HB 7225

1	A bill to be entitled
2	An act relating to property and casualty insurance;
3	providing a short title; amending s. 215.555, F.S.;
4	revising a definition; authorizing the State Board of
5	Administration to make available to certain insurers a
6	contract to cede certain portions of surplus to the
7	Florida Hurricane Catastrophe Fund; providing contract
8	criteria and requirements; revising certain reimbursement
9	contract criteria; revising certain reimbursement premium
10	requirements; deleting a revenue bond issuance prohibition
11	and validation requirement; revising certain revenue bond
12	emergency assessment requirements; creating s. 215.558,
13	F.S.; creating the Florida Hurricane Damage Prevention
14	Endowment; providing a purpose and legislative intent;
15	providing definitions; providing requirements and
16	authority for investment of endowment assets by the State
17	Board of Administration; requiring a report to the
18	Legislature; providing for payment of the board's
19	investment services' costs and fees from the endowment;
20	providing requirements of the Department of Financial
21	Services in providing financial incentives for residential
22	hurricane damage prevention activities; providing for an
23	interest-free loan program; providing program criteria and
24	requirements; creating an advisory council for certain
25	purposes; providing for appointment of members; requiring
26	members to serve without compensation; providing for per
27	diem and travel expenses; creating s. 215.5586, F.S.;
28	establishing the Florida Comprehensive Hurricane Damage
29	Mitigation Program within the Department of Financial
30	Services; providing qualifications for the program
31	administrator; providing program components and
32	requirements; providing for wind certification and
33	hurricane mitigation inspections; providing inspection
34	requirements; providing inspector eligibility
35	requirements; providing for grants; providing grant
36	requirements; providing for loans; providing public
37	education and consumer awareness requirements; creating
38	the Manufactured Housing and Mobile Home Hurricane
39	Mitigation Program for certain purposes; requiring the
40	Department of Financial Services to develop the program in
41	consultation with certain entities; specifying
42	requirements of the program; specifying the program as a
43	matching grant program for improvement of mobile homes and
44	manufactured homes; providing for distribution of the
45	grants to the Department of Financial Services for certain
46	purposes; requiring Citizens Property Insurance
47	Corporation to grant certain insurance discounts, credits,
48	rate differentials, or deductible reductions for property
49	insurance premiums for certain manufactured home or mobile
50	home owners; specifying criteria for such premiums;
51	requiring a program report each year to the Governor and
52	Legislature; providing report requirements; creating an
53	advisory council; providing for appointment of members;
54	specifying service without compensation; providing for per
55	diem and travel expense reimbursements; requiring the
56	department to obtain supplemental federal grants or funds
57	for the program; requiring the department to adopt rules;
58	creating s. 252.63, F.S.; providing purpose and intent;
59	providing powers of the Commissioner of Insurance
60	Regulation during a state of emergency; providing a
61	purpose and intent; authorizing the commissioner to issue
62	certain orders in a state of emergency; providing for
63	effect and duration of such orders; providing for
64	legislative termination of such orders; requiring the
65	commissioner to publish such orders and an explanatory
66	statement; amending s. 626.918, F.S.; authorizing certain
67	letters of credit to fund an insurer's required
68	policyholder protection trust fund; providing a
69	definition; amending s. 627.062, F.S.; specifying certain
70	rate filings as not subject to office determination as
71	excessive or unfairly discriminatory; providing
72	limitations; providing a definition; prohibiting certain
73	rate filings under certain circumstances; preserving the
74	office's authority to disapprove certain rate filings
75	under certain circumstances; providing procedures for
76	insurers submitting certain rate filings; revising
77	provisions providing for recoupment of certain reinsurance
78	costs; specifying nonapplication to certain types of
79	insurance; specifying approval of certain rate filings
80	under certain circumstances; providing an exception;
81	requiring the office to provide annual reports on the
82	impact of certain rate regulations; specifying report
83	requirements; amending s. 627.0628, F.S.; prohibiting
84	certain office or consumer advocate questions of certain
85	models reviewed by the commission; amending s. 627.0645,
86	F.S.; authorizing the office to exempt certain companies
87	from certain rate filing and rate certification
88	requirements; amending s. 627.06281, F.S.; prohibiting the
89	office from using certain hurricane loss projection models
90	under certain circumstances; amending s. 627.351, F.S.,
91	relating to the Citizens Property Insurance Corporation;
92	providing additional legislative intent; specifying
93	application to homestead property; providing that certain
94	responsibilities of the Office of Insurance Regulation
95	with respect to the plan of operation of Citizens Property
96	Insurance Corporation be assumed by the Financial Services
97	Commission; specifying the existing three separate
98	accounts of the corporation as providing coverage only for
99	homestead property; providing a definition; providing for
100	an additional separate account for nonhomestead property;
101	requiring separate maintenance of revenues, assets,
102	liabilities, losses, and expenses attributable to the
103	nonhomestead account; providing authority and requirements
104	for coverage rates for nonhomestead properties; providing
105	for office review of such rates or rating plans for being
106	inadequate or unfairly discriminatory; authorizing the
107	office to order discontinuance of certain policies under
108	certain circumstances; requiring insurers to maintain
109	certain records; providing for reducing regular
110	assessments by the Citizen policyholder surcharge under
111	certain circumstances; providing for deficit assessments
112	against nonhomestead account policyholders under certain
113	circumstances; authorizing the board of governors of the
114	corporation to make loans from the homestead accounts to
115	the nonhomestead account under certain circumstances;
116	specifying ineligibility of certain nonhomestead account
117	policyholders for certain coverage under certain
118	circumstances; revising the requirements of the plan of
119	operation of the corporation; requiring additional
120	procedures for determining eligibility of a risk for
121	coverage; prescribing a 10-day waiting period for
122	applications for coverage for a new policy; authorizing
123	exceptions; providing for determination of regular
124	assessments to which the Citizen policyholder surcharge
125	applies; providing for optional payment plans; specifying
126	a minimum requirement for a hurricane deductible for
127	certain property; specifying contents of required
128	statements in applications for nonhomestead and homestead
129	account coverage; requiring prospective senior management
130	employees of the corporation to successfully pass a
131	background check; requiring employees of the corporation
132	to sign annually a statement that they have no conflict of
133	interest; providing that senior managers and members of
134	the board of governors are subject to the code of ethics
135	and must file financial disclosure; prohibiting employees
136	and members of the board of governors from accepting gifts
137	or expenditures from a persons or entity, or employee
138	thereof, which has or is under consideration for a
139	contract with the corporation; providing penalties;
140	providing a limitation on senior managers' representation
141	of persons before the corporation after retirement or
142	termination of employment and on employment with an
143	insurer that has received a take-out bonus; prescribing
144	guidelines for purchases of goods and services; providing
145	guidelines on use of outside counsel; prohibiting the
146	corporation from retaining a lobbyist; authorizing full-
147	time employees to register and engage in lobbying;
148	creating the Office of Internal Auditor and prescribing
149	its duties; providing record-retention requirements;
150	requiring establishment of a unit or division to
151	investigate claims involving possible fraud against the
152	corporation and another to receive and respond to consumer
153	complaints; requiring a periodic comprehensive market
154	conduct examination of the corporation; requiring periodic
155	operational audits of the corporation by the Auditor
156	General; prescribing elements to be included in such
157	audits; requiring the corporation to limit coverage on
158	certain mobile homes or manufactured homes; providing
159	additional legislative intent relating to rate adequacy in
160	the residual market; revising provisions relating to a
161	pilot program in Monroe County; providing program
162	requirements of the office; deleting provisions relating
163	to a rate methodology panel appointed by the corporation;
164	providing requirements and limitations for a corporation
165	adopted bonus payment program; specifying absence of
166	liability of producing agents of record of the corporation
167	and employees for a take-out insurer's insolvency;
168	deleting provisions for immunity for certain persons and
169	entities; providing a criterion for calculating reduction
170	or increase in probable maximum loss; providing bankruptcy
171	petition limitations; delaying application of certain
172	high-risk area boundary reduction provisions; providing
173	for application of provisions relating to homestead and
174	nonhomestead accounts to certain policies; requiring
175	certain corporation employees to comply with certain
176	ethics code requirements; requiring corporation employees
177	to notify the Division of Insurance Fraud of probable
178	commissions of fraud by corporation employees; requiring
179	the corporation to report on the feasibility of requiring
180	authorized insurers to issue and service specified
181	policies of the corporation; specifying report
182	requirements; providing immunity to producing agents and
183	employees for specified actions taken relating to removal
184	of policies from the corporation; providing a limitation;
185	providing legislative intent; creating a High Risk
186	Eligibility Panel; providing for appointment of panel
187	members and member's terms; providing for administration
188	of the panel by the corporation; prohibiting compensation
189	and per diem and travel expenses; providing an exception;
190	requiring the panel to report annually to the Legislature
191	on the certain areas that should be included in the
192	Citizens Property Insurance Corporation high risk account;
193	specifying factors to be considered by the panel;
194	providing duties of the office; authorizing the office to
195	conduct public hearings; requiring the panel to conduct an
196	analysis of property eligible for the high-risk account in
197	specified areas; requiring the panel to submit a report to
198	the office and corporation; providing requirements of the
199	report; amending s. 627.3517, F.S.; providing that an
200	insurance risk apportionment plan policyholder's right to
201	retain his or her current agent does not apply during the
202	first 10 days after a new application for coverage has
203	been submitted to Citizens Property Insurance Corporation;
204	creating s. 627.3519, F.S.; requiring the Financial
205	Services Commission to report annually to the Legislature
206	on probable maximum losses, financing options, and
207	assessment potentials of the Florida Hurricane Catastrophe
208	Fund and Citizens Property Insurance Corporation; amending
209	s. 627.4035, F.S.; providing for a waiver of a written
210	authorization requirement to pay claims by debit card or
211	other electronic transfer; amending s. 627.701, F.S.;
212	providing additional authorization and requirements for
213	hurricane deductibles for renewal periods; authorizing
214	insurers to provide insureds with certain deductible
215	selection options after hurricane mitigation measures are
216	taken; providing a notice requirement; amending s.
217	627.7011, F.S.; limiting certain law and ordinance
218	coverage; deleting application to personal property;
219	requiring insurers to issue separate checks for certain
220	expenses and requiring certain checks to be issued
221	directly to a policyholder; creating s. 627.7019, F.S.;
222	requiring the Financial Services Commission to adopt rules
223	imposing standardized requirements applicable to insurers
224	after certain natural events; providing criteria;
225	providing requirements of the Office of Insurance
226	Regulation; prohibiting certain conflicting emergency
227	rules; amending s. 627.727, F.S.; correcting a cross-
228	reference; amending s. 631.181, F.S.; providing an
229	exception to certain requirements for a signed statement
230	for certain claims; providing requirements; amending s.
231	631.54, F.S.; defining the term "homeowner's insurance";
232	amending s. 631.55, F.S.; correcting a cross-reference;
233	amending s. 631.57, F.S.; revising requirements and
234	limitations for obligations of the Florida Insurance
235	Guaranty Association for covered claims; authorizing the
236	association to contract with counties, municipalities, and
237	legal entities to issue revenue bonds for certain
238	purposes; authorizing the Office of Insurance Regulation
239	to levy assessments and emergency assessments on insurers
240	under certain circumstances for certain bond repayment
241	purposes; providing requirements for and limitations on
242	such assessments; providing for payment, collection, and
243	distribution of such assessments; requiring insurers to
244	include an analysis of revenues from such assessments in a
245	required report; providing rate filing requirements for
246	insurers relating to such assessments; providing for
247	continuing annual assessments under certain circumstances;
248	specifying emergency assessments as not premium and not
249	subject to certain taxes, fees, or commissions; specifying
250	insurer liability for emergency assessments; providing an
251	exception; creating s. 631.695, F.S.; providing
252	legislative findings and purposes; providing for issuance
253	of revenue bonds through counties and municipalities to
254	fund assistance programs for paying covered claims for
255	hurricane damage; providing procedures, requirements, and
256	limitations for counties, municipalities, and the Florida
257	Insurance Guaranty Association, Inc., relating to issuance
258	and validation of such bonds; prohibiting pledging the
259	funds, credit, property, and taxing power of the state,
260	counties, and municipalities for payment of bonds;
261	specifying authorized uses of bond proceeds; limiting the
262	term of bonds; specifying a state covenant to protect
263	bondholders from adverse actions relating to such bonds;
264	specifying exemptions for bonds, notes, and other
265	obligations of counties and municipalities from certain
266	taxes or assessments on property and revenues; authorizing
267	counties and municipalities to create a legal entity to
268	exercise certain powers; requiring the association to
269	issue an annual report on the status of certain uses of
270	bond proceeds; providing report requirements; requiring
271	the association to provide a copy of the report to the
272	Legislature and Chief Financial Officer; prohibiting
273	repeal of certain provisions relating to certain bonds
274	under certain circumstances; amending s. 817.234, F.S.;
275	providing an additional circumstance that constitutes
276	committing insurance fraud; requiring the Office of
277	Insurance Regulation to submit reports to the Legislature
278	relating to the insurability of certain attached or free
279	standing structures ; providing report requirements;
280	providing duties of the office; providing appropriations;
281	specifying uses and purposes of appropriations; requiring
282	insurers who recoup assessments to notify policyholders of
283	the amount by which the surcharge has been reduced;
284	providing penalties for a violation; providing effective
285	dates.
286
287	Be It Enacted by the Legislature of the State of Florida:
288
289	Section 1.  This act may be cited as the "John F. Cosgrove
290	Memorial Act."
291	Section 2.  Paragraph (d) of subsection (2), paragraphs
292	(b), (c), and (d) of subsection (4), paragraph (b) of subsection
293	(5), and paragraphs (a) and (b) of subsection (6) of section
294	215.555, Florida Statutes, are amended, and paragraph (e) is
295	added to subsection (5) of that section, to read:
296	215.555  Florida Hurricane Catastrophe Fund.--
297	(2)  DEFINITIONS.--As used in this section:
298	(d)  "Losses" means direct incurred losses under covered
299	policies, which shall include losses for additional living
300	expenses not to exceed 40 percent of the insured value of a
301	residential structure or its contents and shall exclude loss
302	adjustment expenses. "Losses" does not include losses for fair
303	rental value, loss of rent or rental income use, or business
304	interruption losses.
305	(4)  REIMBURSEMENT CONTRACTS.--
306	(b)1.  The contract shall contain a promise by the board to
307	reimburse the insurer for 45 percent, 75 percent, or 90 percent
308	of its losses from each covered event in excess of the insurer's
309	retention, plus 5 percent of the reimbursed losses to cover loss
310	adjustment expenses.
311	2.  The insurer must elect one of the percentage coverage
312	levels specified in this paragraph and may, upon renewal of a
313	reimbursement contract, elect a lower percentage coverage level
314	if no revenue bonds issued under subsection (6) after a covered
315	event are outstanding, or elect a higher percentage coverage
316	level, regardless of whether or not revenue bonds are
317	outstanding. All members of an insurer group must elect the same
318	percentage coverage level. Any joint underwriting association,
319	risk apportionment plan, or other entity created under s.
320	627.351 must elect the 90-percent coverage level.
321	3.  The contract shall provide that reimbursement amounts
322	shall not be reduced by reinsurance paid or payable to the
323	insurer from other sources.
324	4.  Notwithstanding any other provision contained in this
325	section, the board shall make available to insurers qualifying
326	as limited apportionment companies under s. 627.351(6)(c)14. a
327	contract which cedes to the fund, after retention, an amount of
328	up to $10 million. The rate to be charged for this coverage
329	shall be 50 percent rate-on-line which includes one prepaid
330	reinstatement. The minimum retention level that a carrier must
331	retain is 30 percent of surplus as of June 1, 2006. This
332	coverage shall be in addition to all other coverage which may be
333	provided under this section. This provision shall expire May 31,
334	2007.
335	5.  Notwithstanding any other provisions contained in this
336	section, the board shall make available for the contract year
337	beginning June 1, 2006, and the contract year beginning June 1,
338	2007, additional contracts to insurers, other than entities
339	created pursuant to s. 627.351, which cede to the fund an amount
340	of additional first-event liability up to $2.5 billion. This
341	additional capacity shall be provided by the fund provided that:
342	a.  The layer of excess reinsurance provides coverage below
343	the attachment point of the fund;
344	b.  At least 20 percent of the excess layer for each
345	participating insurer utilizing this additional capacity is
346	placed with independent reinsurers not related to the cedent;
347	c.  The fund provides coverage at the same terms and
348	conditions as the independent reinsurers, not related to the
349	cedent; and
350	d.  The fund receives 100 percent of the gross reinsurance
351	premium for its participation without deduction for reinsurance
352	brokerage.
353
354	The fund may provide additional coverage for a second event on
355	the same terms and conditions as provided by the independent
356	reinsurers not related to the cedent. This coverage shall be in
357	addition to all other coverage which may be provided under this
358	section. This subparagraph shall expire May 31, 2008.
359	(c)1.  The contract shall also provide that the obligation
360	of the board with respect to all contracts covering a particular
361	contract year shall not exceed the actual claims-paying capacity
362	of the fund up to a limit of $15 billion for that contract year
363	adjusted based upon the reported exposure from the prior
364	contract year to reflect the percentage growth in exposure to
365	the fund for covered policies since 2003, provided the dollar
366	growth in the limit may not increase in any year by an amount
367	greater than the dollar growth of the cash balance of the fund
368	as of December 31 as defined by rule which occurred over the
369	prior calendar year.
370	2.  In May before the start of the upcoming contract year
371	and in October during the contract year, the board shall publish
372	in the Florida Administrative Weekly a statement of the fund's
373	estimated borrowing capacity and the projected balance of the
374	fund as of December 31. After the end of each calendar year, the
375	board shall notify insurers of the estimated borrowing capacity
376	and the balance of the fund as of December 31 to provide
377	insurers with data necessary to assist them in determining their
378	retention and projected payout from the fund for loss
379	reimbursement purposes. In conjunction with the development of
380	the premium formula, as provided for in subsection (5), the
381	board shall publish factors or multiples that assist insurers in
382	determining their retention and projected payout for the next
383	contract year. For all regulatory and reinsurance purposes, an
384	insurer may calculate its projected payout from the fund as its
385	share of the total fund premium for the current contract year
386	multiplied by the sum of the projected balance of the fund as of
387	December 31 and the estimated borrowing capacity for that
388	contract year as reported under this subparagraph.
389	(d)1.  For purposes of determining potential liability and
390	to aid in the sound administration of the fund, the contract
391	shall require each insurer to report such insurer's losses from
392	each covered event on an interim basis, as directed by the
393	board. The contract shall require the insurer to report to the
394	board no later than December 31 of each year, and quarterly
395	thereafter, its reimbursable losses from covered events for the
396	year. The contract shall require the board to determine and pay,
397	as soon as practicable after receiving these reports of
398	reimbursable losses, the initial amount of reimbursement due and
399	adjustments to this amount based on later loss information. The
400	adjustments to reimbursement amounts shall require the board to
401	pay, or the insurer to return, amounts reflecting the most
402	recent calculation of losses.
403	2.  In determining reimbursements pursuant to this
404	subsection, the contract shall provide that the board shall:
405	a.  First reimburse insurers writing covered policies,
406	which insurers are in full compliance with this section and have
407	petitioned the Office of Insurance Regulation and qualified as
408	limited apportionment companies under s. 627.351(2)(b)3. The
409	amount of such reimbursement shall be the lesser of $10 million
410	or an amount equal to 10 times the insurer's reimbursement
411	premium for the current year. The amount of reimbursement paid
412	under this sub-subparagraph may not exceed the full amount of
413	reimbursement promised in the reimbursement contract. This sub-
414	subparagraph does not apply with respect to any contract year in
415	which the year-end projected cash balance of the fund, exclusive
416	of any bonding capacity of the fund, exceeds $2 billion. Only
417	one member of any insurer group may receive reimbursement under
418	this sub-subparagraph.
419	a.b.  Next Pay to each insurer such insurer's projected
420	payout, which is the amount of reimbursement it is owed, up to
421	an amount equal to the insurer's share of the actual premium
422	paid for that contract year, multiplied by the actual claims-
423	paying capacity available for that contract year; provided,
424	entities created pursuant to s. 627.351 shall be further
425	reimbursed in accordance with sub-subparagraph b. c.
426	b.c.  Thereafter, establish the prorated reimbursement
427	level at the highest level for which any remaining fund balance
428	or bond proceeds are sufficient to reimburse entities created
429	pursuant to s. 627.351 based on reimbursable losses exceeding
430	the amounts payable pursuant to sub-subparagraph a. b. for the
431	current contract year.
432	(5)  REIMBURSEMENT PREMIUMS.--
433	(b)  The State Board of Administration shall select an
434	independent consultant to develop a formula for determining the
435	actuarially indicated premium to be paid to the fund. The
436	formula shall specify, for each zip code or other limited
437	geographical area, the amount of premium to be paid by an
438	insurer for each $1,000 of insured value under covered policies
439	in that zip code or other area. In establishing premiums, the
440	board shall consider the coverage elected under paragraph (4)(b)
441	and any factors that tend to enhance the actuarial
442	sophistication of ratemaking for the fund, including
443	deductibles, type of construction, type of coverage provided,
444	relative concentration of risks, a factor providing for more
445	rapid cash buildup in the fund until the fund capacity for a
446	single hurricane season is fully funded, and other such factors
447	deemed by the board to be appropriate. The formula may provide
448	for a procedure to determine the premiums to be paid by new
449	insurers that begin writing covered policies after the beginning
450	of a contract year, taking into consideration when the insurer
451	starts writing covered policies, the potential exposure of the
452	insurer, the potential exposure of the fund, the administrative
453	costs to the insurer and to the fund, and any other factors
454	deemed appropriate by the board. The formula shall include a
455	factor of 25 percent of the fund's actuarially indicated premium
456	in order to provide for more rapid cash buildup in the fund. The
457	formula must be approved by unanimous vote of the board. The
458	board may, at any time, revise the formula pursuant to the
459	procedure provided in this paragraph.
460	(e)  For purposes of paragraph (c), if Citizens Property
461	Insurance Corporation assumes or otherwise provides coverage for
462	policies of insurers placed in liquidation under chapter 631
463	pursuant to s. 627.351(6)(m)5., Citizens Property Insurance
464	Corporation shall notify the board of its insured values with
465	respect to such policies within 60 days after such assumption or
466	other coverage transaction and the fund shall treat such
467	policies as having been in effect as of June 30 of that year.
468	For purposes of subsection (4), Citizens Property Insurance
469	Corporation may enter into a separate reimbursement contract
470	with respect to such policies and, if so, shall be treated by
471	the fund as a separate insurer with respect to such policies
472	until their first renewal effective date.
473	(6)  REVENUE BONDS.--
474	(a)  General provisions.--
475	1.  Upon the occurrence of a hurricane and a determination
476	that the moneys in the fund are or will be insufficient to pay
477	reimbursement at the levels promised in the reimbursement
478	contracts, the board may take the necessary steps under
479	paragraph (c) or paragraph (d) for the issuance of revenue bonds
480	for the benefit of the fund. The proceeds of such revenue bonds
481	may be used to make reimbursement payments under reimbursement
482	contracts; to refinance or replace previously existing
483	borrowings or financial arrangements; to pay interest on bonds;
484	to fund reserves for the bonds; to pay expenses incident to the
485	issuance or sale of any bond issued under this section,
486	including costs of validating, printing, and delivering the
487	bonds, costs of printing the official statement, costs of
488	publishing notices of sale of the bonds, and related
489	administrative expenses; or for such other purposes related to
490	the financial obligations of the fund as the board may
491	determine. The term of the bonds may not exceed 30 years. The
492	board may pledge or authorize the corporation to pledge all or a
493	portion of all revenues under subsection (5) and under paragraph
494	(b) to secure such revenue bonds and the board may execute such
495	agreements between the board and the issuer of any revenue bonds
496	and providers of other financing arrangements under paragraph
497	(7)(b) as the board deems necessary to evidence, secure,
498	preserve, and protect such pledge. If reimbursement premiums
499	received under subsection (5) or earnings on such premiums are
500	used to pay debt service on revenue bonds, such premiums and
501	earnings shall be used only after the use of the moneys derived
502	from assessments under paragraph (b). The funds, credit,
503	property, or taxing power of the state or political subdivisions
504	of the state shall not be pledged for the payment of such bonds.
505	The board may also enter into agreements under paragraph (c) or
506	paragraph (d) for the purpose of issuing revenue bonds in the
507	absence of a hurricane upon a determination that such action
508	would maximize the ability of the fund to meet future
509	obligations.
510	2.  The Legislature finds and declares that the issuance of
511	bonds under this subsection is for the public purpose of paying
512	the proceeds of the bonds to insurers, thereby enabling insurers
513	to pay the claims of policyholders to assure that policyholders
514	are able to pay the cost of construction, reconstruction,
515	repair, restoration, and other costs associated with damage to
516	property of policyholders of covered policies after the
517	occurrence of a hurricane. Revenue bonds may not be issued under
518	this subsection until validated under chapter 75. The validation
519	of at least the first obligations incurred pursuant to this
520	subsection shall be appealed to the Supreme Court, to be handled
521	on an expedited basis.
522	(b)  Emergency assessments.--
523	1.  If the board determines that the amount of revenue
524	produced under subsection (5) is insufficient to fund the
525	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, by order, an emergency assessment on direct
530	premiums for all property and casualty lines of business in this
531	state, including property and casualty business of surplus lines
532	insurers regulated under part VIII of chapter 626, but not
533	including any workers' compensation premiums or medical
534	malpractice premiums. As used in this subsection, the term
535	"property and casualty business" includes all lines of business
536	identified on Form 2, Exhibit of Premiums and Losses, in the
537	annual statement required of authorized insurers by s. 624.424
538	and any rule adopted under this section, except for those lines
539	identified as accident and health insurance and except for
540	policies written under the National Flood Insurance Program. The
541	assessment shall be specified as a percentage of direct written
542	future premium collections and is subject to annual adjustments
543	by the board to reflect changes in premiums subject to
544	assessments collected under this subparagraph in order to meet
545	debt obligations. The same percentage shall apply to all
546	policies in lines of business subject to the assessment issued
547	or renewed during the 12-month period beginning on the effective
548	date of the assessment.
549	2.  A premium is not subject to an annual assessment under
550	this paragraph in excess of 6 percent of premium with respect to
551	obligations arising out of losses attributable to any one
552	contract year, and a premium is not subject to an aggregate
553	annual assessment under this paragraph in excess of 10 percent
554	of premium. An annual assessment under this paragraph shall
555	continue for as long as until the revenue bonds issued with
556	respect to which the assessment was imposed are outstanding,
557	including any bonds the proceeds of which were used to refund
558	the revenue bonds, unless adequate provision has been made for
559	the payment of the bonds under the documents authorizing
560	issuance of the bonds.
561	3.  Emergency assessments shall be collected from
562	policyholders. Emergency assessments shall be remitted by
563	insurers as a percentage of direct written premium for the
564	preceding calendar quarter as specified in the order from With
565	respect to each insurer collecting premiums that are subject to
566	the assessment, the insurer shall collect the assessment at the
567	same time as it collects the premium payment for each policy and
568	shall remit the assessment collected to the fund or corporation
569	as provided in the order issued by the Office of Insurance
570	Regulation. The office shall verify the accurate and timely
571	collection and remittance of emergency assessments and shall
572	report the information to the board in a form and at a time
573	specified by the board. Each insurer collecting assessments
574	shall provide the information with respect to premiums and
575	collections as may be required by the office to enable the
576	office to monitor and verify compliance with this paragraph.
577	4.  With respect to assessments of surplus lines premiums,
578	each surplus lines agent shall collect the assessment at the
579	same time as the agent collects the surplus lines tax required
580	by s. 626.932, and the surplus lines agent shall remit the
581	assessment to the Florida Surplus Lines Service Office created
582	by s. 626.921 at the same time as the agent remits the surplus
583	lines tax to the Florida Surplus Lines Service Office. The
584	emergency assessment on each insured procuring coverage and
585	filing under s. 626.938 shall be remitted by the insured to the
586	Florida Surplus Lines Service Office at the time the insured
587	pays the surplus lines tax to the Florida Surplus Lines Service
588	Office. The Florida Surplus Lines Service Office shall remit the
589	collected assessments to the fund or corporation as provided in
590	the order levied by the Office of Insurance Regulation. The
591	Florida Surplus Lines Service Office shall verify the proper
592	application of such emergency assessments and shall assist the
593	board in ensuring the accurate and timely collection and
594	remittance of assessments as required by the board. The Florida
595	Surplus Lines Service Office shall annually calculate the
596	aggregate written premium on property and casualty business,
597	other than workers' compensation and medical malpractice,
598	procured through surplus lines agents and insureds procuring
599	coverage and filing under s. 626.938 and shall report the
600	information to the board in a form and at a time specified by
601	the board.
602	5.  Any assessment authority not used for a particular
603	contract year may be used for a subsequent contract year. If,
604	for a subsequent contract year, the board determines that the
605	amount of revenue produced under subsection (5) is insufficient
606	to fund the obligations, costs, and expenses of the fund and the
607	corporation, including repayment of revenue bonds and that
608	portion of the debt service coverage not met by reimbursement
609	premiums, the board shall direct the Office of Insurance
610	Regulation to levy an emergency assessment up to an amount not
611	exceeding the amount of unused assessment authority from a
612	previous contract year or years, plus an additional 4 percent
613	provided that the assessments in the aggregate do not exceed the
614	limits specified in subparagraph 2.
615	6.  The assessments otherwise payable to the corporation
616	under this paragraph shall be paid to the fund unless and until
617	the Office of Insurance Regulation and the Florida Surplus Lines
618	Service Office have received from the corporation and the fund a
619	notice, which shall be conclusive and upon which they may rely
620	without further inquiry, that the corporation has issued bonds
621	and the fund has no agreements in effect with local governments
622	under paragraph (c). On or after the date of the notice and
623	until the date the corporation has no bonds outstanding, the
624	fund shall have no right, title, or interest in or to the
625	assessments, except as provided in the fund's agreement with the
626	corporation.
