HB 9A

1	A bill to be entitled
2	An act relating to hurricane preparedness and insurance;
3	providing a short title; amending s. 163.01, F.S.,
4	relating to the Florida Interlocal Cooperation Act;
5	redefining the term "public agency" to include certain
6	legal or administrative entities; authorizing such
7	entities to finance the provision of property coverage
8	contracts for or from local government property insurance
9	pools or property coverage contracts; providing a
10	definition; authorizing certain hospitals and hospital
11	systems to borrow funds, issue bonds, and enter into loan
12	agreements for the purpose of providing windstorm property
13	coverage; amending s. 215.5595, F.S.; including
14	manufactured housing insurers in the Insurance Capital
15	Build-Up Incentive Program; providing manufactured housing
16	insurer program contribution requirements; providing
17	surplus requirements; prioritizing funding for
18	manufactured housing insurers; providing premium to
19	surplus ratio requirements for certain manufactured
20	housing insurers; amending s. 624.462, F.S.; revising
21	requirements for the establishment of a commercial self-
22	insurance fund by a not-for-profit group; amending s.
23	624.4622, F.S.; authorizing local government self-
24	insurance funds to insure or self-insure real or personal
25	property against loss or damage; creating s. 624.4624,
26	F.S.; providing definitions; providing for risk pooling,
27	with respect to windstorm property exposure, by certain
28	hospitals and hospital systems; exempting entities formed
29	to do so from the Insurance Code; creating s. 624.4625,
30	F.S.; authorizing two or more corporations not for profit
31	to form a self-insurance fund for certain purposes;
32	providing specific requirements; providing a definition;
33	providing limitations; providing for application of
34	certain provisions to certain premiums, contributions, and
35	assessments; providing for payment of insurance premium
36	tax at a reduced rate by corporation not-for-profit self-
37	insurance funds; subjecting a corporation not for profit
38	self-insurance fund to certain group self-insurance fund
39	provisions under certain circumstances; amending s.
40	624.610, F.S.; prescribing responsibilities of the
41	Commissioner of Insurance Regulation relating to allowing
42	credit for reinsurance; amending s. 627.062, F.S.;
43	delaying the effective date of certain provisions relating
44	to residential property insurance rate filings; amending
45	s. 627.351, F.S.; prohibiting the Property and Casualty
46	Joint Underwriting Association and Citizens Property
47	Insurance Corporation from insuring certain properties
48	under certain circumstances; providing exceptions;
49	requiring that Citizens' rates must be adequate;
50	rescinding certain rate filings of the corporation;
51	requiring the corporation to use certain other rates;
52	requiring the corporation to refund certain portions of
53	rates; providing for effect of certain rates; providing
54	for new rate filings; requiring the Department of
55	Financial Services to review the corporation's insurance
56	agent commission structure and make recommendations for
57	commission standards; requiring a report; creating the
58	Task Force on Citizens Property Insurance Claims Handling
59	and Resolution; providing for administration of the task
60	force; providing for membership; providing for
61	reimbursement of expenses but no compensation; providing
62	purpose and intent; requiring the task force to address
63	certain issues; requiring reports and recommendations;
64	providing additional responsibilities of the task force;
65	providing for expiration of the task force; abolishing the
66	existing board of governors of Citizens Property Insurance
67	Corporation; providing for appointment of new members;
68	amending s. 631.57, F.S.; revising criteria and
69	requirements for levy of emergency assessments by the
70	Florida Insurance Guaranty Association; revising
71	characterizations of emergency assessments; providing
72	legislative intent; amending s. 627.706, F.S.; revising
73	sinkhole insurance provisions to include coverage for
74	losses due to catastrophic ground cover collapse;
75	authorizing certain deductibles; revising definitions;
76	providing an effective date.
77
78	Be It Enacted by the Legislature of the State of Florida:
79
80	Section 1.  This act may be cited as the "Citizens Reform
81	and Private Market Restoration Act."
82	Section 2.  Paragraph (b) of subsection (3) and paragraph
83	(e) of subsection (7) of section 163.01, Florida Statutes, are
84	amended, and paragraph (h) is added to subsection (7) of that
85	section, to read:
86	163.01  Florida Interlocal Cooperation Act of 1969.--
87	(3)  As used in this section:
88	(b)  "Public agency" means a political subdivision, agency,
89	or officer of this state or of any state of the United States,
90	including, but not limited to, state government, county, city,
91	school district, single and multipurpose special district,
92	single and multipurpose public authority, metropolitan or
93	consolidated government, a separate legal entity or
94	administrative entity created under subsection (7), an
95	independently elected county officer, any agency of the United
96	States Government, a federally recognized Native American tribe,
97	and any similar entity of any other state of the United States.
98	(7)
99	(e)1.  Notwithstanding the provisions of paragraph (c), any
100	separate legal entity, created pursuant to the provisions of
101	this section and controlled by counties or municipalities of
102	this state, the membership of which consists or is to consist
103	only of public agencies of this state, may, for the purpose of
104	financing the provision or acquisition of liability or property
105	coverage contracts for or from one or more local government
106	liability or property pools to provide liability or property
107	coverage for counties, municipalities, or other public agencies
108	of this state, exercise all powers in connection with the
109	authorization, issuance, and sale of bonds. All of the
110	privileges, benefits, powers, and terms of s. 125.01 relating to
111	counties and s. 166.021 relating to municipalities shall be
112	fully applicable to such entity and such entity shall be
113	considered a unit of local government for all of the privileges,
114	benefits, powers, and terms of part I of chapter 159.  Bonds
115	issued by such entity shall be deemed issued on behalf of
116	counties, municipalities, or public agencies which enter into
117	loan agreements with such entity as provided in this paragraph.
118	Proceeds of bonds issued by such entity may be loaned to
119	counties, municipalities, or other public agencies of this
120	state, whether or not such counties, municipalities, or other
121	public agencies are also members of the entity issuing the
122	bonds, and such counties, municipalities, or other public
123	agencies may in turn deposit such loan proceeds with a separate
124	local government liability or property pool for purposes of
125	providing or acquiring liability or property coverage contracts.
126	2.  Counties or municipalities of this state are authorized
127	pursuant to this section, in addition to the authority provided
128	by s. 125.01, part II of chapter 166, and other applicable law,
129	to issue bonds for the purpose of acquiring liability coverage
130	contracts from a local government liability pool. Any individual
131	county or municipality may, by entering into interlocal
132	agreements with other counties, municipalities, or public
133	agencies of this state, issue bonds on behalf of itself and
134	other counties, municipalities, or other public agencies, for
135	purposes of acquiring a liability coverage contract or contracts
136	from a local government liability pool.  Counties,
137	municipalities, or other public agencies are also authorized to
138	enter into loan agreements with any entity created pursuant to
139	subparagraph 1., or with any county or municipality issuing
140	bonds pursuant to this subparagraph, for the purpose of
141	obtaining bond proceeds with which to acquire liability coverage
142	contracts from a local government liability pool.  No county,
143	municipality, or other public agency shall at any time have more
144	than one loan agreement outstanding for the purpose of obtaining
145	bond proceeds with which to acquire liability coverage contracts
146	from a local government liability pool. Obligations of any
147	county, municipality, or other public agency of this state
148	pursuant to a loan agreement as described above may be validated
149	as provided in chapter 75.  Prior to the issuance of any bonds
150	pursuant to subparagraph 1. or this subparagraph for the purpose
151	of acquiring liability coverage contracts from a local
152	government liability pool, the reciprocal insurer or the manager
153	of any self-insurance program shall demonstrate to the
154	satisfaction of the Office of Insurance Regulation of the
155	Financial Services Commission that excess liability coverage for
156	counties, municipalities, or other public agencies is reasonably
157	unobtainable in the amounts provided by such pool or that the
158	liability coverage obtained through acquiring contracts from a
159	local government liability pool, after taking into account costs
160	of issuance of bonds and any other administrative fees, is less
161	expensive to counties, municipalities, or special districts than
162	similar commercial coverage then reasonably available.
163	3.  Any entity created pursuant to this section or any
164	county or municipality may also issue bond anticipation notes,
165	as provided by s. 215.431, in connection with the authorization,
166	issuance, and sale of such bonds.  In addition, the governing
167	body of such legal entity or the governing body of such county
168	or municipality may also authorize bonds to be issued and sold
169	from time to time and may delegate, to such officer, official,
170	or agent of such legal entity as the governing body of such
171	legal entity may select, the power to determine the time; manner
172	of sale, public or private; maturities; rate or rates of
173	interest, which may be fixed or may vary at such time or times
174	and in accordance with a specified formula or method of
175	determination; and other terms and conditions as may be deemed
176	appropriate by the officer, official, or agent so designated by
177	the governing body of such legal entity. However, the amounts
178	and maturities of such bonds and the interest rate or rates of
179	such bonds shall be within the limits prescribed by the
180	governing body of such legal entity and its resolution
181	delegating to such officer, official, or agent the power to
182	authorize the issuance and sale of such bonds.  Any series of
183	bonds issued pursuant to this paragraph shall mature no later
184	than 7 years following the date of issuance thereof.
185	4.  Bonds issued pursuant to subparagraph 1. may be
186	validated as provided in chapter 75.  The complaint in any
187	action to validate such bonds shall be filed only in the Circuit
188	Court for Leon County.  The notice required to be published by
189	s. 75.06 shall be published in Leon County and in each county
190	which is an owner of the entity issuing the bonds, or in which a
191	member of the entity is located, and the complaint and order of
192	the circuit court shall be served only on the State Attorney of
193	the Second Judicial Circuit and on the state attorney of each
194	circuit in each county or municipality which is an owner of the
195	entity issuing the bonds or in which a member of the entity is
196	located.
197	5.  Bonds issued pursuant to subparagraph 2. may be
198	validated as provided in chapter 75. The complaint in any action
199	to validate such bonds shall be filed in the circuit court of
200	the county or municipality which will issue the bonds.  The
201	notice required to be published by s. 75.06 shall be published
202	only in the county where the complaint is filed, and the
203	complaint and order of the circuit court shall be served only on
204	the state attorney of the circuit in the county or municipality
205	which will issue the bonds.
206	6.  The participation by any county, municipality, or other
207	public agency of this state in a local government liability pool
208	shall not be deemed a waiver of immunity to the extent of
209	liability coverage, nor shall any contract entered regarding
210	such a local government liability pool be required to contain
211	any provision for waiver.
212	(h)1.  For purposes of this subsection, the term "alliance"
213	has the meaning as defined in s. 624.4624(2)(a). An alliance
214	may, for the purpose of providing windstorm property coverage
215	for eligible entities under s. 624.4624, exercise all powers
216	under this subsection in connection with borrowing funds for
217	such purposes, including the authorization, issuance, and sale
218	of bonds. Borrowed funds, including bonds issued by such
219	alliance, shall be deemed issued on behalf of eligible entities
220	as defined in s. 624.4624(2)(b) that enter into loan agreements
221	with such alliance as provided in this paragraph.
222	2.  An alliance is authorized to borrow funds, including
223	the issuance of bonds, for the purpose of providing windstorm
224	property insurance coverage to eligible entities. Eligible
225	entities are authorized to enter into loan agreements with any
226	alliance created pursuant to s. 624.4624 for the purpose of
227	obtaining debt proceeds with which to finance windstorm property
228	insurance coverage or claims. Obligations of any eligible entity
229	pursuant to a loan agreement as described above may be validated
230	as provided in chapter 75.
231	3.  In addition, the governing body of such alliance may
232	also authorize bonds to be issued and sold from time to time and
233	may delegate to such officer, official, or agent of such
234	alliance as the governing body of such alliance selects the
235	power to determine the time; manner of sale, public or private;
236	maturities; rate or rates of interest, which may be fixed or may
237	vary at such time or times and in accordance with a specified
238	formula or method of determination; and other terms and
239	conditions as are deemed appropriate by the officer, official,
240	or agent so designated by the governing body of such alliance.
241	However, the amounts and maturities of such bonds and the
242	interest rate or rates of such bonds shall be within the limits
243	prescribed by the governing body of such alliance and its
244	resolution delegating to such officer, official, or agent the
245	power to authorize the issuance and sale of such bonds. Any
246	series of bonds issued pursuant to this paragraph shall mature
247	no later than 30 years following the date of issuance thereof.
248	4.  Bonds issued pursuant to this paragraph may be
249	validated as provided in chapter 75. The complaint in any action
250	to validate such bonds shall be filed in any circuit court where
251	the alliance issuing the bonds is located. The notice required
252	to be published by s. 75.06 shall be published in the circuit
253	where the complaint is filed and, if the circuit encompasses
254	more than one county, in each county within the circuit. The
255	complaint and order of the circuit court shall be served only on
256	the state attorney of the judicial circuit in which an alliance
257	issuing the bonds is located.
258	Section 3.  Paragraphs (a), (c), and (g) of subsection (2)
259	of section 215.5595, Florida Statutes, are amended, and
260	paragraph (i) is added to that subsection, to read:
261	215.5595  Insurance Capital Build-Up Incentive Program.--
262	(2)  The purpose of this section is to provide surplus
263	notes to new or existing authorized residential property
264	insurers under the Insurance Capital Build-Up Incentive Program
265	administered by the State Board of Administration, under the
266	following conditions:
267	(a)  The amount of the surplus note for any insurer or
268	insurer group, other than an insurer writing only manufactured
269	housing policies, may not exceed $25 million or 20 percent of
270	the total amount of funds available under the program, whichever
271	is greater. The amount of the surplus note for any insurer or
272	insurer group writing residential property insurance covering
273	only manufactured housing may not exceed $7 million.
274	(c)  The insurer's surplus, new capital, and the surplus
275	note must total at least $50 million, except for insurers
276	writing residential property insurance covering only
277	manufactured housing. The insurer's surplus, new capital, and
278	the surplus note must total at least $14 million for insurers
279	writing only residential property insurance covering
280	manufactured housing policies as provided in paragraph (a).
281	(g)  The total amount of funds available for the program is
282	limited to the amount appropriated by the Legislature for this
283	purpose. If the amount of surplus notes requested by insurers
284	exceeds the amount of funds available, the board may prioritize
285	insurers that are eligible and approved, with priority for
286	funding given to insurers writing only manufactured housing
287	policies, regardless of the date of application, based on the
288	financial strength of the insurer, the viability of its proposed
289	business plan for writing additional residential property
290	insurance in the state, and the effect on competition in the
291	residential property insurance market.
292	(i)  Notwithstanding paragraph (d), a newly formed
293	manufactured housing insurer that is eligible for a surplus note
294	under this section shall meet the premium to surplus ratio
295	provisions of s. 624.4095.
296	Section 4.  Paragraph (a) of subsection (2) of section
297	624.462, Florida Statutes, is amended to read:
298	624.462  Commercial self-insurance funds.--
299	(2)  As used in ss. 624.460-624.488, "commercial
300	self-insurance fund" or "fund" means a group of members,
301	operating individually and collectively through a trust or
302	corporation, that must be:
303	(a)  Established by:
304	1.  A not-for-profit trade association, industry
305	association, or professional association of employers or
306	professionals which has a constitution or bylaws, which is
307	incorporated under the laws of this state, and which has been
308	organized for purposes other than that of obtaining or providing
309	insurance and operated in good faith for a continuous period of
310	1 year;
311	2.  A self-insurance trust fund organized pursuant to s.
312	627.357 and maintained in good faith for a continuous period of
313	1 year for purposes other than that of obtaining or providing
314	insurance pursuant to this section. Each member of a commercial
315	self-insurance trust fund established pursuant to this
316	subsection must maintain membership in the self-insurance trust
317	fund organized pursuant to s. 627.357;
318	3.  A group of 10 or more health care providers, as defined
319	in s. 627.351(4)(h), for purposes of providing medical
320	malpractice coverage; or
321	4.  A not-for-profit group comprised of no fewer less than
322	10 community condominium associations created and operating
323	under chapter 718, chapter 719, chapter 720, chapter 721, or
324	chapter 723 that as defined in s. 718.103(2), which is
325	incorporated under the laws of this state, which restricts its
326	membership to community condominium associations only, and that
327	which has been organized and maintained in good faith for the
328	purpose of pooling and spreading the liabilities of its group
329	members relating to property or casualty risk a continuous
330	period of 1 year for purposes other than that of obtaining or
331	providing insurance.
332	Section 5.  Subsection (1) of section 624.4622, Florida
333	Statutes, is amended to read:
334	624.4622  Local government self-insurance funds.--
335	(1)  Any two or more local governmental entities may enter
336	into interlocal agreements for the purpose of securing the
337	payment of benefits under chapter 440, or insuring or self-
338	insuring real or personal property of every kind and every
339	interest in such property against loss or damage from any hazard
340	or cause and against any loss consequential to such loss or
341	damage, provided the local government self-insurance fund that
342	is created must:
343	(a)  Have annual normal premiums in excess of $5 million;
344	(b)  Maintain a continuing program of excess insurance
345	coverage and reserve evaluation to protect the financial
346	stability of the fund in an amount and manner determined by a
347	qualified and independent actuary;
348	(c)  Submit annually an audited fiscal year-end financial
349	statement by an independent certified public accountant within 6
350	months after the end of the fiscal year to the office; and
351	(d)  Have a governing body which is comprised entirely of
352	local elected officials.
353	Section 6.  Section 624.4624, Florida Statutes, is created
354	to read:
355	624.4624  Risk pooling by certain hospitals and hospital
356	systems.--
357	(1)  Any two or more eligible entities located in this
358	state may form an alliance for the purpose of pooling and
359	spreading liabilities of its members relative to windstorm
360	property exposure or securing such windstorm property insurance
361	coverage for the benefit of its members, provided the alliance
362	that is created:
363	(a)  Has annual premiums in excess of $3 million;
364	(b)  Maintains a continuing program of premium calculation
365	and evaluation and reserve evaluation to protect the financial
366	stability of the alliance in an amount and manner determined by
367	consultants using catastrophic (CAT) modeling criteria or other
368	risk-estimating methodologies, including those used by qualified
369	and independent actuaries;
370	(c)  Causes to be prepared annually a fiscal year-end
371	financial statement based upon generally accepted accounting
372	principles and audited by an independent certified public
373	accountant within 6 months after the end of the fiscal year; and
374	(d)  Has a governing body comprised entirely of member
375	entities whose representatives on such governing body are
376	specified by the organizational documents of the alliance.
377	(2)  For purposes of this section, the term:
378	(a)  "Alliance" means a corporation, association, limited
379	liability company, or partnership or any other legal entity
380	formed by a group of eligible entities.
381	(b)  "Eligible entity" means a county hospital regulated
382	under chapter 155; a hospital funded, owned, or operated by an
383	independent special taxing district created pursuant to the Laws
384	of Florida or the Florida Statutes; a teaching hospital defined
385	in s. 408.07(45); or a children's hospital defined in s.
386	408.07(45). A hospital may not qualify as an eligible entity
387	unless it maintains tax-exempt status under s. 501(c)(3) of the
388	Internal Revenue Code.
389	(c)  "Windstorm property exposure" or "windstorm property
390	insurance coverage" includes coverage for all property and other
391	losses attributable to damage from a named windstorm event,
392	including a hurricane, and includes, but is not limited to,
393	property, business interruption, and other appropriate
394	coverages.
395	(3)  An alliance that meets the requirements of this
396	section is not subject to any other provision of the Insurance
397	Code. If any of the requirements of this section are not met,
398	the alliance is subject to the requirements of s. 624.401.
