Amendment
Bill No. CS/CS/SB 2860

Amendment No. 128731

CHAMBER ACTION
Senate		House
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1	Representatives Ross, Reagan, and Brown offered the following:
2
3	Substitute Amendment for Amendment (439287) to Senate Bill
4	(with title amendment)
5	Remove everything after the enacting clause and insert:
6
7	Section 1.  Section 215.5595, Florida Statutes, is amended
8	to read:
9	215.5595  Insurance Capital Build-Up Incentive Program.--
10	(1)  Upon entering the 2008 2006 hurricane season, the
11	Legislature finds that:
12	(a)  The losses in this state Florida from eight hurricanes
13	in 2004 and 2005 have seriously strained the resources of both
14	the voluntary insurance market and the public sector mechanisms
15	of Citizens Property Insurance Corporation and the Florida
16	Hurricane Catastrophe Fund.
17	(b)  Private reinsurance is much less available and at a
18	significantly greater cost to residential property insurers as
19	compared to 1 year ago, particularly for amounts below the
20	insurer's retention or retained losses that must be paid before
21	reimbursement is provided by the Florida Hurricane Catastrophe
22	Fund.
23	(c)  The Office of Insurance Regulation has reported that
24	the insolvency of certain insurers may be imminent.
25	(d)  Hurricane forecast experts predict that the 2006
26	hurricane season will be an active hurricane season and that the
27	Atlantic and Gulf Coast regions face an active hurricane cycle
28	of 10 to 20 years or longer.
29	(b)(e)  Citizens Property Insurance Corporation has over
30	1.2 million policies in force, has the largest market share of
31	any insurer writing residential property insurer in the state,
32	and faces the threat of a catastrophic loss that The number of
33	cancellations or nonrenewals of residential property insurance
34	policies is expected to increase and the number of new
35	residential policies written in the voluntary market are likely
36	to decrease, causing increased policy growth and exposure to the
37	state insurer of last resort, Citizens Property Insurance
38	Corporation, and threatening to increase the deficit of the
39	corporation, currently estimated to be over $1.7 billion. This
40	deficit must be funded by assessments against insurers and
41	policyholders, unless otherwise funded by the state. The program
42	has a substantial positive effect on the depopulation efforts of
43	Citizens Property Insurance Corporation since companies
44	participating in the program have removed over 199,000 policies
45	from the corporation. Companies participating in the program
46	have issued a significant number of new policies, thereby
47	keeping an estimated 480,000 new policies out of the
48	corporation.
49	(c)(f)  Policyholders are subject to high increased
50	premiums and assessments that are increasingly making such
51	coverage unaffordable and that may force policyholders to sell
52	their homes and even leave the state.
53	(d)(g)  The increased risk to the public sector and private
54	sector continues to pose poses a serious threat to the economy
55	of this state, particularly the building and financing of
56	residential structures, and existing mortgages may be placed in
57	default.
58	(h)  The losses from 2004 and 2005, combined with the
59	expectation that the increase in hurricane activity will
60	continue for the foreseeable future, have caused both insurers
61	and reinsurers to limit the capital they are willing to commit
62	to covering the hurricane risk in Florida; attracting new
63	capital to the Florida market is a critical priority; and
64	providing a low-cost source of capital would enable insurers to
65	write additional residential property insurance coverage and act
66	to mitigate premium increases.
67	(e)(i)  Appropriating state funds to be exchanged for used
68	as surplus notes issued by for residential property insurers,
69	under conditions requiring the insurer to contribute additional
70	private sector capital and to write a minimum level of premiums
71	for residential hurricane coverage, is a valid and important
72	public purpose.
73	(f)  Extending the Insurance Capital Build-up Incentive
74	Program will provide an incentive for investors to commit
75	additional capital to Florida's residential insurance market.
76	(2)  The purpose of this section is to provide funds in
77	exchange for surplus notes to be issued by to new or existing
78	authorized residential property insurers under the Insurance
79	Capital Build-Up Incentive Program administered by the State
80	Board of Administration, under the following conditions:
81	(a)  The amount of state funds provided in exchange for a
82	the surplus note to for any insurer or insurer group, other than
83	an insurer writing only manufactured housing policies, may not
84	exceed $25 million or 20 percent of the total amount of funds
85	appropriated for available under the program, whichever is
86	greater. The amount of the surplus note for any insurer or
87	insurer group writing residential property insurance covering
88	only manufactured housing may not exceed $7 million.
89	(b)  On or after April 1, 2008, the insurer must contribute
90	an amount of new capital to its surplus which is at least equal
91	to the amount of the surplus note and must apply to the board by
92	September 1, 2008 July 1, 2006. If an insurer applies after
93	September 1, 2008 July 1, 2006, but before June 1, 2009 2007,
94	the amount of the surplus note is limited to one-half of the new
95	capital that the insurer contributes to its surplus, except that
96	an insurer writing only manufactured housing policies is
97	eligible to receive a surplus note of up to $7 million. For
98	purposes of this section, new capital must be in the form of
99	cash or cash equivalents as specified in s. 625.012(1).
100	(c)  The insurer's surplus, new capital, and the surplus
101	note must total at least $50 million, except for insurers
102	writing residential property insurance covering only
103	manufactured housing. The insurer's surplus, new capital, and
104	the surplus note must total at least $14 million for insurers
105	writing only residential property insurance covering
106	manufactured housing policies as provided in paragraph (a).
107	(d)  The insurer must commit to increase its writings of
108	residential property insurance, including the peril of wind, and
109	to meet meeting a minimum writing ratio of net written premium
110	to surplus of at least 1:1 for the first calendar year after
111	receiving the state funds or renegotiation of the surplus note,
112	1.5:1 for the second calendar year, and 2:1 for the remaining
113	term of the surplus note. Alternatively, the insurer must meet a
114	minimum writing ratio of gross written premium to surplus of at
115	least 3:1 for the first calendar year after receiving the state
116	funds or renegotiation of the surplus note, 4.5:1 for the second
117	calendar year, and 6:1 for the remaining term of the surplus
118	note. The writing ratios, which shall be determined by the
119	Office of Insurance Regulation and certified quarterly to the
120	board. For this purpose, the term "premium" "net written
121	premium" means net written premium for residential property
122	insurance in this state Florida, including the peril of wind,
123	and "surplus" means the new capital and surplus note refers to
124	the entire surplus of the insurer. An insurer that makes an
125	initial application after July 1, 2008, must also commit to
126	writing at least 15 percent of its net or gross written premium
127	for new policies, not including renewal premiums, for policies
128	taken out of Citizens Property Insurance Corporation, during
129	each of the first 3 years after receiving the state funds in
130	exchange for the surplus note, which shall be determined by the
131	Office of Insurance Regulation and certified annually to the
132	board. The insurer must also commit to maintaining a level of
133	surplus and reinsurance sufficient to cover in excess of its 1-
134	in-100 year probable maximum loss, as determined by a hurricane
135	loss model accepted by the Florida Commission on Hurricane Loss
136	Projection Methodology, which shall be determined by the Office
137	of Insurance Regulation and certified annually to the board. If
138	the board determines that the insurer has failed to meet any of
139	the requirements of this paragraph required ratio is not
140	maintained during the term of the surplus note, the board may
141	increase the interest rate, accelerate the repayment of interest
142	and principal, or shorten the term of the surplus note, subject
143	to approval by the Commissioner of Insurance of payments by the
144	insurer of principal and interest as provided in paragraph (f).
145	(e)  If the requirements of this section are met, the board
146	may approve an application by an insurer for funds in exchange
147	for issuance of a surplus note, unless the board determines that
148	the financial condition of the insurer and its business plan for
149	writing residential property insurance in Florida places an
150	unreasonably high level of financial risk to the state of
151	nonpayment in full of the interest and principal. The board
152	shall consult with the Office of Insurance Regulation and may
153	contract with independent financial and insurance consultants in
154	making this determination.
155	(f)  The surplus note must be repayable to the state with a
156	term of 20 years. The surplus note shall accrue interest on the
157	unpaid principal balance at a rate equivalent to the 10-year
158	U.S. Treasury Bond rate, require the payment only of interest
159	during the first 3 years, and include such other terms as
160	approved by the board. The board may charge late fees up to 5
161	percent for late payments or other late remittances. Payment of
162	principal, or interest, or late fees by the insurer on the
163	surplus note must be approved by the Commissioner of Insurance,
164	who shall approve such payment unless the commissioner
165	determines that such payment will substantially impair the
166	financial condition of the insurer. If such a determination is
167	made, the commissioner shall approve such payment that will not
168	substantially impair the financial condition of the insurer.
169	(g)  The total amount of funds available for the program is
170	limited to the amount appropriated by the Legislature for this
171	purpose. If the amount of surplus notes requested by insurers
172	exceeds the amount of funds available, the board may prioritize
173	insurers that are eligible and approved, with priority for
174	funding given to insurers writing only manufactured housing
175	policies, regardless of the date of application, based on the
176	financial strength of the insurer, the viability of its proposed
177	business plan for writing additional residential property
178	insurance in the state, and the effect on competition in the
179	residential property insurance market. Between insurers writing
180	residential property insurance covering manufactured housing,
181	priority shall be given to the insurer writing the highest
182	percentage of its policies covering manufactured housing.
183	(h)  The board may allocate portions of the funds available
184	for the program and establish dates for insurers to apply for
185	surplus notes from such allocation which are earlier than the
186	dates established in paragraph (b).
187	(h)(i)  Notwithstanding paragraph (d), a newly formed
188	manufactured housing insurer that is eligible for a surplus note
189	under this section shall meet the premium to surplus ratio
190	provisions of s. 624.4095.
191	(i)(j)  As used in this section, "an insurer writing only
192	manufactured housing policies" includes:
193	1.  A Florida domiciled insurer that begins writing
194	personal lines residential manufactured housing policies in
195	Florida after March 1, 2007, and that removes a minimum of
196	50,000 policies from Citizens Property Insurance Corporation
197	without accepting a bonus, provided at least 25 percent of its
198	policies cover manufactured housing. Such an insurer may count
199	any funds above the minimum capital and surplus requirement that
200	were contributed into the insurer after March 1, 2007, as new
201	capital under this section.
202	2.  A Florida domiciled insurer that writes at least 40
203	percent of its policies covering manufactured housing in
204	Florida.
205	(3)  As used in this section, the term:
206	(a)  "Board" means the State Board of Administration.
207	(b)  "Program" means the Insurance Capital Build-Up
208	Incentive Program established by this section.
209	(4)  The state funds provided to the insurer in exchange
210	for the A surplus note provided to an insurer pursuant to this
211	section are is considered borrowed surplus an asset of the
212	insurer pursuant to s. 628.401 s. 625.012.
213	(5)  If an insurer that receives funds in exchange for
214	issuance of a surplus note pursuant to this section is rendered
215	insolvent, the state is a class 3 creditor pursuant to s.
216	631.271 for the unpaid principal and interest on the surplus
217	note.
218	(6)  The board shall adopt rules prescribing the
219	procedures, administration, and criteria for approving the
220	applications of insurers to receive funds in exchange for
221	issuance of surplus notes pursuant to this section, which may be
222	adopted pursuant to the procedures for emergency rules of
223	chapter 120. Otherwise, actions and determinations by the board
224	pursuant to this section are exempt from chapter 120.
225	(7)  The board shall invest and reinvest the funds
226	appropriated for the program in accordance with s. 215.47 and
227	consistent with board policy.
228	(8)  Costs and fees incurred by the board in administering
229	this program, including fees for investment services, shall be
230	paid from funds appropriated by the Legislature for this
231	program, but are limited to 1 percent of the amount
232	appropriated.
233	(9)  The board shall submit a report to the President of
234	the Senate and the Speaker of the House of Representatives by
235	February 1 of each year as to the results of the program and
236	each insurer's compliance with the terms of its surplus note.
237	(10)  The amendments to this section enacted in 2008 do not
238	affect the terms or conditions of the surplus notes that were
239	approved prior to January 1, 2008. However, the board may
240	renegotiate the terms of any surplus note issued by an insurer
241	prior to January 2008 under this program upon the agreement of
242	the insurer and the board and consistent with the requirements
243	of this section as amended in 2008.
244	(11)  On January 15, 2009, the State Board of
245	Administration shall transfer to Citizens Property Insurance
246	Corporation any funds that have not been committed or reserved
247	for insurers approved to receive such funds under the program,
248	from the funds that were appropriated from Citizens Property
249	Insurance Corporation in 2008-2009 for such purposes.
250	Section 2.  Subsection (6) is added to section, 624.3161,
251	Florida Statutes, to read:
252	624.3161  Market conduct examinations.--
253	(6)  Based on the findings of a market conduct examination
254	that an insurer has exhibited a pattern or practice of willful
255	violations of an unfair insurance trade practice related to
256	claims-handling which caused harm to policyholders, as
257	prohibited by s. 626.9541(1)(i), the office may order an insurer
258	pursuant to chapter 120 to file its claims-handling practices
259	and procedures related to that line of insurance with the office
260	for review and inspection, to be held by the office for the
261	following 36-month period. Such claims-handling practices and
262	procedures are public records and are not trade secrets or
263	otherwise exempt from the provisions of s. 119.07(1). As used in
264	this section, "claims-handling practices and procedures" are any
265	policies, guidelines, rules, protocols, standard operating
266	procedures, instructions, or directives that govern or guide how
267	and the manner in which an insured's claims for benefits under
268	any policy will be processed.
269	Section 3.  Subsections (2) and (3) of section 624.4211,
270	Florida Statutes, are amended to read:
271	624.4211  Administrative fine in lieu of suspension or
272	revocation.--
273	(2)  With respect to any nonwillful violation, such fine
274	may shall not exceed $5,000 $2,500 per violation. In no event
275	shall such fine exceed an aggregate amount of $20,000 $10,000
276	for all nonwillful violations arising out of the same action. If
277	When an insurer discovers a nonwillful violation, the insurer
278	shall correct the violation and, if restitution is due, make
279	restitution to all affected persons. Such restitution shall
280	include interest at 12 percent per year from either the date of
281	the violation or the date of inception of the affected person's
282	policy, at the insurer's option. The restitution may be a credit
283	against future premiums due provided that the interest
284	accumulates shall accumulate until the premiums are due. If the
285	amount of restitution due to any person is $50 or more and the
286	insurer wishes to credit it against future premiums, it shall
287	notify such person that she or he may receive a check instead of
288	a credit. If the credit is on a policy that which is not
289	renewed, the insurer shall pay the restitution to the person to
290	whom it is due.
291	(3)  With respect to any knowing and willful violation of a
292	lawful order or rule of the office or commission or a provision
293	of this code, the office may impose a fine upon the insurer in
294	an amount not to exceed $40,000 $20,000 for each such violation.
295	In no event shall such fine exceed an aggregate amount of
296	$200,000 $100,000 for all knowing and willful violations arising
297	out of the same action. In addition to such fines, the such
298	insurer shall make restitution when due in accordance with the
299	provisions of subsection (2).
300	Section 4.  Section 624.4213, Florida Statutes, is created
301	to read:
302	624.4213  Trade secret documents.--
303	(1)  If any person who is required to submit documents or
304	other information to the office or department pursuant to the
305	Insurance Code or by rule or order of the office, department, or
306	commission claims that such submission contains a trade secret,
307	such person may file with the office or department a notice of
308	trade secret as provided in this section. Failure to do so
309	constitutes a waiver of any claim by such person that the
310	document or information is a trade secret.
311	(a)  Each page of such document or specific portion of a
312	document claimed to be a trade secret must be clearly marked as
313	"trade secret."
314	(b)  All material marked as a trade secret must be
315	separated from all non-trade secret material, such as being
316	submitted in a separate envelope clearly marked as "trade
317	secret."
318	(c)  In submitting a notice of trade secret to the office
319	or department, the submitting party must include an affidavit
320	certifying under oath to the truth of the following statements
321	concerning all documents or information that are claimed to be
322	trade secrets:
323	1.  [I consider/My company considers] this information a
324	trade secret that has value and provides an advantage or an
325	opportunity to obtain an advantage over those who do not know or
326	use it.
327	2.  [I have/My company has] taken measures to prevent the
328	disclosure of the information to anyone other that those who
329	have been selected to have access for limited purposes, and [I
330	intend/my company intends] to continue to take such measures.
331	3.  The information is not, and has not been, reasonably
332	obtainable without [my/our] consent by other persons by use of
333	legitimate means.
334	4.  The information is not publicly available elsewhere.
335	(2)  If the office or department receives a public-records
336	request for a document or information that is marked and
337	certified as a trade secret, the office or department shall
338	promptly notify the person that certified the document as a
339	trade secret. The notice shall inform such person that he or she
340	or his or her company has 30 days following receipt of such
341	notice to file an action in circuit court seeking a
342	determination whether the document in question contains trade
343	secrets and an order barring public disclosure of the document.
344	If that person or company files an action within 30 days after
345	receipt of notice of the public-records request, the office or
346	department may not release the documents pending the outcome of
347	the legal action. The failure to file an action within 30 days
348	constitutes a waiver of any claim of confidentiality and the
349	office or department shall release the document as requested.
350	(3)  The office or department may disclose a trade secret,
351	together with the claim that it is a trade secret, to an officer
352	or employee of another governmental agency whose use of the
353	trade secret is within the scope of his or her employment.
354	Section 5. Section 624.4305, Florida Statutes, is created
355	to read:
356	624.4305  Nonrenewal of residential property insurance
357	policies.--Any insurer planning to nonrenew more than 10,000
358	residential property insurance policies in this state within a
359	12-month period shall give notice in writing to the Office of
360	Insurance Regulation for informational purposes 90 days before
361	the issuance of any notices of nonrenewal. The notice provided
362	to the office must set forth the insurer's reasons for such
363	action, the effective dates of nonrenewal, and any arrangements
364	made for other insurers to offer coverage to affected
365	policyholders.
366	Section 6.  Subsection (2) of section 626.9521, Florida
367	Statutes, is amended to read:
368	626.9521  Unfair methods of competition and unfair or
369	deceptive acts or practices prohibited; penalties.--
370	(2)  Any person who violates any provision of this part
371	shall be subject to a fine in an amount not greater than $5,000
372	$2,500 for each nonwillful violation and not greater than
373	$40,000 $20,000 for each willful violation. Fines under this
374	subsection imposed against an insurer may not exceed an
375	aggregate amount of $20,000 $10,000 for all nonwillful
376	violations arising out of the same action or an aggregate amount
377	of $200,000 $100,000 for all willful violations arising out of
378	the same action. The fines authorized by this subsection may be
379	imposed in addition to any other applicable penalty.
380	Section 7.  Paragraph (i) of subsection (1) of section
381	626.9541, Florida Statutes, is amended to read:
382	626.9541  Unfair methods of competition and unfair or
383	deceptive acts or practices defined.--
384	(1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
385	ACTS.--The following are defined as unfair methods of
386	competition and unfair or deceptive acts or practices:
387	(i)  Unfair claim settlement practices.--
388	1.  Attempting to settle claims on the basis of an
389	application, when serving as a binder or intended to become a
390	part of the policy, or any other material document which was
391	altered without notice to, or knowledge or consent of, the
392	insured;
393	2.  A material misrepresentation made to an insured or any
394	other person having an interest in the proceeds payable under
395	such contract or policy, for the purpose and with the intent of
396	effecting settlement of such claims, loss, or damage under such
397	contract or policy on less favorable terms than those provided
398	in, and contemplated by, such contract or policy; or
399	3.  Committing or performing with such frequency as to
400	indicate a general business practice any of the following:
401	a.  Failing to adopt and implement standards for the proper
402	investigation of claims;
403	b.  Misrepresenting pertinent facts or insurance policy
404	provisions relating to coverages at issue;
405	c.  Failing to acknowledge and act promptly upon
406	communications with respect to claims;
407	d.  Denying claims without conducting reasonable
408	investigations based upon available information;
409	e.  Failing to affirm or deny full or partial coverage of
410	claims, and, as to partial coverage, the dollar amount or extent
411	of coverage, or failing to provide a written statement that the
412	claim is being investigated, upon the written request of the
413	insured within 30 days after proof-of-loss statements have been
414	completed;
415	f.  Failing to promptly provide a reasonable explanation in
416	writing to the insured of the basis in the insurance policy, in
417	relation to the facts or applicable law, for denial of a claim
418	or for the offer of a compromise settlement;
419	g.  Failing to promptly notify the insured of any
420	additional information necessary for the processing of a claim;
421	or
422	h.  Failing to clearly explain the nature of the requested
423	information and the reasons why such information is necessary.
424	4.  Failing to pay undisputed amounts of partial or full
425	benefits owed under first-party property insurance policies
426	within 90 days after an insurer receives notice of a residential
427	property insurance claim, determines the amounts of partial or
428	full benefits, and agrees to coverage, unless payment of the
429	undisputed benefits is prevented by an act of God, prevented by
430	unforeseen circumstances beyond the control of the insurer, or
431	due to actions by the insured or claimant that constitute fraud,
432	lack of cooperation, or intentional misrepresentation regarding
433	the claim for which benefits are owed.