627	7.  Emergency assessments are not premium and are not
628	subject to the premium tax, to the surplus lines tax, to any
629	fees, or to any commissions. An insurer is liable for all
630	assessments that it collects and must treat the failure of an
631	insured to pay an assessment as a failure to pay the premium. An
632	insurer is not liable for uncollectible assessments.
633	8.  When an insurer is required to return an unearned
634	premium, it shall also return any collected assessment
635	attributable to the unearned premium. A credit adjustment to the
636	collected assessment may be made by the insurer with regard to
637	future remittances that are payable to the fund or corporation,
638	but the insurer is not entitled to a refund.
639	9.  When a surplus lines insured or an insured who has
640	procured coverage and filed under s. 626.938 is entitled to the
641	return of an unearned premium, the Florida Surplus Lines Service
642	Office shall provide a credit or refund to the agent or such
643	insured for the collected assessment attributable to the
644	unearned premium prior to remitting the emergency assessment
645	collected to the fund or corporation.
646	10.  The exemption of medical malpractice insurance
647	premiums from emergency assessments under this paragraph is
648	repealed May 31, 2010 2007, and medical malpractice insurance
649	premiums shall be subject to emergency assessments attributable
650	to loss events occurring in the contract years commencing on
651	June 1, 2010 2007.
652	Section 3.  Section 215.558, Florida Statutes, is created
653	to read:
654	215.558  Florida Hurricane Damage Prevention Endowment.--
655	(1)  PURPOSE AND INTENT.--The purpose of this section is to
656	provide a continuing source of funding for financial incentives
657	to encourage residential property owners of this state to
658	retrofit their properties to make them less vulnerable to
659	hurricane damage, to help decrease the cost of residential
660	property and casualty insurance, and to provide matching funds
661	to local governments and nonprofit entities for projects that
662	will reduce hurricane damage to residential properties. It is
663	the intent of the Legislature that this section be construed
664	liberally to effectuate its purpose.
665	(2)  DEFINITIONS.--As used in this section:
666	(a)  "Board" means the State Board of Administration.
667	(b)  "Corpus" means the money that has been appropriated to
668	the endowment by the 2006 Legislature, together with any amounts
669	subsequently appropriated to the endowment that are specifically
670	designated as contributions to the corpus and any grants, gifts,
671	or donations to the endowment that are specifically designated
672	as contributions to the corpus.
673	(c)  "Earnings" means any money in the endowment in excess
674	of the corpus, including any income generated by investments,
675	any increase in the market value of investments net of decreases
676	in market value, and any appropriations, grants, gifts, or
677	donations to the endowment not specifically designated as
678	contributions to the corpus.
679	(d)  "Endowment" means the Florida Hurricane Damage
680	Prevention Endowment created by this section.
681	(e)  "Program administrator" means the Department of
682	Financial Services.
683	(3)  ADMINISTRATION.--
684	(a)  The board shall invest endowment assets as provided in
685	this section.
686	(b)  The board may invest and reinvest funds of the
687	endowment in accordance with s. 215.47 and consistent with board
688	policy.
689	(c)  The investment objective shall be long-term
690	preservation of the value of the corpus and a specified regular
691	annual cash outflow for appropriation, as nonrecurring revenue,
692	for the purposes specified in subsection (4).
693	(d)  In accordance with s. 215.44, the board shall report
694	on the financial status of the endowment in its annual
695	investment report to the Legislature.
696	(e)  Costs and fees of the board for investment services
697	shall be deducted from the assets of the endowment.
698	(4)  FINANCIAL INCENTIVES FOR RESIDENTIAL HURRICANE DAMAGE
699	PREVENTION ACTIVITIES.--
700	(a)  Not less than 80 percent of the net earnings of the
701	endowment shall be expended for financial incentives to
702	residential property owners as described in paragraph (b), and
703	no more than the remainder of the net earnings of the endowment
704	shall be expended for matching fund grants to local governments
705	and nonprofit entities for projects that will reduce hurricane
706	damage to residential properties as described in paragraph (c).
707	Any funds authorized for expenditure but not expended for these
708	purposes shall be returned to the endowment.
709	(b)1.  The program administrator, by rule, shall establish
710	a request for a proposal process to annually solicit proposals
711	from lending institutions under which the lending institution
712	will provide interest-free loans to homestead property owners to
713	pay for inspections of homestead property to determine what
714	mitigation measures are needed and for improvements to existing
715	residential properties intended to reduce the homestead
716	property's vulnerability to hurricane damage, in exchange for
717	funding from the endowment.
718	2.  In order to qualify for funding under this paragraph,
719	an interest-free loan program must include an inspection of
720	homestead property to determine what mitigation measures are
721	needed, a means for verifying that the improvements to be paid
722	for from loan proceeds have been demonstrated to reduce a
723	homestead property's vulnerability to hurricane damage, and a
724	means for verifying that the proceeds were actually spent on
725	such improvements. The program must include a method for
726	awarding loans according to the following priorities:
727	a.  The highest priority must be given to single-family
728	owner-occupied homestead dwellings, insured at $500,000 or less,
729	located in the areas designated as high-risk areas for purposes
730	of coverage by the Citizens Property Insurance Corporation.
731	b.  The next highest priority must be given to single-
732	family owner-occupied homestead dwellings, insured at $500,000
733	or less, covered by the Citizens Property Insurance Corporation,
734	wherever located.
735	c.  The next highest priority must be given to single-
736	family owner-occupied homestead dwellings, insured at $500,000
737	or less, that are more than 40 years old.
738	d.  The next highest priority must be given to all other
739	single-family owner-occupied homestead dwellings insured at
740	$500,000 or less.
741	3.  The program administrator shall evaluate proposals
742	based on the following factors:
743	a.  The degree to which the proposal meets the requirements
744	of subparagraph 2.
745	b.  The lending institution's plan for marketing the loans.
746	c.  The anticipated number of loans to be granted relative
747	to the total amount of funding sought.
748	4.  The program administrator shall annually solicit
749	proposals from local governments and nonprofit entities for
750	projects that will reduce hurricane damage to homestead
751	properties. The program administrator may provide up to 50
752	percent of the funding for such projects. The projects may
753	include educational programs, repair services, property
754	inspections, and hurricane vulnerability analyses and such other
755	projects as the program administrator determines to be
756	consistent with the purposes of this section.
757	(5)  ADVISORY COUNCIL.--There is created an advisory
758	council to provide advice and assistance to the program
759	administrator with regard to its administration of the
760	endowment. The advisory council shall consist of:
761	(a)  A representative of lending institutions, selected by
762	the Financial Services Commission from a list of at least three
763	persons recommended by the Florida Bankers Association.
764	(b)  A representative of residential property insurers,
765	selected by the Financial Services Commission from a list of at
766	least three persons recommended by the Florida Insurance
767	Council.
768	(c)  A representative of home builders, selected by the
769	Financial Services Commission from a list of at least three
770	persons recommended by the Florida Home Builders Association.
771	(d)  A faculty member of a state university selected by the
772	Financial Services Commission who is an expert in hurricane-
773	resistant construction methodologies and materials.
774	(e)  Two members of the House of Representatives selected
775	by the Speaker of the House of Representatives.
776	(f)  Two members of the Senate selected by the President of
777	the Senate.
778	(g)  The senior officer of the Florida Hurricane
779	Catastrophe Fund.
780	(h)  The executive director of Citizens Property Insurance
781	Corporation.
782	(i)  The director of the Division of Emergency Management
783	of the Department of Community Affairs.
784
785	Members appointed under paragraphs (a)-(d) shall serve at the
786	pleasure of the Financial Services Commission. Members appointed
787	under paragraphs (e) and (f) shall serve at the pleasure of the
788	appointing officer. All other members shall serve ex officio.
789	Members of the advisory council shall serve without compensation
790	but may receive reimbursement as provided in s. 112.061 for per
791	diem and travel expenses incurred in the performance of their
792	official duties.
793	Section 4.  Section 215.5586, Florida Statutes, is created
794	to read:
795	215.5586  Florida Comprehensive Hurricane Damage Mitigation
796	Program.--There is established within the Department of
797	Financial Services the Florida Comprehensive Hurricane Damage
798	Mitigation Program. The program shall be administered by an
799	individual with prior executive experience in the private sector
800	in the areas of insurance, business, or construction. The
801	program shall develop and implement a comprehensive and
802	coordinated approach for hurricane damage mitigation that shall
803	include the following:
804	(1)  WIND CERTIFICATION AND HURRICANE MITIGATION
805	INSPECTIONS.--
806	(a)  Free home-retrofit inspections of site-built,
807	residential property, including single-family, two-family,
808	three-family, or four-family residential units, shall be offered
809	to determine what mitigation measures are needed and what
810	improvements to existing residential properties are needed to
811	reduce the property's vulnerability to hurricane damage. The
812	Department of Financial Services shall establish a request for
813	proposals to solicit proposals from wind certification entities
814	to provide at no cost to homeowners wind certification and
815	hurricane mitigation inspections. The inspections provided to
816	homeowners, at a minimum, must include:
817	1.  A home inspection and report that summarizes the
818	results and identifies corrective actions a homeowner may take
819	to mitigate hurricane damage.
820	2.  A range of cost estimates regarding the mitigation
821	features.
822	3.  Insurer-specific information regarding premium
823	discounts correlated to recommended mitigation features
824	identified by the inspection.
825	4.  A hurricane resistance rating scale specifying the
826	home's current as well as projected wind resistance
827	capabilities.
828	(b)  To qualify for selection by the department as a
829	provider of wind certification and hurricane mitigation
830	inspections, the entity shall, at a minimum:
831	1.  Use wind certification and hurricane mitigation
832	inspectors who:
833	a.  Have prior experience in residential construction or
834	inspection and have received specialized training in hurricane
835	mitigation procedures.
836	b.  Have undergone drug testing and background checks.
837	c.  Have been certified, in a manner satisfactory to the
838	department, to conduct the inspections.
839	2.  Provide a quality assurance program including a
840	reinspection component.
841	(2)  GRANTS.--Financial grants shall be used to encourage
842	single-family, site-built, owner-occupied, residential property
843	owners to retrofit their properties to make them less vulnerable
844	to hurricane damage.
845	(a)  To be eligible for a grant, a residential property
846	must:
847	1.  Have been granted a homestead exemption under chapter
848	196.
849	2.  Be a dwelling with an insured value of $500,000 or
850	less.
851	3.  Have undergone an acceptable wind certification and
852	hurricane mitigation inspection.
853
854	A residential property which is part of a multi-family
855	residential unit may receive a grant only if all homeowners
856	participate and the total number of units does not exceed four.
857	(b)  All grants must be matched on a dollar-for-dollar
858	basis for a total of $10,000 for the mitigation project with the
859	state's contribution not to exceed $5,000.
860	(c)  The program shall create a process in which mitigation
861	contractors agree to participate and seek reimbursement from the
862	state and homeowners select from a list of participating
863	contractors. All mitigation must be based upon the securing of
864	all required local permits and inspections. Mitigation projects
865	are subject to random reinspection of up to at least 10 percent
866	of all projects.
867	(d)  Matching fund grants shall also be made available to
868	local governments and nonprofit entities for projects that will
869	reduce hurricane damage to single-family, site-built, owner-
870	occupied, residential property.
871	(3)  LOANS.--Financial incentives shall be provided as
872	authorized by s. 215.558.
873	(4)  EDUCATION AND CONSUMER AWARENESS.--Multimedia public
874	education, awareness, and advertising efforts designed to
875	specifically address mitigation techniques shall be employed, as
876	well as a component to support ongoing consumer resources and
877	referral services.
878	(5)  MANUFACTURED HOUSING AND MOBILE HOME HURRICANE
879	MITIGATION PROGRAM.--The Manufactured Housing and Mobile Home
880	Hurricane Mitigation Program shall be also be implemented under
881	the Florida Comprehensive Hurricane Damage Mitigation Program.
882	(a)  The program shall require the mitigation of damage to
883	homes for the areas of concern raised by the Department of
884	Highway Safety and Motor Vehicles in the 2004-2005 Hurricane
885	Reports on the effects of the 2004 and 2005 hurricanes on
886	manufactured and mobile homes in this state. The mitigation
887	shall include, but not be limited to, problems associated with
888	weakened trusses, studs, and other structural components, site-
889	built additions, or tie-down systems and may also address any
890	other issues deemed appropriate by the Department of Financial
891	Services upon consultation with the Department of Community
892	Affairs, Tallahassee Community College, the Federation of
893	Manufactured Home Owners of Florida, Inc., the Florida
894	Manufactured Housing Association, and the Department of Highway
895	Safety and Motor Vehicles. The program may include an education
896	and outreach component to ensure that owners of manufactured and
897	mobile homes are aware of the benefits of participation.
898	(b)  The program shall include the offering of a matching
899	grant to owners of manufactured and mobile homes. Homeowners
900	accepted for the program shall be eligible to qualify for a
901	$5,000 dollar-for-dollar matching grant in which the homeowner
902	may receive up to $2,500 in state moneys. The moneys
903	appropriated for this program shall be distributed directly to
904	the Department of Financial Services for the uses set forth
905	under this paragraph.
906	(c)  Upon evidence of completion of the program, the
907	Citizens Property Insurance Corporation shall grant, on a pro
908	rata basis, actuarially reasonable discounts, credits, or other
909	rate differentials or appropriate reductions in deductibles for
910	the properties of owners of manufactured homes or mobile homes
911	on which fixtures or construction techniques that have been
912	demonstrated to reduce the amount of loss in a windstorm have
913	been installed or implemented. The discount on the premium shall
914	be applied to subsequent renewal premium amounts. Premiums of
915	the Citizens Property Insurance Corporation shall reflect the
916	location of the home and the fact that the home has been
917	installed in compliance with building codes adopted after
918	Hurricane Andrew.
919	(d)  On or before January 1 of each year, the Department of
920	Financial Services shall provide a report of activities under
921	this subsection to the Governor, the President of the Senate,
922	and the Speaker of the House of Representatives. The report
923	shall set forth the number of manufactured homes and mobile
924	homes that have taken advantage of the program, the types of
925	enhancements and improvements made to the manufactured homes or
926	mobile homes and attachments to such homes, and whether there
927	has been an increase of availability of insurance products to
928	owners of manufactured homes or mobile homes.
929	(6)  ADVISORY COUNCIL.--There is created an advisory
930	council to provide advice and assistance to the program
931	administrator with regard to his or her administration of the
932	program. The advisory council shall consist of:
933	(a)  A representative of lending institutions, selected by
934	the Financial Services Commission from a list of at least three
935	persons recommended by the Florida Bankers Association.
936	(b)  A representative of residential property insurers,
937	selected by the Financial Services Commission from a list of at
938	least three persons recommended by the Florida Insurance
939	Council.
940	(c)  A representative of home builders, selected by the
941	Financial Services Commission from a list of at least three
942	persons recommended by the Florida Home Builders Association.
943	(d)  A faculty member of a state university, selected by
944	the Financial Services Commission, who is an expert in
945	hurricane-resistant construction methodologies and materials.
946	(e)  Two members of the House of Representatives, selected
947	by the Speaker of the House of Representatives.
948	(f)  Two members of the Senate, selected by the President
949	of the Senate.
950	(g)  The Chief Executive Officer of the Federal Alliance
951	for Safe Homes, Inc., or his or her designee.
952	(h)  The senior officer of the Florida Hurricane
953	Catastrophe Fund.
954	(i)  The executive director of Citizens Property Insurance
955	Corporation.
956	(j)  The director of the Division of Emergency Management
957	of the Department of Community Affairs.
958
959	Members appointed under paragraphs (a)-(d) shall serve at the
960	pleasure of the Financial Services Commission. Members appointed
961	under paragraphs (e) and (f) shall serve at the pleasure of the
962	appointing officer. All other members shall serve voting ex
963	officio. Members of the advisory council shall serve without
964	compensation but may receive reimbursement as provided in s.
965	112.061 for per diem and travel expenses incurred in the
966	performance of their official duties.
967	(7)  FEDERAL FUNDING.-The department shall use its best
968	efforts to obtain grants or funds from the federal government to
969	supplement the financial resources of the program.
970	(8)  RULES.--The Department of Financial Services shall
971	adopt rules pursuant to ss. 120.536(1) and 120.54 governing the
972	Florida Comprehensive Hurricane Damage Mitigation Program.
973	Section 5.  Section 215.559, Florida Statutes, is amended
974	to read:
975	215.559  Hurricane Loss Mitigation Program.--
976	(1)  There is created a Hurricane Loss Mitigation Program.
977	The Legislature shall annually appropriate $10 million of the
978	moneys authorized for appropriation under s. 215.555(7)(c) from
979	the Florida Hurricane Catastrophe Fund to the Department of
980	Community Affairs for the purposes set forth in this section.
981	(2)(a)  Seven million dollars in funds provided in
982	subsection (1) shall be used for programs to improve the wind
983	resistance of residences and mobile homes, including loans,
984	subsidies, grants, demonstration projects, and direct
985	assistance; cooperative programs with local governments and the
986	Federal Government; and other efforts to prevent or reduce
987	losses or reduce the cost of rebuilding after a disaster.
988	(b)  Three million dollars in funds provided in subsection
989	(1) shall be used to retrofit existing facilities used as public
990	hurricane shelters. The department must prioritize the use of
991	these funds for projects included in the September 1, 2000,
992	version of the Shelter Retrofit Report prepared in accordance
993	with s. 252.385(3), and each annual report thereafter. The
994	department must give funding priority to projects in regional
995	planning council regions that have shelter deficits and to
996	projects that maximize use of state funds.
997	(3)  By the 2006-2007 fiscal year, the Department of
998	Community Affairs shall develop a low-interest loan program for
999	homeowners and mobile home owners to retrofit their homes with
1000	fixtures or apply construction techniques that have been
1001	demonstrated to reduce the amount of damage or loss due to a
1002	hurricane. Funding for the program shall be used to subsidize or
1003	guaranty private-sector loans for this purpose to qualified
1004	homeowners by financial institutions chartered by the state or
1005	Federal Government. The department may enter into contracts with
1006	financial institutions for this purpose. The department shall
1007	establish criteria for determining eligibility for the loans and
1008	selecting recipients, standards for retrofitting homes or mobile
1009	homes, limitations on loan subsidies and loan guaranties, and
1010	other terms and conditions of the program, which must be
1011	specified in the department's report to the Legislature on
1012	January 1, 2006, required by subsection (8). For the 2005-2006
1013	fiscal year, the Department of Community Affairs may use up to
1014	$1 million of the funds appropriated pursuant to paragraph
1015	(2)(a) to begin the low-interest loan program as a pilot project
1016	in one or more counties. The Department of Financial Services,
1017	the Office of Financial Regulation, the Florida Housing Finance
1018	Corporation, and the Office of Tourism, Trade, and Economic
1019	Development shall assist the Department of Community Affairs in
1020	establishing the program and pilot project. The department may
1021	use up to 2.5 percent of the funds appropriated in any given
1022	fiscal year for administering the loan program. The department
1023	may adopt rules to implement the program.
1024	(3)(4)  Forty percent of the total appropriation in
1025	paragraph (2)(a) shall be used to inspect and improve tie-downs
1026	for mobile homes. Within 30 days after the effective date of
1027	that appropriation, the department shall contract with a public
1028	higher educational institution in this state which has previous
1029	experience in administering the programs set forth in this
1030	subsection to serve as the administrative entity and fiscal
1031	agent pursuant to s. 216.346 for the purpose of administering
1032	the programs set forth in this subsection in accordance with
1033	established policy and procedures. The administrative entity
1034	working with the advisory council set up under subsection (6)
1035	shall develop a list of mobile home parks and counties that may
1036	be eligible to participate in the tie-down program.
1037	(4)(5)  Of moneys provided to the Department of Community
1038	Affairs in paragraph (2)(a), 10 percent shall be allocated to a
1039	Type I Center within the State University System dedicated to
1040	hurricane research. The Type I Center shall develop a
1041	preliminary work plan approved by the advisory council set forth
1042	in subsection (6) to eliminate the state and local barriers to
1043	upgrading existing mobile homes and communities, research and
1044	develop a program for the recycling of existing older mobile
1045	homes, and support programs of research and development relating
1046	to hurricane loss reduction devices and techniques for site-
1047	built residences. The State University System also shall consult
1048	with the Department of Community Affairs and assist the
1049	department with the report required under subsection (8).
1050	(5)(6)  The Department of Community Affairs shall develop
1051	the programs set forth in this section in consultation with an
1052	advisory council consisting of a representative designated by
1053	the Chief Financial Officer, a representative designated by the
1054	Florida Home Builders Association, a representative designated
1055	by the Florida Insurance Council, a representative designated by
1056	the Federation of Manufactured Home Owners, a representative
1057	designated by the Florida Association of Counties, and a
1058	representative designated by the Florida Manufactured Housing
1059	Association.
1060	(6)(7)  Moneys provided to the Department of Community
1061	Affairs under this section are intended to supplement other
1062	funding sources of the Department of Community Affairs and may
1063	not supplant other funding sources of the Department of
1064	Community Affairs.
1065	(7)(8)  On January 1st of each year, the Department of
1066	Community Affairs shall provide a full report and accounting of
1067	activities under this section and an evaluation of such
1068	activities to the Speaker of the House of Representatives, the
1069	President of the Senate, and the Majority and Minority Leaders
1070	of the House of Representatives and the Senate.
1071	(8)(9)  This section is repealed June 30, 2011.
1072	Section 6.  Section 252.63, Florida Statutes, is created to
1073	read:
1074	252.63  Commissioner of Insurance Regulation; powers in a
1075	state of emergency.--
1076	(1)  When the Governor declares a state of emergency
1077	pursuant to s. 252.36, the commissioner may issue one or more
1078	general orders applicable to all insurance companies, entities,
1079	and persons, as defined in s. 624.04, that are subject to the
1080	Florida Insurance Code and that serve any portion of the area of
1081	the state under the state of emergency.
1082	(2)  An order issued by the commissioner under this section
1083	becomes effective upon issuance and continues for 120 days
1084	unless terminated sooner by the commissioner. The commissioner
1085	may extend an order for one additional period of 120 days if he
1086	or she determines that the emergency conditions that gave rise
1087	to the initial order still exist. By concurrent resolution, the
1088	Legislature may terminate any order issued under this section.
1089	(3)  The commissioner shall publish in the next available
1090	publication of the Florida Administrative Weekly a copy of the
1091	text of any order issued under this section, together with a
1092	statement describing the modification or suspension and
1093	explaining how the modification or suspension will facilitate
1094	recovery from the emergency.
1095	Section 7.  Subsections (1) and (2) of section 626.918,
1096	Florida Statutes, are amended to read:
1097	626.918  Eligible surplus lines insurers.--
1098	(1)  A No surplus lines agent may not shall place any
1099	coverage with any unauthorized insurer which is not then an
1100	eligible surplus lines insurer, except as permitted under
1101	subsections (5) and (6).
1102	(2)  An No unauthorized insurer may not shall be or become
1103	an eligible surplus lines insurer unless made eligible by the
1104	office in accordance with the following conditions:
1105	(a)  Eligibility of the insurer must be requested in
1106	writing by the Florida Surplus Lines Service Office.;
1107	(b)  The insurer must be currently an authorized insurer in
1108	the state or country of its domicile as to the kind or kinds of
1109	insurance proposed to be so placed and must have been such an
1110	insurer for not less than the 3 years next preceding or must be
1111	the wholly owned subsidiary of such authorized insurer or must
1112	be the wholly owned subsidiary of an already eligible surplus
1113	lines insurer as to the kind or kinds of insurance proposed for
1114	a period of not less than the 3 years next preceding. However,
1115	the office may waive the 3-year requirement if the insurer
1116	provides a product or service not readily available to the
1117	consumers of this state or has operated successfully for a
1118	period of at least 1 year next preceding and has capital and
1119	surplus of not less than $25 million.;
1120	(c)  Before granting eligibility, the requesting surplus
1121	lines agent or the insurer shall furnish the office with a duly
1122	authenticated copy of its current annual financial statement in
1123	the English language and with all monetary values therein
1124	expressed in United States dollars, at an exchange rate (in the
1125	case of statements originally made in the currencies of other
1126	countries) then-current and shown in the statement, and with
1127	such additional information relative to the insurer as the
1128	office may request.;
1129	(d)1.a.  The insurer must have and maintain surplus as to
1130	policyholders of not less than $15 million; in addition, an
1131	alien insurer must also have and maintain in the United States a
1132	trust fund for the protection of all its policyholders in the
1133	United States under terms deemed by the office to be reasonably
1134	adequate, in an amount not less than $5.4 million. Any such
1135	surplus as to policyholders or trust fund shall be represented
1136	by investments consisting of eligible investments for like funds
1137	of like domestic insurers under part II of chapter 625 provided,
1138	however, that in the case of an alien insurance company, any
1139	such surplus as to policyholders may be represented by
1140	investments permitted by the domestic regulator of such alien
1141	insurance company if such investments are substantially similar
1142	in terms of quality, liquidity, and security to eligible
1143	investments for like funds of like domestic insurers under part
1144	II of chapter 625. Clean, irrevocable, unconditional, and
1145	evergreen letters of credit issued or confirmed by a qualified
1146	United States financial institution, as defined in subparagraph
1147	2., may be used to fund the trust.;
1148	b.2.  For those surplus lines insurers that were eligible
1149	on January 1, 1994, and that maintained their eligibility
1150	thereafter, the required surplus as to policyholders shall be:
1151	(I)a.  On December 31, 1994, and until December 30, 1995,
1152	$2.5 million.
1153	(II)b.  On December 31, 1995, and until December 30, 1996,
1154	$3.5 million.
1155	(III)c.  On December 31, 1996, and until December 30, 1997,
1156	$4.5 million.
1157	(IV)d.  On December 31, 1997, and until December 30, 1998,
1158	$5.5 million.
1159	(V)e.  On December 31, 1998, and until December 30, 1999,
1160	$6.5 million.
1161	(VI)f.  On December 31, 1999, and until December 30, 2000,
1162	$8 million.
1163	(VII)g.  On December 31, 2000, and until December 30, 2001,
1164	$9.5 million.
1165	(VIII)h.  On December 31, 2001, and until December 30,
1166	2002, $11 million.
1167	(IX)i.  On December 31, 2002, and until December 30, 2003,
1168	$13 million.
1169	(X)j.  On December 31, 2003, and thereafter, $15 million.
1170	c.3.  The capital and surplus requirements as set forth in
1171	sub-subparagraph b. subparagraph 2. do not apply in the case of
1172	an insurance exchange created by the laws of individual states,
1173	where the exchange maintains capital and surplus pursuant to the
1174	requirements of that state, or maintains capital and surplus in
1175	an amount not less than $50 million in the aggregate. For an
1176	insurance exchange which maintains funds in the amount of at
1177	least $12 million for the protection of all insurance exchange
1178	policyholders, each individual syndicate shall maintain minimum
1179	capital and surplus in an amount not less than $3 million. If
1180	the insurance exchange does not maintain funds in the amount of
1181	at least $12 million for the protection of all insurance
1182	exchange policyholders, each individual syndicate shall meet the
1183	minimum capital and surplus requirements set forth in sub-
1184	subparagraph b. subparagraph 2.;
1185	d.4.  A surplus lines insurer which is a member of an
1186	insurance holding company that includes a member which is a
1187	Florida domestic insurer as set forth in its holding company
1188	registration statement, as set forth in s. 628.801 and rules
1189	adopted thereunder, may elect to maintain surplus as to
1190	policyholders in an amount equal to the requirements of s.
1191	624.408, subject to the requirement that the surplus lines
1192	insurer shall at all times be in compliance with the
1193	requirements of chapter 625.
1194
1195	The election shall be submitted to the office and shall be
1196	effective upon the office's being satisfied that the
1197	requirements of sub-subparagraph d. subparagraph 4. have been
1198	met. The initial date of election shall be the date of office
1199	approval. The election approval application shall be on a form
1200	adopted by commission rule. The office may approve an election
1201	form submitted pursuant to sub-subparagraph d. subparagraph 4.
1202	only if it was on file with the former Department of Insurance
1203	before February 28, 1998.;
1204	2.  For purposes of letters of credit under subparagraph
1205	1., the term "qualified United States financial institution"
1206	means an institution that:
1207	a.  Is organized or, in the case of a United States office
1208	of a foreign banking organization, is licensed under the laws of
1209	the United States or any state.
1210	b.  Is regulated, supervised, and examined by authorities
1211	of the United States or any state having regulatory authority
1212	over banks and trust companies.
1213	c.  Has been determined by the office or the Securities
1214	Valuation Office of the National Association of Insurance
1215	Commissioners to meet such standards of financial condition and
1216	standing as are considered necessary and appropriate to regulate
1217	the quality of financial institutions whose letters of credit
1218	are acceptable to the office.
1219	(e)  The insurer must be of good reputation as to the
1220	providing of service to its policyholders and the payment of
1221	losses and claims.;
1222	(f)  The insurer must be eligible, as for authority to
1223	transact insurance in this state, under s. 624.404(3).; and
1224	(g)  This subsection does not apply as to unauthorized
1225	insurers made eligible under s. 626.917 as to wet marine and
1226	aviation risks.
1227	Section 8.  Paragraph (j) is added to subsection (2) of
1228	section 627.062, Florida Statutes, subsection (5) of that
1229	section is amended, and subsections (9) and (10) are added to
1230	that section, to read:
1231	627.062  Rate standards.--
1232	(2)  As to all such classes of insurance:
1233	(j)  Effective January 1, 2007, notwithstanding any other
1234	provision of this section:
1235	1.  With respect to any residential property insurance
1236	subject to regulation under this section, a rate filing,
1237	including, but not limited to, any rate changes, rating factors,
1238	territories, classification, discounts, and credits, with
1239	respect to any policy form, including endorsements issued with
1240	the form, that results in an overall average statewide premium
1241	increase or decrease of no more than 5 percent above or below
1242	the premium that would result from the insurer's rates then in
1243	effect shall not be subject to a determination by the office
1244	that the rate is excessive or unfairly discriminatory except as
1245	provided in subparagraph 3., or any other provision of law,
1246	provided all changes specified in the filing do not result in an
1247	overall premium increase of more than 10 percent for any one
1248	territory, for reasons related solely to the rate change. As
1249	used in this subparagraph, the term "insurer's rates then in
1250	effect" includes only rates that have been lawfully in effect
1251	under this section or rates that have been determined to be
1252	lawful through administrative proceedings or judicial
1253	proceedings.
