CS/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 and exclusions
36	for personal lines residential policies; requiring notice
37	of this option to be maintained; providing application;
38	providing for rules; creating s. 627.7018, F.S.; providing
39	a 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 and exclusion.--
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. The failure of the insurer
453	to obtain a signed selection of coverage renders the selection
454	void.
455	(2)  Every insurer offering a personal lines residential
456	property insurance policy covering windstorm in this state
457	shall, in addition to a standard comprehensive policy, offer a
458	policy that excludes personal contents coverage. If an applicant
459	or insured elects to exclude personal contents coverage, the
460	insurer shall obtain a written rejection of such coverage on a
461	form approved by the office. The form must fully advise the
462	applicant or policyholder that the coverage the applicant or
463	policyholder is obtaining does not contain personal contents
464	coverage. If this form is signed by the insured, it will be
465	conclusively presumed that there was an informed, knowing
466	rejection of personal contents coverage on behalf of all
467	insureds. The failure of the insurer to obtain a signed
468	rejection of personal contents coverage renders the selection
469	void.
470	(3)  On a form approved by the office, the insurer shall
471	provide notices of the offers specified in subsections (1) and
472	(2) to the applicant prior to policy issuance and to the
473	policyholder in conjunction with each policy renewal. The
474	failure to provide such notice constitutes a violation of this
475	code but does not affect the coverage provided under the policy.
476	(4)  A signed, written rejection or selection of coverage
477	shall remain in effect for subsequent renewals unless the
478	policyholder notifies the insurer in writing of another
479	selection.
480	(5)  The Financial Services Commission may adopt rules
481	pursuant to ss. 120.536(1) and 120.54 to implement this section.
482	Section 15.  Section 627.7018, Florida Statutes, is created
483	to read:
484	627.7018  Standards for determining risk of coverage.--In
485	determining the risk of providing property insurance coverage,
486	an insurer may not deny coverage solely on the basis of the age
487	of the property and shall consider the wind resistance of the
488	structure and measures undertaken by the owner to protect the
489	property against hurricane loss.
490	Section 16.  Section 627.711, Florida Statutes, is amended
491	to read:
492	627.711  Notice of premium discounts for hurricane loss
493	mitigation.-- Using a form prescribed by the Office of Insurance
494	Regulation, the insurer shall clearly notify the applicant or
495	policyholder of any personal lines residential property
496	insurance policy, at the time of the issuance of the policy and
497	at each renewal, of the availability and the range of each
498	premium discount, credit, other rate differential, or reduction
499	in deductibles for properties on which fixtures or construction
500	techniques, and all combinations of discounts, credits, rate
501	differentials, or reductions in deductibles, demonstrated to
502	reduce the amount of loss in a windstorm can be or have been
503	installed or implemented. The prescribed form shall describe
504	generally what actions the policyholders may be able to take to
505	reduce their windstorm premium. The prescribed form and a list
506	of such ranges approved by the office for each insurer licensed
507	in the state and providing such discounts, credits, other rate
508	differentials, or reductions in deductibles for properties
509	described in this subsection shall be available for electronic
510	viewing and download from the Department of Financial Services'
511	or the Office of Insurance Regulation's Internet website. The
512	Financial Services Commission may adopt rules to implement this
513	subsection.
514	Section 17.  Section 627.713, Florida Statutes, is created
515	to read:
516	627.713  Report of hurricane loss data.--The office may
517	require property insurers to report data regarding hurricane
518	claims and underwriting costs, including, but not limited to:
519	(1)  Number of claims.
520	(2)  Amount of claim payments made.
521	(3)  Number and amount of total-loss claims.
522	(4)  Amount and percentage of losses covered by reinsurance
523	or other loss-transfer agreements.
524	(5)  Amount of losses covered under specified deductibles.
525	(6)  Claims and payments for specified insured values.
526	(7)  Claims and payments for specified dollar values.
527	(8)  Claims and payments for specified types of
528	construction or mitigation features.
529	(9)  Claims and payments for policies under specified
530	underwriting criteria.
531	(10)  Claims and payments for contents, additional living
532	expense, and other specified coverages.
533	(11)  Claims and payments by county for the information
534	specified in this section.
535	(12)  Any other data that the office requires.
536	Section 18.  Section 627.7277, Florida Statutes, is amended
537	to read:
538	627.7277  Notice of renewal premium.--
539	(1)  As used in this section, the terms "policy" and
540	"renewal" have the meaning ascribed in s. 627.728.
541	(2)  An insurer shall mail or deliver to its policyholder
542	at least 30 days' advance written notice of the renewal premium
543	for the policy.
