Citizens Property
158	Insurance Corporation may enter into a separate reimbursement
159	contract with respect to such policies and, if so, shall be
160	treated by the fund as a separate insurer with respect to such
161	policies until their first renewal effective date.
162	(6)  REVENUE BONDS.--
163	(a)  General provisions.--
164	1.  Upon the occurrence of a hurricane and a determination
165	that the moneys in the fund are or will be insufficient to pay
166	reimbursement at the levels promised in the reimbursement
167	contracts, the board may take the necessary steps under
168	paragraph (c) or paragraph (d) for the issuance of revenue bonds
169	for the benefit of the fund. The proceeds of such revenue bonds
170	may be used to make reimbursement payments under reimbursement
171	contracts; to refinance or replace previously existing
172	borrowings or financial arrangements; to pay interest on bonds;
173	to fund reserves for the bonds; to pay expenses incident to the
174	issuance or sale of any bond issued under this section,
175	including costs of validating, printing, and delivering the
176	bonds, costs of printing the official statement, costs of
177	publishing notices of sale of the bonds, and related
178	administrative expenses; or for such other purposes related to
179	the financial obligations of the fund as the board may
180	determine. The term of the bonds may not exceed 30 years. The
181	board may pledge or authorize the corporation to pledge all or a
182	portion of all revenues under subsection (5) and under paragraph
183	(b) to secure such revenue bonds and the board may execute such
184	agreements between the board and the issuer of any revenue bonds
185	and providers of other financing arrangements under paragraph
186	(7)(b) as the board deems necessary to evidence, secure,
187	preserve, and protect such pledge. If reimbursement premiums
188	received under subsection (5) or earnings on such premiums are
189	used to pay debt service on revenue bonds, such premiums and
190	earnings shall be used only after the use of the moneys derived
191	from assessments under paragraph (b). The funds, credit,
192	property, or taxing power of the state or political subdivisions
193	of the state shall not be pledged for the payment of such bonds.
194	The board may also enter into agreements under paragraph (c) or
195	paragraph (d) for the purpose of issuing revenue bonds in the
196	absence of a hurricane upon a determination that such action
197	would maximize the ability of the fund to meet future
198	obligations.
199	2.  The Legislature finds and declares that the issuance of
200	bonds under this subsection is for the public purpose of paying
201	the proceeds of the bonds to insurers, thereby enabling insurers
202	to pay the claims of policyholders to assure that policyholders
203	are able to pay the cost of construction, reconstruction,
204	repair, restoration, and other costs associated with damage to
205	property of policyholders of covered policies after the
206	occurrence of a hurricane. Revenue bonds may not be issued under
207	this subsection until validated under chapter 75. The validation
208	of at least the first obligations incurred pursuant to this
209	subsection shall be appealed to the Supreme Court, to be handled
210	on an expedited basis.
211	(b)  Emergency assessments.--
212	1.  If the board determines that the amount of revenue
213	produced under subsection (5) is insufficient to fund the
214	obligations, costs, and expenses of the fund and the
215	corporation, including repayment of revenue bonds and that
216	portion of the debt service coverage not met by reimbursement
217	premiums, the board shall direct the Office of Insurance
218	Regulation to levy, by order, an emergency assessment on direct
219	premiums for all property and casualty lines of business in this
220	state, including property and casualty business of surplus lines
221	insurers regulated under part VIII of chapter 626, but not
222	including any workers' compensation premiums or medical
223	malpractice premiums. As used in this subsection, the term
224	"property and casualty business" includes all lines of business
225	identified on Form 2, Exhibit of Premiums and Losses, in the
226	annual statement required of authorized insurers by s. 624.424
227	and any rule adopted under this section, except for those lines
228	identified as accident and health insurance and except for
229	policies written under the National Flood Insurance Program. The
230	assessment shall be specified as a percentage of direct written
231	future premium collections and is subject to annual adjustments
232	by the board to reflect changes in premiums subject to
233	assessments collected under this subparagraph in order to meet
234	debt obligations. The same percentage shall apply to all
235	policies in lines of business subject to the assessment issued
236	or renewed during the 12-month period beginning on the effective
237	date of the assessment.
238	2.  A premium is not subject to an annual assessment under
239	this paragraph in excess of 6 percent of premium with respect to
240	obligations arising out of losses attributable to any one
241	contract year, and a premium is not subject to an aggregate
242	annual assessment under this paragraph in excess of 10 percent
243	of premium. An annual assessment under this paragraph shall
244	continue for as long as until the revenue bonds issued with
245	respect to which the assessment was imposed are outstanding,
246	including any bonds the proceeds of which were used to refund
247	the revenue bonds, unless adequate provision has been made for
248	the payment of the bonds under the documents authorizing
249	issuance of the bonds.
250	3.  Emergency assessments shall be collected from
251	policyholders. Emergency assessments shall be remitted by
252	insurers as a percentage of direct written premium for the
253	preceding calendar quarter as specified in the order from With
254	respect to each insurer collecting premiums that are subject to
255	the assessment, the insurer shall collect the assessment at the
256	same time as it collects the premium payment for each policy and
257	shall remit the assessment collected to the fund or corporation
258	as provided in the order issued by the Office of Insurance
259	Regulation. The office shall verify the accurate and timely
260	collection and remittance of emergency assessments and shall
261	report the information to the board in a form and at a time
262	specified by the board. Each insurer collecting assessments
263	shall provide the information with respect to premiums and
264	collections as may be required by the office to enable the
265	office to monitor and verify compliance with this paragraph.
266	4.  With respect to assessments of surplus lines premiums,
267	each surplus lines agent shall collect the assessment at the
268	same time as the agent collects the surplus lines tax required
269	by s. 626.932, and the surplus lines agent shall remit the
270	assessment to the Florida Surplus Lines Service Office created
271	by s. 626.921 at the same time as the agent remits the surplus
272	lines tax to the Florida Surplus Lines Service Office. The
273	emergency assessment on each insured procuring coverage and
274	filing under s. 626.938 shall be remitted by the insured to the
275	Florida Surplus Lines Service Office at the time the insured
276	pays the surplus lines tax to the Florida Surplus Lines Service
277	Office. The Florida Surplus Lines Service Office shall remit the
278	collected assessments to the fund or corporation as provided in
279	the order levied by the Office of Insurance Regulation. The
280	Florida Surplus Lines Service Office shall verify the proper
281	application of such emergency assessments and shall assist the
282	board in ensuring the accurate and timely collection and
283	remittance of assessments as required by the board. The Florida
284	Surplus Lines Service Office shall annually calculate the
285	aggregate written premium on property and casualty business,
286	other than workers' compensation and medical malpractice,
287	procured through surplus lines agents and insureds procuring
288	coverage and filing under s. 626.938 and shall report the
289	information to the board in a form and at a time specified by
290	the board.
291	5.  Any assessment authority not used for a particular
292	contract year may be used for a subsequent contract year. If,
293	for a subsequent contract year, the board determines that the
294	amount of revenue produced under subsection (5) is insufficient
295	to fund the obligations, costs, and expenses of the fund and the
296	corporation, including repayment of revenue bonds and that
297	portion of the debt service coverage not met by reimbursement
298	premiums, the board shall direct the Office of Insurance
299	Regulation to levy an emergency assessment up to an amount not
300	exceeding the amount of unused assessment authority from a
301	previous contract year or years, plus an additional 4 percent
302	provided that the assessments in the aggregate do not exceed the
303	limits specified in subparagraph 2.
304	6.  The assessments otherwise payable to the corporation
305	under this paragraph shall be paid to the fund unless and until
306	the Office of Insurance Regulation and the Florida Surplus Lines
307	Service Office have received from the corporation and the fund a
308	notice, which shall be conclusive and upon which they may rely
309	without further inquiry, that the corporation has issued bonds
310	and the fund has no agreements in effect with local governments
311	under paragraph (c). On or after the date of the notice and
312	until the date the corporation has no bonds outstanding, the
313	fund shall have no right, title, or interest in or to the
314	assessments, except as provided in the fund's agreement with the
315	corporation.
316	7.  Emergency assessments are not premium and are not
317	subject to the premium tax, to the surplus lines tax, to any
318	fees, or to any commissions. An insurer is liable for all
319	assessments that it collects and must treat the failure of an
320	insured to pay an assessment as a failure to pay the premium. An
321	insurer is not liable for uncollectible assessments.
322	8.  When an insurer is required to return an unearned
323	premium, it shall also return any collected assessment
324	attributable to the unearned premium. A credit adjustment to the
325	collected assessment may be made by the insurer with regard to
326	future remittances that are payable to the fund or corporation,
327	but the insurer is not entitled to a refund.
328	9.  When a surplus lines insured or an insured who has
329	procured coverage and filed under s. 626.938 is entitled to the
330	return of an unearned premium, the Florida Surplus Lines Service
331	Office shall provide a credit or refund to the agent or such
332	insured for the collected assessment attributable to the
333	unearned premium prior to remitting the emergency assessment
334	collected to the fund or corporation.
335	10.  The exemption of medical malpractice insurance
336	premiums from emergency assessments under this paragraph is
337	repealed May 31, 2010 2007, and medical malpractice insurance
338	premiums shall be subject to emergency assessments attributable
339	to loss events occurring in the contract years commencing on
340	June 1, 2010 2007.
341	Section 2.  Section 215.558, Florida Statutes, is created
342	to read:
343	215.558  Florida Hurricane Damage Prevention Endowment.--
344	(1)  PURPOSE AND INTENT.--The purpose of this section is to
345	provide a continuing source of funding for financial incentives
346	to encourage residential property owners of this state to
347	retrofit their properties to make them less vulnerable to
348	hurricane damage, to help decrease the cost of residential
349	property and casualty insurance, and to provide matching funds
350	to local governments and nonprofit entities for projects that
351	will reduce hurricane damage to residential properties. It is
352	the intent of the Legislature that this section be construed
353	liberally to effectuate its purpose.
354	(2)  DEFINITIONS.--As used in this section:
355	(a)  "Board" means the State Board of Administration.
356	(b)  "Corpus" means the money that has been appropriated to
357	the endowment by the 2006 Legislature, together with any amounts
358	subsequently appropriated to the endowment that are specifically
359	designated as contributions to the corpus and any grants, gifts,
360	or donations to the endowment that are specifically designated
361	as contributions to the corpus.
362	(c)  "Earnings" means any money in the endowment in excess
363	of the corpus, including any income generated by investments,
364	any increase in the market value of investments net of decreases
365	in market value, and any appropriations, grants, gifts, or
366	donations to the endowment not specifically designated as
367	contributions to the corpus.
368	(d)  "Endowment" means the Florida Hurricane Damage
369	Prevention Endowment created by this section.
370	(e)  "Program administrator" means the Department of
371	Financial Services.
372	(3)  ADMINISTRATION.--
373	(a)  The board shall invest endowment assets as provided in
374	this section.
375	(b)  The board may invest and reinvest funds of the
376	endowment in accordance with s. 215.47 and consistent with board
377	policy.
378	(c)  The investment objective shall be long-term
379	preservation of the value of the corpus and a specified regular
380	annual cash outflow for appropriation, as nonrecurring revenue,
381	for the purposes specified in subsection (4).
382	(d)  In accordance with s. 215.44, the board shall report
383	on the financial status of the endowment in its annual
384	investment report to the Legislature.
385	(e)  Costs and fees of the board for investment services
386	shall be deducted from the assets of the endowment.
387	(4)  FINANCIAL INCENTIVES FOR RESIDENTIAL HURRICANE DAMAGE
388	PREVENTION ACTIVITIES.--
389	(a)  Not less than 80 percent of the net earnings of the
390	endowment shall be expended for financial incentives to
391	residential property owners as described in paragraph (b), and
392	no more than the remainder of the net earnings of the endowment
393	shall be expended for matching fund grants to local governments
394	and nonprofit entities for projects that will reduce hurricane
395	damage to residential properties as described in paragraph (c).
396	Any funds authorized for expenditure but not expended for these
397	purposes shall be returned to the endowment.
398	(b)1.  The program administrator, by rule, shall establish
399	a request for a proposal process to annually solicit proposals
400	from lending institutions under which the lending institution
401	will provide interest-free loans to homestead property owners to
402	pay for inspections of homestead property to determine what
403	mitigation measures are needed and for improvements to existing
404	residential properties intended to reduce the homestead
405	property's vulnerability to hurricane damage, in exchange for
406	funding from the endowment.
407	2.  In order to qualify for funding under this paragraph,
408	an interest-free loan program must include an inspection of
409	homestead property to determine what mitigation measures are
410	needed, a means for verifying that the improvements to be paid
411	for from loan proceeds have been demonstrated to reduce a
412	homestead property's vulnerability to hurricane damage, and a
413	means for verifying that the proceeds were actually spent on
414	such improvements. The program must include a method for
415	awarding loans according to the following priorities:
416	a.  The highest priority must be given to single-family
417	owner-occupied homestead dwellings, insured at $500,000 or less,
418	located in the areas designated as high-risk areas for purposes
419	of coverage by the Citizens Property Insurance Corporation.
420	b.  The next highest priority must be given to single-
421	family owner-occupied homestead dwellings, insured at $500,000
422	or less, covered by the Citizens Property Insurance Corporation,
423	wherever located.
424	c.  The next highest priority must be given to single-
425	family owner-occupied homestead dwellings, insured at $500,000
426	or less, that are more than 40 years old.
427	d.  The next highest priority must be given to all other
428	single-family owner-occupied homestead dwellings insured at
429	$500,000 or less.
430	3.  The program administrator shall evaluate proposals
431	based on the following factors:
432	a.  The degree to which the proposal meets the requirements
433	of subparagraph 2.
434	b.  The lending institution's plan for marketing the loans.
435	c.  The anticipated number of loans to be granted relative
436	to the total amount of funding sought.
437	4.  The program administrator shall annually solicit
438	proposals from local governments and nonprofit entities for
439	projects that will reduce hurricane damage to homestead
440	properties. The program administrator may provide up to 50
441	percent of the funding for such projects. The projects may
442	include educational programs, repair services, property
443	inspections, and hurricane vulnerability analyses and such other
444	projects as the program administrator determines to be
445	consistent with the purposes of this section.
446	(5)  ADVISORY COUNCIL.--There is created an advisory
447	council to provide advice and assistance to the program
448	administrator with regard to its administration of the
449	endowment. The advisory council shall consist of:
450	(a)  A representative of lending institutions, selected by
451	the Financial Services Commission from a list of at least three
452	persons recommended by the Florida Bankers Association.
453	(b)  A representative of residential property insurers,
454	selected by the Financial Services Commission from a list of at
455	least three persons recommended by the Florida Insurance
456	Council.
457	(c)  A representative of home builders, selected by the
458	Financial Services Commission from a list of at least three
459	persons recommended by the Florida Home Builders Association.
460	(d)  A faculty member of a state university selected by the
461	Financial Services Commission who is an expert in hurricane-
462	resistant construction methodologies and materials.
463	(e)  Two members of the House of Representatives selected
464	by the Speaker of the House of Representatives.
465	(f)  Two members of the Senate selected by the President of
466	the Senate.
467	(g)  The senior officer of the Florida Hurricane
468	Catastrophe Fund.
469	(h)  The executive director of Citizens Property Insurance
470	Corporation.
471	(i)  The director of the Division of Emergency Management
472	of the Department of Community Affairs.
473
474	Members appointed under paragraphs (a)-(d) shall serve at the
475	pleasure of the Financial Services Commission. Members appointed
476	under paragraphs (e) and (f) shall serve at the pleasure of the
477	appointing officer. All other members shall serve ex officio.
478	Members of the advisory council shall serve without compensation
479	but may receive reimbursement as provided in s. 112.061 for per
480	diem and travel expenses incurred in the performance of their
481	official duties.
482	Section 3.  Section 215.5586, Florida Statutes, is created
483	to read:
484	215.5586  Florida Comprehensive Hurricane Damage Mitigation
485	Program.--There is established within the Department of
486	Financial Services the Florida Comprehensive Hurricane Damage
487	Mitigation Program. The program shall be administered by an
488	individual with prior executive experience in the private sector
489	in the areas of insurance, business, or construction. The
490	program shall develop and implement a comprehensive and
491	coordinated approach for hurricane damage mitigation that shall
492	include the following:
493	(1)  WIND CERTIFICATION AND HURRICANE MITIGATION
494	INSPECTIONS.--
495	(a)  Free home-retrofit inspections of site-built,
496	residential property, including single-family, two-family,
497	three-family, or four-family residential units, shall be offered
498	to determine what mitigation measures are needed and what
499	improvements to existing residential properties are needed to
500	reduce the property's vulnerability to hurricane damage. The
501	Department of Financial Services shall establish a request for
502	proposals to solicit proposals from wind certification entities
503	to provide at no cost to homeowners wind certification and
504	hurricane mitigation inspections. The inspections provided to
505	homeowners, at a minimum, must include:
506	1.  A home inspection and report that summarizes the
507	results and identifies corrective actions a homeowner may take
508	to mitigate hurricane damage.
509	2.  A range of cost estimates regarding the mitigation
510	features.
511	3.  Insurer-specific information regarding premium
512	discounts correlated to recommended mitigation features
513	identified by the inspection.
514	4.  A hurricane resistance rating scale specifying the
515	home's current as well as projected wind resistance
516	capabilities.
517	(b)  To qualify for selection by the department as a
518	provider of wind certification and hurricane mitigation
519	inspections, the entity shall, at a minimum:
520	1.  Use wind certification and hurricane mitigation
521	inspectors who:
522	a.  Have prior experience in residential construction or
523	inspection and have received specialized training in hurricane
524	mitigation procedures.
525	b.  Have undergone drug testing and background checks.
526	c.  Have been certified, in a manner satisfactory to the
527	department, to conduct the inspections.
528	2.  Provide a quality assurance program including a
529	reinspection component.
530	(2)  GRANTS.--Financial grants shall be used to encourage
531	single-family, site-built, owner-occupied, residential property
532	owners to retrofit their properties to make them less vulnerable
533	to hurricane damage.
534	(a)  To be eligible for a grant, a residential property
535	must:
536	1.  Have been granted a homestead exemption under chapter
537	196.
538	2.  Be a dwelling with an insured value of $500,000 or
539	less.
540	3.  Have undergone an acceptable wind certification and
541	hurricane mitigation inspection.
542
543	A residential property which is part of a multi-family
544	residential unit may receive a grant only if all homeowners
545	participate and the total number of units does not exceed four.
546	(b)  All grants must be matched on a dollar-for-dollar
547	basis for a total of $10,000 for the mitigation project with the
548	state's contribution not to exceed $5,000.
549	(c)  The program shall create a process in which mitigation
550	contractors agree to participate and seek reimbursement from the
551	state and homeowners select from a list of participating
552	contractors. All mitigation must be based upon the securing of
553	all required local permits and inspections. Mitigation projects
554	are subject to random reinspection of up to at least 10 percent
555	of all projects.
556	(d)  Matching fund grants shall also be made available to
557	local governments and nonprofit entities for projects that will
558	reduce hurricane damage to single-family, site-built, owner-
559	occupied, residential property.
560	(3)  LOANS.--Financial incentives shall be provided as
561	authorized by s. 215.558.
562	(4)  EDUCATION AND CONSUMER AWARENESS.--Multimedia public
563	education, awareness, and advertising efforts designed to
564	specifically address mitigation techniques shall be employed, as
565	well as a component to support ongoing consumer resources and
566	referral services.
567	(5)  MANUFACTURED HOUSING AND MOBILE HOME HURRICANE
568	MITIGATION PROGRAM.--The Manufactured Housing and Mobile Home
569	Hurricane Mitigation Program shall be also be implemented under
570	the Florida Comprehensive Hurricane Damage Mitigation Program.
571	(a)  The program shall require the mitigation of damage to
572	homes for the areas of concern raised by the Department of
573	Highway Safety and Motor Vehicles in the 2004-2005 Hurricane
574	Reports on the effects of the 2004 and 2005 hurricanes on
575	manufactured and mobile homes in this state. The mitigation
576	shall include, but not be limited to, problems associated with
577	weakened trusses, studs, and other structural components, site-
578	built additions, or tie-down systems and may also address any
579	other issues deemed appropriate by the Department of Financial
580	Services upon consultation with the Department of Community
581	Affairs, Tallahassee Community College, the Federation of
582	Manufactured Home Owners of Florida, Inc., the Florida
583	Manufactured Housing Association, and the Department of Highway
584	Safety and Motor Vehicles. The program may include an education
585	and outreach component to ensure that owners of manufactured and
586	mobile homes are aware of the benefits of participation.
587	(b)  The program shall include the offering of a matching
588	grant to owners of manufactured and mobile homes manufactured
589	after 1993 only. Homeowners accepted for the program shall be
590	eligible to qualify for a $5,000 dollar-for-dollar matching
591	grant in which the homeowner may receive up to $2,500 in state
592	moneys. The moneys appropriated for this program shall be
593	distributed directly to the Department of Financial Services for
594	the uses set forth under this paragraph.
595	(c)  Upon evidence of completion of the program, the
596	Citizens Property Insurance Corporation shall grant, on a pro
597	rata basis, actuarially reasonable discounts, credits, or other
598	rate differentials or appropriate reductions in deductibles for
599	the properties of owners of manufactured homes or mobile homes
600	on which fixtures or construction techniques that have been
601	demonstrated to reduce the amount of loss in a windstorm have
602	been installed or implemented. The discount on the premium shall
603	be applied to subsequent renewal premium amounts. Premiums of
604	the Citizens Property Insurance Corporation shall reflect the
605	location of the home and the fact that the home has been
606	installed in compliance with building codes adopted after
607	Hurricane Andrew.
608	(d)  On or before January 1 of each year, the Department of
609	Financial Services shall provide a report of activities under
610	this subsection to the Governor, the President of the Senate,
611	and the Speaker of the House of Representatives. The report
612	shall set forth the number of manufactured homes and mobile
613	homes that have taken advantage of the program, the types of
614	enhancements and improvements made to the manufactured homes or
615	mobile homes and attachments to such homes, and whether there
616	has been an increase of availability of insurance products to
617	owners of manufactured homes or mobile homes.
618	(6)  ADVISORY COUNCIL.--There is created an advisory
619	council to provide advice and assistance to the program
620	administrator with regard to his or her administration of the
621	program. The advisory council shall consist of:
622	(a)  A representative of lending institutions, selected by
623	the Financial Services Commission from a list of at least three
624	persons recommended by the Florida Bankers Association.
625	(b)  A representative of residential property insurers,
626	selected by the Financial Services Commission from a list of at
627	least three persons recommended by the Florida Insurance
628	Council.
629	(c)  A representative of home builders, selected by the
630	Financial Services Commission from a list of at least three
631	persons recommended by the Florida Home Builders Association.
632	(d)  A faculty member of a state university, selected by
633	the Financial Services Commission, who is an expert in
634	hurricane-resistant construction methodologies and materials.
635	(e)  Two members of the House of Representatives, selected
636	by the Speaker of the House of Representatives.
637	(f)  Two members of the Senate, selected by the President
638	of the Senate.
639	(g)  The Chief Executive Officer of the Federal Alliance
640	for Safe Homes, Inc., or his or her designee.
641	(h)  The senior officer of the Florida Hurricane
642	Catastrophe Fund.
643	(i)  The executive director of Citizens Property Insurance
644	Corporation.
645	(j)  The director of the Division of Emergency Management
646	of the Department of Community Affairs.
647
648	Members appointed under paragraphs (a)-(d) shall serve at the
649	pleasure of the Financial Services Commission. Members appointed
650	under paragraphs (e) and (f) shall serve at the pleasure of the
651	appointing officer. All other members shall serve voting ex
652	officio. Members of the advisory council shall serve without
653	compensation but may receive reimbursement as provided in s.
654	112.061 for per diem and travel expenses incurred in the
655	performance of their official duties.
656	(7)  FEDERAL FUNDING.-The department shall use its best
657	efforts to obtain grants or funds from the federal government to
658	supplement the financial resources of the program.
659	(8)  RULES.--The Department of Financial Services shall
660	adopt rules pursuant to ss. 120.536(1) and 120.54 governing the
661	Florida Comprehensive Hurricane Damage Mitigation Program.
662	Section 4.  Section 215.559, Florida Statutes, is amended
663	to read:
664	215.559  Hurricane Loss Mitigation Program.--
665	(1)  There is created a Hurricane Loss Mitigation Program.
666	The Legislature shall annually appropriate $10 million of the
667	moneys authorized for appropriation under s. 215.555(7)(c) from
668	the Florida Hurricane Catastrophe Fund to the Department of
669	Community Affairs for the purposes set forth in this section.
670	(2)(a)  Seven million dollars in funds provided in
671	subsection (1) shall be used for programs to improve the wind
672	resistance of residences and mobile homes, including loans,
673	subsidies, grants, demonstration projects, and direct
674	assistance; cooperative programs with local governments and the
675	Federal Government; and other efforts to prevent or reduce
676	losses or reduce the cost of rebuilding after a disaster.
677	(b)  Three million dollars in funds provided in subsection
678	(1) shall be used to retrofit existing facilities used as public
679	hurricane shelters. The department must prioritize the use of
680	these funds for projects included in the September 1, 2000,
681	version of the Shelter Retrofit Report prepared in accordance
682	with s. 252.385(3), and each annual report thereafter. The
683	department must give funding priority to projects in regional
684	planning council regions that have shelter deficits and to
685	projects that maximize use of state funds.
686	(3)  By the 2006-2007 fiscal year, the Department of
687	Community Affairs shall develop a low-interest loan program for
688	homeowners and mobile home owners to retrofit their homes with
689	fixtures or apply construction techniques that have been
690	demonstrated to reduce the amount of damage or loss due to a
691	hurricane. Funding for the program shall be used to subsidize or
692	guaranty private-sector loans for this purpose to qualified
693	homeowners by financial institutions chartered by the state or
694	Federal Government. The department may enter into contracts with
695	financial institutions for this purpose. The department shall
696	establish criteria for determining eligibility for the loans and
697	selecting recipients, standards for retrofitting homes or mobile
698	homes, limitations on loan subsidies and loan guaranties, and
699	other terms and conditions of the program, which must be
700	specified in the department's report to the Legislature on
701	January 1, 2006, required by subsection (8). For the 2005-2006
702	fiscal year, the Department of Community Affairs may use up to
703	$1 million of the funds appropriated pursuant to paragraph
704	(2)(a) to begin the low-interest loan program as a pilot project
705	in one or more counties. The Department of Financial Services,
706	the Office of Financial Regulation, the Florida Housing Finance
707	Corporation, and the Office of Tourism, Trade, and Economic
708	Development shall assist the Department of Community Affairs in
709	establishing the program and pilot project. The department may
710	use up to 2.5 percent of the funds appropriated in any given
711	fiscal year for administering the loan program. The department
712	may adopt rules to implement the program.
713	(3)(4)  Forty percent of the total appropriation in
714	paragraph (2)(a) shall be used to inspect and improve tie-downs
715	for mobile homes. Within 30 days after the effective date of
716	that appropriation, the department shall contract with a public
717	higher educational institution in this state which has previous
718	experience in administering the programs set forth in this
719	subsection to serve as the administrative entity and fiscal
720	agent pursuant to s. 216.346 for the purpose of administering
721	the programs set forth in this subsection in accordance with
722	established policy and procedures. The administrative entity
723	working with the advisory council set up under subsection (6)
724	shall develop a list of mobile home parks and counties that may
725	be eligible to participate in the tie-down program.
726	(4)(5)  Of moneys provided to the Department of Community
727	Affairs in paragraph (2)(a), 10 percent shall be allocated to a
728	Type I Center within the State University System dedicated to
729	hurricane research. The Type I Center shall develop a
730	preliminary work plan approved by the advisory council set forth
731	in subsection (6) to eliminate the state and local barriers to
732	upgrading existing mobile homes and communities, research and
733	develop a program for the recycling of existing older mobile
734	homes, and support programs of research and development relating
735	to hurricane loss reduction devices and techniques for site-
736	built residences. The State University System also shall consult
737	with the Department of Community Affairs and assist the
738	department with the report required under subsection (8).
739	(5)(6)  The Department of Community Affairs shall develop
740	the programs set forth in this section in consultation with an
741	advisory council consisting of a representative designated by
742	the Chief Financial Officer, a representative designated by the
743	Florida Home Builders Association, a representative designated
744	by the Florida Insurance Council, a representative designated by
745	the Federation of Manufactured Home Owners, a representative
746	designated by the Florida Association of Counties, and a
747	representative designated by the Florida Manufactured Housing
748	Association.
749	(6)(7)  Moneys provided to the Department of Community
750	Affairs under this section are intended to supplement other
751	funding sources of the Department of Community Affairs and may
752	not supplant other funding sources of the Department of
753	Community Affairs.
754	(7)(8)  On January 1st of each year, the Department of
755	Community Affairs shall provide a full report and accounting of
756	activities under this section and an evaluation of such
757	activities to the Speaker of the House of Representatives, the
758	President of the Senate, and the Majority and Minority Leaders
759	of the House of Representatives and the Senate.
760	(8)(9)  This section is repealed June 30, 2011.
761	Section 5.  Section 252.63, Florida Statutes, is created to
762	read:
763	252.63  Commissioner of Insurance Regulation; powers in a
764	state of emergency.--
765	(1)  When the Governor declares a state of emergency
766	pursuant to s. 252.36, the commissioner may issue one or more
767	general orders applicable to all insurance companies, entities,
768	and persons, as defined in s. 624.04, that are subject to the
769	Florida Insurance Code and that serve any portion of the area of
770	the state under the state of emergency.