399	(4)  An alliance that meets the requirements of this
400	section is not an insurer for purposes of participation in or
401	coverage by the Florida Insurance Guaranty Association
402	established in part II of chapter 631. Alliance self-insured
403	coverage is not subject to insurance premium tax, nor shall any
404	such alliance pursuant to this section be assessed for purposes
405	of s. 627.351 or s. 215.555.
406	Section 7.  Section 624.4625, Florida Statutes, is created
407	to read:
408	624.4625  Corporation not-for-profit self-insurance
409	funds.--
410	(1)  Notwithstanding any other provision of law, any two or
411	more corporations not for profit located in and organized under
412	the laws of this state may form a self-insurance fund for the
413	purpose of pooling and spreading liabilities of its group
414	members in any one or combination of property or casualty risk,
415	provided the corporation not for profit self-insurance fund that
416	is created:
417	(a)  Has annual normal premiums in excess of $5 million.
418	(b)  Requires for qualification that each participating
419	member receive at least 75 percent of its revenues from local,
420	state, or federal governmental sources or a combination of such
421	sources.
422	(c)  Uses a qualified actuary to determine rates using
423	accepted actuarial principles and annually submits to the office
424	a certification by the actuary that the rates are actuarially
425	sound and are not inadequate, as defined in s. 627.062.
426	(d)  Uses a qualified actuary to establish reserves for
427	loss and loss adjustment expenses and annually submits to the
428	office a certification by the actuary that the loss and loss
429	adjustment expense reserves are adequate. If the actuary
430	determines that reserves are not adequate, the fund shall file
431	with the office a remedial plan for increasing the reserves or
432	otherwise addressing the financial condition of the fund,
433	subject to a determination by the office that the fund will
434	operate on an actuarially sound basis and the fund does not pose
435	a significant risk of insolvency.
436	(e)  Maintains a continuing program of excess insurance
437	coverage and reserve evaluation to protect the financial
438	stability of the fund in an amount and manner determined by a
439	qualified actuary. At a minimum, this program must:
440	1.  Purchase excess insurance from authorized insurance
441	carriers.
442	2.  Retain a per-loss occurrence that does not exceed
443	$350,000.
444	(f)  Submits to the office annually an audited fiscal year-
445	end financial statement by an independent certified public
446	accountant within 6 months after the end of the fiscal year.
447	(g)  Has a governing body that is comprised entirely of
448	officials from corporations not for profit that are members of
449	the corporation not-for-profit self-insurance fund.
450	(h)  Uses knowledgeable persons or business entities to
451	administer or service the fund in the areas of claims
452	administration, claims adjusting, underwriting, risk management,
453	loss control, policy administration, financial audit, and legal
454	areas. Such persons must meet all applicable requirements of law
455	for state licensure and must have at least 5 years' experience
456	with commercial self-insurance funds formed under s. 624.462,
457	self-insurance funds formed under s. 624.4622, or domestic
458	insurers.
459	(i)  Submits to the office copies of contracts used for its
460	members that clearly establish the liability of each member for
461	the obligations of the fund.
462	(j)  Annually submits to the office a certification by the
463	governing body of the fund that, to the best of its knowledge,
464	the requirements of this section are met.
465	(2)  As used in this section, the term "qualified actuary"
466	means an actuary that is a member of the Casualty Actuarial
467	Society or the American Academy of Actuaries.
468	(3)  A corporation not-for-profit self-insurance fund that
469	meets the requirements of this section is not:
470	(a)  An insurer for purposes of participation in or
471	coverage by any insurance guaranty association established by
472	chapter 631; or
473	(b)  Subject to s. 624.4621 and is not required to file any
474	report with the department under s. 440.38(2)(b) that is
475	uniquely required of group self-insurer funds qualified under s.
476	624.4621.
477	(4)  Premiums, contributions, and assessments received by a
478	corporation not-for-profit self-insurance fund are subject to
479	ss. 624.509(1) and (2) and 624.5092, except that the tax rate
480	shall be 1.6 percent of the gross amount of such premiums,
481	contributions, and assessments.
482	(5)  If any of the requirements of subsection (1) are not
483	met, a corporation not-for-profit self-insurance fund is subject
484	to the requirements of s. 624.4621 if the fund provides only
485	workers' compensation coverage or is subject to the requirements
486	of ss. 624.460-624.488 if the fund provides coverage for other
487	property, casualty, or surety risks.
488	Section 8.  Subsection (3) of section 624.610, Florida
489	Statutes, is amended to read:
490	624.610  Reinsurance.--
491	(3)(a)  Credit must be allowed when the reinsurance is
492	ceded to an assuming insurer that is authorized to transact
493	insurance or reinsurance in this state.
494	(b)1.  Credit must be allowed when the reinsurance is ceded
495	to an assuming insurer that is accredited as a reinsurer in this
496	state. An accredited reinsurer is one that:
497	a.  Files with the office evidence of its submission to
498	this state's jurisdiction;
499	b.  Submits to this state's authority to examine its books
500	and records;
501	c.  Is licensed or authorized to transact insurance or
502	reinsurance in at least one state or, in the case of a United
503	States branch of an alien assuming insurer, is entered through,
504	licensed, or authorized to transact insurance or reinsurance in
505	at least one state;
506	d.  Files annually with the office a copy of its annual
507	statement filed with the insurance department of its state of
508	domicile any quarterly statements if required by its state of
509	domicile or such quarterly statements if specifically requested
510	by the office, and a copy of its most recent audited financial
511	statement; and
512	(I)  Maintains a surplus as regards policyholders in an
513	amount not less than $20 million and whose accreditation has not
514	been denied by the office within 90 days after its submission;
515	or
516	(II)  Maintains a surplus as regards policyholders in an
517	amount not less than $20 million and whose accreditation has
518	been approved by the office.
519	2.  The office may deny or revoke an assuming insurer's
520	accreditation if the assuming insurer does not submit the
521	required documentation pursuant to subparagraph 1., if the
522	assuming insurer fails to meet all of the standards required of
523	an accredited reinsurer, or if the assuming insurer's
524	accreditation would be hazardous to the policyholders of this
525	state. In determining whether to deny or revoke accreditation,
526	the office may consider the qualifications of the assuming
527	insurer with respect to all the following subjects:
528	a.  Its financial stability;
529	b.  The lawfulness and quality of its investments;
530	c.  The competency, character, and integrity of its
531	management;
532	d.  The competency, character, and integrity of persons who
533	own or have a controlling interest in the assuming insurer; and
534	e.  Whether claims under its contracts are promptly and
535	fairly adjusted and are promptly and fairly paid in accordance
536	with the law and the terms of the contracts.
537	3.  Credit must not be allowed a ceding insurer if the
538	assuming insurer's accreditation has been revoked by the office
539	after notice and the opportunity for a hearing.
540	4.  The actual costs and expenses incurred by the office to
541	review a reinsurer's request for accreditation and subsequent
542	reviews must be charged to and collected from the requesting
543	reinsurer. If the reinsurer fails to pay the actual costs and
544	expenses promptly when due, the office may refuse to accredit
545	the reinsurer or may revoke the reinsurer's accreditation.
546	(c)1.  Credit must be allowed when the reinsurance is ceded
547	to an assuming insurer that maintains a trust fund in a
548	qualified United States financial institution, as defined in
549	paragraph (5)(b), for the payment of the valid claims of its
550	United States ceding insurers and their assigns and successors
551	in interest. To enable the office to determine the sufficiency
552	of the trust fund, the assuming insurer shall report annually to
553	the office information substantially the same as that required
554	to be reported on the NAIC Annual Statement form by authorized
555	insurers. The assuming insurer shall submit to examination of
556	its books and records by the office and bear the expense of
557	examination.
558	2.a.  Credit for reinsurance must not be granted under this
559	subsection unless the form of the trust and any amendments to
560	the trust have been approved by:
561	(I)  The insurance regulator of the state in which the
562	trust is domiciled; or
563	(II)  The insurance regulator of another state who,
564	pursuant to the terms of the trust instrument, has accepted
565	principal regulatory oversight of the trust.
566	b.  The form of the trust and any trust amendments must be
567	filed with the insurance regulator of every state in which the
568	ceding insurer beneficiaries of the trust are domiciled. The
569	trust instrument must provide that contested claims are valid
570	and enforceable upon the final order of any court of competent
571	jurisdiction in the United States. The trust must vest legal
572	title to its assets in its trustees for the benefit of the
573	assuming insurer's United States ceding insurers and their
574	assigns and successors in interest. The trust and the assuming
575	insurer are subject to examination as determined by the
576	insurance regulator.
577	c.  The trust remains in effect for as long as the assuming
578	insurer has outstanding obligations due under the reinsurance
579	agreements subject to the trust. No later than February 28 of
580	each year, the trustee of the trust shall report to the
581	insurance regulator in writing the balance of the trust and list
582	the trust's investments at the preceding year end, and shall
583	certify that the trust will not expire prior to the following
584	December 31.
585	3.  The following requirements apply to the following
586	categories of assuming insurer:
587	a.  The trust fund for a single assuming insurer consists
588	of funds in trust in an amount not less than the assuming
589	insurer's liabilities attributable to reinsurance ceded by
590	United States ceding insurers, and, in addition, the assuming
591	insurer shall maintain a trusteed surplus of not less than $20
592	million. Not less than 50 percent of the funds in the trust
593	covering the assuming insurer's liabilities attributable to
594	reinsurance ceded by United States ceding insurers and trusteed
595	surplus shall consist of assets of a quality substantially
596	similar to that required in part II of chapter 625. Clean,
597	irrevocable, unconditional, and evergreen letters of credit,
598	issued or confirmed by a qualified United States financial
599	institution, as defined in paragraph (5)(a), effective no later
600	than December 31 of the year for which the filing is made and in
601	the possession of the trust on or before the filing date of its
602	annual statement, may be used to fund the remainder of the trust
603	and trusteed surplus.
604	b.(I)  In the case of a group including incorporated and
605	individual unincorporated underwriters:
606	(A)  For reinsurance ceded under reinsurance agreements
607	with an inception, amendment, or renewal date on or after August
608	1, 1995, the trust consists of a trusteed account in an amount
609	not less than the group's several liabilities attributable to
610	business ceded by United States domiciled ceding insurers to any
611	member of the group;
612	(B)  For reinsurance ceded under reinsurance agreements
613	with an inception date on or before July 31, 1995, and not
614	amended or renewed after that date, notwithstanding the other
615	provisions of this section, the trust consists of a trusteed
616	account in an amount not less than the group's several insurance
617	and reinsurance liabilities attributable to business written in
618	the United States; and
619	(C)  In addition to these trusts, the group shall maintain
620	in trust a trusteed surplus of which $100 million must be held
621	jointly for the benefit of the United States domiciled ceding
622	insurers of any member of the group for all years of account.
623	(II)  The incorporated members of the group must not be
624	engaged in any business other than underwriting of a member of
625	the group, and are subject to the same level of regulation and
626	solvency control by the group's domiciliary regulator as the
627	unincorporated members.
628	(III)  Within 90 days after its financial statements are
629	due to be filed with the group's domiciliary regulator, the
630	group shall provide to the insurance regulator an annual
631	certification by the group's domiciliary regulator of the
632	solvency of each underwriter member or, if a certification is
633	unavailable, financial statements, prepared by independent
634	public accountants, of each underwriter member of the group.
635	(d)  Credit must be allowed when the reinsurance is ceded
636	to an assuming insurer not meeting the requirements of paragraph
637	(a), paragraph (b), or paragraph (c), but only as to the
638	insurance of risks located in jurisdictions in which the
639	reinsurance is required to be purchased by a particular entity
640	by applicable law or regulation of that jurisdiction.
641	(e)  If the reinsurance is ceded to an assuming insurer not
642	meeting the requirements of paragraph (a), paragraph (b),
643	paragraph (c), or paragraph (d), the commissioner may allow
644	credit, but only if the assuming insurer holds surplus in excess
645	of $100 million and has a secure financial strength rating from
646	at least two nationally recognized statistical rating
647	organizations deemed acceptable by the commissioner. In
648	determining whether credit should be allowed, the commissioner
649	shall consider the following:
650	1.  The domiciliary regulatory jurisdiction of the assuming
651	insurer.
652	2.  The structure and authority of the domiciliary
653	regulator with regard to solvency regulation requirements and
654	the financial surveillance of the reinsurer.
655	3.  The substance of financial and operating standards for
656	reinsurers in the domiciliary jurisdiction.
657	4.  The form and substance of financial reports required to
658	be filed by the reinsurers in the domiciliary jurisdiction or
659	other public financial statements filed in accordance with
660	generally accepted accounting principles.
661	5.  The domiciliary regulator's willingness to cooperate
662	with United States regulators in general and the office in
663	particular.
664	6.  The history of performance by reinsurers in the
665	domiciliary jurisdiction.
666	7.  Any documented evidence of substantial problems with
667	the enforcement of valid United States judgments in the
668	domiciliary jurisdiction.
669	8.  Any other matters deemed relevant by the commissioner.
670	The commissioner shall give appropriate consideration to insurer
671	group ratings that may have been issued. The commissioner may,
672	in lieu of granting full credit under this subsection, reduce
673	the amount required to be held in trust under paragraph (c).
674	(f)(e)  If the assuming insurer is not authorized or
675	accredited to transact insurance or reinsurance in this state
676	pursuant to paragraph (a) or paragraph (b), the credit permitted
677	by paragraph (c) or paragraph (d) must not be allowed unless the
678	assuming insurer agrees in the reinsurance agreements:
679	1.a.  That in the event of the failure of the assuming
680	insurer to perform its obligations under the terms of the
681	reinsurance agreement, the assuming insurer, at the request of
682	the ceding insurer, shall submit to the jurisdiction of any
683	court of competent jurisdiction in any state of the United
684	States, will comply with all requirements necessary to give the
685	court jurisdiction, and will abide by the final decision of the
686	court or of any appellate court in the event of an appeal; and
687	b.  To designate the Chief Financial Officer, pursuant to
688	s. 48.151, or a designated attorney as its true and lawful
689	attorney upon whom may be served any lawful process in any
690	action, suit, or proceeding instituted by or on behalf of the
691	ceding company.
692	2.  This paragraph is not intended to conflict with or
693	override the obligation of the parties to a reinsurance
694	agreement to arbitrate their disputes, if this obligation is
695	created in the agreement.
696	(g)(f)  If the assuming insurer does not meet the
697	requirements of paragraph (a) or paragraph (b), the credit
698	permitted by paragraph (c) or paragraph (d) is not allowed
699	unless the assuming insurer agrees in the trust agreements, in
700	substance, to the following conditions:
701	1.  Notwithstanding any other provisions in the trust
702	instrument, if the trust fund is inadequate because it contains
703	an amount less than the amount required by paragraph (c), or if
704	the grantor of the trust has been declared insolvent or placed
705	into receivership, rehabilitation, liquidation, or similar
706	proceedings under the laws of its state or country of domicile,
707	the trustee shall comply with an order of the insurance
708	regulator with regulatory oversight over the trust or with an
709	order of a United States court of competent jurisdiction
710	directing the trustee to transfer to the insurance regulator
711	with regulatory oversight all of the assets of the trust fund.
712	2.  The assets must be distributed by and claims must be
713	filed with and valued by the insurance regulator with regulatory
714	oversight in accordance with the laws of the state in which the
715	trust is domiciled which are applicable to the liquidation of
716	domestic insurance companies.
717	3.  If the insurance regulator with regulatory oversight
718	determines that the assets of the trust fund or any part thereof
719	are not necessary to satisfy the claims of the United States
720	ceding insurers of the grantor of the trust, the assets or part
721	thereof must be returned by the insurance regulator with
722	regulatory oversight to the trustee for distribution in
723	accordance with the trust agreement.
724	4.  The grantor shall waive any right otherwise available
725	to it under United States law which is inconsistent with this
726	provision.
727	Section 9.  Paragraph (j) of subsection (2) of section
728	627.062, Florida Statutes, is amended to read:
729	627.062  Rate standards.--
730	(2)  As to all such classes of insurance:
731	(j)  Effective July 1, 2009 2007, notwithstanding any other
732	provision of this section:
733	1.  With respect to any residential property insurance
734	subject to regulation under this section for any area for which
735	the office determines a reasonable degree of competition exists,
736	a rate filing, including, but not limited to, any rate changes,
737	rating factors, territories, classification, discounts, and
738	credits, with respect to any policy form, including endorsements
739	issued with the form, that results in an overall average
740	statewide premium increase or decrease of no more than 5 percent
741	above or below the premium that would result from the insurer's
742	rates then in effect shall not be subject to a determination by
743	the office that the rate is excessive or unfairly discriminatory
744	except as provided in subparagraph 3., or any other provision of
745	law, provided all changes specified in the filing do not result
746	in an overall premium increase of more than 10 percent for any
747	one territory, for reasons related solely to the rate change. As
748	used in this subparagraph, the term "insurer's rates then in
749	effect" includes only rates that have been lawfully in effect
750	under this section or rates that have been determined to be
751	lawful through administrative proceedings or judicial
752	proceedings.
753	2.  An insurer may not make filings under this paragraph
754	with respect to any policy form, including endorsements issued
755	with the form, if the overall premium changes resulting from
756	such filings exceed the amounts specified in this paragraph in
757	any 12-month period. An insurer may proceed under other
758	provisions of this section or other provisions of law if the
759	insurer seeks to exceed the premium or rate limitations of this
760	paragraph.
761	3.  This paragraph does not affect the authority of the
762	office to disapprove a rate as inadequate or to disapprove a
763	filing for the unlawful use of unfairly discriminatory rating
764	factors that are prohibited by the laws of this state. An
765	insurer electing to implement a rate change under this paragraph
766	shall submit a filing to the office at least 40 days prior to
767	the effective date of the rate change. The office shall have 30
768	days after the filing's submission to review the filing and
769	determine if the rate is inadequate or uses unfairly
770	discriminatory rating factors. Absent a finding by the office
771	within such 30-day period that the rate is inadequate or that
772	the insurer has used unfairly discriminatory rating factors, the
773	filing is deemed approved. If the office finds during the 30-day
774	period that the filing will result in inadequate premiums or
775	otherwise endanger the insurer's solvency, the office shall
776	suspend the rate decrease. If the insurer is implementing an
777	overall rate increase, the results of which continue to produce
778	an inadequate rate, such increase shall proceed pending
779	additional action by the office to ensure the adequacy of the
780	rate.
781	4.  This paragraph does not apply to rate filings for any
782	insurance other than residential property insurance.
783
784	The provisions of this subsection shall not apply to workers'
785	compensation and employer's liability insurance and to motor
786	vehicle insurance.
787	Section 10.  Paragraph (a) of subsection (5) and subsection
788	(6) of section 627.351, Florida Statutes, are amended to read:
789	627.351  Insurance risk apportionment plans.--
790	(5)  PROPERTY AND CASUALTY INSURANCE RISK
791	APPORTIONMENT.--The commission shall adopt by rule a joint
792	underwriting plan to equitably apportion among insurers
793	authorized in this state to write property insurance as defined
794	in s. 624.604 or casualty insurance as defined in s. 624.605,
795	the underwriting of one or more classes of property insurance or
796	casualty insurance, except for the types of insurance that are
797	included within property insurance or casualty insurance for
798	which an equitable apportionment plan, assigned risk plan, or
799	joint underwriting plan is authorized under s. 627.311 or
800	subsection (1), subsection (2), subsection (3), subsection (4),
801	or subsection (5) and except for risks eligible for flood
802	insurance written through the federal flood insurance program to
803	persons with risks eligible under subparagraph (a)1. and who are
804	in good faith entitled to, but are unable to, obtain such
805	property or casualty insurance coverage, including excess
806	coverage, through the voluntary market. For purposes of this
807	subsection, an adequate level of coverage means that coverage
808	which is required by state law or by responsible or prudent
809	business practices. The Joint Underwriting Association shall not
810	be required to provide coverage for any type of risk for which
811	there are no insurers providing similar coverage in this state.
