HB 7225

1	A bill to be entitled
2	An act relating to property and casualty insurance;
3	amending s. 215.555, F.S.; revising a definition; revising
4	certain reimbursement contract criteria; revising certain
5	reimbursement premium requirements; revising certain
6	revenue bond emergency assessment requirements; creating
7	s. 215.558, F.S.; creating the Florida Hurricane Damage
8	Prevention Endowment; providing a purpose and legislative
9	intent; providing definitions; providing requirements and
10	authority for investment of endowment assets by the State
11	Board of Administration; requiring a report to the
12	Legislature; providing for payment of the board's
13	investment services' costs and fees from the endowment;
14	providing requirements of Department of Community Affairs
15	in providing financial incentives for residential
16	hurricane damage prevention activities; providing for an
17	interest-free loan program; providing program criteria and
18	requirements; creating an advisory council for certain
19	purposes; providing for appointment of members; requiring
20	members to serve without compensation; providing for per
21	diem and travel expenses; creating s. 215.5586, F.S.;
22	providing a purpose; requiring the Department of Community
23	Affairs to establish a wind certification and hurricane
24	mitigation inspection program; specifying inspection
25	requirements; providing qualification requirements for
26	inspection providers; requiring the department to adopt
27	rules; creating s. 252.63, F.S.; providing purpose and
28	intent; providing powers of the Commissioner of Insurance
29	Regulation during a state of emergency; providing a
30	purpose and intent; authorizing the commissioner to issue
31	certain orders in a state of emergency; providing for
32	effect and duration of such orders; providing for
33	legislative termination of such orders; requiring the
34	commissioner to publish such orders and an explanatory
35	statement; amending s. 626.918, F.S.; authorizing certain
36	letters of credit to fund an insurer's required
37	policyholder protection trust fund; providing a
38	definition; amending s. 627.062, F.S.; specifying certain
39	rate filings as not subject to office determination as
40	excessive or unfairly discriminatory; providing
41	limitations; providing a definition; prohibiting certain
42	rate filings under certain circumstances; preserving the
43	office's authority to disapprove certain rate filings
44	under certain circumstances; providing procedures for
45	insurers submitting certain rate filings; specifying
46	nonapplication to certain types of insurance; specifying
47	approval of certain rate filings under certain
48	circumstances; providing an exception; requiring the
49	office to provide annual reports on the impact of certain
50	rate regulations; specifying report requirements; amending
51	s. 627.0628, F.S.; prohibiting certain office or consumer
52	advocate questions of certain models reviewed by the
53	commission; amending s. 627.06281, F.S.; prohibiting the
54	office from using certain hurricane loss projection models
55	under certain circumstances; amending s. 627.351, F.S.,
56	relating to the Citizens Property Insurance Corporation;
57	providing additional legislative intent; specifying
58	application to homestead property; specifying the existing
59	three separate accounts of the corporation as providing
60	coverage only for homestead property; providing a
61	definition; providing for an additional separate account
62	for nonhomestead property; requiring separate maintenance
63	of revenues, assets, liabilities, losses, and expenses
64	attributable to the nonhomestead account; providing
65	authority and requirements for coverage rates for
66	nonhomestead properties; providing for office review of
67	such rates or rating plans for being inadequate or
68	unfairly discriminatory; authorizing the office to order
69	discontinuance of certain policies under certain
70	circumstances; requiring insurers to maintain certain
71	records; providing for reducing regular assessments by the
72	Citizen policyholder surcharge under certain
73	circumstances; providing for deficit assessments against
74	nonhomestead account policyholders under certain
75	circumstances; authorizing the board of governors of the
76	corporation to make loans from the homestead accounts to
77	the nonhomestead account under certain circumstances;
78	specifying ineligibility of certain nonhomestead account
79	policyholders for certain coverage under certain
80	circumstances; revising the requirements of the plan of
81	operation of the corporation; requiring additional
82	procedures for determining eligibility of a risk for
83	coverage; providing for determination of regular
84	assessments to which the Citizen policyholder surcharge
85	applies; specifying a minimum requirement for a hurricane
86	deductible for certain property; specifying contents of
87	required statements in applications for nonhomestead and
88	homestead account coverage; limiting coverage on certain
89	mobile or manufactured homes; requiring the corporation to
90	purchase certain catastrophe reinsurance; providing
91	additional legislative intent relating to rate adequacy in
92	the residual market; deleting provisions relating to a
93	rate methodology panel appointed by the corporation;
94	providing requirements and limitations for a corporation
95	adopted bonus payment program; providing a criterion for
96	calculating reduction or increase in probable maximum
97	loss; delaying application of certain high-risk area
98	boundary reduction provisions; providing for application
99	of provisions relating to homestead and nonhomestead
100	accounts to certain policies; requiring certain
101	corporation employees to comply with certain ethics code
102	requirements; requiring corporation employees to notify
103	the Division of Insurance Fraud of probable commissions of
104	fraud by corporation employees; requiring the corporation
105	to report on the feasibility of requiring authorized
106	insurers to issue and service specified policies of the
107	corporation; specifying report requirements; providing
108	immunity to producing agents and employees for specified
109	actions taken relating to removal of policies from the
110	corporation; providing a limitation; providing legislative
111	intent; creating a High Risk Eligibility Panel; providing
112	for appointment of panel members and member's terms;
113	providing for administration of the panel by the
114	corporation; prohibiting compensation and per diem and
115	travel expenses; providing an exception; requiring the
116	panel to report annually to the Legislature on the certain
117	areas that should be included in the Citizens Property
118	Insurance Corporation high risk account; specifying
119	factors to be considered by the panel; providing duties of
120	the office; authorizing the office to conduct public
121	hearings; requiring the panel to conduct an analysis of
122	property eligible for the high-risk account in specified
123	areas; requiring the panel to submit a report to the
124	office and corporation; providing requirements of the
125	report; amending s. 627.4035, F.S.; providing for a waiver
126	of a written authorization requirement to pay claims by
127	debit card or other electronic transfer; providing
128	construction relating to limiting the liability of an
129	insurer for certain replacement costs; amending s.
130	627.7011, F.S.; limiting certain law and ordinance
131	coverage; deleting application to personal property;
132	requiring insurers to issue separate checks for certain
133	expenses and requiring certain checks to be issued
134	directly to a policyholder; creating s. 627.7019, F.S.;
135	requiring the Financial Services Commission to adopt rules
136	imposing standardized requirements applicable to insurers
137	after certain natural events; providing criteria;
138	providing requirements of the Office of Insurance
139	Regulation; prohibiting certain conflicting emergency
140	rules; amending s. 627.727, F.S.; correcting a cross-
141	reference; amending s. 631.181, F.S.; providing an
142	exception to certain requirements for a signed statement
143	for certain claims; providing requirements; amending s.
144	631.54, F.S.; defining the term "homeowner's insurance";
145	amending s. 631.55, F.S.; correcting a cross-reference;
146	amending s. 631.57, F.S.; revising requirements and
147	limitations for obligations of the Florida Insurance
148	Guaranty Association for covered claims; authorizing the
149	association to contract with counties, municipalities, and
150	legal entities to issue revenue bonds for certain
151	purposes; authorizing the Office of Insurance Regulation
152	to levy assessments and emergency assessments on insurers
153	under certain circumstances for certain bond repayment
154	purposes; providing requirements for and limitations on
155	such assessments; providing for payment, collection, and
156	distribution of such assessments; requiring insurers to
157	include an analysis of revenues from such assessments in a
158	required report; providing rate filing requirements for
159	insurers relating to such assessments; providing for
160	continuing annual assessments under certain circumstances;
161	specifying emergency assessments as not premium and not
162	subject to certain taxes, fees, or commissions; specifying
163	insurer liability for emergency assessments; providing an
164	exception; creating s. 631.695, F.S.; providing
165	legislative findings and purposes; providing for issuance
166	of revenue bonds through counties and municipalities to
167	fund assistance programs for paying covered claims for
168	hurricane damage; providing procedures, requirements, and
169	limitations for counties, municipalities, and the Florida
170	Insurance Guaranty Association, Inc., relating to issuance
171	and validation of such bonds; prohibiting pledging the
172	funds, credit, property, and taxing power of the state,
173	counties, and municipalities for payment of bonds;
174	specifying authorized uses of bond proceeds; limiting the
175	term of bonds; specifying a state covenant to protect
176	bondholders from adverse actions relating to such bonds;
177	specifying exemptions for bonds, notes, and other
178	obligations of counties and municipalities from certain
179	taxes or assessments on property and revenues; authorizing
180	counties and municipalities to create a legal entity to
181	exercise certain powers; requiring the association to
182	issue an annual report on the status of certain uses of
183	bond proceeds; providing report requirements; requiring
184	the association to provide a copy of the report to the
185	Legislature and Chief Financial Officer; prohibiting
186	repeal of certain provisions relating to certain bonds
187	under certain circumstances; amending s. 817.234, F.S.;
188	providing an additional circumstance that constitutes
189	committing insurance fraud; creating the Task Force on
190	Hurricane Mitigation and Hurricane Insurance for Mobile
191	and Manufactured Homes; providing for administration by
192	the office; specifying additional agency administrative
193	staff; providing for appointment of task force members;
194	requiring members to serve without compensation; providing
195	for per diem and travel expenses; providing purpose and
196	intent; requiring the task force to address specified
197	issues; requiring a report to the Governor, Chief
198	Financial Officer, and Legislature; providing for
199	expiration of the task force; requiring the Office of
200	Insurance Regulation to submit reports to the Legislature
201	relating to the insurability of certain attached or free
202	standing structures and decreases in policyholder
203	hurricane deductibles based on policyholder hurricane
204	damage mitigation measures; providing report requirements;
205	providing duties of the office; providing appropriations;
206	providing effective dates.
207
208	Be It Enacted by the Legislature of the State of Florida:
209
210	Section 1.  Paragraph (d) of subsection (2), paragraphs (c)
211	and (d) of subsection (4), paragraph (b) of subsection (5), and
212	paragraph (b) of subsection (6) of section 215.555, Florida
213	Statutes, are amended to read:
214	215.555  Florida Hurricane Catastrophe Fund.--
215	(2)  DEFINITIONS.--As used in this section:
216	(d)  "Losses" means direct incurred losses under covered
217	policies, which shall include losses for additional living
218	expenses not to exceed 40 percent of the insured value of a
219	residential structure or its contents and shall exclude loss
220	adjustment expenses. "Losses" does not include losses for fair
221	rental value, loss of rent or rental income use, or business
222	interruption losses.
223	(4)  REIMBURSEMENT CONTRACTS.--
224	(c)1.  The contract shall also provide that the obligation
225	of the board with respect to all contracts covering a particular
226	contract year shall not exceed the actual claims-paying capacity
227	of the fund up to a limit of $15 billion for that contract year
228	adjusted based upon the reported exposure from the prior
229	contract year to reflect the percentage growth in exposure to
230	the fund for covered policies since 2003, provided the dollar
231	growth in the limit may not increase in any year by an amount
232	greater than the dollar growth of the cash balance of the fund
233	as of December 31 as defined by rule which occurred over the
234	prior calendar year.
235	2.  In May before the start of the upcoming contract year
236	and in October during the contract year, the board shall publish
237	in the Florida Administrative Weekly a statement of the fund's
238	estimated borrowing capacity and the projected balance of the
239	fund as of December 31. After the end of each calendar year, the
240	board shall notify insurers of the estimated borrowing capacity
241	and the balance of the fund as of December 31 to provide
242	insurers with data necessary to assist them in determining their
243	retention and projected payout from the fund for loss
244	reimbursement purposes. In conjunction with the development of
245	the premium formula, as provided for in subsection (5), the
246	board shall publish factors or multiples that assist insurers in
247	determining their retention and projected payout for the next
248	contract year. For all regulatory and reinsurance purposes, an
249	insurer may calculate its projected payout from the fund as its
250	share of the total fund premium for the current contract year
251	multiplied by the sum of the projected balance of the fund as of
252	December 31 and the estimated borrowing capacity for that
253	contract year as reported under this subparagraph.
254	(d)1.  For purposes of determining potential liability and
255	to aid in the sound administration of the fund, the contract
256	shall require each insurer to report such insurer's losses from
257	each covered event on an interim basis, as directed by the
258	board. The contract shall require the insurer to report to the
259	board no later than December 31 of each year, and quarterly
260	thereafter, its reimbursable losses from covered events for the
261	year. The contract shall require the board to determine and pay,
262	as soon as practicable after receiving these reports of
263	reimbursable losses, the initial amount of reimbursement due and
264	adjustments to this amount based on later loss information. The
265	adjustments to reimbursement amounts shall require the board to
266	pay, or the insurer to return, amounts reflecting the most
267	recent calculation of losses.
268	2.  In determining reimbursements pursuant to this
269	subsection, the contract shall provide that the board shall:
270	a.  First reimburse insurers writing covered policies,
271	which insurers are in full compliance with this section and have
272	petitioned the Office of Insurance Regulation and qualified as
273	limited apportionment companies under s. 627.351(2)(b)3. The
274	amount of such reimbursement shall be the lesser of $10 million
275	or an amount equal to 10 times the insurer's reimbursement
276	premium for the current year. The amount of reimbursement paid
277	under this sub-subparagraph may not exceed the full amount of
278	reimbursement promised in the reimbursement contract. This sub-
279	subparagraph does not apply with respect to any contract year in
280	which the year-end projected cash balance of the fund, exclusive
281	of any bonding capacity of the fund, exceeds $2 billion. Only
282	one member of any insurer group may receive reimbursement under
283	this sub-subparagraph.
284	a.b.  Next pay to each insurer such insurer's projected
285	payout, which is the amount of reimbursement it is owed, up to
286	an amount equal to the insurer's share of the actual premium
287	paid for that contract year, multiplied by the actual claims-
288	paying capacity available for that contract year; provided,
289	entities created pursuant to s. 627.351 shall be further
290	reimbursed in accordance with sub-subparagraph b. c.
291	b.c.  Thereafter, establish the prorated reimbursement
292	level at the highest level for which any remaining fund balance
293	or bond proceeds are sufficient to reimburse entities created
294	pursuant to s. 627.351 based on reimbursable losses exceeding
295	the amounts payable pursuant to sub-subparagraph a. b. for the
296	current contract year.
297	(5)  REIMBURSEMENT PREMIUMS.--
298	(b)  The State Board of Administration shall select an
299	independent consultant to develop a formula for determining the
300	actuarially indicated premium to be paid to the fund. The
301	formula shall specify, for each zip code or other limited
302	geographical area, the amount of premium to be paid by an
303	insurer for each $1,000 of insured value under covered policies
304	in that zip code or other area. In establishing premiums, the
305	board shall consider the coverage elected under paragraph (4)(b)
306	and any factors that tend to enhance the actuarial
307	sophistication of ratemaking for the fund, including
308	deductibles, type of construction, type of coverage provided,
309	relative concentration of risks, a factor providing for more
310	rapid cash buildup in the fund until the fund capacity for a
311	single hurricane season is fully funded, and other such factors
312	deemed by the board to be appropriate. The formula may provide
313	for a procedure to determine the premiums to be paid by new
314	insurers that begin writing covered policies after the beginning
315	of a contract year, taking into consideration when the insurer
316	starts writing covered policies, the potential exposure of the
317	insurer, the potential exposure of the fund, the administrative
318	costs to the insurer and to the fund, and any other factors
319	deemed appropriate by the board. The formula shall include a
320	factor of 25 percent of the fund's actuarially indicated premium
321	in order to provide for more rapid cash buildup in the fund. The
322	formula must be approved by unanimous vote of the board. The
323	board may, at any time, revise the formula pursuant to the
324	procedure provided in this paragraph.
325	(6)  REVENUE BONDS.--
326	(b)  Emergency assessments.--
327	1.  If the board determines that the amount of revenue
328	produced under subsection (5) is insufficient to fund the
329	obligations, costs, and expenses of the fund and the
330	corporation, including repayment of revenue bonds and that
331	portion of the debt service coverage not met by reimbursement
332	premiums, the board shall direct the Office of Insurance
333	Regulation to levy, by order, an emergency assessment on direct
334	premiums for all property and casualty lines of business in this
335	state, including property and casualty business of surplus lines
336	insurers regulated under part VIII of chapter 626, but not
337	including any workers' compensation premiums or medical
338	malpractice premiums. As used in this subsection, the term
339	"property and casualty business" includes all lines of business
340	identified on Form 2, Exhibit of Premiums and Losses, in the
341	annual statement required of authorized insurers by s. 624.424
342	and any rule adopted under this section, except for those lines
343	identified as accident and health insurance and except for
344	policies written under the National Flood Insurance Program. The
345	assessment shall be specified as a percentage of future premium
346	collections and is subject to annual adjustments by the board to
347	reflect changes in premiums subject to assessments collected
348	under this subparagraph in order to meet debt obligations. The
349	same percentage shall apply to all policies in lines of business
350	subject to the assessment issued or renewed during the 12-month
351	period beginning on the effective date of the assessment.
352	2.  A premium is not subject to an annual assessment under
353	this paragraph in excess of 6 percent of premium with respect to
354	obligations arising out of losses attributable to any one
355	contract year, and a premium is not subject to an aggregate
356	annual assessment under this paragraph in excess of 10 percent
357	of premium. An annual assessment under this paragraph shall
358	continue for as long as until the revenue bonds issued with
359	respect to which the assessment was imposed are outstanding,
360	including any bonds the proceeds of which were used to refund
361	the revenue bonds, unless adequate provision has been made for
362	the payment of the bonds under the documents authorizing
363	issuance of the bonds.
364	3.  With respect to each insurer collecting premiums that
365	are subject to the assessment, the insurer shall collect the
366	assessment at the same time as it collects the premium payment
367	for each policy and shall remit the assessment collected to the
368	fund or corporation as provided in the order issued by the
369	Office of Insurance Regulation. The office shall verify the
370	accurate and timely collection and remittance of emergency
371	assessments and shall report the information to the board in a
372	form and at a time specified by the board. Each insurer
373	collecting assessments shall provide the information with
374	respect to premiums and collections as may be required by the
375	office to enable the office to monitor and verify compliance
376	with this paragraph.
377	4.  With respect to assessments of surplus lines premiums,
378	each surplus lines agent shall collect the assessment at the
379	same time as the agent collects the surplus lines tax required
380	by s. 626.932, and the surplus lines agent shall remit the
381	assessment to the Florida Surplus Lines Service Office created
382	by s. 626.921 at the same time as the agent remits the surplus
383	lines tax to the Florida Surplus Lines Service Office. The
384	emergency assessment on each insured procuring coverage and
385	filing under s. 626.938 shall be remitted by the insured to the
386	Florida Surplus Lines Service Office at the time the insured
387	pays the surplus lines tax to the Florida Surplus Lines Service
388	Office. The Florida Surplus Lines Service Office shall remit the
389	collected assessments to the fund or corporation as provided in
390	the order levied by the Office of Insurance Regulation. The
391	Florida Surplus Lines Service Office shall verify the proper
392	application of such emergency assessments and shall assist the
393	board in ensuring the accurate and timely collection and
394	remittance of assessments as required by the board. The Florida
395	Surplus Lines Service Office shall annually calculate the
396	aggregate written premium on property and casualty business,
397	other than workers' compensation and medical malpractice,
398	procured through surplus lines agents and insureds procuring
399	coverage and filing under s. 626.938 and shall report the
400	information to the board in a form and at a time specified by
401	the board.
402	5.  Any assessment authority not used for a particular
403	contract year may be used for a subsequent contract year. If,
404	for a subsequent contract year, the board determines that the
405	amount of revenue produced under subsection (5) is insufficient
406	to fund the obligations, costs, and expenses of the fund and the
407	corporation, including repayment of revenue bonds and that
408	portion of the debt service coverage not met by reimbursement
409	premiums, the board shall direct the Office of Insurance
410	Regulation to levy an emergency assessment up to an amount not
411	exceeding the amount of unused assessment authority from a
412	previous contract year or years, plus an additional 4 percent
413	provided that the assessments in the aggregate do not exceed the
414	limits specified in subparagraph 2.
415	6.  The assessments otherwise payable to the corporation
416	under this paragraph shall be paid to the fund unless and until
417	the Office of Insurance Regulation and the Florida Surplus Lines
418	Service Office have received from the corporation and the fund a
419	notice, which shall be conclusive and upon which they may rely
420	without further inquiry, that the corporation has issued bonds
421	and the fund has no agreements in effect with local governments
422	under paragraph (c). On or after the date of the notice and
423	until the date the corporation has no bonds outstanding, the
424	fund shall have no right, title, or interest in or to the
425	assessments, except as provided in the fund's agreement with the
426	corporation.
427	7.  Emergency assessments are not premium and are not
428	subject to the premium tax, to the surplus lines tax, to any
429	fees, or to any commissions. An insurer is liable for all
430	assessments that it collects and must treat the failure of an
431	insured to pay an assessment as a failure to pay the premium. An
432	insurer is not liable for uncollectible assessments.
433	8.  When an insurer is required to return an unearned
434	premium, it shall also return any collected assessment
435	attributable to the unearned premium. A credit adjustment to the
436	collected assessment may be made by the insurer with regard to
437	future remittances that are payable to the fund or corporation,
438	but the insurer is not entitled to a refund.
439	9.  When a surplus lines insured or an insured who has
440	procured coverage and filed under s. 626.938 is entitled to the
441	return of an unearned premium, the Florida Surplus Lines Service
442	Office shall provide a credit or refund to the agent or such
443	insured for the collected assessment attributable to the
444	unearned premium prior to remitting the emergency assessment
445	collected to the fund or corporation.
