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., relating to
4	the Florida Interlocal Cooperation Act; redefining the term
5	"public agency" to include certain legal or administrative
6	entities; authorizing such entities to finance the provision
7	of property coverage contracts for or from local government
8	property insurance pools or property coverage contracts;
9	providing a definition; authorizing certain hospitals to
10	jointly issue bonds to finance windstorm coverages and claims;
11	granting authority to individual hospitals and teaching
12	hospitals to jointly issue bond anticipation notes;
13	authorizing validation of bonds issued to certain hospital
14	entities; specifying that a hospital's immunity caps are not
15	waived through issuance of bonds to pay windstorm coverage or
16	claims; amending s. 215.5595, F.S.; including manufactured
17	housing insurers in the Insurance Capital Build-Up Incentive
18	Program; providing manufactured housing insurer program
19	contribution requirements; providing surplus requirements;
20	prioritizing funding for manufactured housing insurers;
21	providing premium to surplus ratio requirements for certain
22	manufactured housing insurers; amending s. 624.462, F.S.;
23	revising requirements for the establishment of a commercial
24	self-insurance fund by a not-for-profit group; specifying
25	required rules of the commission; amending s. 624.4622, F.S.;
26	authorizing local government self-insurance funds to insure or
27	self-insure real or personal property against loss or damage;
28	creating s. 395.106, F.S.; authorizing certain hospitals and
29	hospital systems to pool and spread windstorm property
30	exposure risk among members; providing criteria for
31	participation; providing definitions; subjecting alliances not
32	in compliance with risk pooling requirements to the Insurance
33	Code; excluding an alliance meeting provision requirements
34	from participation in or coverage by an insurance guaranty
35	association established by ch. 631, F.S.; creating s.
36	624.4625, F.S.; authorizing two or more corporations not for
37	profit to form a self-insurance fund for certain purposes;
38	providing specific requirements; providing a definition;
39	providing limitations; providing for application of certain
40	provisions to certain premiums, contributions, and
41	assessments; providing for payment of insurance premium tax at
42	a reduced rate by corporation not-for-profit self-insurance
43	funds; subjecting a corporation not for profit self-insurance
44	fund to certain group self-insurance fund provisions under
45	certain circumstances; amending s. 624.610, F.S.; prescribing
46	responsibilities of the Commissioner of Insurance Regulation
47	relating to allowing credit for reinsurance; amending s.
48	627.062, F.S.; delaying the effective date of certain
49	provisions relating to residential property insurance rate
50	filings; amending s. 627.351, F.S.; prohibiting the Property
51	and Casualty Joint Underwriting Association and Citizens
52	Property Insurance Corporation from insuring certain
53	properties under certain circumstances; providing exceptions;
54	requiring that Citizens' rates must be adequate; rescinding
55	certain rate filings of the corporation; requiring the
56	corporation to use certain other rates; requiring the
57	corporation to refund certain portions of rates; providing for
58	effect of certain rates; providing for new rate filings;
59	requiring the Department of Financial Services to review the
60	corporation's insurance agent commission structure and make
61	recommendations for commission standards; requiring a report;
62	creating the Task Force on Citizens Property Insurance Claims
63	Handling and Resolution; providing for administration of the
64	task force; providing for membership; providing for
65	reimbursement of expenses but no compensation; providing
66	purpose and intent; requiring the task force to address
67	certain issues; requiring reports and recommendations;
68	providing additional responsibilities of the task force;
69	providing for expiration of the task force; abolishing the
70	existing board of governors of Citizens Property Insurance
71	Corporation; providing for appointment of new members;
72	amending s. 631.57, F.S.; revising criteria and requirements
73	for levy of emergency assessments by the Florida Insurance
74	Guaranty Association; revising characterizations of emergency
75	assessments; providing legislative intent; amending s.
76	627.706, F.S.; revising sinkhole insurance provisions to
77	include coverage for losses due to catastrophic ground cover
78	collapse; authorizing certain deductibles; revising
79	definitions; specifying requirements for certain sinkhole
80	insurance disclosures; requiring insurers to offer certain
81	additional coverage; specifying requirements for additional
82	coverage; providing an effective date.
83
84	Be It Enacted by the Legislature of the State of Florida:
85
86	Section 1.  This act may be cited as the "Citizens Reform
87	and Private Market Restoration Act."
88	Section 2.  Paragraph (b) of subsection (3) and paragraph
89	(e) of subsection (7) of section 163.01, Florida Statutes, are
90	amended, and paragraph (h) is added to subsection (7) of that
91	section, to read:
92	163.01  Florida Interlocal Cooperation Act of 1969.--
93	(3)  As used in this section:
94	(b)  "Public agency" means a political subdivision, agency,
95	or officer of this state or of any state of the United States,
96	including, but not limited to, state government, county, city,
97	school district, single and multipurpose special district,
98	single and multipurpose public authority, metropolitan or
99	consolidated government, a separate legal entity or
100	administrative entity created under subsection (7), an
101	independently elected county officer, any agency of the United
102	States Government, a federally recognized Native American tribe,
103	and any similar entity of any other state of the United States.
104	(7)
105	(e)1.  Notwithstanding the provisions of paragraph (c), any
106	separate legal entity, created pursuant to the provisions of
107	this section and controlled by counties or municipalities of
108	this state, the membership of which consists or is to consist
109	only of public agencies of this state, may, for the purpose of
110	financing the provision or acquisition of liability or property
111	coverage contracts for or from one or more local government
112	liability or property pools to provide liability or property
113	coverage for counties, municipalities, or other public agencies
114	of this state, exercise all powers in connection with the
115	authorization, issuance, and sale of bonds. All of the
116	privileges, benefits, powers, and terms of s. 125.01 relating to
117	counties and s. 166.021 relating to municipalities shall be
118	fully applicable to such entity and such entity shall be
119	considered a unit of local government for all of the privileges,
120	benefits, powers, and terms of part I of chapter 159.  Bonds
121	issued by such entity shall be deemed issued on behalf of
122	counties, municipalities, or public agencies which enter into
123	loan agreements with such entity as provided in this paragraph.
124	Proceeds of bonds issued by such entity may be loaned to
125	counties, municipalities, or other public agencies of this
126	state, whether or not such counties, municipalities, or other
127	public agencies are also members of the entity issuing the
128	bonds, and such counties, municipalities, or other public
129	agencies may in turn deposit such loan proceeds with a separate
130	local government liability or property pool for purposes of
131	providing or acquiring liability or property coverage contracts.
132	2.  Counties or municipalities of this state are authorized
133	pursuant to this section, in addition to the authority provided
134	by s. 125.01, part II of chapter 166, and other applicable law,
135	to issue bonds for the purpose of acquiring liability coverage
136	contracts from a local government liability pool. Any individual
137	county or municipality may, by entering into interlocal
138	agreements with other counties, municipalities, or public
139	agencies of this state, issue bonds on behalf of itself and
140	other counties, municipalities, or other public agencies, for
141	purposes of acquiring a liability coverage contract or contracts
142	from a local government liability pool. Counties,
143	municipalities, or other public agencies are also authorized to
144	enter into loan agreements with any entity created pursuant to
145	subparagraph 1., or with any county or municipality issuing
146	bonds pursuant to this subparagraph, for the purpose of
147	obtaining bond proceeds with which to acquire liability coverage
148	contracts from a local government liability pool. No county,
149	municipality, or other public agency shall at any time have more
150	than one loan agreement outstanding for the purpose of obtaining
151	bond proceeds with which to acquire liability coverage contracts
152	from a local government liability pool. Obligations of any
153	county, municipality, or other public agency of this state
154	pursuant to a loan agreement as described above may be validated
155	as provided in chapter 75.  Prior to the issuance of any bonds
156	pursuant to subparagraph 1. or this subparagraph for the purpose
157	of acquiring liability coverage contracts from a local
158	government liability pool, the reciprocal insurer or the manager
159	of any self-insurance program shall demonstrate to the
160	satisfaction of the Office of Insurance Regulation of the
161	Financial Services Commission that excess liability coverage for
162	counties, municipalities, or other public agencies is reasonably
163	unobtainable in the amounts provided by such pool or that the
164	liability coverage obtained through acquiring contracts from a
165	local government liability pool, after taking into account costs
166	of issuance of bonds and any other administrative fees, is less
167	expensive to counties, municipalities, or special districts than
168	similar commercial coverage then reasonably available.
169	3.  Any entity created pursuant to this section or any
170	county or municipality may also issue bond anticipation notes,
171	as provided by s. 215.431, in connection with the authorization,
172	issuance, and sale of such bonds.  In addition, the governing
173	body of such legal entity or the governing body of such county
174	or municipality may also authorize bonds to be issued and sold
175	from time to time and may delegate, to such officer, official,
176	or agent of such legal entity as the governing body of such
177	legal entity may select, the power to determine the time; manner
178	of sale, public or private; maturities; rate or rates of
179	interest, which may be fixed or may vary at such time or times
180	and in accordance with a specified formula or method of
181	determination; and other terms and conditions as may be deemed
182	appropriate by the officer, official, or agent so designated by
183	the governing body of such legal entity. However, the amounts
184	and maturities of such bonds and the interest rate or rates of
185	such bonds shall be within the limits prescribed by the
186	governing body of such legal entity and its resolution
187	delegating to such officer, official, or agent the power to
188	authorize the issuance and sale of such bonds.  Any series of
189	bonds issued pursuant to this paragraph for liability coverage
190	shall mature no later than 7 years following the date of
191	issuance thereof. A series of bonds issued pursuant to this
192	paragraph for property coverage shall mature no later than 30
193	years following the date of issuance.
194	4.  Bonds issued pursuant to subparagraph 1. may be
195	validated as provided in chapter 75.  The complaint in any
196	action to validate such bonds shall be filed only in the Circuit
197	Court for Leon County.  The notice required to be published by
198	s. 75.06 shall be published in Leon County and in each county
199	which is an owner of the entity issuing the bonds, or in which a
200	member of the entity is located, and the complaint and order of
201	the circuit court shall be served only on the State Attorney of
202	the Second Judicial Circuit and on the state attorney of each
203	circuit in each county or municipality which is an owner of the
204	entity issuing the bonds or in which a member of the entity is
205	located.
206	5.  Bonds issued pursuant to subparagraph 2. may be
207	validated as provided in chapter 75. The complaint in any action
208	to validate such bonds shall be filed in the circuit court of
209	the county or municipality which will issue the bonds.  The
210	notice required to be published by s. 75.06 shall be published
211	only in the county where the complaint is filed, and the
212	complaint and order of the circuit court shall be served only on
213	the state attorney of the circuit in the county or municipality
214	which will issue the bonds.
215	6.  The participation by any county, municipality, or other
216	public agency of this state in a local government liability pool
217	shall not be deemed a waiver of immunity to the extent of
218	liability coverage, nor shall any contract entered regarding
219	such a local government liability pool be required to contain
220	any provision for waiver.
221	(h)1.  Notwithstanding the provisions of paragraph (c), any
222	separate legal entity consisting of an alliance, as defined in
223	s. 395.106(2)(a), created pursuant to this paragraph and
224	controlled by and whose members consist of eligible entities
225	comprised of special districts created pursuant to a special act
226	and having the authority to own or operate one or more hospitals
227	licensed in this state or hospitals licensed in this state that
228	are owned, operated, or funded by a county or municipality, for
229	the purpose of providing property insurance coverage as defined
230	in s. 395.106(2)(c), for such eligible entities, may exercise
231	all powers under this subsection in connection with borrowing
232	funds for such purposes, including, without limitation, the
233	authorization, issuance, and sale of bonds, notes, or other
234	obligations of indebtedness. Borrowed funds, including, but not
235	limited to, bonds issued by such alliance shall be deemed issued
236	on behalf of such eligible entities that enter into loan
237	agreements with such separate legal entity as provided in this
238	paragraph.
239	2.  Any such separate legal entity shall have all the
240	powers that are provided by the interlocal agreement under which
241	the entity is created or that are necessary to finance, operate,
242	or manage the alliance's property insurance coverage program.
243	Proceeds of bonds, notes, or other obligations issued by such an
244	entity may be loaned to any one or more eligible entities. Such
245	eligible entities are authorized to enter into loan agreements
246	with any separate legal entity created pursuant to this
247	paragraph for the purpose of obtaining moneys with which to
248	finance property insurance coverage or claims. Obligations of
249	any eligible entity pursuant to a loan agreement as described in
250	this paragraph may be validated as provided in chapter 75.
251	3.  Any bonds, notes, or other obligations to be issued or
252	incurred by a separate legal entity created pursuant to this
253	paragraph shall be authorized by resolution of the governing
254	body of such entity and bear the date or dates; mature at the
255	time or times, not exceeding 30 years from their respective
256	dates; bear interest at the rate or rates, which may be fixed or
257	vary at such time or times and in accordance with a specified
258	formula or method of determination; be payable at the time or
259	times; be in the denomination; be in the form; carry the
260	registration privileges; be executed in the manner; be payable
261	from the sources and in the medium of payment and at the place;
262	and be subject to redemption, including redemption prior to
263	maturity, as the resolution may provide. The bonds, notes, or
264	other obligations may be sold at public or private sale for such
265	price as the governing body of the separate legal entity shall
266	determine. The bonds may be secured by such credit enhancement,
267	if any, as the governing body of the separate legal entity deems
268	appropriate. The bonds may be secured by an indenture of trust
269	or trust agreement. In addition, the governing body of the
270	separate legal entity may delegate, to such officer or official
271	of such entity as the governing body may select, the power to
272	determine the time; manner of sale, public or private;
273	maturities; rate or rates of interest, which may be fixed or may
274	vary at such time or times and in accordance with a specified
275	formula or method of determination; and other terms and
276	conditions as may be deemed appropriate by the officer or
277	official so designated by the governing body of such separate
278	legal entity. However, the amounts and maturities of such bonds,
279	the interest rate or rates, and the purchase price of such bonds
280	shall be within the limits prescribed by the governing body of
281	such separate legal entity in its resolution delegating to such
282	officer or official the power to authorize the issuance and sale
283	of such bonds.
284	4.  Bonds issued pursuant to this paragraph may be
285	validated as provided in chapter 75. The complaint in any action
286	to validate such bonds shall be filed only in the Circuit Court
287	for Leon County. The notice required to be published by s. 75.06
288	shall be published in Leon County and in each county in which an
289	eligible entity that is a member of an alliance is located. The
290	complaint and order of the circuit court shall be served only on
291	the state attorney of the Second Judicial Circuit and on the
292	state attorney of each circuit in each county in which an
293	eligible entity receiving bond proceeds is located.
294	5.  The accomplishment of the authorized purposes of a
295	separate legal entity created under this paragraph is deemed in
296	all respects for the benefit, increase of the commerce and
297	prosperity, and improvement of the health and living conditions
298	of the people of this state. Inasmuch as the separate legal
299	entity performs essential public functions in accomplishing its
300	purposes, the separate legal entity is not required to pay any
301	taxes or assessments of any kind upon any property acquired or
302	used by the entity for such purposes or upon any revenues at any
303	time received by the entity. The bonds, notes, and other
304	obligations of such separate legal entity, the transfer of and
305	income from such bonds, notes, and other obligations, including
306	any profits made on the sale of such bonds, notes, and other
307	obligations, are at all times free from taxation of any kind of
308	the state or by any political subdivision or other agency or
309	instrumentality if the state. The exemption granted in this
310	paragraph does not apply to any tax imposed by chapter 220 on
311	interest, income, or profits on debt obligations owned by
312	corporations.
313	6.  The participation by any eligible entity in an alliance
314	or a separate legal entity created pursuant to this paragraph
315	may not be deemed a waiver of immunity to the extent of
316	liability or any other coverage and a contract entered regarding
317	such alliance is not required to contain any provision for
318	waiver.
319	Section 3.  Paragraphs (a), (c), and (g) of subsection (2)
320	of section 215.5595, Florida Statutes, are amended, and
321	paragraph (i) is added to that subsection, to read:
322	215.5595  Insurance Capital Build-Up Incentive Program.--
323	(2)  The purpose of this section is to provide surplus
324	notes to new or existing authorized residential property
325	insurers under the Insurance Capital Build-Up Incentive Program
326	administered by the State Board of Administration, under the
327	following conditions:
328	(a)  The amount of the surplus note for any insurer or
329	insurer group, other than an insurer writing only manufactured
330	housing policies, may not exceed $25 million or 20 percent of
331	the total amount of funds available under the program, whichever
332	is greater. The amount of the surplus note for any insurer or
333	insurer group writing residential property insurance covering
334	only manufactured housing may not exceed $7 million.
335	(c)  The insurer's surplus, new capital, and the surplus
336	note must total at least $50 million, except for insurers
337	writing residential property insurance covering only
338	manufactured housing. The insurer's surplus, new capital, and
339	the surplus note must total at least $14 million for insurers
340	writing only residential property insurance covering
341	manufactured housing policies as provided in paragraph (a).
342	(g)  The total amount of funds available for the program is
343	limited to the amount appropriated by the Legislature for this
344	purpose. If the amount of surplus notes requested by insurers
345	exceeds the amount of funds available, the board may prioritize
346	insurers that are eligible and approved, with priority for
347	funding given to insurers writing only manufactured housing
348	policies, regardless of the date of application, based on the
349	financial strength of the insurer, the viability of its proposed
350	business plan for writing additional residential property
351	insurance in the state, and the effect on competition in the
352	residential property insurance market.
353	(i)  Notwithstanding paragraph (d), a newly formed
354	manufactured housing insurer that is eligible for a surplus note
355	under this section shall meet the premium to surplus ratio
356	provisions of s. 624.4095.
357	Section 4.  Paragraph (a) of subsection (2) of section
358	624.462, Florida Statutes, is amended to read:
359	624.462  Commercial self-insurance funds.--
360	(2)  As used in ss. 624.460-624.488, "commercial
361	self-insurance fund" or "fund" means a group of members,
362	operating individually and collectively through a trust or
363	corporation, that must be:
364	(a)  Established by:
365	1.  A not-for-profit trade association, industry
366	association, or professional association of employers or
367	professionals which has a constitution or bylaws, which is
368	incorporated under the laws of this state, and which has been
369	organized for purposes other than that of obtaining or providing
370	insurance and operated in good faith for a continuous period of
371	1 year;
372	2.  A self-insurance trust fund organized pursuant to s.
373	627.357 and maintained in good faith for a continuous period of
374	1 year for purposes other than that of obtaining or providing
375	insurance pursuant to this section. Each member of a commercial
376	self-insurance trust fund established pursuant to this
377	subsection must maintain membership in the self-insurance trust
378	fund organized pursuant to s. 627.357;
379	3.  A group of 10 or more health care providers, as defined
380	in s. 627.351(4)(h), for purposes of providing medical
381	malpractice coverage; or
382	4.  A not-for-profit group comprised of no fewer less than
383	10 community condominium associations created and operating
384	under chapter 718, chapter 719, chapter 720, chapter 721, or
385	chapter 723 that as defined in s. 718.103(2), which is
386	incorporated under the laws of this state, which restricts its
387	membership to community condominium associations only, and that
388	which has been organized and maintained in good faith for the
389	purpose of pooling and spreading the liabilities of its group
390	members relating to property or casualty risk a continuous
391	period of 1 year for purposes other than that of obtaining or
392	providing insurance. However, a not-for-profit group comprised
393	of fewer than 10 community associations may establish a
394	commercial self-insurance fund if the commission has adopted
395	rules:
396	a.  Requiring monetary reserves to be maintained by such
397	self-insurers to ensure their financial solvency and governing
398	their organization and operation to ensure compliance with such
399	requirements.
400	b.  Implementing the reserve requirements in accordance
401	with accepted actuarial techniques.
402	c.  Requiring the office to establish procedures by which
403	notice is acknowledged by applicants for the commercial self-
404	insurance fund, as well as individual property owners, of the
405	assessability of membership in the self-insurance fund and that
406	contributing additional moneys to meet unfilled obligations of
407	the fund may be necessary.
