CS/HB 1267

1	A bill to be entitled
2	An act relating to property insurance; amending s.
3	627.351, F.S.; revising legislative findings to provide a
4	finding that the lack of affordable property insurance
5	threatens the public health, safety, and welfare and
6	threatens the economic health of the state; revising
7	provisions for determining eligibility for coverage under
8	the corporation; reinstating certain rate filings by the
9	corporation; prohibiting issuance of new certificates of
10	authority to certain insurers; requiring rate filings of
11	certain insurers to include certain parent company profits
12	information; providing effective dates.
13
14	Be It Enacted by the Legislature of the State of Florida:
15
16	Section 1.  Paragraphs (a), (c), and (m) of subsection (6)
17	of section 627.351, Florida Statutes, as amended by section 21
18	of chapter 2007-1, Laws of Florida, are amended to read:
19	627.351  Insurance risk apportionment plans.--
20	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
21	(a)1.  It is the public purpose of this subsection to
22	ensure the existence of an orderly market for property insurance
23	for citizens of this state and businesses in this state. The
24	Legislature finds that private insurers are unwilling or unable
25	to provide affordable property insurance coverage in this state
26	to the extent sought and needed. The absence of affordable
27	property insurance threatens the public health, safety, and
28	welfare and likewise threatens the economic health of the state.
29	The state therefore has a compelling public interest and a
30	public purpose to assist in ensuring that property in the state
31	is insured and that property is insured at affordable rates so
32	as to facilitate the remediation, reconstruction, and
33	replacement of damaged or destroyed property in order to reduce
34	or avoid the negative effects otherwise resulting to the public
35	health, safety, and welfare, to the economy of the state, and to
36	the revenues of the state and local governments which are needed
37	to provide for the public welfare. It is necessary, therefore,
38	to provide affordable property insurance to applicants who are
39	in good faith entitled to procure insurance through the
40	voluntary market but are unable to do so. The Legislature
41	intends by this subsection that affordable property insurance be
42	provided and that such insurance continue to be provided, as
43	long as necessary, through Citizens Property Insurance
44	Corporation, a government entity that is an integral part of the
45	state and that is not a private insurance company. To that end,
46	Citizens Property Insurance Company shall strive to increase the
47	availability of affordable property insurance in this state,
48	while achieving efficiencies and economies and while providing
49	service to policyholders, applicants, and agents which is no
50	less than the quality generally provided in the voluntary
51	market, for the achievement of the foregoing public purposes.
52	Because it is essential for this government entity to have the
53	maximum financial resources to pay claims following a
54	catastrophic hurricane, it is the intent of the Legislature that
55	Citizens Property Insurance Corporation continue to be an
56	integral part of the state and that the income of the
57	corporation be exempt from federal income taxation and that
58	interest on the debt obligations issued by the corporation be
59	exempt from federal income taxation. The Legislature finds that
60	actual and threatened catastrophic losses to property in this
61	state from hurricanes have caused insurers to be unwilling or
62	unable to provide property insurance coverage to the extent
63	sought and needed. It is in the public interest and a public
64	purpose to assist in assuring that property in the state is
65	insured so as to facilitate the remediation, reconstruction, and
66	replacement of damaged or destroyed property in order to reduce
67	or avoid the negative effects otherwise resulting to the public
68	health, safety, and welfare; to the economy of the state; and to
69	the revenues of the state and local governments needed to
70	provide for the public welfare. It is necessary, therefore, to
71	provide property insurance to applicants who are in good faith
72	entitled to procure insurance through the voluntary market but
73	are unable to do so. The Legislature intends by this subsection
74	that property insurance be provided and that it continues, as
75	long as necessary, through an entity organized to achieve
76	efficiencies and economies, while providing service to
77	policyholders, applicants, and agents that is no less than the
78	quality generally provided in the voluntary market, all toward
79	the achievement of the foregoing public purposes. Because it is
80	essential for the corporation to have the maximum financial
81	resources to pay claims following a catastrophic hurricane, it
82	is the intent of the Legislature that the income of the
83	corporation be exempt from federal income taxation and that
84	interest on the debt obligations issued by the corporation be
85	exempt from federal income taxation.