544	(3)  If the insurer fails to provide the 30 days' notice of
545	a renewal premium that results in a premium increase, the
546	coverage under the policy remains in effect at the existing
547	rates until 30 days after the notice is given or until the
548	effective date of replacement coverage obtained by the insured,
549	whichever occurs first.
550	(4)  Every notice of renewal premium must specify:
551	(a)  The dollar amounts recouped for assessments by the
552	Florida Hurricane Catastrophe Fund, the Citizens Property
553	Insurance Corporation, and the Florida Insurance Guaranty
554	Association. The actual names of the entities must appear next
555	to the dollar amounts.
556	(b)  The dollar amount of any premium increase that is due
557	to a rate increase and the dollar amounts that are due to
558	coverage changes.
559	(c)  For an insurer that is a wholly owned subsidiary of an
560	insurer authorized to do business in any other state, the dollar
561	amount of profit or loss for all lines of property insurance for
562	the wholly owned subsidiary and the parent for the most recent
563	reporting year.
564	(5)  The Financial Services Commission may adopt rules
565	pursuant to ss. 120.536(1) and 120.54 to implement this section.
566	Section 19.  Subsection (5) is added to section 628.371,
567	Florida Statutes, to read:
568	628.371  Dividends to stockholders.--
569	(5)  In addition to the requirements of subsections (2) and
570	(3), a domestic stock insurer that transacts residential
571	property insurance in this state shall file notice with the
572	office 10 business days prior to the payment of any dividend or
573	distribution of cash or other property to stockholders and shall
574	have surplus to policyholders equal to or exceeding 133 percent
575	of the minimum required statutory surplus as to policyholders
576	after the dividend or distribution is made.
577	Section 20.  Paragraph (e) of subsection (3) and paragraph
578	(b) of subsection (5) of section 627.311, Florida Statutes, are
579	amended to read:
580	627.311  Joint underwriters and joint reinsurers; public
581	records and public meetings exemptions.--
582	(3)  The office may, after consultation with insurers
583	licensed to write automobile insurance in this state, approve a
584	joint underwriting plan for purposes of equitable apportionment
585	or sharing among insurers of automobile liability insurance and
586	other motor vehicle insurance, as an alternate to the plan
587	required in s. 627.351(1). All insurers authorized to write
588	automobile insurance in this state shall subscribe to the plan
589	and participate therein. The plan shall be subject to continuous
590	review by the office which may at any time disapprove the entire
591	plan or any part thereof if it determines that conditions have
592	changed since prior approval and that in view of the purposes of
593	the plan changes are warranted. Any disapproval by the office
594	shall be subject to the provisions of chapter 120. The Florida
595	Automobile Joint Underwriting Association is created under the
596	plan. The plan and the association:
597	(e)  Must provide that the joint underwriting association
598	will operate subject to the supervision and approval of a board
599	of governors consisting of 16 11 individuals. The Governor, the
600	Chief Financial Officer, the President of the Senate, and the
601	Speaker of the House of Representatives shall each appoint four
602	members of the board. Members appointed by the President of the
603	Senate and the Speaker of the House of Representatives may not
604	be members of the Legislature unless they are appointed as ex
605	officio, nonvoting members. At least one of the members
606	appointed by each appointing officer must have demonstrated
607	expertise in insurance. The Chief Financial Officer shall
608	designate one of the appointees as chair. All board members
609	serve at the pleasure of the appointing officer. All board
610	members, including the chair, must be appointed to serve for 3-
611	year terms beginning annually on a date designated by the plan.
612	Any board vacancy shall be filled for the unexpired term by the
613	appointing officer, including 1 who will be elected as chair.
614	Five members of the board must be appointed by the Chief
615	Financial Officer. Two of the Chief Financial Officer's
616	appointees must be chosen from the insurance industry. Any board
617	member appointed by the Chief Financial Officer may be removed
618	and replaced by her or him at any time without cause. Six
619	members of the board must be appointed by the participating
620	insurers, two of whom must be from the insurance agents'
621	associations. All board members, including the chair, must be
622	appointed to serve for 2-year terms beginning annually on a date
623	designated by the plan.
624	(5)
625	(b)  The operation of the plan is subject to the
626	supervision and approval of a 9-member board of governors
627	consisting of nine individuals. The Governor shall appoint three
628	members and the Chief Financial Officer, the President of the
629	Senate, and the Speaker of the House of Representatives shall
630	each appoint two members of the board. Members appointed by the
631	President of the Senate and the Speaker of the House of
632	Representatives may not be members of the Legislature unless
633	they are appointed as ex officio, nonvoting members. At least
634	one of the members appointed by each appointing officer must
635	have demonstrated expertise in insurance. The Chief Financial
636	Officer shall designate one of the appointees as chair. All
637	board members serve at the pleasure of the appointing officer.
