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; amending s.
38	215.559, F.S.; deleting provisions relating to the
39	development of a low-interest loan program for homeowners
40	and mobile home owners to retrofit their homes by the
41	Department of Community Affairs; creating the Manufactured
42	Housing and Mobile Home Mitigation and Enhancement Program
43	for certain purposes; requiring Tallahassee Community
44	College to develop the program in consultation with
45	certain entities; specifying requirements of the program;
46	specifying certain requirements of the program as to
47	certain concerns of the Department of Highway Safety and
48	Motor Vehicles relating to manufactured homes and mobile
49	homes; specifying the program as a grant program for
50	improvement of mobile homes and manufactured home parks;
51	requiring the Department of Financial Services to
52	distribute the grants to Tallahassee Community College for
53	certain purposes; requiring Citizens Property Insurance
54	Corporation to grant certain insurance discounts, credits,
55	rate differentials, or deductible reductions for property
56	insurance premiums for manufactured home or mobile home
57	owners; specifying criteria for such premiums; requiring a
58	program report each year to the Governor and Legislature;
59	providing report requirements; specifying funding for tie-
60	down enhancement systems; requiring Tallahassee Community
61	College to provide a program report each year to the
62	Governor and Legislature; providing report requirements;
63	creating s. 252.63, F.S.; providing purpose and intent;
64	providing powers of the Commissioner of Insurance
65	Regulation during a state of emergency; providing a
66	purpose and intent; authorizing the commissioner to issue
67	certain orders in a state of emergency; providing for
68	effect and duration of such orders; providing for
69	legislative termination of such orders; requiring the
70	commissioner to publish such orders and an explanatory
71	statement; amending s. 626.918, F.S.; authorizing certain
72	letters of credit to fund an insurer's required
73	policyholder protection trust fund; providing a
74	definition; amending s. 627.062, F.S.; specifying certain
75	rate filings as not subject to office determination as
76	excessive or unfairly discriminatory; providing
77	limitations; providing a definition; prohibiting certain
78	rate filings under certain circumstances; preserving the
79	office's authority to disapprove certain rate filings
80	under certain circumstances; providing procedures for
81	insurers submitting certain rate filings; revising
82	provisions providing for recoupment of certain reinsurance
83	costs; specifying nonapplication to certain types of
84	insurance; specifying approval of certain rate filings
85	under certain circumstances; providing an exception;
86	requiring the office to provide annual reports on the
87	impact of certain rate regulations; specifying report
88	requirements; amending s. 627.0628, F.S.; prohibiting
89	certain office or consumer advocate questions of certain
90	models reviewed by the commission; amending s. 627.0645,
91	F.S.; authorizing the office to exempt certain companies
92	from certain rate filing and rate certification
93	requirements; amending s. 627.06281, F.S.; prohibiting the
94	office from using certain hurricane loss projection models
95	under certain circumstances; amending s. 627.351, F.S.,
96	relating to the Citizens Property Insurance Corporation;
97	providing additional legislative intent; specifying
98	application to homestead property; providing that certain
99	responsibilities of the Office of Insurance Regulation
100	with respect to the plan of operation of Citizens Property
101	Insurance Corporation be assumed by the Financial Services
102	Commission; specifying the existing three separate
103	accounts of the corporation as providing coverage only for
104	homestead property; providing a definition; providing for
105	an additional separate account for nonhomestead property;
106	requiring separate maintenance of revenues, assets,
107	liabilities, losses, and expenses attributable to the
108	nonhomestead account; providing authority and requirements
109	for coverage rates for nonhomestead properties; providing
110	for office review of such rates or rating plans for being
111	inadequate or unfairly discriminatory; authorizing the
112	office to order discontinuance of certain policies under
113	certain circumstances; requiring insurers to maintain
114	certain records; providing for reducing regular
115	assessments by the Citizen policyholder surcharge under
116	certain circumstances; providing for deficit assessments
117	against nonhomestead account policyholders under certain
118	circumstances; authorizing the board of governors of the
119	corporation to make loans from the homestead accounts to
120	the nonhomestead account under certain circumstances;
121	specifying ineligibility of certain nonhomestead account
122	policyholders for certain coverage under certain
123	circumstances; revising the requirements of the plan of
124	operation of the corporation; requiring additional
125	procedures for determining eligibility of a risk for
126	coverage; prescribing a 10-day waiting period for
127	applications for coverage for a new policy; authorizing
128	exceptions; providing for determination of regular
129	assessments to which the Citizen policyholder surcharge
130	applies; providing for optional payment plans; specifying
131	a minimum requirement for a hurricane deductible for
132	certain property; specifying contents of required
133	statements in applications for nonhomestead and homestead
134	account coverage; requiring prospective senior management
135	employees of the corporation to successfully pass a
136	background check; requiring employees of the corporation
137	to sign annually a statement that they have no conflict of
138	interest; providing that senior managers and members of
139	the board of governors are subject to the code of ethics
140	and must file financial disclosure; prohibiting employees
141	and members of the board of governors from accepting gifts
142	or expenditures from a persons or entity, or employee
143	thereof, which has or is under consideration for a
144	contract with the corporation; providing penalties;
145	providing a limitation on senior managers' representation
146	of persons before the corporation after retirement or
147	termination of employment and on employment with an
148	insurer that has received a take-out bonus; prescribing
149	guidelines for purchases of goods and services; providing
150	guidelines on use of outside counsel; prohibiting the
151	corporation from retaining a lobbyist; authorizing full-
152	time employees to register and engage in lobbying;
153	creating the Office of Internal Auditor and prescribing
154	its duties; providing record-retention requirements;
155	requiring establishment of a unit or division to
156	investigate claims involving possible fraud against the
157	corporation and another to receive and respond to consumer
158	complaints; requiring a periodic comprehensive market
159	conduct examination of the corporation; requiring periodic
160	operational audits of the corporation by the Auditor
161	General; prescribing elements to be included in such
162	audits; requiring the corporation to limit coverage on
163	certain mobile homes or manufactured homes; providing
164	additional legislative intent relating to rate adequacy in
165	the residual market; revising provisions relating to a
166	pilot program in Monroe County; providing program
167	requirements of the office; deleting provisions relating
168	to a rate methodology panel appointed by the corporation;
169	providing requirements and limitations for a corporation
170	adopted bonus payment program; specifying absence of
171	liability of producing agents of record of the corporation
172	and employees for a take-out insurer's insolvency;
173	deleting provisions for immunity for certain persons and
174	entities; providing a criterion for calculating reduction
175	or increase in probable maximum loss; providing bankruptcy
176	petition limitations; delaying application of certain
177	high-risk area boundary reduction provisions; providing
178	for application of provisions relating to homestead and
179	nonhomestead accounts to certain policies; requiring
180	certain corporation employees to comply with certain
181	ethics code requirements; requiring corporation employees
182	to notify the Division of Insurance Fraud of probable
183	commissions of fraud by corporation employees; requiring
184	the corporation to report on the feasibility of requiring
185	authorized insurers to issue and service specified
186	policies of the corporation; specifying report
187	requirements; providing immunity to producing agents and
188	employees for specified actions taken relating to removal
189	of policies from the corporation; providing a limitation;
190	providing legislative intent; creating a High Risk
191	Eligibility Panel; providing for appointment of panel
192	members and member's terms; providing for administration
193	of the panel by the corporation; prohibiting compensation
194	and per diem and travel expenses; providing an exception;
195	requiring the panel to report annually to the Legislature
196	on the certain areas that should be included in the
197	Citizens Property Insurance Corporation high risk account;
198	specifying factors to be considered by the panel;
199	providing duties of the office; authorizing the office to
200	conduct public hearings; requiring the panel to conduct an
201	analysis of property eligible for the high-risk account in
202	specified areas; requiring the panel to submit a report to
203	the office and corporation; providing requirements of the
204	report; amending s. 627.3517, F.S.; providing that an
205	insurance risk apportionment plan policyholder's right to
206	retain his or her current agent does not apply during the
207	first 10 days after a new application for coverage has
208	been submitted to Citizens Property Insurance Corporation;
209	creating s. 627.3519, F.S.; requiring the Financial
210	Services Commission to report annually to the Legislature
211	on probable maximum losses, financing options, and
212	assessment potentials of the Florida Hurricane Catastrophe
213	Fund and Citizens Property Insurance Corporation; amending
214	s. 627.4035, F.S.; providing for a waiver of a written
215	authorization requirement to pay claims by debit card or
216	other electronic transfer; amending s. 627.701, F.S.;
217	providing additional authorization and requirements for
218	hurricane deductibles for renewal periods; authorizing
219	insurers to provide insureds with certain deductible
220	selection options after hurricane mitigation measures are
221	taken; providing a notice requirement; amending s.
222	627.7011, F.S.; limiting certain law and ordinance
223	coverage; deleting application to personal property;
224	requiring insurers to issue separate checks for certain
225	expenses and requiring certain checks to be issued
226	directly to a policyholder; creating s. 627.7019, F.S.;
227	requiring the Financial Services Commission to adopt rules
228	imposing standardized requirements applicable to insurers
229	after certain natural events; providing criteria;
230	providing requirements of the Office of Insurance
231	Regulation; prohibiting certain conflicting emergency
232	rules; amending s. 627.727, F.S.; correcting a cross-
233	reference; amending s. 631.181, F.S.; providing an
234	exception to certain requirements for a signed statement
235	for certain claims; providing requirements; amending s.
236	631.54, F.S.; defining the term "homeowner's insurance";
237	amending s. 631.55, F.S.; correcting a cross-reference;
238	amending s. 631.57, F.S.; revising requirements and
239	limitations for obligations of the Florida Insurance
240	Guaranty Association for covered claims; authorizing the
241	association to contract with counties, municipalities, and
242	legal entities to issue revenue bonds for certain
243	purposes; authorizing the Office of Insurance Regulation
244	to levy assessments and emergency assessments on insurers
245	under certain circumstances for certain bond repayment
246	purposes; providing requirements for and limitations on
247	such assessments; providing for payment, collection, and
248	distribution of such assessments; requiring insurers to
249	include an analysis of revenues from such assessments in a
250	required report; providing rate filing requirements for
251	insurers relating to such assessments; providing for
252	continuing annual assessments under certain circumstances;
253	specifying emergency assessments as not premium and not
254	subject to certain taxes, fees, or commissions; specifying
255	insurer liability for emergency assessments; providing an
256	exception; creating s. 631.695, F.S.; providing
257	legislative findings and purposes; providing for issuance
258	of revenue bonds through counties and municipalities to
259	fund assistance programs for paying covered claims for
260	hurricane damage; providing procedures, requirements, and
261	limitations for counties, municipalities, and the Florida
262	Insurance Guaranty Association, Inc., relating to issuance
263	and validation of such bonds; prohibiting pledging the
264	funds, credit, property, and taxing power of the state,
265	counties, and municipalities for payment of bonds;
266	specifying authorized uses of bond proceeds; limiting the
267	term of bonds; specifying a state covenant to protect
268	bondholders from adverse actions relating to such bonds;
269	specifying exemptions for bonds, notes, and other
270	obligations of counties and municipalities from certain
271	taxes or assessments on property and revenues; authorizing
272	counties and municipalities to create a legal entity to
273	exercise certain powers; requiring the association to
274	issue an annual report on the status of certain uses of
275	bond proceeds; providing report requirements; requiring
276	the association to provide a copy of the report to the
277	Legislature and Chief Financial Officer; prohibiting
278	repeal of certain provisions relating to certain bonds
279	under certain circumstances; amending s. 817.234, F.S.;
280	providing an additional circumstance that constitutes
281	committing insurance fraud; requiring the Office of
282	Insurance Regulation to submit reports to the Legislature
283	relating to the insurability of certain attached or free
284	standing structures ; providing report requirements;
285	providing duties of the office; providing appropriations;
286	specifying uses and purposes of appropriations; requiring
287	insurers who recoup assessments to notify policyholders of
288	the amount by which the surcharge has been reduced;
289	providing penalties for a violation; providing effective
290	dates.
291
292	Be It Enacted by the Legislature of the State of Florida:
293
294	Section 1.  This act may be cited as the "John F. Cosgrove
295	Memorial Act."
296	Section 2.  Paragraph (d) of subsection (2), paragraphs
297	(b), (c), and (d) of subsection (4), paragraph (b) of subsection
298	(5), and paragraphs (a) and (b) of subsection (6) of section
299	215.555, Florida Statutes, are amended, and paragraph (e) is
300	added to subsection (5) of that section, to read:
301	215.555  Florida Hurricane Catastrophe Fund.--
302	(2)  DEFINITIONS.--As used in this section:
303	(d)  "Losses" means direct incurred losses under covered
304	policies, which shall include losses for additional living
305	expenses not to exceed 40 percent of the insured value of a
306	residential structure or its contents and shall exclude loss
307	adjustment expenses. "Losses" does not include losses for fair
308	rental value, loss of rent or rental income use, or business
309	interruption losses.
310	(4)  REIMBURSEMENT CONTRACTS.--
311	(b)1.  The contract shall contain a promise by the board to
312	reimburse the insurer for 45 percent, 75 percent, or 90 percent
313	of its losses from each covered event in excess of the insurer's
314	retention, plus 5 percent of the reimbursed losses to cover loss
315	adjustment expenses.
316	2.  The insurer must elect one of the percentage coverage
317	levels specified in this paragraph and may, upon renewal of a
318	reimbursement contract, elect a lower percentage coverage level
319	if no revenue bonds issued under subsection (6) after a covered
320	event are outstanding, or elect a higher percentage coverage
321	level, regardless of whether or not revenue bonds are
322	outstanding. All members of an insurer group must elect the same
323	percentage coverage level. Any joint underwriting association,
324	risk apportionment plan, or other entity created under s.
325	627.351 must elect the 90-percent coverage level.
326	3.  The contract shall provide that reimbursement amounts
327	shall not be reduced by reinsurance paid or payable to the
328	insurer from other sources.
329	4.  Notwithstanding any other provision contained in this
330	section, the board shall make available to insurers qualifying
331	as limited apportionment companies under s. 627.351(6)(c)14. a
332	contract which cedes to the fund, after retention, an amount of
333	up to $10 million. The rate to be charged for this coverage
334	shall be 50 percent rate-on-line which includes one prepaid
335	reinstatement. The minimum retention level that a carrier must
336	retain is 30 percent of surplus as of June 1, 2006. This
337	coverage shall be in addition to all other coverage which may be
338	provided under this section. This provision shall expire May 31,
339	2007.
340	5.  Notwithstanding any other provisions contained in this
341	section, the board shall make available for the contract year
342	beginning June 1, 2006, and the contract year beginning June 1,
343	2007, additional contracts to insurers, other than entities
344	created pursuant to s. 627.351, which cede to the fund an amount
345	of additional first-event liability up to $2.5 billion. This
346	additional capacity shall be provided by the fund provided that:
347	a.  The layer of excess reinsurance provides coverage below
348	the attachment point of the fund;
349	b.  At least 20 percent of the excess layer for each
350	participating insurer utilizing this additional capacity is
351	placed with independent reinsurers not related to the cedent;
352	c.  The fund provides coverage at the same terms and
353	conditions as the independent reinsurers, not related to the
354	cedent; and
355	d.  The fund receives 100 percent of the gross reinsurance
356	premium for its participation without deduction for reinsurance
357	brokerage.
358
359	The fund may provide additional coverage for a second event on
360	the same terms and conditions as provided by the independent
361	reinsurers not related to the cedent. This coverage shall be in
362	addition to all other coverage which may be provided under this
363	section. This subparagraph shall expire May 31, 2008.
364	(c)1.  The contract shall also provide that the obligation
365	of the board with respect to all contracts covering a particular
366	contract year shall not exceed the actual claims-paying capacity
367	of the fund up to a limit of $15 billion for that contract year
368	adjusted based upon the reported exposure from the prior
369	contract year to reflect the percentage growth in exposure to
370	the fund for covered policies since 2003, provided the dollar
371	growth in the limit may not increase in any year by an amount
372	greater than the dollar growth of the cash balance of the fund
373	as of December 31 as defined by rule which occurred over the
374	prior calendar year.
375	2.  In May before the start of the upcoming contract year
376	and in October during the contract year, the board shall publish
377	in the Florida Administrative Weekly a statement of the fund's
378	estimated borrowing capacity and the projected balance of the
379	fund as of December 31. After the end of each calendar year, the
380	board shall notify insurers of the estimated borrowing capacity
381	and the balance of the fund as of December 31 to provide
382	insurers with data necessary to assist them in determining their
383	retention and projected payout from the fund for loss
384	reimbursement purposes. In conjunction with the development of
385	the premium formula, as provided for in subsection (5), the
386	board shall publish factors or multiples that assist insurers in
387	determining their retention and projected payout for the next
388	contract year. For all regulatory and reinsurance purposes, an
389	insurer may calculate its projected payout from the fund as its
390	share of the total fund premium for the current contract year
391	multiplied by the sum of the projected balance of the fund as of
392	December 31 and the estimated borrowing capacity for that
393	contract year as reported under this subparagraph.
394	(d)1.  For purposes of determining potential liability and
395	to aid in the sound administration of the fund, the contract
396	shall require each insurer to report such insurer's losses from
397	each covered event on an interim basis, as directed by the
398	board. The contract shall require the insurer to report to the
399	board no later than December 31 of each year, and quarterly
400	thereafter, its reimbursable losses from covered events for the
401	year. The contract shall require the board to determine and pay,
402	as soon as practicable after receiving these reports of
403	reimbursable losses, the initial amount of reimbursement due and
404	adjustments to this amount based on later loss information. The
405	adjustments to reimbursement amounts shall require the board to
406	pay, or the insurer to return, amounts reflecting the most
407	recent calculation of losses.
408	2.  In determining reimbursements pursuant to this
409	subsection, the contract shall provide that the board shall:
410	a.  First reimburse insurers writing covered policies,
411	which insurers are in full compliance with this section and have
412	petitioned the Office of Insurance Regulation and qualified as
413	limited apportionment companies under s. 627.351(2)(b)3. The
414	amount of such reimbursement shall be the lesser of $10 million
415	or an amount equal to 10 times the insurer's reimbursement
416	premium for the current year. The amount of reimbursement paid
417	under this sub-subparagraph may not exceed the full amount of
418	reimbursement promised in the reimbursement contract. This sub-
419	subparagraph does not apply with respect to any contract year in
420	which the year-end projected cash balance of the fund, exclusive
421	of any bonding capacity of the fund, exceeds $2 billion. Only
422	one member of any insurer group may receive reimbursement under
423	this sub-subparagraph.
424	a.b.  Next Pay to each insurer such insurer's projected
425	payout, which is the amount of reimbursement it is owed, up to
426	an amount equal to the insurer's share of the actual premium
427	paid for that contract year, multiplied by the actual claims-
428	paying capacity available for that contract year; provided,
429	entities created pursuant to s. 627.351 shall be further
430	reimbursed in accordance with sub-subparagraph b. c.
431	b.c.  Thereafter, establish the prorated reimbursement
432	level at the highest level for which any remaining fund balance
433	or bond proceeds are sufficient to reimburse entities created
434	pursuant to s. 627.351 based on reimbursable losses exceeding
435	the amounts payable pursuant to sub-subparagraph a. b. for the
436	current contract year.
437	(5)  REIMBURSEMENT PREMIUMS.--
438	(b)  The State Board of Administration shall select an
439	independent consultant to develop a formula for determining the
440	actuarially indicated premium to be paid to the fund. The
441	formula shall specify, for each zip code or other limited
442	geographical area, the amount of premium to be paid by an
443	insurer for each $1,000 of insured value under covered policies
444	in that zip code or other area. In establishing premiums, the
445	board shall consider the coverage elected under paragraph (4)(b)
446	and any factors that tend to enhance the actuarial
447	sophistication of ratemaking for the fund, including
448	deductibles, type of construction, type of coverage provided,
449	relative concentration of risks, a factor providing for more
450	rapid cash buildup in the fund until the fund capacity for a
451	single hurricane season is fully funded, and other such factors
452	deemed by the board to be appropriate. The formula may provide
453	for a procedure to determine the premiums to be paid by new
454	insurers that begin writing covered policies after the beginning
455	of a contract year, taking into consideration when the insurer
456	starts writing covered policies, the potential exposure of the
457	insurer, the potential exposure of the fund, the administrative
458	costs to the insurer and to the fund, and any other factors
459	deemed appropriate by the board. The formula shall include a
460	factor of 25 percent of the fund's actuarially indicated premium
461	in order to provide for more rapid cash buildup in the fund. The
462	formula must be approved by unanimous vote of the board. The
463	board may, at any time, revise the formula pursuant to the
464	procedure provided in this paragraph.
465	(e)  For purposes of paragraph (c), if Citizens Property
466	Insurance Corporation assumes or otherwise provides coverage for
467	policies of insurers placed in liquidation under chapter 631
468	pursuant to s. 627.351(6)(m)5., Citizens Property Insurance
469	Corporation shall notify the board of its insured values with
470	respect to such policies within 60 days after such assumption or
471	other coverage transaction and the fund shall treat such
472	policies as having been in effect as of June 30 of that year.
473	For purposes of subsection (4), Citizens Property Insurance
474	Corporation may enter into a separate reimbursement contract
475	with respect to such policies and, if so, shall be treated by
476	the fund as a separate insurer with respect to such policies
477	until their first renewal effective date.
478	(6)  REVENUE BONDS.--
479	(a)  General provisions.--
480	1.  Upon the occurrence of a hurricane and a determination
481	that the moneys in the fund are or will be insufficient to pay
482	reimbursement at the levels promised in the reimbursement
483	contracts, the board may take the necessary steps under
484	paragraph (c) or paragraph (d) for the issuance of revenue bonds
485	for the benefit of the fund. The proceeds of such revenue bonds
486	may be used to make reimbursement payments under reimbursement
487	contracts; to refinance or replace previously existing
488	borrowings or financial arrangements; to pay interest on bonds;
489	to fund reserves for the bonds; to pay expenses incident to the
490	issuance or sale of any bond issued under this section,
491	including costs of validating, printing, and delivering the
492	bonds, costs of printing the official statement, costs of
493	publishing notices of sale of the bonds, and related
494	administrative expenses; or for such other purposes related to
495	the financial obligations of the fund as the board may
496	determine. The term of the bonds may not exceed 30 years. The
497	board may pledge or authorize the corporation to pledge all or a
498	portion of all revenues under subsection (5) and under paragraph
499	(b) to secure such revenue bonds and the board may execute such
500	agreements between the board and the issuer of any revenue bonds
501	and providers of other financing arrangements under paragraph
502	(7)(b) as the board deems necessary to evidence, secure,
503	preserve, and protect such pledge. If reimbursement premiums
504	received under subsection (5) or earnings on such premiums are
505	used to pay debt service on revenue bonds, such premiums and
506	earnings shall be used only after the use of the moneys derived
507	from assessments under paragraph (b). The funds, credit,
508	property, or taxing power of the state or political subdivisions
509	of the state shall not be pledged for the payment of such bonds.
510	The board may also enter into agreements under paragraph (c) or
511	paragraph (d) for the purpose of issuing revenue bonds in the
512	absence of a hurricane upon a determination that such action
513	would maximize the ability of the fund to meet future
514	obligations.
515	2.  The Legislature finds and declares that the issuance of
516	bonds under this subsection is for the public purpose of paying
517	the proceeds of the bonds to insurers, thereby enabling insurers
518	to pay the claims of policyholders to assure that policyholders
519	are able to pay the cost of construction, reconstruction,
520	repair, restoration, and other costs associated with damage to
521	property of policyholders of covered policies after the
522	occurrence of a hurricane. Revenue bonds may not be issued under
523	this subsection until validated under chapter 75. The validation
524	of at least the first obligations incurred pursuant to this
525	subsection shall be appealed to the Supreme Court, to be handled
526	on an expedited basis.
527	(b)  Emergency assessments.--
528	1.  If the board determines that the amount of revenue
529	produced under subsection (5) is insufficient to fund the
530	obligations, costs, and expenses of the fund and the
531	corporation, including repayment of revenue bonds and that
532	portion of the debt service coverage not met by reimbursement
533	premiums, the board shall direct the Office of Insurance
534	Regulation to levy, by order, an emergency assessment on direct
535	premiums for all property and casualty lines of business in this
536	state, including property and casualty business of surplus lines
537	insurers regulated under part VIII of chapter 626, but not
538	including any workers' compensation premiums or medical
539	malpractice premiums. As used in this subsection, the term
540	"property and casualty business" includes all lines of business
541	identified on Form 2, Exhibit of Premiums and Losses, in the
542	annual statement required of authorized insurers by s. 624.424
543	and any rule adopted under this section, except for those lines
544	identified as accident and health insurance and except for
545	policies written under the National Flood Insurance Program. The
546	assessment shall be specified as a percentage of direct written
547	future premium collections and is subject to annual adjustments
548	by the board to reflect changes in premiums subject to
549	assessments collected under this subparagraph in order to meet
550	debt obligations. The same percentage shall apply to all
551	policies in lines of business subject to the assessment issued
552	or renewed during the 12-month period beginning on the effective
553	date of the assessment.
554	2.  A premium is not subject to an annual assessment under
555	this paragraph in excess of 6 percent of premium with respect to
556	obligations arising out of losses attributable to any one
557	contract year, and a premium is not subject to an aggregate
558	annual assessment under this paragraph in excess of 10 percent
559	of premium. An annual assessment under this paragraph shall
560	continue for as long as until the revenue bonds issued with
561	respect to which the assessment was imposed are outstanding,
562	including any bonds the proceeds of which were used to refund
563	the revenue bonds, unless adequate provision has been made for
564	the payment of the bonds under the documents authorizing
565	issuance of the bonds.
566	3.  Emergency assessments shall be collected from
567	policyholders. Emergency assessments shall be remitted by
568	insurers as a percentage of direct written premium for the
569	preceding calendar quarter as specified in the order from With
570	respect to each insurer collecting premiums that are subject to
571	the assessment, the insurer shall collect the assessment at the
572	same time as it collects the premium payment for each policy and
573	shall remit the assessment collected to the fund or corporation
574	as provided in the order issued by the Office of Insurance
575	Regulation. The office shall verify the accurate and timely
576	collection and remittance of emergency assessments and shall
577	report the information to the board in a form and at a time
578	specified by the board. Each insurer collecting assessments
579	shall provide the information with respect to premiums and
580	collections as may be required by the office to enable the
581	office to monitor and verify compliance with this paragraph.
582	4.  With respect to assessments of surplus lines premiums,
583	each surplus lines agent shall collect the assessment at the
584	same time as the agent collects the surplus lines tax required
585	by s. 626.932, and the surplus lines agent shall remit the
586	assessment to the Florida Surplus Lines Service Office created
587	by s. 626.921 at the same time as the agent remits the surplus
588	lines tax to the Florida Surplus Lines Service Office. The
589	emergency assessment on each insured procuring coverage and
590	filing under s. 626.938 shall be remitted by the insured to the
591	Florida Surplus Lines Service Office at the time the insured
592	pays the surplus lines tax to the Florida Surplus Lines Service
593	Office. The Florida Surplus Lines Service Office shall remit the
594	collected assessments to the fund or corporation as provided in
595	the order levied by the Office of Insurance Regulation. The
596	Florida Surplus Lines Service Office shall verify the proper
597	application of such emergency assessments and shall assist the
598	board in ensuring the accurate and timely collection and
599	remittance of assessments as required by the board. The Florida
600	Surplus Lines Service Office shall annually calculate the
601	aggregate written premium on property and casualty business,
602	other than workers' compensation and medical malpractice,
603	procured through surplus lines agents and insureds procuring
604	coverage and filing under s. 626.938 and shall report the
605	information to the board in a form and at a time specified by
606	the board.
607	5.  Any assessment authority not used for a particular
608	contract year may be used for a subsequent contract year. If,
609	for a subsequent contract year, the board determines that the
610	amount of revenue produced under subsection (5) is insufficient
611	to fund the obligations, costs, and expenses of the fund and the
612	corporation, including repayment of revenue bonds and that
613	portion of the debt service coverage not met by reimbursement
614	premiums, the board shall direct the Office of Insurance
615	Regulation to levy an emergency assessment up to an amount not
616	exceeding the amount of unused assessment authority from a
617	previous contract year or years, plus an additional 4 percent
618	provided that the assessments in the aggregate do not exceed the
619	limits specified in subparagraph 2.
620	6.  The assessments otherwise payable to the corporation
621	under this paragraph shall be paid to the fund unless and until
622	the Office of Insurance Regulation and the Florida Surplus Lines
623	Service Office have received from the corporation and the fund a
624	notice, which shall be conclusive and upon which they may rely
625	without further inquiry, that the corporation has issued bonds
626	and the fund has no agreements in effect with local governments
627	under paragraph (c). On or after the date of the notice and
628	until the date the corporation has no bonds outstanding, the
629	fund shall have no right, title, or interest in or to the
630	assessments, except as provided in the fund's agreement with the
631	corporation.
632	7.  Emergency assessments are not premium and are not
633	subject to the premium tax, to the surplus lines tax, to any
634	fees, or to any commissions. An insurer is liable for all
635	assessments that it collects and must treat the failure of an
636	insured to pay an assessment as a failure to pay the premium. An
637	insurer is not liable for uncollectible assessments.
638	8.  When an insurer is required to return an unearned
639	premium, it shall also return any collected assessment
640	attributable to the unearned premium. A credit adjustment to the
641	collected assessment may be made by the insurer with regard to
642	future remittances that are payable to the fund or corporation,
643	but the insurer is not entitled to a refund.
644	9.  When a surplus lines insured or an insured who has
645	procured coverage and filed under s. 626.938 is entitled to the
646	return of an unearned premium, the Florida Surplus Lines Service
647	Office shall provide a credit or refund to the agent or such
648	insured for the collected assessment attributable to the
649	unearned premium prior to remitting the emergency assessment
650	collected to the fund or corporation.