86	2.  The Residential Property and Casualty Joint
87	Underwriting Association originally created by this statute
88	shall be known, as of July 1, 2002, as the Citizens Property
89	Insurance Corporation. The corporation shall provide insurance
90	for residential and commercial property, for applicants who are
91	in good faith entitled, but are unable, to procure insurance
92	through the voluntary market. The corporation shall operate
93	pursuant to a plan of operation approved by order of the
94	Financial Services Commission. The plan is subject to continuous
95	review by the commission. The commission may, by order, withdraw
96	approval of all or part of a plan if the commission determines
97	that conditions have changed since approval was granted and that
98	the purposes of the plan require changes in the plan. The
99	corporation shall continue to operate pursuant to the plan of
100	operation approved by the Office of Insurance Regulation until
101	October 1, 2006. For the purposes of this subsection,
102	residential coverage includes both personal lines residential
103	coverage, which consists of the type of coverage provided by
104	homeowner's, mobile home owner's, dwelling, tenant's,
105	condominium unit owner's, and similar policies, and commercial
106	lines residential coverage, which consists of the type of
107	coverage provided by condominium association, apartment
108	building, and similar policies.
109	3.  For the purposes of this subsection, the term
110	"homestead property" means:
111	a.  Property that has been granted a homestead exemption
112	under chapter 196;
113	b.  Property for which the owner has a current, written
114	lease with a renter for a term of at least 7 months and for
115	which the dwelling is insured by the corporation for $200,000 or
116	less;
117	c.  An owner-occupied mobile home or manufactured home, as
118	defined in s. 320.01, which is permanently affixed to real
119	property, is owned by a Florida resident, and has been granted a
120	homestead exemption under chapter 196 or, if the owner does not
121	own the real property, the owner certifies that the mobile home
122	or manufactured home is his or her principal place of residence;
123	d.  Tenant's coverage;
124	e.  Commercial lines residential property; or
125	f.  Any county, district, or municipal hospital; a hospital
126	licensed by any not-for-profit corporation qualified under s.
127	501(c)(3) of the United States Internal Revenue Code; or a
128	continuing care retirement community that is certified under
129	chapter 651 and that receives an exemption from ad valorem taxes
130	under chapter 196.
131	4.  For the purposes of this subsection, the term
132	"nonhomestead property" means property that is not homestead
133	property.
134	5.  Effective July 1, 2008, a personal lines residential
135	structure that has a dwelling replacement cost of $1 million or
136	more, or a single condominium unit that has a combined dwelling
137	and content replacement cost of $1 million or more is not
138	eligible for coverage by the corporation. Such dwellings insured
139	by the corporation on June 30, 2008, may continue to be covered
140	by the corporation until the end of the policy term. However,
141	such dwellings that are insured by the corporation and become
142	ineligible for coverage due to the provisions of this
143	subparagraph may reapply and obtain coverage in the high-risk
144	account and be considered "nonhomestead property" if the
145	property owner provides the corporation with a sworn affidavit
146	from one or more insurance agents, on a form provided by the
147	corporation, stating that the agents have made their best
148	efforts to obtain coverage and that the property has been
149	rejected for coverage by at least one authorized insurer and at
150	least three surplus lines insurers. If such conditions are met,
151	the dwelling may be insured by the corporation for up to 3
152	years, after which time the dwelling is ineligible for coverage.
153	The office shall approve the method used by the corporation for
154	valuing the dwelling replacement cost for the purposes of this
155	subparagraph. If a policyholder is insured by the corporation
156	prior to being determined to be ineligible pursuant to this
157	subparagraph and such policyholder files a lawsuit challenging
158	the determination, the policyholder may remain insured by the
159	corporation until the conclusion of the litigation.
160	6.  For properties constructed on or after January 1, 2009,
161	the corporation may not insure any property located within 2,500
162	feet landward of the coastal construction control line created
163	pursuant to s. 161.053 unless the property meets the
164	requirements of the code-plus building standards developed by
165	the Florida Building Commission.
166	7.  It is the intent of the Legislature that policyholders,
167	applicants, and agents of the corporation receive service and
168	treatment of the highest possible level but never less than that
169	generally provided in the voluntary market. It also is intended
170	that the corporation be held to service standards no less than
171	those applied to insurers in the voluntary market by the office
172	with respect to responsiveness, timeliness, customer courtesy,
173	and overall dealings with policyholders, applicants, or agents
174	of the corporation.
