Amendment
Bill No. CS/CS/SB 2860

Amendment No. 870297

CHAMBER ACTION
Senate		House
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1	Representatives Ross and Reagan 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 office may determine that an insurer meets the
133	requirement for taking policies out the corporation, by written
134	notice to the board, upon a finding that the insurer made offers
135	of coverage to policyholders of the corporation which would have
136	resulted in meeting this requirement had the policyholders
137	accepted the offer. The insurer must also commit to maintaining
138	a level of surplus and reinsurance sufficient to cover in excess
139	of its 1-in-100 year probable maximum loss, as determined by a
140	hurricane loss model accepted by the Florida Commission on
141	Hurricane Loss Projection Methodology, which shall be determined
142	by the Office of Insurance Regulation and certified annually to
143	the board. If the board determines that the insurer has failed
144	to meet any of the requirements of this paragraph required ratio
145	is not maintained during the term of the surplus note, the board
146	may increase the interest rate, accelerate the repayment of
147	interest and principal, or shorten the term of the surplus note,
148	subject to approval by the Commissioner of Insurance of payments
149	by the insurer of principal and interest as provided in
150	paragraph (f).
151	(e)  If the requirements of this section are met, the board
152	may approve an application by an insurer for funds in exchange
153	for issuance of a surplus note, unless the board determines that
154	the financial condition of the insurer and its business plan for
155	writing residential property insurance in Florida places an
156	unreasonably high level of financial risk to the state of
157	nonpayment in full of the interest and principal. The board
158	shall consult with the Office of Insurance Regulation and may
159	contract with independent financial and insurance consultants in
160	making this determination.
161	(f)  The surplus note must be repayable to the state with a
162	term of 20 years. The surplus note shall accrue interest on the
163	unpaid principal balance at a rate equivalent to the 10-year
164	U.S. Treasury Bond rate, require the payment only of interest
165	during the first 3 years, and include such other terms as
166	approved by the board. The board may charge late fees up to 5
167	percent for late payments or other late remittances. Payment of
168	principal, or interest, or late fees by the insurer on the
169	surplus note must be approved by the Commissioner of Insurance,
170	who shall approve such payment unless the commissioner
171	determines that such payment will substantially impair the
172	financial condition of the insurer. If such a determination is
173	made, the commissioner shall approve such payment that will not
174	substantially impair the financial condition of the insurer.
175	(g)  The total amount of funds available for the program is
176	limited to the amount appropriated by the Legislature for this
177	purpose. If the amount of surplus notes requested by insurers
178	exceeds the amount of funds available, the board may prioritize
179	insurers that are eligible and approved, with priority for
180	funding given to insurers writing only manufactured housing
181	policies, regardless of the date of application, based on the
182	financial strength of the insurer, the viability of its proposed
183	business plan for writing additional residential property
184	insurance in the state, and the effect on competition in the
185	residential property insurance market. Between insurers writing
186	residential property insurance covering manufactured housing,
187	priority shall be given to the insurer writing the highest
188	percentage of its policies covering manufactured housing.
189	(h)  The board may allocate portions of the funds available
190	for the program and establish dates for insurers to apply for
191	surplus notes from such allocation which are earlier than the
192	dates established in paragraph (b).
193	(h)(i)  Notwithstanding paragraph (d), a newly formed
194	manufactured housing insurer that is eligible for a surplus note
195	under this section shall meet the premium to surplus ratio
196	provisions of s. 624.4095.
197	(i)(j)  As used in this section, "an insurer writing only
198	manufactured housing policies" includes:
199	1.  A Florida domiciled insurer that begins writing
200	personal lines residential manufactured housing policies in
201	Florida after March 1, 2007, and that removes a minimum of
202	50,000 policies from Citizens Property Insurance Corporation
203	without accepting a bonus, provided at least 25 percent of its
204	policies cover manufactured housing. Such an insurer may count
205	any funds above the minimum capital and surplus requirement that
206	were contributed into the insurer after March 1, 2007, as new
207	capital under this section.
208	2.  A Florida domiciled insurer that writes at least 40
209	percent of its policies covering manufactured housing in
210	Florida.
211	(3)  As used in this section, the term:
212	(a)  "Board" means the State Board of Administration.
213	(b)  "Program" means the Insurance Capital Build-Up
214	Incentive Program established by this section.
215	(4)  The state funds provided to the insurer in exchange
216	for the A surplus note provided to an insurer pursuant to this
217	section are is considered borrowed surplus an asset of the
218	insurer pursuant to s. 628.401 s. 625.012.
219	(5)  If an insurer that receives funds in exchange for
220	issuance of a surplus note pursuant to this section is rendered
221	insolvent, the state is a class 3 creditor pursuant to s.
222	631.271 for the unpaid principal and interest on the surplus
223	note.
224	(6)  The board shall adopt rules prescribing the
225	procedures, administration, and criteria for approving the
226	applications of insurers to receive funds in exchange for
227	issuance of surplus notes pursuant to this section, which may be
228	adopted pursuant to the procedures for emergency rules of
229	chapter 120. Otherwise, actions and determinations by the board
230	pursuant to this section are exempt from chapter 120.
231	(7)  The board shall invest and reinvest the funds
232	appropriated for the program in accordance with s. 215.47 and
233	consistent with board policy.
234	(8)  Costs and fees incurred by the board in administering
235	this program, including fees for investment services, shall be
236	paid from funds appropriated by the Legislature for this
237	program, but are limited to 1 percent of the amount
238	appropriated.
239	(9)  The board shall submit a report to the President of
240	the Senate and the Speaker of the House of Representatives by
241	February 1 of each year as to the results of the program and
242	each insurer's compliance with the terms of its surplus note.
243	(10)  The amendments to this section enacted in 2008 do not
244	affect the terms or conditions of the surplus notes that were
245	approved prior to January 1, 2008. However, the board may
246	renegotiate the terms of any surplus note issued by an insurer
247	prior to January 2008 under this program upon the agreement of
248	the insurer and the board and consistent with the requirements
249	of this section as amended in 2008.
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, after a proceeding
258	under ss. 120.569 and 120.57(1), may require an insurer to file
259	its claims-handling practices and procedures related to that
260	line of insurance with the office for review and inspection, to
261	be held by the office for the following 36-month period. Such
262	claims-handling practices and procedures are public records and
263	are not trade secrets or otherwise exempt from the provisions of
264	s. 119.07(1). As used in this section, "claims-handling
265	practices and procedures" are any policies, guidelines, rules,
266	protocols, standard operating procedures, instructions, or
267	directives that govern or guide how and the manner in which an
268	insured's claims for benefits under any policy will be
269	processed.
270	Section 3.  Subsections (2) and (3) of section 624.4211,
271	Florida Statutes, are amended to read:
272	624.4211  Administrative fine in lieu of suspension or
273	revocation.--
274	(2)  With respect to any nonwillful violation, such fine
275	may shall not exceed $5,000 $2,500 per violation. In no event
276	shall such fine exceed an aggregate amount of $20,000 $10,000
277	for all nonwillful violations arising out of the same action. If
278	When an insurer discovers a nonwillful violation, the insurer
279	shall correct the violation and, if restitution is due, make
280	restitution to all affected persons. Such restitution shall
281	include interest at 12 percent per year from either the date of
282	the violation or the date of inception of the affected person's
283	policy, at the insurer's option. The restitution may be a credit
284	against future premiums due provided that the interest
285	accumulates shall accumulate until the premiums are due. If the
286	amount of restitution due to any person is $50 or more and the
287	insurer wishes to credit it against future premiums, it shall
288	notify such person that she or he may receive a check instead of
289	a credit. If the credit is on a policy that which is not
290	renewed, the insurer shall pay the restitution to the person to
291	whom it is due.