771	(2)  An order issued by the commissioner under this section
772	becomes effective upon issuance and continues for 120 days
773	unless terminated sooner by the commissioner. The commissioner
774	may extend an order for one additional period of 120 days if he
775	or she determines that the emergency conditions that gave rise
776	to the initial order still exist. By concurrent resolution, the
777	Legislature may terminate any order issued under this section.
778	(3)  The commissioner shall publish in the next available
779	publication of the Florida Administrative Weekly a copy of the
780	text of any order issued under this section, together with a
781	statement describing the modification or suspension and
782	explaining how the modification or suspension will facilitate
783	recovery from the emergency.
784	Section 6.  Subsections (1) and (2) of section 626.918,
785	Florida Statutes, are amended to read:
786	626.918  Eligible surplus lines insurers.--
787	(1)  A No surplus lines agent may not shall place any
788	coverage with any unauthorized insurer which is not then an
789	eligible surplus lines insurer, except as permitted under
790	subsections (5) and (6).
791	(2)  An No unauthorized insurer may not shall be or become
792	an eligible surplus lines insurer unless made eligible by the
793	office in accordance with the following conditions:
794	(a)  Eligibility of the insurer must be requested in
795	writing by the Florida Surplus Lines Service Office.;
796	(b)  The insurer must be currently an authorized insurer in
797	the state or country of its domicile as to the kind or kinds of
798	insurance proposed to be so placed and must have been such an
799	insurer for not less than the 3 years next preceding or must be
800	the wholly owned subsidiary of such authorized insurer or must
801	be the wholly owned subsidiary of an already eligible surplus
802	lines insurer as to the kind or kinds of insurance proposed for
803	a period of not less than the 3 years next preceding. However,
804	the office may waive the 3-year requirement if the insurer
805	provides a product or service not readily available to the
806	consumers of this state or has operated successfully for a
807	period of at least 1 year next preceding and has capital and
808	surplus of not less than $25 million.;
809	(c)  Before granting eligibility, the requesting surplus
810	lines agent or the insurer shall furnish the office with a duly
811	authenticated copy of its current annual financial statement in
812	the English language and with all monetary values therein
813	expressed in United States dollars, at an exchange rate (in the
814	case of statements originally made in the currencies of other
815	countries) then-current and shown in the statement, and with
816	such additional information relative to the insurer as the
817	office may request.;
818	(d)1.a.  The insurer must have and maintain surplus as to
819	policyholders of not less than $15 million; in addition, an
820	alien insurer must also have and maintain in the United States a
821	trust fund for the protection of all its policyholders in the
822	United States under terms deemed by the office to be reasonably
823	adequate, in an amount not less than $5.4 million. Any such
824	surplus as to policyholders or trust fund shall be represented
825	by investments consisting of eligible investments for like funds
826	of like domestic insurers under part II of chapter 625 provided,
827	however, that in the case of an alien insurance company, any
828	such surplus as to policyholders may be represented by
829	investments permitted by the domestic regulator of such alien
830	insurance company if such investments are substantially similar
831	in terms of quality, liquidity, and security to eligible
832	investments for like funds of like domestic insurers under part
833	II of chapter 625. Clean, irrevocable, unconditional, and
834	evergreen letters of credit issued or confirmed by a qualified
835	United States financial institution, as defined in subparagraph
836	2., may be used to fund the trust.;
837	b.2.  For those surplus lines insurers that were eligible
838	on January 1, 1994, and that maintained their eligibility
839	thereafter, the required surplus as to policyholders shall be:
840	(I)a.  On December 31, 1994, and until December 30, 1995,
841	$2.5 million.
842	(II)b.  On December 31, 1995, and until December 30, 1996,
843	$3.5 million.
844	(III)c.  On December 31, 1996, and until December 30, 1997,
845	$4.5 million.
846	(IV)d.  On December 31, 1997, and until December 30, 1998,
847	$5.5 million.
848	(V)e.  On December 31, 1998, and until December 30, 1999,
849	$6.5 million.
850	(VI)f.  On December 31, 1999, and until December 30, 2000,
851	$8 million.
852	(VII)g.  On December 31, 2000, and until December 30, 2001,
853	$9.5 million.
854	(VIII)h.  On December 31, 2001, and until December 30,
855	2002, $11 million.
856	(IX)i.  On December 31, 2002, and until December 30, 2003,
857	$13 million.
858	(X)j.  On December 31, 2003, and thereafter, $15 million.
859	c.3.  The capital and surplus requirements as set forth in
860	sub-subparagraph b. subparagraph 2. do not apply in the case of
861	an insurance exchange created by the laws of individual states,
862	where the exchange maintains capital and surplus pursuant to the
863	requirements of that state, or maintains capital and surplus in
864	an amount not less than $50 million in the aggregate. For an
865	insurance exchange which maintains funds in the amount of at
866	least $12 million for the protection of all insurance exchange
867	policyholders, each individual syndicate shall maintain minimum
868	capital and surplus in an amount not less than $3 million. If
869	the insurance exchange does not maintain funds in the amount of
870	at least $12 million for the protection of all insurance
871	exchange policyholders, each individual syndicate shall meet the
872	minimum capital and surplus requirements set forth in sub-
873	subparagraph b. subparagraph 2.;
874	d.4.  A surplus lines insurer which is a member of an
875	insurance holding company that includes a member which is a
876	Florida domestic insurer as set forth in its holding company
877	registration statement, as set forth in s. 628.801 and rules
878	adopted thereunder, may elect to maintain surplus as to
879	policyholders in an amount equal to the requirements of s.
880	624.408, subject to the requirement that the surplus lines
881	insurer shall at all times be in compliance with the
882	requirements of chapter 625.
883
884	The election shall be submitted to the office and shall be
885	effective upon the office's being satisfied that the
886	requirements of sub-subparagraph d. subparagraph 4. have been
887	met. The initial date of election shall be the date of office
888	approval. The election approval application shall be on a form
889	adopted by commission rule. The office may approve an election
890	form submitted pursuant to sub-subparagraph d. subparagraph 4.
891	only if it was on file with the former Department of Insurance
892	before February 28, 1998.;
893	2.  For purposes of letters of credit under subparagraph
894	1., the term "qualified United States financial institution"
895	means an institution that:
896	a.  Is organized or, in the case of a United States office
897	of a foreign banking organization, is licensed under the laws of
898	the United States or any state.
899	b.  Is regulated, supervised, and examined by authorities
900	of the United States or any state having regulatory authority
901	over banks and trust companies.
902	c.  Has been determined by the office or the Securities
903	Valuation Office of the National Association of Insurance
904	Commissioners to meet such standards of financial condition and
905	standing as are considered necessary and appropriate to regulate
906	the quality of financial institutions whose letters of credit
907	are acceptable to the office.
908	(e)  The insurer must be of good reputation as to the
909	providing of service to its policyholders and the payment of
910	losses and claims.;
911	(f)  The insurer must be eligible, as for authority to
912	transact insurance in this state, under s. 624.404(3).; and
913	(g)  This subsection does not apply as to unauthorized
914	insurers made eligible under s. 626.917 as to wet marine and
915	aviation risks.
916	Section 7.  Paragraph (j) is added to subsection (2) of
917	section 627.062, Florida Statutes, subsection (5) of that
918	section is amended, and subsections (9) and (10) are added to
919	that section, to read:
920	627.062  Rate standards.--
921	(2)  As to all such classes of insurance:
922	(j)  Effective January 1, 2007, notwithstanding any other
923	provision of this section:
924	1.  With respect to any residential property insurance
925	subject to regulation under this section, a rate filing,
926	including, but not limited to, any rate changes, rating factors,
927	territories, classification, discounts, and credits, with
928	respect to any policy form, including endorsements issued with
929	the form, that results in an overall average statewide premium
930	increase or decrease of no more than 5 percent above or below
931	the premium that would result from the insurer's rates then in
932	effect shall not be subject to a determination by the office
933	that the rate is excessive or unfairly discriminatory except as
934	provided in subparagraph 3., or any other provision of law,
935	provided all changes specified in the filing do not result in an
936	overall premium increase of more than 10 percent for any one
937	territory, for reasons related solely to the rate change. As
938	used in this subparagraph, the term "insurer's rates then in
939	effect" includes only rates that have been lawfully in effect
940	under this section or rates that have been determined to be
941	lawful through administrative proceedings or judicial
942	proceedings.
943	2.  An insurer may not make filings under this paragraph
944	with respect to any policy form, including endorsements issued
945	with the form, if the overall premium changes resulting from
946	such filings exceed the amounts specified in this paragraph in
947	any 12-month period. An insurer may proceed under other
948	provisions of this section or other provisions of law if the
949	insurer seeks to exceed the premium or rate limitations of this
950	paragraph.
951	3.  This paragraph does not affect the authority of the
952	office to disapprove a rate as inadequate or to disapprove a
953	filing for the unlawful use of unfairly discriminatory rating
954	factors that are prohibited by the laws of this state. An
955	insurer electing to implement a rate change under this paragraph
956	shall submit a filing to the office at least 30 days prior to
957	the effective date of the rate change. The office shall have 30
958	days after the filing's submission to review the filing and
959	determine if the rate is inadequate or uses unfairly
960	discriminatory rating factors. Absent a finding by the office
961	within such 30-day period that the rate is inadequate or that
962	the insurer has used unfairly discriminatory rating factors, the
963	filing is deemed approved. If the office finds during the 30-day
964	period that the filing will result in inadequate premiums or
965	otherwise endanger the insurer's solvency, the office shall
966	suspend the rate decrease. If the insurer is implementing an
967	overall rate increase, the results of which continue to produce
968	an inadequate rate, such increase shall proceed pending
969	additional action by the office to ensure the adequacy of the
970	rate.
971	4.  This paragraph does not apply to rate filings for any
972	insurance other than residential property insurance.
973
974	The provisions of this subsection shall not apply to workers'
975	compensation and employer's liability insurance and to motor
976	vehicle insurance.
977	(5)  With respect to a rate filing involving coverage of
978	the type for which the insurer is required to pay a
979	reimbursement premium to the Florida Hurricane Catastrophe Fund,
980	the insurer may fully recoup in its property insurance premiums
981	any reimbursement premiums paid to the Florida Hurricane
982	Catastrophe Fund, together with reasonable costs of other
983	reinsurance consistent with prudent business practices and sound
984	actuarial principles, but may not recoup reinsurance costs that
985	duplicate coverage provided by the Florida Hurricane Catastrophe
986	Fund. The burden is on the office to establish that any costs of
987	other reinsurance are in excess of amounts consistent with
988	prudent business practices and sound actuarial principles. An
989	insurer may not recoup more than 1 year of reimbursement premium
990	at a time. Any under-recoupment from the prior year may be added
991	to the following year's reimbursement premium and any over-
992	recoupment shall be subtracted from the following year's
993	reimbursement premium.
994	(9)  Notwithstanding any other provision of this section,
995	any rate filing or applicable portion of the rate filing that
996	includes the peril of wind within the boundary of the area
997	covered by the high-risk account of the Citizens Property
998	Insurance Corporation shall be deemed approved upon submission
999	to the office if the filing or the applicable portion of the
1000	filing requests approval of a rate that is less than the
1001	approved rate for similar risks insured in the high-risk account
1002	of the corporation unless the office determines that such rate
1003	is inadequate or unfairly discriminatory as provided in
1004	subsection (2).
1005	(10)(a)  Beginning January 1, 2007, the office shall
1006	annually provide a report to the President of the Senate, the
1007	Speaker of the House of Representatives, the minority party
1008	leader of each house of the Legislature, and the chairs of the
1009	standing committees of each house of the Legislature having
1010	jurisdiction over insurance issues, specifying the impact of
1011	flexible rate regulation under paragraph (2)(j) on the degree of
1012	competition in insurance markets in this state.
1013	(b)  The report shall include a year-by-year comparison of
1014	the number of companies participating in the market for each
1015	class of insurance and the relative rate levels. The report
1016	shall also specify:
1017	1.  The number of rate filings made under paragraph (2)(j),
1018	the rate levels under those filings, and the market share
1019	affected by those filings.
1020	2.  The number of filings made on a file and use basis, the
1021	rate levels under those filings, and the market share affected
1022	by those filings.
1023	3.  The number of filings made on a use and file basis, the
1024	rate levels under those filings, and the market share affected
1025	by those filings.
1026	4.  Recommendations to promote competition in the insurance
1027	market and further protect insurance consumers.
1028	Section 8.  Paragraph (c) of subsection (3) of section
1029	627.0628, Florida Statutes, is amended to read:
1030	627.0628  Florida Commission on Hurricane Loss Projection
1031	Methodology; public records exemption; public meetings
1032	exemption.--
1033	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1034	(c)  With respect to a rate filing under s. 627.062, an
1035	insurer may employ actuarial methods, principles, standards,
1036	models, or output ranges found by the commission to be accurate
1037	or reliable to determine hurricane loss factors for use in a
1038	rate filing under s. 627.062. Such findings and factors are
1039	admissible and relevant in consideration of a rate filing by the
1040	office or in any arbitration or administrative or judicial
1041	review only if the office and the consumer advocate appointed
1042	pursuant to s. 627.0613 have a reasonable opportunity to review
1043	access to all of the basic assumptions and factors that were
1044	used in developing the actuarial methods, principles, standards,
1045	models, or output ranges. After review of the specific models by
1046	the commission, the office and the consumer advocate may not
1047	pose any questions generated from their respective reviews that
1048	duplicate or compromise the conclusions of the commission
1049	relative to the accuracy or reliability of the models in
1050	producing hurricane loss factors for use in a rate filing under
1051	s. 627.062, and are not precluded from disclosing such
1052	information in a rate proceeding.
1053	Section 9.  Section 627.06281, Florida Statutes, is amended
1054	to read:
1055	627.06281  Public hurricane loss projection model;
1056	reporting of data by insurers.--
1057	(1)  Within 30 days after a written request for loss data
1058	and associated exposure data by the office or a type I center
1059	within the State University System established to study
1060	mitigation, residential property insurers and licensed rating
1061	and advisory organizations that compile residential property
1062	insurance loss data shall provide loss data and associated
1063	exposure data for residential property insurance policies to the
1064	office or to a type I center within the State University System
1065	established to study mitigation, as directed by the office, for
1066	the purposes of developing, maintaining, and updating a public
1067	model for hurricane loss projections. The loss data and
1068	associated exposure data provided shall be in writing.
1069	(2)  The office may not use the public model for hurricane
1070	loss projection referred to in subsection (1) for any purpose
1071	under s. 627.062 or s. 627.351 until the model has been
1072	submitted to the Florida Commission on Hurricane Loss Projection
1073	Methodology for review under s. 627.0628 and the commission has
1074	found the model to be accurate and reliable pursuant to the same
1075	process and standards as the commission uses for the review of
1076	other hurricane loss projection models.
1077	Section 10.  Subsection (2) of section 627.0645, Florida
1078	Statutes, is amended to read:
1079	627.0645  Annual filings.--
1080	(2)(a)  Deviations filed by an insurer to any rating
1081	organization's base rate filing are not subject to this section.
1082	(b)  The office, after receiving a request to be exempted
1083	from the provisions of this section, may, for good cause due to
1084	insignificant numbers of policies in force or insignificant
1085	premium volume, exempt a company, by line of coverage, from
1086	filing rates or rate certification as required by this section.
1087	(c)  The office, after receiving a request to be exempted
1088	from the provisions of this section, shall exempt a company with
1089	less than 500 residential homeowner or mobile homeowner policies
1090	from filing rates or rate certification as required by this
1091	section.
1092	Section 11.  Subsection (6) of section 627.351, Florida
1093	Statutes, is amended to read:
1094	627.351  Insurance risk apportionment plans.--
1095	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1096	(a)1.a.  The Legislature finds that actual and threatened
1097	catastrophic losses to property in this state from hurricanes
1098	have caused insurers to be unwilling or unable to provide
1099	property insurance coverage to the extent sought and needed. It
1100	is in the public interest and a public purpose to assist in
1101	ensuring assuring that homestead property in the state is
1102	insured so as to facilitate the remediation, reconstruction, and
1103	replacement of damaged or destroyed property in order to reduce
1104	or avoid the negative effects otherwise resulting to the public
1105	health, safety, and welfare; to the economy of the state; and to
1106	the revenues of the state and local governments needed to
1107	provide for the public welfare. It is necessary, therefore, to
1108	provide property insurance to applicants who are in good faith
1109	entitled to procure insurance through the voluntary market but
1110	are unable to do so. The Legislature intends by this subsection
1111	that property insurance be provided and that it continues, as
1112	long as necessary, through an entity organized to achieve
1113	efficiencies and economies, while providing service to
1114	policyholders, applicants, and agents that is no less than the
1115	quality generally provided in the voluntary market, all toward
1116	the achievement of the foregoing public purposes. Because it is
1117	essential for the corporation to have the maximum financial
1118	resources to pay claims following a catastrophic hurricane, it
1119	is the intent of the Legislature that the income of the
1120	corporation be exempt from federal income taxation and that
1121	interest on the debt obligations issued by the corporation be
1122	exempt from federal income taxation.
1123	b.  The Legislature finds and declares that:
1124	(I)  The commitment of the state, as expressed in sub-
1125	subparagraph a., to providing a means of ensuring the
1126	availability of property insurance through a residual market
1127	mechanism is hereby reaffirmed.
1128	(II)  Despite legislative efforts to ensure that the
1129	residual market for property insurance is self-supporting to the
1130	greatest reasonable extent, residual market policyholders are to
1131	some degree subsidized by the general public through assessments
1132	on owners of property insured in the voluntary market and their
1133	insurers and through the potential use of general revenues of
1134	the state to eliminate or reduce residual market deficits.
1135	(III)  The degree of such subsidy is a matter of public
1136	policy. It is the intent of the Legislature to better control
1137	the subsidy through at least the following means:
1138	(A)  Restructuring the residual market mechanism to provide
1139	separate treatment of homestead and nonhomestead properties,
1140	with the intent of continuing to provide an insurance program
1141	with limited subsidies for homestead properties while providing
1142	a nonsubsidized insurance program for nonhomestead properties.
1143	(B)  Redefining the concept of rate adequacy in the
1144	subsidized residual market with the intent of ensuring a rate
1145	structure that will enable the subsidized residual market to be
1146	self-supporting except in the event of hurricane losses of a
1147	legislatively specified magnitude. It is the intent of the
1148	Legislature that the funding of the subsidized residual market
1149	be structured to be self-supporting up to the point of its 100-
1150	year probable maximum loss and that the funding be structured to
1151	make reliance on assessments or other sources of public funding
1152	necessary only in the event of a 100-year probable maximum loss
1153	or larger loss.
1154	2.  The Residential Property and Casualty Joint
1155	Underwriting Association originally created by this statute
1156	shall be known, as of July 1, 2002, as the Citizens Property
1157	Insurance Corporation. The corporation shall provide insurance
1158	for residential and commercial property, for applicants who are
1159	in good faith entitled, but are unable, to procure insurance
1160	through the voluntary market. The corporation shall operate
1161	pursuant to a plan of operation approved by order of the
1162	commission office. The plan is subject to continuous review by
1163	the commission office. The commission office may, by order,
1164	withdraw approval of all or part of a plan if the commission
1165	office determines that conditions have changed since approval
1166	was granted and that the purposes of the plan require changes in
1167	the plan. The corporation shall continue to operate pursuant to
1168	the plan of operation approved by the commission until October
1169	1, 2006. For the purposes of this subsection, residential
1170	coverage includes both personal lines residential coverage,
1171	which consists of the type of coverage provided by homeowner's,
1172	mobile home owner's, dwelling, tenant's, condominium unit
1173	owner's, and similar policies, and commercial lines residential
1174	coverage, which consists of the type of coverage provided by
1175	condominium association, apartment building, and similar
1176	policies.
1177	3.  It is the intent of the Legislature that policyholders,
1178	applicants, and agents of the corporation receive service and
1179	treatment of the highest possible level but never less than that
1180	generally provided in the voluntary market. It also is intended
1181	that the corporation be held to service standards no less than
1182	those applied to insurers in the voluntary market by the office
1183	with respect to responsiveness, timeliness, customer courtesy,
1184	and overall dealings with policyholders, applicants, or agents
1185	of the corporation.
1186	(b)1.  All insurers authorized to write one or more subject
1187	lines of business in this state are subject to assessment by the
1188	corporation and, for the purposes of this subsection, are
1189	referred to collectively as "assessable insurers." Insurers
1190	writing one or more subject lines of business in this state
1191	pursuant to part VIII of chapter 626 are not assessable
1192	insurers, but insureds who procure one or more subject lines of
1193	business in this state pursuant to part VIII of chapter 626 are
1194	subject to assessment by the corporation and are referred to
1195	collectively as "assessable insureds." An authorized insurer's
1196	assessment liability shall begin on the first day of the
1197	calendar year following the year in which the insurer was issued
1198	a certificate of authority to transact insurance for subject
1199	lines of business in this state and shall terminate 1 year after
1200	the end of the first calendar year during which the insurer no
1201	longer holds a certificate of authority to transact insurance
1202	for subject lines of business in this state.
1203	2.a.  All revenues, assets, liabilities, losses, and
1204	expenses of the corporation shall be divided into four three
1205	separate accounts as follows:
1206	(I)  Three separate homestead accounts that may provide
1207	coverage only for homestead properties. The term "homestead
1208	property" means a residential property that has been granted a
1209	homestead exemption under chapter 196. The term also includes a
1210	property that is qualified for such exemption but has not
1211	applied for the exemption as of the date of issuance of the
1212	policy, provided the policyholder obtains the exemption within 1
1213	year after initial issuance of the policy. The term also
1214	includes an owner-occupied mobile or manufactured home as
1215	defined in s. 320.01 permanently affixed to real property
1216	regardless of whether the owner of the mobile or manufactured
1217	home is also the owner of the land on which the mobile or
1218	manufactured home is permanently affixed. However, the term does
1219	not include a mobile home that is being held for display by a
1220	licensed mobile home dealer or a licensed mobile home
1221	manufacturer and is not owner-occupied. For the purposes of this
1222	sub-sub-subparagraph, the term "homestead property" also
1223	includes property covered by tenant's insurance; commercial
1224	lines residential policies; any county, district, or municipal
1225	hospital, or hospital licensed by any not-for-profit corporation
1226	that is qualified under s. 501(c)(3) of the United State
1227	Internal Revenue Code; and continuing care retirement
1228	communities certified under chapter 651 that receives an ad
1229	valorem tax exemption under chapter 196. The accounts providing
1230	coverage only for homestead properties are:
1231	(A)(I)  A personal lines account for personal residential
1232	policies issued by the corporation or issued by the Residential
1233	Property and Casualty Joint Underwriting Association and renewed
1234	by the corporation that provide comprehensive, multiperil
1235	coverage on risks that are not located in areas eligible for
1236	coverage in the Florida Windstorm Underwriting Association as
1237	those areas were defined on January 1, 2002, and for such
1238	policies that do not provide coverage for the peril of wind on
1239	risks that are located in such areas;
1240	(B)(II)  A commercial lines account for commercial
1241	residential policies issued by the corporation or issued by the
1242	Residential Property and Casualty Joint Underwriting Association
1243	and renewed by the corporation that provide coverage for basic
1244	property perils on risks that are not located in areas eligible
1245	for coverage in the Florida Windstorm Underwriting Association
1246	as those areas were defined on January 1, 2002, and for such
1247	policies that do not provide coverage for the peril of wind on
1248	risks that are located in such areas; and
1249	(C)(III)  A high-risk account for personal residential
1250	policies and commercial residential and commercial
1251	nonresidential property policies issued by the corporation or
1252	transferred to the corporation that provide coverage for the
1253	peril of wind on risks that are located in areas eligible for
1254	coverage in the Florida Windstorm Underwriting Association as
1255	those areas were defined on January 1, 2002. The high-risk
1256	account must also include quota share primary insurance under
1257	subparagraph (c)2. The area eligible for coverage under the
1258	high-risk account also includes the area within Port Canaveral,
1259	which is bordered on the south by the City of Cape Canaveral,
1260	bordered on the west by the Banana River, and bordered on the
1261	north by Federal Government property. The office may remove
1262	territory from the area eligible for wind-only and quota share
1263	coverage if, after a public hearing, the office finds that
1264	authorized insurers in the voluntary market are willing and able
1265	to write sufficient amounts of personal and commercial
1266	residential coverage for all perils in the territory, including
1267	coverage for the peril of wind, such that risks covered by wind-
1268	only policies in the removed territory could be issued a policy
1269	by the corporation in either the personal lines or commercial
1270	lines account without a significant increase in the
1271	corporation's probable maximum loss in such account. Removal of
1272	territory from the area eligible for wind-only or quota share
1273	coverage does not alter the assignment of wind coverage written
1274	in such areas to the high-risk account.
1275	(II)(A)  A separate nonhomestead account for commercial
1276	nonresidential property policies and for all properties that
1277	otherwise meet all of the criteria for eligibility for coverage
1278	within one of the three homestead accounts described in sub-sub-
1279	subparagraph (I) but that do not meet the definition of
1280	homestead property specified in sub-sub-subparagraph (I). The
1281	nonhomestead account shall provide the same types of coverage as
1282	are provided by the three homestead accounts, including wind-
1283	only coverage in the high-risk account area. In order to be
1284	eligible for coverage in the nonhomestead account, at the
1285	initial issuance of the policy and at renewal the property owner
1286	shall provide the corporation with a sworn affidavit stating
1287	that the property has been rejected for coverage by at least
1288	three authorized insurers and at least three surplus lines
1289	insurers.
1290	(B)  An authorized insurer or approved insurer as defined
1291	in s. 626.914(2) may provide coverage to a nonhomestead property
1292	owner on an individual risk rate basis. Rates and forms of an
1293	authorized insurer for nonhomestead properties are not subject
1294	to ss. 627.062 and 627.0629, except s. 627.0629(2)(b). Such
1295	rates and forms are subject to all other applicable provisions
1296	of this code and rules adopted under this code. During the
1297	course of an insurer's market conduct examination, the office
1298	may review the rate for any nonhomestead property to determine
1299	if such rate is inadequate or unfairly discriminatory. Rates on
1300	nonhomestead property may be found inadequate by the office if
1301	they are clearly insufficient, together with the investment
1302	income attributable to the insurer, to sustain projected losses
1303	and expenses in the class of business to which such rates apply.
1304	Rates on nonhomestead property may also be found inadequate as
1305	to the premium charged to a risk or group of risks if discounts
1306	or credits are allowed that exceed a reasonable reflection of
1307	expense savings and reasonably expected loss experience from the
1308	risk or group of risks. Rates on nonhomestead property may be
1309	found to be unfairly discriminatory as to a risk or group of
1310	risks by the office if the application of premium discounts,
1311	credits, or surcharges among such risks does not bear a
1312	reasonable relationship to the expected loss and expense
1313	experience among the various risks. A rating plan, including
1314	discounts, credits, or surcharges on nonhomestead property, may
1315	also be found to be unfairly discriminatory if the plan fails to
1316	clearly and equitably reflect consideration of the
1317	policyholder's participation in a risk management program
1318	adjusted pursuant to s. 627.0625. The office may order an
1319	insurer to discontinue using a rate for new policies or upon
1320	renewal of a policy if the office finds the rate to be
1321	inadequate or unfairly discriminatory. Insurers shall maintain
1322	records and documentation relating to rates and forms subject to
1323	this sub-sub-sub-subparagraph for a period of at least 5 years
1324	after the effective date of the policy.
1325	b.  The three separate homestead accounts must be
1326	maintained as long as financing obligations entered into by the
1327	Florida Windstorm Underwriting Association or Residential
1328	Property and Casualty Joint Underwriting Association are
1329	outstanding, in accordance with the terms of the corresponding
1330	financing documents. When the financing obligations are no
1331	longer outstanding, in accordance with the terms of the
1332	corresponding financing documents, the corporation may use a
1333	single homestead account for all revenues, assets, liabilities,
1334	losses, and expenses of the corporation. All revenues, assets,
1335	liabilities, losses, and expenses attributable to the
1336	nonhomestead account shall be maintained separately.
1337	c.  Creditors of the Residential Property and Casualty
1338	Joint Underwriting Association shall have a claim against, and
1339	recourse to, the accounts referred to in sub-sub-sub-
1340	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II) and
1341	shall have no claim against, or recourse to, the account
1342	referred to in sub-sub-sub-subparagraph sub-sub-subparagraph
1343	a.(I)(C)(III). Creditors of the Florida Windstorm Underwriting
1344	Association shall have a claim against, and recourse to, the
1345	account referred to in sub-sub-sub-subparagraph sub-sub-
1346	subparagraph a.(I)(C)(III) and shall have no claim against, or
1347	recourse to, the accounts referred to in sub-sub-sub-
1348	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II).
1349	d.  Revenues, assets, liabilities, losses, and expenses not
1350	attributable to particular accounts shall be prorated among the
1351	accounts.
1352	e.  The Legislature finds that the revenues of the
1353	corporation are revenues that are necessary to meet the
1354	requirements set forth in documents authorizing the issuance of
1355	bonds under this subsection.
1356	f.  No part of the income of the corporation may inure to
1357	the benefit of any private person.
