CS/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 to jointly issue
11	bonds to finance windstorm coverages and claims; granting
12	authority to individual hospitals and teaching hospitals
13	to jointly issue bond anticipation notes; authorizing
14	validation of bonds issued to certain hospital entities;
15	specifying that a hospital's immunity caps are not waived
16	through issuance of bonds to pay windstorm coverage or
17	claims; amending s. 215.5595, F.S.; including manufactured
18	housing insurers in the Insurance Capital Build-Up
19	Incentive Program; providing manufactured housing insurer
20	program contribution requirements; providing surplus
21	requirements; prioritizing funding for manufactured
22	housing insurers; providing premium to surplus ratio
23	requirements for certain manufactured housing insurers;
24	amending s. 624.462, F.S.; revising requirements for the
25	establishment of a commercial self-insurance fund by a
26	not-for-profit group; specifying required rules of the
27	commission; amending s. 624.4622, F.S.; authorizing local
28	government self-insurance funds to insure or self-insure
29	real or personal property against loss or damage; creating
30	s. 395.106, F.S.; authorizing certain hospitals and
31	hospital systems to pool and spread windstorm property
32	exposure risk among members; providing criteria for
33	participation; providing definitions; subjecting alliances
34	not in compliance with risk pooling requirements to the
35	Insurance Code; excluding an alliance meeting provision
36	requirements from participation in or coverage by an
37	insurance guaranty association established by ch. 631,
38	F.S.; creating s. 624.4625, F.S.; authorizing two or more
39	corporations not for profit to form a self-insurance fund
40	for certain purposes; providing specific requirements;
41	providing a definition; providing limitations; providing
42	for application of certain provisions to certain premiums,
43	contributions, and assessments; providing for payment of
44	insurance premium tax at a reduced rate by corporation
45	not-for-profit self-insurance funds; subjecting a
46	corporation not for profit self-insurance fund to certain
47	group self-insurance fund provisions under certain
48	circumstances; amending s. 624.610, F.S.; prescribing
49	responsibilities of the Commissioner of Insurance
50	Regulation relating to allowing credit for reinsurance;
51	amending s. 627.062, F.S.; delaying the effective date of
52	certain provisions relating to residential property
53	insurance rate filings; amending s. 627.351, F.S.;
54	prohibiting the Property and Casualty Joint Underwriting
55	Association and Citizens Property Insurance Corporation
56	from insuring certain properties under certain
57	circumstances; providing exceptions; requiring that
58	Citizens' rates must be adequate; rescinding certain rate
59	filings of the corporation; requiring the corporation to
60	use certain other rates; requiring the corporation to
61	refund certain portions of rates; providing for effect of
62	certain rates; providing for new rate filings; requiring
63	the Department of Financial Services to review the
64	corporation's insurance agent commission structure and
65	make recommendations for commission standards; requiring a
66	report; creating the Task Force on Citizens Property
67	Insurance Claims Handling and Resolution; providing for
68	administration of the task force; providing for
69	membership; providing for reimbursement of expenses but no
70	compensation; providing purpose and intent; requiring the
71	task force to address certain issues; requiring reports
72	and recommendations; providing additional responsibilities
73	of the task force; providing for expiration of the task
74	force; abolishing the existing board of governors of
75	Citizens Property Insurance Corporation; providing for
76	appointment of new members; amending s. 631.57, F.S.;
77	revising criteria and requirements for levy of emergency
78	assessments by the Florida Insurance Guaranty Association;
79	revising characterizations of emergency assessments;
80	providing legislative intent; amending s. 627.706, F.S.;
81	revising sinkhole insurance provisions to include coverage
82	for losses due to catastrophic ground cover collapse;
83	authorizing certain deductibles; revising definitions;
84	providing an effective date.
85
86	Be It Enacted by the Legislature of the State of Florida:
87
88	Section 1.  This act may be cited as the "Citizens Reform
89	and Private Market Restoration Act."
90	Section 2.  Paragraph (b) of subsection (3) and paragraph
91	(e) of subsection (7) of section 163.01, Florida Statutes, are
92	amended, and paragraph (h) is added to subsection (7) of that
93	section, to read:
94	163.01  Florida Interlocal Cooperation Act of 1969.--
95	(3)  As used in this section:
96	(b)  "Public agency" means a political subdivision, agency,
97	or officer of this state or of any state of the United States,
98	including, but not limited to, state government, county, city,
99	school district, single and multipurpose special district,
100	single and multipurpose public authority, metropolitan or
101	consolidated government, a separate legal entity or
102	administrative entity created under subsection (7), an
103	independently elected county officer, any agency of the United
104	States Government, a federally recognized Native American tribe,
105	and any similar entity of any other state of the United States.
106	(7)
107	(e)1.  Notwithstanding the provisions of paragraph (c), any
108	separate legal entity, created pursuant to the provisions of
109	this section and controlled by counties or municipalities of
110	this state, the membership of which consists or is to consist
111	only of public agencies of this state, may, for the purpose of
112	financing the provision or acquisition of liability or property
113	coverage contracts for or from one or more local government
114	liability or property pools to provide liability or property
115	coverage for counties, municipalities, or other public agencies
116	of this state, exercise all powers in connection with the
117	authorization, issuance, and sale of bonds. All of the
118	privileges, benefits, powers, and terms of s. 125.01 relating to
119	counties and s. 166.021 relating to municipalities shall be
120	fully applicable to such entity and such entity shall be
121	considered a unit of local government for all of the privileges,
122	benefits, powers, and terms of part I of chapter 159.  Bonds
123	issued by such entity shall be deemed issued on behalf of
124	counties, municipalities, or public agencies which enter into
125	loan agreements with such entity as provided in this paragraph.
126	Proceeds of bonds issued by such entity may be loaned to
127	counties, municipalities, or other public agencies of this
128	state, whether or not such counties, municipalities, or other
129	public agencies are also members of the entity issuing the
130	bonds, and such counties, municipalities, or other public
131	agencies may in turn deposit such loan proceeds with a separate
132	local government liability or property pool for purposes of
133	providing or acquiring liability or property coverage contracts.
134	2.  Counties or municipalities of this state are authorized
135	pursuant to this section, in addition to the authority provided
136	by s. 125.01, part II of chapter 166, and other applicable law,
137	to issue bonds for the purpose of acquiring liability coverage
138	contracts from a local government liability pool. Any individual
139	county or municipality may, by entering into interlocal
140	agreements with other counties, municipalities, or public
141	agencies of this state, issue bonds on behalf of itself and
142	other counties, municipalities, or other public agencies, for
143	purposes of acquiring a liability coverage contract or contracts
144	from a local government liability pool. Counties,
145	municipalities, or other public agencies are also authorized to
146	enter into loan agreements with any entity created pursuant to
147	subparagraph 1., or with any county or municipality issuing
148	bonds pursuant to this subparagraph, for the purpose of
149	obtaining bond proceeds with which to acquire liability coverage
150	contracts from a local government liability pool. No county,
151	municipality, or other public agency shall at any time have more
152	than one loan agreement outstanding for the purpose of obtaining
153	bond proceeds with which to acquire liability coverage contracts
154	from a local government liability pool. Obligations of any
155	county, municipality, or other public agency of this state
156	pursuant to a loan agreement as described above may be validated
157	as provided in chapter 75.  Prior to the issuance of any bonds
158	pursuant to subparagraph 1. or this subparagraph for the purpose
159	of acquiring liability coverage contracts from a local
160	government liability pool, the reciprocal insurer or the manager
161	of any self-insurance program shall demonstrate to the
162	satisfaction of the Office of Insurance Regulation of the
163	Financial Services Commission that excess liability coverage for
164	counties, municipalities, or other public agencies is reasonably
165	unobtainable in the amounts provided by such pool or that the
166	liability coverage obtained through acquiring contracts from a
167	local government liability pool, after taking into account costs
168	of issuance of bonds and any other administrative fees, is less
169	expensive to counties, municipalities, or special districts than
170	similar commercial coverage then reasonably available.
171	3.  Any entity created pursuant to this section or any
172	county or municipality may also issue bond anticipation notes,
173	as provided by s. 215.431, in connection with the authorization,
174	issuance, and sale of such bonds.  In addition, the governing
175	body of such legal entity or the governing body of such county
176	or municipality may also authorize bonds to be issued and sold
177	from time to time and may delegate, to such officer, official,
178	or agent of such legal entity as the governing body of such
179	legal entity may select, the power to determine the time; manner
180	of sale, public or private; maturities; rate or rates of
181	interest, which may be fixed or may vary at such time or times
182	and in accordance with a specified formula or method of
183	determination; and other terms and conditions as may be deemed
184	appropriate by the officer, official, or agent so designated by
185	the governing body of such legal entity. However, the amounts
186	and maturities of such bonds and the interest rate or rates of
187	such bonds shall be within the limits prescribed by the
188	governing body of such legal entity and its resolution
189	delegating to such officer, official, or agent the power to
190	authorize the issuance and sale of such bonds.  Any series of
191	bonds issued pursuant to this paragraph for liability coverage
192	shall mature no later than 7 years following the date of
193	issuance thereof. A series of bonds issued pursuant to this
194	paragraph for property coverage shall mature no later than 30
195	years following the date of issuance.
196	4.  Bonds issued pursuant to subparagraph 1. may be
197	validated as provided in chapter 75.  The complaint in any
198	action to validate such bonds shall be filed only in the Circuit
199	Court for Leon County.  The notice required to be published by
200	s. 75.06 shall be published in Leon County and in each county
201	which is an owner of the entity issuing the bonds, or in which a
202	member of the entity is located, and the complaint and order of
203	the circuit court shall be served only on the State Attorney of
204	the Second Judicial Circuit and on the state attorney of each
205	circuit in each county or municipality which is an owner of the
206	entity issuing the bonds or in which a member of the entity is
207	located.
208	5.  Bonds issued pursuant to subparagraph 2. may be
209	validated as provided in chapter 75. The complaint in any action
210	to validate such bonds shall be filed in the circuit court of
211	the county or municipality which will issue the bonds.  The
212	notice required to be published by s. 75.06 shall be published
213	only in the county where the complaint is filed, and the
214	complaint and order of the circuit court shall be served only on
215	the state attorney of the circuit in the county or municipality
216	which will issue the bonds.
217	6.  The participation by any county, municipality, or other
218	public agency of this state in a local government liability pool
219	shall not be deemed a waiver of immunity to the extent of
220	liability coverage, nor shall any contract entered regarding
221	such a local government liability pool be required to contain
222	any provision for waiver.
223	(h)1.  Notwithstanding the provisions of paragraph (c), any
224	separate legal entity consisting of an alliance, as defined in
225	s. 395.106(2)(a), created pursuant to this paragraph and
226	controlled by and whose members consist of eligible entities
227	comprised of special districts created pursuant to a special act
228	and having the authority to own or operate one or more hospitals
229	licensed in this state or hospitals licensed in this state that
230	are owned, operated, or funded by a county or municipality, for
231	the purpose of providing property insurance coverage as defined
232	in s. 395.106(2)(c), for such eligible entities, may exercise
233	all powers under this subsection in connection with borrowing
234	funds for such purposes, including, without limitation, the
235	authorization, issuance, and sale of bonds, notes, or other
236	obligations of indebtedness. Borrowed funds, including, but not
237	limited to, bonds issued by such alliance shall be deemed issued
238	on behalf of such eligible entities that enter into loan
239	agreements with such separate legal entity as provided in this
240	paragraph.
241	2.  Any such separate legal entity shall have all the
242	powers that are provided by the interlocal agreement under which
243	the entity is created or that are necessary to finance, operate,
244	or manage the alliance's property insurance coverage program.
245	Proceeds of bonds, notes, or other obligations issued by such an
246	entity may be loaned to any one or more eligible entities. Such
247	eligible entities are authorized to enter into loan agreements
248	with any separate legal entity created pursuant to this
249	paragraph for the purpose of obtaining moneys with which to
250	finance property insurance coverage or claims. Obligations of
251	any eligible entity pursuant to a loan agreement as described in
252	this paragraph may be validated as provided in chapter 75.
253	3.  Any bonds, notes, or other obligations to be issued or
254	incurred by a separate legal entity created pursuant to this
255	paragraph shall be authorized by resolution of the governing
256	body of such entity and bear the date or dates; mature at the
257	time or times, not exceeding 30 years from their respective
258	dates; bear interest at the rate or rates, which may be fixed or
259	vary at such time or times and in accordance with a specified
260	formula or method of determination; be payable at the time or
261	times; be in the denomination; be in the form; carry the
262	registration privileges; be executed in the manner; be payable
263	from the sources and in the medium of payment and at the place;
264	and be subject to redemption, including redemption prior to
265	maturity, as the resolution may provide. The bonds, notes, or
266	other obligations may be sold at public or private sale for such
267	price as the governing body of the separate legal entity shall
268	determine. The bonds may be secured by such credit enhancement,
269	if any, as the governing body of the separate legal entity deems
270	appropriate. The bonds may be secured by an indenture of trust
271	or trust agreement. In addition, the governing body of the
272	separate legal entity may delegate, to such officer or official
273	of such entity as the governing body may select, the power to
274	determine the time; manner of sale, public or private;
275	maturities; rate or rates of interest, which may be fixed or may
276	vary at such time or times and in accordance with a specified
277	formula or method of determination; and other terms and
278	conditions as may be deemed appropriate by the officer or
279	official so designated by the governing body of such separate
280	legal entity. However, the amounts and maturities of such bonds,
281	the interest rate or rates, and the purchase price of such bonds
282	shall be within the limits prescribed by the governing body of
283	such separate legal entity in its resolution delegating to such
284	officer or official the power to authorize the issuance and sale
285	of such bonds.
286	4.  Bonds issued pursuant to this paragraph may be
287	validated as provided in chapter 75. The complaint in any action
288	to validate such bonds shall be filed only in the Circuit Court
289	for Leon County. The notice required to be published by s. 75.06
290	shall be published in Leon County and in each county in which an
291	eligible entity that is a member of an alliance is located. The
292	complaint and order of the circuit court shall be served only on
293	the state attorney of the Second Judicial Circuit and on the
294	state attorney of each circuit in each county in which an
295	eligible entity receiving bond proceeds is located.
296	5.  The accomplishment of the authorized purposes of a
297	separate legal entity created under this paragraph is deemed in
298	all respects for the benefit, increase of the commerce and
299	prosperity, and improvement of the health and living conditions
300	of the people of this state. Inasmuch as the separate legal
301	entity performs essential public functions in accomplishing its
302	purposes, the separate legal entity is not required to pay any
303	taxes or assessments of any kind upon any property acquired or
304	used by the entity for such purposes or upon any revenues at any
305	time received by the entity. The bonds, notes, and other
306	obligations of such separate legal entity, the transfer of and
307	income from such bonds, notes, and other obligations, including
308	any profits made on the sale of such bonds, notes, and other
309	obligations, are at all times free from taxation of any kind of
310	the state or by any political subdivision or other agency or
311	instrumentality if the state. The exemption granted in this
312	paragraph does not apply to any tax imposed by chapter 220 on
313	interest, income, or profits on debt obligations owned by
314	corporations.
315	6.  The participation by any eligible entity in an alliance
316	or a separate legal entity created pursuant to this paragraph
317	may not be deemed a waiver of immunity to the extent of
318	liability or any other coverage and a contract entered regarding
319	such alliance is not required to contain any provision for
320	waiver.
321	Section 3.  Paragraphs (a), (c), and (g) of subsection (2)
322	of section 215.5595, Florida Statutes, are amended, and
323	paragraph (i) is added to that subsection, to read:
324	215.5595  Insurance Capital Build-Up Incentive Program.--
325	(2)  The purpose of this section is to provide surplus
326	notes to new or existing authorized residential property
327	insurers under the Insurance Capital Build-Up Incentive Program
328	administered by the State Board of Administration, under the
329	following conditions:
330	(a)  The amount of the surplus note for any insurer or
331	insurer group, other than an insurer writing only manufactured
332	housing policies, may not exceed $25 million or 20 percent of
333	the total amount of funds available under the program, whichever
334	is greater. The amount of the surplus note for any insurer or
335	insurer group writing residential property insurance covering
336	only manufactured housing may not exceed $7 million.
337	(c)  The insurer's surplus, new capital, and the surplus
338	note must total at least $50 million, except for insurers
339	writing residential property insurance covering only
340	manufactured housing. The insurer's surplus, new capital, and
341	the surplus note must total at least $14 million for insurers
342	writing only residential property insurance covering
343	manufactured housing policies as provided in paragraph (a).
344	(g)  The total amount of funds available for the program is
345	limited to the amount appropriated by the Legislature for this
346	purpose. If the amount of surplus notes requested by insurers
347	exceeds the amount of funds available, the board may prioritize
348	insurers that are eligible and approved, with priority for
349	funding given to insurers writing only manufactured housing
350	policies, regardless of the date of application, based on the
351	financial strength of the insurer, the viability of its proposed
352	business plan for writing additional residential property
353	insurance in the state, and the effect on competition in the
354	residential property insurance market.
355	(i)  Notwithstanding paragraph (d), a newly formed
356	manufactured housing insurer that is eligible for a surplus note
357	under this section shall meet the premium to surplus ratio
358	provisions of s. 624.4095.
359	Section 4.  Paragraph (a) of subsection (2) of section
360	624.462, Florida Statutes, is amended to read:
361	624.462  Commercial self-insurance funds.--
362	(2)  As used in ss. 624.460-624.488, "commercial
363	self-insurance fund" or "fund" means a group of members,
364	operating individually and collectively through a trust or
365	corporation, that must be:
366	(a)  Established by:
367	1.  A not-for-profit trade association, industry
368	association, or professional association of employers or
369	professionals which has a constitution or bylaws, which is
370	incorporated under the laws of this state, and which has been
371	organized for purposes other than that of obtaining or providing
372	insurance and operated in good faith for a continuous period of
373	1 year;
374	2.  A self-insurance trust fund organized pursuant to s.
375	627.357 and maintained in good faith for a continuous period of
376	1 year for purposes other than that of obtaining or providing
377	insurance pursuant to this section. Each member of a commercial
378	self-insurance trust fund established pursuant to this
379	subsection must maintain membership in the self-insurance trust
380	fund organized pursuant to s. 627.357;
381	3.  A group of 10 or more health care providers, as defined
382	in s. 627.351(4)(h), for purposes of providing medical
383	malpractice coverage; or
384	4.  A not-for-profit group comprised of no fewer less than
385	10 community condominium associations created and operating
386	under chapter 718, chapter 719, chapter 720, chapter 721, or
387	chapter 723 that as defined in s. 718.103(2), which is
388	incorporated under the laws of this state, which restricts its
389	membership to community condominium associations only, and that
390	which has been organized and maintained in good faith for the
391	purpose of pooling and spreading the liabilities of its group
392	members relating to property or casualty risk a continuous
393	period of 1 year for purposes other than that of obtaining or
394	providing insurance. However, a not-for-profit group comprised
395	of fewer than 10 community associations may establish a
396	commercial self-insurance fund if the commission has adopted
397	rules:
398	a.  Requiring monetary reserves to be maintained by such
399	self-insurers to ensure their financial solvency and governing
400	their organization and operation to ensure compliance with such
401	requirements.
402	b.  Implementing the reserve requirements in accordance
403	with accepted actuarial techniques.
404	c.  Requiring the office to establish procedures by which
405	notice is acknowledged by applicants for the commercial self-
406	insurance fund, as well as individual property owners, of the
407	assessability of membership in the self-insurance fund and that
408	contributing additional moneys to meet unfilled obligations of
409	the fund may be necessary.
410	d.  Prohibiting the office from denying a fund's
411	application solely because of the geographical proximity of the
412	fund's associational membership, provided the fund possesses
413	sufficient financial resources to operate in a fiscally
414	responsible manner.
