(LATE FILED)	Amendment
Bill No. 7077

Amendment No. 736265

CHAMBER ACTION
Senate		House
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1	Representative(s) Reagan offered the following:
2
3	Substitute Amendment for Amendment (695989) (with title
4	amendment)
5	Remove everything after the enacting clause, and insert:
6	Section 1.  Paragraph (h) of subsection (7) of section
7	163.01, Florida Statutes, as amended by chapter 2007-1, Laws of
8	Florida, is amended to read:
9	163.01  Florida Interlocal Cooperation Act of 1969.--
10	(7)
11	(h)1.  Notwithstanding the provisions of paragraph (c), any
12	separate legal entity consisting of an alliance, as defined in
13	s. 395.106(2)(a), created pursuant to this paragraph and
14	controlled by and whose members consist of eligible entities
15	comprised of special districts created pursuant to a special act
16	and having the authority to own or operate one or more hospitals
17	licensed in this state or hospitals licensed in this state that
18	are owned, operated, or funded by a county or municipality, for
19	the purpose of providing property insurance coverage as defined
20	in s. 395.106(2)(b)(c), for such eligible entities, may exercise
21	all powers under this subsection in connection with borrowing
22	funds for such purposes, including, without limitation, the
23	authorization, issuance, and sale of bonds, notes, or other
24	obligations of indebtedness. Borrowed funds, including, but not
25	limited to, bonds issued by such alliance shall be deemed issued
26	on behalf of such eligible entities that enter into loan
27	agreements with such separate legal entity as provided in this
28	paragraph.
29	2.  Any such separate legal entity shall have all the
30	powers that are provided by the interlocal agreement under which
31	the entity is created or that are necessary to finance, operate,
32	or manage the alliance's property insurance coverage program.
33	Proceeds of bonds, notes, or other obligations issued by such an
34	entity may be loaned to any one or more eligible entities. Such
35	eligible entities are authorized to enter into loan agreements
36	with any separate legal entity created pursuant to this
37	paragraph for the purpose of obtaining moneys with which to
38	finance property insurance coverage or claims. Obligations of
39	any eligible entity pursuant to a loan agreement as described in
40	this paragraph may be validated as provided in chapter 75.
41	3.  Any bonds, notes, or other obligations to be issued or
42	incurred by a separate legal entity created pursuant to this
43	paragraph shall be authorized by resolution of the governing
44	body of such entity and bear the date or dates; mature at the
45	time or times, not exceeding 30 years from their respective
46	dates; bear interest at the rate or rates, which may be fixed or
47	vary at such time or times and in accordance with a specified
48	formula or method of determination; be payable at the time or
49	times; be in the denomination; be in the form; carry the
50	registration privileges; be executed in the manner; be payable
51	from the sources and in the medium of payment and at the place;
52	and be subject to redemption, including redemption prior to
53	maturity, as the resolution may provide. The bonds, notes, or
54	other obligations may be sold at public or private sale for such
55	price as the governing body of the separate legal entity shall
56	determine. The bonds may be secured by such credit enhancement,
57	if any, as the governing body of the separate legal entity deems
58	appropriate. The bonds may be secured by an indenture of trust
59	or trust agreement. In addition, the governing body of the
60	separate legal entity may delegate, to such officer or official
61	of such entity as the governing body may select, the power to
62	determine the time; manner of sale, public or private;
63	maturities; rate or rates of interest, which may be fixed or may
64	vary at such time or times and in accordance with a specified
65	formula or method of determination; and other terms and
66	conditions as may be deemed appropriate by the officer or
67	official so designated by the governing body of such separate
68	legal entity. However, the amounts and maturities of such bonds,
69	the interest rate or rates, and the purchase price of such bonds
70	shall be within the limits prescribed by the governing body of
71	such separate legal entity in its resolution delegating to such
72	officer or official the power to authorize the issuance and sale
73	of such bonds.
74	4.  Bonds issued pursuant to this paragraph may be
75	validated as provided in chapter 75. The complaint in any action
76	to validate such bonds shall be filed only in the Circuit Court
77	for Leon County. The notice required to be published by s. 75.06
78	shall be published in Leon County and in each county in which an
79	eligible entity that is a member of an alliance is located. The
80	complaint and order of the circuit court shall be served only on
81	the State Attorney of the Second Judicial Circuit and on the
82	state attorney of each circuit in each county in which an
83	eligible entity receiving bond proceeds is located.
84	5.  The accomplishment of the authorized purposes of a
85	separate legal entity created under this paragraph is deemed in
86	all respects for the benefit, increase of the commerce and
87	prosperity, and improvement of the health and living conditions
88	of the people of this state. Inasmuch as the separate legal
89	entity performs essential public functions in accomplishing its
90	purposes, the separate legal entity is not required to pay any
91	taxes or assessments of any kind upon any property acquired or
92	used by the entity for such purposes or upon any revenues at any
93	time received by the entity. The bonds, notes, and other
94	obligations of such separate legal entity, the transfer of and
95	income from such bonds, notes, and other obligations, including
96	any profits made on the sale of such bonds, notes, and other
97	obligations, are at all times free from taxation of any kind of
98	the state or by any political subdivision or other agency or
99	instrumentality of the state. The exemption granted in this
100	paragraph does not apply to any tax imposed by chapter 220 on
101	interest, income, or profits on debt obligations owned by
102	corporations.
103	6.  The participation by any eligible entity in an alliance
104	or a separate legal entity created pursuant to this paragraph
105	may not be deemed a waiver of immunity to the extent of
106	liability or any other coverage, and a contract entered
107	regarding such alliance is not required to contain any provision
108	for waiver.
109	Section 2.  Paragraph (b) of subsection (4), paragraph (e)
110	of subsection (5), paragraph (b) of subsection (6), and
111	subsection (16) of section 215.555, Florida Statutes, as amended
112	by chapter 2007-1, Laws of Florida, are amended to read:
113	215.555  Florida Hurricane Catastrophe Fund.--
114	(4)  REIMBURSEMENT CONTRACTS.--
115	(b)1.  The contract shall contain a promise by the board to
116	reimburse the insurer for 45 percent, 75 percent, or 90 percent
117	of its losses from each covered event in excess of the insurer's
118	retention, plus 5 percent of the reimbursed losses to cover loss
119	adjustment expenses.
120	2.  The insurer must elect one of the percentage coverage
121	levels specified in this paragraph and may, upon renewal of a
122	reimbursement contract, elect a lower percentage coverage level
123	if no revenue bonds issued under subsection (6) after a covered
124	event are outstanding, or elect a higher percentage coverage
125	level, regardless of whether or not revenue bonds are
126	outstanding. All members of an insurer group must elect the same
127	percentage coverage level. Any joint underwriting association,
128	risk apportionment plan, or other entity created under s.
129	627.351 must elect the 90-percent coverage level.
130	3.  The contract shall provide that reimbursement amounts
131	shall not be reduced by reinsurance paid or payable to the
132	insurer from other sources.
133	4.  Notwithstanding any other provision contained in this
134	section, the board shall make available to insurers that
135	purchased coverage provided by this subparagraph participated in
136	2006, insurers qualifying as limited apportionment companies
137	under s. 627.351(6)(c) which began writing property insurance in
138	2007, and insurers that were approved to participate in 2006 or
139	that are approved in 2007 for the Insurance Capital Build-Up
140	Incentive Program pursuant to s. 215.5595, a contract or
141	contract addendum that provides an additional amount of
142	reimbursement coverage of up to $10 million. The premium to be
143	charged for this additional reimbursement coverage shall be 50
144	percent of the additional reimbursement coverage provided, which
145	shall include one prepaid reinstatement. The minimum retention
146	level that an eligible participating insurer must retain
147	associated with this additional coverage layer is 30 percent of
148	the insurer's surplus as of December 31, 2006. This coverage
149	shall be in addition to all other coverage that may be provided
150	under this section. The coverage provided by the fund under this
151	subsection shall be in addition to the claims-paying capacity as
152	defined in subparagraph (c)1., but only with respect to those
153	insurers that select the additional coverage option and meet the
154	requirements of this subsection. The claims-paying capacity with
155	respect to all other participating insurers and limited
156	apportionment companies that do not select the additional
157	coverage option shall be limited to their reimbursement
158	premium's proportionate share of the actual claims-paying
159	capacity otherwise defined in subparagraph (c)1. and as provided
160	for under the terms of the reimbursement contract. Coverage
161	provided in the reimbursement contract will not be affected by
162	the additional premiums paid by participating insurers
163	exercising the additional coverage option allowed in this
164	subparagraph. This subparagraph expires on May 31, 2008.
165	(5)  REIMBURSEMENT PREMIUMS.--
166	(e)  If Citizens Property Insurance Corporation assumes or
167	otherwise provides coverage for policies of an insurer placed in
168	liquidation under chapter 631 pursuant to s. 627.351(6), the
169	corporation may, pursuant to conditions mutually agreed to
170	between the corporation and the State Board of Administration,
171	obtain coverage for such policies under its contract with the
172	fund or accept an assignment of the liquidated insurer's
173	contract with the fund. If Citizens Property Insurance
174	Corporation elects to cover these policies under the
175	corporation's contract with the fund, it shall notify the board
176	of its insured values with respect to such policies within a
177	specified time mutually agreed to between the corporation and
178	the board, after such assumption or other coverage transaction,
179	and the fund shall treat such policies as having been in effect
180	as of June 30 of that year. In the event of an assignment, the
181	fund shall apply that contract to such policies and treat
182	Citizens Property Insurance Corporation as if the corporation
183	were the liquidated insurer for the remaining term of the
184	contract, and the corporation shall have all rights and duties
185	of the liquidated insurer beginning on the date it provides
186	coverage for such policies, but the corporation is not subject
187	to any preexisting rights, liabilities, or duties of the
188	liquidated insurer. The assignment, including any unresolved
189	issues between the liquidated insurer and Citizens Property
190	Insurance Corporation under the contract, shall be provided for
191	in the liquidation order or otherwise determined by the court.
192	However, if a covered event occurs before the effective date of
193	the assignment, the corporation may not obtain coverage for such
194	policies under its contract with the fund and shall accept an
195	assignment of the liquidated insurer's contract as provided in
196	this paragraph. This paragraph expires on June 1, 2007.
197	(6)  REVENUE BONDS.--
198	(b)  Emergency assessments.--
199	1.  If the board determines that the amount of revenue
200	produced under subsection (5) is insufficient to fund the
201	obligations, costs, and expenses of the fund and the
202	corporation, including repayment of revenue bonds and that
203	portion of the debt service coverage not met by reimbursement
204	premiums, the board shall direct the Office of Insurance
205	Regulation to levy, by order, an emergency assessment on direct
206	premiums for all property and casualty lines of business in this
207	state, including property and casualty business of surplus lines
208	insurers regulated under part VIII of chapter 626, but not
209	including any workers' compensation premiums or medical
210	malpractice premiums. As used in this subsection, the term
211	"property and casualty business" includes all lines of business
212	identified on Form 2, Exhibit of Premiums and Losses, in the
213	annual statement required of authorized insurers by s. 624.424
214	and any rule adopted under this section, except for those lines
215	identified as accident and health insurance and except for
216	policies written under the National Flood Insurance Program. The
217	assessment shall be specified as a percentage of direct written
218	premium and is subject to annual adjustments by the board in
219	order to meet debt obligations. The same percentage shall apply
220	to all policies in lines of business subject to the assessment
221	issued or renewed during the 12-month period beginning on the
222	effective date of the assessment.
223	2.  A premium is not subject to an annual assessment under
224	this paragraph in excess of 6 percent of premium with respect to
225	obligations arising out of losses attributable to any one
226	contract year, and a premium is not subject to an aggregate
227	annual assessment under this paragraph in excess of 10 percent
228	of premium. An annual assessment under this paragraph shall
229	continue as long as the revenue bonds issued with respect to
230	which the assessment was imposed are outstanding, including any
231	bonds the proceeds of which were used to refund the revenue
232	bonds, unless adequate provision has been made for the payment
233	of the bonds under the documents authorizing issuance of the
234	bonds.
235	3.  Emergency assessments shall be collected from
236	policyholders. Emergency assessments shall be remitted by
237	insurers as a percentage of direct written premium for the
238	preceding calendar quarter as specified in the order from the
239	Office of Insurance Regulation. The office shall verify the
240	accurate and timely collection and remittance of emergency
241	assessments and shall report the information to the board in a
242	form and at a time specified by the board. Each insurer
243	collecting assessments shall provide the information with
244	respect to premiums and collections as may be required by the
245	office to enable the office to monitor and verify compliance
246	with this paragraph.
247	4.  With respect to assessments of surplus lines premiums,
248	each surplus lines agent shall collect the assessment at the
249	same time as the agent collects the surplus lines tax required
250	by s. 626.932, and the surplus lines agent shall remit the
251	assessment to the Florida Surplus Lines Service Office created
252	by s. 626.921 at the same time as the agent remits the surplus
253	lines tax to the Florida Surplus Lines Service Office. The
254	emergency assessment on each insured procuring coverage and
255	filing under s. 626.938 shall be remitted by the insured to the
256	Florida Surplus Lines Service Office at the time the insured
257	pays the surplus lines tax to the Florida Surplus Lines Service
258	Office. The Florida Surplus Lines Service Office shall remit the
259	collected assessments to the fund or corporation as provided in
260	the order levied by the Office of Insurance Regulation. The
261	Florida Surplus Lines Service Office shall verify the proper
262	application of such emergency assessments and shall assist the
263	board in ensuring the accurate and timely collection and
264	remittance of assessments as required by the board. The Florida
265	Surplus Lines Service Office shall annually calculate the
266	aggregate written premium on property and casualty business,
267	other than workers' compensation and medical malpractice,
268	procured through surplus lines agents and insureds procuring
269	coverage and filing under s. 626.938 and shall report the
270	information to the board in a form and at a time specified by
271	the board.
272	5.  Any assessment authority not used for a particular
273	contract year may be used for a subsequent contract year. If,
274	for a subsequent contract year, the board determines that the
275	amount of revenue produced under subsection (5) is insufficient
276	to fund the obligations, costs, and expenses of the fund and the
277	corporation, including repayment of revenue bonds and that
278	portion of the debt service coverage not met by reimbursement
279	premiums, the board shall direct the Office of Insurance
280	Regulation to levy an emergency assessment up to an amount not
281	exceeding the amount of unused assessment authority from a
282	previous contract year or years, plus an additional 4 percent
283	provided that the assessments in the aggregate do not exceed the
284	limits specified in subparagraph 2.
285	6.  The assessments otherwise payable to the corporation
286	under this paragraph shall be paid to the fund unless and until
287	the Office of Insurance Regulation and the Florida Surplus Lines
288	Service Office have received from the corporation and the fund a
289	notice, which shall be conclusive and upon which they may rely
290	without further inquiry, that the corporation has issued bonds
291	and the fund has no agreements in effect with local governments
292	under paragraph (c). On or after the date of the notice and
293	until the date the corporation has no bonds outstanding, the
294	fund shall have no right, title, or interest in or to the
295	assessments, except as provided in the fund's agreement with the
296	corporation.
