Amendment
Bill No. 2498

Amendment No. 746895

CHAMBER ACTION
Senate		House
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1	Representative(s) Ross and Gardiner offered the following:
2
3	Amendment to Amendment (900607) (with title amendment)
4	Remove lines 905-1939
5	and insert:
6	(b)1.  All insurers authorized to write one or more subject
7	lines of business in this state are subject to assessment by the
8	corporation and, for the purposes of this subsection, are
9	referred to collectively as "assessable insurers." Insurers
10	writing one or more subject lines of business in this state
11	pursuant to part VIII of chapter 626 are not assessable
12	insurers, but insureds who procure one or more subject lines of
13	business in this state pursuant to part VIII of chapter 626 are
14	subject to assessment by the corporation and are referred to
15	collectively as "assessable insureds." An authorized insurer's
16	assessment liability shall begin on the first day of the
17	calendar year following the year in which the insurer was issued
18	a certificate of authority to transact insurance for subject
19	lines of business in this state and shall terminate 1 year after
20	the end of the first calendar year during which the insurer no
21	longer holds a certificate of authority to transact insurance
22	for subject lines of business in this state.
23	1.2.a.  All revenues, assets, liabilities, losses, and
24	expenses of the corporation shall be divided into three separate
25	accounts as follows:
26	(I)  A personal lines account for personal residential
27	policies issued by the corporation or issued by the Residential
28	Property and Casualty Joint Underwriting Association and renewed
29	by the corporation that provide comprehensive, multiperil
30	coverage on risks that are not located in areas eligible for
31	coverage in the Florida Windstorm Underwriting Association as
32	those areas were defined on January 1, 2002, and for such
33	policies that do not provide coverage for the peril of wind on
34	risks that are located in such areas;
35	(II)  A commercial lines account for commercial residential
36	and commercial nonresidential policies issued by the corporation
37	or issued by the Residential Property and Casualty Joint
38	Underwriting Association and renewed by the corporation that
39	provide coverage for basic property perils on risks that are not
40	located in areas eligible for coverage in the Florida Windstorm
41	Underwriting Association as those areas were defined on January
42	1, 2002, and for such policies that do not provide coverage for
43	the peril of wind on risks that are located in such areas; and
44	(III)  A high-risk account for personal residential
45	policies and commercial residential and commercial
46	nonresidential property policies issued by the corporation or
47	transferred to the corporation that provide coverage for the
48	peril of wind on risks that are located in areas eligible for
49	coverage in the Florida Windstorm Underwriting Association as
50	those areas were defined on January 1, 2002. Subject to the
51	approval of a business plan by the Financial Services Commission
52	and Legislative Budget Commission as provided in this sub-sub-
53	subparagraph, but no earlier than March 31, 2007, the
54	corporation may offer policies that provide multiperil coverage
55	and the corporation shall continue to offer policies that
56	provide coverage only for the peril of wind for risks located in
57	areas eligible for coverage in the high-risk account. In issuing
58	multiperil coverage, the corporation may use its approved policy
59	forms and rates for the personal lines account. An applicant or
60	insured who is eligible to purchase a multiperil policy from the
61	corporation may purchase a multiperil policy from an authorized
62	insurer without prejudice to the applicant's or insured's
63	eligibility to prospectively purchase a policy that provides
64	coverage only for the peril of wind from the corporation. An
65	applicant or insured who is eligible for a corporation policy
66	that provides coverage only for the peril of wind may elect to
67	purchase or retain such policy and also purchase or retain
68	coverage excluding wind from an authorized insurer without
69	prejudice to the applicant's or insured's eligibility to
70	prospectively purchase a policy that provides multiperil
71	coverage from the corporation. It is the goal of the Legislature
72	that there would be an overall average savings of 10 percent or
73	more for a policyholder who currently has a wind-only policy
74	with the corporation, and an ex-wind policy with a voluntary
75	insurer or the corporation, and who then obtains a multiperil
76	policy from the corporation. It is the intent of the Legislature
77	that the offer of multiperil coverage in the high-risk account
78	be made and implemented in a manner that does not adversely
79	affect the tax-exempt status of the corporation or
80	creditworthiness of or security for currently outstanding
81	financing obligations or credit facilities of the high-risk
82	account, the personal lines account, or the commercial lines
83	account. By March 1, 2007, the corporation shall prepare and
84	submit for approval by the Financial Services Commission and
85	Legislative Budget Commission a report detailing the
86	corporation's business plan for issuing multiperil coverage in
87	the high-risk account. The business plan shall be approved or
88	disapproved within 30 days after receipt, as submitted or
89	modified and resubmitted by the corporation. The business plan
90	must include: the impact of such multiperil coverage on the
91	corporation's financial resources, the impact of such multiperil
92	coverage on the corporation's tax-exempt status, the manner in
93	which the corporation plans to implement the processing of
94	applications and policy forms for new and existing
95	policyholders, the impact of such multiperil coverage on the
96	corporation's ability to deliver customer service at the high
97	level required by this subsection, the ability of the
98	corporation to process claims, the ability of the corporation to
99	quote and issue policies, the impact of such multiperil coverage
100	on the corporation's agents, the impact of such multiperil
101	coverage on the corporation's existing policyholders, and the
102	impact of such multiperil coverage on rates and premium. The
103	high-risk account must also include quota share primary
104	insurance under subparagraph (c)2. The area eligible for
105	coverage under the high-risk account also includes the area
106	within Port Canaveral, which is bordered on the south by the
107	City of Cape Canaveral, bordered on the west by the Banana
108	River, and bordered on the north by Federal Government property.
109	b.  The three separate accounts must be maintained as long
110	as financing obligations entered into by the Florida Windstorm
111	Underwriting Association or Residential Property and Casualty
112	Joint Underwriting Association are outstanding, in accordance
113	with the terms of the corresponding financing documents. When
114	the financing obligations are no longer outstanding, in
115	accordance with the terms of the corresponding financing
116	documents, the corporation may use a single account for all
117	revenues, assets, liabilities, losses, and expenses of the
118	corporation. Consistent with the requirement of this
119	subparagraph and prudent investment policies that minimize the
120	cost of carrying debt, the board shall exercise its best efforts
121	to retire existing debt or to obtain approval of necessary
122	parties to amend the terms of existing debt, so as to structure
123	the most efficient plan to consolidate the three separate
124	accounts into a single account. By February 1, 2007, the board
125	shall submit a report to the Financial Services Commission, the
126	President of the Senate, and the Speaker of the House of
127	Representatives which includes an analysis of consolidating the
128	accounts, the actions the board has taken to minimize the cost
129	of carrying debt, and its recommendations for executing the most
130	efficient plan.
131	c.  Creditors of the Residential Property and Casualty
132	Joint Underwriting Association shall have a claim against, and
133	recourse to, the accounts referred to in sub-sub-subparagraphs
134	a.(I) and (II) and shall have no claim against, or recourse to,
135	the account referred to in sub-sub-subparagraph a.(III).
136	Creditors of the Florida Windstorm Underwriting Association
137	shall have a claim against, and recourse to, the account
138	referred to in sub-sub-subparagraph a.(III) and shall have no
139	claim against, or recourse to, the accounts referred to in sub-
140	sub-subparagraphs a.(I) and (II).
141	d.  Revenues, assets, liabilities, losses, and expenses not
142	attributable to particular accounts shall be prorated among the
143	accounts.
144	e.  The Legislature finds that the revenues of the
145	corporation are revenues that are necessary to meet the
146	requirements set forth in documents authorizing the issuance of
147	bonds under this subsection.
148	f.  No part of the income of the corporation may inure to
149	the benefit of any private person.
150	2.3.  With respect to a deficit in an account:
151	a.  When the deficit incurred in a particular calendar year
152	is not greater than 10 percent of the aggregate statewide direct
153	written premium for the subject lines of business for the prior
154	calendar year, the entire deficit shall be recovered through
155	regular assessments of assessable insurers under paragraph (p)
156	and assessable insureds.
157	b.  When the deficit incurred in a particular calendar year
158	exceeds 10 percent of the aggregate statewide direct written
159	premium for the subject lines of business for the prior calendar
160	year, the corporation shall levy regular assessments on
161	assessable insurers under paragraph (p) and on assessable
162	insureds in an amount equal to the greater of 10 percent of the
163	deficit or 10 percent of the aggregate statewide direct written
164	premium for the subject lines of business for the prior calendar
165	year. Any remaining deficit shall be recovered through emergency
166	assessments under sub-subparagraph d.
167	c.  Each assessable insurer's share of the amount being
168	assessed under sub-subparagraph a. or sub-subparagraph b. shall
169	be in the proportion that the assessable insurer's direct
170	written premium for the subject lines of business for the year
171	preceding the assessment bears to the aggregate statewide direct
172	written premium for the subject lines of business for that year.
173	The assessment percentage applicable to each assessable insured
174	is the ratio of the amount being assessed under sub-subparagraph
175	a. or sub-subparagraph b. to the aggregate statewide direct
176	written premium for the subject lines of business for the prior
177	year. Assessments levied by the corporation on assessable
178	insurers under sub-subparagraphs a. and b. shall be paid as
179	required by the corporation's plan of operation and paragraph
180	(p). Notwithstanding any other provision of this subsection, the
181	aggregate amount of a regular assessment for a deficit incurred
182	in a particular calendar year shall be reduced by the estimated
183	amount to be received by the corporation from the Citizens
184	policyholder surcharge under subparagraph (c)11. and the amount
185	collected or estimated to be collected from the assessment on
186	Citizens policyholders pursuant to sub-subparagraph i.
187	Assessments levied by the corporation on assessable insureds
188	under sub-subparagraphs a. and b. shall be collected by the
189	surplus lines agent at the time the surplus lines agent collects
190	the surplus lines tax required by s. 626.932 and shall be paid
191	to the Florida Surplus Lines Service Office at the time the
192	surplus lines agent pays the surplus lines tax to the Florida
193	Surplus Lines Service Office. Upon receipt of regular
194	assessments from surplus lines agents, the Florida Surplus Lines
195	Service Office shall transfer the assessments directly to the
196	corporation as determined by the corporation.
197	d.  Upon a determination by the board of governors that a
198	deficit in an account exceeds the amount that will be recovered
199	through regular assessments under sub-subparagraph a. or sub-
200	subparagraph b., the board shall levy, after verification by the
201	office, emergency assessments, for as many years as necessary to
202	cover the deficits, to be collected by assessable insurers and
203	the corporation and collected from assessable insureds upon
204	issuance or renewal of policies for subject lines of business,
205	excluding National Flood Insurance policies. The amount of the
206	emergency assessment collected in a particular year shall be a
207	uniform percentage of that year's direct written premium for
208	subject lines of business and all accounts of the corporation,
209	excluding National Flood Insurance Program policy premiums, as
210	annually determined by the board and verified by the office. The
211	office shall verify the arithmetic calculations involved in the
212	board's determination within 30 days after receipt of the
213	information on which the determination was based.
214	Notwithstanding any other provision of law, the corporation and
215	each assessable insurer that writes subject lines of business
216	shall collect emergency assessments from its policyholders
217	without such obligation being affected by any credit,
218	limitation, exemption, or deferment. Emergency assessments
219	levied by the corporation on assessable insureds shall be
220	collected by the surplus lines agent at the time the surplus
221	lines agent collects the surplus lines tax required by s.