434	Section 8.  Section 627.0612, Florida Statutes, is amended
435	to read:
436	627.0612  Administrative proceedings in rating
437	determinations.--
438	(1)  In any proceeding to determine whether rates, rating
439	plans, or other matters governed by this part comply with the
440	law, the appellate court shall set aside a final order of the
441	office if the office has violated s. 120.57(1)(k) by
442	substituting its findings of fact for findings of an
443	administrative law judge which were supported by competent
444	substantial evidence.
445	(2)  In an administrative hearing to determine whether an
446	insurer's rates, rating schedules, rating manuals, premium
447	credits, discount schedules, surcharge schedules, or changes
448	thereto, for property insurance comply with the law, in addition
449	to any other findings of fact, findings on the following matters
450	shall be considered findings of fact:
451	(a)  Whether a factor or factors used in a rate filing or
452	applied by the office is consistent with standard actuarial
453	techniques or practices or are otherwise based on reasonable
454	actuarial judgment.
455	(b)  Whether a factor for underwriting profit and
456	contingencies is reasonable or excessive.
457	(c)  Whether the cost of reinsurance is reasonable or
458	excessive.
459	(3)  In an administrative hearing to determine whether an
460	insurer's rates, rating schedules, rating manuals, premium
461	credits, discount schedules, surcharge schedules, or changes
462	thereto, for property insurance comply with the law, a
463	recommended order may be entered that approves, modifies, or
464	rejects the requested change. A recommended order modifying the
465	requested rate change shall recommend such change as is
466	supported by the record in the case.
467	Section 9.  Paragraphs (a), (b), and (g) of subsection (2),
468	subsection (6), and paragraph (a) of subsection (9) of section
469	627.062, Florida Statutes, are amended to read:
470	627.062  Rate standards.--
471	(2)  As to all such classes of insurance:
472	(a)  Insurers or rating organizations shall establish and
473	use rates, rating schedules, or rating manuals to allow the
474	insurer a reasonable rate of return on such classes of insurance
475	written in this state. A copy of rates, rating schedules, rating
476	manuals, premium credits or discount schedules, and surcharge
477	schedules, and changes thereto, shall be filed with the office
478	under one of the following procedures except as provided in
479	subparagraph 3.:
480	1.  If the filing is made at least 90 days before the
481	proposed effective date and the filing is not implemented during
482	the office's review of the filing and any proceeding and
483	judicial review, then such filing shall be considered a "file
484	and use" filing. In such case, the office shall finalize its
485	review by issuance of a notice of intent to approve or a notice
486	of intent to disapprove within 90 days after receipt of the
487	filing. The notice of intent to approve and the notice of intent
488	to disapprove constitute agency action for purposes of the
489	Administrative Procedure Act. Requests for supporting
490	information, requests for mathematical or mechanical
491	corrections, or notification to the insurer by the office of its
492	preliminary findings shall not toll the 90-day period during any
493	such proceedings and subsequent judicial review. The rate shall
494	be deemed approved if the office does not issue a notice of
495	intent to approve or a notice of intent to disapprove within 90
496	days after receipt of the filing.
497	2.  If the filing is not made in accordance with the
498	provisions of subparagraph 1., such filing shall be made as soon
499	as practicable, but no later than 30 days after the effective
500	date, and shall be considered a "use and file" filing. An
501	insurer making a "use and file" filing is potentially subject to
502	an order by the office to return to policyholders portions of
503	rates found to be excessive, as provided in paragraph (h).
504	3.  For all property insurance filings made or submitted
505	after January 25, 2007, but before December 31, 2009 2008, an
506	insurer seeking a rate that is greater than the rate most
507	recently approved by the office shall make a "file and use"
508	filing. This subparagraph applies to property insurance only.
509	For purposes of this subparagraph, motor vehicle collision and
510	comprehensive coverages are not considered to be property
511	coverages.
512	(b)  Upon receiving a rate filing, the office shall review
513	the rate filing to determine if a rate is excessive, inadequate,
514	or unfairly discriminatory. In making that determination, the
515	office shall, in accordance with generally accepted and
516	reasonable actuarial techniques, consider the following factors:
517	1.  Past and prospective loss experience within and without
518	this state.
519	2.  Past and prospective expenses.
520	3.  The degree of competition among insurers for the risk
521	insured.
522	4.  Investment income reasonably expected by the insurer,
523	consistent with the insurer's investment practices, from
524	investable premiums anticipated in the filing, plus any other
525	expected income from currently invested assets representing the
526	amount expected on unearned premium reserves and loss reserves.
527	The commission may adopt rules using utilizing reasonable
528	techniques of actuarial science and economics to specify the
529	manner in which insurers shall calculate investment income
530	attributable to such classes of insurance written in this state
531	and the manner in which such investment income shall be used to
532	calculate in the calculation of insurance rates. Such manner
533	shall contemplate allowances for an underwriting profit factor
534	and full consideration of investment income which produce a
535	reasonable rate of return; however, investment income from
536	invested surplus may shall not be considered.
537	5.  The reasonableness of the judgment reflected in the
538	filing.
539	6.  Dividends, savings, or unabsorbed premium deposits
540	allowed or returned to Florida policyholders, members, or
541	subscribers.
542	7.  The adequacy of loss reserves.
543	8.  The cost of reinsurance. The office shall not
544	disapprove a rate as excessive solely due to the insurer having
545	obtained catastrophic reinsurance to cover the insurer's
546	estimated 250-year probable maximum loss or any lower level of
547	loss.
548	9.  Trend factors, including trends in actual losses per
549	insured unit for the insurer making the filing.
550	10.  Conflagration and catastrophe hazards, if applicable.
551	11.  Projected hurricane losses, if applicable, which must
552	be estimated using a model or method found to be acceptable or
553	reliable by the Florida Commission on Hurricane Loss Projection
554	Methodology, and as further provided in s. 627.0628.
555	12.11.  A reasonable margin for underwriting profit and
556	contingencies. For that portion of the rate covering the risk of
557	hurricanes and other catastrophic losses for which the insurer
558	has not purchased reinsurance and has exposed its capital and
559	surplus to such risk, the office must approve a rating factor
560	that provides the insurer a reasonable rate of return that is
561	commensurate with such risk.
562	13.12.  The cost of medical services, if applicable.
563	14.13.  Other relevant factors which impact upon the
564	frequency or severity of claims or upon expenses.
565	(g)  The office may at any time review a rate, rating
566	schedule, rating manual, or rate change; the pertinent records
567	of the insurer; and market conditions. If the office finds on a
568	preliminary basis that a rate may be excessive, inadequate, or
569	unfairly discriminatory, the office shall initiate proceedings
570	to disapprove the rate and shall so notify the insurer. However,
571	the office may not disapprove as excessive any rate for which it
572	has given final approval or which has been deemed approved for a
573	period of 1 year after the effective date of the filing unless
574	the office finds that a material misrepresentation or material
575	error was made by the insurer or was contained in the filing.
576	Upon being so notified, the insurer or rating organization
577	shall, within 60 days, file with the office all information
578	which, in the belief of the insurer or organization, proves the
579	reasonableness, adequacy, and fairness of the rate or rate
580	change. The office shall issue a notice of intent to approve or
581	a notice of intent to disapprove pursuant to the procedures of
582	paragraph (a) within 90 days after receipt of the insurer's
583	initial response. In such instances and in any administrative
584	proceeding relating to the legality of the rate, the insurer or
585	rating organization shall carry the burden of proof by a
586	preponderance of the evidence to show that the rate is not
587	excessive, inadequate, or unfairly discriminatory. After the
588	office notifies an insurer that a rate may be excessive,
589	inadequate, or unfairly discriminatory, unless the office
590	withdraws the notification, the insurer shall not alter the rate
591	except to conform with the office's notice until the earlier of
592	120 days after the date the notification was provided or 180
593	days after the date of the implementation of the rate. The
594	office may, subject to chapter 120, disapprove without the 60-
595	day notification any rate increase filed by an insurer within
596	the prohibited time period or during the time that the legality
597	of the increased rate is being contested.
598
599	The provisions of this subsection shall not apply to workers'
600	compensation and employer's liability insurance and to motor
601	vehicle insurance.
602	(6)(a)  If an insurer requests an administrative hearing
603	pursuant to s. 120.57 related to a rate filing under this
604	section, the director of the Division of Administrative Hearings
605	shall expedite the hearing and assign an administrative law
606	judge who shall commence the hearing within 30 days after the
607	receipt of the formal request and shall enter a recommended
608	order within 30 days after the hearing or within 30 days after
609	receipt of the hearing transcript by the administrative law
610	judge, whichever is later. Each party shall be allowed 10 days
611	in which to submit written exceptions to the recommended order.
612	The office shall enter a final order within 30 days after the
613	entry of the recommended order. The provisions of this paragraph
614	may be waived upon stipulation of all parties.
615	(b)  Upon entry of a final order, the insurer may request a
616	expedited appellate review pursuant to the Florida Rules of
617	Appellate Procedure. It is the intent of the Legislature that
618	the First District Court of Appeal grant an insurer's request
619	for an expedited appellate review.
620	(a)  After any action with respect to a rate filing that
621	constitutes agency action for purposes of the Administrative
622	Procedure Act, except for a rate filing for medical malpractice,
623	an insurer may, in lieu of demanding a hearing under s. 120.57,
624	require arbitration of the rate filing. However, the arbitration
625	option provision in this subsection does not apply to a rate
626	filing that is made on or after the effective date of this act
627	until January 1, 2009. Arbitration shall be conducted by a board
628	of arbitrators consisting of an arbitrator selected by the
629	office, an arbitrator selected by the insurer, and an arbitrator
630	selected jointly by the other two arbitrators. Each arbitrator
631	must be certified by the American Arbitration Association. A
632	decision is valid only upon the affirmative vote of at least two
633	of the arbitrators. No arbitrator may be an employee of any
634	insurance regulator or regulatory body or of any insurer,
635	regardless of whether or not the employing insurer does business
636	in this state. The office and the insurer must treat the
637	decision of the arbitrators as the final approval of a rate
638	filing. Costs of arbitration shall be paid by the insurer.
639	(b)  Arbitration under this subsection shall be conducted
640	pursuant to the procedures specified in ss. 682.06-682.10.
641	Either party may apply to the circuit court to vacate or modify
642	the decision pursuant to s. 682.13 or s. 682.14. The commission
643	shall adopt rules for arbitration under this subsection, which
644	rules may not be inconsistent with the arbitration rules of the
645	American Arbitration Association as of January 1, 1996.
646	(c)  Upon initiation of the arbitration process, the
647	insurer waives all rights to challenge the action of the office
648	under the Administrative Procedure Act or any other provision of
649	law; however, such rights are restored to the insurer if the
650	arbitrators fail to render a decision within 90 days after
651	initiation of the arbitration process.
652	(9)(a)  Effective March 1, 2007, The chief executive
653	officer or chief financial officer of a property insurer and the
654	chief actuary of a property insurer must certify under oath and
655	subject to the penalty of perjury, on a form approved by the
656	commission, the following information, which must accompany a
657	rate filing:
658	1.  The signing officer and actuary have reviewed the rate
659	filing;
660	2.  Based on the signing officer's and actuary's knowledge,
661	the rate filing does not contain any untrue statement of a
662	material fact or omit to state a material fact necessary in
663	order to make the statements made, in light of the circumstances
664	under which such statements were made, not misleading;
665	3.  Based on the signing officer's and actuary's knowledge,
666	the information and other factors described in paragraph (2)(b),
667	including, but not limited to, investment income, fairly present
668	in all material respects the basis of the rate filing for the
669	periods presented in the filing; and
670	4.  Based on the signing officer's and actuary's knowledge,
671	the rate filing reflects all premium savings that are reasonably
672	expected to result from legislative enactments and are in
673	accordance with generally accepted and reasonable actuarial
674	techniques.
675	Section 10.  Paragraph (c) of subsection (1) and subsection
676	(3) of section 627.0628, Florida Statutes, are amended, and
677	paragraph (e) is added to subsection (1) of that section, to
678	read:
679	627.0628  Florida Commission on Hurricane Loss Projection
680	Methodology; public records exemption; public meetings
681	exemption.--
682	(1)  LEGISLATIVE FINDINGS AND INTENT.--
683	(c)  It is the intent of the Legislature to create the
684	Florida Commission on Hurricane Loss Projection Methodology as a
685	panel of experts to provide the most actuarially sophisticated
686	guidelines and standards for projection of hurricane losses
687	possible, given the current state of actuarial science. It is
688	the further intent of the Legislature that such standards and
689	guidelines must be used by the State Board of Administration in
690	developing reimbursement premium rates for the Florida Hurricane
691	Catastrophe Fund, and, subject to paragraph (3)(c), must may be
692	used by insurers in rate filings under s. 627.062 unless the way
693	in which such standards and guidelines were applied by the
694	insurer was erroneous, as shown by a preponderance of the
695	evidence.
696	(e)  The Legislature finds that the authority to take final
697	agency action with respect to insurance ratemaking is vested in
698	the Office of Insurance Regulation and the Financial Services
699	Commission, and that the processes, standards, and guidelines of
700	the Florida Commission on Hurricane Loss Projection Methodology
701	do not constitute final agency action or statements of general
702	applicability that implement, interpret, or prescribe law or
703	policy; accordingly, chapter 120 does not apply to the
704	processes, standards, and guidelines of the Florida Commission
705	on Hurricane Loss Projection Methodology.
706	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
707	(a)  The commission shall consider any actuarial methods,
708	principles, standards, models, or output ranges that have the
709	potential for improving the accuracy of or reliability of the
710	hurricane loss projections used in residential property
711	insurance rate filings. The commission shall, from time to time,
712	adopt findings as to the accuracy or reliability of particular
713	methods, principles, standards, models, or output ranges.
714	(b)  The commission shall consider any actuarial methods,
715	principles, standards, or models that have the potential for
716	improving the accuracy of or reliability of projecting probable
717	maximum loss levels. The commission shall adopt findings as to
718	the accuracy or reliability of particular methods, principles,
719	standards, or models related to probable maximum loss
720	calculations.
721	(c)(b)  In establishing reimbursement premiums for the
722	Florida Hurricane Catastrophe Fund, the State Board of
723	Administration must, to the extent feasible, employ actuarial
724	methods, principles, standards, models, or output ranges found
725	by the commission to be accurate or reliable.
726	(d)(c)  With respect to a rate filing under s. 627.062, an
727	insurer shall may employ and may not modify or adjust actuarial
728	methods, principles, standards, models, or output ranges found
729	by the commission to be accurate or reliable in determining to
730	determine hurricane loss factors for use in a rate filing under
731	s. 627.062. An insurer shall employ and may not modify or adjust
732	models found by the commission to be accurate or reliable in
733	determining probable maximum loss levels pursuant to paragraph
734	(b) with respect to a rate filing under s. 627.062 made more
735	than 60 days after the commission has made such findings. Such
736	findings and factors are admissible and relevant in
737	consideration of a rate filing by the office or in any
738	arbitration or administrative or judicial review only if the
739	office and the consumer advocate appointed pursuant to s.
740	627.0613 have access to all of the assumptions and factors that
741	were used in developing the actuarial methods, principles,
742	standards, models, or output ranges, and are not precluded from
743	disclosing such information in a rate proceeding. In any rate
744	hearing under s. 120.57 or in any arbitration proceeding under
745	s. 627.062(6), the hearing officer, judge, or arbitration panel
746	may determine whether the office and the consumer advocate were
747	provided with access to all of the assumptions and factors that
748	were used in developing the actuarial methods, principles,
749	standards, models, or output ranges and to determine their
750	admissibility.
751	(e)(d)  The commission shall adopt revisions to previously
752	adopted actuarial methods, principles, standards, models, or
753	output ranges at least annually.
754	(f)(e)1.  A trade secret, as defined in s. 812.081, that is
755	used in designing and constructing a hurricane loss model and
756	that is provided pursuant to this section, by a private company,
757	to the commission, office, or consumer advocate appointed
758	pursuant to s. 627.0613, is confidential and exempt from s.
759	119.07(1) and s. 24(a), Art. I of the State Constitution.
760	2.  That portion of a meeting of the commission or of a
761	rate proceeding on an insurer's rate filing at which a trade
762	secret made confidential and exempt by this paragraph is
763	discussed is exempt from s. 286.011 and s. 24(b), Art. I of the
764	State Constitution.
765	3.  This paragraph is subject to the Open Government Sunset
766	Review Act of 1995 in accordance with s. 119.15, and shall stand
767	repealed on October 2, 2010, unless reviewed and saved from
768	repeal through reenactment by the Legislature.
769	Section 11.  Subsection (1) of section 627.0629, Florida
770	Statutes, is amended to read:
771	627.0629  Residential property insurance; rate filings.--
772	(1)(a)  It is the intent of the Legislature that insurers
773	must provide savings to consumers who install or implement
774	windstorm damage mitigation techniques, alterations, or
775	solutions to their properties to prevent windstorm losses. A
776	rate filing for residential property insurance must include
777	actuarially reasonable discounts, credits, or other rate
778	differentials, or appropriate reductions in deductibles, for
779	properties on which fixtures or construction techniques
780	demonstrated to reduce the amount of loss in a windstorm have
781	been installed or implemented. The fixtures or construction
782	techniques shall include, but not be limited to, fixtures or
783	construction techniques which enhance roof strength, roof
784	covering performance, roof-to-wall strength, wall-to-floor-to-
785	foundation strength, opening protection, and window, door, and
786	skylight strength. Credits, discounts, or other rate
787	differentials, or appropriate reductions in deductibles, for
788	fixtures and construction techniques which meet the minimum
789	requirements of the Florida Building Code must be included in
790	the rate filing. All insurance companies must make a rate filing
791	which includes the credits, discounts, or other rate
792	differentials or reductions in deductibles by February 28, 2003.
793	By July 1, 2007, the office shall reevaluate the discounts,
794	credits, other rate differentials, and appropriate reductions in
795	deductibles for fixtures and construction techniques that meet
796	the minimum requirements of the Florida Building Code, based
797	upon actual experience or any other loss relativity studies
798	available to the office. The office shall determine the
799	discounts, credits, other rate differentials, and appropriate
800	reductions in deductibles that reflect the full actuarial value
801	of such revaluation, which may be used by insurers in rate
802	filings.
803	(b)  By February 1, 2011, the Office of Insurance
804	Regulation, in consultation with the Department of Financial
805	Services and the Department of Community Affairs, shall develop
806	and make publicly available a proposed method for insurers to
807	establish discounts, credits, or other rate differentials for
808	hurricane mitigation measures which directly correlate to the
809	numerical rating assigned to a structure pursuant to the uniform
810	home grading scale adopted by the Financial Services Commission
811	pursuant to s. 215.55865, including any proposed changes to the
812	uniform home grading scale. By October 1, 2011, the commission
813	shall adopt rules requiring insurers to make rate filings for
814	residential property insurance which revise insurers' discounts,
815	credits, or other rate differentials for hurricane mitigation
816	measures so that such rate differentials correlate directly to
817	the uniform home grading scale. The rules may include such
818	changes to the uniform home grading scale as the commission
819	determines are necessary, and may specify the minimum required
820	discounts, credits, or other rate differentials. Such rate
821	differentials must be consistent with generally accepted
822	actuarial principles and wind-loss mitigation studies. The rules
823	shall allow a period of at least 2 years after the effective
824	date of the revised mitigation discounts, credits, or other rate
825	differentials for a property owner to obtain an inspection or
826	otherwise qualify for the revised credit, during which time the
827	insurer shall continue to apply the mitigation credit that was
828	applied immediately prior to the effective date of the revised
829	credit.
830	Section 12.  Subsection (2) and paragraphs (a), (b), (c),
831	(m), (p), (w), (dd), (ee), and (ff) of subsection (6) of section
832	627.351, Florida Statutes, are amended to read:
833	627.351  Insurance risk apportionment plans.--
834	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
835	(b)  The department shall require all insurers holding a
836	certificate of authority to transact property insurance on a
837	direct basis in this state, other than joint underwriting
838	associations and other entities formed pursuant to this section,
839	to provide windstorm coverage to applicants from areas
840	determined to be eligible pursuant to paragraph (c) who in good
841	faith are entitled to, but are unable to procure, such coverage
842	through ordinary means; or it shall adopt a reasonable plan or
843	plans for the equitable apportionment or sharing among such
844	insurers of windstorm coverage, which may include formation of
845	an association for this purpose. As used in this subsection, the
846	term "property insurance" means insurance on real or personal
847	property, as defined in s. 624.604, including insurance for
848	fire, industrial fire, allied lines, farmowners multiperil,
849	homeowners' multiperil, commercial multiperil, and mobile homes,
850	and including liability coverages on all such insurance, but
851	excluding inland marine as defined in s. 624.607(3) and
852	excluding vehicle insurance as defined in s. 624.605(1)(a) other
853	than insurance on mobile homes used as permanent dwellings. The
854	department shall adopt rules that provide a formula for the
855	recovery and repayment of any deferred assessments.