297	7.  Emergency assessments are not premium and are not
298	subject to the premium tax, to the surplus lines tax, to any
299	fees, or to any commissions. An insurer is liable for all
300	assessments that it collects and must treat the failure of an
301	insured to pay an assessment as a failure to pay the premium. An
302	insurer is not liable for uncollectible assessments.
303	8.  When an insurer is required to return an unearned
304	premium, it shall also return any collected assessment
305	attributable to the unearned premium. A credit adjustment to the
306	collected assessment may be made by the insurer with regard to
307	future remittances that are payable to the fund or corporation,
308	but the insurer is not entitled to a refund.
309	9.  When a surplus lines insured or an insured who has
310	procured coverage and filed under s. 626.938 is entitled to the
311	return of an unearned premium, the Florida Surplus Lines Service
312	Office shall provide a credit or refund to the agent or such
313	insured for the collected assessment attributable to the
314	unearned premium prior to remitting the emergency assessment
315	collected to the fund or corporation.
316	10.  The exemption of medical malpractice insurance
317	premiums from emergency assessments under this paragraph is
318	repealed May 31, 2008 2007, and medical malpractice insurance
319	premiums shall be subject to emergency assessments attributable
320	to loss events occurring in the contract years commencing on
321	June 1, 2008 2007.
322	(16)  TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL
323	COVERAGE.--
324	(a)  Findings and intent.--
325	1.  The Legislature finds that:
326	a.  Because of temporary disruptions in the market for
327	catastrophic reinsurance, many property insurers were unable to
328	procure reinsurance for the 2006 hurricane season with an
329	attachment point below the insurers' respective Florida
330	Hurricane Catastrophe Fund attachment points, were unable to
331	procure sufficient amounts of such reinsurance, or were able to
332	procure such reinsurance only by incurring substantially higher
333	costs than in prior years.
334	b.  The reinsurance market problems were responsible, at
335	least in part, for substantial premium increases to many
336	consumers and increases in the number of policies issued by the
337	Citizens Property Insurance Corporation.
338	c.  It is likely that the reinsurance market disruptions
339	will not significantly abate prior to the 2007 hurricane season.
340	2.  It is the intent of the Legislature to create a
341	temporary emergency program, applicable to the 2007, 2008, and
342	2009 hurricane seasons, to address these market disruptions and
343	enable insurers, at their option, to procure additional coverage
344	from the Florida Hurricane Catastrophe Fund.
345	(b)  Applicability of other provisions of this
346	section.--All provisions of this section and the rules adopted
347	under this section apply to the program created by this
348	subsection unless specifically superseded by this subsection.
349	(c)  Optional coverage.--For the contract year commencing
350	June 1, 2007, and ending May 31, 2008, the contract year
351	commencing June 1, 2008, and ending May 31, 2009, and the
352	contract year commencing June 1, 2009, and ending May 31, 2010,
353	the board shall offer for each of such years the optional
354	coverage as provided in this subsection.
355	(d)  Additional definitions.--As used in this subsection,
356	the term:
357	1.  "TEACO options" means the temporary emergency
358	additional coverage options created under this subsection.
359	2.  "TEACO insurer" means an insurer that has opted to
360	obtain coverage under the TEACO options in addition to the
361	coverage provided to the insurer under its reimbursement
362	contract.
363	3.  "TEACO reimbursement premium" means the premium charged
364	by the fund for coverage provided under the TEACO options.
365	4.  "TEACO retention" means the amount of losses below
366	which a TEACO insurer is not entitled to reimbursement from the
367	fund under the TEACO option selected. A TEACO insurer's
368	retention options shall be calculated as follows:
369	a.  The board shall calculate and report to each TEACO
370	insurer the TEACO retention multiples. There shall be three
371	TEACO retention multiples for defining coverage. Each multiple
372	shall be calculated by dividing $3 billion, $4 billion, or $5
373	billion by the total estimated mandatory FHCF TEACO
374	reimbursement premium assuming all insurers selected that
375	option. Total estimated TEACO reimbursement premium for purposes
376	of the calculation under this sub-subparagraph shall be
377	calculated using the assumption that all insurers have selected
378	a specific TEACO retention multiple option and have selected the
379	90-percent coverage level.
380	b.  The TEACO retention multiples as determined under sub-
381	subparagraph a. shall be adjusted to reflect the coverage level
382	elected by the insurer. For insurers electing the 90-percent
383	coverage level, the adjusted retention multiple is 100 percent
384	of the amount determined under sub-subparagraph a. For insurers
385	electing the 75-percent coverage level, the retention multiple
386	is 120 percent of the amount determined under sub-subparagraph
387	a. For insurers electing the 45-percent coverage level, the
388	adjusted retention multiple is 200 percent of the amount
389	determined under sub-subparagraph a.
390	c.  An insurer shall determine its provisional TEACO
391	retention by multiplying its estimated mandatory FHCF
392	provisional TEACO reimbursement premium by the applicable
393	adjusted TEACO retention multiple and shall determine its actual
394	TEACO retention by multiplying its actual mandatory FHCF TEACO
395	reimbursement premium by the applicable adjusted TEACO retention
396	multiple.
397	d.  For TEACO insurers who experience multiple covered
398	events causing loss during the contract year, the insurer's full
399	TEACO retention shall be applied to each of the covered events
400	causing the two largest losses for that insurer. For other
401	covered events resulting in losses, the TEACO option does not
402	apply and the insurer's retention shall be one-third of the full
403	retention as calculated under paragraph (2)(e).
404	5.  "TEACO addendum" means an addendum to the reimbursement
405	contract reflecting the obligations of the fund and TEACO
406	insurers under the program created by this subsection.
407	6.  "FHCF" means the Florida Hurricane Catastrophe Fund.
408	(e)  TEACO addendum.--
409	1.  The TEACO addendum shall provide for reimbursement of
410	TEACO insurers for covered events occurring during the contract
411	year, in exchange for the TEACO reimbursement premium paid into
412	the fund under paragraph (f). Any insurer writing covered
413	policies has the option of choosing to accept the TEACO addendum
414	for any of the 3 contract years that the coverage is offered.
415	2.  The TEACO addendum shall contain a promise by the board
416	to reimburse the TEACO insurer for 45 percent, 75 percent, or 90
417	percent of its losses from each covered event in excess of the
418	insurer's TEACO retention, plus 5 percent of the reimbursed
419	losses to cover loss adjustment expenses. The percentage shall
420	be the same as the coverage level selected by the insurer under
421	paragraph (4)(b).
422	3.  The TEACO addendum shall provide that reimbursement
423	amounts shall not be reduced by reinsurance paid or payable to
424	the insurer from other sources.
425	4.  The TEACO addendum shall also provide that the
426	obligation of the board with respect to all TEACO addenda shall
427	not exceed an amount equal to two times the difference between
428	the industry retention level calculated under paragraph (2)(e)
429	and the $3 billion, $4 billion, or $5 billion industry TEACO
430	retention level options actually selected, but in no event may
431	the board's obligation exceed the actual claims-paying capacity
432	of the fund plus the additional capacity created in paragraph
433	(g). If the actual claims-paying capacity and the additional
434	capacity created under paragraph (g) fall short of the board's
435	obligations under the reimbursement contract, each insurer's
436	share of the fund's capacity shall be prorated based on the
437	premium an insurer pays for its mandatory normal reimbursement
438	coverage and the premium paid for its optional TEACO coverage as
439	each such premium bears to the total premiums paid to the fund
440	times the available capacity.
441	5.  The priorities, schedule, and method of reimbursements
442	under the TEACO addendum shall be the same as provided under
443	subsection (4).
444	6.  A TEACO insurer's maximum reimbursement for a single
445	event shall be equal to the product of multiplying its mandatory
446	FHCF premium by the difference between its FHCF retention
447	multiple and its TEACO retention multiple under the TEACO option
448	selected and by the coverage selected under paragraph (4)(b),
449	plus an additional 5 percent for loss adjustment expenses. A
450	TEACO insurer's maximum reimbursement under the TEACO option
451	selected for a TEACO insurer's two largest events addendum shall
452	be twice its maximum reimbursement for a single event calculated
453	by multiplying the insurer's share of the estimated total TEACO
454	reimbursement premium as calculated under sub-subparagraph
455	(d)4.a. by an amount equal to two times the difference between
456	the industry retention level calculated under paragraph (2)(e)
457	and the $3 billion, $4 billion, or $5 billion industry TEACO
458	retention level specified in sub-subparagraph (d)4.a. as
459	selected by the TEACO insurer.
460	(f)  TEACO reimbursement premiums.--
461	1.  Each TEACO insurer shall pay to the fund, in the manner
462	and at the time provided in the reimbursement contract for
463	payment of reimbursement premiums, a TEACO reimbursement premium
464	calculated as specified in this paragraph.
465	2.  The TEACO reimbursement premiums shall be calculated
466	based on the assumption that, if all insurers entering into
467	reimbursement contracts under subsection (4) also accepted the
468	TEACO option:
469	a.  The insurer's industry TEACO reimbursement premium
470	associated with the $3 billion retention option shall would be
471	equal to 85 percent of a TEACO insurer's maximum reimbursement
472	for a single event as calculated under subparagraph (e)6. the
473	difference between the industry retention level calculated under
474	paragraph (2)(e) and the $3 billion industry TEACO retention
475	level.
476	b.  The TEACO reimbursement premium associated with the $4
477	billion retention option shall would be equal to 80 percent of a
478	TEACO insurer's maximum reimbursement for a single event as
479	calculated under subparagraph (e)6. the difference between the
480	industry retention level calculated under paragraph (2)(e) and
481	the $4 billion industry TEACO retention level.
482	c.  The TEACO premium associated with the $5 billion
483	retention option shall would be equal to 75 percent of a TEACO
484	insurer's maximum reimbursement for a single event as calculated
485	under subparagraph (e)6. the difference between the industry
486	retention level calculated under paragraph (2)(e) and the $5
487	billion industry TEACO retention level.
488	3.  Each insurer's TEACO premium shall be calculated based
489	on its share of the total TEACO reimbursement premiums based on
490	its coverage selection under the TEACO addendum.
491	(g)  Effect on claims-paying capacity of the fund.--For the
492	contract term commencing June 1, 2007, the contract year
493	commencing June 1, 2008, and the contract term beginning June 1,
494	2009, the program created by this subsection shall increase the
495	claims-paying capacity of the fund as provided in subparagraph
496	(4)(c)1. by an amount equal to two times the difference between
497	the industry retention level calculated under paragraph (2)(e)
498	and the $3 billion industry TEACO retention level specified in
499	sub-subparagraph (d)4.a. The additional capacity shall apply
500	only to the additional coverage provided by the TEACO option and
501	shall not otherwise affect any insurer's reimbursement from the
502	fund.
503	Section 3.  Paragraph (b) of subsection (2) of section
504	215.5595, Florida Statutes, is amended to read:
505	215.5595  Insurance Capital Build-Up Incentive Program.--
506	(2)  The purpose of this section is to provide surplus
507	notes to new or existing authorized residential property
508	insurers under the Insurance Capital Build-Up Incentive Program
509	administered by the State Board of Administration, under the
510	following conditions:
511	(b)  The insurer must contribute an amount of new capital
512	to its surplus which is at least equal to the amount of the
513	surplus note and must apply to the board by July 1, 2006. If an
514	insurer applies after July 1, 2006, but before June 1, 2007, the
515	amount of the surplus note is limited to one-half of the new
516	capital that the insurer contributes to its surplus, except for
517	an insurer writing only manufactured housing policies, for which
518	the amount of the surplus note is equal to the amount of the new
519	capital that the insurer contributes to its surplus. For
520	purposes of this section, new capital must be in the form of
521	cash or cash equivalents as specified in s. 625.012(1).
522	Section 4.  Subsection (1) of section 624.407, Florida
523	Statutes, as amended by chapter 2007-1, Laws of Florida, is
524	amended to read:
525	624.407  Capital funds required; new insurers.--
526	(1)  To receive authority to transact any one kind or
527	combinations of kinds of insurance, as defined in part V of this
528	chapter, an insurer applying for its original certificate of
529	authority in this state after the effective date of this section
530	shall possess surplus as to policyholders not less than the
531	greater of:
532	(a)  Five million dollars for a property and casualty
533	insurer, or $2.5 million for any other insurer;
534	(b)  For life insurers, 4 percent of the insurer's total
535	liabilities;
536	(c)  For life and health insurers, 4 percent of the
537	insurer's total liabilities, plus 6 percent of the insurer's
538	liabilities relative to health insurance; or
539	(d)  For all insurers other than life insurers and life and
540	health insurers, 10 percent of the insurer's total liabilities;
541
542	however, a domestic insurer that transacts residential property
543	insurance and is a wholly owned subsidiary of an insurer
544	domiciled authorized to do business in any other state shall
545	possess surplus as to policyholders of at least $50 million, but
546	no insurer shall be required under this subsection to have
547	surplus as to policyholders greater than $100 million.
548	Section 5.  Paragraph (a) of subsection (1) of section
549	624.408, Florida Statutes, is amended to read:
550	624.408  Surplus as to policyholders required; new and
551	existing insurers.--
552	(1)(a)  To maintain a certificate of authority to transact
553	any one kind or combinations of kinds of insurance, as defined
554	in part V of this chapter, an insurer in this state shall at all
555	times maintain surplus as to policyholders not less than the
556	greater of:
557	1.  Except as provided in subparagraph 5. and paragraph
558	(b), $1.5 million;
559	2.  For life insurers, 4 percent of the insurer's total
560	liabilities;
561	3.  For life and health insurers, 4 percent of the
562	insurer's total liabilities plus 6 percent of the insurer's
563	liabilities relative to health insurance; or
564	4.  For all insurers other than mortgage guaranty insurers,
565	life insurers, and life and health insurers, 10 percent of the
566	insurer's total liabilities.
567	5.  For property and casualty insurers, $4 million;
568	however, a domestic insurer that transacts residential property
569	insurance and is a wholly owned subsidiary of an insurer
570	domiciled in any other state shall possess surplus as to
571	policyholders of at least $50 million.
572	Section 6.  Subsection (2) of section 626.9201, Florida
573	Statutes, is amended to read:
574	626.9201  Notice of cancellation or nonrenewal.--
575	(2)  An insurer issuing a policy providing coverage for
576	property, casualty, surety, or marine insurance shall give the
577	named insured written notice of cancellation or termination
578	other than nonrenewal at least 45 days prior to the effective
579	date of the cancellation or termination, including in the
580	written notice the reason or reasons for the cancellation or
581	termination, except that:
582	(a)  When cancellation is for nonpayment of premium, at
583	least 10 days' written notice of cancellation accompanied by the
584	reason therefor shall be given. As used in this paragraph, the
585	term "nonpayment of premium" means failure of the named insured
586	to discharge when due any of his or her obligations in
587	connection with the payment of premiums on a policy or any
588	installment of such premium, whether the premium is payable
589	directly to the insurer or its agent or indirectly under any
590	premium finance plan or extension of credit, or failure to
591	maintain membership in an organization if such membership is a
592	condition precedent to insurance coverage. The term "nonpayment
593	of premium" also means the failure of a financial institution to
594	honor an insurance applicant's check after delivery to a
595	licensed agent for payment of a premium, even if the agent has
596	previously delivered or transferred the premium to the insurer.