812	The office may designate one or more participating insurers who
813	agree to provide policyholder and claims service, including the
814	issuance of policies, on behalf of the participating insurers.
815	(a)  The plan shall provide:
816	1.  A means of establishing eligibility of a risk for
817	obtaining insurance through the plan, which provides that:
818	a.  A risk shall be eligible for such property insurance or
819	casualty insurance as is required by Florida law if the
820	insurance is unavailable in the voluntary market, including the
821	market assistance program and the surplus lines market.
822	b.  A commercial risk not eligible under sub-subparagraph
823	a. shall be eligible for property or casualty insurance if:
824	(I)  The insurance is unavailable in the voluntary market,
825	including the market assistance plan and the surplus lines
826	market;
827	(II)  Failure to secure the insurance would substantially
828	impair the ability of the entity to conduct its affairs; and
829	(III)  The risk is not determined by the Risk Underwriting
830	Committee to be uninsurable.
831	c.  In the event the Federal Government terminates the
832	Federal Crime Insurance Program established under 44 C.F.R. ss.
833	80-83, Florida commercial and residential risks previously
834	insured under the federal program shall be eligible under the
835	plan.
836	d.(I)  In the event a risk is eligible under this paragraph
837	and in the event the market assistance plan receives a minimum
838	of 100 applications for coverage within a 3-month period, or 200
839	applications for coverage within a 1-year period or less, for a
840	given class of risk contained in the classification system
841	defined in the plan of operation of the Joint Underwriting
842	Association, and unless the market assistance plan provides a
843	quotation for at least 80 percent of such applicants, such
844	classification shall immediately be eligible for coverage in the
845	Joint Underwriting Association.
846	(II)  Any market assistance plan application which is
847	rejected because an individual risk is so hazardous as to be
848	practically uninsurable, considering whether the likelihood of a
849	loss for such a risk is substantially higher than for other
850	risks of the same class due to individual risk characteristics,
851	prior loss experience, unwillingness to cooperate with a prior
852	insurer, physical characteristics and physical location shall
853	not be included in the minimum percentage calculation provided
854	above. In the event that there is any legal or administrative
855	challenge to a determination by the office that the conditions
856	of this subparagraph have been met for eligibility for coverage
857	in the Joint Underwriting Association for a given
858	classification, any eligible risk may obtain coverage during the
859	pendency of any such challenge.
860	e.  In order to qualify as a quotation for the purpose of
861	meeting the minimum percentage calculation in this subparagraph,
862	the quoted premium must meet the following criteria:
863	(I)  In the case of an admitted carrier, the quoted premium
864	must not exceed the premium available for a given classification
865	currently in use by the Joint Underwriting Association or the
866	premium developed by using the rates and rating plans on file
867	with the office by the quoting insurer, whichever is greater.
868	(II)  In the case of an authorized surplus lines insurer,
869	the quoted premium must not exceed the premium available for a
870	given classification currently in use by the Joint Underwriting
871	Association by more than 25 percent, after consideration of any
872	individual risk surcharge or credit.
873	f.  Any agent who falsely certifies the unavailability of
874	coverage as provided by sub-subparagraphs a. and b., is subject
875	to the penalties provided in s. 626.611.
876	g.  For properties constructed on or after January 1, 2009,
877	the association shall not insure any property located within 500
878	feet seaward or landward of the coastal construction control
879	line created pursuant to s. 161.053 and shall not insure any
880	property located over 500 to 2,500 feet landward of the coastal
881	construction control line unless the property meets the
882	requirements of the code-plus building standards developed by
883	the Florida Building Commission or the standards contained in
884	the Miami-Dade Building Code pending the adoption of code-plus
885	standards by the commission. However, this sub-subparagraph
886	shall not apply to properties for which a building permit has
887	been issued on or after January 1, 2008.
888	2.  A means for the equitable apportionment of profits or
889	losses and expenses among participating insurers.
890	3.  Rules for the classification of risks and rates which
891	reflect the past and prospective loss experience.
892	4.  A rating plan which reasonably reflects the prior
893	claims experience of the insureds. Such rating plan shall
894	include at least two levels of rates for risks that have
895	favorable loss experience and risks that have unfavorable loss
896	experience, as established by the plan.
897	5.  Reasonable limits to available amounts of insurance.
898	Such limits may not be less than the amounts of insurance
899	required of eligible risks by Florida law.
900	6.  Risk management requirements for insurance where such
901	requirements are reasonable and are expected to reduce losses.
902	7.  Deductibles as may be necessary to meet the needs of
903	insureds.
904	8.  Policy forms which are consistent with the forms in use
905	by the majority of the insurers providing coverage in the
906	voluntary market for the coverage requested by the applicant.
907	9.  A means to remove risks from the plan once such risks
908	no longer meet the eligibility requirements of this paragraph.
909	For this purpose, the plan shall include the following
910	requirements: At each 6-month interval after the activation of
911	any class of insureds, the board of governors or its designated
912	committee shall review the number of applications to the market
913	assistance plan for that class. If, based on these latest
914	numbers, at least 90 percent of such applications have been
915	provided a quotation, the Joint Underwriting Association shall
916	cease underwriting new applications for such class within 30
917	days, and notification of this decision shall be sent to the
918	office, the major agents' associations, and the board of
919	directors of the market assistance plan. A quotation for the
920	purpose of this subparagraph shall meet the same criteria for a
921	quotation as provided in sub-subparagraph 1.e. All policies
922	which were previously written for that class shall continue in
923	force until their normal expiration date, at which time, subject
924	to the required timely notification of nonrenewal by the Joint
925	Underwriting Association, the insured may then elect to reapply
926	to the Joint Underwriting Association according to the
927	requirements of eligibility. If, upon reapplication, those
928	previously insured Joint Underwriting Association risks meet the
929	eligibility requirements, the Joint Underwriting Association
930	shall provide the coverage requested.
931	10.  A means for providing credits to insurers against any
932	deficit assessment levied pursuant to paragraph (c), for risks
933	voluntarily written through the market assistance plan by such
934	insurers.
935	11.  That the Joint Underwriting Association shall operate
936	subject to the supervision and approval of a board of governors
937	consisting of 13 individuals appointed by the Chief Financial
938	Officer, and shall have an executive or underwriting committee.
939	At least four of the members shall be representatives of
940	insurance trade associations as follows: one member from the
941	American Insurance Association, one member from the Alliance of
942	American Insurers, one member from the National Association of
943	Independent Insurers, and one member from an unaffiliated
944	insurer writing coverage on a national basis. Two
945	representatives shall be from two of the statewide agents'
946	associations. Each board member shall be appointed to serve for
947	2-year terms beginning on a date designated by the plan and
948	shall serve at the pleasure of the Chief Financial Officer.
949	Members may be reappointed for subsequent terms.
950	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
951	(a)1.  The Legislature finds that actual and threatened
952	catastrophic losses to property in this state from hurricanes
953	have caused insurers to be unwilling or unable to provide
954	property insurance coverage to the extent sought and needed. It
955	is in the public interest and a public purpose to assist in
956	assuring that property in the state is insured so as to
957	facilitate the remediation, reconstruction, and replacement of
958	damaged or destroyed property in order to reduce or avoid the
959	negative effects otherwise resulting to the public health,
960	safety, and welfare; to the economy of the state; and to the
961	revenues of the state and local governments needed to provide
962	for the public welfare. It is necessary, therefore, to provide
963	property insurance to applicants who are in good faith entitled
964	to procure insurance through the voluntary market but are unable
965	to do so. The Legislature intends by this subsection that
966	property insurance be provided and that it continues, as long as
967	necessary, through an entity organized to achieve efficiencies
968	and economies, while providing service to policyholders,
969	applicants, and agents that is no less than the quality
970	generally provided in the voluntary market, all toward the
971	achievement of the foregoing public purposes. Because it is
972	essential for the corporation to have the maximum financial
973	resources to pay claims following a catastrophic hurricane, it
974	is the intent of the Legislature that the income of the
975	corporation be exempt from federal income taxation and that
976	interest on the debt obligations issued by the corporation be
977	exempt from federal income taxation.
978	2.  The Residential Property and Casualty Joint
979	Underwriting Association originally created by this statute
980	shall be known, as of July 1, 2002, as the Citizens Property
981	Insurance Corporation. The corporation shall provide insurance
982	for residential and commercial property, for applicants who are
983	in good faith entitled, but are unable, to procure insurance
984	through the voluntary market. The corporation shall operate
985	pursuant to a plan of operation approved by order of the
986	Financial Services Commission. The plan is subject to continuous
987	review by the commission. The commission may, by order, withdraw
988	approval of all or part of a plan if the commission determines
989	that conditions have changed since approval was granted and that
990	the purposes of the plan require changes in the plan. The
991	corporation shall continue to operate pursuant to the plan of
992	operation approved by the Office of Insurance Regulation until
993	October 1, 2006. For the purposes of this subsection,
994	residential coverage includes both personal lines residential
995	coverage, which consists of the type of coverage provided by
996	homeowner's, mobile home owner's, dwelling, tenant's,
997	condominium unit owner's, and similar policies, and commercial
998	lines residential coverage, which consists of the type of
999	coverage provided by condominium association, apartment
1000	building, and similar policies.
1001	3.  For the purposes of this subsection, the term
1002	"homestead property" means:
1003	a.  Property that has been granted a homestead exemption
1004	under chapter 196;
1005	b.  Property for which the owner has a current, written
1006	lease with a renter for a term of at least 7 months and for
1007	which the dwelling is insured by the corporation for $200,000 or
1008	less;
1009	c.  An owner-occupied mobile home or manufactured home, as
1010	defined in s. 320.01, which is permanently affixed to real
1011	property, is owned by a Florida resident, and has been granted a
1012	homestead exemption under chapter 196 or, if the owner does not
1013	own the real property, the owner certifies that the mobile home
1014	or manufactured home is his or her principal place of residence.
1015	d.  Tenant's coverage;
1016	e.  Commercial lines residential property; or
1017	f.  Any county, district, or municipal hospital; a hospital
1018	licensed by any not-for-profit corporation qualified under s.
1019	501(c)(3) of the United States Internal Revenue Code; or a
1020	continuing care retirement community that is certified under
1021	chapter 651 and that receives an exemption from ad valorem taxes
1022	under chapter 196.
1023	4.  For the purposes of this subsection, the term
1024	"nonhomestead property" means property that is not homestead
1025	property.
1026	5.  Effective July 1, 2008, a personal lines residential
1027	structure that has a dwelling replacement cost of $1 million or
1028	more, or a single condominium unit that has a combined dwelling
1029	and content replacement cost of $1 million or more is not
1030	eligible for coverage by the corporation. Such dwellings insured
1031	by the corporation on June 30, 2008, may continue to be covered
1032	by the corporation until the end of the policy term. However,
1033	such dwellings that are insured by the corporation and become
1034	ineligible for coverage due to the provisions of this
1035	subparagraph may reapply and obtain coverage in the high-risk
1036	account and be considered "nonhomestead property" if the
1037	property owner provides the corporation with a sworn affidavit
1038	from one or more insurance agents, on a form provided by the
1039	corporation, stating that the agents have made their best
1040	efforts to obtain coverage and that the property has been
1041	rejected for coverage by at least one authorized insurer and at
1042	least three surplus lines insurers. If such conditions are met,
1043	the dwelling may be insured by the corporation for up to 3
1044	years, after which time the dwelling is ineligible for coverage.
1045	The office shall approve the method used by the corporation for
1046	valuing the dwelling replacement cost for the purposes of this
1047	subparagraph. If a policyholder is insured by the corporation
1048	prior to being determined to be ineligible pursuant to this
1049	subparagraph and such policyholder files a lawsuit challenging
1050	the determination, the policyholder may remain insured by the
1051	corporation until the conclusion of the litigation.
1052	6.  Effective March 1, 2007, nonhomestead property is not
1053	eligible for coverage by the corporation and is not eligible for
1054	renewal of such coverage unless the property owner provides the
1055	corporation with a sworn affidavit from one or more insurance
1056	agents, on a form provided by the corporation, stating that the
1057	agents have made their best efforts to obtain coverage and that
1058	the property has been rejected for coverage by at least one
1059	authorized insurer and at least three surplus lines insurers.
1060	7.  For properties constructed on or after January 1, 2009,
1061	the corporation shall not insure any property located within 500
1062	feet seaward or landward of the coastal construction control
1063	line created pursuant to s.161.053 and shall not insure any
1064	property located over 500 to 2,500 feet landward of the coastal
1065	construction control line unless the property meets the
1066	requirements of the code-plus building standards developed by
1067	the Florida Building Commission or the standards contained in
1068	the Miami-Dade Building Code pending the adoption of code-plus
1069	standards by the commission. However, this subparagraph shall
1070	not apply to properties for which a building permit has been
1071	issued on or after January 1, 2008.
1072	8.7.  It is the intent of the Legislature that
1073	policyholders, applicants, and agents of the corporation receive
1074	service and treatment of the highest possible level but never
1075	less than that generally provided in the voluntary market. It
1076	also is intended that the corporation be held to service
1077	standards no less than those applied to insurers in the
1078	voluntary market by the office with respect to responsiveness,
1079	timeliness, customer courtesy, and overall dealings with
1080	policyholders, applicants, or agents of the corporation.
1081	(b)1.  All insurers authorized to write one or more subject
1082	lines of business in this state are subject to assessment by the
1083	corporation and, for the purposes of this subsection, are
1084	referred to collectively as "assessable insurers." Insurers
1085	writing one or more subject lines of business in this state
1086	pursuant to part VIII of chapter 626 are not assessable
1087	insurers, but insureds who procure one or more subject lines of
1088	business in this state pursuant to part VIII of chapter 626 are
1089	subject to assessment by the corporation and are referred to
1090	collectively as "assessable insureds." An authorized insurer's
1091	assessment liability shall begin on the first day of the
1092	calendar year following the year in which the insurer was issued
1093	a certificate of authority to transact insurance for subject
1094	lines of business in this state and shall terminate 1 year after
1095	the end of the first calendar year during which the insurer no
1096	longer holds a certificate of authority to transact insurance
1097	for subject lines of business in this state.
1098	2.a.  All revenues, assets, liabilities, losses, and
1099	expenses of the corporation shall be divided into three separate
1100	accounts as follows:
1101	(I)  A personal lines account for personal residential
1102	policies issued by the corporation or issued by the Residential
1103	Property and Casualty Joint Underwriting Association and renewed
1104	by the corporation that provide comprehensive, multiperil
1105	coverage on risks that are not located in areas eligible for
1106	coverage in the Florida Windstorm Underwriting Association as
1107	those areas were defined on January 1, 2002, and for such
1108	policies that do not provide coverage for the peril of wind on
1109	risks that are located in such areas;
1110	(II)  A commercial lines account for commercial residential
1111	policies issued by the corporation or issued by the Residential
1112	Property and Casualty Joint Underwriting Association and renewed
1113	by the corporation that provide coverage for basic property
1114	perils on risks that are not located in areas eligible for
1115	coverage in the Florida Windstorm Underwriting Association as
1116	those areas were defined on January 1, 2002, and for such
1117	policies that do not provide coverage for the peril of wind on
1118	risks that are located in such areas; and
1119	(III)  A high-risk account for personal residential
1120	policies and commercial residential and commercial
1121	nonresidential property policies issued by the corporation or
1122	transferred to the corporation that provide coverage for the
1123	peril of wind on risks that are located in areas eligible for
1124	coverage in the Florida Windstorm Underwriting Association as
1125	those areas were defined on January 1, 2002. The high-risk
1126	account must also include quota share primary insurance under
1127	subparagraph (c)2. The area eligible for coverage under the
1128	high-risk account also includes the area within Port Canaveral,
1129	which is bordered on the south by the City of Cape Canaveral,
1130	bordered on the west by the Banana River, and bordered on the
1131	north by Federal Government property. The office may remove
1132	territory from the area eligible for wind-only and quota share
1133	coverage if, after a public hearing, the office finds that
1134	authorized insurers in the voluntary market are willing and able
1135	to write sufficient amounts of personal and commercial
1136	residential coverage for all perils in the territory, including
1137	coverage for the peril of wind, such that risks covered by wind-
1138	only policies in the removed territory could be issued a policy
1139	by the corporation in either the personal lines or commercial
1140	lines account without a significant increase in the
1141	corporation's probable maximum loss in such account. Removal of
1142	territory from the area eligible for wind-only or quota share
1143	coverage does not alter the assignment of wind coverage written
1144	in such areas to the high-risk account.
1145	b.  The three separate accounts must be maintained as long
1146	as financing obligations entered into by the Florida Windstorm
1147	Underwriting Association or Residential Property and Casualty
1148	Joint Underwriting Association are outstanding, in accordance
1149	with the terms of the corresponding financing documents. When
1150	the financing obligations are no longer outstanding, in
1151	accordance with the terms of the corresponding financing
1152	documents, the corporation may use a single account for all
1153	revenues, assets, liabilities, losses, and expenses of the
1154	corporation. Consistent with the requirement of this
1155	subparagraph and prudent investment policies that minimize the
1156	cost of carrying debt, the board shall exercise its best efforts
1157	to retire existing debt or to obtain approval of necessary
1158	parties to amend the terms of existing debt, so as to structure
1159	the most efficient plan to consolidate the three separate
1160	accounts into a single account. By February 1, 2007, the board
1161	shall submit a report to the Financial Services Commission, the
1162	President of the Senate, and the Speaker of the House of
1163	Representatives which includes an analysis of consolidating the
1164	accounts, the actions the board has taken to minimize the cost
1165	of carrying debt, and its recommendations for executing the most
1166	efficient plan.
1167	c.  Creditors of the Residential Property and Casualty
1168	Joint Underwriting Association shall have a claim against, and
1169	recourse to, the accounts referred to in sub-sub-subparagraphs
1170	a.(I) and (II) and shall have no claim against, or recourse to,
1171	the account referred to in sub-sub-subparagraph a.(III).
1172	Creditors of the Florida Windstorm Underwriting Association
1173	shall have a claim against, and recourse to, the account
1174	referred to in sub-sub-subparagraph a.(III) and shall have no
1175	claim against, or recourse to, the accounts referred to in sub-
1176	sub-subparagraphs a.(I) and (II).
1177	d.  Revenues, assets, liabilities, losses, and expenses not
1178	attributable to particular accounts shall be prorated among the
1179	accounts.
1180	e.  The Legislature finds that the revenues of the
1181	corporation are revenues that are necessary to meet the
1182	requirements set forth in documents authorizing the issuance of
1183	bonds under this subsection.
1184	f.  No part of the income of the corporation may inure to
1185	the benefit of any private person.
1186	3.  With respect to a deficit in an account:
1187	a.  When the deficit incurred in a particular calendar year
1188	is not greater than 10 percent of the aggregate statewide direct
1189	written premium for the subject lines of business for the prior
1190	calendar year, the entire deficit shall be recovered through
1191	regular assessments of assessable insurers under paragraph (p)
1192	and assessable insureds.
