Amendment
Bill No. 2498

Amendment No. 074213

CHAMBER ACTION
Senate		House
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1	Representative(s) Ross and Gardiner offered the following:
2
3	Amendment (with directory and title amendments)
4	On page 14, line 19, through page 32, line 23,
5	Remove: all of said lines,
6	And insert:
7	(b)1.  All insurers authorized to write one or more subject
8	lines of business in this state are subject to assessment by the
9	corporation and, for the purposes of this subsection, are
10	referred to collectively as "assessable insurers." Insurers
11	writing one or more subject lines of business in this state
12	pursuant to part VIII of chapter 626 are not assessable
13	insurers, but insureds who procure one or more subject lines of
14	business in this state pursuant to part VIII of chapter 626 are
15	subject to assessment by the corporation and are referred to
16	collectively as "assessable insureds." An authorized insurer's
17	assessment liability shall begin on the first day of the
18	calendar year following the year in which the insurer was issued
19	a certificate of authority to transact insurance for subject
20	lines of business in this state and shall terminate 1 year after
21	the end of the first calendar year during which the insurer no
22	longer holds a certificate of authority to transact insurance
23	for subject lines of business in this state.
24	1.2.a.  All revenues, assets, liabilities, losses, and
25	expenses of the corporation shall be divided into three separate
26	accounts as follows:
27	(I)  A personal lines account for personal residential
28	policies issued by the corporation or issued by the Residential
29	Property and Casualty Joint Underwriting Association and renewed
30	by the corporation that provide comprehensive, multiperil
31	coverage on risks that are not located in areas eligible for
32	coverage in the Florida Windstorm Underwriting Association as
33	those areas were defined on January 1, 2002, and for such
34	policies that do not provide coverage for the peril of wind on
35	risks that are located in such areas;
36	(II)  A commercial lines account for commercial residential
37	and commercial nonresidential policies issued by the corporation
38	or issued by the Residential Property and Casualty Joint
39	Underwriting Association and renewed by the corporation that
40	provide coverage for basic property perils on risks that are not
41	located in areas eligible for coverage in the Florida Windstorm
42	Underwriting Association as those areas were defined on January
43	1, 2002, and for such policies that do not provide coverage for
44	the peril of wind on risks that are located in such areas; and
45	(III)  A high-risk account for personal residential
46	policies and commercial residential and commercial
47	nonresidential property policies issued by the corporation or
48	transferred to the corporation that provide coverage for the
49	peril of wind on risks that are located in areas eligible for
50	coverage in the Florida Windstorm Underwriting Association as
51	those areas were defined on January 1, 2002. Subject to the
52	approval of a business plan by the Financial Services Commission
53	and Legislative Budget Commission as provided in this sub-sub-
54	subparagraph, but no earlier than March 31, 2007, the
55	corporation may offer policies that provide multiperil coverage
56	and the corporation shall continue to offer policies that
57	provide coverage only for the peril of wind for risks located in
58	areas eligible for coverage in the high-risk account. In issuing
59	multiperil coverage, the corporation may use its approved policy
60	forms and rates for the personal lines account. An applicant or
61	insured who is eligible to purchase a multiperil policy from the
62	corporation may purchase a multiperil policy from an authorized
63	insurer without prejudice to the applicant's or insured's
64	eligibility to prospectively purchase a policy that provides
65	coverage only for the peril of wind from the corporation. An
66	applicant or insured who is eligible for a corporation policy
67	that provides coverage only for the peril of wind may elect to
68	purchase or retain such policy and also purchase or retain
69	coverage excluding wind from an authorized insurer without
70	prejudice to the applicant's or insured's eligibility to
71	prospectively purchase a policy that provides multiperil
72	coverage from the corporation. It is the goal of the Legislature
73	that there would be an overall average savings of 10 percent or
74	more for a policyholder who currently has a wind-only policy
75	with the corporation, and an ex-wind policy with a voluntary
76	insurer or the corporation, and who then obtains a multiperil
77	policy from the corporation. It is the intent of the Legislature
78	that the offer of multiperil coverage in the high-risk account
79	be made and implemented in a manner that does not adversely
80	affect the tax-exempt status of the corporation or
81	creditworthiness of or security for currently outstanding
82	financing obligations or credit facilities of the high-risk
83	account, the personal lines account, or the commercial lines
84	account. By March 1, 2007, the corporation shall prepare and
85	submit for approval by the Financial Services Commission and
86	Legislative Budget Commission a report detailing the
87	corporation's business plan for issuing multiperil coverage in
88	the high-risk account. The business plan shall be approved or
89	disapproved within 30 days after receipt, as submitted or
90	modified and resubmitted by the corporation. The business plan
91	must include: the impact of such multiperil coverage on the
92	corporation's financial resources, the impact of such multiperil
93	coverage on the corporation's tax-exempt status, the manner in
94	which the corporation plans to implement the processing of
95	applications and policy forms for new and existing
96	policyholders, the impact of such multiperil coverage on the
97	corporation's ability to deliver customer service at the high
98	level required by this subsection, the ability of the
99	corporation to process claims, the ability of the corporation to
100	quote and issue policies, the impact of such multiperil coverage
101	on the corporation's agents, the impact of such multiperil
102	coverage on the corporation's existing policyholders, and the
103	impact of such multiperil coverage on rates and premium. The
104	high-risk account must also include quota share primary
105	insurance under subparagraph (c)2. The area eligible for
106	coverage under the high-risk account also includes the area
107	within Port Canaveral, which is bordered on the south by the
108	City of Cape Canaveral, bordered on the west by the Banana
109	River, and bordered on the north by Federal Government property.
110	b.  The three separate accounts must be maintained as long
111	as financing obligations entered into by the Florida Windstorm
112	Underwriting Association or Residential Property and Casualty
113	Joint Underwriting Association are outstanding, in accordance
114	with the terms of the corresponding financing documents. When
115	the financing obligations are no longer outstanding, in
116	accordance with the terms of the corresponding financing
117	documents, the corporation may use a single account for all
118	revenues, assets, liabilities, losses, and expenses of the
119	corporation. Consistent with the requirement of this
120	subparagraph and prudent investment policies that minimize the
121	cost of carrying debt, the board shall exercise its best efforts
122	to retire existing debt or to obtain approval of necessary
123	parties to amend the terms of existing debt, so as to structure
124	the most efficient plan to consolidate the three separate
125	accounts into a single account. By February 1, 2007, the board
126	shall submit a report to the Financial Services Commission, the
127	President of the Senate, and the Speaker of the House of
128	Representatives which includes an analysis of consolidating the
129	accounts, the actions the board has taken to minimize the cost
130	of carrying debt, and its recommendations for executing the most
131	efficient plan.
132	c.  Creditors of the Residential Property and Casualty
133	Joint Underwriting Association shall have a claim against, and
134	recourse to, the accounts referred to in sub-sub-subparagraphs
135	a.(I) and (II) and shall have no claim against, or recourse to,
136	the account referred to in sub-sub-subparagraph a.(III).
137	Creditors of the Florida Windstorm Underwriting Association
138	shall have a claim against, and recourse to, the account
139	referred to in sub-sub-subparagraph a.(III) and shall have no
140	claim against, or recourse to, the accounts referred to in sub-
141	sub-subparagraphs a.(I) and (II).
142	d.  Revenues, assets, liabilities, losses, and expenses not
143	attributable to particular accounts shall be prorated among the
144	accounts.
145	e.  The Legislature finds that the revenues of the
146	corporation are revenues that are necessary to meet the
147	requirements set forth in documents authorizing the issuance of
148	bonds under this subsection.
149	f.  No part of the income of the corporation may inure to
150	the benefit of any private person.
151	2.3.  With respect to a deficit in an account:
152	a.  When the deficit incurred in a particular calendar year
153	is not greater than 10 percent of the aggregate statewide direct
154	written premium for the subject lines of business for the prior
155	calendar year, the entire deficit shall be recovered through
156	regular assessments of assessable insurers under paragraph (p)
157	and assessable insureds.
158	b.  When the deficit incurred in a particular calendar year
159	exceeds 10 percent of the aggregate statewide direct written
160	premium for the subject lines of business for the prior calendar
161	year, the corporation shall levy regular assessments on
162	assessable insurers under paragraph (p) and on assessable
163	insureds in an amount equal to the greater of 10 percent of the
164	deficit or 10 percent of the aggregate statewide direct written
165	premium for the subject lines of business for the prior calendar
166	year. Any remaining deficit shall be recovered through emergency
167	assessments under sub-subparagraph d.
168	c.  Each assessable insurer's share of the amount being
169	assessed under sub-subparagraph a. or sub-subparagraph b. shall
170	be in the proportion that the assessable insurer's direct
171	written premium for the subject lines of business for the year
172	preceding the assessment bears to the aggregate statewide direct
173	written premium for the subject lines of business for that year.
174	The assessment percentage applicable to each assessable insured
175	is the ratio of the amount being assessed under sub-subparagraph
176	a. or sub-subparagraph b. to the aggregate statewide direct
177	written premium for the subject lines of business for the prior
178	year. Assessments levied by the corporation on assessable
179	insurers under sub-subparagraphs a. and b. shall be paid as
180	required by the corporation's plan of operation and paragraph
181	(p). Notwithstanding any other provision of this subsection, the
182	aggregate amount of a regular assessment for a deficit incurred
183	in a particular calendar year shall be reduced by the estimated
184	amount to be received by the corporation from the Citizens
185	policyholder surcharge under subparagraph (c)11. and the amount
186	collected or estimated to be collected from the assessment on
187	Citizens policyholders pursuant to sub-subparagraph i.
188	Assessments levied by the corporation on assessable insureds
189	under sub-subparagraphs a. and b. shall be collected by the
190	surplus lines agent at the time the surplus lines agent collects
191	the surplus lines tax required by s. 626.932 and shall be paid
192	to the Florida Surplus Lines Service Office at the time the
193	surplus lines agent pays the surplus lines tax to the Florida
194	Surplus Lines Service Office. Upon receipt of regular
195	assessments from surplus lines agents, the Florida Surplus Lines
196	Service Office shall transfer the assessments directly to the
197	corporation as determined by the corporation.
198	d.  Upon a determination by the board of governors that a
199	deficit in an account exceeds the amount that will be recovered
200	through regular assessments under sub-subparagraph a. or sub-
201	subparagraph b., the board shall levy, after verification by the
202	office, emergency assessments, for as many years as necessary to
203	cover the deficits, to be collected by assessable insurers and
204	the corporation and collected from assessable insureds upon
205	issuance or renewal of policies for subject lines of business,
206	excluding National Flood Insurance policies. The amount of the
207	emergency assessment collected in a particular year shall be a
208	uniform percentage of that year's direct written premium for
209	subject lines of business and all accounts of the corporation,
210	excluding National Flood Insurance Program policy premiums, as
211	annually determined by the board and verified by the office. The
212	office shall verify the arithmetic calculations involved in the
213	board's determination within 30 days after receipt of the
214	information on which the determination was based.