597	If a correctly dishonored check represents the initial premium
598	payment, the contract and all contractual obligations shall be
599	void ab initio unless the nonpayment is cured within the earlier
600	of 5 days after actual notice by certified mail is received by
601	the applicant or 15 days after notice is sent to the applicant
602	by certified mail or registered mail, and, if the contract is
603	void, any premium received by the insurer from a third party
604	shall be refunded to that party in full; and
605	(b)  When such cancellation or termination occurs during
606	the first 90 days during which the insurance is in force and the
607	insurance is canceled or terminated for reasons other than
608	nonpayment, at least 20 days' written notice of cancellation or
609	termination accompanied by the reason therefor shall be given
610	except where there has been a material misstatement or
611	misrepresentation or failure to comply with the underwriting
612	requirements established by the insurer.
613	Section 7.  Subsection (4) of section 627.0613, Florida
614	Statutes, as amended by chapter 2007-1, Laws of Florida, is
615	amended to read:
616	627.0613  Consumer advocate.--The Chief Financial Officer
617	must appoint a consumer advocate who must represent the general
618	public of the state before the department and the office. The
619	consumer advocate must report directly to the Chief Financial
620	Officer, but is not otherwise under the authority of the
621	department or of any employee of the department. The consumer
622	advocate has such powers as are necessary to carry out the
623	duties of the office of consumer advocate, including, but not
624	limited to, the powers to:
625	(4)  Prepare an annual report card for each authorized
626	personal residential property insurer, on a form and using a
627	letter-grade scale developed by the commission by rule, which
628	grades each insurer based on the following factors:
629	(a)  The number and nature of consumer complaints received
630	by the department against the insurer.
631	(b)  The disposition of all complaints received by the
632	department.
633	(c)  The average length of time for payment of claims by
634	the insurer.
635	(d)  Any other factors the commission identifies as
636	assisting policyholders in making informed choices about
637	homeowner's insurance.
638	Section 8.  Paragraph (a) of subsection (2) of section
639	627.062, Florida Statutes, as amended by chapter 2007-1, Laws of
640	Florida, is amended to read:
641	627.062  Rate standards.--
642	(2)  As to all such classes of insurance:
643	(a)  Insurers or rating organizations shall establish and
644	use rates, rating schedules, or rating manuals to allow the
645	insurer a reasonable rate of return on such classes of insurance
646	written in this state. A copy of rates, rating schedules, rating
647	manuals, premium credits or discount schedules, and surcharge
648	schedules, and changes thereto, shall be filed with the office
649	under one of the following procedures except as provided in
650	subparagraph 3.:
651	1.  If the filing is made at least 90 days before the
652	proposed effective date and the filing is not implemented during
653	the office's review of the filing and any proceeding and
654	judicial review, then such filing shall be considered a "file
655	and use" filing. In such case, the office shall finalize its
656	review by issuance of a notice of intent to approve or a notice
657	of intent to disapprove within 90 days after receipt of the
658	filing. The notice of intent to approve and the notice of intent
659	to disapprove constitute agency action for purposes of the
660	Administrative Procedure Act. Requests for supporting
661	information, requests for mathematical or mechanical
662	corrections, or notification to the insurer by the office of its
663	preliminary findings shall not toll the 90-day period during any
664	such proceedings and subsequent judicial review. The rate shall
665	be deemed approved if the office does not issue a notice of
666	intent to approve or a notice of intent to disapprove within 90
667	days after receipt of the filing.
668	2.  If the filing is not made in accordance with the
669	provisions of subparagraph 1., such filing shall be made as soon
670	as practicable, but no later than 30 days after the effective
671	date, and shall be considered a "use and file" filing. An
672	insurer making a "use and file" filing is potentially subject to
673	an order by the office to return to policyholders portions of
674	rates found to be excessive, as provided in paragraph (h).
675	3.  For all filings made or submitted after January 25,
676	2007, but on or before December 31, 2008, an insurer seeking a
677	rate that is greater than the rate most recently approved by the
678	office shall make a "file and use" filing. This subparagraph
679	applies to property insurance only. For purposes of this
680	subparagraph, motor vehicle collision and comprehensive
681	coverages are not considered to be property coverages.
682
683	The provisions of this subsection shall not apply to workers'
684	compensation and employer's liability insurance and to motor
685	vehicle insurance.
686	Section 9.  Section 627.0655, Florida Statutes, as created
687	by chapter 2007-1, Laws of Florida, is amended to read:
688	627.0655  Policyholder loss or expense-related premium
689	discounts.--An insurer or person authorized to engage in the
690	business of insurance in this state may include, in the premium
691	charged an insured for any policy, contract, or certificate of
692	insurance, a discount based on the fact that another policy,
693	contract, or certificate of any type has been purchased by the
694	insured from the same insurer or insurer group.
695	Section 10.  Paragraphs (a), (b), (c), (d), (m), (n), and
696	(v) of subsection (6) of section 627.351, Florida Statutes, as
697	amended by chapter 2007-1, Laws of Florida, are amended to read:
698	627.351  Insurance risk apportionment plans.--
699	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
700	(a)1.  It is the public purpose of this subsection to
701	ensure the existence of an orderly market for property insurance
702	for Florida's residents and businesses. The Legislature finds
703	that actual and threatened catastrophic losses to property in
704	this state from hurricanes have caused insurers are to be
705	unwilling or unable to provide affordable property insurance
706	coverage in this state to the extent sought and needed. The
707	absence of affordable property insurance threatens the public
708	health, safety, and welfare and likewise threatens the economic
709	health of this state. The state therefore has a compelling It is
710	in the public interest and a public purpose to assist in
711	assuring that property in the state is insured so as to
712	facilitate the remediation, reconstruction, and replacement of
713	damaged or destroyed property in order to reduce or avoid the
714	negative effects otherwise resulting to the public health,
715	safety, and welfare; to the economy of the state; and to the
716	revenues of the state and local governments needed to provide
717	for the public welfare. It is necessary, therefore, to provide
718	property insurance to applicants who are in good faith entitled
719	to procure insurance through the voluntary market but are unable
720	to do so. The Legislature intends by this subsection that
721	property insurance be provided and that it continues to be
722	provided, as long as necessary, through Citizens Property
723	Insurance Corporation, a government entity that is an integral
724	part of the state and that is not a private insurance company.
725	To that end, the corporation shall strive an entity organized to
726	achieve efficiencies and economies, while providing service to
727	policyholders, applicants, and agents that is no less than the
728	quality generally provided in the voluntary market, for all
729	toward the achievement of the foregoing public purposes. Because
730	it is essential for such government entity the corporation to
731	have the maximum financial resources to pay claims following a
732	catastrophic hurricane, it is the intent of the Legislature that
733	Citizens Property Insurance Corporation continues to be an
734	integral part of this state and that the income of the
735	corporation be exempt from federal income taxation and that
736	interest on the debt obligations issued by the corporation be
737	exempt from federal income taxation.
738	2.  The Residential Property and Casualty Joint
739	Underwriting Association originally created by this statute
740	shall be known, as of July 1, 2002, as the Citizens Property
741	Insurance Corporation. The corporation shall provide insurance
742	for residential and commercial property, for applicants who are
743	in good faith entitled, but are unable, to procure insurance
744	through the voluntary market. The corporation shall operate
745	pursuant to a plan of operation approved by order of the
746	Financial Services Commission. The plan is subject to continuous
747	review by the commission. The commission may, by order, withdraw
748	approval of all or part of a plan if the commission determines
749	that conditions have changed since approval was granted and that
750	the purposes of the plan require changes in the plan. The
751	corporation shall continue to operate pursuant to the plan of
752	operation approved by the Office of Insurance Regulation until
753	October 1, 2006. For the purposes of this subsection,
754	residential coverage includes both personal lines residential
755	coverage, which consists of the type of coverage provided by
756	homeowner's, mobile home owner's, dwelling, tenant's,
757	condominium unit owner's, and similar policies, and commercial
758	lines residential coverage, which consists of the type of
759	coverage provided by condominium association, apartment
760	building, and similar policies.
761	3.  For the purposes of this subsection, the term
762	"homestead property" means:
763	a.  Property that has been granted a homestead exemption
764	under chapter 196;
765	b.  Property for which the owner has a current, written
766	lease with a renter for a term of at least 7 months and for
767	which the dwelling is insured by the corporation for $200,000 or
768	less;
769	c.  An owner-occupied mobile home or manufactured home, as
770	defined in s. 320.01, which is permanently affixed to real
771	property, is owned by a Florida resident, and has been granted a
772	homestead exemption under chapter 196 or, if the owner does not
773	own the real property, the owner certifies that the mobile home
774	or manufactured home is his or her principal place of residence;
775	d.  Tenant's coverage;
776	e.  Commercial lines residential property; or
777	f.  Any county, district, or municipal hospital; a hospital
778	licensed by any not-for-profit corporation qualified under s.
779	501(c)(3) of the United States Internal Revenue Code; or a
780	continuing care retirement community that is certified under
781	chapter 651 and that receives an exemption from ad valorem taxes
782	under chapter 196.
783	4.  For the purposes of this subsection, the term
784	"nonhomestead property" means property that is not homestead
785	property.
786	5.  Effective July 1, 2008, a personal lines residential
787	structure that has a dwelling replacement cost of $1 million or
788	more, or a single condominium unit that has a combined dwelling
789	and content replacement cost of $1 million or more is not
790	eligible for coverage by the corporation. Such dwellings insured
791	by the corporation on June 30, 2008, may continue to be covered
792	by the corporation until the end of the policy term. However,
793	such dwellings that are insured by the corporation and become
794	ineligible for coverage due to the provisions of this
795	subparagraph may reapply and obtain coverage in the high-risk
796	account and be considered "nonhomestead property" if the
797	property owner provides the corporation with a sworn affidavit
798	from one or more insurance agents, on a form provided by the
799	corporation, stating that the agents have made their best
800	efforts to obtain coverage and that the property has been
801	rejected for coverage by at least one authorized insurer and at
802	least three surplus lines insurers. If such conditions are met,
803	the dwelling may be insured by the corporation for up to 3
804	years, after which time the dwelling is ineligible for coverage.
805	The office shall approve the method used by the corporation for
806	valuing the dwelling replacement cost for the purposes of this
807	subparagraph. If a policyholder is insured by the corporation
808	prior to being determined to be ineligible pursuant to this
809	subparagraph and such policyholder files a lawsuit challenging
810	the determination, the policyholder may remain insured by the
811	corporation until the conclusion of the litigation.
812	6.  For properties constructed on or after January 1, 2009,
813	the corporation may not insure any property located within 2,500
814	feet landward of the coastal construction control line created
815	pursuant to s. 161.053 unless the property meets the
816	requirements of the code-plus building standards developed by
817	the Florida Building Commission.
818	7.  It is the intent of the Legislature that policyholders,
819	applicants, and agents of the corporation receive service and
820	treatment of the highest possible level but never less than that
821	generally provided in the voluntary market. It also is intended
822	that the corporation be held to service standards no less than
823	those applied to insurers in the voluntary market by the office
824	with respect to responsiveness, timeliness, customer courtesy,
825	and overall dealings with policyholders, applicants, or agents
826	of the corporation.
827	(b)1.  All insurers authorized to write one or more subject
828	lines of business in this state are subject to assessment by the
829	corporation and, for the purposes of this subsection, are
830	referred to collectively as "assessable insurers." Insurers
831	writing one or more subject lines of business in this state
832	pursuant to part VIII of chapter 626 are not assessable
833	insurers, but insureds who procure one or more subject lines of
834	business in this state pursuant to part VIII of chapter 626 are
835	subject to assessment by the corporation and are referred to
836	collectively as "assessable insureds." An authorized insurer's
837	assessment liability shall begin on the first day of the
838	calendar year following the year in which the insurer was issued
839	a certificate of authority to transact insurance for subject
840	lines of business in this state and shall terminate 1 year after
841	the end of the first calendar year during which the insurer no
842	longer holds a certificate of authority to transact insurance
843	for subject lines of business in this state.
844	2.a.  All revenues, assets, liabilities, losses, and
845	expenses of the corporation shall be divided into three separate
846	accounts as follows:
847	(I)  A personal lines account for personal residential
848	policies issued by the corporation or issued by the Residential
849	Property and Casualty Joint Underwriting Association and renewed
850	by the corporation that provide comprehensive, multiperil
851	coverage on risks that are not located in areas eligible for
852	coverage in the Florida Windstorm Underwriting Association as
853	those areas were defined on January 1, 2002, and for such
854	policies that do not provide coverage for the peril of wind on
855	risks that are located in such areas;