1254	2.  An insurer may not make filings under this paragraph
1255	with respect to any policy form, including endorsements issued
1256	with the form, if the overall premium changes resulting from
1257	such filings exceed the amounts specified in this paragraph in
1258	any 12-month period. An insurer may proceed under other
1259	provisions of this section or other provisions of law if the
1260	insurer seeks to exceed the premium or rate limitations of this
1261	paragraph.
1262	3.  This paragraph does not affect the authority of the
1263	office to disapprove a rate as inadequate or to disapprove a
1264	filing for the unlawful use of unfairly discriminatory rating
1265	factors that are prohibited by the laws of this state. An
1266	insurer electing to implement a rate change under this paragraph
1267	shall submit a filing to the office at least 40 days prior to
1268	the effective date of the rate change. The office shall have 30
1269	days after the filing's submission to review the filing and
1270	determine if the rate is inadequate or uses unfairly
1271	discriminatory rating factors. Absent a finding by the office
1272	within such 30-day period that the rate is inadequate or that
1273	the insurer has used unfairly discriminatory rating factors, the
1274	filing is deemed approved. If the office finds during the 30-day
1275	period that the filing will result in inadequate premiums or
1276	otherwise endanger the insurer's solvency, the office shall
1277	suspend the rate decrease. If the insurer is implementing an
1278	overall rate increase, the results of which continue to produce
1279	an inadequate rate, such increase shall proceed pending
1280	additional action by the office to ensure the adequacy of the
1281	rate.
1282	4.  This paragraph does not apply to rate filings for any
1283	insurance other than residential property insurance.
1284
1285	The provisions of this subsection shall not apply to workers'
1286	compensation and employer's liability insurance and to motor
1287	vehicle insurance.
1288	(5)  With respect to a rate filing involving coverage of
1289	the type for which the insurer is required to pay a
1290	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1291	the insurer may fully recoup in its property insurance premiums
1292	any reimbursement premiums paid to the Florida Hurricane
1293	Catastrophe Fund, together with reasonable costs of other
1294	reinsurance consistent with prudent business practices and sound
1295	actuarial principles, but may not recoup reinsurance costs that
1296	duplicate coverage provided by the Florida Hurricane Catastrophe
1297	Fund. The burden is on the office to establish that any costs of
1298	other reinsurance are in excess of amounts consistent with
1299	prudent business practices and sound actuarial principles. An
1300	insurer may not recoup more than 1 year of reimbursement premium
1301	at a time. Any under-recoupment from the prior year may be added
1302	to the following year's reimbursement premium and any over-
1303	recoupment shall be subtracted from the following year's
1304	reimbursement premium.
1305	(9)  Notwithstanding any other provision of this section,
1306	any rate filing or applicable portion of the rate filing that
1307	includes the peril of wind within the boundary of the area
1308	covered by the high-risk account of the Citizens Property
1309	Insurance Corporation shall be deemed approved upon submission
1310	to the office if the filing or the applicable portion of the
1311	filing requests approval of a rate that is less than the
1312	approved rate for similar risks insured in the high-risk account
1313	of the corporation unless the office determines that such rate
1314	is inadequate or unfairly discriminatory as provided in
1315	subsection (2).
1316	(10)(a)  Beginning January 1, 2007, the office shall
1317	annually provide a report to the President of the Senate, the
1318	Speaker of the House of Representatives, the minority party
1319	leader of each house of the Legislature, and the chairs of the
1320	standing committees of each house of the Legislature having
1321	jurisdiction over insurance issues, specifying the impact of
1322	flexible rate regulation under paragraph (2)(j) on the degree of
1323	competition in insurance markets in this state.
1324	(b)  The report shall include a year-by-year comparison of
1325	the number of companies participating in the market for each
1326	class of insurance and the relative rate levels. The report
1327	shall also specify:
1328	1.  The number of rate filings made under paragraph (2)(j),
1329	the rate levels under those filings, and the market share
1330	affected by those filings.
1331	2.  The number of filings made on a file and use basis, the
1332	rate levels under those filings, and the market share affected
1333	by those filings.
1334	3.  The number of filings made on a use and file basis, the
1335	rate levels under those filings, and the market share affected
1336	by those filings.
1337	4.  Recommendations to promote competition in the insurance
1338	market and further protect insurance consumers.
1339	Section 9.  Paragraph (c) of subsection (3) of section
1340	627.0628, Florida Statutes, is amended to read:
1341	627.0628  Florida Commission on Hurricane Loss Projection
1342	Methodology; public records exemption; public meetings
1343	exemption.--
1344	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1345	(c)  With respect to a rate filing under s. 627.062, an
1346	insurer may employ actuarial methods, principles, standards,
1347	models, or output ranges found by the commission to be accurate
1348	or reliable to determine hurricane loss factors for use in a
1349	rate filing under s. 627.062. Such findings and factors are
1350	admissible and relevant in consideration of a rate filing by the
1351	office or in any arbitration or administrative or judicial
1352	review only if the office and the consumer advocate appointed
1353	pursuant to s. 627.0613 have a reasonable opportunity to review
1354	access to all of the basic assumptions and factors that were
1355	used in developing the actuarial methods, principles, standards,
1356	models, or output ranges. After review of the specific models by
1357	the commission, the office and the consumer advocate may not
1358	pose any questions generated from their respective reviews that
1359	duplicate or compromise the conclusions of the commission
1360	relative to the accuracy or reliability of the models in
1361	producing hurricane loss factors for use in a rate filing under
1362	s. 627.062, and are not precluded from disclosing such
1363	information in a rate proceeding.
1364	Section 10.  Section 627.06281, Florida Statutes, is
1365	amended to read:
1366	627.06281  Public hurricane loss projection model;
1367	reporting of data by insurers.--
1368	(1)  Within 30 days after a written request for loss data
1369	and associated exposure data by the office or a type I center
1370	within the State University System established to study
1371	mitigation, residential property insurers and licensed rating
1372	and advisory organizations that compile residential property
1373	insurance loss data shall provide loss data and associated
1374	exposure data for residential property insurance policies to the
1375	office or to a type I center within the State University System
1376	established to study mitigation, as directed by the office, for
1377	the purposes of developing, maintaining, and updating a public
1378	model for hurricane loss projections. The loss data and
1379	associated exposure data provided shall be in writing.
1380	(2)  The office may not use the public model for hurricane
1381	loss projection referred to in subsection (1) for any purpose
1382	under s. 627.062 or s. 627.351 until the model has been
1383	submitted to the Florida Commission on Hurricane Loss Projection
1384	Methodology for review under s. 627.0628 and the commission has
1385	found the model to be accurate and reliable pursuant to the same
1386	process and standards as the commission uses for the review of
1387	other hurricane loss projection models.
1388	Section 11.  Subsection (2) of section 627.0645, Florida
1389	Statutes, is amended to read:
1390	627.0645  Annual filings.--
1391	(2)(a)  Deviations filed by an insurer to any rating
1392	organization's base rate filing are not subject to this section.
1393	(b)  The office, after receiving a request to be exempted
1394	from the provisions of this section, may, for good cause due to
1395	insignificant numbers of policies in force or insignificant
1396	premium volume, exempt a company, by line of coverage, from
1397	filing rates or rate certification as required by this section.
1398	(c)  The office, after receiving a request to be exempted
1399	from the provisions of this section, shall exempt a company with
1400	less than 500 residential homeowner or mobile homeowner policies
1401	from filing rates or rate certification as required by this
1402	section.
1403	Section 12.  Subsection (6) of section 627.351, Florida
1404	Statutes, is amended to read:
1405	627.351  Insurance risk apportionment plans.--
1406	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1407	(a)1.a.  The Legislature finds that actual and threatened
1408	catastrophic losses to property in this state from hurricanes
1409	have caused insurers to be unwilling or unable to provide
1410	property insurance coverage to the extent sought and needed. It
1411	is in the public interest and a public purpose to assist in
1412	ensuring assuring that homestead property in the state is
1413	insured so as to facilitate the remediation, reconstruction, and
1414	replacement of damaged or destroyed property in order to reduce
1415	or avoid the negative effects otherwise resulting to the public
1416	health, safety, and welfare; to the economy of the state; and to
1417	the revenues of the state and local governments needed to
1418	provide for the public welfare. It is necessary, therefore, to
1419	provide property insurance to applicants who are in good faith
1420	entitled to procure insurance through the voluntary market but
1421	are unable to do so. The Legislature intends by this subsection
1422	that property insurance be provided and that it continues, as
1423	long as necessary, through an entity organized to achieve
1424	efficiencies and economies, while providing service to
1425	policyholders, applicants, and agents that is no less than the
1426	quality generally provided in the voluntary market, all toward
1427	the achievement of the foregoing public purposes. Because it is
1428	essential for the corporation to have the maximum financial
1429	resources to pay claims following a catastrophic hurricane, it
1430	is the intent of the Legislature that the income of the
1431	corporation be exempt from federal income taxation and that
1432	interest on the debt obligations issued by the corporation be
1433	exempt from federal income taxation.
1434	b.  The Legislature finds and declares that:
1435	(I)  The commitment of the state, as expressed in sub-
1436	subparagraph a., to providing a means of ensuring the
1437	availability of property insurance through a residual market
1438	mechanism is hereby reaffirmed.
1439	(II)  Despite legislative efforts to ensure that the
1440	residual market for property insurance is self-supporting to the
1441	greatest reasonable extent, residual market policyholders are to
1442	some degree subsidized by the general public through assessments
1443	on owners of property insured in the voluntary market and their
1444	insurers and through the potential use of general revenues of
1445	the state to eliminate or reduce residual market deficits.
1446	(III)  The degree of such subsidy is a matter of public
1447	policy. It is the intent of the Legislature to better control
1448	the subsidy through at least the following means:
1449	(A)  Restructuring the residual market mechanism to provide
1450	separate treatment of homestead and nonhomestead properties,
1451	with the intent of continuing to provide an insurance program
1452	with limited subsidies for homestead properties while providing
1453	a nonsubsidized insurance program for nonhomestead properties.
1454	(B)  Redefining the concept of rate adequacy in the
1455	subsidized residual market with the intent of ensuring a rate
1456	structure that will enable the subsidized residual market to be
1457	self-supporting except in the event of hurricane losses of a
1458	legislatively specified magnitude. It is the intent of the
1459	Legislature that the funding of the subsidized residual market
1460	be structured to be self-supporting up to the point of its 100-
1461	year probable maximum loss and that the funding be structured to
1462	make reliance on assessments or other sources of public funding
1463	necessary only in the event of a 100-year probable maximum loss
1464	or larger loss.
1465	2.  The Residential Property and Casualty Joint
1466	Underwriting Association originally created by this statute
1467	shall be known, as of July 1, 2002, as the Citizens Property
1468	Insurance Corporation. The corporation shall provide insurance
1469	for residential and commercial property, for applicants who are
1470	in good faith entitled, but are unable, to procure insurance
1471	through the voluntary market. The corporation shall operate
1472	pursuant to a plan of operation approved by order of the
1473	commission office. The plan is subject to continuous review by
1474	the commission office. The commission office may, by order,
1475	withdraw approval of all or part of a plan if the commission
1476	office determines that conditions have changed since approval
1477	was granted and that the purposes of the plan require changes in
1478	the plan. The corporation shall continue to operate pursuant to
1479	the plan of operation approved by the office until October 1,
1480	2006. For the purposes of this subsection, residential coverage
1481	includes both personal lines residential coverage, which
1482	consists of the type of coverage provided by homeowner's, mobile
1483	home owner's, dwelling, tenant's, condominium unit owner's, and
1484	similar policies, and commercial lines residential coverage,
1485	which consists of the type of coverage provided by condominium
1486	association, apartment building, and similar policies.
1487	3.  It is the intent of the Legislature that policyholders,
1488	applicants, and agents of the corporation receive service and
1489	treatment of the highest possible level but never less than that
1490	generally provided in the voluntary market. It also is intended
1491	that the corporation be held to service standards no less than
1492	those applied to insurers in the voluntary market by the office
1493	with respect to responsiveness, timeliness, customer courtesy,
1494	and overall dealings with policyholders, applicants, or agents
1495	of the corporation.
1496	(b)1.  All insurers authorized to write one or more subject
1497	lines of business in this state are subject to assessment by the
1498	corporation and, for the purposes of this subsection, are
1499	referred to collectively as "assessable insurers." Insurers
1500	writing one or more subject lines of business in this state
1501	pursuant to part VIII of chapter 626 are not assessable
1502	insurers, but insureds who procure one or more subject lines of
1503	business in this state pursuant to part VIII of chapter 626 are
1504	subject to assessment by the corporation and are referred to
1505	collectively as "assessable insureds." An authorized insurer's
1506	assessment liability shall begin on the first day of the
1507	calendar year following the year in which the insurer was issued
1508	a certificate of authority to transact insurance for subject
1509	lines of business in this state and shall terminate 1 year after
1510	the end of the first calendar year during which the insurer no
1511	longer holds a certificate of authority to transact insurance
1512	for subject lines of business in this state.
1513	2.a.  All revenues, assets, liabilities, losses, and
1514	expenses of the corporation shall be divided into four three
1515	separate accounts as follows:
1516	(I)  Three separate homestead accounts that may provide
1517	coverage only for homestead properties. The term "homestead
1518	property" means a residential property that has been granted a
1519	homestead exemption under chapter 196. The term also includes a
1520	property that is qualified for such exemption but has not
1521	applied for the exemption as of the date of issuance of the
1522	policy, provided the policyholder obtains the exemption within 1
1523	year after initial issuance of the policy. The term also
1524	includes an owner-occupied mobile or manufactured home as
1525	defined in s. 320.01 permanently affixed to real property
1526	regardless of whether the owner of the mobile or manufactured
1527	home is also the owner of the land on which the mobile or
1528	manufactured home is permanently affixed. However, the term does
1529	not include a mobile home that is being held for display by a
1530	licensed mobile home dealer or a licensed mobile home
1531	manufacturer and is not owner-occupied. For the purposes of this
1532	sub-sub-subparagraph, the term "homestead property" also
1533	includes property covered by tenant's insurance; commercial
1534	lines residential policies; any county, district, or municipal
1535	hospital, or hospital licensed by any not-for-profit corporation
1536	that is qualified under s. 501(c)(3) of the United State
1537	Internal Revenue Code; and continuing care retirement
1538	communities certified under chapter 651 that receives an ad
1539	valorem tax exemption under chapter 196. The accounts providing
1540	coverage only for homestead properties are:
1541	(A)(I)  A personal lines account for personal residential
1542	policies issued by the corporation or issued by the Residential
1543	Property and Casualty Joint Underwriting Association and renewed
1544	by the corporation that provide comprehensive, multiperil
1545	coverage on risks that are not located in areas eligible for
1546	coverage in the Florida Windstorm Underwriting Association as
1547	those areas were defined on January 1, 2002, and for such
1548	policies that do not provide coverage for the peril of wind on
1549	risks that are located in such areas;
1550	(B)(II)  A commercial lines account for commercial
1551	residential policies issued by the corporation or issued by the
1552	Residential Property and Casualty Joint Underwriting Association
1553	and renewed by the corporation that provide coverage for basic
1554	property perils on risks that are not located in areas eligible
1555	for coverage in the Florida Windstorm Underwriting Association
1556	as those areas were defined on January 1, 2002, and for such
1557	policies that do not provide coverage for the peril of wind on
1558	risks that are located in such areas; and
1559	(C)(III)  A high-risk account for personal residential
1560	policies and commercial residential and commercial
1561	nonresidential property policies issued by the corporation or
1562	transferred to the corporation that provide coverage for the
1563	peril of wind on risks that are located in areas eligible for
1564	coverage in the Florida Windstorm Underwriting Association as
1565	those areas were defined on January 1, 2002. The high-risk
1566	account must also include quota share primary insurance under
1567	subparagraph (c)2. The area eligible for coverage under the
1568	high-risk account also includes the area within Port Canaveral,
1569	which is bordered on the south by the City of Cape Canaveral,
1570	bordered on the west by the Banana River, and bordered on the
1571	north by Federal Government property. The office may remove
1572	territory from the area eligible for wind-only and quota share
1573	coverage if, after a public hearing, the office finds that
1574	authorized insurers in the voluntary market are willing and able
1575	to write sufficient amounts of personal and commercial
1576	residential coverage for all perils in the territory, including
1577	coverage for the peril of wind, such that risks covered by wind-
1578	only policies in the removed territory could be issued a policy
1579	by the corporation in either the personal lines or commercial
1580	lines account without a significant increase in the
1581	corporation's probable maximum loss in such account. Removal of
1582	territory from the area eligible for wind-only or quota share
1583	coverage does not alter the assignment of wind coverage written
1584	in such areas to the high-risk account.
1585	(II)(A)  A separate nonhomestead account for commercial
1586	nonresidential property policies and for all properties that
1587	otherwise meet all of the criteria for eligibility for coverage
1588	within one of the three homestead accounts described in sub-sub-
1589	subparagraph (I) but that do not meet the definition of
1590	homestead property specified in sub-sub-subparagraph (I). The
1591	nonhomestead account shall provide the same types of coverage as
1592	are provided by the three homestead accounts, including wind-
1593	only coverage in the high-risk account area. In order to be
1594	eligible for coverage in the nonhomestead account, at the
1595	initial issuance of the policy and at renewal the property owner
1596	shall provide the corporation with a sworn affidavit stating
1597	that the property has been rejected for coverage by at least
1598	three authorized insurers and at least three surplus lines
1599	insurers.
1600	(B)  An authorized insurer or approved insurer as defined
1601	in s. 626.914(2) may provide coverage to a nonhomestead property
1602	owner on an individual risk rate basis. Rates and forms of an
1603	authorized insurer for nonhomestead properties are not subject
1604	to ss. 627.062 and 627.0629, except s. 627.0629(2)(b). Such
1605	rates and forms are subject to all other applicable provisions
1606	of this code and rules adopted under this code. During the
1607	course of an insurer's market conduct examination, the office
1608	may review the rate for any nonhomestead property to determine
1609	if such rate is inadequate or unfairly discriminatory. Rates on
1610	nonhomestead property may be found inadequate by the office if
1611	they are clearly insufficient, together with the investment
1612	income attributable to the insurer, to sustain projected losses
1613	and expenses in the class of business to which such rates apply.
1614	Rates on nonhomestead property may also be found inadequate as
1615	to the premium charged to a risk or group of risks if discounts
1616	or credits are allowed that exceed a reasonable reflection of
1617	expense savings and reasonably expected loss experience from the
1618	risk or group of risks. Rates on nonhomestead property may be
1619	found to be unfairly discriminatory as to a risk or group of
1620	risks by the office if the application of premium discounts,
1621	credits, or surcharges among such risks does not bear a
1622	reasonable relationship to the expected loss and expense
1623	experience among the various risks. A rating plan, including
1624	discounts, credits, or surcharges on nonhomestead property, may
1625	also be found to be unfairly discriminatory if the plan fails to
1626	clearly and equitably reflect consideration of the
1627	policyholder's participation in a risk management program
1628	adjusted pursuant to s. 627.0625. The office may order an
1629	insurer to discontinue using a rate for new policies or upon
1630	renewal of a policy if the office finds the rate to be
1631	inadequate or unfairly discriminatory. Insurers shall maintain
1632	records and documentation relating to rates and forms subject to
1633	this sub-sub-sub-subparagraph for a period of at least 5 years
1634	after the effective date of the policy.
1635	b.  The three separate homestead accounts must be
1636	maintained as long as financing obligations entered into by the
1637	Florida Windstorm Underwriting Association or Residential
1638	Property and Casualty Joint Underwriting Association are
1639	outstanding, in accordance with the terms of the corresponding
1640	financing documents. When the financing obligations are no
1641	longer outstanding, in accordance with the terms of the
1642	corresponding financing documents, the corporation may use a
1643	single homestead account for all revenues, assets, liabilities,
1644	losses, and expenses of the corporation. All revenues, assets,
1645	liabilities, losses, and expenses attributable to the
1646	nonhomestead account shall be maintained separately.
1647	c.  Creditors of the Residential Property and Casualty
1648	Joint Underwriting Association shall have a claim against, and
1649	recourse to, the accounts referred to in sub-sub-sub-
1650	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II) and
1651	shall have no claim against, or recourse to, the account
1652	referred to in sub-sub-sub-subparagraph sub-sub-subparagraph
1653	a.(I)(C)(III). Creditors of the Florida Windstorm Underwriting
1654	Association shall have a claim against, and recourse to, the
1655	account referred to in sub-sub-sub-subparagraph sub-sub-
1656	subparagraph a.(I)(C)(III) and shall have no claim against, or
1657	recourse to, the accounts referred to in sub-sub-sub-
1658	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II).
1659	d.  Revenues, assets, liabilities, losses, and expenses not
1660	attributable to particular accounts shall be prorated among the
1661	accounts.
1662	e.  The Legislature finds that the revenues of the
1663	corporation are revenues that are necessary to meet the
1664	requirements set forth in documents authorizing the issuance of
1665	bonds under this subsection.
1666	f.  No part of the income of the corporation may inure to
1667	the benefit of any private person.
1668	3.  With respect to a deficit in any of the homestead
1669	accounts an account:
1670	a.  When the deficit incurred in a particular calendar year
1671	is not greater than 10 percent of the aggregate statewide direct
1672	written premium for the subject lines of business for the prior
1673	calendar year, the entire deficit shall be recovered through
1674	regular assessments of assessable insurers under paragraph (g)
1675	and assessable insureds.
1676	b.  When the deficit incurred in a particular calendar year
1677	exceeds 10 percent of the aggregate statewide direct written
1678	premium for the subject lines of business for the prior calendar
1679	year, the corporation shall levy regular assessments on
1680	assessable insurers under paragraph (g) and on assessable
1681	insureds in an amount equal to the greater of 10 percent of the
1682	deficit or 10 percent of the aggregate statewide direct written
1683	premium for the subject lines of business for the prior calendar
1684	year. Any remaining deficit shall be recovered through emergency
1685	assessments under sub-subparagraph d.
1686	c.  Each assessable insurer's share of the amount being
1687	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1688	be in the proportion that the assessable insurer's direct
1689	written premium for the subject lines of business for the year
1690	preceding the year in which the deficit is incurred assessment
1691	bears to the aggregate statewide direct written premium for the
1692	subject lines of business for that year. The assessment
1693	percentage applicable to each assessable insured is the ratio of
1694	the amount being assessed under sub-subparagraph a. or sub-
1695	subparagraph b. to the aggregate statewide direct written
1696	premium for the subject lines of business for the prior year.
1697	Assessments levied by the corporation on assessable insurers
1698	under sub-subparagraphs a. and b. shall be paid as required by
1699	the corporation's plan of operation and paragraph (g). Any
1700	assessment levied by the corporation on limited apportionment
1701	companies may be paid to the corporation by such companies on a
1702	monthly basis as the assessment are collected from insureds for
1703	a time period not to exceed 18 months. Notwithstanding any other
1704	provision in this subsection, the aggregate amount of a regular
1705	assessment levied in connection with a deficit incurred in a
1706	particular calendar year shall be reduced by the aggregate
1707	amount of the Citizens Property Insurance Corporation
1708	policyholder surcharge imposed under subparagraph (c)10.
1709	Assessments levied by the corporation on assessable insureds
1710	under sub-subparagraphs a. and b. shall be collected by the
1711	surplus lines agent at the time the surplus lines agent collects
1712	the surplus lines tax required by s. 626.932 and shall be paid
1713	to the Florida Surplus Lines Service Office at the time the
1714	surplus lines agent pays the surplus lines tax to the Florida
1715	Surplus Lines Service Office. Upon receipt of regular
1716	assessments from surplus lines agents, the Florida Surplus Lines
1717	Service Office shall transfer the assessments directly to the
1718	corporation as determined by the corporation.
1719	d.  Upon a determination by the board of governors that a
1720	deficit in an account exceeds the amount that will be recovered
1721	through regular assessments under sub-subparagraph a. or sub-
1722	subparagraph b., the board shall levy, after verification by the
1723	office, emergency assessments, for as many years as necessary to
1724	cover the deficits, to be collected by assessable insurers and
1725	the corporation and collected from assessable insureds upon
1726	issuance or renewal of policies for subject lines of business,
1727	excluding National Flood Insurance policies. The amount of the
1728	emergency assessment collected in a particular year shall be a
1729	uniform percentage of that year's direct written premium for
1730	subject lines of business and all accounts of the corporation,
1731	excluding National Flood Insurance Program policy premiums, as
1732	annually determined by the board and verified by the office. The
1733	office shall verify the arithmetic calculations involved in the
1734	board's determination within 30 days after receipt of the
1735	information on which the determination was based.
1736	Notwithstanding any other provision of law, the corporation and
1737	each assessable insurer that writes subject lines of business
1738	shall collect emergency assessments from its policyholders
1739	without such obligation being affected by any credit,
1740	limitation, exemption, or deferment. Emergency assessments
1741	levied by the corporation on assessable insureds shall be
1742	collected by the surplus lines agent at the time the surplus
1743	lines agent collects the surplus lines tax required by s.
1744	626.932 and shall be paid to the Florida Surplus Lines Service
1745	Office at the time the surplus lines agent pays the surplus
1746	lines tax to the Florida Surplus Lines Service Office. The
1747	emergency assessments so collected shall be transferred directly
1748	to the corporation on a periodic basis as determined by the
1749	corporation and shall be held by the corporation solely in the
1750	applicable account. The aggregate amount of emergency
1751	assessments levied for an account under this sub-subparagraph in
1752	any calendar year may not exceed the greater of 10 percent of
1753	the amount needed to cover the original deficit, plus interest,
1754	fees, commissions, required reserves, and other costs associated
1755	with financing of the original deficit, or 10 percent of the
1756	aggregate statewide direct written premium for subject lines of
1757	business and for all accounts of the corporation for the prior
1758	year, plus interest, fees, commissions, required reserves, and
1759	other costs associated with financing the original deficit.
1760	e.  The corporation may pledge the proceeds of assessments,
1761	projected recoveries from the Florida Hurricane Catastrophe
1762	Fund, other insurance and reinsurance recoverables, Citizens
1763	policyholder market equalization surcharges and other
1764	surcharges, and other funds available to the corporation as the
1765	source of revenue for and to secure bonds issued under paragraph
1766	(g), bonds or other indebtedness issued under subparagraph
1767	(c)3., or lines of credit or other financing mechanisms issued
1768	or created under this subsection, or to retire any other debt
1769	incurred as a result of deficits or events giving rise to
1770	deficits, or in any other way that the board determines will
1771	efficiently recover such deficits. The purpose of the lines of
1772	credit or other financing mechanisms is to provide additional
1773	resources to assist the corporation in covering claims and
1774	expenses attributable to a catastrophe. As used in this
1775	subsection, the term "assessments" includes regular assessments
1776	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1777	(g)1. and emergency assessments under sub-subparagraph d.
1778	Emergency assessments collected under sub-subparagraph d. are
1779	not part of an insurer's rates, are not premium, and are not
1780	subject to premium tax, fees, or commissions; however, failure
1781	to pay the emergency assessment shall be treated as failure to
1782	pay premium. The emergency assessments under sub-subparagraph d.
1783	shall continue as long as any bonds issued or other indebtedness
1784	incurred with respect to a deficit for which the assessment was
1785	imposed remain outstanding, unless adequate provision has been
1786	made for the payment of such bonds or other indebtedness
1787	pursuant to the documents governing such bonds or other
1788	indebtedness.
1789	f.  As used in this subsection, the term "subject lines of
1790	business" means insurance written by assessable insurers or
1791	procured by assessable insureds on real or personal property, as
1792	defined in s. 624.604, including insurance for fire, industrial
1793	fire, allied lines, farmowners multiperil, homeowners
1794	multiperil, commercial multiperil, and mobile homes, and
1795	including liability coverage on all such insurance, but
1796	excluding inland marine as defined in s. 624.607(3) and
1797	excluding vehicle insurance as defined in s. 624.605(1) other
1798	than insurance on mobile homes used as permanent dwellings.
1799	g.  The Florida Surplus Lines Service Office shall
1800	determine annually the aggregate statewide written premium in
1801	subject lines of business procured by assessable insureds and
1802	shall report that information to the corporation in a form and
1803	at a time the corporation specifies to ensure that the
1804	corporation can meet the requirements of this subsection and the
1805	corporation's financing obligations.
1806	h.  The Florida Surplus Lines Service Office shall verify
1807	the proper application by surplus lines agents of assessment
1808	percentages for regular assessments and emergency assessments
1809	levied under this subparagraph on assessable insureds and shall
1810	assist the corporation in ensuring the accurate, timely
1811	collection and payment of assessments by surplus lines agents as
1812	required by the corporation.
1813	4.  With respect to a deficit in the nonhomestead account
1814	or to any cash flow shortfall that the board determines will
1815	create an inability for the nonhomestead account to pay claims
1816	when due:
1817	a.  The board shall levy an immediate assessment against
1818	the premium of each nonhomestead account policyholder, expressed
1819	as a uniform percentage of the premium for the policy then in
1820	effect. The maximum amount of such assessment is 100 percent of
1821	such premium.
1822	b.  If the assessment under sub-subparagraph a. is
1823	insufficient to enable the account to pay claims and eliminate
1824	the deficit in the account, the board may levy an additional
1825	assessment to be collected at the time of any issuance or
1826	renewal of a nonhomestead account policy during the 1-year
1827	period following the levy of the assessment under sub-
1828	subparagraph a., expressed as a uniform percentage of the
1829	premium for the policy for the forthcoming policy period. The
1830	maximum amount of such assessment is 100 percent of such
1831	premium.