292	(3)  With respect to any knowing and willful violation of a
293	lawful order or rule of the office or commission or a provision
294	of this code, the office may impose a fine upon the insurer in
295	an amount not to exceed $40,000 $20,000 for each such violation.
296	In no event shall such fine exceed an aggregate amount of
297	$200,000 $100,000 for all knowing and willful violations arising
298	out of the same action. In addition to such fines, the such
299	insurer shall make restitution when due in accordance with the
300	provisions of subsection (2).
301	Section 4.  Section 624.4213, Florida Statutes, is created
302	to read:
303	624.4213  Trade secret documents.--
304	(1)  If any person who is required to submit documents or
305	other information to the office or department pursuant to the
306	Insurance Code or by rule or order of the office, department, or
307	commission claims that such submission contains a trade secret,
308	such person may file with the office or department a notice of
309	trade secret as provided in this section. Failure to do so
310	constitutes a waiver of any claim by such person that the
311	document or information is a trade secret.
312	(a)  Each page of such document or specific portion of a
313	document claimed to be a trade secret must be clearly marked as
314	"trade secret."
315	(b)  All material marked as a trade secret must be
316	separated from all non-trade secret material, such as being
317	submitted in a separate envelope clearly marked as "trade
318	secret."
319	(c)  In submitting a notice of trade secret to the office
320	or department, the submitting party must include an affidavit
321	certifying under oath to the truth of the following statements
322	concerning all documents or information that are claimed to be
323	trade secrets:
324	1.  [I consider/My company considers] this information a
325	trade secret that has value and provides an advantage or an
326	opportunity to obtain an advantage over those who do not know or
327	use it.
328	2.  [I have/My company has] taken measures to prevent the
329	disclosure of the information to anyone other that those who
330	have been selected to have access for limited purposes, and [I
331	intend/my company intends] to continue to take such measures.
332	3.  The information is not, and has not been, reasonably
333	obtainable without [my/our] consent by other persons by use of
334	legitimate means.
335	4.  The information is not publicly available elsewhere.
336	(2)  If the office or department receives a public-records
337	request for a document or information that is marked and
338	certified as a trade secret, the office or department shall
339	promptly notify the person that certified the document as a
340	trade secret. The notice shall inform such person that he or she
341	or his or her company has 30 days following receipt of such
342	notice to file an action in circuit court seeking a
343	determination whether the document in question contains trade
344	secrets and an order barring public disclosure of the document.
345	If that person or company files an action within 30 days after
346	receipt of notice of the public-records request, the office or
347	department may not release the documents pending the outcome of
348	the legal action. The failure to file an action within 30 days
349	constitutes a waiver of any claim of confidentiality and the
350	office or department shall release the document as requested.
351	(3)  The office or department may disclose a trade secret,
352	together with the claim that it is a trade secret, to an officer
353	or employee of another governmental agency whose use of the
354	trade secret is within the scope of his or her employment.
355	Section 5. Section 624.4305, Florida Statutes, is created
356	to read:
357	624.4305  Nonrenewal of residential property insurance
358	policies.--Any insurer planning to nonrenew more than 10,000
359	residential property insurance policies in this state within a
360	12-month period shall give notice in writing to the Office of
361	Insurance Regulation for informational purposes 90 days before
362	the issuance of any notices of nonrenewal. The notice provided
363	to the office must set forth the insurer's reasons for such
364	action, the effective dates of nonrenewal, and any arrangements
365	made for other insurers to offer coverage to affected
366	policyholders.
367	Section 6.  Subsection (2) of section 626.9521, Florida
368	Statutes, is amended to read:
369	626.9521  Unfair methods of competition and unfair or
370	deceptive acts or practices prohibited; penalties.--
371	(2)  Any person who violates any provision of this part
372	shall be subject to a fine in an amount not greater than $5,000
373	$2,500 for each nonwillful violation and not greater than
374	$40,000 $20,000 for each willful violation. Fines under this
375	subsection imposed against an insurer may not exceed an
376	aggregate amount of $20,000 $10,000 for all nonwillful
377	violations arising out of the same action or an aggregate amount
378	of $200,000 $100,000 for all willful violations arising out of
379	the same action. The fines authorized by this subsection may be
380	imposed in addition to any other applicable penalty.
381	Section 7.  Section 627.0612, Florida Statutes, is amended
382	to read:
383	627.0612  Administrative proceedings in rating
384	determinations.--
385	(1)  In any proceeding to determine whether rates, rating
386	plans, or other matters governed by this part comply with the
387	law, the appellate court shall set aside a final order of the
388	office if the office has violated s. 120.57(1)(k) by
389	substituting its findings of fact for findings of an
390	administrative law judge which were supported by competent
391	substantial evidence.
392	(2)  In an administrative hearing to determine whether an
393	insurer's rates, rating schedules, rating manuals, premium
394	credits, discount schedules, surcharge schedules, or changes
395	thereto, for property insurance comply with the law, in addition
396	to any other findings of fact, findings on the following matters
397	shall be considered findings of fact:
398	(a)  Whether a factor or factors used in a rate filing or
399	applied by the office is consistent with standard actuarial
400	techniques or practices or are otherwise based on reasonable
401	actuarial judgment.
402	(b)  Whether a factor for underwriting profit and
403	contingencies is reasonable or excessive.
404	(c)  Whether the cost of reinsurance is reasonable or
405	excessive.
406	(d)  Whether a factor or factors used in a rate filing or
407	applied by the office demonstrate that a rate is excessive,
408	inadequate or unfairly discriminatory.
409	(3)  In an administrative hearing to determine whether an
410	insurer's rates, rating schedules, rating manuals, premium
411	credits, discount schedules, surcharge schedules, or changes
412	thereto, for property insurance comply with the law, an order
413	may be entered that approves, modifies, or rejects the requested
414	change. An order modifying the requested rate change shall
415	recommend such change as is supported by the record in the case.
416	Section 8.  Paragraphs (a), (b), and (g) of subsection
417	(2),subsection (6), and paragraph (a) of subsection (9) of
418	section 627.062, Florida Statutes, are amended to read:
419	627.062  Rate standards.--
420	(2)  As to all such classes of insurance:
421	(a)  Insurers or rating organizations shall establish and
422	use rates, rating schedules, or rating manuals to allow the
423	insurer a reasonable rate of return on such classes of insurance
424	written in this state. A copy of rates, rating schedules, rating
425	manuals, premium credits or discount schedules, and surcharge
426	schedules, and changes thereto, shall be filed with the office
427	under one of the following procedures except as provided in
428	subparagraph 3.:
429	1.  If the filing is made at least 90 days before the
430	proposed effective date and the filing is not implemented during
431	the office's review of the filing and any proceeding and
432	judicial review, then such filing shall be considered a "file
433	and use" filing. In such case, the office shall finalize its
434	review by issuance of a notice of intent to approve or a notice
435	of intent to disapprove within 90 days after receipt of the
436	filing. The notice of intent to approve and the notice of intent
437	to disapprove constitute agency action for purposes of the
438	Administrative Procedure Act. Requests for supporting
439	information, requests for mathematical or mechanical
440	corrections, or notification to the insurer by the office of its
441	preliminary findings shall not toll the 90-day period during any
442	such proceedings and subsequent judicial review. The rate shall
443	be deemed approved if the office does not issue a notice of
444	intent to approve or a notice of intent to disapprove within 90
445	days after receipt of the filing.
446	2.  If the filing is not made in accordance with the
447	provisions of subparagraph 1., such filing shall be made as soon
448	as practicable, but no later than 30 days after the effective
449	date, and shall be considered a "use and file" filing. An
450	insurer making a "use and file" filing is potentially subject to
451	an order by the office to return to policyholders portions of
452	rates found to be excessive, as provided in paragraph (h).