651	10.  The exemption of medical malpractice insurance
652	premiums from emergency assessments under this paragraph is
653	repealed May 31, 2010 2007, and medical malpractice insurance
654	premiums shall be subject to emergency assessments attributable
655	to loss events occurring in the contract years commencing on
656	June 1, 2010 2007.
657	Section 3.  Section 215.558, Florida Statutes, is created
658	to read:
659	215.558  Florida Hurricane Damage Prevention Endowment.--
660	(1)  PURPOSE AND INTENT.--The purpose of this section is to
661	provide a continuing source of funding for financial incentives
662	to encourage residential property owners of this state to
663	retrofit their properties to make them less vulnerable to
664	hurricane damage, to help decrease the cost of residential
665	property and casualty insurance, and to provide matching funds
666	to local governments and nonprofit entities for projects that
667	will reduce hurricane damage to residential properties. It is
668	the intent of the Legislature that this section be construed
669	liberally to effectuate its purpose.
670	(2)  DEFINITIONS.--As used in this section:
671	(a)  "Board" means the State Board of Administration.
672	(b)  "Corpus" means the money that has been appropriated to
673	the endowment by the 2006 Legislature, together with any amounts
674	subsequently appropriated to the endowment that are specifically
675	designated as contributions to the corpus and any grants, gifts,
676	or donations to the endowment that are specifically designated
677	as contributions to the corpus.
678	(c)  "Earnings" means any money in the endowment in excess
679	of the corpus, including any income generated by investments,
680	any increase in the market value of investments net of decreases
681	in market value, and any appropriations, grants, gifts, or
682	donations to the endowment not specifically designated as
683	contributions to the corpus.
684	(d)  "Endowment" means the Florida Hurricane Damage
685	Prevention Endowment created by this section.
686	(e)  "Program administrator" means the Department of
687	Financial Services.
688	(3)  ADMINISTRATION.--
689	(a)  The board shall invest endowment assets as provided in
690	this section.
691	(b)  The board may invest and reinvest funds of the
692	endowment in accordance with s. 215.47 and consistent with board
693	policy.
694	(c)  The investment objective shall be long-term
695	preservation of the value of the corpus and a specified regular
696	annual cash outflow for appropriation, as nonrecurring revenue,
697	for the purposes specified in subsection (4).
698	(d)  In accordance with s. 215.44, the board shall report
699	on the financial status of the endowment in its annual
700	investment report to the Legislature.
701	(e)  Costs and fees of the board for investment services
702	shall be deducted from the assets of the endowment.
703	(4)  FINANCIAL INCENTIVES FOR RESIDENTIAL HURRICANE DAMAGE
704	PREVENTION ACTIVITIES.--
705	(a)  Not less than 80 percent of the net earnings of the
706	endowment shall be expended for financial incentives to
707	residential property owners as described in paragraph (b), and
708	no more than the remainder of the net earnings of the endowment
709	shall be expended for matching fund grants to local governments
710	and nonprofit entities for projects that will reduce hurricane
711	damage to residential properties as described in paragraph (c).
712	Any funds authorized for expenditure but not expended for these
713	purposes shall be returned to the endowment.
714	(b)1.  The program administrator, by rule, shall establish
715	a request for a proposal process to annually solicit proposals
716	from lending institutions under which the lending institution
717	will provide interest-free loans to homestead property owners to
718	pay for inspections of homestead property to determine what
719	mitigation measures are needed and for improvements to existing
720	residential properties intended to reduce the homestead
721	property's vulnerability to hurricane damage, in exchange for
722	funding from the endowment.
723	2.  In order to qualify for funding under this paragraph,
724	an interest-free loan program must include an inspection of
725	homestead property to determine what mitigation measures are
726	needed, a means for verifying that the improvements to be paid
727	for from loan proceeds have been demonstrated to reduce a
728	homestead property's vulnerability to hurricane damage, and a
729	means for verifying that the proceeds were actually spent on
730	such improvements. The program must include a method for
731	awarding loans according to the following priorities:
732	a.  The highest priority must be given to single-family
733	owner-occupied homestead dwellings, insured at $500,000 or less,
734	located in the areas designated as high-risk areas for purposes
735	of coverage by the Citizens Property Insurance Corporation.
736	b.  The next highest priority must be given to single-
737	family owner-occupied homestead dwellings, insured at $500,000
738	or less, covered by the Citizens Property Insurance Corporation,
739	wherever located.
740	c.  The next highest priority must be given to single-
741	family owner-occupied homestead dwellings, insured at $500,000
742	or less, that are more than 40 years old.
743	d.  The next highest priority must be given to all other
744	single-family owner-occupied homestead dwellings insured at
745	$500,000 or less.
746	3.  The program administrator shall evaluate proposals
747	based on the following factors:
748	a.  The degree to which the proposal meets the requirements
749	of subparagraph 2.
750	b.  The lending institution's plan for marketing the loans.
751	c.  The anticipated number of loans to be granted relative
752	to the total amount of funding sought.
753	4.  The program administrator shall annually solicit
754	proposals from local governments and nonprofit entities for
755	projects that will reduce hurricane damage to homestead
756	properties. The program administrator may provide up to 50
757	percent of the funding for such projects. The projects may
758	include educational programs, repair services, property
759	inspections, and hurricane vulnerability analyses and such other
760	projects as the program administrator determines to be
761	consistent with the purposes of this section.
762	(5)  ADVISORY COUNCIL.--There is created an advisory
763	council to provide advice and assistance to the program
764	administrator with regard to its administration of the
765	endowment. The advisory council shall consist of:
766	(a)  A representative of lending institutions, selected by
767	the Financial Services Commission from a list of at least three
768	persons recommended by the Florida Bankers Association.
769	(b)  A representative of residential property insurers,
770	selected by the Financial Services Commission from a list of at
771	least three persons recommended by the Florida Insurance
772	Council.
773	(c)  A representative of home builders, selected by the
774	Financial Services Commission from a list of at least three
775	persons recommended by the Florida Home Builders Association.
776	(d)  A faculty member of a state university selected by the
777	Financial Services Commission who is an expert in hurricane-
778	resistant construction methodologies and materials.
779	(e)  Two members of the House of Representatives selected
780	by the Speaker of the House of Representatives.
781	(f)  Two members of the Senate selected by the President of
782	the Senate.
783	(g)  The senior officer of the Florida Hurricane
784	Catastrophe Fund.
785	(h)  The executive director of Citizens Property Insurance
786	Corporation.
787	(i)  The director of the Division of Emergency Management
788	of the Department of Community Affairs.
789
790	Members appointed under paragraphs (a)-(d) shall serve at the
791	pleasure of the Financial Services Commission. Members appointed
792	under paragraphs (e) and (f) shall serve at the pleasure of the
793	appointing officer. All other members shall serve ex officio.
794	Members of the advisory council shall serve without compensation
795	but may receive reimbursement as provided in s. 112.061 for per
796	diem and travel expenses incurred in the performance of their
797	official duties.
798	Section 4.  Section 215.5586, Florida Statutes, is created
799	to read:
800	215.5586  Florida Comprehensive Hurricane Damage Mitigation
801	Program.--There is established within the Department of
802	Financial Services the Florida Comprehensive Hurricane Damage
803	Mitigation Program. The program shall be administered by an
804	individual with prior executive experience in the private sector
805	in the areas of insurance, business, or construction. The
806	program shall develop and implement a comprehensive and
807	coordinated approach for hurricane damage mitigation that shall
808	include the following:
809	(1)  WIND CERTIFICATION AND HURRICANE MITIGATION
810	INSPECTIONS.--
811	(a)  Free home-retrofit inspections of site-built,
812	residential property, including single-family, two-family,
813	three-family, or four-family residential units, shall be offered
814	to determine what mitigation measures are needed and what
815	improvements to existing residential properties are needed to
816	reduce the property's vulnerability to hurricane damage. The
817	Department of Financial Services shall establish a request for
818	proposals to solicit proposals from wind certification entities
819	to provide at no cost to homeowners wind certification and
820	hurricane mitigation inspections. The inspections provided to
821	homeowners, at a minimum, must include:
822	1.  A home inspection and report that summarizes the
823	results and identifies corrective actions a homeowner may take
824	to mitigate hurricane damage.
825	2.  A range of cost estimates regarding the mitigation
826	features.
827	3.  Insurer-specific information regarding premium
828	discounts correlated to recommended mitigation features
829	identified by the inspection.
830	4.  A hurricane resistance rating scale specifying the
831	home's current as well as projected wind resistance
832	capabilities.
833	(b)  To qualify for selection by the department as a
834	provider of wind certification and hurricane mitigation
835	inspections, the entity shall, at a minimum:
836	1.  Use wind certification and hurricane mitigation
837	inspectors who:
838	a.  Have prior experience in residential construction or
839	inspection and have received specialized training in hurricane
840	mitigation procedures.
841	b.  Have undergone drug testing and background checks.
842	c.  Have been certified, in a manner satisfactory to the
843	department, to conduct the inspections.
844	2.  Provide a quality assurance program including a
845	reinspection component.
846	(2)  GRANTS.--Financial grants shall be used to encourage
847	single-family, site-built, owner-occupied, residential property
848	owners to retrofit their properties to make them less vulnerable
849	to hurricane damage.
850	(a)  To be eligible for a grant, a residential property
851	must:
852	1.  Have been granted a homestead exemption under chapter
853	196.
854	2.  Be a dwelling with an insured value of $500,000 or
855	less.
856	3.  Have undergone an acceptable wind certification and
857	hurricane mitigation inspection.
858
859	A residential property which is part of a multi-family
860	residential unit may receive a grant only if all homeowners
861	participate and the total number of units does not exceed four.
862	(b)  All grants must be matched on a dollar-for-dollar
863	basis for a total of $10,000 for the mitigation project with the
864	state's contribution not to exceed $5,000.
865	(c)  The program shall create a process in which mitigation
866	contractors agree to participate and seek reimbursement from the
867	state and homeowners select from a list of participating
868	contractors. All mitigation must be based upon the securing of
869	all required local permits and inspections. Mitigation projects
870	are subject to random reinspection of up to at least 10 percent
871	of all projects.
872	(d)  Matching fund grants shall also be made available to
873	local governments and nonprofit entities for projects that will
874	reduce hurricane damage to single-family, site-built, owner-
875	occupied, residential property.
876	(3)  LOANS.--Financial incentives shall be provided as
877	authorized by s. 215.558.
878	(4)  EDUCATION AND CONSUMER AWARENESS.--Multimedia public
879	education, awareness, and advertising efforts designed to
880	specifically address mitigation techniques shall be employed, as
881	well as a component to support ongoing consumer resources and
882	referral services.
883	(5)  ADVISORY COUNCIL.--There is created an advisory
884	council to provide advice and assistance to the program
885	administrator with regard to his or her administration of the
886	program. The advisory council shall consist of:
887	(a)  A representative of lending institutions, selected by
888	the Financial Services Commission from a list of at least three
889	persons recommended by the Florida Bankers Association.
890	(b)  A representative of residential property insurers,
891	selected by the Financial Services Commission from a list of at
892	least three persons recommended by the Florida Insurance
893	Council.
894	(c)  A representative of home builders, selected by the
895	Financial Services Commission from a list of at least three
896	persons recommended by the Florida Home Builders Association.
897	(d)  A faculty member of a state university, selected by
898	the Financial Services Commission, who is an expert in
899	hurricane-resistant construction methodologies and materials.
900	(e)  Two members of the House of Representatives, selected
901	by the Speaker of the House of Representatives.
902	(f)  Two members of the Senate, selected by the President
903	of the Senate.
904	(g)  The Chief Executive Officer of the Federal Alliance
905	for Safe Homes, Inc., or his or her designee.
906	(h)  The senior officer of the Florida Hurricane
907	Catastrophe Fund.
908	(i)  The executive director of Citizens Property Insurance
909	Corporation.
910	(j)  The director of the Division of Emergency Management
911	of the Department of Community Affairs.
912
913	Members appointed under paragraphs (a)-(d) shall serve at the
914	pleasure of the Financial Services Commission. Members appointed
915	under paragraphs (e) and (f) shall serve at the pleasure of the
916	appointing officer. All other members shall serve voting ex
917	officio. Members of the advisory council shall serve without
918	compensation but may receive reimbursement as provided in s.
919	112.061 for per diem and travel expenses incurred in the
920	performance of their official duties.
921	(6)  FEDERAL FUNDING.-The department shall use its best
922	efforts to obtain grants or funds from the federal government to
923	supplement the financial resources of the program.
924	(7)  RULES.--The Department of Financial Services shall
925	adopt rules pursuant to ss. 120.536(1) and 120.54 governing the
926	Florida Comprehensive Hurricane Damage Mitigation Program.
927	Section 5.  Section 215.559, Florida Statutes, is amended
928	to read:
929	215.559  Hurricane Loss Mitigation Program.--
930	(1)  There is created a Hurricane Loss Mitigation Program.
931	The Legislature shall annually appropriate $10 million of the
932	moneys authorized for appropriation under s. 215.555(7)(c) from
933	the Florida Hurricane Catastrophe Fund to the Department of
934	Community Affairs for the purposes set forth in this section.
935	(2)(a)  Seven million dollars in funds provided in
936	subsection (1) shall be used for programs to improve the wind
937	resistance of residences and mobile homes, including loans,
938	subsidies, grants, demonstration projects, and direct
939	assistance; cooperative programs with local governments and the
940	Federal Government; and other efforts to prevent or reduce
941	losses or reduce the cost of rebuilding after a disaster.
942	(b)  Three million dollars in funds provided in subsection
943	(1) shall be used to retrofit existing facilities used as public
944	hurricane shelters. The department must prioritize the use of
945	these funds for projects included in the September 1, 2000,
946	version of the Shelter Retrofit Report prepared in accordance
947	with s. 252.385(3), and each annual report thereafter. The
948	department must give funding priority to projects in regional
949	planning council regions that have shelter deficits and to
950	projects that maximize use of state funds.
951	(3)  By the 2006-2007 fiscal year, the Department of
952	Community Affairs shall develop a low-interest loan program for
953	homeowners and mobile home owners to retrofit their homes with
954	fixtures or apply construction techniques that have been
955	demonstrated to reduce the amount of damage or loss due to a
956	hurricane. Funding for the program shall be used to subsidize or
957	guaranty private-sector loans for this purpose to qualified
958	homeowners by financial institutions chartered by the state or
959	Federal Government. The department may enter into contracts with
960	financial institutions for this purpose. The department shall
961	establish criteria for determining eligibility for the loans and
962	selecting recipients, standards for retrofitting homes or mobile
963	homes, limitations on loan subsidies and loan guaranties, and
964	other terms and conditions of the program, which must be
965	specified in the department's report to the Legislature on
966	January 1, 2006, required by subsection (8). For the 2005-2006
967	fiscal year, the Department of Community Affairs may use up to
968	$1 million of the funds appropriated pursuant to paragraph
969	(2)(a) to begin the low-interest loan program as a pilot project
970	in one or more counties. The Department of Financial Services,
971	the Office of Financial Regulation, the Florida Housing Finance
972	Corporation, and the Office of Tourism, Trade, and Economic
973	Development shall assist the Department of Community Affairs in
974	establishing the program and pilot project. The department may
975	use up to 2.5 percent of the funds appropriated in any given
976	fiscal year for administering the loan program. The department
977	may adopt rules to implement the program.
978	(3)(a)(4)  Forty percent of the total appropriation in
979	paragraph (2)(a) shall be used to inspect and improve tie-downs
980	for mobile homes. Within 30 days after the effective date of
981	that appropriation, the department shall contract with a public
982	higher educational institution in this state which has previous
983	experience in administering the programs set forth in this
984	subsection to serve as the administrative entity and fiscal
985	agent pursuant to s. 216.346 for the purpose of administering
986	the programs set forth in this subsection in accordance with
987	established policy and procedures. The administrative entity
988	working with the advisory council set up under subsection (6)
989	shall develop a list of mobile home parks and counties that may
990	be eligible to participate in the tie-down program.
991	(b)1.  There is created the Manufactured Housing and Mobile
992	Home Mitigation and Enhancement Program. The program shall
993	require the mitigation of damage to or enhancement of homes for
994	the areas of concern raised by the Department of Highway Safety
995	and Motor Vehicles in the 2004-2005 Hurricane Reports on the
996	effects of the 2004 and 2005 hurricanes on manufactured and
997	mobile homes in this state. The mitigation of damage or
998	enhancement of homes shall include, but not be limited to,
999	structural components; site-built additions; or tie-down systems
1000	and may also address any other issues deemed appropriate by
1001	Tallahassee Community College, the Federation of Manufactured
1002	Home Owners of Florida, Inc., the Florida Manufactured Housing
1003	Association, and the Department of Highway Safety and Motor
1004	Vehicles. The program shall include an education and outreach
1005	component to ensure that owners of manufactured and mobile homes
1006	are aware of the benefits of participation.
1007	2.  The program shall be a grant program that ensures
1008	entire manufactured home communities and mobile home parks may
1009	be improved wherever practicable.
1010	3.  Upon evidence of completion of the program, the
1011	Citizens Property Insurance Corporation shall grant, on a pro
1012	rata basis, actuarially reasonable discounts, credits, or other
1013	rate differentials or appropriate reductions in deductibles for
1014	the properties of owners of manufactured homes or mobile homes
1015	on which fixtures or construction techniques that have been
1016	demonstrated to reduce the amount of loss in a windstorm have
1017	been installed or implemented. The discount on the premium shall
1018	be applied to subsequent renewal premium amounts. Premiums of
1019	the Citizens Property Insurance Corporation shall reflect the
1020	location of the home and the fact that the home has been
1021	installed in compliance with building codes adopted after
1022	Hurricane Andrew. Rates resulting from the completion of the
1023	Manufactured Housing and Mobile Home Mitigation and Enhancement
1024	Program are not considered competitive rates for the purposes of
1025	ss. 627.351(6)(d)1. and 2.
1026	4.  On or before January 1 of each year, Tallahassee
1027	Community College shall provide a report of activities under
1028	this section to the Governor, the President of the Senate, and
1029	the Speaker of the House of Representatives. The report shall
1030	set forth the number of homes that have taken advantage of the
1031	program, the types of enhancements and improvements made to the
1032	manufactured or mobile homes and attachments to such homes, and
1033	whether there has been an increase of availability of insurance
1034	products to owners of manufactured homes or mobile homes.
1035
1036	Tallahassee Community College shall develop the programs set
1037	forth in this subsection in consultation with the Federation of
1038	Manufactured Home Owners of Florida, Inc., the Florida
1039	Manufactured Housing Association, and the Department of Highway
1040	Safety and Motor Vehicles. The moneys appropriated for the
1041	programs set forth in this section shall be distributed by the
1042	Department of Financial Servces directly to Tallahassee
1043	Community College for the uses set forth in this section.
1044	(4)(5)  Of moneys provided to the Department of Community
1045	Affairs in paragraph (2)(a), 10 percent shall be allocated to a
1046	Type I Center within the State University System dedicated to
1047	hurricane research. The Type I Center shall develop a
1048	preliminary work plan approved by the advisory council set forth
1049	in subsection (5) (6) to eliminate the state and local barriers
1050	to upgrading existing mobile homes and communities, research and
1051	develop a program for the recycling of existing older mobile
1052	homes, and support programs of research and development relating
1053	to hurricane loss reduction devices and techniques for site-
1054	built residences. The State University System also shall consult
1055	with the Department of Community Affairs and assist the
1056	department with the report required under subsection (7) (8).
1057	(5)(6)  Except for the programs set forth in subsection
1058	(3), the Department of Community Affairs shall develop the
1059	programs set forth in this section in consultation with an
1060	advisory council consisting of a representative designated by
1061	the Chief Financial Officer, a representative designated by the
1062	Florida Home Builders Association, a representative designated
1063	by the Florida Insurance Council, a representative designated by
1064	the Federation of Manufactured Home Owners, a representative
1065	designated by the Florida Association of Counties, and a
1066	representative designated by the Florida Manufactured Housing
1067	Association.
1068	(6)(7)  Moneys provided to the Department of Community
1069	Affairs under this section are intended to supplement other
1070	funding sources of the Department of Community Affairs and may
1071	not supplant other funding sources of the Department of
1072	Community Affairs.
1073	(7)(8)  On January 1st of each year, the Department of
1074	Community Affairs shall provide a full report and accounting of
1075	activities under this section and an evaluation of such
1076	activities to the Speaker of the House of Representatives, the
1077	President of the Senate, and the Majority and Minority Leaders
1078	of the House of Representatives and the Senate.
1079	(8)(9)  This section is repealed June 30, 2011.
1080	Section 6.  Section 252.63, Florida Statutes, is created to
1081	read:
1082	252.63  Commissioner of Insurance Regulation; powers in a
1083	state of emergency.--
1084	(1)  When the Governor declares a state of emergency
1085	pursuant to s. 252.36, the commissioner may issue one or more
1086	general orders applicable to all insurance companies, entities,
1087	and persons, as defined in s. 624.04, that are subject to the
1088	Florida Insurance Code and that serve any portion of the area of
1089	the state under the state of emergency.
1090	(2)  An order issued by the commissioner under this section
1091	becomes effective upon issuance and continues for 120 days
1092	unless terminated sooner by the commissioner. The commissioner
1093	may extend an order for one additional period of 120 days if he
1094	or she determines that the emergency conditions that gave rise
1095	to the initial order still exist. By concurrent resolution, the
1096	Legislature may terminate any order issued under this section.
1097	(3)  The commissioner shall publish in the next available
1098	publication of the Florida Administrative Weekly a copy of the
1099	text of any order issued under this section, together with a
1100	statement describing the modification or suspension and
1101	explaining how the modification or suspension will facilitate
1102	recovery from the emergency.
1103	Section 7.  Subsections (1) and (2) of section 626.918,
1104	Florida Statutes, are amended to read:
1105	626.918  Eligible surplus lines insurers.--
1106	(1)  A No surplus lines agent may not shall place any
1107	coverage with any unauthorized insurer which is not then an
1108	eligible surplus lines insurer, except as permitted under
1109	subsections (5) and (6).
1110	(2)  An No unauthorized insurer may not shall be or become
1111	an eligible surplus lines insurer unless made eligible by the
1112	office in accordance with the following conditions:
1113	(a)  Eligibility of the insurer must be requested in
1114	writing by the Florida Surplus Lines Service Office.;
1115	(b)  The insurer must be currently an authorized insurer in
1116	the state or country of its domicile as to the kind or kinds of
1117	insurance proposed to be so placed and must have been such an
1118	insurer for not less than the 3 years next preceding or must be
1119	the wholly owned subsidiary of such authorized insurer or must
1120	be the wholly owned subsidiary of an already eligible surplus
1121	lines insurer as to the kind or kinds of insurance proposed for
1122	a period of not less than the 3 years next preceding. However,
1123	the office may waive the 3-year requirement if the insurer
1124	provides a product or service not readily available to the
1125	consumers of this state or has operated successfully for a
1126	period of at least 1 year next preceding and has capital and
1127	surplus of not less than $25 million.;
1128	(c)  Before granting eligibility, the requesting surplus
1129	lines agent or the insurer shall furnish the office with a duly
1130	authenticated copy of its current annual financial statement in
1131	the English language and with all monetary values therein
1132	expressed in United States dollars, at an exchange rate (in the
1133	case of statements originally made in the currencies of other
1134	countries) then-current and shown in the statement, and with
1135	such additional information relative to the insurer as the
1136	office may request.;
1137	(d)1.a.  The insurer must have and maintain surplus as to
1138	policyholders of not less than $15 million; in addition, an
1139	alien insurer must also have and maintain in the United States a
1140	trust fund for the protection of all its policyholders in the
1141	United States under terms deemed by the office to be reasonably
1142	adequate, in an amount not less than $5.4 million. Any such
1143	surplus as to policyholders or trust fund shall be represented
1144	by investments consisting of eligible investments for like funds
1145	of like domestic insurers under part II of chapter 625 provided,
1146	however, that in the case of an alien insurance company, any
1147	such surplus as to policyholders may be represented by
1148	investments permitted by the domestic regulator of such alien
1149	insurance company if such investments are substantially similar
1150	in terms of quality, liquidity, and security to eligible
1151	investments for like funds of like domestic insurers under part
1152	II of chapter 625. Clean, irrevocable, unconditional, and
1153	evergreen letters of credit issued or confirmed by a qualified
1154	United States financial institution, as defined in subparagraph
1155	2., may be used to fund the trust.;
1156	b.2.  For those surplus lines insurers that were eligible
1157	on January 1, 1994, and that maintained their eligibility
1158	thereafter, the required surplus as to policyholders shall be:
1159	(I)a.  On December 31, 1994, and until December 30, 1995,
1160	$2.5 million.
1161	(II)b.  On December 31, 1995, and until December 30, 1996,
1162	$3.5 million.
1163	(III)c.  On December 31, 1996, and until December 30, 1997,
1164	$4.5 million.
1165	(IV)d.  On December 31, 1997, and until December 30, 1998,
1166	$5.5 million.
1167	(V)e.  On December 31, 1998, and until December 30, 1999,
1168	$6.5 million.
1169	(VI)f.  On December 31, 1999, and until December 30, 2000,
1170	$8 million.
1171	(VII)g.  On December 31, 2000, and until December 30, 2001,
1172	$9.5 million.
1173	(VIII)h.  On December 31, 2001, and until December 30,
1174	2002, $11 million.
1175	(IX)i.  On December 31, 2002, and until December 30, 2003,
1176	$13 million.
1177	(X)j.  On December 31, 2003, and thereafter, $15 million.
1178	c.3.  The capital and surplus requirements as set forth in
1179	sub-subparagraph b. subparagraph 2. do not apply in the case of
1180	an insurance exchange created by the laws of individual states,
1181	where the exchange maintains capital and surplus pursuant to the
1182	requirements of that state, or maintains capital and surplus in
1183	an amount not less than $50 million in the aggregate. For an
1184	insurance exchange which maintains funds in the amount of at
1185	least $12 million for the protection of all insurance exchange
1186	policyholders, each individual syndicate shall maintain minimum
1187	capital and surplus in an amount not less than $3 million. If
1188	the insurance exchange does not maintain funds in the amount of
1189	at least $12 million for the protection of all insurance
1190	exchange policyholders, each individual syndicate shall meet the
1191	minimum capital and surplus requirements set forth in sub-
1192	subparagraph b. subparagraph 2.;
1193	d.4.  A surplus lines insurer which is a member of an
1194	insurance holding company that includes a member which is a
1195	Florida domestic insurer as set forth in its holding company
1196	registration statement, as set forth in s. 628.801 and rules
1197	adopted thereunder, may elect to maintain surplus as to
1198	policyholders in an amount equal to the requirements of s.
1199	624.408, subject to the requirement that the surplus lines
1200	insurer shall at all times be in compliance with the
1201	requirements of chapter 625.
1202
1203	The election shall be submitted to the office and shall be
1204	effective upon the office's being satisfied that the
1205	requirements of sub-subparagraph d. subparagraph 4. have been
1206	met. The initial date of election shall be the date of office
1207	approval. The election approval application shall be on a form
1208	adopted by commission rule. The office may approve an election
1209	form submitted pursuant to sub-subparagraph d. subparagraph 4.
1210	only if it was on file with the former Department of Insurance
1211	before February 28, 1998.;
1212	2.  For purposes of letters of credit under subparagraph
1213	1., the term "qualified United States financial institution"
1214	means an institution that:
1215	a.  Is organized or, in the case of a United States office
1216	of a foreign banking organization, is licensed under the laws of
1217	the United States or any state.
1218	b.  Is regulated, supervised, and examined by authorities
1219	of the United States or any state having regulatory authority
1220	over banks and trust companies.
1221	c.  Has been determined by the office or the Securities
1222	Valuation Office of the National Association of Insurance
1223	Commissioners to meet such standards of financial condition and
1224	standing as are considered necessary and appropriate to regulate
1225	the quality of financial institutions whose letters of credit
1226	are acceptable to the office.
1227	(e)  The insurer must be of good reputation as to the
1228	providing of service to its policyholders and the payment of
1229	losses and claims.;
1230	(f)  The insurer must be eligible, as for authority to
1231	transact insurance in this state, under s. 624.404(3).; and
1232	(g)  This subsection does not apply as to unauthorized
1233	insurers made eligible under s. 626.917 as to wet marine and
1234	aviation risks.
1235	Section 8.  Paragraph (j) is added to subsection (2) of
1236	section 627.062, Florida Statutes, subsection (5) of that
1237	section is amended, and subsections (9) and (10) are added to
1238	that section, to read:
1239	627.062  Rate standards.--
1240	(2)  As to all such classes of insurance:
1241	(j)  Effective January 1, 2007, notwithstanding any other
1242	provision of this section:
1243	1.  With respect to any residential property insurance
1244	subject to regulation under this section, a rate filing,
1245	including, but not limited to, any rate changes, rating factors,
1246	territories, classification, discounts, and credits, with
1247	respect to any policy form, including endorsements issued with
1248	the form, that results in an overall average statewide premium
1249	increase or decrease of no more than 5 percent above or below
1250	the premium that would result from the insurer's rates then in
1251	effect shall not be subject to a determination by the office
1252	that the rate is excessive or unfairly discriminatory except as
1253	provided in subparagraph 3., or any other provision of law,
1254	provided all changes specified in the filing do not result in an
1255	overall premium increase of more than 10 percent for any one
1256	territory, for reasons related solely to the rate change. As
1257	used in this subparagraph, the term "insurer's rates then in
1258	effect" includes only rates that have been lawfully in effect
1259	under this section or rates that have been determined to be
1260	lawful through administrative proceedings or judicial
1261	proceedings.
1262	2.  An insurer may not make filings under this paragraph
1263	with respect to any policy form, including endorsements issued
1264	with the form, if the overall premium changes resulting from
1265	such filings exceed the amounts specified in this paragraph in
1266	any 12-month period. An insurer may proceed under other
1267	provisions of this section or other provisions of law if the
1268	insurer seeks to exceed the premium or rate limitations of this
1269	paragraph.
