HB 7225

CS

CHAMBER ACTION

1	The Commerce Council recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to property and casualty insurance;
7	amending s. 215.555, F.S.; revising a definition;
8	authorizing the State Board of Administration to make
9	available to certain insurers a contract to cede certain
10	portions of surplus to the Florida Hurricane Catastrophe
11	Fund; providing contract criteria and requirements;
12	revising certain reimbursement contract criteria; revising
13	certain reimbursement premium requirements; deleting a
14	revenue bond issuance prohibition and validation
15	requirement; revising certain revenue bond emergency
16	assessment requirements; creating s. 215.558, F.S.;
17	creating the Florida Hurricane Damage Prevention
18	Endowment; providing a purpose and legislative intent;
19	providing definitions; providing requirements and
20	authority for investment of endowment assets by the State
21	Board of Administration; requiring a report to the
22	Legislature; providing for payment of the board's
23	investment services' costs and fees from the endowment;
24	providing requirements of the Department of Financial
25	Services in providing financial incentives for residential
26	hurricane damage prevention activities; providing for an
27	interest-free loan program; providing program criteria and
28	requirements; creating an advisory council for certain
29	purposes; providing for appointment of members; requiring
30	members to serve without compensation; providing for per
31	diem and travel expenses; creating s. 215.5586, F.S.;
32	establishing the Florida Comprehensive Hurricane Damage
33	Mitigation Program within the Department of Financial
34	Services; providing qualifications for the program
35	administrator; providing program components and
36	requirements; providing for wind certification and
37	hurricane mitigation inspections; providing inspection
38	requirements; providing inspector eligibility
39	requirements; providing for grants; providing grant
40	requirements; providing for loans; providing public
41	education and consumer awareness requirements; creating an
42	advisory council; providing for appointment of members;
43	specifying service without compensation; providing for per
44	diem and travel expense reimbursements; requiring the
45	department to adopt rules; creating the Manufactured
46	Housing and Mobile Home Hurricane Mitigation Program for
47	certain purposes; requiring the Department of Community
48	Affairs to develop the program in consultation with
49	certain entities; specifying requirements of the program;
50	specifying the program as a matching grant program for
51	improvement of mobile homes and manufactured homes;
52	providing for distribution of the grants to the Department
53	of Community Affairs for certain purposes; requiring
54	Citizens Property Insurance Corporation to grant certain
55	insurance discounts, credits, rate differentials, or
56	deductible reductions for property insurance premiums for
57	certain manufactured home or mobile home owners;
58	specifying criteria for such premiums; requiring a program
59	report each year to the Governor and Legislature;
60	providing report requirements; amending s. 626.918, F.S.;
61	authorizing certain letters of credit to fund an insurer's
62	required policyholder protection trust fund; providing a
63	definition; amending s. 627.062, F.S.; specifying certain
64	rate filings as not subject to office determination as
65	excessive or unfairly discriminatory; providing
66	limitations; providing a definition; prohibiting certain
67	rate filings under certain circumstances; preserving the
68	office's authority to disapprove certain rate filings
69	under certain circumstances; providing procedures for
70	insurers submitting certain rate filings; revising
71	provisions providing for recoupment of certain reinsurance
72	costs; specifying nonapplication to certain types of
73	insurance; specifying approval of certain rate filings
74	under certain circumstances; providing an exception;
75	requiring the office to provide annual reports on the
76	impact of certain rate regulations; specifying report
77	requirements; amending s. 627.0628, F.S.; prohibiting
78	certain office or consumer advocate questions of certain
79	models reviewed by the commission; amending s. 627.0645,
80	F.S.; authorizing the office to exempt certain companies
81	from certain rate filing and rate certification
82	requirements; amending s. 627.06281, F.S.; prohibiting the
83	office from using certain hurricane loss projection models
84	under certain circumstances; amending s. 627.351, F.S.,
85	relating to the Citizens Property Insurance Corporation;
86	providing additional legislative intent; specifying
87	application to homestead property; specifying the existing
88	three separate accounts of the corporation as providing
89	coverage only for homestead property; providing a
90	definition; providing for an additional separate account
91	for nonhomestead property; requiring separate maintenance
92	of revenues, assets, liabilities, losses, and expenses
93	attributable to the nonhomestead account; providing
94	authority and requirements for coverage rates for
95	nonhomestead properties; providing for office review of
96	such rates or rating plans for being inadequate or
97	unfairly discriminatory; authorizing the office to order
98	discontinuance of certain policies under certain
99	circumstances; requiring insurers to maintain certain
100	records; providing for reducing regular assessments by the
101	Citizen policyholder surcharge under certain
102	circumstances; providing for deficit assessments against
103	nonhomestead account policyholders under certain
104	circumstances; authorizing the board of governors of the
105	corporation to make loans from the homestead accounts to
106	the nonhomestead account under certain circumstances;
107	specifying ineligibility of certain nonhomestead account
108	policyholders for certain coverage under certain
109	circumstances; revising the requirements of the plan of
110	operation of the corporation; requiring additional
111	procedures for determining eligibility of a risk for
112	coverage; providing for determination of regular
113	assessments to which the Citizen policyholder surcharge
114	applies; specifying a minimum requirement for a hurricane
115	deductible for certain property; specifying contents of
116	required statements in applications for nonhomestead and
117	homestead account coverage; requiring the corporation to
118	limit coverage on certain mobile homes or manufactured
119	homes; providing additional legislative intent relating to
120	rate adequacy in the residual market; revising provisions
121	relating to a pilot program in Monroe County; deleting
122	provisions relating to a rate methodology panel appointed
123	by the corporation; providing requirements and limitations
124	for a corporation adopted bonus payment program;
125	specifying absence of liability of producing agents of
126	record of the corporation and employees for a take-out
127	insurer's insolvency; deleting provisions for immunity for
128	certain persons and entities; providing a criterion for
129	calculating reduction or increase in probable maximum
130	loss; providing bankruptcy petition limitations; delaying
131	application of certain high-risk area boundary reduction
132	provisions; providing for application of provisions
133	relating to homestead and nonhomestead accounts to certain
134	policies; requiring certain corporation employees to
135	comply with certain ethics code requirements; requiring
136	corporation employees to notify the Division of Insurance
137	Fraud of probable commissions of fraud by corporation
138	employees; requiring the corporation to report on the
139	feasibility of requiring authorized insurers to issue and
140	service specified policies of the corporation; specifying
141	report requirements; providing immunity to producing
142	agents and employees for specified actions taken relating
143	to removal of policies from the corporation; providing a
144	limitation; providing legislative intent; creating a High
145	Risk Eligibility Panel; providing for appointment of panel
146	members and member's terms; providing for administration
147	of the panel by the corporation; prohibiting compensation
148	and per diem and travel expenses; providing an exception;
149	requiring the panel to report annually to the Legislature
150	on the certain areas that should be included in the
151	Citizens Property Insurance Corporation high risk account;
152	specifying factors to be considered by the panel;
153	providing duties of the office; authorizing the office to
154	conduct public hearings; requiring the panel to conduct an
155	analysis of property eligible for the high-risk account in
156	specified areas; requiring the panel to submit a report to
157	the office and corporation; providing requirements of the
158	report; amending s. 627.4035, F.S.; providing for a waiver
159	of a written authorization requirement to pay claims by
160	debit card or other electronic transfer; providing
161	construction relating to limiting the liability of an
162	insurer for certain replacement costs; amending s.
163	627.701, F.S.; providing additional authorization and
164	requirements for hurricane deductibles for renewal
165	periods; requiring insurers to provide insureds with
166	certain deductible selection options after hurricane
167	mitigation measures are taken; amending s. 627.7011, F.S.;
168	limiting certain law and ordinance coverage; deleting
169	application to personal property; requiring insurers to
170	issue separate checks for certain expenses and requiring
171	certain checks to be issued directly to a policyholder;
172	creating s. 627.7019, F.S.; requiring the Financial
173	Services Commission to adopt rules imposing standardized
174	requirements applicable to insurers after certain natural
175	events; providing criteria; providing requirements of the
176	Office of Insurance Regulation; prohibiting certain
177	conflicting emergency rules; amending s. 627.727, F.S.;
178	correcting a cross-reference; amending s. 631.181, F.S.;
179	providing an exception to certain requirements for a
180	signed statement for certain claims; providing
181	requirements; amending s. 631.54, F.S.; defining the term
182	"homeowner's insurance"; amending s. 631.55, F.S.;
183	correcting a cross-reference; amending s. 631.57, F.S.;
184	revising requirements and limitations for obligations of
185	the Florida Insurance Guaranty Association for covered
186	claims; authorizing the association to contract with
187	counties, municipalities, and legal entities to issue
188	revenue bonds for certain purposes; authorizing the Office
189	of Insurance Regulation to levy assessments and emergency
190	assessments on insurers under certain circumstances for
191	certain bond repayment purposes; providing requirements
192	for and limitations on such assessments; providing for
193	payment, collection, and distribution of such assessments;
194	requiring insurers to include an analysis of revenues from
195	such assessments in a required report; providing rate
196	filing requirements for insurers relating to such
197	assessments; providing for continuing annual assessments
198	under certain circumstances; specifying emergency
199	assessments as not premium and not subject to certain
200	taxes, fees, or commissions; specifying insurer liability
201	for emergency assessments; providing an exception;
202	creating s. 631.695, F.S.; providing legislative findings
203	and purposes; providing for issuance of revenue bonds
204	through counties and municipalities to fund assistance
205	programs for paying covered claims for hurricane damage;
206	providing procedures, requirements, and limitations for
207	counties, municipalities, and the Florida Insurance
208	Guaranty Association, Inc., relating to issuance and
209	validation of such bonds; prohibiting pledging the funds,
210	credit, property, and taxing power of the state, counties,
211	and municipalities for payment of bonds; specifying
212	authorized uses of bond proceeds; limiting the term of
213	bonds; specifying a state covenant to protect bondholders
214	from adverse actions relating to such bonds; specifying
215	exemptions for bonds, notes, and other obligations of
216	counties and municipalities from certain taxes or
217	assessments on property and revenues; authorizing counties
218	and municipalities to create a legal entity to exercise
219	certain powers; requiring the association to issue an
220	annual report on the status of certain uses of bond
221	proceeds; providing report requirements; requiring the
222	association to provide a copy of the report to the
223	Legislature and Chief Financial Officer; prohibiting
224	repeal of certain provisions relating to certain bonds
225	under certain circumstances; amending s. 817.234, F.S.;
226	providing an additional circumstance that constitutes
227	committing insurance fraud; creating the Task Force on
228	Hurricane Mitigation and Hurricane Insurance for Mobile
229	and Manufactured Homes; providing for administration by
230	the office; specifying additional agency administrative
231	staff; providing for appointment of task force members;
232	requiring members to serve without compensation; providing
233	for per diem and travel expenses; providing purpose and
234	intent; requiring the task force to address specified
235	issues; requiring a report to the Governor, Chief
236	Financial Officer, and Legislature; providing for
237	expiration of the task force; requiring the Office of
238	Insurance Regulation to submit reports to the Legislature
239	relating to the insurability of certain attached or free
240	standing structures ; providing report requirements;
241	providing duties of the office; providing appropriations;
242	specifying uses and purposes of appropriations; providing
243	effective dates.
244
245	Be It Enacted by the Legislature of the State of Florida:
246
247	Section 1.  Paragraph (d) of subsection (2), paragraphs
248	(b), (c), and (d) of subsection (4), paragraph (b) of subsection
249	(5), and paragraphs (a) and (b) of subsection (6) of section
250	215.555, Florida Statutes, are amended to read:
251	215.555  Florida Hurricane Catastrophe Fund.--
252	(2)  DEFINITIONS.--As used in this section:
253	(d)  "Losses" means direct incurred losses under covered
254	policies, which shall include losses for additional living
255	expenses not to exceed 40 percent of the insured value of a
256	residential structure or its contents and shall exclude loss
257	adjustment expenses. "Losses" does not include losses for fair
258	rental value, loss of rent or rental income use, or business
259	interruption losses.
260	(4)  REIMBURSEMENT CONTRACTS.--
261	(b)1.  The contract shall contain a promise by the board to
262	reimburse the insurer for 45 percent, 75 percent, or 90 percent
263	of its losses from each covered event in excess of the insurer's
264	retention, plus 5 percent of the reimbursed losses to cover loss
265	adjustment expenses.
266	2.  The insurer must elect one of the percentage coverage
267	levels specified in this paragraph and may, upon renewal of a
268	reimbursement contract, elect a lower percentage coverage level
269	if no revenue bonds issued under subsection (6) after a covered
270	event are outstanding, or elect a higher percentage coverage
271	level, regardless of whether or not revenue bonds are
272	outstanding. All members of an insurer group must elect the same
273	percentage coverage level. Any joint underwriting association,
274	risk apportionment plan, or other entity created under s.
275	627.351 must elect the 90-percent coverage level.
276	3.  The contract shall provide that reimbursement amounts
277	shall not be reduced by reinsurance paid or payable to the
278	insurer from other sources.
279	4.  Notwithstanding any other provision contained in this
280	section, the board shall make available to insurers qualifying
281	as limited apportionment companies under s. 627.351(2)(b)3. a
282	contract which cedes to the fund, after retention, an amount
283	equal to or up to 50 percent of surplus reported by such company
284	as of June 1, 2006. The rate to be charged for this coverage
285	shall be 50 percent rate-on-line which includes one prepaid
286	reinstatement. The minimum retention level that a carrier must
287	retain is 30 percent of surplus as of June 1, 2006. This
288	coverage shall be in addition to all other coverage which may be
289	provided under this section. This provision shall expire May 31,
290	2007.
291	(c)1.  The contract shall also provide that the obligation
292	of the board with respect to all contracts covering a particular
293	contract year shall not exceed the actual claims-paying capacity
294	of the fund up to a limit of $15 billion for that contract year
295	adjusted based upon the reported exposure from the prior
296	contract year to reflect the percentage growth in exposure to
297	the fund for covered policies since 2003, provided the dollar
298	growth in the limit may not increase in any year by an amount
299	greater than the dollar growth of the cash balance of the fund
300	as of December 31 as defined by rule which occurred over the
301	prior calendar year.
302	2.  In May before the start of the upcoming contract year
303	and in October during the contract year, the board shall publish
304	in the Florida Administrative Weekly a statement of the fund's
305	estimated borrowing capacity and the projected balance of the
306	fund as of December 31. After the end of each calendar year, the
307	board shall notify insurers of the estimated borrowing capacity
308	and the balance of the fund as of December 31 to provide
309	insurers with data necessary to assist them in determining their
310	retention and projected payout from the fund for loss
311	reimbursement purposes. In conjunction with the development of
312	the premium formula, as provided for in subsection (5), the
313	board shall publish factors or multiples that assist insurers in
314	determining their retention and projected payout for the next
315	contract year. For all regulatory and reinsurance purposes, an
316	insurer may calculate its projected payout from the fund as its
317	share of the total fund premium for the current contract year
318	multiplied by the sum of the projected balance of the fund as of
319	December 31 and the estimated borrowing capacity for that
320	contract year as reported under this subparagraph.
321	(d)1.  For purposes of determining potential liability and
322	to aid in the sound administration of the fund, the contract
323	shall require each insurer to report such insurer's losses from
324	each covered event on an interim basis, as directed by the
325	board. The contract shall require the insurer to report to the
326	board no later than December 31 of each year, and quarterly
327	thereafter, its reimbursable losses from covered events for the
328	year. The contract shall require the board to determine and pay,
329	as soon as practicable after receiving these reports of
330	reimbursable losses, the initial amount of reimbursement due and
331	adjustments to this amount based on later loss information. The
332	adjustments to reimbursement amounts shall require the board to
333	pay, or the insurer to return, amounts reflecting the most
334	recent calculation of losses.
335	2.  In determining reimbursements pursuant to this
336	subsection, the contract shall provide that the board shall:
337	a.  First reimburse insurers writing covered policies,
338	which insurers are in full compliance with this section and have
339	petitioned the Office of Insurance Regulation and qualified as
340	limited apportionment companies under s. 627.351(2)(b)3. The
341	amount of such reimbursement shall be the lesser of $10 million
342	or an amount equal to 10 times the insurer's reimbursement
343	premium for the current year. The amount of reimbursement paid
344	under this sub-subparagraph may not exceed the full amount of
345	reimbursement promised in the reimbursement contract. This sub-
346	subparagraph does not apply with respect to any contract year in
347	which the year-end projected cash balance of the fund, exclusive
348	of any bonding capacity of the fund, exceeds $2 billion. Only
349	one member of any insurer group may receive reimbursement under
350	this sub-subparagraph.
351	a.b.  Next Pay to each insurer such insurer's projected
352	payout, which is the amount of reimbursement it is owed, up to
353	an amount equal to the insurer's share of the actual premium
354	paid for that contract year, multiplied by the actual claims-
355	paying capacity available for that contract year; provided,
356	entities created pursuant to s. 627.351 shall be further
357	reimbursed in accordance with sub-subparagraph b. c.
358	b.c.  Thereafter, establish the prorated reimbursement
359	level at the highest level for which any remaining fund balance
360	or bond proceeds are sufficient to reimburse entities created
361	pursuant to s. 627.351 based on reimbursable losses exceeding
362	the amounts payable pursuant to sub-subparagraph a. b. for the
363	current contract year.
364	(5)  REIMBURSEMENT PREMIUMS.--
365	(b)  The State Board of Administration shall select an
366	independent consultant to develop a formula for determining the
367	actuarially indicated premium to be paid to the fund. The
368	formula shall specify, for each zip code or other limited
369	geographical area, the amount of premium to be paid by an
370	insurer for each $1,000 of insured value under covered policies
371	in that zip code or other area. In establishing premiums, the
372	board shall consider the coverage elected under paragraph (4)(b)
373	and any factors that tend to enhance the actuarial
374	sophistication of ratemaking for the fund, including
375	deductibles, type of construction, type of coverage provided,
376	relative concentration of risks, a factor providing for more
377	rapid cash buildup in the fund until the fund capacity for a
378	single hurricane season is fully funded, and other such factors
379	deemed by the board to be appropriate. The formula may provide
380	for a procedure to determine the premiums to be paid by new
381	insurers that begin writing covered policies after the beginning
382	of a contract year, taking into consideration when the insurer
383	starts writing covered policies, the potential exposure of the
384	insurer, the potential exposure of the fund, the administrative
385	costs to the insurer and to the fund, and any other factors
386	deemed appropriate by the board. The formula shall include a
387	factor of 25 percent of the fund's actuarially indicated premium
388	in order to provide for more rapid cash buildup in the fund. The
389	formula must be approved by unanimous vote of the board. The
390	board may, at any time, revise the formula pursuant to the
391	procedure provided in this paragraph.
392	(6)  REVENUE BONDS.--
393	(a)  General provisions.--
394	1.  Upon the occurrence of a hurricane and a determination
395	that the moneys in the fund are or will be insufficient to pay
396	reimbursement at the levels promised in the reimbursement
397	contracts, the board may take the necessary steps under
398	paragraph (c) or paragraph (d) for the issuance of revenue bonds
399	for the benefit of the fund. The proceeds of such revenue bonds
400	may be used to make reimbursement payments under reimbursement
401	contracts; to refinance or replace previously existing
402	borrowings or financial arrangements; to pay interest on bonds;
403	to fund reserves for the bonds; to pay expenses incident to the
404	issuance or sale of any bond issued under this section,
405	including costs of validating, printing, and delivering the
406	bonds, costs of printing the official statement, costs of
407	publishing notices of sale of the bonds, and related
408	administrative expenses; or for such other purposes related to
409	the financial obligations of the fund as the board may
410	determine. The term of the bonds may not exceed 30 years. The
411	board may pledge or authorize the corporation to pledge all or a
412	portion of all revenues under subsection (5) and under paragraph
413	(b) to secure such revenue bonds and the board may execute such
414	agreements between the board and the issuer of any revenue bonds
415	and providers of other financing arrangements under paragraph
416	(7)(b) as the board deems necessary to evidence, secure,
417	preserve, and protect such pledge. If reimbursement premiums
418	received under subsection (5) or earnings on such premiums are
419	used to pay debt service on revenue bonds, such premiums and
420	earnings shall be used only after the use of the moneys derived
421	from assessments under paragraph (b). The funds, credit,
422	property, or taxing power of the state or political subdivisions
423	of the state shall not be pledged for the payment of such bonds.
424	The board may also enter into agreements under paragraph (c) or
425	paragraph (d) for the purpose of issuing revenue bonds in the
426	absence of a hurricane upon a determination that such action
427	would maximize the ability of the fund to meet future
428	obligations.
429	2.  The Legislature finds and declares that the issuance of
430	bonds under this subsection is for the public purpose of paying
431	the proceeds of the bonds to insurers, thereby enabling insurers
432	to pay the claims of policyholders to assure that policyholders
433	are able to pay the cost of construction, reconstruction,
434	repair, restoration, and other costs associated with damage to
435	property of policyholders of covered policies after the
436	occurrence of a hurricane. Revenue bonds may not be issued under
437	this subsection until validated under chapter 75. The validation
438	of at least the first obligations incurred pursuant to this
439	subsection shall be appealed to the Supreme Court, to be handled
440	on an expedited basis.
441	(b)  Emergency assessments.--
442	1.  If the board determines that the amount of revenue
443	produced under subsection (5) is insufficient to fund the
444	obligations, costs, and expenses of the fund and the
445	corporation, including repayment of revenue bonds and that
446	portion of the debt service coverage not met by reimbursement
447	premiums, the board shall direct the Office of Insurance
448	Regulation to levy, by order, an emergency assessment on direct
449	premiums for all property and casualty lines of business in this
450	state, including property and casualty business of surplus lines
451	insurers regulated under part VIII of chapter 626, but not
452	including any workers' compensation premiums or medical
453	malpractice premiums. As used in this subsection, the term
454	"property and casualty business" includes all lines of business
455	identified on Form 2, Exhibit of Premiums and Losses, in the
456	annual statement required of authorized insurers by s. 624.424
457	and any rule adopted under this section, except for those lines
458	identified as accident and health insurance and except for
459	policies written under the National Flood Insurance Program. The
460	assessment shall be specified as a percentage of direct written
461	future premium collections and is subject to annual adjustments
462	by the board to reflect changes in premiums subject to
463	assessments collected under this subparagraph in order to meet
464	debt obligations. The same percentage shall apply to all
465	policies in lines of business subject to the assessment issued
466	or renewed during the 12-month period beginning on the effective
467	date of the assessment.
468	2.  A premium is not subject to an annual assessment under
469	this paragraph in excess of 6 percent of premium with respect to
470	obligations arising out of losses attributable to any one
471	contract year, and a premium is not subject to an aggregate
472	annual assessment under this paragraph in excess of 10 percent
473	of premium. An annual assessment under this paragraph shall
474	continue for as long as until the revenue bonds issued with
475	respect to which the assessment was imposed are outstanding,
476	including any bonds the proceeds of which were used to refund
477	the revenue bonds, unless adequate provision has been made for
478	the payment of the bonds under the documents authorizing
479	issuance of the bonds.
480	3.  Emergency assessments shall be collected from
481	policyholders. Emergency assessments shall be remitted by
482	insurers as a percentage of direct written premium for the
483	preceding calendar quarter as specified in the order from With
484	respect to each insurer collecting premiums that are subject to
485	the assessment, the insurer shall collect the assessment at the
486	same time as it collects the premium payment for each policy and
487	shall remit the assessment collected to the fund or corporation
488	as provided in the order issued by the Office of Insurance
489	Regulation. The office shall verify the accurate and timely
490	collection and remittance of emergency assessments and shall
491	report the information to the board in a form and at a time
492	specified by the board. Each insurer collecting assessments
493	shall provide the information with respect to premiums and
494	collections as may be required by the office to enable the
495	office to monitor and verify compliance with this paragraph.
496	4.  With respect to assessments of surplus lines premiums,
497	each surplus lines agent shall collect the assessment at the
498	same time as the agent collects the surplus lines tax required
499	by s. 626.932, and the surplus lines agent shall remit the
500	assessment to the Florida Surplus Lines Service Office created
501	by s. 626.921 at the same time as the agent remits the surplus
502	lines tax to the Florida Surplus Lines Service Office. The
503	emergency assessment on each insured procuring coverage and
504	filing under s. 626.938 shall be remitted by the insured to the
505	Florida Surplus Lines Service Office at the time the insured
506	pays the surplus lines tax to the Florida Surplus Lines Service
507	Office. The Florida Surplus Lines Service Office shall remit the
508	collected assessments to the fund or corporation as provided in
509	the order levied by the Office of Insurance Regulation. The
510	Florida Surplus Lines Service Office shall verify the proper
511	application of such emergency assessments and shall assist the
512	board in ensuring the accurate and timely collection and
513	remittance of assessments as required by the board. The Florida
514	Surplus Lines Service Office shall annually calculate the
515	aggregate written premium on property and casualty business,
516	other than workers' compensation and medical malpractice,
517	procured through surplus lines agents and insureds procuring
518	coverage and filing under s. 626.938 and shall report the
519	information to the board in a form and at a time specified by
520	the board.