222	626.932 and shall be paid to the Florida Surplus Lines Service
223	Office at the time the surplus lines agent pays the surplus
224	lines tax to the Florida Surplus Lines Service Office. The
225	emergency assessments so collected shall be transferred directly
226	to the corporation on a periodic basis as determined by the
227	corporation and shall be held by the corporation solely in the
228	applicable account. The aggregate amount of emergency
229	assessments levied for an account under this sub-subparagraph in
230	any calendar year may not exceed the greater of 10 percent of
231	the amount needed to cover the original deficit, plus interest,
232	fees, commissions, required reserves, and other costs associated
233	with financing of the original deficit, or 10 percent of the
234	aggregate statewide direct written premium for subject lines of
235	business and for all accounts of the corporation for the prior
236	year, plus interest, fees, commissions, required reserves, and
237	other costs associated with financing the original deficit.
238	e.  The corporation may pledge the proceeds of assessments,
239	projected recoveries from the Florida Hurricane Catastrophe
240	Fund, other insurance and reinsurance recoverables, policyholder
241	surcharges and other surcharges, and other funds available to
242	the corporation as the source of revenue for and to secure bonds
243	issued under paragraph (p), bonds or other indebtedness issued
244	under subparagraph (c)3., or lines of credit or other financing
245	mechanisms issued or created under this subsection, or to retire
246	any other debt incurred as a result of deficits or events giving
247	rise to deficits, or in any other way that the board determines
248	will efficiently recover such deficits. The purpose of the lines
249	of credit or other financing mechanisms is to provide additional
250	resources to assist the corporation in covering claims and
251	expenses attributable to a catastrophe. As used in this
252	subsection, the term "assessments" includes regular assessments
253	under sub-subparagraph a., sub-subparagraph b., or subparagraph
254	(p)1. and emergency assessments under sub-subparagraph d.
255	Emergency assessments collected under sub-subparagraph d. are
256	not part of an insurer's rates, are not premium, and are not
257	subject to premium tax, fees, or commissions; however, failure
258	to pay the emergency assessment shall be treated as failure to
259	pay premium. The emergency assessments under sub-subparagraph d.
260	shall continue as long as any bonds issued or other indebtedness
261	incurred with respect to a deficit for which the assessment was
262	imposed remain outstanding, unless adequate provision has been
263	made for the payment of such bonds or other indebtedness
264	pursuant to the documents governing such bonds or other
265	indebtedness.
266	f.  As used in this subsection, the term "subject lines of
267	business" means insurance written by assessable insurers or
268	procured by assessable insureds for all property and casualty
269	lines of business in this state, but not including workers'
270	compensation or medical malpractice. As used in the sub-
271	subparagraph, the term "property and casualty lines of business"
272	includes all lines of business identified on Form 2, Exhibit of
273	Premiums and Losses, in the annual statement required of
274	authorized insurers by s. 624.424 and any rule adopted under
275	this section, except for those lines identified as accident and
276	health insurance and except for policies written under the
277	National Flood Insurance Program or the Federal Crop Insurance
278	Program. For purposes of this sub-subparagraph, the term
279	"workers' compensation" includes both workers' compensation
280	insurance and excess workers' compensation insurance.
281	g.  The Florida Surplus Lines Service Office shall
282	determine annually the aggregate statewide written premium in
283	subject lines of business procured by assessable insureds and
284	shall report that information to the corporation in a form and
285	at a time the corporation specifies to ensure that the
286	corporation can meet the requirements of this subsection and the
287	corporation's financing obligations.
288	h.  The Florida Surplus Lines Service Office shall verify
289	the proper application by surplus lines agents of assessment
290	percentages for regular assessments and emergency assessments
291	levied under this subparagraph on assessable insureds and shall
292	assist the corporation in ensuring the accurate, timely
293	collection and payment of assessments by surplus lines agents as
294	required by the corporation.
295	b.i.  If a deficit is incurred in any account in 2008 or
296	thereafter, the board of governors shall levy an immediate
297	assessment against the premium of each nonhomestead property
298	policyholder in all accounts of the corporation, as a uniform
299	percentage of the premium of the policy of up to 10 percent of
300	such premium, which funds shall be used to offset the deficit.
301	If this assessment is insufficient to eliminate the deficit, the
302	board of governors shall levy an additional assessment against
303	all policyholders of the corporation, which shall be collected
304	at the time of issuance or renewal of a policy, as a uniform
305	percentage of the premium for the policy of up to 10 percent of
306	such premium, which funds shall be used to further offset the
307	deficit.
308	c.j.  The board of governors shall maintain separate
309	accounting records that consolidate data for nonhomestead
310	properties, including, but not limited to, number of policies,
311	insured values, premiums written, and losses. The board of
312	governors shall annually report to the office and the
313	Legislature a summary of such data.
314	(c)  The plan of operation of the corporation:
315	1.  Must provide for adoption of residential property and
316	casualty insurance policy forms and commercial residential and
317	nonresidential property insurance forms, which forms must be
318	approved by the office prior to use. The corporation shall adopt
319	the following policy forms:
320	a.  Standard personal lines policy forms that are
321	comprehensive multiperil policies providing full coverage of a
322	residential property equivalent to the coverage provided in the
323	private insurance market under an HO-3, HO-4, or HO-6 policy.
324	b.  Basic personal lines policy forms that are policies
325	similar to an HO-8 policy or a dwelling fire policy that provide
326	coverage meeting the requirements of the secondary mortgage
327	market, but which coverage is more limited than the coverage
328	under a standard policy.
329	c.  Commercial lines residential and nonresidential policy
330	forms that are generally similar to the basic perils of full
331	coverage obtainable for commercial residential structures and
332	commercial nonresidential structures in the admitted voluntary
333	market.
334	d.  Personal lines and commercial lines residential
335	property insurance forms that cover the peril of wind only. The
336	forms are applicable only to residential properties located in
337	areas eligible for coverage under the high-risk account referred
338	to in sub-subparagraph (b)1.2.a.
339	e.  Commercial lines nonresidential property insurance
340	forms that cover the peril of wind only. The forms are
341	applicable only to nonresidential properties located in areas
342	eligible for coverage under the high-risk account referred to in
343	sub-subparagraph (b)1.2.a.
344	f.  The corporation may adopt variations of the policy
345	forms listed in sub-subparagraphs a.-e. that contain more
346	restrictive coverage.
347	2.a.  Must provide that the corporation adopt a program in
348	which the corporation and authorized insurers enter into quota
349	share primary insurance agreements for hurricane coverage, as
350	defined in s. 627.4025(2)(a), for eligible risks, and adopt
351	property insurance forms for eligible risks which cover the
352	peril of wind only. As used in this subsection, the term:
353	(I)  "Quota share primary insurance" means an arrangement
354	in which the primary hurricane coverage of an eligible risk is
355	provided in specified percentages by the corporation and an
356	authorized insurer. The corporation and authorized insurer are
357	each solely responsible for a specified percentage of hurricane
358	coverage of an eligible risk as set forth in a quota share
359	primary insurance agreement between the corporation and an
360	authorized insurer and the insurance contract. The
361	responsibility of the corporation or authorized insurer to pay
362	its specified percentage of hurricane losses of an eligible
363	risk, as set forth in the quota share primary insurance
364	agreement, may not be altered by the inability of the other
365	party to the agreement to pay its specified percentage of
366	hurricane losses. Eligible risks that are provided hurricane
367	coverage through a quota share primary insurance arrangement
368	must be provided policy forms that set forth the obligations of
369	the corporation and authorized insurer under the arrangement,
370	clearly specify the percentages of quota share primary insurance
371	provided by the corporation and authorized insurer, and
372	conspicuously and clearly state that neither the authorized
373	insurer nor the corporation may be held responsible beyond its
374	specified percentage of coverage of hurricane losses.
375	(II)  "Eligible risks" means personal lines residential and
376	commercial lines residential risks that meet the underwriting
377	criteria of the corporation and are located in areas that were
378	eligible for coverage by the Florida Windstorm Underwriting
379	Association on January 1, 2002.
380	b.  The corporation may enter into quota share primary
381	insurance agreements with authorized insurers at corporation
382	coverage levels of 90 percent and 50 percent.
383	c.  If the corporation determines that additional coverage
384	levels are necessary to maximize participation in quota share
385	primary insurance agreements by authorized insurers, the
386	corporation may establish additional coverage levels. However,
387	the corporation's quota share primary insurance coverage level
388	may not exceed 90 percent.
389	d.  Any quota share primary insurance agreement entered
390	into between an authorized insurer and the corporation must
391	provide for a uniform specified percentage of coverage of
392	hurricane losses, by county or territory as set forth by the
393	corporation board, for all eligible risks of the authorized
394	insurer covered under the quota share primary insurance
395	agreement.
396	e.  Any quota share primary insurance agreement entered
397	into between an authorized insurer and the corporation is
398	subject to review and approval by the office. However, such
399	agreement shall be authorized only as to insurance contracts
400	entered into between an authorized insurer and an insured who is
401	already insured by the corporation for wind coverage.
402	f.  For all eligible risks covered under quota share
403	primary insurance agreements, the exposure and coverage levels
404	for both the corporation and authorized insurers shall be
405	reported by the corporation to the Florida Hurricane Catastrophe
406	Fund. For all policies of eligible risks covered under quota
407	share primary insurance agreements, the corporation and the
408	authorized insurer shall maintain complete and accurate records
409	for the purpose of exposure and loss reimbursement audits as
410	required by Florida Hurricane Catastrophe Fund rules. The
411	corporation and the authorized insurer shall each maintain
412	duplicate copies of policy declaration pages and supporting
413	claims documents.
414	g.  The corporation board shall establish in its plan of
415	operation standards for quota share agreements which ensure that
416	there is no discriminatory application among insurers as to the
417	terms of quota share agreements, pricing of quota share
418	agreements, incentive provisions if any, and consideration paid
419	for servicing policies or adjusting claims.
420	h.  The quota share primary insurance agreement between the
421	corporation and an authorized insurer must set forth the
422	specific terms under which coverage is provided, including, but
423	not limited to, the sale and servicing of policies issued under
424	the agreement by the insurance agent of the authorized insurer
425	producing the business, the reporting of information concerning
426	eligible risks, the payment of premium to the corporation, and
427	arrangements for the adjustment and payment of hurricane claims
428	incurred on eligible risks by the claims adjuster and personnel
429	of the authorized insurer. Entering into a quota sharing
430	insurance agreement between the corporation and an authorized
431	insurer shall be voluntary and at the discretion of the
432	authorized insurer.