446	10.  The exemption of medical malpractice insurance
447	premiums from emergency assessments under this paragraph is
448	repealed May 31, 2010 2007, and medical malpractice insurance
449	premiums shall be subject to emergency assessments attributable
450	to loss events occurring in the contract years commencing on
451	June 1, 2010 2007.
452	Section 2.  Section 215.558, Florida Statutes, is created
453	to read:
454	215.558  Florida Hurricane Damage Prevention Endowment.--
455	(1)  PURPOSE AND INTENT.--The purpose of this section is to
456	provide a continuing source of funding for financial incentives
457	to encourage residential property owners of this state to
458	retrofit their properties to make them less vulnerable to
459	hurricane damage, to help decrease the cost of residential
460	property and casualty insurance, and to provide matching funds
461	to local governments and nonprofit entities for projects that
462	will reduce hurricane damage to residential properties. It is
463	the intent of the Legislature that this section be construed
464	liberally to effectuate its purpose.
465	(2)  DEFINITIONS.--As used in this section:
466	(a)  "Board" means the State Board of Administration.
467	(b)  "Corpus" means the money that has been appropriated to
468	the endowment by the 2006 Legislature, together with any amounts
469	subsequently appropriated to the endowment that are specifically
470	designated as contributions to the corpus and any grants, gifts,
471	or donations to the endowment that are specifically designated
472	as contributions to the corpus.
473	(c)  "Earnings" means any money in the endowment in excess
474	of the corpus, including any income generated by investments,
475	any increase in the market value of investments net of decreases
476	in market value, and any appropriations, grants, gifts, or
477	donations to the endowment not specifically designated as
478	contributions to the corpus.
479	(d)  "Endowment" means the Florida Hurricane Damage
480	Prevention Endowment Fund created by s. 215.5585.
481	(e)  "Program administrator" means the Department of
482	Community Affairs.
483	(3)  ADMINISTRATION.--
484	(a)  The board shall invest endowment assets as provided in
485	this section.
486	(b)  The board may invest and reinvest funds of the
487	endowment in accordance with s. 215.47 and consistent with board
488	policy.
489	(c)  The investment objective shall be long-term
490	preservation of the value of the corpus and a specified regular
491	annual cash outflow for appropriation, as nonrecurring revenue,
492	for the purposes specified in subsection (4).
493	(d)  In accordance with s. 215.44, the board shall report
494	on the financial status of the endowment in its annual
495	investment report to the Legislature.
496	(e)  Costs and fees of the board for investment services
497	shall be deducted from the assets of the endowment.
498	(4)  FINANCIAL INCENTIVES FOR RESIDENTIAL HURRICANE DAMAGE
499	PREVENTION ACTIVITIES.--
500	(a)  Not less than 80 percent of the net earnings of the
501	endowment shall be expended for financial incentives to
502	residential property owners as described in paragraph (b), and
503	no more than the remainder of the net earnings of the endowment
504	shall be expended for matching fund grants to local governments
505	and nonprofit entities for projects that will reduce hurricane
506	damage to residential properties as described in paragraph (c).
507	Any funds authorized for expenditure but not expended for these
508	purposes shall be returned to the endowment.
509	(b)1.  The program administrator, by rule, shall establish
510	a request for a proposal process to annually solicit proposals
511	from lending institutions under which the lending institution
512	will provide interest-free loans to homestead property owners to
513	pay for inspections of homestead property to determine what
514	mitigation measures are needed and for improvements to existing
515	residential properties intended to reduce the homestead
516	property's vulnerability to hurricane damage, in exchange for
517	funding from the endowment.
518	2.  In order to qualify for funding under this paragraph,
519	an interest-free loan program must include an inspection of
520	homestead property to determine what mitigation measures are
521	needed, a means for verifying that the improvements to be paid
522	for from loan proceeds have been demonstrated to reduce a
523	homestead property's vulnerability to hurricane damage, and a
524	means for verifying that the proceeds were actually spent on
525	such improvements. The program must include a method for
526	awarding loans according to the following priorities:
527	a.  The highest priority must be given to single-family
528	owner-occupied homestead dwellings, insured at $500,000 or less,
529	located in the areas designated as high-risk areas for purposes
530	of coverage by the Citizens Property Insurance Corporation.
531	b.  The next highest priority must be given to single-
532	family owner-occupied homestead dwellings, insured at $500,000
533	or less, covered by the Citizens Property Insurance Corporation,
534	wherever located.
535	c.  The next highest priority must be given to single-
536	family owner-occupied homestead dwellings, insured at $500,000
537	or less, that are more than 40 years old.
538	d.  The next highest priority must be given to all other
539	single-family owner-occupied homestead dwellings insured at
540	$500,000 or less.
541	3.  The program administrator shall evaluate proposals
542	based on the following factors:
543	a.  The degree to which the proposal meets the requirements
544	of subparagraph 2.
545	b.  The lending institution's plan for marketing the loans.
546	c.  The anticipated number of loans to be granted relative
547	to the total amount of funding sought.
548	4.  The program administrator shall annually solicit
549	proposals from local governments and nonprofit entities for
550	projects that will reduce hurricane damage to homestead
551	properties. The program administrator may provide up to 50
552	percent of the funding for such projects. The projects may
553	include educational programs, repair services, property
554	inspections, and hurricane vulnerability analyses and such other
555	projects as the program administrator determines to be
556	consistent with the purposes of this section.
557	(5)  ADVISORY COUNCIL.--There is created an advisory
558	council to provide advice and assistance to the program
559	administrator with regard to its administration of the
560	endowment. The advisory council shall consist of:
561	(a)  A representative of lending institutions, selected by
562	the Financial Services Commission from a list of at least three
563	persons recommended by the Florida Bankers Association.
564	(b)  A representative of residential property insurers,
565	selected by the Financial Services Commission from a list of at
566	least three persons recommended by the Florida Insurance
567	Council.
568	(c)  A representative of home builders, selected by the
569	Financial Services Commission from a list of at least three
570	persons recommended by the Florida Home Builders Association.
571	(d)  A faculty member of a state university selected by the
572	Financial Services Commission who is an expert in hurricane-
573	resistant construction methodologies and materials.
574	(e)  Two members of the House of Representatives selected
575	by the Speaker of the House of Representatives.
576	(f)  Two members of the Senate selected by the President of
577	the Senate.
578	(g)  The senior officer of the Florida Hurricane
579	Catastrophe Fund.
580	(h)  The executive director of Citizens Property Insurance
581	Corporation.
582	(i)  The director of the Division of Emergency Management
583	of the Department of Community Affairs.
584
585	Members appointed under paragraphs (a)-(d) shall serve at the
586	pleasure of the Financial Services Commission. Members appointed
587	under paragraphs (e) and (f) shall serve at the pleasure of the
588	appointing officer. All other members shall serve ex officio.
589	Members of the advisory council shall serve without compensation
590	but may receive reimbursement as provided in s. 112.061 for per
591	diem and travel expenses incurred in the performance of their
592	official duties.
593	Section 3.  Section 215.5586, Florida Statutes, is created
594	to read:
595	215.5586  Wind certification and hurricane mitigation
596	inspections.--
597	(1)  The purpose of this section is to provide wind
598	certification and hurricane mitigation inspections to eligible
599	homeowners in this state for assistance in retrofitting the
600	properties of those homeowners to become less vulnerable to
601	hurricane damage.
602	(2)  The Department of Community Affairs shall establish a
603	request for proposals to solicit proposals from wind
604	certification entities to provide, at no cost to homeowners,
605	wind certification and hurricane mitigation inspections. The
606	inspections provided to homeowners, at a minimum, must include
607	the following:
608	(a)  A home inspection and report that summarizes the
609	results and identifies corrective actions a homeowner may take
610	to mitigate hurricane damage.
611	(b)  A range of cost estimates regarding the mitigation
612	features.
613	(c)  Insurer-specific information regarding premium
614	discounts correlated to recommended mitigation features
615	identified by the inspection.
616	(d)  A hurricane resistance rating scale specifying the
617	home's current, as well as projected, wind resistance
618	capabilities.
619	(3)  To qualify for selection by the department as a
620	provider of wind certification and hurricane mitigation
621	inspections, the entity, at a minimum, must:
622	(a)  Use wind certification and hurricane mitigation
623	inspectors who have:
624	1.  Prior experience in residential construction or
625	inspection and have received specialized training in hurricane
626	mitigation procedures.
627	2.  Undergone drug testing and background checks.
628	3.  Been certified, in a manner satisfactory to the
629	department, to conduct the inspections.
630	(b)  Provide a quality assurance program including a re-
631	inspection component.
632	(4)  The Department of Community Affairs shall adopt rules
633	pursuant to ss. 120.536(1) and 120.54 governing the wind
634	certification and wind mitigation inspection program.
635	Section 4.  Section 252.63, Florida Statutes, is created to
636	read:
637	252.63  Commissioner of Insurance Regulation; powers in a
638	state of emergency.--
639	(1)  It is the purpose and intent of this section to
640	provide the Commissioner of Insurance Regulation the authority
641	to temporarily modify or suspend provisions of the Florida
642	Insurance Code in order to expedite the recovery of communities
643	affected by a disaster or other emergency and encourage
644	insurance companies, entities, and persons subject to the
645	Florida Insurance Code and the jurisdiction of the office to
646	meet the insurance needs of such communities.
647	(2)(a)  When the Governor declares a state of emergency
648	pursuant to s. 252.36, the commissioner may issue:
649	1.  One or more general orders applicable to all insurance
650	companies, entities, and persons, as defined in s. 624.04, that
651	are subject to the Florida Insurance Code and that serve any
652	portion of the area of the state under the state of emergency;
653	or
654	2.  One or more specific orders to particular insurance
655	companies, entities, and persons that are subject to the Florida
656	Insurance Code, as defined in s. 624.01, which orders may modify
657	or suspend, as to those companies, entities, and persons, all or
658	any part of the Florida Insurance Code, or any applicable rule,
659	consistent with the stated purposes of the Florida Insurance
660	Code.
661	(b)  An order issued by the commissioner under this section
662	becomes effective upon issuance and continues for 120 days
663	unless terminated sooner by the commissioner. The commissioner
664	may extend an order for one additional period of 120 days if he
665	or she determines that the emergency conditions that gave rise
666	to the initial order still exist. By concurrent resolution, the
667	Legislature may terminate any order issued under this section.
668	(3)  The commissioner shall publish in the next available
669	publication of the Florida Administrative Weekly a copy of the
670	text of any order issued under this section, together with a
671	statement describing the modification or suspension and
672	explaining how the modification or suspension will facilitate
673	recovery from the emergency.
674	Section 5.  Subsections (1) and (2) of section 626.918,
675	Florida Statutes, are amended to read:
676	626.918  Eligible surplus lines insurers.--
677	(1)  A No surplus lines agent may not shall place any
678	coverage with any unauthorized insurer which is not then an
679	eligible surplus lines insurer, except as permitted under
680	subsections (5) and (6).
681	(2)  An No unauthorized insurer may not shall be or become
682	an eligible surplus lines insurer unless made eligible by the
683	office in accordance with the following conditions:
684	(a)  Eligibility of the insurer must be requested in
685	writing by the Florida Surplus Lines Service Office.;
686	(b)  The insurer must be currently an authorized insurer in
687	the state or country of its domicile as to the kind or kinds of
688	insurance proposed to be so placed and must have been such an
689	insurer for not less than the 3 years next preceding or must be
690	the wholly owned subsidiary of such authorized insurer or must
691	be the wholly owned subsidiary of an already eligible surplus
692	lines insurer as to the kind or kinds of insurance proposed for
693	a period of not less than the 3 years next preceding. However,
694	the office may waive the 3-year requirement if the insurer
695	provides a product or service not readily available to the
696	consumers of this state or has operated successfully for a
697	period of at least 1 year next preceding and has capital and
698	surplus of not less than $25 million.;
699	(c)  Before granting eligibility, the requesting surplus
700	lines agent or the insurer shall furnish the office with a duly
701	authenticated copy of its current annual financial statement in
702	the English language and with all monetary values therein
703	expressed in United States dollars, at an exchange rate (in the
704	case of statements originally made in the currencies of other
705	countries) then-current and shown in the statement, and with
706	such additional information relative to the insurer as the
707	office may request.;
708	(d)1.a.  The insurer must have and maintain surplus as to
709	policyholders of not less than $15 million; in addition, an
710	alien insurer must also have and maintain in the United States a
711	trust fund for the protection of all its policyholders in the
712	United States under terms deemed by the office to be reasonably
713	adequate, in an amount not less than $5.4 million. Any such
714	surplus as to policyholders or trust fund shall be represented
715	by investments consisting of eligible investments for like funds
716	of like domestic insurers under part II of chapter 625 provided,
717	however, that in the case of an alien insurance company, any
718	such surplus as to policyholders may be represented by
719	investments permitted by the domestic regulator of such alien
720	insurance company if such investments are substantially similar
721	in terms of quality, liquidity, and security to eligible
722	investments for like funds of like domestic insurers under part
723	II of chapter 625. Clean, irrevocable, unconditional, and
724	evergreen letters of credit issued or confirmed by a qualified
725	United States financial institution, as defined in subparagraph
726	2., may be used to fund the trust.;
727	b.2.  For those surplus lines insurers that were eligible
728	on January 1, 1994, and that maintained their eligibility
729	thereafter, the required surplus as to policyholders shall be:
730	(I)a.  On December 31, 1994, and until December 30, 1995,
731	$2.5 million.
732	(II)b.  On December 31, 1995, and until December 30, 1996,
733	$3.5 million.
734	(III)c.  On December 31, 1996, and until December 30, 1997,
735	$4.5 million.
736	(IV)d.  On December 31, 1997, and until December 30, 1998,
737	$5.5 million.
738	(V)e.  On December 31, 1998, and until December 30, 1999,
739	$6.5 million.
740	(VI)f.  On December 31, 1999, and until December 30, 2000,
741	$8 million.
742	(VII)g.  On December 31, 2000, and until December 30, 2001,
743	$9.5 million.
744	(VIII)h.  On December 31, 2001, and until December 30,
745	2002, $11 million.
746	(IX)i.  On December 31, 2002, and until December 30, 2003,
747	$13 million.
748	(X)j.  On December 31, 2003, and thereafter, $15 million.
749	c.3.  The capital and surplus requirements as set forth in
750	sub-subparagraph b. subparagraph 2. do not apply in the case of
751	an insurance exchange created by the laws of individual states,
752	where the exchange maintains capital and surplus pursuant to the
753	requirements of that state, or maintains capital and surplus in
754	an amount not less than $50 million in the aggregate. For an
755	insurance exchange which maintains funds in the amount of at
756	least $12 million for the protection of all insurance exchange
757	policyholders, each individual syndicate shall maintain minimum
758	capital and surplus in an amount not less than $3 million. If
759	the insurance exchange does not maintain funds in the amount of
760	at least $12 million for the protection of all insurance
761	exchange policyholders, each individual syndicate shall meet the
762	minimum capital and surplus requirements set forth in sub-
763	subparagraph b. subparagraph 2.;
764	d.4.  A surplus lines insurer which is a member of an
765	insurance holding company that includes a member which is a
766	Florida domestic insurer as set forth in its holding company
767	registration statement, as set forth in s. 628.801 and rules
768	adopted thereunder, may elect to maintain surplus as to
769	policyholders in an amount equal to the requirements of s.
770	624.408, subject to the requirement that the surplus lines
771	insurer shall at all times be in compliance with the
772	requirements of chapter 625.
773
774	The election shall be submitted to the office and shall be
775	effective upon the office's being satisfied that the
776	requirements of sub-subparagraph d. subparagraph 4. have been
777	met. The initial date of election shall be the date of office
778	approval. The election approval application shall be on a form
779	adopted by commission rule. The office may approve an election
780	form submitted pursuant to sub-subparagraph d. subparagraph 4.
781	only if it was on file with the former Department of Insurance
782	before February 28, 1998.;
783	2.  For purposes of letters of credit under subparagraph
784	1., the term "qualified United States financial institution"
785	means an institution that:
786	a.  Is organized or, in the case of a United States office
787	of a foreign banking organization, is licensed under the laws of
788	the United States or any state.
789	b.  Is regulated, supervised, and examined by authorities
790	of the United States or any state having regulatory authority
791	over banks and trust companies.
792	c.  Has been determined by the office or the Securities
793	Valuation Office of the National Association of Insurance
794	Commissioners to meet such standards of financial condition and
795	standing as are considered necessary and appropriate to regulate
796	the quality of financial institutions whose letters of credit
797	are acceptable to the office.
798	(e)  The insurer must be of good reputation as to the
799	providing of service to its policyholders and the payment of
800	losses and claims.;
801	(f)  The insurer must be eligible, as for authority to
802	transact insurance in this state, under s. 624.404(3).; and
803	(g)  This subsection does not apply as to unauthorized
804	insurers made eligible under s. 626.917 as to wet marine and
805	aviation risks.
806	Section 6.  Paragraph (j) is added to subsection (2) of
807	section 627.062, Florida Statutes, and subsections (9) and (10)
808	are added to that section, to read:
809	627.062  Rate standards.--
810	(2)  As to all such classes of insurance:
811	(j)  Effective January 1, 2007, notwithstanding any other
812	provision of this section:
813	1.  With respect to any residential property insurance
814	subject to regulation under this section, a rate filing,
815	including, but not limited to, any rate changes, rating factors,
816	territories, classification, discounts, and credits, with
817	respect to any policy form, including endorsements issued with
818	the form, that results in an overall average statewide premium
819	increase or decrease of no more than 5 percent above or below
820	the premium that would result from the insurer's rates then in
821	effect shall not be subject to a determination by the office
822	that the rate is excessive or unfairly discriminatory except as
823	provided in subparagraph 3., or any other provision of law,
824	provided all changes specified in the filing do not result in an
825	overall premium increase of more than 10 percent for any one
826	territory, for reasons related solely to the rate change. As
827	used in this subparagraph, the term "insurer's rates then in
828	effect" includes only rates that have been lawfully in effect
829	under this section or rates that have been determined to be
830	lawful through administrative proceedings or judicial
831	proceedings.
832	2.  An insurer may not make filings under this paragraph
833	with respect to any policy form, including endorsements issued
834	with the form, if the overall premium changes resulting from
835	such filings exceed the amounts specified in this paragraph in
836	any 12-month period. An insurer may proceed under other
837	provisions of this section or other provisions of law if the
838	insurer seeks to exceed the premium or rate limitations of this
839	paragraph.
840	3.  This paragraph does not affect the authority of the
841	office to disapprove a rate as inadequate or to disapprove a
842	filing for the unlawful use of unfairly discriminatory rating
843	factors that are prohibited by the laws of this state. An
844	insurer electing to implement a rate change under this paragraph
845	shall submit a filing to the office at least 30 days prior to
846	the effective date of the rate change. The office shall have 30
847	days after the filing's submission to review the filing and
848	determine if the rate is inadequate or uses unfairly
849	discriminatory rating factors. Absent a finding by the office
850	within such 30-day period that the rate is inadequate or that
851	the insurer has used unfairly discriminatory rating factors, the
852	filing is deemed approved. If the office finds during the 30-day
853	period that the filing will result in inadequate premiums or
854	otherwise endanger the insurer's solvency, the office shall
855	suspend the rate decrease. If the insurer is implementing an
856	overall rate increase, the results of which continue to produce
857	an inadequate rate, such increase shall proceed pending
858	additional action by the office to ensure the adequacy of the
859	rate.
860	4.  This paragraph does not apply to rate filings for any
861	insurance other than residential property insurance.
862
863	The provisions of this subsection shall not apply to workers'
864	compensation and employer's liability insurance and to motor
865	vehicle insurance.
866	(9)  Notwithstanding any other provision of this section,
867	any rate filing or applicable portion of the rate filing that
868	includes the peril of wind in the high-risk account of the
869	Citizens Property Insurance Corporation shall be deemed approved
870	upon submission to the office if the filing or the applicable
871	portion of the filing requests approval of a rate that is less
872	than the approved rate for similar risks insured in the high-
873	risk account of the corporation unless the office determines
874	that such rate is inadequate or unfairly discriminatory as
875	provided in subsection (2).
876	(10)(a)  Beginning January 1, 2007, the office shall
877	annually provide a report to the President of the Senate, the
878	Speaker of the House of Representatives, the minority party
879	leader of each house of the Legislature, and the chairs of the
880	standing committees of each house of the Legislature having
881	jurisdiction over insurance issues, specifying the impact of
882	flexible rate regulation under paragraph (2)(j) on the degree of
883	competition in insurance markets in this state.
884	(b)  The report shall include a year-by-year comparison of
885	the number of companies participating in the market for each
886	class of insurance and the relative rate levels. The report
887	shall also specify:
888	1.  The number of rate filings made under paragraph (2)(j),
889	the rate levels under those filings, and the market share
890	affected by those filings.
891	2.  The number of filings made on a file and use basis, the
892	rate levels under those filings, and the market share affected
893	by those filings.
894	3.  The number of filings made on a use and file basis, the
895	rate levels under those filings, and the market share affected
896	by those filings.
897	4.  Recommendations to promote competition in the insurance
898	market and further protect insurance consumers.