521	5.  Any assessment authority not used for a particular
522	contract year may be used for a subsequent contract year. If,
523	for a subsequent contract year, the board determines that the
524	amount of revenue produced under subsection (5) is insufficient
525	to fund the obligations, costs, and expenses of the fund and the
526	corporation, including repayment of revenue bonds and that
527	portion of the debt service coverage not met by reimbursement
528	premiums, the board shall direct the Office of Insurance
529	Regulation to levy an emergency assessment up to an amount not
530	exceeding the amount of unused assessment authority from a
531	previous contract year or years, plus an additional 4 percent
532	provided that the assessments in the aggregate do not exceed the
533	limits specified in subparagraph 2.
534	6.  The assessments otherwise payable to the corporation
535	under this paragraph shall be paid to the fund unless and until
536	the Office of Insurance Regulation and the Florida Surplus Lines
537	Service Office have received from the corporation and the fund a
538	notice, which shall be conclusive and upon which they may rely
539	without further inquiry, that the corporation has issued bonds
540	and the fund has no agreements in effect with local governments
541	under paragraph (c). On or after the date of the notice and
542	until the date the corporation has no bonds outstanding, the
543	fund shall have no right, title, or interest in or to the
544	assessments, except as provided in the fund's agreement with the
545	corporation.
546	7.  Emergency assessments are not premium and are not
547	subject to the premium tax, to the surplus lines tax, to any
548	fees, or to any commissions. An insurer is liable for all
549	assessments that it collects and must treat the failure of an
550	insured to pay an assessment as a failure to pay the premium. An
551	insurer is not liable for uncollectible assessments.
552	8.  When an insurer is required to return an unearned
553	premium, it shall also return any collected assessment
554	attributable to the unearned premium. A credit adjustment to the
555	collected assessment may be made by the insurer with regard to
556	future remittances that are payable to the fund or corporation,
557	but the insurer is not entitled to a refund.
558	9.  When a surplus lines insured or an insured who has
559	procured coverage and filed under s. 626.938 is entitled to the
560	return of an unearned premium, the Florida Surplus Lines Service
561	Office shall provide a credit or refund to the agent or such
562	insured for the collected assessment attributable to the
563	unearned premium prior to remitting the emergency assessment
564	collected to the fund or corporation.
565	10.  The exemption of medical malpractice insurance
566	premiums from emergency assessments under this paragraph is
567	repealed May 31, 2010 2007, and medical malpractice insurance
568	premiums shall be subject to emergency assessments attributable
569	to loss events occurring in the contract years commencing on
570	June 1, 2010 2007.
571	Section 2.  Section 215.558, Florida Statutes, is created
572	to read:
573	215.558  Florida Hurricane Damage Prevention Endowment.--
574	(1)  PURPOSE AND INTENT.--The purpose of this section is to
575	provide a continuing source of funding for financial incentives
576	to encourage residential property owners of this state to
577	retrofit their properties to make them less vulnerable to
578	hurricane damage, to help decrease the cost of residential
579	property and casualty insurance, and to provide matching funds
580	to local governments and nonprofit entities for projects that
581	will reduce hurricane damage to residential properties. It is
582	the intent of the Legislature that this section be construed
583	liberally to effectuate its purpose.
584	(2)  DEFINITIONS.--As used in this section:
585	(a)  "Board" means the State Board of Administration.
586	(b)  "Corpus" means the money that has been appropriated to
587	the endowment by the 2006 Legislature, together with any amounts
588	subsequently appropriated to the endowment that are specifically
589	designated as contributions to the corpus and any grants, gifts,
590	or donations to the endowment that are specifically designated
591	as contributions to the corpus.
592	(c)  "Earnings" means any money in the endowment in excess
593	of the corpus, including any income generated by investments,
594	any increase in the market value of investments net of decreases
595	in market value, and any appropriations, grants, gifts, or
596	donations to the endowment not specifically designated as
597	contributions to the corpus.
598	(d)  "Endowment" means the Florida Hurricane Damage
599	Prevention Endowment created by this section.
600	(e)  "Program administrator" means the Department of
601	Financial Services.
602	(3)  ADMINISTRATION.--
603	(a)  The board shall invest endowment assets as provided in
604	this section.
605	(b)  The board may invest and reinvest funds of the
606	endowment in accordance with s. 215.47 and consistent with board
607	policy.
608	(c)  The investment objective shall be long-term
609	preservation of the value of the corpus and a specified regular
610	annual cash outflow for appropriation, as nonrecurring revenue,
611	for the purposes specified in subsection (4).
612	(d)  In accordance with s. 215.44, the board shall report
613	on the financial status of the endowment in its annual
614	investment report to the Legislature.
615	(e)  Costs and fees of the board for investment services
616	shall be deducted from the assets of the endowment.
617	(4)  FINANCIAL INCENTIVES FOR RESIDENTIAL HURRICANE DAMAGE
618	PREVENTION ACTIVITIES.--
619	(a)  Not less than 80 percent of the net earnings of the
620	endowment shall be expended for financial incentives to
621	residential property owners as described in paragraph (b), and
622	no more than the remainder of the net earnings of the endowment
623	shall be expended for matching fund grants to local governments
624	and nonprofit entities for projects that will reduce hurricane
625	damage to residential properties as described in paragraph (c).
626	Any funds authorized for expenditure but not expended for these
627	purposes shall be returned to the endowment.
628	(b)1.  The program administrator, by rule, shall establish
629	a request for a proposal process to annually solicit proposals
630	from lending institutions under which the lending institution
631	will provide interest-free loans to homestead property owners to
632	pay for inspections of homestead property to determine what
633	mitigation measures are needed and for improvements to existing
634	residential properties intended to reduce the homestead
635	property's vulnerability to hurricane damage, in exchange for
636	funding from the endowment.
637	2.  In order to qualify for funding under this paragraph,
638	an interest-free loan program must include an inspection of
639	homestead property to determine what mitigation measures are
640	needed, a means for verifying that the improvements to be paid
641	for from loan proceeds have been demonstrated to reduce a
642	homestead property's vulnerability to hurricane damage, and a
643	means for verifying that the proceeds were actually spent on
644	such improvements. The program must include a method for
645	awarding loans according to the following priorities:
646	a.  The highest priority must be given to single-family
647	owner-occupied homestead dwellings, insured at $500,000 or less,
648	located in the areas designated as high-risk areas for purposes
649	of coverage by the Citizens Property Insurance Corporation.
650	b.  The next highest priority must be given to single-
651	family owner-occupied homestead dwellings, insured at $500,000
652	or less, covered by the Citizens Property Insurance Corporation,
653	wherever located.
654	c.  The next highest priority must be given to single-
655	family owner-occupied homestead dwellings, insured at $500,000
656	or less, that are more than 40 years old.
657	d.  The next highest priority must be given to all other
658	single-family owner-occupied homestead dwellings insured at
659	$500,000 or less.
660	3.  The program administrator shall evaluate proposals
661	based on the following factors:
662	a.  The degree to which the proposal meets the requirements
663	of subparagraph 2.
664	b.  The lending institution's plan for marketing the loans.
665	c.  The anticipated number of loans to be granted relative
666	to the total amount of funding sought.
667	4.  The program administrator shall annually solicit
668	proposals from local governments and nonprofit entities for
669	projects that will reduce hurricane damage to homestead
670	properties. The program administrator may provide up to 50
671	percent of the funding for such projects. The projects may
672	include educational programs, repair services, property
673	inspections, and hurricane vulnerability analyses and such other
674	projects as the program administrator determines to be
675	consistent with the purposes of this section.
676	(5)  ADVISORY COUNCIL.--There is created an advisory
677	council to provide advice and assistance to the program
678	administrator with regard to its administration of the
679	endowment. The advisory council shall consist of:
680	(a)  A representative of lending institutions, selected by
681	the Financial Services Commission from a list of at least three
682	persons recommended by the Florida Bankers Association.
683	(b)  A representative of residential property insurers,
684	selected by the Financial Services Commission from a list of at
685	least three persons recommended by the Florida Insurance
686	Council.
687	(c)  A representative of home builders, selected by the
688	Financial Services Commission from a list of at least three
689	persons recommended by the Florida Home Builders Association.
690	(d)  A faculty member of a state university selected by the
691	Financial Services Commission who is an expert in hurricane-
692	resistant construction methodologies and materials.
693	(e)  Two members of the House of Representatives selected
694	by the Speaker of the House of Representatives.
695	(f)  Two members of the Senate selected by the President of
696	the Senate.
697	(g)  The senior officer of the Florida Hurricane
698	Catastrophe Fund.
699	(h)  The executive director of Citizens Property Insurance
700	Corporation.
701	(i)  The director of the Division of Emergency Management
702	of the Department of Community Affairs.
703
704	Members appointed under paragraphs (a)-(d) shall serve at the
705	pleasure of the Financial Services Commission. Members appointed
706	under paragraphs (e) and (f) shall serve at the pleasure of the
707	appointing officer. All other members shall serve ex officio.
708	Members of the advisory council shall serve without compensation
709	but may receive reimbursement as provided in s. 112.061 for per
710	diem and travel expenses incurred in the performance of their
711	official duties.
712	Section 3.  Section 215.5586, Florida Statutes, is created
713	to read:
714	215.5586  Florida Comprehensive Hurricane Damage Mitigation
715	Program.--There is established within the Department of
716	Financial Services the Florida Comprehensive Hurricane Damage
717	Mitigation Program. The program shall be administered by an
718	individual with prior executive experience in the private sector
719	in the areas of insurance, business, or construction. The
720	program shall develop and implement a comprehensive and
721	coordinated approach for hurricane damage mitigation that shall
722	include the following:
723	(1)  WIND CERTIFICATION AND HURRICANE MITIGATION
724	INSPECTIONS.--
725	(a)  Free home-retrofit inspections of site-built,
726	residential property, including single-family, two-family,
727	three-family, or four-family residential units, shall be offered
728	to determine what mitigation measures are needed and what
729	improvements to existing residential properties are needed to
730	reduce the property's vulnerability to hurricane damage. The
731	Department of Financial Services shall establish a request for
732	proposals to solicit proposals from wind certification entities
733	to provide at no cost to homeowners wind certification and
734	hurricane mitigation inspections. The inspections provided to
735	homeowners, at a minimum, must include:
736	1.  A home inspection and report that summarizes the
737	results and identifies corrective actions a homeowner may take
738	to mitigate hurricane damage.
739	2.  A range of cost estimates regarding the mitigation
740	features.
741	3.  Insurer-specific information regarding premium
742	discounts correlated to recommended mitigation features
743	identified by the inspection.
744	4.  A hurricane resistance rating scale specifying the
745	home's current as well as projected wind resistance
746	capabilities.
747	(b)  To qualify for selection by the department as a
748	provider of wind certification and hurricane mitigation
749	inspections, the entity shall, at a minimum:
750	1.  Use wind certification and hurricane mitigation
751	inspectors who:
752	a.  Have prior experience in residential construction or
753	inspection and have received specialized training in hurricane
754	mitigation procedures.
755	b.  Have undergone drug testing and background checks.
756	c.  Have been certified, in a manner satisfactory to the
757	department, to conduct the inspections.
758	2.  Provide a quality assurance program including a
759	reinspection component.
760	(2)  GRANTS.--Financial grants shall be used to encourage
761	single-family, site-built, owner-occupied, residential property
762	owners to retrofit their properties to make them less vulnerable
763	to hurricane damage.
764	(a)  To be eligible for a grant, a residential property
765	must:
766	1.  Have been granted a homestead exemption under chapter
767	196.
768	2.  Be a dwelling with an insured value of $500,000 or
769	less.
770	3.  Have undergone an acceptable wind certification and
771	hurricane mitigation inspection.
772
773	A residential property which is part of a multi-family
774	residential unit may receive a grant only if all homeowners
775	participate and the total number of units does not exceed four.
776	(b)  All grants must be matched on a dollar-for-dollar
777	basis for a total of $10,000 for the mitigation project with the
778	state's contribution not to exceed $5,000.
779	(c)  The program shall create a process in which mitigation
780	contractors agree to participate and seek reimbursement from the
781	state and homeowners select from a list of participating
782	contractors. All mitigation must be based upon the securing of
783	all required local permits and inspections. Mitigation projects
784	are subject to random reinspection of up to at least 10 percent
785	of all projects.
786	(d)  Matching fund grants shall also be made available to
787	local governments and nonprofit entities for projects that will
788	reduce hurricane damage to single-family, site-built, owner-
789	occupied, residential property.
790	(3)  LOANS.--Financial incentives shall be provided as
791	authorized by s. 215.558.
792	(4)  EDUCATION AND CONSUMER AWARENESS.--Multimedia public
793	education, awareness, and advertising efforts designed to
794	specifically address mitigation techniques shall be employed, as
795	well as a component to support ongoing consumer resources and
796	referral services.
797	(5)  ADVISORY COUNCIL.--There is created an advisory
798	council to provide advice and assistance to the program
799	administrator with regard to his or her administration of the
800	program. The advisory council shall consist of:
801	(a)  A representative of lending institutions, selected by
802	the Financial Services Commission from a list of at least three
803	persons recommended by the Florida Bankers Association.
804	(b)  A representative of residential property insurers,
805	selected by the Financial Services Commission from a list of at
806	least three persons recommended by the Florida Insurance
807	Council.
808	(c)  A representative of home builders, selected by the
809	Financial Services Commission from a list of at least three
810	persons recommended by the Florida Home Builders Association.
811	(d)  A faculty member of a state university, selected by
812	the Financial Services Commission, who is an expert in
813	hurricane-resistant construction methodologies and materials.
814	(e)  Two members of the House of Representatives, selected
815	by the Speaker of the House of Representatives.
816	(f)  Two members of the Senate, selected by the President
817	of the Senate.
818	(g)  The Chief Executive Officer of the Federal Alliance
819	for Safe Homes, Inc., or his or her designee.
820	(h)  The senior officer of the Florida Hurricane
821	Catastrophe Fund.
822	(i)  The executive director of Citizens Property Insurance
823	Corporation.
824	(j)  The director of the Division of Emergency Management
825	of the Department of Community Affairs.
826
827	Members appointed under paragraphs (a)-(d) shall serve at the
828	pleasure of the Financial Services Commission. Members appointed
829	under paragraphs (e) and (f) shall serve at the pleasure of the
830	appointing officer. All other members shall serve voting ex
831	officio. Members of the advisory council shall serve without
832	compensation but may receive reimbursement as provided in s.
833	112.061 for per diem and travel expenses incurred in the
834	performance of their official duties.
835	(6)  RULES.--The Department of Financial Services shall
836	adopt rules pursuant to ss. 120.536(1) and 120.54 governing the
837	Florida Comprehensive Hurricane Damage Mitigation Program.
838	Section 4.  Section 215.559, Florida Statutes, is amended
839	to read:
840	215.559  Hurricane Loss Mitigation Program.--
841	(1)  There is created a Hurricane Loss Mitigation Program.
842	The Legislature shall annually appropriate $10 million of the
843	moneys authorized for appropriation under s. 215.555(7)(c) from
844	the Florida Hurricane Catastrophe Fund to the Department of
845	Community Affairs for the purposes set forth in this section.
846	(2)(a)  Seven million dollars in funds provided in
847	subsection (1) shall be used for programs to improve the wind
848	resistance of residences and mobile homes, including loans,
849	subsidies, grants, demonstration projects, and direct
850	assistance; cooperative programs with local governments and the
851	Federal Government; and other efforts to prevent or reduce
852	losses or reduce the cost of rebuilding after a disaster.
853	(b)  Three million dollars in funds provided in subsection
854	(1) shall be used to retrofit existing facilities used as public
855	hurricane shelters. The department must prioritize the use of
856	these funds for projects included in the September 1, 2000,
857	version of the Shelter Retrofit Report prepared in accordance
858	with s. 252.385(3), and each annual report thereafter. The
859	department must give funding priority to projects in regional
860	planning council regions that have shelter deficits and to
861	projects that maximize use of state funds.
862	(3)  By the 2006-2007 fiscal year, the Department of
863	Community Affairs shall develop a low-interest loan program for
864	homeowners and mobile home owners to retrofit their homes with
865	fixtures or apply construction techniques that have been
866	demonstrated to reduce the amount of damage or loss due to a
867	hurricane. Funding for the program shall be used to subsidize or
868	guaranty private-sector loans for this purpose to qualified
869	homeowners by financial institutions chartered by the state or
870	Federal Government. The department may enter into contracts with
871	financial institutions for this purpose. The department shall
872	establish criteria for determining eligibility for the loans and
873	selecting recipients, standards for retrofitting homes or mobile
874	homes, limitations on loan subsidies and loan guaranties, and
875	other terms and conditions of the program, which must be
876	specified in the department's report to the Legislature on
877	January 1, 2006, required by subsection (8). For the 2005-2006
878	fiscal year, the Department of Community Affairs may use up to
879	$1 million of the funds appropriated pursuant to paragraph
880	(2)(a) to begin the low-interest loan program as a pilot project
881	in one or more counties. The Department of Financial Services,
882	the Office of Financial Regulation, the Florida Housing Finance
883	Corporation, and the Office of Tourism, Trade, and Economic
884	Development shall assist the Department of Community Affairs in
885	establishing the program and pilot project. The department may
886	use up to 2.5 percent of the funds appropriated in any given
887	fiscal year for administering the loan program. The department
888	may adopt rules to implement the program.
889	(3)(a)(4)  Forty percent of the total appropriation in
890	paragraph (2)(a) shall be used to inspect and improve tie-downs
891	for mobile homes. Within 30 days after the effective date of
892	that appropriation, the department shall contract with a public
893	higher educational institution in this state which has previous
894	experience in administering the programs set forth in this
895	subsection to serve as the administrative entity and fiscal
896	agent pursuant to s. 216.346 for the purpose of administering
897	the programs set forth in this subsection in accordance with
898	established policy and procedures. The administrative entity
899	working with the advisory council set up under subsection (6)
900	shall develop a list of mobile home parks and counties that may
901	be eligible to participate in the tie-down program.
902	(b)1.  There is created the Manufactured Housing and Mobile
903	Home Hurricane Mitigation Program. The program shall require the
904	mitigation of damage to homes for the areas of concern raised by
905	the Department of Highway Safety and Motor Vehicles in the 2004-
906	2005 Hurricane Reports on the effects of the 2004 and 2005
907	hurricanes on manufactured and mobile homes in this state. The
908	mitigation shall include, but not be limited to, problems
909	associated with weakened trusses, studs, and other structural
910	components, site-built additions, or tie-down systems and may
911	also address any other issues deemed appropriate by the
912	Department of Community Affairs upon consultation with the
913	Tallahassee Community College, the Federation of Manufactured
914	Home Owners of Florida, Inc., the Florida Manufactured Housing
915	Association, and the Department of Highway Safety and Motor
916	Vehicles. The program may include an education and outreach
917	component to ensure that owners of manufactured and mobile homes
918	are aware of the benefits of participation.
919	2.  The program shall include the offering of a matching
920	grant to owners of manufactured and mobile homes manufactured
921	after 1993 only. Homeowners accepted for the program shall be
922	eligible to qualify for a $5,000 dollar-for-dollar matching
923	grant in which the homeowner may receive up to $2,500 in state
924	moneys. The moneys appropriated for this program shall be
925	distributed directly to the Department of Community Affairs for
926	the uses set forth under this paragraph.
927	3.  Upon evidence of completion of the program, the
928	Citizens Property Insurance Corporation shall grant, on a pro
929	rata basis, actuarially reasonable discounts, credits, or other
930	rate differentials or appropriate reductions in deductibles for
931	the properties of owners of manufactured homes or mobile homes
932	on which fixtures or construction techniques that have been
933	demonstrated to reduce the amount of loss in a windstorm have
934	been installed or implemented. The discount on the premium shall
935	be applied to subsequent renewal premium amounts. Premiums of
936	the Citizens Property Insurance Corporation shall reflect the
937	location of the home and the fact that the home has been
938	installed in compliance with building codes adopted after
939	Hurricane Andrew.
940	4.  On or before January 1 of each year, the Department of
941	Community Affairs shall provide a report of activities under
942	this subsection to the Governor, the President of the Senate,
943	and the Speaker of the House of Representatives. The report
944	shall set forth the number of manufactured homes and mobile
945	homes that have taken advantage of the program, the types of
946	enhancements and improvements made to the manufactured homes or
947	mobile homes and attachments to such homes, and whether there
948	has been an increase of availability of insurance products to
949	owners of manufactured homes or mobile homes.
950	(4)(5)  Of moneys provided to the Department of Community
951	Affairs in paragraph (2)(a), 10 percent shall be allocated to a
952	Type I Center within the State University System dedicated to
953	hurricane research. The Type I Center shall develop a
954	preliminary work plan approved by the advisory council set forth
955	in subsection (6) to eliminate the state and local barriers to
956	upgrading existing mobile homes and communities, research and
957	develop a program for the recycling of existing older mobile
958	homes, and support programs of research and development relating
959	to hurricane loss reduction devices and techniques for site-
960	built residences. The State University System also shall consult
961	with the Department of Community Affairs and assist the
962	department with the report required under subsection (8).
963	(5)(6)  The Department of Community Affairs shall develop
964	the programs set forth in this section in consultation with an
965	advisory council consisting of a representative designated by
966	the Chief Financial Officer, a representative designated by the
967	Florida Home Builders Association, a representative designated
968	by the Florida Insurance Council, a representative designated by
969	the Federation of Manufactured Home Owners, a representative
970	designated by the Florida Association of Counties, and a
971	representative designated by the Florida Manufactured Housing
972	Association.
973	(6)(7)  Moneys provided to the Department of Community
974	Affairs under this section are intended to supplement other
975	funding sources of the Department of Community Affairs and may
976	not supplant other funding sources of the Department of
977	Community Affairs.
978	(7)(8)  On January 1st of each year, the Department of
979	Community Affairs shall provide a full report and accounting of
980	activities under this section and an evaluation of such
981	activities to the Speaker of the House of Representatives, the
982	President of the Senate, and the Majority and Minority Leaders
983	of the House of Representatives and the Senate.
984	(8)(9)  This section is repealed June 30, 2011.
985	Section 5.  Subsections (1) and (2) of section 626.918,
986	Florida Statutes, are amended to read:
987	626.918  Eligible surplus lines insurers.--
988	(1)  A No surplus lines agent may not shall place any
989	coverage with any unauthorized insurer which is not then an
990	eligible surplus lines insurer, except as permitted under
991	subsections (5) and (6).
992	(2)  An No unauthorized insurer may not shall be or become
993	an eligible surplus lines insurer unless made eligible by the
994	office in accordance with the following conditions:
995	(a)  Eligibility of the insurer must be requested in
996	writing by the Florida Surplus Lines Service Office.;
997	(b)  The insurer must be currently an authorized insurer in
998	the state or country of its domicile as to the kind or kinds of
999	insurance proposed to be so placed and must have been such an
1000	insurer for not less than the 3 years next preceding or must be
1001	the wholly owned subsidiary of such authorized insurer or must
1002	be the wholly owned subsidiary of an already eligible surplus
1003	lines insurer as to the kind or kinds of insurance proposed for
1004	a period of not less than the 3 years next preceding. However,
1005	the office may waive the 3-year requirement if the insurer
1006	provides a product or service not readily available to the
1007	consumers of this state or has operated successfully for a
1008	period of at least 1 year next preceding and has capital and
1009	surplus of not less than $25 million.;
1010	(c)  Before granting eligibility, the requesting surplus
1011	lines agent or the insurer shall furnish the office with a duly
1012	authenticated copy of its current annual financial statement in
1013	the English language and with all monetary values therein
1014	expressed in United States dollars, at an exchange rate (in the
1015	case of statements originally made in the currencies of other
1016	countries) then-current and shown in the statement, and with
1017	such additional information relative to the insurer as the
1018	office may request.;
1019	(d)1.a.  The insurer must have and maintain surplus as to
1020	policyholders of not less than $15 million; in addition, an
1021	alien insurer must also have and maintain in the United States a
1022	trust fund for the protection of all its policyholders in the
1023	United States under terms deemed by the office to be reasonably
1024	adequate, in an amount not less than $5.4 million. Any such
1025	surplus as to policyholders or trust fund shall be represented
1026	by investments consisting of eligible investments for like funds
1027	of like domestic insurers under part II of chapter 625 provided,
1028	however, that in the case of an alien insurance company, any
1029	such surplus as to policyholders may be represented by
1030	investments permitted by the domestic regulator of such alien
1031	insurance company if such investments are substantially similar
1032	in terms of quality, liquidity, and security to eligible
1033	investments for like funds of like domestic insurers under part
1034	II of chapter 625. Clean, irrevocable, unconditional, and
1035	evergreen letters of credit issued or confirmed by a qualified
1036	United States financial institution, as defined in subparagraph
1037	2., may be used to fund the trust.;
1038	b.2.  For those surplus lines insurers that were eligible
1039	on January 1, 1994, and that maintained their eligibility
1040	thereafter, the required surplus as to policyholders shall be:
1041	(I)a.  On December 31, 1994, and until December 30, 1995,
1042	$2.5 million.