1358	3.  With respect to a deficit in any of the homestead
1359	accounts an account:
1360	a.  When the deficit incurred in a particular calendar year
1361	is not greater than 10 percent of the aggregate statewide direct
1362	written premium for the subject lines of business for the prior
1363	calendar year, the entire deficit shall be recovered through
1364	regular assessments of assessable insurers under paragraph (g)
1365	and assessable insureds.
1366	b.  When the deficit incurred in a particular calendar year
1367	exceeds 10 percent of the aggregate statewide direct written
1368	premium for the subject lines of business for the prior calendar
1369	year, the corporation shall levy regular assessments on
1370	assessable insurers under paragraph (g) and on assessable
1371	insureds in an amount equal to the greater of 10 percent of the
1372	deficit or 10 percent of the aggregate statewide direct written
1373	premium for the subject lines of business for the prior calendar
1374	year. Any remaining deficit shall be recovered through emergency
1375	assessments under sub-subparagraph d.
1376	c.  Each assessable insurer's share of the amount being
1377	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1378	be in the proportion that the assessable insurer's direct
1379	written premium for the subject lines of business for the year
1380	preceding the year in which the deficit is incurred assessment
1381	bears to the aggregate statewide direct written premium for the
1382	subject lines of business for that year. The assessment
1383	percentage applicable to each assessable insured is the ratio of
1384	the amount being assessed under sub-subparagraph a. or sub-
1385	subparagraph b. to the aggregate statewide direct written
1386	premium for the subject lines of business for the prior year.
1387	Assessments levied by the corporation on assessable insurers
1388	under sub-subparagraphs a. and b. shall be paid as required by
1389	the corporation's plan of operation and paragraph (g). Any
1390	assessment levied by the corporation on limited apportionment
1391	companies may be paid to the corporation by such companies on a
1392	monthly basis as the assessment are collected from insureds for
1393	a time period not to exceed 18 months. Notwithstanding any other
1394	provision in this subsection, the aggregate amount of a regular
1395	assessment levied in connection with a deficit incurred in a
1396	particular calendar year shall be reduced by the aggregate
1397	amount of the Citizens Property Insurance Corporation
1398	policyholder surcharge imposed under subparagraph (c)10.
1399	Assessments levied by the corporation on assessable insureds
1400	under sub-subparagraphs a. and b. shall be collected by the
1401	surplus lines agent at the time the surplus lines agent collects
1402	the surplus lines tax required by s. 626.932 and shall be paid
1403	to the Florida Surplus Lines Service Office at the time the
1404	surplus lines agent pays the surplus lines tax to the Florida
1405	Surplus Lines Service Office. Upon receipt of regular
1406	assessments from surplus lines agents, the Florida Surplus Lines
1407	Service Office shall transfer the assessments directly to the
1408	corporation as determined by the corporation.
1409	d.  Upon a determination by the board of governors that a
1410	deficit in an account exceeds the amount that will be recovered
1411	through regular assessments under sub-subparagraph a. or sub-
1412	subparagraph b., the board shall levy, after verification by the
1413	office, emergency assessments, for as many years as necessary to
1414	cover the deficits, to be collected by assessable insurers and
1415	the corporation and collected from assessable insureds upon
1416	issuance or renewal of policies for subject lines of business,
1417	excluding National Flood Insurance policies. The amount of the
1418	emergency assessment collected in a particular year shall be a
1419	uniform percentage of that year's direct written premium for
1420	subject lines of business and all accounts of the corporation,
1421	excluding National Flood Insurance Program policy premiums, as
1422	annually determined by the board and verified by the office. The
1423	office shall verify the arithmetic calculations involved in the
1424	board's determination within 30 days after receipt of the
1425	information on which the determination was based.
1426	Notwithstanding any other provision of law, the corporation and
1427	each assessable insurer that writes subject lines of business
1428	shall collect emergency assessments from its policyholders
1429	without such obligation being affected by any credit,
1430	limitation, exemption, or deferment. Emergency assessments
1431	levied by the corporation on assessable insureds shall be
1432	collected by the surplus lines agent at the time the surplus
1433	lines agent collects the surplus lines tax required by s.
1434	626.932 and shall be paid to the Florida Surplus Lines Service
1435	Office at the time the surplus lines agent pays the surplus
1436	lines tax to the Florida Surplus Lines Service Office. The
1437	emergency assessments so collected shall be transferred directly
1438	to the corporation on a periodic basis as determined by the
1439	corporation and shall be held by the corporation solely in the
1440	applicable account. The aggregate amount of emergency
1441	assessments levied for an account under this sub-subparagraph in
1442	any calendar year may not exceed the greater of 10 percent of
1443	the amount needed to cover the original deficit, plus interest,
1444	fees, commissions, required reserves, and other costs associated
1445	with financing of the original deficit, or 10 percent of the
1446	aggregate statewide direct written premium for subject lines of
1447	business and for all accounts of the corporation for the prior
1448	year, plus interest, fees, commissions, required reserves, and
1449	other costs associated with financing the original deficit.
1450	e.  The corporation may pledge the proceeds of assessments,
1451	projected recoveries from the Florida Hurricane Catastrophe
1452	Fund, other insurance and reinsurance recoverables, Citizens
1453	policyholder market equalization surcharges and other
1454	surcharges, and other funds available to the corporation as the
1455	source of revenue for and to secure bonds issued under paragraph
1456	(g), bonds or other indebtedness issued under subparagraph
1457	(c)3., or lines of credit or other financing mechanisms issued
1458	or created under this subsection, or to retire any other debt
1459	incurred as a result of deficits or events giving rise to
1460	deficits, or in any other way that the board determines will
1461	efficiently recover such deficits. The purpose of the lines of
1462	credit or other financing mechanisms is to provide additional
1463	resources to assist the corporation in covering claims and
1464	expenses attributable to a catastrophe. As used in this
1465	subsection, the term "assessments" includes regular assessments
1466	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1467	(g)1. and emergency assessments under sub-subparagraph d.
1468	Emergency assessments collected under sub-subparagraph d. are
1469	not part of an insurer's rates, are not premium, and are not
1470	subject to premium tax, fees, or commissions; however, failure
1471	to pay the emergency assessment shall be treated as failure to
1472	pay premium. The emergency assessments under sub-subparagraph d.
1473	shall continue as long as any bonds issued or other indebtedness
1474	incurred with respect to a deficit for which the assessment was
1475	imposed remain outstanding, unless adequate provision has been
1476	made for the payment of such bonds or other indebtedness
1477	pursuant to the documents governing such bonds or other
1478	indebtedness.
1479	f.  As used in this subsection, the term "subject lines of
1480	business" means insurance written by assessable insurers or
1481	procured by assessable insureds on real or personal property, as
1482	defined in s. 624.604, including insurance for fire, industrial
1483	fire, allied lines, farmowners multiperil, homeowners
1484	multiperil, commercial multiperil, and mobile homes, and
1485	including liability coverage on all such insurance, but
1486	excluding inland marine as defined in s. 624.607(3) and
1487	excluding vehicle insurance as defined in s. 624.605(1) other
1488	than insurance on mobile homes used as permanent dwellings.
1489	g.  The Florida Surplus Lines Service Office shall
1490	determine annually the aggregate statewide written premium in
1491	subject lines of business procured by assessable insureds and
1492	shall report that information to the corporation in a form and
1493	at a time the corporation specifies to ensure that the
1494	corporation can meet the requirements of this subsection and the
1495	corporation's financing obligations.
1496	h.  The Florida Surplus Lines Service Office shall verify
1497	the proper application by surplus lines agents of assessment
1498	percentages for regular assessments and emergency assessments
1499	levied under this subparagraph on assessable insureds and shall
1500	assist the corporation in ensuring the accurate, timely
1501	collection and payment of assessments by surplus lines agents as
1502	required by the corporation.
1503	4.  With respect to a deficit in the nonhomestead account
1504	or to any cash flow shortfall that the board determines will
1505	create an inability for the nonhomestead account to pay claims
1506	when due:
1507	a.  The board shall levy an immediate assessment against
1508	the premium of each nonhomestead account policyholder, expressed
1509	as a uniform percentage of the premium for the policy then in
1510	effect. The maximum amount of such assessment is 100 percent of
1511	such premium.
1512	b.  If the assessment under sub-subparagraph a. is
1513	insufficient to enable the account to pay claims and eliminate
1514	the deficit in the account, the board may levy an additional
1515	assessment to be collected at the time of any issuance or
1516	renewal of a nonhomestead account policy during the 1-year
1517	period following the levy of the assessment under sub-
1518	subparagraph a., expressed as a uniform percentage of the
1519	premium for the policy for the forthcoming policy period. The
1520	maximum amount of such assessment is 100 percent of such
1521	premium.
1522	c.  If the assessments under sub-subparagraphs a. and b.
1523	are insufficient to enable the account to pay claims and
1524	eliminate the deficit in the account, the board may make a loan
1525	from any of the homestead accounts to the nonhomestead account,
1526	subject to approval by the office and provided that such loan
1527	does not impair the financial status of any of the homestead
1528	accounts.
1529	5.  A policyholder in a nonhomestead account who has not
1530	paid a deficit assessment levied by the corporation shall be
1531	ineligible for coverage by a surplus lines insurer or authorized
1532	insurer.
1533	(c)  The plan of operation of the corporation:
1534	1.  Must provide for adoption of residential property and
1535	casualty insurance policy forms and commercial residential and
1536	nonresidential property insurance forms, which forms must be
1537	approved by the office prior to use. The corporation shall adopt
1538	the following policy forms:
1539	a.  Standard personal lines policy forms that are
1540	comprehensive multiperil policies providing full coverage of a
1541	residential property equivalent to the coverage provided in the
1542	private insurance market under an HO-3, HO-4, or HO-6 policy.
1543	b.  Basic personal lines policy forms that are policies
1544	similar to an HO-8 policy or a dwelling fire policy that provide
1545	coverage meeting the requirements of the secondary mortgage
1546	market, but which coverage is more limited than the coverage
1547	under a standard policy.
1548	c.  Commercial lines residential policy forms that are
1549	generally similar to the basic perils of full coverage
1550	obtainable for commercial residential structures in the admitted
1551	voluntary market.
1552	d.  Personal lines and commercial lines residential
1553	property insurance forms that cover the peril of wind only. The
1554	forms are applicable only to residential properties located in
1555	areas eligible for coverage under the high-risk account referred
1556	to in sub-subparagraph (b)2.a.
1557	e.  Commercial lines nonresidential property insurance
1558	forms that cover the peril of wind only. The forms are
1559	applicable only to nonresidential properties located in areas
1560	eligible for coverage under the high-risk account referred to in
1561	sub-subparagraph (b)2.a.
1562	f.  The corporation may adopt variations of the policy
1563	forms listed in sub-subparagraphs a.-e. that contain more
1564	restrictive coverage.
1565	2.a.  Must provide that the corporation adopt a program in
1566	which the corporation and authorized insurers enter into quota
1567	share primary insurance agreements for hurricane coverage, as
1568	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1569	property insurance forms for eligible risks which cover the
1570	peril of wind only. As used in this subsection, the term:
1571	(I)  "Quota share primary insurance" means an arrangement
1572	in which the primary hurricane coverage of an eligible risk is
1573	provided in specified percentages by the corporation and an
1574	authorized insurer. The corporation and authorized insurer are
1575	each solely responsible for a specified percentage of hurricane
1576	coverage of an eligible risk as set forth in a quota share
1577	primary insurance agreement between the corporation and an
1578	authorized insurer and the insurance contract. The
1579	responsibility of the corporation or authorized insurer to pay
1580	its specified percentage of hurricane losses of an eligible
1581	risk, as set forth in the quota share primary insurance
1582	agreement, may not be altered by the inability of the other
1583	party to the agreement to pay its specified percentage of
1584	hurricane losses. Eligible risks that are provided hurricane
1585	coverage through a quota share primary insurance arrangement
1586	must be provided policy forms that set forth the obligations of
1587	the corporation and authorized insurer under the arrangement,
1588	clearly specify the percentages of quota share primary insurance
1589	provided by the corporation and authorized insurer, and
1590	conspicuously and clearly state that neither the authorized
1591	insurer nor the corporation may be held responsible beyond its
1592	specified percentage of coverage of hurricane losses.
1593	(II)  "Eligible risks" means personal lines residential and
1594	commercial lines residential risks that meet the underwriting
1595	criteria of the corporation and are located in areas that were
1596	eligible for coverage by the Florida Windstorm Underwriting
1597	Association on January 1, 2002.
1598	b.  The corporation may enter into quota share primary
1599	insurance agreements with authorized insurers at corporation
1600	coverage levels of 90 percent and 50 percent.
1601	c.  If the corporation determines that additional coverage
1602	levels are necessary to maximize participation in quota share
1603	primary insurance agreements by authorized insurers, the
1604	corporation may establish additional coverage levels. However,
1605	the corporation's quota share primary insurance coverage level
1606	may not exceed 90 percent.
1607	d.  Any quota share primary insurance agreement entered
1608	into between an authorized insurer and the corporation must
1609	provide for a uniform specified percentage of coverage of
1610	hurricane losses, by county or territory as set forth by the
1611	corporation board, for all eligible risks of the authorized
1612	insurer covered under the quota share primary insurance
1613	agreement.
1614	e.  Any quota share primary insurance agreement entered
1615	into between an authorized insurer and the corporation is
1616	subject to review and approval by the office. However, such
1617	agreement shall be authorized only as to insurance contracts
1618	entered into between an authorized insurer and an insured who is
1619	already insured by the corporation for wind coverage.
1620	f.  For all eligible risks covered under quota share
1621	primary insurance agreements, the exposure and coverage levels
1622	for both the corporation and authorized insurers shall be
1623	reported by the corporation to the Florida Hurricane Catastrophe
1624	Fund. For all policies of eligible risks covered under quota
1625	share primary insurance agreements, the corporation and the
1626	authorized insurer shall maintain complete and accurate records
1627	for the purpose of exposure and loss reimbursement audits as
1628	required by Florida Hurricane Catastrophe Fund rules. The
1629	corporation and the authorized insurer shall each maintain
1630	duplicate copies of policy declaration pages and supporting
1631	claims documents.
1632	g.  The corporation board shall establish in its plan of
1633	operation standards for quota share agreements which ensure that
1634	there is no discriminatory application among insurers as to the
1635	terms of quota share agreements, pricing of quota share
1636	agreements, incentive provisions if any, and consideration paid
1637	for servicing policies or adjusting claims.
1638	h.  The quota share primary insurance agreement between the
1639	corporation and an authorized insurer must set forth the
1640	specific terms under which coverage is provided, including, but
1641	not limited to, the sale and servicing of policies issued under
1642	the agreement by the insurance agent of the authorized insurer
1643	producing the business, the reporting of information concerning
1644	eligible risks, the payment of premium to the corporation, and
1645	arrangements for the adjustment and payment of hurricane claims
1646	incurred on eligible risks by the claims adjuster and personnel
1647	of the authorized insurer. Entering into a quota sharing
1648	insurance agreement between the corporation and an authorized
1649	insurer shall be voluntary and at the discretion of the
1650	authorized insurer.
1651	3.  May provide that the corporation may employ or
1652	otherwise contract with individuals or other entities to provide
1653	administrative or professional services that may be appropriate
1654	to effectuate the plan. The corporation shall have the power to
1655	borrow funds, by issuing bonds or by incurring other
1656	indebtedness, and shall have other powers reasonably necessary
1657	to effectuate the requirements of this subsection, including,
1658	without limitation, the power to issue bonds and incur other
1659	indebtedness in order to refinance outstanding bonds or other
1660	indebtedness. The corporation may, but is not required to, seek
1661	judicial validation of its bonds or other indebtedness under
1662	chapter 75. The corporation may issue bonds or incur other
1663	indebtedness, or have bonds issued on its behalf by a unit of
1664	local government pursuant to subparagraph (g)2., in the absence
1665	of a hurricane or other weather-related event, upon a
1666	determination by the corporation, subject to approval by the
1667	office, that such action would enable it to efficiently meet the
1668	financial obligations of the corporation and that such
1669	financings are reasonably necessary to effectuate the
1670	requirements of this subsection. The corporation is authorized
1671	to take all actions needed to facilitate tax-free status for any
1672	such bonds or indebtedness, including formation of trusts or
1673	other affiliated entities. The corporation shall have the
1674	authority to pledge assessments, projected recoveries from the
1675	Florida Hurricane Catastrophe Fund, other reinsurance
1676	recoverables, market equalization and other surcharges, and
1677	other funds available to the corporation as security for bonds
1678	or other indebtedness. In recognition of s. 10, Art. I of the
1679	State Constitution, prohibiting the impairment of obligations of
1680	contracts, it is the intent of the Legislature that no action be
1681	taken whose purpose is to impair any bond indenture or financing
1682	agreement or any revenue source committed by contract to such
1683	bond or other indebtedness.
1684	4.a.  Must require that the corporation operate subject to
1685	the supervision and approval of a board of governors consisting
1686	of 8 individuals who are residents of this state, from different
1687	geographical areas of this state. The Governor, the Chief
1688	Financial Officer, the President of the Senate, and the Speaker
1689	of the House of Representatives shall each appoint two members
1690	of the board, effective August 1, 2005. At least one of the two
1691	members appointed by each appointing officer must have
1692	demonstrated expertise in insurance. The Chief Financial Officer
1693	shall designate one of the appointees as chair. All board
1694	members serve at the pleasure of the appointing officer. All
1695	board members, including the chair, must be appointed to serve
1696	for 3-year terms beginning annually on a date designated by the
1697	plan. Any board vacancy shall be filled for the unexpired term
1698	by the appointing officer. The Chief Financial Officer shall
1699	appoint a technical advisory group to provide information and
1700	advice to the board of governors in connection with the board's
1701	duties under this subsection. The executive director and senior
1702	managers of the corporation shall be engaged by the board, as
1703	recommended by the Chief Financial Officer, and serve at the
1704	pleasure of the board. The executive director is responsible for
1705	employing other staff as the corporation may require, subject to
1706	review and concurrence by the board and the Chief Financial
1707	Officer.
1708	b.  The board shall create a Market Accountability Advisory
1709	Committee to assist the corporation in developing awareness of
1710	its rates and its customer and agent service levels in
1711	relationship to the voluntary market insurers writing similar
1712	coverage. The members of the advisory committee shall consist of
1713	the following 11 persons, one of whom must be elected chair by
1714	the members of the committee: four representatives, one
1715	appointed by the Florida Association of Insurance Agents, one by
1716	the Florida Association of Insurance and Financial Advisors, one
1717	by the Professional Insurance Agents of Florida, and one by the
1718	Latin American Association of Insurance Agencies; three
1719	representatives appointed by the insurers with the three highest
1720	voluntary market share of residential property insurance
1721	business in the state; one representative from the Office of
1722	Insurance Regulation; one consumer appointed by the board who is
1723	insured by the corporation at the time of appointment to the
1724	committee; one representative appointed by the Florida
1725	Association of Realtors; and one representative appointed by the
1726	Florida Bankers Association. All members must serve for 3-year
1727	terms and may serve for consecutive terms. The committee shall
1728	report to the corporation at each board meeting on insurance
1729	market issues which may include rates and rate competition with
1730	the voluntary market; service, including policy issuance, claims
1731	processing, and general responsiveness to policyholders,
1732	applicants, and agents; and matters relating to depopulation.
1733	5.  Must provide a procedure for determining the
1734	eligibility of a risk for coverage, as follows:
1735	a.  Subject to the provisions of s. 627.3517, with respect
1736	to personal lines residential risks, if the risk is offered
1737	coverage from an authorized insurer at the insurer's approved
1738	rate under either a standard policy including wind coverage or,
1739	if consistent with the insurer's underwriting rules as filed
1740	with the office, a basic policy including wind coverage, the
1741	risk is not eligible for any policy issued by the corporation.
1742	If the risk is not able to obtain any such offer, the risk is
1743	eligible for either a standard policy including wind coverage or
1744	a basic policy including wind coverage issued by the
1745	corporation; however, if the risk could not be insured under a
1746	standard policy including wind coverage regardless of market
1747	conditions, the risk shall be eligible for a basic policy
1748	including wind coverage unless rejected under subparagraph 8.
1749	The corporation shall determine the type of policy to be
1750	provided on the basis of objective standards specified in the
1751	underwriting manual and based on generally accepted underwriting
1752	practices.
1753	(I)  If the risk accepts an offer of coverage through the
1754	market assistance plan or an offer of coverage through a
1755	mechanism established by the corporation before a policy is
1756	issued to the risk by the corporation or during the first 30
1757	days of coverage by the corporation, and the producing agent who
1758	submitted the application to the plan or to the corporation is
1759	not currently appointed by the insurer, the insurer shall:
1760	(A)  Pay to the producing agent of record of the policy,
1761	for the first year, an amount that is the greater of the
1762	insurer's usual and customary commission for the type of policy
1763	written or a fee equal to the usual and customary commission of
1764	the corporation; or
1765	(B)  Offer to allow the producing agent of record of the
1766	policy to continue servicing the policy for a period of not less
1767	than 1 year and offer to pay the agent the greater of the
1768	insurer's or the corporation's usual and customary commission
1769	for the type of policy written.
1770
1771	If the producing agent is unwilling or unable to accept
1772	appointment, the new insurer shall pay the agent in accordance
1773	with sub-sub-sub-subparagraph (A).
1774	(II)  When the corporation enters into a contractual
1775	agreement for a take-out plan, the producing agent of record of
1776	the corporation policy is entitled to retain any unearned
1777	commission on the policy, and the insurer shall:
1778	(A)  Pay to the producing agent of record of the
1779	corporation policy, for the first year, an amount that is the
1780	greater of the insurer's usual and customary commission for the
1781	type of policy written or a fee equal to the usual and customary
1782	commission of the corporation; or
1783	(B)  Offer to allow the producing agent of record of the
1784	corporation policy to continue servicing the policy for a period
1785	of not less than 1 year and offer to pay the agent the greater
1786	of the insurer's or the corporation's usual and customary
1787	commission for the type of policy written.
1788
1789	If the producing agent is unwilling or unable to accept
1790	appointment, the new insurer shall pay the agent in accordance
1791	with sub-sub-sub-subparagraph (A).
1792	b.  With respect to commercial lines residential risks, if
1793	the risk is offered coverage under a policy including wind
1794	coverage from an authorized insurer at its approved rate, the
1795	risk is not eligible for any policy issued by the corporation.
1796	If the risk is not able to obtain any such offer, the risk is
1797	eligible for a policy including wind coverage issued by the
1798	corporation.
1799	(I)  If the risk accepts an offer of coverage through the
1800	market assistance plan or an offer of coverage through a
1801	mechanism established by the corporation before a policy is
1802	issued to the risk by the corporation or during the first 30
1803	days of coverage by the corporation, and the producing agent who
1804	submitted the application to the plan or the corporation is not
1805	currently appointed by the insurer, the insurer shall:
1806	(A)  Pay to the producing agent of record of the policy,
1807	for the first year, an amount that is the greater of the
1808	insurer's usual and customary commission for the type of policy
1809	written or a fee equal to the usual and customary commission of
1810	the corporation; or
1811	(B)  Offer to allow the producing agent of record of the
1812	policy to continue servicing the policy for a period of not less
1813	than 1 year and offer to pay the agent the greater of the
1814	insurer's or the corporation's usual and customary commission
1815	for the type of policy written.
1816
1817	If the producing agent is unwilling or unable to accept
1818	appointment, the new insurer shall pay the agent in accordance
1819	with sub-sub-sub-subparagraph (A).
1820	(II)  When the corporation enters into a contractual
1821	agreement for a take-out plan, the producing agent of record of
1822	the corporation policy is entitled to retain any unearned
1823	commission on the policy, and the insurer shall:
1824	(A)  Pay to the producing agent of record of the
1825	corporation policy, for the first year, an amount that is the
1826	greater of the insurer's usual and customary commission for the
1827	type of policy written or a fee equal to the usual and customary
1828	commission of the corporation; or
1829	(B)  Offer to allow the producing agent of record of the
1830	corporation policy to continue servicing the policy for a period
1831	of not less than 1 year and offer to pay the agent the greater
1832	of the insurer's or the corporation's usual and customary
1833	commission for the type of policy written.
1834
1835	If the producing agent is unwilling or unable to accept
1836	appointment, the new insurer shall pay the agent in accordance
1837	with sub-sub-sub-subparagraph (A).
1838	c.  To preserve existing incentives for carriers to write
1839	dwellings in the voluntary market and not in the corporation,
1840	the corporation shall continue to offer authorized insurers,
1841	including insurers writing dwellings valued at $1 million or
1842	more, the same voluntary writing credits that were available on
1843	January 1, 2006, to carriers writing wind coverage for dwellings
1844	in the areas eligible for coverage in the high-risk account.
1845	d.  With respect to personal lines residential risks, if
1846	the risk is a dwelling with an insured value of $1 million or
1847	more, or if the risk is one that is excluded from the coverage
1848	to be provided by the condominium association under s.
1849	718.111(11)(b) and that is insured by the condominium unit owner
1850	for a combined dwelling and contents replacement cost of $1
1851	million or more, the risk is not eligible for any policy issued
1852	by the corporation. Rates and forms for personal lines
1853	residential risks not eligible for coverage by the corporation
1854	specified by this sub-subparagraph are not subject to ss.
1855	627.062 and 627.0629. Such rates and forms are subject to all
1856	other applicable provisions of this code and rules adopted under
1857	this code. During the course of an insurer's market conduct
1858	examination, the office may review the rate for any risk to
1859	which the provisions of this sub-subparagraph are applicable to
1860	determine if such rate is inadequate or unfairly discriminatory.
1861	Rates on personal lines residential risks not eligible for
1862	coverage by the corporation may be found inadequate by the
1863	office if they are clearly insufficient, together with the
1864	investment income attributable to such risks, to sustain
1865	projected losses and expenses in the class of business to which
1866	such rates apply. Rates on personal lines residential risks not
1867	eligible for coverage by the corporation may also be found
1868	inadequate as to the premium charged to a risk or group of risks
1869	if discounts or credits are allowed that exceed a reasonable
1870	reflection of expense savings and reasonably expected loss
1871	experience from the risk or group of risks. Rates on personal
1872	lines residential risks not eligible for coverage by the
1873	corporation may be found to be unfairly discriminatory as to a
1874	risk or group of risks by the office if the application of
1875	premium discounts, credits, or surcharges among such risks does
1876	not bear a reasonable relationship to the expected loss and
1877	expense experience among the various risks. A rating plan,
1878	including discounts, credits, or surcharges on personal lines
1879	residential risks not eligible for coverage by the corporation
1880	may also be found to be unfairly discriminatory if the plan
1881	fails to clearly and equitably reflect consideration of the
1882	policyholder's participation in a risk management program
1883	adjusted pursuant to s. 627.0625. The office may order an
1884	insurer to discontinue using a rate for new policies or upon
1885	renewal of a policy if the office finds the rate to be
1886	inadequate or unfairly discriminatory. Insurers must maintain
1887	records and documentation relating to rates and forms subject to
1888	this sub-subparagraph for a period of at least 5 years after the
1889	effective date of the policy.
1890	e.  For policies subject to nonrenewal as a result of the
1891	risk being no longer eligible for coverage pursuant to sub-
1892	subparagraph d., the corporation shall, directly or through the
1893	market assistance plan, make information from confidential
1894	underwriting and claims files of policyholders available only to
1895	licensed general lines agents who register with the corporation
1896	to receive such information according to the following
1897	procedures:
1898	(I)  By August 1, 2006, the corporation shall provide
1899	policyholders who are not eligible for renewal pursuant to sub-
1900	subparagraph d. the opportunity to request in writing, within 30
1901	days after the notification is sent, that information from their
1902	confidential underwriting and claims files not be released to
1903	licensed general lines agents registered pursuant to sub-sub-
1904	subparagraph e.(II);
1905	(II)  By August 1, 2006, the corporation shall make
1906	available to licensed general lines agents the registration
1907	procedures to be used to obtain confidential information from
1908	underwriting and claims files for policies not eligible for
1909	renewal pursuant to sub-subparagraph d. As a condition of
1910	registration, the corporation shall require the licensed general
1911	lines agent to attest that the agent has the experience and
1912	relationships with authorized or surplus lines carriers to
1913	attempt to offer replacement coverage for policies not eligible
1914	for renewal pursuant to sub-subparagraph d.
1915	(III)  By September 1, 2006, the corporation shall make
1916	available through a secured website to licensed general lines
1917	agents registered pursuant to sub-sub-subparagraph e.(II)
1918	application, rating, loss history, mitigation, and policy type
1919	information relating to all policies not eligible for renewal
1920	pursuant to sub-subparagraph d. and for which the policyholder
1921	has not requested the corporation withhold such information
1922	pursuant to sub-sub-subparagraph e.(I). The licensed general
1923	lines agent registered pursuant to sub-sub-subparagraph e.(II)
1924	may use such information to contact and assist the policyholder
1925	in securing replacement policies and the agent may disclose to
1926	the policyholder such information was obtained from the
1927	corporation.
1928	f.  With respect to nonhomestead property, eligibility must
1929	be determined in accordance with sub-sub-sub-subparagraph
1930	(b)2.a.(II)(A).
