HB 1A

1	A bill to be entitled
2	An act relating to hurricane preparedness and insurance;
3	providing a short title; amending s. 624.404, F.S.;
4	prohibiting certain insurers from transacting residential
5	property insurance business under certain circumstances;
6	prohibiting private passenger automobile insurance
7	insurers from writing such insurance under certain
8	circumstances; amending s. 624.407, F.S.; revising
9	capitalization requirements for insurers writing property
10	insurance; specifying certain minimum surplus amounts;
11	amending s. 624.408, F.S.; revising surplus requirements
12	for insurers writing property insurance; creating s.
13	626.9542, F.S.; authorizing insurers to provide certain
14	premium discounts under certain circumstances; providing
15	criteria; amending s. 627.0613, F.S.; providing additional
16	duties of the consumer advocate; amending s. 627.062,
17	F.S.; requiring the filing of a statement of certification
18	for certain rate filings; providing statement
19	requirements; providing a penalty; requiring the Office of
20	Insurance Regulation to adopt rules; providing an
21	additional rate filing review factor; specifying
22	arbitrator decision requirements for "use and file"
23	filings; amending s. 627.0629, F.S.; providing legislative
24	intent relating to savings to customers for windstorm
25	mitigation efforts; amending s. 627.4035, F.S.; requiring
26	insurers to provide certain premium payment plan options
27	to policyholders; amending s. 627.4133, F.S.; increasing a
28	period of notice for nonrenewals, cancellations, and
29	terminations; requiring residential property insurers to
30	return excess profits to policyholders; providing duties
31	of the office; transferring, renumbering, and amending s.
32	627.4261, F.S.; requiring insurers to pay or deny certain
33	claims within a time certain; providing an exception;
34	providing penalties; creating s. 627.70141, F.S.;
35	providing for additional offers of coverage for personal
36	lines residential policies; requiring notice of this
37	option to be maintained; providing application; providing
38	for rules; creating s. 627.7018, F.S.; providing a
39	prohibition and requirements for insurers in denying
40	coverage; amending s. 627.711, F.S.; requiring certain
41	notices to specify combinations of discounts, credits,
42	rate differentials, and reductions in deductibles;
43	creating s. 627.713, F.S.; authorizing the office to
44	require property insurers to report data regarding
45	hurricane claims and underwriting costs; amending s.
46	627.7277, F.S.; requiring certain information to be
47	included in notices of renewal premium; providing for
48	rules; amending s. 628.371, F.S.; providing additional
49	notice requirements for certain domestic stock insurers;
50	providing additional surplus requirements; amending ss.
51	627.311, 627.351, 631.56, 631.716, 631.816, 631.912, and
52	766.105, F.S.; revising the memberships and appointing
53	officers of certain boards of governors; providing
54	experience requirements; providing for terms and filling
55	vacancies; amending s. 440.103, F.S.; correcting a cross-
56	reference; directing the Department of Financial Services
57	to review certain insurance agent commissions for certain
58	purposes; providing duties of the office; requiring a
59	report; providing effective dates.
60
61	Be It Enacted by the Legislature of the State of Florida:
62
63	Section 1.  This act may be cited as the "Insurance
64	Industry Accountability and Consumer Protection Act."
65	Section 2.  Subsection (8) is added to section 624.404,
66	Florida Statutes, to read:
67	624.404  General eligibility of insurers for certificate of
68	authority.--To qualify for and hold authority to transact
69	insurance in this state, an insurer must be otherwise in
70	compliance with this code and with its charter powers and must
71	be an incorporated stock insurer, an incorporated mutual
72	insurer, or a reciprocal insurer, of the same general type as
73	may be formed as a domestic insurer under this code; except
74	that:
75	(8)  Effective January 1, 2008, no new certificate of
76	authority shall be issued to an insurer domiciled in this state
77	for the transaction of residential property insurance business
78	in this state if the insurer is a wholly owned subsidiary of an
79	insurer authorized in any other state.
80	Section 3.  Effective January 1, 2008, no insurer writing
81	private passenger automobile insurance in this state may
82	continue to write such insurance if the insurer writes
83	homeowners' insurance in another state but not in this state
84	unless the insurer writing private passenger automobile
85	insurance in this state is affiliated with an insurer writing
86	homeowners' insurance in this state.
87	Section 4.  Subsection (1) of section 624.407, Florida
88	Statutes, is amended to read:
89	624.407  Capital funds required; new insurers.--
90	(1)  To receive authority to transact any one kind or
91	combinations of kinds of insurance, as defined in part V of this
92	chapter, an insurer applying for its original certificate of
93	authority in this state after the effective date of this section
94	shall possess surplus as to policyholders not less than the
95	greater of:
96	(a)  Five million dollars for insurers writing casualty
97	insurance, $12 million for insurers writing property insurance a
98	property and casualty insurer, or $2.5 million for any other
99	insurer;
100	(b)  For life insurers, 4 percent of the insurer's total
101	liabilities;
102	(c)  For life and health insurers, 4 percent of the
103	insurer's total liabilities, plus 6 percent of the insurer's
104	liabilities relative to health insurance; or
105	(d)  For all insurers other than life insurers and life and
106	health insurers, 10 percent of the insurer's total liabilities;
107
108	however, a domestic insurer that transacts residential property
109	insurance and is a wholly owned subsidiary of an insurer
110	authorized to do business in any other state shall possess
111	surplus as to policyholders of at least $50 million, but no
112	insurer shall be required under this subsection to have surplus
113	as to policyholders greater than $100 million.
114	Section 5.  Subsection (1) of section 624.408, Florida
115	Statutes, is amended to read:
116	624.408  Surplus as to policyholders required; new and
117	existing insurers.--
118	(1)(a)  To maintain a certificate of authority to transact
119	any one kind or combinations of kinds of insurance, as defined
120	in part V of this chapter, an insurer in this state shall at all
121	times maintain surplus as to policyholders not less than the
122	greater of:
123	1.  Except as provided in subparagraphs subparagraph 5. and
124	6. and paragraph (b), $1.5 million;
125	2.  For life insurers, 4 percent of the insurer's total
126	liabilities;
127	3.  For life and health insurers, 4 percent of the
128	insurer's total liabilities plus 6 percent of the insurer's
129	liabilities relative to health insurance; or
130	4.  For all insurers other than mortgage guaranty insurers,
131	life insurers, and life and health insurers, 10 percent of the
132	insurer's total liabilities;.
133	5.  For property and casualty insurers writing casualty
134	insurance, $4 million; or
135	6.  For insurers writing property insurance, $12 million.
136	(b)  For any property and casualty insurer holding a
137	certificate of authority on December 30, 2006 1, 1993, the
138	following amounts apply instead of the $12 $4 million required
139	by subparagraph (a)6. (a)5.:
140	1.  On December 31, 2006 2001, and until December 30, 2007
141	2002, $4 $3 million.
142	2.  On December 31, 2007 2002, and until December 30, 2008
143	2003, $6 $3.25 million.
144	3.  On December 31, 2008 2003, and until December 30, 2009
145	2004, $8 $3.6 million.
146	4.  On December 31, 2009 2004, and until December 30, 2010
147	thereafter, $10 $4 million.
148	5.  On December 31, 2010, and thereafter, $12 million.