453	3.  For all property insurance filings made or submitted
454	after January 25, 2007, but before December 31, 2009 2008, an
455	insurer seeking a rate that is greater than the rate most
456	recently approved by the office shall make a "file and use"
457	filing. This subparagraph applies to property insurance only.
458	For purposes of this subparagraph, motor vehicle collision and
459	comprehensive coverages are not considered to be property
460	coverages.
461	(b)  Upon receiving a rate filing, the office shall review
462	the rate filing to determine if a rate is excessive, inadequate,
463	or unfairly discriminatory. In making that determination, the
464	office shall, in accordance with generally accepted and
465	reasonable actuarial techniques, consider the following factors:
466	1.  Past and prospective loss experience within and without
467	this state.
468	2.  Past and prospective expenses.
469	3.  The degree of competition among insurers for the risk
470	insured.
471	4.  Investment income reasonably expected by the insurer,
472	consistent with the insurer's investment practices, from
473	investable premiums anticipated in the filing, plus any other
474	expected income from currently invested assets representing the
475	amount expected on unearned premium reserves and loss reserves.
476	The commission may adopt rules using utilizing reasonable
477	techniques of actuarial science and economics to specify the
478	manner in which insurers shall calculate investment income
479	attributable to such classes of insurance written in this state
480	and the manner in which such investment income shall be used to
481	calculate in the calculation of insurance rates. Such manner
482	shall contemplate allowances for an underwriting profit factor
483	and full consideration of investment income which produce a
484	reasonable rate of return; however, investment income from
485	invested surplus may shall not be considered.
486	5.  The reasonableness of the judgment reflected in the
487	filing.
488	6.  Dividends, savings, or unabsorbed premium deposits
489	allowed or returned to Florida policyholders, members, or
490	subscribers.
491	7.  The adequacy of loss reserves.
492	8.  The cost of reinsurance. The office shall not
493	disapprove a rate as excessive solely due to the insurer having
494	obtained catastrophic reinsurance to cover the insurer's
495	estimated 250-year probable maximum loss or any lower level of
496	loss.
497	9.  Trend factors, including trends in actual losses per
498	insured unit for the insurer making the filing.
499	10.  Conflagration and catastrophe hazards, if applicable.
500	11.  Projected hurricane losses, if applicable, which must
501	be estimated using a model or method found to be acceptable or
502	reliable by the Florida Commission on Hurricane Loss Projection
503	Methodology, and as further provided in s. 627.0628.
504	12.11.  A reasonable margin for underwriting profit and
505	contingencies. For that portion of the rate covering the risk of
506	hurricanes and other catastrophic losses for which the insurer
507	has not purchased reinsurance and has exposed its capital and
508	surplus to such risk, the office must approve a rating factor
509	that provides the insurer a reasonable rate of return that is
510	commensurate with such risk.
511	13.12.  The cost of medical services, if applicable.
512	14.13.  Other relevant factors which impact upon the
513	frequency or severity of claims or upon expenses.
514	(g)  The office may at any time review a rate, rating
515	schedule, rating manual, or rate change; the pertinent records
516	of the insurer; and market conditions. If the office finds on a
517	preliminary basis that a rate may be excessive, inadequate, or
518	unfairly discriminatory, the office shall initiate proceedings
519	to disapprove the rate and shall so notify the insurer. However,
520	the office may not disapprove as excessive any rate for which it
521	has given final approval or which has been deemed approved for a
522	period of 1 year after the effective date of the filing unless
523	the office finds that a material misrepresentation or material
524	error was made by the insurer or was contained in the filing.
525	Upon being so notified, the insurer or rating organization
526	shall, within 60 days, file with the office all information
527	which, in the belief of the insurer or organization, proves the
528	reasonableness, adequacy, and fairness of the rate or rate
529	change. The office shall issue a notice of intent to approve or
530	a notice of intent to disapprove pursuant to the procedures of
531	paragraph (a) within 90 days after receipt of the insurer's
532	initial response. In such instances and in any administrative
533	proceeding relating to the legality of the rate, the insurer or
534	rating organization shall carry the burden of proof by a
535	preponderance of the evidence to show that the rate is not
536	excessive, inadequate, or unfairly discriminatory. After the
537	office notifies an insurer that a rate may be excessive,
538	inadequate, or unfairly discriminatory, unless the office
539	withdraws the notification, the insurer shall not alter the rate
540	except to conform with the office's notice until the earlier of
541	120 days after the date the notification was provided or 180
542	days after the date of the implementation of the rate. The
543	office may, subject to chapter 120, disapprove without the 60-
544	day notification any rate increase filed by an insurer within
545	the prohibited time period or during the time that the legality
546	of the increased rate is being contested.
547
548	The provisions of this subsection shall not apply to workers'
549	compensation and employer's liability insurance and to motor
550	vehicle insurance.
551	(6)(a)  If an insurer requests an administrative hearing
552	pursuant to s. 120.57 related to a rate filing under this
553	section, the director of the Division of Administrative Hearings
554	shall expedite the hearing and assign an administrative law
555	judge who shall commence the hearing within 30 days after the
556	receipt of the formal request and shall enter a recommended
557	order within 30 days after the hearing or within 30 days after
558	receipt of the hearing transcript by the administrative law
559	judge, whichever is later. Each party shall be allowed 10 days
560	in which to submit written exceptions to the recommended order.
561	The office shall enter a final order within 30 days after the
562	entry of the recommended order. The provisions of this paragraph
563	may be waived upon stipulation of all parties.
564	(b)  Upon entry of a final order, the insurer may request a
565	expedited appellate review pursuant to the Florida Rules of
566	Appellate Procedure. It is the intent of the Legislature that
567	the First District Court of Appeal grant an insurer's request
568	for an expedited appellate review.
569	(a)  After any action with respect to a rate filing that
570	constitutes agency action for purposes of the Administrative
571	Procedure Act, except for a rate filing for medical malpractice,
572	an insurer may, in lieu of demanding a hearing under s. 120.57,
573	require arbitration of the rate filing. However, the arbitration
574	option provision in this subsection does not apply to a rate
575	filing that is made on or after the effective date of this act
576	until January 1, 2009. Arbitration shall be conducted by a board
577	of arbitrators consisting of an arbitrator selected by the
578	office, an arbitrator selected by the insurer, and an arbitrator
579	selected jointly by the other two arbitrators. Each arbitrator
580	must be certified by the American Arbitration Association. A
581	decision is valid only upon the affirmative vote of at least two
582	of the arbitrators. No arbitrator may be an employee of any
583	insurance regulator or regulatory body or of any insurer,
584	regardless of whether or not the employing insurer does business
585	in this state. The office and the insurer must treat the
586	decision of the arbitrators as the final approval of a rate
587	filing. Costs of arbitration shall be paid by the insurer.
588	(b)  Arbitration under this subsection shall be conducted
589	pursuant to the procedures specified in ss. 682.06-682.10.
590	Either party may apply to the circuit court to vacate or modify
591	the decision pursuant to s. 682.13 or s. 682.14. The commission
592	shall adopt rules for arbitration under this subsection, which
593	rules may not be inconsistent with the arbitration rules of the
594	American Arbitration Association as of January 1, 1996.
595	(c)  Upon initiation of the arbitration process, the
596	insurer waives all rights to challenge the action of the office
597	under the Administrative Procedure Act or any other provision of
598	law; however, such rights are restored to the insurer if the
599	arbitrators fail to render a decision within 90 days after
600	initiation of the arbitration process.