899	Section 7.  Paragraph (c) of subsection (3) of section
900	627.0628, Florida Statutes, is amended to read:
901	627.0628  Florida Commission on Hurricane Loss Projection
902	Methodology; public records exemption; public meetings
903	exemption.--
904	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
905	(c)  With respect to a rate filing under s. 627.062, an
906	insurer may employ actuarial methods, principles, standards,
907	models, or output ranges found by the commission to be accurate
908	or reliable to determine hurricane loss factors for use in a
909	rate filing under s. 627.062. Such findings and factors are
910	admissible and relevant in consideration of a rate filing by the
911	office or in any arbitration or administrative or judicial
912	review only if the office and the consumer advocate appointed
913	pursuant to s. 627.0613 have a reasonable opportunity to review
914	access to all of the basic assumptions and factors that were
915	used in developing the actuarial methods, principles, standards,
916	models, or output ranges. After review of the specific models by
917	the commission, the office and the consumer advocate may not
918	pose any questions generated from their respective reviews that
919	duplicate or compromise the conclusions of the commission
920	relative to the accuracy or reliability of the models in
921	producing hurricane loss factors for use in a rate filing under
922	s. 627.062, and are not precluded from disclosing such
923	information in a rate proceeding.
924	Section 8.  Section 627.06281, Florida Statutes, is amended
925	to read:
926	627.06281  Public hurricane loss projection model;
927	reporting of data by insurers.--
928	(1)  Within 30 days after a written request for loss data
929	and associated exposure data by the office or a type I center
930	within the State University System established to study
931	mitigation, residential property insurers and licensed rating
932	and advisory organizations that compile residential property
933	insurance loss data shall provide loss data and associated
934	exposure data for residential property insurance policies to the
935	office or to a type I center within the State University System
936	established to study mitigation, as directed by the office, for
937	the purposes of developing, maintaining, and updating a public
938	model for hurricane loss projections. The loss data and
939	associated exposure data provided shall be in writing.
940	(2)  The office may not use the public model for hurricane
941	loss projection referred to in subsection (1) for any purpose
942	under s. 627.062 or s. 627.351 until the model has been
943	submitted to the Florida Commission on Hurricane Loss Projection
944	Methodology for review under s. 627.0628 and the commission has
945	found the model to be accurate and reliable pursuant to the same
946	process and standards as the commission uses for the review of
947	other hurricane loss projection models.
948	Section 9.  Subsection (6) of section 627.351, Florida
949	Statutes, is amended to read:
950	627.351  Insurance risk apportionment plans.--
951	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
952	(a)1.a.  The Legislature finds that actual and threatened
953	catastrophic losses to property in this state from hurricanes
954	have caused insurers to be unwilling or unable to provide
955	property insurance coverage to the extent sought and needed. It
956	is in the public interest and a public purpose to assist in
957	ensuring assuring that homestead property in the state is
958	insured so as to facilitate the remediation, reconstruction, and
959	replacement of damaged or destroyed property in order to reduce
960	or avoid the negative effects otherwise resulting to the public
961	health, safety, and welfare; to the economy of the state; and to
962	the revenues of the state and local governments needed to
963	provide for the public welfare. It is necessary, therefore, to
964	provide property insurance to applicants who are in good faith
965	entitled to procure insurance through the voluntary market but
966	are unable to do so. The Legislature intends by this subsection
967	that property insurance be provided and that it continues, as
968	long as necessary, through an entity organized to achieve
969	efficiencies and economies, while providing service to
970	policyholders, applicants, and agents that is no less than the
971	quality generally provided in the voluntary market, all toward
972	the achievement of the foregoing public purposes. Because it is
973	essential for the corporation to have the maximum financial
974	resources to pay claims following a catastrophic hurricane, it
975	is the intent of the Legislature that the income of the
976	corporation be exempt from federal income taxation and that
977	interest on the debt obligations issued by the corporation be
978	exempt from federal income taxation.
979	b.  The Legislature finds and declares that:
980	(I)  The commitment of the state, as expressed in sub-
981	subparagraph a., to providing a means of ensuring the
982	availability of property insurance through a residual market
983	mechanism is hereby reaffirmed.
984	(II)  Despite legislative efforts to ensure that the
985	residual market for property insurance is self-supporting to the
986	greatest reasonable extent, residual market policyholders are to
987	some degree subsidized by the general public through assessments
988	on owners of property insured in the voluntary market and their
989	insurers and through the potential use of general revenues of
990	the state to eliminate or reduce residual market deficits.
991	(III)  The degree of such subsidy is a matter of public
992	policy. It is the intent of the Legislature to better control
993	the subsidy through at least the following means:
994	(A)  Restructuring the residual market mechanism to provide
995	separate treatment of homestead and nonhomestead properties,
996	with the intent of continuing to provide an insurance program
997	with limited subsidies for homestead properties while providing
998	a nonsubsidized insurance program for nonhomestead properties.
999	(B)  Redefining the concept of rate adequacy in the
1000	subsidized residual market with the intent of ensuring a rate
1001	structure that will enable the subsidized residual market to be
1002	self-supporting except in the event of hurricane losses of a
1003	legislatively specified magnitude. It is the intent of the
1004	Legislature that the funding of the subsidized residual market
1005	be structured to be self-supporting up to the point of its 100-
1006	year probable maximum loss and that the funding be structured to
1007	make reliance on assessments or other sources of public funding
1008	necessary only in the event of a 100-year probable maximum loss
1009	or larger loss.
1010	2.  The Residential Property and Casualty Joint
1011	Underwriting Association originally created by this statute
1012	shall be known, as of July 1, 2002, as the Citizens Property
1013	Insurance Corporation. The corporation shall provide insurance
1014	for homesteaded residential property and may provide insurance
1015	for residential and commercial property, for applicants who are
1016	in good faith entitled, but are unable, to procure insurance
1017	through the voluntary market. The corporation shall operate
1018	pursuant to a plan of operation approved by order of the office.
1019	The plan is subject to continuous review by the office. The
1020	office may, by order, withdraw approval of all or part of a plan
1021	if the office determines that conditions have changed since
1022	approval was granted and that the purposes of the plan require
1023	changes in the plan. For the purposes of this subsection,
1024	residential coverage includes both personal lines residential
1025	coverage, which consists of the type of coverage provided by
1026	homeowner's, mobile home owner's, dwelling, tenant's,
1027	condominium unit owner's, and similar policies, and commercial
1028	lines residential coverage, which consists of the type of
1029	coverage provided by condominium association, apartment
1030	building, and similar policies.
1031	3.  It is the intent of the Legislature that policyholders,
1032	applicants, and agents of the corporation receive service and
1033	treatment of the highest possible level but never less than that
1034	generally provided in the voluntary market. It also is intended
1035	that the corporation be held to service standards no less than
1036	those applied to insurers in the voluntary market by the office
1037	with respect to responsiveness, timeliness, customer courtesy,
1038	and overall dealings with policyholders, applicants, or agents
1039	of the corporation.
1040	(b)1.  All insurers authorized to write one or more subject
1041	lines of business in this state are subject to assessment by the
1042	corporation and, for the purposes of this subsection, are
1043	referred to collectively as "assessable insurers." Insurers
1044	writing one or more subject lines of business in this state
1045	pursuant to part VIII of chapter 626 are not assessable
1046	insurers, but insureds who procure one or more subject lines of
1047	business in this state pursuant to part VIII of chapter 626 are
1048	subject to assessment by the corporation and are referred to
1049	collectively as "assessable insureds." An authorized insurer's
1050	assessment liability shall begin on the first day of the
1051	calendar year following the year in which the insurer was issued
1052	a certificate of authority to transact insurance for subject
1053	lines of business in this state and shall terminate 1 year after
1054	the end of the first calendar year during which the insurer no
1055	longer holds a certificate of authority to transact insurance
1056	for subject lines of business in this state.
1057	2.a.  All revenues, assets, liabilities, losses, and
1058	expenses of the corporation shall be divided into four three
1059	separate accounts as follows:
1060	(I)  Three separate homestead accounts that may provide
1061	coverage only for homestead properties. The term "homestead
1062	property" means a residential property that has been granted a
1063	homestead exemption under chapter 196. The term also includes a
1064	property that is qualified for such exemption but has not
1065	applied for the exemption as of the date of issuance of the
1066	policy, provided the policyholder obtains the exemption within 1
1067	year after initial issuance of the policy. The term also
1068	includes an owner-occupied mobile or manufactured home as
1069	defined in s. 320.01 permanently affixed to real property
1070	regardless of whether the owner of the mobile or manufactured
1071	home is also the owner of the land on which the mobile or
1072	manufactured home is permanently affixed. However, the term does
1073	not include a mobile home that is being held for display by a
1074	licensed mobile home dealer or a licensed mobile home
1075	manufacturer and is not owner-occupied. For the purposes of this
1076	sub-sub-subparagraph, the term "homestead property" also
1077	includes property covered by tenant's insurance and commercial
1078	lines residential policies. The accounts providing coverage only
1079	for homestead properties are:
1080	(A)(I)  A personal lines account for personal residential
1081	policies issued by the corporation or issued by the Residential
1082	Property and Casualty Joint Underwriting Association and renewed
1083	by the corporation that provide comprehensive, multiperil
1084	coverage on risks that are not located in areas eligible for
1085	coverage in the Florida Windstorm Underwriting Association as
1086	those areas were defined on January 1, 2002, and for such
1087	policies that do not provide coverage for the peril of wind on
1088	risks that are located in such areas;
1089	(B)(II)  A commercial lines account for commercial
1090	residential policies issued by the corporation or issued by the
1091	Residential Property and Casualty Joint Underwriting Association
1092	and renewed by the corporation that provide coverage for basic
1093	property perils on risks that are not located in areas eligible
1094	for coverage in the Florida Windstorm Underwriting Association
1095	as those areas were defined on January 1, 2002, and for such
1096	policies that do not provide coverage for the peril of wind on
1097	risks that are located in such areas; and
1098	(C)(III)  A high-risk account for personal residential
1099	policies and commercial residential and commercial
1100	nonresidential property policies issued by the corporation or
1101	transferred to the corporation that provide coverage for the
1102	peril of wind on risks that are located in areas eligible for
1103	coverage in the Florida Windstorm Underwriting Association as
1104	those areas were defined on January 1, 2002. The high-risk
1105	account must also include quota share primary insurance under
1106	subparagraph (c)2. The area eligible for coverage under the
1107	high-risk account also includes the area within Port Canaveral,
1108	which is bordered on the south by the City of Cape Canaveral,
1109	bordered on the west by the Banana River, and bordered on the
1110	north by Federal Government property. The office may remove
1111	territory from the area eligible for wind-only and quota share
1112	coverage if, after a public hearing, the office finds that
1113	authorized insurers in the voluntary market are willing and able
1114	to write sufficient amounts of personal and commercial
1115	residential coverage for all perils in the territory, including
1116	coverage for the peril of wind, such that risks covered by wind-
1117	only policies in the removed territory could be issued a policy
1118	by the corporation in either the personal lines or commercial
1119	lines account without a significant increase in the
1120	corporation's probable maximum loss in such account. Removal of
1121	territory from the area eligible for wind-only or quota share
1122	coverage does not alter the assignment of wind coverage written
1123	in such areas to the high-risk account.
1124	(II)(A)  A separate nonhomestead account for all properties
1125	that otherwise meet all of the criteria for eligibility for
1126	coverage within one of the three homestead accounts described in
1127	sub-sub-subparagraph (I) but that do not meet the definition of
1128	homestead property specified in sub-sub-subparagraph (I). The
1129	nonhomestead account shall provide the same types of coverage as
1130	are provided by the three homestead accounts, including wind-
1131	only coverage in the high-risk account area. In order to be
1132	eligible for coverage in the nonhomestead account, at the
1133	initial issuance of the policy and at renewal the property owner
1134	shall provide the corporation with a sworn affidavit stating
1135	that the property has been rejected for coverage by at least
1136	three authorized insurers and at least three surplus lines
1137	insurers.
1138	(B)  An authorized insurer may provide coverage to a
1139	nonhomestead property owner on an individual risk rate basis.
1140	Rates and forms of an authorized insurer for nonhomestead
1141	properties are not subject to ss. 627.062 and 627.0629, except
1142	s. 627.0629(2)(b). Such rates and forms are subject to all other
1143	applicable provisions of this code and rules adopted under this
1144	code. During the course of an insurer's market conduct
1145	examination, the office may review the rate for any nonhomestead
1146	property to determine if such rate is inadequate or unfairly
1147	discriminatory. Rates on nonhomestead property may be found
1148	inadequate by the office if they are clearly insufficient,
1149	together with the investment income attributable to the insurer,
1150	to sustain projected losses and expenses in the class of
1151	business to which such rates apply. Rates on nonhomestead
1152	property may also be found inadequate as to the premium charged
1153	to a risk or group of risks if discounts or credits are allowed
1154	that exceed a reasonable reflection of expense savings and
1155	reasonably expected loss experience from the risk or group of
1156	risks. Rates on nonhomestead property may be found to be
1157	unfairly discriminatory as to a risk or group of risks by the
1158	office if the application of premium discounts, credits, or
1159	surcharges among such risks does not bear a reasonable
1160	relationship to the expected loss and expense experience among
1161	the various risks. A rating plan, including discounts, credits,
1162	or surcharges on nonhomestead property, may also be found to be
1163	unfairly discriminatory if the plan fails to clearly and
1164	equitably reflect consideration of the policyholder's
1165	participation in a risk management program adjusted pursuant to
1166	s. 627.0625. The office may order an insurer to discontinue
1167	using a rate for new policies or upon renewal of a policy if the
1168	office finds the rate to be inadequate or unfairly
1169	discriminatory. Insurers shall maintain records and
1170	documentation relating to rates and forms subject to this sub-
1171	sub-sub-subparagraph for a period of at least 5 years after the
1172	effective date of the policy.
1173	b.  The three separate homestead accounts must be
1174	maintained as long as financing obligations entered into by the
1175	Florida Windstorm Underwriting Association or Residential
1176	Property and Casualty Joint Underwriting Association are
1177	outstanding, in accordance with the terms of the corresponding
1178	financing documents. When the financing obligations are no
1179	longer outstanding, in accordance with the terms of the
1180	corresponding financing documents, the corporation may use a
1181	single homestead account for all revenues, assets, liabilities,
1182	losses, and expenses of the corporation. All revenues, assets,
1183	liabilities, losses, and expenses attributable to the
1184	nonhomestead account shall be maintained separately.
1185	c.  Creditors of the Residential Property and Casualty
1186	Joint Underwriting Association shall have a claim against, and
1187	recourse to, the accounts referred to in sub-sub-sub-
1188	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II) and
1189	shall have no claim against, or recourse to, the account
1190	referred to in sub-sub-sub-subparagraph sub-sub-subparagraph
1191	a.(I)(C)(III). Creditors of the Florida Windstorm Underwriting
1192	Association shall have a claim against, and recourse to, the
1193	account referred to in sub-sub-sub-subparagraph sub-sub-
1194	subparagraph a.(I)(C)(III) and shall have no claim against, or
1195	recourse to, the accounts referred to in sub-sub-sub-
1196	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II).
1197	d.  Revenues, assets, liabilities, losses, and expenses not
1198	attributable to particular accounts shall be prorated among the
1199	accounts.
1200	e.  The Legislature finds that the revenues of the
1201	corporation are revenues that are necessary to meet the
1202	requirements set forth in documents authorizing the issuance of
1203	bonds under this subsection.
1204	f.  No part of the income of the corporation may inure to
1205	the benefit of any private person.
1206	3.  With respect to a deficit in any of the homestead
1207	accounts an account:
1208	a.  When the deficit incurred in a particular calendar year
1209	is not greater than 10 percent of the aggregate statewide direct
1210	written premium for the subject lines of business for the prior
1211	calendar year, the entire deficit shall be recovered through
1212	regular assessments of assessable insurers under paragraph (g)
1213	and assessable insureds.
1214	b.  When the deficit incurred in a particular calendar year
1215	exceeds 10 percent of the aggregate statewide direct written
1216	premium for the subject lines of business for the prior calendar
1217	year, the corporation shall levy regular assessments on
1218	assessable insurers under paragraph (g) and on assessable
1219	insureds in an amount equal to the greater of 10 percent of the
1220	deficit or 10 percent of the aggregate statewide direct written
1221	premium for the subject lines of business for the prior calendar
1222	year. Any remaining deficit shall be recovered through emergency
1223	assessments under sub-subparagraph d.
1224	c.  Each assessable insurer's share of the amount being
1225	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1226	be in the proportion that the assessable insurer's direct
1227	written premium for the subject lines of business for the year
1228	preceding the year in which the deficit is incurred assessment
1229	bears to the aggregate statewide direct written premium for the
1230	subject lines of business for that year. The assessment
1231	percentage applicable to each assessable insured is the ratio of
1232	the amount being assessed under sub-subparagraph a. or sub-
1233	subparagraph b. to the aggregate statewide direct written
1234	premium for the subject lines of business for the prior year.
1235	Assessments levied by the corporation on assessable insurers
1236	under sub-subparagraphs a. and b. shall be paid as required by
1237	the corporation's plan of operation and paragraph (g).
1238	Notwithstanding any other provision in this subsection, the
1239	aggregate amount of a regular assessment levied in connection
1240	with a deficit incurred in a particular calendar year shall be
1241	reduced by the aggregate amount of the Citizens Property
1242	Insurance Corporation policyholder surcharge imposed under
1243	subparagraph (c)10. Assessments levied by the corporation on
1244	assessable insureds under sub-subparagraphs a. and b. shall be
1245	collected by the surplus lines agent at the time the surplus
1246	lines agent collects the surplus lines tax required by s.
1247	626.932 and shall be paid to the Florida Surplus Lines Service
1248	Office at the time the surplus lines agent pays the surplus
1249	lines tax to the Florida Surplus Lines Service Office. Upon
1250	receipt of regular assessments from surplus lines agents, the
1251	Florida Surplus Lines Service Office shall transfer the
1252	assessments directly to the corporation as determined by the
1253	corporation.
1254	d.  Upon a determination by the board of governors that a
1255	deficit in an account exceeds the amount that will be recovered
1256	through regular assessments under sub-subparagraph a. or sub-
1257	subparagraph b., the board shall levy, after verification by the
1258	office, emergency assessments, for as many years as necessary to
1259	cover the deficits, to be collected by assessable insurers and
1260	the corporation and collected from assessable insureds upon
1261	issuance or renewal of policies for subject lines of business,
1262	excluding National Flood Insurance policies. The amount of the
1263	emergency assessment collected in a particular year shall be a
1264	uniform percentage of that year's direct written premium for
1265	subject lines of business and all accounts of the corporation,
1266	excluding National Flood Insurance Program policy premiums, as
1267	annually determined by the board and verified by the office. The
1268	office shall verify the arithmetic calculations involved in the
1269	board's determination within 30 days after receipt of the
1270	information on which the determination was based.
1271	Notwithstanding any other provision of law, the corporation and
1272	each assessable insurer that writes subject lines of business
1273	shall collect emergency assessments from its policyholders
1274	without such obligation being affected by any credit,
1275	limitation, exemption, or deferment. Emergency assessments
1276	levied by the corporation on assessable insureds shall be
1277	collected by the surplus lines agent at the time the surplus
1278	lines agent collects the surplus lines tax required by s.
1279	626.932 and shall be paid to the Florida Surplus Lines Service
1280	Office at the time the surplus lines agent pays the surplus
1281	lines tax to the Florida Surplus Lines Service Office. The
1282	emergency assessments so collected shall be transferred directly
1283	to the corporation on a periodic basis as determined by the
1284	corporation and shall be held by the corporation solely in the
1285	applicable account. The aggregate amount of emergency
1286	assessments levied for an account under this sub-subparagraph in
1287	any calendar year may not exceed the greater of 10 percent of
1288	the amount needed to cover the original deficit, plus interest,
1289	fees, commissions, required reserves, and other costs associated
1290	with financing of the original deficit, or 10 percent of the
1291	aggregate statewide direct written premium for subject lines of
1292	business and for all accounts of the corporation for the prior
1293	year, plus interest, fees, commissions, required reserves, and
1294	other costs associated with financing the original deficit.
1295	e.  The corporation may pledge the proceeds of assessments,
1296	projected recoveries from the Florida Hurricane Catastrophe
1297	Fund, other insurance and reinsurance recoverables, Citizens
1298	policyholder market equalization surcharges and other
1299	surcharges, and other funds available to the corporation as the
1300	source of revenue for and to secure bonds issued under paragraph
1301	(g), bonds or other indebtedness issued under subparagraph
1302	(c)3., or lines of credit or other financing mechanisms issued
1303	or created under this subsection, or to retire any other debt
1304	incurred as a result of deficits or events giving rise to
1305	deficits, or in any other way that the board determines will
1306	efficiently recover such deficits. The purpose of the lines of
1307	credit or other financing mechanisms is to provide additional
1308	resources to assist the corporation in covering claims and
1309	expenses attributable to a catastrophe. As used in this
1310	subsection, the term "assessments" includes regular assessments
1311	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1312	(g)1. and emergency assessments under sub-subparagraph d.
1313	Emergency assessments collected under sub-subparagraph d. are
1314	not part of an insurer's rates, are not premium, and are not
1315	subject to premium tax, fees, or commissions; however, failure
1316	to pay the emergency assessment shall be treated as failure to
1317	pay premium. The emergency assessments under sub-subparagraph d.
1318	shall continue as long as any bonds issued or other indebtedness
1319	incurred with respect to a deficit for which the assessment was
1320	imposed remain outstanding, unless adequate provision has been
1321	made for the payment of such bonds or other indebtedness
1322	pursuant to the documents governing such bonds or other
1323	indebtedness.
1324	f.  As used in this subsection, the term "subject lines of
1325	business" means insurance written by assessable insurers or
1326	procured by assessable insureds on real or personal property, as
1327	defined in s. 624.604, including insurance for fire, industrial
1328	fire, allied lines, farmowners multiperil, homeowners
1329	multiperil, commercial multiperil, and mobile homes, and
1330	including liability coverage on all such insurance, but
1331	excluding inland marine as defined in s. 624.607(3) and
1332	excluding vehicle insurance as defined in s. 624.605(1) other
1333	than insurance on mobile homes used as permanent dwellings.