149	Section 6.  Section 626.9542, Florida Statutes, is created
150	to read:
151	626.9542  Policyholder loss or expense-related premium
152	discounts.--An insurer or person authorized to engage in the
153	business of insurance in this state may include, in the premium
154	charged an insured for any policy, contract, or certificate of
155	insurance, a discount based on the fact that another policy,
156	contract, or certificate of any type has been purchased by the
157	insured; however, such discount must bear a reasonable relation
158	to a reduction in expected losses or expenses and must be
159	supported by credible documentation, which may include
160	reasonable judgment factors as to expense or experience savings
161	or other administrative cost savings.
162	Section 7.  Section 627.0613, Florida Statutes, is amended
163	to read:
164	627.0613  Consumer advocate.--The Chief Financial Officer
165	must appoint a consumer advocate who must represent the general
166	public of the state before the department and the office. The
167	consumer advocate must report directly to the Chief Financial
168	Officer, but is not otherwise under the authority of the
169	department or of any employee of the department. The consumer
170	advocate has such powers as are necessary to carry out the
171	duties of the office of consumer advocate, including, but not
172	limited to, the powers to:
173	(1)  Recommend to the department or office, by petition,
174	the commencement of any proceeding or action; appear in any
175	proceeding or action before the department or office; or appear
176	in any proceeding before the Division of Administrative Hearings
177	or arbitration panel specified in s. 627.062(6) relating to
178	subject matter under the jurisdiction of the department or
179	office.
180	(2)  Have access to and use of all files, records, and data
181	of the department or office.
182	(3)  Examine rate and form filings submitted to the office,
183	hire consultants as necessary to aid in the review process, and
184	recommend to the department or office any position deemed by the
185	consumer advocate to be in the public interest.
186	(4)  Prepare an annual report card for each authorized
187	property insurer, on a form and using a letter-grade scale
188	developed by the commission by rule, which grades each insurer
189	based on the following factors:
190	1.  The number and nature of consumer complaints received
191	by the department against the insurer.
192	2.  The disposition of all complaints received by the
193	department.
194	3.  The average length of time for payment of claims by the
195	insurer.
196	4.  Any other factors the commission identifies as
197	assisting policyholders in making informed choices about
198	homeowner's insurance.
199	(5)(4)  Prepare an annual budget for presentation to the
200	Legislature by the department, which budget must be adequate to
201	carry out the duties of the office of consumer advocate.
202	Section 8.  Paragraphs (a) and (b) of subsection (2) of
203	section 627.062, Florida Statutes, are amended, and paragraph
204	(d) is added to subsection (6) of that section, to read:
205	627.062  Rate standards.--
206	(2)  As to all such classes of insurance:
207	(a)  Insurers or rating organizations shall establish and
208	use rates, rating schedules, or rating manuals to allow the
209	insurer a reasonable rate of return on such classes of insurance
210	written in this state. A copy of rates, rating schedules, rating
211	manuals, premium credits or discount schedules, and surcharge
212	schedules, and changes thereto, shall be filed with the office
213	under one of the following procedures:
214	1.  If the filing is made at least 90 days before the
215	proposed effective date and the filing is not implemented during
216	the office's review of the filing and any proceeding and
217	judicial review, then such filing shall be considered a "file
218	and use" filing. In such case, the office shall finalize its
219	review by issuance of a notice of intent to approve or a notice
220	of intent to disapprove within 90 days after receipt of the
221	filing. The notice of intent to approve and the notice of intent
222	to disapprove constitute agency action for purposes of the
223	Administrative Procedure Act. Requests for supporting
224	information, requests for mathematical or mechanical
225	corrections, or notification to the insurer by the office of its
226	preliminary findings shall not toll the 90-day period during any
227	such proceedings and subsequent judicial review. The rate shall
228	be deemed approved if the office does not issue a notice of
229	intent to approve or a notice of intent to disapprove within 90
230	days after receipt of the filing.
231	2.  If the filing is not made in accordance with the
232	provisions of subparagraph 1., such filing shall be made as soon
233	as practicable, but no later than 30 days after the effective
234	date, and shall be considered a "use and file" filing. An
235	insurer making a "use and file" filing is potentially subject to
236	an order by the office to return to policyholders portions of
237	rates found to be excessive, as provided in paragraph (h).
238	3.  The insurer's senior officer responsible for insurance
239	business operations in this state shall sign a sworn statement
240	of certification given under oath subject to the penalty of
241	perjury to accompany the rate filing. The statement shall
242	certify the appropriateness of the information provided in and
243	with the rate filing and that the information fairly presents,
244	in all material respects, the basis of the rate filing submitted
245	by the property and casualty insurer. The insurer shall certify
246	all of the information and factors described in paragraph (b),
247	including, but not limited to, investment income. The commission
248	shall prescribe by rule the form and contents of the statement
249	of certification. Failure to provide such statement of
250	certification shall result in the rate filing being disapproved
251	without prejudice to be refiled but shall not create any private
252	right of action against the insurer.
253	(b)  Upon receiving a rate filing, the office shall review
254	the rate filing to determine if a rate is excessive, inadequate,
255	or unfairly discriminatory. In making that determination, the
256	office shall, in accordance with generally accepted and
257	reasonable actuarial techniques, consider the following factors:
258	1.  Past and prospective loss experience within and without
259	this state.
260	2.  Past and prospective expenses.
261	3.  The degree of competition among insurers for the risk
262	insured.
263	4.  Investment income reasonably expected by the insurer,
264	consistent with the insurer's investment practices, from
265	investable premiums anticipated in the filing, plus any other
266	expected income from currently invested assets representing the
267	amount expected on unearned premium reserves and loss reserves.
268	The commission may adopt rules utilizing reasonable techniques
269	of actuarial science and economics to specify the manner in
270	which insurers shall calculate investment income attributable to
271	such classes of insurance written in this state and the manner
272	in which such investment income shall be used in the calculation
273	of insurance rates. Such manner shall contemplate allowances for
274	an underwriting profit factor and full consideration of
275	investment income which produce a reasonable rate of return;
276	however, investment income from invested surplus shall not be
277	considered.
278	5.  The reasonableness of the judgment reflected in the
279	filing.
280	6.  Dividends, savings, or unabsorbed premium deposits
281	allowed or returned to Florida policyholders, members, or
282	subscribers.
283	7.  The adequacy of loss reserves.
284	8.  The cost of reinsurance.
285	9.  Trend factors, including trends in actual losses per
286	insured unit for the insurer making the filing.
287	10.  Conflagration and catastrophe hazards, if applicable.
288	11.  A reasonable margin for underwriting profit and
289	contingencies. For that portion of the rate covering the risk of
290	hurricanes and other catastrophic losses for which the insurer
291	has not purchased reinsurance and has exposed its capital and
292	surplus to such risk, the office must approve a rating factor
293	that provides the insurer a reasonable rate of return that is
294	commensurate with such risk.
295	12.  The cost of medical services, if applicable.
296	13.  For an insurer that is a wholly owned subsidiary of an
297	insurer authorized to do business in any other state, the
298	profits of the insurer authorized to do business in any other
299	state for the most recent reporting year. However, this
300	subparagraph may not be the sole basis for a rate filing denial.