1043	(II)b.  On December 31, 1995, and until December 30, 1996,
1044	$3.5 million.
1045	(III)c.  On December 31, 1996, and until December 30, 1997,
1046	$4.5 million.
1047	(IV)d.  On December 31, 1997, and until December 30, 1998,
1048	$5.5 million.
1049	(V)e.  On December 31, 1998, and until December 30, 1999,
1050	$6.5 million.
1051	(VI)f.  On December 31, 1999, and until December 30, 2000,
1052	$8 million.
1053	(VII)g.  On December 31, 2000, and until December 30, 2001,
1054	$9.5 million.
1055	(VIII)h.  On December 31, 2001, and until December 30,
1056	2002, $11 million.
1057	(IX)i.  On December 31, 2002, and until December 30, 2003,
1058	$13 million.
1059	(X)j.  On December 31, 2003, and thereafter, $15 million.
1060	c.3.  The capital and surplus requirements as set forth in
1061	sub-subparagraph b. subparagraph 2. do not apply in the case of
1062	an insurance exchange created by the laws of individual states,
1063	where the exchange maintains capital and surplus pursuant to the
1064	requirements of that state, or maintains capital and surplus in
1065	an amount not less than $50 million in the aggregate. For an
1066	insurance exchange which maintains funds in the amount of at
1067	least $12 million for the protection of all insurance exchange
1068	policyholders, each individual syndicate shall maintain minimum
1069	capital and surplus in an amount not less than $3 million. If
1070	the insurance exchange does not maintain funds in the amount of
1071	at least $12 million for the protection of all insurance
1072	exchange policyholders, each individual syndicate shall meet the
1073	minimum capital and surplus requirements set forth in sub-
1074	subparagraph b. subparagraph 2.;
1075	d.4.  A surplus lines insurer which is a member of an
1076	insurance holding company that includes a member which is a
1077	Florida domestic insurer as set forth in its holding company
1078	registration statement, as set forth in s. 628.801 and rules
1079	adopted thereunder, may elect to maintain surplus as to
1080	policyholders in an amount equal to the requirements of s.
1081	624.408, subject to the requirement that the surplus lines
1082	insurer shall at all times be in compliance with the
1083	requirements of chapter 625.
1084
1085	The election shall be submitted to the office and shall be
1086	effective upon the office's being satisfied that the
1087	requirements of sub-subparagraph d. subparagraph 4. have been
1088	met. The initial date of election shall be the date of office
1089	approval. The election approval application shall be on a form
1090	adopted by commission rule. The office may approve an election
1091	form submitted pursuant to sub-subparagraph d. subparagraph 4.
1092	only if it was on file with the former Department of Insurance
1093	before February 28, 1998.;
1094	2.  For purposes of letters of credit under subparagraph
1095	1., the term "qualified United States financial institution"
1096	means an institution that:
1097	a.  Is organized or, in the case of a United States office
1098	of a foreign banking organization, is licensed under the laws of
1099	the United States or any state.
1100	b.  Is regulated, supervised, and examined by authorities
1101	of the United States or any state having regulatory authority
1102	over banks and trust companies.
1103	c.  Has been determined by the office or the Securities
1104	Valuation Office of the National Association of Insurance
1105	Commissioners to meet such standards of financial condition and
1106	standing as are considered necessary and appropriate to regulate
1107	the quality of financial institutions whose letters of credit
1108	are acceptable to the office.
1109	(e)  The insurer must be of good reputation as to the
1110	providing of service to its policyholders and the payment of
1111	losses and claims.;
1112	(f)  The insurer must be eligible, as for authority to
1113	transact insurance in this state, under s. 624.404(3).; and
1114	(g)  This subsection does not apply as to unauthorized
1115	insurers made eligible under s. 626.917 as to wet marine and
1116	aviation risks.
1117	Section 6.  Paragraph (j) is added to subsection (2) of
1118	section 627.062, Florida Statutes, subsection (5) of that
1119	section is amended, and subsections (9) and (10) are added to
1120	that section, to read:
1121	627.062  Rate standards.--
1122	(2)  As to all such classes of insurance:
1123	(j)  Effective January 1, 2007, notwithstanding any other
1124	provision of this section:
1125	1.  With respect to any residential property insurance
1126	subject to regulation under this section, a rate filing,
1127	including, but not limited to, any rate changes, rating factors,
1128	territories, classification, discounts, and credits, with
1129	respect to any policy form, including endorsements issued with
1130	the form, that results in an overall average statewide premium
1131	increase or decrease of no more than 5 percent above or below
1132	the premium that would result from the insurer's rates then in
1133	effect shall not be subject to a determination by the office
1134	that the rate is excessive or unfairly discriminatory except as
1135	provided in subparagraph 3., or any other provision of law,
1136	provided all changes specified in the filing do not result in an
1137	overall premium increase of more than 10 percent for any one
1138	territory, for reasons related solely to the rate change. As
1139	used in this subparagraph, the term "insurer's rates then in
1140	effect" includes only rates that have been lawfully in effect
1141	under this section or rates that have been determined to be
1142	lawful through administrative proceedings or judicial
1143	proceedings.
1144	2.  An insurer may not make filings under this paragraph
1145	with respect to any policy form, including endorsements issued
1146	with the form, if the overall premium changes resulting from
1147	such filings exceed the amounts specified in this paragraph in
1148	any 12-month period. An insurer may proceed under other
1149	provisions of this section or other provisions of law if the
1150	insurer seeks to exceed the premium or rate limitations of this
1151	paragraph.
1152	3.  This paragraph does not affect the authority of the
1153	office to disapprove a rate as inadequate or to disapprove a
1154	filing for the unlawful use of unfairly discriminatory rating
1155	factors that are prohibited by the laws of this state. An
1156	insurer electing to implement a rate change under this paragraph
1157	shall submit a filing to the office at least 30 days prior to
1158	the effective date of the rate change. The office shall have 30
1159	days after the filing's submission to review the filing and
1160	determine if the rate is inadequate or uses unfairly
1161	discriminatory rating factors. Absent a finding by the office
1162	within such 30-day period that the rate is inadequate or that
1163	the insurer has used unfairly discriminatory rating factors, the
1164	filing is deemed approved. If the office finds during the 30-day
1165	period that the filing will result in inadequate premiums or
1166	otherwise endanger the insurer's solvency, the office shall
1167	suspend the rate decrease. If the insurer is implementing an
1168	overall rate increase, the results of which continue to produce
1169	an inadequate rate, such increase shall proceed pending
1170	additional action by the office to ensure the adequacy of the
1171	rate.
1172	4.  This paragraph does not apply to rate filings for any
1173	insurance other than residential property insurance.
1174
1175	The provisions of this subsection shall not apply to workers'
1176	compensation and employer's liability insurance and to motor
1177	vehicle insurance.
1178	(5)  With respect to a rate filing involving coverage of
1179	the type for which the insurer is required to pay a
1180	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1181	the insurer may fully recoup in its property insurance premiums
1182	any reimbursement premiums paid to the Florida Hurricane
1183	Catastrophe Fund, together with reasonable costs of other
1184	reinsurance consistent with prudent business practices and sound
1185	actuarial principles, but may not recoup reinsurance costs that
1186	duplicate coverage provided by the Florida Hurricane Catastrophe
1187	Fund. The burden is on the office to establish that any costs of
1188	other reinsurance are in excess of amounts consistent with
1189	prudent business practices and sound actuarial principles. An
1190	insurer may not recoup more than 1 year of reimbursement premium
1191	at a time. Any under-recoupment from the prior year may be added
1192	to the following year's reimbursement premium and any over-
1193	recoupment shall be subtracted from the following year's
1194	reimbursement premium.
1195	(9)  Notwithstanding any other provision of this section,
1196	any rate filing or applicable portion of the rate filing that
1197	includes the peril of wind within the boundary of the area
1198	covered by the high-risk account of the Citizens Property
1199	Insurance Corporation shall be deemed approved upon submission
1200	to the office if the filing or the applicable portion of the
1201	filing requests approval of a rate that is less than the
1202	approved rate for similar risks insured in the high-risk account
1203	of the corporation unless the office determines that such rate
1204	is inadequate or unfairly discriminatory as provided in
1205	subsection (2).
1206	(10)(a)  Beginning January 1, 2007, the office shall
1207	annually provide a report to the President of the Senate, the
1208	Speaker of the House of Representatives, the minority party
1209	leader of each house of the Legislature, and the chairs of the
1210	standing committees of each house of the Legislature having
1211	jurisdiction over insurance issues, specifying the impact of
1212	flexible rate regulation under paragraph (2)(j) on the degree of
1213	competition in insurance markets in this state.
1214	(b)  The report shall include a year-by-year comparison of
1215	the number of companies participating in the market for each
1216	class of insurance and the relative rate levels. The report
1217	shall also specify:
1218	1.  The number of rate filings made under paragraph (2)(j),
1219	the rate levels under those filings, and the market share
1220	affected by those filings.
1221	2.  The number of filings made on a file and use basis, the
1222	rate levels under those filings, and the market share affected
1223	by those filings.
1224	3.  The number of filings made on a use and file basis, the
1225	rate levels under those filings, and the market share affected
1226	by those filings.
1227	4.  Recommendations to promote competition in the insurance
1228	market and further protect insurance consumers.
1229	Section 7.  Paragraph (c) of subsection (3) of section
1230	627.0628, Florida Statutes, is amended to read:
1231	627.0628  Florida Commission on Hurricane Loss Projection
1232	Methodology; public records exemption; public meetings
1233	exemption.--
1234	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1235	(c)  With respect to a rate filing under s. 627.062, an
1236	insurer may employ actuarial methods, principles, standards,
1237	models, or output ranges found by the commission to be accurate
1238	or reliable to determine hurricane loss factors for use in a
1239	rate filing under s. 627.062. Such findings and factors are
1240	admissible and relevant in consideration of a rate filing by the
1241	office or in any arbitration or administrative or judicial
1242	review only if the office and the consumer advocate appointed
1243	pursuant to s. 627.0613 have a reasonable opportunity to review
1244	access to all of the basic assumptions and factors that were
1245	used in developing the actuarial methods, principles, standards,
1246	models, or output ranges. After review of the specific models by
1247	the commission, the office and the consumer advocate may not
1248	pose any questions generated from their respective reviews that
1249	duplicate or compromise the conclusions of the commission
1250	relative to the accuracy or reliability of the models in
1251	producing hurricane loss factors for use in a rate filing under
1252	s. 627.062, and are not precluded from disclosing such
1253	information in a rate proceeding.
1254	Section 8.  Section 627.06281, Florida Statutes, is amended
1255	to read:
1256	627.06281  Public hurricane loss projection model;
1257	reporting of data by insurers.--
1258	(1)  Within 30 days after a written request for loss data
1259	and associated exposure data by the office or a type I center
1260	within the State University System established to study
1261	mitigation, residential property insurers and licensed rating
1262	and advisory organizations that compile residential property
1263	insurance loss data shall provide loss data and associated
1264	exposure data for residential property insurance policies to the
1265	office or to a type I center within the State University System
1266	established to study mitigation, as directed by the office, for
1267	the purposes of developing, maintaining, and updating a public
1268	model for hurricane loss projections. The loss data and
1269	associated exposure data provided shall be in writing.
1270	(2)  The office may not use the public model for hurricane
1271	loss projection referred to in subsection (1) for any purpose
1272	under s. 627.062 or s. 627.351 until the model has been
1273	submitted to the Florida Commission on Hurricane Loss Projection
1274	Methodology for review under s. 627.0628 and the commission has
1275	found the model to be accurate and reliable pursuant to the same
1276	process and standards as the commission uses for the review of
1277	other hurricane loss projection models.
1278	Section 9.  Subsection (2) of section 627.0645, Florida
1279	Statutes, is amended to read:
1280	627.0645  Annual filings.--
1281	(2)(a)  Deviations filed by an insurer to any rating
1282	organization's base rate filing are not subject to this section.
1283	(b)  The office, after receiving a request to be exempted
1284	from the provisions of this section, may, for good cause due to
1285	insignificant numbers of policies in force or insignificant
1286	premium volume, exempt a company, by line of coverage, from
1287	filing rates or rate certification as required by this section.
1288	(c)  The office, after receiving a request to be exempted
1289	from the provisions of this section, shall exempt a company with
1290	less than 500 residential homeowner or mobile homeowner policies
1291	from filing rates or rate certification as required by this
1292	section.
1293	Section 10.  Subsection (6) of section 627.351, Florida
1294	Statutes, is amended to read:
1295	627.351  Insurance risk apportionment plans.--
1296	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1297	(a)1.a.  The Legislature finds that actual and threatened
1298	catastrophic losses to property in this state from hurricanes
1299	have caused insurers to be unwilling or unable to provide
1300	property insurance coverage to the extent sought and needed. It
1301	is in the public interest and a public purpose to assist in
1302	ensuring assuring that homestead property in the state is
1303	insured so as to facilitate the remediation, reconstruction, and
1304	replacement of damaged or destroyed property in order to reduce
1305	or avoid the negative effects otherwise resulting to the public
1306	health, safety, and welfare; to the economy of the state; and to
1307	the revenues of the state and local governments needed to
1308	provide for the public welfare. It is necessary, therefore, to
1309	provide property insurance to applicants who are in good faith
1310	entitled to procure insurance through the voluntary market but
1311	are unable to do so. The Legislature intends by this subsection
1312	that property insurance be provided and that it continues, as
1313	long as necessary, through an entity organized to achieve
1314	efficiencies and economies, while providing service to
1315	policyholders, applicants, and agents that is no less than the
1316	quality generally provided in the voluntary market, all toward
1317	the achievement of the foregoing public purposes. Because it is
1318	essential for the corporation to have the maximum financial
1319	resources to pay claims following a catastrophic hurricane, it
1320	is the intent of the Legislature that the income of the
1321	corporation be exempt from federal income taxation and that
1322	interest on the debt obligations issued by the corporation be
1323	exempt from federal income taxation.
1324	b.  The Legislature finds and declares that:
1325	(I)  The commitment of the state, as expressed in sub-
1326	subparagraph a., to providing a means of ensuring the
1327	availability of property insurance through a residual market
1328	mechanism is hereby reaffirmed.
1329	(II)  Despite legislative efforts to ensure that the
1330	residual market for property insurance is self-supporting to the
1331	greatest reasonable extent, residual market policyholders are to
1332	some degree subsidized by the general public through assessments
1333	on owners of property insured in the voluntary market and their
1334	insurers and through the potential use of general revenues of
1335	the state to eliminate or reduce residual market deficits.
1336	(III)  The degree of such subsidy is a matter of public
1337	policy. It is the intent of the Legislature to better control
1338	the subsidy through at least the following means:
1339	(A)  Restructuring the residual market mechanism to provide
1340	separate treatment of homestead and nonhomestead properties,
1341	with the intent of continuing to provide an insurance program
1342	with limited subsidies for homestead properties while providing
1343	a nonsubsidized insurance program for nonhomestead properties.
1344	(B)  Redefining the concept of rate adequacy in the
1345	subsidized residual market with the intent of ensuring a rate
1346	structure that will enable the subsidized residual market to be
1347	self-supporting except in the event of hurricane losses of a
1348	legislatively specified magnitude. It is the intent of the
1349	Legislature that the funding of the subsidized residual market
1350	be structured to be self-supporting up to the point of its 100-
1351	year probable maximum loss and that the funding be structured to
1352	make reliance on assessments or other sources of public funding
1353	necessary only in the event of a 100-year probable maximum loss
1354	or larger loss.
1355	2.  The Residential Property and Casualty Joint
1356	Underwriting Association originally created by this statute
1357	shall be known, as of July 1, 2002, as the Citizens Property
1358	Insurance Corporation. The corporation shall provide insurance
1359	for homesteaded residential property and may provide insurance
1360	for residential and commercial property, for applicants who are
1361	in good faith entitled, but are unable, to procure insurance
1362	through the voluntary market. The corporation shall operate
1363	pursuant to a plan of operation approved by order of the office.
1364	The plan is subject to continuous review by the office. The
1365	office may, by order, withdraw approval of all or part of a plan
1366	if the office determines that conditions have changed since
1367	approval was granted and that the purposes of the plan require
1368	changes in the plan. For the purposes of this subsection,
1369	residential coverage includes both personal lines residential
1370	coverage, which consists of the type of coverage provided by
1371	homeowner's, mobile home owner's, dwelling, tenant's,
1372	condominium unit owner's, and similar policies, and commercial
1373	lines residential coverage, which consists of the type of
1374	coverage provided by condominium association, apartment
1375	building, and similar policies.
1376	3.  It is the intent of the Legislature that policyholders,
1377	applicants, and agents of the corporation receive service and
1378	treatment of the highest possible level but never less than that
1379	generally provided in the voluntary market. It also is intended
1380	that the corporation be held to service standards no less than
1381	those applied to insurers in the voluntary market by the office
1382	with respect to responsiveness, timeliness, customer courtesy,
1383	and overall dealings with policyholders, applicants, or agents
1384	of the corporation.
1385	(b)1.  All insurers authorized to write one or more subject
1386	lines of business in this state are subject to assessment by the
1387	corporation and, for the purposes of this subsection, are
1388	referred to collectively as "assessable insurers." Insurers
1389	writing one or more subject lines of business in this state
1390	pursuant to part VIII of chapter 626 are not assessable
1391	insurers, but insureds who procure one or more subject lines of
1392	business in this state pursuant to part VIII of chapter 626 are
1393	subject to assessment by the corporation and are referred to
1394	collectively as "assessable insureds." An authorized insurer's
1395	assessment liability shall begin on the first day of the
1396	calendar year following the year in which the insurer was issued
1397	a certificate of authority to transact insurance for subject
1398	lines of business in this state and shall terminate 1 year after
1399	the end of the first calendar year during which the insurer no
1400	longer holds a certificate of authority to transact insurance
1401	for subject lines of business in this state.
1402	2.a.  All revenues, assets, liabilities, losses, and
1403	expenses of the corporation shall be divided into four three
1404	separate accounts as follows:
1405	(I)  Three separate homestead accounts that may provide
1406	coverage only for homestead properties. The term "homestead
1407	property" means a residential property that has been granted a
1408	homestead exemption under chapter 196. The term also includes a
1409	property that is qualified for such exemption but has not
1410	applied for the exemption as of the date of issuance of the
1411	policy, provided the policyholder obtains the exemption within 1
1412	year after initial issuance of the policy. The term also
1413	includes an owner-occupied mobile or manufactured home as
1414	defined in s. 320.01 permanently affixed to real property
1415	regardless of whether the owner of the mobile or manufactured
1416	home is also the owner of the land on which the mobile or
1417	manufactured home is permanently affixed. However, the term does
1418	not include a mobile home that is being held for display by a
1419	licensed mobile home dealer or a licensed mobile home
1420	manufacturer and is not owner-occupied. For the purposes of this
1421	sub-sub-subparagraph, the term "homestead property" also
1422	includes property covered by tenant's insurance; commercial
1423	lines residential policies; any hospital licensed under chapter
1424	395; and continuing care retirement communities certified under
1425	chapter 651. The accounts providing coverage only for homestead
1426	properties are:
1427	(A)(I)  A personal lines account for personal residential
1428	policies issued by the corporation or issued by the Residential
1429	Property and Casualty Joint Underwriting Association and renewed
1430	by the corporation that provide comprehensive, multiperil
1431	coverage on risks that are not located in areas eligible for
1432	coverage in the Florida Windstorm Underwriting Association as
1433	those areas were defined on January 1, 2002, and for such
1434	policies that do not provide coverage for the peril of wind on
1435	risks that are located in such areas;
1436	(B)(II)  A commercial lines account for commercial
1437	residential policies issued by the corporation or issued by the
1438	Residential Property and Casualty Joint Underwriting Association
1439	and renewed by the corporation that provide coverage for basic
1440	property perils on risks that are not located in areas eligible
1441	for coverage in the Florida Windstorm Underwriting Association
1442	as those areas were defined on January 1, 2002, and for such
1443	policies that do not provide coverage for the peril of wind on
1444	risks that are located in such areas; and
1445	(C)(III)  A high-risk account for personal residential
1446	policies and commercial residential and commercial
1447	nonresidential property policies issued by the corporation or
1448	transferred to the corporation that provide coverage for the
1449	peril of wind on risks that are located in areas eligible for
1450	coverage in the Florida Windstorm Underwriting Association as
1451	those areas were defined on January 1, 2002. The high-risk
1452	account must also include quota share primary insurance under
1453	subparagraph (c)2. The area eligible for coverage under the
1454	high-risk account also includes the area within Port Canaveral,
1455	which is bordered on the south by the City of Cape Canaveral,
1456	bordered on the west by the Banana River, and bordered on the
1457	north by Federal Government property. The office may remove
1458	territory from the area eligible for wind-only and quota share
1459	coverage if, after a public hearing, the office finds that
1460	authorized insurers in the voluntary market are willing and able
1461	to write sufficient amounts of personal and commercial
1462	residential coverage for all perils in the territory, including
1463	coverage for the peril of wind, such that risks covered by wind-
1464	only policies in the removed territory could be issued a policy
1465	by the corporation in either the personal lines or commercial
1466	lines account without a significant increase in the
1467	corporation's probable maximum loss in such account. Removal of
1468	territory from the area eligible for wind-only or quota share
1469	coverage does not alter the assignment of wind coverage written
1470	in such areas to the high-risk account.
1471	(II)(A)  A separate nonhomestead account for commercial
1472	nonresidential property policies and for all properties that
1473	otherwise meet all of the criteria for eligibility for coverage
1474	within one of the three homestead accounts described in sub-sub-
1475	subparagraph (I) but that do not meet the definition of
1476	homestead property specified in sub-sub-subparagraph (I). The
1477	nonhomestead account shall provide the same types of coverage as
1478	are provided by the three homestead accounts, including wind-
1479	only coverage in the high-risk account area. In order to be
1480	eligible for coverage in the nonhomestead account, at the
1481	initial issuance of the policy and at renewal the property owner
1482	shall provide the corporation with a sworn affidavit stating
1483	that the property has been rejected for coverage by at least
1484	three authorized insurers and at least three surplus lines
1485	insurers.
1486	(B)  An authorized insurer or approved insurer as defined
1487	in s. 626.914(2) may provide coverage to a nonhomestead property
1488	owner on an individual risk rate basis. Rates and forms of an
1489	authorized insurer for nonhomestead properties are not subject
1490	to ss. 627.062 and 627.0629, except s. 627.0629(2)(b). Such
1491	rates and forms are subject to all other applicable provisions
1492	of this code and rules adopted under this code. During the
1493	course of an insurer's market conduct examination, the office
1494	may review the rate for any nonhomestead property to determine
1495	if such rate is inadequate or unfairly discriminatory. Rates on
1496	nonhomestead property may be found inadequate by the office if
1497	they are clearly insufficient, together with the investment
1498	income attributable to the insurer, to sustain projected losses
1499	and expenses in the class of business to which such rates apply.
1500	Rates on nonhomestead property may also be found inadequate as
1501	to the premium charged to a risk or group of risks if discounts
1502	or credits are allowed that exceed a reasonable reflection of
1503	expense savings and reasonably expected loss experience from the
1504	risk or group of risks. Rates on nonhomestead property may be
1505	found to be unfairly discriminatory as to a risk or group of
1506	risks by the office if the application of premium discounts,
1507	credits, or surcharges among such risks does not bear a
1508	reasonable relationship to the expected loss and expense
1509	experience among the various risks. A rating plan, including
1510	discounts, credits, or surcharges on nonhomestead property, may
1511	also be found to be unfairly discriminatory if the plan fails to
1512	clearly and equitably reflect consideration of the
1513	policyholder's participation in a risk management program
1514	adjusted pursuant to s. 627.0625. The office may order an
1515	insurer to discontinue using a rate for new policies or upon
1516	renewal of a policy if the office finds the rate to be
1517	inadequate or unfairly discriminatory. Insurers shall maintain
1518	records and documentation relating to rates and forms subject to
1519	this sub-sub-sub-subparagraph for a period of at least 5 years
1520	after the effective date of the policy.
1521	b.  The three separate homestead accounts must be
1522	maintained as long as financing obligations entered into by the
1523	Florida Windstorm Underwriting Association or Residential
1524	Property and Casualty Joint Underwriting Association are
1525	outstanding, in accordance with the terms of the corresponding
1526	financing documents. When the financing obligations are no
1527	longer outstanding, in accordance with the terms of the
1528	corresponding financing documents, the corporation may use a
1529	single homestead account for all revenues, assets, liabilities,
1530	losses, and expenses of the corporation. All revenues, assets,
1531	liabilities, losses, and expenses attributable to the
1532	nonhomestead account shall be maintained separately.