638	All board members, including the chair, must be appointed to
639	serve for 3-year terms beginning annually on a date designated
640	by the plan. Any board vacancy shall be filled for the unexpired
641	term by the appointing officer. The board of governors shall be
642	comprised of:
643	1.  Three members appointed by the Financial Services
644	Commission. Each member appointed by the commission shall serve
645	at the pleasure of the commission;
646	2.  Two of the 20 domestic insurers, as defined in s.
647	624.06(1), having the largest voluntary direct premiums written
648	in this state for workers' compensation and employer's liability
649	insurance, which shall be elected by those 20 domestic insurers;
650	3.  Two of the 20 foreign insurers as defined in s.
651	624.06(2) having the largest voluntary direct premiums written
652	in this state for workers' compensation and employer's liability
653	insurance, which shall be elected by those 20 foreign insurers;
654	4.  One person appointed by the largest property and
655	casualty insurance agents' association in this state; and
656	5.  The consumer advocate appointed under s. 627.0613 or
657	the consumer advocate's designee.
658
659	Each board member shall serve a 4-year term and may serve
660	consecutive terms. A vacancy on the board shall be filled in the
661	same manner as the original appointment for the unexpired
662	portion of the term. The Financial Services Commission shall
663	designate a member of the board to serve as chair. No board
664	member shall be an insurer which provides services to the plan
665	or which has an affiliate which provides services to the plan or
666	which is serviced by a service company or third-party
667	administrator which provides services to the plan or which has
668	an affiliate which provides services to the plan. The minutes,
669	audits, and procedures of the board of governors are subject to
670	chapter 119.
671	Section 21.  Paragraph (b) of subsection (5) of section
672	627.311, Florida Statutes, as amended by section 1 of chapter
673	2003-108, section 1096 of chapter 2003-261, and section 35 of
674	chapter 2003-412, Laws of Florida, is amended to read:
675	627.311  Joint underwriters and joint reinsurers; public
676	records and public meetings exemptions.--
677	(5)
678	(b)  The operation of the plan is subject to the
679	supervision and approval of a 13-member board of governors
680	consisting of nine individuals. The Governor shall appoint three
681	members and the Chief Financial Officer, the President of the
682	Senate, and the Speaker of the House of Representatives shall
683	each appoint two members of the board. Members appointed by the
684	President of the Senate and the Speaker of the House of
685	Representatives may not be members of the Legislature unless
686	they are appointed as ex officio, nonvoting members. At least
687	one of the members appointed by each appointing officer must
688	have demonstrated expertise in insurance. The Chief Financial
689	Officer shall designate one of the appointees as chair. All
690	board members serve at the pleasure of the appointing officer.
691	All board members, including the chair, must be appointed to
692	serve for 3-year terms beginning annually on a date designated
693	by the plan. Any board vacancy shall be filled for the unexpired
694	term by the appointing officer. The board of governors shall be
695	comprised of:
696	1.  Five of the 20 domestic insurers, as defined in s.
697	624.06(1), having the largest voluntary direct premiums written
698	in this state for workers' compensation and employer's liability
699	insurance, which shall be elected by those 20 domestic insurers;
700	2.  Five of the 20 foreign insurers as defined in s.
701	624.06(2) having the largest voluntary direct premiums written
702	in this state for workers' compensation and employer's liability
703	insurance, which shall be elected by those 20 foreign insurers;
704	3.  One person, who shall serve as the chair, appointed by
705	the Chief Financial Officer;
706	4.  One person appointed by the largest property and
707	casualty insurance agents' association in this state; and
708	5.  The consumer advocate appointed under s. 627.0613 or
709	the consumer advocate's designee.
710
711	Each board member shall serve a 4-year term and may serve
712	consecutive terms. No board member shall be an insurer which
713	provides service to the plan or which has an affiliate which
714	provides services to the plan or which is serviced by a service
715	company or third-party administrator which provides services to
716	the plan or which has an affiliate which provides services to
717	the plan. The minutes, audits, and procedures of the board of
718	governors are subject to chapter 119.
