Amendment
Bill No. 7225

Amendment No. 730001

CHAMBER ACTION
Senate		House
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1	Representative(s) Robaina offered the following:
2
3	Substitute Amendment for Amendment (918865) (with title
4	amendment)
5	Between lines 3719 and 3720, insert:
6	Section 24.  Paragraph (n) of subsection (2), subsection
7	(3), paragraphs (c) and (d) of subsection (6), paragraph (c) of
8	subsection (7), and subsection (9) of section 215.555, Florida
9	Statutes, are amended to read:
10	215.555  John F. Cosgrove Florida Hurricane Catastrophe
11	Fund.--
12	(2)  DEFINITIONS.--As used in this section:
13	(n)  "Corporation" means the John F. Cosgrove Florida
14	Hurricane Catastrophe Fund Finance Corporation created in
15	paragraph (6)(d).
16	(3)  JOHN F. COSGROVE FLORIDA HURRICANE CATASTROPHE FUND
17	CREATED.--There is created the John F. Cosgrove Florida
18	Hurricane Catastrophe Fund to be administered by the State Board
19	of Administration. Moneys in the fund may not be expended,
20	loaned, or appropriated except to pay obligations of the fund
21	arising out of reimbursement contracts entered into under
22	subsection (4), payment of debt service on revenue bonds issued
23	under subsection (6), costs of the mitigation program under
24	subsection (7), costs of procuring reinsurance, and costs of
25	administration of the fund. The board shall invest the moneys in
26	the fund pursuant to ss. 215.44-215.52. Except as otherwise
27	provided in this section, earnings from all investments shall be
28	retained in the fund. The board may employ or contract with such
29	staff and professionals as the board deems necessary for the
30	administration of the fund. The board may adopt such rules as
31	are reasonable and necessary to implement this section and shall
32	specify interest due on any delinquent remittances, which
33	interest may not exceed the fund's rate of return plus 5
34	percent. Such rules must conform to the Legislature's specific
35	intent in establishing the fund as expressed in subsection (1),
36	must enhance the fund's potential ability to respond to claims
37	for covered events, must contain general provisions so that the
38	rules can be applied with reasonable flexibility so as to
39	accommodate insurers in situations of an unusual nature or where
40	undue hardship may result, except that such flexibility may not
41	in any way impair, override, supersede, or constrain the public
42	purpose of the fund, and must be consistent with sound insurance
43	practices. The board may, by rule, provide for the exemption
44	from subsections (4) and (5) of insurers writing covered
45	policies with less than $10 million in aggregate exposure for
46	covered policies if the exemption does not affect the actuarial
47	soundness of the fund.
48	(6)  REVENUE BONDS.--
49	(c)  Revenue bond issuance through counties or
50	municipalities.--
51	1.  If the board elects to enter into agreements with local
52	governments for the issuance of revenue bonds for the benefit of
53	the fund, the board shall enter into such contracts with one or
54	more local governments, including agreements providing for the
55	pledge of revenues, as are necessary to effect such issuance.
56	The governing body of a county or municipality is authorized to
57	issue bonds as defined in s. 125.013 or s. 166.101 from time to
58	time to fund an assistance program, in conjunction with the John
59	F. Cosgrove Florida Hurricane Catastrophe Fund, for the purposes
60	set forth in this section or for the purpose of paying the costs
61	of construction, reconstruction, repair, restoration, and other
62	costs associated with damage to properties of policyholders of
63	covered policies due to the occurrence of a hurricane by
64	assuring that policyholders located in this state are able to
65	recover claims under property insurance policies after a covered
66	event.
67	2.  In order to avoid needless and indiscriminate
68	proliferation, duplication, and fragmentation of such assistance
69	programs, any local government may provide for the payment of
70	fund reimbursements, regardless of whether or not the losses for
71	which reimbursement is made occurred within or outside of the
72	territorial jurisdiction of the local government.
73	3.  The state hereby covenants with holders of bonds issued
74	under this paragraph that the state will not repeal or abrogate
75	the power of the board to direct the Office of Insurance
76	Regulation to levy the assessments and to collect the proceeds
77	of the revenues pledged to the payment of such bonds as long as
78	any such bonds remain outstanding unless adequate provision has
79	been made for the payment of such bonds pursuant to the
80	documents authorizing the issuance of such bonds.
81	4.  There shall be no liability on the part of, and no
82	cause of action shall arise against any members or employees of
83	the governing body of a local government for any actions taken
84	by them in the performance of their duties under this paragraph.
85	(d)  John F. Cosgrove Florida Hurricane Catastrophe Fund
86	Finance Corporation.--
87	1.  In addition to the findings and declarations in
88	subsection (1), the Legislature also finds and declares that:
89	a.  The public benefits corporation created under this
90	paragraph will provide a mechanism necessary for the cost-
91	effective and efficient issuance of bonds. This mechanism will
92	eliminate unnecessary costs in the bond issuance process,
93	thereby increasing the amounts available to pay reimbursement
94	for losses to property sustained as a result of hurricane
95	damage.
96	b.  The purpose of such bonds is to fund reimbursements
97	through the John F. Cosgrove Florida Hurricane Catastrophe Fund
98	to pay for the costs of construction, reconstruction, repair,
99	restoration, and other costs associated with damage to
100	properties of policyholders of covered policies due to the
101	occurrence of a hurricane.
102	c.  The efficacy of the financing mechanism will be
103	enhanced by the corporation's ownership of the assessments, by
104	the insulation of the assessments from possible bankruptcy
105	proceedings, and by covenants of the state with the
106	corporation's bondholders.
107	2.a.  There is created a public benefits corporation, which
108	is an instrumentality of the state, to be known as the John F.
109	Cosgrove Florida Hurricane Catastrophe Fund Finance Corporation.
110	b.  The corporation shall operate under a five-member board
111	of directors consisting of the Governor or a designee, the Chief
112	Financial Officer or a designee, the Attorney General or a
113	designee, the director of the Division of Bond Finance of the
114	State Board of Administration, and the senior employee of the
115	State Board of Administration responsible for operations of the
116	John F. Cosgrove Florida Hurricane Catastrophe Fund.
117	c.  The corporation has all of the powers of corporations
118	under chapter 607 and under chapter 617, subject only to the
119	provisions of this subsection.
120	d.  The corporation may issue bonds and engage in such
121	other financial transactions as are necessary to provide
122	sufficient funds to achieve the purposes of this section.
123	e.  The corporation may invest in any of the investments
124	authorized under s. 215.47.
125	f.  There shall be no liability on the part of, and no
126	cause of action shall arise against, any board members or
127	employees of the corporation for any actions taken by them in
128	the performance of their duties under this paragraph.
129	3.a.  In actions under chapter 75 to validate any bonds
130	issued by the corporation, the notice required by s. 75.06 shall
131	be published only in Leon County and in two newspapers of
132	general circulation in the state, and the complaint and order of
133	the court shall be served only on the State Attorney of the
134	Second Judicial Circuit.
135	b.  The state hereby covenants with holders of bonds of the
136	corporation that the state will not repeal or abrogate the power
137	of the board to direct the Office of Insurance Regulation to
138	levy the assessments and to collect the proceeds of the revenues
139	pledged to the payment of such bonds as long as any such bonds
140	remain outstanding unless adequate provision has been made for
141	the payment of such bonds pursuant to the documents authorizing
142	the issuance of such bonds.
143	4.  The bonds of the corporation are not a debt of the
144	state or of any political subdivision, and neither the state nor
145	any political subdivision is liable on such bonds. The
146	corporation does not have the power to pledge the credit, the
147	revenues, or the taxing power of the state or of any political
148	subdivision. The credit, revenues, or taxing power of the state
149	or of any political subdivision shall not be deemed to be
150	pledged to the payment of any bonds of the corporation.
151	5.a.  The property, revenues, and other assets of the
152	corporation; the transactions and operations of the corporation
153	and the income from such transactions and operations; and all
154	bonds issued under this paragraph and interest on such bonds are
155	exempt from taxation by the state and any political subdivision,
156	including the intangibles tax under chapter 199 and the income
157	tax under chapter 220. This exemption does not apply to any tax
158	imposed by chapter 220 on interest, income, or profits on debt
159	obligations owned by corporations other than the John F.
160	Cosgrove Florida Hurricane Catastrophe Fund Finance Corporation.
161	b.  All bonds of the corporation shall be and constitute
162	legal investments without limitation for all public bodies of
163	this state; for all banks, trust companies, savings banks,
164	savings associations, savings and loan associations, and
165	investment companies; for all administrators, executors,
166	trustees, and other fiduciaries; for all insurance companies and
167	associations and other persons carrying on an insurance
168	business; and for all other persons who are now or may hereafter
169	be authorized to invest in bonds or other obligations of the
170	state and shall be and constitute eligible securities to be
171	deposited as collateral for the security of any state, county,
172	municipal, or other public funds. This sub-subparagraph shall be
173	considered as additional and supplemental authority and shall
174	not be limited without specific reference to this sub-
175	subparagraph.
176	6.  The corporation and its corporate existence shall
177	continue until terminated by law; however, no such law shall
178	take effect as long as the corporation has bonds outstanding
179	unless adequate provision has been made for the payment of such
180	bonds pursuant to the documents authorizing the issuance of such
181	bonds. Upon termination of the existence of the corporation, all
182	of its rights and properties in excess of its obligations shall
183	pass to and be vested in the state.
184	(7)  ADDITIONAL POWERS AND DUTIES.--
185	(c)  Each fiscal year, the Legislature shall appropriate
186	from the investment income of the John F. Cosgrove Florida
187	Hurricane Catastrophe Fund an amount no less than $10 million
188	and no more than 35 percent of the investment income based upon
189	the most recent fiscal year-end audited financial statements for
190	the purpose of providing funding for local governments, state
191	agencies, public and private educational institutions, and
192	nonprofit organizations to support programs intended to improve
193	hurricane preparedness, reduce potential losses in the event of
194	a hurricane, provide research into means to reduce such losses,
195	educate or inform the public as to means to reduce hurricane
196	losses, assist the public in determining the appropriateness of
197	particular upgrades to structures or in the financing of such
198	upgrades, or protect local infrastructure from potential damage
199	from a hurricane. Moneys shall first be available for
200	appropriation under this paragraph in fiscal year 1997-1998.
201	Moneys in excess of the $10 million specified in this paragraph
202	shall not be available for appropriation under this paragraph if
203	the State Board of Administration finds that an appropriation of
204	investment income from the fund would jeopardize the actuarial
205	soundness of the fund.