301	14.13.  Other relevant factors which impact upon the
302	frequency or severity of claims or upon expenses.
303
304	The provisions of this subsection shall not apply to workers'
305	compensation and employer's liability insurance and to motor
306	vehicle insurance.
307	(6)
308	(d)  For any "use and file" filing made in accordance with
309	subparagraph (2)(a)2., the decision of the arbitrator shall
310	require a credit or refund of premiums charged each policyholder
311	constituting the portion of the rate above the rate that was
312	actuarially justified.
313	Section 9.  Subsection (1) of section 627.0629, Florida
314	Statutes, is amended to read:
315	627.0629  Residential property insurance; rate filings.--
316	(1)  It is the intent of the Legislature that insurers must
317	provide savings to consumers who install or implement windstorm
318	damage mitigation techniques, alterations, or solutions to their
319	properties to prevent windstorm losses. Effective June 1, 2002,
320	A rate filing for residential property insurance must include
321	actuarially reasonable discounts, credits, or other rate
322	differentials, or appropriate reductions in deductibles, for
323	properties on which fixtures or construction techniques
324	demonstrated to reduce the amount of loss in a windstorm have
325	been installed or implemented. The fixtures or construction
326	techniques shall include, but not be limited to, fixtures or
327	construction techniques which enhance roof strength, roof
328	covering performance, roof-to-wall strength, wall-to-floor-to-
329	foundation strength, opening protection, and window, door, and
330	skylight strength. Credits, discounts, or other rate
331	differentials for fixtures and construction techniques which
332	meet the minimum requirements of the Florida Building Code must
333	be included in the rate filing. All insurance companies must
334	make a rate filing which includes the credits, discounts, or
335	other rate differentials by February 28, 2003. By July 1, 2007,
336	the office shall reevaluate the discounts, credits, other rate
337	differentials, and appropriate reductions in deductibles for
338	fixtures and construction techniques that meet the minimum
339	requirements of the Florida Building Code, based upon actual
340	experience or any other loss relativity studies available to the
341	office. The office shall determine the discounts, credits, other
342	rate differentials, and appropriate reductions in deductibles
343	that reflect the full actuarial value of such revaluation, which
344	may be used by insurers in rate filings.
345	Section 10.  Subsection (1) of section 627.4035, Florida
346	Statutes, is amended to read:
347	627.4035  Cash payment of premiums; claims.--
348	(1)  The premiums for insurance contracts issued in this
349	state or covering risk located in this state shall be paid in
350	cash consisting of coins, currency, checks, or money orders or
351	by using a debit card, credit card, automatic electronic funds
352	transfer, or payroll deduction plan. By July 1, 2007, insurers
353	issuing personal lines residential and commercial property
354	policies shall provide a premium payment plan option to their
355	policyholders which allows for monthly, quarterly, and
356	semiannual payment of premiums.
357	Section 11.  Paragraph (b) of subsection (2) of section
358	627.4133, Florida Statutes, is amended to read:
359	627.4133  Notice of cancellation, nonrenewal, or renewal
360	premium.--
361	(2)  With respect to any personal lines or commercial
362	residential property insurance policy, including, but not
363	limited to, any homeowner's, mobile home owner's, farmowner's,
364	condominium association, condominium unit owner's, apartment
365	building, or other policy covering a residential structure or
366	its contents:
367	(b)  The insurer shall give the named insured written
368	notice of nonrenewal, cancellation, or termination at least 100
369	90 days prior to the effective date of the nonrenewal,
370	cancellation, or termination. However, the insurer shall give at
371	least 100 days' written notice, or written notice by June 1,
372	whichever is earlier, for any nonrenewal, cancellation, or
373	termination that would be effective between June 1 and November
374	30. The notice must include the reason or reasons for the
375	nonrenewal, cancellation, or termination, except that:
376	1.  When cancellation is for nonpayment of premium, at
377	least 10 days' written notice of cancellation accompanied by the
378	reason therefor shall be given. As used in this subparagraph,
379	the term "nonpayment of premium" means failure of the named
380	insured to discharge when due any of her or his obligations in
381	connection with the payment of premiums on a policy or any
382	installment of such premium, whether the premium is payable
383	directly to the insurer or its agent or indirectly under any
384	premium finance plan or extension of credit, or failure to
385	maintain membership in an organization if such membership is a
386	condition precedent to insurance coverage. "Nonpayment of
387	premium" also means the failure of a financial institution to
388	honor an insurance applicant's check after delivery to a
389	licensed agent for payment of a premium, even if the agent has
390	previously delivered or transferred the premium to the insurer.
391	If a dishonored check represents the initial premium payment,
392	the contract and all contractual obligations shall be void ab
393	initio unless the nonpayment is cured within the earlier of 5
394	days after actual notice by certified mail is received by the
395	applicant or 15 days after notice is sent to the applicant by
396	certified mail or registered mail, and if the contract is void,
397	any premium received by the insurer from a third party shall be
398	refunded to that party in full.
399	2.  When such cancellation or termination occurs during the
400	first 90 days during which the insurance is in force and the
401	insurance is canceled or terminated for reasons other than
402	nonpayment of premium, at least 20 days' written notice of
403	cancellation or termination accompanied by the reason therefor
404	shall be given except where there has been a material
405	misstatement or misrepresentation or failure to comply with the
406	underwriting requirements established by the insurer.
407
408	After the policy has been in effect for 90 days, the policy
409	shall not be canceled by the insurer except when there has been
410	a material misstatement, a nonpayment of premium, a failure to
411	comply with underwriting requirements established by the insurer
412	within 90 days of the date of effectuation of coverage, or a
413	substantial change in the risk covered by the policy or when the
414	cancellation is for all insureds under such policies for a given
415	class of insureds. This paragraph does not apply to individually
416	rated risks having a policy term of less than 90 days.
417	Section 12.  A residential property insurer shall return
418	all excess profits to policyholders. In determining whether
419	profits are excessive, the Office of Insurance Regulation shall
420	consider the profits of national affiliates of Florida-based
421	subsidiaries.
422	Section 13.  Section 627.4261, Florida Statutes, is
423	transferred and renumbered as section 627.70131, Florida
424	Statutes, and subsection (5) is added to that section, to read:
425	627.70131 627.4261  Insurer's duty to acknowledge
426	communications regarding claims; investigation.--
427	(5)  Within 90 days after an insurer receives notice of a
428	property insurance claim from a policyholder, the insurer shall
429	pay or deny such claim unless the failure to pay such claim is
430	caused by factors beyond the control of the insurer which
431	reasonably prevent such payment. Failure to comply with this
432	subsection constitutes a violation of this code.
433	Section 14.  Section 627.70141, Florida Statutes, is
434	created to read:
435	627.70141  Personal lines residential policies; additional
436	offers of coverage.--
437	(1)  Every insurer offering a personal lines residential
438	property insurance policy covering windstorm in this state
439	shall, in addition to a standard comprehensive policy, offer
440	policy dwelling limits for windstorm which only cover the
441	outstanding balance of the mortgage. If an applicant or insured
442	elects policy dwelling limits for windstorm which only cover the
443	outstanding balance of the mortgage, the insurer shall obtain a
444	written election of such limited coverage on a form approved by
445	the office. The form must fully advise the applicant or
446	policyholder that the coverage the applicant or policyholder is
447	obtaining is for policy dwelling limits for windstorm which only
448	cover the outstanding balance of the mortgage. If this form is
449	signed by the insured, it will be conclusively presumed that
450	there was an informed, knowing selection of dwelling limits for
451	windstorm which only cover the outstanding balance of the
452	mortgage on behalf of all insureds.