719	Section 22.  Paragraph (c) of subsection (4) and paragraph
720	(a) of subsection (5) of section 627.351, Florida Statutes, are
721	amended to read:
722	627.351  Insurance risk apportionment plans.--
723	(4)  MEDICAL MALPRACTICE RISK APPORTIONMENT.--
724	(c)  The Joint Underwriting Association shall operate
725	subject to the supervision and approval of a board of governors
726	consisting of nine individuals. The Governor shall appoint three
727	members and the Chief Financial Officer, the President of the
728	Senate, and the Speaker of the House of Representatives shall
729	each appoint two members of the board. Members appointed by the
730	President of the Senate and the Speaker of the House of
731	Representatives may not be members of the Legislature unless
732	they are appointed as ex officio, nonvoting members. At least
733	one of the members appointed by each appointing officer must
734	have demonstrated expertise in insurance. The Chief Financial
735	Officer shall designate one of the appointees as chair. All
736	board members serve at the pleasure of the appointing officer.
737	All board members, including the chair, must be appointed to
738	serve for 3-year terms beginning annually on a date designated
739	by the plan. Any board vacancy shall be filled for the unexpired
740	term by the appointing officer representatives of five of the
741	insurers participating in the Joint Underwriting Association, an
742	attorney to be named by The Florida Bar, a physician to be named
743	by the Florida Medical Association, a dentist to be named by the
744	Florida Dental Association, and a hospital representative to be
745	named by the Florida Hospital Association. The Chief Financial
746	Officer shall select the representatives of the five insurers.
747	One insurer representative shall be selected from
748	recommendations of the American Insurance Association. One
749	insurer representative shall be selected from recommendations of
750	the Alliance of American Insurers. One insurer representative
751	shall be selected from recommendations of the National
752	Association of Independent Insurers. Two insurer representatives
753	shall be selected to represent insurers that are not affiliated
754	with these associations. The board of governors shall choose,
755	during the first meeting of the board after June 30 of each
756	year, one of its members to serve as chair of the board and
757	another member to serve as vice chair of the board. There shall
758	be no liability on the part of, and no cause of action of any
759	nature shall arise against, any member insurer, self-insurer, or
760	its agents or employees, the Joint Underwriting Association or
761	its agents or employees, members of the board of governors, or
762	the office or its representatives for any action taken by them
763	in the performance of their powers and duties under this
764	subsection.
765	(5)  PROPERTY AND CASUALTY INSURANCE RISK
766	APPORTIONMENT.--The commission shall adopt by rule a joint
767	underwriting plan to equitably apportion among insurers
768	authorized in this state to write property insurance as defined
769	in s. 624.604 or casualty insurance as defined in s. 624.605,
770	the underwriting of one or more classes of property insurance or
771	casualty insurance, except for the types of insurance that are
772	included within property insurance or casualty insurance for
773	which an equitable apportionment plan, assigned risk plan, or
774	joint underwriting plan is authorized under s. 627.311 or
775	subsection (1), subsection (2), subsection (3), subsection (4),
776	or subsection (5) and except for risks eligible for flood
777	insurance written through the federal flood insurance program to
778	persons with risks eligible under subparagraph (a)1. and who are
779	in good faith entitled to, but are unable to, obtain such
780	property or casualty insurance coverage, including excess
781	coverage, through the voluntary market. For purposes of this
782	subsection, an adequate level of coverage means that coverage
783	which is required by state law or by responsible or prudent
784	business practices. The Joint Underwriting Association shall not
785	be required to provide coverage for any type of risk for which
786	there are no insurers providing similar coverage in this state.
787	The office may designate one or more participating insurers who
788	agree to provide policyholder and claims service, including the
789	issuance of policies, on behalf of the participating insurers.
790	(a)  The plan shall provide:
791	1.  A means of establishing eligibility of a risk for
792	obtaining insurance through the plan, which provides that:
793	a.  A risk shall be eligible for such property insurance or
794	casualty insurance as is required by Florida law if the
795	insurance is unavailable in the voluntary market, including the
796	market assistance program and the surplus lines market.
797	b.  A commercial risk not eligible under sub-subparagraph
798	a. shall be eligible for property or casualty insurance if:
799	(I)  The insurance is unavailable in the voluntary market,
800	including the market assistance plan and the surplus lines
801	market;
802	(II)  Failure to secure the insurance would substantially
803	impair the ability of the entity to conduct its affairs; and
804	(III)  The risk is not determined by the Risk Underwriting
805	Committee to be uninsurable.
806	c.  In the event the Federal Government terminates the
807	Federal Crime Insurance Program established under 44 C.F.R. ss.
808	80-83, Florida commercial and residential risks previously
809	insured under the federal program shall be eligible under the
810	plan.