856	1.  For the purpose of this section, properties eligible
857	for such windstorm coverage are defined as dwellings, buildings,
858	and other structures, including mobile homes which are used as
859	dwellings and which are tied down in compliance with mobile home
860	tie-down requirements prescribed by the Department of Highway
861	Safety and Motor Vehicles pursuant to s. 320.8325, and the
862	contents of all such properties. An applicant or policyholder is
863	eligible for coverage only if an offer of coverage cannot be
864	obtained by or for the applicant or policyholder from an
865	admitted insurer at approved rates.
866	2.a.(I)  All insurers required to be members of such
867	association shall participate in its writings, expenses, and
868	losses. Surplus of the association shall be retained for the
869	payment of claims and shall not be distributed to the member
870	insurers. Such participation by member insurers shall be in the
871	proportion that the net direct premiums of each member insurer
872	written for property insurance in this state during the
873	preceding calendar year bear to the aggregate net direct
874	premiums for property insurance of all member insurers, as
875	reduced by any credits for voluntary writings, in this state
876	during the preceding calendar year. For the purposes of this
877	subsection, the term "net direct premiums" means direct written
878	premiums for property insurance, reduced by premium for
879	liability coverage and for the following if included in allied
880	lines: rain and hail on growing crops; livestock; association
881	direct premiums booked; National Flood Insurance Program direct
882	premiums; and similar deductions specifically authorized by the
883	plan of operation and approved by the department. A member's
884	participation shall begin on the first day of the calendar year
885	following the year in which it is issued a certificate of
886	authority to transact property insurance in the state and shall
887	terminate 1 year after the end of the calendar year during which
888	it no longer holds a certificate of authority to transact
889	property insurance in the state. The commissioner, after review
890	of annual statements, other reports, and any other statistics
891	that the commissioner deems necessary, shall certify to the
892	association the aggregate direct premiums written for property
893	insurance in this state by all member insurers.
894	(II)  Effective July 1, 2002, the association shall operate
895	subject to the supervision and approval of a board of governors
896	who are the same individuals that have been appointed by the
897	Treasurer to serve on the board of governors of the Citizens
898	Property Insurance Corporation.
899	(III)  The plan of operation shall provide a formula
900	whereby a company voluntarily providing windstorm coverage in
901	affected areas will be relieved wholly or partially from
902	apportionment of a regular assessment pursuant to sub-sub-
903	subparagraph d.(I) or sub-sub-subparagraph d.(II).
904	(IV)  A company which is a member of a group of companies
905	under common management may elect to have its credits applied on
906	a group basis, and any company or group may elect to have its
907	credits applied to any other company or group.
908	(V)  There shall be no credits or relief from apportionment
909	to a company for emergency assessments collected from its
910	policyholders under sub-sub-subparagraph d.(III).
911	(VI)  The plan of operation may also provide for the award
912	of credits, for a period not to exceed 3 years, from a regular
913	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
914	subparagraph d.(II) as an incentive for taking policies out of
915	the Residential Property and Casualty Joint Underwriting
916	Association. In order to qualify for the exemption under this
917	sub-sub-subparagraph, the take-out plan must provide that at
918	least 40 percent of the policies removed from the Residential
919	Property and Casualty Joint Underwriting Association cover risks
920	located in Dade, Broward, and Palm Beach Counties or at least 30
921	percent of the policies so removed cover risks located in Dade,
922	Broward, and Palm Beach Counties and an additional 50 percent of
923	the policies so removed cover risks located in other coastal
924	counties, and must also provide that no more than 15 percent of
925	the policies so removed may exclude windstorm coverage. With the
926	approval of the department, the association may waive these
927	geographic criteria for a take-out plan that removes at least
928	the lesser of 100,000 Residential Property and Casualty Joint
929	Underwriting Association policies or 15 percent of the total
930	number of Residential Property and Casualty Joint Underwriting
931	Association policies, provided the governing board of the
932	Residential Property and Casualty Joint Underwriting Association
933	certifies that the take-out plan will materially reduce the
934	Residential Property and Casualty Joint Underwriting
935	Association's 100-year probable maximum loss from hurricanes.
936	With the approval of the department, the board may extend such
937	credits for an additional year if the insurer guarantees an
938	additional year of renewability for all policies removed from
939	the Residential Property and Casualty Joint Underwriting
940	Association, or for 2 additional years if the insurer guarantees
941	2 additional years of renewability for all policies removed from
942	the Residential Property and Casualty Joint Underwriting
943	Association.
944	b.  Assessments to pay deficits in the association under
945	this subparagraph shall be included as an appropriate factor in
946	the making of rates as provided in s. 627.3512.
947	c.  The Legislature finds that the potential for unlimited
948	deficit assessments under this subparagraph may induce insurers
949	to attempt to reduce their writings in the voluntary market, and
950	that such actions would worsen the availability problems that
951	the association was created to remedy. It is the intent of the
952	Legislature that insurers remain fully responsible for paying
953	regular assessments and collecting emergency assessments for any
954	deficits of the association; however, it is also the intent of
955	the Legislature to provide a means by which assessment
956	liabilities may be amortized over a period of years.
957	d.(I)  When the deficit incurred in a particular calendar
958	year is 10 percent or less of the aggregate statewide direct
959	written premium for property insurance for the prior calendar
960	year for all member insurers, the association shall levy an
961	assessment on member insurers in an amount equal to the deficit.
962	(II)  When the deficit incurred in a particular calendar
963	year exceeds 10 percent of the aggregate statewide direct
964	written premium for property insurance for the prior calendar
965	year for all member insurers, the association shall levy an
966	assessment on member insurers in an amount equal to the greater
967	of 10 percent of the deficit or 10 percent of the aggregate
968	statewide direct written premium for property insurance for the
969	prior calendar year for member insurers. Any remaining deficit
970	shall be recovered through emergency assessments under sub-sub-
971	subparagraph (III).
972	(III)  Upon a determination by the board of directors that
973	a deficit exceeds the amount that will be recovered through
974	regular assessments on member insurers, pursuant to sub-sub-
975	subparagraph (I) or sub-sub-subparagraph (II), the board shall
976	levy, after verification by the department, emergency
977	assessments to be collected by member insurers and by
978	underwriting associations created pursuant to this section which
979	write property insurance, upon issuance or renewal of property
980	insurance policies other than National Flood Insurance policies
981	in the year or years following levy of the regular assessments.
982	The amount of the emergency assessment collected in a particular
983	year shall be a uniform percentage of that year's direct written
984	premium for property insurance for all member insurers and
985	underwriting associations, excluding National Flood Insurance
986	policy premiums, as annually determined by the board and
987	verified by the department. The department shall verify the
988	arithmetic calculations involved in the board's determination
989	within 30 days after receipt of the information on which the
990	determination was based. Notwithstanding any other provision of
991	law, each member insurer and each underwriting association
992	created pursuant to this section shall collect emergency
993	assessments from its policyholders without such obligation being
994	affected by any credit, limitation, exemption, or deferment. The
995	emergency assessments so collected shall be transferred directly
996	to the association on a periodic basis as determined by the
997	association. The aggregate amount of emergency assessments
998	levied under this sub-sub-subparagraph in any calendar year may
999	not exceed the greater of 10 percent of the amount needed to
1000	cover the original deficit, plus interest, fees, commissions,
1001	required reserves, and other costs associated with financing of
1002	the original deficit, or 10 percent of the aggregate statewide
1003	direct written premium for property insurance written by member
1004	insurers and underwriting associations for the prior year, plus
1005	interest, fees, commissions, required reserves, and other costs
1006	associated with financing the original deficit. The board may
1007	pledge the proceeds of the emergency assessments under this sub-
1008	sub-subparagraph as the source of revenue for bonds, to retire
1009	any other debt incurred as a result of the deficit or events
1010	giving rise to the deficit, or in any other way that the board
1011	determines will efficiently recover the deficit. The emergency
1012	assessments under this sub-sub-subparagraph shall continue as
1013	long as any bonds issued or other indebtedness incurred with
1014	respect to a deficit for which the assessment was imposed remain
1015	outstanding, unless adequate provision has been made for the
1016	payment of such bonds or other indebtedness pursuant to the
1017	document governing such bonds or other indebtedness. Emergency
1018	assessments collected under this sub-sub-subparagraph are not
1019	part of an insurer's rates, are not premium, and are not subject
1020	to premium tax, fees, or commissions; however, failure to pay
1021	the emergency assessment shall be treated as failure to pay
1022	premium.
1023	(IV)  Each member insurer's share of the total regular
1024	assessments under sub-sub-subparagraph (I) or sub-sub-
1025	subparagraph (II) shall be in the proportion that the insurer's
1026	net direct premium for property insurance in this state, for the
1027	year preceding the assessment bears to the aggregate statewide
1028	net direct premium for property insurance of all member
1029	insurers, as reduced by any credits for voluntary writings for
1030	that year.
1031	(V)  If regular deficit assessments are made under sub-sub-
1032	subparagraph (I) or sub-sub-subparagraph (II), or by the
1033	Residential Property and Casualty Joint Underwriting Association
1034	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
1035	(6)(b)3.b., the association shall levy upon the association's
1036	policyholders, as part of its next rate filing, or by a separate
1037	rate filing solely for this purpose, a market equalization
1038	surcharge in a percentage equal to the total amount of such
1039	regular assessments divided by the aggregate statewide direct
1040	written premium for property insurance for member insurers for
1041	the prior calendar year. Market equalization surcharges under
1042	this sub-sub-subparagraph are not considered premium and are not
1043	subject to commissions, fees, or premium taxes; however, failure
1044	to pay a market equalization surcharge shall be treated as
1045	failure to pay premium.
1046	e.  The governing body of any unit of local government, any
1047	residents of which are insured under the plan, may issue bonds
1048	as defined in s. 125.013 or s. 166.101 to fund an assistance
1049	program, in conjunction with the association, for the purpose of
1050	defraying deficits of the association. In order to avoid
1051	needless and indiscriminate proliferation, duplication, and
1052	fragmentation of such assistance programs, any unit of local
1053	government, any residents of which are insured by the
1054	association, may provide for the payment of losses, regardless
1055	of whether or not the losses occurred within or outside of the
1056	territorial jurisdiction of the local government. Revenue bonds
1057	may not be issued until validated pursuant to chapter 75, unless
1058	a state of emergency is declared by executive order or
1059	proclamation of the Governor pursuant to s. 252.36 making such
1060	findings as are necessary to determine that it is in the best
1061	interests of, and necessary for, the protection of the public
1062	health, safety, and general welfare of residents of this state
1063	and the protection and preservation of the economic stability of
1064	insurers operating in this state, and declaring it an essential
1065	public purpose to permit certain municipalities or counties to
1066	issue bonds as will provide relief to claimants and
1067	policyholders of the association and insurers responsible for
1068	apportionment of plan losses. Any such unit of local government
1069	may enter into such contracts with the association and with any
1070	other entity created pursuant to this subsection as are
1071	necessary to carry out this paragraph. Any bonds issued under
1072	this sub-subparagraph shall be payable from and secured by
1073	moneys received by the association from assessments under this
1074	subparagraph, and assigned and pledged to or on behalf of the
1075	unit of local government for the benefit of the holders of such
1076	bonds. The funds, credit, property, and taxing power of the
1077	state or of the unit of local government shall not be pledged
1078	for the payment of such bonds. If any of the bonds remain unsold
1079	60 days after issuance, the department shall require all
1080	insurers subject to assessment to purchase the bonds, which
1081	shall be treated as admitted assets; each insurer shall be
1082	required to purchase that percentage of the unsold portion of
1083	the bond issue that equals the insurer's relative share of
1084	assessment liability under this subsection. An insurer shall not
1085	be required to purchase the bonds to the extent that the
1086	department determines that the purchase would endanger or impair
1087	the solvency of the insurer. The authority granted by this sub-
1088	subparagraph is additional to any bonding authority granted by
1089	subparagraph 6.
1090	3.  The plan shall also provide that any member with a
1091	surplus as to policyholders of $20 million or less writing 25
1092	percent or more of its total countrywide property insurance
1093	premiums in this state may petition the department, within the
1094	first 90 days of each calendar year, to qualify as a limited
1095	apportionment company. The apportionment of such a member
1096	company in any calendar year for which it is qualified shall not
1097	exceed its gross participation, which shall not be affected by
1098	the formula for voluntary writings. In no event shall a limited
1099	apportionment company be required to participate in any
1100	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1101	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1102	$50 million after payment of available plan funds in any
1103	calendar year. However, a limited apportionment company shall
1104	collect from its policyholders any emergency assessment imposed
1105	under sub-sub-subparagraph 2.d.(III). The plan shall provide
1106	that, if the department determines that any regular assessment
1107	will result in an impairment of the surplus of a limited
1108	apportionment company, the department may direct that all or
1109	part of such assessment be deferred. However, there shall be no
1110	limitation or deferment of an emergency assessment to be
1111	collected from policyholders under sub-sub-subparagraph
1112	2.d.(III).
1113	4.  The plan shall provide for the deferment, in whole or
1114	in part, of a regular assessment of a member insurer under sub-
1115	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1116	not for an emergency assessment collected from policyholders
1117	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1118	commissioner, payment of such regular assessment would endanger
1119	or impair the solvency of the member insurer. In the event a
1120	regular assessment against a member insurer is deferred in whole
1121	or in part, the amount by which such assessment is deferred may
1122	be assessed against the other member insurers in a manner
1123	consistent with the basis for assessments set forth in sub-sub-
1124	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1125	5.a.  The plan of operation may include deductibles and
1126	rules for classification of risks and rate modifications
1127	consistent with the objective of providing and maintaining funds
1128	sufficient to pay catastrophe losses.
1129	b.  The association may require arbitration of a rate
1130	filing under s. 627.062(6). It is the intent of the Legislature
1131	that the rates for coverage provided by the association be
1132	actuarially sound and not competitive with approved rates
1133	charged in the admitted voluntary market such that the
1134	association functions as a residual market mechanism to provide
1135	insurance only when the insurance cannot be procured in the
1136	voluntary market. The plan of operation shall provide a
1137	mechanism to assure that, beginning no later than January 1,
1138	1999, the rates charged by the association for each line of
1139	business are reflective of approved rates in the voluntary
1140	market for hurricane coverage for each line of business in the
1141	various areas eligible for association coverage.
1142	c.  The association shall provide for windstorm coverage on
1143	residential properties in limits up to $10 million for
1144	commercial lines residential risks and up to $1 million for
1145	personal lines residential risks. If coverage with the
1146	association is sought for a residential risk valued in excess of
1147	these limits, coverage shall be available to the risk up to the
1148	replacement cost or actual cash value of the property, at the
1149	option of the insured, if coverage for the risk cannot be
1150	located in the authorized market. The association must accept a
1151	commercial lines residential risk with limits above $10 million
1152	or a personal lines residential risk with limits above $1
1153	million if coverage is not available in the authorized market.
1154	The association may write coverage above the limits specified in
1155	this subparagraph with or without facultative or other
1156	reinsurance coverage, as the association determines appropriate.
1157	d.  The plan of operation must provide objective criteria
1158	and procedures, approved by the department, to be uniformly
1159	applied for all applicants in determining whether an individual
1160	risk is so hazardous as to be uninsurable. In making this
1161	determination and in establishing the criteria and procedures,
1162	the following shall be considered:
1163	(I)  Whether the likelihood of a loss for the individual
1164	risk is substantially higher than for other risks of the same
1165	class; and
1166	(II)  Whether the uncertainty associated with the
1167	individual risk is such that an appropriate premium cannot be
1168	determined.
1169
1170	The acceptance or rejection of a risk by the association
1171	pursuant to such criteria and procedures must be construed as
1172	the private placement of insurance, and the provisions of
1173	chapter 120 do not apply.
1174	e.  If the risk accepts an offer of coverage through the
1175	market assistance program or through a mechanism established by
1176	the association, either before the policy is issued by the
1177	association or during the first 30 days of coverage by the
1178	association, and the producing agent who submitted the
1179	application to the association is not currently appointed by the
1180	insurer, the insurer shall:
1181	(I)  Pay to the producing agent of record of the policy,
1182	for the first year, an amount that is the greater of the
1183	insurer's usual and customary commission for the type of policy
1184	written or a fee equal to the usual and customary commission of
1185	the association; or
1186	(II)  Offer to allow the producing agent of record of the
1187	policy to continue servicing the policy for a period of not less
1188	than 1 year and offer to pay the agent the greater of the
1189	insurer's or the association's usual and customary commission
1190	for the type of policy written.
1191
1192	If the producing agent is unwilling or unable to accept
1193	appointment, the new insurer shall pay the agent in accordance
1194	with sub-sub-subparagraph (I). Subject to the provisions of s.
1195	627.3517, the policies issued by the association must provide
1196	that if the association obtains an offer from an authorized
1197	insurer to cover the risk at its approved rates under either a
1198	standard policy including wind coverage or, if consistent with
1199	the insurer's underwriting rules as filed with the department, a
1200	basic policy including wind coverage, the risk is no longer
1201	eligible for coverage through the association. Upon termination
1202	of eligibility, the association shall provide written notice to
1203	the policyholder and agent of record stating that the
1204	association policy must be canceled as of 60 days after the date
1205	of the notice because of the offer of coverage from an
1206	authorized insurer. Other provisions of the insurance code
1207	relating to cancellation and notice of cancellation do not apply
1208	to actions under this sub-subparagraph.
1209	f.  When the association enters into a contractual
1210	agreement for a take-out plan, the producing agent of record of
1211	the association policy is entitled to retain any unearned
1212	commission on the policy, and the insurer shall:
1213	(I)  Pay to the producing agent of record of the
1214	association policy, for the first year, an amount that is the
1215	greater of the insurer's usual and customary commission for the
1216	type of policy written or a fee equal to the usual and customary
1217	commission of the association; or
1218	(II)  Offer to allow the producing agent of record of the
1219	association policy to continue servicing the policy for a period
1220	of not less than 1 year and offer to pay the agent the greater
1221	of the insurer's or the association's usual and customary
1222	commission for the type of policy written.
1223
1224	If the producing agent is unwilling or unable to accept
1225	appointment, the new insurer shall pay the agent in accordance
1226	with sub-sub-subparagraph (I).
1227	6.a.  The plan of operation may authorize the formation of
1228	a private nonprofit corporation, a private nonprofit
1229	unincorporated association, a partnership, a trust, a limited
1230	liability company, or a nonprofit mutual company which may be
1231	empowered, among other things, to borrow money by issuing bonds
1232	or by incurring other indebtedness and to accumulate reserves or
1233	funds to be used for the payment of insured catastrophe losses.
1234	The plan may authorize all actions necessary to facilitate the
1235	issuance of bonds, including the pledging of assessments or
1236	other revenues.
1237	b.  Any entity created under this subsection, or any entity
1238	formed for the purposes of this subsection, may sue and be sued,
1239	may borrow money; issue bonds, notes, or debt instruments;
1240	pledge or sell assessments, market equalization surcharges and
1241	other surcharges, rights, premiums, contractual rights,
1242	projected recoveries from the Florida Hurricane Catastrophe
1243	Fund, other reinsurance recoverables, and other assets as
1244	security for such bonds, notes, or debt instruments; enter into
1245	any contracts or agreements necessary or proper to accomplish
1246	such borrowings; and take other actions necessary to carry out
1247	the purposes of this subsection. The association may issue bonds
1248	or incur other indebtedness, or have bonds issued on its behalf
1249	by a unit of local government pursuant to subparagraph (6)(p)2.,
1250	in the absence of a hurricane or other weather-related event,
1251	upon a determination by the association subject to approval by
1252	the department that such action would enable it to efficiently
1253	meet the financial obligations of the association and that such
1254	financings are reasonably necessary to effectuate the
1255	requirements of this subsection. Any such entity may accumulate
1256	reserves and retain surpluses as of the end of any association
1257	year to provide for the payment of losses incurred by the
1258	association during that year or any future year. The association
1259	shall incorporate and continue the plan of operation and
1260	articles of agreement in effect on the effective date of chapter
1261	76-96, Laws of Florida, to the extent that it is not
1262	inconsistent with chapter 76-96, and as subsequently modified
1263	consistent with chapter 76-96. The board of directors and
1264	officers currently serving shall continue to serve until their
1265	successors are duly qualified as provided under the plan. The
1266	assets and obligations of the plan in effect immediately prior
1267	to the effective date of chapter 76-96 shall be construed to be
1268	the assets and obligations of the successor plan created herein.
1269	c.  In recognition of s. 10, Art. I of the State
1270	Constitution, prohibiting the impairment of obligations of
1271	contracts, it is the intent of the Legislature that no action be
1272	taken whose purpose is to impair any bond indenture or financing
1273	agreement or any revenue source committed by contract to such
1274	bond or other indebtedness issued or incurred by the association
1275	or any other entity created under this subsection.