453	(2)  On a form approved by the office, the insurer must
454	provide notices of the offer specified in subsection (1) to the
455	applicant prior to policy issuance and to the policyholder in
456	conjunction with each policy renewal. The failure to provide
457	such notice constitutes a violation of this code but does not
458	affect the coverage provided under the policy.
459	(3)  A signed, written election of coverage shall remain in
460	effect for subsequent renewals unless the policyholder notifies
461	the insurer in writing of another selection.
462	(4)  This section only applies to policyholders with
463	property with an insured value of at least $500,000.
464	(5)  The Financial Services Commission may adopt rules
465	pursuant to ss. 120.536(1) and 120.54 to implement this section.
466	Section 15.  Section 627.7018, Florida Statutes, is created
467	to read:
468	627.7018  Standards for determining risk of coverage.--In
469	determining the risk of providing property insurance coverage,
470	an insurer may not deny coverage solely on the basis of the age
471	of the property and shall consider the wind resistance of the
472	structure and measures undertaken by the owner to protect the
473	property against hurricane loss.
474	Section 16.  Section 627.711, Florida Statutes, is amended
475	to read:
476	627.711  Notice of premium discounts for hurricane loss
477	mitigation.-- Using a form prescribed by the Office of Insurance
478	Regulation, the insurer shall clearly notify the applicant or
479	policyholder of any personal lines residential property
480	insurance policy, at the time of the issuance of the policy and
481	at each renewal, of the availability and the range of each
482	premium discount, credit, other rate differential, or reduction
483	in deductibles for properties on which fixtures or construction
484	techniques, and all combinations of discounts, credits, rate
485	differentials, or reductions in deductibles, demonstrated to
486	reduce the amount of loss in a windstorm can be or have been
487	installed or implemented. The prescribed form shall describe
488	generally what actions the policyholders may be able to take to
489	reduce their windstorm premium. The prescribed form and a list
490	of such ranges approved by the office for each insurer licensed
491	in the state and providing such discounts, credits, other rate
492	differentials, or reductions in deductibles for properties
493	described in this subsection shall be available for electronic
494	viewing and download from the Department of Financial Services'
495	or the Office of Insurance Regulation's Internet website. The
496	Financial Services Commission may adopt rules to implement this
497	subsection.
498	Section 17.  Section 627.713, Florida Statutes, is created
499	to read:
500	627.713  Report of hurricane loss data.--The office may
501	require property insurers to report data regarding hurricane
502	claims and underwriting costs, including, but not limited to:
503	(1)  Number of claims.
504	(2)  Amount of claim payments made.
505	(3)  Number and amount of total-loss claims.
506	(4)  Amount and percentage of losses covered by reinsurance
507	or other loss-transfer agreements.
508	(5)  Amount of losses covered under specified deductibles.
509	(6)  Claims and payments for specified insured values.
510	(7)  Claims and payments for specified dollar values.
511	(8)  Claims and payments for specified types of
512	construction or mitigation features.
513	(9)  Claims and payments for policies under specified
514	underwriting criteria.
515	(10)  Claims and payments for contents, additional living
516	expense, and other specified coverages.
517	(11)  Claims and payments by county for the information
518	specified in this section.
519	(12)  Any other data that the office requires.
520	Section 18.  Section 627.7277, Florida Statutes, is amended
521	to read:
522	627.7277  Notice of renewal premium.--
523	(1)  As used in this section, the terms "policy" and
524	"renewal" have the meaning ascribed in s. 627.728.
525	(2)  An insurer shall mail or deliver to its policyholder
526	at least 30 days' advance written notice of the renewal premium
527	for the policy.
528	(3)  If the insurer fails to provide the 30 days' notice of
529	a renewal premium that results in a premium increase, the
530	coverage under the policy remains in effect at the existing
531	rates until 30 days after the notice is given or until the
532	effective date of replacement coverage obtained by the insured,
533	whichever occurs first.
534	(4)  Every notice of renewal premium must specify:
535	(a)  The dollar amounts recouped for assessments by the
536	Florida Hurricane Catastrophe Fund and the Florida Insurance
537	Guaranty Association. The actual names of the entities must
538	appear next to the dollar amounts.
539	(b)  The dollar amount of any premium increase that is due
540	to a rate increase and the dollar amounts that are due to
541	coverage changes.
542	(c)  For an insurer that is a wholly owned subsidiary of an
543	insurer authorized to do business in any other state, the dollar
544	amount of profit or loss for all lines of property insurance for
545	the wholly owned subsidiary and the parent for the most recent
546	reporting year.
547	(5)  The Financial Services Commission may adopt rules
548	pursuant to ss. 120.536(1) and 120.54 to implement this section.
549	Section 19.  Subsection (5) is added to section 628.371,
550	Florida Statutes, to read:
551	628.371  Dividends to stockholders.--
552	(5)  In addition to the requirements of subsections (2) and
553	(3), a domestic stock insurer that transacts residential
554	property insurance in this state shall file notice with the
555	office 10 business days prior to the payment of any dividend or
556	distribution of cash or other property to stockholders and shall
557	have surplus to policyholders equal to or exceeding 133 percent
558	of the minimum required statutory surplus as to policyholders
559	after the dividend or distribution is made.
560	Section 20.  Paragraph (e) of subsection (3) and paragraph
561	(b) of subsection (5) of section 627.311, Florida Statutes, are
562	amended to read:
563	627.311  Joint underwriters and joint reinsurers; public
564	records and public meetings exemptions.--
565	(3)  The office may, after consultation with insurers
566	licensed to write automobile insurance in this state, approve a
567	joint underwriting plan for purposes of equitable apportionment
568	or sharing among insurers of automobile liability insurance and
569	other motor vehicle insurance, as an alternate to the plan
570	required in s. 627.351(1). All insurers authorized to write
571	automobile insurance in this state shall subscribe to the plan
572	and participate therein. The plan shall be subject to continuous
573	review by the office which may at any time disapprove the entire
574	plan or any part thereof if it determines that conditions have
575	changed since prior approval and that in view of the purposes of
576	the plan changes are warranted. Any disapproval by the office
577	shall be subject to the provisions of chapter 120. The Florida
578	Automobile Joint Underwriting Association is created under the
579	plan. The plan and the association:
580	(e)  Must provide that the joint underwriting association
581	will operate subject to the supervision and approval of a board
582	of governors consisting of 16 11 individuals. The Governor, the
583	Chief Financial Officer, the President of the Senate, and the
584	Speaker of the House of Representatives shall each appoint four
585	members of the board. Members appointed by the President of the
586	Senate and the Speaker of the House of Representatives may not
587	be members of the Legislature unless they are appointed as ex
588	officio, nonvoting members. At least one of the members
589	appointed by each appointing officer must have demonstrated
590	expertise in insurance. The Chief Financial Officer shall
591	designate one of the appointees as chair. All board members
592	serve at the pleasure of the appointing officer. All board
593	members, including the chair, must be appointed to serve for 3-
594	year terms beginning annually on a date designated by the plan.
