HB 79

1
A bill to be entitled
2An act relating to the Citizens Property Insurance
3Corporation; amending s. 627.351, F.S.; deleting a
4provision expressing legislative intent; deleting certain
5reporting requirements of the board of governors of the
6corporation relating to losses from wind-only coverage and
7the quota share program; deleting certain duties of the
8board relating to reduction of boundaries of certain areas
9eligible for certain coverage under certain circumstances;
10providing an effective date.
11
12Be It Enacted by the Legislature of the State of Florida:
13
14     Section 1.  Paragraphs (o), (p), (q), and (r) of subsection
15(6) of section 627.351, Florida Statutes, are amended to read:
16     627.351  Insurance risk apportionment plans.--
17     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
18     (o)  It is the intent of the Legislature that the
19amendments to this subsection enacted in 2002 should, over time,
20reduce the probable maximum windstorm losses in the residual
21markets and should reduce the potential assessments to be levied
22on property insurers and policyholders statewide. In furtherance
23of this intent:
24     1.  The board shall, on or before February 1 of each year,
25provide a report to the President of the Senate and the Speaker
26of the House of Representatives showing the reduction or
27increase in the 100-year probable maximum loss attributable to
28wind-only coverages and the quota share program under this
29subsection combined, as compared to the benchmark 100-year
30probable maximum loss of the Florida Windstorm Underwriting
31Association. For purposes of this paragraph, the benchmark 100-
32year probable maximum loss of the Florida Windstorm Underwriting
33Association shall be the calculation dated February 2001 and
34based on November 30, 2000, exposures. In order to ensure
35comparability of data, the board shall use the same methods for
36calculating its probable maximum loss as were used to calculate
37the benchmark probable maximum loss.
38     2.  Beginning February 1, 2007, if the report under
39subparagraph 1. for any year indicates that the 100-year
40probable maximum loss attributable to wind-only coverages and
41the quota share program combined does not reflect a reduction of
42at least 25 percent from the benchmark, the board shall reduce
43the boundaries of the high-risk area eligible for wind-only
44coverages under this subsection in a manner calculated to reduce
45such probable maximum loss to an amount at least 25 percent
46below the benchmark.
47     3.  Beginning February 1, 2012, if the report under
48subparagraph 1. for any year indicates that the 100-year
49probable maximum loss attributable to wind-only coverages and
50the quota share program combined does not reflect a reduction of
51at least 50 percent from the benchmark, the boundaries of the
52high-risk area eligible for wind-only coverages under this
53subsection shall be reduced by the elimination of any area that
54is not seaward of a line 1,000 feet inland from the Intracoastal
55Waterway.
56     (o)(p)  In enacting the provisions of this section, the
57Legislature recognizes that both the Florida Windstorm
58Underwriting Association and the Residential Property and
59Casualty Joint Underwriting Association have entered into
60financing arrangements that obligate each entity to service its
61debts and maintain the capacity to repay funds secured under
62these financing arrangements. It is the intent of the
63Legislature that nothing in this section be construed to
64compromise, diminish, or interfere with the rights of creditors
65under such financing arrangements. It is further the intent of
66the Legislature to preserve the obligations of the Florida
67Windstorm Underwriting Association and Residential Property and
68Casualty Joint Underwriting Association with regard to
69outstanding financing arrangements, with such obligations
70passing entirely and unchanged to the corporation and,
71specifically, to the applicable account of the corporation. So
72long as any bonds, notes, indebtedness, or other financing
73obligations of the Florida Windstorm Underwriting Association or
74the Residential Property and Casualty Joint Underwriting
75Association are outstanding, under the terms of the financing
76documents pertaining to them, the governing board of the
77corporation shall have and shall exercise the authority to levy,
78charge, collect, and receive all premiums, assessments,
79surcharges, charges, revenues, and receipts that the
80associations had authority to levy, charge, collect, or receive
81under the provisions of subsection (2) and this subsection,
82respectively, as they existed on January 1, 2002, to provide
83moneys, without exercise of the authority provided by this
84subsection, in at least the amounts, and by the times, as would
85be provided under those former provisions of subsection (2) or
86this subsection, respectively, so that the value, amount, and
87collectability of any assets, revenues, or revenue source
88pledged or committed to, or any lien thereon securing such
89outstanding bonds, notes, indebtedness, or other financing
90obligations will not be diminished, impaired, or adversely
91affected by the amendments made by this act and to permit
92compliance with all provisions of financing documents pertaining
93to such bonds, notes, indebtedness, or other financing
94obligations, or the security or credit enhancement for them, and
95any reference in this subsection to bonds, notes, indebtedness,
96financing obligations, or similar obligations, of the
97corporation shall include like instruments or contracts of the
98Florida Windstorm Underwriting Association and the Residential
99Property and Casualty Joint Underwriting Association to the
100extent not inconsistent with the provisions of the financing
101documents pertaining to them.
102     (p)(q)  The corporation shall not require the securing of
103flood insurance as a condition of coverage if the insured or
104applicant executes a form approved by the office affirming that
105flood insurance is not provided by the corporation and that if
106flood insurance is not secured by the applicant or insured in
107addition to coverage by the corporation, the risk will not be
108covered for flood damage. A corporation policyholder electing
109not to secure flood insurance and executing a form as provided
110herein making a claim for water damage against the corporation
111shall have the burden of proving the damage was not caused by
112flooding. Notwithstanding other provisions of this subsection,
113the corporation may deny coverage to an applicant or insured who
114refuses to execute the form described herein.
115     (q)(r)  A salaried employee of the corporation who performs
116policy administration services subsequent to the effectuation of
117a corporation policy is not required to be licensed as an agent
118under the provisions of s. 626.112.
119     Section 2.  This act shall take effect July 1, 2006.


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