408	d.  Prohibiting the office from denying a fund's
409	application solely because of the geographical proximity of the
410	fund's associational membership, provided the fund possesses
411	sufficient financial resources to operate in a fiscally
412	responsible manner.
413	Section 5.  Subsection (1) of section 624.4622, Florida
414	Statutes, is amended to read:
415	624.4622  Local government self-insurance funds.--
416	(1)  Any two or more local governmental entities may enter
417	into interlocal agreements for the purpose of securing the
418	payment of benefits under chapter 440, or insuring or self-
419	insuring real or personal property of every kind and every
420	interest in such property against loss or damage from any hazard
421	or cause and against any loss consequential to such loss or
422	damage, provided the local government self-insurance fund that
423	is created must:
424	(a)  Have annual normal premiums in excess of $5 million;
425	(b)  Maintain a continuing program of excess insurance
426	coverage and reserve evaluation to protect the financial
427	stability of the fund in an amount and manner determined by a
428	qualified and independent actuary;
429	(c)  Submit annually an audited fiscal year-end financial
430	statement by an independent certified public accountant within 6
431	months after the end of the fiscal year to the office; and
432	(d)  Have a governing body which is comprised entirely of
433	local elected officials.
434	Section 6.  Section 395.106, Florida Statutes, is created
435	to read:
436	395.106  Risk pooling by certain hospitals and hospital
437	systems.--
438	(1)  Notwithstanding an other provision of law, any two or
439	more hospitals licensed in this state and located in this state
440	may form an alliance for the purpose of pooling and spreading
441	liabilities of its members relative to windstorm property
442	exposure or securing such windstorm property insurance coverage
443	for the benefit of its members, provided an alliance that is
444	created:
445	(a)  Has annual premiums in excess of $3 million.
446	(b)  Maintains a continuing program of premium calculation
447	and evaluation and reserve evaluation to protect the financial
448	stability of the alliance in an amount and manner determined by
449	consultants using catastrophic (CAT) modeling criteria or other
450	risk-estimating methodologies, including those used by qualified
451	and independent actuaries.
452	(c)  Causes to be prepared annually a fiscal year-end
453	financial statement based upon generally accepted accounting
454	principles and audited by an independent certified public
455	accountant within 6 months after the end of the fiscal year.
456	(d)  Has a governing body comprised entirely of member
457	entities whose representatives on such governing body are
458	specified by the organizational documents of the alliance.
459	(2)  For purposes of this section, the term:
460	(a)  "Alliance" means a corporation, association, limited
461	liability company, or partnership or any other legal entity
462	formed by a group of eligible entities.
463	(b)  "Property coverage" means property coverage provided
464	by self-insurance or insurance for real or personal property of
465	every kind and every interest in such property against loss or
466	damage from any hazard or cause and against any loss
467	consequential to such loss or damage.
468	(3)  An alliance that meets the requirements of this
469	section is not subject to any provision of the Insurance Code.
470	(4)  An alliance that meets the requirements of this
471	section is not an insurer for purposes of participation in or
472	coverage by the Florida Insurance Guaranty Association
473	established in part II of chapter 631. Alliance self-insured
474	coverage is not subject to insurance premium tax, and any such
475	alliance formed pursuant to this section may not be assessed for
476	purposes of s. 627.351 or s. 215.555.
477	Section 7.  Section 624.4625, Florida Statutes, is created
478	to read:
479	624.4625  Corporation not-for-profit self-insurance
480	funds.--
481	(1)  Notwithstanding any other provision of law, any two or
482	more corporations not for profit located in and organized under
483	the laws of this state may form a self-insurance fund for the
484	purpose of pooling and spreading liabilities of its group
485	members in any one or combination of property or casualty risk,
486	provided the corporation not for profit self-insurance fund that
487	is created:
488	(a)  Has annual normal premiums in excess of $5 million.
489	(b)  Requires for qualification that each participating
490	member receive at least 75 percent of its revenues from local,
491	state, or federal governmental sources or a combination of such
492	sources.
493	(c)  Uses a qualified actuary to determine rates using
494	accepted actuarial principles and annually submits to the office
495	a certification by the actuary that the rates are actuarially
496	sound and are not inadequate, as defined in s. 627.062.
497	(d)  Uses a qualified actuary to establish reserves for
498	loss and loss adjustment expenses and annually submits to the
499	office a certification by the actuary that the loss and loss
500	adjustment expense reserves are adequate. If the actuary
501	determines that reserves are not adequate, the fund shall file
502	with the office a remedial plan for increasing the reserves or
503	otherwise addressing the financial condition of the fund,
504	subject to a determination by the office that the fund will
505	operate on an actuarially sound basis and the fund does not pose
506	a significant risk of insolvency.
507	(e)  Maintains a continuing program of excess insurance
508	coverage and reserve evaluation to protect the financial
509	stability of the fund in an amount and manner determined by a
510	qualified actuary. At a minimum, this program must:
511	1.  Purchase excess insurance from authorized insurance
512	carriers.
513	2.  Retain a per-loss occurrence that does not exceed
514	$350,000.
515	(f)  Submits to the office annually an audited fiscal year-
516	end financial statement by an independent certified public
517	accountant within 6 months after the end of the fiscal year.
518	(g)  Has a governing body that is comprised entirely of
519	officials from corporations not for profit that are members of
520	the corporation not-for-profit self-insurance fund.
521	(h)  Uses knowledgeable persons or business entities to
522	administer or service the fund in the areas of claims
523	administration, claims adjusting, underwriting, risk management,
524	loss control, policy administration, financial audit, and legal
525	areas. Such persons must meet all applicable requirements of law
526	for state licensure and must have at least 5 years' experience
527	with commercial self-insurance funds formed under s. 624.462,
528	self-insurance funds formed under s. 624.4622, or domestic
529	insurers.
530	(i)  Submits to the office copies of contracts used for its
531	members that clearly establish the liability of each member for
532	the obligations of the fund.
533	(j)  Annually submits to the office a certification by the
534	governing body of the fund that, to the best of its knowledge,
535	the requirements of this section are met.
536	(2)  As used in this section, the term "qualified actuary"
537	means an actuary that is a member of the Casualty Actuarial
538	Society or the American Academy of Actuaries.
539	(3)  A corporation not-for-profit self-insurance fund that
540	meets the requirements of this section is not:
541	(a)  An insurer for purposes of participation in or
542	coverage by any insurance guaranty association established by
543	chapter 631; or
544	(b)  Subject to s. 624.4621 and is not required to file any
545	report with the department under s. 440.38(2)(b) that is
546	uniquely required of group self-insurer funds qualified under s.
547	624.4621.
548	(4)  Premiums, contributions, and assessments received by a
549	corporation not-for-profit self-insurance fund are subject to
550	ss. 624.509(1) and (2) and 624.5092, except that the tax rate
551	shall be 1.6 percent of the gross amount of such premiums,
552	contributions, and assessments.
553	(5)  If any of the requirements of subsection (1) are not
554	met, a corporation not-for-profit self-insurance fund is subject
555	to the requirements of s. 624.4621 if the fund provides only
556	workers' compensation coverage or is subject to the requirements
557	of ss. 624.460-624.488 if the fund provides coverage for other
558	property, casualty, or surety risks.
559	Section 8.  Subsection (3) of section 624.610, Florida
560	Statutes, is amended to read:
561	624.610  Reinsurance.--
562	(3)(a)  Credit must be allowed when the reinsurance is
563	ceded to an assuming insurer that is authorized to transact
564	insurance or reinsurance in this state.
565	(b)1.  Credit must be allowed when the reinsurance is ceded
566	to an assuming insurer that is accredited as a reinsurer in this
567	state. An accredited reinsurer is one that:
568	a.  Files with the office evidence of its submission to
569	this state's jurisdiction;
570	b.  Submits to this state's authority to examine its books
571	and records;
572	c.  Is licensed or authorized to transact insurance or
573	reinsurance in at least one state or, in the case of a United
574	States branch of an alien assuming insurer, is entered through,
575	licensed, or authorized to transact insurance or reinsurance in
576	at least one state;
577	d.  Files annually with the office a copy of its annual
578	statement filed with the insurance department of its state of
579	domicile any quarterly statements if required by its state of
580	domicile or such quarterly statements if specifically requested
581	by the office, and a copy of its most recent audited financial
582	statement; and
583	(I)  Maintains a surplus as regards policyholders in an
584	amount not less than $20 million and whose accreditation has not
585	been denied by the office within 90 days after its submission;
586	or
587	(II)  Maintains a surplus as regards policyholders in an
588	amount not less than $20 million and whose accreditation has
589	been approved by the office.
590	2.  The office may deny or revoke an assuming insurer's
591	accreditation if the assuming insurer does not submit the
592	required documentation pursuant to subparagraph 1., if the
593	assuming insurer fails to meet all of the standards required of
594	an accredited reinsurer, or if the assuming insurer's
595	accreditation would be hazardous to the policyholders of this
596	state. In determining whether to deny or revoke accreditation,
597	the office may consider the qualifications of the assuming
598	insurer with respect to all the following subjects:
599	a.  Its financial stability;
600	b.  The lawfulness and quality of its investments;
601	c.  The competency, character, and integrity of its
602	management;
603	d.  The competency, character, and integrity of persons who
604	own or have a controlling interest in the assuming insurer; and
605	e.  Whether claims under its contracts are promptly and
606	fairly adjusted and are promptly and fairly paid in accordance
607	with the law and the terms of the contracts.
608	3.  Credit must not be allowed a ceding insurer if the
609	assuming insurer's accreditation has been revoked by the office
610	after notice and the opportunity for a hearing.
611	4.  The actual costs and expenses incurred by the office to
612	review a reinsurer's request for accreditation and subsequent
613	reviews must be charged to and collected from the requesting
614	reinsurer. If the reinsurer fails to pay the actual costs and
615	expenses promptly when due, the office may refuse to accredit
616	the reinsurer or may revoke the reinsurer's accreditation.
617	(c)1.  Credit must be allowed when the reinsurance is ceded
618	to an assuming insurer that maintains a trust fund in a
619	qualified United States financial institution, as defined in
620	paragraph (5)(b), for the payment of the valid claims of its
621	United States ceding insurers and their assigns and successors
622	in interest. To enable the office to determine the sufficiency
623	of the trust fund, the assuming insurer shall report annually to
624	the office information substantially the same as that required
625	to be reported on the NAIC Annual Statement form by authorized
626	insurers. The assuming insurer shall submit to examination of
627	its books and records by the office and bear the expense of
628	examination.
629	2.a.  Credit for reinsurance must not be granted under this
630	subsection unless the form of the trust and any amendments to
631	the trust have been approved by:
632	(I)  The insurance regulator of the state in which the
633	trust is domiciled; or
634	(II)  The insurance regulator of another state who,
635	pursuant to the terms of the trust instrument, has accepted
636	principal regulatory oversight of the trust.
637	b.  The form of the trust and any trust amendments must be
638	filed with the insurance regulator of every state in which the
639	ceding insurer beneficiaries of the trust are domiciled. The
640	trust instrument must provide that contested claims are valid
641	and enforceable upon the final order of any court of competent
642	jurisdiction in the United States. The trust must vest legal
643	title to its assets in its trustees for the benefit of the
644	assuming insurer's United States ceding insurers and their
645	assigns and successors in interest. The trust and the assuming
646	insurer are subject to examination as determined by the
647	insurance regulator.
648	c.  The trust remains in effect for as long as the assuming
649	insurer has outstanding obligations due under the reinsurance
650	agreements subject to the trust. No later than February 28 of
651	each year, the trustee of the trust shall report to the
652	insurance regulator in writing the balance of the trust and list
653	the trust's investments at the preceding year end, and shall
654	certify that the trust will not expire prior to the following
655	December 31.
656	3.  The following requirements apply to the following
657	categories of assuming insurer:
658	a.  The trust fund for a single assuming insurer consists
659	of funds in trust in an amount not less than the assuming
660	insurer's liabilities attributable to reinsurance ceded by
661	United States ceding insurers, and, in addition, the assuming
662	insurer shall maintain a trusteed surplus of not less than $20
663	million. Not less than 50 percent of the funds in the trust
664	covering the assuming insurer's liabilities attributable to
665	reinsurance ceded by United States ceding insurers and trusteed
666	surplus shall consist of assets of a quality substantially
667	similar to that required in part II of chapter 625. Clean,
668	irrevocable, unconditional, and evergreen letters of credit,
669	issued or confirmed by a qualified United States financial
670	institution, as defined in paragraph (5)(a), effective no later
671	than December 31 of the year for which the filing is made and in
672	the possession of the trust on or before the filing date of its
673	annual statement, may be used to fund the remainder of the trust
674	and trusteed surplus.
675	b.(I)  In the case of a group including incorporated and
676	individual unincorporated underwriters:
677	(A)  For reinsurance ceded under reinsurance agreements
678	with an inception, amendment, or renewal date on or after August
679	1, 1995, the trust consists of a trusteed account in an amount
680	not less than the group's several liabilities attributable to
681	business ceded by United States domiciled ceding insurers to any
682	member of the group;
683	(B)  For reinsurance ceded under reinsurance agreements
684	with an inception date on or before July 31, 1995, and not
685	amended or renewed after that date, notwithstanding the other
686	provisions of this section, the trust consists of a trusteed
687	account in an amount not less than the group's several insurance
688	and reinsurance liabilities attributable to business written in
689	the United States; and
690	(C)  In addition to these trusts, the group shall maintain
691	in trust a trusteed surplus of which $100 million must be held
692	jointly for the benefit of the United States domiciled ceding
693	insurers of any member of the group for all years of account.
694	(II)  The incorporated members of the group must not be
695	engaged in any business other than underwriting of a member of
696	the group, and are subject to the same level of regulation and
697	solvency control by the group's domiciliary regulator as the
698	unincorporated members.
699	(III)  Within 90 days after its financial statements are
700	due to be filed with the group's domiciliary regulator, the
701	group shall provide to the insurance regulator an annual
702	certification by the group's domiciliary regulator of the
703	solvency of each underwriter member or, if a certification is
704	unavailable, financial statements, prepared by independent
705	public accountants, of each underwriter member of the group.
706	(d)  Credit must be allowed when the reinsurance is ceded
707	to an assuming insurer not meeting the requirements of paragraph
708	(a), paragraph (b), or paragraph (c), but only as to the
709	insurance of risks located in jurisdictions in which the
710	reinsurance is required to be purchased by a particular entity
711	by applicable law or regulation of that jurisdiction.
712	(e)  If the reinsurance is ceded to an assuming insurer not
713	meeting the requirements of paragraph (a), paragraph (b),
714	paragraph (c), or paragraph (d), the commissioner may allow
715	credit, but only if the assuming insurer holds surplus in excess
716	of $100 million and has a secure financial strength rating from
717	at least two nationally recognized statistical rating
718	organizations deemed acceptable by the commissioner. In
719	determining whether credit should be allowed, the commissioner
720	shall consider the following:
721	1.  The domiciliary regulatory jurisdiction of the assuming
722	insurer.
723	2.  The structure and authority of the domiciliary
724	regulator with regard to solvency regulation requirements and
725	the financial surveillance of the reinsurer.
726	3.  The substance of financial and operating standards for
727	reinsurers in the domiciliary jurisdiction.
728	4.  The form and substance of financial reports required to
729	be filed by the reinsurers in the domiciliary jurisdiction or
730	other public financial statements filed in accordance with
731	generally accepted accounting principles.
732	5.  The domiciliary regulator's willingness to cooperate
733	with United States regulators in general and the office in
734	particular.
735	6.  The history of performance by reinsurers in the
736	domiciliary jurisdiction.
737	7.  Any documented evidence of substantial problems with
738	the enforcement of valid United States judgments in the
739	domiciliary jurisdiction.
740	8.  Any other matters deemed relevant by the commissioner.
741	The commissioner shall give appropriate consideration to insurer
742	group ratings that may have been issued. The commissioner may,
743	in lieu of granting full credit under this subsection, reduce
744	the amount required to be held in trust under paragraph (c).
745	(f)(e)  If the assuming insurer is not authorized or
746	accredited to transact insurance or reinsurance in this state
747	pursuant to paragraph (a) or paragraph (b), the credit permitted
748	by paragraph (c) or paragraph (d) must not be allowed unless the
749	assuming insurer agrees in the reinsurance agreements:
750	1.a.  That in the event of the failure of the assuming
751	insurer to perform its obligations under the terms of the
752	reinsurance agreement, the assuming insurer, at the request of
753	the ceding insurer, shall submit to the jurisdiction of any
754	court of competent jurisdiction in any state of the United
755	States, will comply with all requirements necessary to give the
756	court jurisdiction, and will abide by the final decision of the
757	court or of any appellate court in the event of an appeal; and
758	b.  To designate the Chief Financial Officer, pursuant to
759	s. 48.151, or a designated attorney as its true and lawful
760	attorney upon whom may be served any lawful process in any
761	action, suit, or proceeding instituted by or on behalf of the
762	ceding company.
763	2.  This paragraph is not intended to conflict with or
764	override the obligation of the parties to a reinsurance
765	agreement to arbitrate their disputes, if this obligation is
766	created in the agreement.
767	(g)(f)  If the assuming insurer does not meet the
768	requirements of paragraph (a) or paragraph (b), the credit
769	permitted by paragraph (c) or paragraph (d) is not allowed
770	unless the assuming insurer agrees in the trust agreements, in
771	substance, to the following conditions:
772	1.  Notwithstanding any other provisions in the trust
773	instrument, if the trust fund is inadequate because it contains
774	an amount less than the amount required by paragraph (c), or if
775	the grantor of the trust has been declared insolvent or placed
776	into receivership, rehabilitation, liquidation, or similar
777	proceedings under the laws of its state or country of domicile,
778	the trustee shall comply with an order of the insurance
779	regulator with regulatory oversight over the trust or with an
780	order of a United States court of competent jurisdiction
781	directing the trustee to transfer to the insurance regulator
782	with regulatory oversight all of the assets of the trust fund.
783	2.  The assets must be distributed by and claims must be
784	filed with and valued by the insurance regulator with regulatory
785	oversight in accordance with the laws of the state in which the
786	trust is domiciled which are applicable to the liquidation of
787	domestic insurance companies.
788	3.  If the insurance regulator with regulatory oversight
789	determines that the assets of the trust fund or any part thereof
790	are not necessary to satisfy the claims of the United States
791	ceding insurers of the grantor of the trust, the assets or part
792	thereof must be returned by the insurance regulator with
793	regulatory oversight to the trustee for distribution in
794	accordance with the trust agreement.
795	4.  The grantor shall waive any right otherwise available
796	to it under United States law which is inconsistent with this
797	provision.
798	Section 9.  Paragraph (j) of subsection (2) of section
799	627.062, Florida Statutes, is amended to read:
800	627.062  Rate standards.--
801	(2)  As to all such classes of insurance:
802	(j)  Effective July 1, 2009 2007, notwithstanding any other
803	provision of this section:
804	1.  With respect to any residential property insurance
805	subject to regulation under this section for any area for which
806	the office determines a reasonable degree of competition exists,
807	a rate filing, including, but not limited to, any rate changes,
808	rating factors, territories, classification, discounts, and
809	credits, with respect to any policy form, including endorsements
810	issued with the form, that results in an overall average
811	statewide premium increase or decrease of no more than 5 percent
812	above or below the premium that would result from the insurer's
813	rates then in effect shall not be subject to a determination by
814	the office that the rate is excessive or unfairly discriminatory
815	except as provided in subparagraph 3., or any other provision of
816	law, provided all changes specified in the filing do not result
817	in an overall premium increase of more than 10 percent for any
818	one territory, for reasons related solely to the rate change. As
819	used in this subparagraph, the term "insurer's rates then in
820	effect" includes only rates that have been lawfully in effect
821	under this section or rates that have been determined to be
822	lawful through administrative proceedings or judicial
823	proceedings.