1832	c.  If the assessments under sub-subparagraphs a. and b.
1833	are insufficient to enable the account to pay claims and
1834	eliminate the deficit in the account, the board may make a loan
1835	from any of the homestead accounts to the nonhomestead account,
1836	subject to approval by the office and provided that such loan
1837	does not impair the financial status of any of the homestead
1838	accounts.
1839	5.  A policyholder in a nonhomestead account who has not
1840	paid a deficit assessment levied by the corporation shall be
1841	ineligible for coverage by a surplus lines insurer or authorized
1842	insurer.
1843	(c)  The plan of operation of the corporation:
1844	1.  Must provide for adoption of residential property and
1845	casualty insurance policy forms and commercial residential and
1846	nonresidential property insurance forms, which forms must be
1847	approved by the office prior to use. The corporation shall adopt
1848	the following policy forms:
1849	a.  Standard personal lines policy forms that are
1850	comprehensive multiperil policies providing full coverage of a
1851	residential property equivalent to the coverage provided in the
1852	private insurance market under an HO-3, HO-4, or HO-6 policy.
1853	b.  Basic personal lines policy forms that are policies
1854	similar to an HO-8 policy or a dwelling fire policy that provide
1855	coverage meeting the requirements of the secondary mortgage
1856	market, but which coverage is more limited than the coverage
1857	under a standard policy.
1858	c.  Commercial lines residential policy forms that are
1859	generally similar to the basic perils of full coverage
1860	obtainable for commercial residential structures in the admitted
1861	voluntary market.
1862	d.  Personal lines and commercial lines residential
1863	property insurance forms that cover the peril of wind only. The
1864	forms are applicable only to residential properties located in
1865	areas eligible for coverage under the high-risk account referred
1866	to in sub-subparagraph (b)2.a.
1867	e.  Commercial lines nonresidential property insurance
1868	forms that cover the peril of wind only. The forms are
1869	applicable only to nonresidential properties located in areas
1870	eligible for coverage under the high-risk account referred to in
1871	sub-subparagraph (b)2.a.
1872	f.  The corporation may adopt variations of the policy
1873	forms listed in sub-subparagraphs a.-e. that contain more
1874	restrictive coverage.
1875	2.a.  Must provide that the corporation adopt a program in
1876	which the corporation and authorized insurers enter into quota
1877	share primary insurance agreements for hurricane coverage, as
1878	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1879	property insurance forms for eligible risks which cover the
1880	peril of wind only. As used in this subsection, the term:
1881	(I)  "Quota share primary insurance" means an arrangement
1882	in which the primary hurricane coverage of an eligible risk is
1883	provided in specified percentages by the corporation and an
1884	authorized insurer. The corporation and authorized insurer are
1885	each solely responsible for a specified percentage of hurricane
1886	coverage of an eligible risk as set forth in a quota share
1887	primary insurance agreement between the corporation and an
1888	authorized insurer and the insurance contract. The
1889	responsibility of the corporation or authorized insurer to pay
1890	its specified percentage of hurricane losses of an eligible
1891	risk, as set forth in the quota share primary insurance
1892	agreement, may not be altered by the inability of the other
1893	party to the agreement to pay its specified percentage of
1894	hurricane losses. Eligible risks that are provided hurricane
1895	coverage through a quota share primary insurance arrangement
1896	must be provided policy forms that set forth the obligations of
1897	the corporation and authorized insurer under the arrangement,
1898	clearly specify the percentages of quota share primary insurance
1899	provided by the corporation and authorized insurer, and
1900	conspicuously and clearly state that neither the authorized
1901	insurer nor the corporation may be held responsible beyond its
1902	specified percentage of coverage of hurricane losses.
1903	(II)  "Eligible risks" means personal lines residential and
1904	commercial lines residential risks that meet the underwriting
1905	criteria of the corporation and are located in areas that were
1906	eligible for coverage by the Florida Windstorm Underwriting
1907	Association on January 1, 2002.
1908	b.  The corporation may enter into quota share primary
1909	insurance agreements with authorized insurers at corporation
1910	coverage levels of 90 percent and 50 percent.
1911	c.  If the corporation determines that additional coverage
1912	levels are necessary to maximize participation in quota share
1913	primary insurance agreements by authorized insurers, the
1914	corporation may establish additional coverage levels. However,
1915	the corporation's quota share primary insurance coverage level
1916	may not exceed 90 percent.
1917	d.  Any quota share primary insurance agreement entered
1918	into between an authorized insurer and the corporation must
1919	provide for a uniform specified percentage of coverage of
1920	hurricane losses, by county or territory as set forth by the
1921	corporation board, for all eligible risks of the authorized
1922	insurer covered under the quota share primary insurance
1923	agreement.
1924	e.  Any quota share primary insurance agreement entered
1925	into between an authorized insurer and the corporation is
1926	subject to review and approval by the office. However, such
1927	agreement shall be authorized only as to insurance contracts
1928	entered into between an authorized insurer and an insured who is
1929	already insured by the corporation for wind coverage.
1930	f.  For all eligible risks covered under quota share
1931	primary insurance agreements, the exposure and coverage levels
1932	for both the corporation and authorized insurers shall be
1933	reported by the corporation to the Florida Hurricane Catastrophe
1934	Fund. For all policies of eligible risks covered under quota
1935	share primary insurance agreements, the corporation and the
1936	authorized insurer shall maintain complete and accurate records
1937	for the purpose of exposure and loss reimbursement audits as
1938	required by Florida Hurricane Catastrophe Fund rules. The
1939	corporation and the authorized insurer shall each maintain
1940	duplicate copies of policy declaration pages and supporting
1941	claims documents.
1942	g.  The corporation board shall establish in its plan of
1943	operation standards for quota share agreements which ensure that
1944	there is no discriminatory application among insurers as to the
1945	terms of quota share agreements, pricing of quota share
1946	agreements, incentive provisions if any, and consideration paid
1947	for servicing policies or adjusting claims.
1948	h.  The quota share primary insurance agreement between the
1949	corporation and an authorized insurer must set forth the
1950	specific terms under which coverage is provided, including, but
1951	not limited to, the sale and servicing of policies issued under
1952	the agreement by the insurance agent of the authorized insurer
1953	producing the business, the reporting of information concerning
1954	eligible risks, the payment of premium to the corporation, and
1955	arrangements for the adjustment and payment of hurricane claims
1956	incurred on eligible risks by the claims adjuster and personnel
1957	of the authorized insurer. Entering into a quota sharing
1958	insurance agreement between the corporation and an authorized
1959	insurer shall be voluntary and at the discretion of the
1960	authorized insurer.
1961	3.  May provide that the corporation may employ or
1962	otherwise contract with individuals or other entities to provide
1963	administrative or professional services that may be appropriate
1964	to effectuate the plan. The corporation shall have the power to
1965	borrow funds, by issuing bonds or by incurring other
1966	indebtedness, and shall have other powers reasonably necessary
1967	to effectuate the requirements of this subsection, including,
1968	without limitation, the power to issue bonds and incur other
1969	indebtedness in order to refinance outstanding bonds or other
1970	indebtedness. The corporation may, but is not required to, seek
1971	judicial validation of its bonds or other indebtedness under
1972	chapter 75. The corporation may issue bonds or incur other
1973	indebtedness, or have bonds issued on its behalf by a unit of
1974	local government pursuant to subparagraph (g)2., in the absence
1975	of a hurricane or other weather-related event, upon a
1976	determination by the corporation, subject to approval by the
1977	office, that such action would enable it to efficiently meet the
1978	financial obligations of the corporation and that such
1979	financings are reasonably necessary to effectuate the
1980	requirements of this subsection. The corporation is authorized
1981	to take all actions needed to facilitate tax-free status for any
1982	such bonds or indebtedness, including formation of trusts or
1983	other affiliated entities. The corporation shall have the
1984	authority to pledge assessments, projected recoveries from the
1985	Florida Hurricane Catastrophe Fund, other reinsurance
1986	recoverables, market equalization and other surcharges, and
1987	other funds available to the corporation as security for bonds
1988	or other indebtedness. In recognition of s. 10, Art. I of the
1989	State Constitution, prohibiting the impairment of obligations of
1990	contracts, it is the intent of the Legislature that no action be
1991	taken whose purpose is to impair any bond indenture or financing
1992	agreement or any revenue source committed by contract to such
1993	bond or other indebtedness.
1994	4.a.  Must require that the corporation operate subject to
1995	the supervision and approval of a board of governors consisting
1996	of 8 individuals who are residents of this state, from different
1997	geographical areas of this state. The Governor, the Chief
1998	Financial Officer, the President of the Senate, and the Speaker
1999	of the House of Representatives shall each appoint two members
2000	of the board, effective August 1, 2005. At least one of the two
2001	members appointed by each appointing officer must have
2002	demonstrated expertise in insurance. The Chief Financial Officer
2003	shall designate one of the appointees as chair. All board
2004	members serve at the pleasure of the appointing officer. All
2005	board members, including the chair, must be appointed to serve
2006	for 3-year terms beginning annually on a date designated by the
2007	plan. Any board vacancy shall be filled for the unexpired term
2008	by the appointing officer. The Chief Financial Officer shall
2009	appoint a technical advisory group to provide information and
2010	advice to the board of governors in connection with the board's
2011	duties under this subsection. The executive director and senior
2012	managers of the corporation shall be engaged by the board, as
2013	recommended by the Chief Financial Officer, and serve at the
2014	pleasure of the board. The executive director is responsible for
2015	employing other staff as the corporation may require, subject to
2016	review and concurrence by the board and the Chief Financial
2017	Officer.
2018	b.  The board shall create a Market Accountability Advisory
2019	Committee to assist the corporation in developing awareness of
2020	its rates and its customer and agent service levels in
2021	relationship to the voluntary market insurers writing similar
2022	coverage. The members of the advisory committee shall consist of
2023	the following 11 persons, one of whom must be elected chair by
2024	the members of the committee: four representatives, one
2025	appointed by the Florida Association of Insurance Agents, one by
2026	the Florida Association of Insurance and Financial Advisors, one
2027	by the Professional Insurance Agents of Florida, and one by the
2028	Latin American Association of Insurance Agencies; three
2029	representatives appointed by the insurers with the three highest
2030	voluntary market share of residential property insurance
2031	business in the state; one representative from the Office of
2032	Insurance Regulation; one consumer appointed by the board who is
2033	insured by the corporation at the time of appointment to the
2034	committee; one representative appointed by the Florida
2035	Association of Realtors; and one representative appointed by the
2036	Florida Bankers Association. All members must serve for 3-year
2037	terms and may serve for consecutive terms. The committee shall
2038	report to the corporation at each board meeting on insurance
2039	market issues which may include rates and rate competition with
2040	the voluntary market; service, including policy issuance, claims
2041	processing, and general responsiveness to policyholders,
2042	applicants, and agents; and matters relating to depopulation.
2043	5.  Must provide a procedure for determining the
2044	eligibility of a risk for coverage, as follows:
2045	a.  Subject to the provisions of s. 627.3517, with respect
2046	to personal lines residential risks, if the risk is offered
2047	coverage from an authorized insurer at the insurer's approved
2048	rate under either a standard policy including wind coverage or,
2049	if consistent with the insurer's underwriting rules as filed
2050	with the office, a basic policy including wind coverage, the
2051	risk is not eligible for any policy issued by the corporation.
2052	If the risk is not able to obtain any such offer, the risk is
2053	eligible for either a standard policy including wind coverage or
2054	a basic policy including wind coverage issued by the
2055	corporation; however, if the risk could not be insured under a
2056	standard policy including wind coverage regardless of market
2057	conditions, the risk shall be eligible for a basic policy
2058	including wind coverage unless rejected under subparagraph 8.
2059	The corporation shall determine the type of policy to be
2060	provided on the basis of objective standards specified in the
2061	underwriting manual and based on generally accepted underwriting
2062	practices.
2063	(I)  If the risk accepts an offer of coverage through the
2064	market assistance plan or an offer of coverage through a
2065	mechanism established by the corporation before a policy is
2066	issued to the risk by the corporation or during the first 30
2067	days of coverage by the corporation, and the producing agent who
2068	submitted the application to the plan or to the corporation is
2069	not currently appointed by the insurer, the insurer shall:
2070	(A)  Pay to the producing agent of record of the policy,
2071	for the first year, an amount that is the greater of the
2072	insurer's usual and customary commission for the type of policy
2073	written or a fee equal to the usual and customary commission of
2074	the corporation; or
2075	(B)  Offer to allow the producing agent of record of the
2076	policy to continue servicing the policy for a period of not less
2077	than 1 year and offer to pay the agent the greater of the
2078	insurer's or the corporation's usual and customary commission
2079	for the type of policy written.
2080
2081	If the producing agent is unwilling or unable to accept
2082	appointment, the new insurer shall pay the agent in accordance
2083	with sub-sub-sub-subparagraph (A).
2084	(II)  When the corporation enters into a contractual
2085	agreement for a take-out plan, the producing agent of record of
2086	the corporation policy is entitled to retain any unearned
2087	commission on the policy, and the insurer shall:
2088	(A)  Pay to the producing agent of record of the
2089	corporation policy, for the first year, an amount that is the
2090	greater of the insurer's usual and customary commission for the
2091	type of policy written or a fee equal to the usual and customary
2092	commission of the corporation; or
2093	(B)  Offer to allow the producing agent of record of the
2094	corporation policy to continue servicing the policy for a period
2095	of not less than 1 year and offer to pay the agent the greater
2096	of the insurer's or the corporation's usual and customary
2097	commission for the type of policy written.
2098
2099	If the producing agent is unwilling or unable to accept
2100	appointment, the new insurer shall pay the agent in accordance
2101	with sub-sub-sub-subparagraph (A).
2102	b.  With respect to commercial lines residential risks, if
2103	the risk is offered coverage under a policy including wind
2104	coverage from an authorized insurer at its approved rate, the
2105	risk is not eligible for any policy issued by the corporation.
2106	If the risk is not able to obtain any such offer, the risk is
2107	eligible for a policy including wind coverage issued by the
2108	corporation.
2109	(I)  If the risk accepts an offer of coverage through the
2110	market assistance plan or an offer of coverage through a
2111	mechanism established by the corporation before a policy is
2112	issued to the risk by the corporation or during the first 30
2113	days of coverage by the corporation, and the producing agent who
2114	submitted the application to the plan or the corporation is not
2115	currently appointed by the insurer, the insurer shall:
2116	(A)  Pay to the producing agent of record of the policy,
2117	for the first year, an amount that is the greater of the
2118	insurer's usual and customary commission for the type of policy
2119	written or a fee equal to the usual and customary commission of
2120	the corporation; or
2121	(B)  Offer to allow the producing agent of record of the
2122	policy to continue servicing the policy for a period of not less
2123	than 1 year and offer to pay the agent the greater of the
2124	insurer's or the corporation's usual and customary commission
2125	for the type of policy written.
2126
2127	If the producing agent is unwilling or unable to accept
2128	appointment, the new insurer shall pay the agent in accordance
2129	with sub-sub-sub-subparagraph (A).
2130	(II)  When the corporation enters into a contractual
2131	agreement for a take-out plan, the producing agent of record of
2132	the corporation policy is entitled to retain any unearned
2133	commission on the policy, and the insurer shall:
2134	(A)  Pay to the producing agent of record of the
2135	corporation policy, for the first year, an amount that is the
2136	greater of the insurer's usual and customary commission for the
2137	type of policy written or a fee equal to the usual and customary
2138	commission of the corporation; or
2139	(B)  Offer to allow the producing agent of record of the
2140	corporation policy to continue servicing the policy for a period
2141	of not less than 1 year and offer to pay the agent the greater
2142	of the insurer's or the corporation's usual and customary
2143	commission for the type of policy written.
2144
2145	If the producing agent is unwilling or unable to accept
2146	appointment, the new insurer shall pay the agent in accordance
2147	with sub-sub-sub-subparagraph (A).
2148	c.  To preserve existing incentives for carriers to write
2149	dwellings in the voluntary market and not in the corporation,
2150	the corporation shall continue to offer authorized insurers,
2151	including insurers writing dwellings valued at $1 million or
2152	more, the same voluntary writing credits that were available on
2153	January 1, 2006, to carriers writing wind coverage for dwellings
2154	in the areas eligible for coverage in the high-risk account.
2155	d.  With respect to personal lines residential risks, if
2156	the risk is a dwelling with an insured value of $1 million or
2157	more, or if the risk is one that is excluded from the coverage
2158	to be provided by the condominium association under s.
2159	718.111(11)(b) and that is insured by the condominium unit owner
2160	for a combined dwelling and contents replacement cost of $1
2161	million or more, the risk is not eligible for any policy issued
2162	by the corporation. Rates and forms for personal lines
2163	residential risks not eligible for coverage by the corporation
2164	specified by this sub-subparagraph are not subject to ss.
2165	627.062 and 627.0629. Such rates and forms are subject to all
2166	other applicable provisions of this code and rules adopted under
2167	this code. During the course of an insurer's market conduct
2168	examination, the office may review the rate for any risk to
2169	which the provisions of this sub-subparagraph are applicable to
2170	determine if such rate is inadequate or unfairly discriminatory.
2171	Rates on personal lines residential risks not eligible for
2172	coverage by the corporation may be found inadequate by the
2173	office if they are clearly insufficient, together with the
2174	investment income attributable to such risks, to sustain
2175	projected losses and expenses in the class of business to which
2176	such rates apply. Rates on personal lines residential risks not
2177	eligible for coverage by the corporation may also be found
2178	inadequate as to the premium charged to a risk or group of risks
2179	if discounts or credits are allowed that exceed a reasonable
2180	reflection of expense savings and reasonably expected loss
2181	experience from the risk or group of risks. Rates on personal
2182	lines residential risks not eligible for coverage by the
2183	corporation may be found to be unfairly discriminatory as to a
2184	risk or group of risks by the office if the application of
2185	premium discounts, credits, or surcharges among such risks does
2186	not bear a reasonable relationship to the expected loss and
2187	expense experience among the various risks. A rating plan,
2188	including discounts, credits, or surcharges on personal lines
2189	residential risks not eligible for coverage by the corporation
2190	may also be found to be unfairly discriminatory if the plan
2191	fails to clearly and equitably reflect consideration of the
2192	policyholder's participation in a risk management program
2193	adjusted pursuant to s. 627.0625. The office may order an
2194	insurer to discontinue using a rate for new policies or upon
2195	renewal of a policy if the office finds the rate to be
2196	inadequate or unfairly discriminatory. Insurers must maintain
2197	records and documentation relating to rates and forms subject to
2198	this sub-subparagraph for a period of at least 5 years after the
2199	effective date of the policy.
2200	e.  For policies subject to nonrenewal as a result of the
2201	risk being no longer eligible for coverage pursuant to sub-
2202	subparagraph d., the corporation shall, directly or through the
2203	market assistance plan, make information from confidential
2204	underwriting and claims files of policyholders available only to
2205	licensed general lines agents who register with the corporation
2206	to receive such information according to the following
2207	procedures:
2208	(I)  By August 1, 2006, the corporation shall provide
2209	policyholders who are not eligible for renewal pursuant to sub-
2210	subparagraph d. the opportunity to request in writing, within 30
2211	days after the notification is sent, that information from their
2212	confidential underwriting and claims files not be released to
2213	licensed general lines agents registered pursuant to sub-sub-
2214	subparagraph e.(II);
2215	(II)  By August 1, 2006, the corporation shall make
2216	available to licensed general lines agents the registration
2217	procedures to be used to obtain confidential information from
2218	underwriting and claims files for policies not eligible for
2219	renewal pursuant to sub-subparagraph d. As a condition of
2220	registration, the corporation shall require the licensed general
2221	lines agent to attest that the agent has the experience and
2222	relationships with authorized or surplus lines carriers to
2223	attempt to offer replacement coverage for policies not eligible
2224	for renewal pursuant to sub-subparagraph d.
2225	(III)  By September 1, 2006, the corporation shall make
2226	available through a secured website to licensed general lines
2227	agents registered pursuant to sub-sub-subparagraph e.(II)
2228	application, rating, loss history, mitigation, and policy type
2229	information relating to all policies not eligible for renewal
2230	pursuant to sub-subparagraph d. and for which the policyholder
2231	has not requested the corporation withhold such information
2232	pursuant to sub-sub-subparagraph e.(I). The licensed general
2233	lines agent registered pursuant to sub-sub-subparagraph e.(II)
2234	may use such information to contact and assist the policyholder
2235	in securing replacement policies and the agent may disclose to
2236	the policyholder such information was obtained from the
2237	corporation.
2238	f.  With respect to nonhomestead property, eligibility must
2239	be determined in accordance with sub-sub-sub-subparagraph
2240	(b)2.a.(II)(A).
2241	6.  Must provide by July 1, 2007, that an application for
2242	coverage for a new policy is subject to a waiting period of 10
2243	days before coverage is effective, during which time the
2244	corporation shall make such application available for review by
2245	general lines agents and authorized property and casualty
2246	insurers. The board may approve exceptions that allow for
2247	coverage to be effective before the end of the 10-day waiting
2248	period, for coverage issued in conjunction with a real estate
2249	closing, and for such other exceptions as the board determines
2250	are necessary to prevent lapses in coverage.
2251	7.6.  Must include rules for classifications of risks and
2252	rates therefor.
2253	8.7.  Must provide that if premium and investment income
2254	for an account attributable to a particular calendar year are in
2255	excess of projected losses and expenses for the account
2256	attributable to that year, such excess shall be held in surplus
2257	in the account. Such surplus shall be available to defray
2258	deficits in that account as to future years and shall be used
2259	for that purpose prior to assessing assessable insurers and
2260	assessable insureds as to any calendar year.
2261	9.8.  Must provide objective criteria and procedures to be
2262	uniformly applied for all applicants in determining whether an
2263	individual risk is so hazardous as to be uninsurable. In making
2264	this determination and in establishing the criteria and
2265	procedures, the following shall be considered:
2266	a.  Whether the likelihood of a loss for the individual
2267	risk is substantially higher than for other risks of the same
2268	class; and
2269	b.  Whether the uncertainty associated with the individual
2270	risk is such that an appropriate premium cannot be determined.
2271
2272	The acceptance or rejection of a risk by the corporation shall
2273	be construed as the private placement of insurance, and the
2274	provisions of chapter 120 shall not apply.
2275	10.9.  Must provide that the corporation shall make its
2276	best efforts to procure catastrophe reinsurance at reasonable
2277	rates, to cover its projected 100-year probable maximum loss in
2278	the homestead accounts as determined by the board of governors.
2279	11.10.  Must provide that in the event of regular deficit
2280	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2281	(b)3.b., in the personal lines homestead account, the commercial
2282	lines residential homestead account, or the high-risk homestead
2283	account, the corporation shall levy upon corporation homestead
2284	account policyholders in its next rate filing, or by a separate
2285	rate filing solely for this purpose, a Citizens policyholder
2286	market equalization surcharge arising from a regular assessment
2287	in such account in a percentage equal to the total amount of
2288	such regular assessments divided by the aggregate statewide
2289	direct written premium for subject lines of business for the
2290	prior calendar year preceding the year in which the deficit to
2291	which the regular assessment related is incurred. Citizens
2292	policyholder Market equalization surcharges under this
2293	subparagraph are not considered premium and are not subject to
2294	commissions, fees, or premium taxes; however, failure to pay the
2295	Citizens policyholder a market equalization surcharge shall be
2296	treated as failure to pay premium. Notwithstanding any other
2297	provision of this section, for purposes of the Citizens
2298	policyholder surcharges to be levied pursuant to this
2299	subparagraph, the total amount of the regular assessment to
2300	which such Citizens policyholder surcharge relates shall be
2301	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
2302	12.11.  The policies issued by the corporation must provide
2303	that, if the corporation or the market assistance plan obtains
2304	an offer from an authorized insurer to cover the risk at its
2305	approved rates, the risk is no longer eligible for renewal
2306	through the corporation.
2307	13.12.  Corporation policies and applications must include
2308	a notice that the corporation policy could, under this section,
2309	be replaced with a policy issued by an authorized insurer that
2310	does not provide coverage identical to the coverage provided by
2311	the corporation or an insurer writing coverage pursuant to part
2312	VIII of chapter 626. The notice shall also specify that
2313	acceptance of corporation coverage creates a conclusive
2314	presumption that the applicant or policyholder is aware of this
2315	potential.
2316	14.13.  May establish, subject to approval by the office,
2317	different eligibility requirements and operational procedures
2318	for any line or type of coverage for any specified county or
2319	area if the board determines that such changes to the
2320	eligibility requirements and operational procedures are
2321	justified due to the voluntary market being sufficiently stable
2322	and competitive in such area or for such line or type of
2323	coverage and that consumers who, in good faith, are unable to
2324	obtain insurance through the voluntary market through ordinary
2325	methods would continue to have access to coverage from the
2326	corporation. When coverage is sought in connection with a real
2327	property transfer, such requirements and procedures shall not
2328	provide for an effective date of coverage later than the date of
2329	the closing of the transfer as established by the transferor,
2330	the transferee, and, if applicable, the lender.
2331	15.14.  Must provide that, with respect to the high-risk
2332	homestead account, any assessable insurer with a surplus as to
2333	policyholders of $25 million or less writing 25 percent or more
2334	of its total countrywide property insurance premiums in this
2335	state may petition the office, within the first 90 days of each
2336	calendar year, to qualify as a limited apportionment company. In
2337	no event shall a limited apportionment company be required to
2338	participate in the portion of any assessment, within the high-
2339	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
2340	subparagraph (b)3.b. in the aggregate which exceeds $50 million
2341	after payment of available high-risk account funds in any
2342	calendar year. However, a limited apportionment company shall
2343	collect from its policyholders any emergency assessment imposed
2344	under sub-subparagraph (b)3.d. The plan shall provide that, if
2345	the office determines that any regular assessment will result in
2346	an impairment of the surplus of a limited apportionment company,
2347	the office may direct that all or part of such assessment be
2348	deferred as provided in subparagraph (g)4. However, there shall
2349	be no limitation or deferment of an emergency assessment to be
2350	collected from policyholders under sub-subparagraph (b)3.d.
2351	16.15.  Must provide that the corporation appoint as its
2352	licensed agents only those agents who also hold an appointment
2353	as defined in s. 626.015(3) with an insurer who at the time of
2354	the agent's initial appointment by the corporation is authorized
2355	to write and is actually writing personal lines residential
2356	property coverage, commercial residential property coverage, or
2357	commercial nonresidential property coverage within the state.
2358	17.  Must provide, by July 1, 2007, a premium payment plan
2359	option to its policyholders which allows for quarterly and
2360	semiannual payment of premiums.
2361	18.  Must provide that the hurricane deductible for any
2362	property in the nonhomestead account with an insured value of
2363	$250,000 or more must be at least 5 percent of the insured
2364	value.
2365	19.  Must provide that the application for coverage under
2366	the nonhomestead account and the declaration page of each
2367	nonhomestead account policy include a statement in boldface 12-
2368	point type specifying that public subsidies do not support the
2369	corporation's coverage of nonhomestead property; that if the
2370	nonhomestead account of the corporation sustains a deficit or is
2371	unable to pay claims, the nonhomestead policyholder shall be
2372	subject to an immediate assessment in an amount up to 100
2373	percent of the premium and a further assessment upon renewal of
2374	the policy; and that the applicant or policyholder may wish to
2375	seek alternative coverage from an authorized insurer or surplus
2376	lines insurer that will not be subject to such potential
2377	assessments.
2378	20.  Must provide that the application for coverage under
2379	any of the homestead accounts and the declaration page of each
2380	homestead account policy include a statement in boldface 12-
2381	point type specifying that a false declaration of homestead
2382	status for purposes of obtaining coverage in any of the
2383	homestead accounts may constitute the offense of insurance
2384	fraud, as prohibited and punishable as a felony under s.
2385	817.234.
2386	21.  Must limit coverage on mobile homes or manufactured
2387	homes built prior to 1994 to actual cash value of the dwelling
2388	rather than replacement costs of the dwelling. The actual cash
2389	value of these dwellings may be determined by:
2390	a.  A residential appraisal no more than 1 year old from a
2391	Florida licensed appraiser which provides the Depreciated Value
2392	of Improvements; or
2393	b.  A purchase agreement or bill of sale no more than 1
2394	year old which reflects the purchase price less the land value.
2395	22.  Must provide that, notwithstanding any limitation to
2396	the contrary regarding coverage of residential structures,
2397	including, but not limited to, classification or location of
2398	risks, the corporation shall provide coverage to residential
2399	structures constructed after the adoption of the Florida
2400	Building Code for the full value of such structures. Premiums
2401	for such residential structures shall fully reflect all
2402	appropriate discounts, credits, or other rate differentials
2403	based upon actual experience or any other loss relativity
2404	studies available to the corporation.
2405	(d)1.  All prospective employees for senior management
2406	positions, as defined by the plan of operation, are subject to
2407	background checks as a prerequisite for employment. The office
2408	shall conduct background checks on such prospective employees
2409	pursuant to ss. 624.404(3), 624.34, and 628.261.
2410	2.  On or before July 1 of each year, employees of the
2411	corporation are required to sign and submit a statement
2412	attesting that they do not have a conflict of interest, as
2413	defined in part III of chapter 112. As a condition of
2414	employment, all prospective employees are required to sign and
2415	submit to the corporation a conflict-of-interest statement.
2416	3.  Senior managers and members of the board of governors
2417	are subject to the provisions of part III of chapter 112,
2418	including, but not limited to, the code of ethics and public
2419	disclosure and reporting of financial interests, pursuant to s.
2420	112.3145. Senior managers and board members are also required to
2421	file such disclosures with the Office of Insurance Regulation.
2422	The executive director of the corporation or his or her designee
2423	shall notify each newly appointed and existing appointed member
2424	of the board of governors and senior managers of his or her duty
2425	to comply with the reporting requirements of part III of chapter
2426	112. At least quarterly, the executive director or his or her
2427	designee shall submit to the Commission on Ethics a list of
2428	names of the senior managers and members of the board of
2429	governors that are subject to the public disclosure requirements
2430	under s. 112.3145.