595	Any board vacancy shall be filled for the unexpired term by the
596	appointing officer, including 1 who will be elected as chair.
597	Five members of the board must be appointed by the Chief
598	Financial Officer. Two of the Chief Financial Officer's
599	appointees must be chosen from the insurance industry. Any board
600	member appointed by the Chief Financial Officer may be removed
601	and replaced by her or him at any time without cause. Six
602	members of the board must be appointed by the participating
603	insurers, two of whom must be from the insurance agents'
604	associations. All board members, including the chair, must be
605	appointed to serve for 2-year terms beginning annually on a date
606	designated by the plan.
607	(5)
608	(b)  The operation of the plan is subject to the
609	supervision and approval of a 9-member board of governors
610	consisting of nine individuals. The Governor shall appoint three
611	members and the Chief Financial Officer, the President of the
612	Senate, and the Speaker of the House of Representatives shall
613	each appoint two members of the board. Members appointed by the
614	President of the Senate and the Speaker of the House of
615	Representatives may not be members of the Legislature unless
616	they are appointed as ex officio, nonvoting members. At least
617	one of the members appointed by each appointing officer must
618	have demonstrated expertise in insurance. The Chief Financial
619	Officer shall designate one of the appointees as chair. All
620	board members serve at the pleasure of the appointing officer.
621	All board members, including the chair, must be appointed to
622	serve for 3-year terms beginning annually on a date designated
623	by the plan. Any board vacancy shall be filled for the unexpired
624	term by the appointing officer. The board of governors shall be
625	comprised of:
626	1.  Three members appointed by the Financial Services
627	Commission. Each member appointed by the commission shall serve
628	at the pleasure of the commission;
629	2.  Two of the 20 domestic insurers, as defined in s.
630	624.06(1), having the largest voluntary direct premiums written
631	in this state for workers' compensation and employer's liability
632	insurance, which shall be elected by those 20 domestic insurers;
633	3.  Two of the 20 foreign insurers as defined in s.
634	624.06(2) having the largest voluntary direct premiums written
635	in this state for workers' compensation and employer's liability
636	insurance, which shall be elected by those 20 foreign insurers;
637	4.  One person appointed by the largest property and
638	casualty insurance agents' association in this state; and
639	5.  The consumer advocate appointed under s. 627.0613 or
640	the consumer advocate's designee.
641
642	Each board member shall serve a 4-year term and may serve
643	consecutive terms. A vacancy on the board shall be filled in the
644	same manner as the original appointment for the unexpired
645	portion of the term. The Financial Services Commission shall
646	designate a member of the board to serve as chair. No board
647	member shall be an insurer which provides services to the plan
648	or which has an affiliate which provides services to the plan or
649	which is serviced by a service company or third-party
650	administrator which provides services to the plan or which has
651	an affiliate which provides services to the plan. The minutes,
652	audits, and procedures of the board of governors are subject to
653	chapter 119.
654	Section 21.  Paragraph (b) of subsection (5) of section
655	627.311, Florida Statutes, as amended by section 1 of chapter
656	2003-108, section 1096 of chapter 2003-261, and section 35 of
657	chapter 2003-412, Laws of Florida, is amended to read:
658	627.311  Joint underwriters and joint reinsurers; public
659	records and public meetings exemptions.--
660	(5)
661	(b)  The operation of the plan is subject to the
662	supervision and approval of a 13-member board of governors
663	consisting of nine individuals. The Governor shall appoint three
664	members and the Chief Financial Officer, the President of the
665	Senate, and the Speaker of the House of Representatives shall
666	each appoint two members of the board. Members appointed by the
667	President of the Senate and the Speaker of the House of
668	Representatives may not be members of the Legislature unless
669	they are appointed as ex officio, nonvoting members. At least
670	one of the members appointed by each appointing officer must
671	have demonstrated expertise in insurance. The Chief Financial
672	Officer shall designate one of the appointees as chair. All
673	board members serve at the pleasure of the appointing officer.
674	All board members, including the chair, must be appointed to
675	serve for 3-year terms beginning annually on a date designated
676	by the plan. Any board vacancy shall be filled for the unexpired
677	term by the appointing officer. The board of governors shall be
678	comprised of:
679	1.  Five of the 20 domestic insurers, as defined in s.
680	624.06(1), having the largest voluntary direct premiums written
681	in this state for workers' compensation and employer's liability
682	insurance, which shall be elected by those 20 domestic insurers;
683	2.  Five of the 20 foreign insurers as defined in s.
684	624.06(2) having the largest voluntary direct premiums written
685	in this state for workers' compensation and employer's liability
686	insurance, which shall be elected by those 20 foreign insurers;
687	3.  One person, who shall serve as the chair, appointed by
688	the Chief Financial Officer;
689	4.  One person appointed by the largest property and
690	casualty insurance agents' association in this state; and
691	5.  The consumer advocate appointed under s. 627.0613 or
692	the consumer advocate's designee.
693
694	Each board member shall serve a 4-year term and may serve
695	consecutive terms. No board member shall be an insurer which
696	provides service to the plan or which has an affiliate which
697	provides services to the plan or which is serviced by a service
698	company or third-party administrator which provides services to
699	the plan or which has an affiliate which provides services to
700	the plan. The minutes, audits, and procedures of the board of
701	governors are subject to chapter 119.
702	Section 22.  Paragraph (c) of subsection (4) and paragraph
703	(a) of subsection (5) of section 627.351, Florida Statutes, are
704	amended to read:
705	627.351  Insurance risk apportionment plans.--
706	(4)  MEDICAL MALPRACTICE RISK APPORTIONMENT.--
707	(c)  The Joint Underwriting Association shall operate
708	subject to the supervision and approval of a board of governors
709	consisting of nine individuals. The Governor shall appoint three
710	members and the Chief Financial Officer, the President of the
711	Senate, and the Speaker of the House of Representatives shall
712	each appoint two members of the board. Members appointed by the
713	President of the Senate and the Speaker of the House of
714	Representatives may not be members of the Legislature unless
715	they are appointed as ex officio, nonvoting members. At least
716	one of the members appointed by each appointing officer must
717	have demonstrated expertise in insurance. The Chief Financial
718	Officer shall designate one of the appointees as chair. All
719	board members serve at the pleasure of the appointing officer.
720	All board members, including the chair, must be appointed to
721	serve for 3-year terms beginning annually on a date designated
722	by the plan. Any board vacancy shall be filled for the unexpired
723	term by the appointing officer representatives of five of the
724	insurers participating in the Joint Underwriting Association, an
725	attorney to be named by The Florida Bar, a physician to be named
726	by the Florida Medical Association, a dentist to be named by the
727	Florida Dental Association, and a hospital representative to be
728	named by the Florida Hospital Association. The Chief Financial
729	Officer shall select the representatives of the five insurers.
730	One insurer representative shall be selected from
731	recommendations of the American Insurance Association. One
732	insurer representative shall be selected from recommendations of
733	the Alliance of American Insurers. One insurer representative
734	shall be selected from recommendations of the National
735	Association of Independent Insurers. Two insurer representatives
736	shall be selected to represent insurers that are not affiliated
737	with these associations. The board of governors shall choose,
738	during the first meeting of the board after June 30 of each
739	year, one of its members to serve as chair of the board and
740	another member to serve as vice chair of the board. There shall
741	be no liability on the part of, and no cause of action of any
742	nature shall arise against, any member insurer, self-insurer, or
743	its agents or employees, the Joint Underwriting Association or
744	its agents or employees, members of the board of governors, or
745	the office or its representatives for any action taken by them
746	in the performance of their powers and duties under this
747	subsection.