856	(II)  A commercial lines account for commercial residential
857	and commercial nonresidential policies issued by the corporation
858	or issued by the Residential Property and Casualty Joint
859	Underwriting Association and renewed by the corporation that
860	provide coverage for basic property perils on risks that are not
861	located in areas eligible for coverage in the Florida Windstorm
862	Underwriting Association as those areas were defined on January
863	1, 2002, and for such policies that do not provide coverage for
864	the peril of wind on risks that are located in such areas; and
865	(III)  A high-risk account for personal residential
866	policies and commercial residential and commercial
867	nonresidential property policies issued by the corporation or
868	transferred to the corporation that provide coverage for the
869	peril of wind on risks that are located in areas eligible for
870	coverage in the Florida Windstorm Underwriting Association as
871	those areas were defined on January 1, 2002. Subject to the
872	approval of a business plan by the Financial Services Commission
873	and Legislative Budget Commission as provided in this sub-sub-
874	subparagraph, but no earlier than March 31, 2007, the
875	corporation may offer policies that provide multiperil coverage
876	and the corporation shall continue to offer policies that
877	provide coverage only for the peril of wind for risks located in
878	areas eligible for coverage in the high-risk account. In issuing
879	multiperil coverage, the corporation may use its approved policy
880	forms and rates for the personal lines account. An applicant or
881	insured who is eligible to purchase a multiperil policy from the
882	corporation may purchase a multiperil policy from an authorized
883	insurer without prejudice to the applicant's or insured's
884	eligibility to prospectively purchase a policy that provides
885	coverage only for the peril of wind from the corporation. An
886	applicant or insured who is eligible for a corporation policy
887	that provides coverage only for the peril of wind may elect to
888	purchase or retain such policy and also purchase or retain
889	coverage excluding wind from an authorized insurer without
890	prejudice to the applicant's or insured's eligibility to
891	prospectively purchase a policy that provides multiperil
892	coverage from the corporation. It is the goal of the Legislature
893	that there would be an overall average savings of 10 percent or
894	more for a policyholder who currently has a wind-only policy
895	with the corporation, and an ex-wind policy with a voluntary
896	insurer or the corporation, and who then obtains a multiperil
897	policy from the corporation. It is the intent of the Legislature
898	that the offer of multiperil coverage in the high-risk account
899	be made and implemented in a manner that does not adversely
900	affect the tax-exempt status of the corporation or
901	creditworthiness of or security for currently outstanding
902	financing obligations or credit facilities of the high-risk
903	account, the personal lines account, or the commercial lines
904	account. By March 1, 2007, the corporation shall prepare and
905	submit for approval by the Financial Services Commission and
906	Legislative Budget Commission a report detailing the
907	corporation's business plan for issuing multiperil coverage in
908	the high-risk account. The business plan shall be approved or
909	disapproved within 30 days after receipt, as submitted or
910	modified and resubmitted by the corporation. The business plan
911	must include: the impact of such multiperil coverage on the
912	corporation's financial resources, the impact of such multiperil
913	coverage on the corporation's tax-exempt status, the manner in
914	which the corporation plans to implement the processing of
915	applications and policy forms for new and existing
916	policyholders, the impact of such multiperil coverage on the
917	corporation's ability to deliver customer service at the high
918	level required by this subsection, the ability of the
919	corporation to process claims, the ability of the corporation to
920	quote and issue policies, the impact of such multiperil coverage
921	on the corporation's agents, the impact of such multiperil
922	coverage on the corporation's existing policyholders, and the
923	impact of such multiperil coverage on rates and premium. The
924	high-risk account must also include quota share primary
925	insurance under subparagraph (c)2. The area eligible for
926	coverage under the high-risk account also includes the area
927	within Port Canaveral, which is bordered on the south by the
928	City of Cape Canaveral, bordered on the west by the Banana
929	River, and bordered on the north by Federal Government property.
930	b.  The three separate accounts must be maintained as long
931	as financing obligations entered into by the Florida Windstorm
932	Underwriting Association or Residential Property and Casualty
933	Joint Underwriting Association are outstanding, in accordance
934	with the terms of the corresponding financing documents. When
935	the financing obligations are no longer outstanding, in
936	accordance with the terms of the corresponding financing
937	documents, the corporation may use a single account for all
938	revenues, assets, liabilities, losses, and expenses of the
939	corporation. Consistent with the requirement of this
940	subparagraph and prudent investment policies that minimize the
941	cost of carrying debt, the board shall exercise its best efforts
942	to retire existing debt or to obtain approval of necessary
943	parties to amend the terms of existing debt, so as to structure
944	the most efficient plan to consolidate the three separate
945	accounts into a single account. By February 1, 2007, the board
946	shall submit a report to the Financial Services Commission, the
947	President of the Senate, and the Speaker of the House of
948	Representatives which includes an analysis of consolidating the
949	accounts, the actions the board has taken to minimize the cost
950	of carrying debt, and its recommendations for executing the most
951	efficient plan.
952	c.  Creditors of the Residential Property and Casualty
953	Joint Underwriting Association shall have a claim against, and
954	recourse to, the accounts referred to in sub-sub-subparagraphs
955	a.(I) and (II) and shall have no claim against, or recourse to,
956	the account referred to in sub-sub-subparagraph a.(III).
957	Creditors of the Florida Windstorm Underwriting Association
958	shall have a claim against, and recourse to, the account
959	referred to in sub-sub-subparagraph a.(III) and shall have no
960	claim against, or recourse to, the accounts referred to in sub-
961	sub-subparagraphs a.(I) and (II).
962	d.  Revenues, assets, liabilities, losses, and expenses not
963	attributable to particular accounts shall be prorated among the
964	accounts.
965	e.  The Legislature finds that the revenues of the
966	corporation are revenues that are necessary to meet the
967	requirements set forth in documents authorizing the issuance of
968	bonds under this subsection.
969	f.  No part of the income of the corporation may inure to
970	the benefit of any private person.
971	3.  With respect to a deficit in an account:
972	a.  When the deficit incurred in a particular calendar year
973	is not greater than 10 percent of the aggregate statewide direct
974	written premium for the subject lines of business for the prior
975	calendar year, the entire deficit shall be recovered through
976	regular assessments of assessable insurers under paragraph (p)
977	and assessable insureds.
978	b.  When the deficit incurred in a particular calendar year
979	exceeds 10 percent of the aggregate statewide direct written
980	premium for the subject lines of business for the prior calendar
981	year, the corporation shall levy regular assessments on
982	assessable insurers under paragraph (p) and on assessable
983	insureds in an amount equal to the greater of 10 percent of the
984	deficit or 10 percent of the aggregate statewide direct written
985	premium for the subject lines of business for the prior calendar
986	year. Any remaining deficit shall be recovered through emergency
987	assessments under sub-subparagraph d.
988	c.  Each assessable insurer's share of the amount being
989	assessed under sub-subparagraph a. or sub-subparagraph b. shall
990	be in the proportion that the assessable insurer's direct
991	written premium for the subject lines of business for the year
992	preceding the assessment bears to the aggregate statewide direct
993	written premium for the subject lines of business for that year.
994	The assessment percentage applicable to each assessable insured
995	is the ratio of the amount being assessed under sub-subparagraph
996	a. or sub-subparagraph b. to the aggregate statewide direct
997	written premium for the subject lines of business for the prior
998	year. Assessments levied by the corporation on assessable
999	insurers under sub-subparagraphs a. and b. shall be paid as
1000	required by the corporation's plan of operation and paragraph
1001	(p). Notwithstanding any other provision of this subsection, the
1002	aggregate amount of a regular assessment for a deficit incurred
1003	in a particular calendar year shall be reduced by the estimated
1004	amount to be received by the corporation from the Citizens
1005	policyholder surcharge under subparagraph (c)10.11. and the
1006	amount collected or estimated to be collected from the
1007	assessment on Citizens policyholders pursuant to sub-
1008	subparagraph i. Assessments levied by the corporation on
1009	assessable insureds under sub-subparagraphs a. and b. shall be
1010	collected by the surplus lines agent at the time the surplus
1011	lines agent collects the surplus lines tax required by s.
1012	626.932 and shall be paid to the Florida Surplus Lines Service
1013	Office at the time the surplus lines agent pays the surplus
1014	lines tax to the Florida Surplus Lines Service Office. Upon
1015	receipt of regular assessments from surplus lines agents, the
1016	Florida Surplus Lines Service Office shall transfer the
1017	assessments directly to the corporation as determined by the
1018	corporation.
1019	d.  Upon a determination by the board of governors that a
1020	deficit in an account exceeds the amount that will be recovered
1021	through regular assessments under sub-subparagraph a. or sub-
1022	subparagraph b., the board shall levy, after verification by the
1023	office, emergency assessments, for as many years as necessary to
1024	cover the deficits, to be collected by assessable insurers and
1025	the corporation and collected from assessable insureds upon
1026	issuance or renewal of policies for subject lines of business,
1027	excluding National Flood Insurance policies. The amount of the
1028	emergency assessment collected in a particular year shall be a
1029	uniform percentage of that year's direct written premium for
1030	subject lines of business and all accounts of the corporation,
1031	excluding National Flood Insurance Program policy premiums, as
1032	annually determined by the board and verified by the office. The
1033	office shall verify the arithmetic calculations involved in the
1034	board's determination within 30 days after receipt of the
1035	information on which the determination was based.
1036	Notwithstanding any other provision of law, the corporation and
1037	each assessable insurer that writes subject lines of business
1038	shall collect emergency assessments from its policyholders
1039	without such obligation being affected by any credit,
1040	limitation, exemption, or deferment. Emergency assessments
1041	levied by the corporation on assessable insureds shall be
1042	collected by the surplus lines agent at the time the surplus
1043	lines agent collects the surplus lines tax required by s.
1044	626.932 and shall be paid to the Florida Surplus Lines Service
1045	Office at the time the surplus lines agent pays the surplus
1046	lines tax to the Florida Surplus Lines Service Office. The
1047	emergency assessments so collected shall be transferred directly
1048	to the corporation on a periodic basis as determined by the
1049	corporation and shall be held by the corporation solely in the
1050	applicable account. The aggregate amount of emergency
1051	assessments levied for an account under this sub-subparagraph in
1052	any calendar year may not exceed the greater of 10 percent of
1053	the amount needed to cover the original deficit, plus interest,
1054	fees, commissions, required reserves, and other costs associated
1055	with financing of the original deficit, or 10 percent of the
1056	aggregate statewide direct written premium for subject lines of
1057	business and for all accounts of the corporation for the prior
1058	year, plus interest, fees, commissions, required reserves, and
1059	other costs associated with financing the original deficit.
1060	e.  The corporation may pledge the proceeds of assessments,
1061	projected recoveries from the Florida Hurricane Catastrophe
1062	Fund, other insurance and reinsurance recoverables, policyholder
1063	surcharges and other surcharges, and other funds available to
1064	the corporation as the source of revenue for and to secure bonds
1065	issued under paragraph (p), bonds or other indebtedness issued
1066	under subparagraph (c)3., or lines of credit or other financing
1067	mechanisms issued or created under this subsection, or to retire
1068	any other debt incurred as a result of deficits or events giving
1069	rise to deficits, or in any other way that the board determines
1070	will efficiently recover such deficits. The purpose of the lines
1071	of credit or other financing mechanisms is to provide additional
1072	resources to assist the corporation in covering claims and
1073	expenses attributable to a catastrophe. As used in this
1074	subsection, the term "assessments" includes regular assessments
1075	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1076	(p)1. and emergency assessments under sub-subparagraph d.
1077	Emergency assessments collected under sub-subparagraph d. are
1078	not part of an insurer's rates, are not premium, and are not
1079	subject to premium tax, fees, or commissions; however, failure
1080	to pay the emergency assessment shall be treated as failure to
1081	pay premium. The emergency assessments under sub-subparagraph d.
1082	shall continue as long as any bonds issued or other indebtedness
1083	incurred with respect to a deficit for which the assessment was
1084	imposed remain outstanding, unless adequate provision has been
1085	made for the payment of such bonds or other indebtedness
1086	pursuant to the documents governing such bonds or other
1087	indebtedness.
1088	f.  As used in this subsection for purposes of any deficit
1089	incurred on or after January 25, 2007, the term "subject lines
1090	of business" means insurance written by assessable insurers or
1091	procured by assessable insureds for all property and casualty
1092	lines of business in this state, but not including workers'
1093	compensation or medical malpractice. As used in the sub-
1094	subparagraph, the term "property and casualty lines of business"
1095	includes all lines of business identified on Form 2, Exhibit of
1096	Premiums and Losses, in the annual statement required of
1097	authorized insurers by s. 624.424 and any rule adopted under
1098	this section, except for those lines identified as accident and
1099	health insurance and except for policies written under the
1100	National Flood Insurance Program or the Federal Crop Insurance
1101	Program. For purposes of this sub-subparagraph, the term
1102	"workers' compensation" includes both workers' compensation
1103	insurance and excess workers' compensation insurance.
1104	g.  The Florida Surplus Lines Service Office shall
1105	determine annually the aggregate statewide written premium in
1106	subject lines of business procured by assessable insureds and
1107	shall report that information to the corporation in a form and
1108	at a time the corporation specifies to ensure that the
1109	corporation can meet the requirements of this subsection and the
1110	corporation's financing obligations.
1111	h.  The Florida Surplus Lines Service Office shall verify
1112	the proper application by surplus lines agents of assessment
1113	percentages for regular assessments and emergency assessments
1114	levied under this subparagraph on assessable insureds and shall
1115	assist the corporation in ensuring the accurate, timely
1116	collection and payment of assessments by surplus lines agents as
1117	required by the corporation.
1118	i.  If a deficit is incurred in any account in 2008 or
1119	thereafter, the board of governors shall levy an immediate
1120	assessment against the premium of each nonhomestead property
1121	policyholder in all accounts of the corporation, as a uniform
1122	percentage of the premium of the policy of up to 10 percent of
1123	such premium, which funds shall be used to offset the deficit.
1124	If this assessment is insufficient to eliminate the deficit, the
1125	board of governors shall levy an additional assessment against
1126	all policyholders of the corporation, which shall be collected
1127	at the time of issuance or renewal of a policy, as a uniform
1128	percentage of the premium for the policy of up to 10 percent of
1129	such premium, which funds shall be used to further offset the
1130	deficit.
1131	j.  The board of governors shall maintain separate
1132	accounting records that consolidate data for nonhomestead
1133	properties, including, but not limited to, number of policies,
1134	insured values, premiums written, and losses. The board of
1135	governors shall annually report to the office and the
1136	Legislature a summary of such data.
1137	(c)  The plan of operation of the corporation:
1138	1.  Must provide for adoption of residential property and
1139	casualty insurance policy forms and commercial residential and
1140	nonresidential property insurance forms, which forms must be
1141	approved by the office prior to use. The corporation shall adopt
1142	the following policy forms:
1143	a.  Standard personal lines policy forms that are
1144	comprehensive multiperil policies providing full coverage of a
1145	residential property equivalent to the coverage provided in the
1146	private insurance market under an HO-3, HO-4, or HO-6 policy.
1147	b.  Basic personal lines policy forms that are policies
1148	similar to an HO-8 policy or a dwelling fire policy that provide
1149	coverage meeting the requirements of the secondary mortgage
1150	market, but which coverage is more limited than the coverage
1151	under a standard policy.
1152	c.  Commercial lines residential and nonresidential policy
1153	forms that are generally similar to the basic perils of full
1154	coverage obtainable for commercial residential structures and
1155	commercial nonresidential structures in the admitted voluntary
1156	market.
1157	d.  Personal lines and commercial lines residential
1158	property insurance forms that cover the peril of wind only. The
1159	forms are applicable only to residential properties located in
1160	areas eligible for coverage under the high-risk account referred
1161	to in sub-subparagraph (b)2.a.
1162	e.  Commercial lines nonresidential property insurance
1163	forms that cover the peril of wind only. The forms are
1164	applicable only to nonresidential properties located in areas
1165	eligible for coverage under the high-risk account referred to in
1166	sub-subparagraph (b)2.a.
1167	f.  The corporation may adopt variations of the policy
1168	forms listed in sub-subparagraphs a.-e. that contain more
1169	restrictive coverage.
1170	2.a.  Must provide that the corporation adopt a program in
1171	which the corporation and authorized insurers enter into quota
1172	share primary insurance agreements for hurricane coverage, as
1173	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1174	property insurance forms for eligible risks which cover the
1175	peril of wind only. As used in this subsection, the term:
1176	(I)  "Quota share primary insurance" means an arrangement
1177	in which the primary hurricane coverage of an eligible risk is
1178	provided in specified percentages by the corporation and an
1179	authorized insurer. The corporation and authorized insurer are
1180	each solely responsible for a specified percentage of hurricane
1181	coverage of an eligible risk as set forth in a quota share
1182	primary insurance agreement between the corporation and an
1183	authorized insurer and the insurance contract. The
1184	responsibility of the corporation or authorized insurer to pay
1185	its specified percentage of hurricane losses of an eligible
1186	risk, as set forth in the quota share primary insurance
1187	agreement, may not be altered by the inability of the other
1188	party to the agreement to pay its specified percentage of
1189	hurricane losses. Eligible risks that are provided hurricane
1190	coverage through a quota share primary insurance arrangement
1191	must be provided policy forms that set forth the obligations of
1192	the corporation and authorized insurer under the arrangement,
1193	clearly specify the percentages of quota share primary insurance
1194	provided by the corporation and authorized insurer, and
1195	conspicuously and clearly state that neither the authorized
1196	insurer nor the corporation may be held responsible beyond its
1197	specified percentage of coverage of hurricane losses.