1276	7.  On such coverage, an agent's remuneration shall be that
1277	amount of money payable to the agent by the terms of his or her
1278	contract with the company with which the business is placed.
1279	However, no commission will be paid on that portion of the
1280	premium which is in excess of the standard premium of that
1281	company.
1282	8.  Subject to approval by the department, the association
1283	may establish different eligibility requirements and operational
1284	procedures for any line or type of coverage for any specified
1285	eligible area or portion of an eligible area if the board
1286	determines that such changes to the eligibility requirements and
1287	operational procedures are justified due to the voluntary market
1288	being sufficiently stable and competitive in such area or for
1289	such line or type of coverage and that consumers who, in good
1290	faith, are unable to obtain insurance through the voluntary
1291	market through ordinary methods would continue to have access to
1292	coverage from the association. When coverage is sought in
1293	connection with a real property transfer, such requirements and
1294	procedures shall not provide for an effective date of coverage
1295	later than the date of the closing of the transfer as
1296	established by the transferor, the transferee, and, if
1297	applicable, the lender.
1298	9.  Notwithstanding any other provision of law:
1299	a.  The pledge or sale of, the lien upon, and the security
1300	interest in any rights, revenues, or other assets of the
1301	association created or purported to be created pursuant to any
1302	financing documents to secure any bonds or other indebtedness of
1303	the association shall be and remain valid and enforceable,
1304	notwithstanding the commencement of and during the continuation
1305	of, and after, any rehabilitation, insolvency, liquidation,
1306	bankruptcy, receivership, conservatorship, reorganization, or
1307	similar proceeding against the association under the laws of
1308	this state or any other applicable laws.
1309	b.  No such proceeding shall relieve the association of its
1310	obligation, or otherwise affect its ability to perform its
1311	obligation, to continue to collect, or levy and collect,
1312	assessments, market equalization or other surcharges, projected
1313	recoveries from the Florida Hurricane Catastrophe Fund,
1314	reinsurance recoverables, or any other rights, revenues, or
1315	other assets of the association pledged.
1316	c.  Each such pledge or sale of, lien upon, and security
1317	interest in, including the priority of such pledge, lien, or
1318	security interest, any such assessments, emergency assessments,
1319	market equalization or renewal surcharges, projected recoveries
1320	from the Florida Hurricane Catastrophe Fund, reinsurance
1321	recoverables, or other rights, revenues, or other assets which
1322	are collected, or levied and collected, after the commencement
1323	of and during the pendency of or after any such proceeding shall
1324	continue unaffected by such proceeding.
1325	d.  As used in this subsection, the term "financing
1326	documents" means any agreement, instrument, or other document
1327	now existing or hereafter created evidencing any bonds or other
1328	indebtedness of the association or pursuant to which any such
1329	bonds or other indebtedness has been or may be issued and
1330	pursuant to which any rights, revenues, or other assets of the
1331	association are pledged or sold to secure the repayment of such
1332	bonds or indebtedness, together with the payment of interest on
1333	such bonds or such indebtedness, or the payment of any other
1334	obligation of the association related to such bonds or
1335	indebtedness.
1336	e.  Any such pledge or sale of assessments, revenues,
1337	contract rights or other rights or assets of the association
1338	shall constitute a lien and security interest, or sale, as the
1339	case may be, that is immediately effective and attaches to such
1340	assessments, revenues, contract, or other rights or assets,
1341	whether or not imposed or collected at the time the pledge or
1342	sale is made. Any such pledge or sale is effective, valid,
1343	binding, and enforceable against the association or other entity
1344	making such pledge or sale, and valid and binding against and
1345	superior to any competing claims or obligations owed to any
1346	other person or entity, including policyholders in this state,
1347	asserting rights in any such assessments, revenues, contract, or
1348	other rights or assets to the extent set forth in and in
1349	accordance with the terms of the pledge or sale contained in the
1350	applicable financing documents, whether or not any such person
1351	or entity has notice of such pledge or sale and without the need
1352	for any physical delivery, recordation, filing, or other action.
1353	f.  There shall be no liability on the part of, and no
1354	cause of action of any nature shall arise against, any member
1355	insurer or its agents or employees, agents or employees of the
1356	association, members of the board of directors of the
1357	association, or the department or its representatives, for any
1358	action taken by them in the performance of their duties or
1359	responsibilities under this subsection. Such immunity does not
1360	apply to actions for breach of any contract or agreement
1361	pertaining to insurance, or any willful tort.
1362	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1363	(a)1.  It is the public purpose of this subsection to
1364	ensure the existence of an orderly market for property insurance
1365	for Floridians and Florida businesses. The Legislature finds
1366	that private insurers are unwilling or unable to provide
1367	affordable property insurance coverage in this state to the
1368	extent sought and needed. The absence of affordable property
1369	insurance threatens the public health, safety, and welfare and
1370	likewise threatens the economic health of the state. The state
1371	therefore has a compelling public interest and a public purpose
1372	to assist in assuring that property in the state is insured and
1373	that it is insured at affordable rates so as to facilitate the
1374	remediation, reconstruction, and replacement of damaged or
1375	destroyed property in order to reduce or avoid the negative
1376	effects otherwise resulting to the public health, safety, and
1377	welfare, to the economy of the state, and to the revenues of the
1378	state and local governments which are needed to provide for the
1379	public welfare. It is necessary, therefore, to provide
1380	affordable property insurance to applicants who are in good
1381	faith entitled to procure insurance through the voluntary market
1382	but are unable to do so. The Legislature intends by this
1383	subsection that affordable property insurance be provided and
1384	that it continue to be provided, as long as necessary, through
1385	Citizens Property Insurance Corporation, a government entity
1386	that is an integral part of the state, and that is not a private
1387	insurance company. To that end, Citizens Property Insurance
1388	Corporation shall strive to increase the availability of
1389	affordable property insurance in this state, while achieving
1390	efficiencies and economies, and while providing service to
1391	policyholders, applicants, and agents which is no less than the
1392	quality generally provided in the voluntary market, for the
1393	achievement of the foregoing public purposes. Because it is
1394	essential for this government entity to have the maximum
1395	financial resources to pay claims following a catastrophic
1396	hurricane, it is the intent of the Legislature that Citizens
1397	Property Insurance Corporation continue to be an integral part
1398	of the state and that the income of the corporation be exempt
1399	from federal income taxation and that interest on the debt
1400	obligations issued by the corporation be exempt from federal
1401	income taxation.
1402	2.  The Residential Property and Casualty Joint
1403	Underwriting Association originally created by this statute
1404	shall be known, as of July 1, 2002, as the Citizens Property
1405	Insurance Corporation. The corporation shall provide insurance
1406	for residential and commercial property, for applicants who are
1407	in good faith entitled, but are unable, to procure insurance
1408	through the voluntary market. The corporation shall operate
1409	pursuant to a plan of operation approved by order of the
1410	Financial Services Commission. The plan is subject to continuous
1411	review by the commission. The commission may, by order, withdraw
1412	approval of all or part of a plan if the commission determines
1413	that conditions have changed since approval was granted and that
1414	the purposes of the plan require changes in the plan. The
1415	corporation shall continue to operate pursuant to the plan of
1416	operation approved by the Office of Insurance Regulation until
1417	October 1, 2006. For the purposes of this subsection,
1418	residential coverage includes both personal lines residential
1419	coverage, which consists of the type of coverage provided by
1420	homeowner's, mobile home owner's, dwelling, tenant's,
1421	condominium unit owner's, and similar policies, and commercial
1422	lines residential coverage, which consists of the type of
1423	coverage provided by condominium association, apartment
1424	building, and similar policies.
1425	3.  For the purposes of this subsection, the term
1426	"homestead property" means:
1427	a.  Property that has been granted a homestead exemption
1428	under chapter 196;
1429	b.  Property for which the owner has a current, written
1430	lease with a renter for a term of at least 7 months and for
1431	which the dwelling is insured by the corporation for $200,000 or
1432	less;
1433	c.  An owner-occupied mobile home or manufactured home, as
1434	defined in s. 320.01, which is permanently affixed to real
1435	property, is owned by a Florida resident, and has been granted a
1436	homestead exemption under chapter 196 or, if the owner does not
1437	own the real property, the owner certifies that the mobile home
1438	or manufactured home is his or her principal place of residence;
1439	d.  Tenant's coverage;
1440	e.  Commercial lines residential property; or
1441	f.  Any county, district, or municipal hospital; a hospital
1442	licensed by any not-for-profit corporation qualified under s.
1443	501(c)(3) of the United States Internal Revenue Code; or a
1444	continuing care retirement community that is certified under
1445	chapter 651 and that receives an exemption from ad valorem taxes
1446	under chapter 196.
1447	4.  For the purposes of this subsection, the term
1448	"nonhomestead property" means property that is not homestead
1449	property.
1450	3.5.  Effective January 1, 2009, a personal lines
1451	residential structure that has a dwelling replacement cost of $2
1452	$1 million or more, or a single condominium unit that has a
1453	combined dwelling and content replacement cost of $2 $1 million
1454	or more is not eligible for coverage by the corporation. Such
1455	dwellings insured by the corporation on December 31, 2008, may
1456	continue to be covered by the corporation until the end of the
1457	policy term. However, such dwellings that are insured by the
1458	corporation and become ineligible for coverage due to the
1459	provisions of this subparagraph may reapply and obtain coverage
1460	in the high-risk account and be considered "nonhomestead
1461	property" if the property owner provides the corporation with a
1462	sworn affidavit from one or more insurance agents, on a form
1463	provided by the corporation, stating that the agents have made
1464	their best efforts to obtain coverage and that the property has
1465	been rejected for coverage by at least one authorized insurer
1466	and at least three surplus lines insurers. If such conditions
1467	are met, the dwelling may be insured by the corporation for up
1468	to 3 years, after which time the dwelling is ineligible for
1469	coverage. The office shall approve the method used by the
1470	corporation for valuing the dwelling replacement cost for the
1471	purposes of this subparagraph. If a policyholder is insured by
1472	the corporation prior to being determined to be ineligible
1473	pursuant to this subparagraph and such policyholder files a
1474	lawsuit challenging the determination, the policyholder may
1475	remain insured by the corporation until the conclusion of the
1476	litigation.
1477	6.  For properties constructed on or after January 1, 2009,
1478	the corporation may not insure any property located within 2,500
1479	feet landward of the coastal construction control line created
1480	pursuant to s. 161.053 unless the property meets the
1481	requirements of the code-plus building standards developed by
1482	the Florida Building Commission.
1483	4.7.  It is the intent of the Legislature that
1484	policyholders, applicants, and agents of the corporation receive
1485	service and treatment of the highest possible level but never
1486	less than that generally provided in the voluntary market. It
1487	also is intended that the corporation be held to service
1488	standards no less than those applied to insurers in the
1489	voluntary market by the office with respect to responsiveness,
1490	timeliness, customer courtesy, and overall dealings with
1491	policyholders, applicants, or agents of the corporation.
1492	5.8.  Effective January 1, 2009, a personal lines
1493	residential structure that is located in the "wind-borne debris
1494	region," as defined in s. 1609.2, International Building Code
1495	(2006), and that has an insured value on the structure of
1496	$750,000 or more is not eligible for coverage by the corporation
1497	unless the structure has opening protections as required under
1498	the Florida Building Code for a newly constructed residential
1499	structure in that area. A residential structure shall be deemed
1500	to comply with the requirements of this subparagraph if it has
1501	shutters or opening protections on all openings and if such
1502	opening protections complied with the Florida Building Code at
1503	the time they were installed. Effective January 1, 2010, for
1504	personal lines residential property insured by the corporation
1505	that is located in the wind-borne debris region and has an
1506	insured value on the structure of $500,000 or more, a
1507	prospective purchaser of any such residential property must be
1508	provided by the seller a written disclosure that contains the
1509	structure's windstorm mitigation rating based on the uniform
1510	home grading scale adopted under s. 215.55865. Such rating shall
1511	be provided to the purchaser at or before the time the purchaser
1512	executes a contract for sale and purchase.
1513	(b)1.  All insurers authorized to write one or more subject
1514	lines of business in this state are subject to assessment by the
1515	corporation and, for the purposes of this subsection, are
1516	referred to collectively as "assessable insurers." Insurers
1517	writing one or more subject lines of business in this state
1518	pursuant to part VIII of chapter 626 are not assessable
1519	insurers, but insureds who procure one or more subject lines of
1520	business in this state pursuant to part VIII of chapter 626 are
1521	subject to assessment by the corporation and are referred to
1522	collectively as "assessable insureds." An authorized insurer's
1523	assessment liability shall begin on the first day of the
1524	calendar year following the year in which the insurer was issued
1525	a certificate of authority to transact insurance for subject
1526	lines of business in this state and shall terminate 1 year after
1527	the end of the first calendar year during which the insurer no
1528	longer holds a certificate of authority to transact insurance
1529	for subject lines of business in this state.
1530	2.a.  All revenues, assets, liabilities, losses, and
1531	expenses of the corporation shall be divided into three separate
1532	accounts as follows:
1533	(I)  A personal lines account for personal residential
1534	policies issued by the corporation or issued by the Residential
1535	Property and Casualty Joint Underwriting Association and renewed
1536	by the corporation that provide comprehensive, multiperil
1537	coverage on risks that are not located in areas eligible for
1538	coverage in the Florida Windstorm Underwriting Association as
1539	those areas were defined on January 1, 2002, and for such
1540	policies that do not provide coverage for the peril of wind on
1541	risks that are located in such areas;
1542	(II)  A commercial lines account for commercial residential
1543	and commercial nonresidential policies issued by the corporation
1544	or issued by the Residential Property and Casualty Joint
1545	Underwriting Association and renewed by the corporation that
1546	provide coverage for basic property perils on risks that are not
1547	located in areas eligible for coverage in the Florida Windstorm
1548	Underwriting Association as those areas were defined on January
1549	1, 2002, and for such policies that do not provide coverage for
1550	the peril of wind on risks that are located in such areas; and
1551	(III)  A high-risk account for personal residential
1552	policies and commercial residential and commercial
1553	nonresidential property policies issued by the corporation or
1554	transferred to the corporation that provide coverage for the
1555	peril of wind on risks that are located in areas eligible for
1556	coverage in the Florida Windstorm Underwriting Association as
1557	those areas were defined on January 1, 2002. Subject to the
1558	approval of a business plan by the Financial Services Commission
1559	and Legislative Budget Commission as provided in this sub-sub-
1560	subparagraph, but no earlier than March 31, 2007, The
1561	corporation may offer policies that provide multiperil coverage
1562	and the corporation shall continue to offer policies that
1563	provide coverage only for the peril of wind for risks located in
1564	areas eligible for coverage in the high-risk account. In issuing
1565	multiperil coverage, the corporation may use its approved policy
1566	forms and rates for the personal lines account. An applicant or
1567	insured who is eligible to purchase a multiperil policy from the
1568	corporation may purchase a multiperil policy from an authorized
1569	insurer without prejudice to the applicant's or insured's
1570	eligibility to prospectively purchase a policy that provides
1571	coverage only for the peril of wind from the corporation. An
1572	applicant or insured who is eligible for a corporation policy
1573	that provides coverage only for the peril of wind may elect to
1574	purchase or retain such policy and also purchase or retain
1575	coverage excluding wind from an authorized insurer without
1576	prejudice to the applicant's or insured's eligibility to
1577	prospectively purchase a policy that provides multiperil
1578	coverage from the corporation. It is the goal of the Legislature
1579	that there would be an overall average savings of 10 percent or
1580	more for a policyholder who currently has a wind-only policy
1581	with the corporation, and an ex-wind policy with a voluntary
1582	insurer or the corporation, and who then obtains a multiperil
1583	policy from the corporation. It is the intent of the Legislature
1584	that the offer of multiperil coverage in the high-risk account
1585	be made and implemented in a manner that does not adversely
1586	affect the tax-exempt status of the corporation or
1587	creditworthiness of or security for currently outstanding
1588	financing obligations or credit facilities of the high-risk
1589	account, the personal lines account, or the commercial lines
1590	account. By March 1, 2007, the corporation shall prepare and
1591	submit for approval by the Financial Services Commission and
1592	Legislative Budget Commission a report detailing the
1593	corporation's business plan for issuing multiperil coverage in
1594	the high-risk account. The business plan shall be approved or
1595	disapproved within 30 days after receipt, as submitted or
1596	modified and resubmitted by the corporation. The business plan
1597	must include: the impact of such multiperil coverage on the
1598	corporation's financial resources, the impact of such multiperil
1599	coverage on the corporation's tax-exempt status, the manner in
1600	which the corporation plans to implement the processing of
1601	applications and policy forms for new and existing
1602	policyholders, the impact of such multiperil coverage on the
1603	corporation's ability to deliver customer service at the high
1604	level required by this subsection, the ability of the
1605	corporation to process claims, the ability of the corporation to
1606	quote and issue policies, the impact of such multiperil coverage
1607	on the corporation's agents, the impact of such multiperil
1608	coverage on the corporation's existing policyholders, and the
1609	impact of such multiperil coverage on rates and premium. The
1610	high-risk account must also include quota share primary
1611	insurance under subparagraph (c)2. The area eligible for
1612	coverage under the high-risk account also includes the area
1613	within Port Canaveral, which is bordered on the south by the
1614	City of Cape Canaveral, bordered on the west by the Banana
1615	River, and bordered on the north by Federal Government property.
1616	b.  The three separate accounts must be maintained as long
1617	as financing obligations entered into by the Florida Windstorm
1618	Underwriting Association or Residential Property and Casualty
1619	Joint Underwriting Association are outstanding, in accordance
1620	with the terms of the corresponding financing documents. When
1621	the financing obligations are no longer outstanding, in
1622	accordance with the terms of the corresponding financing
1623	documents, the corporation may use a single account for all
1624	revenues, assets, liabilities, losses, and expenses of the
1625	corporation. Consistent with the requirement of this
1626	subparagraph and prudent investment policies that minimize the
1627	cost of carrying debt, the board shall exercise its best efforts
1628	to retire existing debt or to obtain approval of necessary
1629	parties to amend the terms of existing debt, so as to structure
1630	the most efficient plan to consolidate the three separate
1631	accounts into a single account. By February 1, 2007, the board
1632	shall submit a report to the Financial Services Commission, the
1633	President of the Senate, and the Speaker of the House of
1634	Representatives which includes an analysis of consolidating the
1635	accounts, the actions the board has taken to minimize the cost
1636	of carrying debt, and its recommendations for executing the most
1637	efficient plan.
1638	c.  Creditors of the Residential Property and Casualty
1639	Joint Underwriting Association and of the accounts specified in
1640	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1641	and recourse to, the accounts referred to in sub-sub-
1642	subparagraphs a.(I) and (II) and shall have no claim against, or
1643	recourse to, the account referred to in sub-sub-subparagraph
1644	a.(III). Creditors of the Florida Windstorm Underwriting
1645	Association shall have a claim against, and recourse to, the
1646	account referred to in sub-sub-subparagraph a.(III) and shall
1647	have no claim against, or recourse to, the accounts referred to
1648	in sub-sub-subparagraphs a.(I) and (II).
1649	d.  Revenues, assets, liabilities, losses, and expenses not
1650	attributable to particular accounts shall be prorated among the
1651	accounts.
1652	e.  The Legislature finds that the revenues of the
1653	corporation are revenues that are necessary to meet the
1654	requirements set forth in documents authorizing the issuance of
1655	bonds under this subsection.
1656	f.  No part of the income of the corporation may inure to
1657	the benefit of any private person.
1658	3.  With respect to a deficit in an account:
1659	a.  After accounting for the Citizens policyholder
1660	surcharge imposed under sub-subparagraph i., when the remaining
1661	projected deficit incurred in a particular calendar year is not
1662	greater than 6 10 percent of the aggregate statewide direct
1663	written premium for the subject lines of business for the prior
1664	calendar year, the entire deficit shall be recovered through
1665	regular assessments of assessable insurers under paragraph (p)
1666	and assessable insureds.
1667	b.  After accounting for the Citizens policyholder
1668	surcharge imposed under sub-subparagraph i., when the remaining
1669	projected deficit incurred in a particular calendar year exceeds
1670	6 10 percent of the aggregate statewide direct written premium
1671	for the subject lines of business for the prior calendar year,
1672	the corporation shall levy regular assessments on assessable
1673	insurers under paragraph (p) and on assessable insureds in an
1674	amount equal to the greater of 6 10 percent of the deficit or 6
1675	10 percent of the aggregate statewide direct written premium for
1676	the subject lines of business for the prior calendar year. Any
1677	remaining deficit shall be recovered through emergency
1678	assessments under sub-subparagraph d.
1679	c.  Each assessable insurer's share of the amount being
1680	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1681	be in the proportion that the assessable insurer's direct
1682	written premium for the subject lines of business for the year
1683	preceding the assessment bears to the aggregate statewide direct
1684	written premium for the subject lines of business for that year.