601	(9)(a)  Effective March 1, 2007, The chief executive
602	officer or chief financial officer of a property insurer and the
603	chief actuary of a property insurer must certify under oath and
604	subject to the penalty of perjury, on a form approved by the
605	commission, the following information, which must accompany a
606	rate filing:
607	1.  The signing officer and actuary have reviewed the rate
608	filing;
609	2.  Based on the signing officer's and actuary's knowledge,
610	the rate filing does not contain any untrue statement of a
611	material fact or omit to state a material fact necessary in
612	order to make the statements made, in light of the circumstances
613	under which such statements were made, not misleading;
614	3.  Based on the signing officer's and actuary's knowledge,
615	the information and other factors described in paragraph (2)(b),
616	including, but not limited to, investment income, fairly present
617	in all material respects the basis of the rate filing for the
618	periods presented in the filing; and
619	4.  Based on the signing officer's and actuary's knowledge,
620	the rate filing reflects all premium savings that are reasonably
621	expected to result from legislative enactments and are in
622	accordance with generally accepted and reasonable actuarial
623	techniques.
624	Section 9.  Paragraph (c) of subsection (1) and paragraph
625	(c) of subsection (3) of section 627.0628, Florida Statutes, are
626	amended, and paragraph (e) is added to subsection (1) of that
627	section, to read:
628	627.0628  Florida Commission on Hurricane Loss Projection
629	Methodology; public records exemption; public meetings
630	exemption.--
631	(1)  LEGISLATIVE FINDINGS AND INTENT.--
632	(c)  It is the intent of the Legislature to create the
633	Florida Commission on Hurricane Loss Projection Methodology as a
634	panel of experts to provide the most actuarially sophisticated
635	guidelines and standards for projection of hurricane losses
636	possible, given the current state of actuarial science. It is
637	the further intent of the Legislature that such standards and
638	guidelines must be used by the State Board of Administration in
639	developing reimbursement premium rates for the Florida Hurricane
640	Catastrophe Fund, and, subject to paragraph (3)(c), must may be
641	used by insurers in rate filings under s. 627.062 unless the way
642	in which such standards and guidelines were applied by the
643	insurer was erroneous, as shown by a preponderance of the
644	evidence.
645	(e)  The Legislature finds that the authority to take final
646	agency action with respect to insurance ratemaking is vested in
647	the Office of Insurance Regulation and the Financial Services
648	Commission, and that the processes, standards, and guidelines of
649	the Florida Commission on Hurricane Loss Projection Methodology
650	do not constitute final agency action or statements of general
651	applicability that implement, interpret, or prescribe law or
652	policy; accordingly, chapter 120 does not apply to the
653	processes, standards, and guidelines of the Florida Commission
654	on Hurricane Loss Projection Methodology.
655	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
656	(c)  With respect to a rate filing under s. 627.062, an
657	insurer must may employ and may not modify or adjust actuarial
658	methods, principles, standards, models, or output ranges found
659	by the commission to be accurate or reliable in determining to
660	determine hurricane loss factors for use in a rate filing and in
661	determining probable maximum loss levels for reinsurance costs
662	included in a rate filing under s. 627.062; except as provided
663	in s. 627.062(2)(b)12., the use of any other model is reasonable
664	if the insurer provides justification that establishes by a
665	preponderance of the evidence that such use is reasonable and
666	consistent with actuarial standards of practice. Such findings
667	and factors are admissible and relevant in consideration of a
668	rate filing by the office or in any arbitration or
669	administrative or judicial review only if the office and the
670	consumer advocate appointed pursuant to s. 627.0613 have access
671	to all of the assumptions and factors that were used in
672	developing the actuarial methods, principles, standards, models,
673	or output ranges, and are not precluded from disclosing such
674	information in a rate proceeding. In any rate hearing under s.
675	120.57 or in any arbitration proceeding under s. 627.062(6), the
676	hearing officer, judge, or arbitration panel may determine
677	whether the office and the consumer advocate were provided with
678	access to all of the assumptions and factors that were used in
679	developing the actuarial methods, principles, standards, models,
680	or output ranges and to determine their admissibility.
681	Section 10.  Subsection (1) of section 627.0629, Florida
682	Statutes, is amended to read:
683	627.0629  Residential property insurance; rate filings.--
684	(1)(a)  It is the intent of the Legislature that insurers
685	must provide savings to consumers who install or implement
686	windstorm damage mitigation techniques, alterations, or
687	solutions to their properties to prevent windstorm losses. A
688	rate filing for residential property insurance must include
689	actuarially reasonable discounts, credits, or other rate
690	differentials, or appropriate reductions in deductibles, for
691	properties on which fixtures or construction techniques
692	demonstrated to reduce the amount of loss in a windstorm have
693	been installed or implemented. The fixtures or construction
694	techniques shall include, but not be limited to, fixtures or
695	construction techniques which enhance roof strength, roof
696	covering performance, roof-to-wall strength, wall-to-floor-to-
697	foundation strength, opening protection, and window, door, and
698	skylight strength. Credits, discounts, or other rate
699	differentials, or appropriate reductions in deductibles, for
700	fixtures and construction techniques which meet the minimum
701	requirements of the Florida Building Code must be included in
702	the rate filing. All insurance companies must make a rate filing
703	which includes the credits, discounts, or other rate
704	differentials or reductions in deductibles by February 28, 2003.
705	By July 1, 2007, the office shall reevaluate the discounts,
706	credits, other rate differentials, and appropriate reductions in
707	deductibles for fixtures and construction techniques that meet
708	the minimum requirements of the Florida Building Code, based
709	upon actual experience or any other loss relativity studies
710	available to the office. The office shall determine the
711	discounts, credits, other rate differentials, and appropriate
712	reductions in deductibles that reflect the full actuarial value
713	of such revaluation, which may be used by insurers in rate
714	filings.
715	(b)  By February 1, 2011, the Office of Insurance
716	Regulation, in consultation with the Department of Financial
717	Services and the Department of Community Affairs, shall develop
718	and make publicly available a proposed method for insurers to
719	establish discounts, credits, or other rate differentials for
720	hurricane mitigation measures which directly correlate to the
721	numerical rating assigned to a structure pursuant to the uniform
722	home grading scale adopted by the Financial Services Commission
723	pursuant to s. 215.55865, including any proposed changes to the
724	uniform home grading scale. By October 1, 2011, the commission
725	shall adopt rules requiring insurers to make rate filings for
726	residential property insurance which revise insurers' discounts,
727	credits, or other rate differentials for hurricane mitigation
728	measures so that such rate differentials correlate directly to
729	the uniform home grading scale. The rules may include such
730	changes to the uniform home grading scale as the commission
731	determines are necessary, and may specify the minimum required
732	discounts, credits, or other rate differentials. Such rate
733	differentials must be consistent with generally accepted
734	actuarial principles and wind-loss mitigation studies. The rules
735	shall allow a period of at least 2 years after the effective
736	date of the revised mitigation discounts, credits, or other rate
737	differentials for a property owner to obtain an inspection or
738	otherwise qualify for the revised credit, during which time the
739	insurer shall continue to apply the mitigation credit that was
740	applied immediately prior to the effective date of the revised
741	credit.