1193	b.  When the deficit incurred in a particular calendar year
1194	exceeds 10 percent of the aggregate statewide direct written
1195	premium for the subject lines of business for the prior calendar
1196	year, the corporation shall levy regular assessments on
1197	assessable insurers under paragraph (p) and on assessable
1198	insureds in an amount equal to the greater of 10 percent of the
1199	deficit or 10 percent of the aggregate statewide direct written
1200	premium for the subject lines of business for the prior calendar
1201	year. Any remaining deficit shall be recovered through emergency
1202	assessments under sub-subparagraph d.
1203	c.  Each assessable insurer's share of the amount being
1204	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1205	be in the proportion that the assessable insurer's direct
1206	written premium for the subject lines of business for the year
1207	preceding the assessment bears to the aggregate statewide direct
1208	written premium for the subject lines of business for that year.
1209	The assessment percentage applicable to each assessable insured
1210	is the ratio of the amount being assessed under sub-subparagraph
1211	a. or sub-subparagraph b. to the aggregate statewide direct
1212	written premium for the subject lines of business for the prior
1213	year. Assessments levied by the corporation on assessable
1214	insurers under sub-subparagraphs a. and b. shall be paid as
1215	required by the corporation's plan of operation and paragraph
1216	(p). Notwithstanding any other provision of this subsection, the
1217	aggregate amount of a regular assessment for a deficit incurred
1218	in a particular calendar year shall be reduced by the estimated
1219	amount to be received by the corporation from the Citizens
1220	policyholder surcharge under subparagraph (c)11. and the amount
1221	collected or estimated to be collected from the assessment on
1222	Citizens policyholders pursuant to sub-subparagraph i.
1223	Assessments levied by the corporation on assessable insureds
1224	under sub-subparagraphs a. and b. shall be collected by the
1225	surplus lines agent at the time the surplus lines agent collects
1226	the surplus lines tax required by s. 626.932 and shall be paid
1227	to the Florida Surplus Lines Service Office at the time the
1228	surplus lines agent pays the surplus lines tax to the Florida
1229	Surplus Lines Service Office. Upon receipt of regular
1230	assessments from surplus lines agents, the Florida Surplus Lines
1231	Service Office shall transfer the assessments directly to the
1232	corporation as determined by the corporation.
1233	d.  Upon a determination by the board of governors that a
1234	deficit in an account exceeds the amount that will be recovered
1235	through regular assessments under sub-subparagraph a. or sub-
1236	subparagraph b., the board shall levy, after verification by the
1237	office, emergency assessments, for as many years as necessary to
1238	cover the deficits, to be collected by assessable insurers and
1239	the corporation and collected from assessable insureds upon
1240	issuance or renewal of policies for subject lines of business,
1241	excluding National Flood Insurance policies. The amount of the
1242	emergency assessment collected in a particular year shall be a
1243	uniform percentage of that year's direct written premium for
1244	subject lines of business and all accounts of the corporation,
1245	excluding National Flood Insurance Program policy premiums, as
1246	annually determined by the board and verified by the office. The
1247	office shall verify the arithmetic calculations involved in the
1248	board's determination within 30 days after receipt of the
1249	information on which the determination was based.
1250	Notwithstanding any other provision of law, the corporation and
1251	each assessable insurer that writes subject lines of business
1252	shall collect emergency assessments from its policyholders
1253	without such obligation being affected by any credit,
1254	limitation, exemption, or deferment. Emergency assessments
1255	levied by the corporation on assessable insureds shall be
1256	collected by the surplus lines agent at the time the surplus
1257	lines agent collects the surplus lines tax required by s.
1258	626.932 and shall be paid to the Florida Surplus Lines Service
1259	Office at the time the surplus lines agent pays the surplus
1260	lines tax to the Florida Surplus Lines Service Office. The
1261	emergency assessments so collected shall be transferred directly
1262	to the corporation on a periodic basis as determined by the
1263	corporation and shall be held by the corporation solely in the
1264	applicable account. The aggregate amount of emergency
1265	assessments levied for an account under this sub-subparagraph in
1266	any calendar year may not exceed the greater of 10 percent of
1267	the amount needed to cover the original deficit, plus interest,
1268	fees, commissions, required reserves, and other costs associated
1269	with financing of the original deficit, or 10 percent of the
1270	aggregate statewide direct written premium for subject lines of
1271	business and for all accounts of the corporation for the prior
1272	year, plus interest, fees, commissions, required reserves, and
1273	other costs associated with financing the original deficit.
1274	e.  The corporation may pledge the proceeds of assessments,
1275	projected recoveries from the Florida Hurricane Catastrophe
1276	Fund, other insurance and reinsurance recoverables, policyholder
1277	surcharges and other surcharges, and other funds available to
1278	the corporation as the source of revenue for and to secure bonds
1279	issued under paragraph (p), bonds or other indebtedness issued
1280	under subparagraph (c)3., or lines of credit or other financing
1281	mechanisms issued or created under this subsection, or to retire
1282	any other debt incurred as a result of deficits or events giving
1283	rise to deficits, or in any other way that the board determines
1284	will efficiently recover such deficits. The purpose of the lines
1285	of credit or other financing mechanisms is to provide additional
1286	resources to assist the corporation in covering claims and
1287	expenses attributable to a catastrophe. As used in this
1288	subsection, the term "assessments" includes regular assessments
1289	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1290	(p)1. and emergency assessments under sub-subparagraph d.
1291	Emergency assessments collected under sub-subparagraph d. are
1292	not part of an insurer's rates, are not premium, and are not
1293	subject to premium tax, fees, or commissions; however, failure
1294	to pay the emergency assessment shall be treated as failure to
1295	pay premium. The emergency assessments under sub-subparagraph d.
1296	shall continue as long as any bonds issued or other indebtedness
1297	incurred with respect to a deficit for which the assessment was
1298	imposed remain outstanding, unless adequate provision has been
1299	made for the payment of such bonds or other indebtedness
1300	pursuant to the documents governing such bonds or other
1301	indebtedness.
1302	f.  As used in this subsection, the term "subject lines of
1303	business" means insurance written by assessable insurers or
1304	procured by assessable insureds on real or personal property, as
1305	defined in s. 624.604, including insurance for fire, industrial
1306	fire, allied lines, farmowners multiperil, homeowners
1307	multiperil, commercial residential multiperil, and mobile homes,
1308	and including liability coverage on all such insurance, but
1309	excluding inland marine as defined in s. 624.607(3) and
1310	excluding vehicle insurance as defined in s. 624.605(1) other
1311	than insurance on mobile homes used as permanent dwellings.
1312	g.  The Florida Surplus Lines Service Office shall
1313	determine annually the aggregate statewide written premium in
1314	subject lines of business procured by assessable insureds and
1315	shall report that information to the corporation in a form and
1316	at a time the corporation specifies to ensure that the
1317	corporation can meet the requirements of this subsection and the
1318	corporation's financing obligations.
1319	h.  The Florida Surplus Lines Service Office shall verify
1320	the proper application by surplus lines agents of assessment
1321	percentages for regular assessments and emergency assessments
1322	levied under this subparagraph on assessable insureds and shall
1323	assist the corporation in ensuring the accurate, timely
1324	collection and payment of assessments by surplus lines agents as
1325	required by the corporation.
1326	i.  If a deficit is incurred in any account, the board of
1327	governors shall levy an immediate assessment against the premium
1328	of each nonhomestead property policyholder in all accounts of
1329	the corporation, as a uniform percentage of the premium of the
1330	policy of up to 10 percent of such premium, which funds shall be
1331	used to offset the deficit. If this assessment is insufficient
1332	to eliminate the deficit, the board of governors shall levy an
1333	additional assessment against all policyholders of the
1334	corporation, which shall be collected at the time of issuance or
1335	renewal of a policy, as a uniform percentage of the premium for
1336	the policy of up to 10 percent of such premium, which funds
1337	shall be used to further offset the deficit.
1338	j.  The board of governors shall maintain separate
1339	accounting records that consolidate data for nonhomestead
1340	properties, including, but not limited to, number of policies,
1341	insured values, premiums written, and losses. The board of
1342	governors shall annually report to the office and the
1343	Legislature a summary of such data.
1344	(c)  The plan of operation of the corporation:
1345	1.  Must provide for adoption of residential property and
1346	casualty insurance policy forms and commercial residential and
1347	nonresidential property insurance forms, which forms must be
1348	approved by the office prior to use. The corporation shall adopt
1349	the following policy forms:
1350	a.  Standard personal lines policy forms that are
1351	comprehensive multiperil policies providing full coverage of a
1352	residential property equivalent to the coverage provided in the
1353	private insurance market under an HO-3, HO-4, or HO-6 policy.
1354	b.  Basic personal lines policy forms that are policies
1355	similar to an HO-8 policy or a dwelling fire policy that provide
1356	coverage meeting the requirements of the secondary mortgage
1357	market, but which coverage is more limited than the coverage
1358	under a standard policy.
1359	c.  Commercial lines residential policy forms that are
1360	generally similar to the basic perils of full coverage
1361	obtainable for commercial residential structures in the admitted
1362	voluntary market.
1363	d.  Personal lines and commercial lines residential
1364	property insurance forms that cover the peril of wind only. The
1365	forms are applicable only to residential properties located in
1366	areas eligible for coverage under the high-risk account referred
1367	to in sub-subparagraph (b)2.a.
1368	e.  Commercial lines nonresidential property insurance
1369	forms that cover the peril of wind only. The forms are
1370	applicable only to nonresidential properties located in areas
1371	eligible for coverage under the high-risk account referred to in
1372	sub-subparagraph (b)2.a.
1373	e.f.  The corporation may adopt variations of the policy
1374	forms listed in sub-subparagraphs a.-d. a.-e. that contain more
1375	restrictive coverage.
1376	2.a.  Must provide that the corporation adopt a program in
1377	which the corporation and authorized insurers enter into quota
1378	share primary insurance agreements for hurricane coverage, as
1379	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1380	property insurance forms for eligible risks which cover the
1381	peril of wind only. As used in this subsection, the term:
1382	(I)  "Quota share primary insurance" means an arrangement
1383	in which the primary hurricane coverage of an eligible risk is
1384	provided in specified percentages by the corporation and an
1385	authorized insurer. The corporation and authorized insurer are
1386	each solely responsible for a specified percentage of hurricane
1387	coverage of an eligible risk as set forth in a quota share
1388	primary insurance agreement between the corporation and an
1389	authorized insurer and the insurance contract. The
1390	responsibility of the corporation or authorized insurer to pay
1391	its specified percentage of hurricane losses of an eligible
1392	risk, as set forth in the quota share primary insurance
1393	agreement, may not be altered by the inability of the other
1394	party to the agreement to pay its specified percentage of
1395	hurricane losses. Eligible risks that are provided hurricane
1396	coverage through a quota share primary insurance arrangement
1397	must be provided policy forms that set forth the obligations of
1398	the corporation and authorized insurer under the arrangement,
1399	clearly specify the percentages of quota share primary insurance
1400	provided by the corporation and authorized insurer, and
1401	conspicuously and clearly state that neither the authorized
1402	insurer nor the corporation may be held responsible beyond its
1403	specified percentage of coverage of hurricane losses.
1404	(II)  "Eligible risks" means personal lines residential and
1405	commercial lines residential risks that meet the underwriting
1406	criteria of the corporation and are located in areas that were
1407	eligible for coverage by the Florida Windstorm Underwriting
1408	Association on January 1, 2002.
1409	b.  The corporation may enter into quota share primary
1410	insurance agreements with authorized insurers at corporation
1411	coverage levels of 90 percent and 50 percent.
1412	c.  If the corporation determines that additional coverage
1413	levels are necessary to maximize participation in quota share
1414	primary insurance agreements by authorized insurers, the
1415	corporation may establish additional coverage levels. However,
1416	the corporation's quota share primary insurance coverage level
1417	may not exceed 90 percent.
1418	d.  Any quota share primary insurance agreement entered
1419	into between an authorized insurer and the corporation must
1420	provide for a uniform specified percentage of coverage of
1421	hurricane losses, by county or territory as set forth by the
1422	corporation board, for all eligible risks of the authorized
1423	insurer covered under the quota share primary insurance
1424	agreement.
1425	e.  Any quota share primary insurance agreement entered
1426	into between an authorized insurer and the corporation is
1427	subject to review and approval by the office. However, such
1428	agreement shall be authorized only as to insurance contracts
1429	entered into between an authorized insurer and an insured who is
1430	already insured by the corporation for wind coverage.
1431	f.  For all eligible risks covered under quota share
1432	primary insurance agreements, the exposure and coverage levels
1433	for both the corporation and authorized insurers shall be
1434	reported by the corporation to the Florida Hurricane Catastrophe
1435	Fund. For all policies of eligible risks covered under quota
1436	share primary insurance agreements, the corporation and the
1437	authorized insurer shall maintain complete and accurate records
1438	for the purpose of exposure and loss reimbursement audits as
1439	required by Florida Hurricane Catastrophe Fund rules. The
1440	corporation and the authorized insurer shall each maintain
1441	duplicate copies of policy declaration pages and supporting
1442	claims documents.
1443	g.  The corporation board shall establish in its plan of
1444	operation standards for quota share agreements which ensure that
1445	there is no discriminatory application among insurers as to the
1446	terms of quota share agreements, pricing of quota share
1447	agreements, incentive provisions if any, and consideration paid
1448	for servicing policies or adjusting claims.
1449	h.  The quota share primary insurance agreement between the
1450	corporation and an authorized insurer must set forth the
1451	specific terms under which coverage is provided, including, but
1452	not limited to, the sale and servicing of policies issued under
1453	the agreement by the insurance agent of the authorized insurer
1454	producing the business, the reporting of information concerning
1455	eligible risks, the payment of premium to the corporation, and
1456	arrangements for the adjustment and payment of hurricane claims
1457	incurred on eligible risks by the claims adjuster and personnel
1458	of the authorized insurer. Entering into a quota sharing
1459	insurance agreement between the corporation and an authorized
1460	insurer shall be voluntary and at the discretion of the
1461	authorized insurer.
1462	3.  May provide that the corporation may employ or
1463	otherwise contract with individuals or other entities to provide
1464	administrative or professional services that may be appropriate
1465	to effectuate the plan. The corporation shall have the power to
1466	borrow funds, by issuing bonds or by incurring other
1467	indebtedness, and shall have other powers reasonably necessary
1468	to effectuate the requirements of this subsection, including,
1469	without limitation, the power to issue bonds and incur other
1470	indebtedness in order to refinance outstanding bonds or other
1471	indebtedness. The corporation may, but is not required to, seek
1472	judicial validation of its bonds or other indebtedness under
1473	chapter 75. The corporation may issue bonds or incur other
1474	indebtedness, or have bonds issued on its behalf by a unit of
1475	local government pursuant to subparagraph (p)(g)2., in the
1476	absence of a hurricane or other weather-related event, upon a
1477	determination by the corporation, subject to approval by the
1478	office, that such action would enable it to efficiently meet the
1479	financial obligations of the corporation and that such
1480	financings are reasonably necessary to effectuate the
1481	requirements of this subsection. The corporation is authorized
1482	to take all actions needed to facilitate tax-free status for any
1483	such bonds or indebtedness, including formation of trusts or
1484	other affiliated entities. The corporation shall have the
1485	authority to pledge assessments, projected recoveries from the
1486	Florida Hurricane Catastrophe Fund, other reinsurance
1487	recoverables, market equalization and other surcharges, and
1488	other funds available to the corporation as security for bonds
1489	or other indebtedness. In recognition of s. 10, Art. I of the
1490	State Constitution, prohibiting the impairment of obligations of
1491	contracts, it is the intent of the Legislature that no action be
1492	taken whose purpose is to impair any bond indenture or financing
1493	agreement or any revenue source committed by contract to such
1494	bond or other indebtedness.
1495	4.a.  Must require that the corporation operate subject to
1496	the supervision and approval of a board of governors consisting
1497	of eight individuals who are residents of this state, from
1498	different geographical areas of this state. The Governor, the
1499	Chief Financial Officer, the President of the Senate, and the
1500	Speaker of the House of Representatives shall each appoint two
1501	members of the board. At least one of the two members appointed
1502	by each appointing officer must have demonstrated expertise in
1503	insurance. The Chief Financial Officer shall designate one of
1504	the appointees as chair. All board members serve at the pleasure
1505	of the appointing officer. All board members, including the
1506	chair, must be appointed to serve for 3-year terms beginning
1507	annually on a date designated by the plan. Any board vacancy
1508	shall be filled for the unexpired term by the appointing
1509	officer. The Chief Financial Officer shall appoint a technical
1510	advisory group to provide information and advice to the board of
1511	governors in connection with the board's duties under this
1512	subsection. The executive director and senior managers of the
1513	corporation shall be engaged by the board and serve at the
1514	pleasure of the board. Any executive director appointed on or
1515	after July 1, 2006, is subject to confirmation by the Senate.
1516	The executive director is responsible for employing other staff
1517	as the corporation may require, subject to review and
1518	concurrence by the board.
1519	b.  The board shall create a Market Accountability Advisory
1520	Committee to assist the corporation in developing awareness of
1521	its rates and its customer and agent service levels in
1522	relationship to the voluntary market insurers writing similar
1523	coverage. The members of the advisory committee shall consist of
1524	the following 11 persons, one of whom must be elected chair by
1525	the members of the committee: four representatives, one
1526	appointed by the Florida Association of Insurance Agents, one by
1527	the Florida Association of Insurance and Financial Advisors, one
1528	by the Professional Insurance Agents of Florida, and one by the
1529	Latin American Association of Insurance Agencies; three
1530	representatives appointed by the insurers with the three highest
1531	voluntary market share of residential property insurance
1532	business in the state; one representative from the Office of
1533	Insurance Regulation; one consumer appointed by the board who is
1534	insured by the corporation at the time of appointment to the
1535	committee; one representative appointed by the Florida
1536	Association of Realtors; and one representative appointed by the
1537	Florida Bankers Association. All members must serve for 3-year
1538	terms and may serve for consecutive terms. The committee shall
1539	report to the corporation at each board meeting on insurance
1540	market issues which may include rates and rate competition with
1541	the voluntary market; service, including policy issuance, claims
1542	processing, and general responsiveness to policyholders,
1543	applicants, and agents; and matters relating to depopulation.
1544	5.  Must provide a procedure for determining the
1545	eligibility of a risk for coverage, as follows:
1546	a.  Subject to the provisions of s. 627.3517, with respect
1547	to personal lines residential risks, if the risk is offered
1548	coverage from an authorized insurer at the insurer's approved
1549	rate under either a standard policy including wind coverage or,
1550	if consistent with the insurer's underwriting rules as filed
1551	with the office, a basic policy including wind coverage, the
1552	risk is not eligible for any policy issued by the corporation.
1553	If the risk is not able to obtain any such offer, the risk is
1554	eligible for either a standard policy including wind coverage or
1555	a basic policy including wind coverage issued by the
1556	corporation; however, if the risk could not be insured under a
1557	standard policy including wind coverage regardless of market
1558	conditions, the risk shall be eligible for a basic policy
1559	including wind coverage unless rejected under subparagraph 8.
1560	The corporation shall determine the type of policy to be
1561	provided on the basis of objective standards specified in the
1562	underwriting manual and based on generally accepted underwriting
1563	practices.