1931	6.  Must provide by July 1, 2007, that an application for
1932	coverage for a new policy is subject to a waiting period of 10
1933	days before coverage is effective, during which time the
1934	corporation shall make such application available for review by
1935	general lines agents and authorized property and casualty
1936	insurers. The board may approve exceptions that allow for
1937	coverage to be effective before the end of the 10-day waiting
1938	period, for coverage issued in conjunction with a real estate
1939	closing, and for such other exceptions as the board determines
1940	are necessary to prevent lapses in coverage.
1941	7.6.  Must include rules for classifications of risks and
1942	rates therefor.
1943	8.7.  Must provide that if premium and investment income
1944	for an account attributable to a particular calendar year are in
1945	excess of projected losses and expenses for the account
1946	attributable to that year, such excess shall be held in surplus
1947	in the account. Such surplus shall be available to defray
1948	deficits in that account as to future years and shall be used
1949	for that purpose prior to assessing assessable insurers and
1950	assessable insureds as to any calendar year.
1951	9.8.  Must provide objective criteria and procedures to be
1952	uniformly applied for all applicants in determining whether an
1953	individual risk is so hazardous as to be uninsurable. In making
1954	this determination and in establishing the criteria and
1955	procedures, the following shall be considered:
1956	a.  Whether the likelihood of a loss for the individual
1957	risk is substantially higher than for other risks of the same
1958	class; and
1959	b.  Whether the uncertainty associated with the individual
1960	risk is such that an appropriate premium cannot be determined.
1961
1962	The acceptance or rejection of a risk by the corporation shall
1963	be construed as the private placement of insurance, and the
1964	provisions of chapter 120 shall not apply.
1965	10.9.  Must provide that the corporation shall make its
1966	best efforts to procure catastrophe reinsurance at reasonable
1967	rates, to cover its projected 100-year probable maximum loss in
1968	the homestead accounts as determined by the board of governors.
1969	11.10.  Must provide that in the event of regular deficit
1970	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1971	(b)3.b., in the personal lines homestead account, the commercial
1972	lines residential homestead account, or the high-risk homestead
1973	account, the corporation shall levy upon corporation homestead
1974	account policyholders in its next rate filing, or by a separate
1975	rate filing solely for this purpose, a Citizens policyholder
1976	market equalization surcharge arising from a regular assessment
1977	in such account in a percentage equal to the total amount of
1978	such regular assessments divided by the aggregate statewide
1979	direct written premium for subject lines of business for the
1980	prior calendar year preceding the year in which the deficit to
1981	which the regular assessment related is incurred. Citizens
1982	policyholder Market equalization surcharges under this
1983	subparagraph are not considered premium and are not subject to
1984	commissions, fees, or premium taxes; however, failure to pay the
1985	Citizens policyholder a market equalization surcharge shall be
1986	treated as failure to pay premium. Notwithstanding any other
1987	provision of this section, for purposes of the Citizens
1988	policyholder surcharges to be levied pursuant to this
1989	subparagraph, the total amount of the regular assessment to
1990	which such Citizens policyholder surcharge relates shall be
1991	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
1992	12.11.  The policies issued by the corporation must provide
1993	that, if the corporation or the market assistance plan obtains
1994	an offer from an authorized insurer to cover the risk at its
1995	approved rates, the risk is no longer eligible for renewal
1996	through the corporation.
1997	13.12.  Corporation policies and applications must include
1998	a notice that the corporation policy could, under this section,
1999	be replaced with a policy issued by an authorized insurer that
2000	does not provide coverage identical to the coverage provided by
2001	the corporation or an insurer writing coverage pursuant to part
2002	VIII of chapter 626. The notice shall also specify that
2003	acceptance of corporation coverage creates a conclusive
2004	presumption that the applicant or policyholder is aware of this
2005	potential.
2006	14.13.  May establish, subject to approval by the office,
2007	different eligibility requirements and operational procedures
2008	for any line or type of coverage for any specified county or
2009	area if the board determines that such changes to the
2010	eligibility requirements and operational procedures are
2011	justified due to the voluntary market being sufficiently stable
2012	and competitive in such area or for such line or type of
2013	coverage and that consumers who, in good faith, are unable to
2014	obtain insurance through the voluntary market through ordinary
2015	methods would continue to have access to coverage from the
2016	corporation. When coverage is sought in connection with a real
2017	property transfer, such requirements and procedures shall not
2018	provide for an effective date of coverage later than the date of
2019	the closing of the transfer as established by the transferor,
2020	the transferee, and, if applicable, the lender.
2021	15.14.  Must provide that, with respect to the high-risk
2022	homestead account, any assessable insurer with a surplus as to
2023	policyholders of $25 million or less writing 25 percent or more
2024	of its total countrywide property insurance premiums in this
2025	state may petition the office, within the first 90 days of each
2026	calendar year, to qualify as a limited apportionment company. In
2027	no event shall a limited apportionment company be required to
2028	participate in the portion of any assessment, within the high-
2029	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
2030	subparagraph (b)3.b. in the aggregate which exceeds $50 million
2031	after payment of available high-risk account funds in any
2032	calendar year. However, a limited apportionment company shall
2033	collect from its policyholders any emergency assessment imposed
2034	under sub-subparagraph (b)3.d. The plan shall provide that, if
2035	the office determines that any regular assessment will result in
2036	an impairment of the surplus of a limited apportionment company,
2037	the office may direct that all or part of such assessment be
2038	deferred as provided in subparagraph (g)4. However, there shall
2039	be no limitation or deferment of an emergency assessment to be
2040	collected from policyholders under sub-subparagraph (b)3.d.
2041	16.15.  Must provide that the corporation appoint as its
2042	licensed agents only those agents who also hold an appointment
2043	as defined in s. 626.015(3) with an insurer who at the time of
2044	the agent's initial appointment by the corporation is authorized
2045	to write and is actually writing personal lines residential
2046	property coverage, commercial residential property coverage, or
2047	commercial nonresidential property coverage within the state.
2048	17.  Must provide, by July 1, 2007, a premium payment plan
2049	option to its policyholders which allows for quarterly and
2050	semiannual payment of premiums.
2051	18.  Must provide that the hurricane deductible for any
2052	property in the nonhomestead account with an insured value of
2053	$250,000 or more must be at least 5 percent of the insured
2054	value.
2055	19.  Must provide that the application for coverage under
2056	the nonhomestead account and the declaration page of each
2057	nonhomestead account policy include a statement in boldface 12-
2058	point type specifying that public subsidies do not support the
2059	corporation's coverage of nonhomestead property; that if the
2060	nonhomestead account of the corporation sustains a deficit or is
2061	unable to pay claims, the nonhomestead policyholder shall be
2062	subject to an immediate assessment in an amount up to 100
2063	percent of the premium and a further assessment upon renewal of
2064	the policy; and that the applicant or policyholder may wish to
2065	seek alternative coverage from an authorized insurer or surplus
2066	lines insurer that will not be subject to such potential
2067	assessments.
2068	20.  Must provide that the application for coverage under
2069	any of the homestead accounts and the declaration page of each
2070	homestead account policy include a statement in boldface 12-
2071	point type specifying that a false declaration of homestead
2072	status for purposes of obtaining coverage in any of the
2073	homestead accounts may constitute the offense of insurance
2074	fraud, as prohibited and punishable as a felony under s.
2075	817.234.
2076	21.  Must limit coverage on mobile homes or manufactured
2077	homes built prior to 1994 to actual cash value of the dwelling
2078	rather than replacement costs of the dwelling.
2079	(d)1.  All prospective employees for senior management
2080	positions, as defined by the plan of operation, are subject to
2081	background checks as a prerequisite for employment. The office
2082	shall conduct background checks on such prospective employees
2083	pursuant to ss. 624.404(3), 624.34, and 628.261.
2084	2.  On or before July 1 of each year, employees of the
2085	corporation are required to sign and submit a statement
2086	attesting that they do not have a conflict of interest, as
2087	defined in part III of chapter 112. As a condition of
2088	employment, all prospective employees are required to sign and
2089	submit to the corporation a conflict-of-interest statement.
2090	3.  Senior managers and members of the board of governors
2091	are subject to the provisions of part III of chapter 112,
2092	including, but not limited to, the code of ethics and public
2093	disclosure and reporting of financial interests, pursuant to s.
2094	112.3145. Senior managers and board members are also required to
2095	file such disclosures with the Office of Insurance Regulation.
2096	The executive director of the corporation or his or her designee
2097	shall notify each newly appointed and existing appointed member
2098	of the board of governors and senior managers of his or her duty
2099	to comply with the reporting requirements of part III of chapter
2100	112. At least quarterly, the executive director or his or her
2101	designee shall submit to the Commission on Ethics a list of
2102	names of the senior managers and members of the board of
2103	governors that are subject to the public disclosure requirements
2104	under s. 112.3145.
2105	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
2106	other provision of law, an employee or board member may not
2107	knowingly accept, directly or indirectly, any gift or
2108	expenditure from a person or entity, or an employee or
2109	representative of such person or entity, that has a contractual
2110	relationship with the corporation or who is under consideration
2111	for a contract. An employee or board member that fails to comply
2112	with this subparagraph is subject to penalties provided under
2113	ss. 112.317 and 112.3173.
2114	5.  Any senior manager of the corporation who is employed
2115	on or after January 1, 2007, regardless of the date of hire, who
2116	subsequently retires or terminates employment is prohibited from
2117	representing another person or entity before the corporation for
2118	2 years after retirement or termination of employment from the
2119	corporation.
2120	6.  Any employee of the corporation who is employed on or
2121	after January 1, 2007, regardless of the date of hire, who
2122	subsequently retires or terminates employment is prohibited from
2123	having any employment or contractual relationship for 2 years
2124	with an insurer that has received a take-out bonus from the
2125	corporation.
2126	(e)  Purchases that equal or exceed $2,500, but are less
2127	than $25,000, shall be made by receipt of written quotes,
2128	written record of telephone quotes, or informal bids, whenever
2129	practical. The procurement of goods or services valued at or
2130	over $25,000 shall be subject to competitive solicitation,
2131	except in situations where the goods or services are provided by
2132	a sole source or are deemed an emergency purchase; the services
2133	are exempted from competitive solicitation requirements under s.
2134	287.057(5)(f); or the procurement of services is subject to s.
2135	627.3513. Justification for the sole-sourcing or emergency
2136	procurement must be documented. Contracts for goods or services
2137	valued at or over $100,000 are subject to approval by the board.
2138	(f)  The board shall determine whether it is more cost-
2139	effective and in the best interests of the corporation to use
2140	legal services provided by in-house attorneys employed by the
2141	corporation rather than contracting with outside counsel. In
2142	making such determination, the board shall document its findings
2143	and shall consider: the expertise needed; whether time
2144	commitments exceed in-house staff resources; whether local
2145	representation is needed; the travel, lodging and other costs
2146	associated with in-house representation; and such other factors
2147	that the board determines are relevant.
2148	(g)  The corporation may not retain a lobbyist to represent
2149	it before the legislative branch or executive branch. However,
2150	full-time employees of the corporation may register as lobbyists
2151	and represent the corporation before the legislative branch or
2152	executive branch.
2153	(h)1.  The Office of the Internal Auditor is established
2154	within the corporation to provide a central point for
2155	coordination of and responsibility for activities that promote
2156	accountability, integrity, and efficiency to the policyholders
2157	and to the taxpayers of this state. The internal auditor shall
2158	be appointed by the board of governors, shall report to and be
2159	under the general supervision of the board of governors, and is
2160	not subject to supervision by any employee of the corporation.
2161	Administrative staff and support shall be provided by the
2162	corporation. The internal auditor shall be appointed without
2163	regard to political affiliation. It is the duty and
2164	responsibility of the internal auditor to:
2165	a.  Provide direction for, supervise, conduct, and
2166	coordinate audits, investigations, and management reviews
2167	relating to the programs and operations of the corporation.
2168	b.  Conduct, supervise, or coordinate other activities
2169	carried out or financed by the corporation for the purpose of
2170	promoting efficiency in the administration of, or preventing and
2171	detecting fraud, abuse, and mismanagement in, its programs and
2172	operations.
2173	c.  Submit final audit reports, reviews, or investigative
2174	reports to the board of governors, the executive director, the
2175	members of the Financial Services Commission, the President of
2176	the Senate, and the Speaker of the House of Representatives.
2177	d.  Keep the board of governors informed concerning fraud,
2178	abuses, and internal control deficiencies relating to programs
2179	and operations administered or financed by the corporation,
2180	recommend corrective action, and report on the progress made in
2181	implementing corrective action.
2182	e.  Report expeditiously to the Department of Law
2183	Enforcement or other law enforcement agencies, as appropriate,
2184	whenever the internal auditor has reasonable grounds to believe
2185	there has been a violation of criminal law.
2186	2.  On or before February 15, the internal auditor shall
2187	prepare an annual report evaluating the effectiveness of the
2188	internal controls of the corporation and providing
2189	recommendations for corrective action, if necessary, and
2190	summarizing the audits, reviews, and investigations conducted by
2191	the office during the preceding fiscal year. The final report
2192	shall be furnished to the board of governors and the executive
2193	director, the President of the Senate, the Speaker of the House
2194	of Representatives, and the Financial Services Commission.
2195	(i)  The corporation shall establish a unit or division
2196	responsible for receiving and responding to consumer complaints,
2197	which unit or division is the sole responsibility of a senior
2198	manager of the corporation.
2199	(j)  The office shall conduct a comprehensive market
2200	conduct examination of the corporation every 2 years to
2201	determine compliance with its plan of operation and internal
2202	operations procedures. The first market conduct examination
2203	report shall be submitted to the President of the Senate and the
2204	Speaker of the House of Representatives no later than February
2205	1, 2009. Subsequent reports shall be submitted on or before
2206	February 1 every 2 years thereafter.
2207	(k)  The Auditor General shall conduct an operational audit
2208	of the corporations every 3 years to evaluate management's
2209	performance in administering laws, policies, and procedures
2210	governing the operations of the corporation in an efficient and
2211	effective manner. The scope of the review shall include, but is
2212	not limited to, evaluating claims handling, customer service,
2213	take-out programs and bonuses, financing arrangements,
2214	procurement of goods and services, internal controls, and the
2215	internal audit function.
2216	(l)(d)1.a.  It is the intent of the Legislature that the
2217	rates for coverage provided by the corporation be actuarially
2218	adequate sound and not competitive with approved rates charged
2219	in the admitted voluntary market, so that the corporation
2220	functions as a residual market mechanism to provide insurance
2221	only when the insurance cannot be procured in the voluntary
2222	market. Rates shall include a residual market risk load that
2223	reflects the concentrated exposure of the corporation and the
2224	impact of adverse selection as well as an appropriate
2225	catastrophe loading factor that reflects the actual catastrophic
2226	exposure of the corporation.
2227	b.  It is the intent of the Legislature to reaffirm the
2228	requirement of rate adequacy in the residual market. Recognizing
2229	that rates may comply with the intent expressed in sub-
2230	subparagraph a. and yet be inadequate and recognizing the public
2231	need to limit subsidies within the residual market, it is the
2232	further intent of the Legislature to establish statutory
2233	standards for rate adequacy. Such standards are intended to
2234	supplement the standard specified in s. 627.062(2)(e)3.,
2235	providing that rates are inadequate if they are clearly
2236	insufficient to sustain projected losses and expenses in the
2237	class of business to which they apply.
2238	2.  For each county, the average rates of the corporation
2239	for each line of business for personal lines residential
2240	policies excluding rates for wind-only policies shall be no
2241	lower than the average rates charged by the insurer that had the
2242	highest average rate in that county among the 20 insurers with
2243	the greatest total direct written premium in the state for that
2244	line of business in the preceding year, except that with respect
2245	to mobile home coverages, the average rates of the corporation
2246	shall be no lower than the average rates charged by the insurer
2247	that had the highest average rate in that county among the 5
2248	insurers with the greatest total written premium for mobile home
2249	owner's policies in the state in the preceding year.
2250	3.  Rates for personal lines residential wind-only policies
2251	must be actuarially adequate sound and not competitive with
2252	approved rates charged by authorized insurers. If the filing
2253	under this paragraph is made at least 90 days before the
2254	proposed effective date and the filing is not implemented during
2255	the office's review of the filing and any proceeding and
2256	judicial review, such filing shall be considered a file and use
2257	filing. In such case, the office shall finalize its review by
2258	issuance of a notice of intent to approve or a notice of intent
2259	to disapprove within 90 days after receipt of the filing. The
2260	notice of intent to approve and the notice of intent to
2261	disapprove constitute agency action for purposes of the
2262	Administrative Procedure Act. Requests for supporting
2263	information, requests for mathematical or mechanical
2264	corrections, or notification to the insurer by the office of its
2265	preliminary findings shall not toll the 90-day period during any
2266	such proceedings and subsequent judicial review. The rate shall
2267	be deemed approved if the office does not issue a notice of
2268	intent to approve or a notice of intent to disapprove within 90
2269	days after receipt of the filing. Corporation rate manuals shall
2270	include a rate surcharge for seasonal occupancy. To ensure that
2271	personal lines residential wind-only rates are not competitive
2272	with approved rates charged by authorized insurers, the
2273	corporation, in conjunction with the office, shall develop a
2274	wind-only ratemaking methodology, which methodology shall be
2275	contained in each rate filing made by the corporation with the
2276	office. If the office determines that the wind-only rates or
2277	rating factors filed by the corporation fail to comply with the
2278	wind-only ratemaking methodology provided for in this
2279	subsection, it shall so notify the corporation and require the
2280	corporation to amend its rates or rating factors to come into
2281	compliance within 90 days of notice from the office.
2282	4.  For the purposes of establishing a pilot program to
2283	evaluate issues relating to the availability and affordability
2284	of insurance in an area where historically there has been little
2285	market competition, the provisions of subparagraph 2. do not
2286	apply to coverage provided by the corporation in Monroe County
2287	if the office determines that a reasonable degree of competition
2288	does not exist for personal lines residential policies. The
2289	provisions of subparagraph 3. do not apply to coverage provided
2290	by the corporation in Monroe County if the office determines
2291	that a reasonable degree of competition does not exist for
2292	personal lines residential policies in the area of that county
2293	which is eligible for wind-only coverage. In this county, the
2294	rates for personal lines residential coverage shall be
2295	actuarially adequate sound and not excessive, inadequate, or
2296	unfairly discriminatory and are subject to the other provisions
2297	of the paragraph and s. 627.062. The commission shall adopt
2298	rules establishing the criteria for determining whether a
2299	reasonable degree of competition exists for personal lines
2300	residential policies in Monroe County. Any proposed rate
2301	increase filed by the corporation after May 1, 2006, but before
2302	October 1, 2006, for Monroe County based upon actuarial adequacy
2303	shall be implemented in equal amounts over a period of 3 years.
2304	By March 1, 2006, the office shall submit a report to the
2305	Legislature providing an evaluation of the implementation of the
2306	pilot program affecting Monroe County.
2307	5.  Rates for commercial lines coverage shall not be
2308	subject to the requirements of subparagraph 2., but shall be
2309	subject to all other requirements of this paragraph and s.
2310	627.062.
2311	6.a.  Nothing in this paragraph shall require or allow the
2312	corporation to adopt a rate that is inadequate under s. 627.062
2313	or under sub-subparagraph b. or sub-subparagraph c.
2314	b.  With respect to rates for coverage in any homestead
2315	account, a rate is deemed inadequate if the rate is not
2316	sufficient to generate, by means of cash flow, procurement of
2317	coverage under the Florida Hurricane Catastrophe Fund,
2318	reinsurance costs whether or not reinsurance is procured, and
2319	investment income, moneys sufficient to pay all claims and
2320	expenses reasonably expected to result from a 100-year probable
2321	maximum loss event without resort to any regular or emergency
2322	assessments, long-term debt, state revenues, or other funding
2323	sources that reflect any subsidy from persons or entities other
2324	than corporation homestead accounts policyholders.
2325	c.(I)  With respect to rates for coverage in the
2326	nonhomestead account, a rate is deemed inadequate if the rate is
2327	not sufficient to generate, by means of cash flow, procurement
2328	of coverage under the Florida Hurricane Catastrophe Fund,
2329	reinsurance costs, whether or not reinsurance is procured, and
2330	investment income and moneys sufficient to pay all claims and
2331	expenses reasonably expected to result from a 125-year probable
2332	maximum loss event without resort to any assessments, debt,
2333	state revenues, or other funding sources that reflect any
2334	subsidy from persons or entities other than corporation
2335	nonhomestead account policyholders. The rate initially filed by
2336	the corporation to comply with this sub-sub-subparagraph shall
2337	only by effective for 1 year.
2338	(II)  For the year following the initial year under sub-
2339	sub-subparagraph (I), the rate is deemed inadequate if the rate
2340	is not sufficient to generate moneys sufficient to pay all
2341	claims and expenses reasonably expected to result from a 150-
2342	year probable maximum loss event using the same criteria
2343	provided in sub-sub-subparagraph (I).
2344	(III)  For the 2 years following the year under sub-sub-
2345	subparagraph (II), the rate shall be based upon a 175-year and
2346	200-year probable maximum loss event, respectively.
2347	7.  The corporation shall certify to the office at least
2348	twice annually that its personal lines rates comply with the
2349	requirements of subparagraphs 1., and 2., and 6. If any
2350	adjustment in the rates or rating factors of the corporation is
2351	necessary to ensure such compliance, the corporation shall make
2352	and implement such adjustments and file its revised rates and
2353	rating factors with the office. If the office thereafter
2354	determines that the revised rates and rating factors fail to
2355	comply with the provisions of subparagraphs 1. and 2., it shall
2356	notify the corporation and require the corporation to amend its
2357	rates or rating factors in conjunction with its next rate
2358	filing. The office must notify the corporation by electronic
2359	means of any rate filing it approves for any insurer among the
2360	insurers referred to in subparagraph 2.
2361	8.  In addition to the rates otherwise determined pursuant
2362	to this paragraph, the corporation shall impose and collect an
2363	amount equal to the premium tax provided for in s. 624.509 to
2364	augment the financial resources of the corporation.
2365	9.a.  To assist the corporation in developing additional
2366	ratemaking methods to assure compliance with subparagraphs 1.
2367	and 4., the corporation shall appoint a rate methodology panel
2368	consisting of one person recommended by the Florida Association
2369	of Insurance Agents, one person recommended by the Professional
2370	Insurance Agents of Florida, one person recommended by the
2371	Florida Association of Insurance and Financial Advisors, one
2372	person recommended by the insurer with the highest voluntary
2373	market share of residential property insurance business in the
2374	state, one person recommended by the insurer with the second-
2375	highest voluntary market share of residential property insurance
2376	business in the state, one person recommended by an insurer
2377	writing commercial residential property insurance in this state,
2378	one person recommended by the Office of Insurance Regulation,
2379	and one board member designated by the board chairman, who shall
2380	serve as chairman of the panel.
2381	b.  By January 1, 2004, the rate methodology panel shall
2382	provide a report to the corporation of its findings and
2383	recommendations for the use of additional ratemaking methods and
2384	procedures, including the use of a rate equalization surcharge
2385	in an amount sufficient to assure that the total cost of
2386	coverage for policyholders or applicants to the corporation is
2387	sufficient to comply with subparagraph 1.
2388	c.  Within 30 days after such report, the corporation shall
2389	present to the President of the Senate, the Speaker of the House
2390	of Representatives, the minority party leaders of each house of
2391	the Legislature, and the chairs of the standing committees of
2392	each house of the Legislature having jurisdiction of insurance
2393	issues, a plan for implementing the additional ratemaking
2394	methods and an outline of any legislation needed to facilitate
2395	use of the new methods.
2396	d.  The plan must include a provision that producer
2397	commissions paid by the corporation shall not be calculated in
2398	such a manner as to include any rate equalization surcharge.
2399	However, without regard to the plan to be developed or its
2400	implementation, producer commissions paid by the corporation for
2401	each account, other than the quota share primary program, shall
2402	remain fixed as to percentage, effective rate, calculation, and
2403	payment method until January 1, 2004.
2404	9.10.  By January 1, 2004, The corporation shall provide
2405	develop a notice to policyholders or applicants that the rates
2406	of Citizens Property Insurance Corporation are intended to be
2407	higher than the rates of any admitted carrier and providing
2408	other information the corporation deems necessary to assist
2409	consumers in finding other voluntary admitted insurers willing
2410	to insure their property.
2411	(m)(e)  If coverage in an account is deactivated pursuant
2412	to paragraph (f), coverage through the corporation shall be
2413	reactivated by order of the office only under one of the
2414	following circumstances:
2415	1.  If the market assistance plan receives a minimum of 100
2416	applications for coverage within a 3-month period, or 200
2417	applications for coverage within a 1-year period or less for
2418	residential coverage, unless the market assistance plan provides
2419	a quotation from admitted carriers at their filed rates for at
2420	least 90 percent of such applicants. Any market assistance plan
2421	application that is rejected because an individual risk is so
2422	hazardous as to be uninsurable using the criteria specified in
2423	subparagraph (c)8. shall not be included in the minimum
2424	percentage calculation provided herein. In the event that there
2425	is a legal or administrative challenge to a determination by the
2426	office that the conditions of this subparagraph have been met
2427	for eligibility for coverage in the corporation, any eligible
2428	risk may obtain coverage during the pendency of such challenge.
2429	2.  In response to a state of emergency declared by the
2430	Governor under s. 252.36, the office may activate coverage by
2431	order for the period of the emergency upon a finding by the
2432	office that the emergency significantly affects the availability
2433	of residential property insurance.
2434	(n)(f)1.  The corporation shall file with the office
2435	quarterly statements of financial condition, an annual statement
2436	of financial condition, and audited financial statements in the
2437	manner prescribed by law. In addition, the corporation shall
2438	report to the office monthly on the types, premium, exposure,
2439	and distribution by county of its policies in force, and shall
2440	submit other reports as the office requires to carry out its
2441	oversight of the corporation.
2442	2.  The activities of the corporation shall be reviewed at
2443	least annually by the office to determine whether coverage shall
2444	be deactivated in an account on the basis that the conditions
2445	giving rise to its activation no longer exist.
2446	(o)(g)1.  The corporation shall certify to the office its
2447	needs for annual assessments as to a particular calendar year,
2448	and for any interim assessments that it deems to be necessary to
2449	sustain operations as to a particular year pending the receipt
2450	of annual assessments. Upon verification, the office shall
2451	approve such certification, and the corporation shall levy such
2452	annual or interim assessments. Such assessments shall be
2453	prorated as provided in paragraph (b). The corporation shall
2454	take all reasonable and prudent steps necessary to collect the
2455	amount of assessment due from each assessable insurer,
2456	including, if prudent, filing suit to collect such assessment.
2457	If the corporation is unable to collect an assessment from any
2458	assessable insurer, the uncollected assessments shall be levied
2459	as an additional assessment against the assessable insurers and
2460	any assessable insurer required to pay an additional assessment
2461	as a result of such failure to pay shall have a cause of action
2462	against such nonpaying assessable insurer. Assessments shall be
2463	included as an appropriate factor in the making of rates. The
2464	failure of a surplus lines agent to collect and remit any
2465	regular or emergency assessment levied by the corporation is
2466	considered to be a violation of s. 626.936 and subjects the
2467	surplus lines agent to the penalties provided in that section.
2468	2.  The governing body of any unit of local government, any
2469	residents of which are insured by the corporation, may issue
2470	bonds as defined in s. 125.013 or s. 166.101 from time to time
2471	to fund an assistance program, in conjunction with the
2472	corporation, for the purpose of defraying deficits of the
2473	corporation. In order to avoid needless and indiscriminate
2474	proliferation, duplication, and fragmentation of such assistance
2475	programs, any unit of local government, any residents of which
2476	are insured by the corporation, may provide for the payment of
2477	losses, regardless of whether or not the losses occurred within
2478	or outside of the territorial jurisdiction of the local
2479	government. Revenue bonds under this subparagraph may not be
2480	issued until validated pursuant to chapter 75, unless a state of
2481	emergency is declared by executive order or proclamation of the
2482	Governor pursuant to s. 252.36 making such findings as are
2483	necessary to determine that it is in the best interests of, and
2484	necessary for, the protection of the public health, safety, and
2485	general welfare of residents of this state and declaring it an
2486	essential public purpose to permit certain municipalities or
2487	counties to issue such bonds as will permit relief to claimants
2488	and policyholders of the corporation. Any such unit of local
2489	government may enter into such contracts with the corporation
2490	and with any other entity created pursuant to this subsection as
2491	are necessary to carry out this paragraph. Any bonds issued
2492	under this subparagraph shall be payable from and secured by
2493	moneys received by the corporation from emergency assessments
2494	under sub-subparagraph (b)3.d., and assigned and pledged to or
2495	on behalf of the unit of local government for the benefit of the
2496	holders of such bonds. The funds, credit, property, and taxing
2497	power of the state or of the unit of local government shall not
2498	be pledged for the payment of such bonds. If any of the bonds
2499	remain unsold 60 days after issuance, the office shall require
2500	all insurers subject to assessment to purchase the bonds, which
2501	shall be treated as admitted assets; each insurer shall be
2502	required to purchase that percentage of the unsold portion of
2503	the bond issue that equals the insurer's relative share of
2504	assessment liability under this subsection. An insurer shall not
2505	be required to purchase the bonds to the extent that the office
2506	determines that the purchase would endanger or impair the
2507	solvency of the insurer.