748	(5)  PROPERTY AND CASUALTY INSURANCE RISK
749	APPORTIONMENT.--The commission shall adopt by rule a joint
750	underwriting plan to equitably apportion among insurers
751	authorized in this state to write property insurance as defined
752	in s. 624.604 or casualty insurance as defined in s. 624.605,
753	the underwriting of one or more classes of property insurance or
754	casualty insurance, except for the types of insurance that are
755	included within property insurance or casualty insurance for
756	which an equitable apportionment plan, assigned risk plan, or
757	joint underwriting plan is authorized under s. 627.311 or
758	subsection (1), subsection (2), subsection (3), subsection (4),
759	or subsection (5) and except for risks eligible for flood
760	insurance written through the federal flood insurance program to
761	persons with risks eligible under subparagraph (a)1. and who are
762	in good faith entitled to, but are unable to, obtain such
763	property or casualty insurance coverage, including excess
764	coverage, through the voluntary market. For purposes of this
765	subsection, an adequate level of coverage means that coverage
766	which is required by state law or by responsible or prudent
767	business practices. The Joint Underwriting Association shall not
768	be required to provide coverage for any type of risk for which
769	there are no insurers providing similar coverage in this state.
770	The office may designate one or more participating insurers who
771	agree to provide policyholder and claims service, including the
772	issuance of policies, on behalf of the participating insurers.
773	(a)  The plan shall provide:
774	1.  A means of establishing eligibility of a risk for
775	obtaining insurance through the plan, which provides that:
776	a.  A risk shall be eligible for such property insurance or
777	casualty insurance as is required by Florida law if the
778	insurance is unavailable in the voluntary market, including the
779	market assistance program and the surplus lines market.
780	b.  A commercial risk not eligible under sub-subparagraph
781	a. shall be eligible for property or casualty insurance if:
782	(I)  The insurance is unavailable in the voluntary market,
783	including the market assistance plan and the surplus lines
784	market;
785	(II)  Failure to secure the insurance would substantially
786	impair the ability of the entity to conduct its affairs; and
787	(III)  The risk is not determined by the Risk Underwriting
788	Committee to be uninsurable.
789	c.  In the event the Federal Government terminates the
790	Federal Crime Insurance Program established under 44 C.F.R. ss.
791	80-83, Florida commercial and residential risks previously
792	insured under the federal program shall be eligible under the
793	plan.
794	d.(I)  In the event a risk is eligible under this paragraph
795	and in the event the market assistance plan receives a minimum
796	of 100 applications for coverage within a 3-month period, or 200
797	applications for coverage within a 1-year period or less, for a
798	given class of risk contained in the classification system
799	defined in the plan of operation of the Joint Underwriting
800	Association, and unless the market assistance plan provides a
801	quotation for at least 80 percent of such applicants, such
802	classification shall immediately be eligible for coverage in the
803	Joint Underwriting Association.
804	(II)  Any market assistance plan application which is
805	rejected because an individual risk is so hazardous as to be
806	practically uninsurable, considering whether the likelihood of a
807	loss for such a risk is substantially higher than for other
808	risks of the same class due to individual risk characteristics,
809	prior loss experience, unwillingness to cooperate with a prior
810	insurer, physical characteristics and physical location shall
811	not be included in the minimum percentage calculation provided
812	above. In the event that there is any legal or administrative
813	challenge to a determination by the office that the conditions
814	of this subparagraph have been met for eligibility for coverage
815	in the Joint Underwriting Association for a given
816	classification, any eligible risk may obtain coverage during the
817	pendency of any such challenge.
818	e.  In order to qualify as a quotation for the purpose of
819	meeting the minimum percentage calculation in this subparagraph,
820	the quoted premium must meet the following criteria:
821	(I)  In the case of an admitted carrier, the quoted premium
822	must not exceed the premium available for a given classification
823	currently in use by the Joint Underwriting Association or the
824	premium developed by using the rates and rating plans on file
825	with the office by the quoting insurer, whichever is greater.
826	(II)  In the case of an authorized surplus lines insurer,
827	the quoted premium must not exceed the premium available for a
828	given classification currently in use by the Joint Underwriting
829	Association by more than 25 percent, after consideration of any
830	individual risk surcharge or credit.
831	f.  Any agent who falsely certifies the unavailability of
832	coverage as provided by sub-subparagraphs a. and b., is subject
833	to the penalties provided in s. 626.611.
834	2.  A means for the equitable apportionment of profits or
835	losses and expenses among participating insurers.
836	3.  Rules for the classification of risks and rates which
837	reflect the past and prospective loss experience.
838	4.  A rating plan which reasonably reflects the prior
839	claims experience of the insureds. Such rating plan shall
840	include at least two levels of rates for risks that have
841	favorable loss experience and risks that have unfavorable loss
842	experience, as established by the plan.
843	5.  Reasonable limits to available amounts of insurance.
844	Such limits may not be less than the amounts of insurance
845	required of eligible risks by Florida law.
846	6.  Risk management requirements for insurance where such
847	requirements are reasonable and are expected to reduce losses.
848	7.  Deductibles as may be necessary to meet the needs of
849	insureds.
850	8.  Policy forms which are consistent with the forms in use
851	by the majority of the insurers providing coverage in the
852	voluntary market for the coverage requested by the applicant.
853	9.  A means to remove risks from the plan once such risks
854	no longer meet the eligibility requirements of this paragraph.
855	For this purpose, the plan shall include the following
856	requirements: At each 6-month interval after the activation of
857	any class of insureds, the board of governors or its designated
858	committee shall review the number of applications to the market
859	assistance plan for that class. If, based on these latest
860	numbers, at least 90 percent of such applications have been
861	provided a quotation, the Joint Underwriting Association shall
862	cease underwriting new applications for such class within 30
863	days, and notification of this decision shall be sent to the
864	office, the major agents' associations, and the board of
865	directors of the market assistance plan. A quotation for the
866	purpose of this subparagraph shall meet the same criteria for a
867	quotation as provided in sub-subparagraph 1.e. All policies
868	which were previously written for that class shall continue in
869	force until their normal expiration date, at which time, subject
870	to the required timely notification of nonrenewal by the Joint
871	Underwriting Association, the insured may then elect to reapply
872	to the Joint Underwriting Association according to the
873	requirements of eligibility. If, upon reapplication, those
874	previously insured Joint Underwriting Association risks meet the
875	eligibility requirements, the Joint Underwriting Association
876	shall provide the coverage requested.
877	10.  A means for providing credits to insurers against any
878	deficit assessment levied pursuant to paragraph (c), for risks
879	voluntarily written through the market assistance plan by such
880	insurers.