1685	The assessment percentage applicable to each assessable insured
1686	is the ratio of the amount being assessed under sub-subparagraph
1687	a. or sub-subparagraph b. to the aggregate statewide direct
1688	written premium for the subject lines of business for the prior
1689	year. Assessments levied by the corporation on assessable
1690	insurers under sub-subparagraphs a. and b. shall be paid as
1691	required by the corporation's plan of operation and paragraph
1692	(p). notwithstanding any other provision of this subsection, the
1693	aggregate amount of a regular assessment for a deficit incurred
1694	in a particular calendar year shall be reduced by the estimated
1695	amount to be received by the corporation from the Citizens
1696	policyholder surcharge under subparagraph (c)10. and the amount
1697	collected or estimated to be collected from the assessment on
1698	Citizens policyholders pursuant to sub-subparagraph i.
1699	Assessments levied by the corporation on assessable insureds
1700	under sub-subparagraphs a. and b. shall be collected by the
1701	surplus lines agent at the time the surplus lines agent collects
1702	the surplus lines tax required by s. 626.932 and shall be paid
1703	to the Florida Surplus Lines Service Office at the time the
1704	surplus lines agent pays the surplus lines tax to the Florida
1705	Surplus Lines Service Office. Upon receipt of regular
1706	assessments from surplus lines agents, the Florida Surplus Lines
1707	Service Office shall transfer the assessments directly to the
1708	corporation as determined by the corporation.
1709	d.  Upon a determination by the board of governors that a
1710	deficit in an account exceeds the amount that will be recovered
1711	through regular assessments under sub-subparagraph a. or sub-
1712	subparagraph b., plus the amount that is expected to be
1713	recovered through surcharges under sub-subparagraph i., as to
1714	the remaining projected deficit the board shall levy, after
1715	verification by the office, emergency assessments, for as many
1716	years as necessary to cover the deficits, to be collected by
1717	assessable insurers and the corporation and collected from
1718	assessable insureds upon issuance or renewal of policies for
1719	subject lines of business, excluding National Flood Insurance
1720	policies. The amount of the emergency assessment collected in a
1721	particular year shall be a uniform percentage of that year's
1722	direct written premium for subject lines of business and all
1723	accounts of the corporation, excluding National Flood Insurance
1724	Program policy premiums, as annually determined by the board and
1725	verified by the office. The office shall verify the arithmetic
1726	calculations involved in the board's determination within 30
1727	days after receipt of the information on which the determination
1728	was based. Notwithstanding any other provision of law, the
1729	corporation and each assessable insurer that writes subject
1730	lines of business shall collect emergency assessments from its
1731	policyholders without such obligation being affected by any
1732	credit, limitation, exemption, or deferment. Emergency
1733	assessments levied by the corporation on assessable insureds
1734	shall be collected by the surplus lines agent at the time the
1735	surplus lines agent collects the surplus lines tax required by
1736	s. 626.932 and shall be paid to the Florida Surplus Lines
1737	Service Office at the time the surplus lines agent pays the
1738	surplus lines tax to the Florida Surplus Lines Service Office.
1739	The emergency assessments so collected shall be transferred
1740	directly to the corporation on a periodic basis as determined by
1741	the corporation and shall be held by the corporation solely in
1742	the applicable account. The aggregate amount of emergency
1743	assessments levied for an account under this sub-subparagraph in
1744	any calendar year may, at the discretion of the board of
1745	governors, be less than but may not exceed the greater of 10
1746	percent of the amount needed to cover the original deficit, plus
1747	interest, fees, commissions, required reserves, and other costs
1748	associated with financing of the original deficit, or 10 percent
1749	of the aggregate statewide direct written premium for subject
1750	lines of business and for all accounts of the corporation for
1751	the prior year, plus interest, fees, commissions, required
1752	reserves, and other costs associated with financing the original
1753	deficit.
1754	e.  The corporation may pledge the proceeds of assessments,
1755	projected recoveries from the Florida Hurricane Catastrophe
1756	Fund, other insurance and reinsurance recoverables, policyholder
1757	surcharges and other surcharges, and other funds available to
1758	the corporation as the source of revenue for and to secure bonds
1759	issued under paragraph (p), bonds or other indebtedness issued
1760	under subparagraph (c)3., or lines of credit or other financing
1761	mechanisms issued or created under this subsection, or to retire
1762	any other debt incurred as a result of deficits or events giving
1763	rise to deficits, or in any other way that the board determines
1764	will efficiently recover such deficits. The purpose of the lines
1765	of credit or other financing mechanisms is to provide additional
1766	resources to assist the corporation in covering claims and
1767	expenses attributable to a catastrophe. As used in this
1768	subsection, the term "assessments" includes regular assessments
1769	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1770	(p)1. and emergency assessments under sub-subparagraph d.
1771	Emergency assessments collected under sub-subparagraph d. are
1772	not part of an insurer's rates, are not premium, and are not
1773	subject to premium tax, fees, or commissions; however, failure
1774	to pay the emergency assessment shall be treated as failure to
1775	pay premium. The emergency assessments under sub-subparagraph d.
1776	shall continue as long as any bonds issued or other indebtedness
1777	incurred with respect to a deficit for which the assessment was
1778	imposed remain outstanding, unless adequate provision has been
1779	made for the payment of such bonds or other indebtedness
1780	pursuant to the documents governing such bonds or other
1781	indebtedness.
1782	f.  As used in this subsection for purposes of any deficit
1783	incurred on or after January 25, 2007, the term "subject lines
1784	of business" means insurance written by assessable insurers or
1785	procured by assessable insureds for all property and casualty
1786	lines of business in this state, but not including workers'
1787	compensation or medical malpractice. As used in the sub-
1788	subparagraph, the term "property and casualty lines of business"
1789	includes all lines of business identified on Form 2, Exhibit of
1790	Premiums and Losses, in the annual statement required of
1791	authorized insurers by s. 624.424 and any rule adopted under
1792	this section, except for those lines identified as accident and
1793	health insurance and except for policies written under the
1794	National Flood Insurance Program or the Federal Crop Insurance
1795	Program. For purposes of this sub-subparagraph, the term
1796	"workers' compensation" includes both workers' compensation
1797	insurance and excess workers' compensation insurance.
1798	g.  The Florida Surplus Lines Service Office shall
1799	determine annually the aggregate statewide written premium in
1800	subject lines of business procured by assessable insureds and
1801	shall report that information to the corporation in a form and
1802	at a time the corporation specifies to ensure that the
1803	corporation can meet the requirements of this subsection and the
1804	corporation's financing obligations.
1805	h.  The Florida Surplus Lines Service Office shall verify
1806	the proper application by surplus lines agents of assessment
1807	percentages for regular assessments and emergency assessments
1808	levied under this subparagraph on assessable insureds and shall
1809	assist the corporation in ensuring the accurate, timely
1810	collection and payment of assessments by surplus lines agents as
1811	required by the corporation.
1812	i.  If a deficit is incurred in any account in 2008 or
1813	thereafter, the board of governors shall levy a Citizens
1814	policyholder surcharge an immediate assessment against the
1815	premium of each nonhomestead property policyholder in all
1816	accounts of the corporation, as a uniform percentage of the
1817	premium of the policy of up to 10 percent of such premium, which
1818	funds shall be used to offset the deficit. If this assessment is
1819	insufficient to eliminate the deficit, the board of governors
1820	shall levy an additional assessment against all policyholders of
1821	the corporation for a 12-month period, which shall be collected
1822	at the time of issuance or renewal of a policy, as a uniform
1823	percentage of the premium for the policy of up to 15 10 percent
1824	of such premium, which funds shall be used to further offset the
1825	deficit. Citizens policyholder surcharges under this sub-
1826	subparagraph are not considered premium and are not subject to
1827	commissions, fees, or premium taxes. However, failure to pay
1828	such surcharges shall be treated as failure to pay premium.
1829	j.  If the amount of any assessments or surcharges
1830	collected from corporation policyholders, assessable insurers or
1831	their policyholders, or assessable insureds exceeds the amount
1832	of the deficits, such excess amounts shall be remitted to and
1833	retained by the corporation in a reserve to be used by the
1834	corporation, as determined by the board of governors and
1835	approved by the office, to pay claims or reduce any past,
1836	present, or future plan-year deficits or to reduce outstanding
1837	debt. The board of governors shall maintain separate accounting
1838	records that consolidate data for nonhomestead properties,
1839	including, but not limited to, number of policies, insured
1840	values, premiums written, and losses. The board of governors
1841	shall annually report to the office and the Legislature a
1842	summary of such data.
1843	(c)  The plan of operation of the corporation:
1844	1.  Must provide for adoption of residential property and
1845	casualty insurance policy forms and commercial residential and
1846	nonresidential property insurance forms, which forms must be
1847	approved by the office prior to use. The corporation shall adopt
1848	the following policy forms:
1849	a.  Standard personal lines policy forms that are
1850	comprehensive multiperil policies providing full coverage of a
1851	residential property equivalent to the coverage provided in the
1852	private insurance market under an HO-3, HO-4, or HO-6 policy.
1853	b.  Basic personal lines policy forms that are policies
1854	similar to an HO-8 policy or a dwelling fire policy that provide
1855	coverage meeting the requirements of the secondary mortgage
1856	market, but which coverage is more limited than the coverage
1857	under a standard policy.
1858	c.  Commercial lines residential and nonresidential policy
1859	forms that are generally similar to the basic perils of full
1860	coverage obtainable for commercial residential structures and
1861	commercial nonresidential structures in the admitted voluntary
1862	market.
1863	d.  Personal lines and commercial lines residential
1864	property insurance forms that cover the peril of wind only. The
1865	forms are applicable only to residential properties located in
1866	areas eligible for coverage under the high-risk account referred
1867	to in sub-subparagraph (b)2.a.
1868	e.  Commercial lines nonresidential property insurance
1869	forms that cover the peril of wind only. The forms are
1870	applicable only to nonresidential properties located in areas
1871	eligible for coverage under the high-risk account referred to in
1872	sub-subparagraph (b)2.a.
1873	f.  The corporation may adopt variations of the policy
1874	forms listed in sub-subparagraphs a.-e. that contain more
1875	restrictive coverage.
1876	2.a.  Must provide that the corporation adopt a program in
1877	which the corporation and authorized insurers enter into quota
1878	share primary insurance agreements for hurricane coverage, as
1879	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1880	property insurance forms for eligible risks which cover the
1881	peril of wind only. As used in this subsection, the term:
1882	(I)  "Quota share primary insurance" means an arrangement
1883	in which the primary hurricane coverage of an eligible risk is
1884	provided in specified percentages by the corporation and an
1885	authorized insurer. The corporation and authorized insurer are
1886	each solely responsible for a specified percentage of hurricane
1887	coverage of an eligible risk as set forth in a quota share
1888	primary insurance agreement between the corporation and an
1889	authorized insurer and the insurance contract. The
1890	responsibility of the corporation or authorized insurer to pay
1891	its specified percentage of hurricane losses of an eligible
1892	risk, as set forth in the quota share primary insurance
1893	agreement, may not be altered by the inability of the other
1894	party to the agreement to pay its specified percentage of
1895	hurricane losses. Eligible risks that are provided hurricane
1896	coverage through a quota share primary insurance arrangement
1897	must be provided policy forms that set forth the obligations of
1898	the corporation and authorized insurer under the arrangement,
1899	clearly specify the percentages of quota share primary insurance
1900	provided by the corporation and authorized insurer, and
1901	conspicuously and clearly state that neither the authorized
1902	insurer nor the corporation may be held responsible beyond its
1903	specified percentage of coverage of hurricane losses.
1904	(II)  "Eligible risks" means personal lines residential and
1905	commercial lines residential risks that meet the underwriting
1906	criteria of the corporation and are located in areas that were
1907	eligible for coverage by the Florida Windstorm Underwriting
1908	Association on January 1, 2002.
1909	b.  The corporation may enter into quota share primary
1910	insurance agreements with authorized insurers at corporation
1911	coverage levels of 90 percent and 50 percent.
1912	c.  If the corporation determines that additional coverage
1913	levels are necessary to maximize participation in quota share
1914	primary insurance agreements by authorized insurers, the
1915	corporation may establish additional coverage levels. However,
1916	the corporation's quota share primary insurance coverage level
1917	may not exceed 90 percent.
1918	d.  Any quota share primary insurance agreement entered
1919	into between an authorized insurer and the corporation must
1920	provide for a uniform specified percentage of coverage of
1921	hurricane losses, by county or territory as set forth by the
1922	corporation board, for all eligible risks of the authorized
1923	insurer covered under the quota share primary insurance
1924	agreement.
1925	e.  Any quota share primary insurance agreement entered
1926	into between an authorized insurer and the corporation is
1927	subject to review and approval by the office. However, such
1928	agreement shall be authorized only as to insurance contracts
1929	entered into between an authorized insurer and an insured who is
1930	already insured by the corporation for wind coverage.
1931	f.  For all eligible risks covered under quota share
1932	primary insurance agreements, the exposure and coverage levels
1933	for both the corporation and authorized insurers shall be
1934	reported by the corporation to the Florida Hurricane Catastrophe
1935	Fund. For all policies of eligible risks covered under quota
1936	share primary insurance agreements, the corporation and the
1937	authorized insurer shall maintain complete and accurate records
1938	for the purpose of exposure and loss reimbursement audits as
1939	required by Florida Hurricane Catastrophe Fund rules. The
1940	corporation and the authorized insurer shall each maintain
1941	duplicate copies of policy declaration pages and supporting
1942	claims documents.
1943	g.  The corporation board shall establish in its plan of
1944	operation standards for quota share agreements which ensure that
1945	there is no discriminatory application among insurers as to the
1946	terms of quota share agreements, pricing of quota share
1947	agreements, incentive provisions if any, and consideration paid
1948	for servicing policies or adjusting claims.
1949	h.  The quota share primary insurance agreement between the
1950	corporation and an authorized insurer must set forth the
1951	specific terms under which coverage is provided, including, but
1952	not limited to, the sale and servicing of policies issued under
1953	the agreement by the insurance agent of the authorized insurer
1954	producing the business, the reporting of information concerning
1955	eligible risks, the payment of premium to the corporation, and
1956	arrangements for the adjustment and payment of hurricane claims
1957	incurred on eligible risks by the claims adjuster and personnel
1958	of the authorized insurer. Entering into a quota sharing
1959	insurance agreement between the corporation and an authorized
1960	insurer shall be voluntary and at the discretion of the
1961	authorized insurer.
1962	3.  May provide that the corporation may employ or
1963	otherwise contract with individuals or other entities to provide
1964	administrative or professional services that may be appropriate
1965	to effectuate the plan. The corporation shall have the power to
1966	borrow funds, by issuing bonds or by incurring other
1967	indebtedness, and shall have other powers reasonably necessary
1968	to effectuate the requirements of this subsection, including,
1969	without limitation, the power to issue bonds and incur other
1970	indebtedness in order to refinance outstanding bonds or other
1971	indebtedness. The corporation may, but is not required to, seek
1972	judicial validation of its bonds or other indebtedness under
1973	chapter 75. The corporation may issue bonds or incur other
1974	indebtedness, or have bonds issued on its behalf by a unit of
1975	local government pursuant to subparagraph (p)2., in the absence
1976	of a hurricane or other weather-related event, upon a
1977	determination by the corporation, subject to approval by the
1978	office, that such action would enable it to efficiently meet the
1979	financial obligations of the corporation and that such
1980	financings are reasonably necessary to effectuate the
1981	requirements of this subsection. The corporation is authorized
1982	to take all actions needed to facilitate tax-free status for any
1983	such bonds or indebtedness, including formation of trusts or
1984	other affiliated entities. The corporation shall have the
1985	authority to pledge assessments, projected recoveries from the
1986	Florida Hurricane Catastrophe Fund, other reinsurance
1987	recoverables, market equalization and other surcharges, and
1988	other funds available to the corporation as security for bonds
1989	or other indebtedness. In recognition of s. 10, Art. I of the
1990	State Constitution, prohibiting the impairment of obligations of
1991	contracts, it is the intent of the Legislature that no action be
1992	taken whose purpose is to impair any bond indenture or financing
1993	agreement or any revenue source committed by contract to such
1994	bond or other indebtedness.
1995	4.a.  Must require that the corporation operate subject to
1996	the supervision and approval of a board of governors consisting
1997	of eight individuals who are residents of this state, from
1998	different geographical areas of this state. The Governor, the
1999	Chief Financial Officer, the President of the Senate, and the
2000	Speaker of the House of Representatives shall each appoint two
2001	members of the board. At least one of the two members appointed
2002	by each appointing officer must have demonstrated expertise in
2003	insurance. The Chief Financial Officer shall designate one of
2004	the appointees as chair. All board members serve at the pleasure
2005	of the appointing officer. All members of the board of governors
2006	are subject to removal at will by the officers who appointed
2007	them. All board members, including the chair, must be appointed
2008	to serve for 3-year terms beginning annually on a date
2009	designated by the plan. Any board vacancy shall be filled for
2010	the unexpired term by the appointing officer. The Chief
2011	Financial Officer shall appoint a technical advisory group to
2012	provide information and advice to the board of governors in
2013	connection with the board's duties under this subsection. The
2014	executive director and senior managers of the corporation shall
2015	be engaged by the board and serve at the pleasure of the board.
2016	Any executive director appointed on or after July 1, 2006, is
2017	subject to confirmation by the Senate. The executive director is
2018	responsible for employing other staff as the corporation may
2019	require, subject to review and concurrence by the board.
2020	b.  The board shall create a Market Accountability Advisory
2021	Committee to assist the corporation in developing awareness of
2022	its rates and its customer and agent service levels in
2023	relationship to the voluntary market insurers writing similar
2024	coverage. The members of the advisory committee shall consist of
2025	the following 11 persons, one of whom must be elected chair by
2026	the members of the committee: four representatives, one
2027	appointed by the Florida Association of Insurance Agents, one by
2028	the Florida Association of Insurance and Financial Advisors, one
2029	by the Professional Insurance Agents of Florida, and one by the
2030	Latin American Association of Insurance Agencies; three
2031	representatives appointed by the insurers with the three highest
2032	voluntary market share of residential property insurance
2033	business in the state; one representative from the Office of
2034	Insurance Regulation; one consumer appointed by the board who is
2035	insured by the corporation at the time of appointment to the
2036	committee; one representative appointed by the Florida
2037	Association of Realtors; and one representative appointed by the
2038	Florida Bankers Association. All members must serve for 3-year
2039	terms and may serve for consecutive terms. The committee shall
2040	report to the corporation at each board meeting on insurance
2041	market issues which may include rates and rate competition with
2042	the voluntary market; service, including policy issuance, claims
2043	processing, and general responsiveness to policyholders,
2044	applicants, and agents; and matters relating to depopulation.
2045	5.  Must provide a procedure for determining the
2046	eligibility of a risk for coverage, as follows:
2047	a.  Subject to the provisions of s. 627.3517, with respect
2048	to personal lines residential risks, if the risk is offered
2049	coverage from an authorized insurer at the insurer's approved
2050	rate under either a standard policy including wind coverage or,
2051	if consistent with the insurer's underwriting rules as filed
2052	with the office, a basic policy including wind coverage, for a
2053	new application to the corporation for coverage, the risk is not
2054	eligible for any policy issued by the corporation unless the
2055	premium for coverage from the authorized insurer is more than 15
2056	percent greater than the premium for comparable coverage from
2057	the corporation. If the risk is not able to obtain any such
2058	offer, the risk is eligible for either a standard policy
2059	including wind coverage or a basic policy including wind
2060	coverage issued by the corporation; however, if the risk could
2061	not be insured under a standard policy including wind coverage
2062	regardless of market conditions, the risk shall be eligible for
2063	a basic policy including wind coverage unless rejected under
2064	subparagraph 9. However, with regard to a policyholder of the
2065	corporation or a policyholder removed from the corporation
2066	through an assumption agreement until the end of the assumption
2067	period, the policyholder remains eligible for coverage from the
2068	corporation regardless of any offer of coverage from an
2069	authorized insurer or surplus lines insurer. The corporation
2070	shall determine the type of policy to be provided on the basis
2071	of objective standards specified in the underwriting manual and
2072	based on generally accepted underwriting practices.
2073	(I)  If the risk accepts an offer of coverage through the
2074	market assistance plan or an offer of coverage through a
2075	mechanism established by the corporation before a policy is
2076	issued to the risk by the corporation or during the first 30
2077	days of coverage by the corporation, and the producing agent who
2078	submitted the application to the plan or to the corporation is
2079	not currently appointed by the insurer, the insurer shall:
2080	(A)  Pay to the producing agent of record of the policy,
2081	for the first year, an amount that is the greater of the
2082	insurer's usual and customary commission for the type of policy
2083	written or a fee equal to the usual and customary commission of
2084	the corporation; or
2085	(B)  Offer to allow the producing agent of record of the
2086	policy to continue servicing the policy for a period of not less
2087	than 1 year and offer to pay the agent the greater of the
2088	insurer's or the corporation's usual and customary commission
2089	for the type of policy written.