811	d.(I)  In the event a risk is eligible under this paragraph
812	and in the event the market assistance plan receives a minimum
813	of 100 applications for coverage within a 3-month period, or 200
814	applications for coverage within a 1-year period or less, for a
815	given class of risk contained in the classification system
816	defined in the plan of operation of the Joint Underwriting
817	Association, and unless the market assistance plan provides a
818	quotation for at least 80 percent of such applicants, such
819	classification shall immediately be eligible for coverage in the
820	Joint Underwriting Association.
821	(II)  Any market assistance plan application which is
822	rejected because an individual risk is so hazardous as to be
823	practically uninsurable, considering whether the likelihood of a
824	loss for such a risk is substantially higher than for other
825	risks of the same class due to individual risk characteristics,
826	prior loss experience, unwillingness to cooperate with a prior
827	insurer, physical characteristics and physical location shall
828	not be included in the minimum percentage calculation provided
829	above. In the event that there is any legal or administrative
830	challenge to a determination by the office that the conditions
831	of this subparagraph have been met for eligibility for coverage
832	in the Joint Underwriting Association for a given
833	classification, any eligible risk may obtain coverage during the
834	pendency of any such challenge.
835	e.  In order to qualify as a quotation for the purpose of
836	meeting the minimum percentage calculation in this subparagraph,
837	the quoted premium must meet the following criteria:
838	(I)  In the case of an admitted carrier, the quoted premium
839	must not exceed the premium available for a given classification
840	currently in use by the Joint Underwriting Association or the
841	premium developed by using the rates and rating plans on file
842	with the office by the quoting insurer, whichever is greater.
843	(II)  In the case of an authorized surplus lines insurer,
844	the quoted premium must not exceed the premium available for a
845	given classification currently in use by the Joint Underwriting
846	Association by more than 25 percent, after consideration of any
847	individual risk surcharge or credit.
848	f.  Any agent who falsely certifies the unavailability of
849	coverage as provided by sub-subparagraphs a. and b., is subject
850	to the penalties provided in s. 626.611.
851	2.  A means for the equitable apportionment of profits or
852	losses and expenses among participating insurers.
853	3.  Rules for the classification of risks and rates which
854	reflect the past and prospective loss experience.
855	4.  A rating plan which reasonably reflects the prior
856	claims experience of the insureds. Such rating plan shall
857	include at least two levels of rates for risks that have
858	favorable loss experience and risks that have unfavorable loss
859	experience, as established by the plan.
860	5.  Reasonable limits to available amounts of insurance.
861	Such limits may not be less than the amounts of insurance
862	required of eligible risks by Florida law.
863	6.  Risk management requirements for insurance where such
864	requirements are reasonable and are expected to reduce losses.
865	7.  Deductibles as may be necessary to meet the needs of
866	insureds.
867	8.  Policy forms which are consistent with the forms in use
868	by the majority of the insurers providing coverage in the
869	voluntary market for the coverage requested by the applicant.
870	9.  A means to remove risks from the plan once such risks
871	no longer meet the eligibility requirements of this paragraph.
872	For this purpose, the plan shall include the following
873	requirements: At each 6-month interval after the activation of
874	any class of insureds, the board of governors or its designated
875	committee shall review the number of applications to the market
876	assistance plan for that class. If, based on these latest
877	numbers, at least 90 percent of such applications have been
878	provided a quotation, the Joint Underwriting Association shall
879	cease underwriting new applications for such class within 30
880	days, and notification of this decision shall be sent to the
881	office, the major agents' associations, and the board of
882	directors of the market assistance plan. A quotation for the
883	purpose of this subparagraph shall meet the same criteria for a
884	quotation as provided in sub-subparagraph 1.e. All policies
885	which were previously written for that class shall continue in
886	force until their normal expiration date, at which time, subject
887	to the required timely notification of nonrenewal by the Joint
888	Underwriting Association, the insured may then elect to reapply
889	to the Joint Underwriting Association according to the
890	requirements of eligibility. If, upon reapplication, those
891	previously insured Joint Underwriting Association risks meet the
892	eligibility requirements, the Joint Underwriting Association
893	shall provide the coverage requested.
894	10.  A means for providing credits to insurers against any
895	deficit assessment levied pursuant to paragraph (c), for risks
896	voluntarily written through the market assistance plan by such
897	insurers.
898	11.  That the Joint Underwriting Association shall operate
899	subject to the supervision and approval of a board of governors
900	consisting of 13 individuals. The Governor shall appoint four
901	members and the Chief Financial Officer, the President of the
902	Senate, and the Speaker of the House of Representatives shall
903	each appoint three members of the board. Members appointed by
904	the President of the Senate and the Speaker of the House of
905	Representatives may not be members of the Legislature unless
906	they are appointed as ex officio, nonvoting members. At least
907	one of the members appointed by each appointing officer must
908	have demonstrated expertise in insurance. The Chief Financial
909	Officer shall designate one of the appointees as chair. All
910	board members serve at the pleasure of the appointing officer.