206	(9)  APPLICABILITY OF S. 19, ART. III OF THE STATE
207	CONSTITUTION.--The Legislature finds that the John F. Cosgrove
208	Florida Hurricane Catastrophe Fund created by this section is a
209	trust fund established for bond covenants, indentures, or
210	resolutions within the meaning of s. 19(f)(3), Art. III of the
211	State Constitution.
212	Section 25.  Section 215.556, Florida Statutes, is amended
213	to read:
214	215.556  Exemption.--The John F. Cosgrove Florida Hurricane
215	Catastrophe Fund created by s. 215.555 is exempt from the
216	deduction required by s. 215.20(1).
217	Section 26.  Subsection (1) of section 215.559, Florida
218	Statutes, is amended to read:
219	215.559  Hurricane Loss Mitigation Program.--
220	(1)  There is created a Hurricane Loss Mitigation Program.
221	The Legislature shall annually appropriate $10 million of the
222	moneys authorized for appropriation under s. 215.555(7)(c) from
223	the John F. Cosgrove Florida Hurricane Catastrophe Fund to the
224	Department of Community Affairs for the purposes set forth in
225	this section.
226	Section 27.  Subsection (3) of section 624.5091, Florida
227	Statutes, is amended to read:
228	624.5091  Retaliatory provision, insurers.--
229	(3)  This section does not apply as to personal income
230	taxes, nor as to sales or use taxes, nor as to ad valorem taxes
231	on real or personal property, nor as to reimbursement premiums
232	paid to the John F. Cosgrove Florida Hurricane Catastrophe Fund,
233	nor as to emergency assessments paid to the John F. Cosgrove
234	Florida Hurricane Catastrophe Fund, nor as to special purpose
235	obligations or assessments imposed in connection with particular
236	kinds of insurance other than property insurance, except that
237	deductions, from premium taxes or other taxes otherwise payable,
238	allowed on account of real estate or personal property taxes
239	paid shall be taken into consideration by the department in
240	determining the propriety and extent of retaliatory action under
241	this section.
242	Section 28.  Subsection (5) of section 627.062, Florida
243	Statutes, is amended to read:
244	627.062  Rate standards.--
245	(5)  With respect to a rate filing involving coverage of
246	the type for which the insurer is required to pay a
247	reimbursement premium to the John F. Cosgrove Florida Hurricane
248	Catastrophe Fund, the insurer may fully recoup in its property
249	insurance premiums any reimbursement premiums paid to the John
250	F. Cosgrove Florida Hurricane Catastrophe Fund, together with
251	reasonable costs of other reinsurance, but may not recoup
252	reinsurance costs that duplicate coverage provided by the John
253	F. Cosgrove Florida Hurricane Catastrophe Fund. An insurer may
254	not recoup more than 1 year of reimbursement premium at a time.
255	Any under-recoupment from the prior year may be added to the
256	following year's reimbursement premium and any over-recoupment
257	shall be subtracted from the following year's reimbursement
258	premium.
259	Section 29.  Paragraph (c) of subsection (1), paragraphs
260	(b) and (f) of subsection (2), and paragraph (b) of subsection
261	(3) of section 627.0628, Florida Statutes, are amended to read:
262	627.0628  Florida Commission on Hurricane Loss Projection
263	Methodology; public records exemption; public meetings
264	exemption.--
265	(1)  LEGISLATIVE FINDINGS AND INTENT.--
266	(c)  It is the intent of the Legislature to create the
267	Florida Commission on Hurricane Loss Projection Methodology as a
268	panel of experts to provide the most actuarially sophisticated
269	guidelines and standards for projection of hurricane losses
270	possible, given the current state of actuarial science. It is
271	the further intent of the Legislature that such standards and
272	guidelines must be used by the State Board of Administration in
273	developing reimbursement premium rates for the John F. Cosgrove
274	Florida Hurricane Catastrophe Fund, and, subject to paragraph
275	(3)(c), may be used by insurers in rate filings under s. 627.062
276	unless the way in which such standards and guidelines were
277	applied by the insurer was erroneous, as shown by a
278	preponderance of the evidence.
279	(2)  COMMISSION CREATED.--
280	(b)  The commission shall consist of the following 11
281	members:
282	1.  The insurance consumer advocate.
283	2.  The senior employee of the State Board of
284	Administration responsible for operations of the John F.
285	Cosgrove Florida Hurricane Catastrophe Fund.
286	3.  The Executive Director of the Citizens Property
287	Insurance Corporation.
288	4.  The Director of the Division of Emergency Management of
289	the Department of Community Affairs.
290	5.  The actuary member of the John F. Cosgrove Florida
291	Hurricane Catastrophe Fund Advisory Council.
292	6.  An employee of the office who is an actuary responsible
293	for property insurance rate filings and who is appointed by the
294	director of the office.
295	7.  Five members appointed by the Chief Financial Officer,
296	as follows:
297	a.  An actuary who is employed full time by a property and
298	casualty insurer which was responsible for at least 1 percent of
299	the aggregate statewide direct written premium for homeowner's
300	insurance in the calendar year preceding the member's
301	appointment to the commission.
302	b.  An expert in insurance finance who is a full-time
303	member of the faculty of the State University System and who has
304	a background in actuarial science.
305	c.  An expert in statistics who is a full-time member of
306	the faculty of the State University System and who has a
307	background in insurance.
308	d.  An expert in computer system design who is a full-time
309	member of the faculty of the State University System.
310	e.  An expert in meteorology who is a full-time member of
311	the faculty of the State University System and who specializes
312	in hurricanes.
313	(f)  The State Board of Administration shall, as a cost of
314	administration of the John F. Cosgrove Florida Hurricane
315	Catastrophe Fund, provide for travel, expenses, and staff
316	support for the commission.
317	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
318	(b)  In establishing reimbursement premiums for the John F.
319	Cosgrove Florida Hurricane Catastrophe Fund, the State Board of
320	Administration must, to the extent feasible, employ actuarial
321	methods, principles, standards, models, or output ranges found
322	by the commission to be accurate or reliable.
323	Section 30.  Subsection (10) of section 627.0629, Florida
324	Statutes, is amended to read:
325	627.0629  Residential property insurance; rate filings.--
326	(10)  A property insurance rate filing that includes any
327	adjustments related to premiums paid to the John F. Cosgrove
328	Florida Hurricane Catastrophe Fund must include a complete
329	calculation of the insurer's catastrophe load, and the
330	information in the filing may not be limited solely to recovery
331	of moneys paid to the fund.
332	Section 31.  Paragraph (b) of subsection (2), paragraphs
333	(b), (c), (k), and (l) of subsection (6) of section 627.351,
334	Florida Statutes, are amended to read:
335	627.351  Insurance risk apportionment plans.--
336	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
337	(b)  The department shall require all insurers holding a
338	certificate of authority to transact property insurance on a
339	direct basis in this state, other than joint underwriting
340	associations and other entities formed pursuant to this section,
341	to provide windstorm coverage to applicants from areas
342	determined to be eligible pursuant to paragraph (c) who in good
343	faith are entitled to, but are unable to procure, such coverage
344	through ordinary means; or it shall adopt a reasonable plan or
345	plans for the equitable apportionment or sharing among such
346	insurers of windstorm coverage, which may include formation of
347	an association for this purpose. As used in this subsection, the
348	term "property insurance" means insurance on real or personal
349	property, as defined in s. 624.604, including insurance for
350	fire, industrial fire, allied lines, farmowners multiperil,
351	homeowners' multiperil, commercial multiperil, and mobile homes,
352	and including liability coverages on all such insurance, but
353	excluding inland marine as defined in s. 624.607(3) and
354	excluding vehicle insurance as defined in s. 624.605(1)(a) other
355	than insurance on mobile homes used as permanent dwellings. The
356	department shall adopt rules that provide a formula for the
357	recovery and repayment of any deferred assessments.
358	1.  For the purpose of this section, properties eligible
359	for such windstorm coverage are defined as dwellings, buildings,
360	and other structures, including mobile homes which are used as
361	dwellings and which are tied down in compliance with mobile home
362	tie-down requirements prescribed by the Department of Highway
363	Safety and Motor Vehicles pursuant to s. 320.8325, and the
364	contents of all such properties. An applicant or policyholder is
365	eligible for coverage only if an offer of coverage cannot be
366	obtained by or for the applicant or policyholder from an
367	admitted insurer at approved rates.
368	2.a.(I)  All insurers required to be members of such
369	association shall participate in its writings, expenses, and
370	losses. Surplus of the association shall be retained for the
371	payment of claims and shall not be distributed to the member
372	insurers. Such participation by member insurers shall be in the
373	proportion that the net direct premiums of each member insurer
374	written for property insurance in this state during the
375	preceding calendar year bear to the aggregate net direct
376	premiums for property insurance of all member insurers, as
377	reduced by any credits for voluntary writings, in this state
378	during the preceding calendar year. For the purposes of this
379	subsection, the term "net direct premiums" means direct written
380	premiums for property insurance, reduced by premium for
381	liability coverage and for the following if included in allied
382	lines: rain and hail on growing crops; livestock; association
383	direct premiums booked; National Flood Insurance Program direct
384	premiums; and similar deductions specifically authorized by the
385	plan of operation and approved by the department. A member's
386	participation shall begin on the first day of the calendar year
387	following the year in which it is issued a certificate of
388	authority to transact property insurance in the state and shall
389	terminate 1 year after the end of the calendar year during which
390	it no longer holds a certificate of authority to transact
391	property insurance in the state. The commissioner, after review
392	of annual statements, other reports, and any other statistics
393	that the commissioner deems necessary, shall certify to the
394	association the aggregate direct premiums written for property
395	insurance in this state by all member insurers.
396	(II)  Effective July 1, 2002, the association shall operate
397	subject to the supervision and approval of a board of governors
398	who are the same individuals that have been appointed by the
399	Treasurer to serve on the board of governors of the Citizens
400	Property Insurance Corporation.
401	(III)  The plan of operation shall provide a formula
402	whereby a company voluntarily providing windstorm coverage in
403	affected areas will be relieved wholly or partially from
404	apportionment of a regular assessment pursuant to sub-sub-
405	subparagraph d.(I) or sub-sub-subparagraph d.(II).
406	(IV)  A company which is a member of a group of companies
407	under common management may elect to have its credits applied on
408	a group basis, and any company or group may elect to have its
409	credits applied to any other company or group.
410	(V)  There shall be no credits or relief from apportionment
411	to a company for emergency assessments collected from its
412	policyholders under sub-sub-subparagraph d.(III).
