Amendment
Bill No. 7225

Amendment No. 918865

CHAMBER ACTION
Senate		House
.
.
.

---

---

1	Representative(s) Robaina offered the following:
2
3	Amendment (with title amendment)
4	Between lines 3302 and 3303, insert:
5	Section 21.  Paragraph (n) of subsection (2), subsection
6	(3), paragraphs (c) and (d) of subsection (6), paragraph (c) of
7	subsection (7), and subsection (9) of section 215.555, Florida
8	Statutes, are amended to read:
9	215.555  John Cosgrove Florida Hurricane Catastrophe
10	Fund.--
11	(2)  DEFINITIONS.--As used in this section:
12	(n)  "Corporation" means the John Cosgrove Florida
13	Hurricane Catastrophe Fund Finance Corporation created in
14	paragraph (6)(d).
15	(3)  JOHN COSGROVE FLORIDA HURRICANE CATASTROPHE FUND
16	CREATED.--There is created the John Cosgrove Florida Hurricane
17	Catastrophe Fund to be administered by the State Board of
18	Administration. Moneys in the fund may not be expended, loaned,
19	or appropriated except to pay obligations of the fund arising
20	out of reimbursement contracts entered into under subsection
21	(4), payment of debt service on revenue bonds issued under
22	subsection (6), costs of the mitigation program under subsection
23	(7), costs of procuring reinsurance, and costs of administration
24	of the fund. The board shall invest the moneys in the fund
25	pursuant to ss. 215.44-215.52. Except as otherwise provided in
26	this section, earnings from all investments shall be retained in
27	the fund. The board may employ or contract with such staff and
28	professionals as the board deems necessary for the
29	administration of the fund. The board may adopt such rules as
30	are reasonable and necessary to implement this section and shall
31	specify interest due on any delinquent remittances, which
32	interest may not exceed the fund's rate of return plus 5
33	percent. Such rules must conform to the Legislature's specific
34	intent in establishing the fund as expressed in subsection (1),
35	must enhance the fund's potential ability to respond to claims
36	for covered events, must contain general provisions so that the
37	rules can be applied with reasonable flexibility so as to
38	accommodate insurers in situations of an unusual nature or where
39	undue hardship may result, except that such flexibility may not
40	in any way impair, override, supersede, or constrain the public
41	purpose of the fund, and must be consistent with sound insurance
42	practices. The board may, by rule, provide for the exemption
43	from subsections (4) and (5) of insurers writing covered
44	policies with less than $10 million in aggregate exposure for
45	covered policies if the exemption does not affect the actuarial
46	soundness of the fund.
47	(6)  REVENUE BONDS.--
48	(c)  Revenue bond issuance through counties or
49	municipalities.--
50	1.  If the board elects to enter into agreements with local
51	governments for the issuance of revenue bonds for the benefit of
52	the fund, the board shall enter into such contracts with one or
53	more local governments, including agreements providing for the
54	pledge of revenues, as are necessary to effect such issuance.
55	The governing body of a county or municipality is authorized to
56	issue bonds as defined in s. 125.013 or s. 166.101 from time to
57	time to fund an assistance program, in conjunction with the John
58	Cosgrove Florida Hurricane Catastrophe Fund, for the purposes
59	set forth in this section or for the purpose of paying the costs
60	of construction, reconstruction, repair, restoration, and other
61	costs associated with damage to properties of policyholders of
62	covered policies due to the occurrence of a hurricane by
63	assuring that policyholders located in this state are able to
64	recover claims under property insurance policies after a covered
65	event.
66	2.  In order to avoid needless and indiscriminate
67	proliferation, duplication, and fragmentation of such assistance
68	programs, any local government may provide for the payment of
69	fund reimbursements, regardless of whether or not the losses for
70	which reimbursement is made occurred within or outside of the
71	territorial jurisdiction of the local government.
72	3.  The state hereby covenants with holders of bonds issued
73	under this paragraph that the state will not repeal or abrogate
74	the power of the board to direct the Office of Insurance
75	Regulation to levy the assessments and to collect the proceeds
76	of the revenues pledged to the payment of such bonds as long as
77	any such bonds remain outstanding unless adequate provision has
78	been made for the payment of such bonds pursuant to the
79	documents authorizing the issuance of such bonds.
80	4.  There shall be no liability on the part of, and no
81	cause of action shall arise against any members or employees of
82	the governing body of a local government for any actions taken
83	by them in the performance of their duties under this paragraph.
84	(d)  John Cosgrove Florida Hurricane Catastrophe Fund
85	Finance Corporation.--
86	1.  In addition to the findings and declarations in
87	subsection (1), the Legislature also finds and declares that:
88	a.  The public benefits corporation created under this
89	paragraph will provide a mechanism necessary for the cost-
90	effective and efficient issuance of bonds. This mechanism will
91	eliminate unnecessary costs in the bond issuance process,
92	thereby increasing the amounts available to pay reimbursement
93	for losses to property sustained as a result of hurricane
94	damage.
95	b.  The purpose of such bonds is to fund reimbursements
96	through the John Cosgrove Florida Hurricane Catastrophe Fund to
97	pay for the costs of construction, reconstruction, repair,
98	restoration, and other costs associated with damage to
99	properties of policyholders of covered policies due to the
100	occurrence of a hurricane.
101	c.  The efficacy of the financing mechanism will be
102	enhanced by the corporation's ownership of the assessments, by
103	the insulation of the assessments from possible bankruptcy
104	proceedings, and by covenants of the state with the
105	corporation's bondholders.
106	2.a.  There is created a public benefits corporation, which
107	is an instrumentality of the state, to be known as the John
108	Cosgrove Florida Hurricane Catastrophe Fund Finance Corporation.
109	b.  The corporation shall operate under a five-member board
110	of directors consisting of the Governor or a designee, the Chief
111	Financial Officer or a designee, the Attorney General or a
112	designee, the director of the Division of Bond Finance of the
113	State Board of Administration, and the senior employee of the
114	State Board of Administration responsible for operations of the
115	John Cosgrove Florida Hurricane Catastrophe Fund.
116	c.  The corporation has all of the powers of corporations
117	under chapter 607 and under chapter 617, subject only to the
118	provisions of this subsection.
119	d.  The corporation may issue bonds and engage in such
120	other financial transactions as are necessary to provide
121	sufficient funds to achieve the purposes of this section.
122	e.  The corporation may invest in any of the investments
123	authorized under s. 215.47.
124	f.  There shall be no liability on the part of, and no
125	cause of action shall arise against, any board members or
126	employees of the corporation for any actions taken by them in
127	the performance of their duties under this paragraph.
128	3.a.  In actions under chapter 75 to validate any bonds
129	issued by the corporation, the notice required by s. 75.06 shall
130	be published only in Leon County and in two newspapers of
131	general circulation in the state, and the complaint and order of
132	the court shall be served only on the State Attorney of the
133	Second Judicial Circuit.
134	b.  The state hereby covenants with holders of bonds of the
135	corporation that the state will not repeal or abrogate the power
136	of the board to direct the Office of Insurance Regulation to
137	levy the assessments and to collect the proceeds of the revenues
138	pledged to the payment of such bonds as long as any such bonds
139	remain outstanding unless adequate provision has been made for
140	the payment of such bonds pursuant to the documents authorizing
141	the issuance of such bonds.
142	4.  The bonds of the corporation are not a debt of the
143	state or of any political subdivision, and neither the state nor
144	any political subdivision is liable on such bonds. The
145	corporation does not have the power to pledge the credit, the
146	revenues, or the taxing power of the state or of any political
147	subdivision. The credit, revenues, or taxing power of the state
148	or of any political subdivision shall not be deemed to be
149	pledged to the payment of any bonds of the corporation.
150	5.a.  The property, revenues, and other assets of the
151	corporation; the transactions and operations of the corporation
152	and the income from such transactions and operations; and all
153	bonds issued under this paragraph and interest on such bonds are
154	exempt from taxation by the state and any political subdivision,
155	including the intangibles tax under chapter 199 and the income
156	tax under chapter 220. This exemption does not apply to any tax
157	imposed by chapter 220 on interest, income, or profits on debt
158	obligations owned by corporations other than the John Cosgrove
159	Florida Hurricane Catastrophe Fund Finance Corporation.
160	b.  All bonds of the corporation shall be and constitute
161	legal investments without limitation for all public bodies of
162	this state; for all banks, trust companies, savings banks,
163	savings associations, savings and loan associations, and
164	investment companies; for all administrators, executors,
165	trustees, and other fiduciaries; for all insurance companies and
166	associations and other persons carrying on an insurance
167	business; and for all other persons who are now or may hereafter
168	be authorized to invest in bonds or other obligations of the
169	state and shall be and constitute eligible securities to be
170	deposited as collateral for the security of any state, county,
171	municipal, or other public funds. This sub-subparagraph shall be
172	considered as additional and supplemental authority and shall
173	not be limited without specific reference to this sub-
174	subparagraph.
175	6.  The corporation and its corporate existence shall
176	continue until terminated by law; however, no such law shall
177	take effect as long as the corporation has bonds outstanding
178	unless adequate provision has been made for the payment of such
179	bonds pursuant to the documents authorizing the issuance of such
180	bonds. Upon termination of the existence of the corporation, all
181	of its rights and properties in excess of its obligations shall
182	pass to and be vested in the state.
183	(7)  ADDITIONAL POWERS AND DUTIES.--
184	(c)  Each fiscal year, the Legislature shall appropriate
185	from the investment income of the John Cosgrove Florida
186	Hurricane Catastrophe Fund an amount no less than $10 million
187	and no more than 35 percent of the investment income based upon
188	the most recent fiscal year-end audited financial statements for
189	the purpose of providing funding for local governments, state
190	agencies, public and private educational institutions, and
191	nonprofit organizations to support programs intended to improve
192	hurricane preparedness, reduce potential losses in the event of
193	a hurricane, provide research into means to reduce such losses,
194	educate or inform the public as to means to reduce hurricane
195	losses, assist the public in determining the appropriateness of
196	particular upgrades to structures or in the financing of such
197	upgrades, or protect local infrastructure from potential damage
198	from a hurricane. Moneys shall first be available for
199	appropriation under this paragraph in fiscal year 1997-1998.
200	Moneys in excess of the $10 million specified in this paragraph
201	shall not be available for appropriation under this paragraph if
202	the State Board of Administration finds that an appropriation of
203	investment income from the fund would jeopardize the actuarial
204	soundness of the fund.