2508	3.a.  The corporation shall adopt one or more programs
2509	subject to approval by the office for the reduction of both new
2510	and renewal writings in the corporation. Beginning January 1,
2511	2008, any program the corporation adopts for the payment of
2512	bonuses to an insurer for each risk the insurer removes from the
2513	corporation shall comply with s. 627.3511(2) and may not exceed
2514	the amount referenced in s. 627.3511(2) for each risk removed.
2515	The corporation may consider any prudent and not unfairly
2516	discriminatory approach to reducing corporation writings, and
2517	may adopt a credit against assessment liability or other
2518	liability that provides an incentive for insurers to take risks
2519	out of the corporation and to keep risks out of the corporation
2520	by maintaining or increasing voluntary writings in counties or
2521	areas in which corporation risks are highly concentrated and a
2522	program to provide a formula under which an insurer voluntarily
2523	taking risks out of the corporation by maintaining or increasing
2524	voluntary writings will be relieved wholly or partially from
2525	assessments under sub-subparagraphs (b)3.a. and b. When the
2526	corporation enters into a contractual agreement for a take-out
2527	plan, the producing agent of record of the corporation policy is
2528	entitled to retain any unearned commission on such policy, and
2529	the insurer shall either:
2530	(I)  Pay to the producing agent of record of the policy,
2531	for the first year, an amount which is the greater of the
2532	insurer's usual and customary commission for the type of policy
2533	written or a policy fee equal to the usual and customary
2534	commission of the corporation; or
2535	(II)  Offer to allow the producing agent of record of the
2536	policy to continue servicing the policy for a period of not less
2537	than 1 year and offer to pay the agent the insurer's usual and
2538	customary commission for the type of policy written. If the
2539	producing agent is unwilling or unable to accept appointment by
2540	the new insurer, the new insurer shall pay the agent in
2541	accordance with sub-sub-subparagraph (I).
2542	b.  Any credit or exemption from regular assessments
2543	adopted under this subparagraph shall last no longer than the 3
2544	years following the cancellation or expiration of the policy by
2545	the corporation. With the approval of the office, the board may
2546	extend such credits for an additional year if the insurer
2547	guarantees an additional year of renewability for all policies
2548	removed from the corporation, or for 2 additional years if the
2549	insurer guarantees 2 additional years of renewability for all
2550	policies so removed.
2551	c.  There shall be no credit, limitation, exemption, or
2552	deferment from emergency assessments to be collected from
2553	policyholders pursuant to sub-subparagraph (b)3.d.
2554	4.  The plan shall provide for the deferment, in whole or
2555	in part, of the assessment of an assessable insurer, other than
2556	an emergency assessment collected from policyholders pursuant to
2557	sub-subparagraph (b)3.d., if the office finds that payment of
2558	the assessment would endanger or impair the solvency of the
2559	insurer. In the event an assessment against an assessable
2560	insurer is deferred in whole or in part, the amount by which
2561	such assessment is deferred may be assessed against the other
2562	assessable insurers in a manner consistent with the basis for
2563	assessments set forth in paragraph (b).
2564	(p)(h)  Nothing in this subsection shall be construed to
2565	preclude the issuance of residential property insurance coverage
2566	pursuant to part VIII of chapter 626.
2567	(q)(i)  There shall be no liability on the part of, and no
2568	cause of action of any nature shall arise against, any
2569	assessable insurer or its agents or employees, the corporation
2570	or its agents or employees, members of the board of governors or
2571	their respective designees at a board meeting, corporation
2572	committee members, or the office or its representatives, for any
2573	action taken by them in the performance of their duties or
2574	responsibilities under this subsection. Such immunity does not
2575	apply to:
2576	1.  Any of the foregoing persons or entities for any
2577	willful tort;
2578	2.  The corporation or its producing agents for breach of
2579	any contract or agreement pertaining to insurance coverage;
2580	3.  The corporation with respect to issuance or payment of
2581	debt; or
2582	4.  Any assessable insurer with respect to any action to
2583	enforce an assessable insurer's obligations to the corporation
2584	under this subsection.
2585	(r)(j)  For the purposes of s. 199.183(1), the corporation
2586	shall be considered a political subdivision of the state and
2587	shall be exempt from the corporate income tax. The premiums,
2588	assessments, investment income, and other revenue of the
2589	corporation are funds received for providing property insurance
2590	coverage as required by this subsection, paying claims for
2591	Florida citizens insured by the corporation, securing and
2592	repaying debt obligations issued by the corporation, and
2593	conducting all other activities of the corporation, and shall
2594	not be considered taxes, fees, licenses, or charges for services
2595	imposed by the Legislature on individuals, businesses, or
2596	agencies outside state government. Bonds and other debt
2597	obligations issued by or on behalf of the corporation are not to
2598	be considered "state bonds" within the meaning of s. 215.58(8).
2599	The corporation is not subject to the procurement provisions of
2600	chapter 287, and policies and decisions of the corporation
2601	relating to incurring debt, levying of assessments and the sale,
2602	issuance, continuation, terms and claims under corporation
2603	policies, and all services relating thereto, are not subject to
2604	the provisions of chapter 120. The corporation is not required
2605	to obtain or to hold a certificate of authority issued by the
2606	office, nor is it required to participate as a member insurer of
2607	the Florida Insurance Guaranty Association. However, the
2608	corporation is required to pay, in the same manner as an
2609	authorized insurer, assessments pledged by the Florida Insurance
2610	Guaranty Association to secure bonds issued or other
2611	indebtedness incurred to pay covered claims arising from insurer
2612	insolvencies caused by, or proximately related to, hurricane
2613	losses. It is the intent of the Legislature that the tax
2614	exemptions provided in this paragraph will augment the financial
2615	resources of the corporation to better enable the corporation to
2616	fulfill its public purposes. Any debt obligations bonds issued
2617	by the corporation, their transfer, and the income therefrom,
2618	including any profit made on the sale thereof, shall at all
2619	times be free from taxation of every kind by the state and any
2620	political subdivision or local unit or other instrumentality
2621	thereof; however, this exemption does not apply to any tax
2622	imposed by chapter 220 on interest, income, or profits on debt
2623	obligations owned by corporations other than the corporation.
2624	(s)(k)  Upon a determination by the office that the
2625	conditions giving rise to the establishment and activation of
2626	the corporation no longer exist, the corporation is dissolved.
2627	Upon dissolution, the assets of the corporation shall be applied
2628	first to pay all debts, liabilities, and obligations of the
2629	corporation, including the establishment of reasonable reserves
2630	for any contingent liabilities or obligations, and all remaining
2631	assets of the corporation shall become property of the state and
2632	shall be deposited in the Florida Hurricane Catastrophe Fund.
2633	However, no dissolution shall take effect as long as the
2634	corporation has bonds or other financial obligations outstanding
2635	unless adequate provision has been made for the payment of the
2636	bonds or other financial obligations pursuant to the documents
2637	authorizing the issuance of the bonds or other financial
2638	obligations.
2639	(t)(l)1.  Effective July 1, 2002, policies of the
2640	Residential Property and Casualty Joint Underwriting Association
2641	shall become policies of the corporation. All obligations,
2642	rights, assets and liabilities of the Residential Property and
2643	Casualty Joint Underwriting Association, including bonds, note
2644	and debt obligations, and the financing documents pertaining to
2645	them become those of the corporation as of July 1, 2002. The
2646	corporation is not required to issue endorsements or
2647	certificates of assumption to insureds during the remaining term
2648	of in-force transferred policies.
2649	2.  Effective July 1, 2002, policies of the Florida
2650	Windstorm Underwriting Association are transferred to the
2651	corporation and shall become policies of the corporation. All
2652	obligations, rights, assets, and liabilities of the Florida
2653	Windstorm Underwriting Association, including bonds, note and
2654	debt obligations, and the financing documents pertaining to them
2655	are transferred to and assumed by the corporation on July 1,
2656	2002. The corporation is not required to issue endorsement or
2657	certificates of assumption to insureds during the remaining term
2658	of in-force transferred policies.
2659	3.  The Florida Windstorm Underwriting Association and the
2660	Residential Property and Casualty Joint Underwriting Association
2661	shall take all actions as may be proper to further evidence the
2662	transfers and shall provide the documents and instruments of
2663	further assurance as may reasonably be requested by the
2664	corporation for that purpose. The corporation shall execute
2665	assumptions and instruments as the trustees or other parties to
2666	the financing documents of the Florida Windstorm Underwriting
2667	Association or the Residential Property and Casualty Joint
2668	Underwriting Association may reasonably request to further
2669	evidence the transfers and assumptions, which transfers and
2670	assumptions, however, are effective on the date provided under
2671	this paragraph whether or not, and regardless of the date on
2672	which, the assumptions or instruments are executed by the
2673	corporation. Subject to the relevant financing documents
2674	pertaining to their outstanding bonds, notes, indebtedness, or
2675	other financing obligations, the moneys, investments,
2676	receivables, choses in action, and other intangibles of the
2677	Florida Windstorm Underwriting Association shall be credited to
2678	the high-risk account of the corporation, and those of the
2679	personal lines residential coverage account and the commercial
2680	lines residential coverage account of the Residential Property
2681	and Casualty Joint Underwriting Association shall be credited to
2682	the personal lines account and the commercial lines account,
2683	respectively, of the corporation.
2684	4.  Effective July 1, 2002, a new applicant for property
2685	insurance coverage who would otherwise have been eligible for
2686	coverage in the Florida Windstorm Underwriting Association is
2687	eligible for coverage from the corporation as provided in this
2688	subsection.
2689	4.5.  The transfer of all policies, obligations, rights,
2690	assets, and liabilities from the Florida Windstorm Underwriting
2691	Association to the corporation and the renaming of the
2692	Residential Property and Casualty Joint Underwriting Association
2693	as the corporation shall in no way affect the coverage with
2694	respect to covered policies as defined in s. 215.555(2)(c)
2695	provided to these entities by the Florida Hurricane Catastrophe
2696	Fund. The coverage provided by the Florida Hurricane Catastrophe
2697	Fund to the Florida Windstorm Underwriting Association based on
2698	its exposures as of June 30, 2002, and each June 30 thereafter
2699	shall be redesignated as coverage for the high-risk account of
2700	the corporation. Notwithstanding any other provision of law, the
2701	coverage provided by the Florida Hurricane Catastrophe Fund to
2702	the Residential Property and Casualty Joint Underwriting
2703	Association based on its exposures as of June 30, 2002, and each
2704	June 30 thereafter shall be transferred to the personal lines
2705	account and the commercial lines account of the corporation.
2706	Notwithstanding any other provision of law, the high-risk
2707	account shall be treated, for all Florida Hurricane Catastrophe
2708	Fund purposes, as if it were a separate participating insurer
2709	with its own exposures, reimbursement premium, and loss
2710	reimbursement. Likewise, the personal lines and commercial lines
2711	accounts shall be viewed together, for all Florida Hurricane
2712	Catastrophe Fund purposes, as if the two accounts were one and
2713	represent a single, separate participating insurer with its own
2714	exposures, reimbursement premium, and loss reimbursement. The
2715	coverage provided by the Florida Hurricane Catastrophe Fund to
2716	the corporation shall constitute and operate as a full transfer
2717	of coverage from the Florida Windstorm Underwriting Association
2718	and Residential Property and Casualty Joint Underwriting to the
2719	corporation.
2720	(u)(m)  Notwithstanding any other provision of law:
2721	1.  The pledge or sale of, the lien upon, and the security
2722	interest in any rights, revenues, or other assets of the
2723	corporation created or purported to be created pursuant to any
2724	financing documents to secure any bonds or other indebtedness of
2725	the corporation shall be and remain valid and enforceable,
2726	notwithstanding the commencement of and during the continuation
2727	of, and after, any rehabilitation, insolvency, liquidation,
2728	bankruptcy, receivership, conservatorship, reorganization, or
2729	similar proceeding against the corporation under the laws of
2730	this state.
2731	2.  No such proceeding shall relieve the corporation of its
2732	obligation, or otherwise affect its ability to perform its
2733	obligation, to continue to collect, or levy and collect,
2734	assessments, Citizens Property Insurance Corporation
2735	policyholder market equalization or other surcharges under
2736	subparagraph (c)10., or any other rights, revenues, or other
2737	assets of the corporation pledged pursuant to any financing
2738	documents.
2739	3.  Each such pledge or sale of, lien upon, and security
2740	interest in, including the priority of such pledge, lien, or
2741	security interest, any such assessments, market equalization or
2742	other surcharges, or other rights, revenues, or other assets
2743	which are collected, or levied and collected, after the
2744	commencement of and during the pendency of, or after, any such
2745	proceeding shall continue unaffected by such proceeding. As used
2746	in this subsection, the term "financing documents" means any
2747	agreement or agreements, instrument or instruments, or other
2748	document or documents now existing or hereafter created
2749	evidencing any bonds or other indebtedness of the corporation or
2750	pursuant to which any such bonds or other indebtedness has been
2751	or may be issued and pursuant to which any rights, revenues, or
2752	other assets of the corporation are pledged or sold to secure
2753	the repayment of such bonds or indebtedness, together with the
2754	payment of interest on such bonds or such indebtedness, or the
2755	payment of any other obligation or financial product, as defined
2756	in the plan of operation of the corporation related to such
2757	bonds or indebtedness.
2758	4.  Any such pledge or sale of assessments, revenues,
2759	contract rights, or other rights or assets of the corporation
2760	shall constitute a lien and security interest, or sale, as the
2761	case may be, that is immediately effective and attaches to such
2762	assessments, revenues, or contract rights or other rights or
2763	assets, whether or not imposed or collected at the time the
2764	pledge or sale is made. Any such pledge or sale is effective,
2765	valid, binding, and enforceable against the corporation or other
2766	entity making such pledge or sale, and valid and binding against
2767	and superior to any competing claims or obligations owed to any
2768	other person or entity, including policyholders in this state,
2769	asserting rights in any such assessments, revenues, or contract
2770	rights or other rights or assets to the extent set forth in and
2771	in accordance with the terms of the pledge or sale contained in
2772	the applicable financing documents, whether or not any such
2773	person or entity has notice of such pledge or sale and without
2774	the need for any physical delivery, recordation, filing, or
2775	other action.
2776	5.  As long as the corporation has any bonds outstanding,
2777	the corporation may not file a voluntary petition under chapter
2778	9 of the federal Bankruptcy Code, or such corresponding chapter
2779	or sections as may be in effect from time to time, and any
2780	public officer and any organization, entity, or other person may
2781	not authorize the corporation to be or become a debtor under
2782	chapter 9 of the federal Bankruptcy Code, or such corresponding
2783	chapter or sections as may be in effect from time to time,
2784	during any such period.
2785	6.  If ordered by a court of competent jurisdiction, the
2786	corporation may assume policies or otherwise provide coverage
2787	for policyholders of an insurer placed in liquidation under
2788	chapter 631, under such forms, rates, terms, and conditions as
2789	the corporation deems appropriate, subject to approval by the
2790	office.
2791	(v)(n)1.  The following records of the corporation are
2792	confidential and exempt from the provisions of s. 119.07(1) and
2793	s. 24(a), Art. I of the State Constitution:
2794	a.  Underwriting files, except that a policyholder or an
2795	applicant shall have access to his or her own underwriting
2796	files.
2797	b.  Claims files, until termination of all litigation and
2798	settlement of all claims arising out of the same incident,
2799	although portions of the claims files may remain exempt, as
2800	otherwise provided by law. Confidential and exempt claims file
2801	records may be released to other governmental agencies upon
2802	written request and demonstration of need; such records held by
2803	the receiving agency remain confidential and exempt as provided
2804	for herein.
2805	c.  Records obtained or generated by an internal auditor
2806	pursuant to a routine audit, until the audit is completed, or if
2807	the audit is conducted as part of an investigation, until the
2808	investigation is closed or ceases to be active. An investigation
2809	is considered "active" while the investigation is being
2810	conducted with a reasonable, good faith belief that it could
2811	lead to the filing of administrative, civil, or criminal
2812	proceedings.
2813	d.  Matters reasonably encompassed in privileged attorney-
2814	client communications.
2815	e.  Proprietary information licensed to the corporation
2816	under contract and the contract provides for the confidentiality
2817	of such proprietary information.
2818	f.  All information relating to the medical condition or
2819	medical status of a corporation employee which is not relevant
2820	to the employee's capacity to perform his or her duties, except
2821	as otherwise provided in this paragraph. Information which is
2822	exempt shall include, but is not limited to, information
2823	relating to workers' compensation, insurance benefits, and
2824	retirement or disability benefits.
2825	g.  Upon an employee's entrance into the employee
2826	assistance program, a program to assist any employee who has a
2827	behavioral or medical disorder, substance abuse problem, or
2828	emotional difficulty which affects the employee's job
2829	performance, all records relative to that participation shall be
2830	confidential and exempt from the provisions of s. 119.07(1) and
2831	s. 24(a), Art. I of the State Constitution, except as otherwise
2832	provided in s. 112.0455(11).
2833	h.  Information relating to negotiations for financing,
2834	reinsurance, depopulation, or contractual services, until the
2835	conclusion of the negotiations.
2836	i.  Minutes of closed meetings regarding underwriting
2837	files, and minutes of closed meetings regarding an open claims
2838	file until termination of all litigation and settlement of all
2839	claims with regard to that claim, except that information
2840	otherwise confidential or exempt by law will be redacted.
2841
2842	When an authorized insurer is considering underwriting a risk
2843	insured by the corporation, relevant underwriting files and
2844	confidential claims files may be released to the insurer
2845	provided the insurer agrees in writing, notarized and under
2846	oath, to maintain the confidentiality of such files. When a file
2847	is transferred to an insurer that file is no longer a public
2848	record because it is not held by an agency subject to the
2849	provisions of the public records law. Underwriting files and
2850	confidential claims files may also be released to staff of and
2851	the board of governors of the market assistance plan established
2852	pursuant to s. 627.3515, who must retain the confidentiality of
2853	such files, except such files may be released to authorized
2854	insurers that are considering assuming the risks to which the
2855	files apply, provided the insurer agrees in writing, notarized
2856	and under oath, to maintain the confidentiality of such files.
2857	Finally, the corporation or the board or staff of the market
2858	assistance plan may make the following information obtained from
2859	underwriting files and confidential claims files available to
2860	licensed general lines insurance agents: name, address, and
2861	telephone number of the residential property owner or insured;
2862	location of the risk; rating information; loss history; and
2863	policy type. The receiving licensed general lines insurance
2864	agent must retain the confidentiality of the information
2865	received.
2866	2.  Portions of meetings of the corporation are exempt from
2867	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2868	Constitution wherein confidential underwriting files or
2869	confidential open claims files are discussed. All portions of
2870	corporation meetings which are closed to the public shall be
2871	recorded by a court reporter. The court reporter shall record
2872	the times of commencement and termination of the meeting, all
2873	discussion and proceedings, the names of all persons present at
2874	any time, and the names of all persons speaking. No portion of
2875	any closed meeting shall be off the record. Subject to the
2876	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2877	notes of any closed meeting shall be retained by the corporation
2878	for a minimum of 5 years. A copy of the transcript, less any
2879	exempt matters, of any closed meeting wherein claims are
2880	discussed shall become public as to individual claims after
2881	settlement of the claim.
2882	(w)(o)  It is the intent of the Legislature that the
2883	amendments to this subsection enacted in 2002 should, over time,
2884	reduce the probable maximum windstorm losses in the residual
2885	markets and should reduce the potential assessments to be levied
2886	on property insurers and policyholders statewide. In furtherance
2887	of this intent:
2888	1.  The board shall, on or before February 1 of each year,
2889	provide a report to the President of the Senate and the Speaker
2890	of the House of Representatives showing the reduction or
2891	increase in the 100-year probable maximum loss attributable to
2892	wind-only coverages and the quota share program under this
2893	subsection combined, as compared to the benchmark 100-year
2894	probable maximum loss of the Florida Windstorm Underwriting
2895	Association. For purposes of this paragraph, the benchmark 100-
2896	year probable maximum loss of the Florida Windstorm Underwriting
2897	Association shall be the calculation dated February 2001 and
2898	based on November 30, 2000, exposures. In order to ensure
2899	comparability of data, the board shall use the same methods for
2900	calculating its probable maximum loss as were used to calculate
2901	the benchmark probable maximum loss. The reduction or increase
2902	in probable maximum loss shall be calculated without taking into
2903	account the probable maximum loss attributable to the
2904	nonhomestead account.
2905	2.  Beginning February 1, 2013 2007, if the report under
2906	subparagraph 1. for any year indicates that the 100-year
2907	probable maximum loss attributable to wind-only coverages and
2908	the quota share program combined does not reflect a reduction of
2909	at least 25 percent from the benchmark, the board shall reduce
2910	the boundaries of the high-risk area eligible for wind-only
2911	coverages under this subsection in a manner calculated to reduce
2912	such probable maximum loss to an amount at least 25 percent
2913	below the benchmark.
2914	3.  Beginning February 1, 2018 2012, if the report under
2915	subparagraph 1. for any year indicates that the 100-year
2916	probable maximum loss attributable to wind-only coverages and
2917	the quota share program combined does not reflect a reduction of
2918	at least 50 percent from the benchmark, the boundaries of the
2919	high-risk area eligible for wind-only coverages under this
2920	subsection shall be reduced by the elimination of any area that
2921	is not seaward of a line 1,000 feet inland from the Intracoastal
2922	Waterway.
2923	(x)(p)  In enacting the provisions of this section, the
2924	Legislature recognizes that both the Florida Windstorm
2925	Underwriting Association and the Residential Property and
2926	Casualty Joint Underwriting Association have entered into
2927	financing arrangements that obligate each entity to service its
2928	debts and maintain the capacity to repay funds secured under
2929	these financing arrangements. It is the intent of the
2930	Legislature that nothing in this section be construed to
2931	compromise, diminish, or interfere with the rights of creditors
2932	under such financing arrangements. It is further the intent of
2933	the Legislature to preserve the obligations of the Florida
2934	Windstorm Underwriting Association and Residential Property and
2935	Casualty Joint Underwriting Association with regard to
2936	outstanding financing arrangements, with such obligations
2937	passing entirely and unchanged to the corporation and,
2938	specifically, to the applicable account of the corporation. So
2939	long as any bonds, notes, indebtedness, or other financing
2940	obligations of the Florida Windstorm Underwriting Association or
2941	the Residential Property and Casualty Joint Underwriting
2942	Association are outstanding, under the terms of the financing
2943	documents pertaining to them, the governing board of the
2944	corporation shall have and shall exercise the authority to levy,
2945	charge, collect, and receive all premiums, assessments,
2946	surcharges, charges, revenues, and receipts that the
2947	associations had authority to levy, charge, collect, or receive
2948	under the provisions of subsection (2) and this subsection,
2949	respectively, as they existed on January 1, 2002, to provide
2950	moneys, without exercise of the authority provided by this
2951	subsection, in at least the amounts, and by the times, as would
2952	be provided under those former provisions of subsection (2) or
2953	this subsection, respectively, so that the value, amount, and
2954	collectability of any assets, revenues, or revenue source
2955	pledged or committed to, or any lien thereon securing such
2956	outstanding bonds, notes, indebtedness, or other financing
2957	obligations will not be diminished, impaired, or adversely
2958	affected by the amendments made by this act and to permit
2959	compliance with all provisions of financing documents pertaining
2960	to such bonds, notes, indebtedness, or other financing
2961	obligations, or the security or credit enhancement for them, and
2962	any reference in this subsection to bonds, notes, indebtedness,
2963	financing obligations, or similar obligations, of the
2964	corporation shall include like instruments or contracts of the
2965	Florida Windstorm Underwriting Association and the Residential
2966	Property and Casualty Joint Underwriting Association to the
2967	extent not inconsistent with the provisions of the financing
2968	documents pertaining to them.
2969	(y)(q)  The corporation shall not require the securing of
2970	flood insurance as a condition of coverage if the insured or
2971	applicant executes a form approved by the office affirming that
2972	flood insurance is not provided by the corporation and that if
2973	flood insurance is not secured by the applicant or insured in
2974	addition to coverage by the corporation, the risk will not be
2975	covered for flood damage. A corporation policyholder electing
2976	not to secure flood insurance and executing a form as provided
2977	herein making a claim for water damage against the corporation
2978	shall have the burden of proving the damage was not caused by
2979	flooding. Notwithstanding other provisions of this subsection,
2980	the corporation may deny coverage to an applicant or insured who
2981	refuses to execute the form described herein.
2982	(z)(r)  A salaried employee of the corporation who performs
2983	policy administration services subsequent to the effectuation of
2984	a corporation policy is not required to be licensed as an agent
2985	under the provisions of s. 626.112.
2986	(aa)(s)  The transition to homestead and nonhomestead
2987	accounts shall begin on October 1, 2006. A policy issued on or
2988	after that date shall be issued in the applicable homestead
2989	account or the nonhomestead account, based upon whether the
2990	property constitutes homestead property as provided in
2991	subparagraph (b)2. A policy in effect on October 1, 2006, shall
2992	be placed in the applicable homestead account or the
2993	nonhomestead account, based upon whether the property
2994	constitutes homestead property as provided in subparagraph
2995	(b)2., upon the first renewal of such policy after October 1,
2996	2006.
2997	(bb)(u)  An employee of the corporation shall notify the
2998	Division of Insurance Fraud within 48 hours after having
2999	information that would lead a reasonable person to suspect that
3000	fraud may have been committed by any employee of the
3001	corporation.
3002	(cc)(v)  By February 1, 2007, the corporation shall submit
3003	a report to the President of the Senate, the Speaker of the
3004	House of Representatives, the minority party leaders of the
3005	Senate and the House of Representatives, and the chairs of the
3006	standing committees of the Senate and the House of
3007	Representatives having jurisdiction over matters relating to
3008	property and casualty insurance. In preparing the report, the
3009	corporation shall consult with the Office of Insurance
3010	Regulation, the Department of Financial Services, and any other
3011	party the corporation determines is appropriate. The report
3012	shall include findings and recommendations on the feasibility of
3013	requiring authorized insurers that issue and service personal
3014	and commercial residential policies and commercial
3015	nonresidential policies that provide coverage for basic property
3016	perils except for the peril of wind to issue and service for a
3017	fee personal and commercial residential policies and commercial
3018	nonresidential policies providing coverage for the peril of wind
3019	issued by the corporation. The report shall include:
3020	1.  The expense savings to the corporation of issuing and
3021	servicing such policies as determined through a cost benefit
3022	analysis.
3023	2.  The expenses and liability to authorized insurers
3024	associated with issuing and servicing such policies.
3025	3.  The impact on service to policyholders of the
3026	corporation relating to issuing and servicing such policies.
3027	4.  The impact on the producing agent of the corporation of
3028	issuing and servicing such policies.
3029	5.  Recommendations as to the amount of the fee that should
3030	be paid to authorized insurers for issuing and servicing such
3031	policies.
3032	6.  The impact issuing and servicing such policies will
3033	have on the corporation's number of policies, total insured
3034	value, and probable maximum loss.
3035	(dd)(w)  There shall be no liability on the part of, and no
3036	cause of action of any nature shall arise against, producing
3037	agents of record of the corporation or employees of such agents
3038	for insolvency of any take-out insurer.
3039	(ee)(x)  The Legislature finds that the total area eligible
3040	for the high-risk account of the corporation has a material
3041	impact on the availability of wind coverage from the voluntary
3042	admitted market, deficits of the corporation, assessments to be
3043	levied on property insurers and policyholders statewide, the
3044	ability and willingness of authorized insurers to write wind
3045	coverage in the high-risk areas, the probable maximum windstorm
3046	losses of the corporation, general commerce in coastal areas,
3047	and the overall financial condition of the state. Therefore, in
3048	furtherance of these findings and intent:
3049	1.  The High Risk Eligibility Panel is created.
3050	2.  The members of the panel shall be appointed as follows:
3051	a.  The board shall appoint two board members.
3052	b.  The Governor shall appoint one member.
3053	c.  The Chief Financial Officer shall appoint one member.
3054	d.  The Commissioner of Insurance Regulation shall appoint
3055	a representative of the office to serve as a member.
3056	e.  The President of the Senate shall appoint one member.
3057	f.  The Speaker of the House of Representatives shall
3058	appoint one member.
3059
3060	Members of the panel must be residents of this state with
3061	insurance expertise. Members shall elect a chair and shall serve
3062	3-year terms each. The panel shall operate independently of any
3063	state agency and shall be administered by the corporation. The
3064	panel shall make an annual report to the President of the Senate
3065	and the Speaker of the House of Representatives on or before
3066	February 1 of each year recommending the areas that should be
3067	eligible for the high-risk account of the corporation. Members
3068	shall not receive compensation and are not entitled to receive
3069	reimbursement for per diem and travel expenses as provided in s.
3070	112.061, except for any panel member who is a state employee.
3071	3.  The Legislature's intent provided in subparagraphs
3072	(a)1. and 2. shall provide guidance for the panel to use in the
3073	panel's recommendations to the Legislature required in
3074	subparagraph 1. The panel shall consider the following factors
3075	in fulfilling its responsibilities under this paragraph:
3076	a.  The number of commercial risks in a given area that are
3077	unable to find wind coverage from the voluntary admitted market.
3078	b.  Reports from members of the mortgage industry
3079	indicating difficulty in finding forced placed policies for
3080	commercial wind coverage.
3081	c.  The number of approved excess and surplus lines
3082	carriers certifying an unwillingness to provide commercial wind
3083	coverage similar to that approved for use by the office for the
3084	voluntary admitted market.
3085	d.  Other relevant factors.