1270	3.  This paragraph does not affect the authority of the
1271	office to disapprove a rate as inadequate or to disapprove a
1272	filing for the unlawful use of unfairly discriminatory rating
1273	factors that are prohibited by the laws of this state. An
1274	insurer electing to implement a rate change under this paragraph
1275	shall submit a filing to the office at least 40 days prior to
1276	the effective date of the rate change. The office shall have 30
1277	days after the filing's submission to review the filing and
1278	determine if the rate is inadequate or uses unfairly
1279	discriminatory rating factors. Absent a finding by the office
1280	within such 30-day period that the rate is inadequate or that
1281	the insurer has used unfairly discriminatory rating factors, the
1282	filing is deemed approved. If the office finds during the 30-day
1283	period that the filing will result in inadequate premiums or
1284	otherwise endanger the insurer's solvency, the office shall
1285	suspend the rate decrease. If the insurer is implementing an
1286	overall rate increase, the results of which continue to produce
1287	an inadequate rate, such increase shall proceed pending
1288	additional action by the office to ensure the adequacy of the
1289	rate.
1290	4.  This paragraph does not apply to rate filings for any
1291	insurance other than residential property insurance.
1292
1293	The provisions of this subsection shall not apply to workers'
1294	compensation and employer's liability insurance and to motor
1295	vehicle insurance.
1296	(5)  With respect to a rate filing involving coverage of
1297	the type for which the insurer is required to pay a
1298	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1299	the insurer may fully recoup in its property insurance premiums
1300	any reimbursement premiums paid to the Florida Hurricane
1301	Catastrophe Fund, together with reasonable costs of other
1302	reinsurance consistent with prudent business practices and sound
1303	actuarial principles, but may not recoup reinsurance costs that
1304	duplicate coverage provided by the Florida Hurricane Catastrophe
1305	Fund. The burden is on the office to establish that any costs of
1306	other reinsurance are in excess of amounts consistent with
1307	prudent business practices and sound actuarial principles. An
1308	insurer may not recoup more than 1 year of reimbursement premium
1309	at a time. Any under-recoupment from the prior year may be added
1310	to the following year's reimbursement premium and any over-
1311	recoupment shall be subtracted from the following year's
1312	reimbursement premium.
1313	(9)  Notwithstanding any other provision of this section,
1314	any rate filing or applicable portion of the rate filing that
1315	includes the peril of wind within the boundary of the area
1316	covered by the high-risk account of the Citizens Property
1317	Insurance Corporation shall be deemed approved upon submission
1318	to the office if the filing or the applicable portion of the
1319	filing requests approval of a rate that is less than the
1320	approved rate for similar risks insured in the high-risk account
1321	of the corporation unless the office determines that such rate
1322	is inadequate or unfairly discriminatory as provided in
1323	subsection (2).
1324	(10)(a)  Beginning January 1, 2007, the office shall
1325	annually provide a report to the President of the Senate, the
1326	Speaker of the House of Representatives, the minority party
1327	leader of each house of the Legislature, and the chairs of the
1328	standing committees of each house of the Legislature having
1329	jurisdiction over insurance issues, specifying the impact of
1330	flexible rate regulation under paragraph (2)(j) on the degree of
1331	competition in insurance markets in this state.
1332	(b)  The report shall include a year-by-year comparison of
1333	the number of companies participating in the market for each
1334	class of insurance and the relative rate levels. The report
1335	shall also specify:
1336	1.  The number of rate filings made under paragraph (2)(j),
1337	the rate levels under those filings, and the market share
1338	affected by those filings.
1339	2.  The number of filings made on a file and use basis, the
1340	rate levels under those filings, and the market share affected
1341	by those filings.
1342	3.  The number of filings made on a use and file basis, the
1343	rate levels under those filings, and the market share affected
1344	by those filings.
1345	4.  Recommendations to promote competition in the insurance
1346	market and further protect insurance consumers.
1347	Section 9.  Paragraph (c) of subsection (3) of section
1348	627.0628, Florida Statutes, is amended to read:
1349	627.0628  Florida Commission on Hurricane Loss Projection
1350	Methodology; public records exemption; public meetings
1351	exemption.--
1352	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1353	(c)  With respect to a rate filing under s. 627.062, an
1354	insurer may employ actuarial methods, principles, standards,
1355	models, or output ranges found by the commission to be accurate
1356	or reliable to determine hurricane loss factors for use in a
1357	rate filing under s. 627.062. Such findings and factors are
1358	admissible and relevant in consideration of a rate filing by the
1359	office or in any arbitration or administrative or judicial
1360	review only if the office and the consumer advocate appointed
1361	pursuant to s. 627.0613 have a reasonable opportunity to review
1362	access to all of the basic assumptions and factors that were
1363	used in developing the actuarial methods, principles, standards,
1364	models, or output ranges. After review of the specific models by
1365	the commission, the office and the consumer advocate may not
1366	pose any questions generated from their respective reviews that
1367	duplicate or compromise the conclusions of the commission
1368	relative to the accuracy or reliability of the models in
1369	producing hurricane loss factors for use in a rate filing under
1370	s. 627.062, and are not precluded from disclosing such
1371	information in a rate proceeding.
1372	Section 10.  Section 627.06281, Florida Statutes, is
1373	amended to read:
1374	627.06281  Public hurricane loss projection model;
1375	reporting of data by insurers.--
1376	(1)  Within 30 days after a written request for loss data
1377	and associated exposure data by the office or a type I center
1378	within the State University System established to study
1379	mitigation, residential property insurers and licensed rating
1380	and advisory organizations that compile residential property
1381	insurance loss data shall provide loss data and associated
1382	exposure data for residential property insurance policies to the
1383	office or to a type I center within the State University System
1384	established to study mitigation, as directed by the office, for
1385	the purposes of developing, maintaining, and updating a public
1386	model for hurricane loss projections. The loss data and
1387	associated exposure data provided shall be in writing.
1388	(2)  The office may not use the public model for hurricane
1389	loss projection referred to in subsection (1) for any purpose
1390	under s. 627.062 or s. 627.351 until the model has been
1391	submitted to the Florida Commission on Hurricane Loss Projection
1392	Methodology for review under s. 627.0628 and the commission has
1393	found the model to be accurate and reliable pursuant to the same
1394	process and standards as the commission uses for the review of
1395	other hurricane loss projection models.
1396	Section 11.  Subsection (2) of section 627.0645, Florida
1397	Statutes, is amended to read:
1398	627.0645  Annual filings.--
1399	(2)(a)  Deviations filed by an insurer to any rating
1400	organization's base rate filing are not subject to this section.
1401	(b)  The office, after receiving a request to be exempted
1402	from the provisions of this section, may, for good cause due to
1403	insignificant numbers of policies in force or insignificant
1404	premium volume, exempt a company, by line of coverage, from
1405	filing rates or rate certification as required by this section.
1406	(c)  The office, after receiving a request to be exempted
1407	from the provisions of this section, shall exempt a company with
1408	less than 500 residential homeowner or mobile homeowner policies
1409	from filing rates or rate certification as required by this
1410	section.
1411	Section 12.  Subsection (6) of section 627.351, Florida
1412	Statutes, is amended to read:
1413	627.351  Insurance risk apportionment plans.--
1414	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1415	(a)1.a.  The Legislature finds that actual and threatened
1416	catastrophic losses to property in this state from hurricanes
1417	have caused insurers to be unwilling or unable to provide
1418	property insurance coverage to the extent sought and needed. It
1419	is in the public interest and a public purpose to assist in
1420	ensuring assuring that homestead property in the state is
1421	insured so as to facilitate the remediation, reconstruction, and
1422	replacement of damaged or destroyed property in order to reduce
1423	or avoid the negative effects otherwise resulting to the public
1424	health, safety, and welfare; to the economy of the state; and to
1425	the revenues of the state and local governments needed to
1426	provide for the public welfare. It is necessary, therefore, to
1427	provide property insurance to applicants who are in good faith
1428	entitled to procure insurance through the voluntary market but
1429	are unable to do so. The Legislature intends by this subsection
1430	that property insurance be provided and that it continues, as
1431	long as necessary, through an entity organized to achieve
1432	efficiencies and economies, while providing service to
1433	policyholders, applicants, and agents that is no less than the
1434	quality generally provided in the voluntary market, all toward
1435	the achievement of the foregoing public purposes. Because it is
1436	essential for the corporation to have the maximum financial
1437	resources to pay claims following a catastrophic hurricane, it
1438	is the intent of the Legislature that the income of the
1439	corporation be exempt from federal income taxation and that
1440	interest on the debt obligations issued by the corporation be
1441	exempt from federal income taxation.
1442	b.  The Legislature finds and declares that:
1443	(I)  The commitment of the state, as expressed in sub-
1444	subparagraph a., to providing a means of ensuring the
1445	availability of property insurance through a residual market
1446	mechanism is hereby reaffirmed.
1447	(II)  Despite legislative efforts to ensure that the
1448	residual market for property insurance is self-supporting to the
1449	greatest reasonable extent, residual market policyholders are to
1450	some degree subsidized by the general public through assessments
1451	on owners of property insured in the voluntary market and their
1452	insurers and through the potential use of general revenues of
1453	the state to eliminate or reduce residual market deficits.
1454	(III)  The degree of such subsidy is a matter of public
1455	policy. It is the intent of the Legislature to better control
1456	the subsidy through at least the following means:
1457	(A)  Restructuring the residual market mechanism to provide
1458	separate treatment of homestead and nonhomestead properties,
1459	with the intent of continuing to provide an insurance program
1460	with limited subsidies for homestead properties while providing
1461	a nonsubsidized insurance program for nonhomestead properties.
1462	(B)  Redefining the concept of rate adequacy in the
1463	subsidized residual market with the intent of ensuring a rate
1464	structure that will enable the subsidized residual market to be
1465	self-supporting except in the event of hurricane losses of a
1466	legislatively specified magnitude. It is the intent of the
1467	Legislature that the funding of the subsidized residual market
1468	be structured to be self-supporting up to the point of its 100-
1469	year probable maximum loss and that the funding be structured to
1470	make reliance on assessments or other sources of public funding
1471	necessary only in the event of a 100-year probable maximum loss
1472	or larger loss.
1473	2.  The Residential Property and Casualty Joint
1474	Underwriting Association originally created by this statute
1475	shall be known, as of July 1, 2002, as the Citizens Property
1476	Insurance Corporation. The corporation shall provide insurance
1477	for residential and commercial property, for applicants who are
1478	in good faith entitled, but are unable, to procure insurance
1479	through the voluntary market. The corporation shall operate
1480	pursuant to a plan of operation approved by order of the
1481	commission office. The plan is subject to continuous review by
1482	the commission office. The commission office may, by order,
1483	withdraw approval of all or part of a plan if the commission
1484	office determines that conditions have changed since approval
1485	was granted and that the purposes of the plan require changes in
1486	the plan. The corporation shall continue to operate pursuant to
1487	the plan of operation approved by the office until October 1,
1488	2006. For the purposes of this subsection, residential coverage
1489	includes both personal lines residential coverage, which
1490	consists of the type of coverage provided by homeowner's, mobile
1491	home owner's, dwelling, tenant's, condominium unit owner's, and
1492	similar policies, and commercial lines residential coverage,
1493	which consists of the type of coverage provided by condominium
1494	association, apartment building, and similar policies.
1495	3.  It is the intent of the Legislature that policyholders,
1496	applicants, and agents of the corporation receive service and
1497	treatment of the highest possible level but never less than that
1498	generally provided in the voluntary market. It also is intended
1499	that the corporation be held to service standards no less than
1500	those applied to insurers in the voluntary market by the office
1501	with respect to responsiveness, timeliness, customer courtesy,
1502	and overall dealings with policyholders, applicants, or agents
1503	of the corporation.
1504	(b)1.  All insurers authorized to write one or more subject
1505	lines of business in this state are subject to assessment by the
1506	corporation and, for the purposes of this subsection, are
1507	referred to collectively as "assessable insurers." Insurers
1508	writing one or more subject lines of business in this state
1509	pursuant to part VIII of chapter 626 are not assessable
1510	insurers, but insureds who procure one or more subject lines of
1511	business in this state pursuant to part VIII of chapter 626 are
1512	subject to assessment by the corporation and are referred to
1513	collectively as "assessable insureds." An authorized insurer's
1514	assessment liability shall begin on the first day of the
1515	calendar year following the year in which the insurer was issued
1516	a certificate of authority to transact insurance for subject
1517	lines of business in this state and shall terminate 1 year after
1518	the end of the first calendar year during which the insurer no
1519	longer holds a certificate of authority to transact insurance
1520	for subject lines of business in this state.
1521	2.a.  All revenues, assets, liabilities, losses, and
1522	expenses of the corporation shall be divided into four three
1523	separate accounts as follows:
1524	(I)  Three separate homestead accounts that may provide
1525	coverage only for homestead properties. The term "homestead
1526	property" means a residential property that has been granted a
1527	homestead exemption under chapter 196. The term also includes a
1528	property that is qualified for such exemption but has not
1529	applied for the exemption as of the date of issuance of the
1530	policy, provided the policyholder obtains the exemption within 1
1531	year after initial issuance of the policy. The term also
1532	includes an owner-occupied mobile or manufactured home as
1533	defined in s. 320.01 permanently affixed to real property
1534	regardless of whether the owner of the mobile or manufactured
1535	home is also the owner of the land on which the mobile or
1536	manufactured home is permanently affixed. However, the term does
1537	not include a mobile home that is being held for display by a
1538	licensed mobile home dealer or a licensed mobile home
1539	manufacturer and is not owner-occupied. For the purposes of this
1540	sub-sub-subparagraph, the term "homestead property" also
1541	includes property covered by tenant's insurance; commercial
1542	lines residential policies; any county, district, or municipal
1543	hospital, or hospital licensed by any not-for-profit corporation
1544	that is qualified under s. 501(c)(3) of the United State
1545	Internal Revenue Code; and continuing care retirement
1546	communities certified under chapter 651 that receives an ad
1547	valorem tax exemption under chapter 196. The accounts providing
1548	coverage only for homestead properties are:
1549	(A)(I)  A personal lines account for personal residential
1550	policies issued by the corporation or issued by the Residential
1551	Property and Casualty Joint Underwriting Association and renewed
1552	by the corporation that provide comprehensive, multiperil
1553	coverage on risks that are not located in areas eligible for
1554	coverage in the Florida Windstorm Underwriting Association as
1555	those areas were defined on January 1, 2002, and for such
1556	policies that do not provide coverage for the peril of wind on
1557	risks that are located in such areas;
1558	(B)(II)  A commercial lines account for commercial
1559	residential policies issued by the corporation or issued by the
1560	Residential Property and Casualty Joint Underwriting Association
1561	and renewed by the corporation that provide coverage for basic
1562	property perils on risks that are not located in areas eligible
1563	for coverage in the Florida Windstorm Underwriting Association
1564	as those areas were defined on January 1, 2002, and for such
1565	policies that do not provide coverage for the peril of wind on
1566	risks that are located in such areas; and
1567	(C)(III)  A high-risk account for personal residential
1568	policies and commercial residential and commercial
1569	nonresidential property policies issued by the corporation or
1570	transferred to the corporation that provide coverage for the
1571	peril of wind on risks that are located in areas eligible for
1572	coverage in the Florida Windstorm Underwriting Association as
1573	those areas were defined on January 1, 2002. The high-risk
1574	account must also include quota share primary insurance under
1575	subparagraph (c)2. The area eligible for coverage under the
1576	high-risk account also includes the area within Port Canaveral,
1577	which is bordered on the south by the City of Cape Canaveral,
1578	bordered on the west by the Banana River, and bordered on the
1579	north by Federal Government property. The office may remove
1580	territory from the area eligible for wind-only and quota share
1581	coverage if, after a public hearing, the office finds that
1582	authorized insurers in the voluntary market are willing and able
1583	to write sufficient amounts of personal and commercial
1584	residential coverage for all perils in the territory, including
1585	coverage for the peril of wind, such that risks covered by wind-
1586	only policies in the removed territory could be issued a policy
1587	by the corporation in either the personal lines or commercial
1588	lines account without a significant increase in the
1589	corporation's probable maximum loss in such account. Removal of
1590	territory from the area eligible for wind-only or quota share
1591	coverage does not alter the assignment of wind coverage written
1592	in such areas to the high-risk account.
1593	(II)(A)  A separate nonhomestead account for commercial
1594	nonresidential property policies and for all properties that
1595	otherwise meet all of the criteria for eligibility for coverage
1596	within one of the three homestead accounts described in sub-sub-
1597	subparagraph (I) but that do not meet the definition of
1598	homestead property specified in sub-sub-subparagraph (I). The
1599	nonhomestead account shall provide the same types of coverage as
1600	are provided by the three homestead accounts, including wind-
1601	only coverage in the high-risk account area. In order to be
1602	eligible for coverage in the nonhomestead account, at the
1603	initial issuance of the policy and at renewal the property owner
1604	shall provide the corporation with a sworn affidavit stating
1605	that the property has been rejected for coverage by at least
1606	three authorized insurers and at least three surplus lines
1607	insurers.
1608	(B)  An authorized insurer or approved insurer as defined
1609	in s. 626.914(2) may provide coverage to a nonhomestead property
1610	owner on an individual risk rate basis. Rates and forms of an
1611	authorized insurer for nonhomestead properties are not subject
1612	to ss. 627.062 and 627.0629, except s. 627.0629(2)(b). Such
1613	rates and forms are subject to all other applicable provisions
1614	of this code and rules adopted under this code. During the
1615	course of an insurer's market conduct examination, the office
1616	may review the rate for any nonhomestead property to determine
1617	if such rate is inadequate or unfairly discriminatory. Rates on
1618	nonhomestead property may be found inadequate by the office if
1619	they are clearly insufficient, together with the investment
1620	income attributable to the insurer, to sustain projected losses
1621	and expenses in the class of business to which such rates apply.
1622	Rates on nonhomestead property may also be found inadequate as
1623	to the premium charged to a risk or group of risks if discounts
1624	or credits are allowed that exceed a reasonable reflection of
1625	expense savings and reasonably expected loss experience from the
1626	risk or group of risks. Rates on nonhomestead property may be
1627	found to be unfairly discriminatory as to a risk or group of
1628	risks by the office if the application of premium discounts,
1629	credits, or surcharges among such risks does not bear a
1630	reasonable relationship to the expected loss and expense
1631	experience among the various risks. A rating plan, including
1632	discounts, credits, or surcharges on nonhomestead property, may
1633	also be found to be unfairly discriminatory if the plan fails to
1634	clearly and equitably reflect consideration of the
1635	policyholder's participation in a risk management program
1636	adjusted pursuant to s. 627.0625. The office may order an
1637	insurer to discontinue using a rate for new policies or upon
1638	renewal of a policy if the office finds the rate to be
1639	inadequate or unfairly discriminatory. Insurers shall maintain
1640	records and documentation relating to rates and forms subject to
1641	this sub-sub-sub-subparagraph for a period of at least 5 years
1642	after the effective date of the policy.
1643	b.  The three separate homestead accounts must be
1644	maintained as long as financing obligations entered into by the
1645	Florida Windstorm Underwriting Association or Residential
1646	Property and Casualty Joint Underwriting Association are
1647	outstanding, in accordance with the terms of the corresponding
1648	financing documents. When the financing obligations are no
1649	longer outstanding, in accordance with the terms of the
1650	corresponding financing documents, the corporation may use a
1651	single homestead account for all revenues, assets, liabilities,
1652	losses, and expenses of the corporation. All revenues, assets,
1653	liabilities, losses, and expenses attributable to the
1654	nonhomestead account shall be maintained separately.
1655	c.  Creditors of the Residential Property and Casualty
1656	Joint Underwriting Association shall have a claim against, and
1657	recourse to, the accounts referred to in sub-sub-sub-
1658	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II) and
1659	shall have no claim against, or recourse to, the account
1660	referred to in sub-sub-sub-subparagraph sub-sub-subparagraph
1661	a.(I)(C)(III). Creditors of the Florida Windstorm Underwriting
1662	Association shall have a claim against, and recourse to, the
1663	account referred to in sub-sub-sub-subparagraph sub-sub-
1664	subparagraph a.(I)(C)(III) and shall have no claim against, or
1665	recourse to, the accounts referred to in sub-sub-sub-
1666	subparagraphs sub-sub-subparagraphs a.(I)(A) and (B)(II).
1667	d.  Revenues, assets, liabilities, losses, and expenses not
1668	attributable to particular accounts shall be prorated among the
1669	accounts.
1670	e.  The Legislature finds that the revenues of the
1671	corporation are revenues that are necessary to meet the
1672	requirements set forth in documents authorizing the issuance of
1673	bonds under this subsection.
1674	f.  No part of the income of the corporation may inure to
1675	the benefit of any private person.
1676	3.  With respect to a deficit in any of the homestead
1677	accounts an account:
1678	a.  When the deficit incurred in a particular calendar year
1679	is not greater than 10 percent of the aggregate statewide direct
1680	written premium for the subject lines of business for the prior
1681	calendar year, the entire deficit shall be recovered through
1682	regular assessments of assessable insurers under paragraph (g)
1683	and assessable insureds.
1684	b.  When the deficit incurred in a particular calendar year
1685	exceeds 10 percent of the aggregate statewide direct written
1686	premium for the subject lines of business for the prior calendar
1687	year, the corporation shall levy regular assessments on
1688	assessable insurers under paragraph (g) and on assessable
1689	insureds in an amount equal to the greater of 10 percent of the
1690	deficit or 10 percent of the aggregate statewide direct written
1691	premium for the subject lines of business for the prior calendar
1692	year. Any remaining deficit shall be recovered through emergency
1693	assessments under sub-subparagraph d.
1694	c.  Each assessable insurer's share of the amount being
1695	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1696	be in the proportion that the assessable insurer's direct
1697	written premium for the subject lines of business for the year
1698	preceding the year in which the deficit is incurred assessment
1699	bears to the aggregate statewide direct written premium for the
1700	subject lines of business for that year. The assessment
1701	percentage applicable to each assessable insured is the ratio of
1702	the amount being assessed under sub-subparagraph a. or sub-
1703	subparagraph b. to the aggregate statewide direct written
1704	premium for the subject lines of business for the prior year.
1705	Assessments levied by the corporation on assessable insurers
1706	under sub-subparagraphs a. and b. shall be paid as required by
1707	the corporation's plan of operation and paragraph (g). Any
1708	assessment levied by the corporation on limited apportionment
1709	companies may be paid to the corporation by such companies on a
1710	monthly basis as the assessment are collected from insureds for
1711	a time period not to exceed 18 months. Notwithstanding any other
1712	provision in this subsection, the aggregate amount of a regular
1713	assessment levied in connection with a deficit incurred in a
1714	particular calendar year shall be reduced by the aggregate
1715	amount of the Citizens Property Insurance Corporation
1716	policyholder surcharge imposed under subparagraph (c)10.
1717	Assessments levied by the corporation on assessable insureds
1718	under sub-subparagraphs a. and b. shall be collected by the
1719	surplus lines agent at the time the surplus lines agent collects
1720	the surplus lines tax required by s. 626.932 and shall be paid
1721	to the Florida Surplus Lines Service Office at the time the
1722	surplus lines agent pays the surplus lines tax to the Florida
1723	Surplus Lines Service Office. Upon receipt of regular
1724	assessments from surplus lines agents, the Florida Surplus Lines
1725	Service Office shall transfer the assessments directly to the
1726	corporation as determined by the corporation.
1727	d.  Upon a determination by the board of governors that a
1728	deficit in an account exceeds the amount that will be recovered
1729	through regular assessments under sub-subparagraph a. or sub-
1730	subparagraph b., the board shall levy, after verification by the
1731	office, emergency assessments, for as many years as necessary to
1732	cover the deficits, to be collected by assessable insurers and
1733	the corporation and collected from assessable insureds upon
1734	issuance or renewal of policies for subject lines of business,
1735	excluding National Flood Insurance policies. The amount of the
1736	emergency assessment collected in a particular year shall be a
1737	uniform percentage of that year's direct written premium for
1738	subject lines of business and all accounts of the corporation,
1739	excluding National Flood Insurance Program policy premiums, as
1740	annually determined by the board and verified by the office. The
1741	office shall verify the arithmetic calculations involved in the
1742	board's determination within 30 days after receipt of the
1743	information on which the determination was based.
1744	Notwithstanding any other provision of law, the corporation and
1745	each assessable insurer that writes subject lines of business
1746	shall collect emergency assessments from its policyholders
1747	without such obligation being affected by any credit,
1748	limitation, exemption, or deferment. Emergency assessments
1749	levied by the corporation on assessable insureds shall be
1750	collected by the surplus lines agent at the time the surplus
1751	lines agent collects the surplus lines tax required by s.
1752	626.932 and shall be paid to the Florida Surplus Lines Service
1753	Office at the time the surplus lines agent pays the surplus
1754	lines tax to the Florida Surplus Lines Service Office. The
1755	emergency assessments so collected shall be transferred directly
1756	to the corporation on a periodic basis as determined by the
1757	corporation and shall be held by the corporation solely in the
1758	applicable account. The aggregate amount of emergency
1759	assessments levied for an account under this sub-subparagraph in
1760	any calendar year may not exceed the greater of 10 percent of
1761	the amount needed to cover the original deficit, plus interest,
1762	fees, commissions, required reserves, and other costs associated
1763	with financing of the original deficit, or 10 percent of the
1764	aggregate statewide direct written premium for subject lines of
1765	business and for all accounts of the corporation for the prior
1766	year, plus interest, fees, commissions, required reserves, and
1767	other costs associated with financing the original deficit.
1768	e.  The corporation may pledge the proceeds of assessments,
1769	projected recoveries from the Florida Hurricane Catastrophe
1770	Fund, other insurance and reinsurance recoverables, Citizens
1771	policyholder market equalization surcharges and other
1772	surcharges, and other funds available to the corporation as the
1773	source of revenue for and to secure bonds issued under paragraph
1774	(g), bonds or other indebtedness issued under subparagraph
1775	(c)3., or lines of credit or other financing mechanisms issued
1776	or created under this subsection, or to retire any other debt
1777	incurred as a result of deficits or events giving rise to
1778	deficits, or in any other way that the board determines will
1779	efficiently recover such deficits. The purpose of the lines of
1780	credit or other financing mechanisms is to provide additional
1781	resources to assist the corporation in covering claims and
1782	expenses attributable to a catastrophe. As used in this
1783	subsection, the term "assessments" includes regular assessments
1784	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1785	(g)1. and emergency assessments under sub-subparagraph d.
1786	Emergency assessments collected under sub-subparagraph d. are
1787	not part of an insurer's rates, are not premium, and are not
1788	subject to premium tax, fees, or commissions; however, failure
1789	to pay the emergency assessment shall be treated as failure to
1790	pay premium. The emergency assessments under sub-subparagraph d.
1791	shall continue as long as any bonds issued or other indebtedness
1792	incurred with respect to a deficit for which the assessment was
1793	imposed remain outstanding, unless adequate provision has been
1794	made for the payment of such bonds or other indebtedness
1795	pursuant to the documents governing such bonds or other
1796	indebtedness.
1797	f.  As used in this subsection, the term "subject lines of
1798	business" means insurance written by assessable insurers or
1799	procured by assessable insureds on real or personal property, as
1800	defined in s. 624.604, including insurance for fire, industrial
1801	fire, allied lines, farmowners multiperil, homeowners
1802	multiperil, commercial multiperil, and mobile homes, and
1803	including liability coverage on all such insurance, but
1804	excluding inland marine as defined in s. 624.607(3) and
1805	excluding vehicle insurance as defined in s. 624.605(1) other
1806	than insurance on mobile homes used as permanent dwellings.
1807	g.  The Florida Surplus Lines Service Office shall
1808	determine annually the aggregate statewide written premium in
1809	subject lines of business procured by assessable insureds and
1810	shall report that information to the corporation in a form and
1811	at a time the corporation specifies to ensure that the
1812	corporation can meet the requirements of this subsection and the
1813	corporation's financing obligations.
1814	h.  The Florida Surplus Lines Service Office shall verify
1815	the proper application by surplus lines agents of assessment
1816	percentages for regular assessments and emergency assessments
1817	levied under this subparagraph on assessable insureds and shall
1818	assist the corporation in ensuring the accurate, timely
1819	collection and payment of assessments by surplus lines agents as
1820	required by the corporation.
1821	4.  With respect to a deficit in the nonhomestead account
1822	or to any cash flow shortfall that the board determines will
1823	create an inability for the nonhomestead account to pay claims
1824	when due:
1825	a.  The board shall levy an immediate assessment against
1826	the premium of each nonhomestead account policyholder, expressed
1827	as a uniform percentage of the premium for the policy then in
1828	effect. The maximum amount of such assessment is 100 percent of
1829	such premium.
1830	b.  If the assessment under sub-subparagraph a. is
1831	insufficient to enable the account to pay claims and eliminate
1832	the deficit in the account, the board may levy an additional
1833	assessment to be collected at the time of any issuance or
1834	renewal of a nonhomestead account policy during the 1-year
1835	period following the levy of the assessment under sub-
1836	subparagraph a., expressed as a uniform percentage of the
1837	premium for the policy for the forthcoming policy period. The
1838	maximum amount of such assessment is 100 percent of such
1839	premium.
1840	c.  If the assessments under sub-subparagraphs a. and b.
1841	are insufficient to enable the account to pay claims and
1842	eliminate the deficit in the account, the board may make a loan
1843	from any of the homestead accounts to the nonhomestead account,
1844	subject to approval by the office and provided that such loan
1845	does not impair the financial status of any of the homestead
1846	accounts.
1847	5.  A policyholder in a nonhomestead account who has not
1848	paid a deficit assessment levied by the corporation shall be
1849	ineligible for coverage by a surplus lines insurer or authorized
1850	insurer.