2431	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
2432	other provision of law, an employee or board member may not
2433	knowingly accept, directly or indirectly, any gift or
2434	expenditure from a person or entity, or an employee or
2435	representative of such person or entity, that has a contractual
2436	relationship with the corporation or who is under consideration
2437	for a contract. An employee or board member that fails to comply
2438	with this subparagraph is subject to penalties provided under
2439	ss. 112.317 and 112.3173.
2440	5.  Any senior manager of the corporation who is employed
2441	on or after January 1, 2007, regardless of the date of hire, who
2442	subsequently retires or terminates employment is prohibited from
2443	representing another person or entity before the corporation for
2444	2 years after retirement or termination of employment from the
2445	corporation.
2446	6.  Any employee of the corporation who is employed on or
2447	after January 1, 2007, regardless of the date of hire, who
2448	subsequently retires or terminates employment is prohibited from
2449	having any employment or contractual relationship for 2 years
2450	with an insurer that has received a take-out bonus from the
2451	corporation.
2452	(e)  Purchases that equal or exceed $2,500, but are less
2453	than $25,000, shall be made by receipt of written quotes,
2454	written record of telephone quotes, or informal bids, whenever
2455	practical. The procurement of goods or services valued at or
2456	over $25,000 shall be subject to competitive solicitation,
2457	except in situations where the goods or services are provided by
2458	a sole source or are deemed an emergency purchase; the services
2459	are exempted from competitive solicitation requirements under s.
2460	287.057(5)(f); or the procurement of services is subject to s.
2461	627.3513. Justification for the sole-sourcing or emergency
2462	procurement must be documented. Contracts for goods or services
2463	valued at or over $100,000 are subject to approval by the board.
2464	(f)  The board shall determine whether it is more cost-
2465	effective and in the best interests of the corporation to use
2466	legal services provided by in-house attorneys employed by the
2467	corporation rather than contracting with outside counsel. In
2468	making such determination, the board shall document its findings
2469	and shall consider: the expertise needed; whether time
2470	commitments exceed in-house staff resources; whether local
2471	representation is needed; the travel, lodging and other costs
2472	associated with in-house representation; and such other factors
2473	that the board determines are relevant.
2474	(g)  The corporation may not retain a lobbyist to represent
2475	it before the legislative branch or executive branch. However,
2476	full-time employees of the corporation may register as lobbyists
2477	and represent the corporation before the legislative branch or
2478	executive branch.
2479	(h)1.  The Office of the Internal Auditor is established
2480	within the corporation to provide a central point for
2481	coordination of and responsibility for activities that promote
2482	accountability, integrity, and efficiency to the policyholders
2483	and to the taxpayers of this state. The internal auditor shall
2484	be appointed by the board of governors, shall report to and be
2485	under the general supervision of the board of governors, and is
2486	not subject to supervision by any employee of the corporation.
2487	Administrative staff and support shall be provided by the
2488	corporation. The internal auditor shall be appointed without
2489	regard to political affiliation. It is the duty and
2490	responsibility of the internal auditor to:
2491	a.  Provide direction for, supervise, conduct, and
2492	coordinate audits, investigations, and management reviews
2493	relating to the programs and operations of the corporation.
2494	b.  Conduct, supervise, or coordinate other activities
2495	carried out or financed by the corporation for the purpose of
2496	promoting efficiency in the administration of, or preventing and
2497	detecting fraud, abuse, and mismanagement in, its programs and
2498	operations.
2499	c.  Submit final audit reports, reviews, or investigative
2500	reports to the board of governors, the executive director, the
2501	members of the Financial Services Commission, the President of
2502	the Senate, and the Speaker of the House of Representatives.
2503	d.  Keep the board of governors informed concerning fraud,
2504	abuses, and internal control deficiencies relating to programs
2505	and operations administered or financed by the corporation,
2506	recommend corrective action, and report on the progress made in
2507	implementing corrective action.
2508	e.  Report expeditiously to the Department of Law
2509	Enforcement or other law enforcement agencies, as appropriate,
2510	whenever the internal auditor has reasonable grounds to believe
2511	there has been a violation of criminal law.
2512	2.  On or before February 15, the internal auditor shall
2513	prepare an annual report evaluating the effectiveness of the
2514	internal controls of the corporation and providing
2515	recommendations for corrective action, if necessary, and
2516	summarizing the audits, reviews, and investigations conducted by
2517	the office during the preceding fiscal year. The final report
2518	shall be furnished to the board of governors and the executive
2519	director, the President of the Senate, the Speaker of the House
2520	of Representatives, and the Financial Services Commission.
2521	(i)  The corporation shall establish a unit or division
2522	responsible for receiving and responding to consumer complaints,
2523	which unit or division is the sole responsibility of a senior
2524	manager of the corporation.
2525	(j)  The office shall conduct a comprehensive market
2526	conduct examination of the corporation every 2 years to
2527	determine compliance with its plan of operation and internal
2528	operations procedures. The first market conduct examination
2529	report shall be submitted to the President of the Senate and the
2530	Speaker of the House of Representatives no later than February
2531	1, 2009. Subsequent reports shall be submitted on or before
2532	February 1 every 2 years thereafter.
2533	(k)  The Auditor General shall conduct an operational audit
2534	of the corporations every 3 years to evaluate management's
2535	performance in administering laws, policies, and procedures
2536	governing the operations of the corporation in an efficient and
2537	effective manner. The scope of the review shall include, but is
2538	not limited to, evaluating claims handling, customer service,
2539	take-out programs and bonuses, financing arrangements,
2540	procurement of goods and services, internal controls, and the
2541	internal audit function.
2542	(l)(d)1.a.  It is the intent of the Legislature that the
2543	rates for coverage provided by the corporation be actuarially
2544	adequate sound and not competitive with approved rates charged
2545	in the admitted voluntary market, so that the corporation
2546	functions as a residual market mechanism to provide insurance
2547	only when the insurance cannot be procured in the voluntary
2548	market. Rates shall include a residual market risk load that
2549	reflects the concentrated exposure of the corporation and the
2550	impact of adverse selection as well as an appropriate
2551	catastrophe loading factor that reflects the actual catastrophic
2552	exposure of the corporation.
2553	b.  It is the intent of the Legislature to reaffirm the
2554	requirement of rate adequacy in the residual market. Recognizing
2555	that rates may comply with the intent expressed in sub-
2556	subparagraph a. and yet be inadequate and recognizing the public
2557	need to limit subsidies within the residual market, it is the
2558	further intent of the Legislature to establish statutory
2559	standards for rate adequacy. Such standards are intended to
2560	supplement the standard specified in s. 627.062(2)(e)3.,
2561	providing that rates are inadequate if they are clearly
2562	insufficient to sustain projected losses and expenses in the
2563	class of business to which they apply.
2564	2.  For each county, the average rates of the corporation
2565	for each line of business for personal lines residential
2566	policies excluding rates for wind-only policies shall be no
2567	lower than the average rates charged by the insurer that had the
2568	highest average rate in that county among the 20 insurers with
2569	the greatest total direct written premium in the state for that
2570	line of business in the preceding year, except that with respect
2571	to mobile home coverages, the average rates of the corporation
2572	shall be no lower than the average rates charged by the insurer
2573	that had the highest average rate in that county among the 5
2574	insurers with the greatest total written premium for mobile home
2575	owner's policies in the state in the preceding year.
2576	3.  Rates for personal lines residential wind-only policies
2577	must be actuarially adequate sound and not competitive with
2578	approved rates charged by authorized insurers. If the filing
2579	under this paragraph is made at least 90 days before the
2580	proposed effective date and the filing is not implemented during
2581	the office's review of the filing and any proceeding and
2582	judicial review, such filing shall be considered a file and use
2583	filing. In such case, the office shall finalize its review by
2584	issuance of a notice of intent to approve or a notice of intent
2585	to disapprove within 90 days after receipt of the filing. The
2586	notice of intent to approve and the notice of intent to
2587	disapprove constitute agency action for purposes of the
2588	Administrative Procedure Act. Requests for supporting
2589	information, requests for mathematical or mechanical
2590	corrections, or notification to the insurer by the office of its
2591	preliminary findings shall not toll the 90-day period during any
2592	such proceedings and subsequent judicial review. The rate shall
2593	be deemed approved if the office does not issue a notice of
2594	intent to approve or a notice of intent to disapprove within 90
2595	days after receipt of the filing. Corporation rate manuals shall
2596	include a rate surcharge for seasonal occupancy. To ensure that
2597	personal lines residential wind-only rates are not competitive
2598	with approved rates charged by authorized insurers, the
2599	corporation, in conjunction with the office, shall develop a
2600	wind-only ratemaking methodology, which methodology shall be
2601	contained in each rate filing made by the corporation with the
2602	office. If the office determines that the wind-only rates or
2603	rating factors filed by the corporation fail to comply with the
2604	wind-only ratemaking methodology provided for in this
2605	subsection, it shall so notify the corporation and require the
2606	corporation to amend its rates or rating factors to come into
2607	compliance within 90 days of notice from the office.
2608	4.a.  For the purposes of establishing a pilot program to
2609	evaluate issues relating to the availability and affordability
2610	of insurance in an area where historically there has been little
2611	market competition, the provisions of subparagraph 2. do not
2612	apply to coverage provided by the corporation in Monroe County
2613	if the office determines that a reasonable degree of competition
2614	does not exist for personal lines residential policies. The
2615	provisions of subparagraph 3. do not apply to coverage provided
2616	by the corporation in Monroe County if the office determines
2617	that a reasonable degree of competition does not exist for
2618	personal lines residential policies in the area of that county
2619	which is eligible for wind-only coverage. In this county, the
2620	rates for personal lines residential coverage shall be
2621	actuarially adequate sound and not excessive, inadequate, or
2622	unfairly discriminatory and are subject to the other provisions
2623	of the paragraph and s. 627.062. The commission shall adopt
2624	rules establishing the criteria for determining whether a
2625	reasonable degree of competition exists for personal lines
2626	residential policies in Monroe County. Any proposed rate
2627	increase filed by the corporation after May 1, 2006, but before
2628	October 1, 2006, for Monroe County based upon actuarial adequacy
2629	shall be implemented in equal amounts over a period of 3 years.
2630	b.  Pursuant to a report by March 1, 2006, the office shall
2631	submit a report to the Legislature providing an evaluation of
2632	the implementation of the pilot program affecting Monroe County
2633	and indicating that there has historically been a lack of a
2634	reasonable degree of competition in Monroe County, the office
2635	shall proceed as follows:
2636	(I)  The office shall order the corporation to charge only
2637	approved rates in effect for Monroe County on October 1, 2005,
2638	until any new rates are approved by the office.
2639	(II)  The office shall hold one or more public hearings,
2640	with at least 30 days' advance notice to interested persons, in
2641	Monroe County prior to the approval or implementation of a rate
2642	filing which proposes rates that exceed rates that were in
2643	effect for Monroe County on October 1, 2005.
2644	(III)  The office shall make available for public
2645	inspection 30 days prior to such hearings the office's written
2646	actuarial analysis if such analysis differs materially from that
2647	submitted by the corporation in support of the new rates filed.
2648	The office and the corporation shall also provide actuaries and
2649	qualified experts in attendance at such hearings to answer
2650	questions from actuaries or other qualified experts representing
2651	Monroe County or the public concerning the new rates filed.
2652	Additionally, the office shall provide for a technical hearing
2653	at which only actuaries and qualified experts representing the
2654	office, the corporation, Monroe County, or the Office of the
2655	Insurance Consumer Advocate may testify and at which the public
2656	may attend.
2657	(IV)  Notwithstanding any other provision of law, the
2658	office shall order the portion of any premium collected in 2006
2659	based on a rate charged on a use and file bases above that which
2660	was actuarially justified to be returned to such policyholder in
2661	the form of a credit or refund.
2662	5.  Rates for commercial lines coverage shall not be
2663	subject to the requirements of subparagraph 2., but shall be
2664	subject to all other requirements of this paragraph and s.
2665	627.062.
2666	6.a.  Nothing in this paragraph shall require or allow the
2667	corporation to adopt a rate that is inadequate under s. 627.062
2668	or under sub-subparagraph b. or sub-subparagraph c.
2669	b.  With respect to rates for coverage in any homestead
2670	account, a rate is deemed inadequate if the rate is not
2671	sufficient to generate, by means of cash flow, procurement of
2672	coverage under the Florida Hurricane Catastrophe Fund,
2673	reinsurance costs whether or not reinsurance is procured, and
2674	investment income, moneys sufficient to pay all claims and
2675	expenses reasonably expected to result from a 100-year probable
2676	maximum loss event without resort to any regular or emergency
2677	assessments, long-term debt, state revenues, or other funding
2678	sources that reflect any subsidy from persons or entities other
2679	than corporation homestead accounts policyholders.
2680	c.(I)  With respect to rates for coverage in the
2681	nonhomestead account, a rate is deemed inadequate if the rate is
2682	not sufficient to generate, by means of cash flow, procurement
2683	of coverage under the Florida Hurricane Catastrophe Fund,
2684	reinsurance costs, whether or not reinsurance is procured, and
2685	investment income and moneys sufficient to pay all claims and
2686	expenses reasonably expected to result from a 125-year probable
2687	maximum loss event without resort to any assessments, debt,
2688	state revenues, or other funding sources that reflect any
2689	subsidy from persons or entities other than corporation
2690	nonhomestead account policyholders. The rate initially filed by
2691	the corporation to comply with this sub-sub-subparagraph shall
2692	only by effective for 1 year.
2693	(II)  For the year following the initial year under sub-
2694	sub-subparagraph (I), the rate is deemed inadequate if the rate
2695	is not sufficient to generate moneys sufficient to pay all
2696	claims and expenses reasonably expected to result from a 150-
2697	year probable maximum loss event using the same criteria
2698	provided in sub-sub-subparagraph (I).
2699	(III)  For the 2 years following the year under sub-sub-
2700	subparagraph (II), the rate shall be based upon a 175-year and
2701	200-year probable maximum loss event, respectively.
2702	7.  The corporation shall certify to the office at least
2703	twice annually that its personal lines rates comply with the
2704	requirements of subparagraphs 1., and 2., and 6. If any
2705	adjustment in the rates or rating factors of the corporation is
2706	necessary to ensure such compliance, the corporation shall make
2707	and implement such adjustments and file its revised rates and
2708	rating factors with the office. If the office thereafter
2709	determines that the revised rates and rating factors fail to
2710	comply with the provisions of subparagraphs 1. and 2., it shall
2711	notify the corporation and require the corporation to amend its
2712	rates or rating factors in conjunction with its next rate
2713	filing. The office must notify the corporation by electronic
2714	means of any rate filing it approves for any insurer among the
2715	insurers referred to in subparagraph 2.
2716	8.  In addition to the rates otherwise determined pursuant
2717	to this paragraph, the corporation shall impose and collect an
2718	amount equal to the premium tax provided for in s. 624.509 to
2719	augment the financial resources of the corporation.
2720	9.a.  To assist the corporation in developing additional
2721	ratemaking methods to assure compliance with subparagraphs 1.
2722	and 4., the corporation shall appoint a rate methodology panel
2723	consisting of one person recommended by the Florida Association
2724	of Insurance Agents, one person recommended by the Professional
2725	Insurance Agents of Florida, one person recommended by the
2726	Florida Association of Insurance and Financial Advisors, one
2727	person recommended by the insurer with the highest voluntary
2728	market share of residential property insurance business in the
2729	state, one person recommended by the insurer with the second-
2730	highest voluntary market share of residential property insurance
2731	business in the state, one person recommended by an insurer
2732	writing commercial residential property insurance in this state,
2733	one person recommended by the Office of Insurance Regulation,
2734	and one board member designated by the board chairman, who shall
2735	serve as chairman of the panel.
2736	b.  By January 1, 2004, the rate methodology panel shall
2737	provide a report to the corporation of its findings and
2738	recommendations for the use of additional ratemaking methods and
2739	procedures, including the use of a rate equalization surcharge
2740	in an amount sufficient to assure that the total cost of
2741	coverage for policyholders or applicants to the corporation is
2742	sufficient to comply with subparagraph 1.
2743	c.  Within 30 days after such report, the corporation shall
2744	present to the President of the Senate, the Speaker of the House
2745	of Representatives, the minority party leaders of each house of
2746	the Legislature, and the chairs of the standing committees of
2747	each house of the Legislature having jurisdiction of insurance
2748	issues, a plan for implementing the additional ratemaking
2749	methods and an outline of any legislation needed to facilitate
2750	use of the new methods.
2751	d.  The plan must include a provision that producer
2752	commissions paid by the corporation shall not be calculated in
2753	such a manner as to include any rate equalization surcharge.
2754	However, without regard to the plan to be developed or its
2755	implementation, producer commissions paid by the corporation for
2756	each account, other than the quota share primary program, shall
2757	remain fixed as to percentage, effective rate, calculation, and
2758	payment method until January 1, 2004.
2759	9.10.  By January 1, 2004, The corporation shall provide
2760	develop a notice to policyholders or applicants that the rates
2761	of Citizens Property Insurance Corporation are intended to be
2762	higher than the rates of any admitted carrier and providing
2763	other information the corporation deems necessary to assist
2764	consumers in finding other voluntary admitted insurers willing
2765	to insure their property.
2766	(m)(e)  If coverage in an account is deactivated pursuant
2767	to paragraph (f), coverage through the corporation shall be
2768	reactivated by order of the office only under one of the
2769	following circumstances:
2770	1.  If the market assistance plan receives a minimum of 100
2771	applications for coverage within a 3-month period, or 200
2772	applications for coverage within a 1-year period or less for
2773	residential coverage, unless the market assistance plan provides
2774	a quotation from admitted carriers at their filed rates for at
2775	least 90 percent of such applicants. Any market assistance plan
2776	application that is rejected because an individual risk is so
2777	hazardous as to be uninsurable using the criteria specified in
2778	subparagraph (c)8. shall not be included in the minimum
2779	percentage calculation provided herein. In the event that there
2780	is a legal or administrative challenge to a determination by the
2781	office that the conditions of this subparagraph have been met
2782	for eligibility for coverage in the corporation, any eligible
2783	risk may obtain coverage during the pendency of such challenge.
2784	2.  In response to a state of emergency declared by the
2785	Governor under s. 252.36, the office may activate coverage by
2786	order for the period of the emergency upon a finding by the
2787	office that the emergency significantly affects the availability
2788	of residential property insurance.
2789	(n)(f)1.  The corporation shall file with the office
2790	quarterly statements of financial condition, an annual statement
2791	of financial condition, and audited financial statements in the
2792	manner prescribed by law. In addition, the corporation shall
2793	report to the office monthly on the types, premium, exposure,
2794	and distribution by county of its policies in force, and shall
2795	submit other reports as the office requires to carry out its
2796	oversight of the corporation.
2797	2.  The activities of the corporation shall be reviewed at
2798	least annually by the office to determine whether coverage shall
2799	be deactivated in an account on the basis that the conditions
2800	giving rise to its activation no longer exist.
2801	(o)(g)1.  The corporation shall certify to the office its
2802	needs for annual assessments as to a particular calendar year,
2803	and for any interim assessments that it deems to be necessary to
2804	sustain operations as to a particular year pending the receipt
2805	of annual assessments. Upon verification, the office shall
2806	approve such certification, and the corporation shall levy such
2807	annual or interim assessments. Such assessments shall be
2808	prorated as provided in paragraph (b). The corporation shall
2809	take all reasonable and prudent steps necessary to collect the
2810	amount of assessment due from each assessable insurer,
2811	including, if prudent, filing suit to collect such assessment.
2812	If the corporation is unable to collect an assessment from any
2813	assessable insurer, the uncollected assessments shall be levied
2814	as an additional assessment against the assessable insurers and
2815	any assessable insurer required to pay an additional assessment
2816	as a result of such failure to pay shall have a cause of action
2817	against such nonpaying assessable insurer. Assessments shall be
2818	included as an appropriate factor in the making of rates. The
2819	failure of a surplus lines agent to collect and remit any
2820	regular or emergency assessment levied by the corporation is
2821	considered to be a violation of s. 626.936 and subjects the
2822	surplus lines agent to the penalties provided in that section.
2823	2.  The governing body of any unit of local government, any
2824	residents of which are insured by the corporation, may issue
2825	bonds as defined in s. 125.013 or s. 166.101 from time to time
2826	to fund an assistance program, in conjunction with the
2827	corporation, for the purpose of defraying deficits of the
2828	corporation. In order to avoid needless and indiscriminate
2829	proliferation, duplication, and fragmentation of such assistance
2830	programs, any unit of local government, any residents of which
2831	are insured by the corporation, may provide for the payment of
2832	losses, regardless of whether or not the losses occurred within
2833	or outside of the territorial jurisdiction of the local
2834	government. Revenue bonds under this subparagraph may not be
2835	issued until validated pursuant to chapter 75, unless a state of
2836	emergency is declared by executive order or proclamation of the
2837	Governor pursuant to s. 252.36 making such findings as are
2838	necessary to determine that it is in the best interests of, and
2839	necessary for, the protection of the public health, safety, and
2840	general welfare of residents of this state and declaring it an
2841	essential public purpose to permit certain municipalities or
2842	counties to issue such bonds as will permit relief to claimants
2843	and policyholders of the corporation. Any such unit of local
2844	government may enter into such contracts with the corporation
2845	and with any other entity created pursuant to this subsection as
2846	are necessary to carry out this paragraph. Any bonds issued
2847	under this subparagraph shall be payable from and secured by
2848	moneys received by the corporation from emergency assessments
2849	under sub-subparagraph (b)3.d., and assigned and pledged to or
2850	on behalf of the unit of local government for the benefit of the
2851	holders of such bonds. The funds, credit, property, and taxing
2852	power of the state or of the unit of local government shall not
2853	be pledged for the payment of such bonds. If any of the bonds
2854	remain unsold 60 days after issuance, the office shall require
2855	all insurers subject to assessment to purchase the bonds, which
2856	shall be treated as admitted assets; each insurer shall be
2857	required to purchase that percentage of the unsold portion of
2858	the bond issue that equals the insurer's relative share of
2859	assessment liability under this subsection. An insurer shall not
2860	be required to purchase the bonds to the extent that the office
2861	determines that the purchase would endanger or impair the
2862	solvency of the insurer.
2863	3.a.  The corporation shall adopt one or more programs
2864	subject to approval by the office for the reduction of both new
2865	and renewal writings in the corporation. Beginning January 1,
2866	2008, any program the corporation adopts for the payment of
2867	bonuses to an insurer for each risk the insurer removes from the
2868	corporation shall comply with s. 627.3511(2) and may not exceed
2869	the amount referenced in s. 627.3511(2) for each risk removed.
2870	The corporation may consider any prudent and not unfairly
2871	discriminatory approach to reducing corporation writings, and
2872	may adopt a credit against assessment liability or other
2873	liability that provides an incentive for insurers to take risks
2874	out of the corporation and to keep risks out of the corporation
2875	by maintaining or increasing voluntary writings in counties or
2876	areas in which corporation risks are highly concentrated and a
2877	program to provide a formula under which an insurer voluntarily
2878	taking risks out of the corporation by maintaining or increasing
2879	voluntary writings will be relieved wholly or partially from
2880	assessments under sub-subparagraphs (b)3.a. and b. When the
2881	corporation enters into a contractual agreement for a take-out
2882	plan, the producing agent of record of the corporation policy is
2883	entitled to retain any unearned commission on such policy, and
2884	the insurer shall either:
2885	(I)  Pay to the producing agent of record of the policy,
2886	for the first year, an amount which is the greater of the
2887	insurer's usual and customary commission for the type of policy
2888	written or a policy fee equal to the usual and customary
2889	commission of the corporation; or
2890	(II)  Offer to allow the producing agent of record of the
2891	policy to continue servicing the policy for a period of not less
2892	than 1 year and offer to pay the agent the insurer's usual and
2893	customary commission for the type of policy written. If the
2894	producing agent is unwilling or unable to accept appointment by
2895	the new insurer, the new insurer shall pay the agent in
2896	accordance with sub-sub-subparagraph (I).
2897	b.  Any credit or exemption from regular assessments
2898	adopted under this subparagraph shall last no longer than the 3
2899	years following the cancellation or expiration of the policy by
2900	the corporation. With the approval of the office, the board may
2901	extend such credits for an additional year if the insurer
2902	guarantees an additional year of renewability for all policies
2903	removed from the corporation, or for 2 additional years if the
2904	insurer guarantees 2 additional years of renewability for all
2905	policies so removed.
2906	c.  There shall be no credit, limitation, exemption, or
2907	deferment from emergency assessments to be collected from
2908	policyholders pursuant to sub-subparagraph (b)3.d.
2909	4.  The plan shall provide for the deferment, in whole or
2910	in part, of the assessment of an assessable insurer, other than
2911	an emergency assessment collected from policyholders pursuant to
2912	sub-subparagraph (b)3.d., if the office finds that payment of
2913	the assessment would endanger or impair the solvency of the
2914	insurer. In the event an assessment against an assessable
2915	insurer is deferred in whole or in part, the amount by which
2916	such assessment is deferred may be assessed against the other
2917	assessable insurers in a manner consistent with the basis for
2918	assessments set forth in paragraph (b).
2919	(p)(h)  Nothing in this subsection shall be construed to
2920	preclude the issuance of residential property insurance coverage
2921	pursuant to part VIII of chapter 626.
2922	(q)(i)  There shall be no liability on the part of, and no
2923	cause of action of any nature shall arise against, any
2924	assessable insurer or its agents or employees, the corporation
2925	or its agents or employees, members of the board of governors or
2926	their respective designees at a board meeting, corporation
2927	committee members, or the office or its representatives, for any
2928	action taken by them in the performance of their duties or
2929	responsibilities under this subsection. Such immunity does not
2930	apply to:
2931	1.  Any of the foregoing persons or entities for any
2932	willful tort;
2933	2.  The corporation or its producing agents for breach of
2934	any contract or agreement pertaining to insurance coverage;
2935	3.  The corporation with respect to issuance or payment of
2936	debt; or
2937	4.  Any assessable insurer with respect to any action to
2938	enforce an assessable insurer's obligations to the corporation
2939	under this subsection.
2940	(r)(j)  For the purposes of s. 199.183(1), the corporation
2941	shall be considered a political subdivision of the state and
2942	shall be exempt from the corporate income tax. The premiums,
2943	assessments, investment income, and other revenue of the
2944	corporation are funds received for providing property insurance
2945	coverage as required by this subsection, paying claims for
2946	Florida citizens insured by the corporation, securing and
2947	repaying debt obligations issued by the corporation, and
2948	conducting all other activities of the corporation, and shall
2949	not be considered taxes, fees, licenses, or charges for services
2950	imposed by the Legislature on individuals, businesses, or
2951	agencies outside state government. Bonds and other debt
2952	obligations issued by or on behalf of the corporation are not to
2953	be considered "state bonds" within the meaning of s. 215.58(8).
2954	The corporation is not subject to the procurement provisions of
2955	chapter 287, and policies and decisions of the corporation
2956	relating to incurring debt, levying of assessments and the sale,
2957	issuance, continuation, terms and claims under corporation
2958	policies, and all services relating thereto, are not subject to
2959	the provisions of chapter 120. The corporation is not required
2960	to obtain or to hold a certificate of authority issued by the
2961	office, nor is it required to participate as a member insurer of
2962	the Florida Insurance Guaranty Association. However, the
2963	corporation is required to pay, in the same manner as an
2964	authorized insurer, assessments pledged by the Florida Insurance
2965	Guaranty Association to secure bonds issued or other
2966	indebtedness incurred to pay covered claims arising from insurer
2967	insolvencies caused by, or proximately related to, hurricane
2968	losses. It is the intent of the Legislature that the tax
2969	exemptions provided in this paragraph will augment the financial
2970	resources of the corporation to better enable the corporation to
2971	fulfill its public purposes. Any debt obligations bonds issued
2972	by the corporation, their transfer, and the income therefrom,
2973	including any profit made on the sale thereof, shall at all
2974	times be free from taxation of every kind by the state and any
2975	political subdivision or local unit or other instrumentality
2976	thereof; however, this exemption does not apply to any tax
2977	imposed by chapter 220 on interest, income, or profits on debt
2978	obligations owned by corporations other than the corporation.
2979	(s)(k)  Upon a determination by the office that the
2980	conditions giving rise to the establishment and activation of
2981	the corporation no longer exist, the corporation is dissolved.
2982	Upon dissolution, the assets of the corporation shall be applied
2983	first to pay all debts, liabilities, and obligations of the
2984	corporation, including the establishment of reasonable reserves
2985	for any contingent liabilities or obligations, and all remaining
2986	assets of the corporation shall become property of the state and
2987	shall be deposited in the Florida Hurricane Catastrophe Fund.
2988	However, no dissolution shall take effect as long as the
2989	corporation has bonds or other financial obligations outstanding
2990	unless adequate provision has been made for the payment of the
2991	bonds or other financial obligations pursuant to the documents
2992	authorizing the issuance of the bonds or other financial
2993	obligations.
2994	(t)(l)1.  Effective July 1, 2002, policies of the
2995	Residential Property and Casualty Joint Underwriting Association
2996	shall become policies of the corporation. All obligations,
2997	rights, assets and liabilities of the Residential Property and
2998	Casualty Joint Underwriting Association, including bonds, note
2999	and debt obligations, and the financing documents pertaining to
3000	them become those of the corporation as of July 1, 2002. The
3001	corporation is not required to issue endorsements or
3002	certificates of assumption to insureds during the remaining term
3003	of in-force transferred policies.
3004	2.  Effective July 1, 2002, policies of the Florida
3005	Windstorm Underwriting Association are transferred to the
3006	corporation and shall become policies of the corporation. All
3007	obligations, rights, assets, and liabilities of the Florida
3008	Windstorm Underwriting Association, including bonds, note and
3009	debt obligations, and the financing documents pertaining to them
3010	are transferred to and assumed by the corporation on July 1,
3011	2002. The corporation is not required to issue endorsement or
3012	certificates of assumption to insureds during the remaining term
3013	of in-force transferred policies.