175	(c)  The plan of operation of the corporation:
176	1.  Must provide for adoption of residential property and
177	casualty insurance policy forms and commercial residential and
178	nonresidential property insurance forms, which forms must be
179	approved by the office prior to use. The corporation shall adopt
180	the following policy forms:
181	a.  Standard personal lines policy forms that are
182	comprehensive multiperil policies providing full coverage of a
183	residential property equivalent to the coverage provided in the
184	private insurance market under an HO-3, HO-4, or HO-6 policy.
185	b.  Basic personal lines policy forms that are policies
186	similar to an HO-8 policy or a dwelling fire policy that provide
187	coverage meeting the requirements of the secondary mortgage
188	market, but which coverage is more limited than the coverage
189	under a standard policy.
190	c.  Commercial lines residential and nonresidential policy
191	forms that are generally similar to the basic perils of full
192	coverage obtainable for commercial residential structures and
193	commercial nonresidential structures in the admitted voluntary
194	market.
195	d.  Personal lines and commercial lines residential
196	property insurance forms that cover the peril of wind only. The
197	forms are applicable only to residential properties located in
198	areas eligible for coverage under the high-risk account referred
199	to in sub-subparagraph (b)2.a.
200	e.  Commercial lines nonresidential property insurance
201	forms that cover the peril of wind only. The forms are
202	applicable only to nonresidential properties located in areas
203	eligible for coverage under the high-risk account referred to in
204	sub-subparagraph (b)2.a.
205	f.  The corporation may adopt variations of the policy
206	forms listed in sub-subparagraphs a.-e. that contain more
207	restrictive coverage.
208	2.a.  Must provide that the corporation adopt a program in
209	which the corporation and authorized insurers enter into quota
210	share primary insurance agreements for hurricane coverage, as
211	defined in s. 627.4025(2)(a), for eligible risks, and adopt
212	property insurance forms for eligible risks which cover the
213	peril of wind only. As used in this subsection, the term:
214	(I)  "Quota share primary insurance" means an arrangement
215	in which the primary hurricane coverage of an eligible risk is
216	provided in specified percentages by the corporation and an
217	authorized insurer. The corporation and authorized insurer are
218	each solely responsible for a specified percentage of hurricane
219	coverage of an eligible risk as set forth in a quota share
220	primary insurance agreement between the corporation and an
221	authorized insurer and the insurance contract. The
222	responsibility of the corporation or authorized insurer to pay
223	its specified percentage of hurricane losses of an eligible
224	risk, as set forth in the quota share primary insurance
225	agreement, may not be altered by the inability of the other
226	party to the agreement to pay its specified percentage of
227	hurricane losses. Eligible risks that are provided hurricane
228	coverage through a quota share primary insurance arrangement
229	must be provided policy forms that set forth the obligations of
230	the corporation and authorized insurer under the arrangement,
231	clearly specify the percentages of quota share primary insurance
232	provided by the corporation and authorized insurer, and
233	conspicuously and clearly state that neither the authorized
234	insurer nor the corporation may be held responsible beyond its
235	specified percentage of coverage of hurricane losses.
236	(II)  "Eligible risks" means personal lines residential and
237	commercial lines residential risks that meet the underwriting
238	criteria of the corporation and are located in areas that were
239	eligible for coverage by the Florida Windstorm Underwriting
240	Association on January 1, 2002.
241	b.  The corporation may enter into quota share primary
242	insurance agreements with authorized insurers at corporation
243	coverage levels of 90 percent and 50 percent.
244	c.  If the corporation determines that additional coverage
245	levels are necessary to maximize participation in quota share
246	primary insurance agreements by authorized insurers, the
247	corporation may establish additional coverage levels. However,
248	the corporation's quota share primary insurance coverage level
249	may not exceed 90 percent.
250	d.  Any quota share primary insurance agreement entered
251	into between an authorized insurer and the corporation must
252	provide for a uniform specified percentage of coverage of
253	hurricane losses, by county or territory as set forth by the
254	corporation board, for all eligible risks of the authorized
255	insurer covered under the quota share primary insurance
256	agreement.
257	e.  Any quota share primary insurance agreement entered
258	into between an authorized insurer and the corporation is
259	subject to review and approval by the office. However, such
260	agreement shall be authorized only as to insurance contracts
261	entered into between an authorized insurer and an insured who is
262	already insured by the corporation for wind coverage.