742	Section 11.  Subsection (2) and paragraphs (a), (b), (c),
743	(m), (p), (w), (dd), and (ee) of subsection (6) of section
744	627.351, Florida Statutes, are amended, and new paragraph (ff)
745	is added to that subsection, to read:
746	627.351  Insurance risk apportionment plans.--
747	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
748	(b)  The department shall require all insurers holding a
749	certificate of authority to transact property insurance on a
750	direct basis in this state, other than joint underwriting
751	associations and other entities formed pursuant to this section,
752	to provide windstorm coverage to applicants from areas
753	determined to be eligible pursuant to paragraph (c) who in good
754	faith are entitled to, but are unable to procure, such coverage
755	through ordinary means; or it shall adopt a reasonable plan or
756	plans for the equitable apportionment or sharing among such
757	insurers of windstorm coverage, which may include formation of
758	an association for this purpose. As used in this subsection, the
759	term "property insurance" means insurance on real or personal
760	property, as defined in s. 624.604, including insurance for
761	fire, industrial fire, allied lines, farmowners multiperil,
762	homeowners' multiperil, commercial multiperil, and mobile homes,
763	and including liability coverages on all such insurance, but
764	excluding inland marine as defined in s. 624.607(3) and
765	excluding vehicle insurance as defined in s. 624.605(1)(a) other
766	than insurance on mobile homes used as permanent dwellings. The
767	department shall adopt rules that provide a formula for the
768	recovery and repayment of any deferred assessments.
769	1.  For the purpose of this section, properties eligible
770	for such windstorm coverage are defined as dwellings, buildings,
771	and other structures, including mobile homes which are used as
772	dwellings and which are tied down in compliance with mobile home
773	tie-down requirements prescribed by the Department of Highway
774	Safety and Motor Vehicles pursuant to s. 320.8325, and the
775	contents of all such properties. An applicant or policyholder is
776	eligible for coverage only if an offer of coverage cannot be
777	obtained by or for the applicant or policyholder from an
778	admitted insurer at approved rates.
779	2.a.(I)  All insurers required to be members of such
780	association shall participate in its writings, expenses, and
781	losses. Surplus of the association shall be retained for the
782	payment of claims and shall not be distributed to the member
783	insurers. Such participation by member insurers shall be in the
784	proportion that the net direct premiums of each member insurer
785	written for property insurance in this state during the
786	preceding calendar year bear to the aggregate net direct
787	premiums for property insurance of all member insurers, as
788	reduced by any credits for voluntary writings, in this state
789	during the preceding calendar year. For the purposes of this
790	subsection, the term "net direct premiums" means direct written
791	premiums for property insurance, reduced by premium for
792	liability coverage and for the following if included in allied
793	lines: rain and hail on growing crops; livestock; association
794	direct premiums booked; National Flood Insurance Program direct
795	premiums; and similar deductions specifically authorized by the
796	plan of operation and approved by the department. A member's
797	participation shall begin on the first day of the calendar year
798	following the year in which it is issued a certificate of
799	authority to transact property insurance in the state and shall
800	terminate 1 year after the end of the calendar year during which
801	it no longer holds a certificate of authority to transact
802	property insurance in the state. The commissioner, after review
803	of annual statements, other reports, and any other statistics
804	that the commissioner deems necessary, shall certify to the
805	association the aggregate direct premiums written for property
806	insurance in this state by all member insurers.
807	(II)  Effective July 1, 2002, the association shall operate
808	subject to the supervision and approval of a board of governors
809	who are the same individuals that have been appointed by the
810	Treasurer to serve on the board of governors of the Citizens
811	Property Insurance Corporation.
812	(III)  The plan of operation shall provide a formula
813	whereby a company voluntarily providing windstorm coverage in
814	affected areas will be relieved wholly or partially from
815	apportionment of a regular assessment pursuant to sub-sub-
816	subparagraph d.(I) or sub-sub-subparagraph d.(II).
817	(IV)  A company which is a member of a group of companies
818	under common management may elect to have its credits applied on
819	a group basis, and any company or group may elect to have its
820	credits applied to any other company or group.
821	(V)  There shall be no credits or relief from apportionment
822	to a company for emergency assessments collected from its
823	policyholders under sub-sub-subparagraph d.(III).
824	(VI)  The plan of operation may also provide for the award
825	of credits, for a period not to exceed 3 years, from a regular
826	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
827	subparagraph d.(II) as an incentive for taking policies out of
828	the Residential Property and Casualty Joint Underwriting
829	Association. In order to qualify for the exemption under this
830	sub-sub-subparagraph, the take-out plan must provide that at
831	least 40 percent of the policies removed from the Residential
832	Property and Casualty Joint Underwriting Association cover risks
833	located in Dade, Broward, and Palm Beach Counties or at least 30
834	percent of the policies so removed cover risks located in Dade,
835	Broward, and Palm Beach Counties and an additional 50 percent of
836	the policies so removed cover risks located in other coastal
837	counties, and must also provide that no more than 15 percent of
838	the policies so removed may exclude windstorm coverage. With the
839	approval of the department, the association may waive these
840	geographic criteria for a take-out plan that removes at least
841	the lesser of 100,000 Residential Property and Casualty Joint
842	Underwriting Association policies or 15 percent of the total
843	number of Residential Property and Casualty Joint Underwriting
844	Association policies, provided the governing board of the
845	Residential Property and Casualty Joint Underwriting Association
846	certifies that the take-out plan will materially reduce the
847	Residential Property and Casualty Joint Underwriting
848	Association's 100-year probable maximum loss from hurricanes.
849	With the approval of the department, the board may extend such
850	credits for an additional year if the insurer guarantees an
851	additional year of renewability for all policies removed from
852	the Residential Property and Casualty Joint Underwriting
853	Association, or for 2 additional years if the insurer guarantees
854	2 additional years of renewability for all policies removed from
855	the Residential Property and Casualty Joint Underwriting
856	Association.
857	b.  Assessments to pay deficits in the association under
858	this subparagraph shall be included as an appropriate factor in
859	the making of rates as provided in s. 627.3512.
860	c.  The Legislature finds that the potential for unlimited
861	deficit assessments under this subparagraph may induce insurers
862	to attempt to reduce their writings in the voluntary market, and
863	that such actions would worsen the availability problems that
864	the association was created to remedy. It is the intent of the
865	Legislature that insurers remain fully responsible for paying
866	regular assessments and collecting emergency assessments for any
867	deficits of the association; however, it is also the intent of
868	the Legislature to provide a means by which assessment
869	liabilities may be amortized over a period of years.
870	d.(I)  When the deficit incurred in a particular calendar
871	year is 10 percent or less of the aggregate statewide direct
872	written premium for property insurance for the prior calendar
873	year for all member insurers, the association shall levy an
874	assessment on member insurers in an amount equal to the deficit.
875	(II)  When the deficit incurred in a particular calendar
876	year exceeds 10 percent of the aggregate statewide direct
877	written premium for property insurance for the prior calendar
878	year for all member insurers, the association shall levy an
879	assessment on member insurers in an amount equal to the greater
880	of 10 percent of the deficit or 10 percent of the aggregate
881	statewide direct written premium for property insurance for the
882	prior calendar year for member insurers. Any remaining deficit
883	shall be recovered through emergency assessments under sub-sub-
884	subparagraph (III).
885	(III)  Upon a determination by the board of directors that
886	a deficit exceeds the amount that will be recovered through
887	regular assessments on member insurers, pursuant to sub-sub-
888	subparagraph (I) or sub-sub-subparagraph (II), the board shall
889	levy, after verification by the department, emergency
890	assessments to be collected by member insurers and by
891	underwriting associations created pursuant to this section which
892	write property insurance, upon issuance or renewal of property
893	insurance policies other than National Flood Insurance policies
894	in the year or years following levy of the regular assessments.