433	3.  May provide that the corporation may employ or
434	otherwise contract with individuals or other entities to provide
435	administrative or professional services that may be appropriate
436	to effectuate the plan. The corporation shall have the power to
437	borrow funds, by issuing bonds or by incurring other
438	indebtedness, and shall have other powers reasonably necessary
439	to effectuate the requirements of this subsection, including,
440	without limitation, the power to issue bonds and incur other
441	indebtedness in order to refinance outstanding bonds or other
442	indebtedness. The corporation may, but is not required to, seek
443	judicial validation of its bonds or other indebtedness under
444	chapter 75. The corporation may issue bonds or incur other
445	indebtedness, or have bonds issued on its behalf by a unit of
446	local government pursuant to subparagraph (p)(g)2., in the
447	absence of a hurricane or other weather-related event, upon a
448	determination by the corporation, subject to approval by the
449	office, that such action would enable it to efficiently meet the
450	financial obligations of the corporation and that such
451	financings are reasonably necessary to effectuate the
452	requirements of this subsection. The corporation is authorized
453	to take all actions needed to facilitate tax-free status for any
454	such bonds or indebtedness, including formation of trusts or
455	other affiliated entities. The corporation shall have the
456	authority to pledge assessments, projected recoveries from the
457	Florida Hurricane Catastrophe Fund, other reinsurance
458	recoverables, market equalization and other surcharges, and
459	other funds available to the corporation as security for bonds
460	or other indebtedness. In recognition of s. 10, Art. I of the
461	State Constitution, prohibiting the impairment of obligations of
462	contracts, it is the intent of the Legislature that no action be
463	taken whose purpose is to impair any bond indenture or financing
464	agreement or any revenue source committed by contract to such
465	bond or other indebtedness.
466	4.a.  Must require that the corporation operate subject to
467	the supervision and approval of a board of governors consisting
468	of eight individuals who are residents of this state, from
469	different geographical areas of this state. The Governor, the
470	Chief Financial Officer, the President of the Senate, and the
471	Speaker of the House of Representatives shall each appoint two
472	members of the board. At least one of the two members appointed
473	by each appointing officer must have demonstrated expertise in
474	insurance. The Chief Financial Officer shall designate one of
475	the appointees as chair. All board members serve at the pleasure
476	of the appointing officer. All members of the board of governors
477	are subject to removal at will by the officers who appointed
478	them. All board members, including the chair, must be appointed
479	to serve for 3-year terms beginning annually on a date
480	designated by the plan. Any board vacancy shall be filled for
481	the unexpired term by the appointing officer. The Chief
482	Financial Officer shall appoint a technical advisory group to
483	provide information and advice to the board of governors in
484	connection with the board's duties under this subsection. The
485	executive director and senior managers of the corporation shall
486	be engaged by the board and serve at the pleasure of the board.
487	Any executive director appointed on or after July 1, 2006, is
488	subject to confirmation by the Senate. The executive director is
489	responsible for employing other staff as the corporation may
490	require, subject to review and concurrence by the board.
491	b.  The board shall create a Market Accountability Advisory
492	Committee to assist the corporation in developing awareness of
493	its rates and its customer and agent service levels in
494	relationship to the voluntary market insurers writing similar
495	coverage. The members of the advisory committee shall consist of
496	the following 11 persons, one of whom must be elected chair by
497	the members of the committee: four representatives, one
498	appointed by the Florida Association of Insurance Agents, one by
499	the Florida Association of Insurance and Financial Advisors, one
500	by the Professional Insurance Agents of Florida, and one by the
501	Latin American Association of Insurance Agencies; three
502	representatives appointed by the insurers with the three highest
503	voluntary market share of residential property insurance
504	business in the state; one representative from the Office of
505	Insurance Regulation; one consumer appointed by the board who is
506	insured by the corporation at the time of appointment to the
507	committee; one representative appointed by the Florida
508	Association of Realtors; and one representative appointed by the
509	Florida Bankers Association. All members must serve for 3-year
510	terms and may serve for consecutive terms. The committee shall
511	report to the corporation at each board meeting on insurance
512	market issues which may include rates and rate competition with
513	the voluntary market; service, including policy issuance, claims
514	processing, and general responsiveness to policyholders,
515	applicants, and agents; and matters relating to depopulation.
516	5.  Must provide a procedure for determining the
517	eligibility of a risk for coverage, as follows:
518	a.  Subject to the provisions of s. 627.3517, with respect
519	to personal lines residential risks, if the risk is offered
520	coverage from an authorized insurer at the insurer's approved
521	rate under either a standard policy including wind coverage or,
522	if consistent with the insurer's underwriting rules as filed
523	with the office, a basic policy including wind coverage, for a
524	new application to the corporation for coverage, the risk is not
525	eligible for any policy issued by the corporation unless the
526	premium for coverage from the authorized insurer is more than 25
527	percent greater than the premium for comparable coverage from
528	the corporation. If the risk is not able to obtain any such
529	offer, the risk is eligible for either a standard policy
530	including wind coverage or a basic policy including wind
531	coverage issued by the corporation; however, if the risk could
532	not be insured under a standard policy including wind coverage
533	regardless of market conditions, the risk shall be eligible for
534	a basic policy including wind coverage unless rejected under
535	subparagraph 9.8. However, with regard to a policyholder of the
536	corporation, the policyholder remains eligible for coverage from
537	the corporation regardless of any offer of coverage from an
538	authorized insurer or surplus lines insurer. The corporation
539	shall determine the type of policy to be provided on the basis
540	of objective standards specified in the underwriting manual and
541	based on generally accepted underwriting practices.
542	(I)  If the risk accepts an offer of coverage through the
543	market assistance plan or an offer of coverage through a
544	mechanism established by the corporation before a policy is
545	issued to the risk by the corporation or during the first 30
546	days of coverage by the corporation, and the producing agent who
547	submitted the application to the plan or to the corporation is
548	not currently appointed by the insurer, the insurer shall:
549	(A)  Pay to the producing agent of record of the policy,
550	for the first year, an amount that is the greater of the
551	insurer's usual and customary commission for the type of policy
552	written or a fee equal to the usual and customary commission of
553	the corporation; or
554	(B)  Offer to allow the producing agent of record of the
555	policy to continue servicing the policy for a period of not less
556	than 1 year and offer to pay the agent the greater of the
557	insurer's or the corporation's usual and customary commission
558	for the type of policy written.
559
560	If the producing agent is unwilling or unable to accept
561	appointment, the new insurer shall pay the agent in accordance
562	with sub-sub-sub-subparagraph (A).
563	(II)  When the corporation enters into a contractual
564	agreement for a take-out plan, the producing agent of record of
565	the corporation policy is entitled to retain any unearned
566	commission on the policy, and the insurer shall:
567	(A)  Pay to the producing agent of record of the
568	corporation policy, for the first year, an amount that is the
569	greater of the insurer's usual and customary commission for the
570	type of policy written or a fee equal to the usual and customary
571	commission of the corporation; or
572	(B)  Offer to allow the producing agent of record of the
573	corporation policy to continue servicing the policy for a period
574	of not less than 1 year and offer to pay the agent the greater
575	of the insurer's or the corporation's usual and customary
576	commission for the type of policy written.
577
578	If the producing agent is unwilling or unable to accept
579	appointment, the new insurer shall pay the agent in accordance
580	with sub-sub-sub-subparagraph (A).
581	b.  With respect to commercial lines residential risks, for
582	a new application to the corporation for coverage, if the risk
583	is offered coverage under a policy including wind coverage from
584	an authorized insurer at its approved rate, the risk is not
585	eligible for any policy issued by the corporation unless the
586	premium for coverage from the authorized insurer is more than 25
587	percent greater than the premium for comparable coverage from
588	the corporation. If the risk is not able to obtain any such
589	offer, the risk is eligible for a policy including wind coverage
590	issued by the corporation. However, with regard to a
591	policyholder of the corporation, the policyholder remains
592	eligible for coverage from the corporation regardless of any
593	offer of coverage from an authorized insurer or surplus lines
594	insurer.
595	(I)  If the risk accepts an offer of coverage through the
596	market assistance plan or an offer of coverage through a
597	mechanism established by the corporation before a policy is
598	issued to the risk by the corporation or during the first 30
599	days of coverage by the corporation, and the producing agent who
600	submitted the application to the plan or the corporation is not
601	currently appointed by the insurer, the insurer shall:
602	(A)  Pay to the producing agent of record of the policy,
603	for the first year, an amount that is the greater of the
604	insurer's usual and customary commission for the type of policy
605	written or a fee equal to the usual and customary commission of
606	the corporation; or
607	(B)  Offer to allow the producing agent of record of the
608	policy to continue servicing the policy for a period of not less
609	than 1 year and offer to pay the agent the greater of the
610	insurer's or the corporation's usual and customary commission
611	for the type of policy written.
612
613	If the producing agent is unwilling or unable to accept
614	appointment, the new insurer shall pay the agent in accordance
615	with sub-sub-sub-subparagraph (A).
616	(II)  When the corporation enters into a contractual
617	agreement for a take-out plan, the producing agent of record of
618	the corporation policy is entitled to retain any unearned
619	commission on the policy, and the insurer shall:
620	(A)  Pay to the producing agent of record of the
621	corporation policy, for the first year, an amount that is the
622	greater of the insurer's usual and customary commission for the
623	type of policy written or a fee equal to the usual and customary
624	commission of the corporation; or
625	(B)  Offer to allow the producing agent of record of the
626	corporation policy to continue servicing the policy for a period
627	of not less than 1 year and offer to pay the agent the greater
628	of the insurer's or the corporation's usual and customary
629	commission for the type of policy written.
630
631	If the producing agent is unwilling or unable to accept
632	appointment, the new insurer shall pay the agent in accordance
633	with sub-sub-sub-subparagraph (A).
634	6.  Must provide by July 1, 2007, that an application for
635	coverage for a new policy is subject to a waiting period of 10
636	days before coverage is effective, during which time the
637	corporation shall make such application available for review by
638	general lines agents and authorized property and casualty
639	insurers. The board shall approve an exception that allows for
640	coverage to be effective before the end of the 10-day waiting
641	period, for coverage issued in conjunction with a real estate
642	closing. The board may approve such other exceptions as the
643	board determines are necessary to prevent lapses in coverage.
644	7.  Must include rules for classifications of risks and
645	rates therefor.
646	8.  Must provide that if premium and investment income for
647	an account attributable to a particular calendar year are in
648	excess of projected losses and expenses for the account
649	attributable to that year, such excess shall be held in surplus
650	in the account. Such surplus shall be available to defray
651	deficits in that account as to future years and shall be used
652	for that purpose prior to assessing assessable insurers and
653	assessable insureds as to any calendar year.
654	9.  Must provide objective criteria and procedures to be
655	uniformly applied for all applicants in determining whether an
656	individual risk is so hazardous as to be uninsurable. In making
657	this determination and in establishing the criteria and
658	procedures, the following shall be considered:
659	a.  Whether the likelihood of a loss for the individual
660	risk is substantially higher than for other risks of the same
661	class; and
662	b.  Whether the uncertainty associated with the individual
663	risk is such that an appropriate premium cannot be determined.
664
665	The acceptance or rejection of a risk by the corporation shall
666	be construed as the private placement of insurance, and the
667	provisions of chapter 120 shall not apply.
668	10.  Must provide that the corporation shall make its best
669	efforts to procure catastrophe reinsurance at reasonable rates,
670	to cover its projected 100-year probable maximum loss as
671	determined by the board of governors.