1533	c.  Creditors of the Residential Property and Casualty
1534	Joint Underwriting Association shall have a claim against, and
1535	recourse to, the accounts referred to in sub-sub-sub-
1536	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II) and
1537	shall have no claim against, or recourse to, the account
1538	referred to in sub-sub-sub-subparagraph sub-sub-subparagraph
1539	a.(I)(C)(III). Creditors of the Florida Windstorm Underwriting
1540	Association shall have a claim against, and recourse to, the
1541	account referred to in sub-sub-sub-subparagraph sub-sub-
1542	subparagraph a.(I)(C)(III) and shall have no claim against, or
1543	recourse to, the accounts referred to in sub-sub-sub-
1544	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II).
1545	d.  Revenues, assets, liabilities, losses, and expenses not
1546	attributable to particular accounts shall be prorated among the
1547	accounts.
1548	e.  The Legislature finds that the revenues of the
1549	corporation are revenues that are necessary to meet the
1550	requirements set forth in documents authorizing the issuance of
1551	bonds under this subsection.
1552	f.  No part of the income of the corporation may inure to
1553	the benefit of any private person.
1554	3.  With respect to a deficit in any of the homestead
1555	accounts an account:
1556	a.  When the deficit incurred in a particular calendar year
1557	is not greater than 10 percent of the aggregate statewide direct
1558	written premium for the subject lines of business for the prior
1559	calendar year, the entire deficit shall be recovered through
1560	regular assessments of assessable insurers under paragraph (g)
1561	and assessable insureds.
1562	b.  When the deficit incurred in a particular calendar year
1563	exceeds 10 percent of the aggregate statewide direct written
1564	premium for the subject lines of business for the prior calendar
1565	year, the corporation shall levy regular assessments on
1566	assessable insurers under paragraph (g) and on assessable
1567	insureds in an amount equal to the greater of 10 percent of the
1568	deficit or 10 percent of the aggregate statewide direct written
1569	premium for the subject lines of business for the prior calendar
1570	year. Any remaining deficit shall be recovered through emergency
1571	assessments under sub-subparagraph d.
1572	c.  Each assessable insurer's share of the amount being
1573	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1574	be in the proportion that the assessable insurer's direct
1575	written premium for the subject lines of business for the year
1576	preceding the year in which the deficit is incurred assessment
1577	bears to the aggregate statewide direct written premium for the
1578	subject lines of business for that year. The assessment
1579	percentage applicable to each assessable insured is the ratio of
1580	the amount being assessed under sub-subparagraph a. or sub-
1581	subparagraph b. to the aggregate statewide direct written
1582	premium for the subject lines of business for the prior year.
1583	Assessments levied by the corporation on assessable insurers
1584	under sub-subparagraphs a. and b. shall be paid as required by
1585	the corporation's plan of operation and paragraph (g). Any
1586	assessment levied by the corporation on limited apportionment
1587	companies may be paid to the corporation by such companies over
1588	a time period not to exceed 12 months. Notwithstanding any other
1589	provision in this subsection, the aggregate amount of a regular
1590	assessment levied in connection with a deficit incurred in a
1591	particular calendar year shall be reduced by the aggregate
1592	amount of the Citizens Property Insurance Corporation
1593	policyholder surcharge imposed under subparagraph (c)10.
1594	Assessments levied by the corporation on assessable insureds
1595	under sub-subparagraphs a. and b. shall be collected by the
1596	surplus lines agent at the time the surplus lines agent collects
1597	the surplus lines tax required by s. 626.932 and shall be paid
1598	to the Florida Surplus Lines Service Office at the time the
1599	surplus lines agent pays the surplus lines tax to the Florida
1600	Surplus Lines Service Office. Upon receipt of regular
1601	assessments from surplus lines agents, the Florida Surplus Lines
1602	Service Office shall transfer the assessments directly to the
1603	corporation as determined by the corporation.
1604	d.  Upon a determination by the board of governors that a
1605	deficit in an account exceeds the amount that will be recovered
1606	through regular assessments under sub-subparagraph a. or sub-
1607	subparagraph b., the board shall levy, after verification by the
1608	office, emergency assessments, for as many years as necessary to
1609	cover the deficits, to be collected by assessable insurers and
1610	the corporation and collected from assessable insureds upon
1611	issuance or renewal of policies for subject lines of business,
1612	excluding National Flood Insurance policies. The amount of the
1613	emergency assessment collected in a particular year shall be a
1614	uniform percentage of that year's direct written premium for
1615	subject lines of business and all accounts of the corporation,
1616	excluding National Flood Insurance Program policy premiums, as
1617	annually determined by the board and verified by the office. The
1618	office shall verify the arithmetic calculations involved in the
1619	board's determination within 30 days after receipt of the
1620	information on which the determination was based.
1621	Notwithstanding any other provision of law, the corporation and
1622	each assessable insurer that writes subject lines of business
1623	shall collect emergency assessments from its policyholders
1624	without such obligation being affected by any credit,
1625	limitation, exemption, or deferment. Emergency assessments
1626	levied by the corporation on assessable insureds shall be
1627	collected by the surplus lines agent at the time the surplus
1628	lines agent collects the surplus lines tax required by s.
1629	626.932 and shall be paid to the Florida Surplus Lines Service
1630	Office at the time the surplus lines agent pays the surplus
1631	lines tax to the Florida Surplus Lines Service Office. The
1632	emergency assessments so collected shall be transferred directly
1633	to the corporation on a periodic basis as determined by the
1634	corporation and shall be held by the corporation solely in the
1635	applicable account. The aggregate amount of emergency
1636	assessments levied for an account under this sub-subparagraph in
1637	any calendar year may not exceed the greater of 10 percent of
1638	the amount needed to cover the original deficit, plus interest,
1639	fees, commissions, required reserves, and other costs associated
1640	with financing of the original deficit, or 10 percent of the
1641	aggregate statewide direct written premium for subject lines of
1642	business and for all accounts of the corporation for the prior
1643	year, plus interest, fees, commissions, required reserves, and
1644	other costs associated with financing the original deficit.
1645	e.  The corporation may pledge the proceeds of assessments,
1646	projected recoveries from the Florida Hurricane Catastrophe
1647	Fund, other insurance and reinsurance recoverables, Citizens
1648	policyholder market equalization surcharges and other
1649	surcharges, and other funds available to the corporation as the
1650	source of revenue for and to secure bonds issued under paragraph
1651	(g), bonds or other indebtedness issued under subparagraph
1652	(c)3., or lines of credit or other financing mechanisms issued
1653	or created under this subsection, or to retire any other debt
1654	incurred as a result of deficits or events giving rise to
1655	deficits, or in any other way that the board determines will
1656	efficiently recover such deficits. The purpose of the lines of
1657	credit or other financing mechanisms is to provide additional
1658	resources to assist the corporation in covering claims and
1659	expenses attributable to a catastrophe. As used in this
1660	subsection, the term "assessments" includes regular assessments
1661	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1662	(g)1. and emergency assessments under sub-subparagraph d.
1663	Emergency assessments collected under sub-subparagraph d. are
1664	not part of an insurer's rates, are not premium, and are not
1665	subject to premium tax, fees, or commissions; however, failure
1666	to pay the emergency assessment shall be treated as failure to
1667	pay premium. The emergency assessments under sub-subparagraph d.
1668	shall continue as long as any bonds issued or other indebtedness
1669	incurred with respect to a deficit for which the assessment was
1670	imposed remain outstanding, unless adequate provision has been
1671	made for the payment of such bonds or other indebtedness
1672	pursuant to the documents governing such bonds or other
1673	indebtedness.
1674	f.  As used in this subsection, the term "subject lines of
1675	business" means insurance written by assessable insurers or
1676	procured by assessable insureds on real or personal property, as
1677	defined in s. 624.604, including insurance for fire, industrial
1678	fire, allied lines, farmowners multiperil, homeowners
1679	multiperil, commercial multiperil, and mobile homes, and
1680	including liability coverage on all such insurance, but
1681	excluding inland marine as defined in s. 624.607(3) and
1682	excluding vehicle insurance as defined in s. 624.605(1) other
1683	than insurance on mobile homes used as permanent dwellings.
1684	g.  The Florida Surplus Lines Service Office shall
1685	determine annually the aggregate statewide written premium in
1686	subject lines of business procured by assessable insureds and
1687	shall report that information to the corporation in a form and
1688	at a time the corporation specifies to ensure that the
1689	corporation can meet the requirements of this subsection and the
1690	corporation's financing obligations.
1691	h.  The Florida Surplus Lines Service Office shall verify
1692	the proper application by surplus lines agents of assessment
1693	percentages for regular assessments and emergency assessments
1694	levied under this subparagraph on assessable insureds and shall
1695	assist the corporation in ensuring the accurate, timely
1696	collection and payment of assessments by surplus lines agents as
1697	required by the corporation.
1698	4.  With respect to a deficit in the nonhomestead account
1699	or to any cash flow shortfall that the board determines will
1700	create an inability for the nonhomestead account to pay claims
1701	when due:
1702	a.  The board shall levy an immediate assessment against
1703	the premium of each nonhomestead account policyholder, expressed
1704	as a uniform percentage of the premium for the policy then in
1705	effect. The maximum amount of such assessment is 100 percent of
1706	such premium.
1707	b.  If the assessment under sub-subparagraph a. is
1708	insufficient to enable the account to pay claims and eliminate
1709	the deficit in the account, the board may levy an additional
1710	assessment to be collected at the time of any issuance or
1711	renewal of a nonhomestead account policy during the 1-year
1712	period following the levy of the assessment under sub-
1713	subparagraph a., expressed as a uniform percentage of the
1714	premium for the policy for the forthcoming policy period. The
1715	maximum amount of such assessment is 100 percent of such
1716	premium.
1717	c.  If the assessments under sub-subparagraphs a. and b.
1718	are insufficient to enable the account to pay claims and
1719	eliminate the deficit in the account, the board may make a loan
1720	from any of the homestead accounts to the nonhomestead account,
1721	subject to approval by the office and provided that such loan
1722	does not impair the financial status of any of the homestead
1723	accounts.
1724	5.  A policyholder in a nonhomestead account who has not
1725	paid a deficit assessment levied by the corporation shall be
1726	ineligible for coverage by a surplus lines insurer or authorized
1727	insurer.
1728	(c)  The plan of operation of the corporation:
1729	1.  Must provide for adoption of residential property and
1730	casualty insurance policy forms and commercial residential and
1731	nonresidential property insurance forms, which forms must be
1732	approved by the office prior to use. The corporation shall adopt
1733	the following policy forms:
1734	a.  Standard personal lines policy forms that are
1735	comprehensive multiperil policies providing full coverage of a
1736	residential property equivalent to the coverage provided in the
1737	private insurance market under an HO-3, HO-4, or HO-6 policy.
1738	b.  Basic personal lines policy forms that are policies
1739	similar to an HO-8 policy or a dwelling fire policy that provide
1740	coverage meeting the requirements of the secondary mortgage
1741	market, but which coverage is more limited than the coverage
1742	under a standard policy.
1743	c.  Commercial lines residential policy forms that are
1744	generally similar to the basic perils of full coverage
1745	obtainable for commercial residential structures in the admitted
1746	voluntary market.
1747	d.  Personal lines and commercial lines residential
1748	property insurance forms that cover the peril of wind only. The
1749	forms are applicable only to residential properties located in
1750	areas eligible for coverage under the high-risk account referred
1751	to in sub-subparagraph (b)2.a.
1752	e.  Commercial lines nonresidential property insurance
1753	forms that cover the peril of wind only. The forms are
1754	applicable only to nonresidential properties located in areas
1755	eligible for coverage under the high-risk account referred to in
1756	sub-subparagraph (b)2.a.
1757	f.  The corporation may adopt variations of the policy
1758	forms listed in sub-subparagraphs a.-e. that contain more
1759	restrictive coverage.
1760	2.a.  Must provide that the corporation adopt a program in
1761	which the corporation and authorized insurers enter into quota
1762	share primary insurance agreements for hurricane coverage, as
1763	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1764	property insurance forms for eligible risks which cover the
1765	peril of wind only. As used in this subsection, the term:
1766	(I)  "Quota share primary insurance" means an arrangement
1767	in which the primary hurricane coverage of an eligible risk is
1768	provided in specified percentages by the corporation and an
1769	authorized insurer. The corporation and authorized insurer are
1770	each solely responsible for a specified percentage of hurricane
1771	coverage of an eligible risk as set forth in a quota share
1772	primary insurance agreement between the corporation and an
1773	authorized insurer and the insurance contract. The
1774	responsibility of the corporation or authorized insurer to pay
1775	its specified percentage of hurricane losses of an eligible
1776	risk, as set forth in the quota share primary insurance
1777	agreement, may not be altered by the inability of the other
1778	party to the agreement to pay its specified percentage of
1779	hurricane losses. Eligible risks that are provided hurricane
1780	coverage through a quota share primary insurance arrangement
1781	must be provided policy forms that set forth the obligations of
1782	the corporation and authorized insurer under the arrangement,
1783	clearly specify the percentages of quota share primary insurance
1784	provided by the corporation and authorized insurer, and
1785	conspicuously and clearly state that neither the authorized
1786	insurer nor the corporation may be held responsible beyond its
1787	specified percentage of coverage of hurricane losses.
1788	(II)  "Eligible risks" means personal lines residential and
1789	commercial lines residential risks that meet the underwriting
1790	criteria of the corporation and are located in areas that were
1791	eligible for coverage by the Florida Windstorm Underwriting
1792	Association on January 1, 2002.
1793	b.  The corporation may enter into quota share primary
1794	insurance agreements with authorized insurers at corporation
1795	coverage levels of 90 percent and 50 percent.
1796	c.  If the corporation determines that additional coverage
1797	levels are necessary to maximize participation in quota share
1798	primary insurance agreements by authorized insurers, the
1799	corporation may establish additional coverage levels. However,
1800	the corporation's quota share primary insurance coverage level
1801	may not exceed 90 percent.
1802	d.  Any quota share primary insurance agreement entered
1803	into between an authorized insurer and the corporation must
1804	provide for a uniform specified percentage of coverage of
1805	hurricane losses, by county or territory as set forth by the
1806	corporation board, for all eligible risks of the authorized
1807	insurer covered under the quota share primary insurance
1808	agreement.
1809	e.  Any quota share primary insurance agreement entered
1810	into between an authorized insurer and the corporation is
1811	subject to review and approval by the office. However, such
1812	agreement shall be authorized only as to insurance contracts
1813	entered into between an authorized insurer and an insured who is
1814	already insured by the corporation for wind coverage.
1815	f.  For all eligible risks covered under quota share
1816	primary insurance agreements, the exposure and coverage levels
1817	for both the corporation and authorized insurers shall be
1818	reported by the corporation to the Florida Hurricane Catastrophe
1819	Fund. For all policies of eligible risks covered under quota
1820	share primary insurance agreements, the corporation and the
1821	authorized insurer shall maintain complete and accurate records
1822	for the purpose of exposure and loss reimbursement audits as
1823	required by Florida Hurricane Catastrophe Fund rules. The
1824	corporation and the authorized insurer shall each maintain
1825	duplicate copies of policy declaration pages and supporting
1826	claims documents.
1827	g.  The corporation board shall establish in its plan of
1828	operation standards for quota share agreements which ensure that
1829	there is no discriminatory application among insurers as to the
1830	terms of quota share agreements, pricing of quota share
1831	agreements, incentive provisions if any, and consideration paid
1832	for servicing policies or adjusting claims.
1833	h.  The quota share primary insurance agreement between the
1834	corporation and an authorized insurer must set forth the
1835	specific terms under which coverage is provided, including, but
1836	not limited to, the sale and servicing of policies issued under
1837	the agreement by the insurance agent of the authorized insurer
1838	producing the business, the reporting of information concerning
1839	eligible risks, the payment of premium to the corporation, and
1840	arrangements for the adjustment and payment of hurricane claims
1841	incurred on eligible risks by the claims adjuster and personnel
1842	of the authorized insurer. Entering into a quota sharing
1843	insurance agreement between the corporation and an authorized
1844	insurer shall be voluntary and at the discretion of the
1845	authorized insurer.
1846	3.  May provide that the corporation may employ or
1847	otherwise contract with individuals or other entities to provide
1848	administrative or professional services that may be appropriate
1849	to effectuate the plan. The corporation shall have the power to
1850	borrow funds, by issuing bonds or by incurring other
1851	indebtedness, and shall have other powers reasonably necessary
1852	to effectuate the requirements of this subsection, including,
1853	without limitation, the power to issue bonds and incur other
1854	indebtedness in order to refinance outstanding bonds or other
1855	indebtedness. The corporation may, but is not required to, seek
1856	judicial validation of its bonds or other indebtedness under
1857	chapter 75. The corporation may issue bonds or incur other
1858	indebtedness, or have bonds issued on its behalf by a unit of
1859	local government pursuant to subparagraph (g)2., in the absence
1860	of a hurricane or other weather-related event, upon a
1861	determination by the corporation, subject to approval by the
1862	office, that such action would enable it to efficiently meet the
1863	financial obligations of the corporation and that such
1864	financings are reasonably necessary to effectuate the
1865	requirements of this subsection. The corporation is authorized
1866	to take all actions needed to facilitate tax-free status for any
1867	such bonds or indebtedness, including formation of trusts or
1868	other affiliated entities. The corporation shall have the
1869	authority to pledge assessments, projected recoveries from the
1870	Florida Hurricane Catastrophe Fund, other reinsurance
1871	recoverables, market equalization and other surcharges, and
1872	other funds available to the corporation as security for bonds
1873	or other indebtedness. In recognition of s. 10, Art. I of the
1874	State Constitution, prohibiting the impairment of obligations of
1875	contracts, it is the intent of the Legislature that no action be
1876	taken whose purpose is to impair any bond indenture or financing
1877	agreement or any revenue source committed by contract to such
1878	bond or other indebtedness.
1879	4.a.  Must require that the corporation operate subject to
1880	the supervision and approval of a board of governors consisting
1881	of 8 individuals who are residents of this state, from different
1882	geographical areas of this state. The Governor, the Chief
1883	Financial Officer, the President of the Senate, and the Speaker
1884	of the House of Representatives shall each appoint two members
1885	of the board, effective August 1, 2005. At least one of the two
1886	members appointed by each appointing officer must have
1887	demonstrated expertise in insurance. The Chief Financial Officer
1888	shall designate one of the appointees as chair. All board
1889	members serve at the pleasure of the appointing officer. All
1890	board members, including the chair, must be appointed to serve
1891	for 3-year terms beginning annually on a date designated by the
1892	plan. Any board vacancy shall be filled for the unexpired term
1893	by the appointing officer. The Chief Financial Officer shall
1894	appoint a technical advisory group to provide information and
1895	advice to the board of governors in connection with the board's
1896	duties under this subsection. The executive director and senior
1897	managers of the corporation shall be engaged by the board, as
1898	recommended by the Chief Financial Officer, and serve at the
1899	pleasure of the board. The executive director is responsible for
1900	employing other staff as the corporation may require, subject to
1901	review and concurrence by the board and the Chief Financial
1902	Officer.
1903	b.  The board shall create a Market Accountability Advisory
1904	Committee to assist the corporation in developing awareness of
1905	its rates and its customer and agent service levels in
1906	relationship to the voluntary market insurers writing similar
1907	coverage. The members of the advisory committee shall consist of
1908	the following 11 persons, one of whom must be elected chair by
1909	the members of the committee: four representatives, one
1910	appointed by the Florida Association of Insurance Agents, one by
1911	the Florida Association of Insurance and Financial Advisors, one
1912	by the Professional Insurance Agents of Florida, and one by the
1913	Latin American Association of Insurance Agencies; three
1914	representatives appointed by the insurers with the three highest
1915	voluntary market share of residential property insurance
1916	business in the state; one representative from the Office of
1917	Insurance Regulation; one consumer appointed by the board who is
1918	insured by the corporation at the time of appointment to the
1919	committee; one representative appointed by the Florida
1920	Association of Realtors; and one representative appointed by the
1921	Florida Bankers Association. All members must serve for 3-year
1922	terms and may serve for consecutive terms. The committee shall
1923	report to the corporation at each board meeting on insurance
1924	market issues which may include rates and rate competition with
1925	the voluntary market; service, including policy issuance, claims
1926	processing, and general responsiveness to policyholders,
1927	applicants, and agents; and matters relating to depopulation.
1928	5.  Must provide a procedure for determining the
1929	eligibility of a risk for coverage, as follows:
1930	a.  Subject to the provisions of s. 627.3517, with respect
1931	to personal lines residential risks, if the risk is offered
1932	coverage from an authorized insurer at the insurer's approved
1933	rate under either a standard policy including wind coverage or,
1934	if consistent with the insurer's underwriting rules as filed
1935	with the office, a basic policy including wind coverage, the
1936	risk is not eligible for any policy issued by the corporation.
1937	If the risk is not able to obtain any such offer, the risk is
1938	eligible for either a standard policy including wind coverage or
1939	a basic policy including wind coverage issued by the
1940	corporation; however, if the risk could not be insured under a
1941	standard policy including wind coverage regardless of market
1942	conditions, the risk shall be eligible for a basic policy
1943	including wind coverage unless rejected under subparagraph 8.
1944	The corporation shall determine the type of policy to be
1945	provided on the basis of objective standards specified in the
1946	underwriting manual and based on generally accepted underwriting
1947	practices.
1948	(I)  If the risk accepts an offer of coverage through the
1949	market assistance plan or an offer of coverage through a
1950	mechanism established by the corporation before a policy is
1951	issued to the risk by the corporation or during the first 30
1952	days of coverage by the corporation, and the producing agent who
1953	submitted the application to the plan or to the corporation is
1954	not currently appointed by the insurer, the insurer shall:
1955	(A)  Pay to the producing agent of record of the policy,
1956	for the first year, an amount that is the greater of the
1957	insurer's usual and customary commission for the type of policy
1958	written or a fee equal to the usual and customary commission of
1959	the corporation; or
1960	(B)  Offer to allow the producing agent of record of the
1961	policy to continue servicing the policy for a period of not less
1962	than 1 year and offer to pay the agent the greater of the
1963	insurer's or the corporation's usual and customary commission
1964	for the type of policy written.
1965
1966	If the producing agent is unwilling or unable to accept
1967	appointment, the new insurer shall pay the agent in accordance
1968	with sub-sub-sub-subparagraph (A).
1969	(II)  When the corporation enters into a contractual
1970	agreement for a take-out plan, the producing agent of record of
1971	the corporation policy is entitled to retain any unearned
1972	commission on the policy, and the insurer shall:
1973	(A)  Pay to the producing agent of record of the
1974	corporation policy, for the first year, an amount that is the
1975	greater of the insurer's usual and customary commission for the
1976	type of policy written or a fee equal to the usual and customary
1977	commission of the corporation; or
1978	(B)  Offer to allow the producing agent of record of the
1979	corporation policy to continue servicing the policy for a period
1980	of not less than 1 year and offer to pay the agent the greater
1981	of the insurer's or the corporation's usual and customary
1982	commission for the type of policy written.
1983
1984	If the producing agent is unwilling or unable to accept
1985	appointment, the new insurer shall pay the agent in accordance
1986	with sub-sub-sub-subparagraph (A).
1987	b.  With respect to commercial lines residential risks, if
1988	the risk is offered coverage under a policy including wind
1989	coverage from an authorized insurer at its approved rate, the
1990	risk is not eligible for any policy issued by the corporation.
1991	If the risk is not able to obtain any such offer, the risk is
1992	eligible for a policy including wind coverage issued by the
1993	corporation.
1994	(I)  If the risk accepts an offer of coverage through the
1995	market assistance plan or an offer of coverage through a
1996	mechanism established by the corporation before a policy is
1997	issued to the risk by the corporation or during the first 30
1998	days of coverage by the corporation, and the producing agent who
1999	submitted the application to the plan or the corporation is not
2000	currently appointed by the insurer, the insurer shall:
2001	(A)  Pay to the producing agent of record of the policy,
2002	for the first year, an amount that is the greater of the
2003	insurer's usual and customary commission for the type of policy
2004	written or a fee equal to the usual and customary commission of
2005	the corporation; or
2006	(B)  Offer to allow the producing agent of record of the
2007	policy to continue servicing the policy for a period of not less
2008	than 1 year and offer to pay the agent the greater of the
2009	insurer's or the corporation's usual and customary commission
2010	for the type of policy written.
2011
2012	If the producing agent is unwilling or unable to accept
2013	appointment, the new insurer shall pay the agent in accordance
2014	with sub-sub-sub-subparagraph (A).