824	2.  An insurer may not make filings under this paragraph
825	with respect to any policy form, including endorsements issued
826	with the form, if the overall premium changes resulting from
827	such filings exceed the amounts specified in this paragraph in
828	any 12-month period. An insurer may proceed under other
829	provisions of this section or other provisions of law if the
830	insurer seeks to exceed the premium or rate limitations of this
831	paragraph.
832	3.  This paragraph does not affect the authority of the
833	office to disapprove a rate as inadequate or to disapprove a
834	filing for the unlawful use of unfairly discriminatory rating
835	factors that are prohibited by the laws of this state. An
836	insurer electing to implement a rate change under this paragraph
837	shall submit a filing to the office at least 40 days prior to
838	the effective date of the rate change. The office shall have 30
839	days after the filing's submission to review the filing and
840	determine if the rate is inadequate or uses unfairly
841	discriminatory rating factors. Absent a finding by the office
842	within such 30-day period that the rate is inadequate or that
843	the insurer has used unfairly discriminatory rating factors, the
844	filing is deemed approved. If the office finds during the 30-day
845	period that the filing will result in inadequate premiums or
846	otherwise endanger the insurer's solvency, the office shall
847	suspend the rate decrease. If the insurer is implementing an
848	overall rate increase, the results of which continue to produce
849	an inadequate rate, such increase shall proceed pending
850	additional action by the office to ensure the adequacy of the
851	rate.
852	4.  This paragraph does not apply to rate filings for any
853	insurance other than residential property insurance.
854
855	The provisions of this subsection shall not apply to workers'
856	compensation and employer's liability insurance and to motor
857	vehicle insurance.
858	Section 10.  Paragraph (a) of subsection (5) and subsection
859	(6) of section 627.351, Florida Statutes, are amended to read:
860	627.351  Insurance risk apportionment plans.--
861	(5)  PROPERTY AND CASUALTY INSURANCE RISK
862	APPORTIONMENT.--The commission shall adopt by rule a joint
863	underwriting plan to equitably apportion among insurers
864	authorized in this state to write property insurance as defined
865	in s. 624.604 or casualty insurance as defined in s. 624.605,
866	the underwriting of one or more classes of property insurance or
867	casualty insurance, except for the types of insurance that are
868	included within property insurance or casualty insurance for
869	which an equitable apportionment plan, assigned risk plan, or
870	joint underwriting plan is authorized under s. 627.311 or
871	subsection (1), subsection (2), subsection (3), subsection (4),
872	or subsection (5) and except for risks eligible for flood
873	insurance written through the federal flood insurance program to
874	persons with risks eligible under subparagraph (a)1. and who are
875	in good faith entitled to, but are unable to, obtain such
876	property or casualty insurance coverage, including excess
877	coverage, through the voluntary market. For purposes of this
878	subsection, an adequate level of coverage means that coverage
879	which is required by state law or by responsible or prudent
880	business practices. The Joint Underwriting Association shall not
881	be required to provide coverage for any type of risk for which
882	there are no insurers providing similar coverage in this state.
883	The office may designate one or more participating insurers who
884	agree to provide policyholder and claims service, including the
885	issuance of policies, on behalf of the participating insurers.
886	(a)  The plan shall provide:
887	1.  A means of establishing eligibility of a risk for
888	obtaining insurance through the plan, which provides that:
889	a.  A risk shall be eligible for such property insurance or
890	casualty insurance as is required by Florida law if the
891	insurance is unavailable in the voluntary market, including the
892	market assistance program and the surplus lines market.
893	b.  A commercial risk not eligible under sub-subparagraph
894	a. shall be eligible for property or casualty insurance if:
895	(I)  The insurance is unavailable in the voluntary market,
896	including the market assistance plan and the surplus lines
897	market;
898	(II)  Failure to secure the insurance would substantially
899	impair the ability of the entity to conduct its affairs; and
900	(III)  The risk is not determined by the Risk Underwriting
901	Committee to be uninsurable.
902	c.  In the event the Federal Government terminates the
903	Federal Crime Insurance Program established under 44 C.F.R. ss.
904	80-83, Florida commercial and residential risks previously
905	insured under the federal program shall be eligible under the
906	plan.
907	d.(I)  In the event a risk is eligible under this paragraph
908	and in the event the market assistance plan receives a minimum
909	of 100 applications for coverage within a 3-month period, or 200
910	applications for coverage within a 1-year period or less, for a
911	given class of risk contained in the classification system
912	defined in the plan of operation of the Joint Underwriting
913	Association, and unless the market assistance plan provides a
914	quotation for at least 80 percent of such applicants, such
915	classification shall immediately be eligible for coverage in the
916	Joint Underwriting Association.
917	(II)  Any market assistance plan application which is
918	rejected because an individual risk is so hazardous as to be
919	practically uninsurable, considering whether the likelihood of a
920	loss for such a risk is substantially higher than for other
921	risks of the same class due to individual risk characteristics,
922	prior loss experience, unwillingness to cooperate with a prior
923	insurer, physical characteristics and physical location shall
924	not be included in the minimum percentage calculation provided
925	above. In the event that there is any legal or administrative
926	challenge to a determination by the office that the conditions
927	of this subparagraph have been met for eligibility for coverage
928	in the Joint Underwriting Association for a given
929	classification, any eligible risk may obtain coverage during the
930	pendency of any such challenge.
931	e.  In order to qualify as a quotation for the purpose of
932	meeting the minimum percentage calculation in this subparagraph,
933	the quoted premium must meet the following criteria:
934	(I)  In the case of an admitted carrier, the quoted premium
935	must not exceed the premium available for a given classification
936	currently in use by the Joint Underwriting Association or the
937	premium developed by using the rates and rating plans on file
938	with the office by the quoting insurer, whichever is greater.
939	(II)  In the case of an authorized surplus lines insurer,
940	the quoted premium must not exceed the premium available for a
941	given classification currently in use by the Joint Underwriting
942	Association by more than 25 percent, after consideration of any
943	individual risk surcharge or credit.
944	f.  Any agent who falsely certifies the unavailability of
945	coverage as provided by sub-subparagraphs a. and b., is subject
946	to the penalties provided in s. 626.611.
947	g.  For properties constructed on or after January 1, 2009,
948	the association shall not insure any property located within 500
949	feet seaward or landward of the coastal construction control
950	line created pursuant to s. 161.053 and shall not insure any
951	property located over 500 to 2,500 feet landward of the coastal
952	construction control line unless the property meets the
953	requirements of the code-plus building standards developed by
954	the Florida Building Commission or the standards contained in
955	the Miami-Dade Building Code pending the adoption of code-plus
956	standards by the commission. However, this sub-subparagraph
957	shall not apply to properties for which a building permit has
958	been issued prior to January 1, 2009.
959	2.  A means for the equitable apportionment of profits or
960	losses and expenses among participating insurers.
961	3.  Rules for the classification of risks and rates which
962	reflect the past and prospective loss experience.
963	4.  A rating plan which reasonably reflects the prior
964	claims experience of the insureds. Such rating plan shall
965	include at least two levels of rates for risks that have
966	favorable loss experience and risks that have unfavorable loss
967	experience, as established by the plan.
968	5.  Reasonable limits to available amounts of insurance.
969	Such limits may not be less than the amounts of insurance
970	required of eligible risks by Florida law.
971	6.  Risk management requirements for insurance where such
972	requirements are reasonable and are expected to reduce losses.
973	7.  Deductibles as may be necessary to meet the needs of
974	insureds.
975	8.  Policy forms which are consistent with the forms in use
976	by the majority of the insurers providing coverage in the
977	voluntary market for the coverage requested by the applicant.
978	9.  A means to remove risks from the plan once such risks
979	no longer meet the eligibility requirements of this paragraph.
980	For this purpose, the plan shall include the following
981	requirements: At each 6-month interval after the activation of
982	any class of insureds, the board of governors or its designated
983	committee shall review the number of applications to the market
984	assistance plan for that class. If, based on these latest
985	numbers, at least 90 percent of such applications have been
986	provided a quotation, the Joint Underwriting Association shall
987	cease underwriting new applications for such class within 30
988	days, and notification of this decision shall be sent to the
989	office, the major agents' associations, and the board of
990	directors of the market assistance plan. A quotation for the
991	purpose of this subparagraph shall meet the same criteria for a
992	quotation as provided in sub-subparagraph 1.e. All policies
993	which were previously written for that class shall continue in
994	force until their normal expiration date, at which time, subject
995	to the required timely notification of nonrenewal by the Joint
996	Underwriting Association, the insured may then elect to reapply
997	to the Joint Underwriting Association according to the
998	requirements of eligibility. If, upon reapplication, those
999	previously insured Joint Underwriting Association risks meet the
1000	eligibility requirements, the Joint Underwriting Association
1001	shall provide the coverage requested.
1002	10.  A means for providing credits to insurers against any
1003	deficit assessment levied pursuant to paragraph (c), for risks
1004	voluntarily written through the market assistance plan by such
1005	insurers.
1006	11.  That the Joint Underwriting Association shall operate
1007	subject to the supervision and approval of a board of governors
1008	consisting of 13 individuals appointed by the Chief Financial
1009	Officer, and shall have an executive or underwriting committee.
1010	At least four of the members shall be representatives of
1011	insurance trade associations as follows: one member from the
1012	American Insurance Association, one member from the Alliance of
1013	American Insurers, one member from the National Association of
1014	Independent Insurers, and one member from an unaffiliated
1015	insurer writing coverage on a national basis. Two
1016	representatives shall be from two of the statewide agents'
1017	associations. Each board member shall be appointed to serve for
1018	2-year terms beginning on a date designated by the plan and
1019	shall serve at the pleasure of the Chief Financial Officer.
1020	Members may be reappointed for subsequent terms.
1021	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1022	(a)1.  The Legislature finds that actual and threatened
1023	catastrophic losses to property in this state from hurricanes
1024	have caused insurers to be unwilling or unable to provide
1025	property insurance coverage to the extent sought and needed. It
1026	is in the public interest and a public purpose to assist in
1027	assuring that property in the state is insured so as to
1028	facilitate the remediation, reconstruction, and replacement of
1029	damaged or destroyed property in order to reduce or avoid the
1030	negative effects otherwise resulting to the public health,
1031	safety, and welfare; to the economy of the state; and to the
1032	revenues of the state and local governments needed to provide
1033	for the public welfare. It is necessary, therefore, to provide
1034	property insurance to applicants who are in good faith entitled
1035	to procure insurance through the voluntary market but are unable
1036	to do so. The Legislature intends by this subsection that
1037	property insurance be provided and that it continues, as long as
1038	necessary, through an entity organized to achieve efficiencies
1039	and economies, while providing service to policyholders,
1040	applicants, and agents that is no less than the quality
1041	generally provided in the voluntary market, all toward the
1042	achievement of the foregoing public purposes. Because it is
1043	essential for the corporation to have the maximum financial
1044	resources to pay claims following a catastrophic hurricane, it
1045	is the intent of the Legislature that the income of the
1046	corporation be exempt from federal income taxation and that
1047	interest on the debt obligations issued by the corporation be
1048	exempt from federal income taxation.
1049	2.  The Residential Property and Casualty Joint
1050	Underwriting Association originally created by this statute
1051	shall be known, as of July 1, 2002, as the Citizens Property
1052	Insurance Corporation. The corporation shall provide insurance
1053	for residential and commercial property, for applicants who are
1054	in good faith entitled, but are unable, to procure insurance
1055	through the voluntary market. The corporation shall operate
1056	pursuant to a plan of operation approved by order of the
1057	Financial Services Commission. The plan is subject to continuous
1058	review by the commission. The commission may, by order, withdraw
1059	approval of all or part of a plan if the commission determines
1060	that conditions have changed since approval was granted and that
1061	the purposes of the plan require changes in the plan. The
1062	corporation shall continue to operate pursuant to the plan of
1063	operation approved by the Office of Insurance Regulation until
1064	October 1, 2006. For the purposes of this subsection,
1065	residential coverage includes both personal lines residential
1066	coverage, which consists of the type of coverage provided by
1067	homeowner's, mobile home owner's, dwelling, tenant's,
1068	condominium unit owner's, and similar policies, and commercial
1069	lines residential coverage, which consists of the type of
1070	coverage provided by condominium association, apartment
1071	building, and similar policies.
1072	3.  For the purposes of this subsection, the term
1073	"homestead property" means:
1074	a.  Property that has been granted a homestead exemption
1075	under chapter 196;
1076	b.  Property for which the owner has a current, written
1077	lease with a renter for a term of at least 7 months and for
1078	which the dwelling is insured by the corporation for $200,000 or
1079	less;
1080	c.  An owner-occupied mobile home or manufactured home, as
1081	defined in s. 320.01, which is permanently affixed to real
1082	property, is owned by a Florida resident, and has been granted a
1083	homestead exemption under chapter 196 or, if the owner does not
1084	own the real property, the owner certifies that the mobile home
1085	or manufactured home is his or her principal place of residence.
1086	d.  Tenant's coverage;
1087	e.  Commercial lines residential property; or
1088	f.  Any county, district, or municipal hospital; a hospital
1089	licensed by any not-for-profit corporation qualified under s.
1090	501(c)(3) of the United States Internal Revenue Code; or a
1091	continuing care retirement community that is certified under
1092	chapter 651 and that receives an exemption from ad valorem taxes
1093	under chapter 196.
1094	4.  For the purposes of this subsection, the term
1095	"nonhomestead property" means property that is not homestead
1096	property.
1097	5.  Effective July 1, 2008, a personal lines residential
1098	structure that has a dwelling replacement cost of $1 million or
1099	more, or a single condominium unit that has a combined dwelling
1100	and content replacement cost of $1 million or more is not
1101	eligible for coverage by the corporation. Such dwellings insured
1102	by the corporation on June 30, 2008, may continue to be covered
1103	by the corporation until the end of the policy term. However,
1104	such dwellings that are insured by the corporation and become
1105	ineligible for coverage due to the provisions of this
1106	subparagraph may reapply and obtain coverage in the high-risk
1107	account and be considered "nonhomestead property" if the
1108	property owner provides the corporation with a sworn affidavit
1109	from one or more insurance agents, on a form provided by the
1110	corporation, stating that the agents have made their best
1111	efforts to obtain coverage and that the property has been
1112	rejected for coverage by at least one authorized insurer and at
1113	least three surplus lines insurers. If such conditions are met,
1114	the dwelling may be insured by the corporation for up to 3
1115	years, after which time the dwelling is ineligible for coverage.
1116	The office shall approve the method used by the corporation for
1117	valuing the dwelling replacement cost for the purposes of this
1118	subparagraph. If a policyholder is insured by the corporation
1119	prior to being determined to be ineligible pursuant to this
1120	subparagraph and such policyholder files a lawsuit challenging
1121	the determination, the policyholder may remain insured by the
1122	corporation until the conclusion of the litigation.
1123	6.  Effective March 1, 2007, nonhomestead property is not
1124	eligible for coverage by the corporation and is not eligible for
1125	renewal of such coverage unless the property owner provides the
1126	corporation with a sworn affidavit from one or more insurance
1127	agents, on a form provided by the corporation, stating that the
1128	agents have made their best efforts to obtain coverage and that
1129	the property has been rejected for coverage by at least one
1130	authorized insurer and at least three surplus lines insurers.
1131	7.  For properties constructed on or after January 1, 2009,
1132	the corporation shall not insure any property located within 500
1133	feet seaward or landward of the coastal construction control
1134	line created pursuant to s.161.053 and shall not insure any
1135	property located over 500 to 2,500 feet landward of the coastal
1136	construction control line unless the property meets the
1137	requirements of the code-plus building standards developed by
1138	the Florida Building Commission or the standards contained in
1139	the Miami-Dade Building Code pending the adoption of code-plus
1140	standards by the commission. However, this subparagraph shall
1141	not apply to properties for which a building permit has been
1142	issued prior to January 1, 2009.
1143	8.7.  It is the intent of the Legislature that
1144	policyholders, applicants, and agents of the corporation receive
1145	service and treatment of the highest possible level but never
1146	less than that generally provided in the voluntary market. It
1147	also is intended that the corporation be held to service
1148	standards no less than those applied to insurers in the
1149	voluntary market by the office with respect to responsiveness,
1150	timeliness, customer courtesy, and overall dealings with
1151	policyholders, applicants, or agents of the corporation.
1152	(b)1.  All insurers authorized to write one or more subject
1153	lines of business in this state are subject to assessment by the
1154	corporation and, for the purposes of this subsection, are
1155	referred to collectively as "assessable insurers." Insurers
1156	writing one or more subject lines of business in this state
1157	pursuant to part VIII of chapter 626 are not assessable
1158	insurers, but insureds who procure one or more subject lines of
1159	business in this state pursuant to part VIII of chapter 626 are
1160	subject to assessment by the corporation and are referred to
1161	collectively as "assessable insureds." An authorized insurer's
1162	assessment liability shall begin on the first day of the
1163	calendar year following the year in which the insurer was issued
1164	a certificate of authority to transact insurance for subject
1165	lines of business in this state and shall terminate 1 year after
1166	the end of the first calendar year during which the insurer no
1167	longer holds a certificate of authority to transact insurance
1168	for subject lines of business in this state.
1169	2.a.  All revenues, assets, liabilities, losses, and
1170	expenses of the corporation shall be divided into three separate
1171	accounts as follows:
1172	(I)  A personal lines account for personal residential
1173	policies issued by the corporation or issued by the Residential
1174	Property and Casualty Joint Underwriting Association and renewed
1175	by the corporation that provide comprehensive, multiperil
1176	coverage on risks that are not located in areas eligible for
1177	coverage in the Florida Windstorm Underwriting Association as
1178	those areas were defined on January 1, 2002, and for such
1179	policies that do not provide coverage for the peril of wind on
1180	risks that are located in such areas;
1181	(II)  A commercial lines account for commercial residential
1182	policies issued by the corporation or issued by the Residential
1183	Property and Casualty Joint Underwriting Association and renewed
1184	by the corporation that provide coverage for basic property
1185	perils on risks that are not located in areas eligible for
1186	coverage in the Florida Windstorm Underwriting Association as
1187	those areas were defined on January 1, 2002, and for such
1188	policies that do not provide coverage for the peril of wind on
1189	risks that are located in such areas; and
1190	(III)  A high-risk account for personal residential
1191	policies and commercial residential and commercial
1192	nonresidential property policies issued by the corporation or
1193	transferred to the corporation that provide coverage for the
1194	peril of wind on risks that are located in areas eligible for
1195	coverage in the Florida Windstorm Underwriting Association as
1196	those areas were defined on January 1, 2002. The high-risk
1197	account must also include quota share primary insurance under
1198	subparagraph (c)2. The area eligible for coverage under the
1199	high-risk account also includes the area within Port Canaveral,
1200	which is bordered on the south by the City of Cape Canaveral,
1201	bordered on the west by the Banana River, and bordered on the
1202	north by Federal Government property. The office may remove
1203	territory from the area eligible for wind-only and quota share
1204	coverage if, after a public hearing, the office finds that
1205	authorized insurers in the voluntary market are willing and able
1206	to write sufficient amounts of personal and commercial
1207	residential coverage for all perils in the territory, including
1208	coverage for the peril of wind, such that risks covered by wind-
1209	only policies in the removed territory could be issued a policy
1210	by the corporation in either the personal lines or commercial
1211	lines account without a significant increase in the
1212	corporation's probable maximum loss in such account. Removal of
1213	territory from the area eligible for wind-only or quota share
1214	coverage does not alter the assignment of wind coverage written
1215	in such areas to the high-risk account.