672	11.  Must provide that in the event of regular deficit
673	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
674	(b)3.b., in the personal lines account, the commercial lines
675	residential account, or the high-risk account, the corporation
676	shall levy upon corporation policyholders in its next rate
677	filing, or by a separate rate filing solely for this purpose, a
678	Citizens policyholder surcharge arising from a regular
679	assessment in such account in a percentage equal to the total
680	amount of such regular assessments divided by the aggregate
681	statewide direct written premium for subject lines of business
682	for the prior calendar year. For purposes of calculating the
683	Citizens policyholder surcharge to be levied under this
684	subparagraph, the total amount of the regular assessment to
685	which this surcharge is related shall be determined as set forth
686	in subparagraph (b)3., without deducting the estimated Citizens
687	policyholder surcharge. Citizens policyholder surcharges under
688	this subparagraph are not considered premium and are not subject
689	to commissions, fees, or premium taxes; however, failure to pay
690	a market equalization surcharge shall be treated as failure to
691	pay premium.
692	11.12.  The policies issued by the corporation must provide
693	that, if the corporation or the market assistance plan obtains
694	an offer from an authorized insurer to cover the risk at its
695	approved rates, the risk is no longer eligible for renewal
696	through the corporation, except as otherwise provided in this
697	subsection.
698	12.13.  Corporation policies and applications must include
699	a notice that the corporation policy could, under this section,
700	be replaced with a policy issued by an authorized insurer that
701	does not provide coverage identical to the coverage provided by
702	the corporation. The notice shall also specify that acceptance
703	of corporation coverage creates a conclusive presumption that
704	the applicant or policyholder is aware of this potential.
705	13.14.  May establish, subject to approval by the office,
706	different eligibility requirements and operational procedures
707	for any line or type of coverage for any specified county or
708	area if the board determines that such changes to the
709	eligibility requirements and operational procedures are
710	justified due to the voluntary market being sufficiently stable
711	and competitive in such area or for such line or type of
712	coverage and that consumers who, in good faith, are unable to
713	obtain insurance through the voluntary market through ordinary
714	methods would continue to have access to coverage from the
715	corporation. When coverage is sought in connection with a real
716	property transfer, such requirements and procedures shall not
717	provide for an effective date of coverage later than the date of
718	the closing of the transfer as established by the transferor,
719	the transferee, and, if applicable, the lender.
720	15.  Must provide that, with respect to the high-risk
721	account, any assessable insurer with a surplus as to
722	policyholders of $25 million or less writing 25 percent or more
723	of its total countrywide property insurance premiums in this
724	state may petition the office, within the first 90 days of each
725	calendar year, to qualify as a limited apportionment company. A
726	regular assessment levied by the corporation on a limited
727	apportionment company for a deficit incurred by the corporation
728	for the high-risk account in 2006 or thereafter may be paid to
729	the corporation on a monthly basis as the assessments are
730	collected by the limited apportionment company from its insureds
731	pursuant to s. 627.3512, but the regular assessment must be paid
732	in full within 12 months after being levied by the corporation.
733	A limited apportionment company shall collect from its
734	policyholders any emergency assessment imposed under sub-
735	subparagraph (b)3.d. The plan shall provide that, if the office
736	determines that any regular assessment will result in an
737	impairment of the surplus of a limited apportionment company,
738	the office may direct that all or part of such assessment be
739	deferred as provided in subparagraph (g)4. However, there shall
740	be no limitation or deferment of an emergency assessment to be
741	collected from policyholders under sub-subparagraph (b)3.d.
742	14.16.  Must provide that the corporation appoint as its
743	licensed agents only those agents who also hold an appointment
744	as defined in s. 626.015(3) with an insurer who at the time of
745	the agent's initial appointment by the corporation is authorized
746	to write and is actually writing personal lines residential
747	property coverage, commercial residential property coverage, or
748	commercial nonresidential property coverage within the state.
749	15.17.  Must provide, by July 1, 2007, a premium payment
750	plan option to its policyholders which allows for quarterly and
751	semiannual payment of premiums.
752	16.18.  Must provide, effective June 1, 2007, that the
753	corporation contract with each insurer providing the non-wind
754	coverage for risks insured by the corporation in the high-risk
755	account, requiring that the insurer provide claims adjusting
756	services for the wind coverage provided by the corporation for
757	such risks. An insurer is required to enter into this contract
758	as a condition of providing non-wind coverage for a risk that is
759	insured by the corporation in the high-risk account unless the
760	board finds, after a hearing, that the insurer is not capable of
761	providing adjusting services at an acceptable level of quality
762	to corporation policyholders. The terms and conditions of such
763	contracts must be substantially the same as the contracts that
764	the corporation executed with insurers under the "adjust-your-
765	own" program in 2006, except as may be mutually agreed to by the
766	parties and except for such changes that the board determines
767	are necessary to ensure that claims are adjusted appropriately.
768	The corporation shall provide a process for neutral arbitration
769	of any dispute between the corporation and the insurer regarding
770	the terms of the contract. The corporation shall review and
771	monitor the performance of insurers under these contracts.
772	17.19.  Must limit coverage on mobile homes or manufactured
773	homes built prior to 1994 to actual cash value of the dwelling
774	rather than replacement costs of the dwelling.
775	18.20.  May provide such limits of coverage as the board
776	determines, consistent with the requirements of this subsection.
777	19.21.  May require commercial property to meet specified
778	hurricane mitigation construction features as a condition of
779	eligibility for coverage.
780	(n)  If coverage in an account is deactivated pursuant to
781	paragraph (o)(f), coverage through the corporation shall be
782	reactivated by order of the office only under one of the
783	following circumstances:
784	1.  If the market assistance plan receives a minimum of 100
785	applications for coverage within a 3-month period, or 200
786	applications for coverage within a 1-year period or less for
787	residential coverage, unless the market assistance plan provides
788	a quotation from admitted carriers at their filed rates for at
789	least 90 percent of such applicants. Any market assistance plan
790	application that is rejected because an individual risk is so
791	hazardous as to be uninsurable using the criteria specified in
792	subparagraph (c)9.8. shall not be included in the minimum
793	percentage calculation provided herein. In the event that there
794	is a legal or administrative challenge to a determination by the
795	office that the conditions of this subparagraph have been met
796	for eligibility for coverage in the corporation, any eligible
797	risk may obtain coverage during the pendency of such challenge.
798	2.  In response to a state of emergency declared by the
799	Governor under s. 252.36, the office may activate coverage by
800	order for the period of the emergency upon a finding by the
801	office that the emergency significantly affects the availability
802	of residential property insurance.
803	(p)1.  The corporation shall certify to the office its
804	needs for annual assessments as to a particular calendar year,
805	and for any interim assessments that it deems to be necessary to
806	sustain operations as to a particular year pending the receipt
807	of annual assessments. Upon verification, the office shall
808	approve such certification, and the corporation shall levy such
809	annual or interim assessments. Such assessments shall be
810	prorated as provided in paragraph (b). The corporation shall
811	take all reasonable and prudent steps necessary to collect the
812	amount of assessment due from each assessable insured insurer,
813	including, if prudent, filing suit to collect such assessment.
814	If the corporation is unable to collect an assessment from any
815	assessable insurer, the uncollected assessments shall be levied
816	as an additional assessment against the assessable insurers and
817	any assessable insurer required to pay an additional assessment
818	as a result of such failure to pay shall have a cause of action
819	against such nonpaying assessable insurer. Assessments shall be
820	included as an appropriate factor in the making of rates. The
821	failure of a surplus lines agent to collect and remit any
822	regular or emergency assessment levied by the corporation is
823	considered to be a violation of s. 626.936 and subjects the
824	surplus lines agent to the penalties provided in that section.
825	2.  The governing body of any unit of local government, any
826	residents of which are insured by the corporation, may issue
827	bonds as defined in s. 125.013 or s. 166.101 from time to time
828	to fund an assistance program, in conjunction with the
829	corporation, for the purpose of defraying deficits of the
830	corporation. In order to avoid needless and indiscriminate
831	proliferation, duplication, and fragmentation of such assistance
832	programs, any unit of local government, any residents of which
833	are insured by the corporation, may provide for the payment of
834	losses, regardless of whether or not the losses occurred within
835	or outside of the territorial jurisdiction of the local
836	government. Revenue bonds under this subparagraph may not be
837	issued until validated pursuant to chapter 75, unless a state of
838	emergency is declared by executive order or proclamation of the
839	Governor pursuant to s. 252.36 making such findings as are
840	necessary to determine that it is in the best interests of, and
841	necessary for, the protection of the public health, safety, and
842	general welfare of residents of this state and declaring it an
843	essential public purpose to permit certain municipalities or
844	counties to issue such bonds as will permit relief to claimants
845	and policyholders of the corporation. Any such unit of local
846	government may enter into such contracts with the corporation
847	and with any other entity created pursuant to this subsection as
848	are necessary to carry out this paragraph. Any bonds issued
849	under this subparagraph shall be payable from and secured by
850	moneys received by the corporation from emergency assessments
851	under sub-subparagraph (b)2.3.d., and assigned and pledged to or
852	on behalf of the unit of local government for the benefit of the
853	holders of such bonds. The funds, credit, property, and taxing
854	power of the state or of the unit of local government shall not
855	be pledged for the payment of such bonds. If any of the bonds
856	remain unsold 60 days after issuance, the office shall require
857	all insurers subject to assessment to purchase the bonds, which
858	shall be treated as admitted assets; each insurer shall be
859	required to purchase that percentage of the unsold portion of
860	the bond issue that equals the insurer's relative share of
861	assessment liability under this subsection. An insurer shall not
862	be required to purchase the bonds to the extent that the office
863	determines that the purchase would endanger or impair the
864	solvency of the insurer.
865	3.a.  The corporation shall adopt one or more programs
866	subject to approval by the office for the reduction of both new
867	and renewal writings in the corporation. Beginning January 1,
868	2008, any program the corporation adopts for the payment of
869	bonuses to an insurer for each risk the insurer removes from the
870	corporation shall comply with s. 627.3511(2) and may not exceed
871	the amount referenced in s. 627.3511(2) for each risk removed.
872	The corporation may consider any prudent and not unfairly
873	discriminatory approach to reducing corporation writings, and
874	may adopt a credit against assessment liability or other
875	liability that provides an incentive for insurers to take risks
876	out of the corporation and to keep risks out of the corporation
877	by maintaining or increasing voluntary writings in counties or
878	areas in which corporation risks are highly concentrated and a
879	program to provide a formula under which an insurer voluntarily
880	taking risks out of the corporation by maintaining or increasing
881	voluntary writings will be relieved wholly or partially from
882	assessments under sub-subparagraphs (b)3.a. and b. However, any
883	"take-out bonus" or payment to an insurer must be conditioned on
884	the property being insured for at least 5 years by the insurer,
885	unless canceled or nonrenewed by the policyholder. If the policy
886	is canceled or nonrenewed by the policyholder before the end of
887	the 5-year period, the amount of the take-out bonus must be
888	prorated for the time period the policy was insured. When the
889	corporation enters into a contractual agreement for a take-out
890	plan, the producing agent of record of the corporation policy is
891	entitled to retain any unearned commission on such policy, and
892	the insurer shall either:
893	a.(I)  Pay to the producing agent of record of the policy,
894	for the first year, an amount which is the greater of the
895	insurer's usual and customary commission for the type of policy
896	written or a policy fee equal to the usual and customary
897	commission of the corporation; or
898	b.(II)  Offer to allow the producing agent of record of the
899	policy to continue servicing the policy for a period of not less
900	than 1 year and offer to pay the agent the insurer's usual and
901	customary commission for the type of policy written. If the
902	producing agent is unwilling or unable to accept appointment by
903	the new insurer, the new insurer shall pay the agent in
904	accordance with sub-sub-subparagraph (I).