3014	3.  The Florida Windstorm Underwriting Association and the
3015	Residential Property and Casualty Joint Underwriting Association
3016	shall take all actions as may be proper to further evidence the
3017	transfers and shall provide the documents and instruments of
3018	further assurance as may reasonably be requested by the
3019	corporation for that purpose. The corporation shall execute
3020	assumptions and instruments as the trustees or other parties to
3021	the financing documents of the Florida Windstorm Underwriting
3022	Association or the Residential Property and Casualty Joint
3023	Underwriting Association may reasonably request to further
3024	evidence the transfers and assumptions, which transfers and
3025	assumptions, however, are effective on the date provided under
3026	this paragraph whether or not, and regardless of the date on
3027	which, the assumptions or instruments are executed by the
3028	corporation. Subject to the relevant financing documents
3029	pertaining to their outstanding bonds, notes, indebtedness, or
3030	other financing obligations, the moneys, investments,
3031	receivables, choses in action, and other intangibles of the
3032	Florida Windstorm Underwriting Association shall be credited to
3033	the high-risk account of the corporation, and those of the
3034	personal lines residential coverage account and the commercial
3035	lines residential coverage account of the Residential Property
3036	and Casualty Joint Underwriting Association shall be credited to
3037	the personal lines account and the commercial lines account,
3038	respectively, of the corporation.
3039	4.  Effective July 1, 2002, a new applicant for property
3040	insurance coverage who would otherwise have been eligible for
3041	coverage in the Florida Windstorm Underwriting Association is
3042	eligible for coverage from the corporation as provided in this
3043	subsection.
3044	4.5.  The transfer of all policies, obligations, rights,
3045	assets, and liabilities from the Florida Windstorm Underwriting
3046	Association to the corporation and the renaming of the
3047	Residential Property and Casualty Joint Underwriting Association
3048	as the corporation shall in no way affect the coverage with
3049	respect to covered policies as defined in s. 215.555(2)(c)
3050	provided to these entities by the Florida Hurricane Catastrophe
3051	Fund. The coverage provided by the Florida Hurricane Catastrophe
3052	Fund to the Florida Windstorm Underwriting Association based on
3053	its exposures as of June 30, 2002, and each June 30 thereafter
3054	shall be redesignated as coverage for the high-risk account of
3055	the corporation. Notwithstanding any other provision of law, the
3056	coverage provided by the Florida Hurricane Catastrophe Fund to
3057	the Residential Property and Casualty Joint Underwriting
3058	Association based on its exposures as of June 30, 2002, and each
3059	June 30 thereafter shall be transferred to the personal lines
3060	account and the commercial lines account of the corporation.
3061	Notwithstanding any other provision of law, the high-risk
3062	account shall be treated, for all Florida Hurricane Catastrophe
3063	Fund purposes, as if it were a separate participating insurer
3064	with its own exposures, reimbursement premium, and loss
3065	reimbursement. Likewise, the personal lines and commercial lines
3066	accounts shall be viewed together, for all Florida Hurricane
3067	Catastrophe Fund purposes, as if the two accounts were one and
3068	represent a single, separate participating insurer with its own
3069	exposures, reimbursement premium, and loss reimbursement. The
3070	coverage provided by the Florida Hurricane Catastrophe Fund to
3071	the corporation shall constitute and operate as a full transfer
3072	of coverage from the Florida Windstorm Underwriting Association
3073	and Residential Property and Casualty Joint Underwriting to the
3074	corporation.
3075	(u)(m)  Notwithstanding any other provision of law:
3076	1.  The pledge or sale of, the lien upon, and the security
3077	interest in any rights, revenues, or other assets of the
3078	corporation created or purported to be created pursuant to any
3079	financing documents to secure any bonds or other indebtedness of
3080	the corporation shall be and remain valid and enforceable,
3081	notwithstanding the commencement of and during the continuation
3082	of, and after, any rehabilitation, insolvency, liquidation,
3083	bankruptcy, receivership, conservatorship, reorganization, or
3084	similar proceeding against the corporation under the laws of
3085	this state.
3086	2.  No such proceeding shall relieve the corporation of its
3087	obligation, or otherwise affect its ability to perform its
3088	obligation, to continue to collect, or levy and collect,
3089	assessments, Citizens Property Insurance Corporation
3090	policyholder market equalization or other surcharges under
3091	subparagraph (c)10., or any other rights, revenues, or other
3092	assets of the corporation pledged pursuant to any financing
3093	documents.
3094	3.  Each such pledge or sale of, lien upon, and security
3095	interest in, including the priority of such pledge, lien, or
3096	security interest, any such assessments, market equalization or
3097	other surcharges, or other rights, revenues, or other assets
3098	which are collected, or levied and collected, after the
3099	commencement of and during the pendency of, or after, any such
3100	proceeding shall continue unaffected by such proceeding. As used
3101	in this subsection, the term "financing documents" means any
3102	agreement or agreements, instrument or instruments, or other
3103	document or documents now existing or hereafter created
3104	evidencing any bonds or other indebtedness of the corporation or
3105	pursuant to which any such bonds or other indebtedness has been
3106	or may be issued and pursuant to which any rights, revenues, or
3107	other assets of the corporation are pledged or sold to secure
3108	the repayment of such bonds or indebtedness, together with the
3109	payment of interest on such bonds or such indebtedness, or the
3110	payment of any other obligation or financial product, as defined
3111	in the plan of operation of the corporation related to such
3112	bonds or indebtedness.
3113	4.  Any such pledge or sale of assessments, revenues,
3114	contract rights, or other rights or assets of the corporation
3115	shall constitute a lien and security interest, or sale, as the
3116	case may be, that is immediately effective and attaches to such
3117	assessments, revenues, or contract rights or other rights or
3118	assets, whether or not imposed or collected at the time the
3119	pledge or sale is made. Any such pledge or sale is effective,
3120	valid, binding, and enforceable against the corporation or other
3121	entity making such pledge or sale, and valid and binding against
3122	and superior to any competing claims or obligations owed to any
3123	other person or entity, including policyholders in this state,
3124	asserting rights in any such assessments, revenues, or contract
3125	rights or other rights or assets to the extent set forth in and
3126	in accordance with the terms of the pledge or sale contained in
3127	the applicable financing documents, whether or not any such
3128	person or entity has notice of such pledge or sale and without
3129	the need for any physical delivery, recordation, filing, or
3130	other action.
3131	5.  As long as the corporation has any bonds outstanding,
3132	the corporation may not file a voluntary petition under chapter
3133	9 of the federal Bankruptcy Code, or such corresponding chapter
3134	or sections as may be in effect from time to time, and any
3135	public officer and any organization, entity, or other person may
3136	not authorize the corporation to be or become a debtor under
3137	chapter 9 of the federal Bankruptcy Code, or such corresponding
3138	chapter or sections as may be in effect from time to time,
3139	during any such period.
3140	6.  If ordered by a court of competent jurisdiction, the
3141	corporation may assume policies or otherwise provide coverage
3142	for policyholders of an insurer placed in liquidation under
3143	chapter 631, under such forms, rates, terms, and conditions as
3144	the corporation deems appropriate, subject to approval by the
3145	office.
3146	(v)(n)1.  The following records of the corporation are
3147	confidential and exempt from the provisions of s. 119.07(1) and
3148	s. 24(a), Art. I of the State Constitution:
3149	a.  Underwriting files, except that a policyholder or an
3150	applicant shall have access to his or her own underwriting
3151	files.
3152	b.  Claims files, until termination of all litigation and
3153	settlement of all claims arising out of the same incident,
3154	although portions of the claims files may remain exempt, as
3155	otherwise provided by law. Confidential and exempt claims file
3156	records may be released to other governmental agencies upon
3157	written request and demonstration of need; such records held by
3158	the receiving agency remain confidential and exempt as provided
3159	for herein.
3160	c.  Records obtained or generated by an internal auditor
3161	pursuant to a routine audit, until the audit is completed, or if
3162	the audit is conducted as part of an investigation, until the
3163	investigation is closed or ceases to be active. An investigation
3164	is considered "active" while the investigation is being
3165	conducted with a reasonable, good faith belief that it could
3166	lead to the filing of administrative, civil, or criminal
3167	proceedings.
3168	d.  Matters reasonably encompassed in privileged attorney-
3169	client communications.
3170	e.  Proprietary information licensed to the corporation
3171	under contract and the contract provides for the confidentiality
3172	of such proprietary information.
3173	f.  All information relating to the medical condition or
3174	medical status of a corporation employee which is not relevant
3175	to the employee's capacity to perform his or her duties, except
3176	as otherwise provided in this paragraph. Information which is
3177	exempt shall include, but is not limited to, information
3178	relating to workers' compensation, insurance benefits, and
3179	retirement or disability benefits.
3180	g.  Upon an employee's entrance into the employee
3181	assistance program, a program to assist any employee who has a
3182	behavioral or medical disorder, substance abuse problem, or
3183	emotional difficulty which affects the employee's job
3184	performance, all records relative to that participation shall be
3185	confidential and exempt from the provisions of s. 119.07(1) and
3186	s. 24(a), Art. I of the State Constitution, except as otherwise
3187	provided in s. 112.0455(11).
3188	h.  Information relating to negotiations for financing,
3189	reinsurance, depopulation, or contractual services, until the
3190	conclusion of the negotiations.
3191	i.  Minutes of closed meetings regarding underwriting
3192	files, and minutes of closed meetings regarding an open claims
3193	file until termination of all litigation and settlement of all
3194	claims with regard to that claim, except that information
3195	otherwise confidential or exempt by law will be redacted.
3196
3197	When an authorized insurer is considering underwriting a risk
3198	insured by the corporation, relevant underwriting files and
3199	confidential claims files may be released to the insurer
3200	provided the insurer agrees in writing, notarized and under
3201	oath, to maintain the confidentiality of such files. When a file
3202	is transferred to an insurer that file is no longer a public
3203	record because it is not held by an agency subject to the
3204	provisions of the public records law. Underwriting files and
3205	confidential claims files may also be released to staff of and
3206	the board of governors of the market assistance plan established
3207	pursuant to s. 627.3515, who must retain the confidentiality of
3208	such files, except such files may be released to authorized
3209	insurers that are considering assuming the risks to which the
3210	files apply, provided the insurer agrees in writing, notarized
3211	and under oath, to maintain the confidentiality of such files.
3212	Finally, the corporation or the board or staff of the market
3213	assistance plan may make the following information obtained from
3214	underwriting files and confidential claims files available to
3215	licensed general lines insurance agents: name, address, and
3216	telephone number of the residential property owner or insured;
3217	location of the risk; rating information; loss history; and
3218	policy type. The receiving licensed general lines insurance
3219	agent must retain the confidentiality of the information
3220	received.
3221	2.  Portions of meetings of the corporation are exempt from
3222	the provisions of s. 286.011 and s. 24(b), Art. I of the State
3223	Constitution wherein confidential underwriting files or
3224	confidential open claims files are discussed. All portions of
3225	corporation meetings which are closed to the public shall be
3226	recorded by a court reporter. The court reporter shall record
3227	the times of commencement and termination of the meeting, all
3228	discussion and proceedings, the names of all persons present at
3229	any time, and the names of all persons speaking. No portion of
3230	any closed meeting shall be off the record. Subject to the
3231	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
3232	notes of any closed meeting shall be retained by the corporation
3233	for a minimum of 5 years. A copy of the transcript, less any
3234	exempt matters, of any closed meeting wherein claims are
3235	discussed shall become public as to individual claims after
3236	settlement of the claim.
3237	(w)(o)  It is the intent of the Legislature that the
3238	amendments to this subsection enacted in 2002 should, over time,
3239	reduce the probable maximum windstorm losses in the residual
3240	markets and should reduce the potential assessments to be levied
3241	on property insurers and policyholders statewide. In furtherance
3242	of this intent:
3243	1.  The board shall, on or before February 1 of each year,
3244	provide a report to the President of the Senate and the Speaker
3245	of the House of Representatives showing the reduction or
3246	increase in the 100-year probable maximum loss attributable to
3247	wind-only coverages and the quota share program under this
3248	subsection combined, as compared to the benchmark 100-year
3249	probable maximum loss of the Florida Windstorm Underwriting
3250	Association. For purposes of this paragraph, the benchmark 100-
3251	year probable maximum loss of the Florida Windstorm Underwriting
3252	Association shall be the calculation dated February 2001 and
3253	based on November 30, 2000, exposures. In order to ensure
3254	comparability of data, the board shall use the same methods for
3255	calculating its probable maximum loss as were used to calculate
3256	the benchmark probable maximum loss. The reduction or increase
3257	in probable maximum loss shall be calculated without taking into
3258	account the probable maximum loss attributable to the
3259	nonhomestead account.
3260	2.  Beginning February 1, 2013 2007, if the report under
3261	subparagraph 1. for any year indicates that the 100-year
3262	probable maximum loss attributable to wind-only coverages and
3263	the quota share program combined does not reflect a reduction of
3264	at least 25 percent from the benchmark, the board shall reduce
3265	the boundaries of the high-risk area eligible for wind-only
3266	coverages under this subsection in a manner calculated to reduce
3267	such probable maximum loss to an amount at least 25 percent
3268	below the benchmark.
3269	3.  Beginning February 1, 2018 2012, if the report under
3270	subparagraph 1. for any year indicates that the 100-year
3271	probable maximum loss attributable to wind-only coverages and
3272	the quota share program combined does not reflect a reduction of
3273	at least 50 percent from the benchmark, the boundaries of the
3274	high-risk area eligible for wind-only coverages under this
3275	subsection shall be reduced by the elimination of any area that
3276	is not seaward of a line 1,000 feet inland from the Intracoastal
3277	Waterway.
3278	(x)(p)  In enacting the provisions of this section, the
3279	Legislature recognizes that both the Florida Windstorm
3280	Underwriting Association and the Residential Property and
3281	Casualty Joint Underwriting Association have entered into
3282	financing arrangements that obligate each entity to service its
3283	debts and maintain the capacity to repay funds secured under
3284	these financing arrangements. It is the intent of the
3285	Legislature that nothing in this section be construed to
3286	compromise, diminish, or interfere with the rights of creditors
3287	under such financing arrangements. It is further the intent of
3288	the Legislature to preserve the obligations of the Florida
3289	Windstorm Underwriting Association and Residential Property and
3290	Casualty Joint Underwriting Association with regard to
3291	outstanding financing arrangements, with such obligations
3292	passing entirely and unchanged to the corporation and,
3293	specifically, to the applicable account of the corporation. So
3294	long as any bonds, notes, indebtedness, or other financing
3295	obligations of the Florida Windstorm Underwriting Association or
3296	the Residential Property and Casualty Joint Underwriting
3297	Association are outstanding, under the terms of the financing
3298	documents pertaining to them, the governing board of the
3299	corporation shall have and shall exercise the authority to levy,
3300	charge, collect, and receive all premiums, assessments,
3301	surcharges, charges, revenues, and receipts that the
3302	associations had authority to levy, charge, collect, or receive
3303	under the provisions of subsection (2) and this subsection,
3304	respectively, as they existed on January 1, 2002, to provide
3305	moneys, without exercise of the authority provided by this
3306	subsection, in at least the amounts, and by the times, as would
3307	be provided under those former provisions of subsection (2) or
3308	this subsection, respectively, so that the value, amount, and
3309	collectability of any assets, revenues, or revenue source
3310	pledged or committed to, or any lien thereon securing such
3311	outstanding bonds, notes, indebtedness, or other financing
3312	obligations will not be diminished, impaired, or adversely
3313	affected by the amendments made by this act and to permit
3314	compliance with all provisions of financing documents pertaining
3315	to such bonds, notes, indebtedness, or other financing
3316	obligations, or the security or credit enhancement for them, and
3317	any reference in this subsection to bonds, notes, indebtedness,
3318	financing obligations, or similar obligations, of the
3319	corporation shall include like instruments or contracts of the
3320	Florida Windstorm Underwriting Association and the Residential
3321	Property and Casualty Joint Underwriting Association to the
3322	extent not inconsistent with the provisions of the financing
3323	documents pertaining to them.
3324	(y)(q)  The corporation shall not require the securing of
3325	flood insurance as a condition of coverage if the insured or
3326	applicant executes a form approved by the office affirming that
3327	flood insurance is not provided by the corporation and that if
3328	flood insurance is not secured by the applicant or insured in
3329	addition to coverage by the corporation, the risk will not be
3330	covered for flood damage. A corporation policyholder electing
3331	not to secure flood insurance and executing a form as provided
3332	herein making a claim for water damage against the corporation
3333	shall have the burden of proving the damage was not caused by
3334	flooding. Notwithstanding other provisions of this subsection,
3335	the corporation may deny coverage to an applicant or insured who
3336	refuses to execute the form described herein.
3337	(z)(r)  A salaried employee of the corporation who performs
3338	policy administration services subsequent to the effectuation of
3339	a corporation policy is not required to be licensed as an agent
3340	under the provisions of s. 626.112.
3341	(aa)(s)  The transition to homestead and nonhomestead
3342	accounts shall begin on October 1, 2006. A policy issued on or
3343	after that date shall be issued in the applicable homestead
3344	account or the nonhomestead account, based upon whether the
3345	property constitutes homestead property as provided in
3346	subparagraph (b)2. A policy in effect on October 1, 2006, shall
3347	be placed in the applicable homestead account or the
3348	nonhomestead account, based upon whether the property
3349	constitutes homestead property as provided in subparagraph
3350	(b)2., upon the first renewal of such policy after October 1,
3351	2006.
3352	(bb)(u)  An employee of the corporation shall notify the
3353	Division of Insurance Fraud within 48 hours after having
3354	information that would lead a reasonable person to suspect that
3355	fraud may have been committed by any employee of the
3356	corporation.
3357	(cc)(v)  By February 1, 2007, the corporation shall submit
3358	a report to the President of the Senate, the Speaker of the
3359	House of Representatives, the minority party leaders of the
3360	Senate and the House of Representatives, and the chairs of the
3361	standing committees of the Senate and the House of
3362	Representatives having jurisdiction over matters relating to
3363	property and casualty insurance. In preparing the report, the
3364	corporation shall consult with the Office of Insurance
3365	Regulation, the Department of Financial Services, and any other
3366	party the corporation determines is appropriate. The report
3367	shall include findings and recommendations on the feasibility of
3368	requiring authorized insurers that issue and service personal
3369	and commercial residential policies and commercial
3370	nonresidential policies that provide coverage for basic property
3371	perils except for the peril of wind to issue and service for a
3372	fee personal and commercial residential policies and commercial
3373	nonresidential policies providing coverage for the peril of wind
3374	issued by the corporation. The report shall include:
3375	1.  The expense savings to the corporation of issuing and
3376	servicing such policies as determined through a cost benefit
3377	analysis.
3378	2.  The expenses and liability to authorized insurers
3379	associated with issuing and servicing such policies.
3380	3.  The impact on service to policyholders of the
3381	corporation relating to issuing and servicing such policies.
3382	4.  The impact on the producing agent of the corporation of
3383	issuing and servicing such policies.
3384	5.  Recommendations as to the amount of the fee that should
3385	be paid to authorized insurers for issuing and servicing such
3386	policies.
3387	6.  The impact issuing and servicing such policies will
3388	have on the corporation's number of policies, total insured
3389	value, and probable maximum loss.
3390	(dd)(w)  There shall be no liability on the part of, and no
3391	cause of action of any nature shall arise against, producing
3392	agents of record of the corporation or employees of such agents
3393	for insolvency of any take-out insurer.
3394	(ee)(x)  The Legislature finds that the total area eligible
3395	for the high-risk account of the corporation has a material
3396	impact on the availability of wind coverage from the voluntary
3397	admitted market, deficits of the corporation, assessments to be
3398	levied on property insurers and policyholders statewide, the
3399	ability and willingness of authorized insurers to write wind
3400	coverage in the high-risk areas, the probable maximum windstorm
3401	losses of the corporation, general commerce in coastal areas,
3402	and the overall financial condition of the state. Therefore, in
3403	furtherance of these findings and intent:
3404	1.  The High Risk Eligibility Panel is created.
3405	2.  The members of the panel shall be appointed as follows:
3406	a.  The board shall appoint two board members.
3407	b.  The Governor shall appoint one member.
3408	c.  The Chief Financial Officer shall appoint one member.
3409	d.  The Commissioner of Insurance Regulation shall appoint
3410	a representative of the office to serve as a member.
3411	e.  The President of the Senate shall appoint one member.
3412	f.  The Speaker of the House of Representatives shall
3413	appoint one member.
3414
3415	Members of the panel must be residents of this state with
3416	insurance expertise. Members shall elect a chair and shall serve
3417	3-year terms each. The panel shall operate independently of any
3418	state agency and shall be administered by the corporation. The
3419	panel shall make an annual report to the President of the Senate
3420	and the Speaker of the House of Representatives on or before
3421	February 1 of each year recommending the areas that should be
3422	eligible for the high-risk account of the corporation. Members
3423	shall not receive compensation and are not entitled to receive
3424	reimbursement for per diem and travel expenses as provided in s.
3425	112.061, except for any panel member who is a state employee.
3426	3.  The Legislature's intent provided in subparagraphs
3427	(a)1. and 2. shall provide guidance for the panel to use in the
3428	panel's recommendations to the Legislature required in
3429	subparagraph 1. The panel shall consider the following factors
3430	in fulfilling its responsibilities under this paragraph:
3431	a.  The number of commercial risks in a given area that are
3432	unable to find wind coverage from the voluntary admitted market.
3433	b.  Reports from members of the mortgage industry
3434	indicating difficulty in finding forced placed policies for
3435	commercial wind coverage.
3436	c.  The number of approved excess and surplus lines
3437	carriers certifying an unwillingness to provide commercial wind
3438	coverage similar to that approved for use by the office for the
3439	voluntary admitted market.
3440	d.  Other relevant factors.
3441
3442	The office and the corporation shall provide the panel with any
3443	information the panel considers necessary to determine areas
3444	eligible for the high-risk account of the corporation. For the
3445	purpose of making accurate determinations for areas eligible for
3446	the high-risk account of the corporation, the panel may
3447	interview and request and receive information from residents of
3448	this state in areas impacted by this paragraph, including, but
3449	not limited to, insurance agents, insurance companies,
3450	actuaries, and other insurance professionals. Upon request of
3451	the panel, the office may conduct public hearings in areas that
3452	may be impacted by the panel's recommendations.
3453	4.  Notwithstanding other provisions of this paragraph, the
3454	panel shall conduct an analysis to determine the areas to be
3455	eligible for the high-risk account of the corporation for any
3456	county that contains an eligible area extending more than 2
3457	miles from the coast, any coastal county that does not have
3458	areas designated as eligible for the high-risk account, and
3459	counties with barrier islands whether or not such islands or
3460	portions of such islands are currently eligible for the high
3461	risk account. The panel shall submit a report, including its
3462	analysis, to the office and to the corporation by November 30,
3463	2006. The report shall specify changes to the areas eligible for
3464	the high-risk account for such affected counties based on its
3465	analysis.
3466	Section 13.  Effective January 1, 2007, paragraph (c) of
3467	subsection (6) of section 627.351, Florida Statutes, as amended
3468	by this act, is amended to read:
3469	627.351  Insurance risk apportionment plans.--
3470	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
3471	(c)  The plan of operation of the corporation:
3472	1.  Must provide for adoption of residential property and
3473	casualty insurance policy forms and commercial residential and
3474	nonresidential property insurance forms, which forms must be
3475	approved by the office prior to use. The corporation shall adopt
3476	the following policy forms:
3477	a.  Standard personal lines policy forms that are
3478	comprehensive multiperil policies providing full coverage of a
3479	residential property equivalent to the coverage provided in the
3480	private insurance market under an HO-3, HO-4, or HO-6 policy.
3481	b.  Basic personal lines policy forms that are policies
3482	similar to an HO-8 policy or a dwelling fire policy that provide
3483	coverage meeting the requirements of the secondary mortgage
3484	market, but which coverage is more limited than the coverage
3485	under a standard policy.
3486	c.  Commercial lines residential policy forms that are
3487	generally similar to the basic perils of full coverage
3488	obtainable for commercial residential structures in the admitted
3489	voluntary market.
3490	d.  Personal lines and commercial lines residential
3491	property insurance forms that cover the peril of wind only. The
3492	forms are applicable only to residential properties located in
3493	areas eligible for coverage under the high-risk account referred
3494	to in sub-subparagraph (b)2.a.
3495	e.  Commercial lines nonresidential property insurance
3496	forms that cover the peril of wind only. The forms are
3497	applicable only to nonresidential properties located in areas
3498	eligible for coverage under the high-risk account referred to in
3499	sub-subparagraph (b)2.a.
3500	f.  The corporation may adopt variations of the policy
3501	forms listed in sub-subparagraphs a.-e. that contain more
3502	restrictive coverage.
3503	2.a.  Must provide that the corporation adopt a program in
3504	which the corporation and authorized insurers enter into quota
3505	share primary insurance agreements for hurricane coverage, as
3506	defined in s. 627.4025(2)(a), for eligible risks, and adopt
3507	property insurance forms for eligible risks which cover the
3508	peril of wind only. As used in this subsection, the term:
3509	(I)  "Quota share primary insurance" means an arrangement
3510	in which the primary hurricane coverage of an eligible risk is
3511	provided in specified percentages by the corporation and an
3512	authorized insurer. The corporation and authorized insurer are
3513	each solely responsible for a specified percentage of hurricane
3514	coverage of an eligible risk as set forth in a quota share
3515	primary insurance agreement between the corporation and an
3516	authorized insurer and the insurance contract. The
3517	responsibility of the corporation or authorized insurer to pay
3518	its specified percentage of hurricane losses of an eligible
3519	risk, as set forth in the quota share primary insurance
3520	agreement, may not be altered by the inability of the other
3521	party to the agreement to pay its specified percentage of
3522	hurricane losses. Eligible risks that are provided hurricane
3523	coverage through a quota share primary insurance arrangement
3524	must be provided policy forms that set forth the obligations of
3525	the corporation and authorized insurer under the arrangement,
3526	clearly specify the percentages of quota share primary insurance
3527	provided by the corporation and authorized insurer, and
3528	conspicuously and clearly state that neither the authorized
3529	insurer nor the corporation may be held responsible beyond its
3530	specified percentage of coverage of hurricane losses.
3531	(II)  "Eligible risks" means personal lines residential and
3532	commercial lines residential risks that meet the underwriting
3533	criteria of the corporation and are located in areas that were
3534	eligible for coverage by the Florida Windstorm Underwriting
3535	Association on January 1, 2002.
3536	b.  The corporation may enter into quota share primary
3537	insurance agreements with authorized insurers at corporation
3538	coverage levels of 90 percent and 50 percent.
3539	c.  If the corporation determines that additional coverage
3540	levels are necessary to maximize participation in quota share
3541	primary insurance agreements by authorized insurers, the
3542	corporation may establish additional coverage levels. However,
3543	the corporation's quota share primary insurance coverage level
3544	may not exceed 90 percent.
3545	d.  Any quota share primary insurance agreement entered
3546	into between an authorized insurer and the corporation must
3547	provide for a uniform specified percentage of coverage of
3548	hurricane losses, by county or territory as set forth by the
3549	corporation board, for all eligible risks of the authorized
3550	insurer covered under the quota share primary insurance
3551	agreement.
3552	e.  Any quota share primary insurance agreement entered
3553	into between an authorized insurer and the corporation is
3554	subject to review and approval by the office. However, such
3555	agreement shall be authorized only as to insurance contracts
3556	entered into between an authorized insurer and an insured who is
3557	already insured by the corporation for wind coverage.
3558	f.  For all eligible risks covered under quota share
3559	primary insurance agreements, the exposure and coverage levels
3560	for both the corporation and authorized insurers shall be
3561	reported by the corporation to the Florida Hurricane Catastrophe
3562	Fund. For all policies of eligible risks covered under quota
3563	share primary insurance agreements, the corporation and the
3564	authorized insurer shall maintain complete and accurate records
3565	for the purpose of exposure and loss reimbursement audits as
3566	required by Florida Hurricane Catastrophe Fund rules. The
3567	corporation and the authorized insurer shall each maintain
3568	duplicate copies of policy declaration pages and supporting
3569	claims documents.
3570	g.  The corporation board shall establish in its plan of
3571	operation standards for quota share agreements which ensure that
3572	there is no discriminatory application among insurers as to the
3573	terms of quota share agreements, pricing of quota share
3574	agreements, incentive provisions if any, and consideration paid
3575	for servicing policies or adjusting claims.
3576	h.  The quota share primary insurance agreement between the
3577	corporation and an authorized insurer must set forth the
3578	specific terms under which coverage is provided, including, but
3579	not limited to, the sale and servicing of policies issued under
3580	the agreement by the insurance agent of the authorized insurer
3581	producing the business, the reporting of information concerning
3582	eligible risks, the payment of premium to the corporation, and
3583	arrangements for the adjustment and payment of hurricane claims
3584	incurred on eligible risks by the claims adjuster and personnel
3585	of the authorized insurer. Entering into a quota sharing
3586	insurance agreement between the corporation and an authorized
3587	insurer shall be voluntary and at the discretion of the
3588	authorized insurer.