911	All board members, including the chair, must be appointed to
912	serve for 3-year terms beginning annually on a date designated
913	by the plan. Any board vacancy shall be filled for the unexpired
914	term by the appointing officer appointed by the Chief Financial
915	Officer, and shall have an executive or underwriting committee.
916	At least four of the members shall be representatives of
917	insurance trade associations as follows: one member from the
918	American Insurance Association, one member from the Alliance of
919	American Insurers, one member from the National Association of
920	Independent Insurers, and one member from an unaffiliated
921	insurer writing coverage on a national basis. Two
922	representatives shall be from two of the statewide agents'
923	associations. Each board member shall be appointed to serve for
924	2-year terms beginning on a date designated by the plan and
925	shall serve at the pleasure of the Chief Financial Officer.
926	Members may be reappointed for subsequent terms.
927	Section 23.  Section 631.56, Florida Statutes, is amended
928	to read:
929	631.56  Board of directors.--
930	(1)  The board of directors of the association shall
931	consist of eight individuals. The Governor, the Chief Financial
932	Officer, the President of the Senate, and the Speaker of the
933	House of Representatives shall each appoint two members of the
934	board. Members appointed by the President of the Senate and the
935	Speaker of the House of Representatives may not be members of
936	the Legislature unless they are appointed as ex officio,
937	nonvoting members. At least one of the members appointed by each
938	appointing officer must have demonstrated expertise in
939	insurance. The Chief Financial Officer shall designate one of
940	the appointees as chair. All board members serve at the pleasure
941	of the appointing officer. All board members, including the
942	chair, must be appointed to serve for 3-year terms beginning
943	annually on a date designated by the plan. Any board vacancy
944	shall be filled for the unexpired term by the appointing officer
945	not less than five or more than nine persons serving terms as
946	established in the plan of operation. The department shall
947	approve and appoint to the board persons recommended by the
948	member insurers. In the event the department finds that any
949	recommended person does not meet the qualifications for service
950	on the board, the department shall request the member insurers
951	to recommend another person. Each member shall serve for a 4-
952	year term and may be reappointed. Vacancies on the board shall
953	be filled for the remaining period of the term in the same
954	manner as initial appointments.
955	(2)  In appointing members to the board, the department
956	shall consider among other things whether all areas of insurance
957	covered by this part are fairly represented.
958	(2)(3)  Members of the board may be reimbursed from the
959	assets of the association for expenses incurred by them as
960	members of the board of directors.
961	Section 24.  Section 631.716, Florida Statutes, is amended
962	to read:
963	631.716  Board of directors.--
964	(1)  The board of directors of the association shall be
965	comprised of eight individuals. The Governor, the Chief
966	Financial Officer, the President of the Senate, and the Speaker
967	of the House of Representatives shall each appoint two members
968	of the board. Members appointed by the President of the Senate
969	and the Speaker of the House of Representatives may not be
970	members of the Legislature unless they are appointed as ex
971	officio, nonvoting members. At least one of the members
972	appointed by each appointing officer must have demonstrated
973	expertise in insurance. The Chief Financial Officer shall
974	designate one of the appointees as chair. All board members
975	serve at the pleasure of the appointing officer. All board
976	members, including the chair, must be appointed to serve for 3-
977	year terms beginning annually on a date designated by the plan.
978	Any board vacancy shall be filled for the unexpired term by the
979	appointing officer not fewer than five nor more than nine member
980	insurers, serving terms as established in the plan of operation.
981	At all times at least one member of the board shall be a
982	domestic insurer as defined in s. 624.06(1). The members of the
983	board shall be elected by member insurers subject to the
984	approval of the department. A vacancy on the board shall be
985	filled for the remaining period of the term by a majority vote
986	of the remaining board members, subject to the approval of the
987	department. Prior to the selection of the initial board of
988	directors and the organization of the association, the
989	department shall give notice to all member insurers of the time
990	and place of the organizational meeting. At the organizational
991	meeting, each member insurer shall be entitled to one vote, in
992	person or by proxy. If the board of directors is not elected
993	within 60 days after notice of the organizational meeting, the
994	department may appoint the initial members.
995	(2)  In approving the election of members to the board, or
996	in appointing members to the board, the department shall
997	consider, among other things, whether all member insurers are
998	fairly represented.
999	(2)(3)  Members of the board may be reimbursed from the
1000	assets of the association for expenses incurred by them as
1001	members of the board of directors, but members of the board
1002	shall not otherwise be compensated by the association for their
1003	services.