413	(VI)  The plan of operation may also provide for the award
414	of credits, for a period not to exceed 3 years, from a regular
415	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
416	subparagraph d.(II) as an incentive for taking policies out of
417	the Residential Property and Casualty Joint Underwriting
418	Association. In order to qualify for the exemption under this
419	sub-sub-subparagraph, the take-out plan must provide that at
420	least 40 percent of the policies removed from the Residential
421	Property and Casualty Joint Underwriting Association cover risks
422	located in Dade, Broward, and Palm Beach Counties or at least 30
423	percent of the policies so removed cover risks located in Dade,
424	Broward, and Palm Beach Counties and an additional 50 percent of
425	the policies so removed cover risks located in other coastal
426	counties, and must also provide that no more than 15 percent of
427	the policies so removed may exclude windstorm coverage. With the
428	approval of the department, the association may waive these
429	geographic criteria for a take-out plan that removes at least
430	the lesser of 100,000 Residential Property and Casualty Joint
431	Underwriting Association policies or 15 percent of the total
432	number of Residential Property and Casualty Joint Underwriting
433	Association policies, provided the governing board of the
434	Residential Property and Casualty Joint Underwriting Association
435	certifies that the take-out plan will materially reduce the
436	Residential Property and Casualty Joint Underwriting
437	Association's 100-year probable maximum loss from hurricanes.
438	With the approval of the department, the board may extend such
439	credits for an additional year if the insurer guarantees an
440	additional year of renewability for all policies removed from
441	the Residential Property and Casualty Joint Underwriting
442	Association, or for 2 additional years if the insurer guarantees
443	2 additional years of renewability for all policies removed from
444	the Residential Property and Casualty Joint Underwriting
445	Association.
446	b.  Assessments to pay deficits in the association under
447	this subparagraph shall be included as an appropriate factor in
448	the making of rates as provided in s. 627.3512.
449	c.  The Legislature finds that the potential for unlimited
450	deficit assessments under this subparagraph may induce insurers
451	to attempt to reduce their writings in the voluntary market, and
452	that such actions would worsen the availability problems that
453	the association was created to remedy. It is the intent of the
454	Legislature that insurers remain fully responsible for paying
455	regular assessments and collecting emergency assessments for any
456	deficits of the association; however, it is also the intent of
457	the Legislature to provide a means by which assessment
458	liabilities may be amortized over a period of years.
459	d.(I)  When the deficit incurred in a particular calendar
460	year is 10 percent or less of the aggregate statewide direct
461	written premium for property insurance for the prior calendar
462	year for all member insurers, the association shall levy an
463	assessment on member insurers in an amount equal to the deficit.
464	(II)  When the deficit incurred in a particular calendar
465	year exceeds 10 percent of the aggregate statewide direct
466	written premium for property insurance for the prior calendar
467	year for all member insurers, the association shall levy an
468	assessment on member insurers in an amount equal to the greater
469	of 10 percent of the deficit or 10 percent of the aggregate
470	statewide direct written premium for property insurance for the
471	prior calendar year for member insurers. Any remaining deficit
472	shall be recovered through emergency assessments under sub-sub-
473	subparagraph (III).
474	(III)  Upon a determination by the board of directors that
475	a deficit exceeds the amount that will be recovered through
476	regular assessments on member insurers, pursuant to sub-sub-
477	subparagraph (I) or sub-sub-subparagraph (II), the board shall
478	levy, after verification by the department, emergency
479	assessments to be collected by member insurers and by
480	underwriting associations created pursuant to this section which
481	write property insurance, upon issuance or renewal of property
482	insurance policies other than National Flood Insurance policies
483	in the year or years following levy of the regular assessments.
484	The amount of the emergency assessment collected in a particular
485	year shall be a uniform percentage of that year's direct written
486	premium for property insurance for all member insurers and
487	underwriting associations, excluding National Flood Insurance
488	policy premiums, as annually determined by the board and
489	verified by the department. The department shall verify the
490	arithmetic calculations involved in the board's determination
491	within 30 days after receipt of the information on which the
492	determination was based. Notwithstanding any other provision of
493	law, each member insurer and each underwriting association
494	created pursuant to this section shall collect emergency
495	assessments from its policyholders without such obligation being
496	affected by any credit, limitation, exemption, or deferment. The
497	emergency assessments so collected shall be transferred directly
498	to the association on a periodic basis as determined by the
499	association. The aggregate amount of emergency assessments
500	levied under this sub-sub-subparagraph in any calendar year may
501	not exceed the greater of 10 percent of the amount needed to
502	cover the original deficit, plus interest, fees, commissions,
503	required reserves, and other costs associated with financing of
504	the original deficit, or 10 percent of the aggregate statewide
505	direct written premium for property insurance written by member
506	insurers and underwriting associations for the prior year, plus
507	interest, fees, commissions, required reserves, and other costs
508	associated with financing the original deficit. The board may
509	pledge the proceeds of the emergency assessments under this sub-
510	sub-subparagraph as the source of revenue for bonds, to retire
511	any other debt incurred as a result of the deficit or events
512	giving rise to the deficit, or in any other way that the board
513	determines will efficiently recover the deficit. The emergency
514	assessments under this sub-sub-subparagraph shall continue as
515	long as any bonds issued or other indebtedness incurred with
516	respect to a deficit for which the assessment was imposed remain
517	outstanding, unless adequate provision has been made for the
518	payment of such bonds or other indebtedness pursuant to the
519	document governing such bonds or other indebtedness. Emergency
520	assessments collected under this sub-sub-subparagraph are not
521	part of an insurer's rates, are not premium, and are not subject
522	to premium tax, fees, or commissions; however, failure to pay
523	the emergency assessment shall be treated as failure to pay
524	premium.
525	(IV)  Each member insurer's share of the total regular
526	assessments under sub-sub-subparagraph (I) or sub-sub-
527	subparagraph (II) shall be in the proportion that the insurer's
528	net direct premium for property insurance in this state, for the
529	year preceding the assessment bears to the aggregate statewide
530	net direct premium for property insurance of all member
531	insurers, as reduced by any credits for voluntary writings for
532	that year.
533	(V)  If regular deficit assessments are made under sub-sub-
534	subparagraph (I) or sub-sub-subparagraph (II), or by the
535	Residential Property and Casualty Joint Underwriting Association
536	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
537	(6)(b)3.b., the association shall levy upon the association's
538	policyholders, as part of its next rate filing, or by a separate
539	rate filing solely for this purpose, a market equalization
540	surcharge in a percentage equal to the total amount of such
541	regular assessments divided by the aggregate statewide direct
542	written premium for property insurance for member insurers for
543	the prior calendar year. Market equalization surcharges under
544	this sub-sub-subparagraph are not considered premium and are not
545	subject to commissions, fees, or premium taxes; however, failure
546	to pay a market equalization surcharge shall be treated as
547	failure to pay premium.
548	e.  The governing body of any unit of local government, any
549	residents of which are insured under the plan, may issue bonds
550	as defined in s. 125.013 or s. 166.101 to fund an assistance
551	program, in conjunction with the association, for the purpose of
552	defraying deficits of the association. In order to avoid
553	needless and indiscriminate proliferation, duplication, and
554	fragmentation of such assistance programs, any unit of local
555	government, any residents of which are insured by the
556	association, may provide for the payment of losses, regardless
557	of whether or not the losses occurred within or outside of the
558	territorial jurisdiction of the local government. Revenue bonds
559	may not be issued until validated pursuant to chapter 75, unless
560	a state of emergency is declared by executive order or
561	proclamation of the Governor pursuant to s. 252.36 making such
562	findings as are necessary to determine that it is in the best
563	interests of, and necessary for, the protection of the public
564	health, safety, and general welfare of residents of this state
565	and the protection and preservation of the economic stability of
566	insurers operating in this state, and declaring it an essential
567	public purpose to permit certain municipalities or counties to
568	issue bonds as will provide relief to claimants and
569	policyholders of the association and insurers responsible for
570	apportionment of plan losses. Any such unit of local government
571	may enter into such contracts with the association and with any
572	other entity created pursuant to this subsection as are
573	necessary to carry out this paragraph. Any bonds issued under
574	this sub-subparagraph shall be payable from and secured by
575	moneys received by the association from assessments under this
576	subparagraph, and assigned and pledged to or on behalf of the
577	unit of local government for the benefit of the holders of such
578	bonds. The funds, credit, property, and taxing power of the
579	state or of the unit of local government shall not be pledged
580	for the payment of such bonds. If any of the bonds remain unsold
581	60 days after issuance, the department shall require all
582	insurers subject to assessment to purchase the bonds, which
583	shall be treated as admitted assets; each insurer shall be
584	required to purchase that percentage of the unsold portion of
585	the bond issue that equals the insurer's relative share of
586	assessment liability under this subsection. An insurer shall not
587	be required to purchase the bonds to the extent that the
588	department determines that the purchase would endanger or impair
589	the solvency of the insurer. The authority granted by this sub-
590	subparagraph is additional to any bonding authority granted by
591	subparagraph 6.
592	3.  The plan shall also provide that any member with a
593	surplus as to policyholders of $20 million or less writing 25
594	percent or more of its total countrywide property insurance
595	premiums in this state may petition the department, within the
596	first 90 days of each calendar year, to qualify as a limited
597	apportionment company. The apportionment of such a member
598	company in any calendar year for which it is qualified shall not
599	exceed its gross participation, which shall not be affected by
600	the formula for voluntary writings. In no event shall a limited
601	apportionment company be required to participate in any
602	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
603	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
604	$50 million after payment of available plan funds in any
605	calendar year. However, a limited apportionment company shall
606	collect from its policyholders any emergency assessment imposed
607	under sub-sub-subparagraph 2.d.(III). The plan shall provide
608	that, if the department determines that any regular assessment
609	will result in an impairment of the surplus of a limited
610	apportionment company, the department may direct that all or
611	part of such assessment be deferred. However, there shall be no
612	limitation or deferment of an emergency assessment to be
613	collected from policyholders under sub-sub-subparagraph
614	2.d.(III).
615	4.  The plan shall provide for the deferment, in whole or
616	in part, of a regular assessment of a member insurer under sub-
617	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
618	not for an emergency assessment collected from policyholders
619	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
620	commissioner, payment of such regular assessment would endanger
621	or impair the solvency of the member insurer. In the event a
622	regular assessment against a member insurer is deferred in whole
623	or in part, the amount by which such assessment is deferred may
624	be assessed against the other member insurers in a manner
625	consistent with the basis for assessments set forth in sub-sub-
626	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
627	5.a.  The plan of operation may include deductibles and
628	rules for classification of risks and rate modifications
629	consistent with the objective of providing and maintaining funds
630	sufficient to pay catastrophe losses.