415	Section 5.  Subsection (1) of section 624.4622, Florida
416	Statutes, is amended to read:
417	624.4622  Local government self-insurance funds.--
418	(1)  Any two or more local governmental entities may enter
419	into interlocal agreements for the purpose of securing the
420	payment of benefits under chapter 440, or insuring or self-
421	insuring real or personal property of every kind and every
422	interest in such property against loss or damage from any hazard
423	or cause and against any loss consequential to such loss or
424	damage, provided the local government self-insurance fund that
425	is created must:
426	(a)  Have annual normal premiums in excess of $5 million;
427	(b)  Maintain a continuing program of excess insurance
428	coverage and reserve evaluation to protect the financial
429	stability of the fund in an amount and manner determined by a
430	qualified and independent actuary;
431	(c)  Submit annually an audited fiscal year-end financial
432	statement by an independent certified public accountant within 6
433	months after the end of the fiscal year to the office; and
434	(d)  Have a governing body which is comprised entirely of
435	local elected officials.
436	Section 6.  Section 395.106, Florida Statutes, is created
437	to read:
438	395.106  Risk pooling by certain hospitals and hospital
439	systems.--
440	(1)  Notwithstanding an other provision of law, any two or
441	more hospitals licensed in this state and located in this state
442	may form an alliance for the purpose of pooling and spreading
443	liabilities of its members relative to windstorm property
444	exposure or securing such windstorm property insurance coverage
445	for the benefit of its members, provided an alliance that is
446	created:
447	(a)  Has annual premiums in excess of $3 million.
448	(b)  Maintains a continuing program of premium calculation
449	and evaluation and reserve evaluation to protect the financial
450	stability of the alliance in an amount and manner determined by
451	consultants using catastrophic (CAT) modeling criteria or other
452	risk-estimating methodologies, including those used by qualified
453	and independent actuaries.
454	(c)  Causes to be prepared annually a fiscal year-end
455	financial statement based upon generally accepted accounting
456	principles and audited by an independent certified public
457	accountant within 6 months after the end of the fiscal year.
458	(d)  Has a governing body comprised entirely of member
459	entities whose representatives on such governing body are
460	specified by the organizational documents of the alliance.
461	(2)  For purposes of this section, the term:
462	(a)  "Alliance" means a corporation, association, limited
463	liability company, or partnership or any other legal entity
464	formed by a group of eligible entities.
465	(b)  "Property coverage" means property coverage provided
466	by self-insurance or insurance for real or personal property of
467	every kind and every interest in such property against loss or
468	damage from any hazard or cause and against any loss
469	consequential to such loss or damage.
470	(3)  An alliance that meets the requirements of this
471	section is not subject to any provision of the Insurance Code.
472	(4)  An alliance that meets the requirements of this
473	section is not an insurer for purposes of participation in or
474	coverage by the Florida Insurance Guaranty Association
475	established in part II of chapter 631. Alliance self-insured
476	coverage is not subject to insurance premium tax, and any such
477	alliance formed pursuant to this section may not be assessed for
478	purposes of s. 627.351 or s. 215.555.
479	Section 7.  Section 624.4625, Florida Statutes, is created
480	to read:
481	624.4625  Corporation not-for-profit self-insurance
482	funds.--
483	(1)  Notwithstanding any other provision of law, any two or
484	more corporations not for profit located in and organized under
485	the laws of this state may form a self-insurance fund for the
486	purpose of pooling and spreading liabilities of its group
487	members in any one or combination of property or casualty risk,
488	provided the corporation not for profit self-insurance fund that
489	is created:
490	(a)  Has annual normal premiums in excess of $5 million.
491	(b)  Requires for qualification that each participating
492	member receive at least 75 percent of its revenues from local,
493	state, or federal governmental sources or a combination of such
494	sources.
495	(c)  Uses a qualified actuary to determine rates using
496	accepted actuarial principles and annually submits to the office
497	a certification by the actuary that the rates are actuarially
498	sound and are not inadequate, as defined in s. 627.062.
499	(d)  Uses a qualified actuary to establish reserves for
500	loss and loss adjustment expenses and annually submits to the
501	office a certification by the actuary that the loss and loss
502	adjustment expense reserves are adequate. If the actuary
503	determines that reserves are not adequate, the fund shall file
504	with the office a remedial plan for increasing the reserves or
505	otherwise addressing the financial condition of the fund,
506	subject to a determination by the office that the fund will
507	operate on an actuarially sound basis and the fund does not pose
508	a significant risk of insolvency.
509	(e)  Maintains a continuing program of excess insurance
510	coverage and reserve evaluation to protect the financial
511	stability of the fund in an amount and manner determined by a
512	qualified actuary. At a minimum, this program must:
513	1.  Purchase excess insurance from authorized insurance
514	carriers.
515	2.  Retain a per-loss occurrence that does not exceed
516	$350,000.
517	(f)  Submits to the office annually an audited fiscal year-
518	end financial statement by an independent certified public
519	accountant within 6 months after the end of the fiscal year.
520	(g)  Has a governing body that is comprised entirely of
521	officials from corporations not for profit that are members of
522	the corporation not-for-profit self-insurance fund.
523	(h)  Uses knowledgeable persons or business entities to
524	administer or service the fund in the areas of claims
525	administration, claims adjusting, underwriting, risk management,
526	loss control, policy administration, financial audit, and legal
527	areas. Such persons must meet all applicable requirements of law
528	for state licensure and must have at least 5 years' experience
529	with commercial self-insurance funds formed under s. 624.462,
530	self-insurance funds formed under s. 624.4622, or domestic
531	insurers.
532	(i)  Submits to the office copies of contracts used for its
533	members that clearly establish the liability of each member for
534	the obligations of the fund.
535	(j)  Annually submits to the office a certification by the
536	governing body of the fund that, to the best of its knowledge,
537	the requirements of this section are met.
538	(2)  As used in this section, the term "qualified actuary"
539	means an actuary that is a member of the Casualty Actuarial
540	Society or the American Academy of Actuaries.
541	(3)  A corporation not-for-profit self-insurance fund that
542	meets the requirements of this section is not:
543	(a)  An insurer for purposes of participation in or
544	coverage by any insurance guaranty association established by
545	chapter 631; or
546	(b)  Subject to s. 624.4621 and is not required to file any
547	report with the department under s. 440.38(2)(b) that is
548	uniquely required of group self-insurer funds qualified under s.
549	624.4621.
550	(4)  Premiums, contributions, and assessments received by a
551	corporation not-for-profit self-insurance fund are subject to
552	ss. 624.509(1) and (2) and 624.5092, except that the tax rate
553	shall be 1.6 percent of the gross amount of such premiums,
554	contributions, and assessments.
555	(5)  If any of the requirements of subsection (1) are not
556	met, a corporation not-for-profit self-insurance fund is subject
557	to the requirements of s. 624.4621 if the fund provides only
558	workers' compensation coverage or is subject to the requirements
559	of ss. 624.460-624.488 if the fund provides coverage for other
560	property, casualty, or surety risks.
561	Section 8.  Subsection (3) of section 624.610, Florida
562	Statutes, is amended to read:
563	624.610  Reinsurance.--
564	(3)(a)  Credit must be allowed when the reinsurance is
565	ceded to an assuming insurer that is authorized to transact
566	insurance or reinsurance in this state.
567	(b)1.  Credit must be allowed when the reinsurance is ceded
568	to an assuming insurer that is accredited as a reinsurer in this
569	state. An accredited reinsurer is one that:
570	a.  Files with the office evidence of its submission to
571	this state's jurisdiction;
572	b.  Submits to this state's authority to examine its books
573	and records;
574	c.  Is licensed or authorized to transact insurance or
575	reinsurance in at least one state or, in the case of a United
576	States branch of an alien assuming insurer, is entered through,
577	licensed, or authorized to transact insurance or reinsurance in
578	at least one state;
579	d.  Files annually with the office a copy of its annual
580	statement filed with the insurance department of its state of
581	domicile any quarterly statements if required by its state of
582	domicile or such quarterly statements if specifically requested
583	by the office, and a copy of its most recent audited financial
584	statement; and
585	(I)  Maintains a surplus as regards policyholders in an
586	amount not less than $20 million and whose accreditation has not
587	been denied by the office within 90 days after its submission;
588	or
589	(II)  Maintains a surplus as regards policyholders in an
590	amount not less than $20 million and whose accreditation has
591	been approved by the office.
592	2.  The office may deny or revoke an assuming insurer's
593	accreditation if the assuming insurer does not submit the
594	required documentation pursuant to subparagraph 1., if the
595	assuming insurer fails to meet all of the standards required of
596	an accredited reinsurer, or if the assuming insurer's
597	accreditation would be hazardous to the policyholders of this
598	state. In determining whether to deny or revoke accreditation,
599	the office may consider the qualifications of the assuming
600	insurer with respect to all the following subjects:
601	a.  Its financial stability;
602	b.  The lawfulness and quality of its investments;
603	c.  The competency, character, and integrity of its
604	management;
605	d.  The competency, character, and integrity of persons who
606	own or have a controlling interest in the assuming insurer; and
607	e.  Whether claims under its contracts are promptly and
608	fairly adjusted and are promptly and fairly paid in accordance
609	with the law and the terms of the contracts.
610	3.  Credit must not be allowed a ceding insurer if the
611	assuming insurer's accreditation has been revoked by the office
612	after notice and the opportunity for a hearing.
613	4.  The actual costs and expenses incurred by the office to
614	review a reinsurer's request for accreditation and subsequent
615	reviews must be charged to and collected from the requesting
616	reinsurer. If the reinsurer fails to pay the actual costs and
617	expenses promptly when due, the office may refuse to accredit
618	the reinsurer or may revoke the reinsurer's accreditation.
619	(c)1.  Credit must be allowed when the reinsurance is ceded
620	to an assuming insurer that maintains a trust fund in a
621	qualified United States financial institution, as defined in
622	paragraph (5)(b), for the payment of the valid claims of its
623	United States ceding insurers and their assigns and successors
624	in interest. To enable the office to determine the sufficiency
625	of the trust fund, the assuming insurer shall report annually to
626	the office information substantially the same as that required
627	to be reported on the NAIC Annual Statement form by authorized
628	insurers. The assuming insurer shall submit to examination of
629	its books and records by the office and bear the expense of
630	examination.
631	2.a.  Credit for reinsurance must not be granted under this
632	subsection unless the form of the trust and any amendments to
633	the trust have been approved by:
634	(I)  The insurance regulator of the state in which the
635	trust is domiciled; or
636	(II)  The insurance regulator of another state who,
637	pursuant to the terms of the trust instrument, has accepted
638	principal regulatory oversight of the trust.
639	b.  The form of the trust and any trust amendments must be
640	filed with the insurance regulator of every state in which the
641	ceding insurer beneficiaries of the trust are domiciled. The
642	trust instrument must provide that contested claims are valid
643	and enforceable upon the final order of any court of competent
644	jurisdiction in the United States. The trust must vest legal
645	title to its assets in its trustees for the benefit of the
646	assuming insurer's United States ceding insurers and their
647	assigns and successors in interest. The trust and the assuming
648	insurer are subject to examination as determined by the
649	insurance regulator.
650	c.  The trust remains in effect for as long as the assuming
651	insurer has outstanding obligations due under the reinsurance
652	agreements subject to the trust. No later than February 28 of
653	each year, the trustee of the trust shall report to the
654	insurance regulator in writing the balance of the trust and list
655	the trust's investments at the preceding year end, and shall
656	certify that the trust will not expire prior to the following
657	December 31.
658	3.  The following requirements apply to the following
659	categories of assuming insurer:
660	a.  The trust fund for a single assuming insurer consists
661	of funds in trust in an amount not less than the assuming
662	insurer's liabilities attributable to reinsurance ceded by
663	United States ceding insurers, and, in addition, the assuming
664	insurer shall maintain a trusteed surplus of not less than $20
665	million. Not less than 50 percent of the funds in the trust
666	covering the assuming insurer's liabilities attributable to
667	reinsurance ceded by United States ceding insurers and trusteed
668	surplus shall consist of assets of a quality substantially
669	similar to that required in part II of chapter 625. Clean,
670	irrevocable, unconditional, and evergreen letters of credit,
671	issued or confirmed by a qualified United States financial
672	institution, as defined in paragraph (5)(a), effective no later
673	than December 31 of the year for which the filing is made and in
674	the possession of the trust on or before the filing date of its
675	annual statement, may be used to fund the remainder of the trust
676	and trusteed surplus.
677	b.(I)  In the case of a group including incorporated and
678	individual unincorporated underwriters:
679	(A)  For reinsurance ceded under reinsurance agreements
680	with an inception, amendment, or renewal date on or after August
681	1, 1995, the trust consists of a trusteed account in an amount
682	not less than the group's several liabilities attributable to
683	business ceded by United States domiciled ceding insurers to any
684	member of the group;
685	(B)  For reinsurance ceded under reinsurance agreements
686	with an inception date on or before July 31, 1995, and not
687	amended or renewed after that date, notwithstanding the other
688	provisions of this section, the trust consists of a trusteed
689	account in an amount not less than the group's several insurance
690	and reinsurance liabilities attributable to business written in
691	the United States; and
692	(C)  In addition to these trusts, the group shall maintain
693	in trust a trusteed surplus of which $100 million must be held
694	jointly for the benefit of the United States domiciled ceding
695	insurers of any member of the group for all years of account.
696	(II)  The incorporated members of the group must not be
697	engaged in any business other than underwriting of a member of
698	the group, and are subject to the same level of regulation and
699	solvency control by the group's domiciliary regulator as the
700	unincorporated members.
701	(III)  Within 90 days after its financial statements are
702	due to be filed with the group's domiciliary regulator, the
703	group shall provide to the insurance regulator an annual
704	certification by the group's domiciliary regulator of the
705	solvency of each underwriter member or, if a certification is
706	unavailable, financial statements, prepared by independent
707	public accountants, of each underwriter member of the group.
708	(d)  Credit must be allowed when the reinsurance is ceded
709	to an assuming insurer not meeting the requirements of paragraph
710	(a), paragraph (b), or paragraph (c), but only as to the
711	insurance of risks located in jurisdictions in which the
712	reinsurance is required to be purchased by a particular entity
713	by applicable law or regulation of that jurisdiction.
714	(e)  If the reinsurance is ceded to an assuming insurer not
715	meeting the requirements of paragraph (a), paragraph (b),
716	paragraph (c), or paragraph (d), the commissioner may allow
717	credit, but only if the assuming insurer holds surplus in excess
718	of $100 million and has a secure financial strength rating from
719	at least two nationally recognized statistical rating
720	organizations deemed acceptable by the commissioner. In
721	determining whether credit should be allowed, the commissioner
722	shall consider the following:
723	1.  The domiciliary regulatory jurisdiction of the assuming
724	insurer.
725	2.  The structure and authority of the domiciliary
726	regulator with regard to solvency regulation requirements and
727	the financial surveillance of the reinsurer.
728	3.  The substance of financial and operating standards for
729	reinsurers in the domiciliary jurisdiction.
730	4.  The form and substance of financial reports required to
731	be filed by the reinsurers in the domiciliary jurisdiction or
732	other public financial statements filed in accordance with
733	generally accepted accounting principles.
734	5.  The domiciliary regulator's willingness to cooperate
735	with United States regulators in general and the office in
736	particular.
737	6.  The history of performance by reinsurers in the
738	domiciliary jurisdiction.
739	7.  Any documented evidence of substantial problems with
740	the enforcement of valid United States judgments in the
741	domiciliary jurisdiction.
742	8.  Any other matters deemed relevant by the commissioner.
743	The commissioner shall give appropriate consideration to insurer
744	group ratings that may have been issued. The commissioner may,
745	in lieu of granting full credit under this subsection, reduce
746	the amount required to be held in trust under paragraph (c).
747	(f)(e)  If the assuming insurer is not authorized or
748	accredited to transact insurance or reinsurance in this state
749	pursuant to paragraph (a) or paragraph (b), the credit permitted
750	by paragraph (c) or paragraph (d) must not be allowed unless the
751	assuming insurer agrees in the reinsurance agreements:
752	1.a.  That in the event of the failure of the assuming
753	insurer to perform its obligations under the terms of the
754	reinsurance agreement, the assuming insurer, at the request of
755	the ceding insurer, shall submit to the jurisdiction of any
756	court of competent jurisdiction in any state of the United
757	States, will comply with all requirements necessary to give the
758	court jurisdiction, and will abide by the final decision of the
759	court or of any appellate court in the event of an appeal; and
760	b.  To designate the Chief Financial Officer, pursuant to
761	s. 48.151, or a designated attorney as its true and lawful
762	attorney upon whom may be served any lawful process in any
763	action, suit, or proceeding instituted by or on behalf of the
764	ceding company.
765	2.  This paragraph is not intended to conflict with or
766	override the obligation of the parties to a reinsurance
767	agreement to arbitrate their disputes, if this obligation is
768	created in the agreement.
769	(g)(f)  If the assuming insurer does not meet the
770	requirements of paragraph (a) or paragraph (b), the credit
771	permitted by paragraph (c) or paragraph (d) is not allowed
772	unless the assuming insurer agrees in the trust agreements, in
773	substance, to the following conditions:
774	1.  Notwithstanding any other provisions in the trust
775	instrument, if the trust fund is inadequate because it contains
776	an amount less than the amount required by paragraph (c), or if
777	the grantor of the trust has been declared insolvent or placed
778	into receivership, rehabilitation, liquidation, or similar
779	proceedings under the laws of its state or country of domicile,
780	the trustee shall comply with an order of the insurance
781	regulator with regulatory oversight over the trust or with an
782	order of a United States court of competent jurisdiction
783	directing the trustee to transfer to the insurance regulator
784	with regulatory oversight all of the assets of the trust fund.
785	2.  The assets must be distributed by and claims must be
786	filed with and valued by the insurance regulator with regulatory
787	oversight in accordance with the laws of the state in which the
788	trust is domiciled which are applicable to the liquidation of
789	domestic insurance companies.
790	3.  If the insurance regulator with regulatory oversight
791	determines that the assets of the trust fund or any part thereof
792	are not necessary to satisfy the claims of the United States
793	ceding insurers of the grantor of the trust, the assets or part
794	thereof must be returned by the insurance regulator with
795	regulatory oversight to the trustee for distribution in
796	accordance with the trust agreement.
797	4.  The grantor shall waive any right otherwise available
798	to it under United States law which is inconsistent with this
799	provision.
800	Section 9.  Paragraph (j) of subsection (2) of section
801	627.062, Florida Statutes, is amended to read:
802	627.062  Rate standards.--
803	(2)  As to all such classes of insurance:
804	(j)  Effective July 1, 2009 2007, notwithstanding any other
805	provision of this section:
806	1.  With respect to any residential property insurance
807	subject to regulation under this section for any area for which
808	the office determines a reasonable degree of competition exists,
809	a rate filing, including, but not limited to, any rate changes,
810	rating factors, territories, classification, discounts, and
811	credits, with respect to any policy form, including endorsements
812	issued with the form, that results in an overall average
813	statewide premium increase or decrease of no more than 5 percent
814	above or below the premium that would result from the insurer's
815	rates then in effect shall not be subject to a determination by
816	the office that the rate is excessive or unfairly discriminatory
817	except as provided in subparagraph 3., or any other provision of
818	law, provided all changes specified in the filing do not result
819	in an overall premium increase of more than 10 percent for any
820	one territory, for reasons related solely to the rate change. As
821	used in this subparagraph, the term "insurer's rates then in
822	effect" includes only rates that have been lawfully in effect
823	under this section or rates that have been determined to be
824	lawful through administrative proceedings or judicial
825	proceedings.