1334	g.  The Florida Surplus Lines Service Office shall
1335	determine annually the aggregate statewide written premium in
1336	subject lines of business procured by assessable insureds and
1337	shall report that information to the corporation in a form and
1338	at a time the corporation specifies to ensure that the
1339	corporation can meet the requirements of this subsection and the
1340	corporation's financing obligations.
1341	h.  The Florida Surplus Lines Service Office shall verify
1342	the proper application by surplus lines agents of assessment
1343	percentages for regular assessments and emergency assessments
1344	levied under this subparagraph on assessable insureds and shall
1345	assist the corporation in ensuring the accurate, timely
1346	collection and payment of assessments by surplus lines agents as
1347	required by the corporation.
1348	4.  With respect to a deficit in the nonhomestead account
1349	or to any cash flow shortfall that the board determines will
1350	create an inability for the nonhomestead account to pay claims
1351	when due:
1352	a.  The board shall levy an immediate assessment against
1353	the premium of each nonhomestead account policyholder, expressed
1354	as a uniform percentage of the premium for the policy then in
1355	effect. The maximum amount of such assessment is 100 percent of
1356	such premium.
1357	b.  If the assessment under sub-subparagraph a. is
1358	insufficient to enable the account to pay claims and eliminate
1359	the deficit in the account, the board may levy an additional
1360	assessment to be collected at the time of any issuance or
1361	renewal of a nonhomestead account policy during the 1-year
1362	period following the levy of the assessment under sub-
1363	subparagraph a., expressed as a uniform percentage of the
1364	premium for the policy for the forthcoming policy period. The
1365	maximum amount of such assessment is 100 percent of such
1366	premium.
1367	c.  If the assessments under sub-subparagraphs a. and b.
1368	are insufficient to enable the account to pay claims and
1369	eliminate the deficit in the account, the board may make a loan
1370	from any of the homestead accounts to the nonhomestead account,
1371	subject to approval by the office and provided that such loan
1372	does not impair the financial status of any of the homestead
1373	accounts.
1374	5.  A policyholder in a nonhomestead account who has not
1375	paid a deficit assessment levied by the corporation shall be
1376	ineligible for coverage by a surplus lines insurer or authorized
1377	insurer.
1378	(c)  The plan of operation of the corporation:
1379	1.  Must provide for adoption of residential property and
1380	casualty insurance policy forms, rates, and underwriting rules
1381	and commercial residential and nonresidential property insurance
1382	forms, rates, and underwriting rules which forms must be
1383	approved by the office prior to use. The corporation shall adopt
1384	the following policy forms:
1385	a.  Standard personal lines policy forms that are
1386	comprehensive multiperil policies providing full coverage of a
1387	residential property equivalent to the coverage provided in the
1388	private insurance market under an HO-3, HO-4, or HO-6 policy.
1389	b.  Basic personal lines policy forms that are policies
1390	similar to an HO-8 policy or a dwelling fire policy that provide
1391	coverage meeting the requirements of the secondary mortgage
1392	market, but which coverage is more limited than the coverage
1393	under a standard policy.
1394	c.  Commercial lines residential policy forms that are
1395	generally similar to the basic perils of full coverage
1396	obtainable for commercial residential structures in the admitted
1397	voluntary market.
1398	d.  Personal lines and commercial lines residential
1399	property insurance forms that cover the peril of wind only. The
1400	forms are applicable only to residential properties located in
1401	areas eligible for coverage under the high-risk account referred
1402	to in sub-subparagraph (b)2.a.
1403	e.  Commercial lines nonresidential property insurance
1404	forms that cover the peril of wind only. The forms are
1405	applicable only to nonresidential properties located in areas
1406	eligible for coverage under the high-risk account referred to in
1407	sub-subparagraph (b)2.a.
1408	f.  The corporation may adopt variations of the policy
1409	forms listed in sub-subparagraphs a.-e. that contain more
1410	restrictive coverage.
1411	2.a.  Must provide that the corporation adopt a program in
1412	which the corporation and authorized insurers enter into quota
1413	share primary insurance agreements for hurricane coverage, as
1414	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1415	property insurance forms for eligible risks which cover the
1416	peril of wind only. As used in this subsection, the term:
1417	(I)  "Quota share primary insurance" means an arrangement
1418	in which the primary hurricane coverage of an eligible risk is
1419	provided in specified percentages by the corporation and an
1420	authorized insurer. The corporation and authorized insurer are
1421	each solely responsible for a specified percentage of hurricane
1422	coverage of an eligible risk as set forth in a quota share
1423	primary insurance agreement between the corporation and an
1424	authorized insurer and the insurance contract. The
1425	responsibility of the corporation or authorized insurer to pay
1426	its specified percentage of hurricane losses of an eligible
1427	risk, as set forth in the quota share primary insurance
1428	agreement, may not be altered by the inability of the other
1429	party to the agreement to pay its specified percentage of
1430	hurricane losses. Eligible risks that are provided hurricane
1431	coverage through a quota share primary insurance arrangement
1432	must be provided policy forms that set forth the obligations of
1433	the corporation and authorized insurer under the arrangement,
1434	clearly specify the percentages of quota share primary insurance
1435	provided by the corporation and authorized insurer, and
1436	conspicuously and clearly state that neither the authorized
1437	insurer nor the corporation may be held responsible beyond its
1438	specified percentage of coverage of hurricane losses.
1439	(II)  "Eligible risks" means personal lines residential and
1440	commercial lines residential risks that meet the underwriting
1441	criteria of the corporation and are located in areas that were
1442	eligible for coverage by the Florida Windstorm Underwriting
1443	Association on January 1, 2002.
1444	b.  The corporation may enter into quota share primary
1445	insurance agreements with authorized insurers at corporation
1446	coverage levels of 90 percent and 50 percent.
1447	c.  If the corporation determines that additional coverage
1448	levels are necessary to maximize participation in quota share
1449	primary insurance agreements by authorized insurers, the
1450	corporation may establish additional coverage levels. However,
1451	the corporation's quota share primary insurance coverage level
1452	may not exceed 90 percent.
1453	d.  Any quota share primary insurance agreement entered
1454	into between an authorized insurer and the corporation must
1455	provide for a uniform specified percentage of coverage of
1456	hurricane losses, by county or territory as set forth by the
1457	corporation board, for all eligible risks of the authorized
1458	insurer covered under the quota share primary insurance
1459	agreement.
1460	e.  Any quota share primary insurance agreement entered
1461	into between an authorized insurer and the corporation is
1462	subject to review and approval by the office. However, such
1463	agreement shall be authorized only as to insurance contracts
1464	entered into between an authorized insurer and an insured who is
1465	already insured by the corporation for wind coverage.
1466	f.  For all eligible risks covered under quota share
1467	primary insurance agreements, the exposure and coverage levels
1468	for both the corporation and authorized insurers shall be
1469	reported by the corporation to the Florida Hurricane Catastrophe
1470	Fund. For all policies of eligible risks covered under quota
1471	share primary insurance agreements, the corporation and the
1472	authorized insurer shall maintain complete and accurate records
1473	for the purpose of exposure and loss reimbursement audits as
1474	required by Florida Hurricane Catastrophe Fund rules. The
1475	corporation and the authorized insurer shall each maintain
1476	duplicate copies of policy declaration pages and supporting
1477	claims documents.
1478	g.  The corporation board shall establish in its plan of
1479	operation standards for quota share agreements which ensure that
1480	there is no discriminatory application among insurers as to the
1481	terms of quota share agreements, pricing of quota share
1482	agreements, incentive provisions if any, and consideration paid
1483	for servicing policies or adjusting claims.
1484	h.  The quota share primary insurance agreement between the
1485	corporation and an authorized insurer must set forth the
1486	specific terms under which coverage is provided, including, but
1487	not limited to, the sale and servicing of policies issued under
1488	the agreement by the insurance agent of the authorized insurer
1489	producing the business, the reporting of information concerning
1490	eligible risks, the payment of premium to the corporation, and
1491	arrangements for the adjustment and payment of hurricane claims
1492	incurred on eligible risks by the claims adjuster and personnel
1493	of the authorized insurer. Entering into a quota sharing
1494	insurance agreement between the corporation and an authorized
1495	insurer shall be voluntary and at the discretion of the
1496	authorized insurer.
1497	3.  May provide that the corporation may employ or
1498	otherwise contract with individuals or other entities to provide
1499	administrative or professional services that may be appropriate
1500	to effectuate the plan. The corporation shall have the power to
1501	borrow funds, by issuing bonds or by incurring other
1502	indebtedness, and shall have other powers reasonably necessary
1503	to effectuate the requirements of this subsection, including,
1504	without limitation, the power to issue bonds and incur other
1505	indebtedness in order to refinance outstanding bonds or other
1506	indebtedness. The corporation may, but is not required to, seek
1507	judicial validation of its bonds or other indebtedness under
1508	chapter 75. The corporation may issue bonds or incur other
1509	indebtedness, or have bonds issued on its behalf by a unit of
1510	local government pursuant to subparagraph (g)2., in the absence
1511	of a hurricane or other weather-related event, upon a
1512	determination by the corporation, subject to approval by the
1513	office, that such action would enable it to efficiently meet the
1514	financial obligations of the corporation and that such
1515	financings are reasonably necessary to effectuate the
1516	requirements of this subsection. The corporation is authorized
1517	to take all actions needed to facilitate tax-free status for any
1518	such bonds or indebtedness, including formation of trusts or
1519	other affiliated entities. The corporation shall have the
1520	authority to pledge assessments, projected recoveries from the
1521	Florida Hurricane Catastrophe Fund, other reinsurance
1522	recoverables, market equalization and other surcharges, and
1523	other funds available to the corporation as security for bonds
1524	or other indebtedness. In recognition of s. 10, Art. I of the
1525	State Constitution, prohibiting the impairment of obligations of
1526	contracts, it is the intent of the Legislature that no action be
1527	taken whose purpose is to impair any bond indenture or financing
1528	agreement or any revenue source committed by contract to such
1529	bond or other indebtedness.
1530	4.a.  Must require that the corporation operate subject to
1531	the supervision and approval of a board of governors consisting
1532	of 8 individuals who are residents of this state, from different
1533	geographical areas of this state. The Governor, the Chief
1534	Financial Officer, the President of the Senate, and the Speaker
1535	of the House of Representatives shall each appoint two members
1536	of the board, effective August 1, 2005. At least one of the two
1537	members appointed by each appointing officer must have
1538	demonstrated expertise in insurance. The Chief Financial Officer
1539	shall designate one of the appointees as chair. All board
1540	members serve at the pleasure of the appointing officer. All
1541	board members, including the chair, must be appointed to serve
1542	for 3-year terms beginning annually on a date designated by the
1543	plan. Any board vacancy shall be filled for the unexpired term
1544	by the appointing officer. The Chief Financial Officer shall
1545	appoint a technical advisory group to provide information and
1546	advice to the board of governors in connection with the board's
1547	duties under this subsection. The executive director and senior
1548	managers of the corporation shall be engaged by the board, as
1549	recommended by the Chief Financial Officer, and serve at the
1550	pleasure of the board. The executive director is responsible for
1551	employing other staff as the corporation may require, subject to
1552	review and concurrence by the board and the Chief Financial
1553	Officer.
1554	b.  The board shall create a Market Accountability Advisory
1555	Committee to assist the corporation in developing awareness of
1556	its rates and its customer and agent service levels in
1557	relationship to the voluntary market insurers writing similar
1558	coverage. The members of the advisory committee shall consist of
1559	the following 11 persons, one of whom must be elected chair by
1560	the members of the committee: four representatives, one
1561	appointed by the Florida Association of Insurance Agents, one by
1562	the Florida Association of Insurance and Financial Advisors, one
1563	by the Professional Insurance Agents of Florida, and one by the
1564	Latin American Association of Insurance Agencies; three
1565	representatives appointed by the insurers with the three highest
1566	voluntary market share of residential property insurance
1567	business in the state; one representative from the Office of
1568	Insurance Regulation; one consumer appointed by the board who is
1569	insured by the corporation at the time of appointment to the
1570	committee; one representative appointed by the Florida
1571	Association of Realtors; and one representative appointed by the
1572	Florida Bankers Association. All members must serve for 3-year
1573	terms and may serve for consecutive terms. The committee shall
1574	report to the corporation at each board meeting on insurance
1575	market issues which may include rates and rate competition with
1576	the voluntary market; service, including policy issuance, claims
1577	processing, and general responsiveness to policyholders,
1578	applicants, and agents; and matters relating to depopulation.
1579	5.  Must provide a procedure for determining the
1580	eligibility of a risk for coverage, as follows:
1581	a.  Subject to the provisions of s. 627.3517, with respect
1582	to personal lines residential risks, if the risk is offered
1583	coverage from an authorized insurer at the insurer's approved
1584	rate under either a standard policy including wind coverage or,
1585	if consistent with the insurer's underwriting rules as filed
1586	with the office, a basic policy including wind coverage, the
1587	risk is not eligible for any policy issued by the corporation.
1588	If the risk is not able to obtain any such offer, the risk is
1589	eligible for either a standard policy including wind coverage or
1590	a basic policy including wind coverage issued by the
1591	corporation; however, if the risk could not be insured under a
1592	standard policy including wind coverage regardless of market
1593	conditions, the risk shall be eligible for a basic policy
1594	including wind coverage unless rejected under subparagraph 8.
1595	The corporation shall determine the type of policy to be
1596	provided on the basis of objective standards specified in the
1597	underwriting manual and based on generally accepted underwriting
1598	practices.
1599	(I)  If the risk accepts an offer of coverage through the
1600	market assistance plan or an offer of coverage through a
1601	mechanism established by the corporation before a policy is
1602	issued to the risk by the corporation or during the first 30
1603	days of coverage by the corporation, and the producing agent who
1604	submitted the application to the plan or to the corporation is
1605	not currently appointed by the insurer, the insurer shall:
1606	(A)  Pay to the producing agent of record of the policy,
1607	for the first year, an amount that is the greater of the
1608	insurer's usual and customary commission for the type of policy
1609	written or a fee equal to the usual and customary commission of
1610	the corporation; or
1611	(B)  Offer to allow the producing agent of record of the
1612	policy to continue servicing the policy for a period of not less
1613	than 1 year and offer to pay the agent the greater of the
1614	insurer's or the corporation's usual and customary commission
1615	for the type of policy written.
1616
1617	If the producing agent is unwilling or unable to accept
1618	appointment, the new insurer shall pay the agent in accordance
1619	with sub-sub-sub-subparagraph (A).
1620	(II)  When the corporation enters into a contractual
1621	agreement for a take-out plan, the producing agent of record of
1622	the corporation policy is entitled to retain any unearned
1623	commission on the policy, and the insurer shall:
1624	(A)  Pay to the producing agent of record of the
1625	corporation policy, for the first year, an amount that is the
1626	greater of the insurer's usual and customary commission for the
1627	type of policy written or a fee equal to the usual and customary
1628	commission of the corporation; or
1629	(B)  Offer to allow the producing agent of record of the
1630	corporation policy to continue servicing the policy for a period
1631	of not less than 1 year and offer to pay the agent the greater
1632	of the insurer's or the corporation's usual and customary
1633	commission for the type of policy written.
1634
1635	If the producing agent is unwilling or unable to accept
1636	appointment, the new insurer shall pay the agent in accordance
1637	with sub-sub-sub-subparagraph (A).
1638	b.  With respect to commercial lines residential risks, if
1639	the risk is offered coverage under a policy including wind
1640	coverage from an authorized insurer at its approved rate, the
1641	risk is not eligible for any policy issued by the corporation.
1642	If the risk is not able to obtain any such offer, the risk is
1643	eligible for a policy including wind coverage issued by the
1644	corporation.
1645	(I)  If the risk accepts an offer of coverage through the
1646	market assistance plan or an offer of coverage through a
1647	mechanism established by the corporation before a policy is
1648	issued to the risk by the corporation or during the first 30
1649	days of coverage by the corporation, and the producing agent who
1650	submitted the application to the plan or the corporation is not
1651	currently appointed by the insurer, the insurer shall:
1652	(A)  Pay to the producing agent of record of the policy,
1653	for the first year, an amount that is the greater of the
1654	insurer's usual and customary commission for the type of policy
1655	written or a fee equal to the usual and customary commission of
1656	the corporation; or
1657	(B)  Offer to allow the producing agent of record of the
1658	policy to continue servicing the policy for a period of not less
1659	than 1 year and offer to pay the agent the greater of the
1660	insurer's or the corporation's usual and customary commission
1661	for the type of policy written.
1662
1663	If the producing agent is unwilling or unable to accept
1664	appointment, the new insurer shall pay the agent in accordance
1665	with sub-sub-sub-subparagraph (A).
1666	(II)  When the corporation enters into a contractual
1667	agreement for a take-out plan, the producing agent of record of
1668	the corporation policy is entitled to retain any unearned
1669	commission on the policy, and the insurer shall:
1670	(A)  Pay to the producing agent of record of the
1671	corporation policy, for the first year, an amount that is the
1672	greater of the insurer's usual and customary commission for the
1673	type of policy written or a fee equal to the usual and customary
1674	commission of the corporation; or
1675	(B)  Offer to allow the producing agent of record of the
1676	corporation policy to continue servicing the policy for a period
1677	of not less than 1 year and offer to pay the agent the greater
1678	of the insurer's or the corporation's usual and customary
1679	commission for the type of policy written.
1680
1681	If the producing agent is unwilling or unable to accept
1682	appointment, the new insurer shall pay the agent in accordance
1683	with sub-sub-sub-subparagraph (A).
1684	c.  To preserve existing incentives for carriers to write
1685	dwellings in the voluntary market and not in the corporation,
1686	the corporation shall continue to offer authorized insurers,
1687	including insurers writing dwellings valued at $1 million or
1688	more, the same voluntary writing credits that were available on
1689	January 1, 2006, to carriers writing wind coverage for dwellings
1690	in the areas eligible for coverage in the high-risk account.
1691	d.  With respect to personal lines residential risks, if
1692	the risk is a dwelling with an insured value of $1 million or
1693	more, or if the risk is one that is excluded from the coverage
1694	to be provided by the condominium association under s.
1695	718.111(11)(b) and that is insured by the condominium unit owner
1696	for a combined dwelling and contents replacement cost of $1
1697	million or more, the risk is not eligible for any policy issued
1698	by the corporation. Rates and forms for personal lines
1699	residential risks not eligible for coverage by the corporation
1700	specified by this sub-subparagraph are not subject to ss.
1701	627.062 and 627.0629. Such rates and forms are subject to all
1702	other applicable provisions of this code and rules adopted under
1703	this code. During the course of an insurer's market conduct
1704	examination, the office may review the rate for any risk to
1705	which the provisions of this sub-subparagraph are applicable to
1706	determine if such rate is inadequate or unfairly discriminatory.
1707	Rates on personal lines residential risks not eligible for
1708	coverage by the corporation may be found inadequate by the
1709	office if they are clearly insufficient, together with the
1710	investment income attributable to such risks, to sustain
1711	projected losses and expenses in the class of business to which
1712	such rates apply. Rates on personal lines residential risks not
1713	eligible for coverage by the corporation may also be found
1714	inadequate as to the premium charged to a risk or group of risks
1715	if discounts or credits are allowed that exceed a reasonable
1716	reflection of expense savings and reasonably expected loss
1717	experience from the risk or group of risks. Rates on personal
1718	lines residential risks not eligible for coverage by the
1719	corporation may be found to be unfairly discriminatory as to a
1720	risk or group of risks by the office if the application of
1721	premium discounts, credits, or surcharges among such risks does
1722	not bear a reasonable relationship to the expected loss and
1723	expense experience among the various risks. A rating plan,
1724	including discounts, credits, or surcharges on personal lines
1725	residential risks not eligible for coverage by the corporation
1726	may also be found to be unfairly discriminatory if the plan
1727	fails to clearly and equitably reflect consideration of the
1728	policyholder's participation in a risk management program
1729	adjusted pursuant to s. 627.0625. The office may order an
1730	insurer to discontinue using a rate for new policies or upon
1731	renewal of a policy if the office finds the rate to be
1732	inadequate or unfairly discriminatory. Insurers must maintain
1733	records and documentation relating to rates and forms subject to
1734	this sub-subparagraph for a period of at least 5 years after the
1735	effective date of the policy.
1736	e.  For policies subject to nonrenewal as a result of the
1737	risk being no longer eligible for coverage pursuant to sub-
1738	subparagraph d., the corporation shall, directly or through the
1739	market assistance plan, make information from confidential
1740	underwriting and claims files of policyholders available only to
1741	licensed general lines agents who register with the corporation
1742	to receive such information according to the following
1743	procedures:
1744	(I)  By August 1, 2006, the corporation shall provide
1745	policyholders who are not eligible for renewal pursuant to sub-
1746	subparagraph d. the opportunity to request in writing, within 30
1747	days after the notification is sent, that information from their
1748	confidential underwriting and claims files not be released to
1749	licensed general lines agents registered pursuant to sub-sub-
1750	subparagraph e.(II);
1751	(II)  By August 1, 2006, the corporation shall make
1752	available to licensed general lines agents the registration
1753	procedures to be used to obtain confidential information from
1754	underwriting and claims files for policies not eligible for
1755	renewal pursuant to sub-subparagraph d. As a condition of
1756	registration, the corporation shall require the licensed general
1757	lines agent to attest that the agent has the experience and
1758	relationships with authorized or surplus lines carriers to
1759	attempt to offer replacement coverage for policies not eligible
1760	for renewal pursuant to sub-subparagraph d.