1216	b.  The three separate accounts must be maintained as long
1217	as financing obligations entered into by the Florida Windstorm
1218	Underwriting Association or Residential Property and Casualty
1219	Joint Underwriting Association are outstanding, in accordance
1220	with the terms of the corresponding financing documents. When
1221	the financing obligations are no longer outstanding, in
1222	accordance with the terms of the corresponding financing
1223	documents, the corporation may use a single account for all
1224	revenues, assets, liabilities, losses, and expenses of the
1225	corporation. Consistent with the requirement of this
1226	subparagraph and prudent investment policies that minimize the
1227	cost of carrying debt, the board shall exercise its best efforts
1228	to retire existing debt or to obtain approval of necessary
1229	parties to amend the terms of existing debt, so as to structure
1230	the most efficient plan to consolidate the three separate
1231	accounts into a single account. By February 1, 2007, the board
1232	shall submit a report to the Financial Services Commission, the
1233	President of the Senate, and the Speaker of the House of
1234	Representatives which includes an analysis of consolidating the
1235	accounts, the actions the board has taken to minimize the cost
1236	of carrying debt, and its recommendations for executing the most
1237	efficient plan.
1238	c.  Creditors of the Residential Property and Casualty
1239	Joint Underwriting Association shall have a claim against, and
1240	recourse to, the accounts referred to in sub-sub-subparagraphs
1241	a.(I) and (II) and shall have no claim against, or recourse to,
1242	the account referred to in sub-sub-subparagraph a.(III).
1243	Creditors of the Florida Windstorm Underwriting Association
1244	shall have a claim against, and recourse to, the account
1245	referred to in sub-sub-subparagraph a.(III) and shall have no
1246	claim against, or recourse to, the accounts referred to in sub-
1247	sub-subparagraphs a.(I) and (II).
1248	d.  Revenues, assets, liabilities, losses, and expenses not
1249	attributable to particular accounts shall be prorated among the
1250	accounts.
1251	e.  The Legislature finds that the revenues of the
1252	corporation are revenues that are necessary to meet the
1253	requirements set forth in documents authorizing the issuance of
1254	bonds under this subsection.
1255	f.  No part of the income of the corporation may inure to
1256	the benefit of any private person.
1257	3.  With respect to a deficit in an account:
1258	a.  When the deficit incurred in a particular calendar year
1259	is not greater than 10 percent of the aggregate statewide direct
1260	written premium for the subject lines of business for the prior
1261	calendar year, the entire deficit shall be recovered through
1262	regular assessments of assessable insurers under paragraph (p)
1263	and assessable insureds.
1264	b.  When the deficit incurred in a particular calendar year
1265	exceeds 10 percent of the aggregate statewide direct written
1266	premium for the subject lines of business for the prior calendar
1267	year, the corporation shall levy regular assessments on
1268	assessable insurers under paragraph (p) and on assessable
1269	insureds in an amount equal to the greater of 10 percent of the
1270	deficit or 10 percent of the aggregate statewide direct written
1271	premium for the subject lines of business for the prior calendar
1272	year. Any remaining deficit shall be recovered through emergency
1273	assessments under sub-subparagraph d.
1274	c.  Each assessable insurer's share of the amount being
1275	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1276	be in the proportion that the assessable insurer's direct
1277	written premium for the subject lines of business for the year
1278	preceding the assessment bears to the aggregate statewide direct
1279	written premium for the subject lines of business for that year.
1280	The assessment percentage applicable to each assessable insured
1281	is the ratio of the amount being assessed under sub-subparagraph
1282	a. or sub-subparagraph b. to the aggregate statewide direct
1283	written premium for the subject lines of business for the prior
1284	year. Assessments levied by the corporation on assessable
1285	insurers under sub-subparagraphs a. and b. shall be paid as
1286	required by the corporation's plan of operation and paragraph
1287	(p). Notwithstanding any other provision of this subsection, the
1288	aggregate amount of a regular assessment for a deficit incurred
1289	in a particular calendar year shall be reduced by the estimated
1290	amount to be received by the corporation from the Citizens
1291	policyholder surcharge under subparagraph (c)11. and the amount
1292	collected or estimated to be collected from the assessment on
1293	Citizens policyholders pursuant to sub-subparagraph i.
1294	Assessments levied by the corporation on assessable insureds
1295	under sub-subparagraphs a. and b. shall be collected by the
1296	surplus lines agent at the time the surplus lines agent collects
1297	the surplus lines tax required by s. 626.932 and shall be paid
1298	to the Florida Surplus Lines Service Office at the time the
1299	surplus lines agent pays the surplus lines tax to the Florida
1300	Surplus Lines Service Office. Upon receipt of regular
1301	assessments from surplus lines agents, the Florida Surplus Lines
1302	Service Office shall transfer the assessments directly to the
1303	corporation as determined by the corporation.
1304	d.  Upon a determination by the board of governors that a
1305	deficit in an account exceeds the amount that will be recovered
1306	through regular assessments under sub-subparagraph a. or sub-
1307	subparagraph b., the board shall levy, after verification by the
1308	office, emergency assessments, for as many years as necessary to
1309	cover the deficits, to be collected by assessable insurers and
1310	the corporation and collected from assessable insureds upon
1311	issuance or renewal of policies for subject lines of business,
1312	excluding National Flood Insurance policies. The amount of the
1313	emergency assessment collected in a particular year shall be a
1314	uniform percentage of that year's direct written premium for
1315	subject lines of business and all accounts of the corporation,
1316	excluding National Flood Insurance Program policy premiums, as
1317	annually determined by the board and verified by the office. The
1318	office shall verify the arithmetic calculations involved in the
1319	board's determination within 30 days after receipt of the
1320	information on which the determination was based.
1321	Notwithstanding any other provision of law, the corporation and
1322	each assessable insurer that writes subject lines of business
1323	shall collect emergency assessments from its policyholders
1324	without such obligation being affected by any credit,
1325	limitation, exemption, or deferment. Emergency assessments
1326	levied by the corporation on assessable insureds shall be
1327	collected by the surplus lines agent at the time the surplus
1328	lines agent collects the surplus lines tax required by s.
1329	626.932 and shall be paid to the Florida Surplus Lines Service
1330	Office at the time the surplus lines agent pays the surplus
1331	lines tax to the Florida Surplus Lines Service Office. The
1332	emergency assessments so collected shall be transferred directly
1333	to the corporation on a periodic basis as determined by the
1334	corporation and shall be held by the corporation solely in the
1335	applicable account. The aggregate amount of emergency
1336	assessments levied for an account under this sub-subparagraph in
1337	any calendar year may not exceed the greater of 10 percent of
1338	the amount needed to cover the original deficit, plus interest,
1339	fees, commissions, required reserves, and other costs associated
1340	with financing of the original deficit, or 10 percent of the
1341	aggregate statewide direct written premium for subject lines of
1342	business and for all accounts of the corporation for the prior
1343	year, plus interest, fees, commissions, required reserves, and
1344	other costs associated with financing the original deficit.
1345	e.  The corporation may pledge the proceeds of assessments,
1346	projected recoveries from the Florida Hurricane Catastrophe
1347	Fund, other insurance and reinsurance recoverables, policyholder
1348	surcharges and other surcharges, and other funds available to
1349	the corporation as the source of revenue for and to secure bonds
1350	issued under paragraph (p), bonds or other indebtedness issued
1351	under subparagraph (c)3., or lines of credit or other financing
1352	mechanisms issued or created under this subsection, or to retire
1353	any other debt incurred as a result of deficits or events giving
1354	rise to deficits, or in any other way that the board determines
1355	will efficiently recover such deficits. The purpose of the lines
1356	of credit or other financing mechanisms is to provide additional
1357	resources to assist the corporation in covering claims and
1358	expenses attributable to a catastrophe. As used in this
1359	subsection, the term "assessments" includes regular assessments
1360	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1361	(p)1. and emergency assessments under sub-subparagraph d.
1362	Emergency assessments collected under sub-subparagraph d. are
1363	not part of an insurer's rates, are not premium, and are not
1364	subject to premium tax, fees, or commissions; however, failure
1365	to pay the emergency assessment shall be treated as failure to
1366	pay premium. The emergency assessments under sub-subparagraph d.
1367	shall continue as long as any bonds issued or other indebtedness
1368	incurred with respect to a deficit for which the assessment was
1369	imposed remain outstanding, unless adequate provision has been
1370	made for the payment of such bonds or other indebtedness
1371	pursuant to the documents governing such bonds or other
1372	indebtedness.
1373	f.  As used in this subsection, the term "subject lines of
1374	business" means insurance written by assessable insurers or
1375	procured by assessable insureds on real or personal property, as
1376	defined in s. 624.604, including insurance for fire, industrial
1377	fire, allied lines, farmowners multiperil, homeowners
1378	multiperil, commercial residential multiperil, and mobile homes,
1379	and including liability coverage on all such insurance, but
1380	excluding inland marine as defined in s. 624.607(3) and
1381	excluding vehicle insurance as defined in s. 624.605(1) other
1382	than insurance on mobile homes used as permanent dwellings.
1383	g.  The Florida Surplus Lines Service Office shall
1384	determine annually the aggregate statewide written premium in
1385	subject lines of business procured by assessable insureds and
1386	shall report that information to the corporation in a form and
1387	at a time the corporation specifies to ensure that the
1388	corporation can meet the requirements of this subsection and the
1389	corporation's financing obligations.
1390	h.  The Florida Surplus Lines Service Office shall verify
1391	the proper application by surplus lines agents of assessment
1392	percentages for regular assessments and emergency assessments
1393	levied under this subparagraph on assessable insureds and shall
1394	assist the corporation in ensuring the accurate, timely
1395	collection and payment of assessments by surplus lines agents as
1396	required by the corporation.
1397	i.  If a deficit is incurred in any account, the board of
1398	governors shall levy an immediate assessment against the premium
1399	of each nonhomestead property policyholder in all accounts of
1400	the corporation, as a uniform percentage of the premium of the
1401	policy of up to 10 percent of such premium, which funds shall be
1402	used to offset the deficit. If this assessment is insufficient
1403	to eliminate the deficit, the board of governors shall levy an
1404	additional assessment against all policyholders of the
1405	corporation, which shall be collected at the time of issuance or
1406	renewal of a policy, as a uniform percentage of the premium for
1407	the policy of up to 10 percent of such premium, which funds
1408	shall be used to further offset the deficit.
1409	j.  The board of governors shall maintain separate
1410	accounting records that consolidate data for nonhomestead
1411	properties, including, but not limited to, number of policies,
1412	insured values, premiums written, and losses. The board of
1413	governors shall annually report to the office and the
1414	Legislature a summary of such data.
1415	(c)  The plan of operation of the corporation:
1416	1.  Must provide for adoption of residential property and
1417	casualty insurance policy forms and commercial residential and
1418	nonresidential property insurance forms, which forms must be
1419	approved by the office prior to use. The corporation shall adopt
1420	the following policy forms:
1421	a.  Standard personal lines policy forms that are
1422	comprehensive multiperil policies providing full coverage of a
1423	residential property equivalent to the coverage provided in the
1424	private insurance market under an HO-3, HO-4, or HO-6 policy.
1425	b.  Basic personal lines policy forms that are policies
1426	similar to an HO-8 policy or a dwelling fire policy that provide
1427	coverage meeting the requirements of the secondary mortgage
1428	market, but which coverage is more limited than the coverage
1429	under a standard policy.
1430	c.  Commercial lines residential policy forms that are
1431	generally similar to the basic perils of full coverage
1432	obtainable for commercial residential structures in the admitted
1433	voluntary market.
1434	d.  Personal lines and commercial lines residential
1435	property insurance forms that cover the peril of wind only. The
1436	forms are applicable only to residential properties located in
1437	areas eligible for coverage under the high-risk account referred
1438	to in sub-subparagraph (b)2.a.
1439	e.  Commercial lines nonresidential property insurance
1440	forms that cover the peril of wind only. The forms are
1441	applicable only to nonresidential properties located in areas
1442	eligible for coverage under the high-risk account referred to in
1443	sub-subparagraph (b)2.a.
1444	e.f.  The corporation may adopt variations of the policy
1445	forms listed in sub-subparagraphs a.-d. a.-e. that contain more
1446	restrictive coverage.
1447	2.a.  Must provide that the corporation adopt a program in
1448	which the corporation and authorized insurers enter into quota
1449	share primary insurance agreements for hurricane coverage, as
1450	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1451	property insurance forms for eligible risks which cover the
1452	peril of wind only. As used in this subsection, the term:
1453	(I)  "Quota share primary insurance" means an arrangement
1454	in which the primary hurricane coverage of an eligible risk is
1455	provided in specified percentages by the corporation and an
1456	authorized insurer. The corporation and authorized insurer are
1457	each solely responsible for a specified percentage of hurricane
1458	coverage of an eligible risk as set forth in a quota share
1459	primary insurance agreement between the corporation and an
1460	authorized insurer and the insurance contract. The
1461	responsibility of the corporation or authorized insurer to pay
1462	its specified percentage of hurricane losses of an eligible
1463	risk, as set forth in the quota share primary insurance
1464	agreement, may not be altered by the inability of the other
1465	party to the agreement to pay its specified percentage of
1466	hurricane losses. Eligible risks that are provided hurricane
1467	coverage through a quota share primary insurance arrangement
1468	must be provided policy forms that set forth the obligations of
1469	the corporation and authorized insurer under the arrangement,
1470	clearly specify the percentages of quota share primary insurance
1471	provided by the corporation and authorized insurer, and
1472	conspicuously and clearly state that neither the authorized
1473	insurer nor the corporation may be held responsible beyond its
1474	specified percentage of coverage of hurricane losses.
1475	(II)  "Eligible risks" means personal lines residential and
1476	commercial lines residential risks that meet the underwriting
1477	criteria of the corporation and are located in areas that were
1478	eligible for coverage by the Florida Windstorm Underwriting
1479	Association on January 1, 2002.
1480	b.  The corporation may enter into quota share primary
1481	insurance agreements with authorized insurers at corporation
1482	coverage levels of 90 percent and 50 percent.
1483	c.  If the corporation determines that additional coverage
1484	levels are necessary to maximize participation in quota share
1485	primary insurance agreements by authorized insurers, the
1486	corporation may establish additional coverage levels. However,
1487	the corporation's quota share primary insurance coverage level
1488	may not exceed 90 percent.
1489	d.  Any quota share primary insurance agreement entered
1490	into between an authorized insurer and the corporation must
1491	provide for a uniform specified percentage of coverage of
1492	hurricane losses, by county or territory as set forth by the
1493	corporation board, for all eligible risks of the authorized
1494	insurer covered under the quota share primary insurance
1495	agreement.
1496	e.  Any quota share primary insurance agreement entered
1497	into between an authorized insurer and the corporation is
1498	subject to review and approval by the office. However, such
1499	agreement shall be authorized only as to insurance contracts
1500	entered into between an authorized insurer and an insured who is
1501	already insured by the corporation for wind coverage.
1502	f.  For all eligible risks covered under quota share
1503	primary insurance agreements, the exposure and coverage levels
1504	for both the corporation and authorized insurers shall be
1505	reported by the corporation to the Florida Hurricane Catastrophe
1506	Fund. For all policies of eligible risks covered under quota
1507	share primary insurance agreements, the corporation and the
1508	authorized insurer shall maintain complete and accurate records
1509	for the purpose of exposure and loss reimbursement audits as
1510	required by Florida Hurricane Catastrophe Fund rules. The
1511	corporation and the authorized insurer shall each maintain
1512	duplicate copies of policy declaration pages and supporting
1513	claims documents.
1514	g.  The corporation board shall establish in its plan of
1515	operation standards for quota share agreements which ensure that
1516	there is no discriminatory application among insurers as to the
1517	terms of quota share agreements, pricing of quota share
1518	agreements, incentive provisions if any, and consideration paid
1519	for servicing policies or adjusting claims.
1520	h.  The quota share primary insurance agreement between the
1521	corporation and an authorized insurer must set forth the
1522	specific terms under which coverage is provided, including, but
1523	not limited to, the sale and servicing of policies issued under
1524	the agreement by the insurance agent of the authorized insurer
1525	producing the business, the reporting of information concerning
1526	eligible risks, the payment of premium to the corporation, and
1527	arrangements for the adjustment and payment of hurricane claims
1528	incurred on eligible risks by the claims adjuster and personnel
1529	of the authorized insurer. Entering into a quota sharing
1530	insurance agreement between the corporation and an authorized
1531	insurer shall be voluntary and at the discretion of the
1532	authorized insurer.
1533	3.  May provide that the corporation may employ or
1534	otherwise contract with individuals or other entities to provide
1535	administrative or professional services that may be appropriate
1536	to effectuate the plan. The corporation shall have the power to
1537	borrow funds, by issuing bonds or by incurring other
1538	indebtedness, and shall have other powers reasonably necessary
1539	to effectuate the requirements of this subsection, including,
1540	without limitation, the power to issue bonds and incur other
1541	indebtedness in order to refinance outstanding bonds or other
1542	indebtedness. The corporation may, but is not required to, seek
1543	judicial validation of its bonds or other indebtedness under
1544	chapter 75. The corporation may issue bonds or incur other
1545	indebtedness, or have bonds issued on its behalf by a unit of
1546	local government pursuant to subparagraph (p)(g)2., in the
1547	absence of a hurricane or other weather-related event, upon a
1548	determination by the corporation, subject to approval by the
1549	office, that such action would enable it to efficiently meet the
1550	financial obligations of the corporation and that such
1551	financings are reasonably necessary to effectuate the
1552	requirements of this subsection. The corporation is authorized
1553	to take all actions needed to facilitate tax-free status for any
1554	such bonds or indebtedness, including formation of trusts or
1555	other affiliated entities. The corporation shall have the
1556	authority to pledge assessments, projected recoveries from the
1557	Florida Hurricane Catastrophe Fund, other reinsurance
1558	recoverables, market equalization and other surcharges, and
1559	other funds available to the corporation as security for bonds
1560	or other indebtedness. In recognition of s. 10, Art. I of the
1561	State Constitution, prohibiting the impairment of obligations of
1562	contracts, it is the intent of the Legislature that no action be
1563	taken whose purpose is to impair any bond indenture or financing
1564	agreement or any revenue source committed by contract to such
1565	bond or other indebtedness.
1566	4.a.  Must require that the corporation operate subject to
1567	the supervision and approval of a board of governors consisting
1568	of eight individuals who are residents of this state, from
1569	different geographical areas of this state. The Governor, the
1570	Chief Financial Officer, the President of the Senate, and the
1571	Speaker of the House of Representatives shall each appoint two
1572	members of the board. At least one of the two members appointed
1573	by each appointing officer must have demonstrated expertise in
1574	insurance. The Chief Financial Officer shall designate one of
1575	the appointees as chair. All board members serve at the pleasure
1576	of the appointing officer. All board members, including the
1577	chair, must be appointed to serve for 3-year terms beginning
1578	annually on a date designated by the plan. Any board vacancy
1579	shall be filled for the unexpired term by the appointing
1580	officer. The Chief Financial Officer shall appoint a technical
1581	advisory group to provide information and advice to the board of
1582	governors in connection with the board's duties under this
1583	subsection. The executive director and senior managers of the
1584	corporation shall be engaged by the board and serve at the
1585	pleasure of the board. Any executive director appointed on or
1586	after July 1, 2006, is subject to confirmation by the Senate.
1587	The executive director is responsible for employing other staff
1588	as the corporation may require, subject to review and
1589	concurrence by the board.
1590	b.  The board shall create a Market Accountability Advisory
1591	Committee to assist the corporation in developing awareness of
1592	its rates and its customer and agent service levels in
1593	relationship to the voluntary market insurers writing similar
1594	coverage. The members of the advisory committee shall consist of
1595	the following 11 persons, one of whom must be elected chair by
1596	the members of the committee: four representatives, one
1597	appointed by the Florida Association of Insurance Agents, one by
1598	the Florida Association of Insurance and Financial Advisors, one
1599	by the Professional Insurance Agents of Florida, and one by the
1600	Latin American Association of Insurance Agencies; three
1601	representatives appointed by the insurers with the three highest
1602	voluntary market share of residential property insurance
1603	business in the state; one representative from the Office of
1604	Insurance Regulation; one consumer appointed by the board who is
1605	insured by the corporation at the time of appointment to the
1606	committee; one representative appointed by the Florida
1607	Association of Realtors; and one representative appointed by the
1608	Florida Bankers Association. All members must serve for 3-year
1609	terms and may serve for consecutive terms. The committee shall
1610	report to the corporation at each board meeting on insurance
1611	market issues which may include rates and rate competition with
1612	the voluntary market; service, including policy issuance, claims
1613	processing, and general responsiveness to policyholders,
1614	applicants, and agents; and matters relating to depopulation.