215	Notwithstanding any other provision of law, the corporation and
216	each assessable insurer that writes subject lines of business
217	shall collect emergency assessments from its policyholders
218	without such obligation being affected by any credit,
219	limitation, exemption, or deferment. Emergency assessments
220	levied by the corporation on assessable insureds shall be
221	collected by the surplus lines agent at the time the surplus
222	lines agent collects the surplus lines tax required by s.
223	626.932 and shall be paid to the Florida Surplus Lines Service
224	Office at the time the surplus lines agent pays the surplus
225	lines tax to the Florida Surplus Lines Service Office. The
226	emergency assessments so collected shall be transferred directly
227	to the corporation on a periodic basis as determined by the
228	corporation and shall be held by the corporation solely in the
229	applicable account. The aggregate amount of emergency
230	assessments levied for an account under this sub-subparagraph in
231	any calendar year may not exceed the greater of 10 percent of
232	the amount needed to cover the original deficit, plus interest,
233	fees, commissions, required reserves, and other costs associated
234	with financing of the original deficit, or 10 percent of the
235	aggregate statewide direct written premium for subject lines of
236	business and for all accounts of the corporation for the prior
237	year, plus interest, fees, commissions, required reserves, and
238	other costs associated with financing the original deficit.
239	e.  The corporation may pledge the proceeds of assessments,
240	projected recoveries from the Florida Hurricane Catastrophe
241	Fund, other insurance and reinsurance recoverables, policyholder
242	surcharges and other surcharges, and other funds available to
243	the corporation as the source of revenue for and to secure bonds
244	issued under paragraph (p), bonds or other indebtedness issued
245	under subparagraph (c)3., or lines of credit or other financing
246	mechanisms issued or created under this subsection, or to retire
247	any other debt incurred as a result of deficits or events giving
248	rise to deficits, or in any other way that the board determines
249	will efficiently recover such deficits. The purpose of the lines
250	of credit or other financing mechanisms is to provide additional
251	resources to assist the corporation in covering claims and
252	expenses attributable to a catastrophe. As used in this
253	subsection, the term "assessments" includes regular assessments
254	under sub-subparagraph a., sub-subparagraph b., or subparagraph
255	(p)1. and emergency assessments under sub-subparagraph d.
256	Emergency assessments collected under sub-subparagraph d. are
257	not part of an insurer's rates, are not premium, and are not
258	subject to premium tax, fees, or commissions; however, failure
259	to pay the emergency assessment shall be treated as failure to
260	pay premium. The emergency assessments under sub-subparagraph d.
261	shall continue as long as any bonds issued or other indebtedness
262	incurred with respect to a deficit for which the assessment was
263	imposed remain outstanding, unless adequate provision has been
264	made for the payment of such bonds or other indebtedness
265	pursuant to the documents governing such bonds or other
266	indebtedness.
267	f.  As used in this subsection, the term "subject lines of
268	business" means insurance written by assessable insurers or
269	procured by assessable insureds for all property and casualty
270	lines of business in this state, but not including workers'
271	compensation or medical malpractice. As used in the sub-
272	subparagraph, the term "property and casualty lines of business"
273	includes all lines of business identified on Form 2, Exhibit of
274	Premiums and Losses, in the annual statement required of
275	authorized insurers by s. 624.424 and any rule adopted under
276	this section, except for those lines identified as accident and
277	health insurance and except for policies written under the
278	National Flood Insurance Program or the Federal Crop Insurance
279	Program. For purposes of this sub-subparagraph, the term
280	"workers' compensation" includes both workers' compensation
281	insurance and excess workers' compensation insurance.
282	g.  The Florida Surplus Lines Service Office shall
283	determine annually the aggregate statewide written premium in
284	subject lines of business procured by assessable insureds and
285	shall report that information to the corporation in a form and
286	at a time the corporation specifies to ensure that the
287	corporation can meet the requirements of this subsection and the
288	corporation's financing obligations.
289	h.  The Florida Surplus Lines Service Office shall verify
290	the proper application by surplus lines agents of assessment
291	percentages for regular assessments and emergency assessments
292	levied under this subparagraph on assessable insureds and shall
293	assist the corporation in ensuring the accurate, timely
294	collection and payment of assessments by surplus lines agents as
295	required by the corporation.
296	b.i.  If a deficit is incurred in any account in 2008 or
297	thereafter, the board of governors shall levy an immediate
298	assessment against the premium of each nonhomestead property
299	policyholder in all accounts of the corporation, as a uniform
300	percentage of the premium of the policy of up to 10 percent of
301	such premium, which funds shall be used to offset the deficit.
302	If this assessment is insufficient to eliminate the deficit, the
303	board of governors shall levy an additional assessment against
304	all policyholders of the corporation, which shall be collected
305	at the time of issuance or renewal of a policy, as a uniform
306	percentage of the premium for the policy of up to 10 percent of
307	such premium, which funds shall be used to further offset the
308	deficit.
309	c.j.  The board of governors shall maintain separate
310	accounting records that consolidate data for nonhomestead
311	properties, including, but not limited to, number of policies,
312	insured values, premiums written, and losses. The board of
313	governors shall annually report to the office and the
314	Legislature a summary of such data.
315	(c)  The plan of operation of the corporation:
316	1.  Must provide for adoption of residential property and
317	casualty insurance policy forms and commercial residential and
318	nonresidential property insurance forms, which forms must be
319	approved by the office prior to use. The corporation shall adopt
320	the following policy forms:
321	a.  Standard personal lines policy forms that are
322	comprehensive multiperil policies providing full coverage of a
323	residential property equivalent to the coverage provided in the
324	private insurance market under an HO-3, HO-4, or HO-6 policy.
325	b.  Basic personal lines policy forms that are policies
326	similar to an HO-8 policy or a dwelling fire policy that provide
327	coverage meeting the requirements of the secondary mortgage
328	market, but which coverage is more limited than the coverage
329	under a standard policy.
330	c.  Commercial lines residential and nonresidential policy
331	forms that are generally similar to the basic perils of full
332	coverage obtainable for commercial residential structures and
333	commercial nonresidential structures in the admitted voluntary
334	market.
335	d.  Personal lines and commercial lines residential
336	property insurance forms that cover the peril of wind only. The
337	forms are applicable only to residential properties located in
338	areas eligible for coverage under the high-risk account referred
339	to in sub-subparagraph (b)1.2.a.
340	e.  Commercial lines nonresidential property insurance
341	forms that cover the peril of wind only. The forms are
342	applicable only to nonresidential properties located in areas
343	eligible for coverage under the high-risk account referred to in
344	sub-subparagraph (b)1.2.a.
345	f.  The corporation may adopt variations of the policy
346	forms listed in sub-subparagraphs a.-e. that contain more
347	restrictive coverage.
348	2.a.  Must provide that the corporation adopt a program in
349	which the corporation and authorized insurers enter into quota
350	share primary insurance agreements for hurricane coverage, as
351	defined in s. 627.4025(2)(a), for eligible risks, and adopt
352	property insurance forms for eligible risks which cover the
353	peril of wind only. As used in this subsection, the term:
354	(I)  "Quota share primary insurance" means an arrangement
355	in which the primary hurricane coverage of an eligible risk is
356	provided in specified percentages by the corporation and an
357	authorized insurer. The corporation and authorized insurer are
358	each solely responsible for a specified percentage of hurricane
359	coverage of an eligible risk as set forth in a quota share
360	primary insurance agreement between the corporation and an
361	authorized insurer and the insurance contract. The
362	responsibility of the corporation or authorized insurer to pay
363	its specified percentage of hurricane losses of an eligible
364	risk, as set forth in the quota share primary insurance
365	agreement, may not be altered by the inability of the other
366	party to the agreement to pay its specified percentage of
367	hurricane losses. Eligible risks that are provided hurricane
368	coverage through a quota share primary insurance arrangement
369	must be provided policy forms that set forth the obligations of
370	the corporation and authorized insurer under the arrangement,
371	clearly specify the percentages of quota share primary insurance
372	provided by the corporation and authorized insurer, and
373	conspicuously and clearly state that neither the authorized
374	insurer nor the corporation may be held responsible beyond its
375	specified percentage of coverage of hurricane losses.
376	(II)  "Eligible risks" means personal lines residential and
377	commercial lines residential risks that meet the underwriting
378	criteria of the corporation and are located in areas that were
379	eligible for coverage by the Florida Windstorm Underwriting
380	Association on January 1, 2002.
381	b.  The corporation may enter into quota share primary
382	insurance agreements with authorized insurers at corporation
383	coverage levels of 90 percent and 50 percent.
384	c.  If the corporation determines that additional coverage
385	levels are necessary to maximize participation in quota share
386	primary insurance agreements by authorized insurers, the
387	corporation may establish additional coverage levels. However,
388	the corporation's quota share primary insurance coverage level
389	may not exceed 90 percent.
390	d.  Any quota share primary insurance agreement entered
391	into between an authorized insurer and the corporation must
392	provide for a uniform specified percentage of coverage of
393	hurricane losses, by county or territory as set forth by the
394	corporation board, for all eligible risks of the authorized
395	insurer covered under the quota share primary insurance
396	agreement.
397	e.  Any quota share primary insurance agreement entered
398	into between an authorized insurer and the corporation is
399	subject to review and approval by the office. However, such
400	agreement shall be authorized only as to insurance contracts
401	entered into between an authorized insurer and an insured who is
402	already insured by the corporation for wind coverage.
403	f.  For all eligible risks covered under quota share
404	primary insurance agreements, the exposure and coverage levels
405	for both the corporation and authorized insurers shall be
406	reported by the corporation to the Florida Hurricane Catastrophe
407	Fund. For all policies of eligible risks covered under quota
408	share primary insurance agreements, the corporation and the
409	authorized insurer shall maintain complete and accurate records
410	for the purpose of exposure and loss reimbursement audits as
411	required by Florida Hurricane Catastrophe Fund rules. The
412	corporation and the authorized insurer shall each maintain
413	duplicate copies of policy declaration pages and supporting
414	claims documents.
415	g.  The corporation board shall establish in its plan of
416	operation standards for quota share agreements which ensure that
417	there is no discriminatory application among insurers as to the
418	terms of quota share agreements, pricing of quota share
419	agreements, incentive provisions if any, and consideration paid
420	for servicing policies or adjusting claims.
421	h.  The quota share primary insurance agreement between the
422	corporation and an authorized insurer must set forth the
423	specific terms under which coverage is provided, including, but
424	not limited to, the sale and servicing of policies issued under
425	the agreement by the insurance agent of the authorized insurer
426	producing the business, the reporting of information concerning
427	eligible risks, the payment of premium to the corporation, and
428	arrangements for the adjustment and payment of hurricane claims
429	incurred on eligible risks by the claims adjuster and personnel
430	of the authorized insurer. Entering into a quota sharing
431	insurance agreement between the corporation and an authorized
432	insurer shall be voluntary and at the discretion of the
433	authorized insurer.