3086
3087	The office and the corporation shall provide the panel with any
3088	information the panel considers necessary to determine areas
3089	eligible for the high-risk account of the corporation. For the
3090	purpose of making accurate determinations for areas eligible for
3091	the high-risk account of the corporation, the panel may
3092	interview and request and receive information from residents of
3093	this state in areas impacted by this paragraph, including, but
3094	not limited to, insurance agents, insurance companies,
3095	actuaries, and other insurance professionals. Upon request of
3096	the panel, the office may conduct public hearings in areas that
3097	may be impacted by the panel's recommendations.
3098	4.  Notwithstanding other provisions of this paragraph, the
3099	panel shall conduct an analysis to determine the areas to be
3100	eligible for the high-risk account of the corporation for any
3101	county that contains an eligible area extending more than 2
3102	miles from the coast, any coastal county that does not have
3103	areas designated as eligible for the high-risk account, and
3104	counties with barrier islands whether or not such islands or
3105	portions of such islands are currently eligible for the high
3106	risk account. The panel shall submit a report, including its
3107	analysis, to the office and to the corporation by November 30,
3108	2006. The report shall specify changes to the areas eligible for
3109	the high-risk account for such affected counties based on its
3110	analysis.
3111	Section 12.  Effective January 1, 2007, paragraph (c) of
3112	subsection (6) of section 627.351, Florida Statutes, as amended
3113	by this act, is amended to read:
3114	627.351  Insurance risk apportionment plans.--
3115	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
3116	(c)  The plan of operation of the corporation:
3117	1.  Must provide for adoption of residential property and
3118	casualty insurance policy forms and commercial residential and
3119	nonresidential property insurance forms, which forms must be
3120	approved by the office prior to use. The corporation shall adopt
3121	the following policy forms:
3122	a.  Standard personal lines policy forms that are
3123	comprehensive multiperil policies providing full coverage of a
3124	residential property equivalent to the coverage provided in the
3125	private insurance market under an HO-3, HO-4, or HO-6 policy.
3126	b.  Basic personal lines policy forms that are policies
3127	similar to an HO-8 policy or a dwelling fire policy that provide
3128	coverage meeting the requirements of the secondary mortgage
3129	market, but which coverage is more limited than the coverage
3130	under a standard policy.
3131	c.  Commercial lines residential policy forms that are
3132	generally similar to the basic perils of full coverage
3133	obtainable for commercial residential structures in the admitted
3134	voluntary market.
3135	d.  Personal lines and commercial lines residential
3136	property insurance forms that cover the peril of wind only. The
3137	forms are applicable only to residential properties located in
3138	areas eligible for coverage under the high-risk account referred
3139	to in sub-subparagraph (b)2.a.
3140	e.  Commercial lines nonresidential property insurance
3141	forms that cover the peril of wind only. The forms are
3142	applicable only to nonresidential properties located in areas
3143	eligible for coverage under the high-risk account referred to in
3144	sub-subparagraph (b)2.a.
3145	f.  The corporation may adopt variations of the policy
3146	forms listed in sub-subparagraphs a.-e. that contain more
3147	restrictive coverage.
3148	2.a.  Must provide that the corporation adopt a program in
3149	which the corporation and authorized insurers enter into quota
3150	share primary insurance agreements for hurricane coverage, as
3151	defined in s. 627.4025(2)(a), for eligible risks, and adopt
3152	property insurance forms for eligible risks which cover the
3153	peril of wind only. As used in this subsection, the term:
3154	(I)  "Quota share primary insurance" means an arrangement
3155	in which the primary hurricane coverage of an eligible risk is
3156	provided in specified percentages by the corporation and an
3157	authorized insurer. The corporation and authorized insurer are
3158	each solely responsible for a specified percentage of hurricane
3159	coverage of an eligible risk as set forth in a quota share
3160	primary insurance agreement between the corporation and an
3161	authorized insurer and the insurance contract. The
3162	responsibility of the corporation or authorized insurer to pay
3163	its specified percentage of hurricane losses of an eligible
3164	risk, as set forth in the quota share primary insurance
3165	agreement, may not be altered by the inability of the other
3166	party to the agreement to pay its specified percentage of
3167	hurricane losses. Eligible risks that are provided hurricane
3168	coverage through a quota share primary insurance arrangement
3169	must be provided policy forms that set forth the obligations of
3170	the corporation and authorized insurer under the arrangement,
3171	clearly specify the percentages of quota share primary insurance
3172	provided by the corporation and authorized insurer, and
3173	conspicuously and clearly state that neither the authorized
3174	insurer nor the corporation may be held responsible beyond its
3175	specified percentage of coverage of hurricane losses.
3176	(II)  "Eligible risks" means personal lines residential and
3177	commercial lines residential risks that meet the underwriting
3178	criteria of the corporation and are located in areas that were
3179	eligible for coverage by the Florida Windstorm Underwriting
3180	Association on January 1, 2002.
3181	b.  The corporation may enter into quota share primary
3182	insurance agreements with authorized insurers at corporation
3183	coverage levels of 90 percent and 50 percent.
3184	c.  If the corporation determines that additional coverage
3185	levels are necessary to maximize participation in quota share
3186	primary insurance agreements by authorized insurers, the
3187	corporation may establish additional coverage levels. However,
3188	the corporation's quota share primary insurance coverage level
3189	may not exceed 90 percent.
3190	d.  Any quota share primary insurance agreement entered
3191	into between an authorized insurer and the corporation must
3192	provide for a uniform specified percentage of coverage of
3193	hurricane losses, by county or territory as set forth by the
3194	corporation board, for all eligible risks of the authorized
3195	insurer covered under the quota share primary insurance
3196	agreement.
3197	e.  Any quota share primary insurance agreement entered
3198	into between an authorized insurer and the corporation is
3199	subject to review and approval by the office. However, such
3200	agreement shall be authorized only as to insurance contracts
3201	entered into between an authorized insurer and an insured who is
3202	already insured by the corporation for wind coverage.
3203	f.  For all eligible risks covered under quota share
3204	primary insurance agreements, the exposure and coverage levels
3205	for both the corporation and authorized insurers shall be
3206	reported by the corporation to the Florida Hurricane Catastrophe
3207	Fund. For all policies of eligible risks covered under quota
3208	share primary insurance agreements, the corporation and the
3209	authorized insurer shall maintain complete and accurate records
3210	for the purpose of exposure and loss reimbursement audits as
3211	required by Florida Hurricane Catastrophe Fund rules. The
3212	corporation and the authorized insurer shall each maintain
3213	duplicate copies of policy declaration pages and supporting
3214	claims documents.
3215	g.  The corporation board shall establish in its plan of
3216	operation standards for quota share agreements which ensure that
3217	there is no discriminatory application among insurers as to the
3218	terms of quota share agreements, pricing of quota share
3219	agreements, incentive provisions if any, and consideration paid
3220	for servicing policies or adjusting claims.
3221	h.  The quota share primary insurance agreement between the
3222	corporation and an authorized insurer must set forth the
3223	specific terms under which coverage is provided, including, but
3224	not limited to, the sale and servicing of policies issued under
3225	the agreement by the insurance agent of the authorized insurer
3226	producing the business, the reporting of information concerning
3227	eligible risks, the payment of premium to the corporation, and
3228	arrangements for the adjustment and payment of hurricane claims
3229	incurred on eligible risks by the claims adjuster and personnel
3230	of the authorized insurer. Entering into a quota sharing
3231	insurance agreement between the corporation and an authorized
3232	insurer shall be voluntary and at the discretion of the
3233	authorized insurer.
3234	3.  May provide that the corporation may employ or
3235	otherwise contract with individuals or other entities to provide
3236	administrative or professional services that may be appropriate
3237	to effectuate the plan. The corporation shall have the power to
3238	borrow funds, by issuing bonds or by incurring other
3239	indebtedness, and shall have other powers reasonably necessary
3240	to effectuate the requirements of this subsection, including,
3241	without limitation, the power to issue bonds and incur other
3242	indebtedness in order to refinance outstanding bonds or other
3243	indebtedness. The corporation may, but is not required to, seek
3244	judicial validation of its bonds or other indebtedness under
3245	chapter 75. The corporation may issue bonds or incur other
3246	indebtedness, or have bonds issued on its behalf by a unit of
3247	local government pursuant to subparagraph (g)2., in the absence
3248	of a hurricane or other weather-related event, upon a
3249	determination by the corporation, subject to approval by the
3250	office, that such action would enable it to efficiently meet the
3251	financial obligations of the corporation and that such
3252	financings are reasonably necessary to effectuate the
3253	requirements of this subsection. The corporation is authorized
3254	to take all actions needed to facilitate tax-free status for any
3255	such bonds or indebtedness, including formation of trusts or
3256	other affiliated entities. The corporation shall have the
3257	authority to pledge assessments, projected recoveries from the
3258	Florida Hurricane Catastrophe Fund, other reinsurance
3259	recoverables, market equalization and other surcharges, and
3260	other funds available to the corporation as security for bonds
3261	or other indebtedness. In recognition of s. 10, Art. I of the
3262	State Constitution, prohibiting the impairment of obligations of
3263	contracts, it is the intent of the Legislature that no action be
3264	taken whose purpose is to impair any bond indenture or financing
3265	agreement or any revenue source committed by contract to such
3266	bond or other indebtedness.
3267	4.a.  Must require that the corporation operate subject to
3268	the supervision and approval of a board of governors consisting
3269	of 8 individuals who are residents of this state, from different
3270	geographical areas of this state. The Governor, the Chief
3271	Financial Officer, the President of the Senate, and the Speaker
3272	of the House of Representatives shall each appoint two members
3273	of the board, effective August 1, 2005. At least one of the two
3274	members appointed by each appointing officer must have
3275	demonstrated expertise in insurance. The Chief Financial Officer
3276	shall designate one of the appointees as chair. All board
3277	members serve at the pleasure of the appointing officer. All
3278	board members, including the chair, must be appointed to serve
3279	for 3-year terms beginning annually on a date designated by the
3280	plan. Any board vacancy shall be filled for the unexpired term
3281	by the appointing officer. The Chief Financial Officer shall
3282	appoint a technical advisory group to provide information and
3283	advice to the board of governors in connection with the board's
3284	duties under this subsection. The executive director and senior
3285	managers of the corporation shall be engaged by the board, as
3286	recommended by the Chief Financial Officer, and serve at the
3287	pleasure of the board. The executive director is responsible for
3288	employing other staff as the corporation may require, subject to
3289	review and concurrence by the board and the Chief Financial
3290	Officer.
3291	b.  The board shall create a Market Accountability Advisory
3292	Committee to assist the corporation in developing awareness of
3293	its rates and its customer and agent service levels in
3294	relationship to the voluntary market insurers writing similar
3295	coverage. The members of the advisory committee shall consist of
3296	the following 11 persons, one of whom must be elected chair by
3297	the members of the committee: four representatives, one
3298	appointed by the Florida Association of Insurance Agents, one by
3299	the Florida Association of Insurance and Financial Advisors, one
3300	by the Professional Insurance Agents of Florida, and one by the
3301	Latin American Association of Insurance Agencies; three
3302	representatives appointed by the insurers with the three highest
3303	voluntary market share of residential property insurance
3304	business in the state; one representative from the Office of
3305	Insurance Regulation; one consumer appointed by the board who is
3306	insured by the corporation at the time of appointment to the
3307	committee; one representative appointed by the Florida
3308	Association of Realtors; and one representative appointed by the
3309	Florida Bankers Association. All members must serve for 3-year
3310	terms and may serve for consecutive terms. The committee shall
3311	report to the corporation at each board meeting on insurance
3312	market issues which may include rates and rate competition with
3313	the voluntary market; service, including policy issuance, claims
3314	processing, and general responsiveness to policyholders,
3315	applicants, and agents; and matters relating to depopulation.
3316	5.  Must provide a procedure for determining the
3317	eligibility of a risk for coverage, as follows:
3318	a.  Subject to the provisions of s. 627.3517, with respect
3319	to personal lines residential risks, if the risk is offered
3320	coverage from an authorized insurer at the insurer's approved
3321	rate under either a standard policy including wind coverage or,
3322	if consistent with the insurer's underwriting rules as filed
3323	with the office, a basic policy including wind coverage, the
3324	risk is not eligible for any policy issued by the corporation.
3325	If the risk is not able to obtain any such offer, the risk is
3326	eligible for either a standard policy including wind coverage or
3327	a basic policy including wind coverage issued by the
3328	corporation; however, if the risk could not be insured under a
3329	standard policy including wind coverage regardless of market
3330	conditions, the risk shall be eligible for a basic policy
3331	including wind coverage unless rejected under subparagraph 8.
3332	The corporation shall determine the type of policy to be
3333	provided on the basis of objective standards specified in the
3334	underwriting manual and based on generally accepted underwriting
3335	practices.
3336	(I)  If the risk accepts an offer of coverage through the
3337	market assistance plan or an offer of coverage through a
3338	mechanism established by the corporation before a policy is
3339	issued to the risk by the corporation or during the first 30
3340	days of coverage by the corporation, and the producing agent who
3341	submitted the application to the plan or to the corporation is
3342	not currently appointed by the insurer, the insurer shall:
3343	(A)  Pay to the producing agent of record of the policy,
3344	for the first year, an amount that is the greater of the
3345	insurer's usual and customary commission for the type of policy
3346	written or a fee equal to the usual and customary commission of
3347	the corporation; or
3348	(B)  Offer to allow the producing agent of record of the
3349	policy to continue servicing the policy for a period of not less
3350	than 1 year and offer to pay the agent the greater of the
3351	insurer's or the corporation's usual and customary commission
3352	for the type of policy written.
3353
3354	If the producing agent is unwilling or unable to accept
3355	appointment, the new insurer shall pay the agent in accordance
3356	with sub-sub-sub-subparagraph (A).
3357	(II)  When the corporation enters into a contractual
3358	agreement for a take-out plan, the producing agent of record of
3359	the corporation policy is entitled to retain any unearned
3360	commission on the policy, and the insurer shall:
3361	(A)  Pay to the producing agent of record of the
3362	corporation policy, for the first year, an amount that is the
3363	greater of the insurer's usual and customary commission for the
3364	type of policy written or a fee equal to the usual and customary
3365	commission of the corporation; or
3366	(B)  Offer to allow the producing agent of record of the
3367	corporation policy to continue servicing the policy for a period
3368	of not less than 1 year and offer to pay the agent the greater
3369	of the insurer's or the corporation's usual and customary
3370	commission for the type of policy written.
3371
3372	If the producing agent is unwilling or unable to accept
3373	appointment, the new insurer shall pay the agent in accordance
3374	with sub-sub-sub-subparagraph (A).
3375	b.  With respect to commercial lines residential risks, if
3376	the risk is offered coverage under a policy including wind
3377	coverage from an authorized insurer at its approved rate, the
3378	risk is not eligible for any policy issued by the corporation.
3379	If the risk is not able to obtain any such offer, the risk is
3380	eligible for a policy including wind coverage issued by the
3381	corporation.
3382	(I)  If the risk accepts an offer of coverage through the
3383	market assistance plan or an offer of coverage through a
3384	mechanism established by the corporation before a policy is
3385	issued to the risk by the corporation or during the first 30
3386	days of coverage by the corporation, and the producing agent who
3387	submitted the application to the plan or the corporation is not
3388	currently appointed by the insurer, the insurer shall:
3389	(A)  Pay to the producing agent of record of the policy,
3390	for the first year, an amount that is the greater of the
3391	insurer's usual and customary commission for the type of policy
3392	written or a fee equal to the usual and customary commission of
3393	the corporation; or
3394	(B)  Offer to allow the producing agent of record of the
3395	policy to continue servicing the policy for a period of not less
3396	than 1 year and offer to pay the agent the greater of the
3397	insurer's or the corporation's usual and customary commission
3398	for the type of policy written.
3399
3400	If the producing agent is unwilling or unable to accept
3401	appointment, the new insurer shall pay the agent in accordance
3402	with sub-sub-sub-subparagraph (A).
3403	(II)  When the corporation enters into a contractual
3404	agreement for a take-out plan, the producing agent of record of
3405	the corporation policy is entitled to retain any unearned
3406	commission on the policy, and the insurer shall:
3407	(A)  Pay to the producing agent of record of the
3408	corporation policy, for the first year, an amount that is the
3409	greater of the insurer's usual and customary commission for the
3410	type of policy written or a fee equal to the usual and customary
3411	commission of the corporation; or
3412	(B)  Offer to allow the producing agent of record of the
3413	corporation policy to continue servicing the policy for a period
3414	of not less than 1 year and offer to pay the agent the greater
3415	of the insurer's or the corporation's usual and customary
3416	commission for the type of policy written.
3417
3418	If the producing agent is unwilling or unable to accept
3419	appointment, the new insurer shall pay the agent in accordance
3420	with sub-sub-sub-subparagraph (A).
3421	c.  To preserve existing incentives for carriers to write
3422	dwellings in the voluntary market and not in the corporation,
3423	the corporation shall continue to offer authorized insurers,
3424	including insurers writing dwellings valued at $1 million or
3425	more, the same voluntary writing credits that were available on
3426	January 1, 2006, to carriers writing wind coverage for dwellings
3427	in the areas eligible for coverage in the high-risk account.
3428	d.  With respect to personal lines residential risks, if
3429	the risk is a dwelling with an insured value of $1 million or
3430	more, or if the risk is one that is excluded from the coverage
3431	to be provided by the condominium association under s.
3432	718.111(11)(b) and that is insured by the condominium unit owner
3433	for a combined dwelling and contents replacement cost of $1
3434	million or more, the risk is not eligible for any policy issued
3435	by the corporation. Rates and forms for personal lines
3436	residential risks not eligible for coverage by the corporation
3437	specified by this sub-subparagraph are not subject to ss.
3438	627.062 and 627.0629. Such rates and forms are subject to all
3439	other applicable provisions of this code and rules adopted under
3440	this code. During the course of an insurer's market conduct
3441	examination, the office may review the rate for any risk to
3442	which the provisions of this sub-subparagraph are applicable to
3443	determine if such rate is inadequate or unfairly discriminatory.
3444	Rates on personal lines residential risks not eligible for
3445	coverage by the corporation may be found inadequate by the
3446	office if they are clearly insufficient, together with the
3447	investment income attributable to such risks, to sustain
3448	projected losses and expenses in the class of business to which
3449	such rates apply. Rates on personal lines residential risks not
3450	eligible for coverage by the corporation may also be found
3451	inadequate as to the premium charged to a risk or group of risks
3452	if discounts or credits are allowed that exceed a reasonable
3453	reflection of expense savings and reasonably expected loss
3454	experience from the risk or group of risks. Rates on personal
3455	lines residential risks not eligible for coverage by the
3456	corporation may be found to be unfairly discriminatory as to a
3457	risk or group of risks by the office if the application of
3458	premium discounts, credits, or surcharges among such risks does
3459	not bear a reasonable relationship to the expected loss and
3460	expense experience among the various risks. A rating plan,
3461	including discounts, credits, or surcharges on personal lines
3462	residential risks not eligible for coverage by the corporation
3463	may also be found to be unfairly discriminatory if the plan
3464	fails to clearly and equitably reflect consideration of the
3465	policyholder's participation in a risk management program
3466	adjusted pursuant to s. 627.0625. The office may order an
3467	insurer to discontinue using a rate for new policies or upon
3468	renewal of a policy if the office finds the rate to be
3469	inadequate or unfairly discriminatory. Insurers must maintain
3470	records and documentation relating to rates and forms subject to
3471	this sub-subparagraph for a period of at least 5 years after the
3472	effective date of the policy.
3473	e.  For policies subject to nonrenewal as a result of the
3474	risk being no longer eligible for coverage pursuant to sub-
3475	subparagraph d., the corporation shall, directly or through the
3476	market assistance plan, make information from confidential
3477	underwriting and claims files of policyholders available only to
3478	licensed general lines agents who register with the corporation
3479	to receive such information according to the following
3480	procedures:
3481	(I)  By August 1, 2006, the corporation shall provide
3482	policyholders who are not eligible for renewal pursuant to sub-
3483	subparagraph d. the opportunity to request in writing, within 30
3484	days after the notification is sent, that information from their
3485	confidential underwriting and claims files not be released to
3486	licensed general lines agents registered pursuant to sub-sub-
3487	subparagraph e.(II);
3488	(II)  By August 1, 2006, the corporation shall make
3489	available to licensed general lines agents the registration
3490	procedures to be used to obtain confidential information from
3491	underwriting and claims files for policies not eligible for
3492	renewal pursuant to sub-subparagraph d. As a condition of
3493	registration, the corporation shall require the licensed general
3494	lines agent to attest that the agent has the experience and
3495	relationships with authorized or surplus lines carriers to
3496	attempt to offer replacement coverage for policies not eligible
3497	for renewal pursuant to sub-subparagraph d.
3498	(III)  By September 1, 2006, the corporation shall make
3499	available through a secured website to licensed general lines
3500	agents registered pursuant to sub-sub-subparagraph e.(II)
3501	application, rating, loss history, mitigation, and policy type
3502	information relating to all policies not eligible for renewal
3503	pursuant to sub-subparagraph d. and for which the policyholder
3504	has not requested the corporation withhold such information
3505	pursuant to sub-sub-subparagraph e.(I). The licensed general
3506	lines agent registered pursuant to sub-sub-subparagraph e.(II)
3507	may use such information to contact and assist the policyholder
3508	in securing replacement policies and the agent may disclose to
3509	the policyholder such information was obtained from the
3510	corporation.
3511	f.  With respect to nonhomestead property, eligibility must
3512	be determined in accordance with sub-sub-sub-subparagraph
3513	(b)2.a.(II)(A).
3514	6.  Must provide by July 1, 2007, that an application for
3515	coverage for a new policy is subject to a waiting period of 10
3516	days before coverage is effective, during which time the
3517	corporation shall make such application available for review by
3518	general lines agents and authorized property and casualty
3519	insurers. The board may approve exceptions that allow for
3520	coverage to be effective before the end of the 10-day waiting
3521	period, for coverage issued in conjunction with a real estate
3522	closing, and for such other exceptions as the board determines
3523	are necessary to prevent lapses in coverage.
3524	7.  Must include rules for classifications of risks and
3525	rates therefor.
3526	8.  Must provide that if premium and investment income for
3527	an account attributable to a particular calendar year are in
3528	excess of projected losses and expenses for the account
3529	attributable to that year, such excess shall be held in surplus
3530	in the account. Such surplus shall be available to defray
3531	deficits in that account as to future years and shall be used
3532	for that purpose prior to assessing assessable insurers and
3533	assessable insureds as to any calendar year.
3534	9.  Must provide objective criteria and procedures to be
3535	uniformly applied for all applicants in determining whether an
3536	individual risk is so hazardous as to be uninsurable. In making
3537	this determination and in establishing the criteria and
3538	procedures, the following shall be considered:
3539	a.  Whether the likelihood of a loss for the individual
3540	risk is substantially higher than for other risks of the same
3541	class; and
3542	b.  Whether the uncertainty associated with the individual
3543	risk is such that an appropriate premium cannot be determined.
3544
3545	The acceptance or rejection of a risk by the corporation shall
3546	be construed as the private placement of insurance, and the
3547	provisions of chapter 120 shall not apply.
3548	10.  Must provide that the corporation shall make its best
3549	efforts to procure catastrophe reinsurance at reasonable rates,
3550	to cover its projected 100-year probable maximum loss in the
3551	homestead accounts as determined by the board of governors.
3552	11.  Must provide that in the event of regular deficit
3553	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
3554	(b)3.b., in the personal lines homestead account, the commercial
3555	lines residential homestead account, or the high-risk homestead
3556	account, the corporation shall levy upon corporation homestead
3557	account policyholders in its next rate filing, or by a separate
3558	rate filing solely for this purpose, a Citizens policyholder
3559	surcharge arising from a regular assessment in such account in a
3560	percentage equal to the total amount of such regular assessments
3561	divided by the aggregate statewide direct written premium for
3562	subject lines of business for the year preceding the year in
3563	which the deficit to which the regular assessment related is
3564	incurred. Citizens policyholder surcharges under this
3565	subparagraph are not considered premium and are not subject to
3566	commissions, fees, or premium taxes; however, failure to pay the
3567	Citizens policyholder a market equalization surcharge shall be
3568	treated as failure to pay premium. Notwithstanding any other
3569	provision of this section, for purposes of the Citizens
3570	policyholder surcharges to be levied pursuant to this
3571	subparagraph, the total amount of the regular assessment to
3572	which such Citizens policyholder surcharge relates shall be
3573	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
3574	12.  The policies issued by the corporation must provide
3575	that, if the corporation or the market assistance plan obtains
3576	an offer from an authorized insurer to cover the risk at its
3577	approved rates, the risk is no longer eligible for renewal
3578	through the corporation.
3579	13.  Corporation policies and applications must include a
3580	notice that the corporation policy could, under this section, be
3581	replaced with a policy issued by an authorized insurer that does
3582	not provide coverage identical to the coverage provided by the
3583	corporation or an insurer writing coverage pursuant to part VIII
3584	of chapter 626. The notice shall also specify that acceptance of
3585	corporation coverage creates a conclusive presumption that the
3586	applicant or policyholder is aware of this potential.
3587	14.  May establish, subject to approval by the office,
3588	different eligibility requirements and operational procedures
3589	for any line or type of coverage for any specified county or
3590	area if the board determines that such changes to the
3591	eligibility requirements and operational procedures are
3592	justified due to the voluntary market being sufficiently stable
3593	and competitive in such area or for such line or type of
3594	coverage and that consumers who, in good faith, are unable to
3595	obtain insurance through the voluntary market through ordinary
3596	methods would continue to have access to coverage from the
3597	corporation. When coverage is sought in connection with a real
3598	property transfer, such requirements and procedures shall not
3599	provide for an effective date of coverage later than the date of
3600	the closing of the transfer as established by the transferor,
3601	the transferee, and, if applicable, the lender.
3602	15.  Must provide that, with respect to the high-risk
3603	homestead account, any assessable insurer with a surplus as to
3604	policyholders of $25 million or less writing 25 percent or more
3605	of its total countrywide property insurance premiums in this
3606	state may petition the office, within the first 90 days of each
3607	calendar year, to qualify as a limited apportionment company. In
3608	no event shall a limited apportionment company be required to
3609	participate in the portion of any assessment, within the high-
3610	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
3611	subparagraph (b)3.b. in the aggregate which exceeds $50 million
3612	after payment of available high-risk account funds in any
3613	calendar year. However, A limited apportionment company shall
3614	collect from its policyholders any emergency assessment imposed
3615	under sub-subparagraph (b)3.d. The plan shall provide that, if
3616	the office determines that any regular assessment will result in
3617	an impairment of the surplus of a limited apportionment company,
3618	the office may direct that all or part of such assessment be
3619	deferred as provided in subparagraph (g)4. However, there shall
3620	be no limitation or deferment of an emergency assessment to be
3621	collected from policyholders under sub-subparagraph (b)3.d.
3622	16.  Must provide that the corporation appoint as its
3623	licensed agents only those agents who also hold an appointment
3624	as defined in s. 626.015(3) with an insurer who at the time of
3625	the agent's initial appointment by the corporation is authorized
3626	to write and is actually writing personal lines residential
3627	property coverage, commercial residential property coverage, or
3628	commercial nonresidential property coverage within the state.
3629	17.  Must provide, by July 1, 2007, a premium payment plan
3630	option to its policyholders which allows for quarterly and
3631	semiannual payment of premiums.
3632	18.  Must provide that the hurricane deductible for any
3633	property in the nonhomestead account with an insured value of
3634	$250,000 or more must be at least 5 percent of the insured
3635	value.
3636	19.  Must provide that the application for coverage under
3637	the nonhomestead account and the declaration page of each
3638	nonhomestead account policy include a statement in boldface 12-
3639	point type specifying that public subsidies do not support the
3640	corporation's coverage of nonhomestead property; that if the
3641	nonhomestead account of the corporation sustains a deficit or is
3642	unable to pay claims, the nonhomestead policyholder shall be
3643	subject to an immediate assessment in an amount up to 100
3644	percent of the premium and a further assessment upon renewal of
3645	the policy; and that the applicant or policyholder may wish to
3646	seek alternative coverage from an authorized insurer or surplus
3647	lines insurer that will not be subject to such potential
3648	assessments.
3649	20.  Must provide that the application for coverage under
3650	any of the homestead accounts and the declaration page of each
3651	homestead account policy include a statement in boldface 12-
3652	point type specifying that a false declaration of homestead
3653	status for purposes of obtaining coverage in any of the
3654	homestead accounts may constitute the offense of insurance
3655	fraud, as prohibited and punishable as a felony under s.
3656	817.234.
3657	21.  Must limit coverage on mobile homes or manufactured
3658	homes built prior to 1994 to actual cash value of the dwelling
3659	rather than replacement costs of the dwelling.
3660	Section 13.  Effective July 1, 2006, section 627.3517,
3661	Florida Statutes, is amended to read:
3662	627.3517  Consumer choice.--
3663	(1)  Except as provided in subsection (2), no provision of
3664	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
3665	impair the right of any insurance risk apportionment plan
3666	policyholder, upon receipt of any keepout or take-out offer, to
3667	retain his or her current agent, so long as that agent is duly
3668	licensed and appointed by the insurance risk apportionment plan
3669	or otherwise authorized to place business with the insurance
3670	risk apportionment plan. This right shall not be canceled,
3671	suspended, impeded, abridged, or otherwise compromised by any
3672	rule, plan of operation, or depopulation plan, whether through
3673	keepout, take-out, midterm assumption, or any other means, of
3674	any insurance risk apportionment plan or depopulation plan,
3675	including, but not limited to, those described in s. 627.351, s.