631	b.  The association may require arbitration of a rate
632	filing under s. 627.062(6). It is the intent of the Legislature
633	that the rates for coverage provided by the association be
634	actuarially sound and not competitive with approved rates
635	charged in the admitted voluntary market such that the
636	association functions as a residual market mechanism to provide
637	insurance only when the insurance cannot be procured in the
638	voluntary market. The plan of operation shall provide a
639	mechanism to assure that, beginning no later than January 1,
640	1999, the rates charged by the association for each line of
641	business are reflective of approved rates in the voluntary
642	market for hurricane coverage for each line of business in the
643	various areas eligible for association coverage.
644	c.  The association shall provide for windstorm coverage on
645	residential properties in limits up to $10 million for
646	commercial lines residential risks and up to $1 million for
647	personal lines residential risks. If coverage with the
648	association is sought for a residential risk valued in excess of
649	these limits, coverage shall be available to the risk up to the
650	replacement cost or actual cash value of the property, at the
651	option of the insured, if coverage for the risk cannot be
652	located in the authorized market. The association must accept a
653	commercial lines residential risk with limits above $10 million
654	or a personal lines residential risk with limits above $1
655	million if coverage is not available in the authorized market.
656	The association may write coverage above the limits specified in
657	this subparagraph with or without facultative or other
658	reinsurance coverage, as the association determines appropriate.
659	d.  The plan of operation must provide objective criteria
660	and procedures, approved by the department, to be uniformly
661	applied for all applicants in determining whether an individual
662	risk is so hazardous as to be uninsurable. In making this
663	determination and in establishing the criteria and procedures,
664	the following shall be considered:
665	(I)  Whether the likelihood of a loss for the individual
666	risk is substantially higher than for other risks of the same
667	class; and
668	(II)  Whether the uncertainty associated with the
669	individual risk is such that an appropriate premium cannot be
670	determined.
671
672	The acceptance or rejection of a risk by the association
673	pursuant to such criteria and procedures must be construed as
674	the private placement of insurance, and the provisions of
675	chapter 120 do not apply.
676	e.  If the risk accepts an offer of coverage through the
677	market assistance program or through a mechanism established by
678	the association, either before the policy is issued by the
679	association or during the first 30 days of coverage by the
680	association, and the producing agent who submitted the
681	application to the association is not currently appointed by the
682	insurer, the insurer shall:
683	(I)  Pay to the producing agent of record of the policy,
684	for the first year, an amount that is the greater of the
685	insurer's usual and customary commission for the type of policy
686	written or a fee equal to the usual and customary commission of
687	the association; or
688	(II)  Offer to allow the producing agent of record of the
689	policy to continue servicing the policy for a period of not less
690	than 1 year and offer to pay the agent the greater of the
691	insurer's or the association's usual and customary commission
692	for the type of policy written.
693
694	If the producing agent is unwilling or unable to accept
695	appointment, the new insurer shall pay the agent in accordance
696	with sub-sub-subparagraph (I). Subject to the provisions of s.
697	627.3517, the policies issued by the association must provide
698	that if the association obtains an offer from an authorized
699	insurer to cover the risk at its approved rates under either a
700	standard policy including wind coverage or, if consistent with
701	the insurer's underwriting rules as filed with the department, a
702	basic policy including wind coverage, the risk is no longer
703	eligible for coverage through the association. Upon termination
704	of eligibility, the association shall provide written notice to
705	the policyholder and agent of record stating that the
706	association policy must be canceled as of 60 days after the date
707	of the notice because of the offer of coverage from an
708	authorized insurer. Other provisions of the insurance code
709	relating to cancellation and notice of cancellation do not apply
710	to actions under this sub-subparagraph.
711	f.  When the association enters into a contractual
712	agreement for a take-out plan, the producing agent of record of
713	the association policy is entitled to retain any unearned
714	commission on the policy, and the insurer shall:
715	(I)  Pay to the producing agent of record of the
716	association policy, for the first year, an amount that is the
717	greater of the insurer's usual and customary commission for the
718	type of policy written or a fee equal to the usual and customary
719	commission of the association; or
720	(II)  Offer to allow the producing agent of record of the
721	association policy to continue servicing the policy for a period
722	of not less than 1 year and offer to pay the agent the greater
723	of the insurer's or the association's usual and customary
724	commission for the type of policy written.
725
726	If the producing agent is unwilling or unable to accept
727	appointment, the new insurer shall pay the agent in accordance
728	with sub-sub-subparagraph (I).
729	6.a.  The plan of operation may authorize the formation of
730	a private nonprofit corporation, a private nonprofit
731	unincorporated association, a partnership, a trust, a limited
732	liability company, or a nonprofit mutual company which may be
733	empowered, among other things, to borrow money by issuing bonds
734	or by incurring other indebtedness and to accumulate reserves or
735	funds to be used for the payment of insured catastrophe losses.
736	The plan may authorize all actions necessary to facilitate the
737	issuance of bonds, including the pledging of assessments or
738	other revenues.
739	b.  Any entity created under this subsection, or any entity
740	formed for the purposes of this subsection, may sue and be sued,
741	may borrow money; issue bonds, notes, or debt instruments;
742	pledge or sell assessments, market equalization surcharges and
743	other surcharges, rights, premiums, contractual rights,
744	projected recoveries from the John F. Cosgrove Florida Hurricane
745	Catastrophe Fund, other reinsurance recoverables, and other
746	assets as security for such bonds, notes, or debt instruments;
747	enter into any contracts or agreements necessary or proper to
748	accomplish such borrowings; and take other actions necessary to
749	carry out the purposes of this subsection. The association may
750	issue bonds or incur other indebtedness, or have bonds issued on
751	its behalf by a unit of local government pursuant to
752	subparagraph (6)(g)2., in the absence of a hurricane or other
753	weather-related event, upon a determination by the association
754	subject to approval by the department that such action would
755	enable it to efficiently meet the financial obligations of the
756	association and that such financings are reasonably necessary to
757	effectuate the requirements of this subsection. Any such entity
758	may accumulate reserves and retain surpluses as of the end of
759	any association year to provide for the payment of losses
760	incurred by the association during that year or any future year.
761	The association shall incorporate and continue the plan of
762	operation and articles of agreement in effect on the effective
763	date of chapter 76-96, Laws of Florida, to the extent that it is
764	not inconsistent with chapter 76-96, and as subsequently
765	modified consistent with chapter 76-96. The board of directors
766	and officers currently serving shall continue to serve until
767	their successors are duly qualified as provided under the plan.
768	The assets and obligations of the plan in effect immediately
769	prior to the effective date of chapter 76-96 shall be construed
770	to be the assets and obligations of the successor plan created
771	herein.
772	c.  In recognition of s. 10, Art. I of the State
773	Constitution, prohibiting the impairment of obligations of
774	contracts, it is the intent of the Legislature that no action be
775	taken whose purpose is to impair any bond indenture or financing
776	agreement or any revenue source committed by contract to such
777	bond or other indebtedness issued or incurred by the association
778	or any other entity created under this subsection.
779	7.  On such coverage, an agent's remuneration shall be that
780	amount of money payable to the agent by the terms of his or her
781	contract with the company with which the business is placed.
782	However, no commission will be paid on that portion of the
783	premium which is in excess of the standard premium of that
784	company.
785	8.  Subject to approval by the department, the association
786	may establish different eligibility requirements and operational
787	procedures for any line or type of coverage for any specified
788	eligible area or portion of an eligible area if the board
789	determines that such changes to the eligibility requirements and
790	operational procedures are justified due to the voluntary market
791	being sufficiently stable and competitive in such area or for
792	such line or type of coverage and that consumers who, in good
793	faith, are unable to obtain insurance through the voluntary
794	market through ordinary methods would continue to have access to
795	coverage from the association. When coverage is sought in
796	connection with a real property transfer, such requirements and
797	procedures shall not provide for an effective date of coverage
798	later than the date of the closing of the transfer as
799	established by the transferor, the transferee, and, if
800	applicable, the lender.
801	9.  Notwithstanding any other provision of law:
802	a.  The pledge or sale of, the lien upon, and the security
803	interest in any rights, revenues, or other assets of the
804	association created or purported to be created pursuant to any
805	financing documents to secure any bonds or other indebtedness of
806	the association shall be and remain valid and enforceable,
807	notwithstanding the commencement of and during the continuation
808	of, and after, any rehabilitation, insolvency, liquidation,
809	bankruptcy, receivership, conservatorship, reorganization, or
810	similar proceeding against the association under the laws of
811	this state or any other applicable laws.
812	b.  No such proceeding shall relieve the association of its
813	obligation, or otherwise affect its ability to perform its
814	obligation, to continue to collect, or levy and collect,
815	assessments, market equalization or other surcharges, projected
816	recoveries from the John F. Cosgrove Florida Hurricane
817	Catastrophe Fund, reinsurance recoverables, or any other rights,
818	revenues, or other assets of the association pledged.
819	c.  Each such pledge or sale of, lien upon, and security
820	interest in, including the priority of such pledge, lien, or
821	security interest, any such assessments, emergency assessments,
822	market equalization or renewal surcharges, projected recoveries
823	from the John F. Cosgrove Florida Hurricane Catastrophe Fund,
824	reinsurance recoverables, or other rights, revenues, or other
825	assets which are collected, or levied and collected, after the
826	commencement of and during the pendency of or after any such
827	proceeding shall continue unaffected by such proceeding.
828	d.  As used in this subsection, the term "financing
829	documents" means any agreement, instrument, or other document
830	now existing or hereafter created evidencing any bonds or other
831	indebtedness of the association or pursuant to which any such
832	bonds or other indebtedness has been or may be issued and
833	pursuant to which any rights, revenues, or other assets of the
834	association are pledged or sold to secure the repayment of such
835	bonds or indebtedness, together with the payment of interest on
836	such bonds or such indebtedness, or the payment of any other
837	obligation of the association related to such bonds or
838	indebtedness.
839	e.  Any such pledge or sale of assessments, revenues,
840	contract rights or other rights or assets of the association
841	shall constitute a lien and security interest, or sale, as the
842	case may be, that is immediately effective and attaches to such
843	assessments, revenues, contract, or other rights or assets,
844	whether or not imposed or collected at the time the pledge or
845	sale is made. Any such pledge or sale is effective, valid,
846	binding, and enforceable against the association or other entity
847	making such pledge or sale, and valid and binding against and
848	superior to any competing claims or obligations owed to any
849	other person or entity, including policyholders in this state,
850	asserting rights in any such assessments, revenues, contract, or
851	other rights or assets to the extent set forth in and in
852	accordance with the terms of the pledge or sale contained in the
853	applicable financing documents, whether or not any such person
854	or entity has notice of such pledge or sale and without the need
855	for any physical delivery, recordation, filing, or other action.