895	The amount of the emergency assessment collected in a particular
896	year shall be a uniform percentage of that year's direct written
897	premium for property insurance for all member insurers and
898	underwriting associations, excluding National Flood Insurance
899	policy premiums, as annually determined by the board and
900	verified by the department. The department shall verify the
901	arithmetic calculations involved in the board's determination
902	within 30 days after receipt of the information on which the
903	determination was based. Notwithstanding any other provision of
904	law, each member insurer and each underwriting association
905	created pursuant to this section shall collect emergency
906	assessments from its policyholders without such obligation being
907	affected by any credit, limitation, exemption, or deferment. The
908	emergency assessments so collected shall be transferred directly
909	to the association on a periodic basis as determined by the
910	association. The aggregate amount of emergency assessments
911	levied under this sub-sub-subparagraph in any calendar year may
912	not exceed the greater of 10 percent of the amount needed to
913	cover the original deficit, plus interest, fees, commissions,
914	required reserves, and other costs associated with financing of
915	the original deficit, or 10 percent of the aggregate statewide
916	direct written premium for property insurance written by member
917	insurers and underwriting associations for the prior year, plus
918	interest, fees, commissions, required reserves, and other costs
919	associated with financing the original deficit. The board may
920	pledge the proceeds of the emergency assessments under this sub-
921	sub-subparagraph as the source of revenue for bonds, to retire
922	any other debt incurred as a result of the deficit or events
923	giving rise to the deficit, or in any other way that the board
924	determines will efficiently recover the deficit. The emergency
925	assessments under this sub-sub-subparagraph shall continue as
926	long as any bonds issued or other indebtedness incurred with
927	respect to a deficit for which the assessment was imposed remain
928	outstanding, unless adequate provision has been made for the
929	payment of such bonds or other indebtedness pursuant to the
930	document governing such bonds or other indebtedness. Emergency
931	assessments collected under this sub-sub-subparagraph are not
932	part of an insurer's rates, are not premium, and are not subject
933	to premium tax, fees, or commissions; however, failure to pay
934	the emergency assessment shall be treated as failure to pay
935	premium.
936	(IV)  Each member insurer's share of the total regular
937	assessments under sub-sub-subparagraph (I) or sub-sub-
938	subparagraph (II) shall be in the proportion that the insurer's
939	net direct premium for property insurance in this state, for the
940	year preceding the assessment bears to the aggregate statewide
941	net direct premium for property insurance of all member
942	insurers, as reduced by any credits for voluntary writings for
943	that year.
944	(V)  If regular deficit assessments are made under sub-sub-
945	subparagraph (I) or sub-sub-subparagraph (II), or by the
946	Residential Property and Casualty Joint Underwriting Association
947	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
948	(6)(b)3.b., the association shall levy upon the association's
949	policyholders, as part of its next rate filing, or by a separate
950	rate filing solely for this purpose, a market equalization
951	surcharge in a percentage equal to the total amount of such
952	regular assessments divided by the aggregate statewide direct
953	written premium for property insurance for member insurers for
954	the prior calendar year. Market equalization surcharges under
955	this sub-sub-subparagraph are not considered premium and are not
956	subject to commissions, fees, or premium taxes; however, failure
957	to pay a market equalization surcharge shall be treated as
958	failure to pay premium.
959	e.  The governing body of any unit of local government, any
960	residents of which are insured under the plan, may issue bonds
961	as defined in s. 125.013 or s. 166.101 to fund an assistance
962	program, in conjunction with the association, for the purpose of
963	defraying deficits of the association. In order to avoid
964	needless and indiscriminate proliferation, duplication, and
965	fragmentation of such assistance programs, any unit of local
966	government, any residents of which are insured by the
967	association, may provide for the payment of losses, regardless
968	of whether or not the losses occurred within or outside of the
969	territorial jurisdiction of the local government. Revenue bonds
970	may not be issued until validated pursuant to chapter 75, unless
971	a state of emergency is declared by executive order or
972	proclamation of the Governor pursuant to s. 252.36 making such
973	findings as are necessary to determine that it is in the best
974	interests of, and necessary for, the protection of the public
975	health, safety, and general welfare of residents of this state
976	and the protection and preservation of the economic stability of
977	insurers operating in this state, and declaring it an essential
978	public purpose to permit certain municipalities or counties to
979	issue bonds as will provide relief to claimants and
980	policyholders of the association and insurers responsible for
981	apportionment of plan losses. Any such unit of local government
982	may enter into such contracts with the association and with any
983	other entity created pursuant to this subsection as are
984	necessary to carry out this paragraph. Any bonds issued under
985	this sub-subparagraph shall be payable from and secured by
986	moneys received by the association from assessments under this
987	subparagraph, and assigned and pledged to or on behalf of the
988	unit of local government for the benefit of the holders of such
989	bonds. The funds, credit, property, and taxing power of the
990	state or of the unit of local government shall not be pledged
991	for the payment of such bonds. If any of the bonds remain unsold
992	60 days after issuance, the department shall require all
993	insurers subject to assessment to purchase the bonds, which
994	shall be treated as admitted assets; each insurer shall be
995	required to purchase that percentage of the unsold portion of
996	the bond issue that equals the insurer's relative share of
997	assessment liability under this subsection. An insurer shall not
998	be required to purchase the bonds to the extent that the
999	department determines that the purchase would endanger or impair
1000	the solvency of the insurer. The authority granted by this sub-
1001	subparagraph is additional to any bonding authority granted by
1002	subparagraph 6.
1003	3.  The plan shall also provide that any member with a
1004	surplus as to policyholders of $20 million or less writing 25
1005	percent or more of its total countrywide property insurance
1006	premiums in this state may petition the department, within the
1007	first 90 days of each calendar year, to qualify as a limited
1008	apportionment company. The apportionment of such a member
1009	company in any calendar year for which it is qualified shall not
1010	exceed its gross participation, which shall not be affected by
1011	the formula for voluntary writings. In no event shall a limited
1012	apportionment company be required to participate in any
1013	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1014	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1015	$50 million after payment of available plan funds in any
1016	calendar year. However, a limited apportionment company shall
1017	collect from its policyholders any emergency assessment imposed
1018	under sub-sub-subparagraph 2.d.(III). The plan shall provide
1019	that, if the department determines that any regular assessment
1020	will result in an impairment of the surplus of a limited
1021	apportionment company, the department may direct that all or
1022	part of such assessment be deferred. However, there shall be no
1023	limitation or deferment of an emergency assessment to be
1024	collected from policyholders under sub-sub-subparagraph
1025	2.d.(III).
1026	4.  The plan shall provide for the deferment, in whole or
1027	in part, of a regular assessment of a member insurer under sub-
1028	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1029	not for an emergency assessment collected from policyholders
1030	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1031	commissioner, payment of such regular assessment would endanger
1032	or impair the solvency of the member insurer. In the event a
1033	regular assessment against a member insurer is deferred in whole
1034	or in part, the amount by which such assessment is deferred may
1035	be assessed against the other member insurers in a manner
1036	consistent with the basis for assessments set forth in sub-sub-
1037	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1038	5.a.  The plan of operation may include deductibles and
1039	rules for classification of risks and rate modifications
1040	consistent with the objective of providing and maintaining funds
1041	sufficient to pay catastrophe losses.
1042	b.  The association may require arbitration of a rate
1043	filing under s. 627.062(6). It is the intent of the Legislature
1044	that the rates for coverage provided by the association be
1045	actuarially sound and not competitive with approved rates
1046	charged in the admitted voluntary market such that the
1047	association functions as a residual market mechanism to provide
1048	insurance only when the insurance cannot be procured in the
1049	voluntary market. The plan of operation shall provide a
1050	mechanism to assure that, beginning no later than January 1,
1051	1999, the rates charged by the association for each line of
1052	business are reflective of approved rates in the voluntary
1053	market for hurricane coverage for each line of business in the
1054	various areas eligible for association coverage.
1055	c.  The association shall provide for windstorm coverage on
1056	residential properties in limits up to $10 million for
1057	commercial lines residential risks and up to $1 million for
1058	personal lines residential risks. If coverage with the
1059	association is sought for a residential risk valued in excess of
1060	these limits, coverage shall be available to the risk up to the
1061	replacement cost or actual cash value of the property, at the
1062	option of the insured, if coverage for the risk cannot be
1063	located in the authorized market. The association must accept a
1064	commercial lines residential risk with limits above $10 million
1065	or a personal lines residential risk with limits above $1
1066	million if coverage is not available in the authorized market.