881	11.  That the Joint Underwriting Association shall operate
882	subject to the supervision and approval of a board of governors
883	consisting of 13 individuals. The Governor shall appoint four
884	members and the Chief Financial Officer, the President of the
885	Senate, and the Speaker of the House of Representatives shall
886	each appoint three members of the board. Members appointed by
887	the President of the Senate and the Speaker of the House of
888	Representatives may not be members of the Legislature unless
889	they are appointed as ex officio, nonvoting members. At least
890	one of the members appointed by each appointing officer must
891	have demonstrated expertise in insurance. The Chief Financial
892	Officer shall designate one of the appointees as chair. All
893	board members serve at the pleasure of the appointing officer.
894	All board members, including the chair, must be appointed to
895	serve for 3-year terms beginning annually on a date designated
896	by the plan. Any board vacancy shall be filled for the unexpired
897	term by the appointing officer appointed by the Chief Financial
898	Officer, and shall have an executive or underwriting committee.
899	At least four of the members shall be representatives of
900	insurance trade associations as follows: one member from the
901	American Insurance Association, one member from the Alliance of
902	American Insurers, one member from the National Association of
903	Independent Insurers, and one member from an unaffiliated
904	insurer writing coverage on a national basis. Two
905	representatives shall be from two of the statewide agents'
906	associations. Each board member shall be appointed to serve for
907	2-year terms beginning on a date designated by the plan and
908	shall serve at the pleasure of the Chief Financial Officer.
909	Members may be reappointed for subsequent terms.
910	Section 23.  Section 631.56, Florida Statutes, is amended
911	to read:
912	631.56  Board of directors.--
913	(1)  The board of directors of the association shall
914	consist of eight individuals. The Governor, the Chief Financial
915	Officer, the President of the Senate, and the Speaker of the
916	House of Representatives shall each appoint two members of the
917	board. Members appointed by the President of the Senate and the
918	Speaker of the House of Representatives may not be members of
919	the Legislature unless they are appointed as ex officio,
920	nonvoting members. At least one of the members appointed by each
921	appointing officer must have demonstrated expertise in
922	insurance. The Chief Financial Officer shall designate one of
923	the appointees as chair. All board members serve at the pleasure
924	of the appointing officer. All board members, including the
925	chair, must be appointed to serve for 3-year terms beginning
926	annually on a date designated by the plan. Any board vacancy
927	shall be filled for the unexpired term by the appointing officer
928	not less than five or more than nine persons serving terms as
929	established in the plan of operation. The department shall
930	approve and appoint to the board persons recommended by the
931	member insurers. In the event the department finds that any
932	recommended person does not meet the qualifications for service
933	on the board, the department shall request the member insurers
934	to recommend another person. Each member shall serve for a 4-
935	year term and may be reappointed. Vacancies on the board shall
936	be filled for the remaining period of the term in the same
937	manner as initial appointments.
938	(2)  In appointing members to the board, the department
939	shall consider among other things whether all areas of insurance
940	covered by this part are fairly represented.
941	(2)(3)  Members of the board may be reimbursed from the
942	assets of the association for expenses incurred by them as
943	members of the board of directors.
944	Section 24.  Section 631.716, Florida Statutes, is amended
945	to read:
946	631.716  Board of directors.--
947	(1)  The board of directors of the association shall be
948	comprised of eight individuals. The Governor, the Chief
949	Financial Officer, the President of the Senate, and the Speaker
950	of the House of Representatives shall each appoint two members
951	of the board. Members appointed by the President of the Senate
952	and the Speaker of the House of Representatives may not be
953	members of the Legislature unless they are appointed as ex
954	officio, nonvoting members. At least one of the members
955	appointed by each appointing officer must have demonstrated
956	expertise in insurance. The Chief Financial Officer shall
957	designate one of the appointees as chair. All board members
958	serve at the pleasure of the appointing officer. All board
959	members, including the chair, must be appointed to serve for 3-
960	year terms beginning annually on a date designated by the plan.
961	Any board vacancy shall be filled for the unexpired term by the
962	appointing officer not fewer than five nor more than nine member
963	insurers, serving terms as established in the plan of operation.
964	At all times at least one member of the board shall be a
965	domestic insurer as defined in s. 624.06(1). The members of the
966	board shall be elected by member insurers subject to the
967	approval of the department. A vacancy on the board shall be
968	filled for the remaining period of the term by a majority vote
969	of the remaining board members, subject to the approval of the
970	department. Prior to the selection of the initial board of
971	directors and the organization of the association, the
972	department shall give notice to all member insurers of the time
973	and place of the organizational meeting. At the organizational
974	meeting, each member insurer shall be entitled to one vote, in
975	person or by proxy. If the board of directors is not elected
976	within 60 days after notice of the organizational meeting, the
977	department may appoint the initial members.
978	(2)  In approving the election of members to the board, or
979	in appointing members to the board, the department shall
980	consider, among other things, whether all member insurers are
981	fairly represented.
982	(2)(3)  Members of the board may be reimbursed from the
983	assets of the association for expenses incurred by them as
984	members of the board of directors, but members of the board
985	shall not otherwise be compensated by the association for their
986	services.
987	Section 25.  Section 631.816, Florida Statutes, is amended
988	to read:
989	631.816  Board of directors.--
990	(1)  The board of directors of the plan shall consist of
991	eight individuals. The Governor, the Chief Financial Officer,
992	the President of the Senate, and the Speaker of the House of
993	Representatives shall each appoint two members of the board.
994	Members appointed by the President of the Senate and the Speaker
995	of the House of Representatives may not be members of the
996	Legislature unless they are appointed as ex officio, nonvoting
997	members. At least one of the members appointed by each
998	appointing officer must have demonstrated expertise in
999	insurance. The Chief Financial Officer shall designate one of
1000	the appointees as chair. All board members serve at the pleasure
1001	of the appointing officer. All board members, including the
1002	chair, must be appointed to serve for 3-year terms beginning
1003	annually on a date designated by the plan. Any board vacancy
1004	shall be filled for the unexpired term by the appointing officer
1005	not less than five or more than nine persons serving terms as
1006	established in the plan of operation. The department shall
1007	approve and appoint to the board persons recommended by the
1008	member HMOs. In the event the department finds that any
1009	recommended person does not meet the qualifications for service
1010	on the board, the department shall request the member HMOs to
1011	recommend another person. Each member shall serve for a 4-year
1012	term and may be reappointed, except that terms may be staggered
1013	as defined in the plan of operation. Vacancies on the board
1014	shall be filled for the remaining period of the term in the same
1015	manner as initial appointments. In determining voting rights,
1016	each HMO is entitled to vote on the basis of cumulative weighted
1017	voting based on the net written premium for non-Medicare and
1018	non-Medicaid policies.
1019	(2)  In appointing members to the board, the department
1020	shall consider, among other things, whether all member HMOs are
1021	fairly represented.
1022	(2)(3)  Members of the board may be reimbursed from the
1023	assets of the plan for expenses incurred by them as members of
1024	the board of directors, but members of the board shall not
1025	otherwise be compensated by the plan for their services.
1026	(4)  The board of directors shall elect one of its members
1027	as chair.
1028	(3)(5)  The board may contract with an administrator to
1029	carry out the provisions of this part; however, this shall not
1030	relieve the board of its duties and obligations under this part.