1198	(II)  "Eligible risks" means personal lines residential and
1199	commercial lines residential risks that meet the underwriting
1200	criteria of the corporation and are located in areas that were
1201	eligible for coverage by the Florida Windstorm Underwriting
1202	Association on January 1, 2002.
1203	b.  The corporation may enter into quota share primary
1204	insurance agreements with authorized insurers at corporation
1205	coverage levels of 90 percent and 50 percent.
1206	c.  If the corporation determines that additional coverage
1207	levels are necessary to maximize participation in quota share
1208	primary insurance agreements by authorized insurers, the
1209	corporation may establish additional coverage levels. However,
1210	the corporation's quota share primary insurance coverage level
1211	may not exceed 90 percent.
1212	d.  Any quota share primary insurance agreement entered
1213	into between an authorized insurer and the corporation must
1214	provide for a uniform specified percentage of coverage of
1215	hurricane losses, by county or territory as set forth by the
1216	corporation board, for all eligible risks of the authorized
1217	insurer covered under the quota share primary insurance
1218	agreement.
1219	e.  Any quota share primary insurance agreement entered
1220	into between an authorized insurer and the corporation is
1221	subject to review and approval by the office. However, such
1222	agreement shall be authorized only as to insurance contracts
1223	entered into between an authorized insurer and an insured who is
1224	already insured by the corporation for wind coverage.
1225	f.  For all eligible risks covered under quota share
1226	primary insurance agreements, the exposure and coverage levels
1227	for both the corporation and authorized insurers shall be
1228	reported by the corporation to the Florida Hurricane Catastrophe
1229	Fund. For all policies of eligible risks covered under quota
1230	share primary insurance agreements, the corporation and the
1231	authorized insurer shall maintain complete and accurate records
1232	for the purpose of exposure and loss reimbursement audits as
1233	required by Florida Hurricane Catastrophe Fund rules. The
1234	corporation and the authorized insurer shall each maintain
1235	duplicate copies of policy declaration pages and supporting
1236	claims documents.
1237	g.  The corporation board shall establish in its plan of
1238	operation standards for quota share agreements which ensure that
1239	there is no discriminatory application among insurers as to the
1240	terms of quota share agreements, pricing of quota share
1241	agreements, incentive provisions if any, and consideration paid
1242	for servicing policies or adjusting claims.
1243	h.  The quota share primary insurance agreement between the
1244	corporation and an authorized insurer must set forth the
1245	specific terms under which coverage is provided, including, but
1246	not limited to, the sale and servicing of policies issued under
1247	the agreement by the insurance agent of the authorized insurer
1248	producing the business, the reporting of information concerning
1249	eligible risks, the payment of premium to the corporation, and
1250	arrangements for the adjustment and payment of hurricane claims
1251	incurred on eligible risks by the claims adjuster and personnel
1252	of the authorized insurer. Entering into a quota sharing
1253	insurance agreement between the corporation and an authorized
1254	insurer shall be voluntary and at the discretion of the
1255	authorized insurer.
1256	3.  May provide that the corporation may employ or
1257	otherwise contract with individuals or other entities to provide
1258	administrative or professional services that may be appropriate
1259	to effectuate the plan. The corporation shall have the power to
1260	borrow funds, by issuing bonds or by incurring other
1261	indebtedness, and shall have other powers reasonably necessary
1262	to effectuate the requirements of this subsection, including,
1263	without limitation, the power to issue bonds and incur other
1264	indebtedness in order to refinance outstanding bonds or other
1265	indebtedness. The corporation may, but is not required to, seek
1266	judicial validation of its bonds or other indebtedness under
1267	chapter 75. The corporation may issue bonds or incur other
1268	indebtedness, or have bonds issued on its behalf by a unit of
1269	local government pursuant to subparagraph (g)2., in the absence
1270	of a hurricane or other weather-related event, upon a
1271	determination by the corporation, subject to approval by the
1272	office, that such action would enable it to efficiently meet the
1273	financial obligations of the corporation and that such
1274	financings are reasonably necessary to effectuate the
1275	requirements of this subsection. The corporation is authorized
1276	to take all actions needed to facilitate tax-free status for any
1277	such bonds or indebtedness, including formation of trusts or
1278	other affiliated entities. The corporation shall have the
1279	authority to pledge assessments, projected recoveries from the
1280	Florida Hurricane Catastrophe Fund, other reinsurance
1281	recoverables, market equalization and other surcharges, and
1282	other funds available to the corporation as security for bonds
1283	or other indebtedness. In recognition of s. 10, Art. I of the
1284	State Constitution, prohibiting the impairment of obligations of
1285	contracts, it is the intent of the Legislature that no action be
1286	taken whose purpose is to impair any bond indenture or financing
1287	agreement or any revenue source committed by contract to such
1288	bond or other indebtedness.
1289	4.a.  Must require that the corporation operate subject to
1290	the supervision and approval of a board of governors consisting
1291	of eight individuals who are residents of this state, from
1292	different geographical areas of this state. The Governor, the
1293	Chief Financial Officer, the President of the Senate, and the
1294	Speaker of the House of Representatives shall each appoint two
1295	members of the board. At least one of the two members appointed
1296	by each appointing officer must have demonstrated expertise in
1297	insurance. The Chief Financial Officer shall designate one of
1298	the appointees as chair. All board members serve at the pleasure
1299	of the appointing officer. All members of the board of governors
1300	are subject to removal at will by the officers who appointed
1301	them. All board members, including the chair, must be appointed
1302	to serve for 3-year terms beginning annually on a date
1303	designated by the plan. Any board vacancy shall be filled for
1304	the unexpired term by the appointing officer. The Chief
1305	Financial Officer shall appoint a technical advisory group to
1306	provide information and advice to the board of governors in
1307	connection with the board's duties under this subsection. The
1308	executive director and senior managers of the corporation shall
1309	be engaged by the board and serve at the pleasure of the board.
1310	Any executive director appointed on or after July 1, 2006, is
1311	subject to confirmation by the Senate. The executive director is
1312	responsible for employing other staff as the corporation may
1313	require, subject to review and concurrence by the board.
1314	b.  The board shall create a Market Accountability Advisory
1315	Committee to assist the corporation in developing awareness of
1316	its rates and its customer and agent service levels in
1317	relationship to the voluntary market insurers writing similar
1318	coverage. The members of the advisory committee shall consist of
1319	the following 11 persons, one of whom must be elected chair by
1320	the members of the committee: four representatives, one
1321	appointed by the Florida Association of Insurance Agents, one by
1322	the Florida Association of Insurance and Financial Advisors, one
1323	by the Professional Insurance Agents of Florida, and one by the
1324	Latin American Association of Insurance Agencies; three
1325	representatives appointed by the insurers with the three highest
1326	voluntary market share of residential property insurance
1327	business in the state; one representative from the Office of
1328	Insurance Regulation; one consumer appointed by the board who is
1329	insured by the corporation at the time of appointment to the
1330	committee; one representative appointed by the Florida
1331	Association of Realtors; and one representative appointed by the
1332	Florida Bankers Association. All members must serve for 3-year
1333	terms and may serve for consecutive terms. The committee shall
1334	report to the corporation at each board meeting on insurance
1335	market issues which may include rates and rate competition with
1336	the voluntary market; service, including policy issuance, claims
1337	processing, and general responsiveness to policyholders,
1338	applicants, and agents; and matters relating to depopulation.
1339	5.  Must provide a procedure for determining the
1340	eligibility of a risk for coverage, as follows:
1341	a.  Subject to the provisions of s. 627.3517, with respect
1342	to personal lines residential risks, if the risk is offered
1343	coverage from an authorized insurer at the insurer's approved
1344	rate under either a standard policy including wind coverage or,
1345	if consistent with the insurer's underwriting rules as filed
1346	with the office, a basic policy including wind coverage, for a
1347	new application to the corporation for coverage, the risk is not
1348	eligible for any policy issued by the corporation unless the
1349	premium for coverage from the authorized insurer is more than 25
1350	percent greater than the premium for comparable coverage from
1351	the corporation. If the risk is not able to obtain any such
1352	offer, the risk is eligible for either a standard policy
1353	including wind coverage or a basic policy including wind
1354	coverage issued by the corporation; however, if the risk could
1355	not be insured under a standard policy including wind coverage
1356	regardless of market conditions, the risk shall be eligible for
1357	a basic policy including wind coverage unless rejected under
1358	subparagraph 8. However, with regard to a policyholder of the
1359	corporation or a policyholder removed from the corporation
1360	through an assumption agreement until the end of the assumption
1361	period, the policyholder remains eligible for coverage from the
1362	corporation regardless of any offer of coverage from an
1363	authorized insurer or surplus lines insurer. The corporation
1364	shall determine the type of policy to be provided on the basis
1365	of objective standards specified in the underwriting manual and
1366	based on generally accepted underwriting practices.
1367	(I)  If the risk accepts an offer of coverage through the
1368	market assistance plan or an offer of coverage through a
1369	mechanism established by the corporation before a policy is
1370	issued to the risk by the corporation or during the first 30
1371	days of coverage by the corporation, and the producing agent who
1372	submitted the application to the plan or to the corporation is
1373	not currently appointed by the insurer, the insurer shall:
1374	(A)  Pay to the producing agent of record of the policy,
1375	for the first year, an amount that is the greater of the
1376	insurer's usual and customary commission for the type of policy
1377	written or a fee equal to the usual and customary commission of
1378	the corporation; or
1379	(B)  Offer to allow the producing agent of record of the
1380	policy to continue servicing the policy for a period of not less
1381	than 1 year and offer to pay the agent the greater of the
1382	insurer's or the corporation's usual and customary commission
1383	for the type of policy written.
1384
1385	If the producing agent is unwilling or unable to accept
1386	appointment, the new insurer shall pay the agent in accordance
1387	with sub-sub-sub-subparagraph (A).
1388	(II)  When the corporation enters into a contractual
1389	agreement for a take-out plan, the producing agent of record of
1390	the corporation policy is entitled to retain any unearned
1391	commission on the policy, and the insurer shall:
1392	(A)  Pay to the producing agent of record of the
1393	corporation policy, for the first year, an amount that is the
1394	greater of the insurer's usual and customary commission for the
1395	type of policy written or a fee equal to the usual and customary
1396	commission of the corporation; or
1397	(B)  Offer to allow the producing agent of record of the
1398	corporation policy to continue servicing the policy for a period
1399	of not less than 1 year and offer to pay the agent the greater
1400	of the insurer's or the corporation's usual and customary
1401	commission for the type of policy written.
1402
1403	If the producing agent is unwilling or unable to accept
1404	appointment, the new insurer shall pay the agent in accordance
1405	with sub-sub-sub-subparagraph (A).
1406	b.  With respect to commercial lines residential risks, for
1407	a new application to the corporation for coverage, if the risk
1408	is offered coverage under a policy including wind coverage from
1409	an authorized insurer at its approved rate, the risk is not
1410	eligible for any policy issued by the corporation unless the
1411	premium for coverage from the authorized insurer is more than 25
1412	percent greater than the premium for comparable coverage from
1413	the corporation. If the risk is not able to obtain any such
1414	offer, the risk is eligible for a policy including wind coverage
1415	issued by the corporation. However, with regard to a
1416	policyholder of the corporation or a policyholder removed from
1417	the corporation through an assumption agreement until the end of
1418	the assumption period, the policyholder remains eligible for
1419	coverage from the corporation regardless of any offer of
1420	coverage from an authorized insurer or surplus lines insurer.
1421	(I)  If the risk accepts an offer of coverage through the
1422	market assistance plan or an offer of coverage through a
1423	mechanism established by the corporation before a policy is
1424	issued to the risk by the corporation or during the first 30
1425	days of coverage by the corporation, and the producing agent who
1426	submitted the application to the plan or the corporation is not
1427	currently appointed by the insurer, the insurer shall:
1428	(A)  Pay to the producing agent of record of the policy,
1429	for the first year, an amount that is the greater of the
1430	insurer's usual and customary commission for the type of policy
1431	written or a fee equal to the usual and customary commission of
1432	the corporation; or
1433	(B)  Offer to allow the producing agent of record of the
1434	policy to continue servicing the policy for a period of not less
1435	than 1 year and offer to pay the agent the greater of the
1436	insurer's or the corporation's usual and customary commission
1437	for the type of policy written.
1438
1439	If the producing agent is unwilling or unable to accept
1440	appointment, the new insurer shall pay the agent in accordance
1441	with sub-sub-sub-subparagraph (A).
1442	(II)  When the corporation enters into a contractual
1443	agreement for a take-out plan, the producing agent of record of
1444	the corporation policy is entitled to retain any unearned
1445	commission on the policy, and the insurer shall:
1446	(A)  Pay to the producing agent of record of the
1447	corporation policy, for the first year, an amount that is the
1448	greater of the insurer's usual and customary commission for the
1449	type of policy written or a fee equal to the usual and customary
1450	commission of the corporation; or
1451	(B)  Offer to allow the producing agent of record of the
1452	corporation policy to continue servicing the policy for a period
1453	of not less than 1 year and offer to pay the agent the greater
1454	of the insurer's or the corporation's usual and customary
1455	commission for the type of policy written.
1456
1457	If the producing agent is unwilling or unable to accept
1458	appointment, the new insurer shall pay the agent in accordance
1459	with sub-sub-sub-subparagraph (A).
1460	c.  For purposes of determining comparable coverage under
1461	sub-subparagraphs a. and b., the comparison shall be based on
1462	those forms and coverages that are reasonably comparable. The
1463	corporation may rely on a determination of comparable coverage
1464	and premium made by the producing agent who submits the
1465	application to the corporation, made in the agent's capacity as
1466	the corporation's agent. A comparison may be made solely of the
1467	premium with respect to the main building or structure only on
1468	the following basis: the same coverage A or other building
1469	limits; the same percentage hurricane deductible that applies on
1470	an annual basis or that applies to each hurricane for commercial
1471	residential property; the same percentage of ordinance and law
1472	coverage, if the same limit is offered by both the corporation
1473	and the authorized insurer; the same mitigation credits, to the
1474	extent the same types of credits are offered both by the
1475	corporation and the authorized insurer; the same method for loss
1476	payment, such as replacement cost or actual cash value, if the
1477	same method is offered both by the corporation and the
1478	authorized insurer in accordance with underwriting rules; and
1479	any other form or coverage that is reasonably comparable as
1480	determined by the board. If an application is submitted to the
1481	corporation for wind-only coverage in the high-risk account, the
1482	premium for the corporation's wind-only policy plus the premium
1483	for the ex-wind policy that is offered by an authorized insurer
1484	to the applicant shall be compared to the premium for multiperil
1485	coverage offered by an authorized insurer, subject to the
1486	standards for comparison specified in this subparagraph. If the
1487	corporation or the applicant requests from the authorized
1488	insurer a breakdown of the premium of the offer by types of
1489	coverage so that a comparison may be made by the corporation or
1490	its agent and the authorized insurer refuses or is unable to
1491	provide such information, the corporation may treat the offer as
1492	not being an offer of coverage from an authorized insurer at the
1493	insurer's approved rate.