205	(9)  APPLICABILITY OF S. 19, ART. III OF THE STATE
206	CONSTITUTION.--The Legislature finds that the John Cosgrove
207	Florida Hurricane Catastrophe Fund created by this section is a
208	trust fund established for bond covenants, indentures, or
209	resolutions within the meaning of s. 19(f)(3), Art. III of the
210	State Constitution.
211	Section 22.  Section 215.556, Florida Statutes, is amended
212	to read:
213	215.556  Exemption.--The John Cosgrove Florida Hurricane
214	Catastrophe Fund created by s. 215.555 is exempt from the
215	deduction required by s. 215.20(1).
216	Section 23.  Subsection (1) of section 215.559, Florida
217	Statutes, is amended to read:
218	215.559  Hurricane Loss Mitigation Program.--
219	(1)  There is created a Hurricane Loss Mitigation Program.
220	The Legislature shall annually appropriate $10 million of the
221	moneys authorized for appropriation under s. 215.555(7)(c) from
222	the John Cosgrove Florida Hurricane Catastrophe Fund to the
223	Department of Community Affairs for the purposes set forth in
224	this section.
225	Section 24.  Subsection (3) of section 624.5091, Florida
226	Statutes, is amended to read:
227	624.5091  Retaliatory provision, insurers.--
228	(3)  This section does not apply as to personal income
229	taxes, nor as to sales or use taxes, nor as to ad valorem taxes
230	on real or personal property, nor as to reimbursement premiums
231	paid to the John Cosgrove Florida Hurricane Catastrophe Fund,
232	nor as to emergency assessments paid to the John Cosgrove
233	Florida Hurricane Catastrophe Fund, nor as to special purpose
234	obligations or assessments imposed in connection with particular
235	kinds of insurance other than property insurance, except that
236	deductions, from premium taxes or other taxes otherwise payable,
237	allowed on account of real estate or personal property taxes
238	paid shall be taken into consideration by the department in
239	determining the propriety and extent of retaliatory action under
240	this section.
241	Section 25.  Subsection (5) of section 627.062, Florida
242	Statutes, is amended to read:
243	627.062  Rate standards.--
244	(5)  With respect to a rate filing involving coverage of
245	the type for which the insurer is required to pay a
246	reimbursement premium to the John Cosgrove Florida Hurricane
247	Catastrophe Fund, the insurer may fully recoup in its property
248	insurance premiums any reimbursement premiums paid to the John
249	Cosgrove Florida Hurricane Catastrophe Fund, together with
250	reasonable costs of other reinsurance, but may not recoup
251	reinsurance costs that duplicate coverage provided by the John
252	Cosgrove Florida Hurricane Catastrophe Fund. An insurer may not
253	recoup more than 1 year of reimbursement premium at a time. Any
254	under-recoupment from the prior year may be added to the
255	following year's reimbursement premium and any over-recoupment
256	shall be subtracted from the following year's reimbursement
257	premium.
258	Section 26.  Paragraph (c) of subsection (1), paragraphs
259	(b) and (f) of subsection (2), and paragraph (b) of subsection
260	(3) of section 627.0628, Florida Statutes, are amended to read:
261	627.0628  Florida Commission on Hurricane Loss Projection
262	Methodology; public records exemption; public meetings
263	exemption.--
264	(1)  LEGISLATIVE FINDINGS AND INTENT.--
265	(c)  It is the intent of the Legislature to create the
266	Florida Commission on Hurricane Loss Projection Methodology as a
267	panel of experts to provide the most actuarially sophisticated
268	guidelines and standards for projection of hurricane losses
269	possible, given the current state of actuarial science. It is
270	the further intent of the Legislature that such standards and
271	guidelines must be used by the State Board of Administration in
272	developing reimbursement premium rates for the John Cosgrove
273	Florida Hurricane Catastrophe Fund, and, subject to paragraph
274	(3)(c), may be used by insurers in rate filings under s. 627.062
275	unless the way in which such standards and guidelines were
276	applied by the insurer was erroneous, as shown by a
277	preponderance of the evidence.
278	(2)  COMMISSION CREATED.--
279	(b)  The commission shall consist of the following 11
280	members:
281	1.  The insurance consumer advocate.
282	2.  The senior employee of the State Board of
283	Administration responsible for operations of the John Cosgrove
284	Florida Hurricane Catastrophe Fund.
285	3.  The Executive Director of the Citizens Property
286	Insurance Corporation.
287	4.  The Director of the Division of Emergency Management of
288	the Department of Community Affairs.
289	5.  The actuary member of the John Cosgrove Florida
290	Hurricane Catastrophe Fund Advisory Council.
291	6.  An employee of the office who is an actuary responsible
292	for property insurance rate filings and who is appointed by the
293	director of the office.
294	7.  Five members appointed by the Chief Financial Officer,
295	as follows:
296	a.  An actuary who is employed full time by a property and
297	casualty insurer which was responsible for at least 1 percent of
298	the aggregate statewide direct written premium for homeowner's
299	insurance in the calendar year preceding the member's
300	appointment to the commission.
301	b.  An expert in insurance finance who is a full-time
302	member of the faculty of the State University System and who has
303	a background in actuarial science.
304	c.  An expert in statistics who is a full-time member of
305	the faculty of the State University System and who has a
306	background in insurance.
307	d.  An expert in computer system design who is a full-time
308	member of the faculty of the State University System.
309	e.  An expert in meteorology who is a full-time member of
310	the faculty of the State University System and who specializes
311	in hurricanes.
312	(f)  The State Board of Administration shall, as a cost of
313	administration of the John Cosgrove Florida Hurricane
314	Catastrophe Fund, provide for travel, expenses, and staff
315	support for the commission.
316	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
317	(b)  In establishing reimbursement premiums for the John
318	Cosgrove Florida Hurricane Catastrophe Fund, the State Board of
319	Administration must, to the extent feasible, employ actuarial
320	methods, principles, standards, models, or output ranges found
321	by the commission to be accurate or reliable.
322	Section 27.  Subsection (10) of section 627.0629, Florida
323	Statutes, is amended to read:
324	627.0629  Residential property insurance; rate filings.--
325	(10)  A property insurance rate filing that includes any
326	adjustments related to premiums paid to the John Cosgrove
327	Florida Hurricane Catastrophe Fund must include a complete
328	calculation of the insurer's catastrophe load, and the
329	information in the filing may not be limited solely to recovery
330	of moneys paid to the fund.
331	Section 28.  Paragraph (b) of subsection (2), paragraphs
332	(b), (c), (k), and (l) of subsection (6) of section 627.351,
333	Florida Statutes, are amended to read:
334	627.351  Insurance risk apportionment plans.--
335	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
336	(b)  The department shall require all insurers holding a
337	certificate of authority to transact property insurance on a
338	direct basis in this state, other than joint underwriting
339	associations and other entities formed pursuant to this section,
340	to provide windstorm coverage to applicants from areas
341	determined to be eligible pursuant to paragraph (c) who in good
342	faith are entitled to, but are unable to procure, such coverage
343	through ordinary means; or it shall adopt a reasonable plan or
344	plans for the equitable apportionment or sharing among such
345	insurers of windstorm coverage, which may include formation of
346	an association for this purpose. As used in this subsection, the
347	term "property insurance" means insurance on real or personal
348	property, as defined in s. 624.604, including insurance for
349	fire, industrial fire, allied lines, farmowners multiperil,
350	homeowners' multiperil, commercial multiperil, and mobile homes,
351	and including liability coverages on all such insurance, but
352	excluding inland marine as defined in s. 624.607(3) and
353	excluding vehicle insurance as defined in s. 624.605(1)(a) other
354	than insurance on mobile homes used as permanent dwellings. The
355	department shall adopt rules that provide a formula for the
356	recovery and repayment of any deferred assessments.
357	1.  For the purpose of this section, properties eligible
358	for such windstorm coverage are defined as dwellings, buildings,
359	and other structures, including mobile homes which are used as
360	dwellings and which are tied down in compliance with mobile home
361	tie-down requirements prescribed by the Department of Highway
362	Safety and Motor Vehicles pursuant to s. 320.8325, and the
363	contents of all such properties. An applicant or policyholder is
364	eligible for coverage only if an offer of coverage cannot be
365	obtained by or for the applicant or policyholder from an
366	admitted insurer at approved rates.
367	2.a.(I)  All insurers required to be members of such
368	association shall participate in its writings, expenses, and
369	losses. Surplus of the association shall be retained for the
370	payment of claims and shall not be distributed to the member
371	insurers. Such participation by member insurers shall be in the
372	proportion that the net direct premiums of each member insurer
373	written for property insurance in this state during the
374	preceding calendar year bear to the aggregate net direct
375	premiums for property insurance of all member insurers, as
376	reduced by any credits for voluntary writings, in this state
377	during the preceding calendar year. For the purposes of this
378	subsection, the term "net direct premiums" means direct written
379	premiums for property insurance, reduced by premium for
380	liability coverage and for the following if included in allied
381	lines: rain and hail on growing crops; livestock; association
382	direct premiums booked; National Flood Insurance Program direct
383	premiums; and similar deductions specifically authorized by the
384	plan of operation and approved by the department. A member's
385	participation shall begin on the first day of the calendar year
386	following the year in which it is issued a certificate of
387	authority to transact property insurance in the state and shall
388	terminate 1 year after the end of the calendar year during which
389	it no longer holds a certificate of authority to transact
390	property insurance in the state. The commissioner, after review
391	of annual statements, other reports, and any other statistics
392	that the commissioner deems necessary, shall certify to the
393	association the aggregate direct premiums written for property
394	insurance in this state by all member insurers.
395	(II)  Effective July 1, 2002, the association shall operate
396	subject to the supervision and approval of a board of governors
397	who are the same individuals that have been appointed by the
398	Treasurer to serve on the board of governors of the Citizens
399	Property Insurance Corporation.
400	(III)  The plan of operation shall provide a formula
401	whereby a company voluntarily providing windstorm coverage in
402	affected areas will be relieved wholly or partially from
403	apportionment of a regular assessment pursuant to sub-sub-
404	subparagraph d.(I) or sub-sub-subparagraph d.(II).
405	(IV)  A company which is a member of a group of companies
406	under common management may elect to have its credits applied on
407	a group basis, and any company or group may elect to have its
408	credits applied to any other company or group.
409	(V)  There shall be no credits or relief from apportionment
410	to a company for emergency assessments collected from its
411	policyholders under sub-sub-subparagraph d.(III).