1851	(c)  The plan of operation of the corporation:
1852	1.  Must provide for adoption of residential property and
1853	casualty insurance policy forms and commercial residential and
1854	nonresidential property insurance forms, which forms must be
1855	approved by the office prior to use. The corporation shall adopt
1856	the following policy forms:
1857	a.  Standard personal lines policy forms that are
1858	comprehensive multiperil policies providing full coverage of a
1859	residential property equivalent to the coverage provided in the
1860	private insurance market under an HO-3, HO-4, or HO-6 policy.
1861	b.  Basic personal lines policy forms that are policies
1862	similar to an HO-8 policy or a dwelling fire policy that provide
1863	coverage meeting the requirements of the secondary mortgage
1864	market, but which coverage is more limited than the coverage
1865	under a standard policy.
1866	c.  Commercial lines residential policy forms that are
1867	generally similar to the basic perils of full coverage
1868	obtainable for commercial residential structures in the admitted
1869	voluntary market.
1870	d.  Personal lines and commercial lines residential
1871	property insurance forms that cover the peril of wind only. The
1872	forms are applicable only to residential properties located in
1873	areas eligible for coverage under the high-risk account referred
1874	to in sub-subparagraph (b)2.a.
1875	e.  Commercial lines nonresidential property insurance
1876	forms that cover the peril of wind only. The forms are
1877	applicable only to nonresidential properties located in areas
1878	eligible for coverage under the high-risk account referred to in
1879	sub-subparagraph (b)2.a.
1880	f.  The corporation may adopt variations of the policy
1881	forms listed in sub-subparagraphs a.-e. that contain more
1882	restrictive coverage.
1883	2.a.  Must provide that the corporation adopt a program in
1884	which the corporation and authorized insurers enter into quota
1885	share primary insurance agreements for hurricane coverage, as
1886	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1887	property insurance forms for eligible risks which cover the
1888	peril of wind only. As used in this subsection, the term:
1889	(I)  "Quota share primary insurance" means an arrangement
1890	in which the primary hurricane coverage of an eligible risk is
1891	provided in specified percentages by the corporation and an
1892	authorized insurer. The corporation and authorized insurer are
1893	each solely responsible for a specified percentage of hurricane
1894	coverage of an eligible risk as set forth in a quota share
1895	primary insurance agreement between the corporation and an
1896	authorized insurer and the insurance contract. The
1897	responsibility of the corporation or authorized insurer to pay
1898	its specified percentage of hurricane losses of an eligible
1899	risk, as set forth in the quota share primary insurance
1900	agreement, may not be altered by the inability of the other
1901	party to the agreement to pay its specified percentage of
1902	hurricane losses. Eligible risks that are provided hurricane
1903	coverage through a quota share primary insurance arrangement
1904	must be provided policy forms that set forth the obligations of
1905	the corporation and authorized insurer under the arrangement,
1906	clearly specify the percentages of quota share primary insurance
1907	provided by the corporation and authorized insurer, and
1908	conspicuously and clearly state that neither the authorized
1909	insurer nor the corporation may be held responsible beyond its
1910	specified percentage of coverage of hurricane losses.
1911	(II)  "Eligible risks" means personal lines residential and
1912	commercial lines residential risks that meet the underwriting
1913	criteria of the corporation and are located in areas that were
1914	eligible for coverage by the Florida Windstorm Underwriting
1915	Association on January 1, 2002.
1916	b.  The corporation may enter into quota share primary
1917	insurance agreements with authorized insurers at corporation
1918	coverage levels of 90 percent and 50 percent.
1919	c.  If the corporation determines that additional coverage
1920	levels are necessary to maximize participation in quota share
1921	primary insurance agreements by authorized insurers, the
1922	corporation may establish additional coverage levels. However,
1923	the corporation's quota share primary insurance coverage level
1924	may not exceed 90 percent.
1925	d.  Any quota share primary insurance agreement entered
1926	into between an authorized insurer and the corporation must
1927	provide for a uniform specified percentage of coverage of
1928	hurricane losses, by county or territory as set forth by the
1929	corporation board, for all eligible risks of the authorized
1930	insurer covered under the quota share primary insurance
1931	agreement.
1932	e.  Any quota share primary insurance agreement entered
1933	into between an authorized insurer and the corporation is
1934	subject to review and approval by the office. However, such
1935	agreement shall be authorized only as to insurance contracts
1936	entered into between an authorized insurer and an insured who is
1937	already insured by the corporation for wind coverage.
1938	f.  For all eligible risks covered under quota share
1939	primary insurance agreements, the exposure and coverage levels
1940	for both the corporation and authorized insurers shall be
1941	reported by the corporation to the Florida Hurricane Catastrophe
1942	Fund. For all policies of eligible risks covered under quota
1943	share primary insurance agreements, the corporation and the
1944	authorized insurer shall maintain complete and accurate records
1945	for the purpose of exposure and loss reimbursement audits as
1946	required by Florida Hurricane Catastrophe Fund rules. The
1947	corporation and the authorized insurer shall each maintain
1948	duplicate copies of policy declaration pages and supporting
1949	claims documents.
1950	g.  The corporation board shall establish in its plan of
1951	operation standards for quota share agreements which ensure that
1952	there is no discriminatory application among insurers as to the
1953	terms of quota share agreements, pricing of quota share
1954	agreements, incentive provisions if any, and consideration paid
1955	for servicing policies or adjusting claims.
1956	h.  The quota share primary insurance agreement between the
1957	corporation and an authorized insurer must set forth the
1958	specific terms under which coverage is provided, including, but
1959	not limited to, the sale and servicing of policies issued under
1960	the agreement by the insurance agent of the authorized insurer
1961	producing the business, the reporting of information concerning
1962	eligible risks, the payment of premium to the corporation, and
1963	arrangements for the adjustment and payment of hurricane claims
1964	incurred on eligible risks by the claims adjuster and personnel
1965	of the authorized insurer. Entering into a quota sharing
1966	insurance agreement between the corporation and an authorized
1967	insurer shall be voluntary and at the discretion of the
1968	authorized insurer.
1969	3.  May provide that the corporation may employ or
1970	otherwise contract with individuals or other entities to provide
1971	administrative or professional services that may be appropriate
1972	to effectuate the plan. The corporation shall have the power to
1973	borrow funds, by issuing bonds or by incurring other
1974	indebtedness, and shall have other powers reasonably necessary
1975	to effectuate the requirements of this subsection, including,
1976	without limitation, the power to issue bonds and incur other
1977	indebtedness in order to refinance outstanding bonds or other
1978	indebtedness. The corporation may, but is not required to, seek
1979	judicial validation of its bonds or other indebtedness under
1980	chapter 75. The corporation may issue bonds or incur other
1981	indebtedness, or have bonds issued on its behalf by a unit of
1982	local government pursuant to subparagraph (g)2., in the absence
1983	of a hurricane or other weather-related event, upon a
1984	determination by the corporation, subject to approval by the
1985	office, that such action would enable it to efficiently meet the
1986	financial obligations of the corporation and that such
1987	financings are reasonably necessary to effectuate the
1988	requirements of this subsection. The corporation is authorized
1989	to take all actions needed to facilitate tax-free status for any
1990	such bonds or indebtedness, including formation of trusts or
1991	other affiliated entities. The corporation shall have the
1992	authority to pledge assessments, projected recoveries from the
1993	Florida Hurricane Catastrophe Fund, other reinsurance
1994	recoverables, market equalization and other surcharges, and
1995	other funds available to the corporation as security for bonds
1996	or other indebtedness. In recognition of s. 10, Art. I of the
1997	State Constitution, prohibiting the impairment of obligations of
1998	contracts, it is the intent of the Legislature that no action be
1999	taken whose purpose is to impair any bond indenture or financing
2000	agreement or any revenue source committed by contract to such
2001	bond or other indebtedness.
2002	4.a.  Must require that the corporation operate subject to
2003	the supervision and approval of a board of governors consisting
2004	of 8 individuals who are residents of this state, from different
2005	geographical areas of this state. The Governor, the Chief
2006	Financial Officer, the President of the Senate, and the Speaker
2007	of the House of Representatives shall each appoint two members
2008	of the board, effective August 1, 2005. At least one of the two
2009	members appointed by each appointing officer must have
2010	demonstrated expertise in insurance. The Chief Financial Officer
2011	shall designate one of the appointees as chair. All board
2012	members serve at the pleasure of the appointing officer. All
2013	board members, including the chair, must be appointed to serve
2014	for 3-year terms beginning annually on a date designated by the
2015	plan. Any board vacancy shall be filled for the unexpired term
2016	by the appointing officer. The Chief Financial Officer shall
2017	appoint a technical advisory group to provide information and
2018	advice to the board of governors in connection with the board's
2019	duties under this subsection. The executive director and senior
2020	managers of the corporation shall be engaged by the board, as
2021	recommended by the Chief Financial Officer, and serve at the
2022	pleasure of the board. The executive director is responsible for
2023	employing other staff as the corporation may require, subject to
2024	review and concurrence by the board and the Chief Financial
2025	Officer.
2026	b.  The board shall create a Market Accountability Advisory
2027	Committee to assist the corporation in developing awareness of
2028	its rates and its customer and agent service levels in
2029	relationship to the voluntary market insurers writing similar
2030	coverage. The members of the advisory committee shall consist of
2031	the following 11 persons, one of whom must be elected chair by
2032	the members of the committee: four representatives, one
2033	appointed by the Florida Association of Insurance Agents, one by
2034	the Florida Association of Insurance and Financial Advisors, one
2035	by the Professional Insurance Agents of Florida, and one by the
2036	Latin American Association of Insurance Agencies; three
2037	representatives appointed by the insurers with the three highest
2038	voluntary market share of residential property insurance
2039	business in the state; one representative from the Office of
2040	Insurance Regulation; one consumer appointed by the board who is
2041	insured by the corporation at the time of appointment to the
2042	committee; one representative appointed by the Florida
2043	Association of Realtors; and one representative appointed by the
2044	Florida Bankers Association. All members must serve for 3-year
2045	terms and may serve for consecutive terms. The committee shall
2046	report to the corporation at each board meeting on insurance
2047	market issues which may include rates and rate competition with
2048	the voluntary market; service, including policy issuance, claims
2049	processing, and general responsiveness to policyholders,
2050	applicants, and agents; and matters relating to depopulation.
2051	5.  Must provide a procedure for determining the
2052	eligibility of a risk for coverage, as follows:
2053	a.  Subject to the provisions of s. 627.3517, with respect
2054	to personal lines residential risks, if the risk is offered
2055	coverage from an authorized insurer at the insurer's approved
2056	rate under either a standard policy including wind coverage or,
2057	if consistent with the insurer's underwriting rules as filed
2058	with the office, a basic policy including wind coverage, the
2059	risk is not eligible for any policy issued by the corporation.
2060	If the risk is not able to obtain any such offer, the risk is
2061	eligible for either a standard policy including wind coverage or
2062	a basic policy including wind coverage issued by the
2063	corporation; however, if the risk could not be insured under a
2064	standard policy including wind coverage regardless of market
2065	conditions, the risk shall be eligible for a basic policy
2066	including wind coverage unless rejected under subparagraph 8.
2067	The corporation shall determine the type of policy to be
2068	provided on the basis of objective standards specified in the
2069	underwriting manual and based on generally accepted underwriting
2070	practices.
2071	(I)  If the risk accepts an offer of coverage through the
2072	market assistance plan or an offer of coverage through a
2073	mechanism established by the corporation before a policy is
2074	issued to the risk by the corporation or during the first 30
2075	days of coverage by the corporation, and the producing agent who
2076	submitted the application to the plan or to the corporation is
2077	not currently appointed by the insurer, the insurer shall:
2078	(A)  Pay to the producing agent of record of the policy,
2079	for the first year, an amount that is the greater of the
2080	insurer's usual and customary commission for the type of policy
2081	written or a fee equal to the usual and customary commission of
2082	the corporation; or
2083	(B)  Offer to allow the producing agent of record of the
2084	policy to continue servicing the policy for a period of not less
2085	than 1 year and offer to pay the agent the greater of the
2086	insurer's or the corporation's usual and customary commission
2087	for the type of policy written.
2088
2089	If the producing agent is unwilling or unable to accept
2090	appointment, the new insurer shall pay the agent in accordance
2091	with sub-sub-sub-subparagraph (A).
2092	(II)  When the corporation enters into a contractual
2093	agreement for a take-out plan, the producing agent of record of
2094	the corporation policy is entitled to retain any unearned
2095	commission on the policy, and the insurer shall:
2096	(A)  Pay to the producing agent of record of the
2097	corporation policy, for the first year, an amount that is the
2098	greater of the insurer's usual and customary commission for the
2099	type of policy written or a fee equal to the usual and customary
2100	commission of the corporation; or
2101	(B)  Offer to allow the producing agent of record of the
2102	corporation policy to continue servicing the policy for a period
2103	of not less than 1 year and offer to pay the agent the greater
2104	of the insurer's or the corporation's usual and customary
2105	commission for the type of policy written.
2106
2107	If the producing agent is unwilling or unable to accept
2108	appointment, the new insurer shall pay the agent in accordance
2109	with sub-sub-sub-subparagraph (A).
2110	b.  With respect to commercial lines residential risks, if
2111	the risk is offered coverage under a policy including wind
2112	coverage from an authorized insurer at its approved rate, the
2113	risk is not eligible for any policy issued by the corporation.
2114	If the risk is not able to obtain any such offer, the risk is
2115	eligible for a policy including wind coverage issued by the
2116	corporation.
2117	(I)  If the risk accepts an offer of coverage through the
2118	market assistance plan or an offer of coverage through a
2119	mechanism established by the corporation before a policy is
2120	issued to the risk by the corporation or during the first 30
2121	days of coverage by the corporation, and the producing agent who
2122	submitted the application to the plan or the corporation is not
2123	currently appointed by the insurer, the insurer shall:
2124	(A)  Pay to the producing agent of record of the policy,
2125	for the first year, an amount that is the greater of the
2126	insurer's usual and customary commission for the type of policy
2127	written or a fee equal to the usual and customary commission of
2128	the corporation; or
2129	(B)  Offer to allow the producing agent of record of the
2130	policy to continue servicing the policy for a period of not less
2131	than 1 year and offer to pay the agent the greater of the
2132	insurer's or the corporation's usual and customary commission
2133	for the type of policy written.
2134
2135	If the producing agent is unwilling or unable to accept
2136	appointment, the new insurer shall pay the agent in accordance
2137	with sub-sub-sub-subparagraph (A).
2138	(II)  When the corporation enters into a contractual
2139	agreement for a take-out plan, the producing agent of record of
2140	the corporation policy is entitled to retain any unearned
2141	commission on the policy, and the insurer shall:
2142	(A)  Pay to the producing agent of record of the
2143	corporation policy, for the first year, an amount that is the
2144	greater of the insurer's usual and customary commission for the
2145	type of policy written or a fee equal to the usual and customary
2146	commission of the corporation; or
2147	(B)  Offer to allow the producing agent of record of the
2148	corporation policy to continue servicing the policy for a period
2149	of not less than 1 year and offer to pay the agent the greater
2150	of the insurer's or the corporation's usual and customary
2151	commission for the type of policy written.
2152
2153	If the producing agent is unwilling or unable to accept
2154	appointment, the new insurer shall pay the agent in accordance
2155	with sub-sub-sub-subparagraph (A).
2156	c.  To preserve existing incentives for carriers to write
2157	dwellings in the voluntary market and not in the corporation,
2158	the corporation shall continue to offer authorized insurers,
2159	including insurers writing dwellings valued at $1 million or
2160	more, the same voluntary writing credits that were available on
2161	January 1, 2006, to carriers writing wind coverage for dwellings
2162	in the areas eligible for coverage in the high-risk account.
2163	d.  With respect to personal lines residential risks, if
2164	the risk is a dwelling with an insured value of $1 million or
2165	more, or if the risk is one that is excluded from the coverage
2166	to be provided by the condominium association under s.
2167	718.111(11)(b) and that is insured by the condominium unit owner
2168	for a combined dwelling and contents replacement cost of $1
2169	million or more, the risk is not eligible for any policy issued
2170	by the corporation. Rates and forms for personal lines
2171	residential risks not eligible for coverage by the corporation
2172	specified by this sub-subparagraph are not subject to ss.
2173	627.062 and 627.0629. Such rates and forms are subject to all
2174	other applicable provisions of this code and rules adopted under
2175	this code. During the course of an insurer's market conduct
2176	examination, the office may review the rate for any risk to
2177	which the provisions of this sub-subparagraph are applicable to
2178	determine if such rate is inadequate or unfairly discriminatory.
2179	Rates on personal lines residential risks not eligible for
2180	coverage by the corporation may be found inadequate by the
2181	office if they are clearly insufficient, together with the
2182	investment income attributable to such risks, to sustain
2183	projected losses and expenses in the class of business to which
2184	such rates apply. Rates on personal lines residential risks not
2185	eligible for coverage by the corporation may also be found
2186	inadequate as to the premium charged to a risk or group of risks
2187	if discounts or credits are allowed that exceed a reasonable
2188	reflection of expense savings and reasonably expected loss
2189	experience from the risk or group of risks. Rates on personal
2190	lines residential risks not eligible for coverage by the
2191	corporation may be found to be unfairly discriminatory as to a
2192	risk or group of risks by the office if the application of
2193	premium discounts, credits, or surcharges among such risks does
2194	not bear a reasonable relationship to the expected loss and
2195	expense experience among the various risks. A rating plan,
2196	including discounts, credits, or surcharges on personal lines
2197	residential risks not eligible for coverage by the corporation
2198	may also be found to be unfairly discriminatory if the plan
2199	fails to clearly and equitably reflect consideration of the
2200	policyholder's participation in a risk management program
2201	adjusted pursuant to s. 627.0625. The office may order an
2202	insurer to discontinue using a rate for new policies or upon
2203	renewal of a policy if the office finds the rate to be
2204	inadequate or unfairly discriminatory. Insurers must maintain
2205	records and documentation relating to rates and forms subject to
2206	this sub-subparagraph for a period of at least 5 years after the
2207	effective date of the policy.
2208	e.  For policies subject to nonrenewal as a result of the
2209	risk being no longer eligible for coverage pursuant to sub-
2210	subparagraph d., the corporation shall, directly or through the
2211	market assistance plan, make information from confidential
2212	underwriting and claims files of policyholders available only to
2213	licensed general lines agents who register with the corporation
2214	to receive such information according to the following
2215	procedures:
2216	(I)  By August 1, 2006, the corporation shall provide
2217	policyholders who are not eligible for renewal pursuant to sub-
2218	subparagraph d. the opportunity to request in writing, within 30
2219	days after the notification is sent, that information from their
2220	confidential underwriting and claims files not be released to
2221	licensed general lines agents registered pursuant to sub-sub-
2222	subparagraph e.(II);
2223	(II)  By August 1, 2006, the corporation shall make
2224	available to licensed general lines agents the registration
2225	procedures to be used to obtain confidential information from
2226	underwriting and claims files for policies not eligible for
2227	renewal pursuant to sub-subparagraph d. As a condition of
2228	registration, the corporation shall require the licensed general
2229	lines agent to attest that the agent has the experience and
2230	relationships with authorized or surplus lines carriers to
2231	attempt to offer replacement coverage for policies not eligible
2232	for renewal pursuant to sub-subparagraph d.
2233	(III)  By September 1, 2006, the corporation shall make
2234	available through a secured website to licensed general lines
2235	agents registered pursuant to sub-sub-subparagraph e.(II)
2236	application, rating, loss history, mitigation, and policy type
2237	information relating to all policies not eligible for renewal
2238	pursuant to sub-subparagraph d. and for which the policyholder
2239	has not requested the corporation withhold such information
2240	pursuant to sub-sub-subparagraph e.(I). The licensed general
2241	lines agent registered pursuant to sub-sub-subparagraph e.(II)
2242	may use such information to contact and assist the policyholder
2243	in securing replacement policies and the agent may disclose to
2244	the policyholder such information was obtained from the
2245	corporation.
2246	f.  With respect to nonhomestead property, eligibility must
2247	be determined in accordance with sub-sub-sub-subparagraph
2248	(b)2.a.(II)(A).
2249	6.  Must provide by July 1, 2007, that an application for
2250	coverage for a new policy is subject to a waiting period of 10
2251	days before coverage is effective, during which time the
2252	corporation shall make such application available for review by
2253	general lines agents and authorized property and casualty
2254	insurers. The board may approve exceptions that allow for
2255	coverage to be effective before the end of the 10-day waiting
2256	period, for coverage issued in conjunction with a real estate
2257	closing, and for such other exceptions as the board determines
2258	are necessary to prevent lapses in coverage.
2259	7.6.  Must include rules for classifications of risks and
2260	rates therefor.
2261	8.7.  Must provide that if premium and investment income
2262	for an account attributable to a particular calendar year are in
2263	excess of projected losses and expenses for the account
2264	attributable to that year, such excess shall be held in surplus
2265	in the account. Such surplus shall be available to defray
2266	deficits in that account as to future years and shall be used
2267	for that purpose prior to assessing assessable insurers and
2268	assessable insureds as to any calendar year.
2269	9.8.  Must provide objective criteria and procedures to be
2270	uniformly applied for all applicants in determining whether an
2271	individual risk is so hazardous as to be uninsurable. In making
2272	this determination and in establishing the criteria and
2273	procedures, the following shall be considered:
2274	a.  Whether the likelihood of a loss for the individual
2275	risk is substantially higher than for other risks of the same
2276	class; and
2277	b.  Whether the uncertainty associated with the individual
2278	risk is such that an appropriate premium cannot be determined.
2279
2280	The acceptance or rejection of a risk by the corporation shall
2281	be construed as the private placement of insurance, and the
2282	provisions of chapter 120 shall not apply.
2283	10.9.  Must provide that the corporation shall make its
2284	best efforts to procure catastrophe reinsurance at reasonable
2285	rates, to cover its projected 100-year probable maximum loss in
2286	the homestead accounts as determined by the board of governors.
2287	11.10.  Must provide that in the event of regular deficit
2288	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2289	(b)3.b., in the personal lines homestead account, the commercial
2290	lines residential homestead account, or the high-risk homestead
2291	account, the corporation shall levy upon corporation homestead
2292	account policyholders in its next rate filing, or by a separate
2293	rate filing solely for this purpose, a Citizens policyholder
2294	market equalization surcharge arising from a regular assessment
2295	in such account in a percentage equal to the total amount of
2296	such regular assessments divided by the aggregate statewide
2297	direct written premium for subject lines of business for the
2298	prior calendar year preceding the year in which the deficit to
2299	which the regular assessment related is incurred. Citizens
2300	policyholder Market equalization surcharges under this
2301	subparagraph are not considered premium and are not subject to
2302	commissions, fees, or premium taxes; however, failure to pay the
2303	Citizens policyholder a market equalization surcharge shall be
2304	treated as failure to pay premium. Notwithstanding any other
2305	provision of this section, for purposes of the Citizens
2306	policyholder surcharges to be levied pursuant to this
2307	subparagraph, the total amount of the regular assessment to
2308	which such Citizens policyholder surcharge relates shall be
2309	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
2310	12.11.  The policies issued by the corporation must provide
2311	that, if the corporation or the market assistance plan obtains
2312	an offer from an authorized insurer to cover the risk at its
2313	approved rates, the risk is no longer eligible for renewal
2314	through the corporation.
2315	13.12.  Corporation policies and applications must include
2316	a notice that the corporation policy could, under this section,
2317	be replaced with a policy issued by an authorized insurer that
2318	does not provide coverage identical to the coverage provided by
2319	the corporation or an insurer writing coverage pursuant to part
2320	VIII of chapter 626. The notice shall also specify that
2321	acceptance of corporation coverage creates a conclusive
2322	presumption that the applicant or policyholder is aware of this
2323	potential.
2324	14.13.  May establish, subject to approval by the office,
2325	different eligibility requirements and operational procedures
2326	for any line or type of coverage for any specified county or
2327	area if the board determines that such changes to the
2328	eligibility requirements and operational procedures are
2329	justified due to the voluntary market being sufficiently stable
2330	and competitive in such area or for such line or type of
2331	coverage and that consumers who, in good faith, are unable to
2332	obtain insurance through the voluntary market through ordinary
2333	methods would continue to have access to coverage from the
2334	corporation. When coverage is sought in connection with a real
2335	property transfer, such requirements and procedures shall not
2336	provide for an effective date of coverage later than the date of
2337	the closing of the transfer as established by the transferor,
2338	the transferee, and, if applicable, the lender.
2339	15.14.  Must provide that, with respect to the high-risk
2340	homestead account, any assessable insurer with a surplus as to
2341	policyholders of $25 million or less writing 25 percent or more
2342	of its total countrywide property insurance premiums in this
2343	state may petition the office, within the first 90 days of each
2344	calendar year, to qualify as a limited apportionment company. In
2345	no event shall a limited apportionment company be required to
2346	participate in the portion of any assessment, within the high-
2347	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
2348	subparagraph (b)3.b. in the aggregate which exceeds $50 million
2349	after payment of available high-risk account funds in any
2350	calendar year. However, a limited apportionment company shall
2351	collect from its policyholders any emergency assessment imposed
2352	under sub-subparagraph (b)3.d. The plan shall provide that, if
2353	the office determines that any regular assessment will result in
2354	an impairment of the surplus of a limited apportionment company,
2355	the office may direct that all or part of such assessment be
2356	deferred as provided in subparagraph (g)4. However, there shall
2357	be no limitation or deferment of an emergency assessment to be
2358	collected from policyholders under sub-subparagraph (b)3.d.
2359	16.15.  Must provide that the corporation appoint as its
2360	licensed agents only those agents who also hold an appointment
2361	as defined in s. 626.015(3) with an insurer who at the time of
2362	the agent's initial appointment by the corporation is authorized
2363	to write and is actually writing personal lines residential
2364	property coverage, commercial residential property coverage, or
2365	commercial nonresidential property coverage within the state.
2366	17.  Must provide, by July 1, 2007, a premium payment plan
2367	option to its policyholders which allows for quarterly and
2368	semiannual payment of premiums.
2369	18.  Must provide that the hurricane deductible for any
2370	property in the nonhomestead account with an insured value of
2371	$250,000 or more must be at least 5 percent of the insured
2372	value.
2373	19.  Must provide that the application for coverage under
2374	the nonhomestead account and the declaration page of each
2375	nonhomestead account policy include a statement in boldface 12-
2376	point type specifying that public subsidies do not support the
2377	corporation's coverage of nonhomestead property; that if the
2378	nonhomestead account of the corporation sustains a deficit or is
2379	unable to pay claims, the nonhomestead policyholder shall be
2380	subject to an immediate assessment in an amount up to 100
2381	percent of the premium and a further assessment upon renewal of
2382	the policy; and that the applicant or policyholder may wish to
2383	seek alternative coverage from an authorized insurer or surplus
2384	lines insurer that will not be subject to such potential
2385	assessments.
2386	20.  Must provide that the application for coverage under
2387	any of the homestead accounts and the declaration page of each
2388	homestead account policy include a statement in boldface 12-
2389	point type specifying that a false declaration of homestead
2390	status for purposes of obtaining coverage in any of the
2391	homestead accounts may constitute the offense of insurance
2392	fraud, as prohibited and punishable as a felony under s.
2393	817.234.
2394	21.  Must limit coverage on mobile homes or manufactured
2395	homes built prior to 1994 to actual cash value of the dwelling
2396	rather than replacement costs of the dwelling. The actual cash
2397	value of these dwellings may be determined by:
2398	a.  A residential appraisal no more than 1 year old from a
2399	Florida licensed appraiser which provides the Depreciated Value
2400	of Improvements; or
2401	b.  A purchase agreement or bill of sale no more than 1
2402	year old which reflects the purchase price less the land value.
2403	22.  Must provide that, notwithstanding any limitation to
2404	the contrary regarding coverage of residential structures,
2405	including, but not limited to, classification or location of
2406	risks, the corporation shall provide coverage to residential
2407	structures constructed after the adoption of the Florida
2408	Building Code for the full value of such structures. Premiums
2409	for such residential structures shall fully reflect all
2410	appropriate discounts, credits, or other rate differentials
2411	based upon actual experience or any other loss relativity
2412	studies available to the corporation.
2413	(d)1.  All prospective employees for senior management
2414	positions, as defined by the plan of operation, are subject to
2415	background checks as a prerequisite for employment. The office
2416	shall conduct background checks on such prospective employees
2417	pursuant to ss. 624.404(3), 624.34, and 628.261.
2418	2.  On or before July 1 of each year, employees of the
2419	corporation are required to sign and submit a statement
2420	attesting that they do not have a conflict of interest, as
2421	defined in part III of chapter 112. As a condition of
2422	employment, all prospective employees are required to sign and
2423	submit to the corporation a conflict-of-interest statement.
2424	3.  Senior managers and members of the board of governors
2425	are subject to the provisions of part III of chapter 112,
2426	including, but not limited to, the code of ethics and public
2427	disclosure and reporting of financial interests, pursuant to s.
2428	112.3145. Senior managers and board members are also required to
2429	file such disclosures with the Office of Insurance Regulation.
2430	The executive director of the corporation or his or her designee
2431	shall notify each newly appointed and existing appointed member
2432	of the board of governors and senior managers of his or her duty
2433	to comply with the reporting requirements of part III of chapter
2434	112. At least quarterly, the executive director or his or her
2435	designee shall submit to the Commission on Ethics a list of
2436	names of the senior managers and members of the board of
2437	governors that are subject to the public disclosure requirements
2438	under s. 112.3145.
2439	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
2440	other provision of law, an employee or board member may not
2441	knowingly accept, directly or indirectly, any gift or
2442	expenditure from a person or entity, or an employee or
2443	representative of such person or entity, that has a contractual
2444	relationship with the corporation or who is under consideration
2445	for a contract. An employee or board member that fails to comply
2446	with this subparagraph is subject to penalties provided under
2447	ss. 112.317 and 112.3173.