1494	6.  Must provide by July 1, 2007, that an application for
1495	coverage for a new policy is subject to a waiting period of 10
1496	days before coverage is effective, during which time the
1497	corporation shall make such application available for review by
1498	general lines agents and authorized property and casualty
1499	insurers. The board shall approve an exception that allows for
1500	coverage to be effective before the end of the 10-day waiting
1501	period, for coverage issued in conjunction with a real estate
1502	closing. The board may approve such other exceptions as the
1503	board determines are necessary to prevent lapses in coverage.
1504	6.7.  Must include rules for classifications of risks and
1505	rates therefor.
1506	7.8.  Must provide that if premium and investment income
1507	for an account attributable to a particular calendar year are in
1508	excess of projected losses and expenses for the account
1509	attributable to that year, such excess shall be held in surplus
1510	in the account. Such surplus shall be available to defray
1511	deficits in that account as to future years and shall be used
1512	for that purpose prior to assessing assessable insurers and
1513	assessable insureds as to any calendar year.
1514	8.9.  Must provide objective criteria and procedures to be
1515	uniformly applied for all applicants in determining whether an
1516	individual risk is so hazardous as to be uninsurable. In making
1517	this determination and in establishing the criteria and
1518	procedures, the following shall be considered:
1519	a.  Whether the likelihood of a loss for the individual
1520	risk is substantially higher than for other risks of the same
1521	class; and
1522	b.  Whether the uncertainty associated with the individual
1523	risk is such that an appropriate premium cannot be determined.
1524
1525	The acceptance or rejection of a risk by the corporation shall
1526	be construed as the private placement of insurance, and the
1527	provisions of chapter 120 shall not apply.
1528	9.10.  Must provide that the corporation shall make its
1529	best efforts to procure catastrophe reinsurance at reasonable
1530	rates, to cover its projected 100-year probable maximum loss as
1531	determined by the board of governors.
1532	10.11.  Must provide that in the event of regular deficit
1533	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1534	(b)3.b., in the personal lines account, the commercial lines
1535	residential account, or the high-risk account, the corporation
1536	shall levy upon corporation policyholders in its next rate
1537	filing, or by a separate rate filing solely for this purpose, a
1538	Citizens policyholder surcharge arising from a regular
1539	assessment in such account in a percentage equal to the total
1540	amount of such regular assessments divided by the aggregate
1541	statewide direct written premium for subject lines of business
1542	for the prior calendar year. For purposes of calculating the
1543	Citizens policyholder surcharge to be levied under this
1544	subparagraph, the total amount of the regular assessment to
1545	which this surcharge is related shall be determined as set forth
1546	in subparagraph (b)3., without deducting the estimated Citizens
1547	policyholder surcharge. Citizens policyholder surcharges under
1548	this subparagraph are not considered premium and are not subject
1549	to commissions, fees, or premium taxes; however, failure to pay
1550	a market equalization surcharge shall be treated as failure to
1551	pay premium.
1552	11.12.  The policies issued by the corporation must provide
1553	that, if the corporation or the market assistance plan obtains
1554	an offer from an authorized insurer to cover the risk at its
1555	approved rates, the risk is no longer eligible for renewal
1556	through the corporation, except as otherwise provided in this
1557	subsection.
1558	12.13.  Corporation policies and applications must include
1559	a notice that the corporation policy could, under this section,
1560	be replaced with a policy issued by an authorized insurer that
1561	does not provide coverage identical to the coverage provided by
1562	the corporation. The notice shall also specify that acceptance
1563	of corporation coverage creates a conclusive presumption that
1564	the applicant or policyholder is aware of this potential.
1565	13.14.  May establish, subject to approval by the office,
1566	different eligibility requirements and operational procedures
1567	for any line or type of coverage for any specified county or
1568	area if the board determines that such changes to the
1569	eligibility requirements and operational procedures are
1570	justified due to the voluntary market being sufficiently stable
1571	and competitive in such area or for such line or type of
1572	coverage and that consumers who, in good faith, are unable to
1573	obtain insurance through the voluntary market through ordinary
1574	methods would continue to have access to coverage from the
1575	corporation. When coverage is sought in connection with a real
1576	property transfer, such requirements and procedures shall not
1577	provide for an effective date of coverage later than the date of
1578	the closing of the transfer as established by the transferor,
1579	the transferee, and, if applicable, the lender.
1580	14.15.  Must provide that, with respect to the high-risk
1581	account, any assessable insurer with a surplus as to
1582	policyholders of $25 million or less writing 25 percent or more
1583	of its total countrywide property insurance premiums in this
1584	state may petition the office, within the first 90 days of each
1585	calendar year, to qualify as a limited apportionment company. A
1586	regular assessment levied by the corporation on a limited
1587	apportionment company for a deficit incurred by the corporation
1588	for the high-risk account in 2006 or thereafter may be paid to
1589	the corporation on a monthly basis as the assessments are
1590	collected by the limited apportionment company from its insureds
1591	pursuant to s. 627.3512, but the regular assessment must be paid
1592	in full within 12 months after being levied by the corporation.
1593	A limited apportionment company shall collect from its
1594	policyholders any emergency assessment imposed under sub-
1595	subparagraph (b)3.d. The plan shall provide that, if the office
1596	determines that any regular assessment will result in an
1597	impairment of the surplus of a limited apportionment company,
1598	the office may direct that all or part of such assessment be
1599	deferred as provided in subparagraph (g)4. However, there shall
1600	be no limitation or deferment of an emergency assessment to be
1601	collected from policyholders under sub-subparagraph (b)3.d.
1602	15.16.  Must provide that the corporation appoint as its
1603	licensed agents only those agents who also hold an appointment
1604	as defined in s. 626.015(3) with an insurer who at the time of
1605	the agent's initial appointment by the corporation is authorized
1606	to write and is actually writing personal lines residential
1607	property coverage, commercial residential property coverage, or
1608	commercial nonresidential property coverage within the state.
1609	16.17.  Must provide, by July 1, 2007, a premium payment
1610	plan option to its policyholders which allows at a minimum for
1611	quarterly and semiannual payment of premiums. A monthly payment
1612	plan may, but is not required to, be offered.
1613	17.18.  Must provide, effective June 1, 2007, that the
1614	corporation contract with each insurer providing the non-wind
1615	coverage for risks insured by the corporation in the high-risk
1616	account, requiring that the insurer provide claims adjusting
1617	services for the wind coverage provided by the corporation for
1618	such risks. An insurer is required to enter into this contract
1619	as a condition of providing non-wind coverage for a risk that is
1620	insured by the corporation in the high-risk account unless the
1621	board finds, after a hearing, that the insurer is not capable of
1622	providing adjusting services at an acceptable level of quality
1623	to corporation policyholders. The terms and conditions of such
1624	contracts must be substantially the same as the contracts that
1625	the corporation executed with insurers under the "adjust-your-
1626	own" program in 2006, except as may be mutually agreed to by the
1627	parties and except for such changes that the board determines
1628	are necessary to ensure that claims are adjusted appropriately.
1629	The corporation shall provide a process for neutral arbitration
1630	of any dispute between the corporation and the insurer regarding
1631	the terms of the contract. The corporation shall review and
1632	monitor the performance of insurers under these contracts.
1633	18.19.  Must limit coverage on mobile homes or manufactured
1634	homes built prior to 1994 to actual cash value of the dwelling
1635	rather than replacement costs of the dwelling.
1636	19.20.  May provide such limits of coverage as the board
1637	determines, consistent with the requirements of this subsection.
1638	20.21.  May require commercial property to meet specified
1639	hurricane mitigation construction features as a condition of
1640	eligibility for coverage.
1641	(d)1.  All prospective employees for senior management
1642	positions, as defined by the plan of operation, are subject to
1643	background checks as a prerequisite for employment. The office
1644	shall conduct background checks on such prospective employees
1645	pursuant to ss. 624.34, 624.404(3), and 628.261.
1646	2.  On or before July 1 of each year, employees of the
1647	corporation are required to sign and submit a statement
1648	attesting that they do not have a conflict of interest, as
1649	defined in part III of chapter 112. As a condition of
1650	employment, all prospective employees are required to sign and
1651	submit to the corporation a conflict-of-interest statement.
1652	3.  Senior managers and members of the board of governors
1653	are subject to the provisions of part III of chapter 112,
1654	including, but not limited to, the code of ethics and public
1655	disclosure and reporting of financial interests, pursuant to s.
1656	112.3145. For purposes of the filing requirements in s.
1657	112.3145, senior managers and board members are also required to
1658	file such disclosures with the Commission on Ethics and the
1659	Office of Insurance Regulation. The executive director of the
1660	corporation or his or her designee shall notify each newly
1661	appointed and existing appointed member of the board of
1662	governors and senior managers of their duty to comply with the
1663	reporting requirements of s. 112.3145 part III of chapter 112.
1664	At least quarterly, the executive director or his or her
1665	designee shall submit to the Commission on Ethics a list of
1666	names of the senior managers and members of the board of
1667	governors who are subject to the public disclosure requirements
1668	under s. 112.3145.
1669	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
1670	other provision of law, an employee or board member may not
1671	knowingly accept, directly or indirectly, any gift or
1672	expenditure from a person or entity, or an employee or
1673	representative of such person or entity, that has a contractual
1674	relationship with the corporation or who is under consideration
1675	for a contract. An employee or board member who fails to comply
1676	with subparagraph 3. or this subparagraph is subject to
1677	penalties provided under ss. 112.317 and 112.3173.
1678	5.  Any senior manager of the corporation who is employed
1679	on or after January 1, 2007, regardless of the date of hire, who
1680	subsequently retires or terminates employment is prohibited from
1681	representing another person or entity before the corporation for
1682	2 years after retirement or termination of employment from the
1683	corporation.
1684	6.  Any senior manager employee of the corporation who is
1685	employed on or after January 1, 2007, regardless of the date of
1686	hire, who subsequently retires or terminates employment is
1687	prohibited from having any employment or contractual
1688	relationship for 2 years with an insurer that has entered into
1689	received a take-out bonus agreement with from the corporation.
1690	(m)1.  Rates for coverage provided by the corporation shall
1691	be actuarially sound and subject to the requirements of s.
1692	627.062, except as otherwise provided in this paragraph. The
1693	corporation shall file its recommended rates with the office at
1694	least annually. The corporation shall provide any additional
1695	information regarding the rates which the office requires. The
1696	office shall consider the recommendations of the board and issue
1697	a final order establishing the rates for the corporation within
1698	45 days after the recommended rates are filed. The corporation
1699	may not pursue an administrative challenge or judicial review of
1700	the final order of the office.
1701	2.  In addition to the rates otherwise determined pursuant
1702	to this paragraph, the corporation shall impose and collect an
1703	amount equal to the premium tax provided for in s. 624.509 to
1704	augment the financial resources of the corporation.
1705	3.  After the public hurricane loss-projection model under
1706	s. 627.06281 has been found to be accurate and reliable by the
1707	Florida Commission on Hurricane Loss Projection Methodology,
1708	that model shall serve as the minimum benchmark for determining
1709	the windstorm portion of the corporation's rates. This
1710	subparagraph does not require or allow the corporation to adopt
1711	rates lower than the rates otherwise required or allowed by this
1712	paragraph.
1713	4.  The rate filings for the corporation which were
1714	approved by the office and which took effect January 1, 2007,
1715	are rescinded, except for those rates that were lowered. As soon
1716	as possible, the corporation shall begin using the lower rates
1717	that were in effect on December 31, 2006, and shall provide
1718	refunds to policyholders who have paid higher rates as a result
1719	of that rate filing. The rates in effect on December 31, 2006,
1720	shall remain in effect through at least December 31, 2007, for
1721	the 2007 calendar year except for any rate change that results
1722	in a lower rate. The next rate change that may increase rates
1723	shall be filed with the office by take effect January 1, 2008,
1724	pursuant to a new rate filing recommended by the corporation and
1725	established by the office, subject to the requirements of this
1726	paragraph.
1727	(n)  If coverage in an account is deactivated pursuant to
1728	paragraph (f), coverage through the corporation shall be
1729	reactivated by order of the office only under one of the
1730	following circumstances:
1731	1.  If the market assistance plan receives a minimum of 100
1732	applications for coverage within a 3-month period, or 200
1733	applications for coverage within a 1-year period or less for
1734	residential coverage, unless the market assistance plan provides
1735	a quotation from admitted carriers at their filed rates for at
1736	least 90 percent of such applicants. Any market assistance plan
1737	application that is rejected because an individual risk is so
1738	hazardous as to be uninsurable using the criteria specified in
1739	subparagraph (c)7.8. shall not be included in the minimum
1740	percentage calculation provided herein. In the event that there
1741	is a legal or administrative challenge to a determination by the
1742	office that the conditions of this subparagraph have been met
1743	for eligibility for coverage in the corporation, any eligible
1744	risk may obtain coverage during the pendency of such challenge.
1745	2.  In response to a state of emergency declared by the
1746	Governor under s. 252.36, the office may activate coverage by
1747	order for the period of the emergency upon a finding by the
1748	office that the emergency significantly affects the availability
1749	of residential property insurance.
1750	(v)  Notwithstanding any other provision of law:
1751	1.  The pledge or sale of, the lien upon, and the security
1752	interest in any rights, revenues, or other assets of the
1753	corporation created or purported to be created pursuant to any
1754	financing documents to secure any bonds or other indebtedness of
1755	the corporation shall be and remain valid and enforceable,
1756	notwithstanding the commencement of and during the continuation
1757	of, and after, any rehabilitation, insolvency, liquidation,
1758	bankruptcy, receivership, conservatorship, reorganization, or
1759	similar proceeding against the corporation under the laws of
1760	this state.
1761	2.  No such proceeding shall relieve the corporation of its
1762	obligation, or otherwise affect its ability to perform its
1763	obligation, to continue to collect, or levy and collect,
1764	assessments, market equalization or other surcharges under
1765	subparagraph (c)9.10., or any other rights, revenues, or other
1766	assets of the corporation pledged pursuant to any financing
1767	documents.