263	f.  For all eligible risks covered under quota share
264	primary insurance agreements, the exposure and coverage levels
265	for both the corporation and authorized insurers shall be
266	reported by the corporation to the Florida Hurricane Catastrophe
267	Fund. For all policies of eligible risks covered under quota
268	share primary insurance agreements, the corporation and the
269	authorized insurer shall maintain complete and accurate records
270	for the purpose of exposure and loss reimbursement audits as
271	required by Florida Hurricane Catastrophe Fund rules. The
272	corporation and the authorized insurer shall each maintain
273	duplicate copies of policy declaration pages and supporting
274	claims documents.
275	g.  The corporation board shall establish in its plan of
276	operation standards for quota share agreements which ensure that
277	there is no discriminatory application among insurers as to the
278	terms of quota share agreements, pricing of quota share
279	agreements, incentive provisions if any, and consideration paid
280	for servicing policies or adjusting claims.
281	h.  The quota share primary insurance agreement between the
282	corporation and an authorized insurer must set forth the
283	specific terms under which coverage is provided, including, but
284	not limited to, the sale and servicing of policies issued under
285	the agreement by the insurance agent of the authorized insurer
286	producing the business, the reporting of information concerning
287	eligible risks, the payment of premium to the corporation, and
288	arrangements for the adjustment and payment of hurricane claims
289	incurred on eligible risks by the claims adjuster and personnel
290	of the authorized insurer. Entering into a quota sharing
291	insurance agreement between the corporation and an authorized
292	insurer shall be voluntary and at the discretion of the
293	authorized insurer.
294	3.  May provide that the corporation may employ or
295	otherwise contract with individuals or other entities to provide
296	administrative or professional services that may be appropriate
297	to effectuate the plan. The corporation shall have the power to
298	borrow funds, by issuing bonds or by incurring other
299	indebtedness, and shall have other powers reasonably necessary
300	to effectuate the requirements of this subsection, including,
301	without limitation, the power to issue bonds and incur other
302	indebtedness in order to refinance outstanding bonds or other
303	indebtedness. The corporation may, but is not required to, seek
304	judicial validation of its bonds or other indebtedness under
305	chapter 75. The corporation may issue bonds or incur other
306	indebtedness, or have bonds issued on its behalf by a unit of
307	local government pursuant to subparagraph (g)2., in the absence
308	of a hurricane or other weather-related event, upon a
309	determination by the corporation, subject to approval by the
310	office, that such action would enable it to efficiently meet the
311	financial obligations of the corporation and that such
312	financings are reasonably necessary to effectuate the
313	requirements of this subsection. The corporation is authorized
314	to take all actions needed to facilitate tax-free status for any
315	such bonds or indebtedness, including formation of trusts or
316	other affiliated entities. The corporation shall have the
317	authority to pledge assessments, projected recoveries from the
318	Florida Hurricane Catastrophe Fund, other reinsurance
319	recoverables, market equalization and other surcharges, and
320	other funds available to the corporation as security for bonds
321	or other indebtedness. In recognition of s. 10, Art. I of the
322	State Constitution, prohibiting the impairment of obligations of
323	contracts, it is the intent of the Legislature that no action be
324	taken whose purpose is to impair any bond indenture or financing
325	agreement or any revenue source committed by contract to such
326	bond or other indebtedness.
327	4.a.  Must require that the corporation operate subject to
328	the supervision and approval of a board of governors consisting
329	of eight individuals who are residents of this state, from
330	different geographical areas of this state. The Governor, the
331	Chief Financial Officer, the President of the Senate, and the
332	Speaker of the House of Representatives shall each appoint two
333	members of the board. At least one of the two members appointed
334	by each appointing officer must have demonstrated expertise in
335	insurance. The Chief Financial Officer shall designate one of
336	the appointees as chair. All board members serve at the pleasure
337	of the appointing officer. All members of the board of governors
338	are subject to removal at will by the officers who appointed
339	them. All board members, including the chair, must be appointed
340	to serve for 3-year terms beginning annually on a date
341	designated by the plan. Any board vacancy shall be filled for
342	the unexpired term by the appointing officer. The Chief
343	Financial Officer shall appoint a technical advisory group to
344	provide information and advice to the board of governors in
345	connection with the board's duties under this subsection. The
346	executive director and senior managers of the corporation shall
347	be engaged by the board and serve at the pleasure of the board.