1564	(I)  If the risk accepts an offer of coverage through the
1565	market assistance plan or an offer of coverage through a
1566	mechanism established by the corporation before a policy is
1567	issued to the risk by the corporation or during the first 30
1568	days of coverage by the corporation, and the producing agent who
1569	submitted the application to the plan or to the corporation is
1570	not currently appointed by the insurer, the insurer shall:
1571	(A)  Pay to the producing agent of record of the policy,
1572	for the first year, an amount that is the greater of the
1573	insurer's usual and customary commission for the type of policy
1574	written or a fee equal to the usual and customary commission of
1575	the corporation; or
1576	(B)  Offer to allow the producing agent of record of the
1577	policy to continue servicing the policy for a period of not less
1578	than 1 year and offer to pay the agent the greater of the
1579	insurer's or the corporation's usual and customary commission
1580	for the type of policy written.
1581
1582	If the producing agent is unwilling or unable to accept
1583	appointment, the new insurer shall pay the agent in accordance
1584	with sub-sub-sub-subparagraph (A).
1585	(II)  When the corporation enters into a contractual
1586	agreement for a take-out plan, the producing agent of record of
1587	the corporation policy is entitled to retain any unearned
1588	commission on the policy, and the insurer shall:
1589	(A)  Pay to the producing agent of record of the
1590	corporation policy, for the first year, an amount that is the
1591	greater of the insurer's usual and customary commission for the
1592	type of policy written or a fee equal to the usual and customary
1593	commission of the corporation; or
1594	(B)  Offer to allow the producing agent of record of the
1595	corporation policy to continue servicing the policy for a period
1596	of not less than 1 year and offer to pay the agent the greater
1597	of the insurer's or the corporation's usual and customary
1598	commission for the type of policy written.
1599
1600	If the producing agent is unwilling or unable to accept
1601	appointment, the new insurer shall pay the agent in accordance
1602	with sub-sub-sub-subparagraph (A).
1603	b.  With respect to commercial lines residential risks, if
1604	the risk is offered coverage under a policy including wind
1605	coverage from an authorized insurer at its approved rate, the
1606	risk is not eligible for any policy issued by the corporation.
1607	If the risk is not able to obtain any such offer, the risk is
1608	eligible for a policy including wind coverage issued by the
1609	corporation.
1610	(I)  If the risk accepts an offer of coverage through the
1611	market assistance plan or an offer of coverage through a
1612	mechanism established by the corporation before a policy is
1613	issued to the risk by the corporation or during the first 30
1614	days of coverage by the corporation, and the producing agent who
1615	submitted the application to the plan or the corporation is not
1616	currently appointed by the insurer, the insurer shall:
1617	(A)  Pay to the producing agent of record of the policy,
1618	for the first year, an amount that is the greater of the
1619	insurer's usual and customary commission for the type of policy
1620	written or a fee equal to the usual and customary commission of
1621	the corporation; or
1622	(B)  Offer to allow the producing agent of record of the
1623	policy to continue servicing the policy for a period of not less
1624	than 1 year and offer to pay the agent the greater of the
1625	insurer's or the corporation's usual and customary commission
1626	for the type of policy written.
1627
1628	If the producing agent is unwilling or unable to accept
1629	appointment, the new insurer shall pay the agent in accordance
1630	with sub-sub-sub-subparagraph (A).
1631	(II)  When the corporation enters into a contractual
1632	agreement for a take-out plan, the producing agent of record of
1633	the corporation policy is entitled to retain any unearned
1634	commission on the policy, and the insurer shall:
1635	(A)  Pay to the producing agent of record of the
1636	corporation policy, for the first year, an amount that is the
1637	greater of the insurer's usual and customary commission for the
1638	type of policy written or a fee equal to the usual and customary
1639	commission of the corporation; or
1640	(B)  Offer to allow the producing agent of record of the
1641	corporation policy to continue servicing the policy for a period
1642	of not less than 1 year and offer to pay the agent the greater
1643	of the insurer's or the corporation's usual and customary
1644	commission for the type of policy written.
1645
1646	If the producing agent is unwilling or unable to accept
1647	appointment, the new insurer shall pay the agent in accordance
1648	with sub-sub-sub-subparagraph (A).
1649	6.  Must provide by July 1, 2007, that an application for
1650	coverage for a new policy is subject to a waiting period of 10
1651	days before coverage is effective, during which time the
1652	corporation shall make such application available for review by
1653	general lines agents and authorized property and casualty
1654	insurers. The board shall may approve an exception exceptions
1655	that allows allow for coverage to be effective before the end of
1656	the 10-day waiting period, for coverage issued in conjunction
1657	with a real estate closing., The board may approve and for such
1658	other exceptions as the board determines are necessary to
1659	prevent lapses in coverage.
1660	7.  Must include rules for classifications of risks and
1661	rates therefor.
1662	8.  Must provide that if premium and investment income for
1663	an account attributable to a particular calendar year are in
1664	excess of projected losses and expenses for the account
1665	attributable to that year, such excess shall be held in surplus
1666	in the account. Such surplus shall be available to defray
1667	deficits in that account as to future years and shall be used
1668	for that purpose prior to assessing assessable insurers and
1669	assessable insureds as to any calendar year.
1670	9.  Must provide objective criteria and procedures to be
1671	uniformly applied for all applicants in determining whether an
1672	individual risk is so hazardous as to be uninsurable. In making
1673	this determination and in establishing the criteria and
1674	procedures, the following shall be considered:
1675	a.  Whether the likelihood of a loss for the individual
1676	risk is substantially higher than for other risks of the same
1677	class; and
1678	b.  Whether the uncertainty associated with the individual
1679	risk is such that an appropriate premium cannot be determined.
1680
1681	The acceptance or rejection of a risk by the corporation shall
1682	be construed as the private placement of insurance, and the
1683	provisions of chapter 120 shall not apply.
1684	10.  Must provide that the corporation shall make its best
1685	efforts to procure catastrophe reinsurance at reasonable rates,
1686	to cover its projected 100-year probable maximum loss as
1687	determined by the board of governors.
1688	11.  Must provide that in the event of regular deficit
1689	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1690	(b)3.b., in the personal lines account, the commercial lines
1691	residential account, or the high-risk account, the corporation
1692	shall levy upon corporation policyholders in its next rate
1693	filing, or by a separate rate filing solely for this purpose, a
1694	Citizens policyholder surcharge arising from a regular
1695	assessment in such account in a percentage equal to the total
1696	amount of such regular assessments divided by the aggregate
1697	statewide direct written premium for subject lines of business
1698	for the prior calendar year. For purposes of calculating the
1699	Citizens policyholder surcharge to be levied under this
1700	subparagraph, the total amount of the regular assessment to
1701	which this surcharge is related shall be determined as set forth
1702	in subparagraph (b)3., without deducting the estimated Citizens
1703	policyholder surcharge. Citizens policyholder surcharges under
1704	this subparagraph are not considered premium and are not subject
1705	to commissions, fees, or premium taxes; however, failure to pay
1706	a market equalization surcharge shall be treated as failure to
1707	pay premium.
1708	12.  The policies issued by the corporation must provide
1709	that, if the corporation or the market assistance plan obtains
1710	an offer from an authorized insurer to cover the risk at its
1711	approved rates, the risk is no longer eligible for renewal
1712	through the corporation.
1713	13.  Corporation policies and applications must include a
1714	notice that the corporation policy could, under this section, be
1715	replaced with a policy issued by an authorized insurer that does
1716	not provide coverage identical to the coverage provided by the
1717	corporation. The notice shall also specify that acceptance of
1718	corporation coverage creates a conclusive presumption that the
1719	applicant or policyholder is aware of this potential.
1720	14.  May establish, subject to approval by the office,
1721	different eligibility requirements and operational procedures
1722	for any line or type of coverage for any specified county or
1723	area if the board determines that such changes to the
1724	eligibility requirements and operational procedures are
1725	justified due to the voluntary market being sufficiently stable
1726	and competitive in such area or for such line or type of
1727	coverage and that consumers who, in good faith, are unable to
1728	obtain insurance through the voluntary market through ordinary
1729	methods would continue to have access to coverage from the
1730	corporation. When coverage is sought in connection with a real
1731	property transfer, such requirements and procedures shall not
1732	provide for an effective date of coverage later than the date of
1733	the closing of the transfer as established by the transferor,
1734	the transferee, and, if applicable, the lender.
1735	15.  Must provide that, with respect to the high-risk
1736	account, any assessable insurer with a surplus as to
1737	policyholders of $25 million or less writing 25 percent or more
1738	of its total countrywide property insurance premiums in this
1739	state may petition the office, within the first 90 days of each
1740	calendar year, to qualify as a limited apportionment company. A
1741	regular assessment levied by the corporation on a limited
1742	apportionment company for a deficit incurred by the corporation
1743	for the high-risk account in 2006 or thereafter may be paid to
1744	the corporation on a monthly basis as the assessments are
1745	collected by the limited apportionment company from its insureds
1746	pursuant to s. 627.3512, but the regular assessment must be paid
1747	in full within 12 months after being levied by the corporation.
1748	A limited apportionment company shall collect from its
1749	policyholders any emergency assessment imposed under sub-
1750	subparagraph (b)3.d. The plan shall provide that, if the office
1751	determines that any regular assessment will result in an
1752	impairment of the surplus of a limited apportionment company,
1753	the office may direct that all or part of such assessment be
1754	deferred as provided in subparagraph (p)(g)4. However, there
1755	shall be no limitation or deferment of an emergency assessment
1756	to be collected from policyholders under sub-subparagraph
1757	(b)3.d.
1758	16.  Must provide that the corporation appoint as its
1759	licensed agents only those agents who also hold an appointment
1760	as defined in s. 626.015(3) with an insurer who at the time of
1761	the agent's initial appointment by the corporation is authorized
1762	to write and is actually writing personal lines residential
1763	property coverage, or commercial residential property coverage,
1764	or commercial nonresidential property coverage within the state.
1765	17.  Must provide, by July 1, 2007, a premium payment plan
1766	option to its policyholders which allows for monthly, quarterly,
1767	and semiannual payment of premiums.
1768	18.  Must provide, effective June 1, 2007, that the
1769	corporation contract with each insurer providing the non-wind
1770	coverage for risks insured by the corporation in the high-risk
1771	account, requiring that the insurer provide claims adjusting
1772	services for the wind coverage provided by the corporation for
1773	such risks. An insurer is required to enter into this contract
1774	as a condition of providing non-wind coverage for a risk that is
1775	insured by the corporation in the high-risk account unless the
1776	board finds, after a hearing, that the insurer is not capable of
1777	providing adjusting services at an acceptable level of quality
1778	to corporation policyholders. The terms and conditions of such
1779	contracts must be substantially the same as the contracts that
1780	the corporation executed with insurers under the "adjust-your-
1781	own" program in 2006, except as may be mutually agreed to by the
1782	parties and except for such changes that the board determines
1783	are necessary to ensure that claims are adjusted appropriately.
1784	The corporation shall provide a process for neutral arbitration
1785	of any dispute between the corporation and the insurer regarding
1786	the terms of the contract. The corporation shall review and
1787	monitor the performance of insurers under these contracts.
1788	19.  Must limit coverage on mobile homes or manufactured
1789	homes built prior to 1994 to actual cash value of the dwelling
1790	rather than replacement costs of the dwelling.
1791	(d)1.  All prospective employees for senior management
1792	positions, as defined by the plan of operation, are subject to
1793	background checks as a prerequisite for employment. The office
1794	shall conduct background checks on such prospective employees
1795	pursuant to ss. 624.34, 624.404(3), and 628.261.
1796	2.  On or before July 1 of each year, employees of the
1797	corporation are required to sign and submit a statement
1798	attesting that they do not have a conflict of interest, as
1799	defined in part III of chapter 112. As a condition of
1800	employment, all prospective employees are required to sign and
1801	submit to the corporation a conflict-of-interest statement.
1802	3.  Senior managers and members of the board of governors
1803	are subject to the provisions of part III of chapter 112,
1804	including, but not limited to, the code of ethics and public
1805	disclosure and reporting of financial interests, pursuant to s.
1806	112.3145. Senior managers and board members are also required to
1807	file such disclosures with the Office of Insurance Regulation.
1808	The executive director of the corporation or his or her designee
1809	shall notify each newly appointed and existing appointed member
1810	of the board of governors and senior managers of their duty to
1811	comply with the reporting requirements of part III of chapter
1812	112. At least quarterly, the executive director or his or her
1813	designee shall submit to the Commission on Ethics a list of
1814	names of the senior managers and members of the board of
1815	governors who are subject to the public disclosure requirements
1816	under s. 112.3145.
1817	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
1818	other provision of law, an employee or board member may not
1819	knowingly accept, directly or indirectly, any gift or
1820	expenditure from a person or entity, or an employee or
1821	representative of such person or entity, that has a contractual
1822	relationship with the corporation or who is under consideration
1823	for a contract. An employee or board member who fails to comply
1824	with this subparagraph is subject to penalties provided under
1825	ss. 112.317 and 112.3173.
1826	5.  Any senior manager of the corporation who is employed
1827	on or after January 1, 2007, regardless of the date of hire, who
1828	subsequently retires or terminates employment is prohibited from
1829	representing another person or entity before the corporation for
1830	2 years after retirement or termination of employment from the
1831	corporation.
1832	6.  Any employee of the corporation who is employed on or
1833	after January 1, 2007, regardless of the date of hire, who
1834	subsequently retires or terminates employment is prohibited from
1835	having any employment or contractual relationship for 2 years
1836	with an insurer that has received a take-out bonus from the
1837	corporation.
1838	(e)  Purchases that equal or exceed $2,500, but are less
1839	than $25,000, shall be made by receipt of written quotes,
1840	written record of telephone quotes, or informal bids, whenever
1841	practical. The procurement of goods or services valued at or
1842	over $25,000 shall be subject to competitive solicitation,
1843	except in situations where the goods or services are provided by
1844	a sole source or are deemed an emergency purchase; the services
1845	are exempted from competitive solicitation requirements under s.
1846	287.057(5)(f); or the procurement of services is subject to s.
1847	627.3513. Justification for the sole-sourcing or emergency
1848	procurement must be documented. Contracts for goods or services
1849	valued at or over $100,000 are subject to approval by the board.
1850	(f)  The board shall determine whether it is more cost-
1851	effective and in the best interests of the corporation to use
1852	legal services provided by in-house attorneys employed by the
1853	corporation rather than contracting with outside counsel. In
1854	making such determination, the board shall document its findings
1855	and shall consider: the expertise needed; whether time
1856	commitments exceed in-house staff resources; whether local
1857	representation is needed; the travel, lodging and other costs
1858	associated with in-house representation; and such other factors
1859	that the board determines are relevant.
1860	(g)  The corporation may not retain a lobbyist to represent
1861	it before the legislative branch or executive branch. However,
1862	full-time employees of the corporation may register as lobbyists
1863	and represent the corporation before the legislative branch or
1864	executive branch.
1865	(h)1.  The Office of the Internal Auditor is established
1866	within the corporation to provide a central point for
1867	coordination of and responsibility for activities that promote
1868	accountability, integrity, and efficiency to the policyholders
1869	and to the taxpayers of this state. The internal auditor shall
1870	be appointed by the board of governors, shall report to and be
1871	under the general supervision of the board of governors, and is
1872	not subject to supervision by any employee of the corporation.
1873	Administrative staff and support shall be provided by the
1874	corporation. The internal auditor shall be appointed without
1875	regard to political affiliation. It is the duty and
1876	responsibility of the internal auditor to:
1877	a.  Provide direction for, supervise, conduct, and
1878	coordinate audits, investigations, and management reviews
1879	relating to the programs and operations of the corporation.
1880	b.  Conduct, supervise, or coordinate other activities
1881	carried out or financed by the corporation for the purpose of
1882	promoting efficiency in the administration of, or preventing and
1883	detecting fraud, abuse, and mismanagement in, its programs and
1884	operations.
1885	c.  Submit final audit reports, reviews, or investigative
1886	reports to the board of governors, the executive director, the
1887	members of the Financial Services Commission, and the President
1888	of the Senate and the Speaker of the House of Representatives.
1889	d.  Keep the board of governors informed concerning fraud,
1890	abuses, and internal control deficiencies relating to programs
1891	and operations administered or financed by the corporation,
1892	recommend corrective action, and report on the progress made in
1893	implementing corrective action.
1894	e.  Report expeditiously to the Department of Law
1895	Enforcement or other law enforcement agencies, as appropriate,
1896	whenever the internal auditor has reasonable grounds to believe
1897	there has been a violation of criminal law.
1898	2.  On or before February 15, the internal auditor shall
1899	prepare an annual report evaluating the effectiveness of the
1900	internal controls of the corporation and providing
1901	recommendations for corrective action, if necessary, and
1902	summarizing the audits, reviews, and investigations conducted by
1903	the office during the preceding fiscal year. The final report
1904	shall be furnished to the board of governors and the executive
1905	director, the President of the Senate, the Speaker of the House
1906	of Representatives, and the Financial Services Commission.
1907	(i)  All records of the corporation, except as otherwise
1908	provided by law, are subject to the record retention
1909	requirements of s. 119.021.
1910	(j)1.  The corporation shall establish and maintain a unit
1911	or division to investigate possible fraudulent claims by
1912	insureds or by persons making claims for services or repairs
1913	against policies held by insureds; or it may contract with
1914	others to investigate possible fraudulent claims for services or
1915	repairs against policies held by the corporation pursuant to s.
1916	626.9891. The corporation must comply with reporting
1917	requirements of s. 626.9891. An employee of the corporation
1918	shall notify the Division of Insurance Fraud within 48 hours
1919	after having information that would lead a reasonable person to
1920	suspect that fraud may have been committed by any employee of
1921	the corporation.
1922	2.  The corporation shall establish a unit or division
1923	responsible for receiving and responding to consumer complaints,
1924	which unit or division is the sole responsibility of a senior
1925	manager of the corporation.
1926	(k)  The office shall conduct a comprehensive market
1927	conduct examination of the corporation every 2 years to
1928	determine compliance with its plan of operation and internal
1929	operations procedures. The first market conduct examination
1930	report shall be submitted to the President of the Senate and the
1931	Speaker of the House of Representatives no later than February
1932	1, 2009. Subsequent reports shall be submitted on or before
1933	February 1 every 2 years thereafter.
1934	(l)  The Auditor General shall conduct an operational audit
1935	of the corporation every 3 years to evaluate management's
1936	performance in administering laws, policies, and procedures
1937	governing the operations of the corporation in an efficient and
1938	effective manner. The scope of the review shall include, but is
1939	not limited to, evaluating claims handling, customer service,
1940	take-out programs and bonuses, financing arrangements,
1941	procurement of goods and services, internal controls, and the
1942	internal audit function. The initial audit must be completed by
1943	February 1, 2009.
1944	(m)1.a.  Rates for coverage provided by the corporation
1945	shall be actuarially adequate sound and not competitive with
1946	approved rates charged in the admitted voluntary market, so that
1947	the corporation functions as a residual market mechanism to
1948	provide insurance only when the insurance cannot be procured in
1949	the voluntary market. Rates shall include an appropriate
1950	catastrophe loading factor that reflects the actual catastrophic
1951	exposure of the corporation. For policies in the personal lines
1952	account and the commercial lines account issued or renewed on or
1953	after March 1, 2007, a rate is deemed inadequate if the rate,
1954	including investment income, is not sufficient to provide for
1955	the procurement of coverage under the Florida Hurricane
1956	Catastrophe Fund and private reinsurance costs, whether or not
1957	reinsurance is procured, and to pay all claims and expenses
1958	reasonably expected to result from a 100-year probable maximum
1959	loss event without resort to any regular or emergency
1960	assessments, long-term debt, state revenues, or other funding
1961	sources. For policies in the high-risk account issued or renewed
1962	on or after January 1, 2008 March 1, 2007, a rate is deemed
1963	inadequate if the rate, including investment income, is not
1964	sufficient to provide for the procurement of coverage under the
1965	Florida Hurricane Catastrophe Fund and private reinsurance
1966	costs, whether or not reinsurance is procured, and to pay all
1967	claims and expenses reasonably expected to result from a 50-year
1968	70-year probable maximum loss event without with resort to any
1969	regular or emergency assessments, long-term debt, state
1970	revenues, or other funding sources. For policies in the high-
1971	risk account issued or renewed in 2008 and 2009, 2010, 2011,
1972	2012, and 2013, the rate must be based upon a 60-year, 70-year,
1973	80-year, 90-year, an 85-year and 100-year probable maximum loss
1974	event, respectively.