2015	(II)  When the corporation enters into a contractual
2016	agreement for a take-out plan, the producing agent of record of
2017	the corporation policy is entitled to retain any unearned
2018	commission on the policy, and the insurer shall:
2019	(A)  Pay to the producing agent of record of the
2020	corporation policy, for the first year, an amount that is the
2021	greater of the insurer's usual and customary commission for the
2022	type of policy written or a fee equal to the usual and customary
2023	commission of the corporation; or
2024	(B)  Offer to allow the producing agent of record of the
2025	corporation policy to continue servicing the policy for a period
2026	of not less than 1 year and offer to pay the agent the greater
2027	of the insurer's or the corporation's usual and customary
2028	commission for the type of policy written.
2029
2030	If the producing agent is unwilling or unable to accept
2031	appointment, the new insurer shall pay the agent in accordance
2032	with sub-sub-sub-subparagraph (A).
2033	c.  To preserve existing incentives for carriers to write
2034	dwellings in the voluntary market and not in the corporation,
2035	the corporation shall continue to offer authorized insurers,
2036	including insurers writing dwellings valued at $1 million or
2037	more, the same voluntary writing credits that were available on
2038	January 1, 2006, to carriers writing wind coverage for dwellings
2039	in the areas eligible for coverage in the high-risk account.
2040	d.  With respect to personal lines residential risks, if
2041	the risk is a dwelling with an insured value of $1 million or
2042	more, or if the risk is one that is excluded from the coverage
2043	to be provided by the condominium association under s.
2044	718.111(11)(b) and that is insured by the condominium unit owner
2045	for a combined dwelling and contents replacement cost of $1
2046	million or more, the risk is not eligible for any policy issued
2047	by the corporation. Rates and forms for personal lines
2048	residential risks not eligible for coverage by the corporation
2049	specified by this sub-subparagraph are not subject to ss.
2050	627.062 and 627.0629. Such rates and forms are subject to all
2051	other applicable provisions of this code and rules adopted under
2052	this code. During the course of an insurer's market conduct
2053	examination, the office may review the rate for any risk to
2054	which the provisions of this sub-subparagraph are applicable to
2055	determine if such rate is inadequate or unfairly discriminatory.
2056	Rates on personal lines residential risks not eligible for
2057	coverage by the corporation may be found inadequate by the
2058	office if they are clearly insufficient, together with the
2059	investment income attributable to such risks, to sustain
2060	projected losses and expenses in the class of business to which
2061	such rates apply. Rates on personal lines residential risks not
2062	eligible for coverage by the corporation may also be found
2063	inadequate as to the premium charged to a risk or group of risks
2064	if discounts or credits are allowed that exceed a reasonable
2065	reflection of expense savings and reasonably expected loss
2066	experience from the risk or group of risks. Rates on personal
2067	lines residential risks not eligible for coverage by the
2068	corporation may be found to be unfairly discriminatory as to a
2069	risk or group of risks by the office if the application of
2070	premium discounts, credits, or surcharges among such risks does
2071	not bear a reasonable relationship to the expected loss and
2072	expense experience among the various risks. A rating plan,
2073	including discounts, credits, or surcharges on personal lines
2074	residential risks not eligible for coverage by the corporation
2075	may also be found to be unfairly discriminatory if the plan
2076	fails to clearly and equitably reflect consideration of the
2077	policyholder's participation in a risk management program
2078	adjusted pursuant to s. 627.0625. The office may order an
2079	insurer to discontinue using a rate for new policies or upon
2080	renewal of a policy if the office finds the rate to be
2081	inadequate or unfairly discriminatory. Insurers must maintain
2082	records and documentation relating to rates and forms subject to
2083	this sub-subparagraph for a period of at least 5 years after the
2084	effective date of the policy.
2085	e.  For policies subject to nonrenewal as a result of the
2086	risk being no longer eligible for coverage pursuant to sub-
2087	subparagraph d., the corporation shall, directly or through the
2088	market assistance plan, make information from confidential
2089	underwriting and claims files of policyholders available only to
2090	licensed general lines agents who register with the corporation
2091	to receive such information according to the following
2092	procedures:
2093	(I)  By August 1, 2006, the corporation shall provide
2094	policyholders who are not eligible for renewal pursuant to sub-
2095	subparagraph d. the opportunity to request in writing, within 30
2096	days after the notification is sent, that information from their
2097	confidential underwriting and claims files not be released to
2098	licensed general lines agents registered pursuant to sub-sub-
2099	subparagraph e.(II);
2100	(II)  By August 1, 2006, the corporation shall make
2101	available to licensed general lines agents the registration
2102	procedures to be used to obtain confidential information from
2103	underwriting and claims files for policies not eligible for
2104	renewal pursuant to sub-subparagraph d. As a condition of
2105	registration, the corporation shall require the licensed general
2106	lines agent to attest that the agent has the experience and
2107	relationships with authorized or surplus lines carriers to
2108	attempt to offer replacement coverage for policies not eligible
2109	for renewal pursuant to sub-subparagraph d.
2110	(III)  By September 1, 2006, the corporation shall make
2111	available through a secured website to licensed general lines
2112	agents registered pursuant to sub-sub-subparagraph e.(II)
2113	application, rating, loss history, mitigation, and policy type
2114	information relating to all policies not eligible for renewal
2115	pursuant to sub-subparagraph d. and for which the policyholder
2116	has not requested the corporation withhold such information
2117	pursuant to sub-sub-subparagraph e.(I). The licensed general
2118	lines agent registered pursuant to sub-sub-subparagraph e.(II)
2119	may use such information to contact and assist the policyholder
2120	in securing replacement policies and the agent may disclose to
2121	the policyholder such information was obtained from the
2122	corporation.
2123	f.  With respect to nonhomestead property, eligibility must
2124	be determined in accordance with sub-sub-sub-subparagraph
2125	(b)2.a.(II)(A).
2126	6.  Must include rules for classifications of risks and
2127	rates therefor.
2128	7.  Must provide that if premium and investment income for
2129	an account attributable to a particular calendar year are in
2130	excess of projected losses and expenses for the account
2131	attributable to that year, such excess shall be held in surplus
2132	in the account. Such surplus shall be available to defray
2133	deficits in that account as to future years and shall be used
2134	for that purpose prior to assessing assessable insurers and
2135	assessable insureds as to any calendar year.
2136	8.  Must provide objective criteria and procedures to be
2137	uniformly applied for all applicants in determining whether an
2138	individual risk is so hazardous as to be uninsurable. In making
2139	this determination and in establishing the criteria and
2140	procedures, the following shall be considered:
2141	a.  Whether the likelihood of a loss for the individual
2142	risk is substantially higher than for other risks of the same
2143	class; and
2144	b.  Whether the uncertainty associated with the individual
2145	risk is such that an appropriate premium cannot be determined.
2146
2147	The acceptance or rejection of a risk by the corporation shall
2148	be construed as the private placement of insurance, and the
2149	provisions of chapter 120 shall not apply.
2150	9.  Must provide that the corporation shall make its best
2151	efforts to procure catastrophe reinsurance at reasonable rates,
2152	to cover its projected 100-year probable maximum loss in the
2153	homestead accounts as determined by the board of governors.
2154	10.  Must provide that in the event of regular deficit
2155	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2156	(b)3.b., in the personal lines homestead account, the commercial
2157	lines residential homestead account, or the high-risk homestead
2158	account, the corporation shall levy upon corporation homestead
2159	account policyholders in its next rate filing, or by a separate
2160	rate filing solely for this purpose, a Citizens policyholder
2161	market equalization surcharge arising from a regular assessment
2162	in such account in a percentage equal to the total amount of
2163	such regular assessments divided by the aggregate statewide
2164	direct written premium for subject lines of business for the
2165	prior calendar year preceding the year in which the deficit to
2166	which the regular assessment related is incurred. Citizens
2167	policyholder Market equalization surcharges under this
2168	subparagraph are not considered premium and are not subject to
2169	commissions, fees, or premium taxes; however, failure to pay the
2170	Citizens policyholder a market equalization surcharge shall be
2171	treated as failure to pay premium. Notwithstanding any other
2172	provision of this section, for purposes of the Citizens
2173	policyholder surcharges to be levied pursuant to this
2174	subparagraph, the total amount of the regular assessment to
2175	which such Citizens policyholder surcharge relates shall be
2176	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
2177	11.  The policies issued by the corporation must provide
2178	that, if the corporation or the market assistance plan obtains
2179	an offer from an authorized insurer to cover the risk at its
2180	approved rates, the risk is no longer eligible for renewal
2181	through the corporation.
2182	12.  Corporation policies and applications must include a
2183	notice that the corporation policy could, under this section, be
2184	replaced with a policy issued by an authorized insurer that does
2185	not provide coverage identical to the coverage provided by the
2186	corporation or an insurer writing coverage pursuant to part VIII
2187	of chapter 626. The notice shall also specify that acceptance of
2188	corporation coverage creates a conclusive presumption that the
2189	applicant or policyholder is aware of this potential.
2190	13.  May establish, subject to approval by the office,
2191	different eligibility requirements and operational procedures
2192	for any line or type of coverage for any specified county or
2193	area if the board determines that such changes to the
2194	eligibility requirements and operational procedures are
2195	justified due to the voluntary market being sufficiently stable
2196	and competitive in such area or for such line or type of
2197	coverage and that consumers who, in good faith, are unable to
2198	obtain insurance through the voluntary market through ordinary
2199	methods would continue to have access to coverage from the
2200	corporation. When coverage is sought in connection with a real
2201	property transfer, such requirements and procedures shall not
2202	provide for an effective date of coverage later than the date of
2203	the closing of the transfer as established by the transferor,
2204	the transferee, and, if applicable, the lender.
2205	14.  Must provide that, with respect to the high-risk
2206	homestead account, any assessable insurer with a surplus as to
2207	policyholders of $25 million or less writing 25 percent or more
2208	of its total countrywide property insurance premiums in this
2209	state may petition the office, within the first 90 days of each
2210	calendar year, to qualify as a limited apportionment company. In
2211	no event shall a limited apportionment company be required to
2212	participate in the portion of any assessment, within the high-
2213	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
2214	subparagraph (b)3.b. in the aggregate which exceeds $50 million
2215	after payment of available high-risk account funds in any
2216	calendar year. However, A limited apportionment company shall
2217	collect from its policyholders any emergency assessment imposed
2218	under sub-subparagraph (b)3.d. The plan shall provide that, if
2219	the office determines that any regular assessment will result in
2220	an impairment of the surplus of a limited apportionment company,
2221	the office may direct that all or part of such assessment be
2222	deferred as provided in subparagraph (g)4. However, there shall
2223	be no limitation or deferment of an emergency assessment to be
2224	collected from policyholders under sub-subparagraph (b)3.d.
2225	15.  Must provide that the corporation appoint as its
2226	licensed agents only those agents who also hold an appointment
2227	as defined in s. 626.015(3) with an insurer who at the time of
2228	the agent's initial appointment by the corporation is authorized
2229	to write and is actually writing personal lines residential
2230	property coverage, commercial residential property coverage, or
2231	commercial nonresidential property coverage within the state.
2232	16.  Must provide that the hurricane deductible for any
2233	property in the nonhomestead account with an insured value of
2234	$250,000 or more must be at least 5 percent of the insured
2235	value.
2236	17.  Must provide that the application for coverage under
2237	the nonhomestead account and the declaration page of each
2238	nonhomestead account policy include a statement in boldface 12-
2239	point type specifying that public subsidies do not support the
2240	corporation's coverage of nonhomestead property; that if the
2241	nonhomestead account of the corporation sustains a deficit or is
2242	unable to pay claims, the nonhomestead policyholder shall be
2243	subject to an immediate assessment in an amount up to 100
2244	percent of the premium and a further assessment upon renewal of
2245	the policy; and that the applicant or policyholder may wish to
2246	seek alternative coverage from an authorized insurer or surplus
2247	lines insurer that will not be subject to such potential
2248	assessments.
2249	18.  Must provide that the application for coverage under
2250	any of the homestead accounts and the declaration page of each
2251	homestead account policy include a statement in boldface 12-
2252	point type specifying that a false declaration of homestead
2253	status for purposes of obtaining coverage in any of the
2254	homestead accounts may constitute the offense of insurance
2255	fraud, as prohibited and punishable as a felony under s.
2256	817.234.
2257	19.  Must limit coverage on mobile homes or manufactured
2258	homes built prior to 1994 to actual cash value of the dwelling
2259	rather than replacement costs of the dwelling.
2260	(d)1.a.  It is the intent of the Legislature that the rates
2261	for coverage provided by the corporation be actuarially adequate
2262	sound and not competitive with approved rates charged in the
2263	admitted voluntary market, so that the corporation functions as
2264	a residual market mechanism to provide insurance only when the
2265	insurance cannot be procured in the voluntary market. Rates
2266	shall include a residual market risk load that reflects the
2267	concentrated exposure of the corporation and the impact of
2268	adverse selection as well as an appropriate catastrophe loading
2269	factor that reflects the actual catastrophic exposure of the
2270	corporation.
2271	b.  It is the intent of the Legislature to reaffirm the
2272	requirement of rate adequacy in the residual market. Recognizing
2273	that rates may comply with the intent expressed in sub-
2274	subparagraph a. and yet be inadequate and recognizing the public
2275	need to limit subsidies within the residual market, it is the
2276	further intent of the Legislature to establish statutory
2277	standards for rate adequacy. Such standards are intended to
2278	supplement the standard specified in s. 627.062(2)(e)3.,
2279	providing that rates are inadequate if they are clearly
2280	insufficient to sustain projected losses and expenses in the
2281	class of business to which they apply.
2282	2.  For each county, the average rates of the corporation
2283	for each line of business for personal lines residential
2284	policies excluding rates for wind-only policies shall be no
2285	lower than the average rates charged by the insurer that had the
2286	highest average rate in that county among the 20 insurers with
2287	the greatest total direct written premium in the state for that
2288	line of business in the preceding year, except that with respect
2289	to mobile home coverages, the average rates of the corporation
2290	shall be no lower than the average rates charged by the insurer
2291	that had the highest average rate in that county among the 5
2292	insurers with the greatest total written premium for mobile home
2293	owner's policies in the state in the preceding year.
2294	3.  Rates for personal lines residential wind-only policies
2295	must be actuarially adequate sound and not competitive with
2296	approved rates charged by authorized insurers. If the filing
2297	under this paragraph is made at least 90 days before the
2298	proposed effective date and the filing is not implemented during
2299	the office's review of the filing and any proceeding and
2300	judicial review, such filing shall be considered a file and use
2301	filing. In such case, the office shall finalize its review by
2302	issuance of a notice of intent to approve or a notice of intent
2303	to disapprove within 90 days after receipt of the filing. The
2304	notice of intent to approve and the notice of intent to
2305	disapprove constitute agency action for purposes of the
2306	Administrative Procedure Act. Requests for supporting
2307	information, requests for mathematical or mechanical
2308	corrections, or notification to the insurer by the office of its
2309	preliminary findings shall not toll the 90-day period during any
2310	such proceedings and subsequent judicial review. The rate shall
2311	be deemed approved if the office does not issue a notice of
2312	intent to approve or a notice of intent to disapprove within 90
2313	days after receipt of the filing. Corporation rate manuals shall
2314	include a rate surcharge for seasonal occupancy. To ensure that
2315	personal lines residential wind-only rates are not competitive
2316	with approved rates charged by authorized insurers, the
2317	corporation, in conjunction with the office, shall develop a
2318	wind-only ratemaking methodology, which methodology shall be
2319	contained in each rate filing made by the corporation with the
2320	office. If the office determines that the wind-only rates or
2321	rating factors filed by the corporation fail to comply with the
2322	wind-only ratemaking methodology provided for in this
2323	subsection, it shall so notify the corporation and require the
2324	corporation to amend its rates or rating factors to come into
2325	compliance within 90 days of notice from the office.
2326	4.  For the purposes of establishing a pilot program to
2327	evaluate issues relating to the availability and affordability
2328	of insurance in an area where historically there has been little
2329	market competition, the provisions of subparagraph 2. do not
2330	apply to coverage provided by the corporation in Monroe County
2331	if the office determines that a reasonable degree of competition
2332	does not exist for personal lines residential policies. The
2333	provisions of subparagraph 3. do not apply to coverage provided
2334	by the corporation in Monroe County if the office determines
2335	that a reasonable degree of competition does not exist for
2336	personal lines residential policies in the area of that county
2337	which is eligible for wind-only coverage. In this county, the
2338	rates for personal lines residential coverage shall be
2339	actuarially adequate sound and not excessive, inadequate, or
2340	unfairly discriminatory and are subject to the other provisions
2341	of the paragraph and s. 627.062. The commission shall adopt
2342	rules establishing the criteria for determining whether a
2343	reasonable degree of competition exists for personal lines
2344	residential policies in Monroe County. Any proposed rate
2345	increase filed by the corporation after May 1, 2006, but before
2346	October 1, 2006, for Monroe County based upon actuarial adequacy
2347	shall be implemented in equal amounts over a period of 3 years.
2348	By March 1, 2006, the office shall submit a report to the
2349	Legislature providing an evaluation of the implementation of the
2350	pilot program affecting Monroe County.
2351	5.  Rates for commercial lines coverage shall not be
2352	subject to the requirements of subparagraph 2., but shall be
2353	subject to all other requirements of this paragraph and s.
2354	627.062.
2355	6.a.  Nothing in this paragraph shall require or allow the
2356	corporation to adopt a rate that is inadequate under s. 627.062
2357	or under sub-subparagraph b. or sub-subparagraph c.
2358	b.  With respect to rates for coverage in any homestead
2359	account, a rate is deemed inadequate if the rate is not
2360	sufficient to generate, by means of cash flow, procurement of
2361	coverage under the Florida Hurricane Catastrophe Fund,
2362	reinsurance costs whether or not reinsurance is procured, and
2363	investment income, moneys sufficient to pay all claims and
2364	expenses reasonably expected to result from a 100-year probable
2365	maximum loss event without resort to any regular or emergency
2366	assessments, long-term debt, state revenues, or other funding
2367	sources that reflect any subsidy from persons or entities other
2368	than corporation homestead accounts policyholders.
2369	c.  With respect to rates for coverage in the nonhomestead
2370	account, a rate is deemed inadequate if the rate is not
2371	sufficient to generate, by means of cash flow, procurement of
2372	coverage under the Florida Hurricane Catastrophe Fund,
2373	reinsurance costs, whether or not reinsurance is procured, and
2374	investment income and moneys sufficient to pay all claims and
2375	expenses reasonably expected to result from a 250-year probable
2376	maximum loss event without resort to any assessments, debt,
2377	state revenues, or other funding sources that reflect any
2378	subsidy from persons or entities other than corporation
2379	nonhomestead account policyholders.
2380	7.  The corporation shall certify to the office at least
2381	twice annually that its personal lines rates comply with the
2382	requirements of subparagraphs 1., and 2., and 6. If any
2383	adjustment in the rates or rating factors of the corporation is
2384	necessary to ensure such compliance, the corporation shall make
2385	and implement such adjustments and file its revised rates and
2386	rating factors with the office. If the office thereafter
2387	determines that the revised rates and rating factors fail to
2388	comply with the provisions of subparagraphs 1. and 2., it shall
2389	notify the corporation and require the corporation to amend its
2390	rates or rating factors in conjunction with its next rate
2391	filing. The office must notify the corporation by electronic
2392	means of any rate filing it approves for any insurer among the
2393	insurers referred to in subparagraph 2.
2394	8.  In addition to the rates otherwise determined pursuant
2395	to this paragraph, the corporation shall impose and collect an
2396	amount equal to the premium tax provided for in s. 624.509 to
2397	augment the financial resources of the corporation.
2398	9.a.  To assist the corporation in developing additional
2399	ratemaking methods to assure compliance with subparagraphs 1.
2400	and 4., the corporation shall appoint a rate methodology panel
2401	consisting of one person recommended by the Florida Association
2402	of Insurance Agents, one person recommended by the Professional
2403	Insurance Agents of Florida, one person recommended by the
2404	Florida Association of Insurance and Financial Advisors, one
2405	person recommended by the insurer with the highest voluntary
2406	market share of residential property insurance business in the
2407	state, one person recommended by the insurer with the second-
2408	highest voluntary market share of residential property insurance
2409	business in the state, one person recommended by an insurer
2410	writing commercial residential property insurance in this state,
2411	one person recommended by the Office of Insurance Regulation,
2412	and one board member designated by the board chairman, who shall
2413	serve as chairman of the panel.
2414	b.  By January 1, 2004, the rate methodology panel shall
2415	provide a report to the corporation of its findings and
2416	recommendations for the use of additional ratemaking methods and
2417	procedures, including the use of a rate equalization surcharge
2418	in an amount sufficient to assure that the total cost of
2419	coverage for policyholders or applicants to the corporation is
2420	sufficient to comply with subparagraph 1.
2421	c.  Within 30 days after such report, the corporation shall
2422	present to the President of the Senate, the Speaker of the House
2423	of Representatives, the minority party leaders of each house of
2424	the Legislature, and the chairs of the standing committees of
2425	each house of the Legislature having jurisdiction of insurance
2426	issues, a plan for implementing the additional ratemaking
2427	methods and an outline of any legislation needed to facilitate
2428	use of the new methods.
2429	d.  The plan must include a provision that producer
2430	commissions paid by the corporation shall not be calculated in
2431	such a manner as to include any rate equalization surcharge.
2432	However, without regard to the plan to be developed or its
2433	implementation, producer commissions paid by the corporation for
2434	each account, other than the quota share primary program, shall
2435	remain fixed as to percentage, effective rate, calculation, and
2436	payment method until January 1, 2004.
2437	9.10.  By January 1, 2004, The corporation shall provide
2438	develop a notice to policyholders or applicants that the rates
2439	of Citizens Property Insurance Corporation are intended to be
2440	higher than the rates of any admitted carrier and providing
2441	other information the corporation deems necessary to assist
2442	consumers in finding other voluntary admitted insurers willing
2443	to insure their property.
2444	(e)  If coverage in an account is deactivated pursuant to
2445	paragraph (f), coverage through the corporation shall be
2446	reactivated by order of the office only under one of the
2447	following circumstances:
2448	1.  If the market assistance plan receives a minimum of 100
2449	applications for coverage within a 3-month period, or 200
2450	applications for coverage within a 1-year period or less for
2451	residential coverage, unless the market assistance plan provides
2452	a quotation from admitted carriers at their filed rates for at
2453	least 90 percent of such applicants. Any market assistance plan
2454	application that is rejected because an individual risk is so
2455	hazardous as to be uninsurable using the criteria specified in
2456	subparagraph (c)8. shall not be included in the minimum
2457	percentage calculation provided herein. In the event that there
2458	is a legal or administrative challenge to a determination by the
2459	office that the conditions of this subparagraph have been met
2460	for eligibility for coverage in the corporation, any eligible
2461	risk may obtain coverage during the pendency of such challenge.
2462	2.  In response to a state of emergency declared by the
2463	Governor under s. 252.36, the office may activate coverage by
2464	order for the period of the emergency upon a finding by the
2465	office that the emergency significantly affects the availability
2466	of residential property insurance.
2467	(f)1.  The corporation shall file with the office quarterly
2468	statements of financial condition, an annual statement of
2469	financial condition, and audited financial statements in the
2470	manner prescribed by law. In addition, the corporation shall
2471	report to the office monthly on the types, premium, exposure,
2472	and distribution by county of its policies in force, and shall
2473	submit other reports as the office requires to carry out its
2474	oversight of the corporation.
2475	2.  The activities of the corporation shall be reviewed at
2476	least annually by the office to determine whether coverage shall
2477	be deactivated in an account on the basis that the conditions
2478	giving rise to its activation no longer exist.
2479	(g)1.  The corporation shall certify to the office its
2480	needs for annual assessments as to a particular calendar year,
2481	and for any interim assessments that it deems to be necessary to
2482	sustain operations as to a particular year pending the receipt
2483	of annual assessments. Upon verification, the office shall
2484	approve such certification, and the corporation shall levy such
2485	annual or interim assessments. Such assessments shall be
2486	prorated as provided in paragraph (b). The corporation shall
2487	take all reasonable and prudent steps necessary to collect the
2488	amount of assessment due from each assessable insurer,
2489	including, if prudent, filing suit to collect such assessment.
2490	If the corporation is unable to collect an assessment from any
2491	assessable insurer, the uncollected assessments shall be levied
2492	as an additional assessment against the assessable insurers and
2493	any assessable insurer required to pay an additional assessment
2494	as a result of such failure to pay shall have a cause of action
2495	against such nonpaying assessable insurer. Assessments shall be
2496	included as an appropriate factor in the making of rates. The
2497	failure of a surplus lines agent to collect and remit any
2498	regular or emergency assessment levied by the corporation is
2499	considered to be a violation of s. 626.936 and subjects the
2500	surplus lines agent to the penalties provided in that section.