905	b.  Any credit or exemption from regular assessments
906	adopted under this subparagraph shall last no longer than the 3
907	years following the cancellation or expiration of the policy by
908	the corporation. With the approval of the office, the board may
909	extend such credits for an additional year if the insurer
910	guarantees an additional year of renewability for all policies
911	removed from the corporation, or for 2 additional years if the
912	insurer guarantees 2 additional years of renewability for all
913	policies so removed.
914	c.  There shall be no credit, limitation, exemption, or
915	deferment from emergency assessments to be collected from
916	policyholders pursuant to sub-subparagraph (b)3.d.
917	4.  The plan shall provide for the deferment, in whole or
918	in part, of the assessment of an assessable insurer, other than
919	an emergency assessment collected from policyholders pursuant to
920	sub-subparagraph (b)3.d., if the office finds that payment of
921	the assessment would endanger or impair the solvency of the
922	insurer. In the event an assessment against an assessable
923	insurer is deferred in whole or in part, the amount by which
924	such assessment is deferred may be assessed against the other
925	assessable insurers in a manner consistent with the basis for
926	assessments set forth in paragraph (b).
927	4.5.  Effective July 1, 2007, in order to evaluate the
928	costs and benefits of approved take-out plans, if the
929	corporation pays a bonus or other payment to an insurer for an
930	approved take-out plan, it shall maintain a record of the
931	address or such other identifying information on the property or
932	risk removed in order to track if and when the property or risk
933	is later insured by the corporation.
934	5.6.  Any policy taken out, assumed, or removed from the
935	corporation is, as of the effective date of the take-out,
936	assumption, or removal, direct insurance issued by the insurer
937	and not by the corporation, even if the corporation continues to
938	service the policies. This subparagraph applies to policies of
939	the corporation and not policies taken out, assumed, or removed
940	from any other entity.
941	(r)  There shall be no liability on the part of, and no
942	cause of action of any nature shall arise against, any
943	assessable insurer or its agents or employees, the corporation
944	or its agents or employees, members of the board of governors or
945	their respective designees at a board meeting, corporation
946	committee members, or the office or its representatives, for any
947	action taken by them in the performance of their duties or
948	responsibilities under this subsection. Such immunity does not
949	apply to:
950	1.  Any of the foregoing persons or entities for any
951	willful tort;
952	2.  The corporation or its producing agents for breach of
953	any contract or agreement pertaining to insurance coverage;
954	3.  The corporation with respect to issuance or payment of
955	debt; or
956	4.  Any assessable insurer with respect to any action to
957	enforce an assessable insurer's obligations to the corporation
958	under this subsection.
959	(r)(s)  For the purposes of s. 199.183(1), the corporation
960	shall be considered a political subdivision of the state and
961	shall be exempt from the corporate income tax. The premiums,
962	assessments, investment income, and other revenue of the
963	corporation are funds received for providing property insurance
964	coverage as required by this subsection, paying claims for
965	Florida citizens insured by the corporation, securing and
966	repaying debt obligations issued by the corporation, and
967	conducting all other activities of the corporation, and shall
968	not be considered taxes, fees, licenses, or charges for services
969	imposed by the Legislature on individuals, businesses, or
970	agencies outside state government. Bonds and other debt
971	obligations issued by or on behalf of the corporation are not to
972	be considered "state bonds" within the meaning of s. 215.58(8).
973	The corporation is not subject to the procurement provisions of
974	chapter 287, and policies and decisions of the corporation
975	relating to incurring debt, levying of assessments and the sale,
976	issuance, continuation, terms and claims under corporation
977	policies, and all services relating thereto, are not subject to
978	the provisions of chapter 120. The corporation is not required
979	to obtain or to hold a certificate of authority issued by the
980	office, nor is it required to participate as a member insurer of
981	the Florida Insurance Guaranty Association. However, the
982	corporation is required to pay, in the same manner as an
983	authorized insurer, assessments levied by the Florida Insurance
984	Guaranty Association. It is the intent of the Legislature that
985	the tax exemptions provided in this paragraph will augment the
986	financial resources of the corporation to better enable the
987	corporation to fulfill its public purposes. Any debt obligations
988	issued by the corporation, their transfer, and the income
989	therefrom, including any profit made on the sale thereof, shall
990	at all times be free from taxation of every kind by the state
991	and any political subdivision or local unit or other
992	instrumentality thereof; however, this exemption does not apply
993	to any tax imposed by chapter 220 on interest, income, or
994	profits on debt obligations owned by corporations other than the
995	corporation.
996	(s)(t)  Upon a determination by the office that the
997	conditions giving rise to the establishment and activation of
998	the corporation no longer exist, the corporation is dissolved.
999	Upon dissolution, the assets of the corporation shall be applied
1000	first to pay all debts, liabilities, and obligations of the
1001	corporation, including the establishment of reasonable reserves
1002	for any contingent liabilities or obligations, and all remaining
1003	assets of the corporation shall become property of the state and
1004	shall be deposited in the Florida Hurricane Catastrophe Fund.
1005	However, no dissolution shall take effect as long as the
1006	corporation has bonds or other financial obligations outstanding
1007	unless adequate provision has been made for the payment of the
1008	bonds or other financial obligations pursuant to the documents
1009	authorizing the issuance of the bonds or other financial
1010	obligations.
1011	(t)(u)1.  Effective July 1, 2002, policies of the
1012	Residential Property and Casualty Joint Underwriting Association
1013	shall become policies of the corporation. All obligations,
1014	rights, assets and liabilities of the Residential Property and
1015	Casualty Joint Underwriting Association, including bonds, note
1016	and debt obligations, and the financing documents pertaining to
1017	them become those of the corporation as of July 1, 2002. The
1018	corporation is not required to issue endorsements or
1019	certificates of assumption to insureds during the remaining term
1020	of in-force transferred policies.
1021	2.  Effective July 1, 2002, policies of the Florida
1022	Windstorm Underwriting Association are transferred to the
1023	corporation and shall become policies of the corporation. All
1024	obligations, rights, assets, and liabilities of the Florida
1025	Windstorm Underwriting Association, including bonds, note and
1026	debt obligations, and the financing documents pertaining to them
1027	are transferred to and assumed by the corporation on July 1,
1028	2002. The corporation is not required to issue endorsements or
1029	certificates of assumption to insureds during the remaining term
1030	of in-force transferred policies.
1031	3.  The Florida Windstorm Underwriting Association and the
1032	Residential Property and Casualty Joint Underwriting Association
1033	shall take all actions as may be proper to further evidence the
1034	transfers and shall provide the documents and instruments of
1035	further assurance as may reasonably be requested by the
1036	corporation for that purpose. The corporation shall execute
1037	assumptions and instruments as the trustees or other parties to
1038	the financing documents of the Florida Windstorm Underwriting
1039	Association or the Residential Property and Casualty Joint
1040	Underwriting Association may reasonably request to further
1041	evidence the transfers and assumptions, which transfers and
1042	assumptions, however, are effective on the date provided under
1043	this paragraph whether or not, and regardless of the date on
1044	which, the assumptions or instruments are executed by the
1045	corporation. Subject to the relevant financing documents
1046	pertaining to their outstanding bonds, notes, indebtedness, or
1047	other financing obligations, the moneys, investments,
1048	receivables, choses in action, and other intangibles of the
1049	Florida Windstorm Underwriting Association shall be credited to
1050	the high-risk account of the corporation, and those of the
1051	personal lines residential coverage account and the commercial
1052	lines residential coverage account of the Residential Property
1053	and Casualty Joint Underwriting Association shall be credited to
1054	the personal lines account and the commercial lines account,
1055	respectively, of the corporation.
1056	4.  Effective July 1, 2002, a new applicant for property
1057	insurance coverage who would otherwise have been eligible for
1058	coverage in the Florida Windstorm Underwriting Association is
1059	eligible for coverage from the corporation as provided in this
1060	subsection.
1061	5.  The transfer of all policies, obligations, rights,
1062	assets, and liabilities from the Florida Windstorm Underwriting
1063	Association to the corporation and the renaming of the
1064	Residential Property and Casualty Joint Underwriting Association
1065	as the corporation shall in no way affect the coverage with
1066	respect to covered policies as defined in s. 215.555(2)(c)
1067	provided to these entities by the Florida Hurricane Catastrophe
1068	Fund. The coverage provided by the Florida Hurricane Catastrophe
1069	Fund to the Florida Windstorm Underwriting Association based on
1070	its exposures as of June 30, 2002, and each June 30 thereafter
1071	shall be redesignated as coverage for the high-risk account of
1072	the corporation. Notwithstanding any other provision of law, the
1073	coverage provided by the Florida Hurricane Catastrophe Fund to
1074	the Residential Property and Casualty Joint Underwriting
1075	Association based on its exposures as of June 30, 2002, and each
1076	June 30 thereafter shall be transferred to the personal lines
1077	account and the commercial lines account of the corporation.
1078	Notwithstanding any other provision of law, the high-risk
1079	account shall be treated, for all Florida Hurricane Catastrophe
1080	Fund purposes, as if it were a separate participating insurer
1081	with its own exposures, reimbursement premium, and loss
1082	reimbursement. Likewise, the personal lines and commercial lines
1083	accounts shall be viewed together, for all Florida Hurricane
1084	Catastrophe Fund purposes, as if the two accounts were one and
1085	represent a single, separate participating insurer with its own
1086	exposures, reimbursement premium, and loss reimbursement. The
1087	coverage provided by the Florida Hurricane Catastrophe Fund to
1088	the corporation shall constitute and operate as a full transfer
1089	of coverage from the Florida Windstorm Underwriting Association
1090	and Residential Property and Casualty Joint Underwriting to the
1091	corporation.
1092	(u)(v)  Notwithstanding any other provision of law:
1093	1.  The pledge or sale of, the lien upon, and the security
1094	interest in any rights, revenues, or other assets of the
1095	corporation created or purported to be created pursuant to any
1096	financing documents to secure any bonds or other indebtedness of
1097	the corporation shall be and remain valid and enforceable,
1098	notwithstanding the commencement of and during the continuation
1099	of, and after, any rehabilitation, insolvency, liquidation,
1100	bankruptcy, receivership, conservatorship, reorganization, or
1101	similar proceeding against the corporation under the laws of
1102	this state.
1103	2.  No such proceeding shall relieve the corporation of its
1104	obligation, or otherwise affect its ability to perform its
1105	obligation, to continue to collect, or levy and collect,
1106	assessments, market equalization or other surcharges under
1107	subparagraph (c)10., or any other rights, revenues, or other
1108	assets of the corporation pledged pursuant to any financing
1109	documents.