1615	5.  Must provide a procedure for determining the
1616	eligibility of a risk for coverage, as follows:
1617	a.  Subject to the provisions of s. 627.3517, with respect
1618	to personal lines residential risks, if the risk is offered
1619	coverage from an authorized insurer at the insurer's approved
1620	rate under either a standard policy including wind coverage or,
1621	if consistent with the insurer's underwriting rules as filed
1622	with the office, a basic policy including wind coverage, the
1623	risk is not eligible for any policy issued by the corporation.
1624	If the risk is not able to obtain any such offer, the risk is
1625	eligible for either a standard policy including wind coverage or
1626	a basic policy including wind coverage issued by the
1627	corporation; however, if the risk could not be insured under a
1628	standard policy including wind coverage regardless of market
1629	conditions, the risk shall be eligible for a basic policy
1630	including wind coverage unless rejected under subparagraph 8.
1631	The corporation shall determine the type of policy to be
1632	provided on the basis of objective standards specified in the
1633	underwriting manual and based on generally accepted underwriting
1634	practices.
1635	(I)  If the risk accepts an offer of coverage through the
1636	market assistance plan or an offer of coverage through a
1637	mechanism established by the corporation before a policy is
1638	issued to the risk by the corporation or during the first 30
1639	days of coverage by the corporation, and the producing agent who
1640	submitted the application to the plan or to the corporation is
1641	not currently appointed by the insurer, the insurer shall:
1642	(A)  Pay to the producing agent of record of the policy,
1643	for the first year, an amount that is the greater of the
1644	insurer's usual and customary commission for the type of policy
1645	written or a fee equal to the usual and customary commission of
1646	the corporation; or
1647	(B)  Offer to allow the producing agent of record of the
1648	policy to continue servicing the policy for a period of not less
1649	than 1 year and offer to pay the agent the greater of the
1650	insurer's or the corporation's usual and customary commission
1651	for the type of policy written.
1652
1653	If the producing agent is unwilling or unable to accept
1654	appointment, the new insurer shall pay the agent in accordance
1655	with sub-sub-sub-subparagraph (A).
1656	(II)  When the corporation enters into a contractual
1657	agreement for a take-out plan, the producing agent of record of
1658	the corporation policy is entitled to retain any unearned
1659	commission on the policy, and the insurer shall:
1660	(A)  Pay to the producing agent of record of the
1661	corporation policy, for the first year, an amount that is the
1662	greater of the insurer's usual and customary commission for the
1663	type of policy written or a fee equal to the usual and customary
1664	commission of the corporation; or
1665	(B)  Offer to allow the producing agent of record of the
1666	corporation policy to continue servicing the policy for a period
1667	of not less than 1 year and offer to pay the agent the greater
1668	of the insurer's or the corporation's usual and customary
1669	commission for the type of policy written.
1670
1671	If the producing agent is unwilling or unable to accept
1672	appointment, the new insurer shall pay the agent in accordance
1673	with sub-sub-sub-subparagraph (A).
1674	b.  With respect to commercial lines residential risks, if
1675	the risk is offered coverage under a policy including wind
1676	coverage from an authorized insurer at its approved rate, the
1677	risk is not eligible for any policy issued by the corporation.
1678	If the risk is not able to obtain any such offer, the risk is
1679	eligible for a policy including wind coverage issued by the
1680	corporation.
1681	(I)  If the risk accepts an offer of coverage through the
1682	market assistance plan or an offer of coverage through a
1683	mechanism established by the corporation before a policy is
1684	issued to the risk by the corporation or during the first 30
1685	days of coverage by the corporation, and the producing agent who
1686	submitted the application to the plan or the corporation is not
1687	currently appointed by the insurer, the insurer shall:
1688	(A)  Pay to the producing agent of record of the policy,
1689	for the first year, an amount that is the greater of the
1690	insurer's usual and customary commission for the type of policy
1691	written or a fee equal to the usual and customary commission of
1692	the corporation; or
1693	(B)  Offer to allow the producing agent of record of the
1694	policy to continue servicing the policy for a period of not less
1695	than 1 year and offer to pay the agent the greater of the
1696	insurer's or the corporation's usual and customary commission
1697	for the type of policy written.
1698
1699	If the producing agent is unwilling or unable to accept
1700	appointment, the new insurer shall pay the agent in accordance
1701	with sub-sub-sub-subparagraph (A).
1702	(II)  When the corporation enters into a contractual
1703	agreement for a take-out plan, the producing agent of record of
1704	the corporation policy is entitled to retain any unearned
1705	commission on the policy, and the insurer shall:
1706	(A)  Pay to the producing agent of record of the
1707	corporation policy, for the first year, an amount that is the
1708	greater of the insurer's usual and customary commission for the
1709	type of policy written or a fee equal to the usual and customary
1710	commission of the corporation; or
1711	(B)  Offer to allow the producing agent of record of the
1712	corporation policy to continue servicing the policy for a period
1713	of not less than 1 year and offer to pay the agent the greater
1714	of the insurer's or the corporation's usual and customary
1715	commission for the type of policy written.
1716
1717	If the producing agent is unwilling or unable to accept
1718	appointment, the new insurer shall pay the agent in accordance
1719	with sub-sub-sub-subparagraph (A).
1720	6.  Must provide by July 1, 2007, that an application for
1721	coverage for a new policy is subject to a waiting period of 10
1722	days before coverage is effective, during which time the
1723	corporation shall make such application available for review by
1724	general lines agents and authorized property and casualty
1725	insurers. The board shall may approve an exception exceptions
1726	that allows allow for coverage to be effective before the end of
1727	the 10-day waiting period, for coverage issued in conjunction
1728	with a real estate closing., The board may approve and for such
1729	other exceptions as the board determines are necessary to
1730	prevent lapses in coverage.
1731	7.  Must include rules for classifications of risks and
1732	rates therefor.
1733	8.  Must provide that if premium and investment income for
1734	an account attributable to a particular calendar year are in
1735	excess of projected losses and expenses for the account
1736	attributable to that year, such excess shall be held in surplus
1737	in the account. Such surplus shall be available to defray
1738	deficits in that account as to future years and shall be used
1739	for that purpose prior to assessing assessable insurers and
1740	assessable insureds as to any calendar year.
1741	9.  Must provide objective criteria and procedures to be
1742	uniformly applied for all applicants in determining whether an
1743	individual risk is so hazardous as to be uninsurable. In making
1744	this determination and in establishing the criteria and
1745	procedures, the following shall be considered:
1746	a.  Whether the likelihood of a loss for the individual
1747	risk is substantially higher than for other risks of the same
1748	class; and
1749	b.  Whether the uncertainty associated with the individual
1750	risk is such that an appropriate premium cannot be determined.
1751
1752	The acceptance or rejection of a risk by the corporation shall
1753	be construed as the private placement of insurance, and the
1754	provisions of chapter 120 shall not apply.
1755	10.  Must provide that the corporation shall make its best
1756	efforts to procure catastrophe reinsurance at reasonable rates,
1757	to cover its projected 100-year probable maximum loss as
1758	determined by the board of governors.
1759	11.  Must provide that in the event of regular deficit
1760	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1761	(b)3.b., in the personal lines account, the commercial lines
1762	residential account, or the high-risk account, the corporation
1763	shall levy upon corporation policyholders in its next rate
1764	filing, or by a separate rate filing solely for this purpose, a
1765	Citizens policyholder surcharge arising from a regular
1766	assessment in such account in a percentage equal to the total
1767	amount of such regular assessments divided by the aggregate
1768	statewide direct written premium for subject lines of business
1769	for the prior calendar year. For purposes of calculating the
1770	Citizens policyholder surcharge to be levied under this
1771	subparagraph, the total amount of the regular assessment to
1772	which this surcharge is related shall be determined as set forth
1773	in subparagraph (b)3., without deducting the estimated Citizens
1774	policyholder surcharge. Citizens policyholder surcharges under
1775	this subparagraph are not considered premium and are not subject
1776	to commissions, fees, or premium taxes; however, failure to pay
1777	a market equalization surcharge shall be treated as failure to
1778	pay premium.
1779	12.  The policies issued by the corporation must provide
1780	that, if the corporation or the market assistance plan obtains
1781	an offer from an authorized insurer to cover the risk at its
1782	approved rates, the risk is no longer eligible for renewal
1783	through the corporation.
1784	13.  Corporation policies and applications must include a
1785	notice that the corporation policy could, under this section, be
1786	replaced with a policy issued by an authorized insurer that does
1787	not provide coverage identical to the coverage provided by the
1788	corporation. The notice shall also specify that acceptance of
1789	corporation coverage creates a conclusive presumption that the
1790	applicant or policyholder is aware of this potential.
1791	14.  May establish, subject to approval by the office,
1792	different eligibility requirements and operational procedures
1793	for any line or type of coverage for any specified county or
1794	area if the board determines that such changes to the
1795	eligibility requirements and operational procedures are
1796	justified due to the voluntary market being sufficiently stable
1797	and competitive in such area or for such line or type of
1798	coverage and that consumers who, in good faith, are unable to
1799	obtain insurance through the voluntary market through ordinary
1800	methods would continue to have access to coverage from the
1801	corporation. When coverage is sought in connection with a real
1802	property transfer, such requirements and procedures shall not
1803	provide for an effective date of coverage later than the date of
1804	the closing of the transfer as established by the transferor,
1805	the transferee, and, if applicable, the lender.
1806	15.  Must provide that, with respect to the high-risk
1807	account, any assessable insurer with a surplus as to
1808	policyholders of $25 million or less writing 25 percent or more
1809	of its total countrywide property insurance premiums in this
1810	state may petition the office, within the first 90 days of each
1811	calendar year, to qualify as a limited apportionment company. A
1812	regular assessment levied by the corporation on a limited
1813	apportionment company for a deficit incurred by the corporation
1814	for the high-risk account in 2006 or thereafter may be paid to
1815	the corporation on a monthly basis as the assessments are
1816	collected by the limited apportionment company from its insureds
1817	pursuant to s. 627.3512, but the regular assessment must be paid
1818	in full within 12 months after being levied by the corporation.
1819	A limited apportionment company shall collect from its
1820	policyholders any emergency assessment imposed under sub-
1821	subparagraph (b)3.d. The plan shall provide that, if the office
1822	determines that any regular assessment will result in an
1823	impairment of the surplus of a limited apportionment company,
1824	the office may direct that all or part of such assessment be
1825	deferred as provided in subparagraph (p)(g)4. However, there
1826	shall be no limitation or deferment of an emergency assessment
1827	to be collected from policyholders under sub-subparagraph
1828	(b)3.d.
1829	16.  Must provide that the corporation appoint as its
1830	licensed agents only those agents who also hold an appointment
1831	as defined in s. 626.015(3) with an insurer who at the time of
1832	the agent's initial appointment by the corporation is authorized
1833	to write and is actually writing personal lines residential
1834	property coverage, or commercial residential property coverage,
1835	or commercial nonresidential property coverage within the state.
1836	17.  Must provide, by July 1, 2007, a premium payment plan
1837	option to its policyholders which allows for monthly, quarterly,
1838	and semiannual payment of premiums.
1839	18.  Must provide, effective June 1, 2007, that the
1840	corporation contract with each insurer providing the non-wind
1841	coverage for risks insured by the corporation in the high-risk
1842	account, requiring that the insurer provide claims adjusting
1843	services for the wind coverage provided by the corporation for
1844	such risks. An insurer is required to enter into this contract
1845	as a condition of providing non-wind coverage for a risk that is
1846	insured by the corporation in the high-risk account unless the
1847	board finds, after a hearing, that the insurer is not capable of
1848	providing adjusting services at an acceptable level of quality
1849	to corporation policyholders. The terms and conditions of such
1850	contracts must be substantially the same as the contracts that
1851	the corporation executed with insurers under the "adjust-your-
1852	own" program in 2006, except as may be mutually agreed to by the
1853	parties and except for such changes that the board determines
1854	are necessary to ensure that claims are adjusted appropriately.
1855	The corporation shall provide a process for neutral arbitration
1856	of any dispute between the corporation and the insurer regarding
1857	the terms of the contract. The corporation shall review and
1858	monitor the performance of insurers under these contracts.
1859	19.  Must limit coverage on mobile homes or manufactured
1860	homes built prior to 1994 to actual cash value of the dwelling
1861	rather than replacement costs of the dwelling.
1862	(d)1.  All prospective employees for senior management
1863	positions, as defined by the plan of operation, are subject to
1864	background checks as a prerequisite for employment. The office
1865	shall conduct background checks on such prospective employees
1866	pursuant to ss. 624.34, 624.404(3), and 628.261.
1867	2.  On or before July 1 of each year, employees of the
1868	corporation are required to sign and submit a statement
1869	attesting that they do not have a conflict of interest, as
1870	defined in part III of chapter 112. As a condition of
1871	employment, all prospective employees are required to sign and
1872	submit to the corporation a conflict-of-interest statement.
1873	3.  Senior managers and members of the board of governors
1874	are subject to the provisions of part III of chapter 112,
1875	including, but not limited to, the code of ethics and public
1876	disclosure and reporting of financial interests, pursuant to s.
1877	112.3145. Senior managers and board members are also required to
1878	file such disclosures with the Office of Insurance Regulation.
1879	The executive director of the corporation or his or her designee
1880	shall notify each newly appointed and existing appointed member
1881	of the board of governors and senior managers of their duty to
1882	comply with the reporting requirements of part III of chapter
1883	112. At least quarterly, the executive director or his or her
1884	designee shall submit to the Commission on Ethics a list of
1885	names of the senior managers and members of the board of
1886	governors who are subject to the public disclosure requirements
1887	under s. 112.3145.
1888	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
1889	other provision of law, an employee or board member may not
1890	knowingly accept, directly or indirectly, any gift or
1891	expenditure from a person or entity, or an employee or
1892	representative of such person or entity, that has a contractual
1893	relationship with the corporation or who is under consideration
1894	for a contract. An employee or board member who fails to comply
1895	with this subparagraph is subject to penalties provided under
1896	ss. 112.317 and 112.3173.
1897	5.  Any senior manager of the corporation who is employed
1898	on or after January 1, 2007, regardless of the date of hire, who
1899	subsequently retires or terminates employment is prohibited from
1900	representing another person or entity before the corporation for
1901	2 years after retirement or termination of employment from the
1902	corporation.
1903	6.  Any employee of the corporation who is employed on or
1904	after January 1, 2007, regardless of the date of hire, who
1905	subsequently retires or terminates employment is prohibited from
1906	having any employment or contractual relationship for 2 years
1907	with an insurer that has received a take-out bonus from the
1908	corporation.
1909	(e)  Purchases that equal or exceed $2,500, but are less
1910	than $25,000, shall be made by receipt of written quotes,
1911	written record of telephone quotes, or informal bids, whenever
1912	practical. The procurement of goods or services valued at or
1913	over $25,000 shall be subject to competitive solicitation,
1914	except in situations where the goods or services are provided by
1915	a sole source or are deemed an emergency purchase; the services
1916	are exempted from competitive solicitation requirements under s.
1917	287.057(5)(f); or the procurement of services is subject to s.
1918	627.3513. Justification for the sole-sourcing or emergency
1919	procurement must be documented. Contracts for goods or services
1920	valued at or over $100,000 are subject to approval by the board.
1921	(f)  The board shall determine whether it is more cost-
1922	effective and in the best interests of the corporation to use
1923	legal services provided by in-house attorneys employed by the
1924	corporation rather than contracting with outside counsel. In
1925	making such determination, the board shall document its findings
1926	and shall consider: the expertise needed; whether time
1927	commitments exceed in-house staff resources; whether local
1928	representation is needed; the travel, lodging and other costs
1929	associated with in-house representation; and such other factors
1930	that the board determines are relevant.
1931	(g)  The corporation may not retain a lobbyist to represent
1932	it before the legislative branch or executive branch. However,
1933	full-time employees of the corporation may register as lobbyists
1934	and represent the corporation before the legislative branch or
1935	executive branch.
1936	(h)1.  The Office of the Internal Auditor is established
1937	within the corporation to provide a central point for
1938	coordination of and responsibility for activities that promote
1939	accountability, integrity, and efficiency to the policyholders
1940	and to the taxpayers of this state. The internal auditor shall
1941	be appointed by the board of governors, shall report to and be
1942	under the general supervision of the board of governors, and is
1943	not subject to supervision by any employee of the corporation.
1944	Administrative staff and support shall be provided by the
1945	corporation. The internal auditor shall be appointed without
1946	regard to political affiliation. It is the duty and
1947	responsibility of the internal auditor to:
1948	a.  Provide direction for, supervise, conduct, and
1949	coordinate audits, investigations, and management reviews
1950	relating to the programs and operations of the corporation.
1951	b.  Conduct, supervise, or coordinate other activities
1952	carried out or financed by the corporation for the purpose of
1953	promoting efficiency in the administration of, or preventing and
1954	detecting fraud, abuse, and mismanagement in, its programs and
1955	operations.
1956	c.  Submit final audit reports, reviews, or investigative
1957	reports to the board of governors, the executive director, the
1958	members of the Financial Services Commission, and the President
1959	of the Senate and the Speaker of the House of Representatives.
1960	d.  Keep the board of governors informed concerning fraud,
1961	abuses, and internal control deficiencies relating to programs
1962	and operations administered or financed by the corporation,
1963	recommend corrective action, and report on the progress made in
1964	implementing corrective action.
1965	e.  Report expeditiously to the Department of Law
1966	Enforcement or other law enforcement agencies, as appropriate,
1967	whenever the internal auditor has reasonable grounds to believe
1968	there has been a violation of criminal law.
1969	2.  On or before February 15, the internal auditor shall
1970	prepare an annual report evaluating the effectiveness of the
1971	internal controls of the corporation and providing
1972	recommendations for corrective action, if necessary, and
1973	summarizing the audits, reviews, and investigations conducted by
1974	the office during the preceding fiscal year. The final report
1975	shall be furnished to the board of governors and the executive
1976	director, the President of the Senate, the Speaker of the House
1977	of Representatives, and the Financial Services Commission.
1978	(i)  All records of the corporation, except as otherwise
1979	provided by law, are subject to the record retention
1980	requirements of s. 119.021.
1981	(j)1.  The corporation shall establish and maintain a unit
1982	or division to investigate possible fraudulent claims by
1983	insureds or by persons making claims for services or repairs
1984	against policies held by insureds; or it may contract with
1985	others to investigate possible fraudulent claims for services or
1986	repairs against policies held by the corporation pursuant to s.
1987	626.9891. The corporation must comply with reporting
1988	requirements of s. 626.9891. An employee of the corporation
1989	shall notify the Division of Insurance Fraud within 48 hours
1990	after having information that would lead a reasonable person to
1991	suspect that fraud may have been committed by any employee of
1992	the corporation.
1993	2.  The corporation shall establish a unit or division
1994	responsible for receiving and responding to consumer complaints,
1995	which unit or division is the sole responsibility of a senior
1996	manager of the corporation.