856	f.  There shall be no liability on the part of, and no
857	cause of action of any nature shall arise against, any member
858	insurer or its agents or employees, agents or employees of the
859	association, members of the board of directors of the
860	association, or the department or its representatives, for any
861	action taken by them in the performance of their duties or
862	responsibilities under this subsection. Such immunity does not
863	apply to actions for breach of any contract or agreement
864	pertaining to insurance, or any willful tort.
865	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
866	(b)1.  All insurers authorized to write one or more subject
867	lines of business in this state are subject to assessment by the
868	corporation and, for the purposes of this subsection, are
869	referred to collectively as "assessable insurers." Insurers
870	writing one or more subject lines of business in this state
871	pursuant to part VIII of chapter 626 are not assessable
872	insurers, but insureds who procure one or more subject lines of
873	business in this state pursuant to part VIII of chapter 626 are
874	subject to assessment by the corporation and are referred to
875	collectively as "assessable insureds." An authorized insurer's
876	assessment liability shall begin on the first day of the
877	calendar year following the year in which the insurer was issued
878	a certificate of authority to transact insurance for subject
879	lines of business in this state and shall terminate 1 year after
880	the end of the first calendar year during which the insurer no
881	longer holds a certificate of authority to transact insurance
882	for subject lines of business in this state.
883	2.a.  All revenues, assets, liabilities, losses, and
884	expenses of the corporation shall be divided into three separate
885	accounts as follows:
886	(I)  A personal lines account for personal residential
887	policies issued by the corporation or issued by the Residential
888	Property and Casualty Joint Underwriting Association and renewed
889	by the corporation that provide comprehensive, multiperil
890	coverage on risks that are not located in areas eligible for
891	coverage in the Florida Windstorm Underwriting Association as
892	those areas were defined on January 1, 2002, and for such
893	policies that do not provide coverage for the peril of wind on
894	risks that are located in such areas;
895	(II)  A commercial lines account for commercial residential
896	policies issued by the corporation or issued by the Residential
897	Property and Casualty Joint Underwriting Association and renewed
898	by the corporation that provide coverage for basic property
899	perils on risks that are not located in areas eligible for
900	coverage in the Florida Windstorm Underwriting Association as
901	those areas were defined on January 1, 2002, and for such
902	policies that do not provide coverage for the peril of wind on
903	risks that are located in such areas; and
904	(III)  A high-risk account for personal residential
905	policies and commercial residential and commercial
906	nonresidential property policies issued by the corporation or
907	transferred to the corporation that provide coverage for the
908	peril of wind on risks that are located in areas eligible for
909	coverage in the Florida Windstorm Underwriting Association as
910	those areas were defined on January 1, 2002. The high-risk
911	account must also include quota share primary insurance under
912	subparagraph (c)2. The area eligible for coverage under the
913	high-risk account also includes the area within Port Canaveral,
914	which is bordered on the south by the City of Cape Canaveral,
915	bordered on the west by the Banana River, and bordered on the
916	north by Federal Government property. The office may remove
917	territory from the area eligible for wind-only and quota share
918	coverage if, after a public hearing, the office finds that
919	authorized insurers in the voluntary market are willing and able
920	to write sufficient amounts of personal and commercial
921	residential coverage for all perils in the territory, including
922	coverage for the peril of wind, such that risks covered by wind-
923	only policies in the removed territory could be issued a policy
924	by the corporation in either the personal lines or commercial
925	lines account without a significant increase in the
926	corporation's probable maximum loss in such account. Removal of
927	territory from the area eligible for wind-only or quota share
928	coverage does not alter the assignment of wind coverage written
929	in such areas to the high-risk account.
930	b.  The three separate accounts must be maintained as long
931	as financing obligations entered into by the Florida Windstorm
932	Underwriting Association or Residential Property and Casualty
933	Joint Underwriting Association are outstanding, in accordance
934	with the terms of the corresponding financing documents. When
935	the financing obligations are no longer outstanding, in
936	accordance with the terms of the corresponding financing
937	documents, the corporation may use a single account for all
938	revenues, assets, liabilities, losses, and expenses of the
939	corporation.
940	c.  Creditors of the Residential Property and Casualty
941	Joint Underwriting Association shall have a claim against, and
942	recourse to, the accounts referred to in sub-sub-subparagraphs
943	a.(I) and (II) and shall have no claim against, or recourse to,
944	the account referred to in sub-sub-subparagraph a.(III).
945	Creditors of the Florida Windstorm Underwriting Association
946	shall have a claim against, and recourse to, the account
947	referred to in sub-sub-subparagraph a.(III) and shall have no
948	claim against, or recourse to, the accounts referred to in sub-
949	sub-subparagraphs a.(I) and (II).
950	d.  Revenues, assets, liabilities, losses, and expenses not
951	attributable to particular accounts shall be prorated among the
952	accounts.
953	e.  The Legislature finds that the revenues of the
954	corporation are revenues that are necessary to meet the
955	requirements set forth in documents authorizing the issuance of
956	bonds under this subsection.
957	f.  No part of the income of the corporation may inure to
958	the benefit of any private person.
959	3.  With respect to a deficit in an account:
960	a.  When the deficit incurred in a particular calendar year
961	is not greater than 10 percent of the aggregate statewide direct
962	written premium for the subject lines of business for the prior
963	calendar year, the entire deficit shall be recovered through
964	regular assessments of assessable insurers under paragraph (g)
965	and assessable insureds.
966	b.  When the deficit incurred in a particular calendar year
967	exceeds 10 percent of the aggregate statewide direct written
968	premium for the subject lines of business for the prior calendar
969	year, the corporation shall levy regular assessments on
970	assessable insurers under paragraph (g) and on assessable
971	insureds in an amount equal to the greater of 10 percent of the
972	deficit or 10 percent of the aggregate statewide direct written
973	premium for the subject lines of business for the prior calendar
974	year. Any remaining deficit shall be recovered through emergency
975	assessments under sub-subparagraph d.
976	c.  Each assessable insurer's share of the amount being
977	assessed under sub-subparagraph a. or sub-subparagraph b. shall
978	be in the proportion that the assessable insurer's direct
979	written premium for the subject lines of business for the year
980	preceding the assessment bears to the aggregate statewide direct
981	written premium for the subject lines of business for that year.
982	The assessment percentage applicable to each assessable insured
983	is the ratio of the amount being assessed under sub-subparagraph
984	a. or sub-subparagraph b. to the aggregate statewide direct
985	written premium for the subject lines of business for the prior
986	year. Assessments levied by the corporation on assessable
987	insurers under sub-subparagraphs a. and b. shall be paid as
988	required by the corporation's plan of operation and paragraph
989	(g). Assessments levied by the corporation on assessable
990	insureds under sub-subparagraphs a. and b. shall be collected by
991	the surplus lines agent at the time the surplus lines agent
992	collects the surplus lines tax required by s. 626.932 and shall
993	be paid to the Florida Surplus Lines Service Office at the time
994	the surplus lines agent pays the surplus lines tax to the
995	Florida Surplus Lines Service Office. Upon receipt of regular
996	assessments from surplus lines agents, the Florida Surplus Lines
997	Service Office shall transfer the assessments directly to the
998	corporation as determined by the corporation.
999	d.  Upon a determination by the board of governors that a
1000	deficit in an account exceeds the amount that will be recovered
1001	through regular assessments under sub-subparagraph a. or sub-
1002	subparagraph b., the board shall levy, after verification by the
1003	office, emergency assessments, for as many years as necessary to
1004	cover the deficits, to be collected by assessable insurers and
1005	the corporation and collected from assessable insureds upon
1006	issuance or renewal of policies for subject lines of business,
1007	excluding National Flood Insurance policies. The amount of the
1008	emergency assessment collected in a particular year shall be a
1009	uniform percentage of that year's direct written premium for
1010	subject lines of business and all accounts of the corporation,
1011	excluding National Flood Insurance Program policy premiums, as
1012	annually determined by the board and verified by the office. The
1013	office shall verify the arithmetic calculations involved in the
1014	board's determination within 30 days after receipt of the
1015	information on which the determination was based.
1016	Notwithstanding any other provision of law, the corporation and
1017	each assessable insurer that writes subject lines of business
1018	shall collect emergency assessments from its policyholders
1019	without such obligation being affected by any credit,
1020	limitation, exemption, or deferment. Emergency assessments
1021	levied by the corporation on assessable insureds shall be
1022	collected by the surplus lines agent at the time the surplus
1023	lines agent collects the surplus lines tax required by s.
1024	626.932 and shall be paid to the Florida Surplus Lines Service
1025	Office at the time the surplus lines agent pays the surplus
1026	lines tax to the Florida Surplus Lines Service Office. The
1027	emergency assessments so collected shall be transferred directly
1028	to the corporation on a periodic basis as determined by the
1029	corporation and shall be held by the corporation solely in the
1030	applicable account. The aggregate amount of emergency
1031	assessments levied for an account under this sub-subparagraph in
1032	any calendar year may not exceed the greater of 10 percent of
1033	the amount needed to cover the original deficit, plus interest,
1034	fees, commissions, required reserves, and other costs associated
1035	with financing of the original deficit, or 10 percent of the
1036	aggregate statewide direct written premium for subject lines of
1037	business and for all accounts of the corporation for the prior
1038	year, plus interest, fees, commissions, required reserves, and
1039	other costs associated with financing the original deficit.
1040	e.  The corporation may pledge the proceeds of assessments,
1041	projected recoveries from the John F. Cosgrove Florida Hurricane
1042	Catastrophe Fund, other insurance and reinsurance recoverables,
1043	market equalization surcharges and other surcharges, and other
1044	funds available to the corporation as the source of revenue for
1045	and to secure bonds issued under paragraph (g), bonds or other
1046	indebtedness issued under subparagraph (c)3., or lines of credit
1047	or other financing mechanisms issued or created under this
1048	subsection, or to retire any other debt incurred as a result of
1049	deficits or events giving rise to deficits, or in any other way
1050	that the board determines will efficiently recover such
1051	deficits. The purpose of the lines of credit or other financing
1052	mechanisms is to provide additional resources to assist the
1053	corporation in covering claims and expenses attributable to a
1054	catastrophe. As used in this subsection, the term "assessments"
1055	includes regular assessments under sub-subparagraph a., sub-
1056	subparagraph b., or subparagraph (g)1. and emergency assessments
1057	under sub-subparagraph d. Emergency assessments collected under
1058	sub-subparagraph d. are not part of an insurer's rates, are not
1059	premium, and are not subject to premium tax, fees, or
1060	commissions; however, failure to pay the emergency assessment
1061	shall be treated as failure to pay premium. The emergency
1062	assessments under sub-subparagraph d. shall continue as long as
1063	any bonds issued or other indebtedness incurred with respect to
1064	a deficit for which the assessment was imposed remain
1065	outstanding, unless adequate provision has been made for the
1066	payment of such bonds or other indebtedness pursuant to the
1067	documents governing such bonds or other indebtedness.