1067	The association may write coverage above the limits specified in
1068	this subparagraph with or without facultative or other
1069	reinsurance coverage, as the association determines appropriate.
1070	d.  The plan of operation must provide objective criteria
1071	and procedures, approved by the department, to be uniformly
1072	applied for all applicants in determining whether an individual
1073	risk is so hazardous as to be uninsurable. In making this
1074	determination and in establishing the criteria and procedures,
1075	the following shall be considered:
1076	(I)  Whether the likelihood of a loss for the individual
1077	risk is substantially higher than for other risks of the same
1078	class; and
1079	(II)  Whether the uncertainty associated with the
1080	individual risk is such that an appropriate premium cannot be
1081	determined.
1082
1083	The acceptance or rejection of a risk by the association
1084	pursuant to such criteria and procedures must be construed as
1085	the private placement of insurance, and the provisions of
1086	chapter 120 do not apply.
1087	e.  If the risk accepts an offer of coverage through the
1088	market assistance program or through a mechanism established by
1089	the association, either before the policy is issued by the
1090	association or during the first 30 days of coverage by the
1091	association, and the producing agent who submitted the
1092	application to the association is not currently appointed by the
1093	insurer, the insurer shall:
1094	(I)  Pay to the producing agent of record of the policy,
1095	for the first year, an amount that is the greater of the
1096	insurer's usual and customary commission for the type of policy
1097	written or a fee equal to the usual and customary commission of
1098	the association; or
1099	(II)  Offer to allow the producing agent of record of the
1100	policy to continue servicing the policy for a period of not less
1101	than 1 year and offer to pay the agent the greater of the
1102	insurer's or the association's usual and customary commission
1103	for the type of policy written.
1104
1105	If the producing agent is unwilling or unable to accept
1106	appointment, the new insurer shall pay the agent in accordance
1107	with sub-sub-subparagraph (I). Subject to the provisions of s.
1108	627.3517, the policies issued by the association must provide
1109	that if the association obtains an offer from an authorized
1110	insurer to cover the risk at its approved rates under either a
1111	standard policy including wind coverage or, if consistent with
1112	the insurer's underwriting rules as filed with the department, a
1113	basic policy including wind coverage, the risk is no longer
1114	eligible for coverage through the association. Upon termination
1115	of eligibility, the association shall provide written notice to
1116	the policyholder and agent of record stating that the
1117	association policy must be canceled as of 60 days after the date
1118	of the notice because of the offer of coverage from an
1119	authorized insurer. Other provisions of the insurance code
1120	relating to cancellation and notice of cancellation do not apply
1121	to actions under this sub-subparagraph.
1122	f.  When the association enters into a contractual
1123	agreement for a take-out plan, the producing agent of record of
1124	the association policy is entitled to retain any unearned
1125	commission on the policy, and the insurer shall:
1126	(I)  Pay to the producing agent of record of the
1127	association policy, for the first year, an amount that is the
1128	greater of the insurer's usual and customary commission for the
1129	type of policy written or a fee equal to the usual and customary
1130	commission of the association; or
1131	(II)  Offer to allow the producing agent of record of the
1132	association policy to continue servicing the policy for a period
1133	of not less than 1 year and offer to pay the agent the greater
1134	of the insurer's or the association's usual and customary
1135	commission for the type of policy written.
1136
1137	If the producing agent is unwilling or unable to accept
1138	appointment, the new insurer shall pay the agent in accordance
1139	with sub-sub-subparagraph (I).
1140	6.a.  The plan of operation may authorize the formation of
1141	a private nonprofit corporation, a private nonprofit
1142	unincorporated association, a partnership, a trust, a limited
1143	liability company, or a nonprofit mutual company which may be
1144	empowered, among other things, to borrow money by issuing bonds
1145	or by incurring other indebtedness and to accumulate reserves or
1146	funds to be used for the payment of insured catastrophe losses.
1147	The plan may authorize all actions necessary to facilitate the
1148	issuance of bonds, including the pledging of assessments or
1149	other revenues.
1150	b.  Any entity created under this subsection, or any entity
1151	formed for the purposes of this subsection, may sue and be sued,
1152	may borrow money; issue bonds, notes, or debt instruments;
1153	pledge or sell assessments, market equalization surcharges and
1154	other surcharges, rights, premiums, contractual rights,
1155	projected recoveries from the Florida Hurricane Catastrophe
1156	Fund, other reinsurance recoverables, and other assets as
1157	security for such bonds, notes, or debt instruments; enter into
1158	any contracts or agreements necessary or proper to accomplish
1159	such borrowings; and take other actions necessary to carry out
1160	the purposes of this subsection. The association may issue bonds
1161	or incur other indebtedness, or have bonds issued on its behalf
1162	by a unit of local government pursuant to subparagraph (6)(p)2.,
1163	in the absence of a hurricane or other weather-related event,
1164	upon a determination by the association subject to approval by
1165	the department that such action would enable it to efficiently
1166	meet the financial obligations of the association and that such
1167	financings are reasonably necessary to effectuate the
1168	requirements of this subsection. Any such entity may accumulate
1169	reserves and retain surpluses as of the end of any association
1170	year to provide for the payment of losses incurred by the
1171	association during that year or any future year. The association
1172	shall incorporate and continue the plan of operation and
1173	articles of agreement in effect on the effective date of chapter
1174	76-96, Laws of Florida, to the extent that it is not
1175	inconsistent with chapter 76-96, and as subsequently modified
1176	consistent with chapter 76-96. The board of directors and
1177	officers currently serving shall continue to serve until their
1178	successors are duly qualified as provided under the plan. The
1179	assets and obligations of the plan in effect immediately prior
1180	to the effective date of chapter 76-96 shall be construed to be
1181	the assets and obligations of the successor plan created herein.
1182	c.  In recognition of s. 10, Art. I of the State
1183	Constitution, prohibiting the impairment of obligations of
1184	contracts, it is the intent of the Legislature that no action be
1185	taken whose purpose is to impair any bond indenture or financing
1186	agreement or any revenue source committed by contract to such
1187	bond or other indebtedness issued or incurred by the association
1188	or any other entity created under this subsection.
1189	7.  On such coverage, an agent's remuneration shall be that
1190	amount of money payable to the agent by the terms of his or her
1191	contract with the company with which the business is placed.
1192	However, no commission will be paid on that portion of the
1193	premium which is in excess of the standard premium of that
1194	company.
1195	8.  Subject to approval by the department, the association
1196	may establish different eligibility requirements and operational
1197	procedures for any line or type of coverage for any specified
1198	eligible area or portion of an eligible area if the board
1199	determines that such changes to the eligibility requirements and
1200	operational procedures are justified due to the voluntary market
1201	being sufficiently stable and competitive in such area or for
1202	such line or type of coverage and that consumers who, in good
1203	faith, are unable to obtain insurance through the voluntary
1204	market through ordinary methods would continue to have access to
1205	coverage from the association. When coverage is sought in
1206	connection with a real property transfer, such requirements and
1207	procedures shall not provide for an effective date of coverage
1208	later than the date of the closing of the transfer as
1209	established by the transferor, the transferee, and, if
1210	applicable, the lender.