1110	3.  Each such pledge or sale of, lien upon, and security
1111	interest in, including the priority of such pledge, lien, or
1112	security interest, any such assessments, market equalization or
1113	other surcharges, or other rights, revenues, or other assets
1114	which are collected, or levied and collected, after the
1115	commencement of and during the pendency of, or after, any such
1116	proceeding shall continue unaffected by such proceeding. As used
1117	in this subsection, the term "financing documents" means any
1118	agreement or agreements, instrument or instruments, or other
1119	document or documents now existing or hereafter created
1120	evidencing any bonds or other indebtedness of the corporation or
1121	pursuant to which any such bonds or other indebtedness has been
1122	or may be issued and pursuant to which any rights, revenues, or
1123	other assets of the corporation are pledged or sold to secure
1124	the repayment of such bonds or indebtedness, together with the
1125	payment of interest on such bonds or such indebtedness, or the
1126	payment of any other obligation or financial product, as defined
1127	in the plan of operation of the corporation related to such
1128	bonds or indebtedness.
1129	4.  Any such pledge or sale of assessments, revenues,
1130	contract rights, or other rights or assets of the corporation
1131	shall constitute a lien and security interest, or sale, as the
1132	case may be, that is immediately effective and attaches to such
1133	assessments, revenues, or contract rights or other rights or
1134	assets, whether or not imposed or collected at the time the
1135	pledge or sale is made. Any such pledge or sale is effective,
1136	valid, binding, and enforceable against the corporation or other
1137	entity making such pledge or sale, and valid and binding against
1138	and superior to any competing claims or obligations owed to any
1139	other person or entity, including policyholders in this state,
1140	asserting rights in any such assessments, revenues, or contract
1141	rights or other rights or assets to the extent set forth in and
1142	in accordance with the terms of the pledge or sale contained in
1143	the applicable financing documents, whether or not any such
1144	person or entity has notice of such pledge or sale and without
1145	the need for any physical delivery, recordation, filing, or
1146	other action.
1147	5.  As long as the corporation has any bonds outstanding,
1148	the corporation may not file a voluntary petition under chapter
1149	9 of the federal Bankruptcy Code or such corresponding chapter
1150	or sections as may be in effect, from time to time, and a public
1151	officer or any organization, entity, or other person may not
1152	authorize the corporation to be or become a debtor under chapter
1153	9 of the federal Bankruptcy Code or such corresponding chapter
1154	or sections as may be in effect, from time to time, during any
1155	such period.
1156	6.  If ordered by a court of competent jurisdiction, the
1157	corporation may assume policies or otherwise provide coverage
1158	for policyholders of an insurer placed in liquidation under
1159	chapter 631, under such forms, rates, terms, and conditions as
1160	the corporation deems appropriate, subject to approval by the
1161	office.
1162	(v)(w)1.  The following records of the corporation are
1163	confidential and exempt from the provisions of s. 119.07(1) and
1164	s. 24(a), Art. I of the State Constitution:
1165	a.  Underwriting files, except that a policyholder or an
1166	applicant shall have access to his or her own underwriting
1167	files.
1168	b.  Claims files, until termination of all litigation and
1169	settlement of all claims arising out of the same incident,
1170	although portions of the claims files may remain exempt, as
1171	otherwise provided by law. Confidential and exempt claims file
1172	records may be released to other governmental agencies upon
1173	written request and demonstration of need; such records held by
1174	the receiving agency remain confidential and exempt as provided
1175	for herein.
1176	c.  Records obtained or generated by an internal auditor
1177	pursuant to a routine audit, until the audit is completed, or if
1178	the audit is conducted as part of an investigation, until the
1179	investigation is closed or ceases to be active. An investigation
1180	is considered "active" while the investigation is being
1181	conducted with a reasonable, good faith belief that it could
1182	lead to the filing of administrative, civil, or criminal
1183	proceedings.
1184	d.  Matters reasonably encompassed in privileged attorney-
1185	client communications.
1186	e.  Proprietary information licensed to the corporation
1187	under contract and the contract provides for the confidentiality
1188	of such proprietary information.
1189	f.  All information relating to the medical condition or
1190	medical status of a corporation employee which is not relevant
1191	to the employee's capacity to perform his or her duties, except
1192	as otherwise provided in this paragraph. Information which is
1193	exempt shall include, but is not limited to, information
1194	relating to workers' compensation, insurance benefits, and
1195	retirement or disability benefits.
1196	g.  Upon an employee's entrance into the employee
1197	assistance program, a program to assist any employee who has a
1198	behavioral or medical disorder, substance abuse problem, or
1199	emotional difficulty which affects the employee's job
1200	performance, all records relative to that participation shall be
1201	confidential and exempt from the provisions of s. 119.07(1) and
1202	s. 24(a), Art. I of the State Constitution, except as otherwise
1203	provided in s. 112.0455(11).
1204	h.  Information relating to negotiations for financing,
1205	reinsurance, depopulation, or contractual services, until the
1206	conclusion of the negotiations.
1207	i.  Minutes of closed meetings regarding underwriting
1208	files, and minutes of closed meetings regarding an open claims
1209	file until termination of all litigation and settlement of all
1210	claims with regard to that claim, except that information
1211	otherwise confidential or exempt by law will be redacted.
1212
1213	When an authorized insurer is considering underwriting a risk
1214	insured by the corporation, relevant underwriting files and
1215	confidential claims files may be released to the insurer
1216	provided the insurer agrees in writing, notarized and under
1217	oath, to maintain the confidentiality of such files. When a file
1218	is transferred to an insurer that file is no longer a public
1219	record because it is not held by an agency subject to the
1220	provisions of the public records law. Underwriting files and
1221	confidential claims files may also be released to staff of and
1222	the board of governors of the market assistance plan established
1223	pursuant to s. 627.3515, who must retain the confidentiality of
1224	such files, except such files may be released to authorized
1225	insurers that are considering assuming the risks to which the
1226	files apply, provided the insurer agrees in writing, notarized
1227	and under oath, to maintain the confidentiality of such files.
1228	Finally, the corporation or the board or staff of the market
1229	assistance plan may make the following information obtained from
1230	underwriting files and confidential claims files available to
1231	licensed general lines insurance agents: name, address, and
1232	telephone number of the residential property owner or insured;
1233	location of the risk; rating information; loss history; and
1234	policy type. The receiving licensed general lines insurance
1235	agent must retain the confidentiality of the information
1236	received.
1237	2.  Portions of meetings of the corporation are exempt from
1238	the provisions of s. 286.011 and s. 24(b), Art. I of the State
1239	Constitution wherein confidential underwriting files or
1240	confidential open claims files are discussed. All portions of
1241	corporation meetings which are closed to the public shall be
1242	recorded by a court reporter. The court reporter shall record
1243	the times of commencement and termination of the meeting, all
1244	discussion and proceedings, the names of all persons present at
1245	any time, and the names of all persons speaking. No portion of
1246	any closed meeting shall be off the record. Subject to the
1247	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
1248	notes of any closed meeting shall be retained by the corporation
1249	for a minimum of 5 years. A copy of the transcript, less any
1250	exempt matters, of any closed meeting wherein claims are
1251	discussed shall become public as to individual claims after
1252	settlement of the claim.
1253	(w)(x)  It is the intent of the Legislature that the
1254	amendments to this subsection enacted in 2002 should, over time,
1255	reduce the probable maximum windstorm losses in the residual
1256	markets and should reduce the potential assessments to be levied
1257	on property insurers and policyholders statewide. In furtherance
1258	of this intent:
1259	1.  The board shall, on or before February 1 of each year,
1260	provide a report to the President of the Senate and the Speaker
1261	of the House of Representatives showing the reduction or
1262	increase in the 100-year probable maximum loss attributable to
1263	wind-only coverages and the quota share program under this
1264	subsection combined, as compared to the benchmark 100-year
1265	probable maximum loss of the Florida Windstorm Underwriting
1266	Association. For purposes of this paragraph, the benchmark 100-
1267	year probable maximum loss of the Florida Windstorm Underwriting
1268	Association shall be the calculation dated February 2001 and
1269	based on November 30, 2000, exposures. In order to ensure
1270	comparability of data, the board shall use the same methods for
1271	calculating its probable maximum loss as were used to calculate
1272	the benchmark probable maximum loss.
1273	2.  Beginning February 1, 2010, if the report under
1274	subparagraph 1. for any year indicates that the 100-year
1275	probable maximum loss attributable to wind-only coverages and
1276	the quota share program combined does not reflect a reduction of
1277	at least 25 percent from the benchmark, the board shall reduce
1278	the boundaries of the high-risk area eligible for wind-only
1279	coverages under this subsection in a manner calculated to reduce
1280	such probable maximum loss to an amount at least 25 percent
1281	below the benchmark.
1282	3.  Beginning February 1, 2015, if the report under
1283	subparagraph 1. for any year indicates that the 100-year
1284	probable maximum loss attributable to wind-only coverages and
1285	the quota share program combined does not reflect a reduction of
1286	at least 50 percent from the benchmark, the boundaries of the
1287	high-risk area eligible for wind-only coverages under this
1288	subsection shall be reduced by the elimination of any area that
1289	is not seaward of a line 1,000 feet inland from the Intracoastal
1290	Waterway.
1291	(x)(y)  In enacting the provisions of this section, the
1292	Legislature recognizes that both the Florida Windstorm
1293	Underwriting Association and the Residential Property and
1294	Casualty Joint Underwriting Association have entered into
1295	financing arrangements that obligate each entity to service its
1296	debts and maintain the capacity to repay funds secured under
1297	these financing arrangements. It is the intent of the
1298	Legislature that nothing in this section be construed to
1299	compromise, diminish, or interfere with the rights of creditors
1300	under such financing arrangements. It is further the intent of
1301	the Legislature to preserve the obligations of the Florida
1302	Windstorm Underwriting Association and Residential Property and
1303	Casualty Joint Underwriting Association with regard to
1304	outstanding financing arrangements, with such obligations
1305	passing entirely and unchanged to the corporation and,
1306	specifically, to the applicable account of the corporation. So
1307	long as any bonds, notes, indebtedness, or other financing
1308	obligations of the Florida Windstorm Underwriting Association or
1309	the Residential Property and Casualty Joint Underwriting
1310	Association are outstanding, under the terms of the financing
1311	documents pertaining to them, the governing board of the
1312	corporation shall have and shall exercise the authority to levy,
1313	charge, collect, and receive all premiums, assessments,
1314	surcharges, charges, revenues, and receipts that the
1315	associations had authority to levy, charge, collect, or receive
1316	under the provisions of subsection (2) and this subsection,
1317	respectively, as they existed on January 1, 2002, to provide
1318	moneys, without exercise of the authority provided by this
1319	subsection, in at least the amounts, and by the times, as would
1320	be provided under those former provisions of subsection (2) or
1321	this subsection, respectively, so that the value, amount, and
1322	collectability of any assets, revenues, or revenue source
1323	pledged or committed to, or any lien thereon securing such
1324	outstanding bonds, notes, indebtedness, or other financing
1325	obligations will not be diminished, impaired, or adversely
1326	affected by the amendments made by this act and to permit
1327	compliance with all provisions of financing documents pertaining
1328	to such bonds, notes, indebtedness, or other financing
1329	obligations, or the security or credit enhancement for them, and
1330	any reference in this subsection to bonds, notes, indebtedness,
1331	financing obligations, or similar obligations, of the
1332	corporation shall include like instruments or contracts of the
1333	Florida Windstorm Underwriting Association and the Residential
1334	Property and Casualty Joint Underwriting Association to the
1335	extent not inconsistent with the provisions of the financing
1336	documents pertaining to them.