2448	5.  Any senior manager of the corporation who is employed
2449	on or after January 1, 2007, regardless of the date of hire, who
2450	subsequently retires or terminates employment is prohibited from
2451	representing another person or entity before the corporation for
2452	2 years after retirement or termination of employment from the
2453	corporation.
2454	6.  Any employee of the corporation who is employed on or
2455	after January 1, 2007, regardless of the date of hire, who
2456	subsequently retires or terminates employment is prohibited from
2457	having any employment or contractual relationship for 2 years
2458	with an insurer that has received a take-out bonus from the
2459	corporation.
2460	(e)  Purchases that equal or exceed $2,500, but are less
2461	than $25,000, shall be made by receipt of written quotes,
2462	written record of telephone quotes, or informal bids, whenever
2463	practical. The procurement of goods or services valued at or
2464	over $25,000 shall be subject to competitive solicitation,
2465	except in situations where the goods or services are provided by
2466	a sole source or are deemed an emergency purchase; the services
2467	are exempted from competitive solicitation requirements under s.
2468	287.057(5)(f); or the procurement of services is subject to s.
2469	627.3513. Justification for the sole-sourcing or emergency
2470	procurement must be documented. Contracts for goods or services
2471	valued at or over $100,000 are subject to approval by the board.
2472	(f)  The board shall determine whether it is more cost-
2473	effective and in the best interests of the corporation to use
2474	legal services provided by in-house attorneys employed by the
2475	corporation rather than contracting with outside counsel. In
2476	making such determination, the board shall document its findings
2477	and shall consider: the expertise needed; whether time
2478	commitments exceed in-house staff resources; whether local
2479	representation is needed; the travel, lodging and other costs
2480	associated with in-house representation; and such other factors
2481	that the board determines are relevant.
2482	(g)  The corporation may not retain a lobbyist to represent
2483	it before the legislative branch or executive branch. However,
2484	full-time employees of the corporation may register as lobbyists
2485	and represent the corporation before the legislative branch or
2486	executive branch.
2487	(h)1.  The Office of the Internal Auditor is established
2488	within the corporation to provide a central point for
2489	coordination of and responsibility for activities that promote
2490	accountability, integrity, and efficiency to the policyholders
2491	and to the taxpayers of this state. The internal auditor shall
2492	be appointed by the board of governors, shall report to and be
2493	under the general supervision of the board of governors, and is
2494	not subject to supervision by any employee of the corporation.
2495	Administrative staff and support shall be provided by the
2496	corporation. The internal auditor shall be appointed without
2497	regard to political affiliation. It is the duty and
2498	responsibility of the internal auditor to:
2499	a.  Provide direction for, supervise, conduct, and
2500	coordinate audits, investigations, and management reviews
2501	relating to the programs and operations of the corporation.
2502	b.  Conduct, supervise, or coordinate other activities
2503	carried out or financed by the corporation for the purpose of
2504	promoting efficiency in the administration of, or preventing and
2505	detecting fraud, abuse, and mismanagement in, its programs and
2506	operations.
2507	c.  Submit final audit reports, reviews, or investigative
2508	reports to the board of governors, the executive director, the
2509	members of the Financial Services Commission, the President of
2510	the Senate, and the Speaker of the House of Representatives.
2511	d.  Keep the board of governors informed concerning fraud,
2512	abuses, and internal control deficiencies relating to programs
2513	and operations administered or financed by the corporation,
2514	recommend corrective action, and report on the progress made in
2515	implementing corrective action.
2516	e.  Report expeditiously to the Department of Law
2517	Enforcement or other law enforcement agencies, as appropriate,
2518	whenever the internal auditor has reasonable grounds to believe
2519	there has been a violation of criminal law.
2520	2.  On or before February 15, the internal auditor shall
2521	prepare an annual report evaluating the effectiveness of the
2522	internal controls of the corporation and providing
2523	recommendations for corrective action, if necessary, and
2524	summarizing the audits, reviews, and investigations conducted by
2525	the office during the preceding fiscal year. The final report
2526	shall be furnished to the board of governors and the executive
2527	director, the President of the Senate, the Speaker of the House
2528	of Representatives, and the Financial Services Commission.
2529	(i)  The corporation shall establish a unit or division
2530	responsible for receiving and responding to consumer complaints,
2531	which unit or division is the sole responsibility of a senior
2532	manager of the corporation.
2533	(j)  The office shall conduct a comprehensive market
2534	conduct examination of the corporation every 2 years to
2535	determine compliance with its plan of operation and internal
2536	operations procedures. The first market conduct examination
2537	report shall be submitted to the President of the Senate and the
2538	Speaker of the House of Representatives no later than February
2539	1, 2009. Subsequent reports shall be submitted on or before
2540	February 1 every 2 years thereafter.
2541	(k)  The Auditor General shall conduct an operational audit
2542	of the corporations every 3 years to evaluate management's
2543	performance in administering laws, policies, and procedures
2544	governing the operations of the corporation in an efficient and
2545	effective manner. The scope of the review shall include, but is
2546	not limited to, evaluating claims handling, customer service,
2547	take-out programs and bonuses, financing arrangements,
2548	procurement of goods and services, internal controls, and the
2549	internal audit function.
2550	(l)(d)1.a.  It is the intent of the Legislature that the
2551	rates for coverage provided by the corporation be actuarially
2552	adequate sound and not competitive with approved rates charged
2553	in the admitted voluntary market, so that the corporation
2554	functions as a residual market mechanism to provide insurance
2555	only when the insurance cannot be procured in the voluntary
2556	market. Rates shall include a residual market risk load that
2557	reflects the concentrated exposure of the corporation and the
2558	impact of adverse selection as well as an appropriate
2559	catastrophe loading factor that reflects the actual catastrophic
2560	exposure of the corporation.
2561	b.  It is the intent of the Legislature to reaffirm the
2562	requirement of rate adequacy in the residual market. Recognizing
2563	that rates may comply with the intent expressed in sub-
2564	subparagraph a. and yet be inadequate and recognizing the public
2565	need to limit subsidies within the residual market, it is the
2566	further intent of the Legislature to establish statutory
2567	standards for rate adequacy. Such standards are intended to
2568	supplement the standard specified in s. 627.062(2)(e)3.,
2569	providing that rates are inadequate if they are clearly
2570	insufficient to sustain projected losses and expenses in the
2571	class of business to which they apply.
2572	2.  For each county, the average rates of the corporation
2573	for each line of business for personal lines residential
2574	policies excluding rates for wind-only policies shall be no
2575	lower than the average rates charged by the insurer that had the
2576	highest average rate in that county among the 20 insurers with
2577	the greatest total direct written premium in the state for that
2578	line of business in the preceding year, except that with respect
2579	to mobile home coverages, the average rates of the corporation
2580	shall be no lower than the average rates charged by the insurer
2581	that had the highest average rate in that county among the 5
2582	insurers with the greatest total written premium for mobile home
2583	owner's policies in the state in the preceding year.
2584	3.  Rates for personal lines residential wind-only policies
2585	must be actuarially adequate sound and not competitive with
2586	approved rates charged by authorized insurers. If the filing
2587	under this paragraph is made at least 90 days before the
2588	proposed effective date and the filing is not implemented during
2589	the office's review of the filing and any proceeding and
2590	judicial review, such filing shall be considered a file and use
2591	filing. In such case, the office shall finalize its review by
2592	issuance of a notice of intent to approve or a notice of intent
2593	to disapprove within 90 days after receipt of the filing. The
2594	notice of intent to approve and the notice of intent to
2595	disapprove constitute agency action for purposes of the
2596	Administrative Procedure Act. Requests for supporting
2597	information, requests for mathematical or mechanical
2598	corrections, or notification to the insurer by the office of its
2599	preliminary findings shall not toll the 90-day period during any
2600	such proceedings and subsequent judicial review. The rate shall
2601	be deemed approved if the office does not issue a notice of
2602	intent to approve or a notice of intent to disapprove within 90
2603	days after receipt of the filing. Corporation rate manuals shall
2604	include a rate surcharge for seasonal occupancy. To ensure that
2605	personal lines residential wind-only rates are not competitive
2606	with approved rates charged by authorized insurers, the
2607	corporation, in conjunction with the office, shall develop a
2608	wind-only ratemaking methodology, which methodology shall be
2609	contained in each rate filing made by the corporation with the
2610	office. If the office determines that the wind-only rates or
2611	rating factors filed by the corporation fail to comply with the
2612	wind-only ratemaking methodology provided for in this
2613	subsection, it shall so notify the corporation and require the
2614	corporation to amend its rates or rating factors to come into
2615	compliance within 90 days of notice from the office.
2616	4.a.  For the purposes of establishing a pilot program to
2617	evaluate issues relating to the availability and affordability
2618	of insurance in an area where historically there has been little
2619	market competition, the provisions of subparagraph 2. do not
2620	apply to coverage provided by the corporation in Monroe County
2621	if the office determines that a reasonable degree of competition
2622	does not exist for personal lines residential policies. The
2623	provisions of subparagraph 3. do not apply to coverage provided
2624	by the corporation in Monroe County if the office determines
2625	that a reasonable degree of competition does not exist for
2626	personal lines residential policies in the area of that county
2627	which is eligible for wind-only coverage. In this county, the
2628	rates for personal lines residential coverage shall be
2629	actuarially adequate sound and not excessive, inadequate, or
2630	unfairly discriminatory and are subject to the other provisions
2631	of the paragraph and s. 627.062. The commission shall adopt
2632	rules establishing the criteria for determining whether a
2633	reasonable degree of competition exists for personal lines
2634	residential policies in Monroe County. Any proposed rate
2635	increase filed by the corporation after May 1, 2006, but before
2636	October 1, 2006, for Monroe County based upon actuarial adequacy
2637	shall be implemented in equal amounts over a period of 3 years.
2638	b.  Pursuant to a report by March 1, 2006, the office shall
2639	submit a report to the Legislature providing an evaluation of
2640	the implementation of the pilot program affecting Monroe County
2641	and indicating that there has historically been a lack of a
2642	reasonable degree of competition in Monroe County, the office
2643	shall proceed as follows:
2644	(I)  The office shall order the corporation to charge only
2645	approved rates in effect for Monroe County on October 1, 2005,
2646	until any new rates are approved by the office.
2647	(II)  The office shall hold one or more public hearings,
2648	with at least 30 days' advance notice to interested persons, in
2649	Monroe County prior to the approval or implementation of a rate
2650	filing which proposes rates that exceed rates that were in
2651	effect for Monroe County on October 1, 2005.
2652	(III)  The office shall make available for public
2653	inspection 30 days prior to such hearings the office's written
2654	actuarial analysis if such analysis differs materially from that
2655	submitted by the corporation in support of the new rates filed.
2656	The office and the corporation shall also provide actuaries and
2657	qualified experts in attendance at such hearings to answer
2658	questions from actuaries or other qualified experts representing
2659	Monroe County or the public concerning the new rates filed.
2660	Additionally, the office shall provide for a technical hearing
2661	at which only actuaries and qualified experts representing the
2662	office, the corporation, Monroe County, or the Office of the
2663	Insurance Consumer Advocate may testify and at which the public
2664	may attend.
2665	(IV)  Notwithstanding any other provision of law, the
2666	office shall order the portion of any premium collected in 2006
2667	based on a rate charged on a use and file bases above that which
2668	was actuarially justified to be returned to such policyholder in
2669	the form of a credit or refund.
2670	5.  Rates for commercial lines coverage shall not be
2671	subject to the requirements of subparagraph 2., but shall be
2672	subject to all other requirements of this paragraph and s.
2673	627.062.
2674	6.a.  Nothing in this paragraph shall require or allow the
2675	corporation to adopt a rate that is inadequate under s. 627.062
2676	or under sub-subparagraph b. or sub-subparagraph c.
2677	b.  With respect to rates for coverage in any homestead
2678	account, a rate is deemed inadequate if the rate is not
2679	sufficient to generate, by means of cash flow, procurement of
2680	coverage under the Florida Hurricane Catastrophe Fund,
2681	reinsurance costs whether or not reinsurance is procured, and
2682	investment income, moneys sufficient to pay all claims and
2683	expenses reasonably expected to result from a 100-year probable
2684	maximum loss event without resort to any regular or emergency
2685	assessments, long-term debt, state revenues, or other funding
2686	sources that reflect any subsidy from persons or entities other
2687	than corporation homestead accounts policyholders.
2688	c.(I)  With respect to rates for coverage in the
2689	nonhomestead account, a rate is deemed inadequate if the rate is
2690	not sufficient to generate, by means of cash flow, procurement
2691	of coverage under the Florida Hurricane Catastrophe Fund,
2692	reinsurance costs, whether or not reinsurance is procured, and
2693	investment income and moneys sufficient to pay all claims and
2694	expenses reasonably expected to result from a 125-year probable
2695	maximum loss event without resort to any assessments, debt,
2696	state revenues, or other funding sources that reflect any
2697	subsidy from persons or entities other than corporation
2698	nonhomestead account policyholders. The rate initially filed by
2699	the corporation to comply with this sub-sub-subparagraph shall
2700	only by effective for 1 year.
2701	(II)  For the year following the initial year under sub-
2702	sub-subparagraph (I), the rate is deemed inadequate if the rate
2703	is not sufficient to generate moneys sufficient to pay all
2704	claims and expenses reasonably expected to result from a 150-
2705	year probable maximum loss event using the same criteria
2706	provided in sub-sub-subparagraph (I).
2707	(III)  For the 2 years following the year under sub-sub-
2708	subparagraph (II), the rate shall be based upon a 175-year and
2709	200-year probable maximum loss event, respectively.
2710	7.  The corporation shall certify to the office at least
2711	twice annually that its personal lines rates comply with the
2712	requirements of subparagraphs 1., and 2., and 6. If any
2713	adjustment in the rates or rating factors of the corporation is
2714	necessary to ensure such compliance, the corporation shall make
2715	and implement such adjustments and file its revised rates and
2716	rating factors with the office. If the office thereafter
2717	determines that the revised rates and rating factors fail to
2718	comply with the provisions of subparagraphs 1. and 2., it shall
2719	notify the corporation and require the corporation to amend its
2720	rates or rating factors in conjunction with its next rate
2721	filing. The office must notify the corporation by electronic
2722	means of any rate filing it approves for any insurer among the
2723	insurers referred to in subparagraph 2.
2724	8.  In addition to the rates otherwise determined pursuant
2725	to this paragraph, the corporation shall impose and collect an
2726	amount equal to the premium tax provided for in s. 624.509 to
2727	augment the financial resources of the corporation.
2728	9.a.  To assist the corporation in developing additional
2729	ratemaking methods to assure compliance with subparagraphs 1.
2730	and 4., the corporation shall appoint a rate methodology panel
2731	consisting of one person recommended by the Florida Association
2732	of Insurance Agents, one person recommended by the Professional
2733	Insurance Agents of Florida, one person recommended by the
2734	Florida Association of Insurance and Financial Advisors, one
2735	person recommended by the insurer with the highest voluntary
2736	market share of residential property insurance business in the
2737	state, one person recommended by the insurer with the second-
2738	highest voluntary market share of residential property insurance
2739	business in the state, one person recommended by an insurer
2740	writing commercial residential property insurance in this state,
2741	one person recommended by the Office of Insurance Regulation,
2742	and one board member designated by the board chairman, who shall
2743	serve as chairman of the panel.
2744	b.  By January 1, 2004, the rate methodology panel shall
2745	provide a report to the corporation of its findings and
2746	recommendations for the use of additional ratemaking methods and
2747	procedures, including the use of a rate equalization surcharge
2748	in an amount sufficient to assure that the total cost of
2749	coverage for policyholders or applicants to the corporation is
2750	sufficient to comply with subparagraph 1.
2751	c.  Within 30 days after such report, the corporation shall
2752	present to the President of the Senate, the Speaker of the House
2753	of Representatives, the minority party leaders of each house of
2754	the Legislature, and the chairs of the standing committees of
2755	each house of the Legislature having jurisdiction of insurance
2756	issues, a plan for implementing the additional ratemaking
2757	methods and an outline of any legislation needed to facilitate
2758	use of the new methods.
2759	d.  The plan must include a provision that producer
2760	commissions paid by the corporation shall not be calculated in
2761	such a manner as to include any rate equalization surcharge.
2762	However, without regard to the plan to be developed or its
2763	implementation, producer commissions paid by the corporation for
2764	each account, other than the quota share primary program, shall
2765	remain fixed as to percentage, effective rate, calculation, and
2766	payment method until January 1, 2004.
2767	9.10.  By January 1, 2004, The corporation shall provide
2768	develop a notice to policyholders or applicants that the rates
2769	of Citizens Property Insurance Corporation are intended to be
2770	higher than the rates of any admitted carrier and providing
2771	other information the corporation deems necessary to assist
2772	consumers in finding other voluntary admitted insurers willing
2773	to insure their property.
2774	(m)(e)  If coverage in an account is deactivated pursuant
2775	to paragraph (f), coverage through the corporation shall be
2776	reactivated by order of the office only under one of the
2777	following circumstances:
2778	1.  If the market assistance plan receives a minimum of 100
2779	applications for coverage within a 3-month period, or 200
2780	applications for coverage within a 1-year period or less for
2781	residential coverage, unless the market assistance plan provides
2782	a quotation from admitted carriers at their filed rates for at
2783	least 90 percent of such applicants. Any market assistance plan
2784	application that is rejected because an individual risk is so
2785	hazardous as to be uninsurable using the criteria specified in
2786	subparagraph (c)8. shall not be included in the minimum
2787	percentage calculation provided herein. In the event that there
2788	is a legal or administrative challenge to a determination by the
2789	office that the conditions of this subparagraph have been met
2790	for eligibility for coverage in the corporation, any eligible
2791	risk may obtain coverage during the pendency of such challenge.
2792	2.  In response to a state of emergency declared by the
2793	Governor under s. 252.36, the office may activate coverage by
2794	order for the period of the emergency upon a finding by the
2795	office that the emergency significantly affects the availability
2796	of residential property insurance.
2797	(n)(f)1.  The corporation shall file with the office
2798	quarterly statements of financial condition, an annual statement
2799	of financial condition, and audited financial statements in the
2800	manner prescribed by law. In addition, the corporation shall
2801	report to the office monthly on the types, premium, exposure,
2802	and distribution by county of its policies in force, and shall
2803	submit other reports as the office requires to carry out its
2804	oversight of the corporation.
2805	2.  The activities of the corporation shall be reviewed at
2806	least annually by the office to determine whether coverage shall
2807	be deactivated in an account on the basis that the conditions
2808	giving rise to its activation no longer exist.
2809	(o)(g)1.  The corporation shall certify to the office its
2810	needs for annual assessments as to a particular calendar year,
2811	and for any interim assessments that it deems to be necessary to
2812	sustain operations as to a particular year pending the receipt
2813	of annual assessments. Upon verification, the office shall
2814	approve such certification, and the corporation shall levy such
2815	annual or interim assessments. Such assessments shall be
2816	prorated as provided in paragraph (b). The corporation shall
2817	take all reasonable and prudent steps necessary to collect the
2818	amount of assessment due from each assessable insurer,
2819	including, if prudent, filing suit to collect such assessment.
2820	If the corporation is unable to collect an assessment from any
2821	assessable insurer, the uncollected assessments shall be levied
2822	as an additional assessment against the assessable insurers and
2823	any assessable insurer required to pay an additional assessment
2824	as a result of such failure to pay shall have a cause of action
2825	against such nonpaying assessable insurer. Assessments shall be
2826	included as an appropriate factor in the making of rates. The
2827	failure of a surplus lines agent to collect and remit any
2828	regular or emergency assessment levied by the corporation is
2829	considered to be a violation of s. 626.936 and subjects the
2830	surplus lines agent to the penalties provided in that section.
2831	2.  The governing body of any unit of local government, any
2832	residents of which are insured by the corporation, may issue
2833	bonds as defined in s. 125.013 or s. 166.101 from time to time
2834	to fund an assistance program, in conjunction with the
2835	corporation, for the purpose of defraying deficits of the
2836	corporation. In order to avoid needless and indiscriminate
2837	proliferation, duplication, and fragmentation of such assistance
2838	programs, any unit of local government, any residents of which
2839	are insured by the corporation, may provide for the payment of
2840	losses, regardless of whether or not the losses occurred within
2841	or outside of the territorial jurisdiction of the local
2842	government. Revenue bonds under this subparagraph may not be
2843	issued until validated pursuant to chapter 75, unless a state of
2844	emergency is declared by executive order or proclamation of the
2845	Governor pursuant to s. 252.36 making such findings as are
2846	necessary to determine that it is in the best interests of, and
2847	necessary for, the protection of the public health, safety, and
2848	general welfare of residents of this state and declaring it an
2849	essential public purpose to permit certain municipalities or
2850	counties to issue such bonds as will permit relief to claimants
2851	and policyholders of the corporation. Any such unit of local
2852	government may enter into such contracts with the corporation
2853	and with any other entity created pursuant to this subsection as
2854	are necessary to carry out this paragraph. Any bonds issued
2855	under this subparagraph shall be payable from and secured by
2856	moneys received by the corporation from emergency assessments
2857	under sub-subparagraph (b)3.d., and assigned and pledged to or
2858	on behalf of the unit of local government for the benefit of the
2859	holders of such bonds. The funds, credit, property, and taxing
2860	power of the state or of the unit of local government shall not
2861	be pledged for the payment of such bonds. If any of the bonds
2862	remain unsold 60 days after issuance, the office shall require
2863	all insurers subject to assessment to purchase the bonds, which
2864	shall be treated as admitted assets; each insurer shall be
2865	required to purchase that percentage of the unsold portion of
2866	the bond issue that equals the insurer's relative share of
2867	assessment liability under this subsection. An insurer shall not
2868	be required to purchase the bonds to the extent that the office
2869	determines that the purchase would endanger or impair the
2870	solvency of the insurer.
2871	3.a.  The corporation shall adopt one or more programs
2872	subject to approval by the office for the reduction of both new
2873	and renewal writings in the corporation. Beginning January 1,
2874	2008, any program the corporation adopts for the payment of
2875	bonuses to an insurer for each risk the insurer removes from the
2876	corporation shall comply with s. 627.3511(2) and may not exceed
2877	the amount referenced in s. 627.3511(2) for each risk removed.
2878	The corporation may consider any prudent and not unfairly
2879	discriminatory approach to reducing corporation writings, and
2880	may adopt a credit against assessment liability or other
2881	liability that provides an incentive for insurers to take risks
2882	out of the corporation and to keep risks out of the corporation
2883	by maintaining or increasing voluntary writings in counties or
2884	areas in which corporation risks are highly concentrated and a
2885	program to provide a formula under which an insurer voluntarily
2886	taking risks out of the corporation by maintaining or increasing
2887	voluntary writings will be relieved wholly or partially from
2888	assessments under sub-subparagraphs (b)3.a. and b. When the
2889	corporation enters into a contractual agreement for a take-out
2890	plan, the producing agent of record of the corporation policy is
2891	entitled to retain any unearned commission on such policy, and
2892	the insurer shall either:
2893	(I)  Pay to the producing agent of record of the policy,
2894	for the first year, an amount which is the greater of the
2895	insurer's usual and customary commission for the type of policy
2896	written or a policy fee equal to the usual and customary
2897	commission of the corporation; or
2898	(II)  Offer to allow the producing agent of record of the
2899	policy to continue servicing the policy for a period of not less
2900	than 1 year and offer to pay the agent the insurer's usual and
2901	customary commission for the type of policy written. If the
2902	producing agent is unwilling or unable to accept appointment by
2903	the new insurer, the new insurer shall pay the agent in
2904	accordance with sub-sub-subparagraph (I).
2905	b.  Any credit or exemption from regular assessments
2906	adopted under this subparagraph shall last no longer than the 3
2907	years following the cancellation or expiration of the policy by
2908	the corporation. With the approval of the office, the board may
2909	extend such credits for an additional year if the insurer
2910	guarantees an additional year of renewability for all policies
2911	removed from the corporation, or for 2 additional years if the
2912	insurer guarantees 2 additional years of renewability for all
2913	policies so removed.
2914	c.  There shall be no credit, limitation, exemption, or
2915	deferment from emergency assessments to be collected from
2916	policyholders pursuant to sub-subparagraph (b)3.d.
2917	4.  The plan shall provide for the deferment, in whole or
2918	in part, of the assessment of an assessable insurer, other than
2919	an emergency assessment collected from policyholders pursuant to
2920	sub-subparagraph (b)3.d., if the office finds that payment of
2921	the assessment would endanger or impair the solvency of the
2922	insurer. In the event an assessment against an assessable
2923	insurer is deferred in whole or in part, the amount by which
2924	such assessment is deferred may be assessed against the other
2925	assessable insurers in a manner consistent with the basis for
2926	assessments set forth in paragraph (b).
2927	(p)(h)  Nothing in this subsection shall be construed to
2928	preclude the issuance of residential property insurance coverage
2929	pursuant to part VIII of chapter 626.
2930	(q)(i)  There shall be no liability on the part of, and no
2931	cause of action of any nature shall arise against, any
2932	assessable insurer or its agents or employees, the corporation
2933	or its agents or employees, members of the board of governors or
2934	their respective designees at a board meeting, corporation
2935	committee members, or the office or its representatives, for any
2936	action taken by them in the performance of their duties or
2937	responsibilities under this subsection. Such immunity does not
2938	apply to:
2939	1.  Any of the foregoing persons or entities for any
2940	willful tort;
2941	2.  The corporation or its producing agents for breach of
2942	any contract or agreement pertaining to insurance coverage;
2943	3.  The corporation with respect to issuance or payment of
2944	debt; or
2945	4.  Any assessable insurer with respect to any action to
2946	enforce an assessable insurer's obligations to the corporation
2947	under this subsection.
2948	(r)(j)  For the purposes of s. 199.183(1), the corporation
2949	shall be considered a political subdivision of the state and
2950	shall be exempt from the corporate income tax. The premiums,
2951	assessments, investment income, and other revenue of the
2952	corporation are funds received for providing property insurance
2953	coverage as required by this subsection, paying claims for
2954	Florida citizens insured by the corporation, securing and
2955	repaying debt obligations issued by the corporation, and
2956	conducting all other activities of the corporation, and shall
2957	not be considered taxes, fees, licenses, or charges for services
2958	imposed by the Legislature on individuals, businesses, or
2959	agencies outside state government. Bonds and other debt
2960	obligations issued by or on behalf of the corporation are not to
2961	be considered "state bonds" within the meaning of s. 215.58(8).
2962	The corporation is not subject to the procurement provisions of
2963	chapter 287, and policies and decisions of the corporation
2964	relating to incurring debt, levying of assessments and the sale,
2965	issuance, continuation, terms and claims under corporation
2966	policies, and all services relating thereto, are not subject to
2967	the provisions of chapter 120. The corporation is not required
2968	to obtain or to hold a certificate of authority issued by the
2969	office, nor is it required to participate as a member insurer of
2970	the Florida Insurance Guaranty Association. However, the
2971	corporation is required to pay, in the same manner as an
2972	authorized insurer, assessments pledged by the Florida Insurance
2973	Guaranty Association to secure bonds issued or other
2974	indebtedness incurred to pay covered claims arising from insurer
2975	insolvencies caused by, or proximately related to, hurricane
2976	losses. It is the intent of the Legislature that the tax
2977	exemptions provided in this paragraph will augment the financial
2978	resources of the corporation to better enable the corporation to
2979	fulfill its public purposes. Any debt obligations bonds issued
2980	by the corporation, their transfer, and the income therefrom,
2981	including any profit made on the sale thereof, shall at all
2982	times be free from taxation of every kind by the state and any
2983	political subdivision or local unit or other instrumentality
2984	thereof; however, this exemption does not apply to any tax
2985	imposed by chapter 220 on interest, income, or profits on debt
2986	obligations owned by corporations other than the corporation.
2987	(s)(k)  Upon a determination by the office that the
2988	conditions giving rise to the establishment and activation of
2989	the corporation no longer exist, the corporation is dissolved.
2990	Upon dissolution, the assets of the corporation shall be applied
2991	first to pay all debts, liabilities, and obligations of the
2992	corporation, including the establishment of reasonable reserves
2993	for any contingent liabilities or obligations, and all remaining
2994	assets of the corporation shall become property of the state and
2995	shall be deposited in the Florida Hurricane Catastrophe Fund.
2996	However, no dissolution shall take effect as long as the
2997	corporation has bonds or other financial obligations outstanding
2998	unless adequate provision has been made for the payment of the
2999	bonds or other financial obligations pursuant to the documents
3000	authorizing the issuance of the bonds or other financial
3001	obligations.
3002	(t)(l)1.  Effective July 1, 2002, policies of the
3003	Residential Property and Casualty Joint Underwriting Association
3004	shall become policies of the corporation. All obligations,
3005	rights, assets and liabilities of the Residential Property and
3006	Casualty Joint Underwriting Association, including bonds, note
3007	and debt obligations, and the financing documents pertaining to
3008	them become those of the corporation as of July 1, 2002. The
3009	corporation is not required to issue endorsements or
3010	certificates of assumption to insureds during the remaining term
3011	of in-force transferred policies.
3012	2.  Effective July 1, 2002, policies of the Florida
3013	Windstorm Underwriting Association are transferred to the
3014	corporation and shall become policies of the corporation. All
3015	obligations, rights, assets, and liabilities of the Florida
3016	Windstorm Underwriting Association, including bonds, note and
3017	debt obligations, and the financing documents pertaining to them
3018	are transferred to and assumed by the corporation on July 1,
3019	2002. The corporation is not required to issue endorsement or
3020	certificates of assumption to insureds during the remaining term
3021	of in-force transferred policies.