1768	3.  Each such pledge or sale of, lien upon, and security
1769	interest in, including the priority of such pledge, lien, or
1770	security interest, any such assessments, market equalization or
1771	other surcharges, or other rights, revenues, or other assets
1772	which are collected, or levied and collected, after the
1773	commencement of and during the pendency of, or after, any such
1774	proceeding shall continue unaffected by such proceeding. As used
1775	in this subsection, the term "financing documents" means any
1776	agreement or agreements, instrument or instruments, or other
1777	document or documents now existing or hereafter created
1778	evidencing any bonds or other indebtedness of the corporation or
1779	pursuant to which any such bonds or other indebtedness has been
1780	or may be issued and pursuant to which any rights, revenues, or
1781	other assets of the corporation are pledged or sold to secure
1782	the repayment of such bonds or indebtedness, together with the
1783	payment of interest on such bonds or such indebtedness, or the
1784	payment of any other obligation or financial product, as defined
1785	in the plan of operation of the corporation related to such
1786	bonds or indebtedness.
1787	4.  Any such pledge or sale of assessments, revenues,
1788	contract rights, or other rights or assets of the corporation
1789	shall constitute a lien and security interest, or sale, as the
1790	case may be, that is immediately effective and attaches to such
1791	assessments, revenues, or contract rights or other rights or
1792	assets, whether or not imposed or collected at the time the
1793	pledge or sale is made. Any such pledge or sale is effective,
1794	valid, binding, and enforceable against the corporation or other
1795	entity making such pledge or sale, and valid and binding against
1796	and superior to any competing claims or obligations owed to any
1797	other person or entity, including policyholders in this state,
1798	asserting rights in any such assessments, revenues, or contract
1799	rights or other rights or assets to the extent set forth in and
1800	in accordance with the terms of the pledge or sale contained in
1801	the applicable financing documents, whether or not any such
1802	person or entity has notice of such pledge or sale and without
1803	the need for any physical delivery, recordation, filing, or
1804	other action.
1805	5.  As long as the corporation has any bonds outstanding,
1806	the corporation may not file a voluntary petition under chapter
1807	9 of the federal Bankruptcy Code or such corresponding chapter
1808	or sections as may be in effect, from time to time, and a public
1809	officer or any organization, entity, or other person may not
1810	authorize the corporation to be or become a debtor under chapter
1811	9 of the federal Bankruptcy Code or such corresponding chapter
1812	or sections as may be in effect, from time to time, during any
1813	such period.
1814	6.  If ordered by a court of competent jurisdiction, the
1815	corporation may assume policies or otherwise provide coverage
1816	for policyholders of an insurer placed in liquidation under
1817	chapter 631, under such forms, rates, terms, and conditions as
1818	the corporation deems appropriate, subject to approval by the
1819	office.
1820	Section 11.  Subsection (4) of section 627.3511, Florida
1821	Statutes, is amended to read:
1822	627.3511  Depopulation of Citizens Property Insurance
1823	Corporation.--
1824	(4)  AGENT BONUS.--When the corporation enters into a
1825	contractual agreement for a take-out plan that provides a bonus
1826	to the insurer, the producing agent of record of the corporation
1827	policy is entitled to retain any unearned commission on such
1828	policy, and the insurer shall either:
1829	(a)  Pay to the producing agent of record of the
1830	association policy, for the first year, an amount that is the
1831	greater of the insurer's usual and customary commission for the
1832	type of policy written or a fee equal to the usual and customary
1833	commission of the corporation; or
1834	(b)  Offer to allow the producing agent of record of the
1835	corporation policy to continue servicing the policy for a period
1836	of not less than 1 year and offer to pay the agent the greater
1837	of the insurer's or the corporation's usual and customary
1838	commission for the type of policy written.
1839
1840	If the producing agent is unwilling or unable to accept
1841	appointment, the new insurer shall pay the agent in accordance
1842	with paragraph (a). The requirement of this subsection that the
1843	producing agent of record is entitled to retain the unearned
1844	commission on an association policy does not apply to a policy
1845	for which coverage has been provided in the association for 30
1846	days or less or for which a cancellation notice has been issued
1847	pursuant to s. 627.351(6)(c)10.11. during the first 30 days of
1848	coverage.
1849	Section 12.  Paragraph (a) of subsection (3) of section
1850	627.3515, Florida Statutes, as amended by chapter 2007-1, Laws
1851	of Florida, is amended to read:
1852	627.3515  Market assistance plan; property and casualty
1853	risks.--
1854	(3)(a)  The plan and the corporation shall develop a
1855	business plan and present it to the Financial Services
1856	Commission for approval by September 1, 2007, to provide for the
1857	implementation of an electronic database for the purpose of
1858	confirming eligibility pursuant to s. 627.351(6). The business
1859	plan may provide that authorized insurers or agents of
1860	authorized insurers may submit to the plan or the corporation in
1861	electronic form, as determined by the plan or the corporation,
1862	information determined necessary by the plan or the corporation
1863	to deny coverage to risks ineligible for coverage by the
1864	corporation. Any authorized insurer submitting such information
1865	that results in a risk being denied coverage by the corporation
1866	is required to provide coverage to the risk at its approved
1867	rates, for the coverage and premium quoted, for at least 1 year.
1868	Section 13.  Section 627.3517, Florida Statutes, is amended
1869	to read:
1870	627.3517  Consumer choice.--
1871	(1)  Except as provided in subsection (2), No provision of
1872	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
1873	impair the right of any insurance risk apportionment plan
1874	policyholder, upon receipt of any keepout or take-out offer, to
1875	retain his or her current agent, so long as that agent is duly
1876	licensed and appointed by the insurance risk apportionment plan
1877	or otherwise authorized to place business with the insurance
1878	risk apportionment plan. This right shall not be canceled,
1879	suspended, impeded, abridged, or otherwise compromised by any
1880	rule, plan of operation, or depopulation plan, whether through
1881	keepout, take-out, midterm assumption, or any other means, of
1882	any insurance risk apportionment plan or depopulation plan,
1883	including, but not limited to, those described in s. 627.351, s.
1884	627.3511, or s. 627.3515. The commission shall adopt any rules
1885	necessary to cause any insurance risk apportionment plan or
1886	market assistance plan under such sections to demonstrate that
1887	the operations of the plan do not interfere with, promote, or
1888	allow interference with the rights created under this section.
1889	If the policyholder's current agent is unable or unwilling to be
1890	appointed with the insurer making the take-out or keepout offer,
1891	the policyholder shall not be disqualified from participation in
1892	the appropriate insurance risk apportionment plan because of an
1893	offer of coverage in the voluntary market. An offer of full
1894	property insurance coverage by the insurer currently insuring
1895	either the ex-wind or wind-only coverage on the policy to which
1896	the offer applies shall not be considered a take-out or keepout
1897	offer. Any rule, plan of operation, or plan of depopulation,
1898	through keepout, take-out, midterm assumption, or any other
1899	means, of any property insurance risk apportionment plan under
1900	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
1901	and 627.3511(4).
1902	(2)  This section does not apply during the first 10 days
1903	after a new application for coverage has been submitted to
1904	Citizens Property Insurance Corporation under s. 627.351(6),
1905	whether or not coverage is bound during this period.
1906	Section 14.  Subsection (1) of section 627.4035, Florida
1907	Statutes, as amended by chapter 2007-1, Laws of Florida, is
1908	amended to read:
1909	627.4035  Cash payment of premiums; claims.--
1910	(1)  The premiums for insurance contracts issued in this
1911	state or covering risk located in this state shall be paid in
1912	cash consisting of coins, currency, checks, or money orders or
1913	by using a debit card, credit card, automatic electronic funds
1914	transfer, or payroll deduction plan. By July 1, 2007, insurers
1915	issuing personal lines residential and commercial property
1916	policies shall provide a premium payment plan option to their
1917	policyholders which allows for a minimum of quarterly and
1918	semiannual payment of premiums. Insurers may, but are not
1919	required to, offer monthly payment plans. Insurers issuing such
1920	policies must submit their premium payment plan option to the
1921	office for approval before use.
1922	Section 15.  Subsection (7) is added to section 627.4133,
1923	Florida Statutes, to read:
1924	627.4133  Notice of cancellation, nonrenewal, or renewal
1925	premium.--
1926	(7)(a)  Effective August 1, 2007, with respect to any
1927	residential property insurance policy, every notice of renewal
1928	premium must specify:
1929	1.  The dollar amounts recouped for assessments by the
1930	Florida Hurricane Catastrophe Fund, the Citizens Property
1931	Insurance Corporation, and the Florida Insurance Guaranty
1932	Association. The actual names of the entities must appear next
1933	to the dollar amounts.
1934	2.  The dollar amount of any premium increase that is due
1935	to an approved rate increase and the dollar amounts that are due
1936	to coverage changes.
1937	(b)  The Financial Services Commission may adopt rules
1938	pursuant to ss. 120.536(1) and 120.54 to implement this
1939	subsection.
1940	Section 16.  Paragraphs (a) and (c) of subsection (3) and
1941	paragraph (d) of subsection (4) of section 627.701, Florida
1942	Statutes, as amended by chapter 2007-1, Laws of Florida, are
1943	amended to read:
1944	627.701  Liability of insureds; coinsurance; deductibles.--
1945	(3)(a)  Except as otherwise provided in this subsection,
1946	prior to issuing a personal lines residential property insurance
1947	policy, the insurer must offer alternative deductible amounts
1948	applicable to hurricane losses equal to $500, 2 percent, 5
1949	percent, and 10 percent of the policy dwelling limits, unless
1950	the specific percentage deductible is less than $500. The
1951	written notice of the offer shall specify the hurricane or wind
1952	deductible to be applied in the event that the applicant or
1953	policyholder fails to affirmatively choose a hurricane
1954	deductible. The insurer must provide such policyholder with
1955	notice of the availability of the deductible amounts specified
1956	in this paragraph in a form approved by the office in
1957	conjunction with each renewal of the policy. The failure to
1958	provide such notice constitutes a violation of this code but
1959	does not affect the coverage provided under the policy.
1960	(c)  With respect to a policy covering a risk with dwelling
1961	limits of at least $100,000, but less than $250,000, the insurer
1962	may, in lieu of offering a policy with a $500 hurricane or wind
1963	deductible as required by paragraph (a), offer a policy that the
1964	insurer guarantees it will not nonrenew for reasons of reducing
1965	hurricane loss for one renewal period and that contains up to a
1966	2 percent hurricane or wind deductible as required by paragraph
1967	(a).
1968	(4)
1969	(d)1.  A personal lines residential property insurance
1970	policy covering a risk valued at less than $500,000 may not have
1971	a hurricane deductible in excess of 10 percent of the policy
1972	dwelling limits, unless the following conditions are met:
1973	a.  The policyholder must personally write and provide to
1974	the insurer the following statement in his or her own
1975	handwriting and sign his or her name, which must also be signed
1976	by every other named insured on the policy, and dated: "I do not
1977	want the insurance on my home to pay for the first (specify
1978	dollar value) of damage from hurricanes. I will pay those costs.
1979	My insurance will not."
1980	b.  If the structure insured by the policy is subject to a
1981	mortgage or lien, the policyholder must provide the insurer with
1982	a written statement from the mortgageholder or lienholder
1983	indicating that the mortgageholder or lienholder approves the
1984	policyholder electing to have the specified deductible.
1985	2.  A deductible subject to the requirements of this
1986	paragraph applies for the term of the policy and for each
1987	renewal thereafter unless the policyholder elects otherwise.
1988	Changes to the deductible percentage may be implemented only as
1989	of the date of renewal.
1990	3.  An insurer shall keep the original copy of the signed
1991	statement required by this paragraph, electronically or
1992	otherwise, and provide a copy to the policyholder providing the
1993	signed statement. A signed statement meeting the requirements of
1994	this paragraph creates a presumption that there was an informed,
1995	knowing election of coverage.
1996	4.  The commission shall adopt rules providing appropriate
1997	alternative methods for providing the statements required by
1998	this section for policyholders who have a handicapping or
1999	disabling condition that prevents them from providing a
2000	handwritten statement.
2001	Section 17.  Subsection (5) of section 627.70131, Florida
2002	Statutes, as amended by chapter 2007-1, Laws of Florida, is
2003	amended to read:
2004	627.70131  Insurer's duty to acknowledge communications
2005	regarding claims; investigation.--
2006	(5)  Within 90 days after an insurer receives notice of
2007	loss of a residential property insurance claim from a
2008	policyholder, the insurer shall pay or deny such claim unless
2009	the failure to pay such claim is caused by factors beyond the
2010	control of the insurer which reasonably prevent such payment.
2011	Within 90 days after an insurer receives notice of loss of a
2012	commercial property insurance claim from a policyholder, the
2013	insurer shall pay or deny such claim unless the insurer provides
2014	specific reasons to the policyholder why the claim cannot be
2015	paid within the 90-day period. Any overdue payment of a claim
2016	shall bear interest at the rate as set forth in s. 55.03.
2017	Interest on an overdue payment for a claim begins to accrue from
2018	the date the insurer receives notice of the claim. The interest
2019	is payable with the payment of the claim. Interest paid may not
2020	be used in future rate filing as an expense. The provisions of
2021	this subsection may not be waived, voided, or nullified by
2022	contract. The exclusive remedy for a violation of this
2023	subsection is a regulatory action under this code. Failure to
2024	comply with this subsection constitutes a violation of this
2025	code.
2026	Section 18.  Subsections (2), (4), and (5) of section
2027	627.712, Florida Statutes, as created by chapter 2007-1, Laws of
2028	Florida, are amended to read:
2029	627.712  Residential hurricane coverage required;
2030	availability of exclusions for windstorm or contents.--
2031	(1)  An insurer issuing a residential property insurance
2032	policy must provide hurricane or windstorm coverage as defined
2033	in s. 627.4025. This subsection does not apply with respect to
2034	risks that are eligible for wind-only coverage from Citizens
2035	Property Insurance Corporation under s. 627.351(6).
2036	(2)  A property An insurer that is subject to subsection
2037	(1) must make available, at the option of the policyholder, an
2038	exclusion of hurricane coverage or windstorm coverage as
2039	provided within the applicable policy. The coverage may be
2040	excluded only if:
2041	(a)1.  When the policyholder is a natural person, the
2042	policyholder personally writes and provides to the insurer the
2043	following statement in his or her own handwriting and signs his
2044	or her name, which must also be signed by every other named
2045	insured on the policy, and dated: "I do not want the insurance
2046	on my (home/mobile home/condominium unit) to pay for damage from
2047	windstorms or hurricanes. I will pay those costs. My insurance
2048	will not."
2049	2.  When the policyholder is other than a natural person,
2050	the policyholder provides to the insurer on the policyholder's
2051	letterhead the following statement that must be signed by the
2052	policyholder's authorized representative and dated: "(Name of
2053	entity) does not want the insurance on its (type of structure)
2054	to pay for damage from windstorms or hurricanes. (Name of
2055	entity) will be responsible for these costs. (Name of entity)'s
2056	insurance will not."
2057	(b)  If the structure insured by the policy is subject to a
2058	mortgage or lien, the policyholder must provide the insurer with
2059	a written statement from the mortgageholder or lienholder
2060	indicating that the mortgageholder or lienholder approves the
2061	policyholder electing to exclude windstorm coverage or hurricane
2062	coverage from his or her or its residential property insurance
2063	policy.