1337	(y)(z)  The corporation shall not require the securing of
1338	flood insurance as a condition of coverage if the insured or
1339	applicant executes a form approved by the office affirming that
1340	flood insurance is not provided by the corporation and that if
1341	flood insurance is not secured by the applicant or insured in
1342	addition to coverage by the corporation, the risk will not be
1343	covered for flood damage. A corporation policyholder electing
1344	not to secure flood insurance and executing a form as provided
1345	herein making a claim for water damage against the corporation
1346	shall have the burden of proving the damage was not caused by
1347	flooding. Notwithstanding other provisions of this subsection,
1348	the corporation may deny coverage to an applicant or insured who
1349	refuses to execute the form described herein.
1350	(z)(aa)  A salaried employee of the corporation who
1351	performs policy administration services subsequent to the
1352	effectuation of a corporation policy is not required to be
1353	licensed as an agent under the provisions of s. 626.112.
1354	(aa)(bb)  By February 1, 2007, the corporation shall submit
1355	a report to the President of the Senate, the Speaker of the
1356	House of Representatives, the minority party leaders of the
1357	Senate and the House of Representatives, and the chairs of the
1358	standing committees of the Senate and the House of
1359	Representatives having jurisdiction over matters relating to
1360	property and casualty insurance. In preparing the report, the
1361	corporation shall consult with the Office of Insurance
1362	Regulation, the Department of Financial Services, and any other
1363	party the corporation determines appropriate. The report must
1364	include all findings and recommendations on the feasibility of
1365	requiring authorized insurers that issue and service personal
1366	and commercial residential policies and commercial
1367	nonresidential policies that provide coverage for basic property
1368	perils except for the peril of wind to issue and service for a
1369	fee personal and commercial residential policies and commercial
1370	nonresidential policies providing coverage for the peril of wind
1371	issued by the corporation. The report must include:
1372	1.  The expense savings to the corporation of issuing and
1373	servicing such policies as determined by a cost-benefit
1374	analysis.
1375	2.  The expenses and liability to authorized insurers
1376	associated with issuing and servicing such policies.
1377	3.  The effect on service to policyholders of the
1378	corporation relating to issuing and servicing such policies.
1379	4.  The effect on the producing agent of the corporation of
1380	issuing and servicing such policies.
1381	5.  Recommendations as to the amount of the fee which
1382	should be paid to authorized insurers for issuing and servicing
1383	such policies.
1384	6.  The effect that issuing and servicing such policies
1385	will have on the corporation's number of policies, total insured
1386	value, and probable maximum loss.
1387	(bb)(cc)  There shall be no liability on the part of, and
1388	no cause of action of any nature shall arise against, producing
1389	agents of record of the corporation or employees of such agents
1390	for insolvency of any take-out insurer.
1391	(cc)(dd)1.  For policies subject to nonrenewal as a result
1392	of the risk being no longer eligible for coverage due to being
1393	valued at $1 million or more, the corporation shall, directly or
1394	through the market assistance plan, make information from
1395	confidential underwriting and claims files of policyholders
1396	available only to licensed general lines agents who register
1397	with the corporation to receive such information according to
1398	the following procedures:
1399	2.  By August 1, 2006, the corporation shall provide such
1400	policyholders who are not eligible for renewal the opportunity
1401	to request in writing, within 30 days after the notification is
1402	sent, that information from their confidential underwriting and
1403	claims files not be released to licensed general lines agents
1404	registered pursuant to this paragraph.
1405	3.  By August 1, 2006, the corporation shall make available
1406	to licensed general lines agents the registration procedures to
1407	be used to obtain confidential information from underwriting and
1408	claims files for such policies not eligible for renewal. As a
1409	condition of registration, the corporation shall require the
1410	licensed general lines agent to attest that the agent has the
1411	experience and relationships with authorized or surplus lines
1412	carriers to attempt to offer replacement coverage for such
1413	policies.
1414	4.  By September 1, 2006, the corporation shall make
1415	available through a secured website to licensed general lines
1416	agents registered pursuant to this paragraph application,
1417	rating, loss history, mitigation, and policy type information
1418	relating to such policies not eligible for renewal and for which
1419	the policyholder has not requested the corporation withhold such
1420	information. The registered licensed general lines agent may use
1421	such information to contact and assist the policyholder in
1422	securing replacement policies, and the agent may disclose to the
1423	policyholder that such information was obtained from the
1424	corporation.
1425	(dd)(ee)  The assets of the corporation may be invested and
1426	managed by the State Board of Administration.
1427	Section 13.  Subsection (1) of section 624.4072, Florida
1428	Statutes, is amended to read:
1429	624.4072  Minority-owned property and casualty insurers;
1430	limited exemption for taxation and assessments.--
1431	(1)  A minority business that is at least 51 percent owned
1432	by minority persons, as defined in s. 288.703(3), initially
1433	issued a certificate of authority in this state as an authorized
1434	insurer after May 1, 1998, and before January 1, 2002, to write
1435	property and casualty insurance shall be exempt, for a period
1436	not to exceed 10 years from the date of receiving its
1437	certificate of authority, from the following taxes and
1438	assessments:
1439	(a)  taxes imposed under ss. 175.101, 185.08, and 624.509;
1440	(b)  Assessments by the Citizens Property Insurance
1441	Corporation, except for emergency assessments collected from
1442	policyholders pursuant to s. 627.351(6)(b)3.d. Any such insurer
1443	shall be a member insurer of the Citizens Property Insurance
1444	Corporation. The premiums of such insurer shall be included in
1445	determining, for the Citizens Property Insurance Corporation,
1446	the aggregate statewide direct written premium for the subject
1447	lines of business for all member insurers.
1448	Section 14.  Subsections (3), (4), (5), (6), and (7) of
1449	section 627.3511, Florida Statutes, are amended to read:
1450	627.3511  Depopulation of Citizens Property Insurance
1451	Corporation.--
1452	(3)  EXEMPTION FROM DEFICIT ASSESSMENTS.--
1453	(a)  The calculation of an insurer's assessment liability
1454	under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in
1455	any calendar year removes 50,000 or more risks from the Citizens
1456	Property Insurance Corporation, either by issuance of a policy
1457	upon expiration or cancellation of the corporation policy or by
1458	assumption of the corporation's obligations with respect to in-
1459	force policies, exclude such removed policies for the succeeding
1460	3 years, as follows:
1461	1.  In the first year following removal of the risks, the
1462	risks are excluded from the calculation to the extent of 100
1463	percent.
1464	2.  In the second year following removal of the risks, the
1465	risks are excluded from the calculation to the extent of 75
1466	percent.
1467	3.  In the third year following removal of the risks, the
1468	risks are excluded from the calculation to the extent of 50
1469	percent.
1470
1471	If the removal of risks is accomplished through assumption of
1472	obligations with respect to in-force policies, the corporation
1473	shall pay to the assuming insurer all unearned premium with
1474	respect to such policies less any policy acquisition costs
1475	agreed to by the corporation and assuming insurer. The term
1476	"policy acquisition costs" is defined as costs of issuance of
1477	the policy by the corporation which includes agent commissions,
1478	servicing company fees, and premium tax. This paragraph does not
1479	apply to an insurer that, at any time within 5 years before
1480	removing the risks, had a market share in excess of 0.1 percent
1481	of the statewide aggregate gross direct written premium for any
1482	line of property insurance, or to an affiliate of such an
1483	insurer. This paragraph does not apply unless either at least 40
1484	percent of the risks removed from the corporation are located in
1485	Dade, Broward, and Palm Beach Counties, or at least 30 percent
1486	of the risks removed from the corporation are located in such
1487	counties and an additional 50 percent of the risks removed from
1488	the corporation are located in other coastal counties.
1489	(b)  An insurer that first wrote personal lines residential
1490	property coverage in this state on or after July 1, 1994, is
1491	exempt from regular deficit assessments imposed pursuant to s.
1492	627.351(6)(b)3.a. and b., but not emergency assessments
1493	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
1494	of the Citizens Property Insurance Corporation until the earlier
1495	of the following:
1496	1.  The end of the calendar year in which it first wrote
1497	0.5 percent or more of the statewide aggregate direct written
1498	premium for any line of residential property coverage; or
1499	2.  December 31, 1997, or December 31 of the third year in
1500	which it wrote such coverage in this state, whichever is later.
1501	(c)  Other than an insurer that is exempt under paragraph
1502	(b), an insurer that in any calendar year increases its total
1503	structure exposure subject to wind coverage by 25 percent or
1504	more over its exposure for the preceding calendar year is, with
1505	respect to that year, exempt from deficit assessments imposed
1506	pursuant to s. 627.351(6)(b)3.a. and b., but not emergency
1507	assessments collected from policyholders pursuant to s.
1508	627.351(6)(b)3.d., of the Citizens Property Insurance
1509	Corporation attributable to such increase in exposure.
1510	(d)  Any exemption or credit from regular assessments
1511	authorized by this section shall last no longer than 3 years
1512	following the cancellation or expiration of the policy by the
1513	corporation. With the approval of the office, the board may
1514	extend such credits for an additional year if the insurer
1515	guarantees an additional year of renewability for all policies
1516	removed from the corporation, or for 2 additional years if the
1517	insurer guarantees 2 additional years of renewability for all
1518	policies so removed.
1519	(3)(4)  AGENT BONUS.--When the corporation enters into a
1520	contractual agreement for a take-out plan that provides a bonus
1521	to the insurer, the producing agent of record of the corporation
1522	policy is entitled to retain any unearned commission on such
1523	policy, and the insurer shall either:
1524	(a)  Pay to the producing agent of record of the
1525	association policy, for the first year, an amount that is the
1526	greater of the insurer's usual and customary commission for the
1527	type of policy written or a fee equal to the usual and customary
1528	commission of the corporation; or
1529	(b)  Offer to allow the producing agent of record of the
1530	corporation policy to continue servicing the policy for a period
1531	of not less than 1 year and offer to pay the agent the greater
1532	of the insurer's or the corporation's usual and customary
1533	commission for the type of policy written.
1534
1535	If the producing agent is unwilling or unable to accept
1536	appointment, the new insurer shall pay the agent in accordance
1537	with paragraph (a). The requirement of this subsection that the
1538	producing agent of record is entitled to retain the unearned
1539	commission on an association policy does not apply to a policy
1540	for which coverage has been provided in the association for 30
1541	days or less or for which a cancellation notice has been issued
1542	pursuant to s. 627.351(6)(c)10.11. during the first 30 days of
1543	coverage.