2090
2091	If the producing agent is unwilling or unable to accept
2092	appointment, the new insurer shall pay the agent in accordance
2093	with sub-sub-sub-subparagraph (A).
2094	(II)  When the corporation enters into a contractual
2095	agreement for a take-out plan, the producing agent of record of
2096	the corporation policy is entitled to retain any unearned
2097	commission on the policy, and the insurer shall:
2098	(A)  Pay to the producing agent of record of the
2099	corporation policy, for the first year, an amount that is the
2100	greater of the insurer's usual and customary commission for the
2101	type of policy written or a fee equal to the usual and customary
2102	commission of the corporation; or
2103	(B)  Offer to allow the producing agent of record of the
2104	corporation policy to continue servicing the policy for a period
2105	of not less than 1 year and offer to pay the agent the greater
2106	of the insurer's or the corporation's usual and customary
2107	commission for the type of policy written.
2108
2109	If the producing agent is unwilling or unable to accept
2110	appointment, the new insurer shall pay the agent in accordance
2111	with sub-sub-sub-subparagraph (A).
2112	b.  With respect to commercial lines residential risks, for
2113	a new application to the corporation for coverage, if the risk
2114	is offered coverage under a policy including wind coverage from
2115	an authorized insurer at its approved rate, the risk is not
2116	eligible for any policy issued by the corporation unless the
2117	premium for coverage from the authorized insurer is more than 15
2118	percent greater than the premium for comparable coverage from
2119	the corporation. If the risk is not able to obtain any such
2120	offer, the risk is eligible for a policy including wind coverage
2121	issued by the corporation. However, with regard to a
2122	policyholder of the corporation or a policyholder removed from
2123	the corporation through an assumption agreement until the end of
2124	the assumption period, the policyholder remains eligible for
2125	coverage from the corporation regardless of any offer of
2126	coverage from an authorized insurer or surplus lines insurer.
2127	(I)  If the risk accepts an offer of coverage through the
2128	market assistance plan or an offer of coverage through a
2129	mechanism established by the corporation before a policy is
2130	issued to the risk by the corporation or during the first 30
2131	days of coverage by the corporation, and the producing agent who
2132	submitted the application to the plan or the corporation is not
2133	currently appointed by the insurer, the insurer shall:
2134	(A)  Pay to the producing agent of record of the policy,
2135	for the first year, an amount that is the greater of the
2136	insurer's usual and customary commission for the type of policy
2137	written or a fee equal to the usual and customary commission of
2138	the corporation; or
2139	(B)  Offer to allow the producing agent of record of the
2140	policy to continue servicing the policy for a period of not less
2141	than 1 year and offer to pay the agent the greater of the
2142	insurer's or the corporation's usual and customary commission
2143	for the type of policy written.
2144
2145	If the producing agent is unwilling or unable to accept
2146	appointment, the new insurer shall pay the agent in accordance
2147	with sub-sub-sub-subparagraph (A).
2148	(II)  When the corporation enters into a contractual
2149	agreement for a take-out plan, the producing agent of record of
2150	the corporation policy is entitled to retain any unearned
2151	commission on the policy, and the insurer shall:
2152	(A)  Pay to the producing agent of record of the
2153	corporation policy, for the first year, an amount that is the
2154	greater of the insurer's usual and customary commission for the
2155	type of policy written or a fee equal to the usual and customary
2156	commission of the corporation; or
2157	(B)  Offer to allow the producing agent of record of the
2158	corporation policy to continue servicing the policy for a period
2159	of not less than 1 year and offer to pay the agent the greater
2160	of the insurer's or the corporation's usual and customary
2161	commission for the type of policy written.
2162
2163	If the producing agent is unwilling or unable to accept
2164	appointment, the new insurer shall pay the agent in accordance
2165	with sub-sub-sub-subparagraph (A).
2166	c.  For purposes of determining comparable coverage under
2167	sub-subparagraphs a. and b., the comparison shall be based on
2168	those forms and coverages that are reasonably comparable. The
2169	corporation may rely on a determination of comparable coverage
2170	and premium made by the producing agent who submits the
2171	application to the corporation, made in the agent's capacity as
2172	the corporation's agent. A comparison may be made solely of the
2173	premium with respect to the main building or structure only on
2174	the following basis: the same coverage A or other building
2175	limits; the same percentage hurricane deductible that applies on
2176	an annual basis or that applies to each hurricane for commercial
2177	residential property; the same percentage of ordinance and law
2178	coverage, if the same limit is offered by both the corporation
2179	and the authorized insurer; the same mitigation credits, to the
2180	extent the same types of credits are offered both by the
2181	corporation and the authorized insurer; the same method for loss
2182	payment, such as replacement cost or actual cash value, if the
2183	same method is offered both by the corporation and the
2184	authorized insurer in accordance with underwriting rules; and
2185	any other form or coverage that is reasonably comparable as
2186	determined by the board. If an application is submitted to the
2187	corporation for wind-only coverage in the high-risk account, the
2188	premium for the corporation's wind-only policy plus the premium
2189	for the ex-wind policy that is offered by an authorized insurer
2190	to the applicant shall be compared to the premium for multiperil
2191	coverage offered by an authorized insurer, subject to the
2192	standards for comparison specified in this subparagraph. If the
2193	corporation or the applicant requests from the authorized
2194	insurer a breakdown of the premium of the offer by types of
2195	coverage so that a comparison may be made by the corporation or
2196	its agent and the authorized insurer refuses or is unable to
2197	provide such information, the corporation may treat the offer as
2198	not being an offer of coverage from an authorized insurer at the
2199	insurer's approved rate.
2200	6.  Must include rules for classifications of risks and
2201	rates therefor.
2202	7.  Must provide that if premium and investment income for
2203	an account attributable to a particular calendar year are in
2204	excess of projected losses and expenses for the account
2205	attributable to that year, such excess shall be held in surplus
2206	in the account. Such surplus shall be available to defray
2207	deficits in that account as to future years and shall be used
2208	for that purpose prior to assessing assessable insurers and
2209	assessable insureds as to any calendar year.
2210	8.  Must provide objective criteria and procedures to be
2211	uniformly applied for all applicants in determining whether an
2212	individual risk is so hazardous as to be uninsurable. In making
2213	this determination and in establishing the criteria and
2214	procedures, the following shall be considered:
2215	a.  Whether the likelihood of a loss for the individual
2216	risk is substantially higher than for other risks of the same
2217	class; and
2218	b.  Whether the uncertainty associated with the individual
2219	risk is such that an appropriate premium cannot be determined.
2220
2221	The acceptance or rejection of a risk by the corporation shall
2222	be construed as the private placement of insurance, and the
2223	provisions of chapter 120 shall not apply.
2224	9.  Must provide that the corporation shall make its best
2225	efforts to procure catastrophe reinsurance at reasonable rates,
2226	to cover its projected 100-year probable maximum loss as
2227	determined by the board of governors.
2228	10.  Must provide that in the event of regular deficit
2229	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2230	(b)3.b., in the personal lines account, the commercial lines
2231	residential account, or the high-risk account, the corporation
2232	shall levy upon corporation policyholders in its next rate
2233	filing, or by a separate rate filing solely for this purpose, a
2234	Citizens policyholder surcharge arising from a regular
2235	assessment in such account in a percentage equal to the total
2236	amount of such regular assessments divided by the aggregate
2237	statewide direct written premium for subject lines of business
2238	for the prior calendar year. For purposes of calculating the
2239	Citizens policyholder surcharge to be levied under this
2240	subparagraph, the total amount of the regular assessment to
2241	which this surcharge is related shall be determined as set forth
2242	in subparagraph (b)3., without deducting the estimated Citizens
2243	policyholder surcharge. Citizens policyholder surcharges under
2244	this subparagraph are not considered premium and are not subject
2245	to commissions, fees, or premium taxes; however, failure to pay
2246	a market equalization surcharge shall be treated as failure to
2247	pay premium.
2248	10.11.  The policies issued by the corporation must provide
2249	that, if the corporation or the market assistance plan obtains
2250	an offer from an authorized insurer to cover the risk at its
2251	approved rates, the risk is no longer eligible for renewal
2252	through the corporation, except as otherwise provided in this
2253	subsection.
2254	11.12.  Corporation policies and applications must include
2255	a notice that the corporation policy could, under this section,
2256	be replaced with a policy issued by an authorized insurer that
2257	does not provide coverage identical to the coverage provided by
2258	the corporation. The notice shall also specify that acceptance
2259	of corporation coverage creates a conclusive presumption that
2260	the applicant or policyholder is aware of this potential.
2261	12.13.  May establish, subject to approval by the office,
2262	different eligibility requirements and operational procedures
2263	for any line or type of coverage for any specified county or
2264	area if the board determines that such changes to the
2265	eligibility requirements and operational procedures are
2266	justified due to the voluntary market being sufficiently stable
2267	and competitive in such area or for such line or type of
2268	coverage and that consumers who, in good faith, are unable to
2269	obtain insurance through the voluntary market through ordinary
2270	methods would continue to have access to coverage from the
2271	corporation. When coverage is sought in connection with a real
2272	property transfer, such requirements and procedures shall not
2273	provide for an effective date of coverage later than the date of
2274	the closing of the transfer as established by the transferor,
2275	the transferee, and, if applicable, the lender.
2276	13.14.  Must provide that, with respect to the high-risk
2277	account, any assessable insurer with a surplus as to
2278	policyholders of $25 million or less writing 25 percent or more
2279	of its total countrywide property insurance premiums in this
2280	state may petition the office, within the first 90 days of each
2281	calendar year, to qualify as a limited apportionment company. A
2282	regular assessment levied by the corporation on a limited
2283	apportionment company for a deficit incurred by the corporation
2284	for the high-risk account in 2006 or thereafter may be paid to
2285	the corporation on a monthly basis as the assessments are
2286	collected by the limited apportionment company from its insureds
2287	pursuant to s. 627.3512, but the regular assessment must be paid
2288	in full within 12 months after being levied by the corporation.
2289	A limited apportionment company shall collect from its
2290	policyholders any emergency assessment imposed under sub-
2291	subparagraph (b)3.d. The plan shall provide that, if the office
2292	determines that any regular assessment will result in an
2293	impairment of the surplus of a limited apportionment company,
2294	the office may direct that all or part of such assessment be
2295	deferred as provided in subparagraph (p)4. However, there shall
2296	be no limitation or deferment of an emergency assessment to be
2297	collected from policyholders under sub-subparagraph (b)3.d.
2298	14.15.  Must provide that the corporation appoint as its
2299	licensed agents only those agents who also hold an appointment
2300	as defined in s. 626.015(3) with an insurer who at the time of
2301	the agent's initial appointment by the corporation is authorized
2302	to write and is actually writing personal lines residential
2303	property coverage, commercial residential property coverage, or
2304	commercial nonresidential property coverage within the state.
2305	15.16.  Must provide, by July 1, 2007, a premium payment
2306	plan option to its policyholders which allows at a minimum for
2307	quarterly and semiannual payment of premiums. A monthly payment
2308	plan may, but is not required to, be offered.
2309	16.17.  Must limit coverage on mobile homes or manufactured
2310	homes built prior to 1994 to actual cash value of the dwelling
2311	rather than replacement costs of the dwelling.
2312	17.18.  May provide such limits of coverage as the board
2313	determines, consistent with the requirements of this subsection.
2314	18.19.  May require commercial property to meet specified
2315	hurricane mitigation construction features as a condition of
2316	eligibility for coverage.
2317	(m)1.  Rates for coverage provided by the corporation shall
2318	be actuarially sound and subject to the requirements of s.
2319	627.062, except as otherwise provided in this paragraph. The
2320	corporation shall file its recommended rates with the office at
2321	least annually. The corporation shall provide any additional
2322	information regarding the rates which the office requires. The
2323	office shall consider the recommendations of the board and issue
2324	a final order establishing the rates for the corporation within
2325	45 days after the recommended rates are filed. The corporation
2326	may not pursue an administrative challenge or judicial review of
2327	the final order of the office.
2328	2.  In addition to the rates otherwise determined pursuant
2329	to this paragraph, the corporation shall impose and collect an
2330	amount equal to the premium tax provided for in s. 624.509 to
2331	augment the financial resources of the corporation.
2332	3.  After the public hurricane loss-projection model under
2333	s. 627.06281 has been found to be accurate and reliable by the
2334	Florida Commission on Hurricane Loss Projection Methodology,
2335	that model shall serve as the minimum benchmark for determining
2336	the windstorm portion of the corporation's rates. This
2337	subparagraph does not require or allow the corporation to adopt
2338	rates lower than the rates otherwise required or allowed by this
2339	paragraph.
2340	4.  The rate filings for the corporation which were
2341	approved by the office and which took effect January 1, 2007,
2342	are rescinded, except for those rates that were lowered. As soon
2343	as possible, the corporation shall begin using the lower rates
2344	that were in effect on December 31, 2006, and shall provide
2345	refunds to policyholders who have paid higher rates as a result
2346	of that rate filing. The rates in effect on December 31, 2006,
2347	shall remain in effect for the 2007 and 2008 calendar years
2348	except for any rate change that results in a lower rate. The
2349	next rate change that may increase rates shall take effect
2350	January 1, 2009, pursuant to a new rate filing recommended by
2351	the corporation and established by the office, subject to the
2352	requirements of this paragraph.
2353	5.  Beginning on July 15, 2009, and each year thereafter,
2354	the corporation must make a recommended actuarially sound rate
2355	filing for each personal and commercial line of business it
2356	writes, to be effective no earlier than January 1, 2010.
2357	(p)1.  The corporation shall certify to the office its
2358	needs for annual assessments as to a particular calendar year,
2359	and for any interim assessments that it deems to be necessary to
2360	sustain operations as to a particular year pending the receipt
2361	of annual assessments. Upon verification, the office shall
2362	approve such certification, and the corporation shall levy such
2363	annual or interim assessments. Such assessments shall be
2364	prorated as provided in paragraph (b). The corporation shall
2365	take all reasonable and prudent steps necessary to collect the
2366	amount of assessment due from each assessable insurer,
2367	including, if prudent, filing suit to collect such assessment.
2368	If the corporation is unable to collect an assessment from any
2369	assessable insurer, the uncollected assessments shall be levied
2370	as an additional assessment against the assessable insurers and
2371	any assessable insurer required to pay an additional assessment
2372	as a result of such failure to pay shall have a cause of action
2373	against such nonpaying assessable insurer. Assessments shall be
2374	included as an appropriate factor in the making of rates. The
2375	failure of a surplus lines agent to collect and remit any
2376	regular or emergency assessment levied by the corporation is
2377	considered to be a violation of s. 626.936 and subjects the
2378	surplus lines agent to the penalties provided in that section.
2379	2.  The governing body of any unit of local government, any
2380	residents of which are insured by the corporation, may issue
2381	bonds as defined in s. 125.013 or s. 166.101 from time to time
2382	to fund an assistance program, in conjunction with the
2383	corporation, for the purpose of defraying deficits of the
2384	corporation. In order to avoid needless and indiscriminate
2385	proliferation, duplication, and fragmentation of such assistance
2386	programs, any unit of local government, any residents of which
2387	are insured by the corporation, may provide for the payment of
2388	losses, regardless of whether or not the losses occurred within
2389	or outside of the territorial jurisdiction of the local
2390	government. Revenue bonds under this subparagraph may not be
2391	issued until validated pursuant to chapter 75, unless a state of
2392	emergency is declared by executive order or proclamation of the
2393	Governor pursuant to s. 252.36 making such findings as are
2394	necessary to determine that it is in the best interests of, and
2395	necessary for, the protection of the public health, safety, and
2396	general welfare of residents of this state and declaring it an
2397	essential public purpose to permit certain municipalities or
2398	counties to issue such bonds as will permit relief to claimants
2399	and policyholders of the corporation. Any such unit of local
2400	government may enter into such contracts with the corporation
2401	and with any other entity created pursuant to this subsection as
2402	are necessary to carry out this paragraph. Any bonds issued
2403	under this subparagraph shall be payable from and secured by
2404	moneys received by the corporation from emergency assessments
2405	under sub-subparagraph (b)3.d., and assigned and pledged to or
2406	on behalf of the unit of local government for the benefit of the
2407	holders of such bonds. The funds, credit, property, and taxing
2408	power of the state or of the unit of local government shall not
2409	be pledged for the payment of such bonds. If any of the bonds
2410	remain unsold 60 days after issuance, the office shall require
2411	all insurers subject to assessment to purchase the bonds, which
2412	shall be treated as admitted assets; each insurer shall be
2413	required to purchase that percentage of the unsold portion of
2414	the bond issue that equals the insurer's relative share of
2415	assessment liability under this subsection. An insurer shall not
2416	be required to purchase the bonds to the extent that the office
2417	determines that the purchase would endanger or impair the
2418	solvency of the insurer.
2419	3.a.  The corporation shall adopt one or more programs
2420	subject to approval by the office for the reduction of both new
2421	and renewal writings in the corporation. Beginning January 1,
2422	2008, any program the corporation adopts for the payment of
2423	bonuses to an insurer for each risk the insurer removes from the
2424	corporation shall comply with s. 627.3511(2) and may not exceed
2425	the amount referenced in s. 627.3511(2) for each risk removed.
2426	The corporation may consider any prudent and not unfairly
2427	discriminatory approach to reducing corporation writings, and
2428	may adopt a credit against assessment liability or other
2429	liability that provides an incentive for insurers to take risks
2430	out of the corporation and to keep risks out of the corporation
2431	by maintaining or increasing voluntary writings in counties or
2432	areas in which corporation risks are highly concentrated and a
2433	program to provide a formula under which an insurer voluntarily
2434	taking risks out of the corporation by maintaining or increasing
2435	voluntary writings will be relieved wholly or partially from
2436	assessments under sub-subparagraphs (b)3.a. and b. However, any
2437	"take-out bonus" or payment to an insurer must be conditioned on
2438	the property being insured for at least 5 years by the insurer,
2439	unless canceled or nonrenewed by the policyholder. If the policy
2440	is canceled or nonrenewed by the policyholder before the end of
2441	the 5-year period, the amount of the take-out bonus must be
2442	prorated for the time period the policy was insured. When the
2443	corporation enters into a contractual agreement for a take-out
2444	plan, the producing agent of record of the corporation policy is
2445	entitled to retain any unearned commission on such policy, and
2446	the insurer shall either:
2447	(I)  Pay to the producing agent of record of the policy,
2448	for the first year, an amount which is the greater of the
2449	insurer's usual and customary commission for the type of policy
2450	written or a policy fee equal to the usual and customary
2451	commission of the corporation; or
2452	(II)  Offer to allow the producing agent of record of the
2453	policy to continue servicing the policy for a period of not less
2454	than 1 year and offer to pay the agent the insurer's usual and
2455	customary commission for the type of policy written. If the
2456	producing agent is unwilling or unable to accept appointment by
2457	the new insurer, the new insurer shall pay the agent in
2458	accordance with sub-sub-subparagraph (I).
2459	b.  Any credit or exemption from regular assessments
2460	adopted under this subparagraph shall last no longer than the 3
2461	years following the cancellation or expiration of the policy by
2462	the corporation. With the approval of the office, the board may
2463	extend such credits for an additional year if the insurer
2464	guarantees an additional year of renewability for all policies
2465	removed from the corporation, or for 2 additional years if the
2466	insurer guarantees 2 additional years of renewability for all
2467	policies so removed.
2468	c.  There shall be no credit, limitation, exemption, or
2469	deferment from emergency assessments to be collected from
2470	policyholders pursuant to sub-subparagraph (b)3.d.
2471	4.  The plan shall provide for the deferment, in whole or
2472	in part, of the assessment of an assessable insurer, other than
2473	an emergency assessment collected from policyholders pursuant to
2474	sub-subparagraph (b)3.d., if the office finds that payment of
2475	the assessment would endanger or impair the solvency of the
2476	insurer. In the event an assessment against an assessable
2477	insurer is deferred in whole or in part, the amount by which
2478	such assessment is deferred may be assessed against the other
2479	assessable insurers in a manner consistent with the basis for
2480	assessments set forth in paragraph (b).
2481	5.  Effective July 1, 2007, in order to evaluate the costs
2482	and benefits of approved take-out plans, if the corporation pays
2483	a bonus or other payment to an insurer for an approved take-out
2484	plan, it shall maintain a record of the address or such other
2485	identifying information on the property or risk removed in order
2486	to track if and when the property or risk is later insured by
2487	the corporation.
2488	6.  Any policy taken out, assumed, or removed from the
2489	corporation is, as of the effective date of the take-out,
2490	assumption, or removal, direct insurance issued by the insurer
2491	and not by the corporation, even if the corporation continues to
2492	service the policies. This subparagraph applies to policies of
2493	the corporation and not policies taken out, assumed, or removed
2494	from any other entity.