1068	f.  As used in this subsection, the term "subject lines of
1069	business" means insurance written by assessable insurers or
1070	procured by assessable insureds on real or personal property, as
1071	defined in s. 624.604, including insurance for fire, industrial
1072	fire, allied lines, farmowners multiperil, homeowners
1073	multiperil, commercial multiperil, and mobile homes, and
1074	including liability coverage on all such insurance, but
1075	excluding inland marine as defined in s. 624.607(3) and
1076	excluding vehicle insurance as defined in s. 624.605(1) other
1077	than insurance on mobile homes used as permanent dwellings.
1078	g.  The Florida Surplus Lines Service Office shall
1079	determine annually the aggregate statewide written premium in
1080	subject lines of business procured by assessable insureds and
1081	shall report that information to the corporation in a form and
1082	at a time the corporation specifies to ensure that the
1083	corporation can meet the requirements of this subsection and the
1084	corporation's financing obligations.
1085	h.  The Florida Surplus Lines Service Office shall verify
1086	the proper application by surplus lines agents of assessment
1087	percentages for regular assessments and emergency assessments
1088	levied under this subparagraph on assessable insureds and shall
1089	assist the corporation in ensuring the accurate, timely
1090	collection and payment of assessments by surplus lines agents as
1091	required by the corporation.
1092	(c)  The plan of operation of the corporation:
1093	1.  Must provide for adoption of residential property and
1094	casualty insurance policy forms and commercial residential and
1095	nonresidential property insurance forms, which forms must be
1096	approved by the office prior to use. The corporation shall adopt
1097	the following policy forms:
1098	a.  Standard personal lines policy forms that are
1099	comprehensive multiperil policies providing full coverage of a
1100	residential property equivalent to the coverage provided in the
1101	private insurance market under an HO-3, HO-4, or HO-6 policy.
1102	b.  Basic personal lines policy forms that are policies
1103	similar to an HO-8 policy or a dwelling fire policy that provide
1104	coverage meeting the requirements of the secondary mortgage
1105	market, but which coverage is more limited than the coverage
1106	under a standard policy.
1107	c.  Commercial lines residential policy forms that are
1108	generally similar to the basic perils of full coverage
1109	obtainable for commercial residential structures in the admitted
1110	voluntary market.
1111	d.  Personal lines and commercial lines residential
1112	property insurance forms that cover the peril of wind only. The
1113	forms are applicable only to residential properties located in
1114	areas eligible for coverage under the high-risk account referred
1115	to in sub-subparagraph (b)2.a.
1116	e.  Commercial lines nonresidential property insurance
1117	forms that cover the peril of wind only. The forms are
1118	applicable only to nonresidential properties located in areas
1119	eligible for coverage under the high-risk account referred to in
1120	sub-subparagraph (b)2.a.
1121	2.a.  Must provide that the corporation adopt a program in
1122	which the corporation and authorized insurers enter into quota
1123	share primary insurance agreements for hurricane coverage, as
1124	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1125	property insurance forms for eligible risks which cover the
1126	peril of wind only. As used in this subsection, the term:
1127	(I)  "Quota share primary insurance" means an arrangement
1128	in which the primary hurricane coverage of an eligible risk is
1129	provided in specified percentages by the corporation and an
1130	authorized insurer. The corporation and authorized insurer are
1131	each solely responsible for a specified percentage of hurricane
1132	coverage of an eligible risk as set forth in a quota share
1133	primary insurance agreement between the corporation and an
1134	authorized insurer and the insurance contract. The
1135	responsibility of the corporation or authorized insurer to pay
1136	its specified percentage of hurricane losses of an eligible
1137	risk, as set forth in the quota share primary insurance
1138	agreement, may not be altered by the inability of the other
1139	party to the agreement to pay its specified percentage of
1140	hurricane losses. Eligible risks that are provided hurricane
1141	coverage through a quota share primary insurance arrangement
1142	must be provided policy forms that set forth the obligations of
1143	the corporation and authorized insurer under the arrangement,
1144	clearly specify the percentages of quota share primary insurance
1145	provided by the corporation and authorized insurer, and
1146	conspicuously and clearly state that neither the authorized
1147	insurer nor the corporation may be held responsible beyond its
1148	specified percentage of coverage of hurricane losses.
1149	(II)  "Eligible risks" means personal lines residential and
1150	commercial lines residential risks that meet the underwriting
1151	criteria of the corporation and are located in areas that were
1152	eligible for coverage by the Florida Windstorm Underwriting
1153	Association on January 1, 2002.
1154	b.  The corporation may enter into quota share primary
1155	insurance agreements with authorized insurers at corporation
1156	coverage levels of 90 percent and 50 percent.
1157	c.  If the corporation determines that additional coverage
1158	levels are necessary to maximize participation in quota share
1159	primary insurance agreements by authorized insurers, the
1160	corporation may establish additional coverage levels. However,
1161	the corporation's quota share primary insurance coverage level
1162	may not exceed 90 percent.
1163	d.  Any quota share primary insurance agreement entered
1164	into between an authorized insurer and the corporation must
1165	provide for a uniform specified percentage of coverage of
1166	hurricane losses, by county or territory as set forth by the
1167	corporation board, for all eligible risks of the authorized
1168	insurer covered under the quota share primary insurance
1169	agreement.
1170	e.  Any quota share primary insurance agreement entered
1171	into between an authorized insurer and the corporation is
1172	subject to review and approval by the office. However, such
1173	agreement shall be authorized only as to insurance contracts
1174	entered into between an authorized insurer and an insured who is
1175	already insured by the corporation for wind coverage.
1176	f.  For all eligible risks covered under quota share
1177	primary insurance agreements, the exposure and coverage levels
1178	for both the corporation and authorized insurers shall be
1179	reported by the corporation to the John F. Cosgrove Florida
1180	Hurricane Catastrophe Fund. For all policies of eligible risks
1181	covered under quota share primary insurance agreements, the
1182	corporation and the authorized insurer shall maintain complete
1183	and accurate records for the purpose of exposure and loss
1184	reimbursement audits as required by John F. Cosgrove Florida
1185	Hurricane Catastrophe Fund rules. The corporation and the
1186	authorized insurer shall each maintain duplicate copies of
1187	policy declaration pages and supporting claims documents.
1188	g.  The corporation board shall establish in its plan of
1189	operation standards for quota share agreements which ensure that
1190	there is no discriminatory application among insurers as to the
1191	terms of quota share agreements, pricing of quota share
1192	agreements, incentive provisions if any, and consideration paid
1193	for servicing policies or adjusting claims.
1194	h.  The quota share primary insurance agreement between the
1195	corporation and an authorized insurer must set forth the
1196	specific terms under which coverage is provided, including, but
1197	not limited to, the sale and servicing of policies issued under
1198	the agreement by the insurance agent of the authorized insurer
1199	producing the business, the reporting of information concerning
1200	eligible risks, the payment of premium to the corporation, and
1201	arrangements for the adjustment and payment of hurricane claims
1202	incurred on eligible risks by the claims adjuster and personnel
1203	of the authorized insurer. Entering into a quota sharing
1204	insurance agreement between the corporation and an authorized
1205	insurer shall be voluntary and at the discretion of the
1206	authorized insurer.
1207	3.  May provide that the corporation may employ or
1208	otherwise contract with individuals or other entities to provide
1209	administrative or professional services that may be appropriate
1210	to effectuate the plan. The corporation shall have the power to
1211	borrow funds, by issuing bonds or by incurring other
1212	indebtedness, and shall have other powers reasonably necessary
1213	to effectuate the requirements of this subsection, including,
1214	without limitation, the power to issue bonds and incur other
1215	indebtedness in order to refinance outstanding bonds or other
1216	indebtedness. The corporation may, but is not required to, seek
1217	judicial validation of its bonds or other indebtedness under
1218	chapter 75. The corporation may issue bonds or incur other
1219	indebtedness, or have bonds issued on its behalf by a unit of
1220	local government pursuant to subparagraph (g)2., in the absence
1221	of a hurricane or other weather-related event, upon a
1222	determination by the corporation, subject to approval by the
1223	office, that such action would enable it to efficiently meet the
1224	financial obligations of the corporation and that such
1225	financings are reasonably necessary to effectuate the
1226	requirements of this subsection. The corporation is authorized
1227	to take all actions needed to facilitate tax-free status for any
1228	such bonds or indebtedness, including formation of trusts or
1229	other affiliated entities. The corporation shall have the
1230	authority to pledge assessments, projected recoveries from the
1231	John F. Cosgrove Florida Hurricane Catastrophe Fund, other
1232	reinsurance recoverables, market equalization and other
1233	surcharges, and other funds available to the corporation as
1234	security for bonds or other indebtedness. In recognition of s.
1235	10, Art. I of the State Constitution, prohibiting the impairment
1236	of obligations of contracts, it is the intent of the Legislature
1237	that no action be taken whose purpose is to impair any bond
1238	indenture or financing agreement or any revenue source committed
1239	by contract to such bond or other indebtedness.