1004	Section 25.  Section 631.816, Florida Statutes, is amended
1005	to read:
1006	631.816  Board of directors.--
1007	(1)  The board of directors of the plan shall consist of
1008	eight individuals. The Governor, the Chief Financial Officer,
1009	the President of the Senate, and the Speaker of the House of
1010	Representatives shall each appoint two members of the board.
1011	Members appointed by the President of the Senate and the Speaker
1012	of the House of Representatives may not be members of the
1013	Legislature unless they are appointed as ex officio, nonvoting
1014	members. At least one of the members appointed by each
1015	appointing officer must have demonstrated expertise in
1016	insurance. The Chief Financial Officer shall designate one of
1017	the appointees as chair. All board members serve at the pleasure
1018	of the appointing officer. All board members, including the
1019	chair, must be appointed to serve for 3-year terms beginning
1020	annually on a date designated by the plan. Any board vacancy
1021	shall be filled for the unexpired term by the appointing officer
1022	not less than five or more than nine persons serving terms as
1023	established in the plan of operation. The department shall
1024	approve and appoint to the board persons recommended by the
1025	member HMOs. In the event the department finds that any
1026	recommended person does not meet the qualifications for service
1027	on the board, the department shall request the member HMOs to
1028	recommend another person. Each member shall serve for a 4-year
1029	term and may be reappointed, except that terms may be staggered
1030	as defined in the plan of operation. Vacancies on the board
1031	shall be filled for the remaining period of the term in the same
1032	manner as initial appointments. In determining voting rights,
1033	each HMO is entitled to vote on the basis of cumulative weighted
1034	voting based on the net written premium for non-Medicare and
1035	non-Medicaid policies.
1036	(2)  In appointing members to the board, the department
1037	shall consider, among other things, whether all member HMOs are
1038	fairly represented.
1039	(2)(3)  Members of the board may be reimbursed from the
1040	assets of the plan for expenses incurred by them as members of
1041	the board of directors, but members of the board shall not
1042	otherwise be compensated by the plan for their services.
1043	(4)  The board of directors shall elect one of its members
1044	as chair.
1045	(3)(5)  The board may contract with an administrator to
1046	carry out the provisions of this part; however, this shall not
1047	relieve the board of its duties and obligations under this part.
1048	(4)(6)  The board shall collect assessments from all HMOs
1049	as set forth in this part.
1050	Section 26.  Subsection (1) of section 631.912, Florida
1051	Statutes, is amended to read:
1052	631.912  Board of directors.--
1053	(1)  The board of directors of the corporation shall
1054	consist of 16 individuals. The Governor, the Chief Financial
1055	Officer, the President of the Senate, and the Speaker of the
1056	House of Representatives shall each appoint four members of the
1057	board. Members appointed by the President of the Senate and the
1058	Speaker of the House of Representatives may not be members of
1059	the Legislature unless they are appointed as ex officio,
1060	nonvoting members. At least one of the members appointed by each
1061	appointing officer must have demonstrated expertise in
1062	insurance. The Chief Financial Officer shall designate one of
1063	the appointees as chair. All board members serve at the pleasure
1064	of the appointing officer. All board members, including the
1065	chair, must be appointed to serve for 3-year terms beginning
1066	annually on a date designated by the plan. Any board vacancy
1067	shall be filled for the unexpired term by the appointing officer
1068	11 persons, 1 of whom is the insurance consumer advocate
1069	appointed under s. 627.0613 or designee and 1 of whom is
1070	designated by the Chief Financial Officer. The department shall
1071	appoint to the board 6 persons selected by private carriers from
1072	among the 20 workers' compensation insurers with the largest
1073	amount of net direct written premium as determined by the
1074	department, and 3 persons selected by the self-insurance funds.
1075	At least two of the private carriers shall be foreign carriers
1076	authorized to do business in this state. The board shall elect a
1077	chairperson from among its members. The Chief Financial Officer
1078	may remove any board member for cause. Each board member shall
1079	serve for a 4-year term and may be reappointed. A vacancy on the
1080	board shall be filled for the remaining period of the term in
1081	the same manner by which the original appointment was made.
1082	Section 27.  Paragraph (b) of subsection (3) of section
1083	766.105, Florida Statutes, is amended to read:
1084	766.105  Florida Patient's Compensation Fund.--
1085	(3)  THE FUND.--
1086	(b)  Fund administration and operation.--
1087	1.  The fund shall operate subject to the supervision and
1088	approval of a board of governors consisting of 16 individuals.
1089	The Governor, the Chief Financial Officer, the President of the
1090	Senate, and the Speaker of the House of Representatives shall
1091	each appoint four members of the board. Members appointed by the
1092	President of the Senate and the Speaker of the House of
1093	Representatives may not be members of the Legislature unless
1094	they are appointed as ex officio, nonvoting members. At least
1095	one of the members appointed by each appointing officer must
1096	have demonstrated expertise in insurance. The Chief Financial
1097	Officer shall designate one of the appointees as chair. All
1098	board members serve at the pleasure of the appointing officer.