3676	627.3511, or s. 627.3515. The commission shall adopt any rules
3677	necessary to cause any insurance risk apportionment plan or
3678	market assistance plan under such sections to demonstrate that
3679	the operations of the plan do not interfere with, promote, or
3680	allow interference with the rights created under this section.
3681	If the policyholder's current agent is unable or unwilling to be
3682	appointed with the insurer making the take-out or keepout offer,
3683	the policyholder shall not be disqualified from participation in
3684	the appropriate insurance risk apportionment plan because of an
3685	offer of coverage in the voluntary market. An offer of full
3686	property insurance coverage by the insurer currently insuring
3687	either the ex-wind or wind-only coverage on the policy to which
3688	the offer applies shall not be considered a take-out or keepout
3689	offer. Any rule, plan of operation, or plan of depopulation,
3690	through keepout, take-out, midterm assumption, or any other
3691	means, of any property insurance risk apportionment plan under
3692	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
3693	and 627.3511(4).
3694	(2)  This section does not apply during the first 10 days
3695	after a new application for coverage has been submitted to
3696	Citizens Property Insurance Corporation under s. 627.351(6),
3697	whether or not coverage is bound during this period.
3698	Section 14.  Section 627.3519, Florida Statutes, is created
3699	to read:
3700	627.3519  Annual report of aggregate net probable maximum
3701	losses, financing options, and potential assessments.--No later
3702	than February 1 of each year, the Financial Services Commission
3703	shall provide to the Legislature a report of the aggregate net
3704	probable maximum losses, financing options, and potential
3705	assessments of the Florida Hurricane Catastrophe Fund and
3706	Citizens Property Insurance Corporation. The report must include
3707	the respective 50-year, 100-year, and 250-year probable maximum
3708	losses of the fund and the corporation; analysis of all
3709	reasonable financing strategies for each such probable maximum
3710	loss, including the amount and term of debt instruments;
3711	specification of the percentage assessments that would be needed
3712	to support each of the financing strategies; and calculations of
3713	the aggregate assessment burden on Florida property and casualty
3714	policyholders for each of the probable maximum losses. The
3715	commission shall require the fund and the corporation to provide
3716	the commission with such data and analysis as the commission
3717	considers necessary to prepare the report.
3718	Section 15.  Paragraph (b) of subsection (3) of section
3719	627.4035, Florida Statutes, is amended to read:
3720	627.4035  Cash payment of premiums; claims.--
3721	(3)  All payments of claims made in this state under any
3722	contract of insurance shall be paid:
3723	(b)  If authorized in writing by the recipient or the
3724	recipient's representative, by debit card or any other form of
3725	electronic transfer. Any fees or costs to be charged against the
3726	recipient must be disclosed in writing to the recipient or the
3727	recipient's representative at the time of written authorization.
3728	However, the written authorization requirement may be waived by
3729	the recipient or the recipient's representative if the insurer
3730	verifies the identity of the insured or the insured's recipient
3731	and does not charge a fee for the transaction. If the funds are
3732	misdirected, the insurer would remain liable for the payment of
3733	the claim.
3734	Section 16.  Paragraph (b) of subsection (3) of section
3735	627.701, Florida Statutes, is amended to read:
3736	627.701  Liability of insureds; coinsurance; deductibles.--
3737	(3)
3738	(b)1.  Except as otherwise provided in this paragraph,
3739	prior to issuing a personal lines residential property insurance
3740	policy on or after January 1, 2006, or prior to the first
3741	renewal of a residential property insurance policy on or after
3742	January 1, 2006, the insurer must offer alternative deductible
3743	amounts applicable to hurricane losses equal to $500, 2 percent,
3744	5 percent, and 10 percent of the policy dwelling limits, unless
3745	the specific percentage deductible is less than $500. The
3746	written notice of the offer shall specify the hurricane or wind
3747	deductible to be applied in the event that the applicant or
3748	policyholder fails to affirmatively choose a hurricane
3749	deductible. The insurer must provide such policyholder with
3750	notice of the availability of the deductible amounts specified
3751	in this paragraph in a form approved by the office in
3752	conjunction with each renewal of the policy. The failure to
3753	provide such notice constitutes a violation of this code but
3754	does not affect the coverage provided under the policy.
3755	2.  This paragraph does not apply with respect to a
3756	deductible program lawfully in effect on June 14, 1995, or to
3757	any similar deductible program, if the deductible program
3758	requires a minimum deductible amount of no less than 2 percent
3759	of the policy limits.
3760	3.  With respect to a policy covering a risk with dwelling
3761	limits of at least $100,000, but less than $250,000, the insurer
3762	may, in lieu of offering a policy with a $500 hurricane or wind
3763	deductible as required by subparagraph 1., offer a policy that
3764	the insurer guarantees it will not nonrenew for reasons of
3765	reducing hurricane loss for one renewal period and that contains
3766	up to a 2 percent hurricane deductible, for two renewal periods
3767	and that contains up to a 5 percent hurricane deductible, or for
3768	three renewal periods and that contains up to a 10 percent
3769	hurricane deductible. Notwithstanding the requirements of this
3770	paragraph, the Office of Insurance Regulation may approve the
3771	nonrenewal of such policies if the guarantee renewal of the
3772	policies may jeopardize the financial ratings of an insurer or
3773	wind deductible as required by subparagraph 1.
3774	4.  With respect to a policy covering a risk with dwelling
3775	limits of $250,000 or more, the insurer need not offer the $500
3776	hurricane deductible as required by subparagraph 1., but must,
3777	except as otherwise provided in this subsection, offer the other
3778	hurricane deductibles as required by subparagraph 1.
3779	Section 17.  Effective January 1, 2007, subsection (9) is
3780	added to section 627.701, Florida Statutes, to read:
3781	627.701  Liability of insureds; coinsurance; deductibles.--
3782	(9)  With respect to hurricane coverage provided in a
3783	policy of residential coverage, when the policyholder has taken
3784	appropriate hurricane mitigation measures regarding the
3785	residence covered under the policy, the insurer may provide the
3786	insured the option of selecting an appropriate reduction in the
3787	policy's hurricane deductible in lieu of selecting the
3788	appropriate discount credit or other rate differential as
3789	provided in s. 627.0629. If made available by the insurer, the
3790	insurer must provide the policyholder with notice of the options
3791	available under this subsection on a form approved by the
3792	office.
3793	Section 18.  Subsections (2) and (3) of section 627.7011,
3794	Florida Statutes, are amended, and subsections (6) and (7) are
3795	added to that section, to read:
3796	627.7011  Homeowners' policies; offer of replacement cost
3797	coverage and law and ordinance coverage.--
3798	(2)  Unless the insurer obtains the policyholder's written
3799	refusal of the policies or endorsements specified in subsection
3800	(1), any policy covering the dwelling is deemed to include the
3801	law and ordinance coverage limited to 25 percent of the dwelling
3802	limit specified in paragraph (1)(b). The rejection or selection
3803	of alternative coverage shall be made on a form approved by the
3804	office. The form shall fully advise the applicant of the nature
3805	of the coverage being rejected. If this form is signed by a
3806	named insured, it will be conclusively presumed that there was
3807	an informed, knowing rejection of the coverage or election of
3808	the alternative coverage on behalf of all insureds. Unless the
3809	policyholder requests in writing the coverage specified in this
3810	section, it need not be provided in or supplemental to any other
3811	policy that renews, insures, extends, changes, supersedes, or
3812	replaces an existing policy when the policyholder has rejected
3813	the coverage specified in this section or has selected
3814	alternative coverage. The insurer must provide such policyholder
3815	with notice of the availability of such coverage in a form
3816	approved by the office at least once every 3 years. The failure
3817	to provide such notice constitutes a violation of this code, but
3818	does not affect the coverage provided under the policy.
3819	(3)  In the event of a loss for which a dwelling or
3820	personal property is insured on the basis of replacement costs,
3821	the insurer shall pay the replacement cost without reservation
3822	or holdback of any depreciation in value, whether or not the
3823	insured replaces or repairs the dwelling or property.
3824	(6)  Insurers shall issue separate checks for living
3825	expenses, contents, and casualty proceeds. Checks for living
3826	expenses and contents should be issued directly to the
3827	policyholder.
3828	(7)  Nothing in this section shall be construed as
3829	prohibiting an insurer from limiting its liability under a
3830	policy or endorsement providing that loss will be adjusted on
3831	the basis of replacement costs to the lesser of:
3832	(a)  The limit of liability shown on the policy
3833	declarations page;
3834	(b)  The reasonable and necessary cost to repair the
3835	damaged, destroyed, or stolen covered property; or
3836	(c)  The reasonable and necessary cost to replace the
3837	damaged, destroyed, or stolen covered property.
3838	Section 19.  Effective upon this act becoming a law,
3839	section 627.7019, Florida Statutes, is created to read:
3840	627.7019  Standardization of requirements applicable to
3841	insurers after natural disasters.--
3842	(1)  The commission shall adopt by rule, pursuant to s.
3843	120.54(1)-(3), standardized requirements that may be applied to
3844	insurers as a consequence of a hurricane or other natural
3845	disaster. The rules shall address the following areas:
3846	(a)  Claims reporting requirements.
3847	(b)  Grace periods for payment of premiums and performance
3848	of other duties by insureds.
3849	(c)  Temporary postponement of cancellations and
3850	nonrenewals.
3851	(2)  The rules adopted pursuant to this section shall
3852	require the office to issue an order within 72 hours after the
3853	occurrence of a hurricane or other natural disaster specifying,
3854	by line of insurance, which of the standardized requirements
3855	apply, the geographic areas in which they apply, the time at
3856	which applicability commences, and the time at which
3857	applicability terminates.
3858	(3)  The commission and the office may not adopt an
3859	emergency rule under s. 120.54(4) in conflict with any provision
3860	of the rules adopted under this section.
3861	(4)  The commission shall initiate rulemaking under this
3862	section no later than June 1, 2006.
3863	Section 20.  Paragraph (f) is added to subsection (2) of
3864	section 627.706, Florida Statutes, to read:
3865	627.706  Sinkhole insurance; definitions.--
3866	(2)  As used in ss. 627.706-627.7074, and as used in
3867	connection with any policy providing coverage for sinkhole
3868	losses:
3869	(f)  "Structural damage" means damage that has affected the
3870	ability of the structure to carry the loads for which it was
3871	designed or that it was capable of carrying when the structure
3872	was originally constructed.
3873	Section 21.  Subsection (5) of section 627.727, Florida
3874	Statutes, is amended to read:
3875	627.727  Motor vehicle insurance; uninsured and
3876	underinsured vehicle coverage; insolvent insurer protection.--
3877	(5)  Any person having a claim against an insolvent insurer
3878	as defined in s. 631.54(6)(5) under the provisions of this
3879	section shall present such claim for payment to the Florida
3880	Insurance Guaranty Association only. In the event of a payment
3881	to any person in settlement of a claim arising under the
3882	provisions of this section, the association is not subrogated or
3883	entitled to any recovery against the claimant's insurer. The
3884	association, however, has the rights of recovery as set forth in
3885	chapter 631 in the proceeds recoverable from the assets of the
3886	insolvent insurer.
3887	Section 22.  Paragraph (f) is added to subsection (2) of
3888	section 631.181, Florida Statutes, to read:
3889	631.181  Filing and proof of claim.--
3890	(2)
3891	(f)  The signed statement required by this section shall
3892	not be required on claims for which adequate claims file
3893	documentation exists within the records of the insolvent
3894	insurer. Claims for payment of unearned premium shall not be
3895	required to use the signed statement required by this section if
3896	the receiver certifies to the guaranty fund that the records of
3897	the insolvent insurer are sufficient to determine the amount of
3898	unearned premium owed to each policyholder of the insurer and
3899	such information is remitted to the guaranty fund by the
3900	receiver in electronic or other mutually agreed-upon format.
3901	Section 23.  Subsections (5), (6), (7), and (8) of section
3902	631.54, Florida Statutes, are renumbered as subsections (6),
3903	(7), (8), and (9), respectively, and a new subsection (5) is
3904	added to that section, to read:
3905	631.54  Definitions.--As used in this part:
3906	(5)  "Homeowner's insurance" means personal lines
3907	residential property insurance coverage that consists of the
3908	type of coverage provided under homeowner's, dwelling, and
3909	similar policies for repair or replacement of the insured
3910	structure and contents, which policies are written directly to
3911	the individual homeowner. Residential coverage for personal
3912	lines as set forth in this section includes policies that
3913	provide coverage for particular perils such as windstorm and
3914	hurricane coverage but excludes all coverage for mobile homes,
3915	renter's insurance, or tenant's coverage. The term "homeowner's
3916	insurance" excludes commercial residential policies covering
3917	condominium associations or homeowners' associations, which
3918	associations have a responsibility to provide insurance coverage
3919	on residential units within the association, and also excludes
3920	coverage for the common elements of a homeowners' association.
3921	Section 24.  Subsection (1) of section 631.55, Florida
3922	Statutes, is amended to read:
3923	631.55  Creation of the association.--
3924	(1)  There is created a nonprofit corporation to be known
3925	as the "Florida Insurance Guaranty Association, Incorporated."
3926	All insurers defined as member insurers in s. 631.54(7)(6) shall
3927	be members of the association as a condition of their authority
3928	to transact insurance in this state, and, further, as a
3929	condition of such authority, an insurer shall agree to reimburse
3930	the association for all claim payments the association makes on
3931	said insurer's behalf if such insurer is subsequently
3932	rehabilitated. The association shall perform its functions under
3933	a plan of operation established and approved under s. 631.58 and
3934	shall exercise its powers through a board of directors
3935	established under s. 631.56. The corporation shall have all
3936	those powers granted or permitted nonprofit corporations, as
3937	provided in chapter 617.
3938	Section 25.  Paragraph (a) of subsection (1), paragraph (d)
3939	of subsection (2), and paragraph (a) of subsection (3) of
3940	section 631.57, Florida Statutes, are amended, and paragraph (e)
3941	is added to subsection (3) of that section, to read:
3942	631.57  Powers and duties of the association.--
3943	(1)  The association shall:
3944	(a)1.  Be obligated to the extent of the covered claims
3945	existing:
3946	a.  Prior to adjudication of insolvency and arising within
3947	30 days after the determination of insolvency;
3948	b.  Before the policy expiration date if less than 30 days
3949	after the determination; or
3950	c.  Before the insured replaces the policy or causes its
3951	cancellation, if she or he does so within 30 days of the
3952	determination.
3953	2.  The obligation under subparagraph 1. shall include only
3954	the amount of each covered claim that is in excess of $100 and
3955	is less than $300,000, except policies providing coverage for
3956	homeowner's insurance shall provide for an additional $200,000
3957	for the portion of a covered claim that relates only to the
3958	damage to the structure and contents.
3959	3.a.2.  Notwithstanding subparagraph 2., the obligation
3960	under subparagraph 1. for shall include only that amount of each
3961	covered claim which is in excess of $100 and is less than
3962	$300,000, except with respect to policies covering condominium
3963	associations or homeowners' associations, which associations
3964	have a responsibility to provide insurance coverage on
3965	residential units within the association, the obligation shall
3966	include that amount of each covered property insurance claim
3967	which is less than $100,000 multiplied by the number of
3968	condominium units or other residential units; however, as to
3969	homeowners' associations, this sub-subparagraph subparagraph
3970	applies only to claims for damage or loss to residential units
3971	and structures attached to residential units.
3972	b.  Notwithstanding sub-subparagraph a., the association
3973	has no obligation to pay covered claims that are to be paid from
3974	the proceeds of bonds issued under s. 631.695. However, the
3975	association shall assign and pledge the first available moneys
3976	from all or part of the assessments to be made under paragraph
3977	(3)(a) to or on behalf of the issuer of such bonds for the
3978	benefit of the holders of such bonds. The association shall
3979	administer any such covered claims and present valid covered
3980	claims for payment in accordance with the provisions of the
3981	assistance program in connection with which such bonds have been
3982	issued.
3983	3.  In no event shall the association be obligated to a
3984	policyholder or claimant in an amount in excess of the
3985	obligation of the insolvent insurer under the policy from which
3986	the claim arises.
3987	(2)  The association may:
3988	(d)  Negotiate and become a party to such contracts as are
3989	necessary to carry out the purpose of this part. Additionally,
3990	the association may enter into such contracts with a
3991	municipality, a county, or a legal entity created pursuant to s.
3992	163.01(7)(g) as are necessary in order for the municipality,
3993	county, or legal entity to issue bonds under s. 631.695. In
3994	connection with the issuance of any such bonds and the entering
3995	into of any such necessary contracts, the association may agree
3996	to such terms and conditions as the association deems necessary
3997	and proper.
3998	(3)(a)  To the extent necessary to secure the funds for the
3999	respective accounts for the payment of covered claims, and also
4000	to pay the reasonable costs to administer the same, and to the
4001	extent necessary to secure the funds for the account specified
4002	in s. 631.55(2)(c) or to retire indebtedness, including, without
4003	limitation, the principal, redemption premium, if any, and
4004	interest on, and related costs of issuance of, bonds issued
4005	under s. 631.695 and the funding of any reserves and other
4006	payments required under the bond resolution or trust indenture
4007	pursuant to which such bonds have been issued, the office, upon
4008	certification of the board of directors, shall levy assessments
4009	in the proportion that each insurer's net direct written
4010	premiums in this state in the classes protected by the account
4011	bears to the total of said net direct written premiums received
4012	in this state by all such insurers for the preceding calendar
4013	year for the kinds of insurance included within such account.
4014	Assessments shall be remitted to and administered by the board
4015	of directors in the manner specified by the approved plan. Each
4016	insurer so assessed shall have at least 30 days' written notice
4017	as to the date the assessment is due and payable. Every
4018	assessment shall be made as a uniform percentage applicable to
4019	the net direct written premiums of each insurer in the kinds of
4020	insurance included within the account in which the assessment is
4021	made. The assessments levied against any insurer shall not
4022	exceed in any one year more than 2 percent of that insurer's net
4023	direct written premiums in this state for the kinds of insurance
4024	included within such account during the calendar year next
4025	preceding the date of such assessments.
4026	(e)1.a.  In addition to assessments otherwise authorized in
4027	paragraph (a) and to the extent necessary to secure the funds
4028	for the account specified in s. 631.55(2)(c) or to retire
4029	indebtedness, including, without limitation, the principal,
4030	redemption premium, if any, and interest on, and related costs
4031	of issuance of, bonds issued under s. 631.695 and the funding of
4032	any reserves and other payments required under the bond
4033	resolution or trust indenture pursuant to which such bonds have
4034	been issued, the office, upon certification of the board of
4035	directors, shall levy emergency assessments upon insurers
4036	holding a certificate of authority. The emergency assessments
4037	payable under this paragraph by any insurer shall not exceed in
4038	any single year more than 2 percent of that insurer's direct
4039	written premiums, net of refunds, in this state during the
4040	preceding calendar year for the kinds of insurance within the
4041	account specified in s. 631.55(2)(c).
4042	b.  Any emergency assessments authorized under this
4043	paragraph shall be levied by the office upon insurers referred
4044	to in sub-subparagraph a., upon certification as to the need for
4045	such assessments by the board of directors, in each year that
4046	bonds issued under s. 631.695 and secured by such emergency
4047	assessments are outstanding, in such amounts up to such 2-
4048	percent limit as required in order to provide for the full and
4049	timely payment of the principal of, redemption premium, if any,
4050	and interest on, and related costs of issuance of, such bonds.
4051	The emergency assessments provided for in this paragraph are
4052	assigned and pledged to the municipality, county, or legal
4053	entity issuing bonds under s. 631.695 for the benefit of the
4054	holders of such bonds, in order to enable such municipality,
4055	county, or legal entity to provide for the payment of the
4056	principal of, redemption premium, if any, and interest on such
4057	bonds, the cost of issuance of such bonds, and the funding of
4058	any reserves and other payments required under the bond
4059	resolution or trust indenture pursuant to which such bonds have
4060	been issued, without the necessity of any further action by the
4061	association, the office, or any other party. To the extent bonds
4062	are issued under s. 631.695 and the association determines to
4063	secure such bonds by a pledge of revenues received from the
4064	emergency assessments, such bonds, upon such pledge of revenues,
4065	shall be secured by and payable from the proceeds of such
4066	emergency assessments, and the proceeds of emergency assessments
4067	levied under this paragraph shall be remitted directly to and
4068	administered by the trustee or custodian appointed for such
4069	bonds.
4070	c.  Emergency assessments under this paragraph may be
4071	payable in a single payment or, at the option of the
4072	association, may be payable in 12 monthly installments with the
4073	first installment being due and payable at the end of the month
4074	after an emergency assessment is levied and subsequent
4075	installments being due not later than the end of each succeeding
4076	month.
4077	d.  If emergency assessments are imposed, the report
4078	required by s. 631.695(7) shall include an analysis of the
4079	revenues generated from the emergency assessments imposed under
4080	this paragraph.
4081	e.  If emergency assessments are imposed, the references in
4082	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
4083	assessments levied under paragraph (a) shall include emergency
4084	assessments imposed under this paragraph.
4085	2.  In order to ensure that insurers paying emergency
4086	assessments levied under this paragraph continue to charge rates
4087	that are neither inadequate nor excessive, within 90 days after
4088	being notified of such assessments, each insurer that is to be
4089	assessed pursuant to this paragraph shall submit a rate filing
4090	for coverage included within the account specified in s.
4091	631.55(2)(c) and for which rates are required to be filed under
4092	s. 627.062. If the filing reflects a rate change that, as a
4093	percentage, is equal to the difference between the rate of such
4094	assessment and the rate of the previous year's assessment under
4095	this paragraph, the filing shall consist of a certification so
4096	stating and shall be deemed approved when made. Any rate change
4097	of a different percentage shall be subject to the standards and
4098	procedures of s. 627.062.
4099	3.  An annual assessment under this paragraph shall
4100	continue while the bonds issued with respect to which the
4101	assessment was imposed are outstanding, including any bonds the
4102	proceeds of which were used to refund bonds issued pursuant to
4103	s. 631.695, unless adequate provision has been made for the
4104	payment of the bonds in the documents authorizing the issuance
4105	of such bonds.
4106	4.  Emergency assessments under this paragraph are not
4107	premium and are not subject to the premium tax, to any fees, or
4108	to any commissions. An insurer is liable for all emergency
4109	assessments that the insurer collects and shall treat the
4110	failure of an insured to pay an emergency assessment as a
4111	failure to pay the premium. An insurer is not liable for
4112	uncollectible emergency assessments.
4113	Section 26.  Section 631.695, Florida Statutes, is created
4114	to read:
4115	631.695  Revenue bond issuance through counties or
4116	municipalities.--
4117	(1)  The Legislature finds:
4118	(a)  The potential for widespread and massive damage to
4119	persons and property caused by hurricanes making landfall in
4120	this state can generate insurance claims of such a number as to
4121	render numerous insurers operating within this state insolvent
4122	and therefore unable to satisfy covered claims.
4123	(b)  The inability of insureds within this state to receive
4124	payment of covered claims or to timely receive such payment
4125	creates financial and other hardships for such insureds and
4126	places undue burdens on the state, the affected units of local
4127	government, and the community at large.
4128	(c)  In addition, the failure of insurers to pay covered
4129	claims or to timely pay such claims due to the insolvency of
4130	such insurers can undermine the public's confidence in insurers
4131	operating within this state, thereby adversely affecting the
4132	stability of the insurance industry in this state.
4133	(d)  The state has previously taken action to address these
4134	problems by adopting the Florida Insurance Guaranty Association
4135	Act, which, among other things, provides a mechanism for the
4136	payment of covered claims under certain insurance policies to
4137	avoid excessive delay in payment and to avoid financial loss to
4138	claimants or policyholders because of the insolvency of an
4139	insurer.
4140	(e)  In the wake of the unprecedented destruction caused by
4141	various hurricanes that have made landfall in this state, the
4142	resultant covered claims, and the number of insurers rendered
4143	insolvent thereby, make it evident that alternative programs
4144	must be developed to allow the Florida Insurance Guaranty
4145	Association to more expeditiously and effectively provide for
4146	the payment of covered claims.
4147	(f)  It is therefore determined to be in the best interests
4148	of, and necessary for, the protection of the public health,
4149	safety, and general welfare of the residents of this state and
4150	for the protection and preservation of the economic stability of
4151	insurers operating in this state and it is declared to be an
4152	essential public purpose to permit certain municipalities and
4153	counties to take such actions as will provide relief to
4154	claimants and policyholders having covered claims against
4155	insolvent insurers operating in this state by expediting the
4156	handling and payment of covered claims.
4157	(g)  To achieve the foregoing purposes, it is proper to
4158	authorize municipalities and counties of this state
4159	substantially affected by the landfall of a hurricane to issue
4160	bonds to assist the Florida Insurance Guaranty Association in
4161	expediting the handling and payment of covered claims of
4162	insolvent insurers.
4163	(h)  In order to avoid the needless and indiscriminate
4164	proliferation, duplication, and fragmentation of such assistance
4165	programs, it is in the best interests of the residents of this
4166	state to authorize municipalities and counties severely affected
4167	by a hurricane to provide for the payment of covered claims
4168	beyond their territorial limits in the implementation of such
4169	programs.
4170	(i)  It is a paramount public purpose for municipalities
4171	and counties substantially affected by the landfall of a
4172	hurricane to be able to issue bonds for the purposes described
4173	in this section. Such issuance shall provide assistance to
4174	residents of those municipalities and counties as well as to
4175	other residents of this state.
4176	(2)  The governing body of any municipality or county, the
4177	residents of which have been substantially affected by a
4178	hurricane, may issue bonds to fund an assistance program in
4179	conjunction with, and with the consent of, the Florida Insurance
4180	Guaranty Association for the purpose of paying claimants' or
4181	policyholders' covered claims, as defined in s. 631.54, arising
4182	through the insolvency of an insurer, which insolvency is
4183	determined by the Florida Insurance Guaranty Association to have
4184	been a result of a hurricane, regardless of whether the
4185	claimants or policyholders are residents of such municipality or
4186	county or the property to which the claim relates is located
4187	within or outside the territorial jurisdiction of the
4188	municipality or county. The power of a municipality or county to
4189	issue bonds, as described in this section, is in addition to any
4190	powers granted by law and may not be abrogated or restricted by
4191	any provisions in such municipality's or county's charter. A
4192	municipality or county issuing bonds for this purpose shall
4193	enter into such contracts with the Florida Insurance Guaranty
4194	Association or any entity acting on behalf of the Florida
4195	Insurance Guaranty Association as are necessary to implement the
4196	assistance program. Any bonds issued by a municipality or county
4197	or a combination thereof under this subsection shall be payable
4198	from and secured by moneys received by or on behalf of the
4199	municipality or county from assessments levied under s.
4200	631.57(3)(a) and assigned and pledged to or on behalf of the
4201	municipality or county for the benefit of the holders of the
4202	bonds in connection with the assistance program. The funds,
4203	credit, property, and taxing power of the state or any
4204	municipality or county shall not be pledged for the payment of
4205	such bonds.
4206	(3)  Bonds may be validated by the municipality or county
4207	pursuant to chapter 75. The proceeds of the bonds may be used to
4208	pay covered claims of insolvent insurers; to refinance or
4209	replace previously existing borrowings or financial
4210	arrangements; to pay interest on bonds; to fund reserves for the
4211	bonds; to pay expenses incident to the issuance or sale of any
4212	bond issued under this section, including costs of validating,
4213	printing, and delivering the bonds, costs of printing the
4214	official statement, costs of publishing notices of sale of the
4215	bonds, costs of obtaining credit enhancement or liquidity
4216	support, and related administrative expenses; or for such other
4217	purposes related to the financial obligations of the fund as the
4218	association may determine. The term of the bonds may not exceed
4219	30 years.
4220	(4)  The state covenants with holders of bonds of the
4221	assistance program that the state will not take any action that
4222	will have a material adverse effect on the holders and will not
4223	repeal or abrogate the power of the board of directors of the
4224	association to direct the Office of Insurance Regulation to levy
4225	the assessments and to collect the proceeds of the revenues
4226	pledged to the payment of the bonds as long as any of the bonds
4227	remain outstanding, unless adequate provision has been made for
4228	the payment of the bonds in the documents authorizing the
4229	issuance of the bonds.
4230	(5)  The accomplishment of the authorized purposes of such
4231	municipality or county under this section is in all respects for
4232	the benefit of the people of the state, for the increase of
4233	their commerce and prosperity, and for the improvement of their
4234	health and living conditions. The municipality or county, in
4235	performing essential governmental functions in accomplishing its
4236	purposes, is not required to pay any taxes or assessments of any
4237	kind whatsoever upon any property acquired or used by the county
4238	or municipality for such purposes or upon any revenues at any
4239	time received by the county or municipality. The bonds, notes,
4240	and other obligations of the municipality or county and the
4241	transfer of and income from such bonds, notes, and other
4242	obligations, including any profits made on the sale of such
4243	bonds, notes, and other obligations, are exempt from taxation of
4244	any kind by the state or by any political subdivision or other
4245	agency or instrumentality of the state. The exemption granted in
4246	this subsection is not applicable to any tax imposed by chapter
4247	220 on interest, income, or profits on debt obligations owned by
4248	corporations.