434	3.  May provide that the corporation may employ or
435	otherwise contract with individuals or other entities to provide
436	administrative or professional services that may be appropriate
437	to effectuate the plan. The corporation shall have the power to
438	borrow funds, by issuing bonds or by incurring other
439	indebtedness, and shall have other powers reasonably necessary
440	to effectuate the requirements of this subsection, including,
441	without limitation, the power to issue bonds and incur other
442	indebtedness in order to refinance outstanding bonds or other
443	indebtedness. The corporation may, but is not required to, seek
444	judicial validation of its bonds or other indebtedness under
445	chapter 75. The corporation may issue bonds or incur other
446	indebtedness, or have bonds issued on its behalf by a unit of
447	local government pursuant to subparagraph (p)(g)2., in the
448	absence of a hurricane or other weather-related event, upon a
449	determination by the corporation, subject to approval by the
450	office, that such action would enable it to efficiently meet the
451	financial obligations of the corporation and that such
452	financings are reasonably necessary to effectuate the
453	requirements of this subsection. The corporation is authorized
454	to take all actions needed to facilitate tax-free status for any
455	such bonds or indebtedness, including formation of trusts or
456	other affiliated entities. The corporation shall have the
457	authority to pledge assessments, projected recoveries from the
458	Florida Hurricane Catastrophe Fund, other reinsurance
459	recoverables, market equalization and other surcharges, and
460	other funds available to the corporation as security for bonds
461	or other indebtedness. In recognition of s. 10, Art. I of the
462	State Constitution, prohibiting the impairment of obligations of
463	contracts, it is the intent of the Legislature that no action be
464	taken whose purpose is to impair any bond indenture or financing
465	agreement or any revenue source committed by contract to such
466	bond or other indebtedness.
467	4.a.  Must require that the corporation operate subject to
468	the supervision and approval of a board of governors consisting
469	of eight individuals who are residents of this state, from
470	different geographical areas of this state. The Governor, the
471	Chief Financial Officer, the President of the Senate, and the
472	Speaker of the House of Representatives shall each appoint two
473	members of the board. At least one of the two members appointed
474	by each appointing officer must have demonstrated expertise in
475	insurance. The Chief Financial Officer shall designate one of
476	the appointees as chair. All board members serve at the pleasure
477	of the appointing officer. All members of the board of governors
478	are subject to removal at will by the officers who appointed
479	them. All board members, including the chair, must be appointed
480	to serve for 3-year terms beginning annually on a date
481	designated by the plan. Any board vacancy shall be filled for
482	the unexpired term by the appointing officer. The Chief
483	Financial Officer shall appoint a technical advisory group to
484	provide information and advice to the board of governors in
485	connection with the board's duties under this subsection. The
486	executive director and senior managers of the corporation shall
487	be engaged by the board and serve at the pleasure of the board.
488	Any executive director appointed on or after July 1, 2006, is
489	subject to confirmation by the Senate. The executive director is
490	responsible for employing other staff as the corporation may
491	require, subject to review and concurrence by the board.
492	b.  The board shall create a Market Accountability Advisory
493	Committee to assist the corporation in developing awareness of
494	its rates and its customer and agent service levels in
495	relationship to the voluntary market insurers writing similar
496	coverage. The members of the advisory committee shall consist of
497	the following 11 persons, one of whom must be elected chair by
498	the members of the committee: four representatives, one
499	appointed by the Florida Association of Insurance Agents, one by
500	the Florida Association of Insurance and Financial Advisors, one
501	by the Professional Insurance Agents of Florida, and one by the
502	Latin American Association of Insurance Agencies; three
503	representatives appointed by the insurers with the three highest
504	voluntary market share of residential property insurance
505	business in the state; one representative from the Office of
506	Insurance Regulation; one consumer appointed by the board who is
507	insured by the corporation at the time of appointment to the
508	committee; one representative appointed by the Florida
509	Association of Realtors; and one representative appointed by the
510	Florida Bankers Association. All members must serve for 3-year
511	terms and may serve for consecutive terms. The committee shall
512	report to the corporation at each board meeting on insurance
513	market issues which may include rates and rate competition with
514	the voluntary market; service, including policy issuance, claims
515	processing, and general responsiveness to policyholders,
516	applicants, and agents; and matters relating to depopulation.
517	5.  Must provide a procedure for determining the
518	eligibility of a risk for coverage, as follows:
519	a.  Subject to the provisions of s. 627.3517, with respect
520	to personal lines residential risks, if the risk is offered
521	coverage from an authorized insurer at the insurer's approved
522	rate under either a standard policy including wind coverage or,
523	if consistent with the insurer's underwriting rules as filed
524	with the office, a basic policy including wind coverage, for a
525	new application to the corporation for coverage, the risk is not
526	eligible for any policy issued by the corporation unless the
527	premium for coverage from the authorized insurer is more than 25
528	percent greater than the premium for comparable coverage from
529	the corporation. If the risk is not able to obtain any such
530	offer, the risk is eligible for either a standard policy
531	including wind coverage or a basic policy including wind
532	coverage issued by the corporation; however, if the risk could
533	not be insured under a standard policy including wind coverage
534	regardless of market conditions, the risk shall be eligible for
535	a basic policy including wind coverage unless rejected under
536	subparagraph 9.8. However, with regard to a policyholder of the
537	corporation, the policyholder remains eligible for coverage from
538	the corporation regardless of any offer of coverage from an
539	authorized insurer or surplus lines insurer. The corporation
540	shall determine the type of policy to be provided on the basis
541	of objective standards specified in the underwriting manual and
542	based on generally accepted underwriting practices.
543	(I)  If the risk accepts an offer of coverage through the
544	market assistance plan or an offer of coverage through a
545	mechanism established by the corporation before a policy is
546	issued to the risk by the corporation or during the first 30
547	days of coverage by the corporation, and the producing agent who
548	submitted the application to the plan or to the corporation is
549	not currently appointed by the insurer, the insurer shall:
550	(A)  Pay to the producing agent of record of the policy,
551	for the first year, an amount that is the greater of the
552	insurer's usual and customary commission for the type of policy
553	written or a fee equal to the usual and customary commission of
554	the corporation; or
555	(B)  Offer to allow the producing agent of record of the
556	policy to continue servicing the policy for a period of not less
557	than 1 year and offer to pay the agent the greater of the
558	insurer's or the corporation's usual and customary commission
559	for the type of policy written.
560
561	If the producing agent is unwilling or unable to accept
562	appointment, the new insurer shall pay the agent in accordance
563	with sub-sub-sub-subparagraph (A).
564	(II)  When the corporation enters into a contractual
565	agreement for a take-out plan, the producing agent of record of
566	the corporation policy is entitled to retain any unearned
567	commission on the policy, and the insurer shall:
568	(A)  Pay to the producing agent of record of the
569	corporation policy, for the first year, an amount that is the
570	greater of the insurer's usual and customary commission for the
571	type of policy written or a fee equal to the usual and customary
572	commission of the corporation; or
573	(B)  Offer to allow the producing agent of record of the
574	corporation policy to continue servicing the policy for a period
575	of not less than 1 year and offer to pay the agent the greater
576	of the insurer's or the corporation's usual and customary
577	commission for the type of policy written.
578
579	If the producing agent is unwilling or unable to accept
580	appointment, the new insurer shall pay the agent in accordance
581	with sub-sub-sub-subparagraph (A).
582	b.  With respect to commercial lines residential risks, for
583	a new application to the corporation for coverage, if the risk
584	is offered coverage under a policy including wind coverage from
585	an authorized insurer at its approved rate, the risk is not
586	eligible for any policy issued by the corporation unless the
587	premium for coverage from the authorized insurer is more than 25
588	percent greater than the premium for comparable coverage from
589	the corporation. If the risk is not able to obtain any such
590	offer, the risk is eligible for a policy including wind coverage
591	issued by the corporation. However, with regard to a
592	policyholder of the corporation, the policyholder remains
593	eligible for coverage from the corporation regardless of any
594	offer of coverage from an authorized insurer or surplus lines
595	insurer.
596	(I)  If the risk accepts an offer of coverage through the
597	market assistance plan or an offer of coverage through a
598	mechanism established by the corporation before a policy is
599	issued to the risk by the corporation or during the first 30
600	days of coverage by the corporation, and the producing agent who
601	submitted the application to the plan or the corporation is not
602	currently appointed by the insurer, the insurer shall:
603	(A)  Pay to the producing agent of record of the policy,
604	for the first year, an amount that is the greater of the
605	insurer's usual and customary commission for the type of policy
606	written or a fee equal to the usual and customary commission of
607	the corporation; or
608	(B)  Offer to allow the producing agent of record of the
609	policy to continue servicing the policy for a period of not less
610	than 1 year and offer to pay the agent the greater of the
611	insurer's or the corporation's usual and customary commission
612	for the type of policy written.
613
614	If the producing agent is unwilling or unable to accept
615	appointment, the new insurer shall pay the agent in accordance
616	with sub-sub-sub-subparagraph (A).
617	(II)  When the corporation enters into a contractual
618	agreement for a take-out plan, the producing agent of record of
619	the corporation policy is entitled to retain any unearned
620	commission on the policy, and the insurer shall:
621	(A)  Pay to the producing agent of record of the
622	corporation policy, for the first year, an amount that is the
623	greater of the insurer's usual and customary commission for the
624	type of policy written or a fee equal to the usual and customary
625	commission of the corporation; or
626	(B)  Offer to allow the producing agent of record of the
627	corporation policy to continue servicing the policy for a period
628	of not less than 1 year and offer to pay the agent the greater
629	of the insurer's or the corporation's usual and customary
630	commission for the type of policy written.
631
632	If the producing agent is unwilling or unable to accept
633	appointment, the new insurer shall pay the agent in accordance
634	with sub-sub-sub-subparagraph (A).
635	6.  Must provide by July 1, 2007, that an application for
636	coverage for a new policy is subject to a waiting period of 10
637	days before coverage is effective, during which time the
638	corporation shall make such application available for review by
639	general lines agents and authorized property and casualty
640	insurers. The board shall approve an exception that allows for
641	coverage to be effective before the end of the 10-day waiting
642	period, for coverage issued in conjunction with a real estate
643	closing. The board may approve such other exceptions as the
644	board determines are necessary to prevent lapses in coverage.
645	7.  Must include rules for classifications of risks and
646	rates therefor.
647	8.  Must provide that if premium and investment income for
648	an account attributable to a particular calendar year are in
649	excess of projected losses and expenses for the account
650	attributable to that year, such excess shall be held in surplus
651	in the account. Such surplus shall be available to defray
652	deficits in that account as to future years and shall be used
653	for that purpose prior to assessing assessable insurers and
654	assessable insureds as to any calendar year.
655	9.  Must provide objective criteria and procedures to be
656	uniformly applied for all applicants in determining whether an
657	individual risk is so hazardous as to be uninsurable. In making
658	this determination and in establishing the criteria and
659	procedures, the following shall be considered:
660	a.  Whether the likelihood of a loss for the individual
661	risk is substantially higher than for other risks of the same
662	class; and
663	b.  Whether the uncertainty associated with the individual
664	risk is such that an appropriate premium cannot be determined.
665
666	The acceptance or rejection of a risk by the corporation shall
667	be construed as the private placement of insurance, and the
668	provisions of chapter 120 shall not apply.