348	Any executive director appointed on or after July 1, 2006, is
349	subject to confirmation by the Senate. The executive director is
350	responsible for employing other staff as the corporation may
351	require, subject to review and concurrence by the board.
352	b.  The board shall create a Market Accountability Advisory
353	Committee to assist the corporation in developing awareness of
354	its rates and its customer and agent service levels in
355	relationship to the voluntary market insurers writing similar
356	coverage. The members of the advisory committee shall consist of
357	the following 11 persons, one of whom must be elected chair by
358	the members of the committee: four representatives, one
359	appointed by the Florida Association of Insurance Agents, one by
360	the Florida Association of Insurance and Financial Advisors, one
361	by the Professional Insurance Agents of Florida, and one by the
362	Latin American Association of Insurance Agencies; three
363	representatives appointed by the insurers with the three highest
364	voluntary market share of residential property insurance
365	business in the state; one representative from the Office of
366	Insurance Regulation; one consumer appointed by the board who is
367	insured by the corporation at the time of appointment to the
368	committee; one representative appointed by the Florida
369	Association of Realtors; and one representative appointed by the
370	Florida Bankers Association. All members must serve for 3-year
371	terms and may serve for consecutive terms. The committee shall
372	report to the corporation at each board meeting on insurance
373	market issues which may include rates and rate competition with
374	the voluntary market; service, including policy issuance, claims
375	processing, and general responsiveness to policyholders,
376	applicants, and agents; and matters relating to depopulation.
377	5.  Must provide a procedure for determining the
378	eligibility of a risk for coverage, as follows:
379	a.  Subject to the provisions of s. 627.3517, with respect
380	to personal lines residential risks, if the risk is offered
381	coverage from an authorized insurer at the insurer's approved
382	rate under either a standard policy including wind coverage or,
383	if consistent with the insurer's underwriting rules as filed
384	with the office, a basic policy including wind coverage, for a
385	new application to the corporation for coverage, the risk is not
386	eligible for any policy issued by the corporation unless the
387	premium for coverage from the authorized insurer is more than 15
388	25 percent greater than the premium for comparable coverage from
389	the corporation. If the risk is not able to obtain any such
390	offer, the risk is eligible for either a standard policy
391	including wind coverage or a basic policy including wind
392	coverage issued by the corporation; however, if the risk could
393	not be insured under a standard policy including wind coverage
394	regardless of market conditions, the risk shall be eligible for
395	a basic policy including wind coverage unless rejected under
396	subparagraph 8. However, with regard to a policyholder of the
397	corporation, the policyholder remains eligible for coverage from
398	the corporation regardless of any offer of coverage from an
399	authorized insurer or surplus lines insurer. The corporation
400	shall determine the type of policy to be provided on the basis
401	of objective standards specified in the underwriting manual and
402	based on generally accepted underwriting practices.
403	(I)  If the risk accepts an offer of coverage through the
404	market assistance plan or an offer of coverage through a
405	mechanism established by the corporation before a policy is
406	issued to the risk by the corporation or during the first 30
407	days of coverage by the corporation, and the producing agent who
408	submitted the application to the plan or to the corporation is
409	not currently appointed by the insurer, the insurer shall:
410	(A)  Pay to the producing agent of record of the policy,
411	for the first year, an amount that is the greater of the
412	insurer's usual and customary commission for the type of policy
413	written or a fee equal to the usual and customary commission of
414	the corporation; or
415	(B)  Offer to allow the producing agent of record of the
416	policy to continue servicing the policy for a period of not less
417	than 1 year and offer to pay the agent the greater of the
418	insurer's or the corporation's usual and customary commission
419	for the type of policy written.
420
421	If the producing agent is unwilling or unable to accept
422	appointment, the new insurer shall pay the agent in accordance
423	with sub-sub-sub-subparagraph (A).