1997	(k)  The office shall conduct a comprehensive market
1998	conduct examination of the corporation every 2 years to
1999	determine compliance with its plan of operation and internal
2000	operations procedures. The first market conduct examination
2001	report shall be submitted to the President of the Senate and the
2002	Speaker of the House of Representatives no later than February
2003	1, 2009. Subsequent reports shall be submitted on or before
2004	February 1 every 2 years thereafter.
2005	(l)  The Auditor General shall conduct an operational audit
2006	of the corporation every 3 years to evaluate management's
2007	performance in administering laws, policies, and procedures
2008	governing the operations of the corporation in an efficient and
2009	effective manner. The scope of the review shall include, but is
2010	not limited to, evaluating claims handling, customer service,
2011	take-out programs and bonuses, financing arrangements,
2012	procurement of goods and services, internal controls, and the
2013	internal audit function. The initial audit must be completed by
2014	February 1, 2009.
2015	(m)1.a.  Rates for coverage provided by the corporation
2016	shall be actuarially adequate sound and not competitive with
2017	approved rates charged in the admitted voluntary market, so that
2018	the corporation functions as a residual market mechanism to
2019	provide insurance only when the insurance cannot be procured in
2020	the voluntary market. Rates shall include an appropriate
2021	catastrophe loading factor that reflects the actual catastrophic
2022	exposure of the corporation. For policies in the personal lines
2023	account and the commercial lines account issued or renewed on or
2024	after March 1, 2007, a rate is deemed inadequate if the rate,
2025	including investment income, is not sufficient to provide for
2026	the procurement of coverage under the Florida Hurricane
2027	Catastrophe Fund and private reinsurance costs, whether or not
2028	reinsurance is procured, and to pay all claims and expenses
2029	reasonably expected to result from a 100-year probable maximum
2030	loss event without resort to any regular or emergency
2031	assessments, long-term debt, state revenues, or other funding
2032	sources. For policies in the high-risk account issued or renewed
2033	on or after January 1, 2008 March 1, 2007, a rate is deemed
2034	inadequate if the rate, including investment income, is not
2035	sufficient to provide for the procurement of coverage under the
2036	Florida Hurricane Catastrophe Fund and private reinsurance
2037	costs, whether or not reinsurance is procured, and to pay all
2038	claims and expenses reasonably expected to result from a 50-year
2039	70-year probable maximum loss event without with resort to any
2040	regular or emergency assessments, long-term debt, state
2041	revenues, or other funding sources. For policies in the high-
2042	risk account issued or renewed in 2008 and 2009, 2010, 2011,
2043	2012, and 2013, the rate must be based upon a 60-year, 70-year,
2044	80-year, 90-year, an 85-year and 100-year probable maximum loss
2045	event, respectively.
2046	b.  It is the intent of the Legislature to reaffirm the
2047	requirement of rate adequacy in the residual market. Recognizing
2048	that rates may comply with the intent expressed in sub-
2049	subparagraph a. and yet be inadequate and recognizing the public
2050	need to limit subsidies within the residual market, it is the
2051	further intent of the Legislature to establish statutory
2052	standards for rate adequacy. Such standards are intended to
2053	supplement the standard specified in s. 627.062(2)(e)3.,
2054	providing that rates are inadequate if they are clearly
2055	insufficient to sustain projected losses and expenses in the
2056	class of business to which they apply.
2057	2.  For each county, the average rates of the corporation
2058	for each line of business for personal lines residential
2059	policies excluding rates for wind-only policies shall be no
2060	lower than the average rates charged by the insurer that had the
2061	highest average rate in that county among the 20 insurers with
2062	the greatest total direct written premium in the state for that
2063	line of business in the preceding year, except that with respect
2064	to mobile home coverages, the average rates of the corporation
2065	shall be no lower than the average rates charged by the insurer
2066	that had the highest average rate in that county among the 5
2067	insurers with the greatest total written premium for mobile home
2068	owner's policies in the state in the preceding year.
2069	2.3.  Rates for personal lines residential wind-only
2070	policies must be actuarially adequate sound and not competitive
2071	with approved rates charged by authorized insurers. If the
2072	filing under this subparagraph is made at least 90 days before
2073	the proposed effective date and the filing is not implemented
2074	during the office's review of the filing and any proceeding and
2075	judicial review, such filing shall be considered a "file and
2076	use" filing. In such case, the office shall finalize its review
2077	by issuance of a notice of intent to approve or a notice of
2078	intent to disapprove within 90 days after receipt of the filing.
2079	The notice of intent to approve and the notice of intent to
2080	disapprove constitute agency action for purposes of the
2081	Administrative Procedure Act. Requests for supporting
2082	information, requests for mathematical or mechanical
2083	corrections, or notification to the insurer by the office of its
2084	preliminary findings shall not toll the 90-day period during any
2085	such proceedings and subsequent judicial review. The rate shall
2086	be deemed approved if the office does not issue a notice of
2087	intent to approve or a notice of intent to disapprove within 90
2088	days after receipt of the filing. Corporation rate manuals shall
2089	include a rate surcharge for seasonal occupancy. To ensure that
2090	personal lines residential wind-only rates are not competitive
2091	with approved rates charged by authorized insurers, the
2092	corporation, in conjunction with the office, shall develop a
2093	wind-only ratemaking methodology, which methodology shall be
2094	contained in each rate filing made by the corporation with the
2095	office. If the office determines that the wind-only rates or
2096	rating factors filed by the corporation fail to comply with the
2097	wind-only ratemaking methodology provided for in this
2098	subsection, it shall so notify the corporation and require the
2099	corporation to amend its rates or rating factors to come into
2100	compliance within 90 days of notice from the office.
2101	4.  The requirements of this paragraph that rates not be
2102	competitive with approved rates charged by authorized insurers
2103	do not apply in a county or area for which the office determines
2104	that no authorized insurer is offering coverage. The corporation
2105	shall amend its rates or rating factors for the affected county
2106	or area in conjunction with its next rate filing after such
2107	determination is made.
2108	5.  For the purposes of establishing a pilot program to
2109	evaluate issues relating to the availability and affordability
2110	of insurance in an area where historically there has been little
2111	market competition, the provisions of subparagraph 2. do not
2112	apply to coverage provided by the corporation in Monroe County
2113	if the office determines that a reasonable degree of competition
2114	does not exist for personal lines residential policies. The
2115	provisions of subparagraph 3. do not apply to coverage provided
2116	by the corporation in Monroe County if the office determines
2117	that a reasonable degree of competition does not exist for
2118	personal lines residential policies in the area of that county
2119	which is eligible for wind-only coverage. In this county, the
2120	rates for personal lines residential coverage shall be
2121	actuarially sound and not excessive, inadequate, or unfairly
2122	discriminatory and are subject to the other provisions of the
2123	paragraph and s. 627.062. The commission shall adopt rules
2124	establishing the criteria for determining whether a reasonable
2125	degree of competition exists for personal lines residential
2126	policies in Monroe County. By March 1, 2006, the office shall
2127	submit a report to the Legislature providing an evaluation of
2128	the implementation of the pilot program affecting Monroe County.
2129	6.  Rates for commercial lines coverage shall not be
2130	subject to the requirements of subparagraph 2., but shall be
2131	subject to all other requirements of this paragraph and s.
2132	627.062.
2133	3.7.  Nothing in this paragraph shall require or allow the
2134	corporation to adopt a rate that is inadequate under s. 627.062.
2135	4.8.  The corporation shall certify to the office at least
2136	twice annually that its personal lines rates comply with the
2137	requirements of subparagraphs 1. and, 2., and 3. If any
2138	adjustment in the rates or rating factors of the corporation is
2139	necessary to ensure such compliance, the corporation shall make
2140	and implement such adjustments and file its revised rates and
2141	rating factors with the office. If the office thereafter
2142	determines that the revised rates and rating factors fail to
2143	comply with the provisions of subparagraphs 1. and, 2., and 3.,
2144	it shall notify the corporation and require the corporation to
2145	amend its rates or rating factors in conjunction with its next
2146	rate filing. The office must notify the corporation by
2147	electronic means of any rate filing it approves for any insurer
2148	among the insurers referred to in subparagraph 2.
2149	5.9.  In addition to the rates otherwise determined
2150	pursuant to this paragraph, the corporation shall impose and
2151	collect an amount equal to the premium tax provided for in s.
2152	624.509 to augment the financial resources of the corporation.
2153	6.10.  The corporation shall develop a notice to
2154	policyholders or applicants that the rates of Citizens Property
2155	Insurance Corporation are intended to be higher than the rates
2156	of any admitted carrier and providing other information the
2157	corporation deems necessary to assist consumers in finding other
2158	voluntary admitted insurers willing to insure their property.
2159	7.11.  After the public hurricane loss-projection model
2160	under s. 627.06281 has been found to be accurate and reliable by
2161	the Florida Commission on Hurricane Loss Projection Methodology,
2162	that model shall serve as the minimum benchmark for determining
2163	the windstorm portion of the corporation's rates. This
2164	subparagraph does not require or allow the corporation to adopt
2165	rates lower than the rates otherwise required or allowed by this
2166	paragraph.
2167	8.  Except as provided in subparagraph 9., the rate filings
2168	for the corporation which were approved by the office and which
2169	took effect January 1, 2007, are rescinded. As soon as possible,
2170	the corporation shall begin using the rates that were in effect
2171	on December 31, 2006, and shall provide refunds to policyholders
2172	who have paid higher rates as a result of those rate filings.
2173	The rates in effect on December 31, 2006, shall remain in effect
2174	for the 2007 calendar year. The next rate change shall take
2175	effect January 1, 2008, pursuant to a new rate filing
2176	recommended by the corporation and approved by the office,
2177	subject to the requirements of this paragraph.
2178	9.  Through December 31, 2007, the corporation shall use
2179	the lower territorial rates for the hurricane portion of the
2180	rates for high-risk account homeowners (HO3) policies approved
2181	for use by the office in Monroe County beginning January 1,
2182	2007. Nothing in subparagraph 8. is intended to prevent the
2183	corporation from implementing prior to January 1, 2008, rates
2184	pursuant to subparagraph 1. that are lower than rates in effect
2185	on December 31, 2006, including by territory, coverage, and
2186	mitigation factors and other discounts. Prior to January 1,
2187	2008, such lower rates shall be determined to meet the
2188	requirements of subparagraph 1. by comparing such lower rates to
2189	the rates in effect on December 31, 2006.
2190	(n)  If coverage in an account is deactivated pursuant to
2191	paragraph (o)(f), coverage through the corporation shall be
2192	reactivated by order of the office only under one of the
2193	following circumstances:
2194	1.  If the market assistance plan receives a minimum of 100
2195	applications for coverage within a 3-month period, or 200
2196	applications for coverage within a 1-year period or less for
2197	residential coverage, unless the market assistance plan provides
2198	a quotation from admitted carriers at their filed rates for at
2199	least 90 percent of such applicants. Any market assistance plan
2200	application that is rejected because an individual risk is so
2201	hazardous as to be uninsurable using the criteria specified in
2202	subparagraph (c)9.8. shall not be included in the minimum
2203	percentage calculation provided herein. In the event that there
2204	is a legal or administrative challenge to a determination by the
2205	office that the conditions of this subparagraph have been met
2206	for eligibility for coverage in the corporation, any eligible
2207	risk may obtain coverage during the pendency of such challenge.
2208	2.  In response to a state of emergency declared by the
2209	Governor under s. 252.36, the office may activate coverage by
2210	order for the period of the emergency upon a finding by the
2211	office that the emergency significantly affects the availability
2212	of residential property insurance.
2213	(o)1.  The corporation shall file with the office quarterly
2214	statements of financial condition, an annual statement of
2215	financial condition, and audited financial statements in the
2216	manner prescribed by law. In addition, the corporation shall
2217	report to the office monthly on the types, premium, exposure,
2218	and distribution by county of its policies in force, and shall
2219	submit other reports as the office requires to carry out its
2220	oversight of the corporation.
2221	2.  The activities of the corporation shall be reviewed at
2222	least annually by the office to determine whether coverage shall
2223	be deactivated in an account on the basis that the conditions
2224	giving rise to its activation no longer exist.
2225	(p)1.  The corporation shall certify to the office its
2226	needs for annual assessments as to a particular calendar year,
2227	and for any interim assessments that it deems to be necessary to
2228	sustain operations as to a particular year pending the receipt
2229	of annual assessments. Upon verification, the office shall
2230	approve such certification, and the corporation shall levy such
2231	annual or interim assessments. Such assessments shall be
2232	prorated as provided in paragraph (b). The corporation shall
2233	take all reasonable and prudent steps necessary to collect the
2234	amount of assessment due from each assessable insurer,
2235	including, if prudent, filing suit to collect such assessment.
2236	If the corporation is unable to collect an assessment from any
2237	assessable insurer, the uncollected assessments shall be levied
2238	as an additional assessment against the assessable insurers and
2239	any assessable insurer required to pay an additional assessment
2240	as a result of such failure to pay shall have a cause of action
2241	against such nonpaying assessable insurer. Assessments shall be
2242	included as an appropriate factor in the making of rates. The
2243	failure of a surplus lines agent to collect and remit any
2244	regular or emergency assessment levied by the corporation is
2245	considered to be a violation of s. 626.936 and subjects the
2246	surplus lines agent to the penalties provided in that section.
2247	2.  The governing body of any unit of local government, any
2248	residents of which are insured by the corporation, may issue
2249	bonds as defined in s. 125.013 or s. 166.101 from time to time
2250	to fund an assistance program, in conjunction with the
2251	corporation, for the purpose of defraying deficits of the
2252	corporation. In order to avoid needless and indiscriminate
2253	proliferation, duplication, and fragmentation of such assistance
2254	programs, any unit of local government, any residents of which
2255	are insured by the corporation, may provide for the payment of
2256	losses, regardless of whether or not the losses occurred within
2257	or outside of the territorial jurisdiction of the local
2258	government. Revenue bonds under this subparagraph may not be
2259	issued until validated pursuant to chapter 75, unless a state of
2260	emergency is declared by executive order or proclamation of the
2261	Governor pursuant to s. 252.36 making such findings as are
2262	necessary to determine that it is in the best interests of, and
2263	necessary for, the protection of the public health, safety, and
2264	general welfare of residents of this state and declaring it an
2265	essential public purpose to permit certain municipalities or
2266	counties to issue such bonds as will permit relief to claimants
2267	and policyholders of the corporation. Any such unit of local
2268	government may enter into such contracts with the corporation
2269	and with any other entity created pursuant to this subsection as
2270	are necessary to carry out this paragraph. Any bonds issued
2271	under this subparagraph shall be payable from and secured by
2272	moneys received by the corporation from emergency assessments
2273	under sub-subparagraph (b)3.d., and assigned and pledged to or
2274	on behalf of the unit of local government for the benefit of the
2275	holders of such bonds. The funds, credit, property, and taxing
2276	power of the state or of the unit of local government shall not
2277	be pledged for the payment of such bonds. If any of the bonds
2278	remain unsold 60 days after issuance, the office shall require
2279	all insurers subject to assessment to purchase the bonds, which
2280	shall be treated as admitted assets; each insurer shall be
2281	required to purchase that percentage of the unsold portion of
2282	the bond issue that equals the insurer's relative share of
2283	assessment liability under this subsection. An insurer shall not
2284	be required to purchase the bonds to the extent that the office
2285	determines that the purchase would endanger or impair the
2286	solvency of the insurer.
2287	3.a.  The corporation shall adopt one or more programs
2288	subject to approval by the office for the reduction of both new
2289	and renewal writings in the corporation. Beginning January 1,
2290	2008, any program the corporation adopts for the payment of
2291	bonuses to an insurer for each risk the insurer removes from the
2292	corporation shall comply with s. 627.3511(2) and may not exceed
2293	the amount referenced in s. 627.3511(2) for each risk removed.
2294	The corporation may consider any prudent and not unfairly
2295	discriminatory approach to reducing corporation writings, and
2296	may adopt a credit against assessment liability or other
2297	liability that provides an incentive for insurers to take risks
2298	out of the corporation and to keep risks out of the corporation
2299	by maintaining or increasing voluntary writings in counties or
2300	areas in which corporation risks are highly concentrated and a
2301	program to provide a formula under which an insurer voluntarily
2302	taking risks out of the corporation by maintaining or increasing
2303	voluntary writings will be relieved wholly or partially from
2304	assessments under sub-subparagraphs (b)3.a. and b. However, any
2305	"take-out bonus" or payment to an insurer must be conditioned on
2306	the property being insured for at least 5 years by the insurer,
2307	unless canceled or nonrenewed by the policyholder. If the policy
2308	is canceled or nonrenewed by the policyholder before the end of
2309	the 5-year period, the amount of the take-out bonus must be
2310	prorated for the time period the policy was insured. When the
2311	corporation enters into a contractual agreement for a take-out
2312	plan, the producing agent of record of the corporation policy is
2313	entitled to retain any unearned commission on such policy, and
2314	the insurer shall either:
2315	(I)  Pay to the producing agent of record of the policy,
2316	for the first year, an amount which is the greater of the
2317	insurer's usual and customary commission for the type of policy
2318	written or a policy fee equal to the usual and customary
2319	commission of the corporation; or
2320	(II)  Offer to allow the producing agent of record of the
2321	policy to continue servicing the policy for a period of not less
2322	than 1 year and offer to pay the agent the insurer's usual and
2323	customary commission for the type of policy written. If the
2324	producing agent is unwilling or unable to accept appointment by
2325	the new insurer, the new insurer shall pay the agent in
2326	accordance with sub-sub-subparagraph (I).
2327	b.  Any credit or exemption from regular assessments
2328	adopted under this subparagraph shall last no longer than the 3
2329	years following the cancellation or expiration of the policy by
2330	the corporation. With the approval of the office, the board may
2331	extend such credits for an additional year if the insurer
2332	guarantees an additional year of renewability for all policies
2333	removed from the corporation, or for 2 additional years if the
2334	insurer guarantees 2 additional years of renewability for all
2335	policies so removed.
2336	c.  There shall be no credit, limitation, exemption, or
2337	deferment from emergency assessments to be collected from
2338	policyholders pursuant to sub-subparagraph (b)3.d.
2339	4.  The plan shall provide for the deferment, in whole or
2340	in part, of the assessment of an assessable insurer, other than
2341	an emergency assessment collected from policyholders pursuant to
2342	sub-subparagraph (b)3.d., if the office finds that payment of
2343	the assessment would endanger or impair the solvency of the
2344	insurer. In the event an assessment against an assessable
2345	insurer is deferred in whole or in part, the amount by which
2346	such assessment is deferred may be assessed against the other
2347	assessable insurers in a manner consistent with the basis for
2348	assessments set forth in paragraph (b).
2349	5.  Effective July 1, 2007, in order to evaluate the costs
2350	and benefits of approved take-out plans, if the corporation pays
2351	a bonus or other payment to an insurer for an approved take-out
2352	plan, it shall maintain a record of the address or such other
2353	identifying information on the property or risk removed in order
2354	to track if and when the property or risk is later insured by
2355	the corporation.
2356	(q)  Nothing in this subsection shall be construed to
2357	preclude the issuance of residential property insurance coverage
2358	pursuant to part VIII of chapter 626.
2359	(r)  There shall be no liability on the part of, and no
2360	cause of action of any nature shall arise against, any
2361	assessable insurer or its agents or employees, the corporation
2362	or its agents or employees, members of the board of governors or
2363	their respective designees at a board meeting, corporation
2364	committee members, or the office or its representatives, for any
2365	action taken by them in the performance of their duties or
2366	responsibilities under this subsection. Such immunity does not
2367	apply to:
2368	1.  Any of the foregoing persons or entities for any
2369	willful tort;
2370	2.  The corporation or its producing agents for breach of
2371	any contract or agreement pertaining to insurance coverage;
2372	3.  The corporation with respect to issuance or payment of
2373	debt; or
2374	4.  Any assessable insurer with respect to any action to
2375	enforce an assessable insurer's obligations to the corporation
2376	under this subsection.
2377	(s)  For the purposes of s. 199.183(1), the corporation
2378	shall be considered a political subdivision of the state and
2379	shall be exempt from the corporate income tax. The premiums,
2380	assessments, investment income, and other revenue of the
2381	corporation are funds received for providing property insurance
2382	coverage as required by this subsection, paying claims for
2383	Florida citizens insured by the corporation, securing and
2384	repaying debt obligations issued by the corporation, and
2385	conducting all other activities of the corporation, and shall
2386	not be considered taxes, fees, licenses, or charges for services
2387	imposed by the Legislature on individuals, businesses, or
2388	agencies outside state government. Bonds and other debt
2389	obligations issued by or on behalf of the corporation are not to
2390	be considered "state bonds" within the meaning of s. 215.58(8).