669	10.  Must provide that the corporation shall make its best
670	efforts to procure catastrophe reinsurance at reasonable rates,
671	to cover its projected 100-year probable maximum loss as
672	determined by the board of governors.
673	11.  Must provide that in the event of regular deficit
674	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
675	(b)3.b., in the personal lines account, the commercial lines
676	residential account, or the high-risk account, the corporation
677	shall levy upon corporation policyholders in its next rate
678	filing, or by a separate rate filing solely for this purpose, a
679	Citizens policyholder surcharge arising from a regular
680	assessment in such account in a percentage equal to the total
681	amount of such regular assessments divided by the aggregate
682	statewide direct written premium for subject lines of business
683	for the prior calendar year. For purposes of calculating the
684	Citizens policyholder surcharge to be levied under this
685	subparagraph, the total amount of the regular assessment to
686	which this surcharge is related shall be determined as set forth
687	in subparagraph (b)3., without deducting the estimated Citizens
688	policyholder surcharge. Citizens policyholder surcharges under
689	this subparagraph are not considered premium and are not subject
690	to commissions, fees, or premium taxes; however, failure to pay
691	a market equalization surcharge shall be treated as failure to
692	pay premium.
693	11.12.  The policies issued by the corporation must provide
694	that, if the corporation or the market assistance plan obtains
695	an offer from an authorized insurer to cover the risk at its
696	approved rates, the risk is no longer eligible for renewal
697	through the corporation, except as otherwise provided in this
698	subsection.
699	12.13.  Corporation policies and applications must include
700	a notice that the corporation policy could, under this section,
701	be replaced with a policy issued by an authorized insurer that
702	does not provide coverage identical to the coverage provided by
703	the corporation. The notice shall also specify that acceptance
704	of corporation coverage creates a conclusive presumption that
705	the applicant or policyholder is aware of this potential.
706	13.14.  May establish, subject to approval by the office,
707	different eligibility requirements and operational procedures
708	for any line or type of coverage for any specified county or
709	area if the board determines that such changes to the
710	eligibility requirements and operational procedures are
711	justified due to the voluntary market being sufficiently stable
712	and competitive in such area or for such line or type of
713	coverage and that consumers who, in good faith, are unable to
714	obtain insurance through the voluntary market through ordinary
715	methods would continue to have access to coverage from the
716	corporation. When coverage is sought in connection with a real
717	property transfer, such requirements and procedures shall not
718	provide for an effective date of coverage later than the date of
719	the closing of the transfer as established by the transferor,
720	the transferee, and, if applicable, the lender.
721	15.  Must provide that, with respect to the high-risk
722	account, any assessable insurer with a surplus as to
723	policyholders of $25 million or less writing 25 percent or more
724	of its total countrywide property insurance premiums in this
725	state may petition the office, within the first 90 days of each
726	calendar year, to qualify as a limited apportionment company. A
727	regular assessment levied by the corporation on a limited
728	apportionment company for a deficit incurred by the corporation
729	for the high-risk account in 2006 or thereafter may be paid to
730	the corporation on a monthly basis as the assessments are
731	collected by the limited apportionment company from its insureds
732	pursuant to s. 627.3512, but the regular assessment must be paid
733	in full within 12 months after being levied by the corporation.
734	A limited apportionment company shall collect from its
735	policyholders any emergency assessment imposed under sub-
736	subparagraph (b)3.d. The plan shall provide that, if the office
737	determines that any regular assessment will result in an
738	impairment of the surplus of a limited apportionment company,
739	the office may direct that all or part of such assessment be
740	deferred as provided in subparagraph (g)4. However, there shall
741	be no limitation or deferment of an emergency assessment to be
742	collected from policyholders under sub-subparagraph (b)3.d.
743	14.16.  Must provide that the corporation appoint as its
744	licensed agents only those agents who also hold an appointment
745	as defined in s. 626.015(3) with an insurer who at the time of
746	the agent's initial appointment by the corporation is authorized
747	to write and is actually writing personal lines residential
748	property coverage, commercial residential property coverage, or
749	commercial nonresidential property coverage within the state.
750	15.17.  Must provide, by July 1, 2007, a premium payment
751	plan option to its policyholders which allows for quarterly and
752	semiannual payment of premiums.
753	16.18.  Must provide, effective June 1, 2007, that the
754	corporation contract with each insurer providing the non-wind
755	coverage for risks insured by the corporation in the high-risk
756	account, requiring that the insurer provide claims adjusting
757	services for the wind coverage provided by the corporation for
758	such risks. An insurer is required to enter into this contract
759	as a condition of providing non-wind coverage for a risk that is
760	insured by the corporation in the high-risk account unless the
761	board finds, after a hearing, that the insurer is not capable of
762	providing adjusting services at an acceptable level of quality
763	to corporation policyholders. The terms and conditions of such
764	contracts must be substantially the same as the contracts that
765	the corporation executed with insurers under the "adjust-your-
766	own" program in 2006, except as may be mutually agreed to by the
767	parties and except for such changes that the board determines
768	are necessary to ensure that claims are adjusted appropriately.
769	The corporation shall provide a process for neutral arbitration
770	of any dispute between the corporation and the insurer regarding
771	the terms of the contract. The corporation shall review and
772	monitor the performance of insurers under these contracts.
773	17.19.  Must limit coverage on mobile homes or manufactured
774	homes built prior to 1994 to actual cash value of the dwelling
775	rather than replacement costs of the dwelling.
776	18.20.  May provide such limits of coverage as the board
777	determines, consistent with the requirements of this subsection.
778	19.21.  May require commercial property to meet specified
779	hurricane mitigation construction features as a condition of
780	eligibility for coverage.
781	(n)  If coverage in an account is deactivated pursuant to
782	paragraph (o)(f), coverage through the corporation shall be
783	reactivated by order of the office only under one of the
784	following circumstances:
785	1.  If the market assistance plan receives a minimum of 100
786	applications for coverage within a 3-month period, or 200
787	applications for coverage within a 1-year period or less for
788	residential coverage, unless the market assistance plan provides
789	a quotation from admitted carriers at their filed rates for at
790	least 90 percent of such applicants. Any market assistance plan
791	application that is rejected because an individual risk is so
792	hazardous as to be uninsurable using the criteria specified in
793	subparagraph (c)9.8. shall not be included in the minimum
794	percentage calculation provided herein. In the event that there
795	is a legal or administrative challenge to a determination by the
796	office that the conditions of this subparagraph have been met
797	for eligibility for coverage in the corporation, any eligible
798	risk may obtain coverage during the pendency of such challenge.
799	2.  In response to a state of emergency declared by the
800	Governor under s. 252.36, the office may activate coverage by
801	order for the period of the emergency upon a finding by the
802	office that the emergency significantly affects the availability
803	of residential property insurance.
804	(p)1.  The corporation shall certify to the office its
805	needs for annual assessments as to a particular calendar year,
806	and for any interim assessments that it deems to be necessary to
807	sustain operations as to a particular year pending the receipt
808	of annual assessments. Upon verification, the office shall
809	approve such certification, and the corporation shall levy such
810	annual or interim assessments. Such assessments shall be
811	prorated as provided in paragraph (b). The corporation shall
812	take all reasonable and prudent steps necessary to collect the
813	amount of assessment due from each assessable insured insurer,
814	including, if prudent, filing suit to collect such assessment.
815	If the corporation is unable to collect an assessment from any
816	assessable insurer, the uncollected assessments shall be levied
817	as an additional assessment against the assessable insurers and
818	any assessable insurer required to pay an additional assessment
819	as a result of such failure to pay shall have a cause of action
820	against such nonpaying assessable insurer. Assessments shall be
821	included as an appropriate factor in the making of rates. The
822	failure of a surplus lines agent to collect and remit any
823	regular or emergency assessment levied by the corporation is
824	considered to be a violation of s. 626.936 and subjects the
825	surplus lines agent to the penalties provided in that section.
826	2.  The governing body of any unit of local government, any
827	residents of which are insured by the corporation, may issue
828	bonds as defined in s. 125.013 or s. 166.101 from time to time
829	to fund an assistance program, in conjunction with the
830	corporation, for the purpose of defraying deficits of the
831	corporation. In order to avoid needless and indiscriminate
832	proliferation, duplication, and fragmentation of such assistance
833	programs, any unit of local government, any residents of which
834	are insured by the corporation, may provide for the payment of
835	losses, regardless of whether or not the losses occurred within
836	or outside of the territorial jurisdiction of the local
837	government. Revenue bonds under this subparagraph may not be
838	issued until validated pursuant to chapter 75, unless a state of
839	emergency is declared by executive order or proclamation of the
840	Governor pursuant to s. 252.36 making such findings as are
841	necessary to determine that it is in the best interests of, and
842	necessary for, the protection of the public health, safety, and
843	general welfare of residents of this state and declaring it an
844	essential public purpose to permit certain municipalities or
845	counties to issue such bonds as will permit relief to claimants
846	and policyholders of the corporation. Any such unit of local
847	government may enter into such contracts with the corporation
848	and with any other entity created pursuant to this subsection as
849	are necessary to carry out this paragraph. Any bonds issued
850	under this subparagraph shall be payable from and secured by
851	moneys received by the corporation from emergency assessments
852	under sub-subparagraph (b)2.3.d., and assigned and pledged to or
853	on behalf of the unit of local government for the benefit of the
854	holders of such bonds. The funds, credit, property, and taxing
855	power of the state or of the unit of local government shall not
856	be pledged for the payment of such bonds. If any of the bonds
857	remain unsold 60 days after issuance, the office shall require
858	all insurers subject to assessment to purchase the bonds, which
859	shall be treated as admitted assets; each insurer shall be
860	required to purchase that percentage of the unsold portion of
861	the bond issue that equals the insurer's relative share of
862	assessment liability under this subsection. An insurer shall not
863	be required to purchase the bonds to the extent that the office
864	determines that the purchase would endanger or impair the
865	solvency of the insurer.
866	3.a.  The corporation shall adopt one or more programs
867	subject to approval by the office for the reduction of both new
868	and renewal writings in the corporation. Beginning January 1,
869	2008, any program the corporation adopts for the payment of
870	bonuses to an insurer for each risk the insurer removes from the
871	corporation shall comply with s. 627.3511(2) and may not exceed
872	the amount referenced in s. 627.3511(2) for each risk removed.