412	(VI)  The plan of operation may also provide for the award
413	of credits, for a period not to exceed 3 years, from a regular
414	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
415	subparagraph d.(II) as an incentive for taking policies out of
416	the Residential Property and Casualty Joint Underwriting
417	Association. In order to qualify for the exemption under this
418	sub-sub-subparagraph, the take-out plan must provide that at
419	least 40 percent of the policies removed from the Residential
420	Property and Casualty Joint Underwriting Association cover risks
421	located in Dade, Broward, and Palm Beach Counties or at least 30
422	percent of the policies so removed cover risks located in Dade,
423	Broward, and Palm Beach Counties and an additional 50 percent of
424	the policies so removed cover risks located in other coastal
425	counties, and must also provide that no more than 15 percent of
426	the policies so removed may exclude windstorm coverage. With the
427	approval of the department, the association may waive these
428	geographic criteria for a take-out plan that removes at least
429	the lesser of 100,000 Residential Property and Casualty Joint
430	Underwriting Association policies or 15 percent of the total
431	number of Residential Property and Casualty Joint Underwriting
432	Association policies, provided the governing board of the
433	Residential Property and Casualty Joint Underwriting Association
434	certifies that the take-out plan will materially reduce the
435	Residential Property and Casualty Joint Underwriting
436	Association's 100-year probable maximum loss from hurricanes.
437	With the approval of the department, the board may extend such
438	credits for an additional year if the insurer guarantees an
439	additional year of renewability for all policies removed from
440	the Residential Property and Casualty Joint Underwriting
441	Association, or for 2 additional years if the insurer guarantees
442	2 additional years of renewability for all policies removed from
443	the Residential Property and Casualty Joint Underwriting
444	Association.
445	b.  Assessments to pay deficits in the association under
446	this subparagraph shall be included as an appropriate factor in
447	the making of rates as provided in s. 627.3512.
448	c.  The Legislature finds that the potential for unlimited
449	deficit assessments under this subparagraph may induce insurers
450	to attempt to reduce their writings in the voluntary market, and
451	that such actions would worsen the availability problems that
452	the association was created to remedy. It is the intent of the
453	Legislature that insurers remain fully responsible for paying
454	regular assessments and collecting emergency assessments for any
455	deficits of the association; however, it is also the intent of
456	the Legislature to provide a means by which assessment
457	liabilities may be amortized over a period of years.
458	d.(I)  When the deficit incurred in a particular calendar
459	year is 10 percent or less of the aggregate statewide direct
460	written premium for property insurance for the prior calendar
461	year for all member insurers, the association shall levy an
462	assessment on member insurers in an amount equal to the deficit.
463	(II)  When the deficit incurred in a particular calendar
464	year exceeds 10 percent of the aggregate statewide direct
465	written premium for property insurance for the prior calendar
466	year for all member insurers, the association shall levy an
467	assessment on member insurers in an amount equal to the greater
468	of 10 percent of the deficit or 10 percent of the aggregate
469	statewide direct written premium for property insurance for the
470	prior calendar year for member insurers. Any remaining deficit
471	shall be recovered through emergency assessments under sub-sub-
472	subparagraph (III).
473	(III)  Upon a determination by the board of directors that
474	a deficit exceeds the amount that will be recovered through
475	regular assessments on member insurers, pursuant to sub-sub-
476	subparagraph (I) or sub-sub-subparagraph (II), the board shall
477	levy, after verification by the department, emergency
478	assessments to be collected by member insurers and by
479	underwriting associations created pursuant to this section which
480	write property insurance, upon issuance or renewal of property
481	insurance policies other than National Flood Insurance policies
482	in the year or years following levy of the regular assessments.
483	The amount of the emergency assessment collected in a particular
484	year shall be a uniform percentage of that year's direct written
485	premium for property insurance for all member insurers and
486	underwriting associations, excluding National Flood Insurance
487	policy premiums, as annually determined by the board and
488	verified by the department. The department shall verify the
489	arithmetic calculations involved in the board's determination
490	within 30 days after receipt of the information on which the
491	determination was based. Notwithstanding any other provision of
492	law, each member insurer and each underwriting association
493	created pursuant to this section shall collect emergency
494	assessments from its policyholders without such obligation being
495	affected by any credit, limitation, exemption, or deferment. The
496	emergency assessments so collected shall be transferred directly
497	to the association on a periodic basis as determined by the
498	association. The aggregate amount of emergency assessments
499	levied under this sub-sub-subparagraph in any calendar year may
500	not exceed the greater of 10 percent of the amount needed to
501	cover the original deficit, plus interest, fees, commissions,
502	required reserves, and other costs associated with financing of
503	the original deficit, or 10 percent of the aggregate statewide
504	direct written premium for property insurance written by member
505	insurers and underwriting associations for the prior year, plus
506	interest, fees, commissions, required reserves, and other costs
507	associated with financing the original deficit. The board may
508	pledge the proceeds of the emergency assessments under this sub-
509	sub-subparagraph as the source of revenue for bonds, to retire
510	any other debt incurred as a result of the deficit or events
511	giving rise to the deficit, or in any other way that the board
512	determines will efficiently recover the deficit. The emergency
513	assessments under this sub-sub-subparagraph shall continue as
514	long as any bonds issued or other indebtedness incurred with
515	respect to a deficit for which the assessment was imposed remain
516	outstanding, unless adequate provision has been made for the
517	payment of such bonds or other indebtedness pursuant to the
518	document governing such bonds or other indebtedness. Emergency
519	assessments collected under this sub-sub-subparagraph are not
520	part of an insurer's rates, are not premium, and are not subject
521	to premium tax, fees, or commissions; however, failure to pay
522	the emergency assessment shall be treated as failure to pay
523	premium.
524	(IV)  Each member insurer's share of the total regular
525	assessments under sub-sub-subparagraph (I) or sub-sub-
526	subparagraph (II) shall be in the proportion that the insurer's
527	net direct premium for property insurance in this state, for the
528	year preceding the assessment bears to the aggregate statewide
529	net direct premium for property insurance of all member
530	insurers, as reduced by any credits for voluntary writings for
531	that year.
532	(V)  If regular deficit assessments are made under sub-sub-
533	subparagraph (I) or sub-sub-subparagraph (II), or by the
534	Residential Property and Casualty Joint Underwriting Association
535	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
536	(6)(b)3.b., the association shall levy upon the association's
537	policyholders, as part of its next rate filing, or by a separate
538	rate filing solely for this purpose, a market equalization
539	surcharge in a percentage equal to the total amount of such
540	regular assessments divided by the aggregate statewide direct
541	written premium for property insurance for member insurers for
542	the prior calendar year. Market equalization surcharges under
543	this sub-sub-subparagraph are not considered premium and are not
544	subject to commissions, fees, or premium taxes; however, failure
545	to pay a market equalization surcharge shall be treated as
546	failure to pay premium.
547	e.  The governing body of any unit of local government, any
548	residents of which are insured under the plan, may issue bonds
549	as defined in s. 125.013 or s. 166.101 to fund an assistance
550	program, in conjunction with the association, for the purpose of
551	defraying deficits of the association. In order to avoid
552	needless and indiscriminate proliferation, duplication, and
553	fragmentation of such assistance programs, any unit of local
554	government, any residents of which are insured by the
555	association, may provide for the payment of losses, regardless
556	of whether or not the losses occurred within or outside of the
557	territorial jurisdiction of the local government. Revenue bonds
558	may not be issued until validated pursuant to chapter 75, unless
559	a state of emergency is declared by executive order or
560	proclamation of the Governor pursuant to s. 252.36 making such
561	findings as are necessary to determine that it is in the best
562	interests of, and necessary for, the protection of the public
563	health, safety, and general welfare of residents of this state
564	and the protection and preservation of the economic stability of
565	insurers operating in this state, and declaring it an essential
566	public purpose to permit certain municipalities or counties to
567	issue bonds as will provide relief to claimants and
568	policyholders of the association and insurers responsible for
569	apportionment of plan losses. Any such unit of local government
570	may enter into such contracts with the association and with any
571	other entity created pursuant to this subsection as are
572	necessary to carry out this paragraph. Any bonds issued under
573	this sub-subparagraph shall be payable from and secured by
574	moneys received by the association from assessments under this
575	subparagraph, and assigned and pledged to or on behalf of the
576	unit of local government for the benefit of the holders of such
577	bonds. The funds, credit, property, and taxing power of the
578	state or of the unit of local government shall not be pledged
579	for the payment of such bonds. If any of the bonds remain unsold
580	60 days after issuance, the department shall require all
581	insurers subject to assessment to purchase the bonds, which
582	shall be treated as admitted assets; each insurer shall be
583	required to purchase that percentage of the unsold portion of
584	the bond issue that equals the insurer's relative share of
585	assessment liability under this subsection. An insurer shall not
586	be required to purchase the bonds to the extent that the
587	department determines that the purchase would endanger or impair
588	the solvency of the insurer. The authority granted by this sub-
589	subparagraph is additional to any bonding authority granted by
590	subparagraph 6.
591	3.  The plan shall also provide that any member with a
592	surplus as to policyholders of $20 million or less writing 25
593	percent or more of its total countrywide property insurance
594	premiums in this state may petition the department, within the
595	first 90 days of each calendar year, to qualify as a limited
596	apportionment company. The apportionment of such a member
597	company in any calendar year for which it is qualified shall not
598	exceed its gross participation, which shall not be affected by
599	the formula for voluntary writings. In no event shall a limited
600	apportionment company be required to participate in any
601	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
602	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
603	$50 million after payment of available plan funds in any
604	calendar year. However, a limited apportionment company shall
605	collect from its policyholders any emergency assessment imposed
606	under sub-sub-subparagraph 2.d.(III). The plan shall provide
607	that, if the department determines that any regular assessment
608	will result in an impairment of the surplus of a limited
609	apportionment company, the department may direct that all or
610	part of such assessment be deferred. However, there shall be no
611	limitation or deferment of an emergency assessment to be
612	collected from policyholders under sub-sub-subparagraph
613	2.d.(III).
614	4.  The plan shall provide for the deferment, in whole or
615	in part, of a regular assessment of a member insurer under sub-
616	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
617	not for an emergency assessment collected from policyholders
618	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
619	commissioner, payment of such regular assessment would endanger
620	or impair the solvency of the member insurer. In the event a
621	regular assessment against a member insurer is deferred in whole
622	or in part, the amount by which such assessment is deferred may
623	be assessed against the other member insurers in a manner
624	consistent with the basis for assessments set forth in sub-sub-
625	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
626	5.a.  The plan of operation may include deductibles and
627	rules for classification of risks and rate modifications
628	consistent with the objective of providing and maintaining funds
629	sufficient to pay catastrophe losses.