424	(II)  When the corporation enters into a contractual
425	agreement for a take-out plan, the producing agent of record of
426	the corporation policy is entitled to retain any unearned
427	commission on the policy, and the insurer shall:
428	(A)  Pay to the producing agent of record of the
429	corporation policy, for the first year, an amount that is the
430	greater of the insurer's usual and customary commission for the
431	type of policy written or a fee equal to the usual and customary
432	commission of the corporation; or
433	(B)  Offer to allow the producing agent of record of the
434	corporation policy to continue servicing the policy for a period
435	of not less than 1 year and offer to pay the agent the greater
436	of the insurer's or the corporation's usual and customary
437	commission for the type of policy written.
438
439	If the producing agent is unwilling or unable to accept
440	appointment, the new insurer shall pay the agent in accordance
441	with sub-sub-sub-subparagraph (A).
442	b.  With respect to commercial lines residential risks, for
443	a new application to the corporation for coverage, if the risk
444	is offered coverage under a policy including wind coverage from
445	an authorized insurer at its approved rate, the risk is not
446	eligible for any policy issued by the corporation unless the
447	premium for coverage from the authorized insurer is more than 15
448	25 percent greater than the premium for comparable coverage from
449	the corporation. If the risk is not able to obtain any such
450	offer, the risk is eligible for a policy including wind coverage
451	issued by the corporation. However, with regard to a
452	policyholder of the corporation, the policyholder remains
453	eligible for coverage from the corporation regardless of any
454	offer of coverage from an authorized insurer or surplus lines
455	insurer.
456	(I)  If the risk accepts an offer of coverage through the
457	market assistance plan or an offer of coverage through a
458	mechanism established by the corporation before a policy is
459	issued to the risk by the corporation or during the first 30
460	days of coverage by the corporation, and the producing agent who
461	submitted the application to the plan or the corporation is not
462	currently appointed by the insurer, the insurer shall:
463	(A)  Pay to the producing agent of record of the policy,
464	for the first year, an amount that is the greater of the
465	insurer's usual and customary commission for the type of policy
466	written or a fee equal to the usual and customary commission of
467	the corporation; or
468	(B)  Offer to allow the producing agent of record of the
469	policy to continue servicing the policy for a period of not less
470	than 1 year and offer to pay the agent the greater of the
471	insurer's or the corporation's usual and customary commission
472	for the type of policy written.
473
474	If the producing agent is unwilling or unable to accept
475	appointment, the new insurer shall pay the agent in accordance
476	with sub-sub-sub-subparagraph (A).
477	(II)  When the corporation enters into a contractual
478	agreement for a take-out plan, the producing agent of record of
479	the corporation policy is entitled to retain any unearned
480	commission on the policy, and the insurer shall:
481	(A)  Pay to the producing agent of record of the
482	corporation policy, for the first year, an amount that is the
483	greater of the insurer's usual and customary commission for the
484	type of policy written or a fee equal to the usual and customary
485	commission of the corporation; or
486	(B)  Offer to allow the producing agent of record of the
487	corporation policy to continue servicing the policy for a period
488	of not less than 1 year and offer to pay the agent the greater
489	of the insurer's or the corporation's usual and customary
490	commission for the type of policy written.
491
492	If the producing agent is unwilling or unable to accept
493	appointment, the new insurer shall pay the agent in accordance
494	with sub-sub-sub-subparagraph (A).
495	6.  Must provide by July 1, 2007, that an application for
496	coverage for a new policy is subject to a waiting period of 10
497	days before coverage is effective, during which time the
498	corporation shall make such application available for review by
499	general lines agents and authorized property and casualty
500	insurers. The board shall approve an exception that allows for
501	coverage to be effective before the end of the 10-day waiting
502	period, for coverage issued in conjunction with a real estate
503	closing. The board may approve such other exceptions as the
504	board determines are necessary to prevent lapses in coverage.
505	7.  Must include rules for classifications of risks and
506	rates therefor.
507	8.  Must provide that if premium and investment income for
508	an account attributable to a particular calendar year are in
509	excess of projected losses and expenses for the account
510	attributable to that year, such excess shall be held in surplus
511	in the account. Such surplus shall be available to defray
512	deficits in that account as to future years and shall be used
513	for that purpose prior to assessing assessable insurers and
514	assessable insureds as to any calendar year.