826	2.  An insurer may not make filings under this paragraph
827	with respect to any policy form, including endorsements issued
828	with the form, if the overall premium changes resulting from
829	such filings exceed the amounts specified in this paragraph in
830	any 12-month period. An insurer may proceed under other
831	provisions of this section or other provisions of law if the
832	insurer seeks to exceed the premium or rate limitations of this
833	paragraph.
834	3.  This paragraph does not affect the authority of the
835	office to disapprove a rate as inadequate or to disapprove a
836	filing for the unlawful use of unfairly discriminatory rating
837	factors that are prohibited by the laws of this state. An
838	insurer electing to implement a rate change under this paragraph
839	shall submit a filing to the office at least 40 days prior to
840	the effective date of the rate change. The office shall have 30
841	days after the filing's submission to review the filing and
842	determine if the rate is inadequate or uses unfairly
843	discriminatory rating factors. Absent a finding by the office
844	within such 30-day period that the rate is inadequate or that
845	the insurer has used unfairly discriminatory rating factors, the
846	filing is deemed approved. If the office finds during the 30-day
847	period that the filing will result in inadequate premiums or
848	otherwise endanger the insurer's solvency, the office shall
849	suspend the rate decrease. If the insurer is implementing an
850	overall rate increase, the results of which continue to produce
851	an inadequate rate, such increase shall proceed pending
852	additional action by the office to ensure the adequacy of the
853	rate.
854	4.  This paragraph does not apply to rate filings for any
855	insurance other than residential property insurance.
856
857	The provisions of this subsection shall not apply to workers'
858	compensation and employer's liability insurance and to motor
859	vehicle insurance.
860	Section 10.  Paragraph (a) of subsection (5) and subsection
861	(6) of section 627.351, Florida Statutes, are amended to read:
862	627.351  Insurance risk apportionment plans.--
863	(5)  PROPERTY AND CASUALTY INSURANCE RISK
864	APPORTIONMENT.--The commission shall adopt by rule a joint
865	underwriting plan to equitably apportion among insurers
866	authorized in this state to write property insurance as defined
867	in s. 624.604 or casualty insurance as defined in s. 624.605,
868	the underwriting of one or more classes of property insurance or
869	casualty insurance, except for the types of insurance that are
870	included within property insurance or casualty insurance for
871	which an equitable apportionment plan, assigned risk plan, or
872	joint underwriting plan is authorized under s. 627.311 or
873	subsection (1), subsection (2), subsection (3), subsection (4),
874	or subsection (5) and except for risks eligible for flood
875	insurance written through the federal flood insurance program to
876	persons with risks eligible under subparagraph (a)1. and who are
877	in good faith entitled to, but are unable to, obtain such
878	property or casualty insurance coverage, including excess
879	coverage, through the voluntary market. For purposes of this
880	subsection, an adequate level of coverage means that coverage
881	which is required by state law or by responsible or prudent
882	business practices. The Joint Underwriting Association shall not
883	be required to provide coverage for any type of risk for which
884	there are no insurers providing similar coverage in this state.
885	The office may designate one or more participating insurers who
886	agree to provide policyholder and claims service, including the
887	issuance of policies, on behalf of the participating insurers.
888	(a)  The plan shall provide:
889	1.  A means of establishing eligibility of a risk for
890	obtaining insurance through the plan, which provides that:
891	a.  A risk shall be eligible for such property insurance or
892	casualty insurance as is required by Florida law if the
893	insurance is unavailable in the voluntary market, including the
894	market assistance program and the surplus lines market.
895	b.  A commercial risk not eligible under sub-subparagraph
896	a. shall be eligible for property or casualty insurance if:
897	(I)  The insurance is unavailable in the voluntary market,
898	including the market assistance plan and the surplus lines
899	market;
900	(II)  Failure to secure the insurance would substantially
901	impair the ability of the entity to conduct its affairs; and
902	(III)  The risk is not determined by the Risk Underwriting
903	Committee to be uninsurable.
904	c.  In the event the Federal Government terminates the
905	Federal Crime Insurance Program established under 44 C.F.R. ss.
906	80-83, Florida commercial and residential risks previously
907	insured under the federal program shall be eligible under the
908	plan.
909	d.(I)  In the event a risk is eligible under this paragraph
910	and in the event the market assistance plan receives a minimum
911	of 100 applications for coverage within a 3-month period, or 200
912	applications for coverage within a 1-year period or less, for a
913	given class of risk contained in the classification system
914	defined in the plan of operation of the Joint Underwriting
915	Association, and unless the market assistance plan provides a
916	quotation for at least 80 percent of such applicants, such
917	classification shall immediately be eligible for coverage in the
918	Joint Underwriting Association.
919	(II)  Any market assistance plan application which is
920	rejected because an individual risk is so hazardous as to be
921	practically uninsurable, considering whether the likelihood of a
922	loss for such a risk is substantially higher than for other
923	risks of the same class due to individual risk characteristics,
924	prior loss experience, unwillingness to cooperate with a prior
925	insurer, physical characteristics and physical location shall
926	not be included in the minimum percentage calculation provided
927	above. In the event that there is any legal or administrative
928	challenge to a determination by the office that the conditions
929	of this subparagraph have been met for eligibility for coverage
930	in the Joint Underwriting Association for a given
931	classification, any eligible risk may obtain coverage during the
932	pendency of any such challenge.
933	e.  In order to qualify as a quotation for the purpose of
934	meeting the minimum percentage calculation in this subparagraph,
935	the quoted premium must meet the following criteria:
936	(I)  In the case of an admitted carrier, the quoted premium
937	must not exceed the premium available for a given classification
938	currently in use by the Joint Underwriting Association or the
939	premium developed by using the rates and rating plans on file
940	with the office by the quoting insurer, whichever is greater.
941	(II)  In the case of an authorized surplus lines insurer,
942	the quoted premium must not exceed the premium available for a
943	given classification currently in use by the Joint Underwriting
944	Association by more than 25 percent, after consideration of any
945	individual risk surcharge or credit.
946	f.  Any agent who falsely certifies the unavailability of
947	coverage as provided by sub-subparagraphs a. and b., is subject
948	to the penalties provided in s. 626.611.
949	g.  For properties constructed on or after January 1, 2009,
950	the association shall not insure any property located within 500
951	feet seaward or landward of the coastal construction control
952	line created pursuant to s. 161.053 and shall not insure any
953	property located over 500 to 2,500 feet landward of the coastal
954	construction control line unless the property meets the
955	requirements of the code-plus building standards developed by
956	the Florida Building Commission or the standards contained in
957	the Miami-Dade Building Code pending the adoption of code-plus
958	standards by the commission. However, this sub-subparagraph
959	shall not apply to properties for which a building permit has
960	been issued prior to January 1, 2009.
961	2.  A means for the equitable apportionment of profits or
962	losses and expenses among participating insurers.
963	3.  Rules for the classification of risks and rates which
964	reflect the past and prospective loss experience.
965	4.  A rating plan which reasonably reflects the prior
966	claims experience of the insureds. Such rating plan shall
967	include at least two levels of rates for risks that have
968	favorable loss experience and risks that have unfavorable loss
969	experience, as established by the plan.
970	5.  Reasonable limits to available amounts of insurance.
971	Such limits may not be less than the amounts of insurance
972	required of eligible risks by Florida law.
973	6.  Risk management requirements for insurance where such
974	requirements are reasonable and are expected to reduce losses.
975	7.  Deductibles as may be necessary to meet the needs of
976	insureds.
977	8.  Policy forms which are consistent with the forms in use
978	by the majority of the insurers providing coverage in the
979	voluntary market for the coverage requested by the applicant.
980	9.  A means to remove risks from the plan once such risks
981	no longer meet the eligibility requirements of this paragraph.
982	For this purpose, the plan shall include the following
983	requirements: At each 6-month interval after the activation of
984	any class of insureds, the board of governors or its designated
985	committee shall review the number of applications to the market
986	assistance plan for that class. If, based on these latest
987	numbers, at least 90 percent of such applications have been
988	provided a quotation, the Joint Underwriting Association shall
989	cease underwriting new applications for such class within 30
990	days, and notification of this decision shall be sent to the
991	office, the major agents' associations, and the board of
992	directors of the market assistance plan. A quotation for the
993	purpose of this subparagraph shall meet the same criteria for a
994	quotation as provided in sub-subparagraph 1.e. All policies
995	which were previously written for that class shall continue in
996	force until their normal expiration date, at which time, subject
997	to the required timely notification of nonrenewal by the Joint
998	Underwriting Association, the insured may then elect to reapply
999	to the Joint Underwriting Association according to the
1000	requirements of eligibility. If, upon reapplication, those
1001	previously insured Joint Underwriting Association risks meet the
1002	eligibility requirements, the Joint Underwriting Association
1003	shall provide the coverage requested.
1004	10.  A means for providing credits to insurers against any
1005	deficit assessment levied pursuant to paragraph (c), for risks
1006	voluntarily written through the market assistance plan by such
1007	insurers.
1008	11.  That the Joint Underwriting Association shall operate
1009	subject to the supervision and approval of a board of governors
1010	consisting of 13 individuals appointed by the Chief Financial
1011	Officer, and shall have an executive or underwriting committee.
1012	At least four of the members shall be representatives of
1013	insurance trade associations as follows: one member from the
1014	American Insurance Association, one member from the Alliance of
1015	American Insurers, one member from the National Association of
1016	Independent Insurers, and one member from an unaffiliated
1017	insurer writing coverage on a national basis. Two
1018	representatives shall be from two of the statewide agents'
1019	associations. Each board member shall be appointed to serve for
1020	2-year terms beginning on a date designated by the plan and
1021	shall serve at the pleasure of the Chief Financial Officer.
1022	Members may be reappointed for subsequent terms.
1023	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1024	(a)1.  The Legislature finds that actual and threatened
1025	catastrophic losses to property in this state from hurricanes
1026	have caused insurers to be unwilling or unable to provide
1027	property insurance coverage to the extent sought and needed. It
1028	is in the public interest and a public purpose to assist in
1029	assuring that property in the state is insured so as to
1030	facilitate the remediation, reconstruction, and replacement of
1031	damaged or destroyed property in order to reduce or avoid the
1032	negative effects otherwise resulting to the public health,
1033	safety, and welfare; to the economy of the state; and to the
1034	revenues of the state and local governments needed to provide
1035	for the public welfare. It is necessary, therefore, to provide
1036	property insurance to applicants who are in good faith entitled
1037	to procure insurance through the voluntary market but are unable
1038	to do so. The Legislature intends by this subsection that
1039	property insurance be provided and that it continues, as long as
1040	necessary, through an entity organized to achieve efficiencies
1041	and economies, while providing service to policyholders,
1042	applicants, and agents that is no less than the quality
1043	generally provided in the voluntary market, all toward the
1044	achievement of the foregoing public purposes. Because it is
1045	essential for the corporation to have the maximum financial
1046	resources to pay claims following a catastrophic hurricane, it
1047	is the intent of the Legislature that the income of the
1048	corporation be exempt from federal income taxation and that
1049	interest on the debt obligations issued by the corporation be
1050	exempt from federal income taxation.
1051	2.  The Residential Property and Casualty Joint
1052	Underwriting Association originally created by this statute
1053	shall be known, as of July 1, 2002, as the Citizens Property
1054	Insurance Corporation. The corporation shall provide insurance
1055	for residential and commercial property, for applicants who are
1056	in good faith entitled, but are unable, to procure insurance
1057	through the voluntary market. The corporation shall operate
1058	pursuant to a plan of operation approved by order of the
1059	Financial Services Commission. The plan is subject to continuous
1060	review by the commission. The commission may, by order, withdraw
1061	approval of all or part of a plan if the commission determines
1062	that conditions have changed since approval was granted and that
1063	the purposes of the plan require changes in the plan. The
1064	corporation shall continue to operate pursuant to the plan of
1065	operation approved by the Office of Insurance Regulation until
1066	October 1, 2006. For the purposes of this subsection,
1067	residential coverage includes both personal lines residential
1068	coverage, which consists of the type of coverage provided by
1069	homeowner's, mobile home owner's, dwelling, tenant's,
1070	condominium unit owner's, and similar policies, and commercial
1071	lines residential coverage, which consists of the type of
1072	coverage provided by condominium association, apartment
1073	building, and similar policies.
1074	3.  For the purposes of this subsection, the term
1075	"homestead property" means:
1076	a.  Property that has been granted a homestead exemption
1077	under chapter 196;
1078	b.  Property for which the owner has a current, written
1079	lease with a renter for a term of at least 7 months and for
1080	which the dwelling is insured by the corporation for $200,000 or
1081	less;
1082	c.  An owner-occupied mobile home or manufactured home, as
1083	defined in s. 320.01, which is permanently affixed to real
1084	property, is owned by a Florida resident, and has been granted a
1085	homestead exemption under chapter 196 or, if the owner does not
1086	own the real property, the owner certifies that the mobile home
1087	or manufactured home is his or her principal place of residence.
1088	d.  Tenant's coverage;
1089	e.  Commercial lines residential property; or
1090	f.  Any county, district, or municipal hospital; a hospital
1091	licensed by any not-for-profit corporation qualified under s.
1092	501(c)(3) of the United States Internal Revenue Code; or a
1093	continuing care retirement community that is certified under
1094	chapter 651 and that receives an exemption from ad valorem taxes
1095	under chapter 196.
1096	4.  For the purposes of this subsection, the term
1097	"nonhomestead property" means property that is not homestead
1098	property.
1099	5.  Effective July 1, 2008, a personal lines residential
1100	structure that has a dwelling replacement cost of $1 million or
1101	more, or a single condominium unit that has a combined dwelling
1102	and content replacement cost of $1 million or more is not
1103	eligible for coverage by the corporation. Such dwellings insured
1104	by the corporation on June 30, 2008, may continue to be covered
1105	by the corporation until the end of the policy term. However,
1106	such dwellings that are insured by the corporation and become
1107	ineligible for coverage due to the provisions of this
1108	subparagraph may reapply and obtain coverage in the high-risk
1109	account and be considered "nonhomestead property" if the
1110	property owner provides the corporation with a sworn affidavit
1111	from one or more insurance agents, on a form provided by the
1112	corporation, stating that the agents have made their best
1113	efforts to obtain coverage and that the property has been
1114	rejected for coverage by at least one authorized insurer and at
1115	least three surplus lines insurers. If such conditions are met,
1116	the dwelling may be insured by the corporation for up to 3
1117	years, after which time the dwelling is ineligible for coverage.
1118	The office shall approve the method used by the corporation for
1119	valuing the dwelling replacement cost for the purposes of this
1120	subparagraph. If a policyholder is insured by the corporation
1121	prior to being determined to be ineligible pursuant to this
1122	subparagraph and such policyholder files a lawsuit challenging
1123	the determination, the policyholder may remain insured by the
1124	corporation until the conclusion of the litigation.
1125	6.  Effective March 1, 2007, nonhomestead property is not
1126	eligible for coverage by the corporation and is not eligible for
1127	renewal of such coverage unless the property owner provides the
1128	corporation with a sworn affidavit from one or more insurance
1129	agents, on a form provided by the corporation, stating that the
1130	agents have made their best efforts to obtain coverage and that
1131	the property has been rejected for coverage by at least one
1132	authorized insurer and at least three surplus lines insurers.
1133	7.  For properties constructed on or after January 1, 2009,
1134	the corporation shall not insure any property located within 500
1135	feet seaward or landward of the coastal construction control
1136	line created pursuant to s.161.053 and shall not insure any
1137	property located over 500 to 2,500 feet landward of the coastal
1138	construction control line unless the property meets the
1139	requirements of the code-plus building standards developed by
1140	the Florida Building Commission or the standards contained in
1141	the Miami-Dade Building Code pending the adoption of code-plus
1142	standards by the commission. However, this subparagraph shall
1143	not apply to properties for which a building permit has been
1144	issued prior to January 1, 2009.
1145	8.7.  It is the intent of the Legislature that
1146	policyholders, applicants, and agents of the corporation receive
1147	service and treatment of the highest possible level but never
1148	less than that generally provided in the voluntary market. It
1149	also is intended that the corporation be held to service
1150	standards no less than those applied to insurers in the
1151	voluntary market by the office with respect to responsiveness,
1152	timeliness, customer courtesy, and overall dealings with
1153	policyholders, applicants, or agents of the corporation.
1154	(b)1.  All insurers authorized to write one or more subject
1155	lines of business in this state are subject to assessment by the
1156	corporation and, for the purposes of this subsection, are
1157	referred to collectively as "assessable insurers." Insurers
1158	writing one or more subject lines of business in this state
1159	pursuant to part VIII of chapter 626 are not assessable
1160	insurers, but insureds who procure one or more subject lines of
1161	business in this state pursuant to part VIII of chapter 626 are
1162	subject to assessment by the corporation and are referred to
1163	collectively as "assessable insureds." An authorized insurer's
1164	assessment liability shall begin on the first day of the
1165	calendar year following the year in which the insurer was issued
1166	a certificate of authority to transact insurance for subject
1167	lines of business in this state and shall terminate 1 year after
1168	the end of the first calendar year during which the insurer no
1169	longer holds a certificate of authority to transact insurance
1170	for subject lines of business in this state.
1171	2.a.  All revenues, assets, liabilities, losses, and
1172	expenses of the corporation shall be divided into three separate
1173	accounts as follows:
1174	(I)  A personal lines account for personal residential
1175	policies issued by the corporation or issued by the Residential
1176	Property and Casualty Joint Underwriting Association and renewed
1177	by the corporation that provide comprehensive, multiperil
1178	coverage on risks that are not located in areas eligible for
1179	coverage in the Florida Windstorm Underwriting Association as
1180	those areas were defined on January 1, 2002, and for such
1181	policies that do not provide coverage for the peril of wind on
1182	risks that are located in such areas;
1183	(II)  A commercial lines account for commercial residential
1184	policies issued by the corporation or issued by the Residential
1185	Property and Casualty Joint Underwriting Association and renewed
1186	by the corporation that provide coverage for basic property
1187	perils on risks that are not located in areas eligible for
1188	coverage in the Florida Windstorm Underwriting Association as
1189	those areas were defined on January 1, 2002, and for such
1190	policies that do not provide coverage for the peril of wind on
1191	risks that are located in such areas; and
1192	(III)  A high-risk account for personal residential
1193	policies and commercial residential and commercial
1194	nonresidential property policies issued by the corporation or
1195	transferred to the corporation that provide coverage for the
1196	peril of wind on risks that are located in areas eligible for
1197	coverage in the Florida Windstorm Underwriting Association as
1198	those areas were defined on January 1, 2002. The high-risk
1199	account must also include quota share primary insurance under
1200	subparagraph (c)2. The area eligible for coverage under the
1201	high-risk account also includes the area within Port Canaveral,
1202	which is bordered on the south by the City of Cape Canaveral,
1203	bordered on the west by the Banana River, and bordered on the
1204	north by Federal Government property. The office may remove
1205	territory from the area eligible for wind-only and quota share
1206	coverage if, after a public hearing, the office finds that
1207	authorized insurers in the voluntary market are willing and able
1208	to write sufficient amounts of personal and commercial
1209	residential coverage for all perils in the territory, including
1210	coverage for the peril of wind, such that risks covered by wind-
1211	only policies in the removed territory could be issued a policy
1212	by the corporation in either the personal lines or commercial
1213	lines account without a significant increase in the
1214	corporation's probable maximum loss in such account. Removal of
1215	territory from the area eligible for wind-only or quota share
1216	coverage does not alter the assignment of wind coverage written
1217	in such areas to the high-risk account.