630	b.  The association may require arbitration of a rate
631	filing under s. 627.062(6). It is the intent of the Legislature
632	that the rates for coverage provided by the association be
633	actuarially sound and not competitive with approved rates
634	charged in the admitted voluntary market such that the
635	association functions as a residual market mechanism to provide
636	insurance only when the insurance cannot be procured in the
637	voluntary market. The plan of operation shall provide a
638	mechanism to assure that, beginning no later than January 1,
639	1999, the rates charged by the association for each line of
640	business are reflective of approved rates in the voluntary
641	market for hurricane coverage for each line of business in the
642	various areas eligible for association coverage.
643	c.  The association shall provide for windstorm coverage on
644	residential properties in limits up to $10 million for
645	commercial lines residential risks and up to $1 million for
646	personal lines residential risks. If coverage with the
647	association is sought for a residential risk valued in excess of
648	these limits, coverage shall be available to the risk up to the
649	replacement cost or actual cash value of the property, at the
650	option of the insured, if coverage for the risk cannot be
651	located in the authorized market. The association must accept a
652	commercial lines residential risk with limits above $10 million
653	or a personal lines residential risk with limits above $1
654	million if coverage is not available in the authorized market.
655	The association may write coverage above the limits specified in
656	this subparagraph with or without facultative or other
657	reinsurance coverage, as the association determines appropriate.
658	d.  The plan of operation must provide objective criteria
659	and procedures, approved by the department, to be uniformly
660	applied for all applicants in determining whether an individual
661	risk is so hazardous as to be uninsurable. In making this
662	determination and in establishing the criteria and procedures,
663	the following shall be considered:
664	(I)  Whether the likelihood of a loss for the individual
665	risk is substantially higher than for other risks of the same
666	class; and
667	(II)  Whether the uncertainty associated with the
668	individual risk is such that an appropriate premium cannot be
669	determined.
670
671	The acceptance or rejection of a risk by the association
672	pursuant to such criteria and procedures must be construed as
673	the private placement of insurance, and the provisions of
674	chapter 120 do not apply.
675	e.  If the risk accepts an offer of coverage through the
676	market assistance program or through a mechanism established by
677	the association, either before the policy is issued by the
678	association or during the first 30 days of coverage by the
679	association, and the producing agent who submitted the
680	application to the association is not currently appointed by the
681	insurer, the insurer shall:
682	(I)  Pay to the producing agent of record of the policy,
683	for the first year, an amount that is the greater of the
684	insurer's usual and customary commission for the type of policy
685	written or a fee equal to the usual and customary commission of
686	the association; or
687	(II)  Offer to allow the producing agent of record of the
688	policy to continue servicing the policy for a period of not less
689	than 1 year and offer to pay the agent the greater of the
690	insurer's or the association's usual and customary commission
691	for the type of policy written.
692
693	If the producing agent is unwilling or unable to accept
694	appointment, the new insurer shall pay the agent in accordance
695	with sub-sub-subparagraph (I). Subject to the provisions of s.
696	627.3517, the policies issued by the association must provide
697	that if the association obtains an offer from an authorized
698	insurer to cover the risk at its approved rates under either a
699	standard policy including wind coverage or, if consistent with
700	the insurer's underwriting rules as filed with the department, a
701	basic policy including wind coverage, the risk is no longer
702	eligible for coverage through the association. Upon termination
703	of eligibility, the association shall provide written notice to
704	the policyholder and agent of record stating that the
705	association policy must be canceled as of 60 days after the date
706	of the notice because of the offer of coverage from an
707	authorized insurer. Other provisions of the insurance code
708	relating to cancellation and notice of cancellation do not apply
709	to actions under this sub-subparagraph.
710	f.  When the association enters into a contractual
711	agreement for a take-out plan, the producing agent of record of
712	the association policy is entitled to retain any unearned
713	commission on the policy, and the insurer shall:
714	(I)  Pay to the producing agent of record of the
715	association policy, for the first year, an amount that is the
716	greater of the insurer's usual and customary commission for the
717	type of policy written or a fee equal to the usual and customary
718	commission of the association; or
719	(II)  Offer to allow the producing agent of record of the
720	association policy to continue servicing the policy for a period
721	of not less than 1 year and offer to pay the agent the greater
722	of the insurer's or the association's usual and customary
723	commission for the type of policy written.
724
725	If the producing agent is unwilling or unable to accept
726	appointment, the new insurer shall pay the agent in accordance
727	with sub-sub-subparagraph (I).
728	6.a.  The plan of operation may authorize the formation of
729	a private nonprofit corporation, a private nonprofit
730	unincorporated association, a partnership, a trust, a limited
731	liability company, or a nonprofit mutual company which may be
732	empowered, among other things, to borrow money by issuing bonds
733	or by incurring other indebtedness and to accumulate reserves or
734	funds to be used for the payment of insured catastrophe losses.
735	The plan may authorize all actions necessary to facilitate the
736	issuance of bonds, including the pledging of assessments or
737	other revenues.
738	b.  Any entity created under this subsection, or any entity
739	formed for the purposes of this subsection, may sue and be sued,
740	may borrow money; issue bonds, notes, or debt instruments;
741	pledge or sell assessments, market equalization surcharges and
742	other surcharges, rights, premiums, contractual rights,
743	projected recoveries from the John Cosgrove Florida Hurricane
744	Catastrophe Fund, other reinsurance recoverables, and other
745	assets as security for such bonds, notes, or debt instruments;
746	enter into any contracts or agreements necessary or proper to
747	accomplish such borrowings; and take other actions necessary to
748	carry out the purposes of this subsection. The association may
749	issue bonds or incur other indebtedness, or have bonds issued on
750	its behalf by a unit of local government pursuant to
751	subparagraph (6)(g)2., in the absence of a hurricane or other
752	weather-related event, upon a determination by the association
753	subject to approval by the department that such action would
754	enable it to efficiently meet the financial obligations of the
755	association and that such financings are reasonably necessary to
756	effectuate the requirements of this subsection. Any such entity
757	may accumulate reserves and retain surpluses as of the end of
758	any association year to provide for the payment of losses
759	incurred by the association during that year or any future year.
760	The association shall incorporate and continue the plan of
761	operation and articles of agreement in effect on the effective
762	date of chapter 76-96, Laws of Florida, to the extent that it is
763	not inconsistent with chapter 76-96, and as subsequently
764	modified consistent with chapter 76-96. The board of directors
765	and officers currently serving shall continue to serve until
766	their successors are duly qualified as provided under the plan.
767	The assets and obligations of the plan in effect immediately
768	prior to the effective date of chapter 76-96 shall be construed
769	to be the assets and obligations of the successor plan created
770	herein.
771	c.  In recognition of s. 10, Art. I of the State
772	Constitution, prohibiting the impairment of obligations of
773	contracts, it is the intent of the Legislature that no action be
774	taken whose purpose is to impair any bond indenture or financing
775	agreement or any revenue source committed by contract to such
776	bond or other indebtedness issued or incurred by the association
777	or any other entity created under this subsection.
778	7.  On such coverage, an agent's remuneration shall be that
779	amount of money payable to the agent by the terms of his or her
780	contract with the company with which the business is placed.
781	However, no commission will be paid on that portion of the
782	premium which is in excess of the standard premium of that
783	company.
784	8.  Subject to approval by the department, the association
785	may establish different eligibility requirements and operational
786	procedures for any line or type of coverage for any specified
787	eligible area or portion of an eligible area if the board
788	determines that such changes to the eligibility requirements and
789	operational procedures are justified due to the voluntary market
790	being sufficiently stable and competitive in such area or for
791	such line or type of coverage and that consumers who, in good
792	faith, are unable to obtain insurance through the voluntary
793	market through ordinary methods would continue to have access to
794	coverage from the association. When coverage is sought in
795	connection with a real property transfer, such requirements and
796	procedures shall not provide for an effective date of coverage
797	later than the date of the closing of the transfer as
798	established by the transferor, the transferee, and, if
799	applicable, the lender.
800	9.  Notwithstanding any other provision of law:
801	a.  The pledge or sale of, the lien upon, and the security
802	interest in any rights, revenues, or other assets of the
803	association created or purported to be created pursuant to any
804	financing documents to secure any bonds or other indebtedness of
805	the association shall be and remain valid and enforceable,
806	notwithstanding the commencement of and during the continuation
807	of, and after, any rehabilitation, insolvency, liquidation,
808	bankruptcy, receivership, conservatorship, reorganization, or
809	similar proceeding against the association under the laws of
810	this state or any other applicable laws.
811	b.  No such proceeding shall relieve the association of its
812	obligation, or otherwise affect its ability to perform its
813	obligation, to continue to collect, or levy and collect,
814	assessments, market equalization or other surcharges, projected
815	recoveries from the John Cosgrove Florida Hurricane Catastrophe
816	Fund, reinsurance recoverables, or any other rights, revenues,
817	or other assets of the association pledged.
818	c.  Each such pledge or sale of, lien upon, and security
819	interest in, including the priority of such pledge, lien, or
820	security interest, any such assessments, emergency assessments,
821	market equalization or renewal surcharges, projected recoveries
822	from the John Cosgrove Florida Hurricane Catastrophe Fund,
823	reinsurance recoverables, or other rights, revenues, or other
824	assets which are collected, or levied and collected, after the
825	commencement of and during the pendency of or after any such
826	proceeding shall continue unaffected by such proceeding.
827	d.  As used in this subsection, the term "financing
828	documents" means any agreement, instrument, or other document
829	now existing or hereafter created evidencing any bonds or other
830	indebtedness of the association or pursuant to which any such
831	bonds or other indebtedness has been or may be issued and
832	pursuant to which any rights, revenues, or other assets of the
833	association are pledged or sold to secure the repayment of such
834	bonds or indebtedness, together with the payment of interest on
835	such bonds or such indebtedness, or the payment of any other
836	obligation of the association related to such bonds or
837	indebtedness.
838	e.  Any such pledge or sale of assessments, revenues,
839	contract rights or other rights or assets of the association
840	shall constitute a lien and security interest, or sale, as the
841	case may be, that is immediately effective and attaches to such
842	assessments, revenues, contract, or other rights or assets,
843	whether or not imposed or collected at the time the pledge or
844	sale is made. Any such pledge or sale is effective, valid,
845	binding, and enforceable against the association or other entity
846	making such pledge or sale, and valid and binding against and
847	superior to any competing claims or obligations owed to any
848	other person or entity, including policyholders in this state,
849	asserting rights in any such assessments, revenues, contract, or
850	other rights or assets to the extent set forth in and in
851	accordance with the terms of the pledge or sale contained in the
852	applicable financing documents, whether or not any such person
853	or entity has notice of such pledge or sale and without the need
854	for any physical delivery, recordation, filing, or other action.