1761	(III)  By September 1, 2006, the corporation shall make
1762	available through a secured website to licensed general lines
1763	agents registered pursuant to sub-sub-subparagraph e.(II)
1764	application, rating, loss history, mitigation, and policy type
1765	information relating to all policies not eligible for renewal
1766	pursuant to sub-subparagraph d. and for which the policyholder
1767	has not requested the corporation withhold such information
1768	pursuant to sub-sub-subparagraph e.(I). The licensed general
1769	lines agent registered pursuant to sub-sub-subparagraph e.(II)
1770	may use such information to contact and assist the policyholder
1771	in securing replacement policies and the agent may disclose to
1772	the policyholder such information was obtained from the
1773	corporation.
1774	f.  With respect to nonhomestead property, eligibility must
1775	be determined in accordance with sub-sub-sub-subparagraph
1776	(b)2.a.(II)(A).
1777	6.  Must include rules for classifications of risks and
1778	rates therefor.
1779	7.  Must provide that if premium and investment income for
1780	an account attributable to a particular calendar year are in
1781	excess of projected losses and expenses for the account
1782	attributable to that year, such excess shall be held in surplus
1783	in the account. Such surplus shall be available to defray
1784	deficits in that account as to future years and shall be used
1785	for that purpose prior to assessing assessable insurers and
1786	assessable insureds as to any calendar year.
1787	8.  Must provide objective criteria and procedures to be
1788	uniformly applied for all applicants in determining whether an
1789	individual risk is so hazardous as to be uninsurable. In making
1790	this determination and in establishing the criteria and
1791	procedures, the following shall be considered:
1792	a.  Whether the likelihood of a loss for the individual
1793	risk is substantially higher than for other risks of the same
1794	class; and
1795	b.  Whether the uncertainty associated with the individual
1796	risk is such that an appropriate premium cannot be determined.
1797
1798	The acceptance or rejection of a risk by the corporation shall
1799	be construed as the private placement of insurance, and the
1800	provisions of chapter 120 shall not apply.
1801	9.  Must provide that the corporation shall make its best
1802	efforts to procure catastrophe reinsurance at reasonable rates,
1803	to cover its projected 100-year probable maximum loss in the
1804	homestead accounts as determined by the board of governors.
1805	10.  Must provide that in the event of regular deficit
1806	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1807	(b)3.b., in the personal lines homestead account, the commercial
1808	lines residential homestead account, or the high-risk homestead
1809	account, the corporation shall levy upon corporation homestead
1810	account policyholders in its next rate filing, or by a separate
1811	rate filing solely for this purpose, a Citizens policyholder
1812	market equalization surcharge arising from a regular assessment
1813	in such account in a percentage equal to the total amount of
1814	such regular assessments divided by the aggregate statewide
1815	direct written premium for subject lines of business for the
1816	prior calendar year preceding the year in which the deficit to
1817	which the regular assessment related is incurred. Citizens
1818	policyholder Market equalization surcharges under this
1819	subparagraph are not considered premium and are not subject to
1820	commissions, fees, or premium taxes; however, failure to pay the
1821	Citizens policyholder a market equalization surcharge shall be
1822	treated as failure to pay premium. Notwithstanding any other
1823	provision of this section, for purposes of the Citizens
1824	policyholder surcharges to be levied pursuant to this
1825	subparagraph, the total amount of the regular assessment to
1826	which such Citizens policyholder surcharge relates shall be
1827	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
1828	11.  The policies issued by the corporation must provide
1829	that, if the corporation or the market assistance plan obtains
1830	an offer from an authorized insurer to cover the risk at its
1831	approved rates, the risk is no longer eligible for renewal
1832	through the corporation.
1833	12.  Corporation policies and applications must include a
1834	notice that the corporation policy could, under this section, be
1835	replaced with a policy issued by an authorized insurer that does
1836	not provide coverage identical to the coverage provided by the
1837	corporation or an insurer writing coverage pursuant to part VIII
1838	of chapter 626. The notice shall also specify that acceptance of
1839	corporation coverage creates a conclusive presumption that the
1840	applicant or policyholder is aware of this potential.
1841	13.  May establish, subject to approval by the office,
1842	different eligibility requirements and operational procedures
1843	for any line or type of coverage for any specified county or
1844	area if the board determines that such changes to the
1845	eligibility requirements and operational procedures are
1846	justified due to the voluntary market being sufficiently stable
1847	and competitive in such area or for such line or type of
1848	coverage and that consumers who, in good faith, are unable to
1849	obtain insurance through the voluntary market through ordinary
1850	methods would continue to have access to coverage from the
1851	corporation. When coverage is sought in connection with a real
1852	property transfer, such requirements and procedures shall not
1853	provide for an effective date of coverage later than the date of
1854	the closing of the transfer as established by the transferor,
1855	the transferee, and, if applicable, the lender.
1856	14.  Must provide that, with respect to the high-risk
1857	homestead account, any assessable insurer with a surplus as to
1858	policyholders of $25 million or less writing 25 percent or more
1859	of its total countrywide property insurance premiums in this
1860	state may petition the office, within the first 90 days of each
1861	calendar year, to qualify as a limited apportionment company. In
1862	no event shall a limited apportionment company be required to
1863	participate in the portion of any assessment, within the high-
1864	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
1865	subparagraph (b)3.b. in the aggregate which exceeds $50 million
1866	after payment of available high-risk account funds in any
1867	calendar year. However, a limited apportionment company shall
1868	collect from its policyholders any emergency assessment imposed
1869	under sub-subparagraph (b)3.d. The plan shall provide that, if
1870	the office determines that any regular assessment will result in
1871	an impairment of the surplus of a limited apportionment company,
1872	the office may direct that all or part of such assessment be
1873	deferred as provided in subparagraph (g)4. However, there shall
1874	be no limitation or deferment of an emergency assessment to be
1875	collected from policyholders under sub-subparagraph (b)3.d.
1876	15.  Must provide that the corporation appoint as its
1877	licensed agents only those agents who also hold an appointment
1878	as defined in s. 626.015(3) with an insurer who at the time of
1879	the agent's initial appointment by the corporation is authorized
1880	to write and is actually writing personal lines residential
1881	property coverage, commercial residential property coverage, or
1882	commercial nonresidential property coverage within the state.
1883	16.  Must provide that the hurricane deductible for any
1884	property in the nonhomestead account with an insured value of
1885	$250,000 or more must be at least 5 percent of the insured
1886	value.
1887	17.  Must provide that the application for coverage under
1888	the nonhomestead account and the declaration page of each
1889	nonhomestead account policy include a statement in boldface 12-
1890	point type specifying that public subsidies do not support the
1891	corporation's coverage of nonhomestead property; that if the
1892	nonhomestead account of the corporation sustains a deficit or is
1893	unable to pay claims, the nonhomestead policyholder shall be
1894	subject to an immediate assessment in an amount up to 100
1895	percent of the premium and a further assessment upon renewal of
1896	the policy; and that the applicant or policyholder may wish to
1897	seek alternative coverage from an authorized insurer or surplus
1898	lines insurer that will not be subject to such potential
1899	assessments.
1900	18.  Must provide that the application for coverage under
1901	any of the homestead accounts and the declaration page of each
1902	homestead account policy include a statement in boldface 12-
1903	point type specifying that a false declaration of homestead
1904	status for purposes of obtaining coverage in any of the
1905	homestead accounts may constitute the offense of insurance
1906	fraud, as prohibited and punishable as a felony under s.
1907	817.234.
1908	19.  Must limit coverage on mobile or manufactured homes
1909	built prior to 1994 to actual cash value of the dwelling rather
1910	than replacement costs of the dwelling.
1911	20.  Must provide for purchase by the corporation of
1912	catastrophe reinsurance on the nonhomestead account in amounts
1913	sufficient, together with coverage under the Florida Hurricane
1914	Catastrophe Fund, to cover the account's 250-year probable
1915	maximum loss.
1916	(d)1.a.  It is the intent of the Legislature that the rates
1917	for coverage provided by the corporation be actuarially sound
1918	and not competitive with approved rates charged in the admitted
1919	voluntary market, so that the corporation functions as a
1920	residual market mechanism to provide insurance only when the
1921	insurance cannot be procured in the voluntary market. Rates
1922	shall include a residual market risk load that reflects the
1923	concentrated exposure of the corporation and the impact of
1924	adverse selection as well as an appropriate catastrophe loading
1925	factor that reflects the actual catastrophic exposure of the
1926	corporation.
1927	b.  It is the intent of the Legislature to reaffirm the
1928	requirement of rate adequacy in the residual market. Recognizing
1929	that rates may comply with the intent expressed in sub-
1930	subparagraph a. and yet be inadequate and recognizing the public
1931	need to limit subsidies within the residual market, it is the
1932	further intent of the Legislature to establish statutory
1933	standards for rate adequacy. Such standards are intended to
1934	supplement the standard specified in s. 627.062(2)(e)3.,
1935	providing that rates are inadequate if they are clearly
1936	insufficient to sustain projected losses and expenses in the
1937	class of business to which they apply.
1938	2.  For each county, the average rates of the corporation
1939	for each line of business for personal lines residential
1940	policies excluding rates for wind-only policies shall be no
1941	lower than the average rates charged by the insurer that had the
1942	highest average rate in that county among the 20 insurers with
1943	the greatest total direct written premium in the state for that
1944	line of business in the preceding year, except that with respect
1945	to mobile home coverages, the average rates of the corporation
1946	shall be no lower than the average rates charged by the insurer
1947	that had the highest average rate in that county among the 5
1948	insurers with the greatest total written premium for mobile home
1949	owner's policies in the state in the preceding year.
1950	3.  Rates for personal lines residential wind-only policies
1951	must be actuarially sound and not competitive with approved
1952	rates charged by authorized insurers. Corporation rate manuals
1953	shall include a rate surcharge for seasonal occupancy. To ensure
1954	that personal lines residential wind-only rates are not
1955	competitive with approved rates charged by authorized insurers,
1956	the corporation, in conjunction with the office, shall develop a
1957	wind-only ratemaking methodology, which methodology shall be
1958	contained in each rate filing made by the corporation with the
1959	office. If the office determines that the wind-only rates or
1960	rating factors filed by the corporation fail to comply with the
1961	wind-only ratemaking methodology provided for in this
1962	subsection, it shall so notify the corporation and require the
1963	corporation to amend its rates or rating factors to come into
1964	compliance within 90 days of notice from the office.
1965	4.  For the purposes of establishing a pilot program to
1966	evaluate issues relating to the availability and affordability
1967	of insurance in an area where historically there has been little
1968	market competition, the provisions of subparagraph 2. do not
1969	apply to coverage provided by the corporation in Monroe County
1970	if the office determines that a reasonable degree of competition
1971	does not exist for personal lines residential policies. The
1972	provisions of subparagraph 3. do not apply to coverage provided
1973	by the corporation in Monroe County if the office determines
1974	that a reasonable degree of competition does not exist for
1975	personal lines residential policies in the area of that county
1976	which is eligible for wind-only coverage. In this county, the
1977	rates for personal lines residential coverage shall be
1978	actuarially sound and not excessive, inadequate, or unfairly
1979	discriminatory and are subject to the other provisions of the
1980	paragraph and s. 627.062. The commission shall adopt rules
1981	establishing the criteria for determining whether a reasonable
1982	degree of competition exists for personal lines residential
1983	policies in Monroe County. By March 1, 2006, the office shall
1984	submit a report to the Legislature providing an evaluation of
1985	the implementation of the pilot program affecting Monroe County.
1986	5.  Rates for commercial lines coverage shall not be
1987	subject to the requirements of subparagraph 2., but shall be
1988	subject to all other requirements of this paragraph and s.
1989	627.062.
1990	6.a.  Nothing in this paragraph shall require or allow the
1991	corporation to adopt a rate that is inadequate under s. 627.062
1992	or under sub-subparagraph b. or sub-subparagraph c.
1993	b.  With respect to rates for coverage in any homestead
1994	account, a rate is deemed inadequate if the rate is not
1995	sufficient to generate, by means of cash flow, procurement of
1996	coverage under the Florida Hurricane Catastrophe Fund;
1997	procurement of reinsurance; and investment income, moneys
1998	sufficient to pay all claims and expenses reasonably expected to
1999	result from a 100-year probable maximum loss event without
2000	resort to any regular or emergency assessments, long-term debt,
2001	state revenues, or other funding sources that reflect any
2002	subsidy from persons or entities other than corporation
2003	homestead accounts policyholders.
2004	c.  With respect to rates for coverage in the nonhomestead
2005	account, a rate is deemed inadequate if the rate is not
2006	sufficient to generate, by means of cash flow, procurement of
2007	coverage under the Florida Hurricane Catastrophe Fund;
2008	procurement of reinsurance; and investment income, moneys
2009	sufficient to pay all claims and expenses reasonably expected to
2010	result from a 250-year probable maximum loss event without
2011	resort to any assessments, debt, state revenues, or other
2012	funding sources that reflect any subsidy from persons or
2013	entities other than corporation nonhomestead account
2014	policyholders.
2015	7.  The corporation shall certify to the office at least
2016	twice annually that its personal lines rates comply with the
2017	requirements of subparagraphs 1., and 2., and 6. If any
2018	adjustment in the rates or rating factors of the corporation is
2019	necessary to ensure such compliance, the corporation shall make
2020	and implement such adjustments and file its revised rates and
2021	rating factors with the office. If the office thereafter
2022	determines that the revised rates and rating factors fail to
2023	comply with the provisions of subparagraphs 1. and 2., it shall
2024	notify the corporation and require the corporation to amend its
2025	rates or rating factors in conjunction with its next rate
2026	filing. The office must notify the corporation by electronic
2027	means of any rate filing it approves for any insurer among the
2028	insurers referred to in subparagraph 2.
2029	8.  In addition to the rates otherwise determined pursuant
2030	to this paragraph, the corporation shall impose and collect an
2031	amount equal to the premium tax provided for in s. 624.509 to
2032	augment the financial resources of the corporation.
2033	9.a.  To assist the corporation in developing additional
2034	ratemaking methods to assure compliance with subparagraphs 1.
2035	and 4., the corporation shall appoint a rate methodology panel
2036	consisting of one person recommended by the Florida Association
2037	of Insurance Agents, one person recommended by the Professional
2038	Insurance Agents of Florida, one person recommended by the
2039	Florida Association of Insurance and Financial Advisors, one
2040	person recommended by the insurer with the highest voluntary
2041	market share of residential property insurance business in the
2042	state, one person recommended by the insurer with the second-
2043	highest voluntary market share of residential property insurance
2044	business in the state, one person recommended by an insurer
2045	writing commercial residential property insurance in this state,
2046	one person recommended by the Office of Insurance Regulation,
2047	and one board member designated by the board chairman, who shall
2048	serve as chairman of the panel.
2049	b.  By January 1, 2004, the rate methodology panel shall
2050	provide a report to the corporation of its findings and
2051	recommendations for the use of additional ratemaking methods and
2052	procedures, including the use of a rate equalization surcharge
2053	in an amount sufficient to assure that the total cost of
2054	coverage for policyholders or applicants to the corporation is
2055	sufficient to comply with subparagraph 1.
2056	c.  Within 30 days after such report, the corporation shall
2057	present to the President of the Senate, the Speaker of the House
2058	of Representatives, the minority party leaders of each house of
2059	the Legislature, and the chairs of the standing committees of
2060	each house of the Legislature having jurisdiction of insurance
2061	issues, a plan for implementing the additional ratemaking
2062	methods and an outline of any legislation needed to facilitate
2063	use of the new methods.
2064	d.  The plan must include a provision that producer
2065	commissions paid by the corporation shall not be calculated in
2066	such a manner as to include any rate equalization surcharge.
2067	However, without regard to the plan to be developed or its
2068	implementation, producer commissions paid by the corporation for
2069	each account, other than the quota share primary program, shall
2070	remain fixed as to percentage, effective rate, calculation, and
2071	payment method until January 1, 2004.
2072	9.10.  By January 1, 2004, The corporation shall provide
2073	develop a notice to policyholders or applicants that the rates
2074	of Citizens Property Insurance Corporation are intended to be
2075	higher than the rates of any admitted carrier and providing
2076	other information the corporation deems necessary to assist
2077	consumers in finding other voluntary admitted insurers willing
2078	to insure their property.
2079	(e)  If coverage in an account is deactivated pursuant to
2080	paragraph (f), coverage through the corporation shall be
2081	reactivated by order of the office only under one of the
2082	following circumstances:
2083	1.  If the market assistance plan receives a minimum of 100
2084	applications for coverage within a 3-month period, or 200
2085	applications for coverage within a 1-year period or less for
2086	residential coverage, unless the market assistance plan provides
2087	a quotation from admitted carriers at their filed rates for at
2088	least 90 percent of such applicants. Any market assistance plan
2089	application that is rejected because an individual risk is so
2090	hazardous as to be uninsurable using the criteria specified in
2091	subparagraph (c)8. shall not be included in the minimum
2092	percentage calculation provided herein. In the event that there
2093	is a legal or administrative challenge to a determination by the
2094	office that the conditions of this subparagraph have been met
2095	for eligibility for coverage in the corporation, any eligible
2096	risk may obtain coverage during the pendency of such challenge.
2097	2.  In response to a state of emergency declared by the
2098	Governor under s. 252.36, the office may activate coverage by
2099	order for the period of the emergency upon a finding by the
2100	office that the emergency significantly affects the availability
2101	of residential property insurance.
2102	(f)1.  The corporation shall file with the office quarterly
2103	statements of financial condition, an annual statement of
2104	financial condition, and audited financial statements in the
2105	manner prescribed by law. In addition, the corporation shall
2106	report to the office monthly on the types, premium, exposure,
2107	and distribution by county of its policies in force, and shall
2108	submit other reports as the office requires to carry out its
2109	oversight of the corporation.
2110	2.  The activities of the corporation shall be reviewed at
2111	least annually by the office to determine whether coverage shall
2112	be deactivated in an account on the basis that the conditions
2113	giving rise to its activation no longer exist.
2114	(g)1.  The corporation shall certify to the office its
2115	needs for annual assessments as to a particular calendar year,
2116	and for any interim assessments that it deems to be necessary to
2117	sustain operations as to a particular year pending the receipt
2118	of annual assessments. Upon verification, the office shall
2119	approve such certification, and the corporation shall levy such
2120	annual or interim assessments. Such assessments shall be
2121	prorated as provided in paragraph (b). The corporation shall
2122	take all reasonable and prudent steps necessary to collect the
2123	amount of assessment due from each assessable insurer,
2124	including, if prudent, filing suit to collect such assessment.
2125	If the corporation is unable to collect an assessment from any
2126	assessable insurer, the uncollected assessments shall be levied
2127	as an additional assessment against the assessable insurers and
2128	any assessable insurer required to pay an additional assessment
2129	as a result of such failure to pay shall have a cause of action
2130	against such nonpaying assessable insurer. Assessments shall be
2131	included as an appropriate factor in the making of rates. The
2132	failure of a surplus lines agent to collect and remit any
2133	regular or emergency assessment levied by the corporation is
2134	considered to be a violation of s. 626.936 and subjects the
2135	surplus lines agent to the penalties provided in that section.
2136	2.  The governing body of any unit of local government, any
2137	residents of which are insured by the corporation, may issue
2138	bonds as defined in s. 125.013 or s. 166.101 from time to time
2139	to fund an assistance program, in conjunction with the
2140	corporation, for the purpose of defraying deficits of the
2141	corporation. In order to avoid needless and indiscriminate
2142	proliferation, duplication, and fragmentation of such assistance
2143	programs, any unit of local government, any residents of which
2144	are insured by the corporation, may provide for the payment of
2145	losses, regardless of whether or not the losses occurred within
2146	or outside of the territorial jurisdiction of the local
2147	government. Revenue bonds under this subparagraph may not be
2148	issued until validated pursuant to chapter 75, unless a state of
2149	emergency is declared by executive order or proclamation of the
2150	Governor pursuant to s. 252.36 making such findings as are
2151	necessary to determine that it is in the best interests of, and
2152	necessary for, the protection of the public health, safety, and
2153	general welfare of residents of this state and declaring it an
2154	essential public purpose to permit certain municipalities or
2155	counties to issue such bonds as will permit relief to claimants
2156	and policyholders of the corporation. Any such unit of local
2157	government may enter into such contracts with the corporation
2158	and with any other entity created pursuant to this subsection as
2159	are necessary to carry out this paragraph. Any bonds issued
2160	under this subparagraph shall be payable from and secured by
2161	moneys received by the corporation from emergency assessments
2162	under sub-subparagraph (b)3.d., and assigned and pledged to or
2163	on behalf of the unit of local government for the benefit of the
2164	holders of such bonds. The funds, credit, property, and taxing
2165	power of the state or of the unit of local government shall not
2166	be pledged for the payment of such bonds. If any of the bonds
2167	remain unsold 60 days after issuance, the office shall require
2168	all insurers subject to assessment to purchase the bonds, which
2169	shall be treated as admitted assets; each insurer shall be
2170	required to purchase that percentage of the unsold portion of
2171	the bond issue that equals the insurer's relative share of
2172	assessment liability under this subsection. An insurer shall not
2173	be required to purchase the bonds to the extent that the office
2174	determines that the purchase would endanger or impair the
2175	solvency of the insurer.