1240	4.a.  Must require that the corporation operate subject to
1241	the supervision and approval of a board of governors consisting
1242	of 8 individuals who are residents of this state, from different
1243	geographical areas of this state. The Governor, the Chief
1244	Financial Officer, the President of the Senate, and the Speaker
1245	of the House of Representatives shall each appoint two members
1246	of the board, effective August 1, 2005. At least one of the two
1247	members appointed by each appointing officer must have
1248	demonstrated expertise in insurance. The Chief Financial Officer
1249	shall designate one of the appointees as chair. All board
1250	members serve at the pleasure of the appointing officer. All
1251	board members, including the chair, must be appointed to serve
1252	for 3-year terms beginning annually on a date designated by the
1253	plan. Any board vacancy shall be filled for the unexpired term
1254	by the appointing officer. The Chief Financial Officer shall
1255	appoint a technical advisory group to provide information and
1256	advice to the board of governors in connection with the board's
1257	duties under this subsection. The executive director and senior
1258	managers of the corporation shall be engaged by the board, as
1259	recommended by the Chief Financial Officer, and serve at the
1260	pleasure of the board. The executive director is responsible for
1261	employing other staff as the corporation may require, subject to
1262	review and concurrence by the board and the Chief Financial
1263	Officer.
1264	b.  The board shall create a Market Accountability Advisory
1265	Committee to assist the corporation in developing awareness of
1266	its rates and its customer and agent service levels in
1267	relationship to the voluntary market insurers writing similar
1268	coverage. The members of the advisory committee shall consist of
1269	the following 11 persons, one of whom must be elected chair by
1270	the members of the committee: four representatives, one
1271	appointed by the Florida Association of Insurance Agents, one by
1272	the Florida Association of Insurance and Financial Advisors, one
1273	by the Professional Insurance Agents of Florida, and one by the
1274	Latin American Association of Insurance Agencies; three
1275	representatives appointed by the insurers with the three highest
1276	voluntary market share of residential property insurance
1277	business in the state; one representative from the Office of
1278	Insurance Regulation; one consumer appointed by the board who is
1279	insured by the corporation at the time of appointment to the
1280	committee; one representative appointed by the Florida
1281	Association of Realtors; and one representative appointed by the
1282	Florida Bankers Association. All members must serve for 3-year
1283	terms and may serve for consecutive terms. The committee shall
1284	report to the corporation at each board meeting on insurance
1285	market issues which may include rates and rate competition with
1286	the voluntary market; service, including policy issuance, claims
1287	processing, and general responsiveness to policyholders,
1288	applicants, and agents; and matters relating to depopulation.
1289	5.  Must provide a procedure for determining the
1290	eligibility of a risk for coverage, as follows:
1291	a.  Subject to the provisions of s. 627.3517, with respect
1292	to personal lines residential risks, if the risk is offered
1293	coverage from an authorized insurer at the insurer's approved
1294	rate under either a standard policy including wind coverage or,
1295	if consistent with the insurer's underwriting rules as filed
1296	with the office, a basic policy including wind coverage, the
1297	risk is not eligible for any policy issued by the corporation.
1298	If the risk is not able to obtain any such offer, the risk is
1299	eligible for either a standard policy including wind coverage or
1300	a basic policy including wind coverage issued by the
1301	corporation; however, if the risk could not be insured under a
1302	standard policy including wind coverage regardless of market
1303	conditions, the risk shall be eligible for a basic policy
1304	including wind coverage unless rejected under subparagraph 8.
1305	The corporation shall determine the type of policy to be
1306	provided on the basis of objective standards specified in the
1307	underwriting manual and based on generally accepted underwriting
1308	practices.
1309	(I)  If the risk accepts an offer of coverage through the
1310	market assistance plan or an offer of coverage through a
1311	mechanism established by the corporation before a policy is
1312	issued to the risk by the corporation or during the first 30
1313	days of coverage by the corporation, and the producing agent who
1314	submitted the application to the plan or to the corporation is
1315	not currently appointed by the insurer, the insurer shall:
1316	(A)  Pay to the producing agent of record of the policy,
1317	for the first year, an amount that is the greater of the
1318	insurer's usual and customary commission for the type of policy
1319	written or a fee equal to the usual and customary commission of
1320	the corporation; or
1321	(B)  Offer to allow the producing agent of record of the
1322	policy to continue servicing the policy for a period of not less
1323	than 1 year and offer to pay the agent the greater of the
1324	insurer's or the corporation's usual and customary commission
1325	for the type of policy written.
1326
1327	If the producing agent is unwilling or unable to accept
1328	appointment, the new insurer shall pay the agent in accordance
1329	with sub-sub-sub-subparagraph (A).
1330	(II)  When the corporation enters into a contractual
1331	agreement for a take-out plan, the producing agent of record of
1332	the corporation policy is entitled to retain any unearned
1333	commission on the policy, and the insurer shall:
1334	(A)  Pay to the producing agent of record of the
1335	corporation policy, for the first year, an amount that is the
1336	greater of the insurer's usual and customary commission for the
1337	type of policy written or a fee equal to the usual and customary
1338	commission of the corporation; or
1339	(B)  Offer to allow the producing agent of record of the
1340	corporation policy to continue servicing the policy for a period
1341	of not less than 1 year and offer to pay the agent the greater
1342	of the insurer's or the corporation's usual and customary
1343	commission for the type of policy written.
1344
1345	If the producing agent is unwilling or unable to accept
1346	appointment, the new insurer shall pay the agent in accordance
1347	with sub-sub-sub-subparagraph (A).
1348	b.  With respect to commercial lines residential risks, if
1349	the risk is offered coverage under a policy including wind
1350	coverage from an authorized insurer at its approved rate, the
1351	risk is not eligible for any policy issued by the corporation.
1352	If the risk is not able to obtain any such offer, the risk is
1353	eligible for a policy including wind coverage issued by the
1354	corporation.
1355	(I)  If the risk accepts an offer of coverage through the
1356	market assistance plan or an offer of coverage through a
1357	mechanism established by the corporation before a policy is
1358	issued to the risk by the corporation or during the first 30
1359	days of coverage by the corporation, and the producing agent who
1360	submitted the application to the plan or the corporation is not
1361	currently appointed by the insurer, the insurer shall:
1362	(A)  Pay to the producing agent of record of the policy,
1363	for the first year, an amount that is the greater of the
1364	insurer's usual and customary commission for the type of policy
1365	written or a fee equal to the usual and customary commission of
1366	the corporation; or
1367	(B)  Offer to allow the producing agent of record of the
1368	policy to continue servicing the policy for a period of not less
1369	than 1 year and offer to pay the agent the greater of the
1370	insurer's or the corporation's usual and customary commission
1371	for the type of policy written.
1372
1373	If the producing agent is unwilling or unable to accept
1374	appointment, the new insurer shall pay the agent in accordance
1375	with sub-sub-sub-subparagraph (A).
1376	(II)  When the corporation enters into a contractual
1377	agreement for a take-out plan, the producing agent of record of
1378	the corporation policy is entitled to retain any unearned
1379	commission on the policy, and the insurer shall:
1380	(A)  Pay to the producing agent of record of the
1381	corporation policy, for the first year, an amount that is the
1382	greater of the insurer's usual and customary commission for the
1383	type of policy written or a fee equal to the usual and customary
1384	commission of the corporation; or
1385	(B)  Offer to allow the producing agent of record of the
1386	corporation policy to continue servicing the policy for a period
1387	of not less than 1 year and offer to pay the agent the greater
1388	of the insurer's or the corporation's usual and customary
1389	commission for the type of policy written.
1390
1391	If the producing agent is unwilling or unable to accept
1392	appointment, the new insurer shall pay the agent in accordance
1393	with sub-sub-sub-subparagraph (A).
1394	6.  Must include rules for classifications of risks and
1395	rates therefor.
1396	7.  Must provide that if premium and investment income for
1397	an account attributable to a particular calendar year are in
1398	excess of projected losses and expenses for the account
1399	attributable to that year, such excess shall be held in surplus
1400	in the account. Such surplus shall be available to defray
1401	deficits in that account as to future years and shall be used
1402	for that purpose prior to assessing assessable insurers and
1403	assessable insureds as to any calendar year.
1404	8.  Must provide objective criteria and procedures to be
1405	uniformly applied for all applicants in determining whether an
1406	individual risk is so hazardous as to be uninsurable. In making
1407	this determination and in establishing the criteria and
1408	procedures, the following shall be considered:
1409	a.  Whether the likelihood of a loss for the individual
1410	risk is substantially higher than for other risks of the same
1411	class; and
1412	b.  Whether the uncertainty associated with the individual
1413	risk is such that an appropriate premium cannot be determined.
1414
1415	The acceptance or rejection of a risk by the corporation shall
1416	be construed as the private placement of insurance, and the
1417	provisions of chapter 120 shall not apply.
1418	9.  Must provide that the corporation shall make its best
1419	efforts to procure catastrophe reinsurance at reasonable rates,
1420	to cover its projected 100-year probable maximum loss as
1421	determined by the board of governors.
1422	10.  Must provide that in the event of regular deficit
1423	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1424	(b)3.b., in the personal lines account, the commercial lines
1425	residential account, or the high-risk account, the corporation
1426	shall levy upon corporation policyholders in its next rate
1427	filing, or by a separate rate filing solely for this purpose, a
1428	market equalization surcharge arising from a regular assessment
1429	in such account in a percentage equal to the total amount of
1430	such regular assessments divided by the aggregate statewide
1431	direct written premium for subject lines of business for the
1432	prior calendar year. Market equalization surcharges under this
1433	subparagraph are not considered premium and are not subject to
1434	commissions, fees, or premium taxes; however, failure to pay a
1435	market equalization surcharge shall be treated as failure to pay
1436	premium.
1437	11.  The policies issued by the corporation must provide
1438	that, if the corporation or the market assistance plan obtains
1439	an offer from an authorized insurer to cover the risk at its
1440	approved rates, the risk is no longer eligible for renewal
1441	through the corporation.
1442	12.  Corporation policies and applications must include a
1443	notice that the corporation policy could, under this section, be
1444	replaced with a policy issued by an authorized insurer that does
1445	not provide coverage identical to the coverage provided by the
1446	corporation. The notice shall also specify that acceptance of
1447	corporation coverage creates a conclusive presumption that the
1448	applicant or policyholder is aware of this potential.
1449	13.  May establish, subject to approval by the office,
1450	different eligibility requirements and operational procedures
1451	for any line or type of coverage for any specified county or
1452	area if the board determines that such changes to the
1453	eligibility requirements and operational procedures are
1454	justified due to the voluntary market being sufficiently stable
1455	and competitive in such area or for such line or type of
1456	coverage and that consumers who, in good faith, are unable to
1457	obtain insurance through the voluntary market through ordinary
1458	methods would continue to have access to coverage from the
1459	corporation. When coverage is sought in connection with a real
1460	property transfer, such requirements and procedures shall not
1461	provide for an effective date of coverage later than the date of
1462	the closing of the transfer as established by the transferor,
1463	the transferee, and, if applicable, the lender.