855	f.  There shall be no liability on the part of, and no
856	cause of action of any nature shall arise against, any member
857	insurer or its agents or employees, agents or employees of the
858	association, members of the board of directors of the
859	association, or the department or its representatives, for any
860	action taken by them in the performance of their duties or
861	responsibilities under this subsection. Such immunity does not
862	apply to actions for breach of any contract or agreement
863	pertaining to insurance, or any willful tort.
864	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
865	(b)1.  All insurers authorized to write one or more subject
866	lines of business in this state are subject to assessment by the
867	corporation and, for the purposes of this subsection, are
868	referred to collectively as "assessable insurers." Insurers
869	writing one or more subject lines of business in this state
870	pursuant to part VIII of chapter 626 are not assessable
871	insurers, but insureds who procure one or more subject lines of
872	business in this state pursuant to part VIII of chapter 626 are
873	subject to assessment by the corporation and are referred to
874	collectively as "assessable insureds." An authorized insurer's
875	assessment liability shall begin on the first day of the
876	calendar year following the year in which the insurer was issued
877	a certificate of authority to transact insurance for subject
878	lines of business in this state and shall terminate 1 year after
879	the end of the first calendar year during which the insurer no
880	longer holds a certificate of authority to transact insurance
881	for subject lines of business in this state.
882	2.a.  All revenues, assets, liabilities, losses, and
883	expenses of the corporation shall be divided into three separate
884	accounts as follows:
885	(I)  A personal lines account for personal residential
886	policies issued by the corporation or issued by the Residential
887	Property and Casualty Joint Underwriting Association and renewed
888	by the corporation that provide comprehensive, multiperil
889	coverage on risks that are not located in areas eligible for
890	coverage in the Florida Windstorm Underwriting Association as
891	those areas were defined on January 1, 2002, and for such
892	policies that do not provide coverage for the peril of wind on
893	risks that are located in such areas;
894	(II)  A commercial lines account for commercial residential
895	policies issued by the corporation or issued by the Residential
896	Property and Casualty Joint Underwriting Association and renewed
897	by the corporation that provide coverage for basic property
898	perils on risks that are not located in areas eligible for
899	coverage in the Florida Windstorm Underwriting Association as
900	those areas were defined on January 1, 2002, and for such
901	policies that do not provide coverage for the peril of wind on
902	risks that are located in such areas; and
903	(III)  A high-risk account for personal residential
904	policies and commercial residential and commercial
905	nonresidential property policies issued by the corporation or
906	transferred to the corporation that provide coverage for the
907	peril of wind on risks that are located in areas eligible for
908	coverage in the Florida Windstorm Underwriting Association as
909	those areas were defined on January 1, 2002. The high-risk
910	account must also include quota share primary insurance under
911	subparagraph (c)2. The area eligible for coverage under the
912	high-risk account also includes the area within Port Canaveral,
913	which is bordered on the south by the City of Cape Canaveral,
914	bordered on the west by the Banana River, and bordered on the
915	north by Federal Government property. The office may remove
916	territory from the area eligible for wind-only and quota share
917	coverage if, after a public hearing, the office finds that
918	authorized insurers in the voluntary market are willing and able
919	to write sufficient amounts of personal and commercial
920	residential coverage for all perils in the territory, including
921	coverage for the peril of wind, such that risks covered by wind-
922	only policies in the removed territory could be issued a policy
923	by the corporation in either the personal lines or commercial
924	lines account without a significant increase in the
925	corporation's probable maximum loss in such account. Removal of
926	territory from the area eligible for wind-only or quota share
927	coverage does not alter the assignment of wind coverage written
928	in such areas to the high-risk account.
929	b.  The three separate accounts must be maintained as long
930	as financing obligations entered into by the Florida Windstorm
931	Underwriting Association or Residential Property and Casualty
932	Joint Underwriting Association are outstanding, in accordance
933	with the terms of the corresponding financing documents. When
934	the financing obligations are no longer outstanding, in
935	accordance with the terms of the corresponding financing
936	documents, the corporation may use a single account for all
937	revenues, assets, liabilities, losses, and expenses of the
938	corporation.
939	c.  Creditors of the Residential Property and Casualty
940	Joint Underwriting Association shall have a claim against, and
941	recourse to, the accounts referred to in sub-sub-subparagraphs
942	a.(I) and (II) and shall have no claim against, or recourse to,
943	the account referred to in sub-sub-subparagraph a.(III).
944	Creditors of the Florida Windstorm Underwriting Association
945	shall have a claim against, and recourse to, the account
946	referred to in sub-sub-subparagraph a.(III) and shall have no
947	claim against, or recourse to, the accounts referred to in sub-
948	sub-subparagraphs a.(I) and (II).
949	d.  Revenues, assets, liabilities, losses, and expenses not
950	attributable to particular accounts shall be prorated among the
951	accounts.
952	e.  The Legislature finds that the revenues of the
953	corporation are revenues that are necessary to meet the
954	requirements set forth in documents authorizing the issuance of
955	bonds under this subsection.
956	f.  No part of the income of the corporation may inure to
957	the benefit of any private person.
958	3.  With respect to a deficit in an account:
959	a.  When the deficit incurred in a particular calendar year
960	is not greater than 10 percent of the aggregate statewide direct
961	written premium for the subject lines of business for the prior
962	calendar year, the entire deficit shall be recovered through
963	regular assessments of assessable insurers under paragraph (g)
964	and assessable insureds.
965	b.  When the deficit incurred in a particular calendar year
966	exceeds 10 percent of the aggregate statewide direct written
967	premium for the subject lines of business for the prior calendar
968	year, the corporation shall levy regular assessments on
969	assessable insurers under paragraph (g) and on assessable
970	insureds in an amount equal to the greater of 10 percent of the
971	deficit or 10 percent of the aggregate statewide direct written
972	premium for the subject lines of business for the prior calendar
973	year. Any remaining deficit shall be recovered through emergency
974	assessments under sub-subparagraph d.
975	c.  Each assessable insurer's share of the amount being
976	assessed under sub-subparagraph a. or sub-subparagraph b. shall
977	be in the proportion that the assessable insurer's direct
978	written premium for the subject lines of business for the year
979	preceding the assessment bears to the aggregate statewide direct
980	written premium for the subject lines of business for that year.
981	The assessment percentage applicable to each assessable insured
982	is the ratio of the amount being assessed under sub-subparagraph
983	a. or sub-subparagraph b. to the aggregate statewide direct
984	written premium for the subject lines of business for the prior
985	year. Assessments levied by the corporation on assessable
986	insurers under sub-subparagraphs a. and b. shall be paid as
987	required by the corporation's plan of operation and paragraph
988	(g). Assessments levied by the corporation on assessable
989	insureds under sub-subparagraphs a. and b. shall be collected by
990	the surplus lines agent at the time the surplus lines agent
991	collects the surplus lines tax required by s. 626.932 and shall
992	be paid to the Florida Surplus Lines Service Office at the time
993	the surplus lines agent pays the surplus lines tax to the
994	Florida Surplus Lines Service Office. Upon receipt of regular
995	assessments from surplus lines agents, the Florida Surplus Lines
996	Service Office shall transfer the assessments directly to the
997	corporation as determined by the corporation.
998	d.  Upon a determination by the board of governors that a
999	deficit in an account exceeds the amount that will be recovered
1000	through regular assessments under sub-subparagraph a. or sub-
1001	subparagraph b., the board shall levy, after verification by the
1002	office, emergency assessments, for as many years as necessary to
1003	cover the deficits, to be collected by assessable insurers and
1004	the corporation and collected from assessable insureds upon
1005	issuance or renewal of policies for subject lines of business,
1006	excluding National Flood Insurance policies. The amount of the
1007	emergency assessment collected in a particular year shall be a
1008	uniform percentage of that year's direct written premium for
1009	subject lines of business and all accounts of the corporation,
1010	excluding National Flood Insurance Program policy premiums, as
1011	annually determined by the board and verified by the office. The
1012	office shall verify the arithmetic calculations involved in the
1013	board's determination within 30 days after receipt of the
1014	information on which the determination was based.
1015	Notwithstanding any other provision of law, the corporation and
1016	each assessable insurer that writes subject lines of business
1017	shall collect emergency assessments from its policyholders
1018	without such obligation being affected by any credit,
1019	limitation, exemption, or deferment. Emergency assessments
1020	levied by the corporation on assessable insureds shall be
1021	collected by the surplus lines agent at the time the surplus
1022	lines agent collects the surplus lines tax required by s.
1023	626.932 and shall be paid to the Florida Surplus Lines Service
1024	Office at the time the surplus lines agent pays the surplus
1025	lines tax to the Florida Surplus Lines Service Office. The
1026	emergency assessments so collected shall be transferred directly
1027	to the corporation on a periodic basis as determined by the
1028	corporation and shall be held by the corporation solely in the
1029	applicable account. The aggregate amount of emergency
1030	assessments levied for an account under this sub-subparagraph in
1031	any calendar year may not exceed the greater of 10 percent of
1032	the amount needed to cover the original deficit, plus interest,
1033	fees, commissions, required reserves, and other costs associated
1034	with financing of the original deficit, or 10 percent of the
1035	aggregate statewide direct written premium for subject lines of
1036	business and for all accounts of the corporation for the prior
1037	year, plus interest, fees, commissions, required reserves, and
1038	other costs associated with financing the original deficit.
1039	e.  The corporation may pledge the proceeds of assessments,
1040	projected recoveries from the John Cosgrove Florida Hurricane
1041	Catastrophe Fund, other insurance and reinsurance recoverables,
1042	market equalization surcharges and other surcharges, and other
1043	funds available to the corporation as the source of revenue for
1044	and to secure bonds issued under paragraph (g), bonds or other
1045	indebtedness issued under subparagraph (c)3., or lines of credit
1046	or other financing mechanisms issued or created under this
1047	subsection, or to retire any other debt incurred as a result of
1048	deficits or events giving rise to deficits, or in any other way
1049	that the board determines will efficiently recover such
1050	deficits. The purpose of the lines of credit or other financing
1051	mechanisms is to provide additional resources to assist the
1052	corporation in covering claims and expenses attributable to a
1053	catastrophe. As used in this subsection, the term "assessments"
1054	includes regular assessments under sub-subparagraph a., sub-
1055	subparagraph b., or subparagraph (g)1. and emergency assessments
1056	under sub-subparagraph d. Emergency assessments collected under
1057	sub-subparagraph d. are not part of an insurer's rates, are not
1058	premium, and are not subject to premium tax, fees, or
1059	commissions; however, failure to pay the emergency assessment
1060	shall be treated as failure to pay premium. The emergency
1061	assessments under sub-subparagraph d. shall continue as long as
1062	any bonds issued or other indebtedness incurred with respect to
1063	a deficit for which the assessment was imposed remain
1064	outstanding, unless adequate provision has been made for the
1065	payment of such bonds or other indebtedness pursuant to the
1066	documents governing such bonds or other indebtedness.