1975	b.  It is the intent of the Legislature to reaffirm the
1976	requirement of rate adequacy in the residual market. Recognizing
1977	that rates may comply with the intent expressed in sub-
1978	subparagraph a. and yet be inadequate and recognizing the public
1979	need to limit subsidies within the residual market, it is the
1980	further intent of the Legislature to establish statutory
1981	standards for rate adequacy. Such standards are intended to
1982	supplement the standard specified in s. 627.062(2)(e)3.,
1983	providing that rates are inadequate if they are clearly
1984	insufficient to sustain projected losses and expenses in the
1985	class of business to which they apply.
1986	2.  For each county, the average rates of the corporation
1987	for each line of business for personal lines residential
1988	policies excluding rates for wind-only policies shall be no
1989	lower than the average rates charged by the insurer that had the
1990	highest average rate in that county among the 20 insurers with
1991	the greatest total direct written premium in the state for that
1992	line of business in the preceding year, except that with respect
1993	to mobile home coverages, the average rates of the corporation
1994	shall be no lower than the average rates charged by the insurer
1995	that had the highest average rate in that county among the 5
1996	insurers with the greatest total written premium for mobile home
1997	owner's policies in the state in the preceding year.
1998	2.3.  Rates for personal lines residential wind-only
1999	policies must be actuarially adequate sound and not competitive
2000	with approved rates charged by authorized insurers. If the
2001	filing under this subparagraph is made at least 90 days before
2002	the proposed effective date and the filing is not implemented
2003	during the office's review of the filing and any proceeding and
2004	judicial review, such filing shall be considered a "file and
2005	use" filing. In such case, the office shall finalize its review
2006	by issuance of a notice of intent to approve or a notice of
2007	intent to disapprove within 90 days after receipt of the filing.
2008	The notice of intent to approve and the notice of intent to
2009	disapprove constitute agency action for purposes of the
2010	Administrative Procedure Act. Requests for supporting
2011	information, requests for mathematical or mechanical
2012	corrections, or notification to the insurer by the office of its
2013	preliminary findings shall not toll the 90-day period during any
2014	such proceedings and subsequent judicial review. The rate shall
2015	be deemed approved if the office does not issue a notice of
2016	intent to approve or a notice of intent to disapprove within 90
2017	days after receipt of the filing. Corporation rate manuals shall
2018	include a rate surcharge for seasonal occupancy. To ensure that
2019	personal lines residential wind-only rates are not competitive
2020	with approved rates charged by authorized insurers, the
2021	corporation, in conjunction with the office, shall develop a
2022	wind-only ratemaking methodology, which methodology shall be
2023	contained in each rate filing made by the corporation with the
2024	office. If the office determines that the wind-only rates or
2025	rating factors filed by the corporation fail to comply with the
2026	wind-only ratemaking methodology provided for in this
2027	subsection, it shall so notify the corporation and require the
2028	corporation to amend its rates or rating factors to come into
2029	compliance within 90 days of notice from the office.
2030	4.  The requirements of this paragraph that rates not be
2031	competitive with approved rates charged by authorized insurers
2032	do not apply in a county or area for which the office determines
2033	that no authorized insurer is offering coverage. The corporation
2034	shall amend its rates or rating factors for the affected county
2035	or area in conjunction with its next rate filing after such
2036	determination is made.
2037	5.  For the purposes of establishing a pilot program to
2038	evaluate issues relating to the availability and affordability
2039	of insurance in an area where historically there has been little
2040	market competition, the provisions of subparagraph 2. do not
2041	apply to coverage provided by the corporation in Monroe County
2042	if the office determines that a reasonable degree of competition
2043	does not exist for personal lines residential policies. The
2044	provisions of subparagraph 3. do not apply to coverage provided
2045	by the corporation in Monroe County if the office determines
2046	that a reasonable degree of competition does not exist for
2047	personal lines residential policies in the area of that county
2048	which is eligible for wind-only coverage. In this county, the
2049	rates for personal lines residential coverage shall be
2050	actuarially sound and not excessive, inadequate, or unfairly
2051	discriminatory and are subject to the other provisions of the
2052	paragraph and s. 627.062. The commission shall adopt rules
2053	establishing the criteria for determining whether a reasonable
2054	degree of competition exists for personal lines residential
2055	policies in Monroe County. By March 1, 2006, the office shall
2056	submit a report to the Legislature providing an evaluation of
2057	the implementation of the pilot program affecting Monroe County.
2058	6.  Rates for commercial lines coverage shall not be
2059	subject to the requirements of subparagraph 2., but shall be
2060	subject to all other requirements of this paragraph and s.
2061	627.062.
2062	3.7.  Nothing in this paragraph shall require or allow the
2063	corporation to adopt a rate that is inadequate under s. 627.062.
2064	4.8.  The corporation shall certify to the office at least
2065	twice annually that its personal lines rates comply with the
2066	requirements of subparagraphs 1. and, 2., and 3. If any
2067	adjustment in the rates or rating factors of the corporation is
2068	necessary to ensure such compliance, the corporation shall make
2069	and implement such adjustments and file its revised rates and
2070	rating factors with the office. If the office thereafter
2071	determines that the revised rates and rating factors fail to
2072	comply with the provisions of subparagraphs 1. and, 2., and 3.,
2073	it shall notify the corporation and require the corporation to
2074	amend its rates or rating factors in conjunction with its next
2075	rate filing. The office must notify the corporation by
2076	electronic means of any rate filing it approves for any insurer
2077	among the insurers referred to in subparagraph 2.
2078	5.9.  In addition to the rates otherwise determined
2079	pursuant to this paragraph, the corporation shall impose and
2080	collect an amount equal to the premium tax provided for in s.
2081	624.509 to augment the financial resources of the corporation.
2082	6.10.  The corporation shall develop a notice to
2083	policyholders or applicants that the rates of Citizens Property
2084	Insurance Corporation are intended to be higher than the rates
2085	of any admitted carrier and providing other information the
2086	corporation deems necessary to assist consumers in finding other
2087	voluntary admitted insurers willing to insure their property.
2088	7.11.  After the public hurricane loss-projection model
2089	under s. 627.06281 has been found to be accurate and reliable by
2090	the Florida Commission on Hurricane Loss Projection Methodology,
2091	that model shall serve as the minimum benchmark for determining
2092	the windstorm portion of the corporation's rates. This
2093	subparagraph does not require or allow the corporation to adopt
2094	rates lower than the rates otherwise required or allowed by this
2095	paragraph.
2096	8.  Except as provided in subparagraph 9., the rate filings
2097	for the corporation which were approved by the office and which
2098	took effect January 1, 2007, are rescinded. As soon as possible,
2099	the corporation shall begin using the rates that were in effect
2100	on December 31, 2006, and shall provide refunds to policyholders
2101	who have paid higher rates as a result of those rate filings.
2102	The rates in effect on December 31, 2006, shall remain in effect
2103	for the 2007 calendar year. The next rate change shall take
2104	effect January 1, 2008, pursuant to a new rate filing
2105	recommended by the corporation and approved by the office,
2106	subject to the requirements of this paragraph.
2107	9.  Through December 31, 2007, the corporation shall use
2108	the lower territorial rates for the hurricane portion of the
2109	rates for high-risk account homeowners (HO3) policies approved
2110	for use by the office in Monroe County beginning January 1,
2111	2007. Nothing in subparagraph 8. is intended to prevent the
2112	corporation from implementing prior to January 1, 2008, rates
2113	pursuant to subparagraph 1. that are lower than rates in effect
2114	on December 31, 2006, including by territory, coverage, and
2115	mitigation factors and other discounts. Prior to January 1,
2116	2008, such lower rates shall be determined to meet the
2117	requirements of subparagraph 1. by comparing such lower rates to
2118	the rates in effect on December 31, 2006.
2119	(n)  If coverage in an account is deactivated pursuant to
2120	paragraph (o)(f), coverage through the corporation shall be
2121	reactivated by order of the office only under one of the
2122	following circumstances:
2123	1.  If the market assistance plan receives a minimum of 100
2124	applications for coverage within a 3-month period, or 200
2125	applications for coverage within a 1-year period or less for
2126	residential coverage, unless the market assistance plan provides
2127	a quotation from admitted carriers at their filed rates for at
2128	least 90 percent of such applicants. Any market assistance plan
2129	application that is rejected because an individual risk is so
2130	hazardous as to be uninsurable using the criteria specified in
2131	subparagraph (c)9.8. shall not be included in the minimum
2132	percentage calculation provided herein. In the event that there
2133	is a legal or administrative challenge to a determination by the
2134	office that the conditions of this subparagraph have been met
2135	for eligibility for coverage in the corporation, any eligible
2136	risk may obtain coverage during the pendency of such challenge.
2137	2.  In response to a state of emergency declared by the
2138	Governor under s. 252.36, the office may activate coverage by
2139	order for the period of the emergency upon a finding by the
2140	office that the emergency significantly affects the availability
2141	of residential property insurance.
2142	(o)1.  The corporation shall file with the office quarterly
2143	statements of financial condition, an annual statement of
2144	financial condition, and audited financial statements in the
2145	manner prescribed by law. In addition, the corporation shall
2146	report to the office monthly on the types, premium, exposure,
2147	and distribution by county of its policies in force, and shall
2148	submit other reports as the office requires to carry out its
2149	oversight of the corporation.
2150	2.  The activities of the corporation shall be reviewed at
2151	least annually by the office to determine whether coverage shall
2152	be deactivated in an account on the basis that the conditions
2153	giving rise to its activation no longer exist.
2154	(p)1.  The corporation shall certify to the office its
2155	needs for annual assessments as to a particular calendar year,
2156	and for any interim assessments that it deems to be necessary to
2157	sustain operations as to a particular year pending the receipt
2158	of annual assessments. Upon verification, the office shall
2159	approve such certification, and the corporation shall levy such
2160	annual or interim assessments. Such assessments shall be
2161	prorated as provided in paragraph (b). The corporation shall
2162	take all reasonable and prudent steps necessary to collect the
2163	amount of assessment due from each assessable insurer,
2164	including, if prudent, filing suit to collect such assessment.
2165	If the corporation is unable to collect an assessment from any
2166	assessable insurer, the uncollected assessments shall be levied
2167	as an additional assessment against the assessable insurers and
2168	any assessable insurer required to pay an additional assessment
2169	as a result of such failure to pay shall have a cause of action
2170	against such nonpaying assessable insurer. Assessments shall be
2171	included as an appropriate factor in the making of rates. The
2172	failure of a surplus lines agent to collect and remit any
2173	regular or emergency assessment levied by the corporation is
2174	considered to be a violation of s. 626.936 and subjects the
2175	surplus lines agent to the penalties provided in that section.
2176	2.  The governing body of any unit of local government, any
2177	residents of which are insured by the corporation, may issue
2178	bonds as defined in s. 125.013 or s. 166.101 from time to time
2179	to fund an assistance program, in conjunction with the
2180	corporation, for the purpose of defraying deficits of the
2181	corporation. In order to avoid needless and indiscriminate
2182	proliferation, duplication, and fragmentation of such assistance
2183	programs, any unit of local government, any residents of which
2184	are insured by the corporation, may provide for the payment of
2185	losses, regardless of whether or not the losses occurred within
2186	or outside of the territorial jurisdiction of the local
2187	government. Revenue bonds under this subparagraph may not be
2188	issued until validated pursuant to chapter 75, unless a state of
2189	emergency is declared by executive order or proclamation of the
2190	Governor pursuant to s. 252.36 making such findings as are
2191	necessary to determine that it is in the best interests of, and
2192	necessary for, the protection of the public health, safety, and
2193	general welfare of residents of this state and declaring it an
2194	essential public purpose to permit certain municipalities or
2195	counties to issue such bonds as will permit relief to claimants
2196	and policyholders of the corporation. Any such unit of local
2197	government may enter into such contracts with the corporation
2198	and with any other entity created pursuant to this subsection as
2199	are necessary to carry out this paragraph. Any bonds issued
2200	under this subparagraph shall be payable from and secured by
2201	moneys received by the corporation from emergency assessments
2202	under sub-subparagraph (b)3.d., and assigned and pledged to or
2203	on behalf of the unit of local government for the benefit of the
2204	holders of such bonds. The funds, credit, property, and taxing
2205	power of the state or of the unit of local government shall not
2206	be pledged for the payment of such bonds. If any of the bonds
2207	remain unsold 60 days after issuance, the office shall require
2208	all insurers subject to assessment to purchase the bonds, which
2209	shall be treated as admitted assets; each insurer shall be
2210	required to purchase that percentage of the unsold portion of
2211	the bond issue that equals the insurer's relative share of
2212	assessment liability under this subsection. An insurer shall not
2213	be required to purchase the bonds to the extent that the office
2214	determines that the purchase would endanger or impair the
2215	solvency of the insurer.
2216	3.a.  The corporation shall adopt one or more programs
2217	subject to approval by the office for the reduction of both new
2218	and renewal writings in the corporation. Beginning January 1,
2219	2008, any program the corporation adopts for the payment of
2220	bonuses to an insurer for each risk the insurer removes from the
2221	corporation shall comply with s. 627.3511(2) and may not exceed
2222	the amount referenced in s. 627.3511(2) for each risk removed.
2223	The corporation may consider any prudent and not unfairly
2224	discriminatory approach to reducing corporation writings, and
2225	may adopt a credit against assessment liability or other
2226	liability that provides an incentive for insurers to take risks
2227	out of the corporation and to keep risks out of the corporation
2228	by maintaining or increasing voluntary writings in counties or
2229	areas in which corporation risks are highly concentrated and a
2230	program to provide a formula under which an insurer voluntarily
2231	taking risks out of the corporation by maintaining or increasing
2232	voluntary writings will be relieved wholly or partially from
2233	assessments under sub-subparagraphs (b)3.a. and b. However, any
2234	"take-out bonus" or payment to an insurer must be conditioned on
2235	the property being insured for at least 5 years by the insurer,
2236	unless canceled or nonrenewed by the policyholder. If the policy
2237	is canceled or nonrenewed by the policyholder before the end of
2238	the 5-year period, the amount of the take-out bonus must be
2239	prorated for the time period the policy was insured. When the
2240	corporation enters into a contractual agreement for a take-out
2241	plan, the producing agent of record of the corporation policy is
2242	entitled to retain any unearned commission on such policy, and
2243	the insurer shall either:
2244	(I)  Pay to the producing agent of record of the policy,
2245	for the first year, an amount which is the greater of the
2246	insurer's usual and customary commission for the type of policy
2247	written or a policy fee equal to the usual and customary
2248	commission of the corporation; or
2249	(II)  Offer to allow the producing agent of record of the
2250	policy to continue servicing the policy for a period of not less
2251	than 1 year and offer to pay the agent the insurer's usual and
2252	customary commission for the type of policy written. If the
2253	producing agent is unwilling or unable to accept appointment by
2254	the new insurer, the new insurer shall pay the agent in
2255	accordance with sub-sub-subparagraph (I).
2256	b.  Any credit or exemption from regular assessments
2257	adopted under this subparagraph shall last no longer than the 3
2258	years following the cancellation or expiration of the policy by
2259	the corporation. With the approval of the office, the board may
2260	extend such credits for an additional year if the insurer
2261	guarantees an additional year of renewability for all policies
2262	removed from the corporation, or for 2 additional years if the
2263	insurer guarantees 2 additional years of renewability for all
2264	policies so removed.
2265	c.  There shall be no credit, limitation, exemption, or
2266	deferment from emergency assessments to be collected from
2267	policyholders pursuant to sub-subparagraph (b)3.d.
2268	4.  The plan shall provide for the deferment, in whole or
2269	in part, of the assessment of an assessable insurer, other than
2270	an emergency assessment collected from policyholders pursuant to
2271	sub-subparagraph (b)3.d., if the office finds that payment of
2272	the assessment would endanger or impair the solvency of the
2273	insurer. In the event an assessment against an assessable
2274	insurer is deferred in whole or in part, the amount by which
2275	such assessment is deferred may be assessed against the other
2276	assessable insurers in a manner consistent with the basis for
2277	assessments set forth in paragraph (b).
2278	5.  Effective July 1, 2007, in order to evaluate the costs
2279	and benefits of approved take-out plans, if the corporation pays
2280	a bonus or other payment to an insurer for an approved take-out
2281	plan, it shall maintain a record of the address or such other
2282	identifying information on the property or risk removed in order
2283	to track if and when the property or risk is later insured by
2284	the corporation.
2285	(q)  Nothing in this subsection shall be construed to
2286	preclude the issuance of residential property insurance coverage
2287	pursuant to part VIII of chapter 626.
2288	(r)  There shall be no liability on the part of, and no
2289	cause of action of any nature shall arise against, any
2290	assessable insurer or its agents or employees, the corporation
2291	or its agents or employees, members of the board of governors or
2292	their respective designees at a board meeting, corporation
2293	committee members, or the office or its representatives, for any
2294	action taken by them in the performance of their duties or
2295	responsibilities under this subsection. Such immunity does not
2296	apply to:
2297	1.  Any of the foregoing persons or entities for any
2298	willful tort;
2299	2.  The corporation or its producing agents for breach of
2300	any contract or agreement pertaining to insurance coverage;
2301	3.  The corporation with respect to issuance or payment of
2302	debt; or
2303	4.  Any assessable insurer with respect to any action to
2304	enforce an assessable insurer's obligations to the corporation
2305	under this subsection.
2306	(s)  For the purposes of s. 199.183(1), the corporation
2307	shall be considered a political subdivision of the state and
2308	shall be exempt from the corporate income tax. The premiums,
2309	assessments, investment income, and other revenue of the
2310	corporation are funds received for providing property insurance
2311	coverage as required by this subsection, paying claims for
2312	Florida citizens insured by the corporation, securing and
2313	repaying debt obligations issued by the corporation, and
2314	conducting all other activities of the corporation, and shall
2315	not be considered taxes, fees, licenses, or charges for services
2316	imposed by the Legislature on individuals, businesses, or
2317	agencies outside state government. Bonds and other debt
2318	obligations issued by or on behalf of the corporation are not to
2319	be considered "state bonds" within the meaning of s. 215.58(8).