2176	3.a.  The corporation shall adopt one or more programs
2177	subject to approval by the office for the reduction of both new
2178	and renewal writings in the corporation. Any program the
2179	corporation adopts for the payment of bonuses to an insurer for
2180	each risk the insurer removes from the corporation shall comply
2181	with s. 627.3511(2) and may not exceed the amount referenced in
2182	s. 627.3511(2) for each risk removed. The corporation may
2183	consider any prudent and not unfairly discriminatory approach to
2184	reducing corporation writings, and may adopt a credit against
2185	assessment liability or other liability that provides an
2186	incentive for insurers to take risks out of the corporation and
2187	to keep risks out of the corporation by maintaining or
2188	increasing voluntary writings in counties or areas in which
2189	corporation risks are highly concentrated and a program to
2190	provide a formula under which an insurer voluntarily taking
2191	risks out of the corporation by maintaining or increasing
2192	voluntary writings will be relieved wholly or partially from
2193	assessments under sub-subparagraphs (b)3.a. and b. When the
2194	corporation enters into a contractual agreement for a take-out
2195	plan, the producing agent of record of the corporation policy is
2196	entitled to retain any unearned commission on such policy, and
2197	the insurer shall either:
2198	(I)  Pay to the producing agent of record of the policy,
2199	for the first year, an amount which is the greater of the
2200	insurer's usual and customary commission for the type of policy
2201	written or a policy fee equal to the usual and customary
2202	commission of the corporation; or
2203	(II)  Offer to allow the producing agent of record of the
2204	policy to continue servicing the policy for a period of not less
2205	than 1 year and offer to pay the agent the insurer's usual and
2206	customary commission for the type of policy written. If the
2207	producing agent is unwilling or unable to accept appointment by
2208	the new insurer, the new insurer shall pay the agent in
2209	accordance with sub-sub-subparagraph (I).
2210	b.  Any credit or exemption from regular assessments
2211	adopted under this subparagraph shall last no longer than the 3
2212	years following the cancellation or expiration of the policy by
2213	the corporation. With the approval of the office, the board may
2214	extend such credits for an additional year if the insurer
2215	guarantees an additional year of renewability for all policies
2216	removed from the corporation, or for 2 additional years if the
2217	insurer guarantees 2 additional years of renewability for all
2218	policies so removed.
2219	c.  There shall be no credit, limitation, exemption, or
2220	deferment from emergency assessments to be collected from
2221	policyholders pursuant to sub-subparagraph (b)3.d.
2222	4.  The plan shall provide for the deferment, in whole or
2223	in part, of the assessment of an assessable insurer, other than
2224	an emergency assessment collected from policyholders pursuant to
2225	sub-subparagraph (b)3.d., if the office finds that payment of
2226	the assessment would endanger or impair the solvency of the
2227	insurer. In the event an assessment against an assessable
2228	insurer is deferred in whole or in part, the amount by which
2229	such assessment is deferred may be assessed against the other
2230	assessable insurers in a manner consistent with the basis for
2231	assessments set forth in paragraph (b).
2232	(h)  Nothing in this subsection shall be construed to
2233	preclude the issuance of residential property insurance coverage
2234	pursuant to part VIII of chapter 626.
2235	(i)  There shall be no liability on the part of, and no
2236	cause of action of any nature shall arise against, any
2237	assessable insurer or its agents or employees, the corporation
2238	or its agents or employees, members of the board of governors or
2239	their respective designees at a board meeting, corporation
2240	committee members, or the office or its representatives, for any
2241	action taken by them in the performance of their duties or
2242	responsibilities under this subsection. Such immunity does not
2243	apply to:
2244	1.  Any of the foregoing persons or entities for any
2245	willful tort;
2246	2.  The corporation or its producing agents for breach of
2247	any contract or agreement pertaining to insurance coverage;
2248	3.  The corporation with respect to issuance or payment of
2249	debt; or
2250	4.  Any assessable insurer with respect to any action to
2251	enforce an assessable insurer's obligations to the corporation
2252	under this subsection.
2253	(j)  For the purposes of s. 199.183(1), the corporation
2254	shall be considered a political subdivision of the state and
2255	shall be exempt from the corporate income tax. The premiums,
2256	assessments, investment income, and other revenue of the
2257	corporation are funds received for providing property insurance
2258	coverage as required by this subsection, paying claims for
2259	Florida citizens insured by the corporation, securing and
2260	repaying debt obligations issued by the corporation, and
2261	conducting all other activities of the corporation, and shall
2262	not be considered taxes, fees, licenses, or charges for services
2263	imposed by the Legislature on individuals, businesses, or
2264	agencies outside state government. Bonds and other debt
2265	obligations issued by or on behalf of the corporation are not to
2266	be considered "state bonds" within the meaning of s. 215.58(8).
2267	The corporation is not subject to the procurement provisions of
2268	chapter 287, and policies and decisions of the corporation
2269	relating to incurring debt, levying of assessments and the sale,
2270	issuance, continuation, terms and claims under corporation
2271	policies, and all services relating thereto, are not subject to
2272	the provisions of chapter 120. The corporation is not required
2273	to obtain or to hold a certificate of authority issued by the
2274	office, nor is it required to participate as a member insurer of
2275	the Florida Insurance Guaranty Association. However, the
2276	corporation is required to pay, in the same manner as an
2277	authorized insurer, assessments pledged by the Florida Insurance
2278	Guaranty Association to secure bonds issued or other
2279	indebtedness incurred to pay covered claims arising from insurer
2280	insolvencies caused by, or proximately related to, hurricane
2281	losses. It is the intent of the Legislature that the tax
2282	exemptions provided in this paragraph will augment the financial
2283	resources of the corporation to better enable the corporation to
2284	fulfill its public purposes. Any bonds issued by the
2285	corporation, their transfer, and the income therefrom, including
2286	any profit made on the sale thereof, shall at all times be free
2287	from taxation of every kind by the state and any political
2288	subdivision or local unit or other instrumentality thereof;
2289	however, this exemption does not apply to any tax imposed by
2290	chapter 220 on interest, income, or profits on debt obligations
2291	owned by corporations other than the corporation.
2292	(k)  Upon a determination by the office that the conditions
2293	giving rise to the establishment and activation of the
2294	corporation no longer exist, the corporation is dissolved. Upon
2295	dissolution, the assets of the corporation shall be applied
2296	first to pay all debts, liabilities, and obligations of the
2297	corporation, including the establishment of reasonable reserves
2298	for any contingent liabilities or obligations, and all remaining
2299	assets of the corporation shall become property of the state and
2300	shall be deposited in the Florida Hurricane Catastrophe Fund.
2301	However, no dissolution shall take effect as long as the
2302	corporation has bonds or other financial obligations outstanding
2303	unless adequate provision has been made for the payment of the
2304	bonds or other financial obligations pursuant to the documents
2305	authorizing the issuance of the bonds or other financial
2306	obligations.
2307	(l)1.  Effective July 1, 2002, policies of the Residential
2308	Property and Casualty Joint Underwriting Association shall
2309	become policies of the corporation. All obligations, rights,
2310	assets and liabilities of the Residential Property and Casualty
2311	Joint Underwriting Association, including bonds, note and debt
2312	obligations, and the financing documents pertaining to them
2313	become those of the corporation as of July 1, 2002. The
2314	corporation is not required to issue endorsements or
2315	certificates of assumption to insureds during the remaining term
2316	of in-force transferred policies.
2317	2.  Effective July 1, 2002, policies of the Florida
2318	Windstorm Underwriting Association are transferred to the
2319	corporation and shall become policies of the corporation. All
2320	obligations, rights, assets, and liabilities of the Florida
2321	Windstorm Underwriting Association, including bonds, note and
2322	debt obligations, and the financing documents pertaining to them
2323	are transferred to and assumed by the corporation on July 1,
2324	2002. The corporation is not required to issue endorsement or
2325	certificates of assumption to insureds during the remaining term
2326	of in-force transferred policies.
2327	3.  The Florida Windstorm Underwriting Association and the
2328	Residential Property and Casualty Joint Underwriting Association
2329	shall take all actions as may be proper to further evidence the
2330	transfers and shall provide the documents and instruments of
2331	further assurance as may reasonably be requested by the
2332	corporation for that purpose. The corporation shall execute
2333	assumptions and instruments as the trustees or other parties to
2334	the financing documents of the Florida Windstorm Underwriting
2335	Association or the Residential Property and Casualty Joint
2336	Underwriting Association may reasonably request to further
2337	evidence the transfers and assumptions, which transfers and
2338	assumptions, however, are effective on the date provided under
2339	this paragraph whether or not, and regardless of the date on
2340	which, the assumptions or instruments are executed by the
2341	corporation. Subject to the relevant financing documents
2342	pertaining to their outstanding bonds, notes, indebtedness, or
2343	other financing obligations, the moneys, investments,
2344	receivables, choses in action, and other intangibles of the
2345	Florida Windstorm Underwriting Association shall be credited to
2346	the high-risk account of the corporation, and those of the
2347	personal lines residential coverage account and the commercial
2348	lines residential coverage account of the Residential Property
2349	and Casualty Joint Underwriting Association shall be credited to
2350	the personal lines account and the commercial lines account,
2351	respectively, of the corporation.
2352	4.  Effective July 1, 2002, a new applicant for property
2353	insurance coverage who would otherwise have been eligible for
2354	coverage in the Florida Windstorm Underwriting Association is
2355	eligible for coverage from the corporation as provided in this
2356	subsection.
2357	4.5.  The transfer of all policies, obligations, rights,
2358	assets, and liabilities from the Florida Windstorm Underwriting
2359	Association to the corporation and the renaming of the
2360	Residential Property and Casualty Joint Underwriting Association
2361	as the corporation shall in no way affect the coverage with
2362	respect to covered policies as defined in s. 215.555(2)(c)
2363	provided to these entities by the Florida Hurricane Catastrophe
2364	Fund. The coverage provided by the Florida Hurricane Catastrophe
2365	Fund to the Florida Windstorm Underwriting Association based on
2366	its exposures as of June 30, 2002, and each June 30 thereafter
2367	shall be redesignated as coverage for the high-risk account of
2368	the corporation. Notwithstanding any other provision of law, the
2369	coverage provided by the Florida Hurricane Catastrophe Fund to
2370	the Residential Property and Casualty Joint Underwriting
2371	Association based on its exposures as of June 30, 2002, and each
2372	June 30 thereafter shall be transferred to the personal lines
2373	account and the commercial lines account of the corporation.
2374	Notwithstanding any other provision of law, the high-risk
2375	account shall be treated, for all Florida Hurricane Catastrophe
2376	Fund purposes, as if it were a separate participating insurer
2377	with its own exposures, reimbursement premium, and loss
2378	reimbursement. Likewise, the personal lines and commercial lines
2379	accounts shall be viewed together, for all Florida Hurricane
2380	Catastrophe Fund purposes, as if the two accounts were one and
2381	represent a single, separate participating insurer with its own
2382	exposures, reimbursement premium, and loss reimbursement. The
2383	coverage provided by the Florida Hurricane Catastrophe Fund to
2384	the corporation shall constitute and operate as a full transfer
2385	of coverage from the Florida Windstorm Underwriting Association
2386	and Residential Property and Casualty Joint Underwriting to the
2387	corporation.
2388	(m)  Notwithstanding any other provision of law:
2389	1.  The pledge or sale of, the lien upon, and the security
2390	interest in any rights, revenues, or other assets of the
2391	corporation created or purported to be created pursuant to any
2392	financing documents to secure any bonds or other indebtedness of
2393	the corporation shall be and remain valid and enforceable,
2394	notwithstanding the commencement of and during the continuation
2395	of, and after, any rehabilitation, insolvency, liquidation,
2396	bankruptcy, receivership, conservatorship, reorganization, or
2397	similar proceeding against the corporation under the laws of
2398	this state.
2399	2.  No such proceeding shall relieve the corporation of its
2400	obligation, or otherwise affect its ability to perform its
2401	obligation, to continue to collect, or levy and collect,
2402	assessments, market equalization or other surcharges under
2403	subparagraph (c)10., or any other rights, revenues, or other
2404	assets of the corporation pledged pursuant to any financing
2405	documents.
2406	3.  Each such pledge or sale of, lien upon, and security
2407	interest in, including the priority of such pledge, lien, or
2408	security interest, any such assessments, market equalization or
2409	other surcharges, or other rights, revenues, or other assets
2410	which are collected, or levied and collected, after the
2411	commencement of and during the pendency of, or after, any such
2412	proceeding shall continue unaffected by such proceeding. As used
2413	in this subsection, the term "financing documents" means any
2414	agreement or agreements, instrument or instruments, or other
2415	document or documents now existing or hereafter created
2416	evidencing any bonds or other indebtedness of the corporation or
2417	pursuant to which any such bonds or other indebtedness has been
2418	or may be issued and pursuant to which any rights, revenues, or
2419	other assets of the corporation are pledged or sold to secure
2420	the repayment of such bonds or indebtedness, together with the
2421	payment of interest on such bonds or such indebtedness, or the
2422	payment of any other obligation or financial product, as defined
2423	in the plan of operation of the corporation related to such
2424	bonds or indebtedness.
2425	4.  Any such pledge or sale of assessments, revenues,
2426	contract rights, or other rights or assets of the corporation
2427	shall constitute a lien and security interest, or sale, as the
2428	case may be, that is immediately effective and attaches to such
2429	assessments, revenues, or contract rights or other rights or
2430	assets, whether or not imposed or collected at the time the
2431	pledge or sale is made. Any such pledge or sale is effective,
2432	valid, binding, and enforceable against the corporation or other
2433	entity making such pledge or sale, and valid and binding against
2434	and superior to any competing claims or obligations owed to any
2435	other person or entity, including policyholders in this state,
2436	asserting rights in any such assessments, revenues, or contract
2437	rights or other rights or assets to the extent set forth in and
2438	in accordance with the terms of the pledge or sale contained in
2439	the applicable financing documents, whether or not any such
2440	person or entity has notice of such pledge or sale and without
2441	the need for any physical delivery, recordation, filing, or
2442	other action.
2443	(n)1.  The following records of the corporation are
2444	confidential and exempt from the provisions of s. 119.07(1) and
2445	s. 24(a), Art. I of the State Constitution:
2446	a.  Underwriting files, except that a policyholder or an
2447	applicant shall have access to his or her own underwriting
2448	files.
2449	b.  Claims files, until termination of all litigation and
2450	settlement of all claims arising out of the same incident,
2451	although portions of the claims files may remain exempt, as
2452	otherwise provided by law. Confidential and exempt claims file
2453	records may be released to other governmental agencies upon
2454	written request and demonstration of need; such records held by
2455	the receiving agency remain confidential and exempt as provided
2456	for herein.
2457	c.  Records obtained or generated by an internal auditor
2458	pursuant to a routine audit, until the audit is completed, or if
2459	the audit is conducted as part of an investigation, until the
2460	investigation is closed or ceases to be active. An investigation
2461	is considered "active" while the investigation is being
2462	conducted with a reasonable, good faith belief that it could
2463	lead to the filing of administrative, civil, or criminal
2464	proceedings.
2465	d.  Matters reasonably encompassed in privileged attorney-
2466	client communications.
2467	e.  Proprietary information licensed to the corporation
2468	under contract and the contract provides for the confidentiality
2469	of such proprietary information.
2470	f.  All information relating to the medical condition or
2471	medical status of a corporation employee which is not relevant
2472	to the employee's capacity to perform his or her duties, except
2473	as otherwise provided in this paragraph. Information which is
2474	exempt shall include, but is not limited to, information
2475	relating to workers' compensation, insurance benefits, and
2476	retirement or disability benefits.
2477	g.  Upon an employee's entrance into the employee
2478	assistance program, a program to assist any employee who has a
2479	behavioral or medical disorder, substance abuse problem, or
2480	emotional difficulty which affects the employee's job
2481	performance, all records relative to that participation shall be
2482	confidential and exempt from the provisions of s. 119.07(1) and
2483	s. 24(a), Art. I of the State Constitution, except as otherwise
2484	provided in s. 112.0455(11).
2485	h.  Information relating to negotiations for financing,
2486	reinsurance, depopulation, or contractual services, until the
2487	conclusion of the negotiations.
2488	i.  Minutes of closed meetings regarding underwriting
2489	files, and minutes of closed meetings regarding an open claims
2490	file until termination of all litigation and settlement of all
2491	claims with regard to that claim, except that information
2492	otherwise confidential or exempt by law will be redacted.
2493
2494	When an authorized insurer is considering underwriting a risk
2495	insured by the corporation, relevant underwriting files and
2496	confidential claims files may be released to the insurer
2497	provided the insurer agrees in writing, notarized and under
2498	oath, to maintain the confidentiality of such files. When a file
2499	is transferred to an insurer that file is no longer a public
2500	record because it is not held by an agency subject to the
2501	provisions of the public records law. Underwriting files and
2502	confidential claims files may also be released to staff of and
2503	the board of governors of the market assistance plan established
2504	pursuant to s. 627.3515, who must retain the confidentiality of
2505	such files, except such files may be released to authorized
2506	insurers that are considering assuming the risks to which the
2507	files apply, provided the insurer agrees in writing, notarized
2508	and under oath, to maintain the confidentiality of such files.
2509	Finally, the corporation or the board or staff of the market
2510	assistance plan may make the following information obtained from
2511	underwriting files and confidential claims files available to
2512	licensed general lines insurance agents: name, address, and
2513	telephone number of the residential property owner or insured;
2514	location of the risk; rating information; loss history; and
2515	policy type. The receiving licensed general lines insurance
2516	agent must retain the confidentiality of the information
2517	received.
2518	2.  Portions of meetings of the corporation are exempt from
2519	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2520	Constitution wherein confidential underwriting files or
2521	confidential open claims files are discussed. All portions of
2522	corporation meetings which are closed to the public shall be
2523	recorded by a court reporter. The court reporter shall record
2524	the times of commencement and termination of the meeting, all
2525	discussion and proceedings, the names of all persons present at
2526	any time, and the names of all persons speaking. No portion of
2527	any closed meeting shall be off the record. Subject to the
2528	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2529	notes of any closed meeting shall be retained by the corporation
2530	for a minimum of 5 years. A copy of the transcript, less any
2531	exempt matters, of any closed meeting wherein claims are
2532	discussed shall become public as to individual claims after
2533	settlement of the claim.
2534	(o)  It is the intent of the Legislature that the
2535	amendments to this subsection enacted in 2002 should, over time,
2536	reduce the probable maximum windstorm losses in the residual
2537	markets and should reduce the potential assessments to be levied
2538	on property insurers and policyholders statewide. In furtherance
2539	of this intent:
2540	1.  The board shall, on or before February 1 of each year,
2541	provide a report to the President of the Senate and the Speaker
2542	of the House of Representatives showing the reduction or
2543	increase in the 100-year probable maximum loss attributable to
2544	wind-only coverages and the quota share program under this
2545	subsection combined, as compared to the benchmark 100-year
2546	probable maximum loss of the Florida Windstorm Underwriting
2547	Association. For purposes of this paragraph, the benchmark 100-
2548	year probable maximum loss of the Florida Windstorm Underwriting
2549	Association shall be the calculation dated February 2001 and
2550	based on November 30, 2000, exposures. In order to ensure
2551	comparability of data, the board shall use the same methods for
2552	calculating its probable maximum loss as were used to calculate
2553	the benchmark probable maximum loss. The reduction or increase
2554	in probable maximum loss shall be calculated without taking into
2555	account the probable maximum loss attributable to the
2556	nonhomestead account.
2557	2.  Beginning February 1, 2013 2007, if the report under
2558	subparagraph 1. for any year indicates that the 100-year
2559	probable maximum loss attributable to wind-only coverages and
2560	the quota share program combined does not reflect a reduction of
2561	at least 25 percent from the benchmark, the board shall reduce
2562	the boundaries of the high-risk area eligible for wind-only
2563	coverages under this subsection in a manner calculated to reduce
2564	such probable maximum loss to an amount at least 25 percent
2565	below the benchmark.
2566	3.  Beginning February 1, 2018 2012, if the report under
2567	subparagraph 1. for any year indicates that the 100-year
2568	probable maximum loss attributable to wind-only coverages and
2569	the quota share program combined does not reflect a reduction of
2570	at least 50 percent from the benchmark, the boundaries of the
2571	high-risk area eligible for wind-only coverages under this
2572	subsection shall be reduced by the elimination of any area that
2573	is not seaward of a line 1,000 feet inland from the Intracoastal
2574	Waterway.
2575	(p)  In enacting the provisions of this section, the
2576	Legislature recognizes that both the Florida Windstorm
2577	Underwriting Association and the Residential Property and
2578	Casualty Joint Underwriting Association have entered into
2579	financing arrangements that obligate each entity to service its
2580	debts and maintain the capacity to repay funds secured under
2581	these financing arrangements. It is the intent of the
2582	Legislature that nothing in this section be construed to
2583	compromise, diminish, or interfere with the rights of creditors
2584	under such financing arrangements. It is further the intent of
2585	the Legislature to preserve the obligations of the Florida
2586	Windstorm Underwriting Association and Residential Property and
2587	Casualty Joint Underwriting Association with regard to
2588	outstanding financing arrangements, with such obligations
2589	passing entirely and unchanged to the corporation and,
2590	specifically, to the applicable account of the corporation. So
2591	long as any bonds, notes, indebtedness, or other financing
2592	obligations of the Florida Windstorm Underwriting Association or
2593	the Residential Property and Casualty Joint Underwriting
2594	Association are outstanding, under the terms of the financing
2595	documents pertaining to them, the governing board of the
2596	corporation shall have and shall exercise the authority to levy,
2597	charge, collect, and receive all premiums, assessments,
2598	surcharges, charges, revenues, and receipts that the
2599	associations had authority to levy, charge, collect, or receive
2600	under the provisions of subsection (2) and this subsection,
2601	respectively, as they existed on January 1, 2002, to provide
2602	moneys, without exercise of the authority provided by this
2603	subsection, in at least the amounts, and by the times, as would
2604	be provided under those former provisions of subsection (2) or
2605	this subsection, respectively, so that the value, amount, and
2606	collectability of any assets, revenues, or revenue source
2607	pledged or committed to, or any lien thereon securing such
2608	outstanding bonds, notes, indebtedness, or other financing
2609	obligations will not be diminished, impaired, or adversely
2610	affected by the amendments made by this act and to permit
2611	compliance with all provisions of financing documents pertaining
2612	to such bonds, notes, indebtedness, or other financing
2613	obligations, or the security or credit enhancement for them, and
2614	any reference in this subsection to bonds, notes, indebtedness,
2615	financing obligations, or similar obligations, of the
2616	corporation shall include like instruments or contracts of the
2617	Florida Windstorm Underwriting Association and the Residential
2618	Property and Casualty Joint Underwriting Association to the
2619	extent not inconsistent with the provisions of the financing
2620	documents pertaining to them.