2501	2.  The governing body of any unit of local government, any
2502	residents of which are insured by the corporation, may issue
2503	bonds as defined in s. 125.013 or s. 166.101 from time to time
2504	to fund an assistance program, in conjunction with the
2505	corporation, for the purpose of defraying deficits of the
2506	corporation. In order to avoid needless and indiscriminate
2507	proliferation, duplication, and fragmentation of such assistance
2508	programs, any unit of local government, any residents of which
2509	are insured by the corporation, may provide for the payment of
2510	losses, regardless of whether or not the losses occurred within
2511	or outside of the territorial jurisdiction of the local
2512	government. Revenue bonds under this subparagraph may not be
2513	issued until validated pursuant to chapter 75, unless a state of
2514	emergency is declared by executive order or proclamation of the
2515	Governor pursuant to s. 252.36 making such findings as are
2516	necessary to determine that it is in the best interests of, and
2517	necessary for, the protection of the public health, safety, and
2518	general welfare of residents of this state and declaring it an
2519	essential public purpose to permit certain municipalities or
2520	counties to issue such bonds as will permit relief to claimants
2521	and policyholders of the corporation. Any such unit of local
2522	government may enter into such contracts with the corporation
2523	and with any other entity created pursuant to this subsection as
2524	are necessary to carry out this paragraph. Any bonds issued
2525	under this subparagraph shall be payable from and secured by
2526	moneys received by the corporation from emergency assessments
2527	under sub-subparagraph (b)3.d., and assigned and pledged to or
2528	on behalf of the unit of local government for the benefit of the
2529	holders of such bonds. The funds, credit, property, and taxing
2530	power of the state or of the unit of local government shall not
2531	be pledged for the payment of such bonds. If any of the bonds
2532	remain unsold 60 days after issuance, the office shall require
2533	all insurers subject to assessment to purchase the bonds, which
2534	shall be treated as admitted assets; each insurer shall be
2535	required to purchase that percentage of the unsold portion of
2536	the bond issue that equals the insurer's relative share of
2537	assessment liability under this subsection. An insurer shall not
2538	be required to purchase the bonds to the extent that the office
2539	determines that the purchase would endanger or impair the
2540	solvency of the insurer.
2541	3.a.  The corporation shall adopt one or more programs
2542	subject to approval by the office for the reduction of both new
2543	and renewal writings in the corporation. Beginning January 1,
2544	2008, any program the corporation adopts for the payment of
2545	bonuses to an insurer for each risk the insurer removes from the
2546	corporation shall comply with s. 627.3511(2) and may not exceed
2547	the amount referenced in s. 627.3511(2) for each risk removed.
2548	The corporation may consider any prudent and not unfairly
2549	discriminatory approach to reducing corporation writings, and
2550	may adopt a credit against assessment liability or other
2551	liability that provides an incentive for insurers to take risks
2552	out of the corporation and to keep risks out of the corporation
2553	by maintaining or increasing voluntary writings in counties or
2554	areas in which corporation risks are highly concentrated and a
2555	program to provide a formula under which an insurer voluntarily
2556	taking risks out of the corporation by maintaining or increasing
2557	voluntary writings will be relieved wholly or partially from
2558	assessments under sub-subparagraphs (b)3.a. and b. When the
2559	corporation enters into a contractual agreement for a take-out
2560	plan, the producing agent of record of the corporation policy is
2561	entitled to retain any unearned commission on such policy, and
2562	the insurer shall either:
2563	(I)  Pay to the producing agent of record of the policy,
2564	for the first year, an amount which is the greater of the
2565	insurer's usual and customary commission for the type of policy
2566	written or a policy fee equal to the usual and customary
2567	commission of the corporation; or
2568	(II)  Offer to allow the producing agent of record of the
2569	policy to continue servicing the policy for a period of not less
2570	than 1 year and offer to pay the agent the insurer's usual and
2571	customary commission for the type of policy written. If the
2572	producing agent is unwilling or unable to accept appointment by
2573	the new insurer, the new insurer shall pay the agent in
2574	accordance with sub-sub-subparagraph (I).
2575	b.  Any credit or exemption from regular assessments
2576	adopted under this subparagraph shall last no longer than the 3
2577	years following the cancellation or expiration of the policy by
2578	the corporation. With the approval of the office, the board may
2579	extend such credits for an additional year if the insurer
2580	guarantees an additional year of renewability for all policies
2581	removed from the corporation, or for 2 additional years if the
2582	insurer guarantees 2 additional years of renewability for all
2583	policies so removed.
2584	c.  There shall be no credit, limitation, exemption, or
2585	deferment from emergency assessments to be collected from
2586	policyholders pursuant to sub-subparagraph (b)3.d.
2587	4.  The plan shall provide for the deferment, in whole or
2588	in part, of the assessment of an assessable insurer, other than
2589	an emergency assessment collected from policyholders pursuant to
2590	sub-subparagraph (b)3.d., if the office finds that payment of
2591	the assessment would endanger or impair the solvency of the
2592	insurer. In the event an assessment against an assessable
2593	insurer is deferred in whole or in part, the amount by which
2594	such assessment is deferred may be assessed against the other
2595	assessable insurers in a manner consistent with the basis for
2596	assessments set forth in paragraph (b).
2597	(h)  Nothing in this subsection shall be construed to
2598	preclude the issuance of residential property insurance coverage
2599	pursuant to part VIII of chapter 626.
2600	(i)  There shall be no liability on the part of, and no
2601	cause of action of any nature shall arise against, any
2602	assessable insurer or its agents or employees, the corporation
2603	or its agents or employees, members of the board of governors or
2604	their respective designees at a board meeting, corporation
2605	committee members, or the office or its representatives, for any
2606	action taken by them in the performance of their duties or
2607	responsibilities under this subsection. Such immunity does not
2608	apply to:
2609	1.  Any of the foregoing persons or entities for any
2610	willful tort;
2611	2.  The corporation or its producing agents for breach of
2612	any contract or agreement pertaining to insurance coverage;
2613	3.  The corporation with respect to issuance or payment of
2614	debt; or
2615	4.  Any assessable insurer with respect to any action to
2616	enforce an assessable insurer's obligations to the corporation
2617	under this subsection.
2618	(j)  For the purposes of s. 199.183(1), the corporation
2619	shall be considered a political subdivision of the state and
2620	shall be exempt from the corporate income tax. The premiums,
2621	assessments, investment income, and other revenue of the
2622	corporation are funds received for providing property insurance
2623	coverage as required by this subsection, paying claims for
2624	Florida citizens insured by the corporation, securing and
2625	repaying debt obligations issued by the corporation, and
2626	conducting all other activities of the corporation, and shall
2627	not be considered taxes, fees, licenses, or charges for services
2628	imposed by the Legislature on individuals, businesses, or
2629	agencies outside state government. Bonds and other debt
2630	obligations issued by or on behalf of the corporation are not to
2631	be considered "state bonds" within the meaning of s. 215.58(8).
2632	The corporation is not subject to the procurement provisions of
2633	chapter 287, and policies and decisions of the corporation
2634	relating to incurring debt, levying of assessments and the sale,
2635	issuance, continuation, terms and claims under corporation
2636	policies, and all services relating thereto, are not subject to
2637	the provisions of chapter 120. The corporation is not required
2638	to obtain or to hold a certificate of authority issued by the
2639	office, nor is it required to participate as a member insurer of
2640	the Florida Insurance Guaranty Association. However, the
2641	corporation is required to pay, in the same manner as an
2642	authorized insurer, assessments pledged by the Florida Insurance
2643	Guaranty Association to secure bonds issued or other
2644	indebtedness incurred to pay covered claims arising from insurer
2645	insolvencies caused by, or proximately related to, hurricane
2646	losses. It is the intent of the Legislature that the tax
2647	exemptions provided in this paragraph will augment the financial
2648	resources of the corporation to better enable the corporation to
2649	fulfill its public purposes. Any debt obligations bonds issued
2650	by the corporation, their transfer, and the income therefrom,
2651	including any profit made on the sale thereof, shall at all
2652	times be free from taxation of every kind by the state and any
2653	political subdivision or local unit or other instrumentality
2654	thereof; however, this exemption does not apply to any tax
2655	imposed by chapter 220 on interest, income, or profits on debt
2656	obligations owned by corporations other than the corporation.
2657	(k)  Upon a determination by the office that the conditions
2658	giving rise to the establishment and activation of the
2659	corporation no longer exist, the corporation is dissolved. Upon
2660	dissolution, the assets of the corporation shall be applied
2661	first to pay all debts, liabilities, and obligations of the
2662	corporation, including the establishment of reasonable reserves
2663	for any contingent liabilities or obligations, and all remaining
2664	assets of the corporation shall become property of the state and
2665	shall be deposited in the Florida Hurricane Catastrophe Fund.
2666	However, no dissolution shall take effect as long as the
2667	corporation has bonds or other financial obligations outstanding
2668	unless adequate provision has been made for the payment of the
2669	bonds or other financial obligations pursuant to the documents
2670	authorizing the issuance of the bonds or other financial
2671	obligations.
2672	(l)1.  Effective July 1, 2002, policies of the Residential
2673	Property and Casualty Joint Underwriting Association shall
2674	become policies of the corporation. All obligations, rights,
2675	assets and liabilities of the Residential Property and Casualty
2676	Joint Underwriting Association, including bonds, note and debt
2677	obligations, and the financing documents pertaining to them
2678	become those of the corporation as of July 1, 2002. The
2679	corporation is not required to issue endorsements or
2680	certificates of assumption to insureds during the remaining term
2681	of in-force transferred policies.
2682	2.  Effective July 1, 2002, policies of the Florida
2683	Windstorm Underwriting Association are transferred to the
2684	corporation and shall become policies of the corporation. All
2685	obligations, rights, assets, and liabilities of the Florida
2686	Windstorm Underwriting Association, including bonds, note and
2687	debt obligations, and the financing documents pertaining to them
2688	are transferred to and assumed by the corporation on July 1,
2689	2002. The corporation is not required to issue endorsement or
2690	certificates of assumption to insureds during the remaining term
2691	of in-force transferred policies.
2692	3.  The Florida Windstorm Underwriting Association and the
2693	Residential Property and Casualty Joint Underwriting Association
2694	shall take all actions as may be proper to further evidence the
2695	transfers and shall provide the documents and instruments of
2696	further assurance as may reasonably be requested by the
2697	corporation for that purpose. The corporation shall execute
2698	assumptions and instruments as the trustees or other parties to
2699	the financing documents of the Florida Windstorm Underwriting
2700	Association or the Residential Property and Casualty Joint
2701	Underwriting Association may reasonably request to further
2702	evidence the transfers and assumptions, which transfers and
2703	assumptions, however, are effective on the date provided under
2704	this paragraph whether or not, and regardless of the date on
2705	which, the assumptions or instruments are executed by the
2706	corporation. Subject to the relevant financing documents
2707	pertaining to their outstanding bonds, notes, indebtedness, or
2708	other financing obligations, the moneys, investments,
2709	receivables, choses in action, and other intangibles of the
2710	Florida Windstorm Underwriting Association shall be credited to
2711	the high-risk account of the corporation, and those of the
2712	personal lines residential coverage account and the commercial
2713	lines residential coverage account of the Residential Property
2714	and Casualty Joint Underwriting Association shall be credited to
2715	the personal lines account and the commercial lines account,
2716	respectively, of the corporation.
2717	4.  Effective July 1, 2002, a new applicant for property
2718	insurance coverage who would otherwise have been eligible for
2719	coverage in the Florida Windstorm Underwriting Association is
2720	eligible for coverage from the corporation as provided in this
2721	subsection.
2722	4.5.  The transfer of all policies, obligations, rights,
2723	assets, and liabilities from the Florida Windstorm Underwriting
2724	Association to the corporation and the renaming of the
2725	Residential Property and Casualty Joint Underwriting Association
2726	as the corporation shall in no way affect the coverage with
2727	respect to covered policies as defined in s. 215.555(2)(c)
2728	provided to these entities by the Florida Hurricane Catastrophe
2729	Fund. The coverage provided by the Florida Hurricane Catastrophe
2730	Fund to the Florida Windstorm Underwriting Association based on
2731	its exposures as of June 30, 2002, and each June 30 thereafter
2732	shall be redesignated as coverage for the high-risk account of
2733	the corporation. Notwithstanding any other provision of law, the
2734	coverage provided by the Florida Hurricane Catastrophe Fund to
2735	the Residential Property and Casualty Joint Underwriting
2736	Association based on its exposures as of June 30, 2002, and each
2737	June 30 thereafter shall be transferred to the personal lines
2738	account and the commercial lines account of the corporation.
2739	Notwithstanding any other provision of law, the high-risk
2740	account shall be treated, for all Florida Hurricane Catastrophe
2741	Fund purposes, as if it were a separate participating insurer
2742	with its own exposures, reimbursement premium, and loss
2743	reimbursement. Likewise, the personal lines and commercial lines
2744	accounts shall be viewed together, for all Florida Hurricane
2745	Catastrophe Fund purposes, as if the two accounts were one and
2746	represent a single, separate participating insurer with its own
2747	exposures, reimbursement premium, and loss reimbursement. The
2748	coverage provided by the Florida Hurricane Catastrophe Fund to
2749	the corporation shall constitute and operate as a full transfer
2750	of coverage from the Florida Windstorm Underwriting Association
2751	and Residential Property and Casualty Joint Underwriting to the
2752	corporation.
2753	(m)  Notwithstanding any other provision of law:
2754	1.  The pledge or sale of, the lien upon, and the security
2755	interest in any rights, revenues, or other assets of the
2756	corporation created or purported to be created pursuant to any
2757	financing documents to secure any bonds or other indebtedness of
2758	the corporation shall be and remain valid and enforceable,
2759	notwithstanding the commencement of and during the continuation
2760	of, and after, any rehabilitation, insolvency, liquidation,
2761	bankruptcy, receivership, conservatorship, reorganization, or
2762	similar proceeding against the corporation under the laws of
2763	this state.
2764	2.  No such proceeding shall relieve the corporation of its
2765	obligation, or otherwise affect its ability to perform its
2766	obligation, to continue to collect, or levy and collect,
2767	assessments, Citizens Property Insurance Corporation
2768	policyholder market equalization or other surcharges under
2769	subparagraph (c)10., or any other rights, revenues, or other
2770	assets of the corporation pledged pursuant to any financing
2771	documents.
2772	3.  Each such pledge or sale of, lien upon, and security
2773	interest in, including the priority of such pledge, lien, or
2774	security interest, any such assessments, market equalization or
2775	other surcharges, or other rights, revenues, or other assets
2776	which are collected, or levied and collected, after the
2777	commencement of and during the pendency of, or after, any such
2778	proceeding shall continue unaffected by such proceeding. As used
2779	in this subsection, the term "financing documents" means any
2780	agreement or agreements, instrument or instruments, or other
2781	document or documents now existing or hereafter created
2782	evidencing any bonds or other indebtedness of the corporation or
2783	pursuant to which any such bonds or other indebtedness has been
2784	or may be issued and pursuant to which any rights, revenues, or
2785	other assets of the corporation are pledged or sold to secure
2786	the repayment of such bonds or indebtedness, together with the
2787	payment of interest on such bonds or such indebtedness, or the
2788	payment of any other obligation or financial product, as defined
2789	in the plan of operation of the corporation related to such
2790	bonds or indebtedness.
2791	4.  Any such pledge or sale of assessments, revenues,
2792	contract rights, or other rights or assets of the corporation
2793	shall constitute a lien and security interest, or sale, as the
2794	case may be, that is immediately effective and attaches to such
2795	assessments, revenues, or contract rights or other rights or
2796	assets, whether or not imposed or collected at the time the
2797	pledge or sale is made. Any such pledge or sale is effective,
2798	valid, binding, and enforceable against the corporation or other
2799	entity making such pledge or sale, and valid and binding against
2800	and superior to any competing claims or obligations owed to any
2801	other person or entity, including policyholders in this state,
2802	asserting rights in any such assessments, revenues, or contract
2803	rights or other rights or assets to the extent set forth in and
2804	in accordance with the terms of the pledge or sale contained in
2805	the applicable financing documents, whether or not any such
2806	person or entity has notice of such pledge or sale and without
2807	the need for any physical delivery, recordation, filing, or
2808	other action.
2809	5.  As long as the corporation has any bonds outstanding,
2810	the corporation may not file a voluntary petition under chapter
2811	9 of the federal Bankruptcy Code, or such corresponding chapter
2812	or sections as may be in effect from time to time, and any
2813	public officer and any organization, entity, or other person may
2814	not authorize the corporation to be or become a debtor under
2815	chapter 9 of the federal Bankruptcy Code, or such corresponding
2816	chapter or sections as may be in effect from time to time,
2817	during any such period.
2818	(n)1.  The following records of the corporation are
2819	confidential and exempt from the provisions of s. 119.07(1) and
2820	s. 24(a), Art. I of the State Constitution:
2821	a.  Underwriting files, except that a policyholder or an
2822	applicant shall have access to his or her own underwriting
2823	files.
2824	b.  Claims files, until termination of all litigation and
2825	settlement of all claims arising out of the same incident,
2826	although portions of the claims files may remain exempt, as
2827	otherwise provided by law. Confidential and exempt claims file
2828	records may be released to other governmental agencies upon
2829	written request and demonstration of need; such records held by
2830	the receiving agency remain confidential and exempt as provided
2831	for herein.
2832	c.  Records obtained or generated by an internal auditor
2833	pursuant to a routine audit, until the audit is completed, or if
2834	the audit is conducted as part of an investigation, until the
2835	investigation is closed or ceases to be active. An investigation
2836	is considered "active" while the investigation is being
2837	conducted with a reasonable, good faith belief that it could
2838	lead to the filing of administrative, civil, or criminal
2839	proceedings.
2840	d.  Matters reasonably encompassed in privileged attorney-
2841	client communications.
2842	e.  Proprietary information licensed to the corporation
2843	under contract and the contract provides for the confidentiality
2844	of such proprietary information.
2845	f.  All information relating to the medical condition or
2846	medical status of a corporation employee which is not relevant
2847	to the employee's capacity to perform his or her duties, except
2848	as otherwise provided in this paragraph. Information which is
2849	exempt shall include, but is not limited to, information
2850	relating to workers' compensation, insurance benefits, and
2851	retirement or disability benefits.
2852	g.  Upon an employee's entrance into the employee
2853	assistance program, a program to assist any employee who has a
2854	behavioral or medical disorder, substance abuse problem, or
2855	emotional difficulty which affects the employee's job
2856	performance, all records relative to that participation shall be
2857	confidential and exempt from the provisions of s. 119.07(1) and
2858	s. 24(a), Art. I of the State Constitution, except as otherwise
2859	provided in s. 112.0455(11).
2860	h.  Information relating to negotiations for financing,
2861	reinsurance, depopulation, or contractual services, until the
2862	conclusion of the negotiations.
2863	i.  Minutes of closed meetings regarding underwriting
2864	files, and minutes of closed meetings regarding an open claims
2865	file until termination of all litigation and settlement of all
2866	claims with regard to that claim, except that information
2867	otherwise confidential or exempt by law will be redacted.
2868
2869	When an authorized insurer is considering underwriting a risk
2870	insured by the corporation, relevant underwriting files and
2871	confidential claims files may be released to the insurer
2872	provided the insurer agrees in writing, notarized and under
2873	oath, to maintain the confidentiality of such files. When a file
2874	is transferred to an insurer that file is no longer a public
2875	record because it is not held by an agency subject to the
2876	provisions of the public records law. Underwriting files and
2877	confidential claims files may also be released to staff of and
2878	the board of governors of the market assistance plan established
2879	pursuant to s. 627.3515, who must retain the confidentiality of
2880	such files, except such files may be released to authorized
2881	insurers that are considering assuming the risks to which the
2882	files apply, provided the insurer agrees in writing, notarized
2883	and under oath, to maintain the confidentiality of such files.
2884	Finally, the corporation or the board or staff of the market
2885	assistance plan may make the following information obtained from
2886	underwriting files and confidential claims files available to
2887	licensed general lines insurance agents: name, address, and
2888	telephone number of the residential property owner or insured;
2889	location of the risk; rating information; loss history; and
2890	policy type. The receiving licensed general lines insurance
2891	agent must retain the confidentiality of the information
2892	received.
2893	2.  Portions of meetings of the corporation are exempt from
2894	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2895	Constitution wherein confidential underwriting files or
2896	confidential open claims files are discussed. All portions of
2897	corporation meetings which are closed to the public shall be
2898	recorded by a court reporter. The court reporter shall record
2899	the times of commencement and termination of the meeting, all
2900	discussion and proceedings, the names of all persons present at
2901	any time, and the names of all persons speaking. No portion of
2902	any closed meeting shall be off the record. Subject to the
2903	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2904	notes of any closed meeting shall be retained by the corporation
2905	for a minimum of 5 years. A copy of the transcript, less any
2906	exempt matters, of any closed meeting wherein claims are
2907	discussed shall become public as to individual claims after
2908	settlement of the claim.
2909	(o)  It is the intent of the Legislature that the
2910	amendments to this subsection enacted in 2002 should, over time,
2911	reduce the probable maximum windstorm losses in the residual
2912	markets and should reduce the potential assessments to be levied
2913	on property insurers and policyholders statewide. In furtherance
2914	of this intent:
2915	1.  The board shall, on or before February 1 of each year,
2916	provide a report to the President of the Senate and the Speaker
2917	of the House of Representatives showing the reduction or
2918	increase in the 100-year probable maximum loss attributable to
2919	wind-only coverages and the quota share program under this
2920	subsection combined, as compared to the benchmark 100-year
2921	probable maximum loss of the Florida Windstorm Underwriting
2922	Association. For purposes of this paragraph, the benchmark 100-
2923	year probable maximum loss of the Florida Windstorm Underwriting
2924	Association shall be the calculation dated February 2001 and
2925	based on November 30, 2000, exposures. In order to ensure
2926	comparability of data, the board shall use the same methods for
2927	calculating its probable maximum loss as were used to calculate
2928	the benchmark probable maximum loss. The reduction or increase
2929	in probable maximum loss shall be calculated without taking into
2930	account the probable maximum loss attributable to the
2931	nonhomestead account.
2932	2.  Beginning February 1, 2013 2007, if the report under
2933	subparagraph 1. for any year indicates that the 100-year
2934	probable maximum loss attributable to wind-only coverages and
2935	the quota share program combined does not reflect a reduction of
2936	at least 25 percent from the benchmark, the board shall reduce
2937	the boundaries of the high-risk area eligible for wind-only
2938	coverages under this subsection in a manner calculated to reduce
2939	such probable maximum loss to an amount at least 25 percent
2940	below the benchmark.
2941	3.  Beginning February 1, 2018 2012, if the report under
2942	subparagraph 1. for any year indicates that the 100-year
2943	probable maximum loss attributable to wind-only coverages and
2944	the quota share program combined does not reflect a reduction of
2945	at least 50 percent from the benchmark, the boundaries of the
2946	high-risk area eligible for wind-only coverages under this
2947	subsection shall be reduced by the elimination of any area that
2948	is not seaward of a line 1,000 feet inland from the Intracoastal
2949	Waterway.
2950	(p)  In enacting the provisions of this section, the
2951	Legislature recognizes that both the Florida Windstorm
2952	Underwriting Association and the Residential Property and
2953	Casualty Joint Underwriting Association have entered into
2954	financing arrangements that obligate each entity to service its
2955	debts and maintain the capacity to repay funds secured under
2956	these financing arrangements. It is the intent of the
2957	Legislature that nothing in this section be construed to
2958	compromise, diminish, or interfere with the rights of creditors
2959	under such financing arrangements. It is further the intent of
2960	the Legislature to preserve the obligations of the Florida
2961	Windstorm Underwriting Association and Residential Property and
2962	Casualty Joint Underwriting Association with regard to
2963	outstanding financing arrangements, with such obligations
2964	passing entirely and unchanged to the corporation and,
2965	specifically, to the applicable account of the corporation. So
2966	long as any bonds, notes, indebtedness, or other financing
2967	obligations of the Florida Windstorm Underwriting Association or
2968	the Residential Property and Casualty Joint Underwriting
2969	Association are outstanding, under the terms of the financing
2970	documents pertaining to them, the governing board of the
2971	corporation shall have and shall exercise the authority to levy,
2972	charge, collect, and receive all premiums, assessments,
2973	surcharges, charges, revenues, and receipts that the
2974	associations had authority to levy, charge, collect, or receive
2975	under the provisions of subsection (2) and this subsection,
2976	respectively, as they existed on January 1, 2002, to provide
2977	moneys, without exercise of the authority provided by this
2978	subsection, in at least the amounts, and by the times, as would
2979	be provided under those former provisions of subsection (2) or
2980	this subsection, respectively, so that the value, amount, and
2981	collectability of any assets, revenues, or revenue source
2982	pledged or committed to, or any lien thereon securing such
2983	outstanding bonds, notes, indebtedness, or other financing
2984	obligations will not be diminished, impaired, or adversely
2985	affected by the amendments made by this act and to permit
2986	compliance with all provisions of financing documents pertaining
2987	to such bonds, notes, indebtedness, or other financing
2988	obligations, or the security or credit enhancement for them, and
2989	any reference in this subsection to bonds, notes, indebtedness,
2990	financing obligations, or similar obligations, of the
2991	corporation shall include like instruments or contracts of the
2992	Florida Windstorm Underwriting Association and the Residential
2993	Property and Casualty Joint Underwriting Association to the
2994	extent not inconsistent with the provisions of the financing
2995	documents pertaining to them.