2320	The corporation is not subject to the procurement provisions of
2321	chapter 287, and policies and decisions of the corporation
2322	relating to incurring debt, levying of assessments and the sale,
2323	issuance, continuation, terms and claims under corporation
2324	policies, and all services relating thereto, are not subject to
2325	the provisions of chapter 120. The corporation is not required
2326	to obtain or to hold a certificate of authority issued by the
2327	office, nor is it required to participate as a member insurer of
2328	the Florida Insurance Guaranty Association. However, the
2329	corporation is required to pay, in the same manner as an
2330	authorized insurer, assessments pledged by the Florida Insurance
2331	Guaranty Association to secure bonds issued or other
2332	indebtedness incurred to pay covered claims arising from insurer
2333	insolvencies caused by, or proximately related to, hurricane
2334	losses. It is the intent of the Legislature that the tax
2335	exemptions provided in this paragraph will augment the financial
2336	resources of the corporation to better enable the corporation to
2337	fulfill its public purposes. Any debt obligations issued by the
2338	corporation, their transfer, and the income therefrom, including
2339	any profit made on the sale thereof, shall at all times be free
2340	from taxation of every kind by the state and any political
2341	subdivision or local unit or other instrumentality thereof;
2342	however, this exemption does not apply to any tax imposed by
2343	chapter 220 on interest, income, or profits on debt obligations
2344	owned by corporations other than the corporation.
2345	(t)  Upon a determination by the office that the conditions
2346	giving rise to the establishment and activation of the
2347	corporation no longer exist, the corporation is dissolved. Upon
2348	dissolution, the assets of the corporation shall be applied
2349	first to pay all debts, liabilities, and obligations of the
2350	corporation, including the establishment of reasonable reserves
2351	for any contingent liabilities or obligations, and all remaining
2352	assets of the corporation shall become property of the state and
2353	shall be deposited in the Florida Hurricane Catastrophe Fund.
2354	However, no dissolution shall take effect as long as the
2355	corporation has bonds or other financial obligations outstanding
2356	unless adequate provision has been made for the payment of the
2357	bonds or other financial obligations pursuant to the documents
2358	authorizing the issuance of the bonds or other financial
2359	obligations.
2360	(u)1.  Effective July 1, 2002, policies of the Residential
2361	Property and Casualty Joint Underwriting Association shall
2362	become policies of the corporation. All obligations, rights,
2363	assets and liabilities of the Residential Property and Casualty
2364	Joint Underwriting Association, including bonds, note and debt
2365	obligations, and the financing documents pertaining to them
2366	become those of the corporation as of July 1, 2002. The
2367	corporation is not required to issue endorsements or
2368	certificates of assumption to insureds during the remaining term
2369	of in-force transferred policies.
2370	2.  Effective July 1, 2002, policies of the Florida
2371	Windstorm Underwriting Association are transferred to the
2372	corporation and shall become policies of the corporation. All
2373	obligations, rights, assets, and liabilities of the Florida
2374	Windstorm Underwriting Association, including bonds, note and
2375	debt obligations, and the financing documents pertaining to them
2376	are transferred to and assumed by the corporation on July 1,
2377	2002. The corporation is not required to issue endorsements or
2378	certificates of assumption to insureds during the remaining term
2379	of in-force transferred policies.
2380	3.  The Florida Windstorm Underwriting Association and the
2381	Residential Property and Casualty Joint Underwriting Association
2382	shall take all actions as may be proper to further evidence the
2383	transfers and shall provide the documents and instruments of
2384	further assurance as may reasonably be requested by the
2385	corporation for that purpose. The corporation shall execute
2386	assumptions and instruments as the trustees or other parties to
2387	the financing documents of the Florida Windstorm Underwriting
2388	Association or the Residential Property and Casualty Joint
2389	Underwriting Association may reasonably request to further
2390	evidence the transfers and assumptions, which transfers and
2391	assumptions, however, are effective on the date provided under
2392	this paragraph whether or not, and regardless of the date on
2393	which, the assumptions or instruments are executed by the
2394	corporation. Subject to the relevant financing documents
2395	pertaining to their outstanding bonds, notes, indebtedness, or
2396	other financing obligations, the moneys, investments,
2397	receivables, choses in action, and other intangibles of the
2398	Florida Windstorm Underwriting Association shall be credited to
2399	the high-risk account of the corporation, and those of the
2400	personal lines residential coverage account and the commercial
2401	lines residential coverage account of the Residential Property
2402	and Casualty Joint Underwriting Association shall be credited to
2403	the personal lines account and the commercial lines account,
2404	respectively, of the corporation.
2405	4.  Effective July 1, 2002, a new applicant for property
2406	insurance coverage who would otherwise have been eligible for
2407	coverage in the Florida Windstorm Underwriting Association is
2408	eligible for coverage from the corporation as provided in this
2409	subsection.
2410	5.  The transfer of all policies, obligations, rights,
2411	assets, and liabilities from the Florida Windstorm Underwriting
2412	Association to the corporation and the renaming of the
2413	Residential Property and Casualty Joint Underwriting Association
2414	as the corporation shall in no way affect the coverage with
2415	respect to covered policies as defined in s. 215.555(2)(c)
2416	provided to these entities by the Florida Hurricane Catastrophe
2417	Fund. The coverage provided by the Florida Hurricane Catastrophe
2418	Fund to the Florida Windstorm Underwriting Association based on
2419	its exposures as of June 30, 2002, and each June 30 thereafter
2420	shall be redesignated as coverage for the high-risk account of
2421	the corporation. Notwithstanding any other provision of law, the
2422	coverage provided by the Florida Hurricane Catastrophe Fund to
2423	the Residential Property and Casualty Joint Underwriting
2424	Association based on its exposures as of June 30, 2002, and each
2425	June 30 thereafter shall be transferred to the personal lines
2426	account and the commercial lines account of the corporation.
2427	Notwithstanding any other provision of law, the high-risk
2428	account shall be treated, for all Florida Hurricane Catastrophe
2429	Fund purposes, as if it were a separate participating insurer
2430	with its own exposures, reimbursement premium, and loss
2431	reimbursement. Likewise, the personal lines and commercial lines
2432	accounts shall be viewed together, for all Florida Hurricane
2433	Catastrophe Fund purposes, as if the two accounts were one and
2434	represent a single, separate participating insurer with its own
2435	exposures, reimbursement premium, and loss reimbursement. The
2436	coverage provided by the Florida Hurricane Catastrophe Fund to
2437	the corporation shall constitute and operate as a full transfer
2438	of coverage from the Florida Windstorm Underwriting Association
2439	and Residential Property and Casualty Joint Underwriting to the
2440	corporation.
2441	(v)  Notwithstanding any other provision of law:
2442	1.  The pledge or sale of, the lien upon, and the security
2443	interest in any rights, revenues, or other assets of the
2444	corporation created or purported to be created pursuant to any
2445	financing documents to secure any bonds or other indebtedness of
2446	the corporation shall be and remain valid and enforceable,
2447	notwithstanding the commencement of and during the continuation
2448	of, and after, any rehabilitation, insolvency, liquidation,
2449	bankruptcy, receivership, conservatorship, reorganization, or
2450	similar proceeding against the corporation under the laws of
2451	this state.
2452	2.  No such proceeding shall relieve the corporation of its
2453	obligation, or otherwise affect its ability to perform its
2454	obligation, to continue to collect, or levy and collect,
2455	assessments, market equalization or other surcharges under
2456	subparagraph (c)11.10., or any other rights, revenues, or other
2457	assets of the corporation pledged pursuant to any financing
2458	documents.
2459	3.  Each such pledge or sale of, lien upon, and security
2460	interest in, including the priority of such pledge, lien, or
2461	security interest, any such assessments, market equalization or
2462	other surcharges, or other rights, revenues, or other assets
2463	which are collected, or levied and collected, after the
2464	commencement of and during the pendency of, or after, any such
2465	proceeding shall continue unaffected by such proceeding. As used
2466	in this subsection, the term "financing documents" means any
2467	agreement or agreements, instrument or instruments, or other
2468	document or documents now existing or hereafter created
2469	evidencing any bonds or other indebtedness of the corporation or
2470	pursuant to which any such bonds or other indebtedness has been
2471	or may be issued and pursuant to which any rights, revenues, or
2472	other assets of the corporation are pledged or sold to secure
2473	the repayment of such bonds or indebtedness, together with the
2474	payment of interest on such bonds or such indebtedness, or the
2475	payment of any other obligation or financial product, as defined
2476	in the plan of operation of the corporation related to such
2477	bonds or indebtedness.
2478	4.  Any such pledge or sale of assessments, revenues,
2479	contract rights, or other rights or assets of the corporation
2480	shall constitute a lien and security interest, or sale, as the
2481	case may be, that is immediately effective and attaches to such
2482	assessments, revenues, or contract rights or other rights or
2483	assets, whether or not imposed or collected at the time the
2484	pledge or sale is made. Any such pledge or sale is effective,
2485	valid, binding, and enforceable against the corporation or other
2486	entity making such pledge or sale, and valid and binding against
2487	and superior to any competing claims or obligations owed to any
2488	other person or entity, including policyholders in this state,
2489	asserting rights in any such assessments, revenues, or contract
2490	rights or other rights or assets to the extent set forth in and
2491	in accordance with the terms of the pledge or sale contained in
2492	the applicable financing documents, whether or not any such
2493	person or entity has notice of such pledge or sale and without
2494	the need for any physical delivery, recordation, filing, or
2495	other action.
2496	5.  As long as the corporation has any bonds outstanding,
2497	the corporation may not file a voluntary petition under chapter
2498	9 of the federal Bankruptcy Code or such corresponding chapter
2499	or sections as may be in effect, from time to time, and a public
2500	officer or any organization, entity, or other person may not
2501	authorize the corporation to be or become a debtor under chapter
2502	9 of the federal Bankruptcy Code or such corresponding chapter
2503	or sections as may be in effect, from time to time, during any
2504	such period.
2505	6.  If ordered by a court of competent jurisdiction, the
2506	corporation may assume policies or otherwise provide coverage
2507	for policyholders of an insurer placed in liquidation under
2508	chapter 631, under such forms, rates, terms, and conditions as
2509	the corporation deems appropriate, subject to approval by the
2510	office.
2511	(w)1.  The following records of the corporation are
2512	confidential and exempt from the provisions of s. 119.07(1) and
2513	s. 24(a), Art. I of the State Constitution:
2514	a.  Underwriting files, except that a policyholder or an
2515	applicant shall have access to his or her own underwriting
2516	files.
2517	b.  Claims files, until termination of all litigation and
2518	settlement of all claims arising out of the same incident,
2519	although portions of the claims files may remain exempt, as
2520	otherwise provided by law. Confidential and exempt claims file
2521	records may be released to other governmental agencies upon
2522	written request and demonstration of need; such records held by
2523	the receiving agency remain confidential and exempt as provided
2524	for herein.
2525	c.  Records obtained or generated by an internal auditor
2526	pursuant to a routine audit, until the audit is completed, or if
2527	the audit is conducted as part of an investigation, until the
2528	investigation is closed or ceases to be active. An investigation
2529	is considered "active" while the investigation is being
2530	conducted with a reasonable, good faith belief that it could
2531	lead to the filing of administrative, civil, or criminal
2532	proceedings.
2533	d.  Matters reasonably encompassed in privileged attorney-
2534	client communications.
2535	e.  Proprietary information licensed to the corporation
2536	under contract and the contract provides for the confidentiality
2537	of such proprietary information.
2538	f.  All information relating to the medical condition or
2539	medical status of a corporation employee which is not relevant
2540	to the employee's capacity to perform his or her duties, except
2541	as otherwise provided in this paragraph. Information which is
2542	exempt shall include, but is not limited to, information
2543	relating to workers' compensation, insurance benefits, and
2544	retirement or disability benefits.
2545	g.  Upon an employee's entrance into the employee
2546	assistance program, a program to assist any employee who has a
2547	behavioral or medical disorder, substance abuse problem, or
2548	emotional difficulty which affects the employee's job
2549	performance, all records relative to that participation shall be
2550	confidential and exempt from the provisions of s. 119.07(1) and
2551	s. 24(a), Art. I of the State Constitution, except as otherwise
2552	provided in s. 112.0455(11).
2553	h.  Information relating to negotiations for financing,
2554	reinsurance, depopulation, or contractual services, until the
2555	conclusion of the negotiations.
2556	i.  Minutes of closed meetings regarding underwriting
2557	files, and minutes of closed meetings regarding an open claims
2558	file until termination of all litigation and settlement of all
2559	claims with regard to that claim, except that information
2560	otherwise confidential or exempt by law will be redacted.
2561
2562	When an authorized insurer is considering underwriting a risk
2563	insured by the corporation, relevant underwriting files and
2564	confidential claims files may be released to the insurer
2565	provided the insurer agrees in writing, notarized and under
2566	oath, to maintain the confidentiality of such files. When a file
2567	is transferred to an insurer that file is no longer a public
2568	record because it is not held by an agency subject to the
2569	provisions of the public records law. Underwriting files and
2570	confidential claims files may also be released to staff of and
2571	the board of governors of the market assistance plan established
2572	pursuant to s. 627.3515, who must retain the confidentiality of
2573	such files, except such files may be released to authorized
2574	insurers that are considering assuming the risks to which the
2575	files apply, provided the insurer agrees in writing, notarized
2576	and under oath, to maintain the confidentiality of such files.
2577	Finally, the corporation or the board or staff of the market
2578	assistance plan may make the following information obtained from
2579	underwriting files and confidential claims files available to
2580	licensed general lines insurance agents: name, address, and
2581	telephone number of the residential property owner or insured;
2582	location of the risk; rating information; loss history; and
2583	policy type. The receiving licensed general lines insurance
2584	agent must retain the confidentiality of the information
2585	received.
2586	2.  Portions of meetings of the corporation are exempt from
2587	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2588	Constitution wherein confidential underwriting files or
2589	confidential open claims files are discussed. All portions of
2590	corporation meetings which are closed to the public shall be
2591	recorded by a court reporter. The court reporter shall record
2592	the times of commencement and termination of the meeting, all
2593	discussion and proceedings, the names of all persons present at
2594	any time, and the names of all persons speaking. No portion of
2595	any closed meeting shall be off the record. Subject to the
2596	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2597	notes of any closed meeting shall be retained by the corporation
2598	for a minimum of 5 years. A copy of the transcript, less any
2599	exempt matters, of any closed meeting wherein claims are
2600	discussed shall become public as to individual claims after
2601	settlement of the claim.
2602	(x)  It is the intent of the Legislature that the
2603	amendments to this subsection enacted in 2002 should, over time,
2604	reduce the probable maximum windstorm losses in the residual
2605	markets and should reduce the potential assessments to be levied
2606	on property insurers and policyholders statewide. In furtherance
2607	of this intent:
2608	1.  The board shall, on or before February 1 of each year,
2609	provide a report to the President of the Senate and the Speaker
2610	of the House of Representatives showing the reduction or
2611	increase in the 100-year probable maximum loss attributable to
2612	wind-only coverages and the quota share program under this
2613	subsection combined, as compared to the benchmark 100-year
2614	probable maximum loss of the Florida Windstorm Underwriting
2615	Association. For purposes of this paragraph, the benchmark 100-
2616	year probable maximum loss of the Florida Windstorm Underwriting
2617	Association shall be the calculation dated February 2001 and
2618	based on November 30, 2000, exposures. In order to ensure
2619	comparability of data, the board shall use the same methods for
2620	calculating its probable maximum loss as were used to calculate
2621	the benchmark probable maximum loss.
2622	2.  Beginning February 1, 2010, if the report under
2623	subparagraph 1. for any year indicates that the 100-year
2624	probable maximum loss attributable to wind-only coverages and
2625	the quota share program combined does not reflect a reduction of
2626	at least 25 percent from the benchmark, the board shall reduce
2627	the boundaries of the high-risk area eligible for wind-only
2628	coverages under this subsection in a manner calculated to reduce
2629	such probable maximum loss to an amount at least 25 percent
2630	below the benchmark.
2631	3.  Beginning February 1, 2015, if the report under
2632	subparagraph 1. for any year indicates that the 100-year
2633	probable maximum loss attributable to wind-only coverages and
2634	the quota share program combined does not reflect a reduction of
2635	at least 50 percent from the benchmark, the boundaries of the
2636	high-risk area eligible for wind-only coverages under this
2637	subsection shall be reduced by the elimination of any area that
2638	is not seaward of a line 1,000 feet inland from the Intracoastal
2639	Waterway.
2640	(y)  In enacting the provisions of this section, the
2641	Legislature recognizes that both the Florida Windstorm
2642	Underwriting Association and the Residential Property and
2643	Casualty Joint Underwriting Association have entered into
2644	financing arrangements that obligate each entity to service its
2645	debts and maintain the capacity to repay funds secured under
2646	these financing arrangements. It is the intent of the
2647	Legislature that nothing in this section be construed to
2648	compromise, diminish, or interfere with the rights of creditors
2649	under such financing arrangements. It is further the intent of
2650	the Legislature to preserve the obligations of the Florida
2651	Windstorm Underwriting Association and Residential Property and
2652	Casualty Joint Underwriting Association with regard to
2653	outstanding financing arrangements, with such obligations
2654	passing entirely and unchanged to the corporation and,
2655	specifically, to the applicable account of the corporation. So
2656	long as any bonds, notes, indebtedness, or other financing
2657	obligations of the Florida Windstorm Underwriting Association or
2658	the Residential Property and Casualty Joint Underwriting
2659	Association are outstanding, under the terms of the financing
2660	documents pertaining to them, the governing board of the
2661	corporation shall have and shall exercise the authority to levy,
2662	charge, collect, and receive all premiums, assessments,
2663	surcharges, charges, revenues, and receipts that the
2664	associations had authority to levy, charge, collect, or receive
2665	under the provisions of subsection (2) and this subsection,
2666	respectively, as they existed on January 1, 2002, to provide
2667	moneys, without exercise of the authority provided by this
2668	subsection, in at least the amounts, and by the times, as would
2669	be provided under those former provisions of subsection (2) or
2670	this subsection, respectively, so that the value, amount, and
2671	collectability of any assets, revenues, or revenue source
2672	pledged or committed to, or any lien thereon securing such
2673	outstanding bonds, notes, indebtedness, or other financing
2674	obligations will not be diminished, impaired, or adversely
2675	affected by the amendments made by this act and to permit
2676	compliance with all provisions of financing documents pertaining
2677	to such bonds, notes, indebtedness, or other financing
2678	obligations, or the security or credit enhancement for them, and
2679	any reference in this subsection to bonds, notes, indebtedness,
2680	financing obligations, or similar obligations, of the
2681	corporation shall include like instruments or contracts of the
2682	Florida Windstorm Underwriting Association and the Residential
2683	Property and Casualty Joint Underwriting Association to the
2684	extent not inconsistent with the provisions of the financing
2685	documents pertaining to them.
2686	(z)  The corporation shall not require the securing of
2687	flood insurance as a condition of coverage if the insured or
2688	applicant executes a form approved by the office affirming that
2689	flood insurance is not provided by the corporation and that if
2690	flood insurance is not secured by the applicant or insured in
2691	addition to coverage by the corporation, the risk will not be
2692	covered for flood damage. A corporation policyholder electing
2693	not to secure flood insurance and executing a form as provided
2694	herein making a claim for water damage against the corporation
2695	shall have the burden of proving the damage was not caused by
2696	flooding. Notwithstanding other provisions of this subsection,
2697	the corporation may deny coverage to an applicant or insured who
2698	refuses to execute the form described herein.