1218	b.  The three separate accounts must be maintained as long
1219	as financing obligations entered into by the Florida Windstorm
1220	Underwriting Association or Residential Property and Casualty
1221	Joint Underwriting Association are outstanding, in accordance
1222	with the terms of the corresponding financing documents. When
1223	the financing obligations are no longer outstanding, in
1224	accordance with the terms of the corresponding financing
1225	documents, the corporation may use a single account for all
1226	revenues, assets, liabilities, losses, and expenses of the
1227	corporation. Consistent with the requirement of this
1228	subparagraph and prudent investment policies that minimize the
1229	cost of carrying debt, the board shall exercise its best efforts
1230	to retire existing debt or to obtain approval of necessary
1231	parties to amend the terms of existing debt, so as to structure
1232	the most efficient plan to consolidate the three separate
1233	accounts into a single account. By February 1, 2007, the board
1234	shall submit a report to the Financial Services Commission, the
1235	President of the Senate, and the Speaker of the House of
1236	Representatives which includes an analysis of consolidating the
1237	accounts, the actions the board has taken to minimize the cost
1238	of carrying debt, and its recommendations for executing the most
1239	efficient plan.
1240	c.  Creditors of the Residential Property and Casualty
1241	Joint Underwriting Association shall have a claim against, and
1242	recourse to, the accounts referred to in sub-sub-subparagraphs
1243	a.(I) and (II) and shall have no claim against, or recourse to,
1244	the account referred to in sub-sub-subparagraph a.(III).
1245	Creditors of the Florida Windstorm Underwriting Association
1246	shall have a claim against, and recourse to, the account
1247	referred to in sub-sub-subparagraph a.(III) and shall have no
1248	claim against, or recourse to, the accounts referred to in sub-
1249	sub-subparagraphs a.(I) and (II).
1250	d.  Revenues, assets, liabilities, losses, and expenses not
1251	attributable to particular accounts shall be prorated among the
1252	accounts.
1253	e.  The Legislature finds that the revenues of the
1254	corporation are revenues that are necessary to meet the
1255	requirements set forth in documents authorizing the issuance of
1256	bonds under this subsection.
1257	f.  No part of the income of the corporation may inure to
1258	the benefit of any private person.
1259	3.  With respect to a deficit in an account:
1260	a.  When the deficit incurred in a particular calendar year
1261	is not greater than 10 percent of the aggregate statewide direct
1262	written premium for the subject lines of business for the prior
1263	calendar year, the entire deficit shall be recovered through
1264	regular assessments of assessable insurers under paragraph (p)
1265	and assessable insureds.
1266	b.  When the deficit incurred in a particular calendar year
1267	exceeds 10 percent of the aggregate statewide direct written
1268	premium for the subject lines of business for the prior calendar
1269	year, the corporation shall levy regular assessments on
1270	assessable insurers under paragraph (p) and on assessable
1271	insureds in an amount equal to the greater of 10 percent of the
1272	deficit or 10 percent of the aggregate statewide direct written
1273	premium for the subject lines of business for the prior calendar
1274	year. Any remaining deficit shall be recovered through emergency
1275	assessments under sub-subparagraph d.
1276	c.  Each assessable insurer's share of the amount being
1277	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1278	be in the proportion that the assessable insurer's direct
1279	written premium for the subject lines of business for the year
1280	preceding the assessment bears to the aggregate statewide direct
1281	written premium for the subject lines of business for that year.
1282	The assessment percentage applicable to each assessable insured
1283	is the ratio of the amount being assessed under sub-subparagraph
1284	a. or sub-subparagraph b. to the aggregate statewide direct
1285	written premium for the subject lines of business for the prior
1286	year. Assessments levied by the corporation on assessable
1287	insurers under sub-subparagraphs a. and b. shall be paid as
1288	required by the corporation's plan of operation and paragraph
1289	(p). Notwithstanding any other provision of this subsection, the
1290	aggregate amount of a regular assessment for a deficit incurred
1291	in a particular calendar year shall be reduced by the estimated
1292	amount to be received by the corporation from the Citizens
1293	policyholder surcharge under subparagraph (c)11. and the amount
1294	collected or estimated to be collected from the assessment on
1295	Citizens policyholders pursuant to sub-subparagraph i.
1296	Assessments levied by the corporation on assessable insureds
1297	under sub-subparagraphs a. and b. shall be collected by the
1298	surplus lines agent at the time the surplus lines agent collects
1299	the surplus lines tax required by s. 626.932 and shall be paid
1300	to the Florida Surplus Lines Service Office at the time the
1301	surplus lines agent pays the surplus lines tax to the Florida
1302	Surplus Lines Service Office. Upon receipt of regular
1303	assessments from surplus lines agents, the Florida Surplus Lines
1304	Service Office shall transfer the assessments directly to the
1305	corporation as determined by the corporation.
1306	d.  Upon a determination by the board of governors that a
1307	deficit in an account exceeds the amount that will be recovered
1308	through regular assessments under sub-subparagraph a. or sub-
1309	subparagraph b., the board shall levy, after verification by the
1310	office, emergency assessments, for as many years as necessary to
1311	cover the deficits, to be collected by assessable insurers and
1312	the corporation and collected from assessable insureds upon
1313	issuance or renewal of policies for subject lines of business,
1314	excluding National Flood Insurance policies. The amount of the
1315	emergency assessment collected in a particular year shall be a
1316	uniform percentage of that year's direct written premium for
1317	subject lines of business and all accounts of the corporation,
1318	excluding National Flood Insurance Program policy premiums, as
1319	annually determined by the board and verified by the office. The
1320	office shall verify the arithmetic calculations involved in the
1321	board's determination within 30 days after receipt of the
1322	information on which the determination was based.
1323	Notwithstanding any other provision of law, the corporation and
1324	each assessable insurer that writes subject lines of business
1325	shall collect emergency assessments from its policyholders
1326	without such obligation being affected by any credit,
1327	limitation, exemption, or deferment. Emergency assessments
1328	levied by the corporation on assessable insureds shall be
1329	collected by the surplus lines agent at the time the surplus
1330	lines agent collects the surplus lines tax required by s.
1331	626.932 and shall be paid to the Florida Surplus Lines Service
1332	Office at the time the surplus lines agent pays the surplus
1333	lines tax to the Florida Surplus Lines Service Office. The
1334	emergency assessments so collected shall be transferred directly
1335	to the corporation on a periodic basis as determined by the
1336	corporation and shall be held by the corporation solely in the
1337	applicable account. The aggregate amount of emergency
1338	assessments levied for an account under this sub-subparagraph in
1339	any calendar year may not exceed the greater of 10 percent of
1340	the amount needed to cover the original deficit, plus interest,
1341	fees, commissions, required reserves, and other costs associated
1342	with financing of the original deficit, or 10 percent of the
1343	aggregate statewide direct written premium for subject lines of
1344	business and for all accounts of the corporation for the prior
1345	year, plus interest, fees, commissions, required reserves, and
1346	other costs associated with financing the original deficit.
1347	e.  The corporation may pledge the proceeds of assessments,
1348	projected recoveries from the Florida Hurricane Catastrophe
1349	Fund, other insurance and reinsurance recoverables, policyholder
1350	surcharges and other surcharges, and other funds available to
1351	the corporation as the source of revenue for and to secure bonds
1352	issued under paragraph (p), bonds or other indebtedness issued
1353	under subparagraph (c)3., or lines of credit or other financing
1354	mechanisms issued or created under this subsection, or to retire
1355	any other debt incurred as a result of deficits or events giving
1356	rise to deficits, or in any other way that the board determines
1357	will efficiently recover such deficits. The purpose of the lines
1358	of credit or other financing mechanisms is to provide additional
1359	resources to assist the corporation in covering claims and
1360	expenses attributable to a catastrophe. As used in this
1361	subsection, the term "assessments" includes regular assessments
1362	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1363	(p)1. and emergency assessments under sub-subparagraph d.
1364	Emergency assessments collected under sub-subparagraph d. are
1365	not part of an insurer's rates, are not premium, and are not
1366	subject to premium tax, fees, or commissions; however, failure
1367	to pay the emergency assessment shall be treated as failure to
1368	pay premium. The emergency assessments under sub-subparagraph d.
1369	shall continue as long as any bonds issued or other indebtedness
1370	incurred with respect to a deficit for which the assessment was
1371	imposed remain outstanding, unless adequate provision has been
1372	made for the payment of such bonds or other indebtedness
1373	pursuant to the documents governing such bonds or other
1374	indebtedness.
1375	f.  As used in this subsection, the term "subject lines of
1376	business" means insurance written by assessable insurers or
1377	procured by assessable insureds on real or personal property, as
1378	defined in s. 624.604, including insurance for fire, industrial
1379	fire, allied lines, farmowners multiperil, homeowners
1380	multiperil, commercial residential multiperil, and mobile homes,
1381	and including liability coverage on all such insurance, but
1382	excluding inland marine as defined in s. 624.607(3) and
1383	excluding vehicle insurance as defined in s. 624.605(1) other
1384	than insurance on mobile homes used as permanent dwellings.
1385	g.  The Florida Surplus Lines Service Office shall
1386	determine annually the aggregate statewide written premium in
1387	subject lines of business procured by assessable insureds and
1388	shall report that information to the corporation in a form and
1389	at a time the corporation specifies to ensure that the
1390	corporation can meet the requirements of this subsection and the
1391	corporation's financing obligations.
1392	h.  The Florida Surplus Lines Service Office shall verify
1393	the proper application by surplus lines agents of assessment
1394	percentages for regular assessments and emergency assessments
1395	levied under this subparagraph on assessable insureds and shall
1396	assist the corporation in ensuring the accurate, timely
1397	collection and payment of assessments by surplus lines agents as
1398	required by the corporation.
1399	i.  If a deficit is incurred in any account, the board of
1400	governors shall levy an immediate assessment against the premium
1401	of each nonhomestead property policyholder in all accounts of
1402	the corporation, as a uniform percentage of the premium of the
1403	policy of up to 10 percent of such premium, which funds shall be
1404	used to offset the deficit. If this assessment is insufficient
1405	to eliminate the deficit, the board of governors shall levy an
1406	additional assessment against all policyholders of the
1407	corporation, which shall be collected at the time of issuance or
1408	renewal of a policy, as a uniform percentage of the premium for
1409	the policy of up to 10 percent of such premium, which funds
1410	shall be used to further offset the deficit.
1411	j.  The board of governors shall maintain separate
1412	accounting records that consolidate data for nonhomestead
1413	properties, including, but not limited to, number of policies,
1414	insured values, premiums written, and losses. The board of
1415	governors shall annually report to the office and the
1416	Legislature a summary of such data.
1417	(c)  The plan of operation of the corporation:
1418	1.  Must provide for adoption of residential property and
1419	casualty insurance policy forms and commercial residential and
1420	nonresidential property insurance forms, which forms must be
1421	approved by the office prior to use. The corporation shall adopt
1422	the following policy forms:
1423	a.  Standard personal lines policy forms that are
1424	comprehensive multiperil policies providing full coverage of a
1425	residential property equivalent to the coverage provided in the
1426	private insurance market under an HO-3, HO-4, or HO-6 policy.
1427	b.  Basic personal lines policy forms that are policies
1428	similar to an HO-8 policy or a dwelling fire policy that provide
1429	coverage meeting the requirements of the secondary mortgage
1430	market, but which coverage is more limited than the coverage
1431	under a standard policy.
1432	c.  Commercial lines residential policy forms that are
1433	generally similar to the basic perils of full coverage
1434	obtainable for commercial residential structures in the admitted
1435	voluntary market.
1436	d.  Personal lines and commercial lines residential
1437	property insurance forms that cover the peril of wind only. The
1438	forms are applicable only to residential properties located in
1439	areas eligible for coverage under the high-risk account referred
1440	to in sub-subparagraph (b)2.a.
1441	e.  Commercial lines nonresidential property insurance
1442	forms that cover the peril of wind only. The forms are
1443	applicable only to nonresidential properties located in areas
1444	eligible for coverage under the high-risk account referred to in
1445	sub-subparagraph (b)2.a.
1446	e.f.  The corporation may adopt variations of the policy
1447	forms listed in sub-subparagraphs a.-d. a.-e. that contain more
1448	restrictive coverage.
1449	2.a.  Must provide that the corporation adopt a program in
1450	which the corporation and authorized insurers enter into quota
1451	share primary insurance agreements for hurricane coverage, as
1452	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1453	property insurance forms for eligible risks which cover the
1454	peril of wind only. As used in this subsection, the term:
1455	(I)  "Quota share primary insurance" means an arrangement
1456	in which the primary hurricane coverage of an eligible risk is
1457	provided in specified percentages by the corporation and an
1458	authorized insurer. The corporation and authorized insurer are
1459	each solely responsible for a specified percentage of hurricane
1460	coverage of an eligible risk as set forth in a quota share
1461	primary insurance agreement between the corporation and an
1462	authorized insurer and the insurance contract. The
1463	responsibility of the corporation or authorized insurer to pay
1464	its specified percentage of hurricane losses of an eligible
1465	risk, as set forth in the quota share primary insurance
1466	agreement, may not be altered by the inability of the other
1467	party to the agreement to pay its specified percentage of
1468	hurricane losses. Eligible risks that are provided hurricane
1469	coverage through a quota share primary insurance arrangement
1470	must be provided policy forms that set forth the obligations of
1471	the corporation and authorized insurer under the arrangement,
1472	clearly specify the percentages of quota share primary insurance
1473	provided by the corporation and authorized insurer, and
1474	conspicuously and clearly state that neither the authorized
1475	insurer nor the corporation may be held responsible beyond its
1476	specified percentage of coverage of hurricane losses.
1477	(II)  "Eligible risks" means personal lines residential and
1478	commercial lines residential risks that meet the underwriting
1479	criteria of the corporation and are located in areas that were
1480	eligible for coverage by the Florida Windstorm Underwriting
1481	Association on January 1, 2002.
1482	b.  The corporation may enter into quota share primary
1483	insurance agreements with authorized insurers at corporation
1484	coverage levels of 90 percent and 50 percent.
1485	c.  If the corporation determines that additional coverage
1486	levels are necessary to maximize participation in quota share
1487	primary insurance agreements by authorized insurers, the
1488	corporation may establish additional coverage levels. However,
1489	the corporation's quota share primary insurance coverage level
1490	may not exceed 90 percent.
1491	d.  Any quota share primary insurance agreement entered
1492	into between an authorized insurer and the corporation must
1493	provide for a uniform specified percentage of coverage of
1494	hurricane losses, by county or territory as set forth by the
1495	corporation board, for all eligible risks of the authorized
1496	insurer covered under the quota share primary insurance
1497	agreement.
1498	e.  Any quota share primary insurance agreement entered
1499	into between an authorized insurer and the corporation is
1500	subject to review and approval by the office. However, such
1501	agreement shall be authorized only as to insurance contracts
1502	entered into between an authorized insurer and an insured who is
1503	already insured by the corporation for wind coverage.
1504	f.  For all eligible risks covered under quota share
1505	primary insurance agreements, the exposure and coverage levels
1506	for both the corporation and authorized insurers shall be
1507	reported by the corporation to the Florida Hurricane Catastrophe
1508	Fund. For all policies of eligible risks covered under quota
1509	share primary insurance agreements, the corporation and the
1510	authorized insurer shall maintain complete and accurate records
1511	for the purpose of exposure and loss reimbursement audits as
1512	required by Florida Hurricane Catastrophe Fund rules. The
1513	corporation and the authorized insurer shall each maintain
1514	duplicate copies of policy declaration pages and supporting
1515	claims documents.
1516	g.  The corporation board shall establish in its plan of
1517	operation standards for quota share agreements which ensure that
1518	there is no discriminatory application among insurers as to the
1519	terms of quota share agreements, pricing of quota share
1520	agreements, incentive provisions if any, and consideration paid
1521	for servicing policies or adjusting claims.
1522	h.  The quota share primary insurance agreement between the
1523	corporation and an authorized insurer must set forth the
1524	specific terms under which coverage is provided, including, but
1525	not limited to, the sale and servicing of policies issued under
1526	the agreement by the insurance agent of the authorized insurer
1527	producing the business, the reporting of information concerning
1528	eligible risks, the payment of premium to the corporation, and
1529	arrangements for the adjustment and payment of hurricane claims
1530	incurred on eligible risks by the claims adjuster and personnel
1531	of the authorized insurer. Entering into a quota sharing
1532	insurance agreement between the corporation and an authorized
1533	insurer shall be voluntary and at the discretion of the
1534	authorized insurer.
1535	3.  May provide that the corporation may employ or
1536	otherwise contract with individuals or other entities to provide
1537	administrative or professional services that may be appropriate
1538	to effectuate the plan. The corporation shall have the power to
1539	borrow funds, by issuing bonds or by incurring other
1540	indebtedness, and shall have other powers reasonably necessary
1541	to effectuate the requirements of this subsection, including,
1542	without limitation, the power to issue bonds and incur other
1543	indebtedness in order to refinance outstanding bonds or other
1544	indebtedness. The corporation may, but is not required to, seek
1545	judicial validation of its bonds or other indebtedness under
1546	chapter 75. The corporation may issue bonds or incur other
1547	indebtedness, or have bonds issued on its behalf by a unit of
1548	local government pursuant to subparagraph (p)(g)2., in the
1549	absence of a hurricane or other weather-related event, upon a
1550	determination by the corporation, subject to approval by the
1551	office, that such action would enable it to efficiently meet the
1552	financial obligations of the corporation and that such
1553	financings are reasonably necessary to effectuate the
1554	requirements of this subsection. The corporation is authorized
1555	to take all actions needed to facilitate tax-free status for any
1556	such bonds or indebtedness, including formation of trusts or
1557	other affiliated entities. The corporation shall have the
1558	authority to pledge assessments, projected recoveries from the
1559	Florida Hurricane Catastrophe Fund, other reinsurance
1560	recoverables, market equalization and other surcharges, and
1561	other funds available to the corporation as security for bonds
1562	or other indebtedness. In recognition of s. 10, Art. I of the
1563	State Constitution, prohibiting the impairment of obligations of
1564	contracts, it is the intent of the Legislature that no action be
1565	taken whose purpose is to impair any bond indenture or financing
1566	agreement or any revenue source committed by contract to such
1567	bond or other indebtedness.
1568	4.a.  Must require that the corporation operate subject to
1569	the supervision and approval of a board of governors consisting
1570	of eight individuals who are residents of this state, from
1571	different geographical areas of this state. The Governor, the
1572	Chief Financial Officer, the President of the Senate, and the
1573	Speaker of the House of Representatives shall each appoint two
1574	members of the board. At least one of the two members appointed
1575	by each appointing officer must have demonstrated expertise in
1576	insurance. The Chief Financial Officer shall designate one of
1577	the appointees as chair. All board members serve at the pleasure
1578	of the appointing officer. All board members, including the
1579	chair, must be appointed to serve for 3-year terms beginning
1580	annually on a date designated by the plan. Any board vacancy
1581	shall be filled for the unexpired term by the appointing
1582	officer. The Chief Financial Officer shall appoint a technical
1583	advisory group to provide information and advice to the board of
1584	governors in connection with the board's duties under this
1585	subsection. The executive director and senior managers of the
1586	corporation shall be engaged by the board and serve at the
1587	pleasure of the board. Any executive director appointed on or
1588	after July 1, 2006, is subject to confirmation by the Senate.
1589	The executive director is responsible for employing other staff
1590	as the corporation may require, subject to review and
1591	concurrence by the board.
1592	b.  The board shall create a Market Accountability Advisory
1593	Committee to assist the corporation in developing awareness of
1594	its rates and its customer and agent service levels in
1595	relationship to the voluntary market insurers writing similar
1596	coverage. The members of the advisory committee shall consist of
1597	the following 11 persons, one of whom must be elected chair by
1598	the members of the committee: four representatives, one
1599	appointed by the Florida Association of Insurance Agents, one by
1600	the Florida Association of Insurance and Financial Advisors, one
1601	by the Professional Insurance Agents of Florida, and one by the
1602	Latin American Association of Insurance Agencies; three
1603	representatives appointed by the insurers with the three highest
1604	voluntary market share of residential property insurance
1605	business in the state; one representative from the Office of
1606	Insurance Regulation; one consumer appointed by the board who is
1607	insured by the corporation at the time of appointment to the
1608	committee; one representative appointed by the Florida
1609	Association of Realtors; and one representative appointed by the
1610	Florida Bankers Association. All members must serve for 3-year
1611	terms and may serve for consecutive terms. The committee shall
1612	report to the corporation at each board meeting on insurance
1613	market issues which may include rates and rate competition with
1614	the voluntary market; service, including policy issuance, claims
1615	processing, and general responsiveness to policyholders,
1616	applicants, and agents; and matters relating to depopulation.