2621	(q)  The corporation shall not require the securing of
2622	flood insurance as a condition of coverage if the insured or
2623	applicant executes a form approved by the office affirming that
2624	flood insurance is not provided by the corporation and that if
2625	flood insurance is not secured by the applicant or insured in
2626	addition to coverage by the corporation, the risk will not be
2627	covered for flood damage. A corporation policyholder electing
2628	not to secure flood insurance and executing a form as provided
2629	herein making a claim for water damage against the corporation
2630	shall have the burden of proving the damage was not caused by
2631	flooding. Notwithstanding other provisions of this subsection,
2632	the corporation may deny coverage to an applicant or insured who
2633	refuses to execute the form described herein.
2634	(r)  A salaried employee of the corporation who performs
2635	policy administration services subsequent to the effectuation of
2636	a corporation policy is not required to be licensed as an agent
2637	under the provisions of s. 626.112.
2638	(s)  The transition to homestead and nonhomestead accounts
2639	shall begin on October 1, 2006. A policy issued on or after that
2640	date shall be issued in the applicable homestead account or the
2641	nonhomestead account, based upon whether the property
2642	constitutes homestead property as provided in subparagraph (b)2.
2643	A policy in effect on October 1, 2006, shall be placed in the
2644	applicable homestead account or the nonhomestead account, based
2645	upon whether the property constitutes homestead property as
2646	provided in subparagraph (b)2., upon the first renewal of such
2647	policy after October 1, 2006.
2648	(t)  Any employee of the corporation whose position is
2649	managerial, policymaking, or professional in nature and all
2650	members of the corporation's board of governors shall comply
2651	with the Code of Ethics for public officers and employers found
2652	in ss. 112.311-112.326.
2653	(u)  An employee of the corporation shall notify the
2654	Division of Insurance Fraud within 48 hours after having
2655	information that would lead a reasonable person to suspect that
2656	fraud may have been committed by any employee of the
2657	corporation.
2658	(v)  By February 1, 2007, the corporation shall submit a
2659	report to the President of the Senate, the Speaker of the House
2660	of Representatives, the minority party leaders of the Senate and
2661	the House of Representatives, and the chairs of the standing
2662	committees of the Senate and the House of Representatives having
2663	jurisdiction over matters relating to property and casualty
2664	insurance. In preparing the report, the corporation shall
2665	consult with the Office of Insurance Regulation, the Department
2666	of Financial Services, and any other party the corporation
2667	determines is appropriate. The report shall include findings and
2668	recommendations on the feasibility of requiring authorized
2669	insurers that issue and service personal and commercial
2670	residential policies and commercial nonresidential policies that
2671	provide coverage for basic property perils except for the peril
2672	of wind to issue and service for a fee personal and commercial
2673	residential policies and commercial nonresidential policies
2674	providing coverage for the peril of wind issued by the
2675	corporation. The report shall include:
2676	1.  The expense savings to the corporation of issuing and
2677	servicing such policies as determined through a cost benefit
2678	analysis.
2679	2.  The expenses and liability to authorized insurers
2680	associated with issuing and servicing such policies.
2681	3.  The impact on service to policyholders of the
2682	corporation relating to issuing and servicing such policies.
2683	4.  The impact on the producing agent of the corporation of
2684	issuing and servicing such policies.
2685	5.  Recommendations as to the amount of the fee that should
2686	be paid to authorized insurers for issuing and servicing such
2687	policies.
2688	6.  The impact issuing and servicing such policies will
2689	have on the corporation's number of policies, total insured
2690	value, and probable maximum loss.
2691	(w)  There shall be no liability on the part of, and no
2692	cause of action of any nature shall arise against, producing
2693	agents of record or their employees for any action taken by them
2694	in the performance of their duties or responsibilities relating
2695	to the removal of policies from the corporation. Such immunity
2696	only applies to actions that may arise due to differences in
2697	coverage or procedures between any take-out insurer and the
2698	corporation or for insolvency of any take-out insurer.
2699	(x)  The Legislature finds that the total area eligible for
2700	the high-risk account of the corporation has a material impact
2701	on the availability of wind coverage from the voluntary admitted
2702	market, deficits of the corporation, assessments to be levied on
2703	property insurers and policyholders statewide, the ability and
2704	willingness of authorized insurers to write wind coverage in the
2705	high-risk areas, the probable maximum windstorm losses of the
2706	corporation, general commerce in coastal areas, and the overall
2707	financial condition of the state. Therefore, in furtherance of
2708	these findings and intent:
2709	1.  The High Risk Eligibility Panel is created.
2710	2.  The members of the panel shall be appointed as follows:
2711	a.  The board shall appoint two board members.
2712	b.  The Governor shall appoint one member.
2713	c.  The Chief Financial Officer shall appoint one member.
2714	d.  The Commissioner of Insurance Regulation shall appoint
2715	a representative of the office to serve as a member.
2716	e.  The President of the Senate shall appoint one member.
2717	f.  The Speaker of the House of Representatives shall
2718	appoint one member.
2719
2720	Members of the panel must be residents of this state with
2721	insurance expertise. Members shall elect a chair and shall serve
2722	3-year terms each. The panel shall operate independently of any
2723	state agency and shall be administered by the corporation. The
2724	panel shall make an annual report to the President of the Senate
2725	and the Speaker of the House of Representatives on or before
2726	February 1 of each year recommending the areas that should be
2727	eligible for the high-risk account of the corporation. Members
2728	shall not receive compensation and are not entitled to receive
2729	reimbursement for per diem and travel expenses as provided in s.
2730	112.061, except for any panel member who is a state employee.
2731	3.  The Legislature's intent provided in subparagraphs
2732	(a)1. and 2. shall provide guidance for the panel to use in the
2733	panel's recommendations to the Legislature required in
2734	subparagraph 1. The panel shall consider the following factors
2735	in fulfilling its responsibilities under this paragraph:
2736	a.  The number of commercial risks in a given area that are
2737	unable to find wind coverage from the voluntary admitted market.
2738	b.  Reports from members of the mortgage industry
2739	indicating difficulty in finding forced placed policies for
2740	commercial wind coverage.
2741	c.  The number of approved excess and surplus lines
2742	carriers certifying an unwillingness to provide commercial wind
2743	coverage similar to that approved for use by the office for the
2744	voluntary admitted market.
2745	d.  Other relevant factors.
2746
2747	The office and the corporation shall provide the panel with any
2748	information the panel considers necessary to determine areas
2749	eligible for the high-risk account of the corporation. For the
2750	purpose of making accurate determinations for areas eligible for
2751	the high-risk account of the corporation, the panel may
2752	interview and request and receive information from residents of
2753	this state in areas impacted by this paragraph, including, but
2754	not limited to, insurance agents, insurance companies,
2755	actuaries, and other insurance professionals. Upon request of
2756	the panel, the office may conduct public hearings in areas that
2757	may be impacted by the panel's recommendations.
2758	4.  Notwithstanding other provisions of this paragraph, the
2759	panel shall conduct an analysis to determine the areas to be
2760	eligible for the high-risk account of the corporation for any
2761	county that contains an eligible area extending more than 2
2762	miles from the coast, any coastal county that does not have
2763	areas designated as eligible for the high-risk account, and
2764	counties with barrier islands whether or not such islands or
2765	portions of such islands are currently eligible for the high
2766	risk account. The panel shall submit a report, including its
2767	analysis, to the office and to the corporation by November 30,
2768	2006. The report shall specify changes to the areas eligible for
2769	the high-risk account for such affected counties based on its
2770	analysis.
2771	Section 10.  Paragraph (b) of subsection (3) of section
2772	627.4035, Florida Statutes, is amended, and subsection (4) is
2773	added to that section, to read:
2774	627.4035  Cash payment of premiums; claims.--
2775	(3)  All payments of claims made in this state under any
2776	contract of insurance shall be paid:
2777	(b)  If authorized in writing by the recipient or the
2778	recipient's representative, by debit card or any other form of
2779	electronic transfer. Any fees or costs to be charged against the
2780	recipient must be disclosed in writing to the recipient or the
2781	recipient's representative at the time of written authorization.
2782	However, the written authorization requirement may be waived by
2783	the recipient or the recipient's representative if the insurer
2784	verifies the identity of the insured or the insured's recipient
2785	and does not charge a fee for the transaction. If the funds are
2786	misdirected, the insurer would remain liable for the payment of
2787	the claim.
2788	(4)  Nothing in this section shall be construed as
2789	prohibiting an insurer from limiting its liability under a
2790	policy or endorsement providing that loss will be adjusted on
2791	the basis of replacement costs to the lesser of:
2792	(a)  The limit of liability shown on the policy
2793	declarations page;
2794	(b)  The reasonable and necessary cost to repair the
2795	damaged, destroyed, or stolen covered property; or
2796	(c)  The reasonable and necessary cost to replace the
2797	damaged, destroyed, or stolen covered property.
2798	Section 11.  Subsections (2) and (3) of section 627.7011,
2799	Florida Statutes, are amended, and subsection (6) is added to
2800	that section, to read:
2801	627.7011  Homeowners' policies; offer of replacement cost
2802	coverage and law and ordinance coverage.--
2803	(2)  Unless the insurer obtains the policyholder's written
2804	refusal of the policies or endorsements specified in subsection
2805	(1), any policy covering the dwelling is deemed to include the
2806	law and ordinance coverage limited to 25 percent of the dwelling
2807	limit specified in paragraph (1)(b). The rejection or selection
2808	of alternative coverage shall be made on a form approved by the
2809	office. The form shall fully advise the applicant of the nature
2810	of the coverage being rejected. If this form is signed by a
2811	named insured, it will be conclusively presumed that there was
2812	an informed, knowing rejection of the coverage or election of
2813	the alternative coverage on behalf of all insureds. Unless the
2814	policyholder requests in writing the coverage specified in this
2815	section, it need not be provided in or supplemental to any other
2816	policy that renews, insures, extends, changes, supersedes, or
2817	replaces an existing policy when the policyholder has rejected
2818	the coverage specified in this section or has selected
2819	alternative coverage. The insurer must provide such policyholder
2820	with notice of the availability of such coverage in a form
2821	approved by the office at least once every 3 years. The failure
2822	to provide such notice constitutes a violation of this code, but
2823	does not affect the coverage provided under the policy.
2824	(3)  In the event of a loss for which a dwelling or
2825	personal property is insured on the basis of replacement costs,
2826	the insurer shall pay the replacement cost without reservation
2827	or holdback of any depreciation in value, whether or not the
2828	insured replaces or repairs the dwelling or property.
2829	(6)  Insurers shall issue separate checks for living
2830	expenses, contents, and casualty proceeds. Checks for living
2831	expenses and contents should be issued directly to the
2832	policyholder.
2833	Section 12.  Effective upon this act becoming a law,
2834	section 627.7019, Florida Statutes, is created to read:
2835	627.7019  Standardization of requirements applicable to
2836	insurers after natural disasters.--
2837	(1)  The commission shall adopt by rule, pursuant to s.
2838	120.54(1)-(3), standardized requirements that may be applied to
2839	insurers as a consequence of a hurricane or other natural
2840	disaster. The rules shall address the following areas:
2841	(a)  Claims reporting requirements.
2842	(b)  Grace periods for payment of premiums and performance
2843	of other duties by insureds.
2844	(c)  Temporary postponement of cancellations and
2845	nonrenewals.
2846	(2)  The rules adopted pursuant to this section shall
2847	require the office to issue an order within 72 hours after the
2848	occurrence of a hurricane or other natural disaster specifying,
2849	by line of insurance, which of the standardized requirements
2850	apply, the geographic areas in which they apply, the time at
2851	which applicability commences, and the time at which
2852	applicability terminates.
2853	(3)  The commission and the office may not adopt an
2854	emergency rule under s. 120.54(4) in conflict with any provision
2855	of the rules adopted under this section.
2856	(4)  The commission shall initiate rulemaking under this
2857	section no later than June 1, 2006.
2858	Section 13.  Subsection (5) of section 627.727, Florida
2859	Statutes, is amended to read:
2860	627.727  Motor vehicle insurance; uninsured and
2861	underinsured vehicle coverage; insolvent insurer protection.--
2862	(5)  Any person having a claim against an insolvent insurer
2863	as defined in s. 631.54(6)(5) under the provisions of this
2864	section shall present such claim for payment to the Florida
2865	Insurance Guaranty Association only. In the event of a payment
2866	to any person in settlement of a claim arising under the
2867	provisions of this section, the association is not subrogated or
2868	entitled to any recovery against the claimant's insurer. The
2869	association, however, has the rights of recovery as set forth in
2870	chapter 631 in the proceeds recoverable from the assets of the
2871	insolvent insurer.
2872	Section 14.  Paragraph (f) is added to subsection (2) of
2873	section 631.181, Florida Statutes, to read:
2874	631.181  Filing and proof of claim.--
2875	(2)
2876	(f)  The signed statement required by this section shall
2877	not be required on claims for which adequate claims file
2878	documentation exists within the records of the insolvent
2879	insurer. Claims for payment of unearned premium shall not be
2880	required to use the signed statement required by this section if
2881	the receiver certifies to the guaranty fund that the records of
2882	the insolvent insurer are sufficient to determine the amount of
2883	unearned premium owed to each policyholder of the insurer and
2884	such information is remitted to the guaranty fund by the
2885	receiver in electronic or other mutually agreed-upon format.
2886	Section 15.  Subsections (5), (6), (7), and (8) of section
2887	631.54, Florida Statutes, are renumbered as subsections (6),
2888	(7), (8), and (9), respectively, and a new subsection (5) is
2889	added to that section, to read:
2890	631.54  Definitions.--As used in this part:
2891	(5)  "Homeowner's insurance" means personal lines
2892	residential property insurance coverage that consists of the
2893	type of coverage provided under homeowner's, dwelling, and
2894	similar policies for repair or replacement of the insured
2895	structure and contents, which policies are written directly to
2896	the individual homeowner. Residential coverage for personal
2897	lines as set forth in this section includes policies that
2898	provide coverage for particular perils such as windstorm and
2899	hurricane coverage but excludes all coverage for mobile homes,
2900	renter's insurance, or tenant's coverage. The term "homeowner's
2901	insurance" excludes commercial residential policies covering
2902	condominium associations or homeowners' associations, which
2903	associations have a responsibility to provide insurance coverage
2904	on residential units within the association, and also excludes
2905	coverage for the common elements of a homeowners' association.
2906	Section 16.  Subsection (1) of section 631.55, Florida
2907	Statutes, is amended to read:
2908	631.55  Creation of the association.--
2909	(1)  There is created a nonprofit corporation to be known
2910	as the "Florida Insurance Guaranty Association, Incorporated."
2911	All insurers defined as member insurers in s. 631.54(7)(6) shall
2912	be members of the association as a condition of their authority
2913	to transact insurance in this state, and, further, as a
2914	condition of such authority, an insurer shall agree to reimburse
2915	the association for all claim payments the association makes on
2916	said insurer's behalf if such insurer is subsequently
2917	rehabilitated. The association shall perform its functions under
2918	a plan of operation established and approved under s. 631.58 and
2919	shall exercise its powers through a board of directors
2920	established under s. 631.56. The corporation shall have all
2921	those powers granted or permitted nonprofit corporations, as
2922	provided in chapter 617.
2923	Section 17.  Paragraph (a) of subsection (1), paragraph (d)
2924	of subsection (2), and paragraph (a) of subsection (3) of
2925	section 631.57, Florida Statutes, are amended, and paragraph (e)
2926	is added to subsection (3) of that section, to read:
2927	631.57  Powers and duties of the association.--
2928	(1)  The association shall:
2929	(a)1.  Be obligated to the extent of the covered claims
2930	existing:
2931	a.  Prior to adjudication of insolvency and arising within
2932	30 days after the determination of insolvency;
2933	b.  Before the policy expiration date if less than 30 days
2934	after the determination; or
2935	c.  Before the insured replaces the policy or causes its
2936	cancellation, if she or he does so within 30 days of the
2937	determination.
2938	2.  The obligation under subparagraph 1. shall include only
2939	the amount of each covered claim that is in excess of $100 and
2940	is less than $300,000, except policies providing coverage for
2941	homeowner's insurance shall provide for an additional $200,000
2942	for the portion of a covered claim that relates only to the
2943	damage to the structure and contents.
2944	3.a.2.  Notwithstanding subparagraph 2., the obligation
2945	under subparagraph 1. for shall include only that amount of each
2946	covered claim which is in excess of $100 and is less than
2947	$300,000, except with respect to policies covering condominium
2948	associations or homeowners' associations, which associations
2949	have a responsibility to provide insurance coverage on
2950	residential units within the association, the obligation shall
2951	include that amount of each covered property insurance claim
2952	which is less than $100,000 multiplied by the number of
2953	condominium units or other residential units; however, as to
2954	homeowners' associations, this sub-subparagraph subparagraph
2955	applies only to claims for damage or loss to residential units
2956	and structures attached to residential units.
2957	b.  Notwithstanding sub-subparagraph a., the association
2958	has no obligation to pay covered claims that are to be paid from
2959	the proceeds of bonds issued under s. 631.695. However, the
2960	association shall assign and pledge the first available moneys
2961	from all or part of the assessments to be made under paragraph
2962	(3)(a) to or on behalf of the issuer of such bonds for the
2963	benefit of the holders of such bonds. The association shall
2964	administer any such covered claims and present valid covered
2965	claims for payment in accordance with the provisions of the
2966	assistance program in connection with which such bonds have been
2967	issued.
2968	3.  In no event shall the association be obligated to a
2969	policyholder or claimant in an amount in excess of the
2970	obligation of the insolvent insurer under the policy from which
2971	the claim arises.
2972	(2)  The association may:
2973	(d)  Negotiate and become a party to such contracts as are
2974	necessary to carry out the purpose of this part. Additionally,
2975	the association may enter into such contracts with a
2976	municipality, a county, or a legal entity created pursuant to s.
2977	163.01(7)(g) as are necessary in order for the municipality,
2978	county, or legal entity to issue bonds under s. 631.695. In
2979	connection with the issuance of any such bonds and the entering
2980	into of any such necessary contracts, the association may agree
2981	to such terms and conditions as the association deems necessary
2982	and proper.
2983	(3)(a)  To the extent necessary to secure the funds for the
2984	respective accounts for the payment of covered claims, and also
2985	to pay the reasonable costs to administer the same, and to the
2986	extent necessary to secure the funds for the account specified
2987	in s. 631.55(2)(c) or to retire indebtedness, including, without
2988	limitation, the principal, redemption premium, if any, and
2989	interest on, and related costs of issuance of, bonds issued
2990	under s. 631.695 and the funding of any reserves and other
2991	payments required under the bond resolution or trust indenture
2992	pursuant to which such bonds have been issued, the office, upon
2993	certification of the board of directors, shall levy assessments
2994	in the proportion that each insurer's net direct written
2995	premiums in this state in the classes protected by the account
2996	bears to the total of said net direct written premiums received
2997	in this state by all such insurers for the preceding calendar
2998	year for the kinds of insurance included within such account.
2999	Assessments shall be remitted to and administered by the board
3000	of directors in the manner specified by the approved plan. Each
3001	insurer so assessed shall have at least 30 days' written notice
3002	as to the date the assessment is due and payable. Every
3003	assessment shall be made as a uniform percentage applicable to
3004	the net direct written premiums of each insurer in the kinds of
3005	insurance included within the account in which the assessment is
3006	made. The assessments levied against any insurer shall not
3007	exceed in any one year more than 2 percent of that insurer's net
3008	direct written premiums in this state for the kinds of insurance
3009	included within such account during the calendar year next
3010	preceding the date of such assessments.
3011	(e)1.a.  In addition to assessments otherwise authorized in
3012	paragraph (a) and to the extent necessary to secure the funds
3013	for the account specified in s. 631.55(2)(c) or to retire
3014	indebtedness, including, without limitation, the principal,
3015	redemption premium, if any, and interest on, and related costs
3016	of issuance of, bonds issued under s. 631.695 and the funding of
3017	any reserves and other payments required under the bond
3018	resolution or trust indenture pursuant to which such bonds have
3019	been issued, the office, upon certification of the board of
3020	directors, shall levy emergency assessments upon insurers
3021	holding a certificate of authority. The emergency assessments
3022	payable under this paragraph by any insurer shall not exceed in
3023	any single year more than 2 percent of that insurer's direct
3024	written premiums, net of refunds, in this state during the
3025	preceding calendar year for the kinds of insurance within the
3026	account specified in s. 631.55(2)(c).
3027	b.  Any emergency assessments authorized under this
3028	paragraph shall be levied by the office upon insurers referred
3029	to in sub-subparagraph a., upon certification as to the need for
3030	such assessments by the board of directors, in each year that
3031	bonds issued under s. 631.695 and secured by such emergency
3032	assessments are outstanding, in such amounts up to such 2-
3033	percent limit as required in order to provide for the full and
3034	timely payment of the principal of, redemption premium, if any,
3035	and interest on, and related costs of issuance of, such bonds.