515	9.  Must provide objective criteria and procedures to be
516	uniformly applied for all applicants in determining whether an
517	individual risk is so hazardous as to be uninsurable. In making
518	this determination and in establishing the criteria and
519	procedures, the following shall be considered:
520	a.  Whether the likelihood of a loss for the individual
521	risk is substantially higher than for other risks of the same
522	class; and
523	b.  Whether the uncertainty associated with the individual
524	risk is such that an appropriate premium cannot be determined.
525
526	The acceptance or rejection of a risk by the corporation shall
527	be construed as the private placement of insurance, and the
528	provisions of chapter 120 shall not apply.
529	10.  Must provide that the corporation shall make its best
530	efforts to procure catastrophe reinsurance at reasonable rates,
531	to cover its projected 100-year probable maximum loss as
532	determined by the board of governors.
533	11.  Must provide that in the event of regular deficit
534	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
535	(b)3.b., in the personal lines account, the commercial lines
536	residential account, or the high-risk account, the corporation
537	shall levy upon corporation policyholders in its next rate
538	filing, or by a separate rate filing solely for this purpose, a
539	Citizens policyholder surcharge arising from a regular
540	assessment in such account in a percentage equal to the total
541	amount of such regular assessments divided by the aggregate
542	statewide direct written premium for subject lines of business
543	for the prior calendar year. For purposes of calculating the
544	Citizens policyholder surcharge to be levied under this
545	subparagraph, the total amount of the regular assessment to
546	which this surcharge is related shall be determined as set forth
547	in subparagraph (b)3., without deducting the estimated Citizens
548	policyholder surcharge. Citizens policyholder surcharges under
549	this subparagraph are not considered premium and are not subject
550	to commissions, fees, or premium taxes; however, failure to pay
551	a market equalization surcharge shall be treated as failure to
552	pay premium.
553	12.  The policies issued by the corporation must provide
554	that, if the corporation or the market assistance plan obtains
555	an offer from an authorized insurer to cover the risk at its
556	approved rates, the risk is no longer eligible for renewal
557	through the corporation, except as otherwise provided in this
558	subsection.
559	13.  Corporation policies and applications must include a
560	notice that the corporation policy could, under this section, be
561	replaced with a policy issued by an authorized insurer that does
562	not provide coverage identical to the coverage provided by the
563	corporation. The notice shall also specify that acceptance of
564	corporation coverage creates a conclusive presumption that the
565	applicant or policyholder is aware of this potential.
566	14.  May establish, subject to approval by the office,
567	different eligibility requirements and operational procedures
568	for any line or type of coverage for any specified county or
569	area if the board determines that such changes to the
570	eligibility requirements and operational procedures are
571	justified due to the voluntary market being sufficiently stable
572	and competitive in such area or for such line or type of
573	coverage and that consumers who, in good faith, are unable to
574	obtain insurance through the voluntary market through ordinary
575	methods would continue to have access to coverage from the
576	corporation. When coverage is sought in connection with a real
577	property transfer, such requirements and procedures shall not
578	provide for an effective date of coverage later than the date of
579	the closing of the transfer as established by the transferor,
580	the transferee, and, if applicable, the lender.
581	15.  Must provide that, with respect to the high-risk
582	account, any assessable insurer with a surplus as to
583	policyholders of $25 million or less writing 25 percent or more
584	of its total countrywide property insurance premiums in this
585	state may petition the office, within the first 90 days of each
586	calendar year, to qualify as a limited apportionment company. A
587	regular assessment levied by the corporation on a limited
588	apportionment company for a deficit incurred by the corporation
589	for the high-risk account in 2006 or thereafter may be paid to
590	the corporation on a monthly basis as the assessments are
591	collected by the limited apportionment company from its insureds
592	pursuant to s. 627.3512, but the regular assessment must be paid
593	in full within 12 months after being levied by the corporation.
594	A limited apportionment company shall collect from its
595	policyholders any emergency assessment imposed under sub-
596	subparagraph (b)3.d. The plan shall provide that, if the office
597	determines that any regular assessment will result in an
598	impairment of the surplus of a limited apportionment company,
599	the office may direct that all or part of such assessment be
600	deferred as provided in subparagraph (g)4. However, there shall
601	be no limitation or deferment of an emergency assessment to be
602	collected from policyholders under sub-subparagraph (b)3.d.