1617	5.  Must provide a procedure for determining the
1618	eligibility of a risk for coverage, as follows:
1619	a.  Subject to the provisions of s. 627.3517, with respect
1620	to personal lines residential risks, if the risk is offered
1621	coverage from an authorized insurer at the insurer's approved
1622	rate under either a standard policy including wind coverage or,
1623	if consistent with the insurer's underwriting rules as filed
1624	with the office, a basic policy including wind coverage, the
1625	risk is not eligible for any policy issued by the corporation.
1626	If the risk is not able to obtain any such offer, the risk is
1627	eligible for either a standard policy including wind coverage or
1628	a basic policy including wind coverage issued by the
1629	corporation; however, if the risk could not be insured under a
1630	standard policy including wind coverage regardless of market
1631	conditions, the risk shall be eligible for a basic policy
1632	including wind coverage unless rejected under subparagraph 8.
1633	The corporation shall determine the type of policy to be
1634	provided on the basis of objective standards specified in the
1635	underwriting manual and based on generally accepted underwriting
1636	practices.
1637	(I)  If the risk accepts an offer of coverage through the
1638	market assistance plan or an offer of coverage through a
1639	mechanism established by the corporation before a policy is
1640	issued to the risk by the corporation or during the first 30
1641	days of coverage by the corporation, and the producing agent who
1642	submitted the application to the plan or to the corporation is
1643	not currently appointed by the insurer, the insurer shall:
1644	(A)  Pay to the producing agent of record of the policy,
1645	for the first year, an amount that is the greater of the
1646	insurer's usual and customary commission for the type of policy
1647	written or a fee equal to the usual and customary commission of
1648	the corporation; or
1649	(B)  Offer to allow the producing agent of record of the
1650	policy to continue servicing the policy for a period of not less
1651	than 1 year and offer to pay the agent the greater of the
1652	insurer's or the corporation's usual and customary commission
1653	for the type of policy written.
1654
1655	If the producing agent is unwilling or unable to accept
1656	appointment, the new insurer shall pay the agent in accordance
1657	with sub-sub-sub-subparagraph (A).
1658	(II)  When the corporation enters into a contractual
1659	agreement for a take-out plan, the producing agent of record of
1660	the corporation policy is entitled to retain any unearned
1661	commission on the policy, and the insurer shall:
1662	(A)  Pay to the producing agent of record of the
1663	corporation policy, for the first year, an amount that is the
1664	greater of the insurer's usual and customary commission for the
1665	type of policy written or a fee equal to the usual and customary
1666	commission of the corporation; or
1667	(B)  Offer to allow the producing agent of record of the
1668	corporation policy to continue servicing the policy for a period
1669	of not less than 1 year and offer to pay the agent the greater
1670	of the insurer's or the corporation's usual and customary
1671	commission for the type of policy written.
1672
1673	If the producing agent is unwilling or unable to accept
1674	appointment, the new insurer shall pay the agent in accordance
1675	with sub-sub-sub-subparagraph (A).
1676	b.  With respect to commercial lines residential risks, if
1677	the risk is offered coverage under a policy including wind
1678	coverage from an authorized insurer at its approved rate, the
1679	risk is not eligible for any policy issued by the corporation.
1680	If the risk is not able to obtain any such offer, the risk is
1681	eligible for a policy including wind coverage issued by the
1682	corporation.
1683	(I)  If the risk accepts an offer of coverage through the
1684	market assistance plan or an offer of coverage through a
1685	mechanism established by the corporation before a policy is
1686	issued to the risk by the corporation or during the first 30
1687	days of coverage by the corporation, and the producing agent who
1688	submitted the application to the plan or the corporation is not
1689	currently appointed by the insurer, the insurer shall:
1690	(A)  Pay to the producing agent of record of the policy,
1691	for the first year, an amount that is the greater of the
1692	insurer's usual and customary commission for the type of policy
1693	written or a fee equal to the usual and customary commission of
1694	the corporation; or
1695	(B)  Offer to allow the producing agent of record of the
1696	policy to continue servicing the policy for a period of not less
1697	than 1 year and offer to pay the agent the greater of the
1698	insurer's or the corporation's usual and customary commission
1699	for the type of policy written.
1700
1701	If the producing agent is unwilling or unable to accept
1702	appointment, the new insurer shall pay the agent in accordance
1703	with sub-sub-sub-subparagraph (A).
1704	(II)  When the corporation enters into a contractual
1705	agreement for a take-out plan, the producing agent of record of
1706	the corporation policy is entitled to retain any unearned
1707	commission on the policy, and the insurer shall:
1708	(A)  Pay to the producing agent of record of the
1709	corporation policy, for the first year, an amount that is the
1710	greater of the insurer's usual and customary commission for the
1711	type of policy written or a fee equal to the usual and customary
1712	commission of the corporation; or
1713	(B)  Offer to allow the producing agent of record of the
1714	corporation policy to continue servicing the policy for a period
1715	of not less than 1 year and offer to pay the agent the greater
1716	of the insurer's or the corporation's usual and customary
1717	commission for the type of policy written.
1718
1719	If the producing agent is unwilling or unable to accept
1720	appointment, the new insurer shall pay the agent in accordance
1721	with sub-sub-sub-subparagraph (A).
1722	6.  Must provide by July 1, 2007, that an application for
1723	coverage for a new policy is subject to a waiting period of 10
1724	days before coverage is effective, during which time the
1725	corporation shall make such application available for review by
1726	general lines agents and authorized property and casualty
1727	insurers. The board shall may approve an exception exceptions
1728	that allows allow for coverage to be effective before the end of
1729	the 10-day waiting period, for coverage issued in conjunction
1730	with a real estate closing., The board may approve and for such
1731	other exceptions as the board determines are necessary to
1732	prevent lapses in coverage.
1733	7.  Must include rules for classifications of risks and
1734	rates therefor.
1735	8.  Must provide that if premium and investment income for
1736	an account attributable to a particular calendar year are in
1737	excess of projected losses and expenses for the account
1738	attributable to that year, such excess shall be held in surplus
1739	in the account. Such surplus shall be available to defray
1740	deficits in that account as to future years and shall be used
1741	for that purpose prior to assessing assessable insurers and
1742	assessable insureds as to any calendar year.
1743	9.  Must provide objective criteria and procedures to be
1744	uniformly applied for all applicants in determining whether an
1745	individual risk is so hazardous as to be uninsurable. In making
1746	this determination and in establishing the criteria and
1747	procedures, the following shall be considered:
1748	a.  Whether the likelihood of a loss for the individual
1749	risk is substantially higher than for other risks of the same
1750	class; and
1751	b.  Whether the uncertainty associated with the individual
1752	risk is such that an appropriate premium cannot be determined.
1753
1754	The acceptance or rejection of a risk by the corporation shall
1755	be construed as the private placement of insurance, and the
1756	provisions of chapter 120 shall not apply.
1757	10.  Must provide that the corporation shall make its best
1758	efforts to procure catastrophe reinsurance at reasonable rates,
1759	to cover its projected 100-year probable maximum loss as
1760	determined by the board of governors.
1761	11.  Must provide that in the event of regular deficit
1762	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1763	(b)3.b., in the personal lines account, the commercial lines
1764	residential account, or the high-risk account, the corporation
1765	shall levy upon corporation policyholders in its next rate
1766	filing, or by a separate rate filing solely for this purpose, a
1767	Citizens policyholder surcharge arising from a regular
1768	assessment in such account in a percentage equal to the total
1769	amount of such regular assessments divided by the aggregate
1770	statewide direct written premium for subject lines of business
1771	for the prior calendar year. For purposes of calculating the
1772	Citizens policyholder surcharge to be levied under this
1773	subparagraph, the total amount of the regular assessment to
1774	which this surcharge is related shall be determined as set forth
1775	in subparagraph (b)3., without deducting the estimated Citizens
1776	policyholder surcharge. Citizens policyholder surcharges under
1777	this subparagraph are not considered premium and are not subject
1778	to commissions, fees, or premium taxes; however, failure to pay
1779	a market equalization surcharge shall be treated as failure to
1780	pay premium.
1781	12.  The policies issued by the corporation must provide
1782	that, if the corporation or the market assistance plan obtains
1783	an offer from an authorized insurer to cover the risk at its
1784	approved rates, the risk is no longer eligible for renewal
1785	through the corporation.
1786	13.  Corporation policies and applications must include a
1787	notice that the corporation policy could, under this section, be
1788	replaced with a policy issued by an authorized insurer that does
1789	not provide coverage identical to the coverage provided by the
1790	corporation. The notice shall also specify that acceptance of
1791	corporation coverage creates a conclusive presumption that the
1792	applicant or policyholder is aware of this potential.
1793	14.  May establish, subject to approval by the office,
1794	different eligibility requirements and operational procedures
1795	for any line or type of coverage for any specified county or
1796	area if the board determines that such changes to the
1797	eligibility requirements and operational procedures are
1798	justified due to the voluntary market being sufficiently stable
1799	and competitive in such area or for such line or type of
1800	coverage and that consumers who, in good faith, are unable to
1801	obtain insurance through the voluntary market through ordinary
1802	methods would continue to have access to coverage from the
1803	corporation. When coverage is sought in connection with a real
1804	property transfer, such requirements and procedures shall not
1805	provide for an effective date of coverage later than the date of
1806	the closing of the transfer as established by the transferor,
1807	the transferee, and, if applicable, the lender.
1808	15.  Must provide that, with respect to the high-risk
1809	account, any assessable insurer with a surplus as to
1810	policyholders of $25 million or less writing 25 percent or more
1811	of its total countrywide property insurance premiums in this
1812	state may petition the office, within the first 90 days of each
1813	calendar year, to qualify as a limited apportionment company. A
1814	regular assessment levied by the corporation on a limited
1815	apportionment company for a deficit incurred by the corporation
1816	for the high-risk account in 2006 or thereafter may be paid to
1817	the corporation on a monthly basis as the assessments are
1818	collected by the limited apportionment company from its insureds
1819	pursuant to s. 627.3512, but the regular assessment must be paid
1820	in full within 12 months after being levied by the corporation.
1821	A limited apportionment company shall collect from its
1822	policyholders any emergency assessment imposed under sub-
1823	subparagraph (b)3.d. The plan shall provide that, if the office
1824	determines that any regular assessment will result in an
1825	impairment of the surplus of a limited apportionment company,
1826	the office may direct that all or part of such assessment be
1827	deferred as provided in subparagraph (p)(g)4. However, there
1828	shall be no limitation or deferment of an emergency assessment
1829	to be collected from policyholders under sub-subparagraph
1830	(b)3.d.
1831	16.  Must provide that the corporation appoint as its
1832	licensed agents only those agents who also hold an appointment
1833	as defined in s. 626.015(3) with an insurer who at the time of
1834	the agent's initial appointment by the corporation is authorized
1835	to write and is actually writing personal lines residential
1836	property coverage, or commercial residential property coverage,
1837	or commercial nonresidential property coverage within the state.
1838	17.  Must provide, by July 1, 2007, a premium payment plan
1839	option to its policyholders which allows for monthly, quarterly,
1840	and semiannual payment of premiums.
1841	18.  Must provide, effective June 1, 2007, that the
1842	corporation contract with each insurer providing the non-wind
1843	coverage for risks insured by the corporation in the high-risk
1844	account, requiring that the insurer provide claims adjusting
1845	services for the wind coverage provided by the corporation for
1846	such risks. An insurer is required to enter into this contract
1847	as a condition of providing non-wind coverage for a risk that is
1848	insured by the corporation in the high-risk account unless the
1849	board finds, after a hearing, that the insurer is not capable of
1850	providing adjusting services at an acceptable level of quality
1851	to corporation policyholders. The terms and conditions of such
1852	contracts must be substantially the same as the contracts that
1853	the corporation executed with insurers under the "adjust-your-
1854	own" program in 2006, except as may be mutually agreed to by the
1855	parties and except for such changes that the board determines
1856	are necessary to ensure that claims are adjusted appropriately.
1857	The corporation shall provide a process for neutral arbitration
1858	of any dispute between the corporation and the insurer regarding
1859	the terms of the contract. The corporation shall review and
1860	monitor the performance of insurers under these contracts.
1861	19.  Must limit coverage on mobile homes or manufactured
1862	homes built prior to 1994 to actual cash value of the dwelling
1863	rather than replacement costs of the dwelling.
1864	(d)1.  All prospective employees for senior management
1865	positions, as defined by the plan of operation, are subject to
1866	background checks as a prerequisite for employment. The office
1867	shall conduct background checks on such prospective employees
1868	pursuant to ss. 624.34, 624.404(3), and 628.261.
1869	2.  On or before July 1 of each year, employees of the
1870	corporation are required to sign and submit a statement
1871	attesting that they do not have a conflict of interest, as
1872	defined in part III of chapter 112. As a condition of
1873	employment, all prospective employees are required to sign and
1874	submit to the corporation a conflict-of-interest statement.
1875	3.  Senior managers and members of the board of governors
1876	are subject to the provisions of part III of chapter 112,
1877	including, but not limited to, the code of ethics and public
1878	disclosure and reporting of financial interests, pursuant to s.
1879	112.3145. Senior managers and board members are also required to
1880	file such disclosures with the Office of Insurance Regulation.
1881	The executive director of the corporation or his or her designee
1882	shall notify each newly appointed and existing appointed member
1883	of the board of governors and senior managers of their duty to
1884	comply with the reporting requirements of part III of chapter
1885	112. At least quarterly, the executive director or his or her
1886	designee shall submit to the Commission on Ethics a list of
1887	names of the senior managers and members of the board of
1888	governors who are subject to the public disclosure requirements
1889	under s. 112.3145.
1890	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
1891	other provision of law, an employee or board member may not
1892	knowingly accept, directly or indirectly, any gift or
1893	expenditure from a person or entity, or an employee or
1894	representative of such person or entity, that has a contractual
1895	relationship with the corporation or who is under consideration
1896	for a contract. An employee or board member who fails to comply
1897	with this subparagraph is subject to penalties provided under
1898	ss. 112.317 and 112.3173.
1899	5.  Any senior manager of the corporation who is employed
1900	on or after January 1, 2007, regardless of the date of hire, who
1901	subsequently retires or terminates employment is prohibited from
1902	representing another person or entity before the corporation for
1903	2 years after retirement or termination of employment from the
1904	corporation.
1905	6.  Any employee of the corporation who is employed on or
1906	after January 1, 2007, regardless of the date of hire, who
1907	subsequently retires or terminates employment is prohibited from
1908	having any employment or contractual relationship for 2 years
1909	with an insurer that has received a take-out bonus from the
1910	corporation.
1911	(e)  Purchases that equal or exceed $2,500, but are less
1912	than $25,000, shall be made by receipt of written quotes,
1913	written record of telephone quotes, or informal bids, whenever
1914	practical. The procurement of goods or services valued at or
1915	over $25,000 shall be subject to competitive solicitation,
1916	except in situations where the goods or services are provided by
1917	a sole source or are deemed an emergency purchase; the services
1918	are exempted from competitive solicitation requirements under s.
1919	287.057(5)(f); or the procurement of services is subject to s.
1920	627.3513. Justification for the sole-sourcing or emergency
1921	procurement must be documented. Contracts for goods or services
1922	valued at or over $100,000 are subject to approval by the board.
1923	(f)  The board shall determine whether it is more cost-
1924	effective and in the best interests of the corporation to use
1925	legal services provided by in-house attorneys employed by the
1926	corporation rather than contracting with outside counsel. In
1927	making such determination, the board shall document its findings
1928	and shall consider: the expertise needed; whether time
1929	commitments exceed in-house staff resources; whether local
1930	representation is needed; the travel, lodging and other costs
1931	associated with in-house representation; and such other factors
1932	that the board determines are relevant.
1933	(g)  The corporation may not retain a lobbyist to represent
1934	it before the legislative branch or executive branch. However,
1935	full-time employees of the corporation may register as lobbyists
1936	and represent the corporation before the legislative branch or
1937	executive branch.
1938	(h)1.  The Office of the Internal Auditor is established
1939	within the corporation to provide a central point for
1940	coordination of and responsibility for activities that promote
1941	accountability, integrity, and efficiency to the policyholders
1942	and to the taxpayers of this state. The internal auditor shall
1943	be appointed by the board of governors, shall report to and be
1944	under the general supervision of the board of governors, and is
1945	not subject to supervision by any employee of the corporation.
1946	Administrative staff and support shall be provided by the
1947	corporation. The internal auditor shall be appointed without
1948	regard to political affiliation. It is the duty and
1949	responsibility of the internal auditor to:
1950	a.  Provide direction for, supervise, conduct, and
1951	coordinate audits, investigations, and management reviews
1952	relating to the programs and operations of the corporation.
1953	b.  Conduct, supervise, or coordinate other activities
1954	carried out or financed by the corporation for the purpose of
1955	promoting efficiency in the administration of, or preventing and
1956	detecting fraud, abuse, and mismanagement in, its programs and
1957	operations.
1958	c.  Submit final audit reports, reviews, or investigative
1959	reports to the board of governors, the executive director, the
1960	members of the Financial Services Commission, and the President
1961	of the Senate and the Speaker of the House of Representatives.
1962	d.  Keep the board of governors informed concerning fraud,
1963	abuses, and internal control deficiencies relating to programs
1964	and operations administered or financed by the corporation,
1965	recommend corrective action, and report on the progress made in
1966	implementing corrective action.
1967	e.  Report expeditiously to the Department of Law
1968	Enforcement or other law enforcement agencies, as appropriate,
1969	whenever the internal auditor has reasonable grounds to believe
1970	there has been a violation of criminal law.
1971	2.  On or before February 15, the internal auditor shall
1972	prepare an annual report evaluating the effectiveness of the
1973	internal controls of the corporation and providing
1974	recommendations for corrective action, if necessary, and
1975	summarizing the audits, reviews, and investigations conducted by
1976	the office during the preceding fiscal year. The final report
1977	shall be furnished to the board of governors and the executive
1978	director, the President of the Senate, the Speaker of the House
1979	of Representatives, and the Financial Services Commission.
1980	(i)  All records of the corporation, except as otherwise
1981	provided by law, are subject to the record retention
1982	requirements of s. 119.021.
1983	(j)1.  The corporation shall establish and maintain a unit
1984	or division to investigate possible fraudulent claims by
1985	insureds or by persons making claims for services or repairs
1986	against policies held by insureds; or it may contract with
1987	others to investigate possible fraudulent claims for services or
1988	repairs against policies held by the corporation pursuant to s.
1989	626.9891. The corporation must comply with reporting
1990	requirements of s. 626.9891. An employee of the corporation
1991	shall notify the Division of Insurance Fraud within 48 hours
1992	after having information that would lead a reasonable person to
1993	suspect that fraud may have been committed by any employee of
1994	the corporation.
1995	2.  The corporation shall establish a unit or division
1996	responsible for receiving and responding to consumer complaints,
1997	which unit or division is the sole responsibility of a senior
1998	manager of the corporation.