1031	(4)(6)  The board shall collect assessments from all HMOs
1032	as set forth in this part.
1033	Section 26.  Subsection (1) of section 631.912, Florida
1034	Statutes, is amended to read:
1035	631.912  Board of directors.--
1036	(1)  The board of directors of the corporation shall
1037	consist of 16 individuals. The Governor, the Chief Financial
1038	Officer, the President of the Senate, and the Speaker of the
1039	House of Representatives shall each appoint four members of the
1040	board. Members appointed by the President of the Senate and the
1041	Speaker of the House of Representatives may not be members of
1042	the Legislature unless they are appointed as ex officio,
1043	nonvoting members. At least one of the members appointed by each
1044	appointing officer must have demonstrated expertise in
1045	insurance. The Chief Financial Officer shall designate one of
1046	the appointees as chair. All board members serve at the pleasure
1047	of the appointing officer. All board members, including the
1048	chair, must be appointed to serve for 3-year terms beginning
1049	annually on a date designated by the plan. Any board vacancy
1050	shall be filled for the unexpired term by the appointing officer
1051	11 persons, 1 of whom is the insurance consumer advocate
1052	appointed under s. 627.0613 or designee and 1 of whom is
1053	designated by the Chief Financial Officer. The department shall
1054	appoint to the board 6 persons selected by private carriers from
1055	among the 20 workers' compensation insurers with the largest
1056	amount of net direct written premium as determined by the
1057	department, and 3 persons selected by the self-insurance funds.
1058	At least two of the private carriers shall be foreign carriers
1059	authorized to do business in this state. The board shall elect a
1060	chairperson from among its members. The Chief Financial Officer
1061	may remove any board member for cause. Each board member shall
1062	serve for a 4-year term and may be reappointed. A vacancy on the
1063	board shall be filled for the remaining period of the term in
1064	the same manner by which the original appointment was made.
1065	Section 27.  Paragraph (b) of subsection (3) of section
1066	766.105, Florida Statutes, is amended to read:
1067	766.105  Florida Patient's Compensation Fund.--
1068	(3)  THE FUND.--
1069	(b)  Fund administration and operation.--
1070	1.  The fund shall operate subject to the supervision and
1071	approval of a board of governors consisting of 16 individuals.
1072	The Governor, the Chief Financial Officer, the President of the
1073	Senate, and the Speaker of the House of Representatives shall
1074	each appoint four members of the board. Members appointed by the
1075	President of the Senate and the Speaker of the House of
1076	Representatives may not be members of the Legislature unless
1077	they are appointed as ex officio, nonvoting members. At least
1078	one of the members appointed by each appointing officer must
1079	have demonstrated expertise in insurance. The Chief Financial
1080	Officer shall designate one of the appointees as chair. All
1081	board members serve at the pleasure of the appointing officer.
1082	All board members, including the chair, must be appointed to
1083	serve for 3-year terms beginning annually on a date designated
1084	by the plan. Any board vacancy shall be filled for the unexpired
1085	term by the appointing officer a representative of the insurance
1086	industry appointed by the Chief Financial Officer, an attorney
1087	appointed by The Florida Bar, a representative of physicians
1088	appointed by the Florida Medical Association, a representative
1089	of physicians' insurance appointed by the Chief Financial
1090	Officer, a representative of physicians' self-insurance
1091	appointed by the Chief Financial Officer, two representatives of
1092	hospitals appointed by the Florida Hospital Association, a
1093	representative of hospital insurance appointed by the Chief
1094	Financial Officer, a representative of hospital self-insurance
1095	appointed by the Chief Financial Officer, a representative of
1096	the osteopathic physicians' or podiatric physicians' insurance
1097	or self-insurance appointed by the Chief Financial Officer, and
1098	a representative of the general public appointed by the Chief
1099	Financial Officer. The board of governors shall, during the
1100	first meeting after June 30 of each year, choose one of its
1101	members to serve as chair of the board and another member to
1102	serve as vice chair of the board. The members of the board shall
1103	be appointed to serve terms of 4 years, except that the initial
1104	appointments of a representative of the general public by the
1105	Chief Financial Officer, an attorney by The Florida Bar, a
1106	representative of physicians by the Florida Medical Association,
1107	and one of the two representatives of the Florida Hospital
1108	Association shall be for terms of 3 years; thereafter, such
1109	representatives shall be appointed for terms of 4 years.
1110	Subsequent to initial appointments for 4-year terms, the
1111	representative of the osteopathic physicians' or podiatric
1112	physicians' insurance or self-insurance appointed by the Chief
1113	Financial Officer and the representative of hospital self-
1114	insurance appointed by the Chief Financial Officer shall be
1115	appointed for 2-year terms; thereafter, such representatives
1116	shall be appointed for terms of 4 years. Each appointed member
1117	may designate in writing to the chair an alternate to act in the
1118	member's absence or incapacity. A member of the board, or the
1119	member's alternate, may be reimbursed from the assets of the
1120	fund for expenses incurred by him or her as a member, or
1121	alternate member, of the board and for committee work, but he or
1122	she may not otherwise be compensated by the fund for his or her
1123	service as a board member or alternate.
1124	2.  There shall be no liability on the part of, and no
1125	cause of action of any nature shall arise against, the fund or
1126	its agents or employees, professional advisers or consultants,
1127	members of the board of governors or their alternates, or the
1128	Department of Financial Services or the Office of Insurance
1129	Regulation of the Financial Services Commission or their
1130	representatives for any action taken by them in the performance
1131	of their powers and duties pursuant to this section.
1132	Section 28.  Section 440.103, Florida Statutes, is amended
1133	to read:
1134	440.103  Building permits; identification of minimum
1135	premium policy.--Every employer shall, as a condition to
1136	applying for and receiving a building permit, show proof and
1137	certify to the permit issuer that it has secured compensation
1138	for its employees under this chapter as provided in ss. 440.10
1139	and 440.38. Such proof of compensation must be evidenced by a
1140	certificate of coverage issued by the carrier, a valid exemption
1141	certificate approved by the department, or a copy of the
1142	employer's authority to self-insure and shall be presented each
1143	time the employer applies for a building permit. As provided in
1144	s. 627.413(6)(5), each certificate of coverage must show, on its
1145	face, whether or not coverage is secured under the minimum
1146	premium provisions of rules adopted by rating organizations
1147	licensed pursuant to s. 627.221. The words "minimum premium
1148	policy" or equivalent language shall be typed, printed, stamped,
1149	or legibly handwritten.
1150	Section 29.  The Department of Financial Services shall
1151	review how insurance agent commissions for the placement and
1152	renewal of property insurance policies are established and
1153	applied and shall make recommendations, based on industry best
1154	practices, for standards to ensure that agent commissions are
1155	justified on a market basis based on the nature and amount of
1156	work performed by the agents. The Office of Insurance Regulation
1157	shall provide the department with all information requested
1158	pursuant to this section. The department shall report its
1159	findings and recommendations to the Governor, the President of
1160	the Senate, and the Speaker of the House of Representatives by
1161	July 1, 2007.
1162	Section 30.  Except as otherwise expressly provided in this
1163	act, this act shall take effect upon becoming a law.

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