2996	(q)  The corporation shall not require the securing of
2997	flood insurance as a condition of coverage if the insured or
2998	applicant executes a form approved by the office affirming that
2999	flood insurance is not provided by the corporation and that if
3000	flood insurance is not secured by the applicant or insured in
3001	addition to coverage by the corporation, the risk will not be
3002	covered for flood damage. A corporation policyholder electing
3003	not to secure flood insurance and executing a form as provided
3004	herein making a claim for water damage against the corporation
3005	shall have the burden of proving the damage was not caused by
3006	flooding. Notwithstanding other provisions of this subsection,
3007	the corporation may deny coverage to an applicant or insured who
3008	refuses to execute the form described herein.
3009	(r)  A salaried employee of the corporation who performs
3010	policy administration services subsequent to the effectuation of
3011	a corporation policy is not required to be licensed as an agent
3012	under the provisions of s. 626.112.
3013	(s)  The transition to homestead and nonhomestead accounts
3014	shall begin on October 1, 2006. A policy issued on or after that
3015	date shall be issued in the applicable homestead account or the
3016	nonhomestead account, based upon whether the property
3017	constitutes homestead property as provided in subparagraph (b)2.
3018	A policy in effect on October 1, 2006, shall be placed in the
3019	applicable homestead account or the nonhomestead account, based
3020	upon whether the property constitutes homestead property as
3021	provided in subparagraph (b)2., upon the first renewal of such
3022	policy after October 1, 2006.
3023	(t)  Any employee of the corporation whose position is
3024	managerial, policymaking, or professional in nature and all
3025	members of the corporation's board of governors shall comply
3026	with the Code of Ethics for public officers and employers found
3027	in ss. 112.311-112.326.
3028	(u)  An employee of the corporation shall notify the
3029	Division of Insurance Fraud within 48 hours after having
3030	information that would lead a reasonable person to suspect that
3031	fraud may have been committed by any employee of the
3032	corporation.
3033	(v)  By February 1, 2007, the corporation shall submit a
3034	report to the President of the Senate, the Speaker of the House
3035	of Representatives, the minority party leaders of the Senate and
3036	the House of Representatives, and the chairs of the standing
3037	committees of the Senate and the House of Representatives having
3038	jurisdiction over matters relating to property and casualty
3039	insurance. In preparing the report, the corporation shall
3040	consult with the Office of Insurance Regulation, the Department
3041	of Financial Services, and any other party the corporation
3042	determines is appropriate. The report shall include findings and
3043	recommendations on the feasibility of requiring authorized
3044	insurers that issue and service personal and commercial
3045	residential policies and commercial nonresidential policies that
3046	provide coverage for basic property perils except for the peril
3047	of wind to issue and service for a fee personal and commercial
3048	residential policies and commercial nonresidential policies
3049	providing coverage for the peril of wind issued by the
3050	corporation. The report shall include:
3051	1.  The expense savings to the corporation of issuing and
3052	servicing such policies as determined through a cost benefit
3053	analysis.
3054	2.  The expenses and liability to authorized insurers
3055	associated with issuing and servicing such policies.
3056	3.  The impact on service to policyholders of the
3057	corporation relating to issuing and servicing such policies.
3058	4.  The impact on the producing agent of the corporation of
3059	issuing and servicing such policies.
3060	5.  Recommendations as to the amount of the fee that should
3061	be paid to authorized insurers for issuing and servicing such
3062	policies.
3063	6.  The impact issuing and servicing such policies will
3064	have on the corporation's number of policies, total insured
3065	value, and probable maximum loss.
3066	(w)  There shall be no liability on the part of, and no
3067	cause of action of any nature shall arise against, producing
3068	agents of record of the corporation or employees of such agents
3069	for insolvency of any take-out insurer.
3070	(x)  The Legislature finds that the total area eligible for
3071	the high-risk account of the corporation has a material impact
3072	on the availability of wind coverage from the voluntary admitted
3073	market, deficits of the corporation, assessments to be levied on
3074	property insurers and policyholders statewide, the ability and
3075	willingness of authorized insurers to write wind coverage in the
3076	high-risk areas, the probable maximum windstorm losses of the
3077	corporation, general commerce in coastal areas, and the overall
3078	financial condition of the state. Therefore, in furtherance of
3079	these findings and intent:
3080	1.  The High Risk Eligibility Panel is created.
3081	2.  The members of the panel shall be appointed as follows:
3082	a.  The board shall appoint two board members.
3083	b.  The Governor shall appoint one member.
3084	c.  The Chief Financial Officer shall appoint one member.
3085	d.  The Commissioner of Insurance Regulation shall appoint
3086	a representative of the office to serve as a member.
3087	e.  The President of the Senate shall appoint one member.
3088	f.  The Speaker of the House of Representatives shall
3089	appoint one member.
3090
3091	Members of the panel must be residents of this state with
3092	insurance expertise. Members shall elect a chair and shall serve
3093	3-year terms each. The panel shall operate independently of any
3094	state agency and shall be administered by the corporation. The
3095	panel shall make an annual report to the President of the Senate
3096	and the Speaker of the House of Representatives on or before
3097	February 1 of each year recommending the areas that should be
3098	eligible for the high-risk account of the corporation. Members
3099	shall not receive compensation and are not entitled to receive
3100	reimbursement for per diem and travel expenses as provided in s.
3101	112.061, except for any panel member who is a state employee.
3102	3.  The Legislature's intent provided in subparagraphs
3103	(a)1. and 2. shall provide guidance for the panel to use in the
3104	panel's recommendations to the Legislature required in
3105	subparagraph 1. The panel shall consider the following factors
3106	in fulfilling its responsibilities under this paragraph:
3107	a.  The number of commercial risks in a given area that are
3108	unable to find wind coverage from the voluntary admitted market.
3109	b.  Reports from members of the mortgage industry
3110	indicating difficulty in finding forced placed policies for
3111	commercial wind coverage.
3112	c.  The number of approved excess and surplus lines
3113	carriers certifying an unwillingness to provide commercial wind
3114	coverage similar to that approved for use by the office for the
3115	voluntary admitted market.
3116	d.  Other relevant factors.
3117
3118	The office and the corporation shall provide the panel with any
3119	information the panel considers necessary to determine areas
3120	eligible for the high-risk account of the corporation. For the
3121	purpose of making accurate determinations for areas eligible for
3122	the high-risk account of the corporation, the panel may
3123	interview and request and receive information from residents of
3124	this state in areas impacted by this paragraph, including, but
3125	not limited to, insurance agents, insurance companies,
3126	actuaries, and other insurance professionals. Upon request of
3127	the panel, the office may conduct public hearings in areas that
3128	may be impacted by the panel's recommendations.
3129	4.  Notwithstanding other provisions of this paragraph, the
3130	panel shall conduct an analysis to determine the areas to be
3131	eligible for the high-risk account of the corporation for any
3132	county that contains an eligible area extending more than 2
3133	miles from the coast, any coastal county that does not have
3134	areas designated as eligible for the high-risk account, and
3135	counties with barrier islands whether or not such islands or
3136	portions of such islands are currently eligible for the high
3137	risk account. The panel shall submit a report, including its
3138	analysis, to the office and to the corporation by November 30,
3139	2006. The report shall specify changes to the areas eligible for
3140	the high-risk account for such affected counties based on its
3141	analysis.
3142	Section 11.  Paragraph (b) of subsection (3) of section
3143	627.4035, Florida Statutes, is amended, and subsection (4) is
3144	added to that section, to read:
3145	627.4035  Cash payment of premiums; claims.--
3146	(3)  All payments of claims made in this state under any
3147	contract of insurance shall be paid:
3148	(b)  If authorized in writing by the recipient or the
3149	recipient's representative, by debit card or any other form of
3150	electronic transfer. Any fees or costs to be charged against the
3151	recipient must be disclosed in writing to the recipient or the
3152	recipient's representative at the time of written authorization.
3153	However, the written authorization requirement may be waived by
3154	the recipient or the recipient's representative if the insurer
3155	verifies the identity of the insured or the insured's recipient
3156	and does not charge a fee for the transaction. If the funds are
3157	misdirected, the insurer would remain liable for the payment of
3158	the claim.
3159	(4)  Nothing in this section shall be construed as
3160	prohibiting an insurer from limiting its liability under a
3161	policy or endorsement providing that loss will be adjusted on
3162	the basis of replacement costs to the lesser of:
3163	(a)  The limit of liability shown on the policy
3164	declarations page;
3165	(b)  The reasonable and necessary cost to repair the
3166	damaged, destroyed, or stolen covered property; or
3167	(c)  The reasonable and necessary cost to replace the
3168	damaged, destroyed, or stolen covered property.
3169	Section 12.  Paragraph (b) of subsection (3) of section
3170	627.701, Florida Statutes, is amended to read:
3171	627.701  Liability of insureds; coinsurance; deductibles.--
3172	(3)
3173	(b)1.  Except as otherwise provided in this paragraph,
3174	prior to issuing a personal lines residential property insurance
3175	policy on or after January 1, 2006, or prior to the first
3176	renewal of a residential property insurance policy on or after
3177	January 1, 2006, the insurer must offer alternative deductible
3178	amounts applicable to hurricane losses equal to $500, 2 percent,
3179	5 percent, and 10 percent of the policy dwelling limits, unless
3180	the specific percentage deductible is less than $500. The
3181	written notice of the offer shall specify the hurricane or wind
3182	deductible to be applied in the event that the applicant or
3183	policyholder fails to affirmatively choose a hurricane
3184	deductible. The insurer must provide such policyholder with
3185	notice of the availability of the deductible amounts specified
3186	in this paragraph in a form approved by the office in
3187	conjunction with each renewal of the policy. The failure to
3188	provide such notice constitutes a violation of this code but
3189	does not affect the coverage provided under the policy.
3190	2.  This paragraph does not apply with respect to a
3191	deductible program lawfully in effect on June 14, 1995, or to
3192	any similar deductible program, if the deductible program
3193	requires a minimum deductible amount of no less than 2 percent
3194	of the policy limits.
3195	3.  With respect to a policy covering a risk with dwelling
3196	limits of at least $100,000, but less than $250,000, the insurer
3197	may, in lieu of offering a policy with a $500 hurricane or wind
3198	deductible as required by subparagraph 1., offer a policy that
3199	the insurer guarantees it will not nonrenew for reasons of
3200	reducing hurricane loss for one renewal period and that contains
3201	up to a 2 percent hurricane deductible, for two renewal periods
3202	and that contains up to a 5 percent hurricane deductible, or for
3203	three renewal periods and that contains up to a 10 percent
3204	hurricane deductible. Notwithstanding the requirements of this
3205	paragraph, the Office of Insurance Regulation may approve the
3206	nonrenewal of such policies if the guarantee renewal of the
3207	policies may jeopardize the financial ratings of an insurer or
3208	wind deductible as required by subparagraph 1.
3209	4.  With respect to a policy covering a risk with dwelling
3210	limits of $250,000 or more, the insurer need not offer the $500
3211	hurricane deductible as required by subparagraph 1., but must,
3212	except as otherwise provided in this subsection, offer the other
3213	hurricane deductibles as required by subparagraph 1.
3214	Section 13.  Effective January 1, 2007, subsection (9) is
3215	added to section 627.701, Florida Statutes, to read:
3216	627.701  Liability of insureds; coinsurance; deductibles.--
3217	(9)  With respect to hurricane coverage provided in a
3218	policy of residential coverage, when the policyholder has taken
3219	appropriate hurricane mitigation measures regarding the
3220	residence covered under the policy, the insurer shall provide
3221	the insured the option of selecting an appropriate reduction in
3222	the policy's hurricane deductible or selecting the appropriate
3223	discount credit or other rate differential as provided in s.
3224	627.0629. The insurer must provide the policyholder with notice
3225	of the options available under this subsection on a form
3226	approved by the office.
3227	Section 14.  Subsections (2) and (3) of section 627.7011,
3228	Florida Statutes, are amended, and subsection (6) is added to
3229	that section, to read:
3230	627.7011  Homeowners' policies; offer of replacement cost
3231	coverage and law and ordinance coverage.--
3232	(2)  Unless the insurer obtains the policyholder's written
3233	refusal of the policies or endorsements specified in subsection
3234	(1), any policy covering the dwelling is deemed to include the
3235	law and ordinance coverage limited to 25 percent of the dwelling
3236	limit specified in paragraph (1)(b). The rejection or selection
3237	of alternative coverage shall be made on a form approved by the
3238	office. The form shall fully advise the applicant of the nature
3239	of the coverage being rejected. If this form is signed by a
3240	named insured, it will be conclusively presumed that there was
3241	an informed, knowing rejection of the coverage or election of
3242	the alternative coverage on behalf of all insureds. Unless the
3243	policyholder requests in writing the coverage specified in this
3244	section, it need not be provided in or supplemental to any other
3245	policy that renews, insures, extends, changes, supersedes, or
3246	replaces an existing policy when the policyholder has rejected
3247	the coverage specified in this section or has selected
3248	alternative coverage. The insurer must provide such policyholder
3249	with notice of the availability of such coverage in a form
3250	approved by the office at least once every 3 years. The failure
3251	to provide such notice constitutes a violation of this code, but
3252	does not affect the coverage provided under the policy.
3253	(3)  In the event of a loss for which a dwelling or
3254	personal property is insured on the basis of replacement costs,
3255	the insurer shall pay the replacement cost without reservation
3256	or holdback of any depreciation in value, whether or not the
3257	insured replaces or repairs the dwelling or property.
3258	(6)  Insurers shall issue separate checks for living
3259	expenses, contents, and casualty proceeds. Checks for living
3260	expenses and contents should be issued directly to the
3261	policyholder.
3262	Section 15.  Effective upon this act becoming a law,
3263	section 627.7019, Florida Statutes, is created to read:
3264	627.7019  Standardization of requirements applicable to
3265	insurers after natural disasters.--
3266	(1)  The commission shall adopt by rule, pursuant to s.
3267	120.54(1)-(3), standardized requirements that may be applied to
3268	insurers as a consequence of a hurricane or other natural
3269	disaster. The rules shall address the following areas:
3270	(a)  Claims reporting requirements.
3271	(b)  Grace periods for payment of premiums and performance
3272	of other duties by insureds.
3273	(c)  Temporary postponement of cancellations and
3274	nonrenewals.
3275	(2)  The rules adopted pursuant to this section shall
3276	require the office to issue an order within 72 hours after the
3277	occurrence of a hurricane or other natural disaster specifying,
3278	by line of insurance, which of the standardized requirements
3279	apply, the geographic areas in which they apply, the time at
3280	which applicability commences, and the time at which
3281	applicability terminates.
3282	(3)  The commission and the office may not adopt an
3283	emergency rule under s. 120.54(4) in conflict with any provision
3284	of the rules adopted under this section.
3285	(4)  The commission shall initiate rulemaking under this
3286	section no later than June 1, 2006.
3287	Section 16.  Subsection (5) of section 627.727, Florida
3288	Statutes, is amended to read:
3289	627.727  Motor vehicle insurance; uninsured and
3290	underinsured vehicle coverage; insolvent insurer protection.--
3291	(5)  Any person having a claim against an insolvent insurer
3292	as defined in s. 631.54(6)(5) under the provisions of this
3293	section shall present such claim for payment to the Florida
3294	Insurance Guaranty Association only. In the event of a payment
3295	to any person in settlement of a claim arising under the
3296	provisions of this section, the association is not subrogated or
3297	entitled to any recovery against the claimant's insurer. The
3298	association, however, has the rights of recovery as set forth in
3299	chapter 631 in the proceeds recoverable from the assets of the
3300	insolvent insurer.
3301	Section 17.  Paragraph (f) is added to subsection (2) of
3302	section 631.181, Florida Statutes, to read:
3303	631.181  Filing and proof of claim.--
3304	(2)
3305	(f)  The signed statement required by this section shall
3306	not be required on claims for which adequate claims file
3307	documentation exists within the records of the insolvent
3308	insurer. Claims for payment of unearned premium shall not be
3309	required to use the signed statement required by this section if
3310	the receiver certifies to the guaranty fund that the records of
3311	the insolvent insurer are sufficient to determine the amount of
3312	unearned premium owed to each policyholder of the insurer and
3313	such information is remitted to the guaranty fund by the
3314	receiver in electronic or other mutually agreed-upon format.
3315	Section 18.  Subsections (5), (6), (7), and (8) of section
3316	631.54, Florida Statutes, are renumbered as subsections (6),
3317	(7), (8), and (9), respectively, and a new subsection (5) is
3318	added to that section, to read:
3319	631.54  Definitions.--As used in this part:
3320	(5)  "Homeowner's insurance" means personal lines
3321	residential property insurance coverage that consists of the
3322	type of coverage provided under homeowner's, dwelling, and
3323	similar policies for repair or replacement of the insured
3324	structure and contents, which policies are written directly to
3325	the individual homeowner. Residential coverage for personal
3326	lines as set forth in this section includes policies that
3327	provide coverage for particular perils such as windstorm and
3328	hurricane coverage but excludes all coverage for mobile homes,
3329	renter's insurance, or tenant's coverage. The term "homeowner's
3330	insurance" excludes commercial residential policies covering
3331	condominium associations or homeowners' associations, which
3332	associations have a responsibility to provide insurance coverage
3333	on residential units within the association, and also excludes
3334	coverage for the common elements of a homeowners' association.
3335	Section 19.  Subsection (1) of section 631.55, Florida
3336	Statutes, is amended to read:
3337	631.55  Creation of the association.--
3338	(1)  There is created a nonprofit corporation to be known
3339	as the "Florida Insurance Guaranty Association, Incorporated."
3340	All insurers defined as member insurers in s. 631.54(7)(6) shall
3341	be members of the association as a condition of their authority
3342	to transact insurance in this state, and, further, as a
3343	condition of such authority, an insurer shall agree to reimburse
3344	the association for all claim payments the association makes on
3345	said insurer's behalf if such insurer is subsequently
3346	rehabilitated. The association shall perform its functions under
3347	a plan of operation established and approved under s. 631.58 and
3348	shall exercise its powers through a board of directors
3349	established under s. 631.56. The corporation shall have all
3350	those powers granted or permitted nonprofit corporations, as
3351	provided in chapter 617.
3352	Section 20.  Paragraph (a) of subsection (1), paragraph (d)
3353	of subsection (2), and paragraph (a) of subsection (3) of
3354	section 631.57, Florida Statutes, are amended, and paragraph (e)
3355	is added to subsection (3) of that section, to read:
3356	631.57  Powers and duties of the association.--
3357	(1)  The association shall:
3358	(a)1.  Be obligated to the extent of the covered claims
3359	existing:
3360	a.  Prior to adjudication of insolvency and arising within
3361	30 days after the determination of insolvency;
3362	b.  Before the policy expiration date if less than 30 days
3363	after the determination; or
3364	c.  Before the insured replaces the policy or causes its
3365	cancellation, if she or he does so within 30 days of the
3366	determination.
3367	2.  The obligation under subparagraph 1. shall include only
3368	the amount of each covered claim that is in excess of $100 and
3369	is less than $300,000, except policies providing coverage for
3370	homeowner's insurance shall provide for an additional $200,000
3371	for the portion of a covered claim that relates only to the
3372	damage to the structure and contents.
3373	3.a.2.  Notwithstanding subparagraph 2., the obligation
3374	under subparagraph 1. for shall include only that amount of each
3375	covered claim which is in excess of $100 and is less than
3376	$300,000, except with respect to policies covering condominium
3377	associations or homeowners' associations, which associations
3378	have a responsibility to provide insurance coverage on
3379	residential units within the association, the obligation shall
3380	include that amount of each covered property insurance claim
3381	which is less than $100,000 multiplied by the number of
3382	condominium units or other residential units; however, as to
3383	homeowners' associations, this sub-subparagraph subparagraph
3384	applies only to claims for damage or loss to residential units
3385	and structures attached to residential units.
3386	b.  Notwithstanding sub-subparagraph a., the association
3387	has no obligation to pay covered claims that are to be paid from
3388	the proceeds of bonds issued under s. 631.695. However, the
3389	association shall assign and pledge the first available moneys
3390	from all or part of the assessments to be made under paragraph
3391	(3)(a) to or on behalf of the issuer of such bonds for the
3392	benefit of the holders of such bonds. The association shall
3393	administer any such covered claims and present valid covered
3394	claims for payment in accordance with the provisions of the
3395	assistance program in connection with which such bonds have been
3396	issued.
3397	3.  In no event shall the association be obligated to a
3398	policyholder or claimant in an amount in excess of the
3399	obligation of the insolvent insurer under the policy from which
3400	the claim arises.
3401	(2)  The association may:
3402	(d)  Negotiate and become a party to such contracts as are
3403	necessary to carry out the purpose of this part. Additionally,
3404	the association may enter into such contracts with a
3405	municipality, a county, or a legal entity created pursuant to s.
3406	163.01(7)(g) as are necessary in order for the municipality,
3407	county, or legal entity to issue bonds under s. 631.695. In
3408	connection with the issuance of any such bonds and the entering
3409	into of any such necessary contracts, the association may agree
3410	to such terms and conditions as the association deems necessary
3411	and proper.
3412	(3)(a)  To the extent necessary to secure the funds for the
3413	respective accounts for the payment of covered claims, and also
3414	to pay the reasonable costs to administer the same, and to the
3415	extent necessary to secure the funds for the account specified
3416	in s. 631.55(2)(c) or to retire indebtedness, including, without
3417	limitation, the principal, redemption premium, if any, and
3418	interest on, and related costs of issuance of, bonds issued
3419	under s. 631.695 and the funding of any reserves and other
3420	payments required under the bond resolution or trust indenture
3421	pursuant to which such bonds have been issued, the office, upon
3422	certification of the board of directors, shall levy assessments
3423	in the proportion that each insurer's net direct written
3424	premiums in this state in the classes protected by the account
3425	bears to the total of said net direct written premiums received
3426	in this state by all such insurers for the preceding calendar
3427	year for the kinds of insurance included within such account.
3428	Assessments shall be remitted to and administered by the board
3429	of directors in the manner specified by the approved plan. Each
3430	insurer so assessed shall have at least 30 days' written notice
3431	as to the date the assessment is due and payable. Every
3432	assessment shall be made as a uniform percentage applicable to
3433	the net direct written premiums of each insurer in the kinds of
3434	insurance included within the account in which the assessment is
3435	made. The assessments levied against any insurer shall not
3436	exceed in any one year more than 2 percent of that insurer's net
3437	direct written premiums in this state for the kinds of insurance
3438	included within such account during the calendar year next
3439	preceding the date of such assessments.
3440	(e)1.a.  In addition to assessments otherwise authorized in
3441	paragraph (a) and to the extent necessary to secure the funds
3442	for the account specified in s. 631.55(2)(c) or to retire
3443	indebtedness, including, without limitation, the principal,
3444	redemption premium, if any, and interest on, and related costs
3445	of issuance of, bonds issued under s. 631.695 and the funding of
3446	any reserves and other payments required under the bond
3447	resolution or trust indenture pursuant to which such bonds have
3448	been issued, the office, upon certification of the board of
3449	directors, shall levy emergency assessments upon insurers
3450	holding a certificate of authority. The emergency assessments
3451	payable under this paragraph by any insurer shall not exceed in
3452	any single year more than 2 percent of that insurer's direct
3453	written premiums, net of refunds, in this state during the
3454	preceding calendar year for the kinds of insurance within the
3455	account specified in s. 631.55(2)(c).
3456	b.  Any emergency assessments authorized under this
3457	paragraph shall be levied by the office upon insurers referred
3458	to in sub-subparagraph a., upon certification as to the need for
3459	such assessments by the board of directors, in each year that
3460	bonds issued under s. 631.695 and secured by such emergency
3461	assessments are outstanding, in such amounts up to such 2-
3462	percent limit as required in order to provide for the full and
3463	timely payment of the principal of, redemption premium, if any,
3464	and interest on, and related costs of issuance of, such bonds.