1999	(k)  The office shall conduct a comprehensive market
2000	conduct examination of the corporation every 2 years to
2001	determine compliance with its plan of operation and internal
2002	operations procedures. The first market conduct examination
2003	report shall be submitted to the President of the Senate and the
2004	Speaker of the House of Representatives no later than February
2005	1, 2009. Subsequent reports shall be submitted on or before
2006	February 1 every 2 years thereafter.
2007	(l)  The Auditor General shall conduct an operational audit
2008	of the corporation every 3 years to evaluate management's
2009	performance in administering laws, policies, and procedures
2010	governing the operations of the corporation in an efficient and
2011	effective manner. The scope of the review shall include, but is
2012	not limited to, evaluating claims handling, customer service,
2013	take-out programs and bonuses, financing arrangements,
2014	procurement of goods and services, internal controls, and the
2015	internal audit function. The initial audit must be completed by
2016	February 1, 2009.
2017	(m)1.a.  Rates for coverage provided by the corporation
2018	shall be actuarially adequate sound and not competitive with
2019	approved rates charged in the admitted voluntary market, so that
2020	the corporation functions as a residual market mechanism to
2021	provide insurance only when the insurance cannot be procured in
2022	the voluntary market. Rates shall include an appropriate
2023	catastrophe loading factor that reflects the actual catastrophic
2024	exposure of the corporation. For policies in the personal lines
2025	account and the commercial lines account issued or renewed on or
2026	after March 1, 2007, a rate is deemed inadequate if the rate,
2027	including investment income, is not sufficient to provide for
2028	the procurement of coverage under the Florida Hurricane
2029	Catastrophe Fund and private reinsurance costs, whether or not
2030	reinsurance is procured, and to pay all claims and expenses
2031	reasonably expected to result from a 100-year probable maximum
2032	loss event without resort to any regular or emergency
2033	assessments, long-term debt, state revenues, or other funding
2034	sources. For policies in the high-risk account issued or renewed
2035	on or after January 1, 2008 March 1, 2007, a rate is deemed
2036	inadequate if the rate, including investment income, is not
2037	sufficient to provide for the procurement of coverage under the
2038	Florida Hurricane Catastrophe Fund and private reinsurance
2039	costs, whether or not reinsurance is procured, and to pay all
2040	claims and expenses reasonably expected to result from a 50-year
2041	70-year probable maximum loss event without with resort to any
2042	regular or emergency assessments, long-term debt, state
2043	revenues, or other funding sources. For policies in the high-
2044	risk account issued or renewed in 2008 and 2009, 2010, 2011,
2045	2012, and 2013, the rate must be based upon a 60-year, 70-year,
2046	80-year, 90-year, an 85-year and 100-year probable maximum loss
2047	event, respectively.
2048	b.  It is the intent of the Legislature to reaffirm the
2049	requirement of rate adequacy in the residual market. Recognizing
2050	that rates may comply with the intent expressed in sub-
2051	subparagraph a. and yet be inadequate and recognizing the public
2052	need to limit subsidies within the residual market, it is the
2053	further intent of the Legislature to establish statutory
2054	standards for rate adequacy. Such standards are intended to
2055	supplement the standard specified in s. 627.062(2)(e)3.,
2056	providing that rates are inadequate if they are clearly
2057	insufficient to sustain projected losses and expenses in the
2058	class of business to which they apply.
2059	2.  For each county, the average rates of the corporation
2060	for each line of business for personal lines residential
2061	policies excluding rates for wind-only policies shall be no
2062	lower than the average rates charged by the insurer that had the
2063	highest average rate in that county among the 20 insurers with
2064	the greatest total direct written premium in the state for that
2065	line of business in the preceding year, except that with respect
2066	to mobile home coverages, the average rates of the corporation
2067	shall be no lower than the average rates charged by the insurer
2068	that had the highest average rate in that county among the 5
2069	insurers with the greatest total written premium for mobile home
2070	owner's policies in the state in the preceding year.
2071	2.3.  Rates for personal lines residential wind-only
2072	policies must be actuarially adequate sound and not competitive
2073	with approved rates charged by authorized insurers. If the
2074	filing under this subparagraph is made at least 90 days before
2075	the proposed effective date and the filing is not implemented
2076	during the office's review of the filing and any proceeding and
2077	judicial review, such filing shall be considered a "file and
2078	use" filing. In such case, the office shall finalize its review
2079	by issuance of a notice of intent to approve or a notice of
2080	intent to disapprove within 90 days after receipt of the filing.
2081	The notice of intent to approve and the notice of intent to
2082	disapprove constitute agency action for purposes of the
2083	Administrative Procedure Act. Requests for supporting
2084	information, requests for mathematical or mechanical
2085	corrections, or notification to the insurer by the office of its
2086	preliminary findings shall not toll the 90-day period during any
2087	such proceedings and subsequent judicial review. The rate shall
2088	be deemed approved if the office does not issue a notice of
2089	intent to approve or a notice of intent to disapprove within 90
2090	days after receipt of the filing. Corporation rate manuals shall
2091	include a rate surcharge for seasonal occupancy. To ensure that
2092	personal lines residential wind-only rates are not competitive
2093	with approved rates charged by authorized insurers, the
2094	corporation, in conjunction with the office, shall develop a
2095	wind-only ratemaking methodology, which methodology shall be
2096	contained in each rate filing made by the corporation with the
2097	office. If the office determines that the wind-only rates or
2098	rating factors filed by the corporation fail to comply with the
2099	wind-only ratemaking methodology provided for in this
2100	subsection, it shall so notify the corporation and require the
2101	corporation to amend its rates or rating factors to come into
2102	compliance within 90 days of notice from the office.
2103	4.  The requirements of this paragraph that rates not be
2104	competitive with approved rates charged by authorized insurers
2105	do not apply in a county or area for which the office determines
2106	that no authorized insurer is offering coverage. The corporation
2107	shall amend its rates or rating factors for the affected county
2108	or area in conjunction with its next rate filing after such
2109	determination is made.
2110	5.  For the purposes of establishing a pilot program to
2111	evaluate issues relating to the availability and affordability
2112	of insurance in an area where historically there has been little
2113	market competition, the provisions of subparagraph 2. do not
2114	apply to coverage provided by the corporation in Monroe County
2115	if the office determines that a reasonable degree of competition
2116	does not exist for personal lines residential policies. The
2117	provisions of subparagraph 3. do not apply to coverage provided
2118	by the corporation in Monroe County if the office determines
2119	that a reasonable degree of competition does not exist for
2120	personal lines residential policies in the area of that county
2121	which is eligible for wind-only coverage. In this county, the
2122	rates for personal lines residential coverage shall be
2123	actuarially sound and not excessive, inadequate, or unfairly
2124	discriminatory and are subject to the other provisions of the
2125	paragraph and s. 627.062. The commission shall adopt rules
2126	establishing the criteria for determining whether a reasonable
2127	degree of competition exists for personal lines residential
2128	policies in Monroe County. By March 1, 2006, the office shall
2129	submit a report to the Legislature providing an evaluation of
2130	the implementation of the pilot program affecting Monroe County.
2131	6.  Rates for commercial lines coverage shall not be
2132	subject to the requirements of subparagraph 2., but shall be
2133	subject to all other requirements of this paragraph and s.
2134	627.062.
2135	3.7.  Nothing in this paragraph shall require or allow the
2136	corporation to adopt a rate that is inadequate under s. 627.062.
2137	4.8.  The corporation shall certify to the office at least
2138	twice annually that its personal lines rates comply with the
2139	requirements of subparagraphs 1. and, 2., and 3. If any
2140	adjustment in the rates or rating factors of the corporation is
2141	necessary to ensure such compliance, the corporation shall make
2142	and implement such adjustments and file its revised rates and
2143	rating factors with the office. If the office thereafter
2144	determines that the revised rates and rating factors fail to
2145	comply with the provisions of subparagraphs 1. and, 2., and 3.,
2146	it shall notify the corporation and require the corporation to
2147	amend its rates or rating factors in conjunction with its next
2148	rate filing. The office must notify the corporation by
2149	electronic means of any rate filing it approves for any insurer
2150	among the insurers referred to in subparagraph 2.
2151	5.9.  In addition to the rates otherwise determined
2152	pursuant to this paragraph, the corporation shall impose and
2153	collect an amount equal to the premium tax provided for in s.
2154	624.509 to augment the financial resources of the corporation.
2155	6.10.  The corporation shall develop a notice to
2156	policyholders or applicants that the rates of Citizens Property
2157	Insurance Corporation are intended to be higher than the rates
2158	of any admitted carrier and providing other information the
2159	corporation deems necessary to assist consumers in finding other
2160	voluntary admitted insurers willing to insure their property.
2161	7.11.  After the public hurricane loss-projection model
2162	under s. 627.06281 has been found to be accurate and reliable by
2163	the Florida Commission on Hurricane Loss Projection Methodology,
2164	that model shall serve as the minimum benchmark for determining
2165	the windstorm portion of the corporation's rates. This
2166	subparagraph does not require or allow the corporation to adopt
2167	rates lower than the rates otherwise required or allowed by this
2168	paragraph.
2169	8.  Except as provided in subparagraph 9., the rate filings
2170	for the corporation which were approved by the office and which
2171	took effect January 1, 2007, are rescinded. As soon as possible,
2172	the corporation shall begin using the rates that were in effect
2173	on December 31, 2006, and shall provide refunds to policyholders
2174	who have paid higher rates as a result of those rate filings.
2175	The rates in effect on December 31, 2006, shall remain in effect
2176	for the 2007 calendar year. The next rate change shall take
2177	effect January 1, 2008, pursuant to a new rate filing
2178	recommended by the corporation and approved by the office,
2179	subject to the requirements of this paragraph.
2180	9.  Through December 31, 2007, the corporation shall use
2181	the lower territorial rates for the hurricane portion of the
2182	rates for high-risk account homeowners (HO3) policies approved
2183	for use by the office in Monroe County beginning January 1,
2184	2007. Nothing in subparagraph 8. is intended to prevent the
2185	corporation from implementing prior to January 1, 2008, rates
2186	pursuant to subparagraph 1. that are lower than rates in effect
2187	on December 31, 2006, including by territory, coverage, and
2188	mitigation factors and other discounts. Prior to January 1,
2189	2008, such lower rates shall be determined to meet the
2190	requirements of subparagraph 1. by comparing such lower rates to
2191	the rates in effect on December 31, 2006.
2192	(n)  If coverage in an account is deactivated pursuant to
2193	paragraph (o)(f), coverage through the corporation shall be
2194	reactivated by order of the office only under one of the
2195	following circumstances:
2196	1.  If the market assistance plan receives a minimum of 100
2197	applications for coverage within a 3-month period, or 200
2198	applications for coverage within a 1-year period or less for
2199	residential coverage, unless the market assistance plan provides
2200	a quotation from admitted carriers at their filed rates for at
2201	least 90 percent of such applicants. Any market assistance plan
2202	application that is rejected because an individual risk is so
2203	hazardous as to be uninsurable using the criteria specified in
2204	subparagraph (c)9.8. shall not be included in the minimum
2205	percentage calculation provided herein. In the event that there
2206	is a legal or administrative challenge to a determination by the
2207	office that the conditions of this subparagraph have been met
2208	for eligibility for coverage in the corporation, any eligible
2209	risk may obtain coverage during the pendency of such challenge.
2210	2.  In response to a state of emergency declared by the
2211	Governor under s. 252.36, the office may activate coverage by
2212	order for the period of the emergency upon a finding by the
2213	office that the emergency significantly affects the availability
2214	of residential property insurance.
2215	(o)1.  The corporation shall file with the office quarterly
2216	statements of financial condition, an annual statement of
2217	financial condition, and audited financial statements in the
2218	manner prescribed by law. In addition, the corporation shall
2219	report to the office monthly on the types, premium, exposure,
2220	and distribution by county of its policies in force, and shall
2221	submit other reports as the office requires to carry out its
2222	oversight of the corporation.
2223	2.  The activities of the corporation shall be reviewed at
2224	least annually by the office to determine whether coverage shall
2225	be deactivated in an account on the basis that the conditions
2226	giving rise to its activation no longer exist.
2227	(p)1.  The corporation shall certify to the office its
2228	needs for annual assessments as to a particular calendar year,
2229	and for any interim assessments that it deems to be necessary to
2230	sustain operations as to a particular year pending the receipt
2231	of annual assessments. Upon verification, the office shall
2232	approve such certification, and the corporation shall levy such
2233	annual or interim assessments. Such assessments shall be
2234	prorated as provided in paragraph (b). The corporation shall
2235	take all reasonable and prudent steps necessary to collect the
2236	amount of assessment due from each assessable insurer,
2237	including, if prudent, filing suit to collect such assessment.
2238	If the corporation is unable to collect an assessment from any
2239	assessable insurer, the uncollected assessments shall be levied
2240	as an additional assessment against the assessable insurers and
2241	any assessable insurer required to pay an additional assessment
2242	as a result of such failure to pay shall have a cause of action
2243	against such nonpaying assessable insurer. Assessments shall be
2244	included as an appropriate factor in the making of rates. The
2245	failure of a surplus lines agent to collect and remit any
2246	regular or emergency assessment levied by the corporation is
2247	considered to be a violation of s. 626.936 and subjects the
2248	surplus lines agent to the penalties provided in that section.
2249	2.  The governing body of any unit of local government, any
2250	residents of which are insured by the corporation, may issue
2251	bonds as defined in s. 125.013 or s. 166.101 from time to time
2252	to fund an assistance program, in conjunction with the
2253	corporation, for the purpose of defraying deficits of the
2254	corporation. In order to avoid needless and indiscriminate
2255	proliferation, duplication, and fragmentation of such assistance
2256	programs, any unit of local government, any residents of which
2257	are insured by the corporation, may provide for the payment of
2258	losses, regardless of whether or not the losses occurred within
2259	or outside of the territorial jurisdiction of the local
2260	government. Revenue bonds under this subparagraph may not be
2261	issued until validated pursuant to chapter 75, unless a state of
2262	emergency is declared by executive order or proclamation of the
2263	Governor pursuant to s. 252.36 making such findings as are
2264	necessary to determine that it is in the best interests of, and
2265	necessary for, the protection of the public health, safety, and
2266	general welfare of residents of this state and declaring it an
2267	essential public purpose to permit certain municipalities or
2268	counties to issue such bonds as will permit relief to claimants
2269	and policyholders of the corporation. Any such unit of local
2270	government may enter into such contracts with the corporation
2271	and with any other entity created pursuant to this subsection as
2272	are necessary to carry out this paragraph. Any bonds issued
2273	under this subparagraph shall be payable from and secured by
2274	moneys received by the corporation from emergency assessments
2275	under sub-subparagraph (b)3.d., and assigned and pledged to or
2276	on behalf of the unit of local government for the benefit of the
2277	holders of such bonds. The funds, credit, property, and taxing
2278	power of the state or of the unit of local government shall not
2279	be pledged for the payment of such bonds. If any of the bonds
2280	remain unsold 60 days after issuance, the office shall require
2281	all insurers subject to assessment to purchase the bonds, which
2282	shall be treated as admitted assets; each insurer shall be
2283	required to purchase that percentage of the unsold portion of
2284	the bond issue that equals the insurer's relative share of
2285	assessment liability under this subsection. An insurer shall not
2286	be required to purchase the bonds to the extent that the office
2287	determines that the purchase would endanger or impair the
2288	solvency of the insurer.
2289	3.a.  The corporation shall adopt one or more programs
2290	subject to approval by the office for the reduction of both new
2291	and renewal writings in the corporation. Beginning January 1,
2292	2008, any program the corporation adopts for the payment of
2293	bonuses to an insurer for each risk the insurer removes from the
2294	corporation shall comply with s. 627.3511(2) and may not exceed
2295	the amount referenced in s. 627.3511(2) for each risk removed.
2296	The corporation may consider any prudent and not unfairly
2297	discriminatory approach to reducing corporation writings, and
2298	may adopt a credit against assessment liability or other
2299	liability that provides an incentive for insurers to take risks
2300	out of the corporation and to keep risks out of the corporation
2301	by maintaining or increasing voluntary writings in counties or
2302	areas in which corporation risks are highly concentrated and a
2303	program to provide a formula under which an insurer voluntarily
2304	taking risks out of the corporation by maintaining or increasing
2305	voluntary writings will be relieved wholly or partially from
2306	assessments under sub-subparagraphs (b)3.a. and b. However, any
2307	"take-out bonus" or payment to an insurer must be conditioned on
2308	the property being insured for at least 5 years by the insurer,
2309	unless canceled or nonrenewed by the policyholder. If the policy
2310	is canceled or nonrenewed by the policyholder before the end of
2311	the 5-year period, the amount of the take-out bonus must be
2312	prorated for the time period the policy was insured. When the
2313	corporation enters into a contractual agreement for a take-out
2314	plan, the producing agent of record of the corporation policy is
2315	entitled to retain any unearned commission on such policy, and
2316	the insurer shall either:
2317	(I)  Pay to the producing agent of record of the policy,
2318	for the first year, an amount which is the greater of the
2319	insurer's usual and customary commission for the type of policy
2320	written or a policy fee equal to the usual and customary
2321	commission of the corporation; or
2322	(II)  Offer to allow the producing agent of record of the
2323	policy to continue servicing the policy for a period of not less
2324	than 1 year and offer to pay the agent the insurer's usual and
2325	customary commission for the type of policy written. If the
2326	producing agent is unwilling or unable to accept appointment by
2327	the new insurer, the new insurer shall pay the agent in
2328	accordance with sub-sub-subparagraph (I).
2329	b.  Any credit or exemption from regular assessments
2330	adopted under this subparagraph shall last no longer than the 3
2331	years following the cancellation or expiration of the policy by
2332	the corporation. With the approval of the office, the board may
2333	extend such credits for an additional year if the insurer
2334	guarantees an additional year of renewability for all policies
2335	removed from the corporation, or for 2 additional years if the
2336	insurer guarantees 2 additional years of renewability for all
2337	policies so removed.
2338	c.  There shall be no credit, limitation, exemption, or
2339	deferment from emergency assessments to be collected from
2340	policyholders pursuant to sub-subparagraph (b)3.d.
2341	4.  The plan shall provide for the deferment, in whole or
2342	in part, of the assessment of an assessable insurer, other than
2343	an emergency assessment collected from policyholders pursuant to
2344	sub-subparagraph (b)3.d., if the office finds that payment of
2345	the assessment would endanger or impair the solvency of the
2346	insurer. In the event an assessment against an assessable
2347	insurer is deferred in whole or in part, the amount by which
2348	such assessment is deferred may be assessed against the other
2349	assessable insurers in a manner consistent with the basis for
2350	assessments set forth in paragraph (b).
2351	5.  Effective July 1, 2007, in order to evaluate the costs
2352	and benefits of approved take-out plans, if the corporation pays
2353	a bonus or other payment to an insurer for an approved take-out
2354	plan, it shall maintain a record of the address or such other
2355	identifying information on the property or risk removed in order
2356	to track if and when the property or risk is later insured by
2357	the corporation.
2358	(q)  Nothing in this subsection shall be construed to
2359	preclude the issuance of residential property insurance coverage
2360	pursuant to part VIII of chapter 626.
2361	(r)  There shall be no liability on the part of, and no
2362	cause of action of any nature shall arise against, any
2363	assessable insurer or its agents or employees, the corporation
2364	or its agents or employees, members of the board of governors or
2365	their respective designees at a board meeting, corporation
2366	committee members, or the office or its representatives, for any
2367	action taken by them in the performance of their duties or
2368	responsibilities under this subsection. Such immunity does not
2369	apply to:
2370	1.  Any of the foregoing persons or entities for any
2371	willful tort;
2372	2.  The corporation or its producing agents for breach of
2373	any contract or agreement pertaining to insurance coverage;
2374	3.  The corporation with respect to issuance or payment of
2375	debt; or
2376	4.  Any assessable insurer with respect to any action to
2377	enforce an assessable insurer's obligations to the corporation
2378	under this subsection.