2495	(w)1.  The following records of the corporation are
2496	confidential and exempt from the provisions of s. 119.07(1) and
2497	s. 24(a), Art. I of the State Constitution:
2498	a.  Underwriting files, except that a policyholder or an
2499	applicant shall have access to his or her own underwriting
2500	files. Confidential and exempt underwriting file records may
2501	also be released to other governmental agencies upon written
2502	request and demonstration of need; such records held by the
2503	receiving agency remain confidential and exempt as provided
2504	herein.
2505	b.  Claims files, until termination of all litigation and
2506	settlement of all claims arising out of the same incident,
2507	although portions of the claims files may remain exempt, as
2508	otherwise provided by law. Confidential and exempt claims file
2509	records may be released to other governmental agencies upon
2510	written request and demonstration of need; such records held by
2511	the receiving agency remain confidential and exempt as provided
2512	for herein.
2513	c.  Records obtained or generated by an internal auditor
2514	pursuant to a routine audit, until the audit is completed, or if
2515	the audit is conducted as part of an investigation, until the
2516	investigation is closed or ceases to be active. An investigation
2517	is considered "active" while the investigation is being
2518	conducted with a reasonable, good faith belief that it could
2519	lead to the filing of administrative, civil, or criminal
2520	proceedings.
2521	d.  Matters reasonably encompassed in privileged attorney-
2522	client communications.
2523	e.  Proprietary information licensed to the corporation
2524	under contract and the contract provides for the confidentiality
2525	of such proprietary information.
2526	f.  All information relating to the medical condition or
2527	medical status of a corporation employee which is not relevant
2528	to the employee's capacity to perform his or her duties, except
2529	as otherwise provided in this paragraph. Information that which
2530	is exempt shall include, but is not limited to, information
2531	relating to workers' compensation, insurance benefits, and
2532	retirement or disability benefits.
2533	g.  Upon an employee's entrance into the employee
2534	assistance program, a program to assist any employee who has a
2535	behavioral or medical disorder, substance abuse problem, or
2536	emotional difficulty which affects the employee's job
2537	performance, all records relative to that participation shall be
2538	confidential and exempt from the provisions of s. 119.07(1) and
2539	s. 24(a), Art. I of the State Constitution, except as otherwise
2540	provided in s. 112.0455(11).
2541	h.  Information relating to negotiations for financing,
2542	reinsurance, depopulation, or contractual services, until the
2543	conclusion of the negotiations.
2544	i.  Minutes of closed meetings regarding underwriting
2545	files, and minutes of closed meetings regarding an open claims
2546	file until termination of all litigation and settlement of all
2547	claims with regard to that claim, except that information
2548	otherwise confidential or exempt by law shall will be redacted.
2549	2.  If When an authorized insurer is considering
2550	underwriting a risk insured by the corporation, relevant
2551	underwriting files and confidential claims files may be released
2552	to the insurer provided the insurer agrees in writing, notarized
2553	and under oath, to maintain the confidentiality of such files.
2554	If When a file is transferred to an insurer that file is no
2555	longer a public record because it is not held by an agency
2556	subject to the provisions of the public records law.
2557	Underwriting files and confidential claims files may also be
2558	released to staff of and the board of governors of the market
2559	assistance plan established pursuant to s. 627.3515, who must
2560	retain the confidentiality of such files, except such files may
2561	be released to authorized insurers that are considering assuming
2562	the risks to which the files apply, provided the insurer agrees
2563	in writing, notarized and under oath, to maintain the
2564	confidentiality of such files. Finally, the corporation or the
2565	board or staff of the market assistance plan may make the
2566	following information obtained from underwriting files and
2567	confidential claims files available to licensed general lines
2568	insurance agents: name, address, and telephone number of the
2569	residential property owner or insured; location of the risk;
2570	rating information; loss history; and policy type. The receiving
2571	licensed general lines insurance agent must retain the
2572	confidentiality of the information received.
2573	3.  A policyholder who has filed suit against the
2574	corporation has the right to discover the contents of his or her
2575	own claims file to the same extent that discovery of such
2576	contents would be available from a private insurer in litigation
2577	as provided by the Florida Rules of Civil Procedure, the Florida
2578	Evidence Code, and other applicable law. Pursuant to subpoena, a
2579	third party has the right to discover the contents of an
2580	insured's or applicant's underwriting or claims file to the same
2581	extent that discovery of such contents would be available from a
2582	private insurer by subpoena as provided by the Florida Rules of
2583	Civil Procedure, the Florida Evidence Code, and other applicable
2584	law, and subject to any confidentiality protections requested by
2585	the corporation and agreed to by the seeking party or ordered by
2586	the court. The corporation may release confidential underwriting
2587	and claims file contents and information as it deems necessary
2588	and appropriate to underwrite or service insurance policies and
2589	claims, subject to any confidentiality protections deemed
2590	necessary and appropriate by the corporation.
2591	4.2.  Portions of meetings of the corporation are exempt
2592	from the provisions of s. 286.011 and s. 24(b), Art. I of the
2593	State Constitution wherein confidential underwriting files or
2594	confidential open claims files are discussed. All portions of
2595	corporation meetings which are closed to the public shall be
2596	recorded by a court reporter. The court reporter shall record
2597	the times of commencement and termination of the meeting, all
2598	discussion and proceedings, the names of all persons present at
2599	any time, and the names of all persons speaking. No portion of
2600	any closed meeting shall be off the record. Subject to the
2601	provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2602	notes of any closed meeting shall be retained by the corporation
2603	for a minimum of 5 years. A copy of the transcript, less any
2604	exempt matters, of any closed meeting wherein claims are
2605	discussed shall become public as to individual claims after
2606	settlement of the claim.
2607	(dd)1.  For policies subject to nonrenewal as a result of
2608	the risk being no longer eligible for coverage due to being
2609	valued at $1 million or more, the corporation shall, directly or
2610	through the market assistance plan, make information from
2611	confidential underwriting and claims files of policyholders
2612	available only to licensed general lines agents who register
2613	with the corporation to receive such information according to
2614	the following procedures:
2615	2.  By August 1, 2006, the corporation shall provide such
2616	policyholders who are not eligible for renewal the opportunity
2617	to request in writing, within 30 days after the notification is
2618	sent, that information from their confidential underwriting and
2619	claims files not be released to licensed general lines agents
2620	registered pursuant to this paragraph.
2621	3.  By August 1, 2006, the corporation shall make available
2622	to licensed general lines agents the registration procedures to
2623	be used to obtain confidential information from underwriting and
2624	claims files for such policies not eligible for renewal. As a
2625	condition of registration, the corporation shall require the
2626	licensed general lines agent to attest that the agent has the
2627	experience and relationships with authorized or surplus lines
2628	carriers to attempt to offer replacement coverage for such
2629	policies.
2630	4.  By September 1, 2006, the corporation shall make
2631	available through a secured website to licensed general lines
2632	agents registered pursuant to this paragraph application,
2633	rating, loss history, mitigation, and policy type information
2634	relating to such policies not eligible for renewal and for which
2635	the policyholder has not requested the corporation withhold such
2636	information. The registered licensed general lines agent may use
2637	such information to contact and assist the policyholder in
2638	securing replacement policies, and the agent may disclose to the
2639	policyholder that such information was obtained from the
2640	corporation.
2641	(dd)(ee)  The assets of the corporation may be invested and
2642	managed by the State Board of Administration.
2643	(ee)(ff)  The office may establish a pilot program to offer
2644	optional sinkhole coverage in one or more counties or other
2645	territories of the corporation for the purpose of implementing
2646	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2647	Florida. Under the pilot program, the corporation is not
2648	required to issue a notice of nonrenewal to exclude sinkhole
2649	coverage upon the renewal of existing policies, but may exclude
2650	such coverage using a notice of coverage change.
2651	Section 13.  Paragraph (b) of subsection (2) of section
2652	627.4133, Florida Statutes, is amended to read:
2653	627.4133  Notice of cancellation, nonrenewal, or renewal
2654	premium.--
2655	(2)  With respect to any personal lines or commercial
2656	residential property insurance policy, including, but not
2657	limited to, any homeowner's, mobile home owner's, farmowner's,
2658	condominium association, condominium unit owner's, apartment
2659	building, or other policy covering a residential structure or
2660	its contents:
2661	(b)  The insurer shall give the named insured written
2662	notice of nonrenewal, cancellation, or termination at least 100
2663	days prior to the effective date of the nonrenewal,
2664	cancellation, or termination. However, the insurer shall give at
2665	least 100 days' written notice, or written notice by June 1,
2666	whichever is earlier, for any nonrenewal, cancellation, or
2667	termination that would be effective between June 1 and November
2668	30. The notice must include the reason or reasons for the
2669	nonrenewal, cancellation, or termination, except that:
2670	1.  The insurer shall give the named insured written notice
2671	of nonrenewal, cancellation, or termination at least 180 days
2672	prior to the effective date of the nonrenewal, cancellation, or
2673	termination for a named insured whose residential structure has
2674	been insured by that insurer or an affiliated insurer for at
2675	least a 5-year period immediately prior to date of the written
2676	notice.
2677	2.1.  When cancellation is for nonpayment of premium, at
2678	least 10 days' written notice of cancellation accompanied by the
2679	reason therefor shall be given. As used in this subparagraph,
2680	the term "nonpayment of premium" means failure of the named
2681	insured to discharge when due any of her or his obligations in
2682	connection with the payment of premiums on a policy or any
2683	installment of such premium, whether the premium is payable
2684	directly to the insurer or its agent or indirectly under any
2685	premium finance plan or extension of credit, or failure to
2686	maintain membership in an organization if such membership is a
2687	condition precedent to insurance coverage. "Nonpayment of
2688	premium" also means the failure of a financial institution to
2689	honor an insurance applicant's check after delivery to a
2690	licensed agent for payment of a premium, even if the agent has
2691	previously delivered or transferred the premium to the insurer.
2692	If a dishonored check represents the initial premium payment,
2693	the contract and all contractual obligations shall be void ab
2694	initio unless the nonpayment is cured within the earlier of 5
2695	days after actual notice by certified mail is received by the
2696	applicant or 15 days after notice is sent to the applicant by
2697	certified mail or registered mail, and if the contract is void,
2698	any premium received by the insurer from a third party shall be
2699	refunded to that party in full.
2700	3.2.  When such cancellation or termination occurs during
2701	the first 90 days during which the insurance is in force and the
2702	insurance is canceled or terminated for reasons other than
2703	nonpayment of premium, at least 20 days' written notice of
2704	cancellation or termination accompanied by the reason therefor
2705	shall be given except where there has been a material
2706	misstatement or misrepresentation or failure to comply with the
2707	underwriting requirements established by the insurer.
2708	4.3.  The requirement for providing written notice of
2709	nonrenewal by June 1 of any nonrenewal that would be effective
2710	between June 1 and November 30 does not apply to the following
2711	situations, but the insurer remains subject to the requirement
2712	to provide such notice at least 100 days prior to the effective
2713	date of nonrenewal:
2714	a.  A policy that is nonrenewed due to a revision in the
2715	coverage for sinkhole losses and catastrophic ground cover
2716	collapse pursuant to s. 627.730, as amended by s. 30, chapter
2717	2007-1, Laws of Florida.
2718	b.  A policy that is nonrenewed by Citizens Property
2719	Insurance Corporation, pursuant to s. 627.351(6), for a policy
2720	that has been assumed by an authorized insurer offering
2721	replacement or renewal coverage to the policyholder.
2722
2723	After the policy has been in effect for 90 days, the policy
2724	shall not be canceled by the insurer except when there has been
2725	a material misstatement, a nonpayment of premium, a failure to
2726	comply with underwriting requirements established by the insurer
2727	within 90 days of the date of effectuation of coverage, or a
2728	substantial change in the risk covered by the policy or when the
2729	cancellation is for all insureds under such policies for a given
2730	class of insureds. This paragraph does not apply to individually
2731	rated risks having a policy term of less than 90 days.
2732	Section 14.  Effective January 1, 2011, section 689.262,
2733	Florida Statutes, is created to read:
2734	689.262  Sale of residential property; disclosure of
2735	windstorm mitigation rating.--A purchaser of residential
2736	property that is located in the wind-borne debris region, as
2737	defined in s. 1609.2 of the International Building Code(2006),
2738	must be informed of the windstorm mitigation rating of the
2739	structure, based on the uniform home grading scale adopted
2740	pursuant to s. 215.55865. The rating must be included in the
2741	contract for sale or as a separate document attached to the
2742	contract for sale. The Financial Services Commission may adopt
2743	rules, consistent with other state laws, to administer this
2744	section, including the form of the disclosure and the
2745	requirements for the windstorm mitigation inspection or report
2746	that is required for purposes of determining the rating.
2747	Section 15.  (1)  By December 15, 2008, Citizens Property
2748	Insurance Corporation shall transfer $250 million to the General
2749	Revenue Fund, from the personal lines account and the commercial
2750	lines account only, if the combined surplus of the personal
2751	lines account and commercial lines account as defined in s.
2752	627.351(6), Florida Statutes, exceeds $1 billion. The board of
2753	governors of Citizens Property Insurance Corporation must make a
2754	reasonable estimate of such surplus on or after December 1,
2755	2008, and no later than December 14, 2008, using generally
2756	accepted actuarial and accounting practices, recognizing that
2757	audited financial statements will not yet be available.
2758	(2)  Beginning July 1, 2009, the board shall make quarterly
2759	transfers of any interest earned prior to the issuance of any
2760	surplus notes, interest paid, and principal repaid to the state
2761	for any surplus notes issued by the program after December 1,
2762	2008, to Citizens Property Insurance Corporation, provided such
2763	surplus notes were funded exclusively by an appropriation to the
2764	program by the Legislature for the 2008-2009 fiscal year. The
2765	corporation shall credit each account as defined in s.
2766	627.351(6) in a pro rata manner for the funds removed from each
2767	account to make the transfer required by subsection (1).
2768	(3)  On July 1, 2009, the State Board of Administration
2769	shall transfer to Citizens Property Insurance Corporation any
2770	funds that have not been committed or reserved for insurers
2771	approved to receive such funds under the program from the funds
2772	that were appropriated from the corporation in 2008-2009 for
2773	such purposes.
2774	Section 16.  Citizens Property Insurance Corporation may
2775	not use any amendments made to s. 215.5595, Florida Statutes, by
2776	this act or any transfer of funds authorized by this act as
2777	justification or cause in seeking any rate or assessment
2778	increase.
2779	Section 17.  Subsection (3) is added to section 627.06281,
2780	Florida Statutes, to read:
2781	627.06281  Public hurricane loss projection model;
2782	reporting of data by insurers.--
2783	(3)(a)  A residential property insurer may have access to
2784	and use the public hurricane loss projection model, including
2785	all assumptions and factors and all detailed loss results, for
2786	the purpose of calculating rate indications in a rate filing and
2787	for analytical purposes, including any analysis or evaluation of
2788	the model required under actuarial standards of practice.
2789	(b)  By January 1, 2009, the office shall establish by rule
2790	a fee schedule for access to and the use of the model. The fee
2791	schedule must be reasonably calculated to cover only the actual
2792	costs of providing access to and the use of the model.
2793	Section 18.  Section 627.0655, Florida Statutes, is amended
2794	to read:
2795	627.0655  Policyholder loss or expense-related premium
2796	discounts.--An insurer or person authorized to engage in the
2797	business of insurance in this state may include, in the premium
2798	charged an insured for any policy, contract, or certificate of
2799	insurance, a discount based on the fact that another policy,
2800	contract, or certificate of any type has been purchased by the
2801	insured from the same insurer or insurer group, the Citizens
2802	Property Insurance Corporation created under s. 627.351(6) if
2803	the same insurance agent is servicing both policies, or an
2804	insurer that has removed the policy from the Citizens Property
2805	Insurance Corporation if the same insurance agent is servicing
2806	both policies.
2807	Section 19.  (1)  The Citizens Property Insurance
2808	Corporation Mission Review Task Force is created to analyze and
2809	compile available data and to develop a report setting forth the
2810	statutory and operational changes needed to return Citizens
2811	Property Insurance Corporation to its former role as a state-
2812	created, noncompetitive residual market mechanism that provides
2813	property insurance coverage to risks that are otherwise entitled
2814	but unable to obtain such coverage in the private insurance
2815	market. The task force shall submit a report to the Governor,
2816	the President of the Senate, and the Speaker of the House of
2817	Representatives by January 31, 2009. At a minimum, the task
2818	force shall analyze and evaluate relevant and applicable
2819	information and data and develop recommendations concerning:
2820	(a)  The nature of Citizens Property Insurance
2821	Corporation's role in providing property insurance coverage only
2822	if such coverage is not available from private insurers.
2823	(b)  The ability of the admitted market to offer policies
2824	to those consumers formerly insured through Citizens Property
2825	Insurance Corporation. This consideration shall include, but not
2826	be limited to, the availability of private market reinsurance
2827	and coverage through the Florida Hurricane Catastrophe Fund and
2828	the capacity of the industry to offer policies to former
2829	Citizens Property Insurance Corporation policyholders within
2830	existing writing ratio limitations.
2831	(c)  The relationship of rates charged by Citizens Property
2832	Insurance Corporation to rates charged by private insurers, with
2833	due consideration for the corporation's role as a noncompetitive
2834	residual market mechanism.
2835	(d)  The relationships between the exposure of Citizens
2836	Property Insurance Corporation to catastrophic hurricane losses,
2837	the corporation's history of purchasing any reinsurance
2838	coverage, and the corporation's capital capacity to meet its
2839	potential claim obligations without incurring large deficits.
2840	(e)  The projected assessments on all policies required to
2841	offset the lack of capitol to pay claims.
2842	(f)  The projections under paragraph (e) shall be specific
2843	to losses of $3 billion, $12 billion, and $23 billion caused by
2844	a storm or a group of storms in any given year.
2845	(g)  The operational implications of the variation in the
2846	number of policies in force over time in Citizens Property
2847	Insurance Corporation and the merits of outsourcing some or all
2848	of its operational responsibilities.
2849	(h)  Changes in the mission and operations of Citizens
2850	Property Insurance Corporation to reduce or eliminate any
2851	adverse effect such mission and operations may be having on the
2852	promotion of sound and economic growth and development of the
2853	coastal areas of this state.
2854	(i)  Appropriate and consistent geographic boundaries of
2855	the high-risk account.
2856	(j)  The rankings, by county, of the average approved rates
2857	in Citizens Property Insurance Corporation and any savings
2858	associated with policyholder choice in selecting Citizens.
2859	(2)  The task force shall be composed of 11 members as
2860	follows:
2861	(a)  Two members appointed by the Speaker of the House of
2862	Representatives.
2863	1.  One member representing a property and casualty
2864	residential insurer that provides at least 150,000 homeowner's
2865	insurance policies in this state at the time of the creation of
2866	the task force.
2867	2.  One member representing a surplus lines insurance
2868	company.
2869	(b)  Two members appointed by the President of the
2870	Senate.
2871	1.  One member representing a property and casualty
2872	commercial non-residential insurer.
2873	2.  One member representing a property and casualty
2874	residential insurer with fewer than 150,000 homeowner's policies
2875	in this state at the time of the creation of the task force.
2876	(c)  Three members appointed by the Governor who are not
2877	employed by or professionally affiliated with an insurance
2878	company or a subsidiary of an insurance company, at least one of
2879	whom must be consumer advocates or members of a consumer
2880	advocacy organization or agency.
2881	(d)  Two members appointed by the Chief Financial Officer
2882	representing insurance agents in this state.
2883	(e)  One member representing Citizens Property Insurance
2884	Corporation selected by Citizens Chairman of the Board.
2885	(f)  The Commissioner of Insurance Regulation or his or her
2886	designee.
2887	(3)  The task force shall conduct research, hold public
2888	meetings, receive testimony, employ consultants and
2889	administrative staff, and undertake other activities determined
2890	by its members to be necessary to complete its responsibilities.
2891	Citizens Property Insurance Corporation shall have appropriate
2892	senior staff attend task force meetings, shall respond to
2893	requests for testimony and data by the task force, shall
2894	otherwise cooperate with the task force, and shall provide
2895	funding for the necessary costs of implementing the provisions
2896	of this section.
2897	(4)  A member of the task force may not delegate his or her
2898	attendance or voting power to a designee.
2899	(5)  Members of the task force shall serve without
2900	compensation but are entitled to receive reimbursement for
2901	travel and per diem as provided in s. 112.061, Florida Statutes.
2902	(6)  The appointments to the task force must be completed
2903	within 30 calendar days after the effective date of this act,
2904	and the task force must hold its initial meeting within 1 month
2905	after appointment of all members. The task force shall expire no
2906	later than 60 calendar days after submission of the report
2907	required in subsection (1).
2908	Section 20.  The Chief Financial Officer shall provide a
2909	report on the economic impact on the state of a 1-in-100-year
2910	hurricane to the Governor, the President of the Senate, and the
2911	Speaker of the House of Representatives by March 1 of each year.
2912	The report shall include an estimate of the short-term and long-
2913	term fiscal impacts of such a storm on Citizens Property
2914	Insurance Corporation, the Florida Hurricane Catastrophe Fund,
2915	the private insurance and reinsurance markets, the state
2916	economy, and the state debt. The report shall also include an
2917	analysis of the average premium increase to fund a 1-in-100-year
2918	hurricane event and list the average cost, in both a percentage
2919	and dollar amount, impact to consumers on a county-level basis.