1099	All board members, including the chair, must be appointed to
1100	serve for 3-year terms beginning annually on a date designated
1101	by the plan. Any board vacancy shall be filled for the unexpired
1102	term by the appointing officer a representative of the insurance
1103	industry appointed by the Chief Financial Officer, an attorney
1104	appointed by The Florida Bar, a representative of physicians
1105	appointed by the Florida Medical Association, a representative
1106	of physicians' insurance appointed by the Chief Financial
1107	Officer, a representative of physicians' self-insurance
1108	appointed by the Chief Financial Officer, two representatives of
1109	hospitals appointed by the Florida Hospital Association, a
1110	representative of hospital insurance appointed by the Chief
1111	Financial Officer, a representative of hospital self-insurance
1112	appointed by the Chief Financial Officer, a representative of
1113	the osteopathic physicians' or podiatric physicians' insurance
1114	or self-insurance appointed by the Chief Financial Officer, and
1115	a representative of the general public appointed by the Chief
1116	Financial Officer. The board of governors shall, during the
1117	first meeting after June 30 of each year, choose one of its
1118	members to serve as chair of the board and another member to
1119	serve as vice chair of the board. The members of the board shall
1120	be appointed to serve terms of 4 years, except that the initial
1121	appointments of a representative of the general public by the
1122	Chief Financial Officer, an attorney by The Florida Bar, a
1123	representative of physicians by the Florida Medical Association,
1124	and one of the two representatives of the Florida Hospital
1125	Association shall be for terms of 3 years; thereafter, such
1126	representatives shall be appointed for terms of 4 years.
1127	Subsequent to initial appointments for 4-year terms, the
1128	representative of the osteopathic physicians' or podiatric
1129	physicians' insurance or self-insurance appointed by the Chief
1130	Financial Officer and the representative of hospital self-
1131	insurance appointed by the Chief Financial Officer shall be
1132	appointed for 2-year terms; thereafter, such representatives
1133	shall be appointed for terms of 4 years. Each appointed member
1134	may designate in writing to the chair an alternate to act in the
1135	member's absence or incapacity. A member of the board, or the
1136	member's alternate, may be reimbursed from the assets of the
1137	fund for expenses incurred by him or her as a member, or
1138	alternate member, of the board and for committee work, but he or
1139	she may not otherwise be compensated by the fund for his or her
1140	service as a board member or alternate.
1141	2.  There shall be no liability on the part of, and no
1142	cause of action of any nature shall arise against, the fund or
1143	its agents or employees, professional advisers or consultants,
1144	members of the board of governors or their alternates, or the
1145	Department of Financial Services or the Office of Insurance
1146	Regulation of the Financial Services Commission or their
1147	representatives for any action taken by them in the performance
1148	of their powers and duties pursuant to this section.
1149	Section 28.  Section 440.103, Florida Statutes, is amended
1150	to read:
1151	440.103  Building permits; identification of minimum
1152	premium policy.--Every employer shall, as a condition to
1153	applying for and receiving a building permit, show proof and
1154	certify to the permit issuer that it has secured compensation
1155	for its employees under this chapter as provided in ss. 440.10
1156	and 440.38. Such proof of compensation must be evidenced by a
1157	certificate of coverage issued by the carrier, a valid exemption
1158	certificate approved by the department, or a copy of the
1159	employer's authority to self-insure and shall be presented each
1160	time the employer applies for a building permit. As provided in
1161	s. 627.413(6)(5), each certificate of coverage must show, on its
1162	face, whether or not coverage is secured under the minimum
1163	premium provisions of rules adopted by rating organizations
1164	licensed pursuant to s. 627.221. The words "minimum premium
1165	policy" or equivalent language shall be typed, printed, stamped,
1166	or legibly handwritten.
1167	Section 29.  The Department of Financial Services shall
1168	review how insurance agent commissions for the placement and
1169	renewal of property insurance policies are established and
1170	applied and shall make recommendations, based on industry best
1171	practices, for standards to ensure that agent commissions are
1172	justified on a market basis based on the nature and amount of
1173	work performed by the agents. The Office of Insurance Regulation
1174	shall provide the department with all information requested
1175	pursuant to this section. The department shall report its
1176	findings and recommendations to the Governor, the President of
1177	the Senate, and the Speaker of the House of Representatives by
1178	July 1, 2007.
1179	Section 30.  Except as otherwise expressly provided in this
1180	act, this act shall take effect upon becoming a law.

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