873	The corporation may consider any prudent and not unfairly
874	discriminatory approach to reducing corporation writings, and
875	may adopt a credit against assessment liability or other
876	liability that provides an incentive for insurers to take risks
877	out of the corporation and to keep risks out of the corporation
878	by maintaining or increasing voluntary writings in counties or
879	areas in which corporation risks are highly concentrated and a
880	program to provide a formula under which an insurer voluntarily
881	taking risks out of the corporation by maintaining or increasing
882	voluntary writings will be relieved wholly or partially from
883	assessments under sub-subparagraphs (b)3.a. and b. However, any
884	"take-out bonus" or payment to an insurer must be conditioned on
885	the property being insured for at least 5 years by the insurer,
886	unless canceled or nonrenewed by the policyholder. If the policy
887	is canceled or nonrenewed by the policyholder before the end of
888	the 5-year period, the amount of the take-out bonus must be
889	prorated for the time period the policy was insured. When the
890	corporation enters into a contractual agreement for a take-out
891	plan, the producing agent of record of the corporation policy is
892	entitled to retain any unearned commission on such policy, and
893	the insurer shall either:
894	(I)  Pay to the producing agent of record of the policy,
895	for the first year, an amount which is the greater of the
896	insurer's usual and customary commission for the type of policy
897	written or a policy fee equal to the usual and customary
898	commission of the corporation; or
899	(II)  Offer to allow the producing agent of record of the
900	policy to continue servicing the policy for a period of not less
901	than 1 year and offer to pay the agent the insurer's usual and
902	customary commission for the type of policy written. If the
903	producing agent is unwilling or unable to accept appointment by
904	the new insurer, the new insurer shall pay the agent in
905	accordance with sub-sub-subparagraph (I).
906	b.  Any credit or exemption from regular assessments
907	adopted under this subparagraph shall last no longer than the 3
908	years following the cancellation or expiration of the policy by
909	the corporation. With the approval of the office, the board may
910	extend such credits for an additional year if the insurer
911	guarantees an additional year of renewability for all policies
912	removed from the corporation, or for 2 additional years if the
913	insurer guarantees 2 additional years of renewability for all
914	policies so removed.
915	c.  There shall be no credit, limitation, exemption, or
916	deferment from emergency assessments to be collected from
917	policyholders pursuant to sub-subparagraph (b)3.d.
918	4.  The plan shall provide for the deferment, in whole or
919	in part, of the assessment of an assessable insurer, other than
920	an emergency assessment collected from policyholders pursuant to
921	sub-subparagraph (b)3.d., if the office finds that payment of
922	the assessment would endanger or impair the solvency of the
923	insurer. In the event an assessment against an assessable
924	insurer is deferred in whole or in part, the amount by which
925	such assessment is deferred may be assessed against the other
926	assessable insurers in a manner consistent with the basis for
927	assessments set forth in paragraph (b).
928	4.5.  Effective July 1, 2007, in order to evaluate the
929	costs and benefits of approved take-out plans, if the
930	corporation pays a bonus or other payment to an insurer for an
931	approved take-out plan, it shall maintain a record of the
932	address or such other identifying information on the property or
933	risk removed in order to track if and when the property or risk
934	is later insured by the corporation.
935	5.6.  Any policy taken out, assumed, or removed from the
936	corporation is, as of the effective date of the take-out,
937	assumption, or removal, direct insurance issued by the insurer
938	and not by the corporation, even if the corporation continues to
939	service the policies. This subparagraph applies to policies of
940	the corporation and not policies taken out, assumed, or removed
941	from any other entity.
942	(r)  There shall be no liability on the part of, and no
943	cause of action of any nature shall arise against, any
944	assessable insurer or its agents or employees, the corporation
945	or its agents or employees, members of the board of governors or
946	their respective designees at a board meeting, corporation
947	committee members, or the office or its representatives, for any
948	action taken by them in the performance of their duties or
949	responsibilities under this subsection. Such immunity does not
950	apply to:
951	1.  Any of the foregoing persons or entities for any
952	willful tort;
953	2.  The corporation or its producing agents for breach of
954	any contract or agreement pertaining to insurance coverage;
955	3.  The corporation with respect to issuance or payment of
956	debt; or
957	4.  Any assessable insurer with respect to any action to
958	enforce an assessable insurer's obligations to the corporation
959	under this subsection.
960	(r)(s)  For the purposes of s. 199.183(1), the corporation
961	shall be considered a political subdivision of the state and
962	shall be exempt from the corporate income tax. The premiums,
963	assessments, investment income, and other revenue of the
964	corporation are funds received for providing property insurance
965	coverage as required by this subsection, paying claims for
966	Florida citizens insured by the corporation, securing and
967	repaying debt obligations issued by the corporation, and
968	conducting all other activities of the corporation, and shall
969	not be considered taxes, fees, licenses, or charges for services
970	imposed by the Legislature on individuals, businesses, or
971	agencies outside state government. Bonds and other debt
972	obligations issued by or on behalf of the corporation are not to
973	be considered "state bonds" within the meaning of s. 215.58(8).
974	The corporation is not subject to the procurement provisions of
975	chapter 287, and policies and decisions of the corporation
976	relating to incurring debt, levying of assessments and the sale,
977	issuance, continuation, terms and claims under corporation
978	policies, and all services relating thereto, are not subject to
979	the provisions of chapter 120. The corporation is not required
980	to obtain or to hold a certificate of authority issued by the
981	office, nor is it required to participate as a member insurer of
982	the Florida Insurance Guaranty Association. However, the
983	corporation is required to pay, in the same manner as an
984	authorized insurer, assessments levied by the Florida Insurance
985	Guaranty Association. It is the intent of the Legislature that
986	the tax exemptions provided in this paragraph will augment the
987	financial resources of the corporation to better enable the
988	corporation to fulfill its public purposes. Any debt obligations
989	issued by the corporation, their transfer, and the income
990	therefrom, including any profit made on the sale thereof, shall
991	at all times be free from taxation of every kind by the state
992	and any political subdivision or local unit or other
993	instrumentality thereof; however, this exemption does not apply
994	to any tax imposed by chapter 220 on interest, income, or
995	profits on debt obligations owned by corporations other than the
996	corporation.
997	(s)(t)  Upon a determination by the office that the
998	conditions giving rise to the establishment and activation of
999	the corporation no longer exist, the corporation is dissolved.
1000	Upon dissolution, the assets of the corporation shall be applied
1001	first to pay all debts, liabilities, and obligations of the
1002	corporation, including the establishment of reasonable reserves
1003	for any contingent liabilities or obligations, and all remaining
1004	assets of the corporation shall become property of the state and
1005	shall be deposited in the Florida Hurricane Catastrophe Fund.
1006	However, no dissolution shall take effect as long as the
1007	corporation has bonds or other financial obligations outstanding
1008	unless adequate provision has been made for the payment of the
1009	bonds or other financial obligations pursuant to the documents
1010	authorizing the issuance of the bonds or other financial
1011	obligations.
1012	(t)(u)1.  Effective July 1, 2002, policies of the
1013	Residential Property and Casualty Joint Underwriting Association
1014	shall become policies of the corporation. All obligations,
1015	rights, assets and liabilities of the Residential Property and
1016	Casualty Joint Underwriting Association, including bonds, note
1017	and debt obligations, and the financing documents pertaining to
1018	them become those of the corporation as of July 1, 2002. The
1019	corporation is not required to issue endorsements or
1020	certificates of assumption to insureds during the remaining term
1021	of in-force transferred policies.
1022	2.  Effective July 1, 2002, policies of the Florida
1023	Windstorm Underwriting Association are transferred to the
1024	corporation and shall become policies of the corporation. All
1025	obligations, rights, assets, and liabilities of the Florida
1026	Windstorm Underwriting Association, including bonds, note and
1027	debt obligations, and the financing documents pertaining to them
1028	are transferred to and assumed by the corporation on July 1,
1029	2002. The corporation is not required to issue endorsements or
1030	certificates of assumption to insureds during the remaining term
1031	of in-force transferred policies.
1032	3.  The Florida Windstorm Underwriting Association and the
1033	Residential Property and Casualty Joint Underwriting Association
1034	shall take all actions as may be proper to further evidence the
1035	transfers and shall provide the documents and instruments of
1036	further assurance as may reasonably be requested by the
1037	corporation for that purpose. The corporation shall execute
1038	assumptions and instruments as the trustees or other parties to
1039	the financing documents of the Florida Windstorm Underwriting
1040	Association or the Residential Property and Casualty Joint
1041	Underwriting Association may reasonably request to further
1042	evidence the transfers and assumptions, which transfers and
1043	assumptions, however, are effective on the date provided under
1044	this paragraph whether or not, and regardless of the date on
1045	which, the assumptions or instruments are executed by the
1046	corporation. Subject to the relevant financing documents
1047	pertaining to their outstanding bonds, notes, indebtedness, or
1048	other financing obligations, the moneys, investments,
1049	receivables, choses in action, and other intangibles of the
1050	Florida Windstorm Underwriting Association shall be credited to
1051	the high-risk account of the corporation, and those of the
1052	personal lines residential coverage account and the commercial
1053	lines residential coverage account of the Residential Property
1054	and Casualty Joint Underwriting Association shall be credited to
1055	the personal lines account and the commercial lines account,
1056	respectively, of the corporation.
1057	4.  Effective July 1, 2002, a new applicant for property
1058	insurance coverage who would otherwise have been eligible for
1059	coverage in the Florida Windstorm Underwriting Association is
1060	eligible for coverage from the corporation as provided in this
1061	subsection.
1062	5.  The transfer of all policies, obligations, rights,
1063	assets, and liabilities from the Florida Windstorm Underwriting
1064	Association to the corporation and the renaming of the
1065	Residential Property and Casualty Joint Underwriting Association
1066	as the corporation shall in no way affect the coverage with
1067	respect to covered policies as defined in s. 215.555(2)(c)
1068	provided to these entities by the Florida Hurricane Catastrophe
1069	Fund. The coverage provided by the Florida Hurricane Catastrophe
1070	Fund to the Florida Windstorm Underwriting Association based on
1071	its exposures as of June 30, 2002, and each June 30 thereafter
1072	shall be redesignated as coverage for the high-risk account of
1073	the corporation. Notwithstanding any other provision of law, the
1074	coverage provided by the Florida Hurricane Catastrophe Fund to
1075	the Residential Property and Casualty Joint Underwriting
1076	Association based on its exposures as of June 30, 2002, and each
1077	June 30 thereafter shall be transferred to the personal lines
1078	account and the commercial lines account of the corporation.
1079	Notwithstanding any other provision of law, the high-risk
1080	account shall be treated, for all Florida Hurricane Catastrophe
1081	Fund purposes, as if it were a separate participating insurer
1082	with its own exposures, reimbursement premium, and loss
1083	reimbursement. Likewise, the personal lines and commercial lines
1084	accounts shall be viewed together, for all Florida Hurricane
1085	Catastrophe Fund purposes, as if the two accounts were one and
1086	represent a single, separate participating insurer with its own
1087	exposures, reimbursement premium, and loss reimbursement. The
1088	coverage provided by the Florida Hurricane Catastrophe Fund to
1089	the corporation shall constitute and operate as a full transfer
1090	of coverage from the Florida Windstorm Underwriting Association
1091	and Residential Property and Casualty Joint Underwriting to the
1092	corporation.
1093	(u)(v)  Notwithstanding any other provision of law:
1094	1.  The pledge or sale of, the lien upon, and the security
1095	interest in any rights, revenues, or other assets of the
1096	corporation created or purported to be created pursuant to any
1097	financing documents to secure any bonds or other indebtedness of
1098	the corporation shall be and remain valid and enforceable,
1099	notwithstanding the commencement of and during the continuation
1100	of, and after, any rehabilitation, insolvency, liquidation,
1101	bankruptcy, receivership, conservatorship, reorganization, or
1102	similar proceeding against the corporation under the laws of
1103	this state.