3465	The emergency assessments provided for in this paragraph are
3466	assigned and pledged to the municipality, county, or legal
3467	entity issuing bonds under s. 631.695 for the benefit of the
3468	holders of such bonds, in order to enable such municipality,
3469	county, or legal entity to provide for the payment of the
3470	principal of, redemption premium, if any, and interest on such
3471	bonds, the cost of issuance of such bonds, and the funding of
3472	any reserves and other payments required under the bond
3473	resolution or trust indenture pursuant to which such bonds have
3474	been issued, without the necessity of any further action by the
3475	association, the office, or any other party. To the extent bonds
3476	are issued under s. 631.695 and the association determines to
3477	secure such bonds by a pledge of revenues received from the
3478	emergency assessments, such bonds, upon such pledge of revenues,
3479	shall be secured by and payable from the proceeds of such
3480	emergency assessments, and the proceeds of emergency assessments
3481	levied under this paragraph shall be remitted directly to and
3482	administered by the trustee or custodian appointed for such
3483	bonds.
3484	c.  Emergency assessments under this paragraph may be
3485	payable in a single payment or, at the option of the
3486	association, may be payable in 12 monthly installments with the
3487	first installment being due and payable at the end of the month
3488	after an emergency assessment is levied and subsequent
3489	installments being due not later than the end of each succeeding
3490	month.
3491	d.  If emergency assessments are imposed, the report
3492	required by s. 631.695(7) shall include an analysis of the
3493	revenues generated from the emergency assessments imposed under
3494	this paragraph.
3495	e.  If emergency assessments are imposed, the references in
3496	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
3497	assessments levied under paragraph (a) shall include emergency
3498	assessments imposed under this paragraph.
3499	2.  In order to ensure that insurers paying emergency
3500	assessments levied under this paragraph continue to charge rates
3501	that are neither inadequate nor excessive, within 90 days after
3502	being notified of such assessments, each insurer that is to be
3503	assessed pursuant to this paragraph shall submit a rate filing
3504	for coverage included within the account specified in s.
3505	631.55(2)(c) and for which rates are required to be filed under
3506	s. 627.062. If the filing reflects a rate change that, as a
3507	percentage, is equal to the difference between the rate of such
3508	assessment and the rate of the previous year's assessment under
3509	this paragraph, the filing shall consist of a certification so
3510	stating and shall be deemed approved when made. Any rate change
3511	of a different percentage shall be subject to the standards and
3512	procedures of s. 627.062.
3513	3.  An annual assessment under this paragraph shall
3514	continue while the bonds issued with respect to which the
3515	assessment was imposed are outstanding, including any bonds the
3516	proceeds of which were used to refund bonds issued pursuant to
3517	s. 631.695, unless adequate provision has been made for the
3518	payment of the bonds in the documents authorizing the issuance
3519	of such bonds.
3520	4.  Emergency assessments under this paragraph are not
3521	premium and are not subject to the premium tax, to any fees, or
3522	to any commissions. An insurer is liable for all emergency
3523	assessments that the insurer collects and shall treat the
3524	failure of an insured to pay an emergency assessment as a
3525	failure to pay the premium. An insurer is not liable for
3526	uncollectible emergency assessments.
3527	Section 21.  Section 631.695, Florida Statutes, is created
3528	to read:
3529	631.695  Revenue bond issuance through counties or
3530	municipalities.--
3531	(1)  The Legislature finds:
3532	(a)  The potential for widespread and massive damage to
3533	persons and property caused by hurricanes making landfall in
3534	this state can generate insurance claims of such a number as to
3535	render numerous insurers operating within this state insolvent
3536	and therefore unable to satisfy covered claims.
3537	(b)  The inability of insureds within this state to receive
3538	payment of covered claims or to timely receive such payment
3539	creates financial and other hardships for such insureds and
3540	places undue burdens on the state, the affected units of local
3541	government, and the community at large.
3542	(c)  In addition, the failure of insurers to pay covered
3543	claims or to timely pay such claims due to the insolvency of
3544	such insurers can undermine the public's confidence in insurers
3545	operating within this state, thereby adversely affecting the
3546	stability of the insurance industry in this state.
3547	(d)  The state has previously taken action to address these
3548	problems by adopting the Florida Insurance Guaranty Association
3549	Act, which, among other things, provides a mechanism for the
3550	payment of covered claims under certain insurance policies to
3551	avoid excessive delay in payment and to avoid financial loss to
3552	claimants or policyholders because of the insolvency of an
3553	insurer.
3554	(e)  In the wake of the unprecedented destruction caused by
3555	various hurricanes that have made landfall in this state, the
3556	resultant covered claims, and the number of insurers rendered
3557	insolvent thereby, make it evident that alternative programs
3558	must be developed to allow the Florida Insurance Guaranty
3559	Association to more expeditiously and effectively provide for
3560	the payment of covered claims.
3561	(f)  It is therefore determined to be in the best interests
3562	of, and necessary for, the protection of the public health,
3563	safety, and general welfare of the residents of this state and
3564	for the protection and preservation of the economic stability of
3565	insurers operating in this state and it is declared to be an
3566	essential public purpose to permit certain municipalities and
3567	counties to take such actions as will provide relief to
3568	claimants and policyholders having covered claims against
3569	insolvent insurers operating in this state by expediting the
3570	handling and payment of covered claims.
3571	(g)  To achieve the foregoing purposes, it is proper to
3572	authorize municipalities and counties of this state
3573	substantially affected by the landfall of a hurricane to issue
3574	bonds to assist the Florida Insurance Guaranty Association in
3575	expediting the handling and payment of covered claims of
3576	insolvent insurers.
3577	(h)  In order to avoid the needless and indiscriminate
3578	proliferation, duplication, and fragmentation of such assistance
3579	programs, it is in the best interests of the residents of this
3580	state to authorize municipalities and counties severely affected
3581	by a hurricane to provide for the payment of covered claims
3582	beyond their territorial limits in the implementation of such
3583	programs.
3584	(i)  It is a paramount public purpose for municipalities
3585	and counties substantially affected by the landfall of a
3586	hurricane to be able to issue bonds for the purposes described
3587	in this section. Such issuance shall provide assistance to
3588	residents of those municipalities and counties as well as to
3589	other residents of this state.
3590	(2)  The governing body of any municipality or county, the
3591	residents of which have been substantially affected by a
3592	hurricane, may issue bonds to fund an assistance program in
3593	conjunction with, and with the consent of, the Florida Insurance
3594	Guaranty Association for the purpose of paying claimants' or
3595	policyholders' covered claims, as defined in s. 631.54, arising
3596	through the insolvency of an insurer, which insolvency is
3597	determined by the Florida Insurance Guaranty Association to have
3598	been a result of a hurricane, regardless of whether the
3599	claimants or policyholders are residents of such municipality or
3600	county or the property to which the claim relates is located
3601	within or outside the territorial jurisdiction of the
3602	municipality or county. The power of a municipality or county to
3603	issue bonds, as described in this section, is in addition to any
3604	powers granted by law and may not be abrogated or restricted by
3605	any provisions in such municipality's or county's charter. A
3606	municipality or county issuing bonds for this purpose shall
3607	enter into such contracts with the Florida Insurance Guaranty
3608	Association or any entity acting on behalf of the Florida
3609	Insurance Guaranty Association as are necessary to implement the
3610	assistance program. Any bonds issued by a municipality or county
3611	or a combination thereof under this subsection shall be payable
3612	from and secured by moneys received by or on behalf of the
3613	municipality or county from assessments levied under s.
3614	631.57(3)(a) and assigned and pledged to or on behalf of the
3615	municipality or county for the benefit of the holders of the
3616	bonds in connection with the assistance program. The funds,
3617	credit, property, and taxing power of the state or any
3618	municipality or county shall not be pledged for the payment of
3619	such bonds.
3620	(3)  Bonds may be validated by the municipality or county
3621	pursuant to chapter 75. The proceeds of the bonds may be used to
3622	pay covered claims of insolvent insurers; to refinance or
3623	replace previously existing borrowings or financial
3624	arrangements; to pay interest on bonds; to fund reserves for the
3625	bonds; to pay expenses incident to the issuance or sale of any
3626	bond issued under this section, including costs of validating,
3627	printing, and delivering the bonds, costs of printing the
3628	official statement, costs of publishing notices of sale of the
3629	bonds, costs of obtaining credit enhancement or liquidity
3630	support, and related administrative expenses; or for such other
3631	purposes related to the financial obligations of the fund as the
3632	association may determine. The term of the bonds may not exceed
3633	30 years.
3634	(4)  The state covenants with holders of bonds of the
3635	assistance program that the state will not take any action that
3636	will have a material adverse effect on the holders and will not
3637	repeal or abrogate the power of the board of directors of the
3638	association to direct the Office of Insurance Regulation to levy
3639	the assessments and to collect the proceeds of the revenues
3640	pledged to the payment of the bonds as long as any of the bonds
3641	remain outstanding, unless adequate provision has been made for
3642	the payment of the bonds in the documents authorizing the
3643	issuance of the bonds.
3644	(5)  The accomplishment of the authorized purposes of such
3645	municipality or county under this section is in all respects for
3646	the benefit of the people of the state, for the increase of
3647	their commerce and prosperity, and for the improvement of their
3648	health and living conditions. The municipality or county, in
3649	performing essential governmental functions in accomplishing its
3650	purposes, is not required to pay any taxes or assessments of any
3651	kind whatsoever upon any property acquired or used by the county
3652	or municipality for such purposes or upon any revenues at any
3653	time received by the county or municipality. The bonds, notes,
3654	and other obligations of the municipality or county and the
3655	transfer of and income from such bonds, notes, and other
3656	obligations, including any profits made on the sale of such
3657	bonds, notes, and other obligations, are exempt from taxation of
3658	any kind by the state or by any political subdivision or other
3659	agency or instrumentality of the state. The exemption granted in
3660	this subsection is not applicable to any tax imposed by chapter
3661	220 on interest, income, or profits on debt obligations owned by
3662	corporations.
3663	(6)  Two or more municipalities or counties, the residents
3664	of which have been substantially affected by a hurricane, may
3665	create a legal entity pursuant to s. 163.01(7)(g) to exercise
3666	the powers described in this section as well as those powers
3667	granted in s. 163.01(7)(g). References in this section to a
3668	municipality or county includes such legal entity.
3669	(7)  The association shall issue an annual report on the
3670	status of the use of bond proceeds as related to insolvencies
3671	caused by hurricanes. The report must contain the number and
3672	amount of claims paid. The association shall also include an
3673	analysis of the revenue generated from the assessment levied
3674	under s. 631.57(3)(a) to pay such bonds. The association shall
3675	submit a copy of the report to the President of the Senate, the
3676	Speaker of the House of Representatives, and the Chief Financial
3677	Officer within 90 days after the end of each calendar year in
3678	which bonds were outstanding.
3679	Section 22.  No provision of s. 631.57 or s. 631.695,
3680	Florida Statutes, shall be repealed until such time as the
3681	principal, redemption premium, if any, and interest on all bonds
3682	issued under s. 631.695, Florida Statutes, payable and secured
3683	from assessments levied under s. 631.57(3)(a), Florida Statutes,
3684	have been paid in full or adequate provision for such payment
3685	has been made in accordance with the bond resolution or trust
3686	indenture pursuant to which the bonds were issued.
3687	Section 23.  Paragraph (a) of subsection (1) of section
3688	817.234, Florida Statutes, is amended to read:
3689	817.234  False and fraudulent insurance claims.--
3690	(1)(a)  A person commits insurance fraud punishable as
3691	provided in subsection (11) if that person, with the intent to
3692	injure, defraud, or deceive any insurer:
3693	1.  Presents or causes to be presented any written or oral
3694	statement as part of, or in support of, a claim for payment or
3695	other benefit pursuant to an insurance policy or a health
3696	maintenance organization subscriber or provider contract,
3697	knowing that such statement contains any false, incomplete, or
3698	misleading information concerning any fact or thing material to
3699	such claim;
3700	2.  Prepares or makes any written or oral statement that is
3701	intended to be presented to any insurer in connection with, or
3702	in support of, any claim for payment or other benefit pursuant
3703	to an insurance policy or a health maintenance organization
3704	subscriber or provider contract, knowing that such statement
3705	contains any false, incomplete, or misleading information
3706	concerning any fact or thing material to such claim; or
3707	3.a.  Knowingly presents, causes to be presented, or
3708	prepares or makes with knowledge or belief that it will be
3709	presented to any insurer, purported insurer, servicing
3710	corporation, insurance broker, or insurance agent, or any
3711	employee or agent thereof, any false, incomplete, or misleading
3712	information or written or oral statement as part of, or in
3713	support of, an application for the issuance of, or the rating
3714	of, any insurance policy, or a health maintenance organization
3715	subscriber or provider contract, including any false declaration
3716	of homestead status for the purpose of obtaining coverage in a
3717	homestead account under s. 627.351(6); or
3718	b.  Who knowingly conceals information concerning any fact
3719	material to such application.
3720	Section 24.  Task Force on Hurricane Mitigation and
3721	Hurricane Insurance for Mobile and Manufactured Homes.--
3722	(1)  TASK FORCE CREATED.--There is created the Task Force
3723	on Hurricane Mitigation and Hurricane Insurance for Mobile and
3724	Manufactured Homes.
3725	(2)  ADMINISTRATION.--The task force shall be
3726	administratively housed within the Office of Insurance
3727	Regulation but shall operate independently of any state officer
3728	or agency. The office shall provide such administrative support
3729	as the task force deems necessary to accomplish its mission and
3730	shall provide necessary funding for the task force within the
3731	office's existing resources. The Executive Office of the
3732	Governor, the Department of Financial Services, the Office of
3733	Insurance Regulation, the Department of Highway Safety and Motor
3734	Vehicles, and the Department of Community Affairs shall provide
3735	substantive staff support for the task force.
3736	(3)  MEMBERSHIP.--The members of the task force shall be
3737	appointed as follows:
3738	(a)  The Governor shall appoint two members who have
3739	expertise in financial matters, one of whom is a representative
3740	of the mobile or manufactured home industry and one of whom is a
3741	representative of insurance consumers.
3742	(b)  The Chief Financial Officer shall appoint two members
3743	who have expertise in financial matters, one of whom is a
3744	representative of a property insurer writing mobile or
3745	manufactured homeowners insurance in this state and one of whom
3746	is a representative of insurance agents.
3747	(c)  The President of the Senate shall appoint one member.
3748	(d)  The Speaker of the House of Representatives shall
3749	appoint one member.
3750	(e)  The Commissioner of Insurance Regulation or his or her
3751	designee shall serve as an ex officio voting member of the task
3752	force.
3753	(f)  The Executive Director of Citizens Property Insurance
3754	or his or her designee shall serve as an ex officio voting
3755	member of the task force.
3756	(g)  The Chief Executive Officer of the Federal Alliance
3757	for Safe Homes, Incorporated or his or her designee shall serve
3758	as an ex officio voting member of the task force.
3759
3760	Members of the task force shall serve without compensation but
3761	may receive reimbursement for per diem and travel expenses as
3762	provided in s. 112.061, Florida Statutes.
3763	(4)  PURPOSE AND INTENT.--The Legislature recognizes the
3764	continued availability of hurricane insurance coverage for
3765	mobile and manufactured home owners in this state is essential
3766	to the state's economic survival. The Legislature further
3767	recognizes hurricane mitigation measures and building codes may
3768	reduce the likelihood or amount of damage to mobile or
3769	manufactured homes in the event of a hurricane. The Legislature
3770	further recognizes mobile and manufactured homes provide safe
3771	and affordable housing to many residents of this state. The
3772	purpose of the task force is to make recommendations to the
3773	legislative and executive branches of this state's government
3774	relating to the creation and maintenance of insurance capacity
3775	in the private sector and public sector that is sufficient to
3776	ensure that all mobile and manufactured home owners in this
3777	state are able to obtain appropriate insurance coverage for
3778	hurricane losses and relating to the effectiveness of hurricane
3779	mitigation measures for mobile or manufactured homes as further
3780	described in this section.
3781	(5)  SPECIFIC TASKS.--The task force shall conduct such
3782	research and hearings as the task force deems necessary to
3783	achieve the purposes specified in subsection (4) and shall
3784	develop information on relevant issues, including, but not
3785	limited to, the following issues:
3786	(a)  Whether this state currently has sufficient hurricane
3787	insurance capacity for mobile and manufactured homes to ensure
3788	the continuation of a healthy, competitive marketplace, taking
3789	into consideration private-sector and public-sector resources.
3790	(b)  Identifying the future demands on the hurricane
3791	insurance capacity of this state, taking into account population
3792	growth, coastal growth, and anticipated future hurricane
3793	activity.
3794	(c)  Identifying how many mobile or manufactured homes are
3795	occupied in this state, how many mobile or manufactured homes
3796	are occupied by owners who also own the land to which the unit
3797	is attached, the age or average age of mobile or manufactured
3798	homes, the location of such homes, and the size of such homes.
3799	(d)  The extent to which the growth in insurance on mobile
3800	or manufactured homes in Citizens Property Insurance Corporation
3801	is attributable to insufficient insurance capacity.
3802	(e)  The extent to which the growth trends of Citizens
3803	Property Insurance Corporation create long-term problems for
3804	mobile and manufactured home owners in this state and for other
3805	persons and businesses that depend on a viable market.
3806	(f)  The extent to which insurance discounts, credits, or
3807	other rate differentials or reductions in the hurricane
3808	insurance deductible for a mobile or manufactured homeowner who
3809	takes mitigative measures would increase hurricane insurance
3810	capacity for mobile or manufactured homeowners.
3811	(g)  The extent hurricane mitigation enhancements to mobile
3812	or manufactured homes decreases the likelihood of damage from a
3813	hurricane or decreases the amount of damage from a hurricane.
3814	(h)  The extent to which the building codes reduce the
3815	likelihood of damage or amount of damage to mobile or
3816	manufactured homes.
3817	(6)  REPORT AND RECOMMENDATIONS.--By January 1, 2007, the
3818	task force shall provide a report containing findings relating
3819	to the tasks identified in subsection (5) and recommendations
3820	consistent with the purposes of this section and also consistent
3821	with such findings. The task force shall submit the report to
3822	the Governor, the Chief Financial Officer, the President of the
3823	Senate, and the Speaker of the House of Representatives. The
3824	task force may also submit such interim reports as the task
3825	force deems appropriate.
3826	(7)  EXPIRATION.--The task force shall expire on January 2,
3827	2007.
3828	Section 25.  By January 1, 2007, the Office of Insurance
3829	Regulation shall submit a report to the President of the Senate,
3830	the Speaker of the House of Representatives, the minority party
3831	leaders of the Senate and the House of Representatives, and the
3832	chairs of the standing committees of the Senate and the House of
3833	Representatives having jurisdiction over matters relating to
3834	property and casualty insurance. In preparing the report, the
3835	office shall consult with the Department of Highway Safety and
3836	Motor Vehicles, the Department of Community Affairs, the Florida
3837	Building Commission, the Florida Home Builders Association,
3838	representatives of the mobile and manufactured home industry,
3839	representatives of the property and casualty insurance industry,
3840	and any other party the office determines is appropriate. The
3841	report shall include findings and recommendations on the
3842	insurability of attached or free standing structures to
3843	residential homes, mobile, or manufactured homes, such as
3844	carports or pool enclosures; the increase or decrease in
3845	insurance costs associated with insuring such structures; the
3846	feasibility of insuring such structures; the impact on
3847	homeowners of not having insurance coverage for such structures;
3848	the ability of mitigation measures relating to such structures
3849	to reduce risk and loss; and such other related information as
3850	the office determines is appropriate for the Legislature to
3851	consider.
3852	Section 26.  (1)  The Office of Insurance Regulation, in
3853	consultation with the Department of Community Affairs, the
3854	Department of Financial Services, the Federal Alliance for Safe
3855	Homes, the Florida Insurance Council, the Florida Home Builders
3856	Association, the Florida Manufactured Housing Association, the
3857	Risk and Insurance Department of Florida State University, and
3858	the Institute for Business and Homes Safety, shall study and
3859	develop a program that will provide an objective rating system
3860	that will allow homeowners to evaluate the relative ability of
3861	Florida properties to withstand the wind load from a sustained
3862	severe tropical storm or hurricane.
3863	(2)  The rating system will be designed in a manner that is
3864	easy to understand for the property owner, based on proven
3865	readily verifiable mitigation techniques and devices, and able
3866	to be implemented based on a visual inspection program. The
3867	Department of Financial Services shall implement a pilot program
3868	for use in the Florida Comprehensive Hurricane Damage Mitigation
3869	Program.
3870	(3)  The Department shall provide a report to the Governor,
3871	the President of the Senate, and the Speaker of the House of
3872	Representatives by March 31, 2007, detailing the nature and
3873	construction of the rating scale, its effectiveness based on
3874	implementation in a pilot program, and an operational plan for
3875	statewide implementation of the rating scale.
3876	Section 27.  (1)  For fiscal year 2006-2007, the sum of
3877	$100 million is appropriated from the General Revenue Fund to
3878	the Department of Financial Services for the Florida Hurricane
3879	Damage Prevention Endowment as a nonrecurring appropriation for
3880	the purposes specified in s. 215.558, Florida Statutes.
3881	(2)  The sum of $400 million is appropriated from the
3882	General Revenue Fund to the Department of Financial Services as
3883	a nonrecurring appropriation for the purposes specified in s.
3884	215.5586, Florida Statutes.
3885	(3)  Funds provided in subsections (1) and (2) shall be
3886	transferred by the department to the Florida Hurricane Damage
3887	Prevention Trust Fund, as created in s. 215.5585, Florida
3888	Statutes.
3889	(4)  For fiscal year 2006-2007, the recurring sum of $5
3890	million is appropriated to the Department of Financial Services
3891	from the Florida Hurricane Damage Prevention Trust Fund, Special
3892	Category ? Financial Incentives for Hurricane Damage Prevention.
3893	(5)  For fiscal year 2006-2007, the nonrecurring sum of
3894	$392.5 million is appropriated to the Department of Financial
3895	Services from the Florida Hurricane Damage Prevention Trust
3896	Fund, Special Category ? Florida Comprehensive Hurricane Damage
3897	Mitigation Program. The department may spend up to 1 percent of
3898	the funds appropriated to administer the program.
3899	Notwithstanding s. 216.301, Florida Statutes, and pursuant to s.
3900	216.351, Florida Statutes, any unexpended balance from this
3901	appropriation shall be carried forward at the end of each fiscal
3902	year until the 2010-2011 fiscal year. At the end of the 2010-
3903	2011 fiscal year, any obligated funds for qualified projects
3904	that are not yet disbursed shall remain with the department to
3905	be used for the purposes of this act. Any unobligated funds of
3906	this appropriation shall revert to the Florida Hurricane Damage
3907	Prevention Trust Fund at the end of the 2010-2011 fiscal year.
3908	(6)  For fiscal year 2006-2007, the nonrecurring sum of
3909	$7.5 million is appropriated to the Department of Community
3910	Affairs from the Florida Hurricane Damage Prevention Trust Fund,
3911	Special Category ? Florida Comprehensive Hurricane Damage
3912	Mitigation Program. The department may spend up to 5 percent of
3913	the funds appropriated to administer the Manufactured Housing
3914	and Mobile Home Hurricane Mitigation Program. Notwithstanding s.
3915	216.301, Florida Statutes, and pursuant to s. 216.351, Florida
3916	Statutes, any unexpended balance from this appropriation shall
3917	be carried forward at the end of each fiscal year until the
3918	2010-2011 fiscal year. At the end of the 2010-2011 fiscal year,
3919	any obligated funds for qualified projects that are not yet
3920	disbursed shall remain with the department to be used for the
3921	purposes of this act. Any unobligated funds of this
3922	appropriation shall revert to the Florida Hurricane Damage
3923	Prevention Trust Fund at the end of the 2010-2011 fiscal year.
3924	Section 28.  (1)  For fiscal year 2006-2007, the sum of
3925	$920 million in nonrecurring funds is appropriated from the
3926	General Revenue Fund to the Department of Financial Services for
3927	transfer to the Citizens Property Insurance Corporation to avoid
3928	regular assessments on assessable insurers, as authorized under
3929	s. 627.351(6)(b)3.b., Florida Statutes, for the 2005 Plan Year
3930	deficit. The board of governors of the corporation shall use
3931	appropriated state moneys to fund that portion of the 2005 Plan
3932	Year deficit which would result in the levying of regular
3933	assessments in the commercial lines, personal lines, and high-
3934	risk accounts. The transfer made by the department to the
3935	corporation shall be limited to the amount of the total regular
3936	assessments that were authorized by law to cover the 2005 Plan
3937	Year deficit. Any unused and remaining funds in this
3938	appropriation shall revert to the General Revenue Fund.
3939	(2)  The corporation shall amortize over a 10-year period
3940	any emergency assessments resulting from the 2005 Plan Year
3941	deficit.
3942	Section 29.  For fiscal year 2006-2007, the sums of
3943	$250,000 in recurring funds and $425,000 in nonrecurring funds
3944	are appropriated from the Insurance Regulatory Trust Fund in the
3945	Department of Financial Services to the Office of Insurance
3946	Regulation for the purpose of carrying out reporting and
3947	administrative responsibilities of this act.
3948	Section 30.  Except as otherwise expressly provided in this
3949	act, this act shall take effect July 1, 2006.

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