2699	(aa)  A salaried employee of the corporation who performs
2700	policy administration services subsequent to the effectuation of
2701	a corporation policy is not required to be licensed as an agent
2702	under the provisions of s. 626.112.
2703	(bb)  By February 1, 2007, the corporation shall submit a
2704	report to the President of the Senate, the Speaker of the House
2705	of Representatives, the minority party leaders of the Senate and
2706	the House of Representatives, and the chairs of the standing
2707	committees of the Senate and the House of Representatives having
2708	jurisdiction over matters relating to property and casualty
2709	insurance. In preparing the report, the corporation shall
2710	consult with the Office of Insurance Regulation, the Department
2711	of Financial Services, and any other party the corporation
2712	determines appropriate. The report must include all findings and
2713	recommendations on the feasibility of requiring authorized
2714	insurers that issue and service personal and commercial
2715	residential policies and commercial nonresidential policies that
2716	provide coverage for basic property perils except for the peril
2717	of wind to issue and service for a fee personal and commercial
2718	residential policies and commercial nonresidential policies
2719	providing coverage for the peril of wind issued by the
2720	corporation. The report must include:
2721	1.  The expense savings to the corporation of issuing and
2722	servicing such policies as determined by a cost-benefit
2723	analysis.
2724	2.  The expenses and liability to authorized insurers
2725	associated with issuing and servicing such policies.
2726	3.  The effect on service to policyholders of the
2727	corporation relating to issuing and servicing such policies.
2728	4.  The effect on the producing agent of the corporation of
2729	issuing and servicing such policies.
2730	5.  Recommendations as to the amount of the fee which
2731	should be paid to authorized insurers for issuing and servicing
2732	such policies.
2733	6.  The effect that issuing and servicing such policies
2734	will have on the corporation's number of policies, total insured
2735	value, and probable maximum loss.
2736	(cc)  There shall be no liability on the part of, and no
2737	cause of action of any nature shall arise against, producing
2738	agents of record of the corporation or employees of such agents
2739	for insolvency of any take-out insurer.
2740	(dd)1.  For policies subject to nonrenewal as a result of
2741	the risk being no longer eligible for coverage due to being
2742	valued at $1 million or more, the corporation shall, directly or
2743	through the market assistance plan, make information from
2744	confidential underwriting and claims files of policyholders
2745	available only to licensed general lines agents who register
2746	with the corporation to receive such information according to
2747	the following procedures:
2748	2.  By August 1, 2006, the corporation shall provide such
2749	policyholders who are not eligible for renewal the opportunity
2750	to request in writing, within 30 days after the notification is
2751	sent, that information from their confidential underwriting and
2752	claims files not be released to licensed general lines agents
2753	registered pursuant to this paragraph.
2754	3.  By August 1, 2006, the corporation shall make available
2755	to licensed general lines agents the registration procedures to
2756	be used to obtain confidential information from underwriting and
2757	claims files for such policies not eligible for renewal. As a
2758	condition of registration, the corporation shall require the
2759	licensed general lines agent to attest that the agent has the
2760	experience and relationships with authorized or surplus lines
2761	carriers to attempt to offer replacement coverage for such
2762	policies.
2763	4.  By September 1, 2006, the corporation shall make
2764	available through a secured website to licensed general lines
2765	agents registered pursuant to this paragraph application,
2766	rating, loss history, mitigation, and policy type information
2767	relating to such policies not eligible for renewal and for which
2768	the policyholder has not requested the corporation withhold such
2769	information. The registered licensed general lines agent may use
2770	such information to contact and assist the policyholder in
2771	securing replacement policies, and the agent may disclose to the
2772	policyholder that such information was obtained from the
2773	corporation.
2774	(ee)  Effective June 1, 2007, all commercial nonresidential
2775	policies issued by the corporation as of May 31, 2007, shall
2776	become policies of the Property and Casualty Joint Underwriting
2777	Association created pursuant to subsection (5).
2778	Section 11.  The Department of Financial Services shall
2779	review how insurance agent commissions for the placement and
2780	renewal of property insurance policies in Citizens Property
2781	Insurance Corporation are established and applied and shall make
2782	recommendations, based on industry best practices, for standards
2783	to ensure that agent commissions are justified on a market basis
2784	based on the nature and amount of work performed by the agents.
2785	The department shall report its findings and recommendations to
2786	the Governor, the President of the Senate, and the Speaker of
2787	the House of Representatives by July 1, 2007.
2788	Section 12.  Task Force on Citizens Property Insurance
2789	Claims Handling and Resolution.--
2790	(1)  TASK FORCE CREATED.--There is created the Task Force
2791	on Citizens Property Insurance Claims Handling and Resolution.
2792	(2)  ADMINISTRATION.--The task force shall be
2793	administratively housed within the Office of the Chief Financial
2794	Officer but shall operate independently of any state officer or
2795	agency. The Office of the Chief Financial Officer shall provide
2796	such administrative support as the task force deems necessary to
2797	accomplish its mission and shall provide necessary funding for
2798	the task force within its existing resources. The Executive
2799	Office of the Governor, the Department of Financial Services,
2800	and the Office of Insurance Regulation shall provide substantive
2801	staff support for the task force.
2802	(3)  MEMBERSHIP.--The members of the task force shall be
2803	appointed as follows:
2804	(a)  The Governor shall appoint one member who is a
2805	representative of insurance consumers.
2806	(b)  The Chief Financial Officer shall appoint one member
2807	who has expertise in claims handling.
2808	(c)  The President of the Senate shall appoint one member.
2809	(d)  The Speaker of the House of Representatives shall
2810	appoint one member.
2811	(e)  The Commissioner of Insurance Regulation, or his or
2812	her designee, shall serve as an ex officio voting member of the
2813	task force.
2814	(f)  The Insurance Consumer Advocate, or his or her
2815	designee, shall serve as an ex officio voting member of the task
2816	force.
2817	(g)  The Executive Director of Citizens Property Insurance
2818	Corporation, or his or her designee, shall serve as an ex
2819	officio voting member of the task force.
2820
2821	Members of the task force shall serve without compensation but
2822	are entitled to receive reimbursement for per diem and travel
2823	expenses as provided in s. 112.061, Florida Statutes.
2824	(4)  PURPOSE AND INTENT.--The Legislature recognizes that
2825	policyholders and applicants of Citizens Property Insurance
2826	Corporation should receive the highest possible level of service
2827	and treatment. This level should never be less than the private
2828	market. The Legislature further recognizes that Citizens
2829	Property Insurance Corporation's service standards should be no
2830	less than those applied to insurers in the voluntary market with
2831	respect to responsiveness, timeliness, customer courtesy, and
2832	overall dealings with policyholders and applicants. The purpose
2833	of the task force is to make recommendations to the legislative
2834	and executive branches of this state's government relating to
2835	the handling, service, and resolution of claims by Citizens
2836	Property Insurance Corporation that are sufficient to ensure
2837	that all Citizens' policyholders and applicants in this state
2838	are able to obtain appropriate handling, service, and resolution
2839	of claims, as further described in this section.
2840	(5)  SPECIFIC ISSUES.--The task force shall conduct such
2841	research and hearings as it deems necessary to achieve the
2842	purposes specified in subsection (4) and shall develop
2843	information on relevant issues, including, but not limited to,
2844	the following:
2845	(a)  How Citizens Property Insurance Corporation can
2846	improve its customer service.
2847	(b)  How Citizens Property Insurance Corporation can
2848	improve its adjuster response time after a hurricane.
2849	(c)  How Citizens Property Insurance Corporation can
2850	efficiently use its available adjusting sources for claims.
2851	(d)  How Citizens Property Insurance Corporation can
2852	improve the time it takes to conduct damage assessments.
2853	(e)  How Citizens Property Insurance Corporation can
2854	dispose of and settle claims remaining from the 2004 and 2005
2855	hurricane seasons and can improve the time it takes to dispose
2856	of and settle claims remaining from the 2004 and 2005 hurricane
2857	seasons.
2858	(f)  How Citizens Property Insurance Corporation can
2859	improve the time it takes to dispose of and settle claims.
2860	(g)  Whether Citizens Property Insurance Corporation has
2861	hired an adequate level of permanent claims and adjusting staff
2862	in addition to outsourcing its claims-adjusting functions to
2863	independent adjusting firms.
2864	(6)  REPORTS AND RECOMMENDATIONS.--By July 1, 2007, the
2865	task force shall provide a report containing recommendations
2866	regarding the process Citizens Property Insurance Corporation
2867	should use to dispose of the claims remaining open from the 2004
2868	and 2005 hurricane seasons. By July 1, 2008, the task force
2869	shall provide a report containing findings relating to the
2870	issues identified in subsection (5) and recommendations
2871	consistent with the purposes of this section and also consistent
2872	with such findings. The report shall include recommendations
2873	regarding the process Citizens Property Insurance Corporation
2874	should use to dispose of claims. The task force shall submit the
2875	reports to the Governor, the Chief Financial Officer, the
2876	President of the Senate, and the Speaker of the House of
2877	Representatives. The task force may also submit such interim
2878	reports as it deems appropriate.
2879	(7)  ADDITIONAL ACTIVITIES.--The task force shall monitor
2880	the implementation of the provisions of chapter 2006-12, Laws of
2881	Florida, relating to the creation of the Office of Internal
2882	Auditor in Citizens Property Insurance Corporation and shall
2883	make such additional recommendations as it deems appropriate for
2884	further legislative action during the 2006-2008 legislative
2885	biennium.
2886	(8)  EXPIRATION.--The task force shall expire at the end of
2887	the 2006-2008 legislative biennium.
2888	Section 13.  Notwithstanding the provisions of s.
2889	627.351(6), Florida Statutes, the existing board of governors of
2890	Citizens Property Insurance Corporation appointed under s.
2891	627.351(6)(c)4.a., Florida Statutes, is abolished effective
2892	March 1, 2007. By March 2, 2007, pursuant to s.
2893	627.351(6)(c)4.a., Florida Statutes, each appointing officer
2894	shall appoint new members or reappoint existing members of the
2895	board of governors of the corporation for the unexpired portions
2896	of the terms of the existing board of governors.
2897	Section 14.  Paragraph (e) of subsection (3) and subsection
2898	(4) of section 631.57, Florida Statutes, are amended to read:
2899	631.57  Powers and duties of the association.--
2900	(3)
2901	(e)1.a.  In addition to assessments otherwise authorized in
2902	paragraph (a) and to the extent necessary to secure the funds
2903	for the account specified in s. 631.55(2)(c) for the direct
2904	payment of covered claims of insolvent homeowners insurers and
2905	to pay the reasonable costs to administer such claims, or to
2906	retire indebtedness, including, without limitation, the
2907	principal, redemption premium, if any, and interest on, and
2908	related costs of issuance of, bonds issued under s. 631.695 and
2909	the funding of any reserves and other payments required under
2910	the bond resolution or trust indenture pursuant to which such
2911	bonds have been issued, the office, upon certification of the
2912	board of directors, shall levy emergency assessments upon
2913	insurers holding a certificate of authority. The emergency
2914	assessments payable under this paragraph by any insurer shall
2915	not exceed in any single year more than 2 percent of that
2916	insurer's direct written premiums, net of refunds, in this state
2917	during the preceding calendar year for the kinds of insurance
2918	within the account specified in s. 631.55(2)(c).
2919	b.  Any emergency assessments authorized under this
2920	paragraph shall be levied by the office upon insurers referred
2921	to in sub-subparagraph a., upon certification as to the need for
2922	such assessments by the board of directors. In the event the
2923	board of directors participates in the issuance of bonds in
2924	accordance with s. 631.695, emergency assessments shall be
2925	levied, in each year that bonds issued under s. 631.695 and
2926	secured by such emergency assessments are outstanding, in such
2927	amounts up to such 2-percent limit as required in order to
2928	provide for the full and timely payment of the principal of,
2929	redemption premium, if any, and interest on, and related costs
2930	of issuance of, such bonds. The emergency assessments provided
2931	for in this paragraph are assigned and pledged to the
2932	municipality, county, or legal entity issuing bonds under s.
2933	631.695 for the benefit of the holders of such bonds, in order
2934	to enable such municipality, county, or legal entity to provide
2935	for the payment of the principal of, redemption premium, if any,
2936	and interest on such bonds, the cost of issuance of such bonds,
2937	and the funding of any reserves and other payments required
2938	under the bond resolution or trust indenture pursuant to which
2939	such bonds have been issued, without the necessity of any
2940	further action by the association, the office, or any other
2941	party. To the extent bonds are issued under s. 631.695 and the
2942	association determines to secure such bonds by a pledge of
2943	revenues received from the emergency assessments, such bonds,
2944	upon such pledge of revenues, shall be secured by and payable
2945	from the proceeds of such emergency assessments, and the
2946	proceeds of emergency assessments levied under this paragraph
2947	shall be remitted directly to and administered by the trustee or
2948	custodian appointed for such bonds.
2949	c.  Emergency assessments under this paragraph may be
2950	payable in a single payment or, at the option of the
2951	association, may be payable in 12 monthly installments with the
2952	first installment being due and payable at the end of the month
2953	after an emergency assessment is levied and subsequent
2954	installments being due not later than the end of each succeeding
2955	month.
2956	d.  If emergency assessments are imposed, the report
2957	required by s. 631.695(7) shall include an analysis of the
2958	revenues generated from the emergency assessments imposed under
2959	this paragraph.
2960	e.  If emergency assessments are imposed, the references in
2961	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
2962	assessments levied under paragraph (a) shall include emergency
2963	assessments imposed under this paragraph.
2964	2.  In order to ensure that insurers paying emergency
2965	assessments levied under this paragraph continue to charge rates
2966	that are neither inadequate nor excessive, within 90 days after
2967	being notified of such assessments, each insurer that is to be
2968	assessed pursuant to this paragraph shall submit a rate filing
2969	for coverage included within the account specified in s.
2970	631.55(2)(c) and for which rates are required to be filed under
2971	s. 627.062. If the filing reflects a rate change that, as a
2972	percentage, is equal to the difference between the rate of such
2973	assessment and the rate of the previous year's assessment under
2974	this paragraph, the filing shall consist of a certification so
2975	stating and shall be deemed approved when made. Any rate change
2976	of a different percentage shall be subject to the standards and
2977	procedures of s. 627.062.
2978	3.  In the event the board of directors participates in the
2979	issuance of bonds in accordance with s. 631.695, an annual
2980	assessment under this paragraph shall continue while the bonds
2981	issued with respect to which the assessment was imposed are
2982	outstanding, including any bonds the proceeds of which were used
2983	to refund bonds issued pursuant to s. 631.695, unless adequate
2984	provision has been made for the payment of the bonds in the
2985	documents authorizing the issuance of such bonds.
2986	4.  Emergency assessments under this paragraph are not
2987	premium and are not subject to the premium tax, to any fees, or
2988	to any commissions. An insurer is liable for all emergency
2989	assessments that the insurer collects and shall treat the
2990	failure of an insured to pay an emergency assessment as a
2991	failure to pay the premium. An insurer is not liable for
2992	uncollectible emergency assessments.
2993	(4)  The department may exempt any insurer from any regular
2994	or emergency an assessment if an assessment would result in such
2995	insurer's financial statement reflecting an amount of capital or
2996	surplus less than the sum of the minimum amount required by any
2997	jurisdiction in which the insurer is authorized to transact
2998	insurance.
2999	Section 15.  It is the intent of the Legislature that the
3000	amendments to s. 631.57, Florida Statutes, by s. 34, chapter
3001	2006-12, Laws of Florida, authorized the Florida Insurance
3002	Guaranty Association to certify, and the Office of Insurance
3003	Regulation to levy, an emergency assessment of up to 2 percent
3004	to directly pay the covered claims out of the account specified
3005	in s. 631.55(2)(c), Florida Statutes, or use such emergency
3006	assessment proceeds to retire the indebtedness and costs of
3007	bonds issued to pay such claims and reasonable claims
3008	administration costs.
3009	Section 16.  Subsections (1) and (2) of section 627.706,
3010	Florida Statutes, are amended to read:
3011	627.706  Sinkhole insurance; definitions.--
3012	(1)  Every insurer authorized to transact property
3013	insurance in this state shall make available coverage for
3014	insurable sinkhole losses on any structure, including contents
3015	of personal property contained therein, resulting from a
3016	catastrophic ground cover collapse to the extent provided in the
3017	form to which the sinkhole coverage attaches. A policy for
3018	residential property insurance may include a deductible amount
3019	applicable to sinkhole losses equal to 1 percent, 2 percent, 5
3020	percent, or 10 percent of the policy dwelling limits, with
3021	appropriate premium discounts offered with each deductible
3022	amount.
3023	(2)  As used in ss. 627.706-627.7074, and as used in
3024	connection with any policy providing coverage for sinkhole
3025	losses resulting from a catastrophic ground cover collapse:
3026	(a)  "Catastrophic ground cover collapse" means geological
3027	activity that, within a period of 7 days or less, results in the
3028	collapse of the ground cover that renders the insured structure
3029	uninhabitable. The term "catastrophic ground cover collapse"
3030	does not include ground cover subsidence caused when, during a
3031	period exceeding 7 days, the upper surface of limestone is
3032	dissolved away and the ground cover slowly subsides to occupy
3033	the space once occupied by limestone.
3034	(b)  "Sinkhole Loss" means structural damage to a structure
3035	or the building, including the foundation, caused by a
3036	catastrophic ground cover collapse or sinkhole activity.
3037	Contents coverage shall apply only if there is structural damage
3038	to a structure or the building caused by a catastrophic ground
3039	cover collapse or sinkhole activity. Structural damage
3040	consisting merely of the settling or cracking of a foundation,
3041	structure, or building does not constitute a loss resulting from
3042	a catastrophic ground cover collapse or sinkhole activity.
3043	(c)(d)  "Professional engineer" means a person, as defined
3044	in s. 471.005, who has a bachelor's degree or higher in
3045	engineering with a specialty in the geotechnical engineering
3046	field. A professional engineer must have geotechnical experience
3047	and expertise in the identification of sinkhole activity as well
3048	as other potential causes of damage to the structure.
3049	(d)(e)  "Professional geologist" means a person, as defined
3050	by s. 492.102, who has a bachelor's degree or higher in geology
3051	or related earth science with expertise in the geology of
3052	Florida. A professional geologist must have geological
3053	experience and expertise in the identification of sinkhole
3054	activity as well as other potential geologic causes of damage to
3055	the structure.
3056	(e)(a)  "Sinkhole" means a depression in the ground cover,
3057	visible to the naked eye, landform created by subsidence of
3058	soil, sediment, or rock as underlying strata are dissolved by
3059	groundwater. A sinkhole may form by collapse into subterranean
3060	voids created by dissolution of limestone or dolostone or by
3061	subsidence as these strata are dissolved.
3062	(f)(c)  "Sinkhole activity" means settlement or systematic
3063	weakening of the earth supporting such property only when such
3064	settlement or systematic weakening results from movement or
3065	raveling of soils, sediments, or rock materials into
3066	subterranean voids created by the effect of water on a limestone
3067	or similar rock formation.
3068	(g)  "Uninhabitable" means condemned and ordered vacated by
3069	the governmental agency charged with making such findings and
3070	issuing such orders in the county in which the insured structure
3071	is located.
3072	Section 17.  This act shall take effect upon becoming a
3073	law.

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