3022	3.  The Florida Windstorm Underwriting Association and the
3023	Residential Property and Casualty Joint Underwriting Association
3024	shall take all actions as may be proper to further evidence the
3025	transfers and shall provide the documents and instruments of
3026	further assurance as may reasonably be requested by the
3027	corporation for that purpose. The corporation shall execute
3028	assumptions and instruments as the trustees or other parties to
3029	the financing documents of the Florida Windstorm Underwriting
3030	Association or the Residential Property and Casualty Joint
3031	Underwriting Association may reasonably request to further
3032	evidence the transfers and assumptions, which transfers and
3033	assumptions, however, are effective on the date provided under
3034	this paragraph whether or not, and regardless of the date on
3035	which, the assumptions or instruments are executed by the
3036	corporation. Subject to the relevant financing documents
3037	pertaining to their outstanding bonds, notes, indebtedness, or
3038	other financing obligations, the moneys, investments,
3039	receivables, choses in action, and other intangibles of the
3040	Florida Windstorm Underwriting Association shall be credited to
3041	the high-risk account of the corporation, and those of the
3042	personal lines residential coverage account and the commercial
3043	lines residential coverage account of the Residential Property
3044	and Casualty Joint Underwriting Association shall be credited to
3045	the personal lines account and the commercial lines account,
3046	respectively, of the corporation.
3047	4.  Effective July 1, 2002, a new applicant for property
3048	insurance coverage who would otherwise have been eligible for
3049	coverage in the Florida Windstorm Underwriting Association is
3050	eligible for coverage from the corporation as provided in this
3051	subsection.
3052	4.5.  The transfer of all policies, obligations, rights,
3053	assets, and liabilities from the Florida Windstorm Underwriting
3054	Association to the corporation and the renaming of the
3055	Residential Property and Casualty Joint Underwriting Association
3056	as the corporation shall in no way affect the coverage with
3057	respect to covered policies as defined in s. 215.555(2)(c)
3058	provided to these entities by the Florida Hurricane Catastrophe
3059	Fund. The coverage provided by the Florida Hurricane Catastrophe
3060	Fund to the Florida Windstorm Underwriting Association based on
3061	its exposures as of June 30, 2002, and each June 30 thereafter
3062	shall be redesignated as coverage for the high-risk account of
3063	the corporation. Notwithstanding any other provision of law, the
3064	coverage provided by the Florida Hurricane Catastrophe Fund to
3065	the Residential Property and Casualty Joint Underwriting
3066	Association based on its exposures as of June 30, 2002, and each
3067	June 30 thereafter shall be transferred to the personal lines
3068	account and the commercial lines account of the corporation.
3069	Notwithstanding any other provision of law, the high-risk
3070	account shall be treated, for all Florida Hurricane Catastrophe
3071	Fund purposes, as if it were a separate participating insurer
3072	with its own exposures, reimbursement premium, and loss
3073	reimbursement. Likewise, the personal lines and commercial lines
3074	accounts shall be viewed together, for all Florida Hurricane
3075	Catastrophe Fund purposes, as if the two accounts were one and
3076	represent a single, separate participating insurer with its own
3077	exposures, reimbursement premium, and loss reimbursement. The
3078	coverage provided by the Florida Hurricane Catastrophe Fund to
3079	the corporation shall constitute and operate as a full transfer
3080	of coverage from the Florida Windstorm Underwriting Association
3081	and Residential Property and Casualty Joint Underwriting to the
3082	corporation.
3083	(u)(m)  Notwithstanding any other provision of law:
3084	1.  The pledge or sale of, the lien upon, and the security
3085	interest in any rights, revenues, or other assets of the
3086	corporation created or purported to be created pursuant to any
3087	financing documents to secure any bonds or other indebtedness of
3088	the corporation shall be and remain valid and enforceable,
3089	notwithstanding the commencement of and during the continuation
3090	of, and after, any rehabilitation, insolvency, liquidation,
3091	bankruptcy, receivership, conservatorship, reorganization, or
3092	similar proceeding against the corporation under the laws of
3093	this state.
3094	2.  No such proceeding shall relieve the corporation of its
3095	obligation, or otherwise affect its ability to perform its
3096	obligation, to continue to collect, or levy and collect,
3097	assessments, Citizens Property Insurance Corporation
3098	policyholder market equalization or other surcharges under
3099	subparagraph (c)10., or any other rights, revenues, or other
3100	assets of the corporation pledged pursuant to any financing
3101	documents.
3102	3.  Each such pledge or sale of, lien upon, and security
3103	interest in, including the priority of such pledge, lien, or
3104	security interest, any such assessments, market equalization or
3105	other surcharges, or other rights, revenues, or other assets
3106	which are collected, or levied and collected, after the
3107	commencement of and during the pendency of, or after, any such
3108	proceeding shall continue unaffected by such proceeding. As used
3109	in this subsection, the term "financing documents" means any
3110	agreement or agreements, instrument or instruments, or other
3111	document or documents now existing or hereafter created
3112	evidencing any bonds or other indebtedness of the corporation or
3113	pursuant to which any such bonds or other indebtedness has been
3114	or may be issued and pursuant to which any rights, revenues, or
3115	other assets of the corporation are pledged or sold to secure
3116	the repayment of such bonds or indebtedness, together with the
3117	payment of interest on such bonds or such indebtedness, or the
3118	payment of any other obligation or financial product, as defined
3119	in the plan of operation of the corporation related to such
3120	bonds or indebtedness.
3121	4.  Any such pledge or sale of assessments, revenues,
3122	contract rights, or other rights or assets of the corporation
3123	shall constitute a lien and security interest, or sale, as the
3124	case may be, that is immediately effective and attaches to such
3125	assessments, revenues, or contract rights or other rights or
3126	assets, whether or not imposed or collected at the time the
3127	pledge or sale is made. Any such pledge or sale is effective,
3128	valid, binding, and enforceable against the corporation or other
3129	entity making such pledge or sale, and valid and binding against
3130	and superior to any competing claims or obligations owed to any
3131	other person or entity, including policyholders in this state,
3132	asserting rights in any such assessments, revenues, or contract
3133	rights or other rights or assets to the extent set forth in and
3134	in accordance with the terms of the pledge or sale contained in
3135	the applicable financing documents, whether or not any such
3136	person or entity has notice of such pledge or sale and without
3137	the need for any physical delivery, recordation, filing, or
3138	other action.
3139	5.  As long as the corporation has any bonds outstanding,
3140	the corporation may not file a voluntary petition under chapter
3141	9 of the federal Bankruptcy Code, or such corresponding chapter
3142	or sections as may be in effect from time to time, and any
3143	public officer and any organization, entity, or other person may
3144	not authorize the corporation to be or become a debtor under
3145	chapter 9 of the federal Bankruptcy Code, or such corresponding
3146	chapter or sections as may be in effect from time to time,
3147	during any such period.
3148	6.  If ordered by a court of competent jurisdiction, the
3149	corporation may assume policies or otherwise provide coverage
3150	for policyholders of an insurer placed in liquidation under
3151	chapter 631, under such forms, rates, terms, and conditions as
3152	the corporation deems appropriate, subject to approval by the
3153	office.
3154	(v)(n)1.  The following records of the corporation are
3155	confidential and exempt from the provisions of s. 119.07(1) and
3156	s. 24(a), Art. I of the State Constitution:
3157	a.  Underwriting files, except that a policyholder or an
3158	applicant shall have access to his or her own underwriting
3159	files.
3160	b.  Claims files, until termination of all litigation and
3161	settlement of all claims arising out of the same incident,
3162	although portions of the claims files may remain exempt, as
3163	otherwise provided by law. Confidential and exempt claims file
3164	records may be released to other governmental agencies upon
3165	written request and demonstration of need; such records held by
3166	the receiving agency remain confidential and exempt as provided
3167	for herein.
3168	c.  Records obtained or generated by an internal auditor
3169	pursuant to a routine audit, until the audit is completed, or if
3170	the audit is conducted as part of an investigation, until the
3171	investigation is closed or ceases to be active. An investigation
3172	is considered "active" while the investigation is being
3173	conducted with a reasonable, good faith belief that it could
3174	lead to the filing of administrative, civil, or criminal
3175	proceedings.
3176	d.  Matters reasonably encompassed in privileged attorney-
3177	client communications.
3178	e.  Proprietary information licensed to the corporation
3179	under contract and the contract provides for the confidentiality
3180	of such proprietary information.
3181	f.  All information relating to the medical condition or
3182	medical status of a corporation employee which is not relevant
3183	to the employee's capacity to perform his or her duties, except
3184	as otherwise provided in this paragraph. Information which is
3185	exempt shall include, but is not limited to, information
3186	relating to workers' compensation, insurance benefits, and
3187	retirement or disability benefits.
3188	g.  Upon an employee's entrance into the employee
3189	assistance program, a program to assist any employee who has a
3190	behavioral or medical disorder, substance abuse problem, or
3191	emotional difficulty which affects the employee's job
3192	performance, all records relative to that participation shall be
3193	confidential and exempt from the provisions of s. 119.07(1) and
3194	s. 24(a), Art. I of the State Constitution, except as otherwise
3195	provided in s. 112.0455(11).
3196	h.  Information relating to negotiations for financing,
3197	reinsurance, depopulation, or contractual services, until the
3198	conclusion of the negotiations.
3199	i.  Minutes of closed meetings regarding underwriting
3200	files, and minutes of closed meetings regarding an open claims
3201	file until termination of all litigation and settlement of all
3202	claims with regard to that claim, except that information
3203	otherwise confidential or exempt by law will be redacted.
3204
3205	When an authorized insurer is considering underwriting a risk
3206	insured by the corporation, relevant underwriting files and
3207	confidential claims files may be released to the insurer
3208	provided the insurer agrees in writing, notarized and under
3209	oath, to maintain the confidentiality of such files. When a file
3210	is transferred to an insurer that file is no longer a public
3211	record because it is not held by an agency subject to the
3212	provisions of the public records law. Underwriting files and
3213	confidential claims files may also be released to staff of and
3214	the board of governors of the market assistance plan established
3215	pursuant to s. 627.3515, who must retain the confidentiality of
3216	such files, except such files may be released to authorized
3217	insurers that are considering assuming the risks to which the
3218	files apply, provided the insurer agrees in writing, notarized
3219	and under oath, to maintain the confidentiality of such files.
3220	Finally, the corporation or the board or staff of the market
3221	assistance plan may make the following information obtained from
3222	underwriting files and confidential claims files available to
3223	licensed general lines insurance agents: name, address, and
3224	telephone number of the residential property owner or insured;
3225	location of the risk; rating information; loss history; and
3226	policy type. The receiving licensed general lines insurance
3227	agent must retain the confidentiality of the information
3228	received.
3229	2.  Portions of meetings of the corporation are exempt from
3230	the provisions of s. 286.011 and s. 24(b), Art. I of the State
3231	Constitution wherein confidential underwriting files or
3232	confidential open claims files are discussed. All portions of
3233	corporation meetings which are closed to the public shall be
3234	recorded by a court reporter. The court reporter shall record
3235	the times of commencement and termination of the meeting, all
3236	discussion and proceedings, the names of all persons present at
3237	any time, and the names of all persons speaking. No portion of
3238	any closed meeting shall be off the record. Subject to the
3239	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
3240	notes of any closed meeting shall be retained by the corporation
3241	for a minimum of 5 years. A copy of the transcript, less any
3242	exempt matters, of any closed meeting wherein claims are
3243	discussed shall become public as to individual claims after
3244	settlement of the claim.
3245	(w)(o)  It is the intent of the Legislature that the
3246	amendments to this subsection enacted in 2002 should, over time,
3247	reduce the probable maximum windstorm losses in the residual
3248	markets and should reduce the potential assessments to be levied
3249	on property insurers and policyholders statewide. In furtherance
3250	of this intent:
3251	1.  The board shall, on or before February 1 of each year,
3252	provide a report to the President of the Senate and the Speaker
3253	of the House of Representatives showing the reduction or
3254	increase in the 100-year probable maximum loss attributable to
3255	wind-only coverages and the quota share program under this
3256	subsection combined, as compared to the benchmark 100-year
3257	probable maximum loss of the Florida Windstorm Underwriting
3258	Association. For purposes of this paragraph, the benchmark 100-
3259	year probable maximum loss of the Florida Windstorm Underwriting
3260	Association shall be the calculation dated February 2001 and
3261	based on November 30, 2000, exposures. In order to ensure
3262	comparability of data, the board shall use the same methods for
3263	calculating its probable maximum loss as were used to calculate
3264	the benchmark probable maximum loss. The reduction or increase
3265	in probable maximum loss shall be calculated without taking into
3266	account the probable maximum loss attributable to the
3267	nonhomestead account.
3268	2.  Beginning February 1, 2013 2007, if the report under
3269	subparagraph 1. for any year indicates that the 100-year
3270	probable maximum loss attributable to wind-only coverages and
3271	the quota share program combined does not reflect a reduction of
3272	at least 25 percent from the benchmark, the board shall reduce
3273	the boundaries of the high-risk area eligible for wind-only
3274	coverages under this subsection in a manner calculated to reduce
3275	such probable maximum loss to an amount at least 25 percent
3276	below the benchmark.
3277	3.  Beginning February 1, 2018 2012, if the report under
3278	subparagraph 1. for any year indicates that the 100-year
3279	probable maximum loss attributable to wind-only coverages and
3280	the quota share program combined does not reflect a reduction of
3281	at least 50 percent from the benchmark, the boundaries of the
3282	high-risk area eligible for wind-only coverages under this
3283	subsection shall be reduced by the elimination of any area that
3284	is not seaward of a line 1,000 feet inland from the Intracoastal
3285	Waterway.
3286	(x)(p)  In enacting the provisions of this section, the
3287	Legislature recognizes that both the Florida Windstorm
3288	Underwriting Association and the Residential Property and
3289	Casualty Joint Underwriting Association have entered into
3290	financing arrangements that obligate each entity to service its
3291	debts and maintain the capacity to repay funds secured under
3292	these financing arrangements. It is the intent of the
3293	Legislature that nothing in this section be construed to
3294	compromise, diminish, or interfere with the rights of creditors
3295	under such financing arrangements. It is further the intent of
3296	the Legislature to preserve the obligations of the Florida
3297	Windstorm Underwriting Association and Residential Property and
3298	Casualty Joint Underwriting Association with regard to
3299	outstanding financing arrangements, with such obligations
3300	passing entirely and unchanged to the corporation and,
3301	specifically, to the applicable account of the corporation. So
3302	long as any bonds, notes, indebtedness, or other financing
3303	obligations of the Florida Windstorm Underwriting Association or
3304	the Residential Property and Casualty Joint Underwriting
3305	Association are outstanding, under the terms of the financing
3306	documents pertaining to them, the governing board of the
3307	corporation shall have and shall exercise the authority to levy,
3308	charge, collect, and receive all premiums, assessments,
3309	surcharges, charges, revenues, and receipts that the
3310	associations had authority to levy, charge, collect, or receive
3311	under the provisions of subsection (2) and this subsection,
3312	respectively, as they existed on January 1, 2002, to provide
3313	moneys, without exercise of the authority provided by this
3314	subsection, in at least the amounts, and by the times, as would
3315	be provided under those former provisions of subsection (2) or
3316	this subsection, respectively, so that the value, amount, and
3317	collectability of any assets, revenues, or revenue source
3318	pledged or committed to, or any lien thereon securing such
3319	outstanding bonds, notes, indebtedness, or other financing
3320	obligations will not be diminished, impaired, or adversely
3321	affected by the amendments made by this act and to permit
3322	compliance with all provisions of financing documents pertaining
3323	to such bonds, notes, indebtedness, or other financing
3324	obligations, or the security or credit enhancement for them, and
3325	any reference in this subsection to bonds, notes, indebtedness,
3326	financing obligations, or similar obligations, of the
3327	corporation shall include like instruments or contracts of the
3328	Florida Windstorm Underwriting Association and the Residential
3329	Property and Casualty Joint Underwriting Association to the
3330	extent not inconsistent with the provisions of the financing
3331	documents pertaining to them.
3332	(y)(q)  The corporation shall not require the securing of
3333	flood insurance as a condition of coverage if the insured or
3334	applicant executes a form approved by the office affirming that
3335	flood insurance is not provided by the corporation and that if
3336	flood insurance is not secured by the applicant or insured in
3337	addition to coverage by the corporation, the risk will not be
3338	covered for flood damage. A corporation policyholder electing
3339	not to secure flood insurance and executing a form as provided
3340	herein making a claim for water damage against the corporation
3341	shall have the burden of proving the damage was not caused by
3342	flooding. Notwithstanding other provisions of this subsection,
3343	the corporation may deny coverage to an applicant or insured who
3344	refuses to execute the form described herein.
3345	(z)(r)  A salaried employee of the corporation who performs
3346	policy administration services subsequent to the effectuation of
3347	a corporation policy is not required to be licensed as an agent
3348	under the provisions of s. 626.112.
3349	(aa)(s)  The transition to homestead and nonhomestead
3350	accounts shall begin on October 1, 2006. A policy issued on or
3351	after that date shall be issued in the applicable homestead
3352	account or the nonhomestead account, based upon whether the
3353	property constitutes homestead property as provided in
3354	subparagraph (b)2. A policy in effect on October 1, 2006, shall
3355	be placed in the applicable homestead account or the
3356	nonhomestead account, based upon whether the property
3357	constitutes homestead property as provided in subparagraph
3358	(b)2., upon the first renewal of such policy after October 1,
3359	2006.
3360	(bb)(u)  An employee of the corporation shall notify the
3361	Division of Insurance Fraud within 48 hours after having
3362	information that would lead a reasonable person to suspect that
3363	fraud may have been committed by any employee of the
3364	corporation.
3365	(cc)(v)  By February 1, 2007, the corporation shall submit
3366	a report to the President of the Senate, the Speaker of the
3367	House of Representatives, the minority party leaders of the
3368	Senate and the House of Representatives, and the chairs of the
3369	standing committees of the Senate and the House of
3370	Representatives having jurisdiction over matters relating to
3371	property and casualty insurance. In preparing the report, the
3372	corporation shall consult with the Office of Insurance
3373	Regulation, the Department of Financial Services, and any other
3374	party the corporation determines is appropriate. The report
3375	shall include findings and recommendations on the feasibility of
3376	requiring authorized insurers that issue and service personal
3377	and commercial residential policies and commercial
3378	nonresidential policies that provide coverage for basic property
3379	perils except for the peril of wind to issue and service for a
3380	fee personal and commercial residential policies and commercial
3381	nonresidential policies providing coverage for the peril of wind
3382	issued by the corporation. The report shall include:
3383	1.  The expense savings to the corporation of issuing and
3384	servicing such policies as determined through a cost benefit
3385	analysis.
3386	2.  The expenses and liability to authorized insurers
3387	associated with issuing and servicing such policies.
3388	3.  The impact on service to policyholders of the
3389	corporation relating to issuing and servicing such policies.
3390	4.  The impact on the producing agent of the corporation of
3391	issuing and servicing such policies.
3392	5.  Recommendations as to the amount of the fee that should
3393	be paid to authorized insurers for issuing and servicing such
3394	policies.
3395	6.  The impact issuing and servicing such policies will
3396	have on the corporation's number of policies, total insured
3397	value, and probable maximum loss.
3398	(dd)(w)  There shall be no liability on the part of, and no
3399	cause of action of any nature shall arise against, producing
3400	agents of record of the corporation or employees of such agents
3401	for insolvency of any take-out insurer.
3402	(ee)(x)  The Legislature finds that the total area eligible
3403	for the high-risk account of the corporation has a material
3404	impact on the availability of wind coverage from the voluntary
3405	admitted market, deficits of the corporation, assessments to be
3406	levied on property insurers and policyholders statewide, the
3407	ability and willingness of authorized insurers to write wind
3408	coverage in the high-risk areas, the probable maximum windstorm
3409	losses of the corporation, general commerce in coastal areas,
3410	and the overall financial condition of the state. Therefore, in
3411	furtherance of these findings and intent:
3412	1.  The High Risk Eligibility Panel is created.
3413	2.  The members of the panel shall be appointed as follows:
3414	a.  The board shall appoint two board members.
3415	b.  The Governor shall appoint one member.
3416	c.  The Chief Financial Officer shall appoint one member.
3417	d.  The Commissioner of Insurance Regulation shall appoint
3418	a representative of the office to serve as a member.
3419	e.  The President of the Senate shall appoint one member.
3420	f.  The Speaker of the House of Representatives shall
3421	appoint one member.
3422
3423	Members of the panel must be residents of this state with
3424	insurance expertise. Members shall elect a chair and shall serve
3425	3-year terms each. The panel shall operate independently of any
3426	state agency and shall be administered by the corporation. The
3427	panel shall make an annual report to the President of the Senate
3428	and the Speaker of the House of Representatives on or before
3429	February 1 of each year recommending the areas that should be
3430	eligible for the high-risk account of the corporation. Members
3431	shall not receive compensation and are not entitled to receive
3432	reimbursement for per diem and travel expenses as provided in s.
3433	112.061, except for any panel member who is a state employee.
3434	3.  The Legislature's intent provided in subparagraphs
3435	(a)1. and 2. shall provide guidance for the panel to use in the
3436	panel's recommendations to the Legislature required in
3437	subparagraph 1. The panel shall consider the following factors
3438	in fulfilling its responsibilities under this paragraph:
3439	a.  The number of commercial risks in a given area that are
3440	unable to find wind coverage from the voluntary admitted market.
3441	b.  Reports from members of the mortgage industry
3442	indicating difficulty in finding forced placed policies for
3443	commercial wind coverage.
3444	c.  The number of approved excess and surplus lines
3445	carriers certifying an unwillingness to provide commercial wind
3446	coverage similar to that approved for use by the office for the
3447	voluntary admitted market.
3448	d.  Other relevant factors.
3449
3450	The office and the corporation shall provide the panel with any
3451	information the panel considers necessary to determine areas
3452	eligible for the high-risk account of the corporation. For the
3453	purpose of making accurate determinations for areas eligible for
3454	the high-risk account of the corporation, the panel may
3455	interview and request and receive information from residents of
3456	this state in areas impacted by this paragraph, including, but
3457	not limited to, insurance agents, insurance companies,
3458	actuaries, and other insurance professionals. Upon request of
3459	the panel, the office may conduct public hearings in areas that
3460	may be impacted by the panel's recommendations.
3461	4.  Notwithstanding other provisions of this paragraph, the
3462	panel shall conduct an analysis to determine the areas to be
3463	eligible for the high-risk account of the corporation for any
3464	county that contains an eligible area extending more than 2
3465	miles from the coast, any coastal county that does not have
3466	areas designated as eligible for the high-risk account, and
3467	counties with barrier islands whether or not such islands or
3468	portions of such islands are currently eligible for the high
3469	risk account. The panel shall submit a report, including its
3470	analysis, to the office and to the corporation by November 30,
3471	2006. The report shall specify changes to the areas eligible for
3472	the high-risk account for such affected counties based on its
3473	analysis.
3474	Section 13.  Effective January 1, 2007, paragraph (c) of
3475	subsection (6) of section 627.351, Florida Statutes, as amended
3476	by this act, is amended to read:
3477	627.351  Insurance risk apportionment plans.--
3478	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
3479	(c)  The plan of operation of the corporation:
3480	1.  Must provide for adoption of residential property and
3481	casualty insurance policy forms and commercial residential and
3482	nonresidential property insurance forms, which forms must be
3483	approved by the office prior to use. The corporation shall adopt
3484	the following policy forms:
3485	a.  Standard personal lines policy forms that are
3486	comprehensive multiperil policies providing full coverage of a
3487	residential property equivalent to the coverage provided in the
3488	private insurance market under an HO-3, HO-4, or HO-6 policy.
3489	b.  Basic personal lines policy forms that are policies
3490	similar to an HO-8 policy or a dwelling fire policy that provide
3491	coverage meeting the requirements of the secondary mortgage
3492	market, but which coverage is more limited than the coverage
3493	under a standard policy.
3494	c.  Commercial lines residential policy forms that are
3495	generally similar to the basic perils of full coverage
3496	obtainable for commercial residential structures in the admitted
3497	voluntary market.
3498	d.  Personal lines and commercial lines residential
3499	property insurance forms that cover the peril of wind only. The
3500	forms are applicable only to residential properties located in
3501	areas eligible for coverage under the high-risk account referred
3502	to in sub-subparagraph (b)2.a.
3503	e.  Commercial lines nonresidential property insurance
3504	forms that cover the peril of wind only. The forms are
3505	applicable only to nonresidential properties located in areas
3506	eligible for coverage under the high-risk account referred to in
3507	sub-subparagraph (b)2.a.
3508	f.  The corporation may adopt variations of the policy
3509	forms listed in sub-subparagraphs a.-e. that contain more
3510	restrictive coverage.
3511	2.a.  Must provide that the corporation adopt a program in
3512	which the corporation and authorized insurers enter into quota
3513	share primary insurance agreements for hurricane coverage, as
3514	defined in s. 627.4025(2)(a), for eligible risks, and adopt
3515	property insurance forms for eligible risks which cover the
3516	peril of wind only. As used in this subsection, the term:
3517	(I)  "Quota share primary insurance" means an arrangement
3518	in which the primary hurricane coverage of an eligible risk is
3519	provided in specified percentages by the corporation and an
3520	authorized insurer. The corporation and authorized insurer are
3521	each solely responsible for a specified percentage of hurricane
3522	coverage of an eligible risk as set forth in a quota share
3523	primary insurance agreement between the corporation and an
3524	authorized insurer and the insurance contract. The
3525	responsibility of the corporation or authorized insurer to pay
3526	its specified percentage of hurricane losses of an eligible
3527	risk, as set forth in the quota share primary insurance
3528	agreement, may not be altered by the inability of the other
3529	party to the agreement to pay its specified percentage of
3530	hurricane losses. Eligible risks that are provided hurricane
3531	coverage through a quota share primary insurance arrangement
3532	must be provided policy forms that set forth the obligations of
3533	the corporation and authorized insurer under the arrangement,
3534	clearly specify the percentages of quota share primary insurance
3535	provided by the corporation and authorized insurer, and
3536	conspicuously and clearly state that neither the authorized
3537	insurer nor the corporation may be held responsible beyond its
3538	specified percentage of coverage of hurricane losses.
3539	(II)  "Eligible risks" means personal lines residential and
3540	commercial lines residential risks that meet the underwriting
3541	criteria of the corporation and are located in areas that were
3542	eligible for coverage by the Florida Windstorm Underwriting
3543	Association on January 1, 2002.
3544	b.  The corporation may enter into quota share primary
3545	insurance agreements with authorized insurers at corporation
3546	coverage levels of 90 percent and 50 percent.
3547	c.  If the corporation determines that additional coverage
3548	levels are necessary to maximize participation in quota share
3549	primary insurance agreements by authorized insurers, the
3550	corporation may establish additional coverage levels. However,
3551	the corporation's quota share primary insurance coverage level
3552	may not exceed 90 percent.
3553	d.  Any quota share primary insurance agreement entered
3554	into between an authorized insurer and the corporation must
3555	provide for a uniform specified percentage of coverage of
3556	hurricane losses, by county or territory as set forth by the
3557	corporation board, for all eligible risks of the authorized
3558	insurer covered under the quota share primary insurance
3559	agreement.
3560	e.  Any quota share primary insurance agreement entered
3561	into between an authorized insurer and the corporation is
3562	subject to review and approval by the office. However, such
3563	agreement shall be authorized only as to insurance contracts
3564	entered into between an authorized insurer and an insured who is
3565	already insured by the corporation for wind coverage.
3566	f.  For all eligible risks covered under quota share
3567	primary insurance agreements, the exposure and coverage levels
3568	for both the corporation and authorized insurers shall be
3569	reported by the corporation to the Florida Hurricane Catastrophe
3570	Fund. For all policies of eligible risks covered under quota
3571	share primary insurance agreements, the corporation and the
3572	authorized insurer shall maintain complete and accurate records
3573	for the purpose of exposure and loss reimbursement audits as
3574	required by Florida Hurricane Catastrophe Fund rules. The
3575	corporation and the authorized insurer shall each maintain
3576	duplicate copies of policy declaration pages and supporting
3577	claims documents.
3578	g.  The corporation board shall establish in its plan of
3579	operation standards for quota share agreements which ensure that
3580	there is no discriminatory application among insurers as to the
3581	terms of quota share agreements, pricing of quota share
3582	agreements, incentive provisions if any, and consideration paid
3583	for servicing policies or adjusting claims.
3584	h.  The quota share primary insurance agreement between the
3585	corporation and an authorized insurer must set forth the
3586	specific terms under which coverage is provided, including, but
3587	not limited to, the sale and servicing of policies issued under
3588	the agreement by the insurance agent of the authorized insurer
3589	producing the business, the reporting of information concerning
3590	eligible risks, the payment of premium to the corporation, and
3591	arrangements for the adjustment and payment of hurricane claims
3592	incurred on eligible risks by the claims adjuster and personnel
3593	of the authorized insurer. Entering into a quota sharing
3594	insurance agreement between the corporation and an authorized
3595	insurer shall be voluntary and at the discretion of the
3596	authorized insurer.
3597	3.  May provide that the corporation may employ or
3598	otherwise contract with individuals or other entities to provide
3599	administrative or professional services that may be appropriate
3600	to effectuate the plan. The corporation shall have the power to
3601	borrow funds, by issuing bonds or by incurring other
3602	indebtedness, and shall have other powers reasonably necessary
3603	to effectuate the requirements of this subsection, including,
3604	without limitation, the power to issue bonds and incur other
3605	indebtedness in order to refinance outstanding bonds or other
3606	indebtedness. The corporation may, but is not required to, seek
3607	judicial validation of its bonds or other indebtedness under
3608	chapter 75. The corporation may issue bonds or incur other
3609	indebtedness, or have bonds issued on its behalf by a unit of
3610	local government pursuant to subparagraph (g)2., in the absence
3611	of a hurricane or other weather-related event, upon a
3612	determination by the corporation, subject to approval by the
3613	office, that such action would enable it to efficiently meet the
3614	financial obligations of the corporation and that such
3615	financings are reasonably necessary to effectuate the
3616	requirements of this subsection. The corporation is authorized
3617	to take all actions needed to facilitate tax-free status for any
3618	such bonds or indebtedness, including formation of trusts or
3619	other affiliated entities. The corporation shall have the
3620	authority to pledge assessments, projected recoveries from the
3621	Florida Hurricane Catastrophe Fund, other reinsurance
3622	recoverables, market equalization and other surcharges, and
3623	other funds available to the corporation as security for bonds
3624	or other indebtedness. In recognition of s. 10, Art. I of the
3625	State Constitution, prohibiting the impairment of obligations of
3626	contracts, it is the intent of the Legislature that no action be
3627	taken whose purpose is to impair any bond indenture or financing
3628	agreement or any revenue source committed by contract to such
3629	bond or other indebtedness.