1464	14.  Must provide that, with respect to the high-risk
1465	account, any assessable insurer with a surplus as to
1466	policyholders of $25 million or less writing 25 percent or more
1467	of its total countrywide property insurance premiums in this
1468	state may petition the office, within the first 90 days of each
1469	calendar year, to qualify as a limited apportionment company. In
1470	no event shall a limited apportionment company be required to
1471	participate in the portion of any assessment, within the high-
1472	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
1473	subparagraph (b)3.b. in the aggregate which exceeds $50 million
1474	after payment of available high-risk account funds in any
1475	calendar year. However, a limited apportionment company shall
1476	collect from its policyholders any emergency assessment imposed
1477	under sub-subparagraph (b)3.d. The plan shall provide that, if
1478	the office determines that any regular assessment will result in
1479	an impairment of the surplus of a limited apportionment company,
1480	the office may direct that all or part of such assessment be
1481	deferred as provided in subparagraph (g)4. However, there shall
1482	be no limitation or deferment of an emergency assessment to be
1483	collected from policyholders under sub-subparagraph (b)3.d.
1484	15.  Must provide that the corporation appoint as its
1485	licensed agents only those agents who also hold an appointment
1486	as defined in s. 626.015(3) with an insurer who at the time of
1487	the agent's initial appointment by the corporation is authorized
1488	to write and is actually writing personal lines residential
1489	property coverage, commercial residential property coverage, or
1490	commercial nonresidential property coverage within the state.
1491	(k)  Upon a determination by the office that the conditions
1492	giving rise to the establishment and activation of the
1493	corporation no longer exist, the corporation is dissolved. Upon
1494	dissolution, the assets of the corporation shall be applied
1495	first to pay all debts, liabilities, and obligations of the
1496	corporation, including the establishment of reasonable reserves
1497	for any contingent liabilities or obligations, and all remaining
1498	assets of the corporation shall become property of the state and
1499	shall be deposited in the John F. Cosgrove Florida Hurricane
1500	Catastrophe Fund. However, no dissolution shall take effect as
1501	long as the corporation has bonds or other financial obligations
1502	outstanding unless adequate provision has been made for the
1503	payment of the bonds or other financial obligations pursuant to
1504	the documents authorizing the issuance of the bonds or other
1505	financial obligations.
1506	(l)1.  Effective July 1, 2002, policies of the Residential
1507	Property and Casualty Joint Underwriting Association shall
1508	become policies of the corporation. All obligations, rights,
1509	assets and liabilities of the Residential Property and Casualty
1510	Joint Underwriting Association, including bonds, note and debt
1511	obligations, and the financing documents pertaining to them
1512	become those of the corporation as of July 1, 2002. The
1513	corporation is not required to issue endorsements or
1514	certificates of assumption to insureds during the remaining term
1515	of in-force transferred policies.
1516	2.  Effective July 1, 2002, policies of the Florida
1517	Windstorm Underwriting Association are transferred to the
1518	corporation and shall become policies of the corporation. All
1519	obligations, rights, assets, and liabilities of the Florida
1520	Windstorm Underwriting Association, including bonds, note and
1521	debt obligations, and the financing documents pertaining to them
1522	are transferred to and assumed by the corporation on July 1,
1523	2002. The corporation is not required to issue endorsement or
1524	certificates of assumption to insureds during the remaining term
1525	of in-force transferred policies.
1526	3.  The Florida Windstorm Underwriting Association and the
1527	Residential Property and Casualty Joint Underwriting Association
1528	shall take all actions as may be proper to further evidence the
1529	transfers and shall provide the documents and instruments of
1530	further assurance as may reasonably be requested by the
1531	corporation for that purpose. The corporation shall execute
1532	assumptions and instruments as the trustees or other parties to
1533	the financing documents of the Florida Windstorm Underwriting
1534	Association or the Residential Property and Casualty Joint
1535	Underwriting Association may reasonably request to further
1536	evidence the transfers and assumptions, which transfers and
1537	assumptions, however, are effective on the date provided under
1538	this paragraph whether or not, and regardless of the date on
1539	which, the assumptions or instruments are executed by the
1540	corporation. Subject to the relevant financing documents
1541	pertaining to their outstanding bonds, notes, indebtedness, or
1542	other financing obligations, the moneys, investments,
1543	receivables, choses in action, and other intangibles of the
1544	Florida Windstorm Underwriting Association shall be credited to
1545	the high-risk account of the corporation, and those of the
1546	personal lines residential coverage account and the commercial
1547	lines residential coverage account of the Residential Property
1548	and Casualty Joint Underwriting Association shall be credited to
1549	the personal lines account and the commercial lines account,
1550	respectively, of the corporation.
1551	4.  Effective July 1, 2002, a new applicant for property
1552	insurance coverage who would otherwise have been eligible for
1553	coverage in the Florida Windstorm Underwriting Association is
1554	eligible for coverage from the corporation as provided in this
1555	subsection.
1556	5.  The transfer of all policies, obligations, rights,
1557	assets, and liabilities from the Florida Windstorm Underwriting
1558	Association to the corporation and the renaming of the
1559	Residential Property and Casualty Joint Underwriting Association
1560	as the corporation shall in no way affect the coverage with
1561	respect to covered policies as defined in s. 215.555(2)(c)
1562	provided to these entities by the John F. Cosgrove Florida
1563	Hurricane Catastrophe Fund. The coverage provided by the John F.
1564	Cosgrove Florida Hurricane Catastrophe Fund to the Florida
1565	Windstorm Underwriting Association based on its exposures as of
1566	June 30, 2002, and each June 30 thereafter shall be redesignated
1567	as coverage for the high-risk account of the corporation.
1568	Notwithstanding any other provision of law, the coverage
1569	provided by the John F. Cosgrove Florida Hurricane Catastrophe
1570	Fund to the Residential Property and Casualty Joint Underwriting
1571	Association based on its exposures as of June 30, 2002, and each
1572	June 30 thereafter shall be transferred to the personal lines
1573	account and the commercial lines account of the corporation.
1574	Notwithstanding any other provision of law, the high-risk
1575	account shall be treated, for all John F. Cosgrove Florida
1576	Hurricane Catastrophe Fund purposes, as if it were a separate
1577	participating insurer with its own exposures, reimbursement
1578	premium, and loss reimbursement. Likewise, the personal lines
1579	and commercial lines accounts shall be viewed together, for all
1580	John F. Cosgrove Florida Hurricane Catastrophe Fund purposes, as
1581	if the two accounts were one and represent a single, separate
1582	participating insurer with its own exposures, reimbursement
1583	premium, and loss reimbursement. The coverage provided by the
1584	John F. Cosgrove Florida Hurricane Catastrophe Fund to the
1585	corporation shall constitute and operate as a full transfer of
1586	coverage from the Florida Windstorm Underwriting Association and
1587	Residential Property and Casualty Joint Underwriting to the
1588	corporation.
1589	Section 32.  Paragraph (d) of subsection (6) of section
1590	627.701, Florida Statutes, is amended to read:
1591	627.701  Liability of insureds; coinsurance; deductibles.--
1592	(6)
1593	(d)  The office shall draft and formally propose as a rule
1594	the form for the certificate of security. The certificate of
1595	security may be issued in any of the following circumstances:
1596	1.  A mortgage lender or other financial institution may
1597	issue a certificate of security after granting the applicant a
1598	line of credit, secured by equity in real property or other
1599	reasonable security, which line of credit may be drawn on only
1600	to pay for the deductible portion of insured construction or
1601	reconstruction after a hurricane loss. In the sole discretion of
1602	the mortgage lender or other financial institution, the line of
1603	credit may be issued to an applicant on an unsecured basis.
1604	2.  A licensed insurance agent may issue a certificate of
1605	security after obtaining for an applicant a line of credit,
1606	secured by equity in real property or other reasonable security,
1607	which line of credit may be drawn on only to pay for the
1608	deductible portion of insured construction or reconstruction
1609	after a hurricane loss. The John F. Cosgrove Florida Hurricane
1610	Catastrophe Fund shall negotiate agreements creating a financing
1611	consortium to serve as an additional source of lines of credit
1612	to secure deductibles. Any licensed insurance agent may act as
1613	the agent of such consortium.
1614	3.  Any person qualified to act as a trustee for any
1615	purpose may issue a certificate of security secured by a pledge
1616	of assets, with the restriction that the assets may be drawn on
1617	only to pay for the deductible portion of insured construction
1618	or reconstruction after a hurricane loss.
1619	4.  Any insurer, including any admitted insurer or any
1620	surplus lines insurer, may issue a certificate of security after
1621	issuing the applicant a policy of supplemental insurance that
1622	will pay for 100 percent of the deductible portion of insured
1623	construction or reconstruction after a hurricane loss.
1624	5.  Any other method approved by the office upon finding
1625	that such other method provides a similar level of security as
1626	the methods specified in this paragraph and that such other
1627	method has no negative impact on residential property insurance
1628	catastrophic capacity. The legislative intent of this
1629	subparagraph is to provide the flexibility needed to achieve the
1630	public policy of expanding property insurance capacity while
1631	improving the affordability of property insurance.
1632	Section 33.  Paragraph (a) of subsection (3) of section
1633	627.7077, Florida Statutes, is amended to read:
1634	627.7077  Florida Sinkhole Insurance Facility and other
1635	matters related to affordability and availability of sinkhole
1636	insurance; feasibility study.--
1637	(3)  The feasibility study shall, at a minimum, address the
1638	following issues:
1639	(a)  Where the facility should be housed, including, but
1640	not limited to, the options of creating a separate facility or
1641	using the Citizens Property Insurance Corporation or the John F.
1642	Cosgrove Florida Hurricane Catastrophe Fund.
1643	Section 34.  Subsection (6) of section 6 of chapter 2004-
1644	480, Laws of Florida, is amended to read:
1645	Section 6.
1646	(6)  In order to maintain actuarially indicated premiums as
1647	required by s. 215.555, Florida Statutes, the State Board of
1648	Administration shall increase future premiums by the amount
1649	appropriated and transferred from the John F. Cosgrove Florida
1650	Hurricane Catastrophe Fund under this section, plus additional
1651	amounts necessary to recover lost investment income, less any
1652	refunds of unused cash to the John F. Cosgrove Florida Hurricane
1653	Catastrophe Fund. The increase in future premiums shall be
1654	spread over 5 years, in equal or approximately equal amounts,
1655	beginning with the June 1, 2006, contract year.
1656
1657
1658	=========== T I T L E  A M E N D M E N T ========
1659	Remove line 227, and insert:
1660	committing insurance fraud; amending ss. 215.555, 215.556,
1661	215.559, 624.5091, 627.062, 627.0628, 627.0629, 627.351,
1662	627.701, and 627.7077, F.S., and ch. 2004-480, Laws of
1663	Florida; changing the name of the Florida Hurricane
1664	Catastrophe Fund to the John F. Cosgrove Hurricane
1665	Catastrophe Fund; renaming the fund finance corporation to
1666	conform; creating the Task Force on

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