2920	The report may also include recommendations by the Chief
2921	Financial Officer for preparing for such a hurricane and
2922	reducing the economic impact of such a hurricane on the state.
2923	In preparing the analysis, the Chief Financial Officer shall
2924	coordinate with and obtain data from the Office of Insurance
2925	Regulation, Citizens Property Insurance Corporation, the Florida
2926	Hurricane Catastrophe Fund, the Florida Commission on Hurricane
2927	Loss Projection Methodology, the State Board of Administration,
2928	the Office of Economic and Demographic Research, and other state
2929	agencies.
2930	Section 21.  Section 627.0621, Florida Statutes, is created
2931	to read:
2932	627.0621  Transparency in rate regulation.--
2933	(1)  DEFINITIONS.--As used in this section, the term:
2934	(a)  "Rate filing" means any original or amended rate
2935	residential property insurance filing.
2936	(b)  "Recommendation" means any proposed, preliminary, or
2937	final recommendation from an office actuary reviewing a rate
2938	filing with respect to the issue of approval or disapproval of
2939	the rate filing or with respect to rate indications that the
2940	office would consider acceptable.
2941	(2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2942	INFORMATION.--With respect to any rate filing made on after July
2943	1, 2008, the office shall provide the following information on a
2944	publicly accessible Internet website:
2945	(a)  The overall rate change requested by the insurer.
2946	(b)  All assumptions made by the office's actuaries.
2947	(c)  A statement describing any assumptions or methods that
2948	deviate from the actuarial standards of practice of the Casualty
2949	Actuarial Society or the American Academy of Actuaries,
2950	including an explanation of the nature, rationale, and effect of
2951	the deviation.
2952	(d)  All recommendations made by any office actuary who
2953	reviewed the rate filing.
2954	(e)  Certification by the office's actuary that, based on
2955	the actuary's knowledge, his or her recommendations are
2956	consistent with accepted actuarial principles.
2957	(f)  The overall rate change approved by the office.
2958	(3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--It is the
2959	intent of the Legislature that the principles of the public
2960	records and open meetings laws apply to the assertion of
2961	attorney-client privilege and work product confidentiality by
2962	the office in connection with a challenge to its actions on a
2963	rate filing. Therefore, in any administrative or judicial
2964	proceeding relating to a rate filing, attorney-client privilege
2965	and work product exemptions from disclosure do not apply to
2966	communications with office attorneys or records prepared by or
2967	at the direction of an office attorney, except when the
2968	conditions of paragraphs (a) and (b) have been met:
2969	(a)  The communication or record reflects a mental
2970	impression, conclusion, litigation strategy, or legal theory of
2971	the attorney or office that was prepared exclusively for civil
2972	or criminal litigation or adversarial administrative
2973	proceedings.
2974	(b)  The communication occurred or the record was prepared
2975	after the initiation of an action in a court of competent
2976	jurisdiction, after the issuance of a notice of intent to deny a
2977	rate filing, or after the filing of a request for a proceeding
2978	under ss. 120.569 and 120.57.
2979	Section 22.  Paragraph (b) of subsection (4) of section
2980	215.555, Florida Statutes, is amended to read:
2981	215.555  Florida Hurricane Catastrophe Fund.--
2982	(4)  REIMBURSEMENT CONTRACTS.--
2983	(b)1.  The contract shall contain a promise by the board to
2984	reimburse the insurer for 45 percent, 75 percent, or 90 percent
2985	of its losses from each covered event in excess of the insurer's
2986	retention, plus 5 percent of the reimbursed losses to cover loss
2987	adjustment expenses.
2988	2.  The insurer must elect one of the percentage coverage
2989	levels specified in this paragraph and may, upon renewal of a
2990	reimbursement contract, elect a lower percentage coverage level
2991	if no revenue bonds issued under subsection (6) after a covered
2992	event are outstanding, or elect a higher percentage coverage
2993	level, regardless of whether or not revenue bonds are
2994	outstanding. All members of an insurer group must elect the same
2995	percentage coverage level. Any joint underwriting association,
2996	risk apportionment plan, or other entity created under s.
2997	627.351 must elect the 90-percent coverage level.
2998	3.  The contract shall provide that reimbursement amounts
2999	shall not be reduced by reinsurance paid or payable to the
3000	insurer from other sources.
3001	4.  Notwithstanding any other provision contained in this
3002	section, the board shall make available to insurers that
3003	purchased coverage provided by this subparagraph in 2007 2006,
3004	insurers qualifying as limited apportionment companies under s.
3005	627.351(6)(c), and insurers that have been were approved to
3006	participate in 2006 or that are approved in 2007 for the
3007	Insurance Capital Build-Up Incentive Program pursuant to s.
3008	215.5595, a contract or contract addendum that provides an
3009	additional amount of reimbursement coverage of up to $10
3010	million. The premium to be charged for this additional
3011	reimbursement coverage shall be 50 percent of the additional
3012	reimbursement coverage provided, which shall include one prepaid
3013	reinstatement. The minimum retention level that an eligible
3014	participating insurer must retain associated with this
3015	additional coverage layer is 30 percent of the insurer's surplus
3016	as of December 31, 2007 2006. This coverage shall be in addition
3017	to all other coverage that may be provided under this section.
3018	The coverage provided by the fund under this subparagraph shall
3019	be in addition to the claims-paying capacity as defined in
3020	subparagraph (c)1., but only with respect to those insurers that
3021	select the additional coverage option and meet the requirements
3022	of this subparagraph. The claims-paying capacity with respect to
3023	all other participating insurers and limited apportionment
3024	companies that do not select the additional coverage option
3025	shall be limited to their reimbursement premium's proportionate
3026	share of the actual claims-paying capacity otherwise defined in
3027	subparagraph (c)1. and as provided for under the terms of the
3028	reimbursement contract. Coverage provided in the reimbursement
3029	contract shall will not be affected by the additional premiums
3030	paid by participating insurers exercising the additional
3031	coverage option allowed in this subparagraph. This subparagraph
3032	expires on May 31, 2009 2008.
3033	Section 23.  Subsection (1) of section 627.0613, Florida
3034	Statutes, is amended to read:
3035	627.0613  Consumer advocate.--The Chief Financial Officer
3036	must appoint a consumer advocate who must represent the general
3037	public of the state before the department and the office. The
3038	consumer advocate must report directly to the Chief Financial
3039	Officer, but is not otherwise under the authority of the
3040	department or of any employee of the department. The consumer
3041	advocate has such powers as are necessary to carry out the
3042	duties of the office of consumer advocate, including, but not
3043	limited to, the powers to:
3044	(1)  Recommend to the department or office, by petition,
3045	the commencement of any proceeding or action; appear in any
3046	proceeding or action before the department or office; or appear
3047	in any proceeding before the Division of Administrative Hearings
3048	or arbitration panel specified in s. 627.062(6) relating to
3049	subject matter under the jurisdiction of the department or
3050	office.
3051	Section 24.  Subsections (1) and (2) of section 627.712,
3052	Florida Statutes, are amended to read:
3053	627.712  Residential windstorm coverage required;
3054	availability of exclusions for windstorm or contents.--
3055	(1)  An insurer issuing a residential property insurance
3056	policy must provide windstorm coverage. Except as provided in
3057	paragraph (2)(c), this section subsection does not apply with
3058	respect to risks that are eligible for wind-only coverage from
3059	Citizens Property Insurance Corporation under s. 627.351(6).
3060	(2)  A property insurer must make available, at the option
3061	of the policyholder, an exclusion of windstorm coverage.
3062	(a)  The coverage may be excluded only if:
3063	(a)1.  When the policyholder is a natural person, the
3064	policyholder personally writes and provides to the insurer the
3065	following statement in his or her own handwriting and signs his
3066	or her name, which must also be signed by every other named
3067	insured on the policy, and dated: "I do not want the insurance
3068	on my (home/mobile home/condominium unit) to pay for damage from
3069	windstorms. I will pay those costs. My insurance will not."
3070	2.  When the policyholder is other than a natural person,
3071	the policyholder provides to the insurer on the policyholder's
3072	letterhead the following statement that must be signed by the
3073	policyholder's authorized representative and dated: "  (Name of
3074	entity)   does not want the insurance on its   (type of
3075	structure)   to pay for damage from windstorms.   (Name of
3076	entity)   will be responsible for these costs.   (Name of
3077	entity's)   insurance will not."
3078	(b)  If the structure insured by the policy is subject to a
3079	mortgage or lien, the policyholder must provide the insurer with
3080	a written statement from the mortgageholder or lienholder
3081	indicating that the mortgageholder or lienholder approves the
3082	policyholder electing to exclude windstorm coverage or hurricane
3083	coverage from his or her or its property insurance policy.
3084	(c)  If the residential structure is eligible for wind-only
3085	coverage from Citizens Property Insurance Corporation, an
3086	insurer nonrenewing a policy and issuing a replacement policy,
3087	or issuing a new policy, that does not provide wind coverage
3088	shall provide a notice to the mortgageholder or lienholder
3089	indicating the policyholder has elected coverage that does not
3090	cover wind.
3091	Section 25.  The provisions of this act shall supersede and
3092	control over any conflicting provisions adopted in House Bill
3093	5057, 2008 Regular Session, to the extent of such conflict, if
3094	that bill becomes a law.
3095	Section 26.  Except as otherwise expressly provided in this
3096	act, this act shall take effect July 1, 2008.
3097
3098
3099
3100
3101
3102	-----------------------------------------------------
3103	T I T L E  A M E N D M E N T
3104	Remove the entire title and insert:
3105	A bill to be entitled
3106	An act relating to insurance; amending s. 215.5595, F.S.;
3107	revising legislative findings; providing for an appropriation of
3108	state funds in exchange for surplus notes issued by residential
3109	property insurers under the program; revising the conditions and
3110	requirements for providing funds to insurers under the program;
3111	requiring a commitment by the insurer to meet minimum premium-
3112	to-surplus writing ratios for residential property insurance and
3113	for taking policies out of Citizens Property Insurance
3114	Corporation; requiring insurers to commit to maintaining certain
3115	levels of surplus and reinsurance; authorizing the State Board
3116	of Administration to charge a fee for late payments; providing
3117	for payment of costs and fees incurred by the board in
3118	administering the program from funds appropriated to the
3119	program, subject to a specified limit; requiring the board to
3120	submit an annual report to the Legislature on the program and
3121	insurer compliance with certain requirements; providing that
3122	amendments made by the act do not affect the terms of surplus
3123	notes approved prior to a specified date; authorizing the State
3124	Board of Administration and an insurer to renegotiate such terms
3125	consistent with such amendments; requiring the State Board of
3126	Administration to transfer to Citizens Property Insurance
3127	Corporation certain uncommitted or unreserved funds; amending s.
3128	624.3161, F.S.; authorizing the Office of Insurance Regulation
3129	to require an insurer to file its claims handling practices and
3130	procedures as a public record based on findings of a market
3131	conduct examination; amending s. 624.4211, F.S.; increasing the
3132	maximum amounts of administrative fines that may be imposed upon
3133	an insurer by the Office of Insurance Regulation for nonwillful
3134	and willful violations of an order or rule of the office or any
3135	provision of the Florida Insurance Code; creating s. 624.4213,
3136	F.S.; specifying requirements for submission of a document or
3137	information to the Office of Insurance Regulation or the
3138	Department of Financial Services in order for a person to claim
3139	that the document is a trade secret; requiring each page or
3140	portion to be labeled as a trade secret and be separated from
3141	non-trade secret material; requiring the submitting party to
3142	include an affidavit certifying certain information about the
3143	documents claimed to be trade secrets; requiring the office or
3144	department to notify persons who submit trade secret documents
3145	of any public-records request and the opportunity to file a
3146	court action to bar disclosure; specifying conditions for the
3147	office to retain or release such documents; creating s.
3148	624.4305, F.S.; requiring that an insurer planning to nonrenew
3149	more than a specified number of residential property insurance
3150	policies notify the Office of Insurance Regulation and obtain
3151	approval for such nonrenewals; specifying procedures for
3152	issuance of such notice; amending s. 626.9521, F.S.; increasing
3153	the maximum fines that may be imposed by the office or
3154	department for nonwillful and willful violations of state law
3155	regarding unfair methods of competition and unfair or deceptive
3156	acts or practices related to insurance; amending s. 626.9541,
3157	F.S.; specifying an additional unfair claims settlement
3158	practice; amending s. 627.0612, F.S.; providing criteria for
3159	administrative hearings to determine whether an insurer's
3160	property insurance rates, rating manuals, premium credits,
3161	discount schedules, and surcharge schedules comply with the law;
3162	providing for entry of certain  orders; amending s. 627.062,
3163	F.S.; requiring that an insurer seeking a rate for property
3164	insurance that is greater than the rate most recently approved
3165	by the Office of Insurance Regulation make a "file and use"
3166	filing for all such rate filings made after a specified date;
3167	revising the factors the office must consider in reviewing a
3168	rate filing; prohibiting the Office of Insurance Regulation from
3169	disapproving as excessive a rate solely because the insurer
3170	obtained reinsurance covering a specified probably maximum loss;
3171	allowing the office to disapprove a rate as excessive within 1
3172	year after the rate has been approved under certain conditions
3173	related to nonrenewal of policies by the insurer; requiring the
3174	Division of Administrative Hearings to expedite a hearing
3175	request by an insurer and for the administrative law judge to
3176	commence the hearing within a specified time; authorizing an
3177	insurer to request an expedited appellate review pursuant to the
3178	Florida Rules of Appellate Procedure; expressing legislative
3179	intent for an expedited appellate review; revising provisions
3180	relating to the submission of a disputed rate filing, other than
3181	a rate filing for medical malpractice insurance, to an
3182	arbitration panel in lieu of an administrative hearing if the
3183	rate is filed before a specified date; deleting provisions
3184	relating to mandatory arbitration in lieu of certain hearings;
3185	amending s. 627.0628, F.S.; providing legislative findings
3186	relating to final agency action for insurance ratemaking;
3187	requiring the Financial Services Commission to consider and
3188	adopt findings relating to certain actuarial models, principles,
3189	standards, or models for certain maximum loss level
3190	calculations; requiring that with respect to rate filings,
3191	insurers must use actuarial methods or models found to be
3192	accurate or reliable by the Florida Commission on Hurricane Loss
3193	Projection Methodology; deleting the requirement for the Office
3194	of Insurance Regulation and the Consumer Advocate to have access
3195	to all assumptions of a hurricane loss model in order for a
3196	model that has been found to be accurate and reliable by the
3197	Florida Commission on Hurricane Loss Projection Methodology to
3198	be admissible in a rate proceeding; deleting cross-references to
3199	conform to changes made by the act; amending s. 627.0629, F.S.;
3200	requiring that the Office of Insurance Regulation develop and
3201	make publicly available before a specified deadline a proposed
3202	method for insurers to establish windstorm mitigation premium
3203	discounts that correlate to the uniform home rating scale;
3204	requiring that the Financial Services Commission adopt rules
3205	before a specified deadline; requiring insurers to make rate
3206	filings pursuant to such method; authorizing the commission to
3207	make changes by rule to the uniform home grading scale and
3208	specify by rule the minimum required discounts, credits, or
3209	other rate differentials; requiring that such rate differentials
3210	be consistent with generally accepted actuarial principles and
3211	wind loss mitigation studies; amending s. 627.351, F.S.,
3212	relating to Citizens Property Insurance Corporation; deleting a
3213	provision to conform to changes made in the act; deleting
3214	provisions defining the terms "homestead property" and
3215	"nonhomestead property"; increasing threshold replacement costs
3216	of certain structures for eligibility for coverage by the
3217	corporation; deleting requirements for certain properties to
3218	meeting building code plus requirements as a condition of
3219	eligibility for coverage by the corporation; decreasing the
3220	value at which certain structures are eligible for coverage;
3221	requiring written disclosure of windstorm mitigation ratings for
3222	certain structures; deleting outdated provisions requiring the
3223	corporation to submit a report for approval of offering
3224	multiperil coverage; revising threshold amounts of deficits
3225	incurred in a calendar year on which the decision to levy
3226	assessments and the types of such assessments are based;
3227	revising the formula used to calculate shares of assessments
3228	owed by certain assessable insureds; requiring that the board of
3229	governors make certain determinations before levying emergency
3230	assessments; providing the board of governors with discretion to
3231	set the amount of an emergency assessment within specified
3232	limits; requiring the board of governors to levy a Citizens
3233	policyholder surcharge under certain conditions; increasing the
3234	amount of the surcharge; deleting a provision requiring the levy
3235	of an immediate assessment against certain policyholders under
3236	such conditions; requiring that funds collected from the levy of
3237	such surcharges be used for certain purposes; providing that
3238	such surcharges are not considered premium and are not subject
3239	to commissions, fees, or premium taxes; requiring that the
3240	failure to pay such surcharges be treated as failure to pay
3241	premium; requiring that the amount of any assessment or
3242	surcharge which exceeds the amount of deficits be remitted to
3243	and used by the corporation for specified purposes; deleting
3244	provisions requiring that the plan of operation of the
3245	corporation provide for the levy of a Citizens policyholder
3246	surcharge if regular deficit assessments are levied as a result
3247	of deficits in certain accounts; deleting provisions related to
3248	the calculation, classification, and nonpayment of such
3249	surcharge; requiring that the corporation make an annual filing
3250	for each personal or commercial line of business it writes,
3251	beginning on a specified date; deleting a provision requiring an
3252	insurer to purchase bonds that remain unsold; deleting
3253	provisions requiring the corporation to make certain
3254	confidential underwriting and claims files available to agents
3255	to conform to changes made by the act relating to ineligibility
3256	of certain dwellings; clarifying the right of certain parties to
3257	discover underwriting and claims file records; authorizing the
3258	corporation to release such records as it deems necessary;
3259	amending s. 627.4133, F.S.; requiring insurers to provide
3260	written notice of certain cancellations, nonrenewals, or
3261	terminations; creating s. 689.262, F.S.; requiring a purchaser
3262	of residential property in wind-borne debris regions to be
3263	presented with the windstorm mitigation rating of the structure;
3264	authorizing the Financial Services Commission to adopt rules;
3265	requiring Citizens Property Insurance Corporation to transfer
3266	funds to the General Revenue Fund if the losses due to a
3267	hurricane do not exceed a specified amount; requiring the board
3268	of governors of Citizens Property Insurance Corporation to make
3269	a reasonable estimate of such losses by a certain date;
3270	requiring the board to make quarterly transfers of funds to the
3271	corporation under certain circumstances; requiring the
3272	corporation to credit certain accounts for funds removed to make
3273	certain transfers; requiring the State Board of Administration
3274	to transfer to Citizens Property Insurance Corporation certain
3275	uncommitted or unreserved funds under certain circumstances;
3276	prohibiting Citizens Property Insurance Corporation from using
3277	certain statutory changes or authorized transfers of funds as
3278	justification or cause to seek any rate or assessment increase;
3279	amending s. 627.06281, F.S.; providing for residential property
3280	insurers to have access to and use a public hurricane loss
3281	projection model; requiring the office to establish a fee
3282	schedule for such model access and use; amending s. 627.0655,
3283	F.S.; expanding application of policyholder loss or expense-
3284	related premium discounts; creating the Citizens Property
3285	Insurance Corporation Mission Review Task Force; providing
3286	purposes; requiring a report; providing report requirements;
3287	providing for appointment of members; providing
3288	responsibilities; specifying service without compensation;
3289	providing for reimbursement of per diem and travel expenses;
3290	providing meeting requirements; requiring the corporation to
3291	assist the task force; providing for the expiration of the task
3292	force; requiring the Chief Financial Officer to provide a report
3293	on the economic impact on the state of certain hurricanes;
3294	providing report requirements; creating s. 627.0621, F.S.;
3295	providing requirements for transparency in rate regulation;
3296	providing definitions; providing for a website for public access
3297	to rate filing information; providing requirements; providing
3298	for application of public meeting requirements; specifying
3299	nonapplication of attorney-client or work-product privileges to
3300	certain communications in certain administrative or judicial
3301	proceedings under certain circumstances; specifying criteria;
3302	amending s. 215.555, F.S.; extending for an additional year the
3303	offer of reimbursement coverage for specified insurers; revising
3304	the qualifying criteria for such insurers; revising provisions
3305	to conform; amending s. 627.0613, F.S.; deleting cross-
3306	references to conform to changes made by the act; amending s.
3307	627.712, F.S.; requiring insurers to provide notice to
3308	mortgageholders or lienholders of certain policies not providing
3309	wind coverage for certain structures; providing for provisions
3310	of the act to supersede and control over conflicting provisions
3311	of House Bill 5057; providing effective dates.
3312
3313

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