1067	f.  As used in this subsection, the term "subject lines of
1068	business" means insurance written by assessable insurers or
1069	procured by assessable insureds on real or personal property, as
1070	defined in s. 624.604, including insurance for fire, industrial
1071	fire, allied lines, farmowners multiperil, homeowners
1072	multiperil, commercial multiperil, and mobile homes, and
1073	including liability coverage on all such insurance, but
1074	excluding inland marine as defined in s. 624.607(3) and
1075	excluding vehicle insurance as defined in s. 624.605(1) other
1076	than insurance on mobile homes used as permanent dwellings.
1077	g.  The Florida Surplus Lines Service Office shall
1078	determine annually the aggregate statewide written premium in
1079	subject lines of business procured by assessable insureds and
1080	shall report that information to the corporation in a form and
1081	at a time the corporation specifies to ensure that the
1082	corporation can meet the requirements of this subsection and the
1083	corporation's financing obligations.
1084	h.  The Florida Surplus Lines Service Office shall verify
1085	the proper application by surplus lines agents of assessment
1086	percentages for regular assessments and emergency assessments
1087	levied under this subparagraph on assessable insureds and shall
1088	assist the corporation in ensuring the accurate, timely
1089	collection and payment of assessments by surplus lines agents as
1090	required by the corporation.
1091	(c)  The plan of operation of the corporation:
1092	1.  Must provide for adoption of residential property and
1093	casualty insurance policy forms and commercial residential and
1094	nonresidential property insurance forms, which forms must be
1095	approved by the office prior to use. The corporation shall adopt
1096	the following policy forms:
1097	a.  Standard personal lines policy forms that are
1098	comprehensive multiperil policies providing full coverage of a
1099	residential property equivalent to the coverage provided in the
1100	private insurance market under an HO-3, HO-4, or HO-6 policy.
1101	b.  Basic personal lines policy forms that are policies
1102	similar to an HO-8 policy or a dwelling fire policy that provide
1103	coverage meeting the requirements of the secondary mortgage
1104	market, but which coverage is more limited than the coverage
1105	under a standard policy.
1106	c.  Commercial lines residential policy forms that are
1107	generally similar to the basic perils of full coverage
1108	obtainable for commercial residential structures in the admitted
1109	voluntary market.
1110	d.  Personal lines and commercial lines residential
1111	property insurance forms that cover the peril of wind only. The
1112	forms are applicable only to residential properties located in
1113	areas eligible for coverage under the high-risk account referred
1114	to in sub-subparagraph (b)2.a.
1115	e.  Commercial lines nonresidential property insurance
1116	forms that cover the peril of wind only. The forms are
1117	applicable only to nonresidential properties located in areas
1118	eligible for coverage under the high-risk account referred to in
1119	sub-subparagraph (b)2.a.
1120	2.a.  Must provide that the corporation adopt a program in
1121	which the corporation and authorized insurers enter into quota
1122	share primary insurance agreements for hurricane coverage, as
1123	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1124	property insurance forms for eligible risks which cover the
1125	peril of wind only. As used in this subsection, the term:
1126	(I)  "Quota share primary insurance" means an arrangement
1127	in which the primary hurricane coverage of an eligible risk is
1128	provided in specified percentages by the corporation and an
1129	authorized insurer. The corporation and authorized insurer are
1130	each solely responsible for a specified percentage of hurricane
1131	coverage of an eligible risk as set forth in a quota share
1132	primary insurance agreement between the corporation and an
1133	authorized insurer and the insurance contract. The
1134	responsibility of the corporation or authorized insurer to pay
1135	its specified percentage of hurricane losses of an eligible
1136	risk, as set forth in the quota share primary insurance
1137	agreement, may not be altered by the inability of the other
1138	party to the agreement to pay its specified percentage of
1139	hurricane losses. Eligible risks that are provided hurricane
1140	coverage through a quota share primary insurance arrangement
1141	must be provided policy forms that set forth the obligations of
1142	the corporation and authorized insurer under the arrangement,
1143	clearly specify the percentages of quota share primary insurance
1144	provided by the corporation and authorized insurer, and
1145	conspicuously and clearly state that neither the authorized
1146	insurer nor the corporation may be held responsible beyond its
1147	specified percentage of coverage of hurricane losses.
1148	(II)  "Eligible risks" means personal lines residential and
1149	commercial lines residential risks that meet the underwriting
1150	criteria of the corporation and are located in areas that were
1151	eligible for coverage by the Florida Windstorm Underwriting
1152	Association on January 1, 2002.
1153	b.  The corporation may enter into quota share primary
1154	insurance agreements with authorized insurers at corporation
1155	coverage levels of 90 percent and 50 percent.
1156	c.  If the corporation determines that additional coverage
1157	levels are necessary to maximize participation in quota share
1158	primary insurance agreements by authorized insurers, the
1159	corporation may establish additional coverage levels. However,
1160	the corporation's quota share primary insurance coverage level
1161	may not exceed 90 percent.
1162	d.  Any quota share primary insurance agreement entered
1163	into between an authorized insurer and the corporation must
1164	provide for a uniform specified percentage of coverage of
1165	hurricane losses, by county or territory as set forth by the
1166	corporation board, for all eligible risks of the authorized
1167	insurer covered under the quota share primary insurance
1168	agreement.
1169	e.  Any quota share primary insurance agreement entered
1170	into between an authorized insurer and the corporation is
1171	subject to review and approval by the office. However, such
1172	agreement shall be authorized only as to insurance contracts
1173	entered into between an authorized insurer and an insured who is
1174	already insured by the corporation for wind coverage.
1175	f.  For all eligible risks covered under quota share
1176	primary insurance agreements, the exposure and coverage levels
1177	for both the corporation and authorized insurers shall be
1178	reported by the corporation to the John Cosgrove Florida
1179	Hurricane Catastrophe Fund. For all policies of eligible risks
1180	covered under quota share primary insurance agreements, the
1181	corporation and the authorized insurer shall maintain complete
1182	and accurate records for the purpose of exposure and loss
1183	reimbursement audits as required by John Cosgrove Florida
1184	Hurricane Catastrophe Fund rules. The corporation and the
1185	authorized insurer shall each maintain duplicate copies of
1186	policy declaration pages and supporting claims documents.
1187	g.  The corporation board shall establish in its plan of
1188	operation standards for quota share agreements which ensure that
1189	there is no discriminatory application among insurers as to the
1190	terms of quota share agreements, pricing of quota share
1191	agreements, incentive provisions if any, and consideration paid
1192	for servicing policies or adjusting claims.
1193	h.  The quota share primary insurance agreement between the
1194	corporation and an authorized insurer must set forth the
1195	specific terms under which coverage is provided, including, but
1196	not limited to, the sale and servicing of policies issued under
1197	the agreement by the insurance agent of the authorized insurer
1198	producing the business, the reporting of information concerning
1199	eligible risks, the payment of premium to the corporation, and
1200	arrangements for the adjustment and payment of hurricane claims
1201	incurred on eligible risks by the claims adjuster and personnel
1202	of the authorized insurer. Entering into a quota sharing
1203	insurance agreement between the corporation and an authorized
1204	insurer shall be voluntary and at the discretion of the
1205	authorized insurer.
1206	3.  May provide that the corporation may employ or
1207	otherwise contract with individuals or other entities to provide
1208	administrative or professional services that may be appropriate
1209	to effectuate the plan. The corporation shall have the power to
1210	borrow funds, by issuing bonds or by incurring other
1211	indebtedness, and shall have other powers reasonably necessary
1212	to effectuate the requirements of this subsection, including,
1213	without limitation, the power to issue bonds and incur other
1214	indebtedness in order to refinance outstanding bonds or other
1215	indebtedness. The corporation may, but is not required to, seek
1216	judicial validation of its bonds or other indebtedness under
1217	chapter 75. The corporation may issue bonds or incur other
1218	indebtedness, or have bonds issued on its behalf by a unit of
1219	local government pursuant to subparagraph (g)2., in the absence
1220	of a hurricane or other weather-related event, upon a
1221	determination by the corporation, subject to approval by the
1222	office, that such action would enable it to efficiently meet the
1223	financial obligations of the corporation and that such
1224	financings are reasonably necessary to effectuate the
1225	requirements of this subsection. The corporation is authorized
1226	to take all actions needed to facilitate tax-free status for any
1227	such bonds or indebtedness, including formation of trusts or
1228	other affiliated entities. The corporation shall have the
1229	authority to pledge assessments, projected recoveries from the
1230	John Cosgrove Florida Hurricane Catastrophe Fund, other
1231	reinsurance recoverables, market equalization and other
1232	surcharges, and other funds available to the corporation as
1233	security for bonds or other indebtedness. In recognition of s.
1234	10, Art. I of the State Constitution, prohibiting the impairment
1235	of obligations of contracts, it is the intent of the Legislature
1236	that no action be taken whose purpose is to impair any bond
1237	indenture or financing agreement or any revenue source committed
1238	by contract to such bond or other indebtedness.