2391	The corporation is not subject to the procurement provisions of
2392	chapter 287, and policies and decisions of the corporation
2393	relating to incurring debt, levying of assessments and the sale,
2394	issuance, continuation, terms and claims under corporation
2395	policies, and all services relating thereto, are not subject to
2396	the provisions of chapter 120. The corporation is not required
2397	to obtain or to hold a certificate of authority issued by the
2398	office, nor is it required to participate as a member insurer of
2399	the Florida Insurance Guaranty Association. However, the
2400	corporation is required to pay, in the same manner as an
2401	authorized insurer, assessments pledged by the Florida Insurance
2402	Guaranty Association to secure bonds issued or other
2403	indebtedness incurred to pay covered claims arising from insurer
2404	insolvencies caused by, or proximately related to, hurricane
2405	losses. It is the intent of the Legislature that the tax
2406	exemptions provided in this paragraph will augment the financial
2407	resources of the corporation to better enable the corporation to
2408	fulfill its public purposes. Any debt obligations issued by the
2409	corporation, their transfer, and the income therefrom, including
2410	any profit made on the sale thereof, shall at all times be free
2411	from taxation of every kind by the state and any political
2412	subdivision or local unit or other instrumentality thereof;
2413	however, this exemption does not apply to any tax imposed by
2414	chapter 220 on interest, income, or profits on debt obligations
2415	owned by corporations other than the corporation.
2416	(t)  Upon a determination by the office that the conditions
2417	giving rise to the establishment and activation of the
2418	corporation no longer exist, the corporation is dissolved. Upon
2419	dissolution, the assets of the corporation shall be applied
2420	first to pay all debts, liabilities, and obligations of the
2421	corporation, including the establishment of reasonable reserves
2422	for any contingent liabilities or obligations, and all remaining
2423	assets of the corporation shall become property of the state and
2424	shall be deposited in the Florida Hurricane Catastrophe Fund.
2425	However, no dissolution shall take effect as long as the
2426	corporation has bonds or other financial obligations outstanding
2427	unless adequate provision has been made for the payment of the
2428	bonds or other financial obligations pursuant to the documents
2429	authorizing the issuance of the bonds or other financial
2430	obligations.
2431	(u)1.  Effective July 1, 2002, policies of the Residential
2432	Property and Casualty Joint Underwriting Association shall
2433	become policies of the corporation. All obligations, rights,
2434	assets and liabilities of the Residential Property and Casualty
2435	Joint Underwriting Association, including bonds, note and debt
2436	obligations, and the financing documents pertaining to them
2437	become those of the corporation as of July 1, 2002. The
2438	corporation is not required to issue endorsements or
2439	certificates of assumption to insureds during the remaining term
2440	of in-force transferred policies.
2441	2.  Effective July 1, 2002, policies of the Florida
2442	Windstorm Underwriting Association are transferred to the
2443	corporation and shall become policies of the corporation. All
2444	obligations, rights, assets, and liabilities of the Florida
2445	Windstorm Underwriting Association, including bonds, note and
2446	debt obligations, and the financing documents pertaining to them
2447	are transferred to and assumed by the corporation on July 1,
2448	2002. The corporation is not required to issue endorsements or
2449	certificates of assumption to insureds during the remaining term
2450	of in-force transferred policies.
2451	3.  The Florida Windstorm Underwriting Association and the
2452	Residential Property and Casualty Joint Underwriting Association
2453	shall take all actions as may be proper to further evidence the
2454	transfers and shall provide the documents and instruments of
2455	further assurance as may reasonably be requested by the
2456	corporation for that purpose. The corporation shall execute
2457	assumptions and instruments as the trustees or other parties to
2458	the financing documents of the Florida Windstorm Underwriting
2459	Association or the Residential Property and Casualty Joint
2460	Underwriting Association may reasonably request to further
2461	evidence the transfers and assumptions, which transfers and
2462	assumptions, however, are effective on the date provided under
2463	this paragraph whether or not, and regardless of the date on
2464	which, the assumptions or instruments are executed by the
2465	corporation. Subject to the relevant financing documents
2466	pertaining to their outstanding bonds, notes, indebtedness, or
2467	other financing obligations, the moneys, investments,
2468	receivables, choses in action, and other intangibles of the
2469	Florida Windstorm Underwriting Association shall be credited to
2470	the high-risk account of the corporation, and those of the
2471	personal lines residential coverage account and the commercial
2472	lines residential coverage account of the Residential Property
2473	and Casualty Joint Underwriting Association shall be credited to
2474	the personal lines account and the commercial lines account,
2475	respectively, of the corporation.
2476	4.  Effective July 1, 2002, a new applicant for property
2477	insurance coverage who would otherwise have been eligible for
2478	coverage in the Florida Windstorm Underwriting Association is
2479	eligible for coverage from the corporation as provided in this
2480	subsection.
2481	5.  The transfer of all policies, obligations, rights,
2482	assets, and liabilities from the Florida Windstorm Underwriting
2483	Association to the corporation and the renaming of the
2484	Residential Property and Casualty Joint Underwriting Association
2485	as the corporation shall in no way affect the coverage with
2486	respect to covered policies as defined in s. 215.555(2)(c)
2487	provided to these entities by the Florida Hurricane Catastrophe
2488	Fund. The coverage provided by the Florida Hurricane Catastrophe
2489	Fund to the Florida Windstorm Underwriting Association based on
2490	its exposures as of June 30, 2002, and each June 30 thereafter
2491	shall be redesignated as coverage for the high-risk account of
2492	the corporation. Notwithstanding any other provision of law, the
2493	coverage provided by the Florida Hurricane Catastrophe Fund to
2494	the Residential Property and Casualty Joint Underwriting
2495	Association based on its exposures as of June 30, 2002, and each
2496	June 30 thereafter shall be transferred to the personal lines
2497	account and the commercial lines account of the corporation.
2498	Notwithstanding any other provision of law, the high-risk
2499	account shall be treated, for all Florida Hurricane Catastrophe
2500	Fund purposes, as if it were a separate participating insurer
2501	with its own exposures, reimbursement premium, and loss
2502	reimbursement. Likewise, the personal lines and commercial lines
2503	accounts shall be viewed together, for all Florida Hurricane
2504	Catastrophe Fund purposes, as if the two accounts were one and
2505	represent a single, separate participating insurer with its own
2506	exposures, reimbursement premium, and loss reimbursement. The
2507	coverage provided by the Florida Hurricane Catastrophe Fund to
2508	the corporation shall constitute and operate as a full transfer
2509	of coverage from the Florida Windstorm Underwriting Association
2510	and Residential Property and Casualty Joint Underwriting to the
2511	corporation.
2512	(v)  Notwithstanding any other provision of law:
2513	1.  The pledge or sale of, the lien upon, and the security
2514	interest in any rights, revenues, or other assets of the
2515	corporation created or purported to be created pursuant to any
2516	financing documents to secure any bonds or other indebtedness of
2517	the corporation shall be and remain valid and enforceable,
2518	notwithstanding the commencement of and during the continuation
2519	of, and after, any rehabilitation, insolvency, liquidation,
2520	bankruptcy, receivership, conservatorship, reorganization, or
2521	similar proceeding against the corporation under the laws of
2522	this state.
2523	2.  No such proceeding shall relieve the corporation of its
2524	obligation, or otherwise affect its ability to perform its
2525	obligation, to continue to collect, or levy and collect,
2526	assessments, market equalization or other surcharges under
2527	subparagraph (c)11.10., or any other rights, revenues, or other
2528	assets of the corporation pledged pursuant to any financing
2529	documents.
2530	3.  Each such pledge or sale of, lien upon, and security
2531	interest in, including the priority of such pledge, lien, or
2532	security interest, any such assessments, market equalization or
2533	other surcharges, or other rights, revenues, or other assets
2534	which are collected, or levied and collected, after the
2535	commencement of and during the pendency of, or after, any such
2536	proceeding shall continue unaffected by such proceeding. As used
2537	in this subsection, the term "financing documents" means any
2538	agreement or agreements, instrument or instruments, or other
2539	document or documents now existing or hereafter created
2540	evidencing any bonds or other indebtedness of the corporation or
2541	pursuant to which any such bonds or other indebtedness has been
2542	or may be issued and pursuant to which any rights, revenues, or
2543	other assets of the corporation are pledged or sold to secure
2544	the repayment of such bonds or indebtedness, together with the
2545	payment of interest on such bonds or such indebtedness, or the
2546	payment of any other obligation or financial product, as defined
2547	in the plan of operation of the corporation related to such
2548	bonds or indebtedness.
2549	4.  Any such pledge or sale of assessments, revenues,
2550	contract rights, or other rights or assets of the corporation
2551	shall constitute a lien and security interest, or sale, as the
2552	case may be, that is immediately effective and attaches to such
2553	assessments, revenues, or contract rights or other rights or
2554	assets, whether or not imposed or collected at the time the
2555	pledge or sale is made. Any such pledge or sale is effective,
2556	valid, binding, and enforceable against the corporation or other
2557	entity making such pledge or sale, and valid and binding against
2558	and superior to any competing claims or obligations owed to any
2559	other person or entity, including policyholders in this state,
2560	asserting rights in any such assessments, revenues, or contract
2561	rights or other rights or assets to the extent set forth in and
2562	in accordance with the terms of the pledge or sale contained in
2563	the applicable financing documents, whether or not any such
2564	person or entity has notice of such pledge or sale and without
2565	the need for any physical delivery, recordation, filing, or
2566	other action.
2567	5.  As long as the corporation has any bonds outstanding,
2568	the corporation may not file a voluntary petition under chapter
2569	9 of the federal Bankruptcy Code or such corresponding chapter
2570	or sections as may be in effect, from time to time, and a public
2571	officer or any organization, entity, or other person may not
2572	authorize the corporation to be or become a debtor under chapter
2573	9 of the federal Bankruptcy Code or such corresponding chapter
2574	or sections as may be in effect, from time to time, during any
2575	such period.
2576	6.  If ordered by a court of competent jurisdiction, the
2577	corporation may assume policies or otherwise provide coverage
2578	for policyholders of an insurer placed in liquidation under
2579	chapter 631, under such forms, rates, terms, and conditions as
2580	the corporation deems appropriate, subject to approval by the
2581	office.
2582	(w)1.  The following records of the corporation are
2583	confidential and exempt from the provisions of s. 119.07(1) and
2584	s. 24(a), Art. I of the State Constitution:
2585	a.  Underwriting files, except that a policyholder or an
2586	applicant shall have access to his or her own underwriting
2587	files.
2588	b.  Claims files, until termination of all litigation and
2589	settlement of all claims arising out of the same incident,
2590	although portions of the claims files may remain exempt, as
2591	otherwise provided by law. Confidential and exempt claims file
2592	records may be released to other governmental agencies upon
2593	written request and demonstration of need; such records held by
2594	the receiving agency remain confidential and exempt as provided
2595	for herein.
2596	c.  Records obtained or generated by an internal auditor
2597	pursuant to a routine audit, until the audit is completed, or if
2598	the audit is conducted as part of an investigation, until the
2599	investigation is closed or ceases to be active. An investigation
2600	is considered "active" while the investigation is being
2601	conducted with a reasonable, good faith belief that it could
2602	lead to the filing of administrative, civil, or criminal
2603	proceedings.
2604	d.  Matters reasonably encompassed in privileged attorney-
2605	client communications.
2606	e.  Proprietary information licensed to the corporation
2607	under contract and the contract provides for the confidentiality
2608	of such proprietary information.
2609	f.  All information relating to the medical condition or
2610	medical status of a corporation employee which is not relevant
2611	to the employee's capacity to perform his or her duties, except
2612	as otherwise provided in this paragraph. Information which is
2613	exempt shall include, but is not limited to, information
2614	relating to workers' compensation, insurance benefits, and
2615	retirement or disability benefits.
2616	g.  Upon an employee's entrance into the employee
2617	assistance program, a program to assist any employee who has a
2618	behavioral or medical disorder, substance abuse problem, or
2619	emotional difficulty which affects the employee's job
2620	performance, all records relative to that participation shall be
2621	confidential and exempt from the provisions of s. 119.07(1) and
2622	s. 24(a), Art. I of the State Constitution, except as otherwise
2623	provided in s. 112.0455(11).
2624	h.  Information relating to negotiations for financing,
2625	reinsurance, depopulation, or contractual services, until the
2626	conclusion of the negotiations.
2627	i.  Minutes of closed meetings regarding underwriting
2628	files, and minutes of closed meetings regarding an open claims
2629	file until termination of all litigation and settlement of all
2630	claims with regard to that claim, except that information
2631	otherwise confidential or exempt by law will be redacted.
2632
2633	When an authorized insurer is considering underwriting a risk
2634	insured by the corporation, relevant underwriting files and
2635	confidential claims files may be released to the insurer
2636	provided the insurer agrees in writing, notarized and under
2637	oath, to maintain the confidentiality of such files. When a file
2638	is transferred to an insurer that file is no longer a public
2639	record because it is not held by an agency subject to the
2640	provisions of the public records law. Underwriting files and
2641	confidential claims files may also be released to staff of and
2642	the board of governors of the market assistance plan established
2643	pursuant to s. 627.3515, who must retain the confidentiality of
2644	such files, except such files may be released to authorized
2645	insurers that are considering assuming the risks to which the
2646	files apply, provided the insurer agrees in writing, notarized
2647	and under oath, to maintain the confidentiality of such files.
2648	Finally, the corporation or the board or staff of the market
2649	assistance plan may make the following information obtained from
2650	underwriting files and confidential claims files available to
2651	licensed general lines insurance agents: name, address, and
2652	telephone number of the residential property owner or insured;
2653	location of the risk; rating information; loss history; and
2654	policy type. The receiving licensed general lines insurance
2655	agent must retain the confidentiality of the information
2656	received.
2657	2.  Portions of meetings of the corporation are exempt from
2658	the provisions of s. 286.011 and s. 24(b), Art. I of the State
2659	Constitution wherein confidential underwriting files or
2660	confidential open claims files are discussed. All portions of
2661	corporation meetings which are closed to the public shall be
2662	recorded by a court reporter. The court reporter shall record
2663	the times of commencement and termination of the meeting, all
2664	discussion and proceedings, the names of all persons present at
2665	any time, and the names of all persons speaking. No portion of
2666	any closed meeting shall be off the record. Subject to the
2667	provisions hereof and s. 119.07(1)(b)-(d), the court reporter's
2668	notes of any closed meeting shall be retained by the corporation
2669	for a minimum of 5 years. A copy of the transcript, less any
2670	exempt matters, of any closed meeting wherein claims are
2671	discussed shall become public as to individual claims after
2672	settlement of the claim.
2673	(x)  It is the intent of the Legislature that the
2674	amendments to this subsection enacted in 2002 should, over time,
2675	reduce the probable maximum windstorm losses in the residual
2676	markets and should reduce the potential assessments to be levied
2677	on property insurers and policyholders statewide. In furtherance
2678	of this intent:
2679	1.  The board shall, on or before February 1 of each year,
2680	provide a report to the President of the Senate and the Speaker
2681	of the House of Representatives showing the reduction or
2682	increase in the 100-year probable maximum loss attributable to
2683	wind-only coverages and the quota share program under this
2684	subsection combined, as compared to the benchmark 100-year
2685	probable maximum loss of the Florida Windstorm Underwriting
2686	Association. For purposes of this paragraph, the benchmark 100-
2687	year probable maximum loss of the Florida Windstorm Underwriting
2688	Association shall be the calculation dated February 2001 and
2689	based on November 30, 2000, exposures. In order to ensure
2690	comparability of data, the board shall use the same methods for
2691	calculating its probable maximum loss as were used to calculate
2692	the benchmark probable maximum loss.
2693	2.  Beginning February 1, 2010, if the report under
2694	subparagraph 1. for any year indicates that the 100-year
2695	probable maximum loss attributable to wind-only coverages and
2696	the quota share program combined does not reflect a reduction of
2697	at least 25 percent from the benchmark, the board shall reduce
2698	the boundaries of the high-risk area eligible for wind-only
2699	coverages under this subsection in a manner calculated to reduce
2700	such probable maximum loss to an amount at least 25 percent
2701	below the benchmark.
2702	3.  Beginning February 1, 2015, if the report under
2703	subparagraph 1. for any year indicates that the 100-year
2704	probable maximum loss attributable to wind-only coverages and
2705	the quota share program combined does not reflect a reduction of
2706	at least 50 percent from the benchmark, the boundaries of the
2707	high-risk area eligible for wind-only coverages under this
2708	subsection shall be reduced by the elimination of any area that
2709	is not seaward of a line 1,000 feet inland from the Intracoastal
2710	Waterway.
2711	(y)  In enacting the provisions of this section, the
2712	Legislature recognizes that both the Florida Windstorm
2713	Underwriting Association and the Residential Property and
2714	Casualty Joint Underwriting Association have entered into
2715	financing arrangements that obligate each entity to service its
2716	debts and maintain the capacity to repay funds secured under
2717	these financing arrangements. It is the intent of the
2718	Legislature that nothing in this section be construed to
2719	compromise, diminish, or interfere with the rights of creditors
2720	under such financing arrangements. It is further the intent of
2721	the Legislature to preserve the obligations of the Florida
2722	Windstorm Underwriting Association and Residential Property and
2723	Casualty Joint Underwriting Association with regard to
2724	outstanding financing arrangements, with such obligations
2725	passing entirely and unchanged to the corporation and,
2726	specifically, to the applicable account of the corporation. So
2727	long as any bonds, notes, indebtedness, or other financing
2728	obligations of the Florida Windstorm Underwriting Association or
2729	the Residential Property and Casualty Joint Underwriting
2730	Association are outstanding, under the terms of the financing
2731	documents pertaining to them, the governing board of the
2732	corporation shall have and shall exercise the authority to levy,
2733	charge, collect, and receive all premiums, assessments,
2734	surcharges, charges, revenues, and receipts that the
2735	associations had authority to levy, charge, collect, or receive
2736	under the provisions of subsection (2) and this subsection,
2737	respectively, as they existed on January 1, 2002, to provide
2738	moneys, without exercise of the authority provided by this
2739	subsection, in at least the amounts, and by the times, as would
2740	be provided under those former provisions of subsection (2) or
2741	this subsection, respectively, so that the value, amount, and
2742	collectability of any assets, revenues, or revenue source
2743	pledged or committed to, or any lien thereon securing such
2744	outstanding bonds, notes, indebtedness, or other financing
2745	obligations will not be diminished, impaired, or adversely
2746	affected by the amendments made by this act and to permit
2747	compliance with all provisions of financing documents pertaining
2748	to such bonds, notes, indebtedness, or other financing
2749	obligations, or the security or credit enhancement for them, and
2750	any reference in this subsection to bonds, notes, indebtedness,
2751	financing obligations, or similar obligations, of the
2752	corporation shall include like instruments or contracts of the
2753	Florida Windstorm Underwriting Association and the Residential
2754	Property and Casualty Joint Underwriting Association to the
2755	extent not inconsistent with the provisions of the financing
2756	documents pertaining to them.
2757	(z)  The corporation shall not require the securing of
2758	flood insurance as a condition of coverage if the insured or
2759	applicant executes a form approved by the office affirming that
2760	flood insurance is not provided by the corporation and that if
2761	flood insurance is not secured by the applicant or insured in
2762	addition to coverage by the corporation, the risk will not be
2763	covered for flood damage. A corporation policyholder electing
2764	not to secure flood insurance and executing a form as provided
2765	herein making a claim for water damage against the corporation
2766	shall have the burden of proving the damage was not caused by
2767	flooding. Notwithstanding other provisions of this subsection,
2768	the corporation may deny coverage to an applicant or insured who
2769	refuses to execute the form described herein.