1104	2.  No such proceeding shall relieve the corporation of its
1105	obligation, or otherwise affect its ability to perform its
1106	obligation, to continue to collect, or levy and collect,
1107	assessments, market equalization or other surcharges under
1108	subparagraph (c)10., or any other rights, revenues, or other
1109	assets of the corporation pledged pursuant to any financing
1110	documents.
1111	3.  Each such pledge or sale of, lien upon, and security
1112	interest in, including the priority of such pledge, lien, or
1113	security interest, any such assessments, market equalization or
1114	other surcharges, or other rights, revenues, or other assets
1115	which are collected, or levied and collected, after the
1116	commencement of and during the pendency of, or after, any such
1117	proceeding shall continue unaffected by such proceeding. As used
1118	in this subsection, the term "financing documents" means any
1119	agreement or agreements, instrument or instruments, or other
1120	document or documents now existing or hereafter created
1121	evidencing any bonds or other indebtedness of the corporation or
1122	pursuant to which any such bonds or other indebtedness has been
1123	or may be issued and pursuant to which any rights, revenues, or
1124	other assets of the corporation are pledged or sold to secure
1125	the repayment of such bonds or indebtedness, together with the
1126	payment of interest on such bonds or such indebtedness, or the
1127	payment of any other obligation or financial product, as defined
1128	in the plan of operation of the corporation related to such
1129	bonds or indebtedness.
1130	4.  Any such pledge or sale of assessments, revenues,
1131	contract rights, or other rights or assets of the corporation
1132	shall constitute a lien and security interest, or sale, as the
1133	case may be, that is immediately effective and attaches to such
1134	assessments, revenues, or contract rights or other rights or
1135	assets, whether or not imposed or collected at the time the
1136	pledge or sale is made. Any such pledge or sale is effective,
1137	valid, binding, and enforceable against the corporation or other
1138	entity making such pledge or sale, and valid and binding against
1139	and superior to any competing claims or obligations owed to any
1140	other person or entity, including policyholders in this state,
1141	asserting rights in any such assessments, revenues, or contract
1142	rights or other rights or assets to the extent set forth in and
1143	in accordance with the terms of the pledge or sale contained in
1144	the applicable financing documents, whether or not any such
1145	person or entity has notice of such pledge or sale and without
1146	the need for any physical delivery, recordation, filing, or
1147	other action.
1148	5.  As long as the corporation has any bonds outstanding,
1149	the corporation may not file a voluntary petition under chapter
1150	9 of the federal Bankruptcy Code or such corresponding chapter
1151	or sections as may be in effect, from time to time, and a public
1152	officer or any organization, entity, or other person may not
1153	authorize the corporation to be or become a debtor under chapter
1154	9 of the federal Bankruptcy Code or such corresponding chapter
1155	or sections as may be in effect, from time to time, during any
1156	such period.
1157	6.  If ordered by a court of competent jurisdiction, the
1158	corporation may assume policies or otherwise provide coverage
1159	for policyholders of an insurer placed in liquidation under
1160	chapter 631, under such forms, rates, terms, and conditions as
1161	the corporation deems appropriate, subject to approval by the
1162	office.
1163	(v)(w)1.  The following records of the corporation are
1164	confidential and exempt from the provisions of s. 119.07(1) and
1165	s. 24(a), Art. I of the State Constitution:
1166	a.  Underwriting files, except that a policyholder or an
1167	applicant shall have access to his or her own underwriting
1168	files.
1169	b.  Claims files, until termination of all litigation and
1170	settlement of all claims arising out of the same incident,
1171	although portions of the claims files may remain exempt, as
1172	otherwise provided by law. Confidential and exempt claims file
1173	records may be released to other governmental agencies upon
1174	written request and demonstration of need; such records held by
1175	the receiving agency remain confidential and exempt as provided
1176	for herein.
1177	c.  Records obtained or generated by an internal auditor
1178	pursuant to a routine audit, until the audit is completed, or if
1179	the audit is conducted as part of an investigation, until the
1180	investigation is closed or ceases to be active. An investigation
1181	is considered "active" while the investigation is being
1182	conducted with a reasonable, good faith belief that it could
1183	lead to the filing of administrative, civil, or criminal
1184	proceedings.
1185	d.  Matters reasonably encompassed in privileged attorney-
1186	client communications.
1187	e.  Proprietary information licensed to the corporation
1188	under contract and the contract provides for the confidentiality
1189	of such proprietary information.
1190	f.  All information relating to the medical condition or
1191	medical status of a corporation employee which is not relevant
1192	to the employee's capacity to perform his or her duties, except
1193	as otherwise provided in this paragraph. Information which is
1194	exempt shall include, but is not limited to, information
1195	relating to workers' compensation, insurance benefits, and
1196	retirement or disability benefits.
1197	g.  Upon an employee's entrance into the employee
1198	assistance program, a program to assist any employee who has a
1199	behavioral or medical disorder, substance abuse problem, or
1200	emotional difficulty which affects the employee's job
1201	performance, all records relative to that participation shall be
1202	confidential and exempt from the provisions of s. 119.07(1) and
1203	s. 24(a), Art. I of the State Constitution, except as otherwise
1204	provided in s. 112.0455(11).
1205	h.  Information relating to negotiations for financing,
1206	reinsurance, depopulation, or contractual services, until the
1207	conclusion of the negotiations.
1208	i.  Minutes of closed meetings regarding underwriting
1209	files, and minutes of closed meetings regarding an open claims
1210	file until termination of all litigation and settlement of all
1211	claims with regard to that claim, except that information
1212	otherwise confidential or exempt by law will be redacted.
1213
1214	When an authorized insurer is considering underwriting a risk
1215	insured by the corporation, relevant underwriting files and
1216	confidential claims files may be released to the insurer
1217	provided the insurer agrees in writing, notarized and under
1218	oath, to maintain the confidentiality of such files. When a file
1219	is transferred to an insurer that file is no longer a public
1220	record because it is not held by an agency subject to the
1221	provisions of the public records law. Underwriting files and
1222	confidential claims files may also be released to staff of and
1223	the board of governors of the market assistance plan established
1224	pursuant to s. 627.3515, who must retain the confidentiality of
1225	such files, except such files may be released to authorized
1226	insurers that are considering assuming the risks to which the
1227	files apply, provided the insurer agrees in writing, notarized
1228	and under oath, to maintain the confidentiality of such files.
1229	Finally, the corporation or the board or staff of the market
1230	assistance plan may make the following information obtained from
1231	underwriting files and confidential claims files available to
1232	licensed general lines insurance agents: name, address, and
1233	telephone number of the residential property owner or insured;
1234	location of the risk; rating information; loss history; and
1235	policy type. The receiving licensed general lines insurance
1236	agent must retain the confidentiality of the information
1237	received.
1238	2.  Portions of meetings of the corporation are exempt from
1239	the provisions of s. 286.011 and s. 24(b), Art. I of the State
1240	Constitution wherein confidential underwriting files or
1241	confidential open claims files are discussed. All portions of
1242	corporation meetings which are closed to the public shall be
1243	recorded by a court reporter. The court reporter shall record
1244	the times of commencement and termination of the meeting, all
1245	discussion and proceedings, the names of all persons present at
1246	any time, and the names of all persons speaking. No portion of
1247	any closed meeting shall be off the record. Subject to the
1248	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
1249	notes of any closed meeting shall be retained by the corporation
1250	for a minimum of 5 years. A copy of the transcript, less any
1251	exempt matters, of any closed meeting wherein claims are
1252	discussed shall become public as to individual claims after
1253	settlement of the claim.
1254	(w)(x)  It is the intent of the Legislature that the
1255	amendments to this subsection enacted in 2002 should, over time,
1256	reduce the probable maximum windstorm losses in the residual
1257	markets and should reduce the potential assessments to be levied
1258	on property insurers and policyholders statewide. In furtherance
1259	of this intent:
1260	1.  The board shall, on or before February 1 of each year,
1261	provide a report to the President of the Senate and the Speaker
1262	of the House of Representatives showing the reduction or
1263	increase in the 100-year probable maximum loss attributable to
1264	wind-only coverages and the quota share program under this
1265	subsection combined, as compared to the benchmark 100-year
1266	probable maximum loss of the Florida Windstorm Underwriting
1267	Association. For purposes of this paragraph, the benchmark 100-
1268	year probable maximum loss of the Florida Windstorm Underwriting
1269	Association shall be the calculation dated February 2001 and
1270	based on November 30, 2000, exposures. In order to ensure
1271	comparability of data, the board shall use the same methods for
1272	calculating its probable maximum loss as were used to calculate
1273	the benchmark probable maximum loss.
1274	2.  Beginning February 1, 2010, if the report under
1275	subparagraph 1. for any year indicates that the 100-year
1276	probable maximum loss attributable to wind-only coverages and
1277	the quota share program combined does not reflect a reduction of
1278	at least 25 percent from the benchmark, the board shall reduce
1279	the boundaries of the high-risk area eligible for wind-only
1280	coverages under this subsection in a manner calculated to reduce
1281	such probable maximum loss to an amount at least 25 percent
1282	below the benchmark.
1283	3.  Beginning February 1, 2015, if the report under
1284	subparagraph 1. for any year indicates that the 100-year
1285	probable maximum loss attributable to wind-only coverages and
1286	the quota share program combined does not reflect a reduction of
1287	at least 50 percent from the benchmark, the boundaries of the
1288	high-risk area eligible for wind-only coverages under this
1289	subsection shall be reduced by the elimination of any area that
1290	is not seaward of a line 1,000 feet inland from the Intracoastal
1291	Waterway.
1292	(x)(y)  In enacting the provisions of this section, the
1293	Legislature recognizes that both the Florida Windstorm
1294	Underwriting Association and the Residential Property and
1295	Casualty Joint Underwriting Association have entered into
1296	financing arrangements that obligate each entity to service its
1297	debts and maintain the capacity to repay funds secured under
1298	these financing arrangements. It is the intent of the
1299	Legislature that nothing in this section be construed to
1300	compromise, diminish, or interfere with the rights of creditors
1301	under such financing arrangements. It is further the intent of
1302	the Legislature to preserve the obligations of the Florida
1303	Windstorm Underwriting Association and Residential Property and
1304	Casualty Joint Underwriting Association with regard to
1305	outstanding financing arrangements, with such obligations
1306	passing entirely and unchanged to the corporation and,
1307	specifically, to the applicable account of the corporation. So
1308	long as any bonds, notes, indebtedness, or other financing
1309	obligations of the Florida Windstorm Underwriting Association or
1310	the Residential Property and Casualty Joint Underwriting
1311	Association are outstanding, under the terms of the financing
1312	documents pertaining to them, the governing board of the
1313	corporation shall have and shall exercise the authority to levy,
1314	charge, collect, and receive all premiums, assessments,
1315	surcharges, charges, revenues, and receipts that the
1316	associations had authority to levy, charge, collect, or receive
1317	under the provisions of subsection (2) and this subsection,
1318	respectively, as they existed on January 1, 2002, to provide
1319	moneys, without exercise of the authority provided by this
1320	subsection, in at least the amounts, and by the times, as would
1321	be provided under those former provisions of subsection (2) or
1322	this subsection, respectively, so that the value, amount, and
1323	collectability of any assets, revenues, or revenue source
1324	pledged or committed to, or any lien thereon securing such
1325	outstanding bonds, notes, indebtedness, or other financing
1326	obligations will not be diminished, impaired, or adversely
1327	affected by the amendments made by this act and to permit
1328	compliance with all provisions of financing documents pertaining
1329	to such bonds, notes, indebtedness, or other financing
1330	obligations, or the security or credit enhancement for them, and
1331	any reference in this subsection to bonds, notes, indebtedness,
1332	financing obligations, or similar obligations, of the
1333	corporation shall include like instruments or contracts of the
1334	Florida Windstorm Underwriting Association and the Residential
1335	Property and Casualty Joint Underwriting Association to the
1336	extent not inconsistent with the provisions of the financing
1337	documents pertaining to them.