3630	4.a.  Must require that the corporation operate subject to
3631	the supervision and approval of a board of governors consisting
3632	of 8 individuals who are residents of this state, from different
3633	geographical areas of this state. The Governor, the Chief
3634	Financial Officer, the President of the Senate, and the Speaker
3635	of the House of Representatives shall each appoint two members
3636	of the board, effective August 1, 2005. At least one of the two
3637	members appointed by each appointing officer must have
3638	demonstrated expertise in insurance. The Chief Financial Officer
3639	shall designate one of the appointees as chair. All board
3640	members serve at the pleasure of the appointing officer. All
3641	board members, including the chair, must be appointed to serve
3642	for 3-year terms beginning annually on a date designated by the
3643	plan. Any board vacancy shall be filled for the unexpired term
3644	by the appointing officer. The Chief Financial Officer shall
3645	appoint a technical advisory group to provide information and
3646	advice to the board of governors in connection with the board's
3647	duties under this subsection. The executive director and senior
3648	managers of the corporation shall be engaged by the board, as
3649	recommended by the Chief Financial Officer, and serve at the
3650	pleasure of the board. The executive director is responsible for
3651	employing other staff as the corporation may require, subject to
3652	review and concurrence by the board and the Chief Financial
3653	Officer.
3654	b.  The board shall create a Market Accountability Advisory
3655	Committee to assist the corporation in developing awareness of
3656	its rates and its customer and agent service levels in
3657	relationship to the voluntary market insurers writing similar
3658	coverage. The members of the advisory committee shall consist of
3659	the following 11 persons, one of whom must be elected chair by
3660	the members of the committee: four representatives, one
3661	appointed by the Florida Association of Insurance Agents, one by
3662	the Florida Association of Insurance and Financial Advisors, one
3663	by the Professional Insurance Agents of Florida, and one by the
3664	Latin American Association of Insurance Agencies; three
3665	representatives appointed by the insurers with the three highest
3666	voluntary market share of residential property insurance
3667	business in the state; one representative from the Office of
3668	Insurance Regulation; one consumer appointed by the board who is
3669	insured by the corporation at the time of appointment to the
3670	committee; one representative appointed by the Florida
3671	Association of Realtors; and one representative appointed by the
3672	Florida Bankers Association. All members must serve for 3-year
3673	terms and may serve for consecutive terms. The committee shall
3674	report to the corporation at each board meeting on insurance
3675	market issues which may include rates and rate competition with
3676	the voluntary market; service, including policy issuance, claims
3677	processing, and general responsiveness to policyholders,
3678	applicants, and agents; and matters relating to depopulation.
3679	5.  Must provide a procedure for determining the
3680	eligibility of a risk for coverage, as follows:
3681	a.  Subject to the provisions of s. 627.3517, with respect
3682	to personal lines residential risks, if the risk is offered
3683	coverage from an authorized insurer at the insurer's approved
3684	rate under either a standard policy including wind coverage or,
3685	if consistent with the insurer's underwriting rules as filed
3686	with the office, a basic policy including wind coverage, the
3687	risk is not eligible for any policy issued by the corporation.
3688	If the risk is not able to obtain any such offer, the risk is
3689	eligible for either a standard policy including wind coverage or
3690	a basic policy including wind coverage issued by the
3691	corporation; however, if the risk could not be insured under a
3692	standard policy including wind coverage regardless of market
3693	conditions, the risk shall be eligible for a basic policy
3694	including wind coverage unless rejected under subparagraph 8.
3695	The corporation shall determine the type of policy to be
3696	provided on the basis of objective standards specified in the
3697	underwriting manual and based on generally accepted underwriting
3698	practices.
3699	(I)  If the risk accepts an offer of coverage through the
3700	market assistance plan or an offer of coverage through a
3701	mechanism established by the corporation before a policy is
3702	issued to the risk by the corporation or during the first 30
3703	days of coverage by the corporation, and the producing agent who
3704	submitted the application to the plan or to the corporation is
3705	not currently appointed by the insurer, the insurer shall:
3706	(A)  Pay to the producing agent of record of the policy,
3707	for the first year, an amount that is the greater of the
3708	insurer's usual and customary commission for the type of policy
3709	written or a fee equal to the usual and customary commission of
3710	the corporation; or
3711	(B)  Offer to allow the producing agent of record of the
3712	policy to continue servicing the policy for a period of not less
3713	than 1 year and offer to pay the agent the greater of the
3714	insurer's or the corporation's usual and customary commission
3715	for the type of policy written.
3716
3717	If the producing agent is unwilling or unable to accept
3718	appointment, the new insurer shall pay the agent in accordance
3719	with sub-sub-sub-subparagraph (A).
3720	(II)  When the corporation enters into a contractual
3721	agreement for a take-out plan, the producing agent of record of
3722	the corporation policy is entitled to retain any unearned
3723	commission on the policy, and the insurer shall:
3724	(A)  Pay to the producing agent of record of the
3725	corporation policy, for the first year, an amount that is the
3726	greater of the insurer's usual and customary commission for the
3727	type of policy written or a fee equal to the usual and customary
3728	commission of the corporation; or
3729	(B)  Offer to allow the producing agent of record of the
3730	corporation policy to continue servicing the policy for a period
3731	of not less than 1 year and offer to pay the agent the greater
3732	of the insurer's or the corporation's usual and customary
3733	commission for the type of policy written.
3734
3735	If the producing agent is unwilling or unable to accept
3736	appointment, the new insurer shall pay the agent in accordance
3737	with sub-sub-sub-subparagraph (A).
3738	b.  With respect to commercial lines residential risks, if
3739	the risk is offered coverage under a policy including wind
3740	coverage from an authorized insurer at its approved rate, the
3741	risk is not eligible for any policy issued by the corporation.
3742	If the risk is not able to obtain any such offer, the risk is
3743	eligible for a policy including wind coverage issued by the
3744	corporation.
3745	(I)  If the risk accepts an offer of coverage through the
3746	market assistance plan or an offer of coverage through a
3747	mechanism established by the corporation before a policy is
3748	issued to the risk by the corporation or during the first 30
3749	days of coverage by the corporation, and the producing agent who
3750	submitted the application to the plan or the corporation is not
3751	currently appointed by the insurer, the insurer shall:
3752	(A)  Pay to the producing agent of record of the policy,
3753	for the first year, an amount that is the greater of the
3754	insurer's usual and customary commission for the type of policy
3755	written or a fee equal to the usual and customary commission of
3756	the corporation; or
3757	(B)  Offer to allow the producing agent of record of the
3758	policy to continue servicing the policy for a period of not less
3759	than 1 year and offer to pay the agent the greater of the
3760	insurer's or the corporation's usual and customary commission
3761	for the type of policy written.
3762
3763	If the producing agent is unwilling or unable to accept
3764	appointment, the new insurer shall pay the agent in accordance
3765	with sub-sub-sub-subparagraph (A).
3766	(II)  When the corporation enters into a contractual
3767	agreement for a take-out plan, the producing agent of record of
3768	the corporation policy is entitled to retain any unearned
3769	commission on the policy, and the insurer shall:
3770	(A)  Pay to the producing agent of record of the
3771	corporation policy, for the first year, an amount that is the
3772	greater of the insurer's usual and customary commission for the
3773	type of policy written or a fee equal to the usual and customary
3774	commission of the corporation; or
3775	(B)  Offer to allow the producing agent of record of the
3776	corporation policy to continue servicing the policy for a period
3777	of not less than 1 year and offer to pay the agent the greater
3778	of the insurer's or the corporation's usual and customary
3779	commission for the type of policy written.
3780
3781	If the producing agent is unwilling or unable to accept
3782	appointment, the new insurer shall pay the agent in accordance
3783	with sub-sub-sub-subparagraph (A).
3784	c.  To preserve existing incentives for carriers to write
3785	dwellings in the voluntary market and not in the corporation,
3786	the corporation shall continue to offer authorized insurers,
3787	including insurers writing dwellings valued at $1 million or
3788	more, the same voluntary writing credits that were available on
3789	January 1, 2006, to carriers writing wind coverage for dwellings
3790	in the areas eligible for coverage in the high-risk account.
3791	d.  With respect to personal lines residential risks, if
3792	the risk is a dwelling with an insured value of $1 million or
3793	more, or if the risk is one that is excluded from the coverage
3794	to be provided by the condominium association under s.
3795	718.111(11)(b) and that is insured by the condominium unit owner
3796	for a combined dwelling and contents replacement cost of $1
3797	million or more, the risk is not eligible for any policy issued
3798	by the corporation. Rates and forms for personal lines
3799	residential risks not eligible for coverage by the corporation
3800	specified by this sub-subparagraph are not subject to ss.
3801	627.062 and 627.0629. Such rates and forms are subject to all
3802	other applicable provisions of this code and rules adopted under
3803	this code. During the course of an insurer's market conduct
3804	examination, the office may review the rate for any risk to
3805	which the provisions of this sub-subparagraph are applicable to
3806	determine if such rate is inadequate or unfairly discriminatory.
3807	Rates on personal lines residential risks not eligible for
3808	coverage by the corporation may be found inadequate by the
3809	office if they are clearly insufficient, together with the
3810	investment income attributable to such risks, to sustain
3811	projected losses and expenses in the class of business to which
3812	such rates apply. Rates on personal lines residential risks not
3813	eligible for coverage by the corporation may also be found
3814	inadequate as to the premium charged to a risk or group of risks
3815	if discounts or credits are allowed that exceed a reasonable
3816	reflection of expense savings and reasonably expected loss
3817	experience from the risk or group of risks. Rates on personal
3818	lines residential risks not eligible for coverage by the
3819	corporation may be found to be unfairly discriminatory as to a
3820	risk or group of risks by the office if the application of
3821	premium discounts, credits, or surcharges among such risks does
3822	not bear a reasonable relationship to the expected loss and
3823	expense experience among the various risks. A rating plan,
3824	including discounts, credits, or surcharges on personal lines
3825	residential risks not eligible for coverage by the corporation
3826	may also be found to be unfairly discriminatory if the plan
3827	fails to clearly and equitably reflect consideration of the
3828	policyholder's participation in a risk management program
3829	adjusted pursuant to s. 627.0625. The office may order an
3830	insurer to discontinue using a rate for new policies or upon
3831	renewal of a policy if the office finds the rate to be
3832	inadequate or unfairly discriminatory. Insurers must maintain
3833	records and documentation relating to rates and forms subject to
3834	this sub-subparagraph for a period of at least 5 years after the
3835	effective date of the policy.
3836	e.  For policies subject to nonrenewal as a result of the
3837	risk being no longer eligible for coverage pursuant to sub-
3838	subparagraph d., the corporation shall, directly or through the
3839	market assistance plan, make information from confidential
3840	underwriting and claims files of policyholders available only to
3841	licensed general lines agents who register with the corporation
3842	to receive such information according to the following
3843	procedures:
3844	(I)  By August 1, 2006, the corporation shall provide
3845	policyholders who are not eligible for renewal pursuant to sub-
3846	subparagraph d. the opportunity to request in writing, within 30
3847	days after the notification is sent, that information from their
3848	confidential underwriting and claims files not be released to
3849	licensed general lines agents registered pursuant to sub-sub-
3850	subparagraph e.(II);
3851	(II)  By August 1, 2006, the corporation shall make
3852	available to licensed general lines agents the registration
3853	procedures to be used to obtain confidential information from
3854	underwriting and claims files for policies not eligible for
3855	renewal pursuant to sub-subparagraph d. As a condition of
3856	registration, the corporation shall require the licensed general
3857	lines agent to attest that the agent has the experience and
3858	relationships with authorized or surplus lines carriers to
3859	attempt to offer replacement coverage for policies not eligible
3860	for renewal pursuant to sub-subparagraph d.
3861	(III)  By September 1, 2006, the corporation shall make
3862	available through a secured website to licensed general lines
3863	agents registered pursuant to sub-sub-subparagraph e.(II)
3864	application, rating, loss history, mitigation, and policy type
3865	information relating to all policies not eligible for renewal
3866	pursuant to sub-subparagraph d. and for which the policyholder
3867	has not requested the corporation withhold such information
3868	pursuant to sub-sub-subparagraph e.(I). The licensed general
3869	lines agent registered pursuant to sub-sub-subparagraph e.(II)
3870	may use such information to contact and assist the policyholder
3871	in securing replacement policies and the agent may disclose to
3872	the policyholder such information was obtained from the
3873	corporation.
3874	f.  With respect to nonhomestead property, eligibility must
3875	be determined in accordance with sub-sub-sub-subparagraph
3876	(b)2.a.(II)(A).
3877	6.  Must provide by July 1, 2007, that an application for
3878	coverage for a new policy is subject to a waiting period of 10
3879	days before coverage is effective, during which time the
3880	corporation shall make such application available for review by
3881	general lines agents and authorized property and casualty
3882	insurers. The board may approve exceptions that allow for
3883	coverage to be effective before the end of the 10-day waiting
3884	period, for coverage issued in conjunction with a real estate
3885	closing, and for such other exceptions as the board determines
3886	are necessary to prevent lapses in coverage.
3887	7.  Must include rules for classifications of risks and
3888	rates therefor.
3889	8.  Must provide that if premium and investment income for
3890	an account attributable to a particular calendar year are in
3891	excess of projected losses and expenses for the account
3892	attributable to that year, such excess shall be held in surplus
3893	in the account. Such surplus shall be available to defray
3894	deficits in that account as to future years and shall be used
3895	for that purpose prior to assessing assessable insurers and
3896	assessable insureds as to any calendar year.
3897	9.  Must provide objective criteria and procedures to be
3898	uniformly applied for all applicants in determining whether an
3899	individual risk is so hazardous as to be uninsurable. In making
3900	this determination and in establishing the criteria and
3901	procedures, the following shall be considered:
3902	a.  Whether the likelihood of a loss for the individual
3903	risk is substantially higher than for other risks of the same
3904	class; and
3905	b.  Whether the uncertainty associated with the individual
3906	risk is such that an appropriate premium cannot be determined.
3907
3908	The acceptance or rejection of a risk by the corporation shall
3909	be construed as the private placement of insurance, and the
3910	provisions of chapter 120 shall not apply.
3911	10.  Must provide that the corporation shall make its best
3912	efforts to procure catastrophe reinsurance at reasonable rates,
3913	to cover its projected 100-year probable maximum loss in the
3914	homestead accounts as determined by the board of governors.
3915	11.  Must provide that in the event of regular deficit
3916	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
3917	(b)3.b., in the personal lines homestead account, the commercial
3918	lines residential homestead account, or the high-risk homestead
3919	account, the corporation shall levy upon corporation homestead
3920	account policyholders in its next rate filing, or by a separate
3921	rate filing solely for this purpose, a Citizens policyholder
3922	surcharge arising from a regular assessment in such account in a
3923	percentage equal to the total amount of such regular assessments
3924	divided by the aggregate statewide direct written premium for
3925	subject lines of business for the year preceding the year in
3926	which the deficit to which the regular assessment related is
3927	incurred. Citizens policyholder surcharges under this
3928	subparagraph are not considered premium and are not subject to
3929	commissions, fees, or premium taxes; however, failure to pay the
3930	Citizens policyholder a market equalization surcharge shall be
3931	treated as failure to pay premium. Notwithstanding any other
3932	provision of this section, for purposes of the Citizens
3933	policyholder surcharges to be levied pursuant to this
3934	subparagraph, the total amount of the regular assessment to
3935	which such Citizens policyholder surcharge relates shall be
3936	determined as set forth in sub-subparagraphs (b)3.a., b., and c.
3937	12.  The policies issued by the corporation must provide
3938	that, if the corporation or the market assistance plan obtains
3939	an offer from an authorized insurer to cover the risk at its
3940	approved rates, the risk is no longer eligible for renewal
3941	through the corporation.
3942	13.  Corporation policies and applications must include a
3943	notice that the corporation policy could, under this section, be
3944	replaced with a policy issued by an authorized insurer that does
3945	not provide coverage identical to the coverage provided by the
3946	corporation or an insurer writing coverage pursuant to part VIII
3947	of chapter 626. The notice shall also specify that acceptance of
3948	corporation coverage creates a conclusive presumption that the
3949	applicant or policyholder is aware of this potential.
3950	14.  May establish, subject to approval by the office,
3951	different eligibility requirements and operational procedures
3952	for any line or type of coverage for any specified county or
3953	area if the board determines that such changes to the
3954	eligibility requirements and operational procedures are
3955	justified due to the voluntary market being sufficiently stable
3956	and competitive in such area or for such line or type of
3957	coverage and that consumers who, in good faith, are unable to
3958	obtain insurance through the voluntary market through ordinary
3959	methods would continue to have access to coverage from the
3960	corporation. When coverage is sought in connection with a real
3961	property transfer, such requirements and procedures shall not
3962	provide for an effective date of coverage later than the date of
3963	the closing of the transfer as established by the transferor,
3964	the transferee, and, if applicable, the lender.
3965	15.  Must provide that, with respect to the high-risk
3966	homestead account, any assessable insurer with a surplus as to
3967	policyholders of $25 million or less writing 25 percent or more
3968	of its total countrywide property insurance premiums in this
3969	state may petition the office, within the first 90 days of each
3970	calendar year, to qualify as a limited apportionment company. In
3971	no event shall a limited apportionment company be required to
3972	participate in the portion of any assessment, within the high-
3973	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
3974	subparagraph (b)3.b. in the aggregate which exceeds $50 million
3975	after payment of available high-risk account funds in any
3976	calendar year. However, A limited apportionment company shall
3977	collect from its policyholders any emergency assessment imposed
3978	under sub-subparagraph (b)3.d. The plan shall provide that, if
3979	the office determines that any regular assessment will result in
3980	an impairment of the surplus of a limited apportionment company,
3981	the office may direct that all or part of such assessment be
3982	deferred as provided in subparagraph (g)4. However, there shall
3983	be no limitation or deferment of an emergency assessment to be
3984	collected from policyholders under sub-subparagraph (b)3.d.
3985	16.  Must provide that the corporation appoint as its
3986	licensed agents only those agents who also hold an appointment
3987	as defined in s. 626.015(3) with an insurer who at the time of
3988	the agent's initial appointment by the corporation is authorized
3989	to write and is actually writing personal lines residential
3990	property coverage, commercial residential property coverage, or
3991	commercial nonresidential property coverage within the state.
3992	17.  Must provide, by July 1, 2007, a premium payment plan
3993	option to its policyholders which allows for quarterly and
3994	semiannual payment of premiums.
3995	18.  Must provide that the hurricane deductible for any
3996	property in the nonhomestead account with an insured value of
3997	$250,000 or more must be at least 5 percent of the insured
3998	value.
3999	19.  Must provide that the application for coverage under
4000	the nonhomestead account and the declaration page of each
4001	nonhomestead account policy include a statement in boldface 12-
4002	point type specifying that public subsidies do not support the
4003	corporation's coverage of nonhomestead property; that if the
4004	nonhomestead account of the corporation sustains a deficit or is
4005	unable to pay claims, the nonhomestead policyholder shall be
4006	subject to an immediate assessment in an amount up to 100
4007	percent of the premium and a further assessment upon renewal of
4008	the policy; and that the applicant or policyholder may wish to
4009	seek alternative coverage from an authorized insurer or surplus
4010	lines insurer that will not be subject to such potential
4011	assessments.
4012	20.  Must provide that the application for coverage under
4013	any of the homestead accounts and the declaration page of each
4014	homestead account policy include a statement in boldface 12-
4015	point type specifying that a false declaration of homestead
4016	status for purposes of obtaining coverage in any of the
4017	homestead accounts may constitute the offense of insurance
4018	fraud, as prohibited and punishable as a felony under s.
4019	817.234.
4020	21.  Must limit coverage on mobile homes or manufactured
4021	homes built prior to 1994 to actual cash value of the dwelling
4022	rather than replacement costs of the dwelling.
4023	Section 14.  Effective July 1, 2006, section 627.3517,
4024	Florida Statutes, is amended to read:
4025	627.3517  Consumer choice.--
4026	(1)  Except as provided in subsection (2), no provision of
4027	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
4028	impair the right of any insurance risk apportionment plan
4029	policyholder, upon receipt of any keepout or take-out offer, to
4030	retain his or her current agent, so long as that agent is duly
4031	licensed and appointed by the insurance risk apportionment plan
4032	or otherwise authorized to place business with the insurance
4033	risk apportionment plan. This right shall not be canceled,
4034	suspended, impeded, abridged, or otherwise compromised by any
4035	rule, plan of operation, or depopulation plan, whether through
4036	keepout, take-out, midterm assumption, or any other means, of
4037	any insurance risk apportionment plan or depopulation plan,
4038	including, but not limited to, those described in s. 627.351, s.
4039	627.3511, or s. 627.3515. The commission shall adopt any rules
4040	necessary to cause any insurance risk apportionment plan or
4041	market assistance plan under such sections to demonstrate that
4042	the operations of the plan do not interfere with, promote, or
4043	allow interference with the rights created under this section.
4044	If the policyholder's current agent is unable or unwilling to be
4045	appointed with the insurer making the take-out or keepout offer,
4046	the policyholder shall not be disqualified from participation in
4047	the appropriate insurance risk apportionment plan because of an
4048	offer of coverage in the voluntary market. An offer of full
4049	property insurance coverage by the insurer currently insuring
4050	either the ex-wind or wind-only coverage on the policy to which
4051	the offer applies shall not be considered a take-out or keepout
4052	offer. Any rule, plan of operation, or plan of depopulation,
4053	through keepout, take-out, midterm assumption, or any other
4054	means, of any property insurance risk apportionment plan under
4055	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
4056	and 627.3511(4).
4057	(2)  This section does not apply during the first 10 days
4058	after a new application for coverage has been submitted to
4059	Citizens Property Insurance Corporation under s. 627.351(6),
4060	whether or not coverage is bound during this period.
4061	Section 15.  Section 627.3519, Florida Statutes, is created
4062	to read:
4063	627.3519  Annual report of aggregate net probable maximum
4064	losses, financing options, and potential assessments.--No later
4065	than February 1 of each year, the Financial Services Commission
4066	shall provide to the Legislature a report of the aggregate net
4067	probable maximum losses, financing options, and potential
4068	assessments of the Florida Hurricane Catastrophe Fund and
4069	Citizens Property Insurance Corporation. The report must include
4070	the respective 50-year, 100-year, and 250-year probable maximum
4071	losses of the fund and the corporation; analysis of all
4072	reasonable financing strategies for each such probable maximum
4073	loss, including the amount and term of debt instruments;
4074	specification of the percentage assessments that would be needed
4075	to support each of the financing strategies; and calculations of
4076	the aggregate assessment burden on Florida property and casualty
4077	policyholders for each of the probable maximum losses. The
4078	commission shall require the fund and the corporation to provide
4079	the commission with such data and analysis as the commission
4080	considers necessary to prepare the report.
4081	Section 16.  Paragraph (b) of subsection (3) of section
4082	627.4035, Florida Statutes, is amended to read:
4083	627.4035  Cash payment of premiums; claims.--
4084	(3)  All payments of claims made in this state under any
4085	contract of insurance shall be paid:
4086	(b)  If authorized in writing by the recipient or the
4087	recipient's representative, by debit card or any other form of
4088	electronic transfer. Any fees or costs to be charged against the
4089	recipient must be disclosed in writing to the recipient or the
4090	recipient's representative at the time of written authorization.
4091	However, the written authorization requirement may be waived by
4092	the recipient or the recipient's representative if the insurer
4093	verifies the identity of the insured or the insured's recipient
4094	and does not charge a fee for the transaction. If the funds are
4095	misdirected, the insurer would remain liable for the payment of
4096	the claim.
4097	Section 17.  Paragraph (b) of subsection (3) of section
4098	627.701, Florida Statutes, is amended to read:
4099	627.701  Liability of insureds; coinsurance; deductibles.--
4100	(3)
4101	(b)1.  Except as otherwise provided in this paragraph,
4102	prior to issuing a personal lines residential property insurance
4103	policy on or after January 1, 2006, or prior to the first
4104	renewal of a residential property insurance policy on or after
4105	January 1, 2006, the insurer must offer alternative deductible
4106	amounts applicable to hurricane losses equal to $500, 2 percent,
4107	5 percent, and 10 percent of the policy dwelling limits, unless
4108	the specific percentage deductible is less than $500. The
4109	written notice of the offer shall specify the hurricane or wind
4110	deductible to be applied in the event that the applicant or
4111	policyholder fails to affirmatively choose a hurricane
4112	deductible. The insurer must provide such policyholder with
4113	notice of the availability of the deductible amounts specified
4114	in this paragraph in a form approved by the office in
4115	conjunction with each renewal of the policy. The failure to
4116	provide such notice constitutes a violation of this code but
4117	does not affect the coverage provided under the policy.
4118	2.  This paragraph does not apply with respect to a
4119	deductible program lawfully in effect on June 14, 1995, or to
4120	any similar deductible program, if the deductible program
4121	requires a minimum deductible amount of no less than 2 percent
4122	of the policy limits.
4123	3.  With respect to a policy covering a risk with dwelling
4124	limits of at least $100,000, but less than $250,000, the insurer
4125	may, in lieu of offering a policy with a $500 hurricane or wind
4126	deductible as required by subparagraph 1., offer a policy that
4127	the insurer guarantees it will not nonrenew for reasons of
4128	reducing hurricane loss for one renewal period and that contains
4129	up to a 2 percent hurricane deductible, for two renewal periods
4130	and that contains up to a 5 percent hurricane deductible, or for
4131	three renewal periods and that contains up to a 10 percent
4132	hurricane deductible. Notwithstanding the requirements of this
4133	paragraph, the Office of Insurance Regulation may approve the
4134	nonrenewal of such policies if the guarantee renewal of the
4135	policies may jeopardize the financial ratings of an insurer or
4136	wind deductible as required by subparagraph 1.
4137	4.  With respect to a policy covering a risk with dwelling
4138	limits of $250,000 or more, the insurer need not offer the $500
4139	hurricane deductible as required by subparagraph 1., but must,
4140	except as otherwise provided in this subsection, offer the other
4141	hurricane deductibles as required by subparagraph 1.
4142	Section 18.  Effective January 1, 2007, subsection (9) is
4143	added to section 627.701, Florida Statutes, to read:
4144	627.701  Liability of insureds; coinsurance; deductibles.--
4145	(9)  With respect to hurricane coverage provided in a
4146	policy of residential coverage, when the policyholder has taken
4147	appropriate hurricane mitigation measures regarding the
4148	residence covered under the policy, the insurer may provide the
4149	insured the option of selecting an appropriate reduction in the
4150	policy's hurricane deductible in lieu of selecting the
4151	appropriate discount credit or other rate differential as
4152	provided in s. 627.0629. If made available by the insurer, the
4153	insurer must provide the policyholder with notice of the options
4154	available under this subsection on a form approved by the
4155	office.
4156	Section 19.  Subsections (2) and (3) of section 627.7011,
4157	Florida Statutes, are amended, and subsection (6) is added to
4158	that section, to read:
4159	627.7011  Homeowners' policies; offer of replacement cost
4160	coverage and law and ordinance coverage.--
4161	(2)  Unless the insurer obtains the policyholder's written
4162	refusal of the policies or endorsements specified in subsection
4163	(1), any policy covering the dwelling is deemed to include the
4164	law and ordinance coverage limited to 25 percent of the dwelling
4165	limit specified in paragraph (1)(b). The rejection or selection
4166	of alternative coverage shall be made on a form approved by the
4167	office. The form shall fully advise the applicant of the nature
4168	of the coverage being rejected. If this form is signed by a
4169	named insured, it will be conclusively presumed that there was
4170	an informed, knowing rejection of the coverage or election of
4171	the alternative coverage on behalf of all insureds. Unless the
4172	policyholder requests in writing the coverage specified in this
4173	section, it need not be provided in or supplemental to any other
4174	policy that renews, insures, extends, changes, supersedes, or
4175	replaces an existing policy when the policyholder has rejected
4176	the coverage specified in this section or has selected
4177	alternative coverage. The insurer must provide such policyholder
4178	with notice of the availability of such coverage in a form
4179	approved by the office at least once every 3 years. The failure
4180	to provide such notice constitutes a violation of this code, but
4181	does not affect the coverage provided under the policy.
4182	(3)  In the event of a loss for which a dwelling or
4183	personal property is insured on the basis of replacement costs,
4184	the insurer shall pay the replacement cost without reservation
4185	or holdback of any depreciation in value, whether or not the
4186	insured replaces or repairs the dwelling or property.
4187	(6)  Insurers shall issue separate checks for living
4188	expenses, contents, and casualty proceeds. Checks for living
4189	expenses and contents should be issued directly to the
4190	policyholder.
4191	Section 20.  Effective upon this act becoming a law,
4192	section 627.7019, Florida Statutes, is created to read:
4193	627.7019  Standardization of requirements applicable to
4194	insurers after natural disasters.--
4195	(1)  The commission shall adopt by rule, pursuant to s.
4196	120.54(1)-(3), standardized requirements that may be applied to
4197	insurers as a consequence of a hurricane or other natural
4198	disaster. The rules shall address the following areas:
4199	(a)  Claims reporting requirements.
4200	(b)  Grace periods for payment of premiums and performance
4201	of other duties by insureds.
4202	(c)  Temporary postponement of cancellations and
4203	nonrenewals.