3036	The emergency assessments provided for in this paragraph are
3037	assigned and pledged to the municipality, county, or legal
3038	entity issuing bonds under s. 631.695 for the benefit of the
3039	holders of such bonds, in order to enable such municipality,
3040	county, or legal entity to provide for the payment of the
3041	principal of, redemption premium, if any, and interest on such
3042	bonds, the cost of issuance of such bonds, and the funding of
3043	any reserves and other payments required under the bond
3044	resolution or trust indenture pursuant to which such bonds have
3045	been issued, without the necessity of any further action by the
3046	association, the office, or any other party. To the extent bonds
3047	are issued under s. 631.695 and the association determines to
3048	secure such bonds by a pledge of revenues received from the
3049	emergency assessments, such bonds, upon such pledge of revenues,
3050	shall be secured by and payable from the proceeds of such
3051	emergency assessments, and the proceeds of emergency assessments
3052	levied under this paragraph shall be remitted directly to and
3053	administered by the trustee or custodian appointed for such
3054	bonds.
3055	c.  Emergency assessments under this paragraph may be
3056	payable in a single payment or, at the option of the
3057	association, may be payable in 12 monthly installments with the
3058	first installment being due and payable at the end of the month
3059	after an emergency assessment is levied and subsequent
3060	installments being due not later than the end of each succeeding
3061	month.
3062	d.  If emergency assessments are imposed, the report
3063	required by s. 631.695(7) shall include an analysis of the
3064	revenues generated from the emergency assessments imposed under
3065	this paragraph.
3066	e.  If emergency assessments are imposed, the references in
3067	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
3068	assessments levied under paragraph (a) shall include emergency
3069	assessments imposed under this paragraph.
3070	2.  In order to ensure that insurers paying emergency
3071	assessments levied under this paragraph continue to charge rates
3072	that are neither inadequate nor excessive, within 90 days after
3073	being notified of such assessments, each insurer that is to be
3074	assessed pursuant to this paragraph shall submit a rate filing
3075	for coverage included within the account specified in s.
3076	631.55(2)(c) and for which rates are required to be filed under
3077	s. 627.062. If the filing reflects a rate change that, as a
3078	percentage, is equal to the difference between the rate of such
3079	assessment and the rate of the previous year's assessment under
3080	this paragraph, the filing shall consist of a certification so
3081	stating and shall be deemed approved when made. Any rate change
3082	of a different percentage shall be subject to the standards and
3083	procedures of s. 627.062.
3084	3.  An annual assessment under this paragraph shall
3085	continue while the bonds issued with respect to which the
3086	assessment was imposed are outstanding, including any bonds the
3087	proceeds of which were used to refund bonds issued pursuant to
3088	s. 631.695, unless adequate provision has been made for the
3089	payment of the bonds in the documents authorizing the issuance
3090	of such bonds.
3091	4.  Emergency assessments under this paragraph are not
3092	premium and are not subject to the premium tax, to any fees, or
3093	to any commissions. An insurer is liable for all emergency
3094	assessments that the insurer collects and shall treat the
3095	failure of an insured to pay an emergency assessment as a
3096	failure to pay the premium. An insurer is not liable for
3097	uncollectible emergency assessments.
3098	Section 18.  Section 631.695, Florida Statutes, is created
3099	to read:
3100	631.695  Revenue bond issuance through counties or
3101	municipalities.--
3102	(1)  The Legislature finds:
3103	(a)  The potential for widespread and massive damage to
3104	persons and property caused by hurricanes making landfall in
3105	this state can generate insurance claims of such a number as to
3106	render numerous insurers operating within this state insolvent
3107	and therefore unable to satisfy covered claims.
3108	(b)  The inability of insureds within this state to receive
3109	payment of covered claims or to timely receive such payment
3110	creates financial and other hardships for such insureds and
3111	places undue burdens on the state, the affected units of local
3112	government, and the community at large.
3113	(c)  In addition, the failure of insurers to pay covered
3114	claims or to timely pay such claims due to the insolvency of
3115	such insurers can undermine the public's confidence in insurers
3116	operating within this state, thereby adversely affecting the
3117	stability of the insurance industry in this state.
3118	(d)  The state has previously taken action to address these
3119	problems by adopting the Florida Insurance Guaranty Association
3120	Act, which, among other things, provides a mechanism for the
3121	payment of covered claims under certain insurance policies to
3122	avoid excessive delay in payment and to avoid financial loss to
3123	claimants or policyholders because of the insolvency of an
3124	insurer.
3125	(e)  In the wake of the unprecedented destruction caused by
3126	various hurricanes that have made landfall in this state, the
3127	resultant covered claims, and the number of insurers rendered
3128	insolvent thereby, make it evident that alternative programs
3129	must be developed to allow the Florida Insurance Guaranty
3130	Association to more expeditiously and effectively provide for
3131	the payment of covered claims.
3132	(f)  It is therefore determined to be in the best interests
3133	of, and necessary for, the protection of the public health,
3134	safety, and general welfare of the residents of this state and
3135	for the protection and preservation of the economic stability of
3136	insurers operating in this state and it is declared to be an
3137	essential public purpose to permit certain municipalities and
3138	counties to take such actions as will provide relief to
3139	claimants and policyholders having covered claims against
3140	insolvent insurers operating in this state by expediting the
3141	handling and payment of covered claims.
3142	(g)  To achieve the foregoing purposes, it is proper to
3143	authorize municipalities and counties of this state
3144	substantially affected by the landfall of a hurricane to issue
3145	bonds to assist the Florida Insurance Guaranty Association in
3146	expediting the handling and payment of covered claims of
3147	insolvent insurers.
3148	(h)  In order to avoid the needless and indiscriminate
3149	proliferation, duplication, and fragmentation of such assistance
3150	programs, it is in the best interests of the residents of this
3151	state to authorize municipalities and counties severely affected
3152	by a hurricane to provide for the payment of covered claims
3153	beyond their territorial limits in the implementation of such
3154	programs.
3155	(i)  It is a paramount public purpose for municipalities
3156	and counties substantially affected by the landfall of a
3157	hurricane to be able to issue bonds for the purposes described
3158	in this section. Such issuance shall provide assistance to
3159	residents of those municipalities and counties as well as to
3160	other residents of this state.
3161	(2)  The governing body of any municipality or county, the
3162	residents of which have been substantially affected by a
3163	hurricane, may issue bonds to fund an assistance program in
3164	conjunction with, and with the consent of, the Florida Insurance
3165	Guaranty Association for the purpose of paying claimants' or
3166	policyholders' covered claims, as defined in s. 631.54, arising
3167	through the insolvency of an insurer, which insolvency is
3168	determined by the Florida Insurance Guaranty Association to have
3169	been a result of a hurricane, regardless of whether the
3170	claimants or policyholders are residents of such municipality or
3171	county or the property to which the claim relates is located
3172	within or outside the territorial jurisdiction of the
3173	municipality or county. The power of a municipality or county to
3174	issue bonds, as described in this section, is in addition to any
3175	powers granted by law and may not be abrogated or restricted by
3176	any provisions in such municipality's or county's charter. A
3177	municipality or county issuing bonds for this purpose shall
3178	enter into such contracts with the Florida Insurance Guaranty
3179	Association or any entity acting on behalf of the Florida
3180	Insurance Guaranty Association as are necessary to implement the
3181	assistance program. Any bonds issued by a municipality or county
3182	or a combination thereof under this subsection shall be payable
3183	from and secured by moneys received by or on behalf of the
3184	municipality or county from assessments levied under s.
3185	631.57(3)(a) and assigned and pledged to or on behalf of the
3186	municipality or county for the benefit of the holders of the
3187	bonds in connection with the assistance program. The funds,
3188	credit, property, and taxing power of the state or any
3189	municipality or county shall not be pledged for the payment of
3190	such bonds.
3191	(3)  Bonds may be validated by the municipality or county
3192	pursuant to chapter 75. The proceeds of the bonds may be used to
3193	pay covered claims of insolvent insurers; to refinance or
3194	replace previously existing borrowings or financial
3195	arrangements; to pay interest on bonds; to fund reserves for the
3196	bonds; to pay expenses incident to the issuance or sale of any
3197	bond issued under this section, including costs of validating,
3198	printing, and delivering the bonds, costs of printing the
3199	official statement, costs of publishing notices of sale of the
3200	bonds, costs of obtaining credit enhancement or liquidity
3201	support, and related administrative expenses; or for such other
3202	purposes related to the financial obligations of the fund as the
3203	association may determine. The term of the bonds may not exceed
3204	30 years.
3205	(4)  The state covenants with holders of bonds of the
3206	assistance program that the state will not take any action that
3207	will have a material adverse effect on the holders and will not
3208	repeal or abrogate the power of the board of directors of the
3209	association to direct the Office of Insurance Regulation to levy
3210	the assessments and to collect the proceeds of the revenues
3211	pledged to the payment of the bonds as long as any of the bonds
3212	remain outstanding, unless adequate provision has been made for
3213	the payment of the bonds in the documents authorizing the
3214	issuance of the bonds.
3215	(5)  The accomplishment of the authorized purposes of such
3216	municipality or county under this section is in all respects for
3217	the benefit of the people of the state, for the increase of
3218	their commerce and prosperity, and for the improvement of their
3219	health and living conditions. The municipality or county, in
3220	performing essential governmental functions in accomplishing its
3221	purposes, is not required to pay any taxes or assessments of any
3222	kind whatsoever upon any property acquired or used by the county
3223	or municipality for such purposes or upon any revenues at any
3224	time received by the county or municipality. The bonds, notes,
3225	and other obligations of the municipality or county and the
3226	transfer of and income from such bonds, notes, and other
3227	obligations, including any profits made on the sale of such
3228	bonds, notes, and other obligations, are exempt from taxation of
3229	any kind by the state or by any political subdivision or other
3230	agency or instrumentality of the state. The exemption granted in
3231	this subsection is not applicable to any tax imposed by chapter
3232	220 on interest, income, or profits on debt obligations owned by
3233	corporations.
3234	(6)  Two or more municipalities or counties, the residents
3235	of which have been substantially affected by a hurricane, may
3236	create a legal entity pursuant to s. 163.01(7)(g) to exercise
3237	the powers described in this section as well as those powers
3238	granted in s. 163.01(7)(g). References in this section to a
3239	municipality or county includes such legal entity.
3240	(7)  The association shall issue an annual report on the
3241	status of the use of bond proceeds as related to insolvencies
3242	caused by hurricanes. The report must contain the number and
3243	amount of claims paid. The association shall also include an
3244	analysis of the revenue generated from the assessment levied
3245	under s. 631.57(3)(a) to pay such bonds. The association shall
3246	submit a copy of the report to the President of the Senate, the
3247	Speaker of the House of Representatives, and the Chief Financial
3248	Officer within 90 days after the end of each calendar year in
3249	which bonds were outstanding.
3250	Section 19.  No provision of s. 631.57 or s. 631.695,
3251	Florida Statutes, shall be repealed until such time as the
3252	principal, redemption premium, if any, and interest on all bonds
3253	issued under s. 631.695, Florida Statutes, payable and secured
3254	from assessments levied under s. 631.57(3)(a), Florida Statutes,
3255	have been paid in full or adequate provision for such payment
3256	has been made in accordance with the bond resolution or trust
3257	indenture pursuant to which the bonds were issued.
3258	Section 20.  Paragraph (a) of subsection (1) of section
3259	817.234, Florida Statutes, is amended to read:
3260	817.234  False and fraudulent insurance claims.--
3261	(1)(a)  A person commits insurance fraud punishable as
3262	provided in subsection (11) if that person, with the intent to
3263	injure, defraud, or deceive any insurer:
3264	1.  Presents or causes to be presented any written or oral
3265	statement as part of, or in support of, a claim for payment or
3266	other benefit pursuant to an insurance policy or a health
3267	maintenance organization subscriber or provider contract,
3268	knowing that such statement contains any false, incomplete, or
3269	misleading information concerning any fact or thing material to
3270	such claim;
3271	2.  Prepares or makes any written or oral statement that is
3272	intended to be presented to any insurer in connection with, or
3273	in support of, any claim for payment or other benefit pursuant
3274	to an insurance policy or a health maintenance organization
3275	subscriber or provider contract, knowing that such statement
3276	contains any false, incomplete, or misleading information
3277	concerning any fact or thing material to such claim; or
3278	3.a.  Knowingly presents, causes to be presented, or
3279	prepares or makes with knowledge or belief that it will be
3280	presented to any insurer, purported insurer, servicing
3281	corporation, insurance broker, or insurance agent, or any
3282	employee or agent thereof, any false, incomplete, or misleading
3283	information or written or oral statement as part of, or in
3284	support of, an application for the issuance of, or the rating
3285	of, any insurance policy, or a health maintenance organization
3286	subscriber or provider contract, including any false declaration
3287	of homestead status for the purpose of obtaining coverage in a
3288	homestead account under s. 627.351(6); or
3289	b.  Who knowingly conceals information concerning any fact
3290	material to such application.
3291	Section 21.  Task Force on Hurricane Mitigation and
3292	Hurricane Insurance for Mobile and Manufactured Homes.--
3293	(1)  TASK FORCE CREATED.--There is created the Task Force
3294	on Hurricane Mitigation and Hurricane Insurance for Mobile and
3295	Manufactured Homes.
3296	(2)  ADMINISTRATION.--The task force shall be
3297	administratively housed within the Office of Insurance
3298	Regulation but shall operate independently of any state officer
3299	or agency. The office shall provide such administrative support
3300	as the task force deems necessary to accomplish its mission and
3301	shall provide necessary funding for the task force within the
3302	office's existing resources. The Executive Office of the
3303	Governor, the Department of Financial Services, the Office of
3304	Insurance Regulation, the Department of Highway Safety and Motor
3305	Vehicles, and the Department of Community Affairs shall provide
3306	substantive staff support for the task force.
3307	(3)  MEMBERSHIP.--The members of the task force shall be
3308	appointed as follows:
3309	(a)  The Governor shall appoint two members who have
3310	expertise in financial matters, one of whom is a representative
3311	of the mobile or manufactured home industry and one of whom is a
3312	representative of insurance consumers.
3313	(b)  The Chief Financial Officer shall appoint two members
3314	who have expertise in financial matters, one of whom is a
3315	representative of a property insurer writing mobile or
3316	manufactured homeowners insurance in this state and one of whom
3317	is a representative of insurance agents.
3318	(c)  The President of the Senate shall appoint one member.
3319	(d)  The Speaker of the House of Representatives shall
3320	appoint one member.
3321	(e)  The Commissioner of Insurance Regulation or his or her
3322	designee shall serve as an ex officio voting member of the task
3323	force.
3324	(f)  The Executive Director of Citizens Property Insurance
3325	or his or her designee shall serve as an ex officio voting
3326	member of the task force.
3327	(g)  The Chief Executive Officer of the Federal Alliance
3328	for Safe Homes, Incorporated or his or her designee shall serve
3329	as an ex officio voting member of the task force.
3330
3331	Members of the task force shall serve without compensation but
3332	may receive reimbursement for per diem and travel expenses as
3333	provided in s. 112.061, Florida Statutes.
3334	(4)  PURPOSE AND INTENT.--The Legislature recognizes the
3335	continued availability of hurricane insurance coverage for
3336	mobile and manufactured home owners in this state is essential
3337	to the state's economic survival. The Legislature further
3338	recognizes hurricane mitigation measures and building codes may
3339	reduce the likelihood or amount of damage to mobile or
3340	manufactured homes in the event of a hurricane. The Legislature
3341	further recognizes mobile and manufactured homes provide safe
3342	and affordable housing to many residents of this state. The
3343	purpose of the task force is to make recommendations to the
3344	legislative and executive branches of this state's government
3345	relating to the creation and maintenance of insurance capacity
3346	in the private sector and public sector that is sufficient to
3347	ensure that all mobile and manufactured home owners in this
3348	state are able to obtain appropriate insurance coverage for
3349	hurricane losses and relating to the effectiveness of hurricane
3350	mitigation measures for mobile or manufactured homes as further
3351	described in this section.
3352	(5)  SPECIFIC TASKS.--The task force shall conduct such
3353	research and hearings as the task force deems necessary to
3354	achieve the purposes specified in subsection (4) and shall
3355	develop information on relevant issues, including, but not
3356	limited to, the following issues:
3357	(a)  Whether this state currently has sufficient hurricane
3358	insurance capacity for mobile and manufactured homes to ensure
3359	the continuation of a healthy, competitive marketplace, taking
3360	into consideration private-sector and public-sector resources.
3361	(b)  Identifying the future demands on the hurricane
3362	insurance capacity of this state, taking into account population
3363	growth, coastal growth, and anticipated future hurricane
3364	activity.
3365	(c)  Identifying how many mobile or manufactured homes are
3366	occupied in this state, how many mobile or manufactured homes
3367	are occupied by owners who also own the land to which the unit
3368	is attached, the age or average age of mobile or manufactured
3369	homes, the location of such homes, and the size of such homes.
3370	(d)  The extent to which the growth in insurance on mobile
3371	or manufactured homes in Citizens Property Insurance Corporation
3372	is attributable to insufficient insurance capacity.
3373	(e)  The extent to which the growth trends of Citizens
3374	Property Insurance Corporation create long-term problems for
3375	mobile and manufactured home owners in this state and for other
3376	persons and businesses that depend on a viable market.
3377	(f)  The extent to which insurance discounts, credits, or
3378	other rate differentials or reductions in the hurricane
3379	insurance deductible for a mobile or manufactured homeowner who
3380	takes mitigative measures would increase hurricane insurance
3381	capacity for mobile or manufactured homeowners.
3382	(g)  The extent hurricane mitigation enhancements to mobile
3383	or manufactured homes decreases the likelihood of damage from a
3384	hurricane or decreases the amount of damage from a hurricane.
3385	(h)  The extent to which the building codes reduce the
3386	likelihood of damage or amount of damage to mobile or
3387	manufactured homes.
3388	(6)  REPORT AND RECOMMENDATIONS.--By January 1, 2007, the
3389	task force shall provide a report containing findings relating
3390	to the tasks identified in subsection (5) and recommendations
3391	consistent with the purposes of this section and also consistent
3392	with such findings. The task force shall submit the report to
3393	the Governor, the Chief Financial Officer, the President of the
3394	Senate, and the Speaker of the House of Representatives. The
3395	task force may also submit such interim reports as the task
3396	force deems appropriate.
3397	(7)  EXPIRATION.--The task force shall expire on January 2,
3398	2007.
3399	Section 22.  By January 1, 2007, the Office of Insurance
3400	Regulation shall submit a report to the President of the Senate,
3401	the Speaker of the House of Representatives, the minority party
3402	leaders of the Senate and the House of Representatives, and the
3403	chairs of the standing committees of the Senate and the House of
3404	Representatives having jurisdiction over matters relating to
3405	property and casualty insurance. In preparing the report, the
3406	office shall consult with the Department of Highway Safety and
3407	Motor Vehicles, the Department of Community Affairs, the Florida
3408	Building Commission, the Florida Home Builders Association,
3409	representatives of the mobile and manufactured home industry,
3410	representatives of the property and casualty insurance industry,
3411	and any other party the office determines is appropriate. The
3412	report shall include findings and recommendations on the
3413	insurability of attached or free standing structures to
3414	residential homes, mobile, or manufactured homes, such as
3415	carports or pool enclosures; the increase or decrease in
3416	insurance costs associated with insuring such structures; the
3417	feasibility of insuring such structures; the impact on
3418	homeowners of not having insurance coverage for such structures;
3419	the ability of mitigation measures relating to such structures
3420	to reduce risk and loss; and such other related information as
3421	the office determines is appropriate for the Legislature to
3422	consider.
3423	Section 23.  (1)  By January 15, 2007, the Office of
3424	Insurance Regulation shall submit a report to the President of
3425	the Senate, the Speaker of the House of Representatives, the
3426	minority party leaders of the Senate and the House of
3427	Representatives, and the chairs of the standing committees of
3428	the Senate and the House of Representatives having jurisdiction
3429	over matters relating to property and casualty insurance. The
3430	report shall include findings and recommendations on requiring
3431	residential property insurers to provide an opportunity for
3432	policyholders to decrease the monetary amount of a hurricane
3433	deductible predicated upon the policyholder demonstrating
3434	certifiable and verifiable mitigation measures that reduce
3435	hurricane damage. As a part of the report, the office shall
3436	address the feasibility of such a requirement and the specific
3437	procedures necessary for implementation and include suggested
3438	legislation. The report may also include other related
3439	information as the office determines is appropriate for the
3440	Legislature to consider.
3441	(2)  In conducting such research and offering
3442	recommendations for the report, the office shall consult with
3443	consumers, insurers, builders, wind certification inspectors,
3444	organizations dedicated to promoting disaster safety and
3445	property loss mitigation, counties, municipalities, and state
3446	agencies as well as any other entity that the office determines
3447	could provide relevant information.
3448	Section 24.  (1)  The sum of $100 million is appropriated
3449	from the General Revenue Fund to the Florida Hurricane Damage
3450	Prevention Endowment as a nonrecurring appropriation for the
3451	purposes specified in s. 215.558, Florida Statutes.
3452	(2)  The sum of $5.5 million is appropriated from the
3453	General Revenue Fund to the Department of Community Affairs as a
3454	nonrecurring appropriation for the purposes specified in s.
3455	215.5586, Florida Statutes.
3456	Section 25.  Except as otherwise expressly provided in this
3457	act, this act shall take effect July 1, 2006.

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