2379	(s)  For the purposes of s. 199.183(1), the corporation
2380	shall be considered a political subdivision of the state and
2381	shall be exempt from the corporate income tax. The premiums,
2382	assessments, investment income, and other revenue of the
2383	corporation are funds received for providing property insurance
2384	coverage as required by this subsection, paying claims for
2385	Florida citizens insured by the corporation, securing and
2386	repaying debt obligations issued by the corporation, and
2387	conducting all other activities of the corporation, and shall
2388	not be considered taxes, fees, licenses, or charges for services
2389	imposed by the Legislature on individuals, businesses, or
2390	agencies outside state government. Bonds and other debt
2391	obligations issued by or on behalf of the corporation are not to
2392	be considered "state bonds" within the meaning of s. 215.58(8).
2393	The corporation is not subject to the procurement provisions of
2394	chapter 287, and policies and decisions of the corporation
2395	relating to incurring debt, levying of assessments and the sale,
2396	issuance, continuation, terms and claims under corporation
2397	policies, and all services relating thereto, are not subject to
2398	the provisions of chapter 120. The corporation is not required
2399	to obtain or to hold a certificate of authority issued by the
2400	office, nor is it required to participate as a member insurer of
2401	the Florida Insurance Guaranty Association. However, the
2402	corporation is required to pay, in the same manner as an
2403	authorized insurer, assessments pledged by the Florida Insurance
2404	Guaranty Association to secure bonds issued or other
2405	indebtedness incurred to pay covered claims arising from insurer
2406	insolvencies caused by, or proximately related to, hurricane
2407	losses. It is the intent of the Legislature that the tax
2408	exemptions provided in this paragraph will augment the financial
2409	resources of the corporation to better enable the corporation to
2410	fulfill its public purposes. Any debt obligations issued by the
2411	corporation, their transfer, and the income therefrom, including
2412	any profit made on the sale thereof, shall at all times be free
2413	from taxation of every kind by the state and any political
2414	subdivision or local unit or other instrumentality thereof;
2415	however, this exemption does not apply to any tax imposed by
2416	chapter 220 on interest, income, or profits on debt obligations
2417	owned by corporations other than the corporation.
2418	(t)  Upon a determination by the office that the conditions
2419	giving rise to the establishment and activation of the
2420	corporation no longer exist, the corporation is dissolved. Upon
2421	dissolution, the assets of the corporation shall be applied
2422	first to pay all debts, liabilities, and obligations of the
2423	corporation, including the establishment of reasonable reserves
2424	for any contingent liabilities or obligations, and all remaining
2425	assets of the corporation shall become property of the state and
2426	shall be deposited in the Florida Hurricane Catastrophe Fund.
2427	However, no dissolution shall take effect as long as the
2428	corporation has bonds or other financial obligations outstanding
2429	unless adequate provision has been made for the payment of the
2430	bonds or other financial obligations pursuant to the documents
2431	authorizing the issuance of the bonds or other financial
2432	obligations.
2433	(u)1.  Effective July 1, 2002, policies of the Residential
2434	Property and Casualty Joint Underwriting Association shall
2435	become policies of the corporation. All obligations, rights,
2436	assets and liabilities of the Residential Property and Casualty
2437	Joint Underwriting Association, including bonds, note and debt
2438	obligations, and the financing documents pertaining to them
2439	become those of the corporation as of July 1, 2002. The
2440	corporation is not required to issue endorsements or
2441	certificates of assumption to insureds during the remaining term
2442	of in-force transferred policies.
2443	2.  Effective July 1, 2002, policies of the Florida
2444	Windstorm Underwriting Association are transferred to the
2445	corporation and shall become policies of the corporation. All
2446	obligations, rights, assets, and liabilities of the Florida
2447	Windstorm Underwriting Association, including bonds, note and
2448	debt obligations, and the financing documents pertaining to them
2449	are transferred to and assumed by the corporation on July 1,
2450	2002. The corporation is not required to issue endorsements or
2451	certificates of assumption to insureds during the remaining term
2452	of in-force transferred policies.
2453	3.  The Florida Windstorm Underwriting Association and the
2454	Residential Property and Casualty Joint Underwriting Association
2455	shall take all actions as may be proper to further evidence the
2456	transfers and shall provide the documents and instruments of
2457	further assurance as may reasonably be requested by the
2458	corporation for that purpose. The corporation shall execute
2459	assumptions and instruments as the trustees or other parties to
2460	the financing documents of the Florida Windstorm Underwriting
2461	Association or the Residential Property and Casualty Joint
2462	Underwriting Association may reasonably request to further
2463	evidence the transfers and assumptions, which transfers and
2464	assumptions, however, are effective on the date provided under
2465	this paragraph whether or not, and regardless of the date on
2466	which, the assumptions or instruments are executed by the
2467	corporation. Subject to the relevant financing documents
2468	pertaining to their outstanding bonds, notes, indebtedness, or
2469	other financing obligations, the moneys, investments,
2470	receivables, choses in action, and other intangibles of the
2471	Florida Windstorm Underwriting Association shall be credited to
2472	the high-risk account of the corporation, and those of the
2473	personal lines residential coverage account and the commercial
2474	lines residential coverage account of the Residential Property
2475	and Casualty Joint Underwriting Association shall be credited to
2476	the personal lines account and the commercial lines account,
2477	respectively, of the corporation.
2478	4.  Effective July 1, 2002, a new applicant for property
2479	insurance coverage who would otherwise have been eligible for
2480	coverage in the Florida Windstorm Underwriting Association is
2481	eligible for coverage from the corporation as provided in this
2482	subsection.
2483	5.  The transfer of all policies, obligations, rights,
2484	assets, and liabilities from the Florida Windstorm Underwriting
2485	Association to the corporation and the renaming of the
2486	Residential Property and Casualty Joint Underwriting Association
2487	as the corporation shall in no way affect the coverage with
2488	respect to covered policies as defined in s. 215.555(2)(c)
2489	provided to these entities by the Florida Hurricane Catastrophe
2490	Fund. The coverage provided by the Florida Hurricane Catastrophe
2491	Fund to the Florida Windstorm Underwriting Association based on
2492	its exposures as of June 30, 2002, and each June 30 thereafter
2493	shall be redesignated as coverage for the high-risk account of
2494	the corporation. Notwithstanding any other provision of law, the
2495	coverage provided by the Florida Hurricane Catastrophe Fund to
2496	the Residential Property and Casualty Joint Underwriting
2497	Association based on its exposures as of June 30, 2002, and each
2498	June 30 thereafter shall be transferred to the personal lines
2499	account and the commercial lines account of the corporation.
2500	Notwithstanding any other provision of law, the high-risk
2501	account shall be treated, for all Florida Hurricane Catastrophe
2502	Fund purposes, as if it were a separate participating insurer
2503	with its own exposures, reimbursement premium, and loss
2504	reimbursement. Likewise, the personal lines and commercial lines
2505	accounts shall be viewed together, for all Florida Hurricane
2506	Catastrophe Fund purposes, as if the two accounts were one and
2507	represent a single, separate participating insurer with its own
2508	exposures, reimbursement premium, and loss reimbursement. The
2509	coverage provided by the Florida Hurricane Catastrophe Fund to
2510	the corporation shall constitute and operate as a full transfer
2511	of coverage from the Florida Windstorm Underwriting Association
2512	and Residential Property and Casualty Joint Underwriting to the
2513	corporation.
2514	(v)  Notwithstanding any other provision of law:
2515	1.  The pledge or sale of, the lien upon, and the security
2516	interest in any rights, revenues, or other assets of the
2517	corporation created or purported to be created pursuant to any
2518	financing documents to secure any bonds or other indebtedness of
2519	the corporation shall be and remain valid and enforceable,
2520	notwithstanding the commencement of and during the continuation
2521	of, and after, any rehabilitation, insolvency, liquidation,
2522	bankruptcy, receivership, conservatorship, reorganization, or
2523	similar proceeding against the corporation under the laws of
2524	this state.
2525	2.  No such proceeding shall relieve the corporation of its
2526	obligation, or otherwise affect its ability to perform its
2527	obligation, to continue to collect, or levy and collect,
2528	assessments, market equalization or other surcharges under
2529	subparagraph (c)11.10., or any other rights, revenues, or other
2530	assets of the corporation pledged pursuant to any financing
2531	documents.
2532	3.  Each such pledge or sale of, lien upon, and security
2533	interest in, including the priority of such pledge, lien, or
2534	security interest, any such assessments, market equalization or
2535	other surcharges, or other rights, revenues, or other assets
2536	which are collected, or levied and collected, after the
2537	commencement of and during the pendency of, or after, any such
2538	proceeding shall continue unaffected by such proceeding. As used
2539	in this subsection, the term "financing documents" means any
2540	agreement or agreements, instrument or instruments, or other
2541	document or documents now existing or hereafter created
2542	evidencing any bonds or other indebtedness of the corporation or
2543	pursuant to which any such bonds or other indebtedness has been
2544	or may be issued and pursuant to which any rights, revenues, or
2545	other assets of the corporation are pledged or sold to secure
2546	the repayment of such bonds or indebtedness, together with the
2547	payment of interest on such bonds or such indebtedness, or the
2548	payment of any other obligation or financial product, as defined
2549	in the plan of operation of the corporation related to such
2550	bonds or indebtedness.
2551	4.  Any such pledge or sale of assessments, revenues,
2552	contract rights, or other rights or assets of the corporation
2553	shall constitute a lien and security interest, or sale, as the
2554	case may be, that is immediately effective and attaches to such
2555	assessments, revenues, or contract rights or other rights or
2556	assets, whether or not imposed or collected at the time the
2557	pledge or sale is made. Any such pledge or sale is effective,
2558	valid, binding, and enforceable against the corporation or other
2559	entity making such pledge or sale, and valid and binding against
2560	and superior to any competing claims or obligations owed to any
2561	other person or entity, including policyholders in this state,
2562	asserting rights in any such assessments, revenues, or contract
2563	rights or other rights or assets to the extent set forth in and
2564	in accordance with the terms of the pledge or sale contained in
2565	the applicable financing documents, whether or not any such
2566	person or entity has notice of such pledge or sale and without
2567	the need for any physical delivery, recordation, filing, or
2568	other action.
2569	5.  As long as the corporation has any bonds outstanding,
2570	the corporation may not file a voluntary petition under chapter
2571	9 of the federal Bankruptcy Code or such corresponding chapter
2572	or sections as may be in effect, from time to time, and a public
2573	officer or any organization, entity, or other person may not
2574	authorize the corporation to be or become a debtor under chapter
2575	9 of the federal Bankruptcy Code or such corresponding chapter
2576	or sections as may be in effect, from time to time, during any
2577	such period.
2578	6.  If ordered by a court of competent jurisdiction, the
2579	corporation may assume policies or otherwise provide coverage
2580	for policyholders of an insurer placed in liquidation under
2581	chapter 631, under such forms, rates, terms, and conditions as
2582	the corporation deems appropriate, subject to approval by the
2583	office.
2584	(w)1.  The following records of the corporation are
2585	confidential and exempt from the provisions of s. 119.07(1) and
2586	s. 24(a), Art. I of the State Constitution:
2587	a.  Underwriting files, except that a policyholder or an
2588	applicant shall have access to his or her own underwriting
2589	files.
2590	b.  Claims files, until termination of all litigation and
2591	settlement of all claims arising out of the same incident,
2592	although portions of the claims files may remain exempt, as
2593	otherwise provided by law. Confidential and exempt claims file
2594	records may be released to other governmental agencies upon
2595	written request and demonstration of need; such records held by
2596	the receiving agency remain confidential and exempt as provided
2597	for herein.
2598	c.  Records obtained or generated by an internal auditor
2599	pursuant to a routine audit, until the audit is completed, or if
2600	the audit is conducted as part of an investigation, until the
2601	investigation is closed or ceases to be active. An investigation
2602	is considered "active" while the investigation is being
2603	conducted with a reasonable, good faith belief that it could
2604	lead to the filing of administrative, civil, or criminal
2605	proceedings.
2606	d.  Matters reasonably encompassed in privileged attorney-
2607	client communications.
2608	e.  Proprietary information licensed to the corporation
2609	under contract and the contract provides for the confidentiality
2610	of such proprietary information.
2611	f.  All information relating to the medical condition or
2612	medical status of a corporation employee which is not relevant
2613	to the employee's capacity to perform his or her duties, except
2614	as otherwise provided in this paragraph. Information which is
2615	exempt shall include, but is not limited to, information
2616	relating to workers' compensation, insurance benefits, and
2617	retirement or disability benefits.
2618	g.  Upon an employee's entrance into the employee
2619	assistance program, a program to assist any employee who has a
2620	behavioral or medical disorder, substance abuse problem, or
2621	emotional difficulty which affects the employee's job
2622	performance, all records relative to that participation shall be
2623	confidential and exempt from the provisions of s. 119.07(1) and
2624	s. 24(a), Art. I of the State Constitution, except as otherwise
2625	provided in s. 112.0455(11).
2626	h.  Information relating to negotiations for financing,
2627	reinsurance, depopulation, or contractual services, until the
2628	conclusion of the negotiations.
2629	i.  Minutes of closed meetings regarding underwriting
2630	files, and minutes of closed meetings regarding an open claims
2631	file until termination of all litigation and settlement of all
2632	claims with regard to that claim, except that information
2633	otherwise confidential or exempt by law will be redacted.
2634
2635	When an authorized insurer is considering underwriting a risk
2636	insured by the corporation, relevant underwriting files and
2637	confidential claims files may be released to the insurer
2638	provided the insurer agrees in writing, notarized and under
2639	oath, to maintain the confidentiality of such files. When a file
2640	is transferred to an insurer that file is no longer a public
2641	record because it is not held by an agency subject to the
2642	provisions of the public records law. Underwriting files and
2643	confidential claims files may also be released to staff of and
2644	the board of governors of the market assistance plan established
2645	pursuant to s. 627.3515, who must retain the confidentiality of
2646	such files, except such files may be released to authorized
2647	insurers that are considering assuming the risks to which the
2648	files apply, provided the insurer agrees in writing, notarized
2649	and under oath, to maintain the confidentiality of such files.
2650	Finally, the corporation or the board or staff of the market
2651	assistance plan may make the following information obtained from
2652	underwriting files and confidential claims files available to
2653	licensed general lines insurance agents: name, address, and
2654	telephone number of the residential property owner or insured;
2655	location of the risk; rating information; loss history; and
2656	policy type. The receiving licensed general lines insurance
2657	agent must retain the confidentiality of the information
2658	received.
2659	2.  Portions of meetings of the corporation are exempt from
2660	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2661	Constitution wherein confidential underwriting files or
2662	confidential open claims files are discussed. All portions of
2663	corporation meetings which are closed to the public shall be
2664	recorded by a court reporter. The court reporter shall record
2665	the times of commencement and termination of the meeting, all
2666	discussion and proceedings, the names of all persons present at
2667	any time, and the names of all persons speaking. No portion of
2668	any closed meeting shall be off the record. Subject to the
2669	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2670	notes of any closed meeting shall be retained by the corporation
2671	for a minimum of 5 years. A copy of the transcript, less any
2672	exempt matters, of any closed meeting wherein claims are
2673	discussed shall become public as to individual claims after
2674	settlement of the claim.
2675	(x)  It is the intent of the Legislature that the
2676	amendments to this subsection enacted in 2002 should, over time,
2677	reduce the probable maximum windstorm losses in the residual
2678	markets and should reduce the potential assessments to be levied
2679	on property insurers and policyholders statewide. In furtherance
2680	of this intent:
2681	1.  The board shall, on or before February 1 of each year,
2682	provide a report to the President of the Senate and the Speaker
2683	of the House of Representatives showing the reduction or
2684	increase in the 100-year probable maximum loss attributable to
2685	wind-only coverages and the quota share program under this
2686	subsection combined, as compared to the benchmark 100-year
2687	probable maximum loss of the Florida Windstorm Underwriting
2688	Association. For purposes of this paragraph, the benchmark 100-
2689	year probable maximum loss of the Florida Windstorm Underwriting
2690	Association shall be the calculation dated February 2001 and
2691	based on November 30, 2000, exposures. In order to ensure
2692	comparability of data, the board shall use the same methods for
2693	calculating its probable maximum loss as were used to calculate
2694	the benchmark probable maximum loss.
2695	2.  Beginning February 1, 2010, if the report under
2696	subparagraph 1. for any year indicates that the 100-year
2697	probable maximum loss attributable to wind-only coverages and
2698	the quota share program combined does not reflect a reduction of
2699	at least 25 percent from the benchmark, the board shall reduce
2700	the boundaries of the high-risk area eligible for wind-only
2701	coverages under this subsection in a manner calculated to reduce
2702	such probable maximum loss to an amount at least 25 percent
2703	below the benchmark.
2704	3.  Beginning February 1, 2015, if the report under
2705	subparagraph 1. for any year indicates that the 100-year
2706	probable maximum loss attributable to wind-only coverages and
2707	the quota share program combined does not reflect a reduction of
2708	at least 50 percent from the benchmark, the boundaries of the
2709	high-risk area eligible for wind-only coverages under this
2710	subsection shall be reduced by the elimination of any area that
2711	is not seaward of a line 1,000 feet inland from the Intracoastal
2712	Waterway.
2713	(y)  In enacting the provisions of this section, the
2714	Legislature recognizes that both the Florida Windstorm
2715	Underwriting Association and the Residential Property and
2716	Casualty Joint Underwriting Association have entered into
2717	financing arrangements that obligate each entity to service its
2718	debts and maintain the capacity to repay funds secured under
2719	these financing arrangements. It is the intent of the
2720	Legislature that nothing in this section be construed to
2721	compromise, diminish, or interfere with the rights of creditors
2722	under such financing arrangements. It is further the intent of
2723	the Legislature to preserve the obligations of the Florida
2724	Windstorm Underwriting Association and Residential Property and
2725	Casualty Joint Underwriting Association with regard to
2726	outstanding financing arrangements, with such obligations
2727	passing entirely and unchanged to the corporation and,
2728	specifically, to the applicable account of the corporation. So
2729	long as any bonds, notes, indebtedness, or other financing
2730	obligations of the Florida Windstorm Underwriting Association or
2731	the Residential Property and Casualty Joint Underwriting
2732	Association are outstanding, under the terms of the financing
2733	documents pertaining to them, the governing board of the
2734	corporation shall have and shall exercise the authority to levy,
2735	charge, collect, and receive all premiums, assessments,
2736	surcharges, charges, revenues, and receipts that the
2737	associations had authority to levy, charge, collect, or receive
2738	under the provisions of subsection (2) and this subsection,
2739	respectively, as they existed on January 1, 2002, to provide
2740	moneys, without exercise of the authority provided by this
2741	subsection, in at least the amounts, and by the times, as would
2742	be provided under those former provisions of subsection (2) or
2743	this subsection, respectively, so that the value, amount, and
2744	collectability of any assets, revenues, or revenue source
2745	pledged or committed to, or any lien thereon securing such
2746	outstanding bonds, notes, indebtedness, or other financing
2747	obligations will not be diminished, impaired, or adversely
2748	affected by the amendments made by this act and to permit
2749	compliance with all provisions of financing documents pertaining
2750	to such bonds, notes, indebtedness, or other financing
2751	obligations, or the security or credit enhancement for them, and
2752	any reference in this subsection to bonds, notes, indebtedness,
2753	financing obligations, or similar obligations, of the
2754	corporation shall include like instruments or contracts of the
2755	Florida Windstorm Underwriting Association and the Residential
2756	Property and Casualty Joint Underwriting Association to the
2757	extent not inconsistent with the provisions of the financing
2758	documents pertaining to them.