3589	3.  May provide that the corporation may employ or
3590	otherwise contract with individuals or other entities to provide
3591	administrative or professional services that may be appropriate
3592	to effectuate the plan. The corporation shall have the power to
3593	borrow funds, by issuing bonds or by incurring other
3594	indebtedness, and shall have other powers reasonably necessary
3595	to effectuate the requirements of this subsection, including,
3596	without limitation, the power to issue bonds and incur other
3597	indebtedness in order to refinance outstanding bonds or other
3598	indebtedness. The corporation may, but is not required to, seek
3599	judicial validation of its bonds or other indebtedness under
3600	chapter 75. The corporation may issue bonds or incur other
3601	indebtedness, or have bonds issued on its behalf by a unit of
3602	local government pursuant to subparagraph (g)2., in the absence
3603	of a hurricane or other weather-related event, upon a
3604	determination by the corporation, subject to approval by the
3605	office, that such action would enable it to efficiently meet the
3606	financial obligations of the corporation and that such
3607	financings are reasonably necessary to effectuate the
3608	requirements of this subsection. The corporation is authorized
3609	to take all actions needed to facilitate tax-free status for any
3610	such bonds or indebtedness, including formation of trusts or
3611	other affiliated entities. The corporation shall have the
3612	authority to pledge assessments, projected recoveries from the
3613	Florida Hurricane Catastrophe Fund, other reinsurance
3614	recoverables, market equalization and other surcharges, and
3615	other funds available to the corporation as security for bonds
3616	or other indebtedness. In recognition of s. 10, Art. I of the
3617	State Constitution, prohibiting the impairment of obligations of
3618	contracts, it is the intent of the Legislature that no action be
3619	taken whose purpose is to impair any bond indenture or financing
3620	agreement or any revenue source committed by contract to such
3621	bond or other indebtedness.
3622	4.a.  Must require that the corporation operate subject to
3623	the supervision and approval of a board of governors consisting
3624	of 8 individuals who are residents of this state, from different
3625	geographical areas of this state. The Governor, the Chief
3626	Financial Officer, the President of the Senate, and the Speaker
3627	of the House of Representatives shall each appoint two members
3628	of the board, effective August 1, 2005. At least one of the two
3629	members appointed by each appointing officer must have
3630	demonstrated expertise in insurance. The Chief Financial Officer
3631	shall designate one of the appointees as chair. All board
3632	members serve at the pleasure of the appointing officer. All
3633	board members, including the chair, must be appointed to serve
3634	for 3-year terms beginning annually on a date designated by the
3635	plan. Any board vacancy shall be filled for the unexpired term
3636	by the appointing officer. The Chief Financial Officer shall
3637	appoint a technical advisory group to provide information and
3638	advice to the board of governors in connection with the board's
3639	duties under this subsection. The executive director and senior
3640	managers of the corporation shall be engaged by the board, as
3641	recommended by the Chief Financial Officer, and serve at the
3642	pleasure of the board. The executive director is responsible for
3643	employing other staff as the corporation may require, subject to
3644	review and concurrence by the board and the Chief Financial
3645	Officer.
3646	b.  The board shall create a Market Accountability Advisory
3647	Committee to assist the corporation in developing awareness of
3648	its rates and its customer and agent service levels in
3649	relationship to the voluntary market insurers writing similar
3650	coverage. The members of the advisory committee shall consist of
3651	the following 11 persons, one of whom must be elected chair by
3652	the members of the committee: four representatives, one
3653	appointed by the Florida Association of Insurance Agents, one by
3654	the Florida Association of Insurance and Financial Advisors, one
3655	by the Professional Insurance Agents of Florida, and one by the
3656	Latin American Association of Insurance Agencies; three
3657	representatives appointed by the insurers with the three highest
3658	voluntary market share of residential property insurance
3659	business in the state; one representative from the Office of
3660	Insurance Regulation; one consumer appointed by the board who is
3661	insured by the corporation at the time of appointment to the
3662	committee; one representative appointed by the Florida
3663	Association of Realtors; and one representative appointed by the
3664	Florida Bankers Association. All members must serve for 3-year
3665	terms and may serve for consecutive terms. The committee shall
3666	report to the corporation at each board meeting on insurance
3667	market issues which may include rates and rate competition with
3668	the voluntary market; service, including policy issuance, claims
3669	processing, and general responsiveness to policyholders,
3670	applicants, and agents; and matters relating to depopulation.
3671	5.  Must provide a procedure for determining the
3672	eligibility of a risk for coverage, as follows:
3673	a.  Subject to the provisions of s. 627.3517, with respect
3674	to personal lines residential risks, if the risk is offered
3675	coverage from an authorized insurer at the insurer's approved
3676	rate under either a standard policy including wind coverage or,
3677	if consistent with the insurer's underwriting rules as filed
3678	with the office, a basic policy including wind coverage, the
3679	risk is not eligible for any policy issued by the corporation.
3680	If the risk is not able to obtain any such offer, the risk is
3681	eligible for either a standard policy including wind coverage or
3682	a basic policy including wind coverage issued by the
3683	corporation; however, if the risk could not be insured under a
3684	standard policy including wind coverage regardless of market
3685	conditions, the risk shall be eligible for a basic policy
3686	including wind coverage unless rejected under subparagraph 8.
3687	The corporation shall determine the type of policy to be
3688	provided on the basis of objective standards specified in the
3689	underwriting manual and based on generally accepted underwriting
3690	practices.
3691	(I)  If the risk accepts an offer of coverage through the
3692	market assistance plan or an offer of coverage through a
3693	mechanism established by the corporation before a policy is
3694	issued to the risk by the corporation or during the first 30
3695	days of coverage by the corporation, and the producing agent who
3696	submitted the application to the plan or to the corporation is
3697	not currently appointed by the insurer, the insurer shall:
3698	(A)  Pay to the producing agent of record of the policy,
3699	for the first year, an amount that is the greater of the
3700	insurer's usual and customary commission for the type of policy
3701	written or a fee equal to the usual and customary commission of
3702	the corporation; or
3703	(B)  Offer to allow the producing agent of record of the
3704	policy to continue servicing the policy for a period of not less
3705	than 1 year and offer to pay the agent the greater of the
3706	insurer's or the corporation's usual and customary commission
3707	for the type of policy written.
3708
3709	If the producing agent is unwilling or unable to accept
3710	appointment, the new insurer shall pay the agent in accordance
3711	with sub-sub-sub-subparagraph (A).
3712	(II)  When the corporation enters into a contractual
3713	agreement for a take-out plan, the producing agent of record of
3714	the corporation policy is entitled to retain any unearned
3715	commission on the policy, and the insurer shall:
3716	(A)  Pay to the producing agent of record of the
3717	corporation policy, for the first year, an amount that is the
3718	greater of the insurer's usual and customary commission for the
3719	type of policy written or a fee equal to the usual and customary
3720	commission of the corporation; or
3721	(B)  Offer to allow the producing agent of record of the
3722	corporation policy to continue servicing the policy for a period
3723	of not less than 1 year and offer to pay the agent the greater
3724	of the insurer's or the corporation's usual and customary
3725	commission for the type of policy written.
3726
3727	If the producing agent is unwilling or unable to accept
3728	appointment, the new insurer shall pay the agent in accordance
3729	with sub-sub-sub-subparagraph (A).
3730	b.  With respect to commercial lines residential risks, if
3731	the risk is offered coverage under a policy including wind
3732	coverage from an authorized insurer at its approved rate, the
3733	risk is not eligible for any policy issued by the corporation.
3734	If the risk is not able to obtain any such offer, the risk is
3735	eligible for a policy including wind coverage issued by the
3736	corporation.
3737	(I)  If the risk accepts an offer of coverage through the
3738	market assistance plan or an offer of coverage through a
3739	mechanism established by the corporation before a policy is
3740	issued to the risk by the corporation or during the first 30
3741	days of coverage by the corporation, and the producing agent who
3742	submitted the application to the plan or the corporation is not
3743	currently appointed by the insurer, the insurer shall:
3744	(A)  Pay to the producing agent of record of the policy,
3745	for the first year, an amount that is the greater of the
3746	insurer's usual and customary commission for the type of policy
3747	written or a fee equal to the usual and customary commission of
3748	the corporation; or
3749	(B)  Offer to allow the producing agent of record of the
3750	policy to continue servicing the policy for a period of not less
3751	than 1 year and offer to pay the agent the greater of the
3752	insurer's or the corporation's usual and customary commission
3753	for the type of policy written.
3754
3755	If the producing agent is unwilling or unable to accept
3756	appointment, the new insurer shall pay the agent in accordance
3757	with sub-sub-sub-subparagraph (A).
3758	(II)  When the corporation enters into a contractual
3759	agreement for a take-out plan, the producing agent of record of
3760	the corporation policy is entitled to retain any unearned
3761	commission on the policy, and the insurer shall:
3762	(A)  Pay to the producing agent of record of the
3763	corporation policy, for the first year, an amount that is the
3764	greater of the insurer's usual and customary commission for the
3765	type of policy written or a fee equal to the usual and customary
3766	commission of the corporation; or
3767	(B)  Offer to allow the producing agent of record of the
3768	corporation policy to continue servicing the policy for a period
3769	of not less than 1 year and offer to pay the agent the greater
3770	of the insurer's or the corporation's usual and customary
3771	commission for the type of policy written.
3772
3773	If the producing agent is unwilling or unable to accept
3774	appointment, the new insurer shall pay the agent in accordance
3775	with sub-sub-sub-subparagraph (A).
3776	c.  To preserve existing incentives for carriers to write
3777	dwellings in the voluntary market and not in the corporation,
3778	the corporation shall continue to offer authorized insurers,
3779	including insurers writing dwellings valued at $1 million or
3780	more, the same voluntary writing credits that were available on
3781	January 1, 2006, to carriers writing wind coverage for dwellings
3782	in the areas eligible for coverage in the high-risk account.
3783	d.  With respect to personal lines residential risks, if
3784	the risk is a dwelling with an insured value of $1 million or
3785	more, or if the risk is one that is excluded from the coverage
3786	to be provided by the condominium association under s.
3787	718.111(11)(b) and that is insured by the condominium unit owner
3788	for a combined dwelling and contents replacement cost of $1
3789	million or more, the risk is not eligible for any policy issued
3790	by the corporation. Rates and forms for personal lines
3791	residential risks not eligible for coverage by the corporation
3792	specified by this sub-subparagraph are not subject to ss.
3793	627.062 and 627.0629. Such rates and forms are subject to all
3794	other applicable provisions of this code and rules adopted under
3795	this code. During the course of an insurer's market conduct
3796	examination, the office may review the rate for any risk to
3797	which the provisions of this sub-subparagraph are applicable to
3798	determine if such rate is inadequate or unfairly discriminatory.
3799	Rates on personal lines residential risks not eligible for
3800	coverage by the corporation may be found inadequate by the
3801	office if they are clearly insufficient, together with the
3802	investment income attributable to such risks, to sustain
3803	projected losses and expenses in the class of business to which
3804	such rates apply. Rates on personal lines residential risks not
3805	eligible for coverage by the corporation may also be found
3806	inadequate as to the premium charged to a risk or group of risks
3807	if discounts or credits are allowed that exceed a reasonable
3808	reflection of expense savings and reasonably expected loss
3809	experience from the risk or group of risks. Rates on personal
3810	lines residential risks not eligible for coverage by the
3811	corporation may be found to be unfairly discriminatory as to a
3812	risk or group of risks by the office if the application of
3813	premium discounts, credits, or surcharges among such risks does
3814	not bear a reasonable relationship to the expected loss and
3815	expense experience among the various risks. A rating plan,
3816	including discounts, credits, or surcharges on personal lines
3817	residential risks not eligible for coverage by the corporation
3818	may also be found to be unfairly discriminatory if the plan
3819	fails to clearly and equitably reflect consideration of the
3820	policyholder's participation in a risk management program
3821	adjusted pursuant to s. 627.0625. The office may order an
3822	insurer to discontinue using a rate for new policies or upon
3823	renewal of a policy if the office finds the rate to be
3824	inadequate or unfairly discriminatory. Insurers must maintain
3825	records and documentation relating to rates and forms subject to
3826	this sub-subparagraph for a period of at least 5 years after the
3827	effective date of the policy.
3828	e.  For policies subject to nonrenewal as a result of the
3829	risk being no longer eligible for coverage pursuant to sub-
3830	subparagraph d., the corporation shall, directly or through the
3831	market assistance plan, make information from confidential
3832	underwriting and claims files of policyholders available only to
3833	licensed general lines agents who register with the corporation
3834	to receive such information according to the following
3835	procedures:
3836	(I)  By August 1, 2006, the corporation shall provide
3837	policyholders who are not eligible for renewal pursuant to sub-
3838	subparagraph d. the opportunity to request in writing, within 30
3839	days after the notification is sent, that information from their
3840	confidential underwriting and claims files not be released to
3841	licensed general lines agents registered pursuant to sub-sub-
3842	subparagraph e.(II);
3843	(II)  By August 1, 2006, the corporation shall make
3844	available to licensed general lines agents the registration
3845	procedures to be used to obtain confidential information from
3846	underwriting and claims files for policies not eligible for
3847	renewal pursuant to sub-subparagraph d. As a condition of
3848	registration, the corporation shall require the licensed general
3849	lines agent to attest that the agent has the experience and
3850	relationships with authorized or surplus lines carriers to
3851	attempt to offer replacement coverage for policies not eligible
3852	for renewal pursuant to sub-subparagraph d.
3853	(III)  By September 1, 2006, the corporation shall make
3854	available through a secured website to licensed general lines
3855	agents registered pursuant to sub-sub-subparagraph e.(II)
3856	application, rating, loss history, mitigation, and policy type
3857	information relating to all policies not eligible for renewal
3858	pursuant to sub-subparagraph d. and for which the policyholder
3859	has not requested the corporation withhold such information
3860	pursuant to sub-sub-subparagraph e.(I). The licensed general
3861	lines agent registered pursuant to sub-sub-subparagraph e.(II)
3862	may use such information to contact and assist the policyholder
3863	in securing replacement policies and the agent may disclose to
3864	the policyholder such information was obtained from the
3865	corporation.
3866	f.  With respect to nonhomestead property, eligibility must
3867	be determined in accordance with sub-sub-sub-subparagraph
3868	(b)2.a.(II)(A).
3869	6.  Must provide by July 1, 2007, that an application for
3870	coverage for a new policy is subject to a waiting period of 10
3871	days before coverage is effective, during which time the
3872	corporation shall make such application available for review by
3873	general lines agents and authorized property and casualty
3874	insurers. The board may approve exceptions that allow for
3875	coverage to be effective before the end of the 10-day waiting
3876	period, for coverage issued in conjunction with a real estate
3877	closing, and for such other exceptions as the board determines
3878	are necessary to prevent lapses in coverage.
3879	7.  Must include rules for classifications of risks and
3880	rates therefor.
3881	8.  Must provide that if premium and investment income for
3882	an account attributable to a particular calendar year are in
3883	excess of projected losses and expenses for the account
3884	attributable to that year, such excess shall be held in surplus
3885	in the account. Such surplus shall be available to defray
3886	deficits in that account as to future years and shall be used
3887	for that purpose prior to assessing assessable insurers and
3888	assessable insureds as to any calendar year.
3889	9.  Must provide objective criteria and procedures to be
3890	uniformly applied for all applicants in determining whether an
3891	individual risk is so hazardous as to be uninsurable. In making
3892	this determination and in establishing the criteria and
3893	procedures, the following shall be considered:
3894	a.  Whether the likelihood of a loss for the individual
3895	risk is substantially higher than for other risks of the same
3896	class; and
3897	b.  Whether the uncertainty associated with the individual
3898	risk is such that an appropriate premium cannot be determined.
3899
3900	The acceptance or rejection of a risk by the corporation shall
3901	be construed as the private placement of insurance, and the
3902	provisions of chapter 120 shall not apply.
3903	10.  Must provide that the corporation shall make its best
3904	efforts to procure catastrophe reinsurance at reasonable rates,
3905	to cover its projected 100-year probable maximum loss in the
3906	homestead accounts as determined by the board of governors.
3907	11.  Must provide that in the event of regular deficit
3908	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
3909	(b)3.b., in the personal lines homestead account, the commercial
3910	lines residential homestead account, or the high-risk homestead
3911	account, the corporation shall levy upon corporation homestead
3912	account policyholders in its next rate filing, or by a separate
3913	rate filing solely for this purpose, a Citizens policyholder
3914	surcharge arising from a regular assessment in such account in a
3915	percentage equal to the total amount of such regular assessments
3916	divided by the aggregate statewide direct written premium for
3917	subject lines of business for the year preceding the year in
3918	which the deficit to which the regular assessment related is
3919	incurred. Citizens policyholder surcharges under this
3920	subparagraph are not considered premium and are not subject to
3921	commissions, fees, or premium taxes; however, failure to pay the
3922	Citizens policyholder a market equalization surcharge shall be
3923	treated as failure to pay premium. Notwithstanding any other
3924	provision of this section, for purposes of the Citizens
3925	policyholder surcharges to be levied pursuant to this
3926	subparagraph, the total amount of the regular assessment to
3927	which such Citizens policyholder surcharge relates shall be
3928	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
3929	12.  The policies issued by the corporation must provide
3930	that, if the corporation or the market assistance plan obtains
3931	an offer from an authorized insurer to cover the risk at its
3932	approved rates, the risk is no longer eligible for renewal
3933	through the corporation.
3934	13.  Corporation policies and applications must include a
3935	notice that the corporation policy could, under this section, be
3936	replaced with a policy issued by an authorized insurer that does
3937	not provide coverage identical to the coverage provided by the
3938	corporation or an insurer writing coverage pursuant to part VIII
3939	of chapter 626. The notice shall also specify that acceptance of
3940	corporation coverage creates a conclusive presumption that the
3941	applicant or policyholder is aware of this potential.
3942	14.  May establish, subject to approval by the office,
3943	different eligibility requirements and operational procedures
3944	for any line or type of coverage for any specified county or
3945	area if the board determines that such changes to the
3946	eligibility requirements and operational procedures are
3947	justified due to the voluntary market being sufficiently stable
3948	and competitive in such area or for such line or type of
3949	coverage and that consumers who, in good faith, are unable to
3950	obtain insurance through the voluntary market through ordinary
3951	methods would continue to have access to coverage from the
3952	corporation. When coverage is sought in connection with a real
3953	property transfer, such requirements and procedures shall not
3954	provide for an effective date of coverage later than the date of
3955	the closing of the transfer as established by the transferor,
3956	the transferee, and, if applicable, the lender.
3957	15.  Must provide that, with respect to the high-risk
3958	homestead account, any assessable insurer with a surplus as to
3959	policyholders of $25 million or less writing 25 percent or more
3960	of its total countrywide property insurance premiums in this
3961	state may petition the office, within the first 90 days of each
3962	calendar year, to qualify as a limited apportionment company. In
3963	no event shall a limited apportionment company be required to
3964	participate in the portion of any assessment, within the high-
3965	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
3966	subparagraph (b)3.b. in the aggregate which exceeds $50 million
3967	after payment of available high-risk account funds in any
3968	calendar year. However, A limited apportionment company shall
3969	collect from its policyholders any emergency assessment imposed
3970	under sub-subparagraph (b)3.d. The plan shall provide that, if
3971	the office determines that any regular assessment will result in
3972	an impairment of the surplus of a limited apportionment company,
3973	the office may direct that all or part of such assessment be
3974	deferred as provided in subparagraph (g)4. However, there shall
3975	be no limitation or deferment of an emergency assessment to be
3976	collected from policyholders under sub-subparagraph (b)3.d.
3977	16.  Must provide that the corporation appoint as its
3978	licensed agents only those agents who also hold an appointment
3979	as defined in s. 626.015(3) with an insurer who at the time of
3980	the agent's initial appointment by the corporation is authorized
3981	to write and is actually writing personal lines residential
3982	property coverage, commercial residential property coverage, or
3983	commercial nonresidential property coverage within the state.
3984	17.  Must provide, by July 1, 2007, a premium payment plan
3985	option to its policyholders which allows for quarterly and
3986	semiannual payment of premiums.
3987	18.  Must provide that the hurricane deductible for any
3988	property in the nonhomestead account with an insured value of
3989	$250,000 or more must be at least 5 percent of the insured
3990	value.
3991	19.  Must provide that the application for coverage under
3992	the nonhomestead account and the declaration page of each
3993	nonhomestead account policy include a statement in boldface 12-
3994	point type specifying that public subsidies do not support the
3995	corporation's coverage of nonhomestead property; that if the
3996	nonhomestead account of the corporation sustains a deficit or is
3997	unable to pay claims, the nonhomestead policyholder shall be
3998	subject to an immediate assessment in an amount up to 100
3999	percent of the premium and a further assessment upon renewal of
4000	the policy; and that the applicant or policyholder may wish to
4001	seek alternative coverage from an authorized insurer or surplus
4002	lines insurer that will not be subject to such potential
4003	assessments.
4004	20.  Must provide that the application for coverage under
4005	any of the homestead accounts and the declaration page of each
4006	homestead account policy include a statement in boldface 12-
4007	point type specifying that a false declaration of homestead
4008	status for purposes of obtaining coverage in any of the
4009	homestead accounts may constitute the offense of insurance
4010	fraud, as prohibited and punishable as a felony under s.
4011	817.234.
4012	21.  Must limit coverage on mobile homes or manufactured
4013	homes built prior to 1994 to actual cash value of the dwelling
4014	rather than replacement costs of the dwelling.
4015	Section 14.  Effective July 1, 2006, section 627.3517,
4016	Florida Statutes, is amended to read:
4017	627.3517  Consumer choice.--
4018	(1)  Except as provided in subsection (2), no provision of
4019	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
4020	impair the right of any insurance risk apportionment plan
4021	policyholder, upon receipt of any keepout or take-out offer, to
4022	retain his or her current agent, so long as that agent is duly
4023	licensed and appointed by the insurance risk apportionment plan
4024	or otherwise authorized to place business with the insurance
4025	risk apportionment plan. This right shall not be canceled,
4026	suspended, impeded, abridged, or otherwise compromised by any
4027	rule, plan of operation, or depopulation plan, whether through
4028	keepout, take-out, midterm assumption, or any other means, of
4029	any insurance risk apportionment plan or depopulation plan,
4030	including, but not limited to, those described in s. 627.351, s.
4031	627.3511, or s. 627.3515. The commission shall adopt any rules
4032	necessary to cause any insurance risk apportionment plan or
4033	market assistance plan under such sections to demonstrate that
4034	the operations of the plan do not interfere with, promote, or
4035	allow interference with the rights created under this section.
4036	If the policyholder's current agent is unable or unwilling to be
4037	appointed with the insurer making the take-out or keepout offer,
4038	the policyholder shall not be disqualified from participation in
4039	the appropriate insurance risk apportionment plan because of an
4040	offer of coverage in the voluntary market. An offer of full
4041	property insurance coverage by the insurer currently insuring
4042	either the ex-wind or wind-only coverage on the policy to which
4043	the offer applies shall not be considered a take-out or keepout
4044	offer. Any rule, plan of operation, or plan of depopulation,
4045	through keepout, take-out, midterm assumption, or any other
4046	means, of any property insurance risk apportionment plan under
4047	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
4048	and 627.3511(4).
4049	(2)  This section does not apply during the first 10 days
4050	after a new application for coverage has been submitted to
4051	Citizens Property Insurance Corporation under s. 627.351(6),
4052	whether or not coverage is bound during this period.
4053	Section 15.  Section 627.3519, Florida Statutes, is created
4054	to read:
4055	627.3519  Annual report of aggregate net probable maximum
4056	losses, financing options, and potential assessments.--No later
4057	than February 1 of each year, the Financial Services Commission
4058	shall provide to the Legislature a report of the aggregate net
4059	probable maximum losses, financing options, and potential
4060	assessments of the Florida Hurricane Catastrophe Fund and
4061	Citizens Property Insurance Corporation. The report must include
4062	the respective 50-year, 100-year, and 250-year probable maximum
4063	losses of the fund and the corporation; analysis of all
4064	reasonable financing strategies for each such probable maximum
4065	loss, including the amount and term of debt instruments;
4066	specification of the percentage assessments that would be needed
4067	to support each of the financing strategies; and calculations of
4068	the aggregate assessment burden on Florida property and casualty
4069	policyholders for each of the probable maximum losses. The
4070	commission shall require the fund and the corporation to provide
4071	the commission with such data and analysis as the commission
4072	considers necessary to prepare the report.
4073	Section 16.  Paragraph (b) of subsection (3) of section
4074	627.4035, Florida Statutes, is amended to read:
4075	627.4035  Cash payment of premiums; claims.--
4076	(3)  All payments of claims made in this state under any
4077	contract of insurance shall be paid:
4078	(b)  If authorized in writing by the recipient or the
4079	recipient's representative, by debit card or any other form of
4080	electronic transfer. Any fees or costs to be charged against the
4081	recipient must be disclosed in writing to the recipient or the
4082	recipient's representative at the time of written authorization.
4083	However, the written authorization requirement may be waived by
4084	the recipient or the recipient's representative if the insurer
4085	verifies the identity of the insured or the insured's recipient
4086	and does not charge a fee for the transaction. If the funds are
4087	misdirected, the insurer would remain liable for the payment of
4088	the claim.
4089	Section 17.  Paragraph (b) of subsection (3) of section
4090	627.701, Florida Statutes, is amended to read:
4091	627.701  Liability of insureds; coinsurance; deductibles.--
4092	(3)
4093	(b)1.  Except as otherwise provided in this paragraph,
4094	prior to issuing a personal lines residential property insurance
4095	policy on or after January 1, 2006, or prior to the first
4096	renewal of a residential property insurance policy on or after
4097	January 1, 2006, the insurer must offer alternative deductible
4098	amounts applicable to hurricane losses equal to $500, 2 percent,
4099	5 percent, and 10 percent of the policy dwelling limits, unless
4100	the specific percentage deductible is less than $500. The
4101	written notice of the offer shall specify the hurricane or wind
4102	deductible to be applied in the event that the applicant or
4103	policyholder fails to affirmatively choose a hurricane
4104	deductible. The insurer must provide such policyholder with
4105	notice of the availability of the deductible amounts specified
4106	in this paragraph in a form approved by the office in
4107	conjunction with each renewal of the policy. The failure to
4108	provide such notice constitutes a violation of this code but
4109	does not affect the coverage provided under the policy.
4110	2.  This paragraph does not apply with respect to a
4111	deductible program lawfully in effect on June 14, 1995, or to
4112	any similar deductible program, if the deductible program
4113	requires a minimum deductible amount of no less than 2 percent
4114	of the policy limits.
4115	3.  With respect to a policy covering a risk with dwelling
4116	limits of at least $100,000, but less than $250,000, the insurer
4117	may, in lieu of offering a policy with a $500 hurricane or wind
4118	deductible as required by subparagraph 1., offer a policy that
4119	the insurer guarantees it will not nonrenew for reasons of
4120	reducing hurricane loss for one renewal period and that contains
4121	up to a 2 percent hurricane deductible, for two renewal periods
4122	and that contains up to a 5 percent hurricane deductible, or for
4123	three renewal periods and that contains up to a 10 percent
4124	hurricane deductible. Notwithstanding the requirements of this
4125	paragraph, the Office of Insurance Regulation may approve the
4126	nonrenewal of such policies if the guarantee renewal of the
4127	policies may jeopardize the financial ratings of an insurer or
4128	wind deductible as required by subparagraph 1.
4129	4.  With respect to a policy covering a risk with dwelling
4130	limits of $250,000 or more, the insurer need not offer the $500
4131	hurricane deductible as required by subparagraph 1., but must,
4132	except as otherwise provided in this subsection, offer the other
4133	hurricane deductibles as required by subparagraph 1.
4134	Section 18.  Effective January 1, 2007, subsection (9) is
4135	added to section 627.701, Florida Statutes, to read:
4136	627.701  Liability of insureds; coinsurance; deductibles.--
4137	(9)  With respect to hurricane coverage provided in a
4138	policy of residential coverage, when the policyholder has taken
4139	appropriate hurricane mitigation measures regarding the
4140	residence covered under the policy, the insurer may provide the
4141	insured the option of selecting an appropriate reduction in the
4142	policy's hurricane deductible in lieu of selecting the
4143	appropriate discount credit or other rate differential as
4144	provided in s. 627.0629. If made available by the insurer, the
4145	insurer must provide the policyholder with notice of the options
4146	available under this subsection on a form approved by the
4147	office.
4148	Section 19.  Subsections (2) and (3) of section 627.7011,
4149	Florida Statutes, are amended, and subsection (6) is added to
4150	that section, to read:
4151	627.7011  Homeowners' policies; offer of replacement cost
4152	coverage and law and ordinance coverage.--
4153	(2)  Unless the insurer obtains the policyholder's written
4154	refusal of the policies or endorsements specified in subsection
4155	(1), any policy covering the dwelling is deemed to include the
4156	law and ordinance coverage limited to 25 percent of the dwelling
4157	limit specified in paragraph (1)(b). The rejection or selection
4158	of alternative coverage shall be made on a form approved by the
4159	office. The form shall fully advise the applicant of the nature
4160	of the coverage being rejected. If this form is signed by a
4161	named insured, it will be conclusively presumed that there was
4162	an informed, knowing rejection of the coverage or election of
4163	the alternative coverage on behalf of all insureds. Unless the
4164	policyholder requests in writing the coverage specified in this
4165	section, it need not be provided in or supplemental to any other
4166	policy that renews, insures, extends, changes, supersedes, or
4167	replaces an existing policy when the policyholder has rejected
4168	the coverage specified in this section or has selected
4169	alternative coverage. The insurer must provide such policyholder
4170	with notice of the availability of such coverage in a form
4171	approved by the office at least once every 3 years. The failure
4172	to provide such notice constitutes a violation of this code, but
4173	does not affect the coverage provided under the policy.
4174	(3)  In the event of a loss for which a dwelling or
4175	personal property is insured on the basis of replacement costs,
4176	the insurer shall pay the replacement cost without reservation
4177	or holdback of any depreciation in value, whether or not the
4178	insured replaces or repairs the dwelling or property.
4179	(6)  Insurers shall issue separate checks for living
4180	expenses, contents, and casualty proceeds. Checks for living
4181	expenses and contents should be issued directly to the
4182	policyholder.
4183	Section 20.  Effective upon this act becoming a law,
4184	section 627.7019, Florida Statutes, is created to read:
4185	627.7019  Standardization of requirements applicable to
4186	insurers after natural disasters.--
4187	(1)  The commission shall adopt by rule, pursuant to s.
4188	120.54(1)-(3), standardized requirements that may be applied to
4189	insurers as a consequence of a hurricane or other natural
4190	disaster. The rules shall address the following areas:
4191	(a)  Claims reporting requirements.
4192	(b)  Grace periods for payment of premiums and performance
4193	of other duties by insureds.