603	16.  Must provide that the corporation appoint as its
604	licensed agents only those agents who also hold an appointment
605	as defined in s. 626.015(3) with an insurer who at the time of
606	the agent's initial appointment by the corporation is authorized
607	to write and is actually writing personal lines residential
608	property coverage, commercial residential property coverage, or
609	commercial nonresidential property coverage within the state.
610	17.  Must provide, by July 1, 2007, a premium payment plan
611	option to its policyholders which allows for quarterly and
612	semiannual payment of premiums.
613	18.  Must provide, effective June 1, 2007, that the
614	corporation contract with each insurer providing the non-wind
615	coverage for risks insured by the corporation in the high-risk
616	account, requiring that the insurer provide claims adjusting
617	services for the wind coverage provided by the corporation for
618	such risks. An insurer is required to enter into this contract
619	as a condition of providing non-wind coverage for a risk that is
620	insured by the corporation in the high-risk account unless the
621	board finds, after a hearing, that the insurer is not capable of
622	providing adjusting services at an acceptable level of quality
623	to corporation policyholders. The terms and conditions of such
624	contracts must be substantially the same as the contracts that
625	the corporation executed with insurers under the "adjust-your-
626	own" program in 2006, except as may be mutually agreed to by the
627	parties and except for such changes that the board determines
628	are necessary to ensure that claims are adjusted appropriately.
629	The corporation shall provide a process for neutral arbitration
630	of any dispute between the corporation and the insurer regarding
631	the terms of the contract. The corporation shall review and
632	monitor the performance of insurers under these contracts.
633	19.  Must limit coverage on mobile homes or manufactured
634	homes built prior to 1994 to actual cash value of the dwelling
635	rather than replacement costs of the dwelling.
636	20.  May provide such limits of coverage as the board
637	determines, consistent with the requirements of this subsection.
638	21.  May require commercial property to meet specified
639	hurricane mitigation construction features as a condition of
640	eligibility for coverage.
641	(m)1.  Rates for coverage provided by the corporation shall
642	be actuarially sound and subject to the requirements of s.
643	627.062, except as otherwise provided in this paragraph. The
644	corporation shall file its recommended rates with the office at
645	least annually. The corporation shall provide any additional
646	information regarding the rates which the office requires. The
647	office shall consider the recommendations of the board and issue
648	a final order establishing the rates for the corporation within
649	45 days after the recommended rates are filed. The corporation
650	may not pursue an administrative challenge or judicial review of
651	the final order of the office.
652	2.  In addition to the rates otherwise determined pursuant
653	to this paragraph, the corporation shall impose and collect an
654	amount equal to the premium tax provided for in s. 624.509 to
655	augment the financial resources of the corporation.
656	3.  After the public hurricane loss-projection model under
657	s. 627.06281 has been found to be accurate and reliable by the
658	Florida Commission on Hurricane Loss Projection Methodology,
659	that model shall serve as the minimum benchmark for determining
660	the windstorm portion of the corporation's rates. This
661	subparagraph does not require or allow the corporation to adopt
662	rates lower than the rates otherwise required or allowed by this
663	paragraph.
664	4.  The rate filings for the corporation which were
665	approved by the office and which took effect January 1, 2007,
666	are rescinded, except for those rates that were lowered. As soon
667	as possible, the corporation shall begin using the lower rates
668	that were in effect on December 31, 2006, and shall provide
669	refunds to policyholders who have paid higher rates as a result
670	of that rate filing. The rates in effect on December 31, 2006,
671	shall remain in effect for the 2007 and 2008 calendar years year
672	except for any rate change that results in a lower rate. The
673	next rate change that may increase rates shall take effect
674	January 1, 2009 2008, pursuant to a new rate filing recommended
675	by the corporation and established by the office, subject to the
676	requirements of this paragraph.
677	Section 2.  Effective January 1, 2008, and notwithstanding
678	any other provision of law:
679	(1)  A new certificate of authority for the transaction of
680	residential property insurance may not be issued to any insurer
681	domiciled in this state that is a wholly owned subsidiary of an
682	insurer authorized to do business in any other state.
683	(2)  The rate filings of any insurer domiciled in this
684	state that is a wholly owned subsidiary of an insurer authorized
685	to do business in any other state shall include information
686	relating to the profits of the parent company of the insurer
687	domiciled in this state.
688	Section 3.  Except as otherwise expressly provided in this
689	act, this act shall take effect upon becoming a law.

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