4249	(6)  Two or more municipalities or counties, the residents
4250	of which have been substantially affected by a hurricane, may
4251	create a legal entity pursuant to s. 163.01(7)(g) to exercise
4252	the powers described in this section as well as those powers
4253	granted in s. 163.01(7)(g). References in this section to a
4254	municipality or county includes such legal entity.
4255	(7)  The association shall issue an annual report on the
4256	status of the use of bond proceeds as related to insolvencies
4257	caused by hurricanes. The report must contain the number and
4258	amount of claims paid. The association shall also include an
4259	analysis of the revenue generated from the assessment levied
4260	under s. 631.57(3)(a) to pay such bonds. The association shall
4261	submit a copy of the report to the President of the Senate, the
4262	Speaker of the House of Representatives, and the Chief Financial
4263	Officer within 90 days after the end of each calendar year in
4264	which bonds were outstanding.
4265	Section 27.  No provision of s. 631.57 or s. 631.695,
4266	Florida Statutes, shall be repealed until such time as the
4267	principal, redemption premium, if any, and interest on all bonds
4268	issued under s. 631.695, Florida Statutes, payable and secured
4269	from assessments levied under s. 631.57(3)(a), Florida Statutes,
4270	have been paid in full or adequate provision for such payment
4271	has been made in accordance with the bond resolution or trust
4272	indenture pursuant to which the bonds were issued.
4273	Section 28.  Paragraph (a) of subsection (1) of section
4274	817.234, Florida Statutes, is amended to read:
4275	817.234  False and fraudulent insurance claims.--
4276	(1)(a)  A person commits insurance fraud punishable as
4277	provided in subsection (11) if that person, with the intent to
4278	injure, defraud, or deceive any insurer:
4279	1.  Presents or causes to be presented any written or oral
4280	statement as part of, or in support of, a claim for payment or
4281	other benefit pursuant to an insurance policy or a health
4282	maintenance organization subscriber or provider contract,
4283	knowing that such statement contains any false, incomplete, or
4284	misleading information concerning any fact or thing material to
4285	such claim;
4286	2.  Prepares or makes any written or oral statement that is
4287	intended to be presented to any insurer in connection with, or
4288	in support of, any claim for payment or other benefit pursuant
4289	to an insurance policy or a health maintenance organization
4290	subscriber or provider contract, knowing that such statement
4291	contains any false, incomplete, or misleading information
4292	concerning any fact or thing material to such claim; or
4293	3.a.  Knowingly presents, causes to be presented, or
4294	prepares or makes with knowledge or belief that it will be
4295	presented to any insurer, purported insurer, servicing
4296	corporation, insurance broker, or insurance agent, or any
4297	employee or agent thereof, any false, incomplete, or misleading
4298	information or written or oral statement as part of, or in
4299	support of, an application for the issuance of, or the rating
4300	of, any insurance policy, or a health maintenance organization
4301	subscriber or provider contract, including any false declaration
4302	of homestead status for the purpose of obtaining coverage in a
4303	homestead account under s. 627.351(6); or
4304	b.  Who knowingly conceals information concerning any fact
4305	material to such application.
4306	Section 29.  Task Force on Hurricane Mitigation and
4307	Hurricane Insurance for Mobile and Manufactured Homes.--
4308	(1)  TASK FORCE CREATED.--There is created the Task Force
4309	on Hurricane Mitigation and Hurricane Insurance for Mobile and
4310	Manufactured Homes.
4311	(2)  ADMINISTRATION.--The task force shall be
4312	administratively housed within the Office of Insurance
4313	Regulation but shall operate independently of any state officer
4314	or agency. The office shall provide such administrative support
4315	as the task force deems necessary to accomplish its mission and
4316	shall provide necessary funding for the task force within the
4317	office's existing resources. The Executive Office of the
4318	Governor, the Department of Financial Services, the Office of
4319	Insurance Regulation, the Department of Highway Safety and Motor
4320	Vehicles, and the Department of Community Affairs shall provide
4321	substantive staff support for the task force.
4322	(3)  MEMBERSHIP.--The members of the task force shall be
4323	appointed as follows:
4324	(a)  The Governor shall appoint two members who have
4325	expertise in financial matters, one of whom is a representative
4326	of the mobile or manufactured home industry and one of whom is a
4327	representative of insurance consumers.
4328	(b)  The Chief Financial Officer shall appoint two members
4329	who have expertise in financial matters, one of whom is a
4330	representative of a property insurer writing mobile or
4331	manufactured homeowners insurance in this state and one of whom
4332	is a representative of insurance agents.
4333	(c)  The President of the Senate shall appoint one member.
4334	(d)  The Speaker of the House of Representatives shall
4335	appoint one member.
4336	(e)  The Commissioner of Insurance Regulation or his or her
4337	designee shall serve as an ex officio voting member of the task
4338	force.
4339	(f)  The Executive Director of Citizens Property Insurance
4340	or his or her designee shall serve as an ex officio voting
4341	member of the task force.
4342	(g)  The Chief Executive Officer of the Federal Alliance
4343	for Safe Homes, Incorporated or his or her designee shall serve
4344	as an ex officio voting member of the task force.
4345
4346	Members of the task force shall serve without compensation but
4347	may receive reimbursement for per diem and travel expenses as
4348	provided in s. 112.061, Florida Statutes.
4349	(4)  PURPOSE AND INTENT.--The Legislature recognizes the
4350	continued availability of hurricane insurance coverage for
4351	mobile and manufactured home owners in this state is essential
4352	to the state's economic survival. The Legislature further
4353	recognizes hurricane mitigation measures and building codes may
4354	reduce the likelihood or amount of damage to mobile or
4355	manufactured homes in the event of a hurricane. The Legislature
4356	further recognizes mobile and manufactured homes provide safe
4357	and affordable housing to many residents of this state. The
4358	purpose of the task force is to make recommendations to the
4359	legislative and executive branches of this state's government
4360	relating to the creation and maintenance of insurance capacity
4361	in the private sector and public sector that is sufficient to
4362	ensure that all mobile and manufactured home owners in this
4363	state are able to obtain appropriate insurance coverage for
4364	hurricane losses and relating to the effectiveness of hurricane
4365	mitigation measures for mobile or manufactured homes as further
4366	described in this section.
4367	(5)  SPECIFIC TASKS.--The task force shall conduct such
4368	research and hearings as the task force deems necessary to
4369	achieve the purposes specified in subsection (4) and shall
4370	develop information on relevant issues, including, but not
4371	limited to, the following issues:
4372	(a)  Whether this state currently has sufficient hurricane
4373	insurance capacity for mobile and manufactured homes to ensure
4374	the continuation of a healthy, competitive marketplace, taking
4375	into consideration private-sector and public-sector resources.
4376	(b)  Identifying the future demands on the hurricane
4377	insurance capacity of this state, taking into account population
4378	growth, coastal growth, and anticipated future hurricane
4379	activity.
4380	(c)  Identifying how many mobile or manufactured homes are
4381	occupied in this state, how many mobile or manufactured homes
4382	are occupied by owners who also own the land to which the unit
4383	is attached, the age or average age of mobile or manufactured
4384	homes, the location of such homes, and the size of such homes.
4385	(d)  The extent to which the growth in insurance on mobile
4386	or manufactured homes in Citizens Property Insurance Corporation
4387	is attributable to insufficient insurance capacity.
4388	(e)  The extent to which the growth trends of Citizens
4389	Property Insurance Corporation create long-term problems for
4390	mobile and manufactured home owners in this state and for other
4391	persons and businesses that depend on a viable market.
4392	(f)  The extent to which insurance discounts, credits, or
4393	other rate differentials or reductions in the hurricane
4394	insurance deductible for a mobile or manufactured homeowner who
4395	takes mitigative measures would increase hurricane insurance
4396	capacity for mobile or manufactured homeowners.
4397	(g)  The extent hurricane mitigation enhancements to mobile
4398	or manufactured homes decreases the likelihood of damage from a
4399	hurricane or decreases the amount of damage from a hurricane.
4400	(h)  The extent to which the building codes reduce the
4401	likelihood of damage or amount of damage to mobile or
4402	manufactured homes.
4403	(6)  REPORT AND RECOMMENDATIONS.--By January 1, 2007, the
4404	task force shall provide a report containing findings relating
4405	to the tasks identified in subsection (5) and recommendations
4406	consistent with the purposes of this section and also consistent
4407	with such findings. The task force shall submit the report to
4408	the Governor, the Chief Financial Officer, the President of the
4409	Senate, and the Speaker of the House of Representatives. The
4410	task force may also submit such interim reports as the task
4411	force deems appropriate.
4412	(7)  EXPIRATION.--The task force shall expire on January 2,
4413	2007.
4414	Section 30.  By January 1, 2007, the Office of Insurance
4415	Regulation shall submit a report to the President of the Senate,
4416	the Speaker of the House of Representatives, the minority party
4417	leaders of the Senate and the House of Representatives, and the
4418	chairs of the standing committees of the Senate and the House of
4419	Representatives having jurisdiction over matters relating to
4420	property and casualty insurance. In preparing the report, the
4421	office shall consult with the Department of Highway Safety and
4422	Motor Vehicles, the Department of Community Affairs, the Florida
4423	Building Commission, the Florida Home Builders Association,
4424	representatives of the mobile and manufactured home industry,
4425	representatives of the property and casualty insurance industry,
4426	and any other party the office determines is appropriate. The
4427	report shall include findings and recommendations on the
4428	insurability of attached or free standing structures to
4429	residential homes, mobile, or manufactured homes, such as
4430	carports or pool enclosures; the increase or decrease in
4431	insurance costs associated with insuring such structures; the
4432	feasibility of insuring such structures; the impact on
4433	homeowners of not having insurance coverage for such structures;
4434	the ability of mitigation measures relating to such structures
4435	to reduce risk and loss; and such other related information as
4436	the office determines is appropriate for the Legislature to
4437	consider.
4438	Section 31.  (1)  The Office of Insurance Regulation, in
4439	consultation with the Department of Community Affairs, the
4440	Department of Financial Services, the Federal Alliance for Safe
4441	Homes, the Florida Insurance Council, the Florida Home Builders
4442	Association, the Florida Manufactured Housing Association, the
4443	Risk and Insurance Department of Florida State University, and
4444	the Institute for Business and Homes Safety, shall study and
4445	develop a program that will provide an objective rating system
4446	that will allow homeowners to evaluate the relative ability of
4447	Florida properties to withstand the wind load from a sustained
4448	severe tropical storm or hurricane.
4449	(2)  The rating system will be designed in a manner that is
4450	easy to understand for the property owner, based on proven
4451	readily verifiable mitigation techniques and devices, and able
4452	to be implemented based on a visual inspection program. The
4453	Department of Financial Services shall implement a pilot program
4454	for use in the Florida Comprehensive Hurricane Damage Mitigation
4455	Program.
4456	(3)  The Department shall provide a report to the Governor,
4457	the President of the Senate, and the Speaker of the House of
4458	Representatives by March 31, 2007, detailing the nature and
4459	construction of the rating scale, its effectiveness based on
4460	implementation in a pilot program, and an operational plan for
4461	statewide implementation of the rating scale.
4462	Section 32.  (1)  For fiscal year 2006-2007, the sum of
4463	$100 million is appropriated from the General Revenue Fund to
4464	the Department of Financial Services for the Florida Hurricane
4465	Damage Prevention Endowment as a nonrecurring appropriation for
4466	the purposes specified in s. 215.558, Florida Statutes.
4467	(2)  The sum of $400 million is appropriated from the
4468	General Revenue Fund to the Department of Financial Services as
4469	a nonrecurring appropriation for the purposes specified in s.
4470	215.5586, Florida Statutes.
4471	(3)  Funds provided in subsections (1) and (2) shall be
4472	transferred by the department to the Florida Hurricane Damage
4473	Prevention Trust Fund, as created in s. 215.5585, Florida
4474	Statutes.
4475	(4)  For fiscal year 2006-2007, the recurring sum of $5
4476	million is appropriated to the Department of Financial Services
4477	from the Florida Hurricane Damage Prevention Trust Fund, Special
4478	Category ? Financial Incentives for Hurricane Damage Prevention.
4479	(5)  For fiscal year 2006-2007, the nonrecurring sum of
4480	$400 million is appropriated to the Department of Financial
4481	Services from the Florida Hurricane Damage Prevention Trust
4482	Fund, Special Category ? Florida Comprehensive Hurricane Damage
4483	Mitigation Program. The department may spend up to 1 percent of
4484	the funds appropriated to administer the program. The department
4485	may spend up to $7.5 million to fund the Manufactured Housing
4486	and Mobile Home Hurricane Mitigation Program that is part of the
4487	Florida Comprehensive Hurricane Damage Mitigation Program.
4488	Notwithstanding s. 216.301, Florida Statutes, and pursuant to s.
4489	216.351, Florida Statutes, any unexpended balance from this
4490	appropriation shall be carried forward at the end of each fiscal
4491	year until the 2010-2011 fiscal year. At the end of the 2010-
4492	2011 fiscal year, any obligated funds for qualified projects
4493	that are not yet disbursed shall remain with the department to
4494	be used for the purposes of this act. Any unobligated funds of
4495	this appropriation shall revert to the Florida Hurricane Damage
4496	Prevention Trust Fund at the end of the 2010-2011 fiscal year.
4497	Section 33.  (1)  For fiscal year 2006-2007, the sum of
4498	$920 million in nonrecurring funds is appropriated from the
4499	General Revenue Fund to the Department of Financial Services for
4500	transfer to the Citizens Property Insurance Corporation as an
4501	allocation to regular assessments on assessable insurers and
4502	insureds, as authorized under s. 627.351(6)(b)3.b., Florida
4503	Statutes, for the 2005 Plan Year deficit. The board of governors
4504	of the corporation shall allocate the appropriated state moneys
4505	to each of the personal lines, commercial lines, and high-risk
4506	accounts so as to totally eliminate the deficit for calendar
4507	year 2005 in each such account that would have been paid from
4508	the proceeds of regular assessment but for the appropriated
4509	moneys. The moneys allocated to each account from the
4510	appropriations shall be considered to be and shall be treated as
4511	proceeds of regular assessments for purposes of financing
4512	documents of the corporation. No regular assessments shall be
4513	imposed for any portion of the calendar year 2005 deficit paid
4514	from the appropriated moneys. The transfer made by the
4515	department to the corporation shall be limited to the amount of
4516	the total regular assessments that were authorized by law to
4517	cover the 2005 Plan Year deficit. Any unused and remaining funds
4518	in this appropriation shall revert to the General Revenue Fund.
4519	(2)  The corporation shall amortize over a 10-year period
4520	any emergency assessments resulting from the 2005 Plan Year
4521	deficit.
4522	Section 34.  For fiscal year 2006-2007, the sums of
4523	$250,000 in recurring funds and $425,000 in nonrecurring funds
4524	are appropriated from the Insurance Regulatory Trust Fund in the
4525	Department of Financial Services to the Office of Insurance
4526	Regulation for the purpose of carrying out reporting and
4527	administrative responsibilities of this act.
4528	Section 35.  Except as otherwise expressly provided in this
4529	act, this act shall take effect July 1, 2006.
4530
4531
4532	======= T I T L E  A M E N D M E N T =======
4533	Remove the entire title, and insert:
4534	A bill to be entitled
4535	An act relating to property and casualty insurance; amending s.
4536	215.555, F.S.; revising a definition; authorizing the State
4537	Board of Administration to make available to certain insurers a
4538	contract to cede certain portions of surplus to the Florida
4539	Hurricane Catastrophe Fund; providing contract criteria and
4540	requirements; revising certain reimbursement contract criteria;
4541	revising certain reimbursement premium requirements; deleting a
4542	revenue bond issuance prohibition and validation requirement;
4543	revising certain revenue bond emergency assessment requirements;
4544	creating s. 215.558, F.S.; creating the Florida Hurricane Damage
4545	Prevention Endowment; providing a purpose and legislative
4546	intent; providing definitions; providing requirements and
4547	authority for investment of endowment assets by the State Board
4548	of Administration; requiring a report to the Legislature;
4549	providing for payment of the board's investment services' costs
4550	and fees from the endowment; providing requirements of the
4551	Department of Financial Services in providing financial
4552	incentives for residential hurricane damage prevention
4553	activities; providing for an interest-free loan program;
4554	providing program criteria and requirements; creating an
4555	advisory council for certain purposes; providing for appointment
4556	of members; requiring members to serve without compensation;
4557	providing for per diem and travel expenses; creating s.
4558	215.5586, F.S.; establishing the Florida Comprehensive Hurricane
4559	Damage Mitigation Program within the Department of Financial
4560	Services; providing qualifications for the program
4561	administrator; providing program components and requirements;
4562	providing for wind certification and hurricane mitigation
4563	inspections; providing inspection requirements; providing
4564	inspector eligibility requirements; providing for grants;
4565	providing grant requirements; providing for loans; providing
4566	public education and consumer awareness requirements; creating
4567	the Manufactured Housing and Mobile Home Hurricane Mitigation
4568	Program for certain purposes; requiring the Department of
4569	Financial Services to develop the program in consultation with
4570	certain entities; specifying requirements of the program;
4571	specifying the program as a matching grant program for
4572	improvement of mobile homes and manufactured homes; providing
4573	for distribution of the grants to the Department of Financial
4574	Services for certain purposes; requiring Citizens Property
4575	Insurance Corporation to grant certain insurance discounts,
4576	credits, rate differentials, or deductible reductions for
4577	property insurance premiums for certain manufactured home or
4578	mobile home owners; specifying criteria for such premiums;
4579	requiring a program report each year to the Governor and
4580	Legislature; providing report requirements; creating an advisory
4581	council; providing for appointment of members; specifying
4582	service without compensation; providing for per diem and travel
4583	expense reimbursements; requiring the department to obtain
4584	supplemental federal grants or funds for the program; requiring
4585	the department to adopt rules; creating s. 252.63, F.S.;
4586	providing purpose and intent; providing powers of the
4587	Commissioner of Insurance Regulation during a state of
4588	emergency; providing a purpose and intent; authorizing the
4589	commissioner to issue certain orders in a state of emergency;
4590	providing for effect and duration of such orders; providing for
4591	legislative termination of such orders; requiring the
4592	commissioner to publish such orders and an explanatory
4593	statement; amending s. 626.918, F.S.; authorizing certain
4594	letters of credit to fund an insurer's required policyholder
4595	protection trust fund; providing a definition; amending s.
4596	627.062, F.S.; specifying certain rate filings as not subject to
4597	office determination as excessive or unfairly discriminatory;
4598	providing limitations; providing a definition; prohibiting
4599	certain rate filings under certain circumstances; preserving the
4600	office's authority to disapprove certain rate filings under
4601	certain circumstances; providing procedures for insurers
4602	submitting certain rate filings; revising provisions providing
4603	for recoupment of certain reinsurance costs; specifying
4604	nonapplication to certain types of insurance; specifying
4605	approval of certain rate filings under certain circumstances;
4606	providing an exception; requiring the office to provide annual
4607	reports on the impact of certain rate regulations; specifying
4608	report requirements; amending s. 627.0628, F.S.; prohibiting
4609	certain office or consumer advocate questions of certain models
4610	reviewed by the commission; amending s. 627.0645, F.S.;
4611	authorizing the office to exempt certain companies from certain
4612	rate filing and rate certification requirements; amending s.
4613	627.06281, F.S.; prohibiting the office from using certain
4614	hurricane loss projection models under certain circumstances;
4615	amending s. 627.351, F.S., relating to the Citizens Property
4616	Insurance Corporation; providing additional legislative intent;
4617	specifying application to homestead property; providing that
4618	certain responsibilities of the Office of Insurance Regulation
4619	with respect to the plan of operation of Citizens Property
4620	Insurance Corporation be assumed by the Financial Services
4621	Commission; specifying the existing three separate accounts of
4622	the corporation as providing coverage only for homestead
4623	property; providing a definition; providing for an additional
4624	separate account for nonhomestead property; requiring separate
4625	maintenance of revenues, assets, liabilities, losses, and
4626	expenses attributable to the nonhomestead account; providing
4627	authority and requirements for coverage rates for nonhomestead
4628	properties; providing for office review of such rates or rating
4629	plans for being inadequate or unfairly discriminatory;
4630	authorizing the office to order discontinuance of certain
4631	policies under certain circumstances; requiring insurers to
4632	maintain certain records; providing for reducing regular
4633	assessments by the Citizen policyholder surcharge under certain
4634	circumstances; providing for deficit assessments against
4635	nonhomestead account policyholders under certain circumstances;
4636	authorizing the board of governors of the corporation to make
4637	loans from the homestead accounts to the nonhomestead account
4638	under certain circumstances; specifying ineligibility of certain
4639	nonhomestead account policyholders for certain coverage under
4640	certain circumstances; revising the requirements of the plan of
4641	operation of the corporation; requiring additional procedures
4642	for determining eligibility of a risk for coverage; prescribing
4643	a 10-day waiting period for applications for coverage for a new
4644	policy; authorizing exceptions; providing for determination of
4645	regular assessments to which the Citizen policyholder surcharge
4646	applies; providing for optional payment plans; specifying a
4647	minimum requirement for a hurricane deductible for certain
4648	property; specifying contents of required statements in
4649	applications for nonhomestead and homestead account coverage;
4650	requiring prospective senior management employees of the
4651	corporation to successfully pass a background check; requiring
4652	employees of the corporation to sign annually a statement that
4653	they have no conflict of interest; providing that senior
4654	managers and members of the board of governors are subject to
4655	the code of ethics and must file financial disclosure;
4656	prohibiting employees and members of the board of governors from
4657	accepting gifts or expenditures from a persons or entity, or
4658	employee thereof, which has or is under consideration for a
4659	contract with the corporation; providing penalties; providing a
4660	limitation on senior managers' representation of persons before
4661	the corporation after retirement or termination of employment
4662	and on employment with an insurer that has received a take-out
4663	bonus; prescribing guidelines for purchases of goods and
4664	services; providing guidelines on use of outside counsel;
4665	prohibiting the corporation from retaining a lobbyist;
4666	authorizing full-time employees to register and engage in
4667	lobbying; creating the Office of Internal Auditor and
4668	prescribing its duties; providing record-retention requirements;
4669	requiring establishment of a unit or division to investigate
4670	claims involving possible fraud against the corporation and
4671	another to receive and respond to consumer complaints; requiring
4672	a periodic comprehensive market conduct examination of the
4673	corporation; requiring periodic operational audits of the
4674	corporation by the Auditor General; prescribing elements to be
4675	included in such audits; requiring the corporation to limit
4676	coverage on certain mobile homes or manufactured homes;
4677	providing additional legislative intent relating to rate
4678	adequacy in the residual market; revising provisions relating to
4679	a pilot program in Monroe County; deleting provisions relating
4680	to a rate methodology panel appointed by the corporation;
4681	providing requirements and limitations for a corporation adopted
4682	bonus payment program; specifying absence of liability of
4683	producing agents of record of the corporation and employees for
4684	a take-out insurer's insolvency; deleting provisions for
4685	immunity for certain persons and entities; providing a criterion
4686	for calculating reduction or increase in probable maximum loss;
4687	providing bankruptcy petition limitations; delaying application
4688	of certain high-risk area boundary reduction provisions;
4689	providing for application of provisions relating to homestead
4690	and nonhomestead accounts to certain policies; requiring certain
4691	corporation employees to comply with certain ethics code
4692	requirements; requiring corporation employees to notify the
4693	Division of Insurance Fraud of probable commissions of fraud by
4694	corporation employees; requiring the corporation to report on
4695	the feasibility of requiring authorized insurers to issue and
4696	service specified policies of the corporation; specifying report
4697	requirements; providing immunity to producing agents and
4698	employees for specified actions taken relating to removal of
4699	policies from the corporation; providing a limitation; providing
4700	legislative intent; creating a High Risk Eligibility Panel;
4701	providing for appointment of panel members and member's terms;
4702	providing for administration of the panel by the corporation;
4703	prohibiting compensation and per diem and travel expenses;
4704	providing an exception; requiring the panel to report annually
4705	to the Legislature on the certain areas that should be included
4706	in the Citizens Property Insurance Corporation high risk
4707	account; specifying factors to be considered by the panel;
4708	providing duties of the office; authorizing the office to
4709	conduct public hearings; requiring the panel to conduct an
4710	analysis of property eligible for the high-risk account in
4711	specified areas; requiring the panel to submit a report to the
4712	office and corporation; providing requirements of the report;
4713	amending s. 627.3517, F.S.; providing that an insurance risk
4714	apportionment plan policyholder's right to retain his or her
4715	current agent does not apply during the first 10 days after a
4716	new application for coverage has been submitted to Citizens
4717	Property Insurance Corporation; creating s. 627.3519, F.S.;
4718	requiring the Financial Services Commission to report annually
4719	to the Legislature on probable maximum losses, financing
4720	options, and assessment potentials of the Florida Hurricane
4721	Catastrophe Fund and Citizens Property Insurance Corporation;
4722	amending s. 627.4035, F.S.; providing for a waiver of a written
4723	authorization requirement to pay claims by debit card or other
4724	electronic transfer; amending s. 627.701, F.S.; providing
4725	additional authorization and requirements for hurricane
4726	deductibles for renewal periods; authorizing insurers to provide
4727	insureds with certain deductible selection options after
4728	hurricane mitigation measures are taken; providing a notice
4729	requirement; amending s. 627.7011, F.S.; limiting certain law
4730	and ordinance coverage; deleting application to personal
4731	property; requiring insurers to issue separate checks for
4732	certain expenses and requiring certain checks to be issued
4733	directly to a policyholder; providing construction relating to
4734	limiting the liability of an insurer for certain replacement
4735	costs; creating s. 627.7019, F.S.; requiring the Financial
4736	Services Commission to adopt rules imposing standardized
4737	requirements applicable to insurers after certain natural
4738	events; providing criteria; providing requirements of the Office
4739	of Insurance Regulation; prohibiting certain conflicting
4740	emergency rules; amending s. 627.706, F.S.; providing a
4741	definition; amending s. 627.727, F.S.; correcting a cross-
4742	reference; amending s. 631.181, F.S.; providing an exception to
4743	certain requirements for a signed statement for certain claims;
4744	providing requirements; amending s. 631.54, F.S.; defining the
4745	term "homeowner's insurance"; amending s. 631.55, F.S.;
4746	correcting a cross-reference; amending s. 631.57, F.S.; revising
4747	requirements and limitations for obligations of the Florida
4748	Insurance Guaranty Association for covered claims; authorizing
4749	the association to contract with counties, municipalities, and
4750	legal entities to issue revenue bonds for certain purposes;
4751	authorizing the Office of Insurance Regulation to levy
4752	assessments and emergency assessments on insurers under certain
4753	circumstances for certain bond repayment purposes; providing
4754	requirements for and limitations on such assessments; providing
4755	for payment, collection, and distribution of such assessments;
4756	requiring insurers to include an analysis of revenues from such
4757	assessments in a required report; providing rate filing
4758	requirements for insurers relating to such assessments;
4759	providing for continuing annual assessments under certain
4760	circumstances; specifying emergency assessments as not premium
4761	and not subject to certain taxes, fees, or commissions;
4762	specifying insurer liability for emergency assessments;
4763	providing an exception; creating s. 631.695, F.S.; providing
4764	legislative findings and purposes; providing for issuance of
4765	revenue bonds through counties and municipalities to fund
4766	assistance programs for paying covered claims for hurricane
4767	damage; providing procedures, requirements, and limitations for
4768	counties, municipalities, and the Florida Insurance Guaranty
4769	Association, Inc., relating to issuance and validation of such
4770	bonds; prohibiting pledging the funds, credit, property, and
4771	taxing power of the state, counties, and municipalities for
4772	payment of bonds; specifying authorized uses of bond proceeds;
4773	limiting the term of bonds; specifying a state covenant to
4774	protect bondholders from adverse actions relating to such bonds;
4775	specifying exemptions for bonds, notes, and other obligations of
4776	counties and municipalities from certain taxes or assessments on
4777	property and revenues; authorizing counties and municipalities
4778	to create a legal entity to exercise certain powers; requiring
4779	the association to issue an annual report on the status of
4780	certain uses of bond proceeds; providing report requirements;
4781	requiring the association to provide a copy of the report to the
4782	Legislature and Chief Financial Officer; prohibiting repeal of
4783	certain provisions relating to certain bonds under certain
4784	circumstances; amending s. 817.234, F.S.; providing an
4785	additional circumstance that constitutes committing insurance
4786	fraud; creating the Task Force on Hurricane Mitigation and
4787	Hurricane Insurance for Mobile and Manufactured Homes; providing
4788	for administration by the office; specifying additional agency
4789	administrative staff; providing for appointment of task force
4790	members; requiring members to serve without compensation;
4791	providing for per diem and travel expenses; providing purpose
4792	and intent; requiring the task force to address specified
4793	issues; requiring a report to the Governor, Chief Financial
4794	Officer, and Legislature; providing for expiration of the task
4795	force; requiring the Office of Insurance Regulation to submit
4796	reports to the Legislature relating to the insurability of
4797	certain attached or free standing structures ; providing report
4798	requirements; providing duties of the office; providing
4799	appropriations; specifying uses and purposes of appropriations;
4800	providing effective dates.

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