4194	(c)  Temporary postponement of cancellations and
4195	nonrenewals.
4196	(2)  The rules adopted pursuant to this section shall
4197	require the office to issue an order within 72 hours after the
4198	occurrence of a hurricane or other natural disaster specifying,
4199	by line of insurance, which of the standardized requirements
4200	apply, the geographic areas in which they apply, the time at
4201	which applicability commences, and the time at which
4202	applicability terminates.
4203	(3)  The commission and the office may not adopt an
4204	emergency rule under s. 120.54(4) in conflict with any provision
4205	of the rules adopted under this section.
4206	(4)  The commission shall initiate rulemaking under this
4207	section no later than June 1, 2006.
4208	Section 21.  Subsection (5) of section 627.727, Florida
4209	Statutes, is amended to read:
4210	627.727  Motor vehicle insurance; uninsured and
4211	underinsured vehicle coverage; insolvent insurer protection.--
4212	(5)  Any person having a claim against an insolvent insurer
4213	as defined in s. 631.54(6)(5) under the provisions of this
4214	section shall present such claim for payment to the Florida
4215	Insurance Guaranty Association only. In the event of a payment
4216	to any person in settlement of a claim arising under the
4217	provisions of this section, the association is not subrogated or
4218	entitled to any recovery against the claimant's insurer. The
4219	association, however, has the rights of recovery as set forth in
4220	chapter 631 in the proceeds recoverable from the assets of the
4221	insolvent insurer.
4222	Section 22.  Paragraph (f) is added to subsection (2) of
4223	section 631.181, Florida Statutes, to read:
4224	631.181  Filing and proof of claim.--
4225	(2)
4226	(f)  The signed statement required by this section shall
4227	not be required on claims for which adequate claims file
4228	documentation exists within the records of the insolvent
4229	insurer. Claims for payment of unearned premium shall not be
4230	required to use the signed statement required by this section if
4231	the receiver certifies to the guaranty fund that the records of
4232	the insolvent insurer are sufficient to determine the amount of
4233	unearned premium owed to each policyholder of the insurer and
4234	such information is remitted to the guaranty fund by the
4235	receiver in electronic or other mutually agreed-upon format.
4236	Section 23.  Subsections (5), (6), (7), and (8) of section
4237	631.54, Florida Statutes, are renumbered as subsections (6),
4238	(7), (8), and (9), respectively, and a new subsection (5) is
4239	added to that section, to read:
4240	631.54  Definitions.--As used in this part:
4241	(5)  "Homeowner's insurance" means personal lines
4242	residential property insurance coverage that consists of the
4243	type of coverage provided under homeowner's, dwelling, and
4244	similar policies for repair or replacement of the insured
4245	structure and contents, which policies are written directly to
4246	the individual homeowner. Residential coverage for personal
4247	lines as set forth in this section includes policies that
4248	provide coverage for particular perils such as windstorm and
4249	hurricane coverage but excludes all coverage for mobile homes,
4250	renter's insurance, or tenant's coverage. The term "homeowner's
4251	insurance" excludes commercial residential policies covering
4252	condominium associations or homeowners' associations, which
4253	associations have a responsibility to provide insurance coverage
4254	on residential units within the association, and also excludes
4255	coverage for the common elements of a homeowners' association.
4256	Section 24.  Subsection (1) of section 631.55, Florida
4257	Statutes, is amended to read:
4258	631.55  Creation of the association.--
4259	(1)  There is created a nonprofit corporation to be known
4260	as the "Florida Insurance Guaranty Association, Incorporated."
4261	All insurers defined as member insurers in s. 631.54(7)(6) shall
4262	be members of the association as a condition of their authority
4263	to transact insurance in this state, and, further, as a
4264	condition of such authority, an insurer shall agree to reimburse
4265	the association for all claim payments the association makes on
4266	said insurer's behalf if such insurer is subsequently
4267	rehabilitated. The association shall perform its functions under
4268	a plan of operation established and approved under s. 631.58 and
4269	shall exercise its powers through a board of directors
4270	established under s. 631.56. The corporation shall have all
4271	those powers granted or permitted nonprofit corporations, as
4272	provided in chapter 617.
4273	Section 25.  Paragraph (a) of subsection (1), paragraph (d)
4274	of subsection (2), and paragraph (a) of subsection (3) of
4275	section 631.57, Florida Statutes, are amended, and paragraph (e)
4276	is added to subsection (3) of that section, to read:
4277	631.57  Powers and duties of the association.--
4278	(1)  The association shall:
4279	(a)1.  Be obligated to the extent of the covered claims
4280	existing:
4281	a.  Prior to adjudication of insolvency and arising within
4282	30 days after the determination of insolvency;
4283	b.  Before the policy expiration date if less than 30 days
4284	after the determination; or
4285	c.  Before the insured replaces the policy or causes its
4286	cancellation, if she or he does so within 30 days of the
4287	determination.
4288	2.  The obligation under subparagraph 1. shall include only
4289	the amount of each covered claim that is in excess of $100 and
4290	is less than $300,000, except policies providing coverage for
4291	homeowner's insurance shall provide for an additional $200,000
4292	for the portion of a covered claim that relates only to the
4293	damage to the structure and contents.
4294	3.a.2.  Notwithstanding subparagraph 2., the obligation
4295	under subparagraph 1. for shall include only that amount of each
4296	covered claim which is in excess of $100 and is less than
4297	$300,000, except with respect to policies covering condominium
4298	associations or homeowners' associations, which associations
4299	have a responsibility to provide insurance coverage on
4300	residential units within the association, the obligation shall
4301	include that amount of each covered property insurance claim
4302	which is less than $100,000 multiplied by the number of
4303	condominium units or other residential units; however, as to
4304	homeowners' associations, this sub-subparagraph subparagraph
4305	applies only to claims for damage or loss to residential units
4306	and structures attached to residential units.
4307	b.  Notwithstanding sub-subparagraph a., the association
4308	has no obligation to pay covered claims that are to be paid from
4309	the proceeds of bonds issued under s. 631.695. However, the
4310	association shall assign and pledge the first available moneys
4311	from all or part of the assessments to be made under paragraph
4312	(3)(a) to or on behalf of the issuer of such bonds for the
4313	benefit of the holders of such bonds. The association shall
4314	administer any such covered claims and present valid covered
4315	claims for payment in accordance with the provisions of the
4316	assistance program in connection with which such bonds have been
4317	issued.
4318	3.  In no event shall the association be obligated to a
4319	policyholder or claimant in an amount in excess of the
4320	obligation of the insolvent insurer under the policy from which
4321	the claim arises.
4322	(2)  The association may:
4323	(d)  Negotiate and become a party to such contracts as are
4324	necessary to carry out the purpose of this part. Additionally,
4325	the association may enter into such contracts with a
4326	municipality, a county, or a legal entity created pursuant to s.
4327	163.01(7)(g) as are necessary in order for the municipality,
4328	county, or legal entity to issue bonds under s. 631.695. In
4329	connection with the issuance of any such bonds and the entering
4330	into of any such necessary contracts, the association may agree
4331	to such terms and conditions as the association deems necessary
4332	and proper.
4333	(3)(a)  To the extent necessary to secure the funds for the
4334	respective accounts for the payment of covered claims, and also
4335	to pay the reasonable costs to administer the same, and to the
4336	extent necessary to secure the funds for the account specified
4337	in s. 631.55(2)(c) or to retire indebtedness, including, without
4338	limitation, the principal, redemption premium, if any, and
4339	interest on, and related costs of issuance of, bonds issued
4340	under s. 631.695 and the funding of any reserves and other
4341	payments required under the bond resolution or trust indenture
4342	pursuant to which such bonds have been issued, the office, upon
4343	certification of the board of directors, shall levy assessments
4344	in the proportion that each insurer's net direct written
4345	premiums in this state in the classes protected by the account
4346	bears to the total of said net direct written premiums received
4347	in this state by all such insurers for the preceding calendar
4348	year for the kinds of insurance included within such account.
4349	Assessments shall be remitted to and administered by the board
4350	of directors in the manner specified by the approved plan. Each
4351	insurer so assessed shall have at least 30 days' written notice
4352	as to the date the assessment is due and payable. Every
4353	assessment shall be made as a uniform percentage applicable to
4354	the net direct written premiums of each insurer in the kinds of
4355	insurance included within the account in which the assessment is
4356	made. The assessments levied against any insurer shall not
4357	exceed in any one year more than 2 percent of that insurer's net
4358	direct written premiums in this state for the kinds of insurance
4359	included within such account during the calendar year next
4360	preceding the date of such assessments.
4361	(e)1.a.  In addition to assessments otherwise authorized in
4362	paragraph (a) and to the extent necessary to secure the funds
4363	for the account specified in s. 631.55(2)(c) or to retire
4364	indebtedness, including, without limitation, the principal,
4365	redemption premium, if any, and interest on, and related costs
4366	of issuance of, bonds issued under s. 631.695 and the funding of
4367	any reserves and other payments required under the bond
4368	resolution or trust indenture pursuant to which such bonds have
4369	been issued, the office, upon certification of the board of
4370	directors, shall levy emergency assessments upon insurers
4371	holding a certificate of authority. The emergency assessments
4372	payable under this paragraph by any insurer shall not exceed in
4373	any single year more than 2 percent of that insurer's direct
4374	written premiums, net of refunds, in this state during the
4375	preceding calendar year for the kinds of insurance within the
4376	account specified in s. 631.55(2)(c).
4377	b.  Any emergency assessments authorized under this
4378	paragraph shall be levied by the office upon insurers referred
4379	to in sub-subparagraph a., upon certification as to the need for
4380	such assessments by the board of directors, in each year that
4381	bonds issued under s. 631.695 and secured by such emergency
4382	assessments are outstanding, in such amounts up to such 2-
4383	percent limit as required in order to provide for the full and
4384	timely payment of the principal of, redemption premium, if any,
4385	and interest on, and related costs of issuance of, such bonds.
4386	The emergency assessments provided for in this paragraph are
4387	assigned and pledged to the municipality, county, or legal
4388	entity issuing bonds under s. 631.695 for the benefit of the
4389	holders of such bonds, in order to enable such municipality,
4390	county, or legal entity to provide for the payment of the
4391	principal of, redemption premium, if any, and interest on such
4392	bonds, the cost of issuance of such bonds, and the funding of
4393	any reserves and other payments required under the bond
4394	resolution or trust indenture pursuant to which such bonds have
4395	been issued, without the necessity of any further action by the
4396	association, the office, or any other party. To the extent bonds
4397	are issued under s. 631.695 and the association determines to
4398	secure such bonds by a pledge of revenues received from the
4399	emergency assessments, such bonds, upon such pledge of revenues,
4400	shall be secured by and payable from the proceeds of such
4401	emergency assessments, and the proceeds of emergency assessments
4402	levied under this paragraph shall be remitted directly to and
4403	administered by the trustee or custodian appointed for such
4404	bonds.
4405	c.  Emergency assessments under this paragraph may be
4406	payable in a single payment or, at the option of the
4407	association, may be payable in 12 monthly installments with the
4408	first installment being due and payable at the end of the month
4409	after an emergency assessment is levied and subsequent
4410	installments being due not later than the end of each succeeding
4411	month.
4412	d.  If emergency assessments are imposed, the report
4413	required by s. 631.695(7) shall include an analysis of the
4414	revenues generated from the emergency assessments imposed under
4415	this paragraph.
4416	e.  If emergency assessments are imposed, the references in
4417	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
4418	assessments levied under paragraph (a) shall include emergency
4419	assessments imposed under this paragraph.
4420	2.  In order to ensure that insurers paying emergency
4421	assessments levied under this paragraph continue to charge rates
4422	that are neither inadequate nor excessive, within 90 days after
4423	being notified of such assessments, each insurer that is to be
4424	assessed pursuant to this paragraph shall submit a rate filing
4425	for coverage included within the account specified in s.
4426	631.55(2)(c) and for which rates are required to be filed under
4427	s. 627.062. If the filing reflects a rate change that, as a
4428	percentage, is equal to the difference between the rate of such
4429	assessment and the rate of the previous year's assessment under
4430	this paragraph, the filing shall consist of a certification so
4431	stating and shall be deemed approved when made. Any rate change
4432	of a different percentage shall be subject to the standards and
4433	procedures of s. 627.062.
4434	3.  An annual assessment under this paragraph shall
4435	continue while the bonds issued with respect to which the
4436	assessment was imposed are outstanding, including any bonds the
4437	proceeds of which were used to refund bonds issued pursuant to
4438	s. 631.695, unless adequate provision has been made for the
4439	payment of the bonds in the documents authorizing the issuance
4440	of such bonds.
4441	4.  Emergency assessments under this paragraph are not
4442	premium and are not subject to the premium tax, to any fees, or
4443	to any commissions. An insurer is liable for all emergency
4444	assessments that the insurer collects and shall treat the
4445	failure of an insured to pay an emergency assessment as a
4446	failure to pay the premium. An insurer is not liable for
4447	uncollectible emergency assessments.
4448	Section 26.  Section 631.695, Florida Statutes, is created
4449	to read:
4450	631.695  Revenue bond issuance through counties or
4451	municipalities.--
4452	(1)  The Legislature finds:
4453	(a)  The potential for widespread and massive damage to
4454	persons and property caused by hurricanes making landfall in
4455	this state can generate insurance claims of such a number as to
4456	render numerous insurers operating within this state insolvent
4457	and therefore unable to satisfy covered claims.
4458	(b)  The inability of insureds within this state to receive
4459	payment of covered claims or to timely receive such payment
4460	creates financial and other hardships for such insureds and
4461	places undue burdens on the state, the affected units of local
4462	government, and the community at large.
4463	(c)  In addition, the failure of insurers to pay covered
4464	claims or to timely pay such claims due to the insolvency of
4465	such insurers can undermine the public's confidence in insurers
4466	operating within this state, thereby adversely affecting the
4467	stability of the insurance industry in this state.
4468	(d)  The state has previously taken action to address these
4469	problems by adopting the Florida Insurance Guaranty Association
4470	Act, which, among other things, provides a mechanism for the
4471	payment of covered claims under certain insurance policies to
4472	avoid excessive delay in payment and to avoid financial loss to
4473	claimants or policyholders because of the insolvency of an
4474	insurer.
4475	(e)  In the wake of the unprecedented destruction caused by
4476	various hurricanes that have made landfall in this state, the
4477	resultant covered claims, and the number of insurers rendered
4478	insolvent thereby, make it evident that alternative programs
4479	must be developed to allow the Florida Insurance Guaranty
4480	Association to more expeditiously and effectively provide for
4481	the payment of covered claims.
4482	(f)  It is therefore determined to be in the best interests
4483	of, and necessary for, the protection of the public health,
4484	safety, and general welfare of the residents of this state and
4485	for the protection and preservation of the economic stability of
4486	insurers operating in this state and it is declared to be an
4487	essential public purpose to permit certain municipalities and
4488	counties to take such actions as will provide relief to
4489	claimants and policyholders having covered claims against
4490	insolvent insurers operating in this state by expediting the
4491	handling and payment of covered claims.
4492	(g)  To achieve the foregoing purposes, it is proper to
4493	authorize municipalities and counties of this state
4494	substantially affected by the landfall of a hurricane to issue
4495	bonds to assist the Florida Insurance Guaranty Association in
4496	expediting the handling and payment of covered claims of
4497	insolvent insurers.
4498	(h)  In order to avoid the needless and indiscriminate
4499	proliferation, duplication, and fragmentation of such assistance
4500	programs, it is in the best interests of the residents of this
4501	state to authorize municipalities and counties severely affected
4502	by a hurricane to provide for the payment of covered claims
4503	beyond their territorial limits in the implementation of such
4504	programs.
4505	(i)  It is a paramount public purpose for municipalities
4506	and counties substantially affected by the landfall of a
4507	hurricane to be able to issue bonds for the purposes described
4508	in this section. Such issuance shall provide assistance to
4509	residents of those municipalities and counties as well as to
4510	other residents of this state.
4511	(2)  The governing body of any municipality or county, the
4512	residents of which have been substantially affected by a
4513	hurricane, may issue bonds to fund an assistance program in
4514	conjunction with, and with the consent of, the Florida Insurance
4515	Guaranty Association for the purpose of paying claimants' or
4516	policyholders' covered claims, as defined in s. 631.54, arising
4517	through the insolvency of an insurer, which insolvency is
4518	determined by the Florida Insurance Guaranty Association to have
4519	been a result of a hurricane, regardless of whether the
4520	claimants or policyholders are residents of such municipality or
4521	county or the property to which the claim relates is located
4522	within or outside the territorial jurisdiction of the
4523	municipality or county. The power of a municipality or county to
4524	issue bonds, as described in this section, is in addition to any
4525	powers granted by law and may not be abrogated or restricted by
4526	any provisions in such municipality's or county's charter. A
4527	municipality or county issuing bonds for this purpose shall
4528	enter into such contracts with the Florida Insurance Guaranty
4529	Association or any entity acting on behalf of the Florida
4530	Insurance Guaranty Association as are necessary to implement the
4531	assistance program. Any bonds issued by a municipality or county
4532	or a combination thereof under this subsection shall be payable
4533	from and secured by moneys received by or on behalf of the
4534	municipality or county from assessments levied under s.
4535	631.57(3)(a) and assigned and pledged to or on behalf of the
4536	municipality or county for the benefit of the holders of the
4537	bonds in connection with the assistance program. The funds,
4538	credit, property, and taxing power of the state or any
4539	municipality or county shall not be pledged for the payment of
4540	such bonds.
4541	(3)  Bonds may be validated by the municipality or county
4542	pursuant to chapter 75. The proceeds of the bonds may be used to
4543	pay covered claims of insolvent insurers; to refinance or
4544	replace previously existing borrowings or financial
4545	arrangements; to pay interest on bonds; to fund reserves for the
4546	bonds; to pay expenses incident to the issuance or sale of any
4547	bond issued under this section, including costs of validating,
4548	printing, and delivering the bonds, costs of printing the
4549	official statement, costs of publishing notices of sale of the
4550	bonds, costs of obtaining credit enhancement or liquidity
4551	support, and related administrative expenses; or for such other
4552	purposes related to the financial obligations of the fund as the
4553	association may determine. The term of the bonds may not exceed
4554	30 years.
4555	(4)  The state covenants with holders of bonds of the
4556	assistance program that the state will not take any action that
4557	will have a material adverse effect on the holders and will not
4558	repeal or abrogate the power of the board of directors of the
4559	association to direct the Office of Insurance Regulation to levy
4560	the assessments and to collect the proceeds of the revenues
4561	pledged to the payment of the bonds as long as any of the bonds
4562	remain outstanding, unless adequate provision has been made for
4563	the payment of the bonds in the documents authorizing the
4564	issuance of the bonds.
4565	(5)  The accomplishment of the authorized purposes of such
4566	municipality or county under this section is in all respects for
4567	the benefit of the people of the state, for the increase of
4568	their commerce and prosperity, and for the improvement of their
4569	health and living conditions. The municipality or county, in
4570	performing essential governmental functions in accomplishing its
4571	purposes, is not required to pay any taxes or assessments of any
4572	kind whatsoever upon any property acquired or used by the county
4573	or municipality for such purposes or upon any revenues at any
4574	time received by the county or municipality. The bonds, notes,
4575	and other obligations of the municipality or county and the
4576	transfer of and income from such bonds, notes, and other
4577	obligations, including any profits made on the sale of such
4578	bonds, notes, and other obligations, are exempt from taxation of
4579	any kind by the state or by any political subdivision or other
4580	agency or instrumentality of the state. The exemption granted in
4581	this subsection is not applicable to any tax imposed by chapter
4582	220 on interest, income, or profits on debt obligations owned by
4583	corporations.
4584	(6)  Two or more municipalities or counties, the residents
4585	of which have been substantially affected by a hurricane, may
4586	create a legal entity pursuant to s. 163.01(7)(g) to exercise
4587	the powers described in this section as well as those powers
4588	granted in s. 163.01(7)(g). References in this section to a
4589	municipality or county includes such legal entity.
4590	(7)  The association shall issue an annual report on the
4591	status of the use of bond proceeds as related to insolvencies
4592	caused by hurricanes. The report must contain the number and
4593	amount of claims paid. The association shall also include an
4594	analysis of the revenue generated from the assessment levied
4595	under s. 631.57(3)(a) to pay such bonds. The association shall
4596	submit a copy of the report to the President of the Senate, the
4597	Speaker of the House of Representatives, and the Chief Financial
4598	Officer within 90 days after the end of each calendar year in
4599	which bonds were outstanding.
4600	Section 27.  No provision of s. 631.57 or s. 631.695,
4601	Florida Statutes, shall be repealed until such time as the
4602	principal, redemption premium, if any, and interest on all bonds
4603	issued under s. 631.695, Florida Statutes, payable and secured
4604	from assessments levied under s. 631.57(3)(a), Florida Statutes,
4605	have been paid in full or adequate provision for such payment
4606	has been made in accordance with the bond resolution or trust
4607	indenture pursuant to which the bonds were issued.
4608	Section 28.  Paragraph (a) of subsection (1) of section
4609	817.234, Florida Statutes, is amended to read:
4610	817.234  False and fraudulent insurance claims.--
4611	(1)(a)  A person commits insurance fraud punishable as
4612	provided in subsection (11) if that person, with the intent to
4613	injure, defraud, or deceive any insurer:
4614	1.  Presents or causes to be presented any written or oral
4615	statement as part of, or in support of, a claim for payment or
4616	other benefit pursuant to an insurance policy or a health
4617	maintenance organization subscriber or provider contract,
4618	knowing that such statement contains any false, incomplete, or
4619	misleading information concerning any fact or thing material to
4620	such claim;
4621	2.  Prepares or makes any written or oral statement that is
4622	intended to be presented to any insurer in connection with, or
4623	in support of, any claim for payment or other benefit pursuant
4624	to an insurance policy or a health maintenance organization
4625	subscriber or provider contract, knowing that such statement
4626	contains any false, incomplete, or misleading information
4627	concerning any fact or thing material to such claim; or
4628	3.a.  Knowingly presents, causes to be presented, or
4629	prepares or makes with knowledge or belief that it will be
4630	presented to any insurer, purported insurer, servicing
4631	corporation, insurance broker, or insurance agent, or any
4632	employee or agent thereof, any false, incomplete, or misleading
4633	information or written or oral statement as part of, or in
4634	support of, an application for the issuance of, or the rating
4635	of, any insurance policy, or a health maintenance organization
4636	subscriber or provider contract, including any false declaration
4637	of homestead status for the purpose of obtaining coverage in a
4638	homestead account under s. 627.351(6); or
4639	b.  Who knowingly conceals information concerning any fact
4640	material to such application.
4641	Section 29.  By January 1, 2007, the Office of Insurance
4642	Regulation shall submit a report to the President of the Senate,
4643	the Speaker of the House of Representatives, the minority party
4644	leaders of the Senate and the House of Representatives, and the
4645	chairs of the standing committees of the Senate and the House of
4646	Representatives having jurisdiction over matters relating to
4647	property and casualty insurance. In preparing the report, the
4648	office shall consult with the Department of Highway Safety and
4649	Motor Vehicles, the Department of Community Affairs, the Florida
4650	Building Commission, the Florida Home Builders Association,
4651	representatives of the mobile and manufactured home industry,
4652	representatives of the property and casualty insurance industry,
4653	and any other party the office determines is appropriate. The
4654	report shall include findings and recommendations on the
4655	insurability of attached or free standing structures to
4656	residential homes, mobile, or manufactured homes, such as
4657	carports or pool enclosures; the increase or decrease in
4658	insurance costs associated with insuring such structures; the
4659	feasibility of insuring such structures; the impact on
4660	homeowners of not having insurance coverage for such structures;
4661	the ability of mitigation measures relating to such structures
4662	to reduce risk and loss; and such other related information as
4663	the office determines is appropriate for the Legislature to
4664	consider.
4665	Section 30.  (1)  The Office of Insurance Regulation, in
4666	consultation with the Department of Community Affairs, the
4667	Department of Financial Services, the Federal Alliance for Safe
4668	Homes, the Florida Insurance Council, the Florida Home Builders
4669	Association, the Florida Manufactured Housing Association, the
4670	Risk and Insurance Department of Florida State University, and
4671	the Institute for Business and Homes Safety, shall study and
4672	develop a program that will provide an objective rating system
4673	that will allow homeowners to evaluate the relative ability of
4674	Florida properties to withstand the wind load from a sustained
4675	severe tropical storm or hurricane.
4676	(2)  The rating system will be designed in a manner that is
4677	easy to understand for the property owner, based on proven
4678	readily verifiable mitigation techniques and devices, and able
4679	to be implemented based on a visual inspection program. The
4680	Department of Financial Services shall implement a pilot program
4681	for use in the Florida Comprehensive Hurricane Damage Mitigation
4682	Program.
4683	(3)  The Department shall provide a report to the Governor,
4684	the President of the Senate, and the Speaker of the House of
4685	Representatives by March 31, 2007, detailing the nature and
4686	construction of the rating scale, its effectiveness based on
4687	implementation in a pilot program, and an operational plan for
4688	statewide implementation of the rating scale.
4689	Section 31.  (1)  For fiscal year 2006-2007, the sum of
4690	$100 million is appropriated from the General Revenue Fund to
4691	the Department of Financial Services for the Florida Hurricane
4692	Damage Prevention Endowment as a nonrecurring appropriation for
4693	the purposes specified in s. 215.558, Florida Statutes.
4694	(2)  The sum of $400 million is appropriated from the
4695	General Revenue Fund to the Department of Financial Services as
4696	a nonrecurring appropriation for the purposes specified in s.
4697	215.5586, Florida Statutes.
4698	(3)  Funds provided in subsections (1) and (2) shall be
4699	transferred by the department to the Florida Hurricane Damage
4700	Prevention Trust Fund, as created in s. 215.5585, Florida
4701	Statutes.
4702	(4)  For fiscal year 2006-2007, the recurring sum of $5
4703	million is appropriated to the Department of Financial Services
4704	from the Florida Hurricane Damage Prevention Trust Fund, Special
4705	Category ? Financial Incentives for Hurricane Damage Prevention.
4706	(5)  For fiscal year 2006-2007, the nonrecurring sum of
4707	$400 million is appropriated to the Department of Financial
4708	Services from the Florida Hurricane Damage Prevention Trust
4709	Fund, Special Category ? Florida Comprehensive Hurricane Damage
4710	Mitigation Program. The department may spend up to 1 percent of
4711	the funds appropriated to administer the program. The department
4712	shall contract with Tallahassee Community College for $7.5
4713	million to implement the Manufactured Housing and Mobile Home
4714	Hurricane Mitigation Program that is part of the Florida
4715	Comprehensive Hurricane Damage Mitigation Program. Tallahassee
4716	Community College may spend up to 5 percent of the funds
4717	appropriated to administer the Manufactured Housing and Mobile
4718	Home Hurricane Mitigation and Enhancement Program.
4719	Notwithstanding s. 216.301, Florida Statutes, and pursuant to s.
4720	216.351, Florida Statutes, any unexpended balance from this
4721	appropriation shall be carried forward at the end of each fiscal
4722	year until the 2010-2011 fiscal year. At the end of the 2010-
4723	2011 fiscal year, any obligated funds for qualified projects
4724	that are not yet disbursed shall remain with the department to
4725	be used for the purposes of this act. Any unobligated funds of
4726	this appropriation shall revert to the Florida Hurricane Damage
4727	Prevention Trust Fund at the end of the 2010-2011 fiscal year.
4728	Section 32.  (1)  For fiscal year 2006-2007, the sum of
4729	$920 million in nonrecurring funds is appropriated from the
4730	General Revenue Fund to the Department of Financial Services for
4731	transfer to the Citizens Property Insurance Corporation as an
4732	allocation to regular assessments on assessable insurers and
4733	insureds, as authorized under s. 627.351(6)(b)3.b., Florida
4734	Statutes, for the 2005 Plan Year deficit. The board of governors
4735	of the corporation shall allocate the appropriated state moneys
4736	to each of the personal lines, commercial lines, and high-risk
4737	accounts so as to totally eliminate the deficit for calendar
4738	year 2005 in each such account that would have been paid from
4739	the proceeds of regular assessment but for the appropriated
4740	moneys. The moneys allocated to each account from the
4741	appropriations shall be considered to be and shall be treated as
4742	proceeds of regular assessments for purposes of financing
4743	documents of the corporation. No regular assessments shall be
4744	imposed for any portion of the calendar year 2005 deficit paid
4745	from the appropriated moneys. The transfer made by the
4746	department to the corporation shall be limited to the amount of
4747	the total regular assessments that were authorized by law to
4748	cover the 2005 Plan Year deficit. Any unused and remaining funds
4749	in this appropriation shall revert to the General Revenue Fund.
4750	(2)  The corporation shall amortize over a 10-year period
4751	any emergency assessments resulting from the 2005 Plan Year
4752	deficit.
4753	(3)  Each insurer that recoups an assessment from its
4754	policyholders as allowed by law shall include on the premium
4755	notice sent to policyholders, in 12-point type, the following
4756	statement, with the appropriate dollar amounts shown:
4757	"THE $    SURCHARGE IN YOUR PREMIUM FOR THE ASSESSMENT BY
4758	CITIZENS PROPERTY INSURANCE CORPORATION HAS BEEN REDUCED BY
4759	$____DUE TO AN APPROPRIATION BY THE FLORIDA LEGISLATURE."
4760	(4)  A violation of this section by an insurer is a
4761	violation of the Insurance Code and the insurer is subject to
4762	the penalties provided in ss. 624.418 and 624.4211, Florida
4763	Statutes.
4764	Section 33.  For fiscal year 2006-2007, the sums of
4765	$250,000 in recurring funds and $425,000 in nonrecurring funds
4766	are appropriated from the Insurance Regulatory Trust Fund in the
4767	Department of Financial Services to the Office of Insurance
4768	Regulation for the purpose of carrying out reporting and
4769	administrative responsibilities of this act.
4770	Section 34.  Except as otherwise expressly provided in this
4771	act, this act shall take effect July 1, 2006.

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