1544	(4)(5)  APPLICABILITY.--
1545	(a)  The take-out bonus provided by subsection (2) applies
1546	and the exemption from assessment provided by paragraph (3)(a)
1547	apply only if the corporation policy is replaced by either a
1548	standard policy including wind coverage or, if consistent with
1549	the insurer's underwriting rules as filed with the office, a
1550	basic policy including wind coverage; however, with respect to
1551	risks located in areas where coverage through the high-risk
1552	account of the corporation is available, the replacement policy
1553	need not provide wind coverage. The insurer must renew the
1554	replacement policy at approved rates on substantially similar
1555	terms for four additional 1-year terms, unless canceled or not
1556	renewed by the policyholder. If an insurer assumes the
1557	corporation's obligations for a policy, it must issue a
1558	replacement policy for a 1-year term upon expiration of the
1559	corporation policy and must renew the replacement policy at
1560	approved rates on substantially similar terms for four
1561	additional 1-year terms, unless canceled or not renewed by the
1562	policyholder. For each replacement policy canceled or nonrenewed
1563	by the insurer for any reason during the 5-year coverage period
1564	required by this paragraph, the insurer must remove from the
1565	corporation one additional policy covering a risk similar to the
1566	risk covered by the canceled or nonrenewed policy. In addition
1567	to these requirements, the corporation must place the bonus
1568	moneys in escrow for a period of 5 years; such moneys may be
1569	released from escrow only to pay claims. If the policy is
1570	canceled or nonrenewed before the end of the 5-year period, the
1571	amount of the take-out bonus must be prorated for the time
1572	period the policy was insured. A take-out bonus provided by
1573	subsection (2) or subsection (5)(6) shall not be considered
1574	premium income for purposes of taxes and assessments under the
1575	Florida Insurance Code and shall remain the property of the
1576	corporation, subject to the prior security interest of the
1577	insurer under the escrow agreement until it is released from
1578	escrow, and after it is released from escrow it shall be
1579	considered an asset of the insurer and credited to the insurer's
1580	capital and surplus.
1581	(b)  It is the intent of the Legislature that an insurer
1582	eligible for the exemption under paragraph (3)(a) establish a
1583	preference in appointment of agents for those agents who lose a
1584	substantial amount of business as a result of risks being
1585	removed from the corporation.
1586	(5)(6)  COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--
1587	(a)  The corporation shall pay a bonus to an insurer for
1588	each commercial residential policy that the insurer removes from
1589	the corporation pursuant to an approved take-out plan, either by
1590	issuance of a new policy upon expiration of the corporation
1591	policy or by assumption of the corporation's obligations with
1592	respect to an in-force policy. The corporation board shall
1593	determine the amount of the bonus based on such factors as the
1594	coverage provided, relative hurricane risk, the length of time
1595	that the property has been covered by the corporation, and the
1596	criteria specified in paragraphs (b) and (c). The amount of the
1597	bonus with respect to a particular policy may not exceed 25
1598	percent of the corporation's 1-year premium for the policy. Such
1599	payment is subject to approval of the corporation board. In
1600	order to qualify for the bonus under this subsection, the take-
1601	out plan must include policies reflecting at least $100 million
1602	in structure exposure.
1603	(b)  In order for a plan to qualify for approval:
1604	1.  At least 40 percent of the policies removed from the
1605	corporation under the plan must be located in Dade, Broward, and
1606	Palm Beach Counties, or at least 30 percent of the policies
1607	removed from the corporation under the plan must be located in
1608	such counties and an additional 50 percent of the policies
1609	removed from the corporation must be located in other coastal
1610	counties.
1611	2.  The insurer must renew the replacement policy at
1612	approved rates on substantially similar terms for two additional
1613	1-year terms, unless canceled or nonrenewed by the insurer for a
1614	lawful reason other than reduction of hurricane exposure. If an
1615	insurer assumes the corporation's obligations for a policy, it
1616	must issue a replacement policy for a 1-year term upon
1617	expiration of the corporation policy and must renew the
1618	replacement policy at approved rates on substantially similar
1619	terms for two additional 1-year terms, unless canceled by the
1620	insurer for a lawful reason other than reduction of hurricane
1621	exposure. For each replacement policy canceled or nonrenewed by
1622	the insurer for any reason during the 3-year coverage period
1623	required by this subparagraph, the insurer must remove from the
1624	corporation one additional policy covering a risk similar to the
1625	risk covered by the canceled or nonrenewed policy.
1626	(c)  A take-out plan is deemed approved unless the office,
1627	within 120 days after the board votes to recommend the plan,
1628	disapproves the plan based on:
1629	1.  The capacity of the insurer to absorb the policies
1630	proposed to be taken out of the corporation and the
1631	concentration of risks of those policies.
1632	2.  Whether the geographic and risk characteristics of
1633	policies in the proposed take-out plan serve to reduce the
1634	exposure of the corporation sufficiently to justify the bonus.
1635	3.  Whether coverage for risks to be taken out otherwise
1636	exists in the admitted voluntary market.
1637	4.  The degree to which the take-out bonus is promoting new
1638	capital being allocated by the insurer to residential property
1639	coverage in this state.
1640	(d)  The calculation of an insurer's regular assessment
1641	liability under s. 627.351(6)(b)3.a. and b., but not emergency
1642	assessments collected from policyholders pursuant to s.
1643	627.351(6)(b)3.d., shall, with respect to commercial residential
1644	policies removed from the corporation under an approved take-out
1645	plan, exclude such removed policies for the succeeding 3 years,
1646	as follows:
1647	1.  In the first year following removal of the policies,
1648	the policies are excluded from the calculation to the extent of
1649	100 percent.
1650	2.  In the second year following removal of the policies,
1651	the policies are excluded from the calculation to the extent of
1652	75 percent.
1653	3.  In the third year following removal of the policies,
1654	the policies are excluded from the calculation to the extent of
1655	50 percent.
1656	(e)  An insurer that first wrote commercial residential
1657	property coverage in this state on or after June 1, 1996, is
1658	exempt from regular assessments under s. 627.351(6)(b)3.a. and
1659	b., but not emergency assessments collected from policyholders
1660	pursuant to s. 627.351(6)(b)3.d., with respect to commercial
1661	residential policies until the earlier of:
1662	1.  The end of the calendar year in which such insurer
1663	first wrote 0.5 percent or more of the statewide aggregate
1664	direct written premium for commercial residential property
1665	coverage; or
1666	2.  December 31 of the third year in which such insurer
1667	wrote commercial residential property coverage in this state.
1668	(f)  An insurer that is not otherwise exempt from regular
1669	assessments under s. 627.351(6)(b)3.a. and b. with respect to
1670	commercial residential policies is, for any calendar year in
1671	which such insurer increased its total commercial residential
1672	hurricane exposure by 25 percent or more over its exposure for
1673	the preceding calendar year, exempt from regular assessments
1674	under s. 627.351(6)(b)3.a. and b., but not emergency assessments
1675	collected from policyholders pursuant to s. 627.351(6)(b)3.d.,
1676	attributable to such increased exposure.
1677	(6)(7)  A minority business, which is at least 51 percent
1678	owned by minority persons as described in s. 288.703(3),
1679	desiring to operate or become licensed as a property and
1680	casualty insurer may exempt up to $50 of the escrow requirements
1681	of the take-out bonus, as described in this section. Such
1682	minority business, which has applied for a certificate of
1683	authority to engage in business as a property and casualty
1684	insurer, may simultaneously file the business' proposed take-out
1685	plan, as described in this section, with the corporation.
1686	Section 15.  Paragraph (a) of subsection (3) of section
1687	627.3515, Florida Statutes, as amended by chapter 2007-1, Laws
1688	of Florida, is amended to read:
1689	627.3515  Market assistance plan; property and casualty
1690	risks.--
1691	(3)(a)  The plan and the corporation shall develop a
1692	business plan and present it to the Financial Services
1693	Commission for approval by September 1, 2007, to provide for the
1694	implementation of an electronic database for the purpose of
1695	confirming eligibility pursuant to s. 627.351(6). The business
1696	plan may provide that authorized insurers or agents of
1697	authorized insurers may submit to the plan or the corporation in
1698	electronic form, as determined by the plan or the corporation,
1699	information determined necessary by the plan or the corporation
1700	to deny coverage to risks ineligible for coverage by the
1701	corporation. Any authorized insurer submitting such information
1702	that results in a risk being denied coverage by the corporation
1703	is required to offer coverage to the risk at its approved rates,
1704	for the coverage and premium quoted, for at least 1 year.
1705	Section 16.  Section 627.3517, Florida Statutes, is amended
1706	to read:
1707	627.3517  Consumer choice.--
1708	(1)  Except as provided in subsection (2), No provision of
1709	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
1710	impair the right of any insurance risk apportionment plan
1711	policyholder, upon receipt of any keepout or take-out offer, to
1712	retain his or her current agent, so long as that agent is duly
1713	licensed and appointed by the insurance risk apportionment plan
1714	or otherwise authorized to place business with the insurance
1715	risk apportionment plan. This right shall not be canceled,
1716	suspended, impeded, abridged, or otherwise compromised by any
1717	rule, plan of operation, or depopulation plan, whether through
1718	keepout, take-out, midterm assumption, or any other means, of
1719	any insurance risk apportionment plan or depopulation plan,
1720	including, but not limited to, those described in s. 627.351, s.
1721	627.3511, or s. 627.3515. The commission shall adopt any rules
1722	necessary to cause any insurance risk apportionment plan or
1723	market assistance plan under such sections to demonstrate that
1724	the operations of the plan do not interfere with, promote, or
1725	allow interference with the rights created under this section.
1726	If the policyholder's current agent is unable or unwilling to be
1727	appointed with the insurer making the take-out or keepout offer,
1728	the policyholder shall not be disqualified from participation in
1729	the appropriate insurance risk apportionment plan because of an
1730	offer of coverage in the voluntary market. An offer of full
1731	property insurance coverage by the insurer currently insuring
1732	either the ex-wind or wind-only coverage on the policy to which
1733	the offer applies shall not be considered a take-out or keepout
1734	offer. Any rule, plan of operation, or plan of depopulation,
1735	through keepout, take-out, midterm assumption, or any other
1736	means, of any property insurance risk apportionment plan under
1737	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
1738	and 627.3511(3)(4).
1739
1740	====== D I R E C T O R Y  A M E N D M E N T ======
1741	Remove lines 744-747, and insert:
1742	Section 5.  Paragraphs (a), (b), (c), (n), (p), (r), (s),
1743	(t), (u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd), and
1744	(ee) of subsection (6) of section 627.351, Florida Statutes, as
1745	amended by chapter 2007-1, Laws of Florida, are amended to read:
1746
1747	========= T I T L E  A M E N D M E N T =========
1748	Remove lines 2612-2626,
1749	and insert:
1750	the economic health of the state; deleting provisions relating
1751	to assessing assessable insurers; deleting provisions relating
1752	to what constitutes an assessable insurer; deleting provisions
1753	relating to deficit in an account; revising the definition of
1754	the term "assessments"; deleting provisions relating to subject
1755	lines of business; revising powers of the corporation to levy
1756	certain assessments; deleting provisions relating to unsold
1757	bonds; revising powers of the corporation; deleting provisions
1758	relating to credits and exemptions from assessments; revising
1759	provisions for determining eligibility for coverage under the
1760	corporation; reinstating certain rate filings by the
1761	corporation; deleting provisions relating to the uncollected
1762	assessments; deleting provisions relieving assessable insurers
1763	of liability under certain circumstances; amending s. 627.3515,
1764	F.S.; revising criteria for an electronic database for a
1765	business plan; amending ss. 624.4072, 627.3511, and 627.3517,
1766	F.S.; conforming provisions to changes made by this act;
1767	deleting a provision specifying nonapplication for a certain
1768	period; correcting cross-references; amending s.

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