2770	(aa)  A salaried employee of the corporation who performs
2771	policy administration services subsequent to the effectuation of
2772	a corporation policy is not required to be licensed as an agent
2773	under the provisions of s. 626.112.
2774	(bb)  By February 1, 2007, the corporation shall submit a
2775	report to the President of the Senate, the Speaker of the House
2776	of Representatives, the minority party leaders of the Senate and
2777	the House of Representatives, and the chairs of the standing
2778	committees of the Senate and the House of Representatives having
2779	jurisdiction over matters relating to property and casualty
2780	insurance. In preparing the report, the corporation shall
2781	consult with the Office of Insurance Regulation, the Department
2782	of Financial Services, and any other party the corporation
2783	determines appropriate. The report must include all findings and
2784	recommendations on the feasibility of requiring authorized
2785	insurers that issue and service personal and commercial
2786	residential policies and commercial nonresidential policies that
2787	provide coverage for basic property perils except for the peril
2788	of wind to issue and service for a fee personal and commercial
2789	residential policies and commercial nonresidential policies
2790	providing coverage for the peril of wind issued by the
2791	corporation. The report must include:
2792	1.  The expense savings to the corporation of issuing and
2793	servicing such policies as determined by a cost-benefit
2794	analysis.
2795	2.  The expenses and liability to authorized insurers
2796	associated with issuing and servicing such policies.
2797	3.  The effect on service to policyholders of the
2798	corporation relating to issuing and servicing such policies.
2799	4.  The effect on the producing agent of the corporation of
2800	issuing and servicing such policies.
2801	5.  Recommendations as to the amount of the fee which
2802	should be paid to authorized insurers for issuing and servicing
2803	such policies.
2804	6.  The effect that issuing and servicing such policies
2805	will have on the corporation's number of policies, total insured
2806	value, and probable maximum loss.
2807	(cc)  There shall be no liability on the part of, and no
2808	cause of action of any nature shall arise against, producing
2809	agents of record of the corporation or employees of such agents
2810	for insolvency of any take-out insurer.
2811	(dd)1.  For policies subject to nonrenewal as a result of
2812	the risk being no longer eligible for coverage due to being
2813	valued at $1 million or more, the corporation shall, directly or
2814	through the market assistance plan, make information from
2815	confidential underwriting and claims files of policyholders
2816	available only to licensed general lines agents who register
2817	with the corporation to receive such information according to
2818	the following procedures:
2819	2.  By August 1, 2006, the corporation shall provide such
2820	policyholders who are not eligible for renewal the opportunity
2821	to request in writing, within 30 days after the notification is
2822	sent, that information from their confidential underwriting and
2823	claims files not be released to licensed general lines agents
2824	registered pursuant to this paragraph.
2825	3.  By August 1, 2006, the corporation shall make available
2826	to licensed general lines agents the registration procedures to
2827	be used to obtain confidential information from underwriting and
2828	claims files for such policies not eligible for renewal. As a
2829	condition of registration, the corporation shall require the
2830	licensed general lines agent to attest that the agent has the
2831	experience and relationships with authorized or surplus lines
2832	carriers to attempt to offer replacement coverage for such
2833	policies.
2834	4.  By September 1, 2006, the corporation shall make
2835	available through a secured website to licensed general lines
2836	agents registered pursuant to this paragraph application,
2837	rating, loss history, mitigation, and policy type information
2838	relating to such policies not eligible for renewal and for which
2839	the policyholder has not requested the corporation withhold such
2840	information. The registered licensed general lines agent may use
2841	such information to contact and assist the policyholder in
2842	securing replacement policies, and the agent may disclose to the
2843	policyholder that such information was obtained from the
2844	corporation.
2845	(ee)  Effective June 1, 2007, all commercial nonresidential
2846	policies issued by the corporation as of May 31, 2007, shall
2847	become policies of the Property and Casualty Joint Underwriting
2848	Association created pursuant to subsection (5).
2849	Section 11.  The Department of Financial Services shall
2850	review how insurance agent commissions for the placement and
2851	renewal of property insurance policies in Citizens Property
2852	Insurance Corporation are established and applied and shall make
2853	recommendations, based on industry best practices, for standards
2854	to ensure that agent commissions are justified on a market basis
2855	based on the nature and amount of work performed by the agents.
2856	The department shall report its findings and recommendations to
2857	the Governor, the President of the Senate, and the Speaker of
2858	the House of Representatives by July 1, 2007.
2859	Section 12.  Task Force on Citizens Property Insurance
2860	Claims Handling and Resolution.--
2861	(1)  TASK FORCE CREATED.--There is created the Task Force
2862	on Citizens Property Insurance Claims Handling and Resolution.
2863	(2)  ADMINISTRATION.--The task force shall be
2864	administratively housed within the Office of the Chief Financial
2865	Officer but shall operate independently of any state officer or
2866	agency. The Office of the Chief Financial Officer shall provide
2867	such administrative support as the task force deems necessary to
2868	accomplish its mission and shall provide necessary funding for
2869	the task force within its existing resources. The Executive
2870	Office of the Governor, the Department of Financial Services,
2871	and the Office of Insurance Regulation shall provide substantive
2872	staff support for the task force.
2873	(3)  MEMBERSHIP.--The members of the task force shall be
2874	appointed as follows:
2875	(a)  The Governor shall appoint one member who is a
2876	representative of insurance consumers.
2877	(b)  The Chief Financial Officer shall appoint one member
2878	who has expertise in claims handling.
2879	(c)  The President of the Senate shall appoint one member.
2880	(d)  The Speaker of the House of Representatives shall
2881	appoint one member.
2882	(e)  The Commissioner of Insurance Regulation, or his or
2883	her designee, shall serve as an ex officio voting member of the
2884	task force.
2885	(f)  The Insurance Consumer Advocate, or his or her
2886	designee, shall serve as an ex officio voting member of the task
2887	force.
2888	(g)  The Executive Director of Citizens Property Insurance
2889	Corporation, or his or her designee, shall serve as an ex
2890	officio voting member of the task force.
2891
2892	Members of the task force shall serve without compensation but
2893	are entitled to receive reimbursement for per diem and travel
2894	expenses as provided in s. 112.061, Florida Statutes.
2895	(4)  PURPOSE AND INTENT.--The Legislature recognizes that
2896	policyholders and applicants of Citizens Property Insurance
2897	Corporation should receive the highest possible level of service
2898	and treatment. This level should never be less than the private
2899	market. The Legislature further recognizes that Citizens
2900	Property Insurance Corporation's service standards should be no
2901	less than those applied to insurers in the voluntary market with
2902	respect to responsiveness, timeliness, customer courtesy, and
2903	overall dealings with policyholders and applicants. The purpose
2904	of the task force is to make recommendations to the legislative
2905	and executive branches of this state's government relating to
2906	the handling, service, and resolution of claims by Citizens
2907	Property Insurance Corporation that are sufficient to ensure
2908	that all Citizens' policyholders and applicants in this state
2909	are able to obtain appropriate handling, service, and resolution
2910	of claims, as further described in this section.
2911	(5)  SPECIFIC ISSUES.--The task force shall conduct such
2912	research and hearings as it deems necessary to achieve the
2913	purposes specified in subsection (4) and shall develop
2914	information on relevant issues, including, but not limited to,
2915	the following:
2916	(a)  How Citizens Property Insurance Corporation can
2917	improve its customer service.
2918	(b)  How Citizens Property Insurance Corporation can
2919	improve its adjuster response time after a hurricane.
2920	(c)  How Citizens Property Insurance Corporation can
2921	efficiently use its available adjusting sources for claims.
2922	(d)  How Citizens Property Insurance Corporation can
2923	improve the time it takes to conduct damage assessments.
2924	(e)  How Citizens Property Insurance Corporation can
2925	dispose of and settle claims remaining from the 2004 and 2005
2926	hurricane seasons and can improve the time it takes to dispose
2927	of and settle claims remaining from the 2004 and 2005 hurricane
2928	seasons.
2929	(f)  How Citizens Property Insurance Corporation can
2930	improve the time it takes to dispose of and settle claims.
2931	(g)  Whether Citizens Property Insurance Corporation has
2932	hired an adequate level of permanent claims and adjusting staff
2933	in addition to outsourcing its claims-adjusting functions to
2934	independent adjusting firms.
2935	(6)  REPORTS AND RECOMMENDATIONS.--By July 1, 2007, the
2936	task force shall provide a report containing recommendations
2937	regarding the process Citizens Property Insurance Corporation
2938	should use to dispose of the claims remaining open from the 2004
2939	and 2005 hurricane seasons. By July 1, 2008, the task force
2940	shall provide a report containing findings relating to the
2941	issues identified in subsection (5) and recommendations
2942	consistent with the purposes of this section and also consistent
2943	with such findings. The report shall include recommendations
2944	regarding the process Citizens Property Insurance Corporation
2945	should use to dispose of claims. The task force shall submit the
2946	reports to the Governor, the Chief Financial Officer, the
2947	President of the Senate, and the Speaker of the House of
2948	Representatives. The task force may also submit such interim
2949	reports as it deems appropriate.
2950	(7)  ADDITIONAL ACTIVITIES.--The task force shall monitor
2951	the implementation of the provisions of chapter 2006-12, Laws of
2952	Florida, relating to the creation of the Office of Internal
2953	Auditor in Citizens Property Insurance Corporation and shall
2954	make such additional recommendations as it deems appropriate for
2955	further legislative action during the 2006-2008 legislative
2956	biennium.
2957	(8)  EXPIRATION.--The task force shall expire at the end of
2958	the 2006-2008 legislative biennium.
2959	Section 13.  Notwithstanding the provisions of s.
2960	627.351(6), Florida Statutes, the existing board of governors of
2961	Citizens Property Insurance Corporation appointed under s.
2962	627.351(6)(c)4.a., Florida Statutes, is abolished effective
2963	March 1, 2007. By March 2, 2007, pursuant to s.
2964	627.351(6)(c)4.a., Florida Statutes, each appointing officer
2965	shall appoint new members or reappoint existing members of the
2966	board of governors of the corporation for the unexpired portions
2967	of the terms of the existing board of governors.
2968	Section 14.  Paragraph (e) of subsection (3) and subsection
2969	(4) of section 631.57, Florida Statutes, are amended to read:
2970	631.57  Powers and duties of the association.--
2971	(3)
2972	(e)1.a.  In addition to assessments otherwise authorized in
2973	paragraph (a) and to the extent necessary to secure the funds
2974	for the account specified in s. 631.55(2)(c) for the direct
2975	payment of covered claims of insolvent homeowners insurers and
2976	to pay the reasonable costs to administer such claims, or to
2977	retire indebtedness, including, without limitation, the
2978	principal, redemption premium, if any, and interest on, and
2979	related costs of issuance of, bonds issued under s. 631.695 and
2980	the funding of any reserves and other payments required under
2981	the bond resolution or trust indenture pursuant to which such
2982	bonds have been issued, the office, upon certification of the
2983	board of directors, shall levy emergency assessments upon
2984	insurers holding a certificate of authority. The emergency
2985	assessments payable under this paragraph by any insurer shall
2986	not exceed in any single year more than 2 percent of that
2987	insurer's direct written premiums, net of refunds, in this state
2988	during the preceding calendar year for the kinds of insurance
2989	within the account specified in s. 631.55(2)(c).
2990	b.  Any emergency assessments authorized under this
2991	paragraph shall be levied by the office upon insurers referred
2992	to in sub-subparagraph a., upon certification as to the need for
2993	such assessments by the board of directors. In the event the
2994	board of directors participates in the issuance of bonds in
2995	accordance with s. 631.695, emergency assessments shall be
2996	levied, in each year that bonds issued under s. 631.695 and
2997	secured by such emergency assessments are outstanding, in such
2998	amounts up to such 2-percent limit as required in order to
2999	provide for the full and timely payment of the principal of,
3000	redemption premium, if any, and interest on, and related costs
3001	of issuance of, such bonds. The emergency assessments provided
3002	for in this paragraph are assigned and pledged to the
3003	municipality, county, or legal entity issuing bonds under s.
3004	631.695 for the benefit of the holders of such bonds, in order
3005	to enable such municipality, county, or legal entity to provide
3006	for the payment of the principal of, redemption premium, if any,
3007	and interest on such bonds, the cost of issuance of such bonds,
3008	and the funding of any reserves and other payments required
3009	under the bond resolution or trust indenture pursuant to which
3010	such bonds have been issued, without the necessity of any
3011	further action by the association, the office, or any other
3012	party. To the extent bonds are issued under s. 631.695 and the
3013	association determines to secure such bonds by a pledge of
3014	revenues received from the emergency assessments, such bonds,
3015	upon such pledge of revenues, shall be secured by and payable
3016	from the proceeds of such emergency assessments, and the
3017	proceeds of emergency assessments levied under this paragraph
3018	shall be remitted directly to and administered by the trustee or
3019	custodian appointed for such bonds.
3020	c.  Emergency assessments under this paragraph may be
3021	payable in a single payment or, at the option of the
3022	association, may be payable in 12 monthly installments with the
3023	first installment being due and payable at the end of the month
3024	after an emergency assessment is levied and subsequent
3025	installments being due not later than the end of each succeeding
3026	month.
3027	d.  If emergency assessments are imposed, the report
3028	required by s. 631.695(7) shall include an analysis of the
3029	revenues generated from the emergency assessments imposed under
3030	this paragraph.
3031	e.  If emergency assessments are imposed, the references in
3032	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
3033	assessments levied under paragraph (a) shall include emergency
3034	assessments imposed under this paragraph.
3035	2.  In order to ensure that insurers paying emergency
3036	assessments levied under this paragraph continue to charge rates
3037	that are neither inadequate nor excessive, within 90 days after
3038	being notified of such assessments, each insurer that is to be
3039	assessed pursuant to this paragraph shall submit a rate filing
3040	for coverage included within the account specified in s.
3041	631.55(2)(c) and for which rates are required to be filed under
3042	s. 627.062. If the filing reflects a rate change that, as a
3043	percentage, is equal to the difference between the rate of such
3044	assessment and the rate of the previous year's assessment under
3045	this paragraph, the filing shall consist of a certification so
3046	stating and shall be deemed approved when made. Any rate change
3047	of a different percentage shall be subject to the standards and
3048	procedures of s. 627.062.
3049	3.  In the event the board of directors participates in the
3050	issuance of bonds in accordance with s. 631.695, an annual
3051	assessment under this paragraph shall continue while the bonds
3052	issued with respect to which the assessment was imposed are
3053	outstanding, including any bonds the proceeds of which were used
3054	to refund bonds issued pursuant to s. 631.695, unless adequate
3055	provision has been made for the payment of the bonds in the
3056	documents authorizing the issuance of such bonds.
3057	4.  Emergency assessments under this paragraph are not
3058	premium and are not subject to the premium tax, to any fees, or
3059	to any commissions. An insurer is liable for all emergency
3060	assessments that the insurer collects and shall treat the
3061	failure of an insured to pay an emergency assessment as a
3062	failure to pay the premium. An insurer is not liable for
3063	uncollectible emergency assessments.
3064	(4)  The department may exempt any insurer from any regular
3065	or emergency an assessment if an assessment would result in such
3066	insurer's financial statement reflecting an amount of capital or
3067	surplus less than the sum of the minimum amount required by any
3068	jurisdiction in which the insurer is authorized to transact
3069	insurance.
3070	Section 15.  It is the intent of the Legislature that the
3071	amendments to s. 631.57, Florida Statutes, by s. 34, chapter
3072	2006-12, Laws of Florida, authorized the Florida Insurance
3073	Guaranty Association to certify, and the Office of Insurance
3074	Regulation to levy, an emergency assessment of up to 2 percent
3075	to directly pay the covered claims out of the account specified
3076	in s. 631.55(2)(c), Florida Statutes, or use such emergency
3077	assessment proceeds to retire the indebtedness and costs of
3078	bonds issued to pay such claims and reasonable claims
3079	administration costs.
3080	Section 16.  Subsections (1) and (2) of section 627.706,
3081	Florida Statutes, are amended to read:
3082	627.706  Sinkhole insurance; definitions.--
3083	(1)  Every insurer authorized to transact property
3084	insurance in this state shall make available coverage for
3085	insurable sinkhole losses on any structure, including contents
3086	of personal property contained therein, resulting from a
3087	catastrophic ground cover collapse to the extent provided in the
3088	form to which the sinkhole coverage attaches. A policy for
3089	residential property insurance may include a deductible amount
3090	applicable to sinkhole losses equal to 1 percent, 2 percent, 5
3091	percent, or 10 percent of the policy dwelling limits, with
3092	appropriate premium discounts offered with each deductible
3093	amount.
3094	(2)  As used in ss. 627.706-627.7074, and as used in
3095	connection with any policy providing coverage for sinkhole
3096	losses resulting from a catastrophic ground cover collapse:
3097	(a)  "Catastrophic ground cover collapse" means geological
3098	activity that, within a period of 7 days or less, results in the
3099	collapse of the ground cover that renders the insured structure
3100	uninhabitable. The term "catastrophic ground cover collapse"
3101	does not include ground cover subsidence caused when, during a
3102	period exceeding 7 days, the upper surface of limestone is
3103	dissolved away and the ground cover slowly subsides to occupy
3104	the space once occupied by limestone.
3105	(b)  "Sinkhole Loss" means structural damage to a structure
3106	or the building, including the foundation, caused by a
3107	catastrophic ground cover collapse or sinkhole activity.
3108	Contents coverage shall apply only if there is structural damage
3109	to a structure or the building caused by a catastrophic ground
3110	cover collapse or sinkhole activity. Structural damage
3111	consisting merely of the settling or cracking of a foundation,
3112	structure, or building does not constitute a loss resulting from
3113	a catastrophic ground cover collapse or sinkhole activity.
3114	(c)(d)  "Professional engineer" means a person, as defined
3115	in s. 471.005, who has a bachelor's degree or higher in
3116	engineering with a specialty in the geotechnical engineering
3117	field. A professional engineer must have geotechnical experience
3118	and expertise in the identification of sinkhole activity as well
3119	as other potential causes of damage to the structure.
3120	(d)(e)  "Professional geologist" means a person, as defined
3121	by s. 492.102, who has a bachelor's degree or higher in geology
3122	or related earth science with expertise in the geology of
3123	Florida. A professional geologist must have geological
3124	experience and expertise in the identification of sinkhole
3125	activity as well as other potential geologic causes of damage to
3126	the structure.
3127	(e)(a)  "Sinkhole" means a depression in the ground cover,
3128	visible to the naked eye, landform created by subsidence of
3129	soil, sediment, or rock as underlying strata are dissolved by
3130	groundwater. A sinkhole may form by collapse into subterranean
3131	voids created by dissolution of limestone or dolostone or by
3132	subsidence as these strata are dissolved.
3133	(f)(c)  "Sinkhole activity" means settlement or systematic
3134	weakening of the earth supporting such property only when such
3135	settlement or systematic weakening results from movement or
3136	raveling of soils, sediments, or rock materials into
3137	subterranean voids created by the effect of water on a limestone
3138	or similar rock formation.
3139	(g)  "Uninhabitable" means condemned and ordered vacated by
3140	the governmental agency charged with making such findings and
3141	issuing such orders in the county in which the insured structure
3142	is located.
3143	Section 17.  Insurers offering policies of sinkhole
3144	insurance shall inform policyholders in bold type of not less
3145	than 14 points that the policyholder will not have sinkhole
3146	coverage other than coverage for catastrophic ground cover
3147	collapse that results in the property being condemned and
3148	uninhabitable. In addition to coverage for such catastrophic
3149	loss, insurers shall offer sinkhole insurance coverage to
3150	policyholders for less than catastrophic loss and shall provide
3151	notice to policyholders of the availability of the additional
3152	coverage for an additional premium and the types of damage
3153	covered under the additional coverage.
3154	Section 18.  This act shall take effect upon becoming a
3155	law.

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