1239	4.a.  Must require that the corporation operate subject to
1240	the supervision and approval of a board of governors consisting
1241	of 8 individuals who are residents of this state, from different
1242	geographical areas of this state. The Governor, the Chief
1243	Financial Officer, the President of the Senate, and the Speaker
1244	of the House of Representatives shall each appoint two members
1245	of the board, effective August 1, 2005. At least one of the two
1246	members appointed by each appointing officer must have
1247	demonstrated expertise in insurance. The Chief Financial Officer
1248	shall designate one of the appointees as chair. All board
1249	members serve at the pleasure of the appointing officer. All
1250	board members, including the chair, must be appointed to serve
1251	for 3-year terms beginning annually on a date designated by the
1252	plan. Any board vacancy shall be filled for the unexpired term
1253	by the appointing officer. The Chief Financial Officer shall
1254	appoint a technical advisory group to provide information and
1255	advice to the board of governors in connection with the board's
1256	duties under this subsection. The executive director and senior
1257	managers of the corporation shall be engaged by the board, as
1258	recommended by the Chief Financial Officer, and serve at the
1259	pleasure of the board. The executive director is responsible for
1260	employing other staff as the corporation may require, subject to
1261	review and concurrence by the board and the Chief Financial
1262	Officer.
1263	b.  The board shall create a Market Accountability Advisory
1264	Committee to assist the corporation in developing awareness of
1265	its rates and its customer and agent service levels in
1266	relationship to the voluntary market insurers writing similar
1267	coverage. The members of the advisory committee shall consist of
1268	the following 11 persons, one of whom must be elected chair by
1269	the members of the committee: four representatives, one
1270	appointed by the Florida Association of Insurance Agents, one by
1271	the Florida Association of Insurance and Financial Advisors, one
1272	by the Professional Insurance Agents of Florida, and one by the
1273	Latin American Association of Insurance Agencies; three
1274	representatives appointed by the insurers with the three highest
1275	voluntary market share of residential property insurance
1276	business in the state; one representative from the Office of
1277	Insurance Regulation; one consumer appointed by the board who is
1278	insured by the corporation at the time of appointment to the
1279	committee; one representative appointed by the Florida
1280	Association of Realtors; and one representative appointed by the
1281	Florida Bankers Association. All members must serve for 3-year
1282	terms and may serve for consecutive terms. The committee shall
1283	report to the corporation at each board meeting on insurance
1284	market issues which may include rates and rate competition with
1285	the voluntary market; service, including policy issuance, claims
1286	processing, and general responsiveness to policyholders,
1287	applicants, and agents; and matters relating to depopulation.
1288	5.  Must provide a procedure for determining the
1289	eligibility of a risk for coverage, as follows:
1290	a.  Subject to the provisions of s. 627.3517, with respect
1291	to personal lines residential risks, if the risk is offered
1292	coverage from an authorized insurer at the insurer's approved
1293	rate under either a standard policy including wind coverage or,
1294	if consistent with the insurer's underwriting rules as filed
1295	with the office, a basic policy including wind coverage, the
1296	risk is not eligible for any policy issued by the corporation.
1297	If the risk is not able to obtain any such offer, the risk is
1298	eligible for either a standard policy including wind coverage or
1299	a basic policy including wind coverage issued by the
1300	corporation; however, if the risk could not be insured under a
1301	standard policy including wind coverage regardless of market
1302	conditions, the risk shall be eligible for a basic policy
1303	including wind coverage unless rejected under subparagraph 8.
1304	The corporation shall determine the type of policy to be
1305	provided on the basis of objective standards specified in the
1306	underwriting manual and based on generally accepted underwriting
1307	practices.
1308	(I)  If the risk accepts an offer of coverage through the
1309	market assistance plan or an offer of coverage through a
1310	mechanism established by the corporation before a policy is
1311	issued to the risk by the corporation or during the first 30
1312	days of coverage by the corporation, and the producing agent who
1313	submitted the application to the plan or to the corporation is
1314	not currently appointed by the insurer, the insurer shall:
1315	(A)  Pay to the producing agent of record of the policy,
1316	for the first year, an amount that is the greater of the
1317	insurer's usual and customary commission for the type of policy
1318	written or a fee equal to the usual and customary commission of
1319	the corporation; or
1320	(B)  Offer to allow the producing agent of record of the
1321	policy to continue servicing the policy for a period of not less
1322	than 1 year and offer to pay the agent the greater of the
1323	insurer's or the corporation's usual and customary commission
1324	for the type of policy written.
1325
1326	If the producing agent is unwilling or unable to accept
1327	appointment, the new insurer shall pay the agent in accordance
1328	with sub-sub-sub-subparagraph (A).
1329	(II)  When the corporation enters into a contractual
1330	agreement for a take-out plan, the producing agent of record of
1331	the corporation policy is entitled to retain any unearned
1332	commission on the policy, and the insurer shall:
1333	(A)  Pay to the producing agent of record of the
1334	corporation policy, for the first year, an amount that is the
1335	greater of the insurer's usual and customary commission for the
1336	type of policy written or a fee equal to the usual and customary
1337	commission of the corporation; or
1338	(B)  Offer to allow the producing agent of record of the
1339	corporation policy to continue servicing the policy for a period
1340	of not less than 1 year and offer to pay the agent the greater
1341	of the insurer's or the corporation's usual and customary
1342	commission for the type of policy written.
1343
1344	If the producing agent is unwilling or unable to accept
1345	appointment, the new insurer shall pay the agent in accordance
1346	with sub-sub-sub-subparagraph (A).
1347	b.  With respect to commercial lines residential risks, if
1348	the risk is offered coverage under a policy including wind
1349	coverage from an authorized insurer at its approved rate, the
1350	risk is not eligible for any policy issued by the corporation.
1351	If the risk is not able to obtain any such offer, the risk is
1352	eligible for a policy including wind coverage issued by the
1353	corporation.
1354	(I)  If the risk accepts an offer of coverage through the
1355	market assistance plan or an offer of coverage through a
1356	mechanism established by the corporation before a policy is
1357	issued to the risk by the corporation or during the first 30
1358	days of coverage by the corporation, and the producing agent who
1359	submitted the application to the plan or the corporation is not
1360	currently appointed by the insurer, the insurer shall:
1361	(A)  Pay to the producing agent of record of the policy,
1362	for the first year, an amount that is the greater of the
1363	insurer's usual and customary commission for the type of policy
1364	written or a fee equal to the usual and customary commission of
1365	the corporation; or
1366	(B)  Offer to allow the producing agent of record of the
1367	policy to continue servicing the policy for a period of not less
1368	than 1 year and offer to pay the agent the greater of the
1369	insurer's or the corporation's usual and customary commission
1370	for the type of policy written.
1371
1372	If the producing agent is unwilling or unable to accept
1373	appointment, the new insurer shall pay the agent in accordance
1374	with sub-sub-sub-subparagraph (A).
1375	(II)  When the corporation enters into a contractual
1376	agreement for a take-out plan, the producing agent of record of
1377	the corporation policy is entitled to retain any unearned
1378	commission on the policy, and the insurer shall:
1379	(A)  Pay to the producing agent of record of the
1380	corporation policy, for the first year, an amount that is the
1381	greater of the insurer's usual and customary commission for the
1382	type of policy written or a fee equal to the usual and customary
1383	commission of the corporation; or
1384	(B)  Offer to allow the producing agent of record of the
1385	corporation policy to continue servicing the policy for a period
1386	of not less than 1 year and offer to pay the agent the greater
1387	of the insurer's or the corporation's usual and customary
1388	commission for the type of policy written.
1389
1390	If the producing agent is unwilling or unable to accept
1391	appointment, the new insurer shall pay the agent in accordance
1392	with sub-sub-sub-subparagraph (A).
1393	6.  Must include rules for classifications of risks and
1394	rates therefor.
1395	7.  Must provide that if premium and investment income for
1396	an account attributable to a particular calendar year are in
1397	excess of projected losses and expenses for the account
1398	attributable to that year, such excess shall be held in surplus
1399	in the account. Such surplus shall be available to defray
1400	deficits in that account as to future years and shall be used
1401	for that purpose prior to assessing assessable insurers and
1402	assessable insureds as to any calendar year.
1403	8.  Must provide objective criteria and procedures to be
1404	uniformly applied for all applicants in determining whether an
1405	individual risk is so hazardous as to be uninsurable. In making
1406	this determination and in establishing the criteria and
1407	procedures, the following shall be considered:
1408	a.  Whether the likelihood of a loss for the individual
1409	risk is substantially higher than for other risks of the same
1410	class; and
1411	b.  Whether the uncertainty associated with the individual
1412	risk is such that an appropriate premium cannot be determined.
1413
1414	The acceptance or rejection of a risk by the corporation shall
1415	be construed as the private placement of insurance, and the
1416	provisions of chapter 120 shall not apply.
1417	9.  Must provide that the corporation shall make its best
1418	efforts to procure catastrophe reinsurance at reasonable rates,
1419	to cover its projected 100-year probable maximum loss as
1420	determined by the board of governors.
1421	10.  Must provide that in the event of regular deficit
1422	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1423	(b)3.b., in the personal lines account, the commercial lines
1424	residential account, or the high-risk account, the corporation
1425	shall levy upon corporation policyholders in its next rate
1426	filing, or by a separate rate filing solely for this purpose, a
1427	market equalization surcharge arising from a regular assessment
1428	in such account in a percentage equal to the total amount of
1429	such regular assessments divided by the aggregate statewide
1430	direct written premium for subject lines of business for the
1431	prior calendar year. Market equalization surcharges under this
1432	subparagraph are not considered premium and are not subject to
1433	commissions, fees, or premium taxes; however, failure to pay a
1434	market equalization surcharge shall be treated as failure to pay
1435	premium.
1436	11.  The policies issued by the corporation must provide
1437	that, if the corporation or the market assistance plan obtains
1438	an offer from an authorized insurer to cover the risk at its
1439	approved rates, the risk is no longer eligible for renewal
1440	through the corporation.
1441	12.  Corporation policies and applications must include a
1442	notice that the corporation policy could, under this section, be
1443	replaced with a policy issued by an authorized insurer that does
1444	not provide coverage identical to the coverage provided by the
1445	corporation. The notice shall also specify that acceptance of
1446	corporation coverage creates a conclusive presumption that the
1447	applicant or policyholder is aware of this potential.
1448	13.  May establish, subject to approval by the office,
1449	different eligibility requirements and operational procedures
1450	for any line or type of coverage for any specified county or
1451	area if the board determines that such changes to the
1452	eligibility requirements and operational procedures are
1453	justified due to the voluntary market being sufficiently stable
1454	and competitive in such area or for such line or type of
1455	coverage and that consumers who, in good faith, are unable to
1456	obtain insurance through the voluntary market through ordinary
1457	methods would continue to have access to coverage from the
1458	corporation. When coverage is sought in connection with a real
1459	property transfer, such requirements and procedures shall not
1460	provide for an effective date of coverage later than the date of
1461	the closing of the transfer as established by the transferor,
1462	the transferee, and, if applicable, the lender.