1338	(y)(z)  The corporation shall not require the securing of
1339	flood insurance as a condition of coverage if the insured or
1340	applicant executes a form approved by the office affirming that
1341	flood insurance is not provided by the corporation and that if
1342	flood insurance is not secured by the applicant or insured in
1343	addition to coverage by the corporation, the risk will not be
1344	covered for flood damage. A corporation policyholder electing
1345	not to secure flood insurance and executing a form as provided
1346	herein making a claim for water damage against the corporation
1347	shall have the burden of proving the damage was not caused by
1348	flooding. Notwithstanding other provisions of this subsection,
1349	the corporation may deny coverage to an applicant or insured who
1350	refuses to execute the form described herein.
1351	(z)(aa)  A salaried employee of the corporation who
1352	performs policy administration services subsequent to the
1353	effectuation of a corporation policy is not required to be
1354	licensed as an agent under the provisions of s. 626.112.
1355	(aa)(bb)  By February 1, 2007, the corporation shall submit
1356	a report to the President of the Senate, the Speaker of the
1357	House of Representatives, the minority party leaders of the
1358	Senate and the House of Representatives, and the chairs of the
1359	standing committees of the Senate and the House of
1360	Representatives having jurisdiction over matters relating to
1361	property and casualty insurance. In preparing the report, the
1362	corporation shall consult with the Office of Insurance
1363	Regulation, the Department of Financial Services, and any other
1364	party the corporation determines appropriate. The report must
1365	include all findings and recommendations on the feasibility of
1366	requiring authorized insurers that issue and service personal
1367	and commercial residential policies and commercial
1368	nonresidential policies that provide coverage for basic property
1369	perils except for the peril of wind to issue and service for a
1370	fee personal and commercial residential policies and commercial
1371	nonresidential policies providing coverage for the peril of wind
1372	issued by the corporation. The report must include:
1373	1.  The expense savings to the corporation of issuing and
1374	servicing such policies as determined by a cost-benefit
1375	analysis.
1376	2.  The expenses and liability to authorized insurers
1377	associated with issuing and servicing such policies.
1378	3.  The effect on service to policyholders of the
1379	corporation relating to issuing and servicing such policies.
1380	4.  The effect on the producing agent of the corporation of
1381	issuing and servicing such policies.
1382	5.  Recommendations as to the amount of the fee which
1383	should be paid to authorized insurers for issuing and servicing
1384	such policies.
1385	6.  The effect that issuing and servicing such policies
1386	will have on the corporation's number of policies, total insured
1387	value, and probable maximum loss.
1388	(bb)(cc)  There shall be no liability on the part of, and
1389	no cause of action of any nature shall arise against, producing
1390	agents of record of the corporation or employees of such agents
1391	for insolvency of any take-out insurer.
1392	(cc)(dd)1.  For policies subject to nonrenewal as a result
1393	of the risk being no longer eligible for coverage due to being
1394	valued at $1 million or more, the corporation shall, directly or
1395	through the market assistance plan, make information from
1396	confidential underwriting and claims files of policyholders
1397	available only to licensed general lines agents who register
1398	with the corporation to receive such information according to
1399	the following procedures:
1400	2.  By August 1, 2006, the corporation shall provide such
1401	policyholders who are not eligible for renewal the opportunity
1402	to request in writing, within 30 days after the notification is
1403	sent, that information from their confidential underwriting and
1404	claims files not be released to licensed general lines agents
1405	registered pursuant to this paragraph.
1406	3.  By August 1, 2006, the corporation shall make available
1407	to licensed general lines agents the registration procedures to
1408	be used to obtain confidential information from underwriting and
1409	claims files for such policies not eligible for renewal. As a
1410	condition of registration, the corporation shall require the
1411	licensed general lines agent to attest that the agent has the
1412	experience and relationships with authorized or surplus lines
1413	carriers to attempt to offer replacement coverage for such
1414	policies.
1415	4.  By September 1, 2006, the corporation shall make
1416	available through a secured website to licensed general lines
1417	agents registered pursuant to this paragraph application,
1418	rating, loss history, mitigation, and policy type information
1419	relating to such policies not eligible for renewal and for which
1420	the policyholder has not requested the corporation withhold such
1421	information. The registered licensed general lines agent may use
1422	such information to contact and assist the policyholder in
1423	securing replacement policies, and the agent may disclose to the
1424	policyholder that such information was obtained from the
1425	corporation.
1426	(dd)(ee)  The assets of the corporation may be invested and
1427	managed by the State Board of Administration.
1428	Section 6.  Subsection (1) of section 624.4072, Florida
1429	Statutes, is amended to read:
1430	624.4072  Minority-owned property and casualty insurers;
1431	limited exemption for taxation and assessments.--
1432	(1)  A minority business that is at least 51 percent owned
1433	by minority persons, as defined in s. 288.703(3), initially
1434	issued a certificate of authority in this state as an authorized
1435	insurer after May 1, 1998, and before January 1, 2002, to write
1436	property and casualty insurance shall be exempt, for a period
1437	not to exceed 10 years from the date of receiving its
1438	certificate of authority, from the following taxes and
1439	assessments:
1440	(a)  taxes imposed under ss. 175.101, 185.08, and 624.509;
1441	(b)  Assessments by the Citizens Property Insurance
1442	Corporation, except for emergency assessments collected from
1443	policyholders pursuant to s. 627.351(6)(b)3.d. Any such insurer
1444	shall be a member insurer of the Citizens Property Insurance
1445	Corporation. The premiums of such insurer shall be included in
1446	determining, for the Citizens Property Insurance Corporation,
1447	the aggregate statewide direct written premium for the subject
1448	lines of business for all member insurers.
1449	Section 7.  Subsections (3), (4), (5), (6), and (7) of
1450	section 627.3511, Florida Statutes, are amended to read:
1451	627.3511  Depopulation of Citizens Property Insurance
1452	Corporation.--
1453	(3)  EXEMPTION FROM DEFICIT ASSESSMENTS.--
1454	(a)  The calculation of an insurer's assessment liability
1455	under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in
1456	any calendar year removes 50,000 or more risks from the Citizens
1457	Property Insurance Corporation, either by issuance of a policy
1458	upon expiration or cancellation of the corporation policy or by
1459	assumption of the corporation's obligations with respect to in-
1460	force policies, exclude such removed policies for the succeeding
1461	3 years, as follows:
1462	1.  In the first year following removal of the risks, the
1463	risks are excluded from the calculation to the extent of 100
1464	percent.
1465	2.  In the second year following removal of the risks, the
1466	risks are excluded from the calculation to the extent of 75
1467	percent.
1468	3.  In the third year following removal of the risks, the
1469	risks are excluded from the calculation to the extent of 50
1470	percent.
1471
1472	If the removal of risks is accomplished through assumption of
1473	obligations with respect to in-force policies, the corporation
1474	shall pay to the assuming insurer all unearned premium with
1475	respect to such policies less any policy acquisition costs
1476	agreed to by the corporation and assuming insurer. The term
1477	"policy acquisition costs" is defined as costs of issuance of
1478	the policy by the corporation which includes agent commissions,
1479	servicing company fees, and premium tax. This paragraph does not
1480	apply to an insurer that, at any time within 5 years before
1481	removing the risks, had a market share in excess of 0.1 percent
1482	of the statewide aggregate gross direct written premium for any
1483	line of property insurance, or to an affiliate of such an
1484	insurer. This paragraph does not apply unless either at least 40
1485	percent of the risks removed from the corporation are located in
1486	Dade, Broward, and Palm Beach Counties, or at least 30 percent
1487	of the risks removed from the corporation are located in such
1488	counties and an additional 50 percent of the risks removed from
1489	the corporation are located in other coastal counties.
1490	(b)  An insurer that first wrote personal lines residential
1491	property coverage in this state on or after July 1, 1994, is
1492	exempt from regular deficit assessments imposed pursuant to s.
1493	627.351(6)(b)3.a. and b., but not emergency assessments
1494	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
1495	of the Citizens Property Insurance Corporation until the earlier
1496	of the following:
1497	1.  The end of the calendar year in which it first wrote
1498	0.5 percent or more of the statewide aggregate direct written
1499	premium for any line of residential property coverage; or
1500	2.  December 31, 1997, or December 31 of the third year in
1501	which it wrote such coverage in this state, whichever is later.
1502	(c)  Other than an insurer that is exempt under paragraph
1503	(b), an insurer that in any calendar year increases its total
1504	structure exposure subject to wind coverage by 25 percent or
1505	more over its exposure for the preceding calendar year is, with
1506	respect to that year, exempt from deficit assessments imposed
1507	pursuant to s. 627.351(6)(b)3.a. and b., but not emergency
1508	assessments collected from policyholders pursuant to s.
1509	627.351(6)(b)3.d., of the Citizens Property Insurance
1510	Corporation attributable to such increase in exposure.
1511	(d)  Any exemption or credit from regular assessments
1512	authorized by this section shall last no longer than 3 years
1513	following the cancellation or expiration of the policy by the
1514	corporation. With the approval of the office, the board may
1515	extend such credits for an additional year if the insurer
1516	guarantees an additional year of renewability for all policies
1517	removed from the corporation, or for 2 additional years if the
1518	insurer guarantees 2 additional years of renewability for all
1519	policies so removed.
1520	(3)(4)  AGENT BONUS.--When the corporation enters into a
1521	contractual agreement for a take-out plan that provides a bonus
1522	to the insurer, the producing agent of record of the corporation
1523	policy is entitled to retain any unearned commission on such
1524	policy, and the insurer shall either:
1525	(a)  Pay to the producing agent of record of the
1526	association policy, for the first year, an amount that is the
1527	greater of the insurer's usual and customary commission for the
1528	type of policy written or a fee equal to the usual and customary
1529	commission of the corporation; or
1530	(b)  Offer to allow the producing agent of record of the
1531	corporation policy to continue servicing the policy for a period
1532	of not less than 1 year and offer to pay the agent the greater
1533	of the insurer's or the corporation's usual and customary
1534	commission for the type of policy written.