4204	(2)  The rules adopted pursuant to this section shall
4205	require the office to issue an order within 72 hours after the
4206	occurrence of a hurricane or other natural disaster specifying,
4207	by line of insurance, which of the standardized requirements
4208	apply, the geographic areas in which they apply, the time at
4209	which applicability commences, and the time at which
4210	applicability terminates.
4211	(3)  The commission and the office may not adopt an
4212	emergency rule under s. 120.54(4) in conflict with any provision
4213	of the rules adopted under this section.
4214	(4)  The commission shall initiate rulemaking under this
4215	section no later than June 1, 2006.
4216	Section 21.  Subsection (5) of section 627.727, Florida
4217	Statutes, is amended to read:
4218	627.727  Motor vehicle insurance; uninsured and
4219	underinsured vehicle coverage; insolvent insurer protection.--
4220	(5)  Any person having a claim against an insolvent insurer
4221	as defined in s. 631.54(6)(5) under the provisions of this
4222	section shall present such claim for payment to the Florida
4223	Insurance Guaranty Association only. In the event of a payment
4224	to any person in settlement of a claim arising under the
4225	provisions of this section, the association is not subrogated or
4226	entitled to any recovery against the claimant's insurer. The
4227	association, however, has the rights of recovery as set forth in
4228	chapter 631 in the proceeds recoverable from the assets of the
4229	insolvent insurer.
4230	Section 22.  Paragraph (f) is added to subsection (2) of
4231	section 631.181, Florida Statutes, to read:
4232	631.181  Filing and proof of claim.--
4233	(2)
4234	(f)  The signed statement required by this section shall
4235	not be required on claims for which adequate claims file
4236	documentation exists within the records of the insolvent
4237	insurer. Claims for payment of unearned premium shall not be
4238	required to use the signed statement required by this section if
4239	the receiver certifies to the guaranty fund that the records of
4240	the insolvent insurer are sufficient to determine the amount of
4241	unearned premium owed to each policyholder of the insurer and
4242	such information is remitted to the guaranty fund by the
4243	receiver in electronic or other mutually agreed-upon format.
4244	Section 23.  Subsections (5), (6), (7), and (8) of section
4245	631.54, Florida Statutes, are renumbered as subsections (6),
4246	(7), (8), and (9), respectively, and a new subsection (5) is
4247	added to that section, to read:
4248	631.54  Definitions.--As used in this part:
4249	(5)  "Homeowner's insurance" means personal lines
4250	residential property insurance coverage that consists of the
4251	type of coverage provided under homeowner's, dwelling, and
4252	similar policies for repair or replacement of the insured
4253	structure and contents, which policies are written directly to
4254	the individual homeowner. Residential coverage for personal
4255	lines as set forth in this section includes policies that
4256	provide coverage for particular perils such as windstorm and
4257	hurricane coverage but excludes all coverage for mobile homes,
4258	renter's insurance, or tenant's coverage. The term "homeowner's
4259	insurance" excludes commercial residential policies covering
4260	condominium associations or homeowners' associations, which
4261	associations have a responsibility to provide insurance coverage
4262	on residential units within the association, and also excludes
4263	coverage for the common elements of a homeowners' association.
4264	Section 24.  Subsection (1) of section 631.55, Florida
4265	Statutes, is amended to read:
4266	631.55  Creation of the association.--
4267	(1)  There is created a nonprofit corporation to be known
4268	as the "Florida Insurance Guaranty Association, Incorporated."
4269	All insurers defined as member insurers in s. 631.54(7)(6) shall
4270	be members of the association as a condition of their authority
4271	to transact insurance in this state, and, further, as a
4272	condition of such authority, an insurer shall agree to reimburse
4273	the association for all claim payments the association makes on
4274	said insurer's behalf if such insurer is subsequently
4275	rehabilitated. The association shall perform its functions under
4276	a plan of operation established and approved under s. 631.58 and
4277	shall exercise its powers through a board of directors
4278	established under s. 631.56. The corporation shall have all
4279	those powers granted or permitted nonprofit corporations, as
4280	provided in chapter 617.
4281	Section 25.  Paragraph (a) of subsection (1), paragraph (d)
4282	of subsection (2), and paragraph (a) of subsection (3) of
4283	section 631.57, Florida Statutes, are amended, and paragraph (e)
4284	is added to subsection (3) of that section, to read:
4285	631.57  Powers and duties of the association.--
4286	(1)  The association shall:
4287	(a)1.  Be obligated to the extent of the covered claims
4288	existing:
4289	a.  Prior to adjudication of insolvency and arising within
4290	30 days after the determination of insolvency;
4291	b.  Before the policy expiration date if less than 30 days
4292	after the determination; or
4293	c.  Before the insured replaces the policy or causes its
4294	cancellation, if she or he does so within 30 days of the
4295	determination.
4296	2.  The obligation under subparagraph 1. shall include only
4297	the amount of each covered claim that is in excess of $100 and
4298	is less than $300,000, except policies providing coverage for
4299	homeowner's insurance shall provide for an additional $200,000
4300	for the portion of a covered claim that relates only to the
4301	damage to the structure and contents.
4302	3.a.2.  Notwithstanding subparagraph 2., the obligation
4303	under subparagraph 1. for shall include only that amount of each
4304	covered claim which is in excess of $100 and is less than
4305	$300,000, except with respect to policies covering condominium
4306	associations or homeowners' associations, which associations
4307	have a responsibility to provide insurance coverage on
4308	residential units within the association, the obligation shall
4309	include that amount of each covered property insurance claim
4310	which is less than $100,000 multiplied by the number of
4311	condominium units or other residential units; however, as to
4312	homeowners' associations, this sub-subparagraph subparagraph
4313	applies only to claims for damage or loss to residential units
4314	and structures attached to residential units.
4315	b.  Notwithstanding sub-subparagraph a., the association
4316	has no obligation to pay covered claims that are to be paid from
4317	the proceeds of bonds issued under s. 631.695. However, the
4318	association shall assign and pledge the first available moneys
4319	from all or part of the assessments to be made under paragraph
4320	(3)(a) to or on behalf of the issuer of such bonds for the
4321	benefit of the holders of such bonds. The association shall
4322	administer any such covered claims and present valid covered
4323	claims for payment in accordance with the provisions of the
4324	assistance program in connection with which such bonds have been
4325	issued.
4326	3.  In no event shall the association be obligated to a
4327	policyholder or claimant in an amount in excess of the
4328	obligation of the insolvent insurer under the policy from which
4329	the claim arises.
4330	(2)  The association may:
4331	(d)  Negotiate and become a party to such contracts as are
4332	necessary to carry out the purpose of this part. Additionally,
4333	the association may enter into such contracts with a
4334	municipality, a county, or a legal entity created pursuant to s.
4335	163.01(7)(g) as are necessary in order for the municipality,
4336	county, or legal entity to issue bonds under s. 631.695. In
4337	connection with the issuance of any such bonds and the entering
4338	into of any such necessary contracts, the association may agree
4339	to such terms and conditions as the association deems necessary
4340	and proper.
4341	(3)(a)  To the extent necessary to secure the funds for the
4342	respective accounts for the payment of covered claims, and also
4343	to pay the reasonable costs to administer the same, and to the
4344	extent necessary to secure the funds for the account specified
4345	in s. 631.55(2)(c) or to retire indebtedness, including, without
4346	limitation, the principal, redemption premium, if any, and
4347	interest on, and related costs of issuance of, bonds issued
4348	under s. 631.695 and the funding of any reserves and other
4349	payments required under the bond resolution or trust indenture
4350	pursuant to which such bonds have been issued, the office, upon
4351	certification of the board of directors, shall levy assessments
4352	in the proportion that each insurer's net direct written
4353	premiums in this state in the classes protected by the account
4354	bears to the total of said net direct written premiums received
4355	in this state by all such insurers for the preceding calendar
4356	year for the kinds of insurance included within such account.
4357	Assessments shall be remitted to and administered by the board
4358	of directors in the manner specified by the approved plan. Each
4359	insurer so assessed shall have at least 30 days' written notice
4360	as to the date the assessment is due and payable. Every
4361	assessment shall be made as a uniform percentage applicable to
4362	the net direct written premiums of each insurer in the kinds of
4363	insurance included within the account in which the assessment is
4364	made. The assessments levied against any insurer shall not
4365	exceed in any one year more than 2 percent of that insurer's net
4366	direct written premiums in this state for the kinds of insurance
4367	included within such account during the calendar year next
4368	preceding the date of such assessments.
4369	(e)1.a.  In addition to assessments otherwise authorized in
4370	paragraph (a) and to the extent necessary to secure the funds
4371	for the account specified in s. 631.55(2)(c) or to retire
4372	indebtedness, including, without limitation, the principal,
4373	redemption premium, if any, and interest on, and related costs
4374	of issuance of, bonds issued under s. 631.695 and the funding of
4375	any reserves and other payments required under the bond
4376	resolution or trust indenture pursuant to which such bonds have
4377	been issued, the office, upon certification of the board of
4378	directors, shall levy emergency assessments upon insurers
4379	holding a certificate of authority. The emergency assessments
4380	payable under this paragraph by any insurer shall not exceed in
4381	any single year more than 2 percent of that insurer's direct
4382	written premiums, net of refunds, in this state during the
4383	preceding calendar year for the kinds of insurance within the
4384	account specified in s. 631.55(2)(c).
4385	b.  Any emergency assessments authorized under this
4386	paragraph shall be levied by the office upon insurers referred
4387	to in sub-subparagraph a., upon certification as to the need for
4388	such assessments by the board of directors, in each year that
4389	bonds issued under s. 631.695 and secured by such emergency
4390	assessments are outstanding, in such amounts up to such 2-
4391	percent limit as required in order to provide for the full and
4392	timely payment of the principal of, redemption premium, if any,
4393	and interest on, and related costs of issuance of, such bonds.
4394	The emergency assessments provided for in this paragraph are
4395	assigned and pledged to the municipality, county, or legal
4396	entity issuing bonds under s. 631.695 for the benefit of the
4397	holders of such bonds, in order to enable such municipality,
4398	county, or legal entity to provide for the payment of the
4399	principal of, redemption premium, if any, and interest on such
4400	bonds, the cost of issuance of such bonds, and the funding of
4401	any reserves and other payments required under the bond
4402	resolution or trust indenture pursuant to which such bonds have
4403	been issued, without the necessity of any further action by the
4404	association, the office, or any other party. To the extent bonds
4405	are issued under s. 631.695 and the association determines to
4406	secure such bonds by a pledge of revenues received from the
4407	emergency assessments, such bonds, upon such pledge of revenues,
4408	shall be secured by and payable from the proceeds of such
4409	emergency assessments, and the proceeds of emergency assessments
4410	levied under this paragraph shall be remitted directly to and
4411	administered by the trustee or custodian appointed for such
4412	bonds.
4413	c.  Emergency assessments under this paragraph may be
4414	payable in a single payment or, at the option of the
4415	association, may be payable in 12 monthly installments with the
4416	first installment being due and payable at the end of the month
4417	after an emergency assessment is levied and subsequent
4418	installments being due not later than the end of each succeeding
4419	month.
4420	d.  If emergency assessments are imposed, the report
4421	required by s. 631.695(7) shall include an analysis of the
4422	revenues generated from the emergency assessments imposed under
4423	this paragraph.
4424	e.  If emergency assessments are imposed, the references in
4425	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
4426	assessments levied under paragraph (a) shall include emergency
4427	assessments imposed under this paragraph.
4428	2.  In order to ensure that insurers paying emergency
4429	assessments levied under this paragraph continue to charge rates
4430	that are neither inadequate nor excessive, within 90 days after
4431	being notified of such assessments, each insurer that is to be
4432	assessed pursuant to this paragraph shall submit a rate filing
4433	for coverage included within the account specified in s.
4434	631.55(2)(c) and for which rates are required to be filed under
4435	s. 627.062. If the filing reflects a rate change that, as a
4436	percentage, is equal to the difference between the rate of such
4437	assessment and the rate of the previous year's assessment under
4438	this paragraph, the filing shall consist of a certification so
4439	stating and shall be deemed approved when made. Any rate change
4440	of a different percentage shall be subject to the standards and
4441	procedures of s. 627.062.
4442	3.  An annual assessment under this paragraph shall
4443	continue while the bonds issued with respect to which the
4444	assessment was imposed are outstanding, including any bonds the
4445	proceeds of which were used to refund bonds issued pursuant to
4446	s. 631.695, unless adequate provision has been made for the
4447	payment of the bonds in the documents authorizing the issuance
4448	of such bonds.
4449	4.  Emergency assessments under this paragraph are not
4450	premium and are not subject to the premium tax, to any fees, or
4451	to any commissions. An insurer is liable for all emergency
4452	assessments that the insurer collects and shall treat the
4453	failure of an insured to pay an emergency assessment as a
4454	failure to pay the premium. An insurer is not liable for
4455	uncollectible emergency assessments.
4456	Section 26.  Section 631.695, Florida Statutes, is created
4457	to read:
4458	631.695  Revenue bond issuance through counties or
4459	municipalities.--
4460	(1)  The Legislature finds:
4461	(a)  The potential for widespread and massive damage to
4462	persons and property caused by hurricanes making landfall in
4463	this state can generate insurance claims of such a number as to
4464	render numerous insurers operating within this state insolvent
4465	and therefore unable to satisfy covered claims.
4466	(b)  The inability of insureds within this state to receive
4467	payment of covered claims or to timely receive such payment
4468	creates financial and other hardships for such insureds and
4469	places undue burdens on the state, the affected units of local
4470	government, and the community at large.
4471	(c)  In addition, the failure of insurers to pay covered
4472	claims or to timely pay such claims due to the insolvency of
4473	such insurers can undermine the public's confidence in insurers
4474	operating within this state, thereby adversely affecting the
4475	stability of the insurance industry in this state.
4476	(d)  The state has previously taken action to address these
4477	problems by adopting the Florida Insurance Guaranty Association
4478	Act, which, among other things, provides a mechanism for the
4479	payment of covered claims under certain insurance policies to
4480	avoid excessive delay in payment and to avoid financial loss to
4481	claimants or policyholders because of the insolvency of an
4482	insurer.
4483	(e)  In the wake of the unprecedented destruction caused by
4484	various hurricanes that have made landfall in this state, the
4485	resultant covered claims, and the number of insurers rendered
4486	insolvent thereby, make it evident that alternative programs
4487	must be developed to allow the Florida Insurance Guaranty
4488	Association to more expeditiously and effectively provide for
4489	the payment of covered claims.
4490	(f)  It is therefore determined to be in the best interests
4491	of, and necessary for, the protection of the public health,
4492	safety, and general welfare of the residents of this state and
4493	for the protection and preservation of the economic stability of
4494	insurers operating in this state and it is declared to be an
4495	essential public purpose to permit certain municipalities and
4496	counties to take such actions as will provide relief to
4497	claimants and policyholders having covered claims against
4498	insolvent insurers operating in this state by expediting the
4499	handling and payment of covered claims.
4500	(g)  To achieve the foregoing purposes, it is proper to
4501	authorize municipalities and counties of this state
4502	substantially affected by the landfall of a hurricane to issue
4503	bonds to assist the Florida Insurance Guaranty Association in
4504	expediting the handling and payment of covered claims of
4505	insolvent insurers.
4506	(h)  In order to avoid the needless and indiscriminate
4507	proliferation, duplication, and fragmentation of such assistance
4508	programs, it is in the best interests of the residents of this
4509	state to authorize municipalities and counties severely affected
4510	by a hurricane to provide for the payment of covered claims
4511	beyond their territorial limits in the implementation of such
4512	programs.
4513	(i)  It is a paramount public purpose for municipalities
4514	and counties substantially affected by the landfall of a
4515	hurricane to be able to issue bonds for the purposes described
4516	in this section. Such issuance shall provide assistance to
4517	residents of those municipalities and counties as well as to
4518	other residents of this state.
4519	(2)  The governing body of any municipality or county, the
4520	residents of which have been substantially affected by a
4521	hurricane, may issue bonds to fund an assistance program in
4522	conjunction with, and with the consent of, the Florida Insurance
4523	Guaranty Association for the purpose of paying claimants' or
4524	policyholders' covered claims, as defined in s. 631.54, arising
4525	through the insolvency of an insurer, which insolvency is
4526	determined by the Florida Insurance Guaranty Association to have
4527	been a result of a hurricane, regardless of whether the
4528	claimants or policyholders are residents of such municipality or
4529	county or the property to which the claim relates is located
4530	within or outside the territorial jurisdiction of the
4531	municipality or county. The power of a municipality or county to
4532	issue bonds, as described in this section, is in addition to any
4533	powers granted by law and may not be abrogated or restricted by
4534	any provisions in such municipality's or county's charter. A
4535	municipality or county issuing bonds for this purpose shall
4536	enter into such contracts with the Florida Insurance Guaranty
4537	Association or any entity acting on behalf of the Florida
4538	Insurance Guaranty Association as are necessary to implement the
4539	assistance program. Any bonds issued by a municipality or county
4540	or a combination thereof under this subsection shall be payable
4541	from and secured by moneys received by or on behalf of the
4542	municipality or county from assessments levied under s.
4543	631.57(3)(a) and assigned and pledged to or on behalf of the
4544	municipality or county for the benefit of the holders of the
4545	bonds in connection with the assistance program. The funds,
4546	credit, property, and taxing power of the state or any
4547	municipality or county shall not be pledged for the payment of
4548	such bonds.
4549	(3)  Bonds may be validated by the municipality or county
4550	pursuant to chapter 75. The proceeds of the bonds may be used to
4551	pay covered claims of insolvent insurers; to refinance or
4552	replace previously existing borrowings or financial
4553	arrangements; to pay interest on bonds; to fund reserves for the
4554	bonds; to pay expenses incident to the issuance or sale of any
4555	bond issued under this section, including costs of validating,
4556	printing, and delivering the bonds, costs of printing the
4557	official statement, costs of publishing notices of sale of the
4558	bonds, costs of obtaining credit enhancement or liquidity
4559	support, and related administrative expenses; or for such other
4560	purposes related to the financial obligations of the fund as the
4561	association may determine. The term of the bonds may not exceed
4562	30 years.
4563	(4)  The state covenants with holders of bonds of the
4564	assistance program that the state will not take any action that
4565	will have a material adverse effect on the holders and will not
4566	repeal or abrogate the power of the board of directors of the
4567	association to direct the Office of Insurance Regulation to levy
4568	the assessments and to collect the proceeds of the revenues
4569	pledged to the payment of the bonds as long as any of the bonds
4570	remain outstanding, unless adequate provision has been made for
4571	the payment of the bonds in the documents authorizing the
4572	issuance of the bonds.
4573	(5)  The accomplishment of the authorized purposes of such
4574	municipality or county under this section is in all respects for
4575	the benefit of the people of the state, for the increase of
4576	their commerce and prosperity, and for the improvement of their
4577	health and living conditions. The municipality or county, in
4578	performing essential governmental functions in accomplishing its
4579	purposes, is not required to pay any taxes or assessments of any
4580	kind whatsoever upon any property acquired or used by the county
4581	or municipality for such purposes or upon any revenues at any
4582	time received by the county or municipality. The bonds, notes,
4583	and other obligations of the municipality or county and the
4584	transfer of and income from such bonds, notes, and other
4585	obligations, including any profits made on the sale of such
4586	bonds, notes, and other obligations, are exempt from taxation of
4587	any kind by the state or by any political subdivision or other
4588	agency or instrumentality of the state. The exemption granted in
4589	this subsection is not applicable to any tax imposed by chapter
4590	220 on interest, income, or profits on debt obligations owned by
4591	corporations.
4592	(6)  Two or more municipalities or counties, the residents
4593	of which have been substantially affected by a hurricane, may
4594	create a legal entity pursuant to s. 163.01(7)(g) to exercise
4595	the powers described in this section as well as those powers
4596	granted in s. 163.01(7)(g). References in this section to a
4597	municipality or county includes such legal entity.
4598	(7)  The association shall issue an annual report on the
4599	status of the use of bond proceeds as related to insolvencies
4600	caused by hurricanes. The report must contain the number and
4601	amount of claims paid. The association shall also include an
4602	analysis of the revenue generated from the assessment levied
4603	under s. 631.57(3)(a) to pay such bonds. The association shall
4604	submit a copy of the report to the President of the Senate, the
4605	Speaker of the House of Representatives, and the Chief Financial
4606	Officer within 90 days after the end of each calendar year in
4607	which bonds were outstanding.
4608	Section 27.  No provision of s. 631.57 or s. 631.695,
4609	Florida Statutes, shall be repealed until such time as the
4610	principal, redemption premium, if any, and interest on all bonds
4611	issued under s. 631.695, Florida Statutes, payable and secured
4612	from assessments levied under s. 631.57(3)(a), Florida Statutes,
4613	have been paid in full or adequate provision for such payment
4614	has been made in accordance with the bond resolution or trust
4615	indenture pursuant to which the bonds were issued.
4616	Section 28.  Paragraph (a) of subsection (1) of section
4617	817.234, Florida Statutes, is amended to read:
4618	817.234  False and fraudulent insurance claims.--
4619	(1)(a)  A person commits insurance fraud punishable as
4620	provided in subsection (11) if that person, with the intent to
4621	injure, defraud, or deceive any insurer:
4622	1.  Presents or causes to be presented any written or oral
4623	statement as part of, or in support of, a claim for payment or
4624	other benefit pursuant to an insurance policy or a health
4625	maintenance organization subscriber or provider contract,
4626	knowing that such statement contains any false, incomplete, or
4627	misleading information concerning any fact or thing material to
4628	such claim;
4629	2.  Prepares or makes any written or oral statement that is
4630	intended to be presented to any insurer in connection with, or
4631	in support of, any claim for payment or other benefit pursuant
4632	to an insurance policy or a health maintenance organization
4633	subscriber or provider contract, knowing that such statement
4634	contains any false, incomplete, or misleading information
4635	concerning any fact or thing material to such claim; or
4636	3.a.  Knowingly presents, causes to be presented, or
4637	prepares or makes with knowledge or belief that it will be
4638	presented to any insurer, purported insurer, servicing
4639	corporation, insurance broker, or insurance agent, or any
4640	employee or agent thereof, any false, incomplete, or misleading
4641	information or written or oral statement as part of, or in
4642	support of, an application for the issuance of, or the rating
4643	of, any insurance policy, or a health maintenance organization
4644	subscriber or provider contract, including any false declaration
4645	of homestead status for the purpose of obtaining coverage in a
4646	homestead account under s. 627.351(6); or
4647	b.  Who knowingly conceals information concerning any fact
4648	material to such application.
4649	Section 29.  By January 1, 2007, the Office of Insurance
4650	Regulation shall submit a report to the President of the Senate,
4651	the Speaker of the House of Representatives, the minority party
4652	leaders of the Senate and the House of Representatives, and the
4653	chairs of the standing committees of the Senate and the House of
4654	Representatives having jurisdiction over matters relating to
4655	property and casualty insurance. In preparing the report, the
4656	office shall consult with the Department of Highway Safety and
4657	Motor Vehicles, the Department of Community Affairs, the Florida
4658	Building Commission, the Florida Home Builders Association,
4659	representatives of the mobile and manufactured home industry,
4660	representatives of the property and casualty insurance industry,
4661	and any other party the office determines is appropriate. The
4662	report shall include findings and recommendations on the
4663	insurability of attached or free standing structures to
4664	residential homes, mobile, or manufactured homes, such as
4665	carports or pool enclosures; the increase or decrease in
4666	insurance costs associated with insuring such structures; the
4667	feasibility of insuring such structures; the impact on
4668	homeowners of not having insurance coverage for such structures;
4669	the ability of mitigation measures relating to such structures
4670	to reduce risk and loss; and such other related information as
4671	the office determines is appropriate for the Legislature to
4672	consider.
4673	Section 30.  (1)  The Office of Insurance Regulation, in
4674	consultation with the Department of Community Affairs, the
4675	Department of Financial Services, the Federal Alliance for Safe
4676	Homes, the Florida Insurance Council, the Florida Home Builders
4677	Association, the Florida Manufactured Housing Association, the
4678	Risk and Insurance Department of Florida State University, and
4679	the Institute for Business and Homes Safety, shall study and
4680	develop a program that will provide an objective rating system
4681	that will allow homeowners to evaluate the relative ability of
4682	Florida properties to withstand the wind load from a sustained
4683	severe tropical storm or hurricane.
4684	(2)  The rating system will be designed in a manner that is
4685	easy to understand for the property owner, based on proven
4686	readily verifiable mitigation techniques and devices, and able
4687	to be implemented based on a visual inspection program. The
4688	Department of Financial Services shall implement a pilot program
4689	for use in the Florida Comprehensive Hurricane Damage Mitigation
4690	Program.
4691	(3)  The Department shall provide a report to the Governor,
4692	the President of the Senate, and the Speaker of the House of
4693	Representatives by March 31, 2007, detailing the nature and
4694	construction of the rating scale, its effectiveness based on
4695	implementation in a pilot program, and an operational plan for
4696	statewide implementation of the rating scale.
4697	Section 31.  (1)  For fiscal year 2006-2007, the sum of
4698	$100 million is appropriated from the General Revenue Fund to
4699	the Department of Financial Services for the Florida Hurricane
4700	Damage Prevention Endowment as a nonrecurring appropriation for
4701	the purposes specified in s. 215.558, Florida Statutes.
4702	(2)  The sum of $400 million is appropriated from the
4703	General Revenue Fund to the Department of Financial Services as
4704	a nonrecurring appropriation for the purposes specified in s.
4705	215.5586, Florida Statutes.
4706	(3)  Funds provided in subsections (1) and (2) shall be
4707	transferred by the department to the Florida Hurricane Damage
4708	Prevention Trust Fund, as created in s. 215.5585, Florida
4709	Statutes.
4710	(4)  For fiscal year 2006-2007, the recurring sum of $5
4711	million is appropriated to the Department of Financial Services
4712	from the Florida Hurricane Damage Prevention Trust Fund, Special
4713	Category ? Financial Incentives for Hurricane Damage Prevention.
4714	(5)  For fiscal year 2006-2007, the nonrecurring sum of
4715	$400 million is appropriated to the Department of Financial
4716	Services from the Florida Hurricane Damage Prevention Trust
4717	Fund, Special Category ? Florida Comprehensive Hurricane Damage
4718	Mitigation Program. The department may spend up to 1 percent of
4719	the funds appropriated to administer the program. The department
4720	shall contract with Tallahassee Community College for $7.5
4721	million to implement the Manufactured Housing and Mobile Home
4722	Hurricane Mitigation and Enhancement Program. Tallahassee
4723	Community College may spend up to 5 percent of the funds
4724	appropriated to administer the Manufactured Housing and Mobile
4725	Home Hurricane Mitigation and Enhancement Program.
4726	Notwithstanding s. 216.301, Florida Statutes, and pursuant to s.
4727	216.351, Florida Statutes, any unexpended balance from this
4728	appropriation shall be carried forward at the end of each fiscal
4729	year until the 2010-2011 fiscal year. At the end of the 2010-
4730	2011 fiscal year, any obligated funds for qualified projects
4731	that are not yet disbursed shall remain with the department to
4732	be used for the purposes of this act. Any unobligated funds of
4733	this appropriation shall revert to the Florida Hurricane Damage
4734	Prevention Trust Fund at the end of the 2010-2011 fiscal year.
4735	Section 32.  (1)  For fiscal year 2006-2007, the sum of
4736	$920 million in nonrecurring funds is appropriated from the
4737	General Revenue Fund to the Department of Financial Services for
4738	transfer to the Citizens Property Insurance Corporation as an
4739	allocation to regular assessments on assessable insurers and
4740	insureds, as authorized under s. 627.351(6)(b)3.b., Florida
4741	Statutes, for the 2005 Plan Year deficit. The board of governors
4742	of the corporation shall allocate the appropriated state moneys
4743	to each of the personal lines, commercial lines, and high-risk
4744	accounts so as to totally eliminate the deficit for calendar
4745	year 2005 in each such account that would have been paid from
4746	the proceeds of regular assessment but for the appropriated
4747	moneys. The moneys allocated to each account from the
4748	appropriations shall be considered to be and shall be treated as
4749	proceeds of regular assessments for purposes of financing
4750	documents of the corporation. No regular assessments shall be
4751	imposed for any portion of the calendar year 2005 deficit paid
4752	from the appropriated moneys. The transfer made by the
4753	department to the corporation shall be limited to the amount of
4754	the total regular assessments that were authorized by law to
4755	cover the 2005 Plan Year deficit. Any unused and remaining funds
4756	in this appropriation shall revert to the General Revenue Fund.
4757	(2)  The corporation shall amortize over a 10-year period
4758	any emergency assessments resulting from the 2005 Plan Year
4759	deficit.
4760	(3)  Each insurer that recoups an assessment from its
4761	policyholders as allowed by law shall include on the premium
4762	notice sent to policyholders, in 12-point type, the following
4763	statement, with the appropriate dollar amounts shown:
4764	"THE $    SURCHARGE IN YOUR PREMIUM FOR THE ASSESSMENT BY
4765	CITIZENS PROPERTY INSURANCE CORPORATION HAS BEEN REDUCED BY
4766	$____DUE TO AN APPROPRIATION BY THE FLORIDA LEGISLATURE."
4767	(4)  A violation of this section by an insurer is a
4768	violation of the Insurance Code and the insurer is subject to
4769	the penalties provided in ss. 624.418 and 624.4211, Florida
4770	Statutes.
4771	Section 33.  For fiscal year 2006-2007, the sums of
4772	$250,000 in recurring funds and $425,000 in nonrecurring funds
4773	are appropriated from the Insurance Regulatory Trust Fund in the
4774	Department of Financial Services to the Office of Insurance
4775	Regulation for the purpose of carrying out reporting and
4776	administrative responsibilities of this act.
4777	Section 34.  Except as otherwise expressly provided in this
4778	act, this act shall take effect July 1, 2006.

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