1463	14.  Must provide that, with respect to the high-risk
1464	account, any assessable insurer with a surplus as to
1465	policyholders of $25 million or less writing 25 percent or more
1466	of its total countrywide property insurance premiums in this
1467	state may petition the office, within the first 90 days of each
1468	calendar year, to qualify as a limited apportionment company. In
1469	no event shall a limited apportionment company be required to
1470	participate in the portion of any assessment, within the high-
1471	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
1472	subparagraph (b)3.b. in the aggregate which exceeds $50 million
1473	after payment of available high-risk account funds in any
1474	calendar year. However, a limited apportionment company shall
1475	collect from its policyholders any emergency assessment imposed
1476	under sub-subparagraph (b)3.d. The plan shall provide that, if
1477	the office determines that any regular assessment will result in
1478	an impairment of the surplus of a limited apportionment company,
1479	the office may direct that all or part of such assessment be
1480	deferred as provided in subparagraph (g)4. However, there shall
1481	be no limitation or deferment of an emergency assessment to be
1482	collected from policyholders under sub-subparagraph (b)3.d.
1483	15.  Must provide that the corporation appoint as its
1484	licensed agents only those agents who also hold an appointment
1485	as defined in s. 626.015(3) with an insurer who at the time of
1486	the agent's initial appointment by the corporation is authorized
1487	to write and is actually writing personal lines residential
1488	property coverage, commercial residential property coverage, or
1489	commercial nonresidential property coverage within the state.
1490	(k)  Upon a determination by the office that the conditions
1491	giving rise to the establishment and activation of the
1492	corporation no longer exist, the corporation is dissolved. Upon
1493	dissolution, the assets of the corporation shall be applied
1494	first to pay all debts, liabilities, and obligations of the
1495	corporation, including the establishment of reasonable reserves
1496	for any contingent liabilities or obligations, and all remaining
1497	assets of the corporation shall become property of the state and
1498	shall be deposited in the John Cosgrove Florida Hurricane
1499	Catastrophe Fund. However, no dissolution shall take effect as
1500	long as the corporation has bonds or other financial obligations
1501	outstanding unless adequate provision has been made for the
1502	payment of the bonds or other financial obligations pursuant to
1503	the documents authorizing the issuance of the bonds or other
1504	financial obligations.
1505	(l)1.  Effective July 1, 2002, policies of the Residential
1506	Property and Casualty Joint Underwriting Association shall
1507	become policies of the corporation. All obligations, rights,
1508	assets and liabilities of the Residential Property and Casualty
1509	Joint Underwriting Association, including bonds, note and debt
1510	obligations, and the financing documents pertaining to them
1511	become those of the corporation as of July 1, 2002. The
1512	corporation is not required to issue endorsements or
1513	certificates of assumption to insureds during the remaining term
1514	of in-force transferred policies.
1515	2.  Effective July 1, 2002, policies of the Florida
1516	Windstorm Underwriting Association are transferred to the
1517	corporation and shall become policies of the corporation. All
1518	obligations, rights, assets, and liabilities of the Florida
1519	Windstorm Underwriting Association, including bonds, note and
1520	debt obligations, and the financing documents pertaining to them
1521	are transferred to and assumed by the corporation on July 1,
1522	2002. The corporation is not required to issue endorsement or
1523	certificates of assumption to insureds during the remaining term
1524	of in-force transferred policies.
1525	3.  The Florida Windstorm Underwriting Association and the
1526	Residential Property and Casualty Joint Underwriting Association
1527	shall take all actions as may be proper to further evidence the
1528	transfers and shall provide the documents and instruments of
1529	further assurance as may reasonably be requested by the
1530	corporation for that purpose. The corporation shall execute
1531	assumptions and instruments as the trustees or other parties to
1532	the financing documents of the Florida Windstorm Underwriting
1533	Association or the Residential Property and Casualty Joint
1534	Underwriting Association may reasonably request to further
1535	evidence the transfers and assumptions, which transfers and
1536	assumptions, however, are effective on the date provided under
1537	this paragraph whether or not, and regardless of the date on
1538	which, the assumptions or instruments are executed by the
1539	corporation. Subject to the relevant financing documents
1540	pertaining to their outstanding bonds, notes, indebtedness, or
1541	other financing obligations, the moneys, investments,
1542	receivables, choses in action, and other intangibles of the
1543	Florida Windstorm Underwriting Association shall be credited to
1544	the high-risk account of the corporation, and those of the
1545	personal lines residential coverage account and the commercial
1546	lines residential coverage account of the Residential Property
1547	and Casualty Joint Underwriting Association shall be credited to
1548	the personal lines account and the commercial lines account,
1549	respectively, of the corporation.
1550	4.  Effective July 1, 2002, a new applicant for property
1551	insurance coverage who would otherwise have been eligible for
1552	coverage in the Florida Windstorm Underwriting Association is
1553	eligible for coverage from the corporation as provided in this
1554	subsection.
1555	5.  The transfer of all policies, obligations, rights,
1556	assets, and liabilities from the Florida Windstorm Underwriting
1557	Association to the corporation and the renaming of the
1558	Residential Property and Casualty Joint Underwriting Association
1559	as the corporation shall in no way affect the coverage with
1560	respect to covered policies as defined in s. 215.555(2)(c)
1561	provided to these entities by the John Cosgrove Florida
1562	Hurricane Catastrophe Fund. The coverage provided by the John
1563	Cosgrove Florida Hurricane Catastrophe Fund to the Florida
1564	Windstorm Underwriting Association based on its exposures as of
1565	June 30, 2002, and each June 30 thereafter shall be redesignated
1566	as coverage for the high-risk account of the corporation.
1567	Notwithstanding any other provision of law, the coverage
1568	provided by the John Cosgrove Florida Hurricane Catastrophe Fund
1569	to the Residential Property and Casualty Joint Underwriting
1570	Association based on its exposures as of June 30, 2002, and each
1571	June 30 thereafter shall be transferred to the personal lines
1572	account and the commercial lines account of the corporation.
1573	Notwithstanding any other provision of law, the high-risk
1574	account shall be treated, for all John Cosgrove Florida
1575	Hurricane Catastrophe Fund purposes, as if it were a separate
1576	participating insurer with its own exposures, reimbursement
1577	premium, and loss reimbursement. Likewise, the personal lines
1578	and commercial lines accounts shall be viewed together, for all
1579	John Cosgrove Florida Hurricane Catastrophe Fund purposes, as if
1580	the two accounts were one and represent a single, separate
1581	participating insurer with its own exposures, reimbursement
1582	premium, and loss reimbursement. The coverage provided by the
1583	John Cosgrove Florida Hurricane Catastrophe Fund to the
1584	corporation shall constitute and operate as a full transfer of
1585	coverage from the Florida Windstorm Underwriting Association and
1586	Residential Property and Casualty Joint Underwriting to the
1587	corporation.
1588	Section 29.  Paragraph (d) of subsection (6) of section
1589	627.701, Florida Statutes, is amended to read:
1590	627.701  Liability of insureds; coinsurance; deductibles.--
1591	(6)
1592	(d)  The office shall draft and formally propose as a rule
1593	the form for the certificate of security. The certificate of
1594	security may be issued in any of the following circumstances:
1595	1.  A mortgage lender or other financial institution may
1596	issue a certificate of security after granting the applicant a
1597	line of credit, secured by equity in real property or other
1598	reasonable security, which line of credit may be drawn on only
1599	to pay for the deductible portion of insured construction or
1600	reconstruction after a hurricane loss. In the sole discretion of
1601	the mortgage lender or other financial institution, the line of
1602	credit may be issued to an applicant on an unsecured basis.
1603	2.  A licensed insurance agent may issue a certificate of
1604	security after obtaining for an applicant a line of credit,
1605	secured by equity in real property or other reasonable security,
1606	which line of credit may be drawn on only to pay for the
1607	deductible portion of insured construction or reconstruction
1608	after a hurricane loss. The John Cosgrove Florida Hurricane
1609	Catastrophe Fund shall negotiate agreements creating a financing
1610	consortium to serve as an additional source of lines of credit
1611	to secure deductibles. Any licensed insurance agent may act as
1612	the agent of such consortium.
1613	3.  Any person qualified to act as a trustee for any
1614	purpose may issue a certificate of security secured by a pledge
1615	of assets, with the restriction that the assets may be drawn on
1616	only to pay for the deductible portion of insured construction
1617	or reconstruction after a hurricane loss.
1618	4.  Any insurer, including any admitted insurer or any
1619	surplus lines insurer, may issue a certificate of security after
1620	issuing the applicant a policy of supplemental insurance that
1621	will pay for 100 percent of the deductible portion of insured
1622	construction or reconstruction after a hurricane loss.
1623	5.  Any other method approved by the office upon finding
1624	that such other method provides a similar level of security as
1625	the methods specified in this paragraph and that such other
1626	method has no negative impact on residential property insurance
1627	catastrophic capacity. The legislative intent of this
1628	subparagraph is to provide the flexibility needed to achieve the
1629	public policy of expanding property insurance capacity while
1630	improving the affordability of property insurance.
1631	Section 30.  Paragraph (a) of subsection (3) of section
1632	627.7077, Florida Statutes, is amended to read:
1633	627.7077  Florida Sinkhole Insurance Facility and other
1634	matters related to affordability and availability of sinkhole
1635	insurance; feasibility study.--
1636	(3)  The feasibility study shall, at a minimum, address the
1637	following issues:
1638	(a)  Where the facility should be housed, including, but
1639	not limited to, the options of creating a separate facility or
1640	using the Citizens Property Insurance Corporation or the John
1641	Cosgrove Florida Hurricane Catastrophe Fund.
1642	Section 31.  Subsection (6) of section 6 of chapter 2004-
1643	480, Laws of Florida, is amended to read:
1644	Section 6.
1645	(6)  In order to maintain actuarially indicated premiums as
1646	required by s. 215.555, Florida Statutes, the State Board of
1647	Administration shall increase future premiums by the amount
1648	appropriated and transferred from the John Cosgrove Florida
1649	Hurricane Catastrophe Fund under this section, plus additional
1650	amounts necessary to recover lost investment income, less any
1651	refunds of unused cash to the John Cosgrove Florida Hurricane
1652	Catastrophe Fund. The increase in future premiums shall be
1653	spread over 5 years, in equal or approximately equal amounts,
1654	beginning with the June 1, 2006, contract year.
1655
1656	================= T I T L E  A M E N D M E N T =================
1657	Remove line 192, and insert:
1658	committing insurance fraud; amending ss. 215.555, 215.556,
1659	215.559, 624.5091, 627.062, 627.0628, 627.0629, 627.351,
1660	627.701, and 627.7077, F.S., and ch. 2004-480, Laws of
1661	Florida; changing the name of the Florida Hurricane
1662	Catastrophe Fund to the John Cosgrove Hurricane
1663	Catastrophe Fund; renaming the fund finance corporation to
1664	conform; creating the Task Force on

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