2064	(4)  An insurer shall keep the original copy of a signed
2065	statement required by this section, electronically or otherwise,
2066	and provide a copy to the policyholder providing the signed
2067	statement. A signed statement meeting the requirements of this
2068	section creates a presumption that there was an informed,
2069	knowing rejection of coverage.
2070	(5)  The exclusions authorized by this section apply for
2071	the term of the policy and for each renewal thereafter. Changes
2072	to the exclusions authorized by this section may be implemented
2073	only as of the date of renewal. The exclusions authorized by
2074	this section are valid for the term of the contract and for each
2075	renewal unless the policyholder elects otherwise.
2076	Section 19.  Subsections (4) and (5) of section 627.7277,
2077	Florida Statutes, as amended by chapter 2007-1, Laws of Florida,
2078	are amended to read:
2079	627.7277  Notice of renewal premium.--
2080	(4)  Every notice of renewal premium must specify:
2081	(a)  The dollar amounts recouped for assessments by the
2082	Florida Hurricane Catastrophe Fund, the Citizens Property
2083	Insurance Corporation, and the Florida Insurance Guaranty
2084	Association. The actual names of the entities must appear next
2085	to the dollar amounts.
2086	(b)  The dollar amount of any premium increase that is due
2087	to a rate increase and the dollar amounts that are due to
2088	coverage changes.
2089	(5)  The Financial Services Commission may adopt rules
2090	pursuant to ss. 120.536(1) and 120.54 to implement this section.
2091	Section 20.  Subsection (11) of section 631.52, Florida
2092	Statutes, is amended to read:
2093	631.52  Scope.--This part shall apply to all kinds of
2094	direct insurance, except:
2095	(11)  Self-insurance and any kind of self-insurance fund,
2096	liability pool, or risk management fund;
2097	Section 21.  Paragraph (e) of subsection (3) of section
2098	631.57, Florida Statutes, as amended by chapter 2007-1, Laws of
2099	Florida, is amended to read:
2100	631.57  Powers and duties of the association.--
2101	(3)
2102	(e)1.a.  In addition to assessments otherwise authorized in
2103	paragraph (a) and to the extent necessary to secure the funds
2104	for the account specified in s. 631.55(2)(c) for the direct
2105	payment of covered claims of insurers rendered insolvent by the
2106	effects of a hurricane homeowners' insurers and to pay the
2107	reasonable costs to administer such claims, or to retire
2108	indebtedness, including, without limitation, the principal,
2109	redemption premium, if any, and interest on, and related costs
2110	of issuance of, bonds issued under s. 631.695 and the funding of
2111	any reserves and other payments required under the bond
2112	resolution or trust indenture pursuant to which such bonds have
2113	been issued, the office, upon certification of the board of
2114	directors, shall levy emergency assessments upon insurers
2115	holding a certificate of authority. The emergency assessments
2116	payable under this paragraph by any insurer shall not exceed in
2117	any single year more than 2 percent of that insurer's direct
2118	written premiums, net of refunds, in this state during the
2119	preceding calendar year for the kinds of insurance within the
2120	account specified in s. 631.55(2)(c).
2121	b.  Any emergency assessments authorized under this
2122	paragraph shall be levied by the office upon insurers referred
2123	to in sub-subparagraph a., upon certification as to the need for
2124	such assessments by the board of directors. In the event the
2125	board of directors participates in the issuance of bonds in
2126	accordance with s. 631.695, emergency assessments shall be
2127	levied in each year that bonds issued under s. 631.695 and
2128	secured by such emergency assessments are outstanding, in such
2129	amounts up to such 2-percent limit as required in order to
2130	provide for the full and timely payment of the principal of,
2131	redemption premium, if any, and interest on, and related costs
2132	of issuance of, such bonds. The emergency assessments provided
2133	for in this paragraph are assigned and pledged to the
2134	municipality, county, or legal entity issuing bonds under s.
2135	631.695 for the benefit of the holders of such bonds, in order
2136	to enable such municipality, county, or legal entity to provide
2137	for the payment of the principal of, redemption premium, if any,
2138	and interest on such bonds, the cost of issuance of such bonds,
2139	and the funding of any reserves and other payments required
2140	under the bond resolution or trust indenture pursuant to which
2141	such bonds have been issued, without the necessity of any
2142	further action by the association, the office, or any other
2143	party. To the extent bonds are issued under s. 631.695 and the
2144	association determines to secure such bonds by a pledge of
2145	revenues received from the emergency assessments, such bonds,
2146	upon such pledge of revenues, shall be secured by and payable
2147	from the proceeds of such emergency assessments, and the
2148	proceeds of emergency assessments levied under this paragraph
2149	shall be remitted directly to and administered by the trustee or
2150	custodian appointed for such bonds.
2151	c.  Emergency assessments under this paragraph may be
2152	payable in a single payment or, at the option of the
2153	association, may be payable in 12 monthly installments with the
2154	first installment being due and payable at the end of the month
2155	after an emergency assessment is levied and subsequent
2156	installments being due not later than the end of each succeeding
2157	month.
2158	d.  If emergency assessments are imposed, the report
2159	required by s. 631.695(7) shall include an analysis of the
2160	revenues generated from the emergency assessments imposed under
2161	this paragraph.
2162	e.  If emergency assessments are imposed, the references in
2163	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
2164	assessments levied under paragraph (a) shall include emergency
2165	assessments imposed under this paragraph.
2166	2.  In order to ensure that insurers paying emergency
2167	assessments levied under this paragraph continue to charge rates
2168	that are neither inadequate nor excessive, within 90 days after
2169	being notified of such assessments, each insurer that is to be
2170	assessed pursuant to this paragraph shall submit a rate filing
2171	for coverage included within the account specified in s.
2172	631.55(2)(c) and for which rates are required to be filed under
2173	s. 627.062. If the filing reflects a rate change that, as a
2174	percentage, is equal to the difference between the rate of such
2175	assessment and the rate of the previous year's assessment under
2176	this paragraph, the filing shall consist of a certification so
2177	stating and shall be deemed approved when made. Any rate change
2178	of a different percentage shall be subject to the standards and
2179	procedures of s. 627.062.
2180	3.  In the event the board of directors participates in the
2181	issuance of bonds in accordance with s. 631.695, an annual
2182	assessment under this paragraph shall continue while the bonds
2183	issued with respect to which the assessment was imposed are
2184	outstanding, including any bonds the proceeds of which were used
2185	to refund bonds issued pursuant to s. 631.695, unless adequate
2186	provision has been made for the payment of the bonds in the
2187	documents authorizing the issuance of such bonds.
2188	4.  Emergency assessments under this paragraph are not
2189	premium and are not subject to the premium tax, to any fees, or
2190	to any commissions. An insurer is liable for all emergency
2191	assessments that the insurer collects and shall treat the
2192	failure of an insured to pay an emergency assessment as a
2193	failure to pay the premium. An insurer is not liable for
2194	uncollectible emergency assessments.
2195	Section 22.  Paragraphs (g), (h), and (i) of subsection (1)
2196	and subsections (2) and (6) of section 631.695, Florida
2197	Statutes, are amended to read:
2198	631.695  Revenue bond issuance through counties or
2199	municipalities.--
2200	(1)  The Legislature finds:
2201	(g)  To achieve the foregoing purposes, it is proper to
2202	authorize municipalities and counties of this state
2203	substantially affected by the landfall of a hurricane to issue
2204	bonds to assist the Florida Insurance Guaranty Association in
2205	expediting the handling and payment of covered claims of
2206	insolvent insurers.
2207	(h)  In order to avoid the needless and indiscriminate
2208	proliferation, duplication, and fragmentation of such assistance
2209	programs, it is in the best interests of the residents of this
2210	state to authorize municipalities and counties severely affected
2211	by a hurricane to provide for the payment of covered claims
2212	beyond their territorial limits in the implementation of such
2213	programs.
2214	(i)  It is a paramount public purpose for municipalities
2215	and counties substantially affected by the landfall of a
2216	hurricane to be able to issue bonds for the purposes described
2217	in this section. Such issuance shall provide assistance to
2218	residents of those municipalities and counties as well as to
2219	other residents of this state.
2220	(2)  The governing body of any municipality or county, the
2221	residents of which have been substantially affected by a
2222	hurricane, may issue bonds to fund an assistance program in
2223	conjunction with, and with the consent of, the Florida Insurance
2224	Guaranty Association for the purpose of paying claimants' or
2225	policyholders' covered claims, as defined in s. 631.54, arising
2226	through the insolvency of an insurer, which insolvency is
2227	determined by the Florida Insurance Guaranty Association to have
2228	been a result of a hurricane, regardless of whether the
2229	claimants or policyholders are residents of such municipality or
2230	county or the property to which the claim relates is located
2231	within or outside the territorial jurisdiction of the
2232	municipality or county. The power of a municipality or county to
2233	issue bonds, as described in this section, is in addition to any
2234	powers granted by law and may not be abrogated or restricted by
2235	any provisions in such municipality's or county's charter. A
2236	municipality or county issuing bonds for this purpose shall
2237	enter into such contracts with the Florida Insurance Guaranty
2238	Association or any entity acting on behalf of the Florida
2239	Insurance Guaranty Association as are necessary to implement the
2240	assistance program. Any bonds issued by a municipality or county
2241	or a combination thereof under this subsection shall be payable
2242	from and secured by moneys received by or on behalf of the
2243	municipality or county from assessments levied under s.
2244	631.57(3)(a) and assigned and pledged to or on behalf of the
2245	municipality or county for the benefit of the holders of the
2246	bonds in connection with the assistance program. The funds,
2247	credit, property, and taxing power of the state or any
2248	municipality or county shall not be pledged for the payment of
2249	such bonds.
2250	(6)  Two or more municipalities or counties, the residents
2251	of which have been substantially affected by a hurricane, may
2252	create a legal entity pursuant to s. 163.01(7)(g) to exercise
2253	the powers described in this section as well as those powers
2254	granted in s. 163.01(7)(g). References in this section to a
2255	municipality or county includes such legal entity.
2256	Section 23.  (1)  Notwithstanding section 9 of chapter
2257	2007-1, Laws of Florida, the internal design option provided in
2258	s. 1609.1.4.1. of the Florida Building Code shall remain in
2259	effect until June 1, 2007, for a building permit application
2260	made prior to that date.
2261	(2)  This section shall take effect upon this act becoming
2262	a law and shall apply retroactively to January 25, 2007. This
2263	section shall apply to any actions taken on any building permit
2264	affected by section 9 of chapter 2007-1, Laws of Florida,
2265	including any actions, legal or ministerial, pertaining to the
2266	issuance, revocation, or modifications of any building permit
2267	initiated or issued prior to, on, after, or pending as of
2268	January 25, 2007. If the retroactive application of any
2269	provision of this section is held invalid, the invalidity shall
2270	not affect the retroactive application of other provisions of
2271	this section.
2272	Section 24.  Except as otherwise expressly provided in this
2273	act, this act shall take effect July 1, 2007.
2274
2275	======= T I T L E  A M E N D M E N T =======
2276	Remove the entire title, and insert:
2277	A bill to be entitled
2278	An act relating to insurance; amending s. 163.01, F.S.;
2279	correcting a cross-reference; amending s. 215.555, F.S.;
2280	revising certain reimbursement contract requirements;
2281	deleting an expiration provision relating to obtaining
2282	coverage for liquidated insurers; delaying repeal of an
2283	exemption of medical malpractice insurance premiums from
2284	emergency assessments; revising criteria, requirements,
2285	and limitations on temporary emergency options for
2286	additional coverage under the Florida Hurricane
2287	Catastrophe Fund; amending s. 215.5595, F.S.; providing an
2288	exception to certain surplus note limitations for certain
2289	manufactured housing insurers; amending s. 624.407, F.S.;
2290	revising an insurer criterion for capital funds
2291	requirements for new insurers; amending s. 624.408, F.S.;
2292	specifying an additional surplus to policyholder amount
2293	requirement for certain insurers; amending s. 626.9201,
2294	F.S.; defining the term "nonpayment of premium"; providing
2295	additional criterion for cancellation for nonpayment of
2296	premium; amending s. 627.0613, F.S.; limiting application
2297	of certain annual report card preparation powers of the
2298	consumer advocate to personal residential property
2299	insurers; amending s. 627.062, F.S.; specifying
2300	application of certain "file and use" requirements to
2301	property insurance only; excluding certain motor vehicle
2302	coverages; amending s. 627.0655, F.S.; revising criteria
2303	for certain inclusion of discounts in certain premiums;
2304	amending s. 627.351, F.S.; revising legislative findings
2305	and intent; limiting application of the term "subject
2306	lines of business" to deficit assessments; revising a
2307	provision for determining eligibility of a risk for
2308	coverage; providing requirements for determining
2309	comparable coverage; revising requirements relating to
2310	senior management employees and members of the board of
2311	governors; revising rate filings provisions; amending s.
2312	627.3511, F.S.; correcting a cross-reference; amending s.
2313	627.3515, F.S.; revising criteria for an electronic
2314	database for a business plan; amending s. 627.3517, F.S.;
2315	deleting a provision specifying nonapplication for a
2316	certain period; amending s. 627.4035, F.S.; revising a
2317	premium payment plan option provision for certain
2318	insurers; amending s. 627.4133, F.S.; specifying
2319	requirements for notices of renewal premium of property
2320	insurance policies; authorizing the Financial Services
2321	Commission to adopt rules; amending s. 627.701, F.S.;
2322	revising requirements for deductibles for certain personal
2323	lines residential property insurance policies; amending s.
2324	627.70131, F.S.; revising certain payment or denial of
2325	claim requirements; requiring an insurer to pay or deny a
2326	claim within a certain time period; providing requirements
2327	for payment of interest on overdue claims; prohibiting the
2328	expensing of interest paid in future rate filings;
2329	prohibiting contractual waivers, voidances, or
2330	nullifications; specifying regulatory action as an
2331	exclusive remedy for certain violations; amending s.
2332	627.712, F.S.; limiting application of certain residential
2333	hurricane coverage requirements to property insurance
2334	policies; specifying separate coverage exclusion
2335	statements for policyholders that are natural persons and
2336	other than natural persons; specifying a period of
2337	application of certain exclusions; providing for
2338	implementation of changes to certain exclusions; amending
2339	s. 627.7277, F.S.; deleting certain notice of renewal
2340	premium requirements; deleting authority of the commission
2341	to adopt rules; amending s. 631.52, F.S.; expanding an
2342	exception to application to self insurance of provisions
2343	relating to Florida Insurance Guaranty of Payment;
2344	amending s. 631.57, F.S.; revising certain emergency
2345	assessment provisions relating to insurers rendered
2346	insolvent by the effects of hurricanes; amending s.
2347	631.695, F.S.; deleting provisions limiting application of
2348	certain revenue bond issuance authority to certain
2349	counties; preserving certain Florida Building Code
2350	internal design options for certain building permits for a
2351	certain time; providing for retroactive application;
2352	providing severability; providing effective dates.

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