2759	(z)  The corporation shall not require the securing of
2760	flood insurance as a condition of coverage if the insured or
2761	applicant executes a form approved by the office affirming that
2762	flood insurance is not provided by the corporation and that if
2763	flood insurance is not secured by the applicant or insured in
2764	addition to coverage by the corporation, the risk will not be
2765	covered for flood damage. A corporation policyholder electing
2766	not to secure flood insurance and executing a form as provided
2767	herein making a claim for water damage against the corporation
2768	shall have the burden of proving the damage was not caused by
2769	flooding. Notwithstanding other provisions of this subsection,
2770	the corporation may deny coverage to an applicant or insured who
2771	refuses to execute the form described herein.
2772	(aa)  A salaried employee of the corporation who performs
2773	policy administration services subsequent to the effectuation of
2774	a corporation policy is not required to be licensed as an agent
2775	under the provisions of s. 626.112.
2776	(bb)  By February 1, 2007, the corporation shall submit a
2777	report to the President of the Senate, the Speaker of the House
2778	of Representatives, the minority party leaders of the Senate and
2779	the House of Representatives, and the chairs of the standing
2780	committees of the Senate and the House of Representatives having
2781	jurisdiction over matters relating to property and casualty
2782	insurance. In preparing the report, the corporation shall
2783	consult with the Office of Insurance Regulation, the Department
2784	of Financial Services, and any other party the corporation
2785	determines appropriate. The report must include all findings and
2786	recommendations on the feasibility of requiring authorized
2787	insurers that issue and service personal and commercial
2788	residential policies and commercial nonresidential policies that
2789	provide coverage for basic property perils except for the peril
2790	of wind to issue and service for a fee personal and commercial
2791	residential policies and commercial nonresidential policies
2792	providing coverage for the peril of wind issued by the
2793	corporation. The report must include:
2794	1.  The expense savings to the corporation of issuing and
2795	servicing such policies as determined by a cost-benefit
2796	analysis.
2797	2.  The expenses and liability to authorized insurers
2798	associated with issuing and servicing such policies.
2799	3.  The effect on service to policyholders of the
2800	corporation relating to issuing and servicing such policies.
2801	4.  The effect on the producing agent of the corporation of
2802	issuing and servicing such policies.
2803	5.  Recommendations as to the amount of the fee which
2804	should be paid to authorized insurers for issuing and servicing
2805	such policies.
2806	6.  The effect that issuing and servicing such policies
2807	will have on the corporation's number of policies, total insured
2808	value, and probable maximum loss.
2809	(cc)  There shall be no liability on the part of, and no
2810	cause of action of any nature shall arise against, producing
2811	agents of record of the corporation or employees of such agents
2812	for insolvency of any take-out insurer.
2813	(dd)1.  For policies subject to nonrenewal as a result of
2814	the risk being no longer eligible for coverage due to being
2815	valued at $1 million or more, the corporation shall, directly or
2816	through the market assistance plan, make information from
2817	confidential underwriting and claims files of policyholders
2818	available only to licensed general lines agents who register
2819	with the corporation to receive such information according to
2820	the following procedures:
2821	2.  By August 1, 2006, the corporation shall provide such
2822	policyholders who are not eligible for renewal the opportunity
2823	to request in writing, within 30 days after the notification is
2824	sent, that information from their confidential underwriting and
2825	claims files not be released to licensed general lines agents
2826	registered pursuant to this paragraph.
2827	3.  By August 1, 2006, the corporation shall make available
2828	to licensed general lines agents the registration procedures to
2829	be used to obtain confidential information from underwriting and
2830	claims files for such policies not eligible for renewal. As a
2831	condition of registration, the corporation shall require the
2832	licensed general lines agent to attest that the agent has the
2833	experience and relationships with authorized or surplus lines
2834	carriers to attempt to offer replacement coverage for such
2835	policies.
2836	4.  By September 1, 2006, the corporation shall make
2837	available through a secured website to licensed general lines
2838	agents registered pursuant to this paragraph application,
2839	rating, loss history, mitigation, and policy type information
2840	relating to such policies not eligible for renewal and for which
2841	the policyholder has not requested the corporation withhold such
2842	information. The registered licensed general lines agent may use
2843	such information to contact and assist the policyholder in
2844	securing replacement policies, and the agent may disclose to the
2845	policyholder that such information was obtained from the
2846	corporation.
2847	(ee)  Effective June 1, 2007, all commercial nonresidential
2848	policies issued by the corporation as of May 31, 2007, shall
2849	become policies of the Property and Casualty Joint Underwriting
2850	Association created pursuant to subsection (5).
2851	Section 11.  The Department of Financial Services shall
2852	review how insurance agent commissions for the placement and
2853	renewal of property insurance policies in Citizens Property
2854	Insurance Corporation are established and applied and shall make
2855	recommendations, based on industry best practices, for standards
2856	to ensure that agent commissions are justified on a market basis
2857	based on the nature and amount of work performed by the agents.
2858	The department shall report its findings and recommendations to
2859	the Governor, the President of the Senate, and the Speaker of
2860	the House of Representatives by July 1, 2007.
2861	Section 12.  Task Force on Citizens Property Insurance
2862	Claims Handling and Resolution.--
2863	(1)  TASK FORCE CREATED.--There is created the Task Force
2864	on Citizens Property Insurance Claims Handling and Resolution.
2865	(2)  ADMINISTRATION.--The task force shall be
2866	administratively housed within the Office of the Chief Financial
2867	Officer but shall operate independently of any state officer or
2868	agency. The Office of the Chief Financial Officer shall provide
2869	such administrative support as the task force deems necessary to
2870	accomplish its mission and shall provide necessary funding for
2871	the task force within its existing resources. The Executive
2872	Office of the Governor, the Department of Financial Services,
2873	and the Office of Insurance Regulation shall provide substantive
2874	staff support for the task force.
2875	(3)  MEMBERSHIP.--The members of the task force shall be
2876	appointed as follows:
2877	(a)  The Governor shall appoint one member who is a
2878	representative of insurance consumers.
2879	(b)  The Chief Financial Officer shall appoint one member
2880	who has expertise in claims handling.
2881	(c)  The President of the Senate shall appoint one member.
2882	(d)  The Speaker of the House of Representatives shall
2883	appoint one member.
2884	(e)  The Commissioner of Insurance Regulation, or his or
2885	her designee, shall serve as an ex officio voting member of the
2886	task force.
2887	(f)  The Insurance Consumer Advocate, or his or her
2888	designee, shall serve as an ex officio voting member of the task
2889	force.
2890	(g)  The Executive Director of Citizens Property Insurance
2891	Corporation, or his or her designee, shall serve as an ex
2892	officio voting member of the task force.
2893
2894	Members of the task force shall serve without compensation but
2895	are entitled to receive reimbursement for per diem and travel
2896	expenses as provided in s. 112.061, Florida Statutes.
2897	(4)  PURPOSE AND INTENT.--The Legislature recognizes that
2898	policyholders and applicants of Citizens Property Insurance
2899	Corporation should receive the highest possible level of service
2900	and treatment. This level should never be less than the private
2901	market. The Legislature further recognizes that Citizens
2902	Property Insurance Corporation's service standards should be no
2903	less than those applied to insurers in the voluntary market with
2904	respect to responsiveness, timeliness, customer courtesy, and
2905	overall dealings with policyholders and applicants. The purpose
2906	of the task force is to make recommendations to the legislative
2907	and executive branches of this state's government relating to
2908	the handling, service, and resolution of claims by Citizens
2909	Property Insurance Corporation that are sufficient to ensure
2910	that all Citizens' policyholders and applicants in this state
2911	are able to obtain appropriate handling, service, and resolution
2912	of claims, as further described in this section.
2913	(5)  SPECIFIC ISSUES.--The task force shall conduct such
2914	research and hearings as it deems necessary to achieve the
2915	purposes specified in subsection (4) and shall develop
2916	information on relevant issues, including, but not limited to,
2917	the following:
2918	(a)  How Citizens Property Insurance Corporation can
2919	improve its customer service.
2920	(b)  How Citizens Property Insurance Corporation can
2921	improve its adjuster response time after a hurricane.
2922	(c)  How Citizens Property Insurance Corporation can
2923	efficiently use its available adjusting sources for claims.
2924	(d)  How Citizens Property Insurance Corporation can
2925	improve the time it takes to conduct damage assessments.
2926	(e)  How Citizens Property Insurance Corporation can
2927	dispose of and settle claims remaining from the 2004 and 2005
2928	hurricane seasons and can improve the time it takes to dispose
2929	of and settle claims remaining from the 2004 and 2005 hurricane
2930	seasons.
2931	(f)  How Citizens Property Insurance Corporation can
2932	improve the time it takes to dispose of and settle claims.
2933	(g)  Whether Citizens Property Insurance Corporation has
2934	hired an adequate level of permanent claims and adjusting staff
2935	in addition to outsourcing its claims-adjusting functions to
2936	independent adjusting firms.
2937	(6)  REPORTS AND RECOMMENDATIONS.--By July 1, 2007, the
2938	task force shall provide a report containing recommendations
2939	regarding the process Citizens Property Insurance Corporation
2940	should use to dispose of the claims remaining open from the 2004
2941	and 2005 hurricane seasons. By July 1, 2008, the task force
2942	shall provide a report containing findings relating to the
2943	issues identified in subsection (5) and recommendations
2944	consistent with the purposes of this section and also consistent
2945	with such findings. The report shall include recommendations
2946	regarding the process Citizens Property Insurance Corporation
2947	should use to dispose of claims. The task force shall submit the
2948	reports to the Governor, the Chief Financial Officer, the
2949	President of the Senate, and the Speaker of the House of
2950	Representatives. The task force may also submit such interim
2951	reports as it deems appropriate.
2952	(7)  ADDITIONAL ACTIVITIES.--The task force shall monitor
2953	the implementation of the provisions of chapter 2006-12, Laws of
2954	Florida, relating to the creation of the Office of Internal
2955	Auditor in Citizens Property Insurance Corporation and shall
2956	make such additional recommendations as it deems appropriate for
2957	further legislative action during the 2006-2008 legislative
2958	biennium.
2959	(8)  EXPIRATION.--The task force shall expire at the end of
2960	the 2006-2008 legislative biennium.
2961	Section 13.  Notwithstanding the provisions of s.
2962	627.351(6), Florida Statutes, the existing board of governors of
2963	Citizens Property Insurance Corporation appointed under s.
2964	627.351(6)(c)4.a., Florida Statutes, is abolished effective
2965	March 1, 2007. By March 2, 2007, pursuant to s.
2966	627.351(6)(c)4.a., Florida Statutes, each appointing officer
2967	shall appoint new members or reappoint existing members of the
2968	board of governors of the corporation for the unexpired portions
2969	of the terms of the existing board of governors.
2970	Section 14.  Paragraph (e) of subsection (3) and subsection
2971	(4) of section 631.57, Florida Statutes, are amended to read:
2972	631.57  Powers and duties of the association.--
2973	(3)
2974	(e)1.a.  In addition to assessments otherwise authorized in
2975	paragraph (a) and to the extent necessary to secure the funds
2976	for the account specified in s. 631.55(2)(c) for the direct
2977	payment of covered claims of insolvent homeowners insurers and
2978	to pay the reasonable costs to administer such claims, or to
2979	retire indebtedness, including, without limitation, the
2980	principal, redemption premium, if any, and interest on, and
2981	related costs of issuance of, bonds issued under s. 631.695 and
2982	the funding of any reserves and other payments required under
2983	the bond resolution or trust indenture pursuant to which such
2984	bonds have been issued, the office, upon certification of the
2985	board of directors, shall levy emergency assessments upon
2986	insurers holding a certificate of authority. The emergency
2987	assessments payable under this paragraph by any insurer shall
2988	not exceed in any single year more than 2 percent of that
2989	insurer's direct written premiums, net of refunds, in this state
2990	during the preceding calendar year for the kinds of insurance
2991	within the account specified in s. 631.55(2)(c).
2992	b.  Any emergency assessments authorized under this
2993	paragraph shall be levied by the office upon insurers referred
2994	to in sub-subparagraph a., upon certification as to the need for
2995	such assessments by the board of directors. In the event the
2996	board of directors participates in the issuance of bonds in
2997	accordance with s. 631.695, emergency assessments shall be
2998	levied, in each year that bonds issued under s. 631.695 and
2999	secured by such emergency assessments are outstanding, in such
3000	amounts up to such 2-percent limit as required in order to
3001	provide for the full and timely payment of the principal of,
3002	redemption premium, if any, and interest on, and related costs
3003	of issuance of, such bonds. The emergency assessments provided
3004	for in this paragraph are assigned and pledged to the
3005	municipality, county, or legal entity issuing bonds under s.
3006	631.695 for the benefit of the holders of such bonds, in order
3007	to enable such municipality, county, or legal entity to provide
3008	for the payment of the principal of, redemption premium, if any,
3009	and interest on such bonds, the cost of issuance of such bonds,
3010	and the funding of any reserves and other payments required
3011	under the bond resolution or trust indenture pursuant to which
3012	such bonds have been issued, without the necessity of any
3013	further action by the association, the office, or any other
3014	party. To the extent bonds are issued under s. 631.695 and the
3015	association determines to secure such bonds by a pledge of
3016	revenues received from the emergency assessments, such bonds,
3017	upon such pledge of revenues, shall be secured by and payable
3018	from the proceeds of such emergency assessments, and the
3019	proceeds of emergency assessments levied under this paragraph
3020	shall be remitted directly to and administered by the trustee or
3021	custodian appointed for such bonds.
3022	c.  Emergency assessments under this paragraph may be
3023	payable in a single payment or, at the option of the
3024	association, may be payable in 12 monthly installments with the
3025	first installment being due and payable at the end of the month
3026	after an emergency assessment is levied and subsequent
3027	installments being due not later than the end of each succeeding
3028	month.
3029	d.  If emergency assessments are imposed, the report
3030	required by s. 631.695(7) shall include an analysis of the
3031	revenues generated from the emergency assessments imposed under
3032	this paragraph.
3033	e.  If emergency assessments are imposed, the references in
3034	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
3035	assessments levied under paragraph (a) shall include emergency
3036	assessments imposed under this paragraph.
3037	2.  In order to ensure that insurers paying emergency
3038	assessments levied under this paragraph continue to charge rates
3039	that are neither inadequate nor excessive, within 90 days after
3040	being notified of such assessments, each insurer that is to be
3041	assessed pursuant to this paragraph shall submit a rate filing
3042	for coverage included within the account specified in s.
3043	631.55(2)(c) and for which rates are required to be filed under
3044	s. 627.062. If the filing reflects a rate change that, as a
3045	percentage, is equal to the difference between the rate of such
3046	assessment and the rate of the previous year's assessment under
3047	this paragraph, the filing shall consist of a certification so
3048	stating and shall be deemed approved when made. Any rate change
3049	of a different percentage shall be subject to the standards and
3050	procedures of s. 627.062.
3051	3.  In the event the board of directors participates in the
3052	issuance of bonds in accordance with s. 631.695, an annual
3053	assessment under this paragraph shall continue while the bonds
3054	issued with respect to which the assessment was imposed are
3055	outstanding, including any bonds the proceeds of which were used
3056	to refund bonds issued pursuant to s. 631.695, unless adequate
3057	provision has been made for the payment of the bonds in the
3058	documents authorizing the issuance of such bonds.
3059	4.  Emergency assessments under this paragraph are not
3060	premium and are not subject to the premium tax, to any fees, or
3061	to any commissions. An insurer is liable for all emergency
3062	assessments that the insurer collects and shall treat the
3063	failure of an insured to pay an emergency assessment as a
3064	failure to pay the premium. An insurer is not liable for
3065	uncollectible emergency assessments.
3066	(4)  The department may exempt any insurer from any regular
3067	or emergency an assessment if an assessment would result in such
3068	insurer's financial statement reflecting an amount of capital or
3069	surplus less than the sum of the minimum amount required by any
3070	jurisdiction in which the insurer is authorized to transact
3071	insurance.
3072	Section 15.  It is the intent of the Legislature that the
3073	amendments to s. 631.57, Florida Statutes, by s. 34, chapter
3074	2006-12, Laws of Florida, authorized the Florida Insurance
3075	Guaranty Association to certify, and the Office of Insurance
3076	Regulation to levy, an emergency assessment of up to 2 percent
3077	to directly pay the covered claims out of the account specified
3078	in s. 631.55(2)(c), Florida Statutes, or use such emergency
3079	assessment proceeds to retire the indebtedness and costs of
3080	bonds issued to pay such claims and reasonable claims
3081	administration costs.
3082	Section 16.  Subsections (1) and (2) of section 627.706,
3083	Florida Statutes, are amended to read:
3084	627.706  Sinkhole insurance; definitions.--
3085	(1)  Every insurer authorized to transact property
3086	insurance in this state shall make available coverage for
3087	insurable sinkhole losses on any structure, including contents
3088	of personal property contained therein, resulting from a
3089	catastrophic ground cover collapse to the extent provided in the
3090	form to which the sinkhole coverage attaches. A policy for
3091	residential property insurance may include a deductible amount
3092	applicable to sinkhole losses equal to 1 percent, 2 percent, 5
3093	percent, or 10 percent of the policy dwelling limits, with
3094	appropriate premium discounts offered with each deductible
3095	amount.
3096	(2)  As used in ss. 627.706-627.7074, and as used in
3097	connection with any policy providing coverage for sinkhole
3098	losses resulting from a catastrophic ground cover collapse:
3099	(a)  "Catastrophic ground cover collapse" means geological
3100	activity that, within a period of 7 days or less, results in the
3101	collapse of the ground cover that renders the insured structure
3102	uninhabitable. The term "catastrophic ground cover collapse"
3103	does not include ground cover subsidence caused when, during a
3104	period exceeding 7 days, the upper surface of limestone is
3105	dissolved away and the ground cover slowly subsides to occupy
3106	the space once occupied by limestone.
3107	(b)  "Sinkhole Loss" means structural damage to a structure
3108	or the building, including the foundation, caused by a
3109	catastrophic ground cover collapse or sinkhole activity.
3110	Contents coverage shall apply only if there is structural damage
3111	to a structure or the building caused by a catastrophic ground
3112	cover collapse or sinkhole activity. Structural damage
3113	consisting merely of the settling or cracking of a foundation,
3114	structure, or building does not constitute a loss resulting from
3115	a catastrophic ground cover collapse or sinkhole activity.
3116	(c)(d)  "Professional engineer" means a person, as defined
3117	in s. 471.005, who has a bachelor's degree or higher in
3118	engineering with a specialty in the geotechnical engineering
3119	field. A professional engineer must have geotechnical experience
3120	and expertise in the identification of sinkhole activity as well
3121	as other potential causes of damage to the structure.
3122	(d)(e)  "Professional geologist" means a person, as defined
3123	by s. 492.102, who has a bachelor's degree or higher in geology
3124	or related earth science with expertise in the geology of
3125	Florida. A professional geologist must have geological
3126	experience and expertise in the identification of sinkhole
3127	activity as well as other potential geologic causes of damage to
3128	the structure.
3129	(e)(a)  "Sinkhole" means a depression in the ground cover,
3130	visible to the naked eye, landform created by subsidence of
3131	soil, sediment, or rock as underlying strata are dissolved by
3132	groundwater. A sinkhole may form by collapse into subterranean
3133	voids created by dissolution of limestone or dolostone or by
3134	subsidence as these strata are dissolved.
3135	(f)(c)  "Sinkhole activity" means settlement or systematic
3136	weakening of the earth supporting such property only when such
3137	settlement or systematic weakening results from movement or
3138	raveling of soils, sediments, or rock materials into
3139	subterranean voids created by the effect of water on a limestone
3140	or similar rock formation.
3141	(g)  "Uninhabitable" means condemned and ordered vacated by
3142	the governmental agency charged with making such findings and
3143	issuing such orders in the county in which the insured structure
3144	is located.
3145	Section 17.  This act shall take effect upon becoming a
3146	law.

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