1535
1536	If the producing agent is unwilling or unable to accept
1537	appointment, the new insurer shall pay the agent in accordance
1538	with paragraph (a). The requirement of this subsection that the
1539	producing agent of record is entitled to retain the unearned
1540	commission on an association policy does not apply to a policy
1541	for which coverage has been provided in the association for 30
1542	days or less or for which a cancellation notice has been issued
1543	pursuant to s. 627.351(6)(c)11. during the first 30 days of
1544	coverage.
1545	(4)(5)  APPLICABILITY.--
1546	(a)  The take-out bonus provided by subsection (2) applies
1547	and the exemption from assessment provided by paragraph (3)(a)
1548	apply only if the corporation policy is replaced by either a
1549	standard policy including wind coverage or, if consistent with
1550	the insurer's underwriting rules as filed with the office, a
1551	basic policy including wind coverage; however, with respect to
1552	risks located in areas where coverage through the high-risk
1553	account of the corporation is available, the replacement policy
1554	need not provide wind coverage. The insurer must renew the
1555	replacement policy at approved rates on substantially similar
1556	terms for four additional 1-year terms, unless canceled or not
1557	renewed by the policyholder. If an insurer assumes the
1558	corporation's obligations for a policy, it must issue a
1559	replacement policy for a 1-year term upon expiration of the
1560	corporation policy and must renew the replacement policy at
1561	approved rates on substantially similar terms for four
1562	additional 1-year terms, unless canceled or not renewed by the
1563	policyholder. For each replacement policy canceled or nonrenewed
1564	by the insurer for any reason during the 5-year coverage period
1565	required by this paragraph, the insurer must remove from the
1566	corporation one additional policy covering a risk similar to the
1567	risk covered by the canceled or nonrenewed policy. In addition
1568	to these requirements, the corporation must place the bonus
1569	moneys in escrow for a period of 5 years; such moneys may be
1570	released from escrow only to pay claims. If the policy is
1571	canceled or nonrenewed before the end of the 5-year period, the
1572	amount of the take-out bonus must be prorated for the time
1573	period the policy was insured. A take-out bonus provided by
1574	subsection (2) or subsection (5)(6) shall not be considered
1575	premium income for purposes of taxes and assessments under the
1576	Florida Insurance Code and shall remain the property of the
1577	corporation, subject to the prior security interest of the
1578	insurer under the escrow agreement until it is released from
1579	escrow, and after it is released from escrow it shall be
1580	considered an asset of the insurer and credited to the insurer's
1581	capital and surplus.
1582	(b)  It is the intent of the Legislature that an insurer
1583	eligible for the exemption under paragraph (3)(a) establish a
1584	preference in appointment of agents for those agents who lose a
1585	substantial amount of business as a result of risks being
1586	removed from the corporation.
1587	(5)(6)  COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--
1588	(a)  The corporation shall pay a bonus to an insurer for
1589	each commercial residential policy that the insurer removes from
1590	the corporation pursuant to an approved take-out plan, either by
1591	issuance of a new policy upon expiration of the corporation
1592	policy or by assumption of the corporation's obligations with
1593	respect to an in-force policy. The corporation board shall
1594	determine the amount of the bonus based on such factors as the
1595	coverage provided, relative hurricane risk, the length of time
1596	that the property has been covered by the corporation, and the
1597	criteria specified in paragraphs (b) and (c). The amount of the
1598	bonus with respect to a particular policy may not exceed 25
1599	percent of the corporation's 1-year premium for the policy. Such
1600	payment is subject to approval of the corporation board. In
1601	order to qualify for the bonus under this subsection, the take-
1602	out plan must include policies reflecting at least $100 million
1603	in structure exposure.
1604	(b)  In order for a plan to qualify for approval:
1605	1.  At least 40 percent of the policies removed from the
1606	corporation under the plan must be located in Dade, Broward, and
1607	Palm Beach Counties, or at least 30 percent of the policies
1608	removed from the corporation under the plan must be located in
1609	such counties and an additional 50 percent of the policies
1610	removed from the corporation must be located in other coastal
1611	counties.
1612	2.  The insurer must renew the replacement policy at
1613	approved rates on substantially similar terms for two additional
1614	1-year terms, unless canceled or nonrenewed by the insurer for a
1615	lawful reason other than reduction of hurricane exposure. If an
1616	insurer assumes the corporation's obligations for a policy, it
1617	must issue a replacement policy for a 1-year term upon
1618	expiration of the corporation policy and must renew the
1619	replacement policy at approved rates on substantially similar
1620	terms for two additional 1-year terms, unless canceled by the
1621	insurer for a lawful reason other than reduction of hurricane
1622	exposure. For each replacement policy canceled or nonrenewed by
1623	the insurer for any reason during the 3-year coverage period
1624	required by this subparagraph, the insurer must remove from the
1625	corporation one additional policy covering a risk similar to the
1626	risk covered by the canceled or nonrenewed policy.
1627	(c)  A take-out plan is deemed approved unless the office,
1628	within 120 days after the board votes to recommend the plan,
1629	disapproves the plan based on:
1630	1.  The capacity of the insurer to absorb the policies
1631	proposed to be taken out of the corporation and the
1632	concentration of risks of those policies.
1633	2.  Whether the geographic and risk characteristics of
1634	policies in the proposed take-out plan serve to reduce the
1635	exposure of the corporation sufficiently to justify the bonus.
1636	3.  Whether coverage for risks to be taken out otherwise
1637	exists in the admitted voluntary market.
1638	4.  The degree to which the take-out bonus is promoting new
1639	capital being allocated by the insurer to residential property
1640	coverage in this state.
1641	(d)  The calculation of an insurer's regular assessment
1642	liability under s. 627.351(6)(b)3.a. and b., but not emergency
1643	assessments collected from policyholders pursuant to s.
1644	627.351(6)(b)3.d., shall, with respect to commercial residential
1645	policies removed from the corporation under an approved take-out
1646	plan, exclude such removed policies for the succeeding 3 years,
1647	as follows:
1648	1.  In the first year following removal of the policies,
1649	the policies are excluded from the calculation to the extent of
1650	100 percent.
1651	2.  In the second year following removal of the policies,
1652	the policies are excluded from the calculation to the extent of
1653	75 percent.
1654	3.  In the third year following removal of the policies,
1655	the policies are excluded from the calculation to the extent of
1656	50 percent.
1657	(e)  An insurer that first wrote commercial residential
1658	property coverage in this state on or after June 1, 1996, is
1659	exempt from regular assessments under s. 627.351(6)(b)3.a. and
1660	b., but not emergency assessments collected from policyholders
1661	pursuant to s. 627.351(6)(b)3.d., with respect to commercial
1662	residential policies until the earlier of:
1663	1.  The end of the calendar year in which such insurer
1664	first wrote 0.5 percent or more of the statewide aggregate
1665	direct written premium for commercial residential property
1666	coverage; or
1667	2.  December 31 of the third year in which such insurer
1668	wrote commercial residential property coverage in this state.
1669	(f)  An insurer that is not otherwise exempt from regular
1670	assessments under s. 627.351(6)(b)3.a. and b. with respect to
1671	commercial residential policies is, for any calendar year in
1672	which such insurer increased its total commercial residential
1673	hurricane exposure by 25 percent or more over its exposure for
1674	the preceding calendar year, exempt from regular assessments
1675	under s. 627.351(6)(b)3.a. and b., but not emergency assessments
1676	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
1677	attributable to such increased exposure.
1678	(6)(7)  A minority business, which is at least 51 percent
1679	owned by minority persons as described in s. 288.703(3),
1680	desiring to operate or become licensed as a property and
1681	casualty insurer may exempt up to $50 of the escrow requirements
1682	of the take-out bonus, as described in this section. Such
1683	minority business, which has applied for a certificate of
1684	authority to engage in business as a property and casualty
1685	insurer, may simultaneously file the business' proposed take-out
1686	plan, as described in this section, with the corporation.
1687	Section 8.  Subsection (1) of section 627.3517, Florida
1688	Statutes, is amended to read:
1689	627.3517  Consumer choice.--
1690	(1)  Except as provided in subsection (2), no provision of
1691	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
1692	impair the right of any insurance risk apportionment plan
1693	policyholder, upon receipt of any keepout or take-out offer, to
1694	retain his or her current agent, so long as that agent is duly
1695	licensed and appointed by the insurance risk apportionment plan
1696	or otherwise authorized to place business with the insurance
1697	risk apportionment plan. This right shall not be canceled,
1698	suspended, impeded, abridged, or otherwise compromised by any
1699	rule, plan of operation, or depopulation plan, whether through
1700	keepout, take-out, midterm assumption, or any other means, of
1701	any insurance risk apportionment plan or depopulation plan,
1702	including, but not limited to, those described in s. 627.351, s.
1703	627.3511, or s. 627.3515. The commission shall adopt any rules
1704	necessary to cause any insurance risk apportionment plan or
1705	market assistance plan under such sections to demonstrate that
1706	the operations of the plan do not interfere with, promote, or
1707	allow interference with the rights created under this section.
1708	If the policyholder's current agent is unable or unwilling to be
1709	appointed with the insurer making the take-out or keepout offer,
1710	the policyholder shall not be disqualified from participation in
1711	the appropriate insurance risk apportionment plan because of an
1712	offer of coverage in the voluntary market. An offer of full
1713	property insurance coverage by the insurer currently insuring
1714	either the ex-wind or wind-only coverage on the policy to which
1715	the offer applies shall not be considered a take-out or keepout
1716	offer. Any rule, plan of operation, or plan of depopulation,
1717	through keepout, take-out, midterm assumption, or any other
1718	means, of any property insurance risk apportionment plan under
1719	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
1720	and 627.3511(3)(4).
1721
1722	====== D I R E C T O R Y  A M E N D M E N T ======
1723	On page 9, lines 7-11,
1724	remove:  all of said lines,
1725
1726	and insert:
1727	Section 5.  Paragraphs (a), (b), (c), (n), (p), (r), (s),
1728	(t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), and
1729	(ee) of subsection (6) of section 627.351, Florida Statutes, as
1730	amended by section 21 of chapter 2007-1, Laws of Florida, are
1731	amended to read:
1732
1733	========= T I T L E  A M E N D M E N T =========
1734	On page 1, lines 22-24,
1735	remove:  all of said lines,
1736	and insert:
1737	the state; deleting provisions relating to assessing assessable
1738	insurers; deleting provisions relating to what constitutes an
1739	assessable insurer; deleting provisions relating to deficit in
1740	an account; revising the definition of the term "assessments";
1741	deleting provisions relating to subject lines of business;
1742	revising powers of the corporation to levy certain assessments;
1743	deleting provisions relating to unsold bonds; revising powers of
1744	the corporation; deleting provisions relating to credits and
1745	exemptions from assessments; revising provisions for determining
1746	eligibility for coverage under the corporation; reinstating
1747	certain rate filings by the corporation; deleting provisions
1748	relating to the uncollected assessments; deleting provisions
1749	relieving assessable insurers of liability under certain
1750	circumstances; amending ss. 624.4072, 627.3511, and 627.3517,
1751	F.S.; conforming provisions to changes made by this act;
1752	correcting cross-references; amending s.

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