1211	9.  Notwithstanding any other provision of law:
1212	a.  The pledge or sale of, the lien upon, and the security
1213	interest in any rights, revenues, or other assets of the
1214	association created or purported to be created pursuant to any
1215	financing documents to secure any bonds or other indebtedness of
1216	the association shall be and remain valid and enforceable,
1217	notwithstanding the commencement of and during the continuation
1218	of, and after, any rehabilitation, insolvency, liquidation,
1219	bankruptcy, receivership, conservatorship, reorganization, or
1220	similar proceeding against the association under the laws of
1221	this state or any other applicable laws.
1222	b.  No such proceeding shall relieve the association of its
1223	obligation, or otherwise affect its ability to perform its
1224	obligation, to continue to collect, or levy and collect,
1225	assessments, market equalization or other surcharges, projected
1226	recoveries from the Florida Hurricane Catastrophe Fund,
1227	reinsurance recoverables, or any other rights, revenues, or
1228	other assets of the association pledged.
1229	c.  Each such pledge or sale of, lien upon, and security
1230	interest in, including the priority of such pledge, lien, or
1231	security interest, any such assessments, emergency assessments,
1232	market equalization or renewal surcharges, projected recoveries
1233	from the Florida Hurricane Catastrophe Fund, reinsurance
1234	recoverables, or other rights, revenues, or other assets which
1235	are collected, or levied and collected, after the commencement
1236	of and during the pendency of or after any such proceeding shall
1237	continue unaffected by such proceeding.
1238	d.  As used in this subsection, the term "financing
1239	documents" means any agreement, instrument, or other document
1240	now existing or hereafter created evidencing any bonds or other
1241	indebtedness of the association or pursuant to which any such
1242	bonds or other indebtedness has been or may be issued and
1243	pursuant to which any rights, revenues, or other assets of the
1244	association are pledged or sold to secure the repayment of such
1245	bonds or indebtedness, together with the payment of interest on
1246	such bonds or such indebtedness, or the payment of any other
1247	obligation of the association related to such bonds or
1248	indebtedness.
1249	e.  Any such pledge or sale of assessments, revenues,
1250	contract rights or other rights or assets of the association
1251	shall constitute a lien and security interest, or sale, as the
1252	case may be, that is immediately effective and attaches to such
1253	assessments, revenues, contract, or other rights or assets,
1254	whether or not imposed or collected at the time the pledge or
1255	sale is made. Any such pledge or sale is effective, valid,
1256	binding, and enforceable against the association or other entity
1257	making such pledge or sale, and valid and binding against and
1258	superior to any competing claims or obligations owed to any
1259	other person or entity, including policyholders in this state,
1260	asserting rights in any such assessments, revenues, contract, or
1261	other rights or assets to the extent set forth in and in
1262	accordance with the terms of the pledge or sale contained in the
1263	applicable financing documents, whether or not any such person
1264	or entity has notice of such pledge or sale and without the need
1265	for any physical delivery, recordation, filing, or other action.
1266	f.  There shall be no liability on the part of, and no
1267	cause of action of any nature shall arise against, any member
1268	insurer or its agents or employees, agents or employees of the
1269	association, members of the board of directors of the
1270	association, or the department or its representatives, for any
1271	action taken by them in the performance of their duties or
1272	responsibilities under this subsection. Such immunity does not
1273	apply to actions for breach of any contract or agreement
1274	pertaining to insurance, or any willful tort.
1275	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1276	(a)1.  It is the public purpose of this subsection to
1277	ensure the existence of an orderly market for property insurance
1278	for Floridians and Florida businesses. The Legislature finds
1279	that private insurers are unwilling or unable to provide
1280	affordable property insurance coverage in this state to the
1281	extent sought and needed. The absence of affordable property
1282	insurance threatens the public health, safety, and welfare and
1283	likewise threatens the economic health of the state. The state
1284	therefore has a compelling public interest and a public purpose
1285	to assist in assuring that property in the state is insured and
1286	that it is insured at affordable rates so as to facilitate the
1287	remediation, reconstruction, and replacement of damaged or
1288	destroyed property in order to reduce or avoid the negative
1289	effects otherwise resulting to the public health, safety, and
1290	welfare, to the economy of the state, and to the revenues of the
1291	state and local governments which are needed to provide for the
1292	public welfare. It is necessary, therefore, to provide
1293	affordable property insurance to applicants who are in good
1294	faith entitled to procure insurance through the voluntary market
1295	but are unable to do so. The Legislature intends by this
1296	subsection that affordable property insurance be provided and
1297	that it continue to be provided, as long as necessary, through
1298	Citizens Property Insurance Corporation, a government entity
1299	that is an integral part of the state, and that is not a private
1300	insurance company. To that end, Citizens Property Insurance
1301	Corporation shall strive to increase the availability of
1302	affordable property insurance in this state, while achieving
1303	efficiencies and economies, and while providing service to
1304	policyholders, applicants, and agents which is no less than the
1305	quality generally provided in the voluntary market, for the
1306	achievement of the foregoing public purposes. Because it is
1307	essential for this government entity to have the maximum
1308	financial resources to pay claims following a catastrophic
1309	hurricane, it is the intent of the Legislature that Citizens
1310	Property Insurance Corporation continue to be an integral part
1311	of the state and that the income of the corporation be exempt
1312	from federal income taxation and that interest on the debt
1313	obligations issued by the corporation be exempt from federal
1314	income taxation.
1315	2.  The Residential Property and Casualty Joint
1316	Underwriting Association originally created by this statute
1317	shall be known, as of July 1, 2002, as the Citizens Property
1318	Insurance Corporation. The corporation shall provide insurance
1319	for residential and commercial property, for applicants who are
1320	in good faith entitled, but are unable, to procure insurance
1321	through the voluntary market. The corporation shall operate
1322	pursuant to a plan of operation approved by order of the
1323	Financial Services Commission. The plan is subject to continuous
1324	review by the commission. The commission may, by order, withdraw
1325	approval of all or part of a plan if the commission determines
1326	that conditions have changed since approval was granted and that
1327	the purposes of the plan require changes in the plan. The
1328	corporation shall continue to operate pursuant to the plan of
1329	operation approved by the Office of Insurance Regulation until
1330	October 1, 2006. For the purposes of this subsection,
1331	residential coverage includes both personal lines residential
1332	coverage, which consists of the type of coverage provided by
1333	homeowner's, mobile home owner's, dwelling, tenant's,
1334	condominium unit owner's, and similar policies, and commercial
1335	lines residential coverage, which consists of the type of
1336	coverage provided by condominium association, apartment
1337	building, and similar policies.
1338	3.  For the purposes of this subsection, the term
1339	"homestead property" means:
1340	a.  Property that has been granted a homestead exemption
1341	under chapter 196;
1342	b.  Property for which the owner has a current, written
1343	lease with a renter for a term of at least 7 months and for
1344	which the dwelling is insured by the corporation for $200,000 or
1345	less;
1346	c.  An owner-occupied mobile home or manufactured home, as
1347	defined in s. 320.01, which is permanently affixed to real
1348	property, is owned by a Florida resident, and has been granted a
1349	homestead exemption under chapter 196 or, if the owner does not
1350	own the real property, the owner certifies that the mobile home
1351	or manufactured home is his or her principal place of residence;
1352	d.  Tenant's coverage;
1353	e.  Commercial lines residential property; or
1354	f.  Any county, district, or municipal hospital; a hospital
1355	licensed by any not-for-profit corporation qualified under s.
1356	501(c)(3) of the United States Internal Revenue Code; or a
1357	continuing care retirement community that is certified under
1358	chapter 651 and that receives an exemption from ad valorem taxes
1359	under chapter 196.
1360	4.  For the purposes of this subsection, the term
1361	"nonhomestead property" means property that is not homestead
1362	property.
1363	3.5.  Effective January 1, 2009, a personal lines
1364	residential structure that has a dwelling replacement cost of $2
1365	$1 million or more, or a single condominium unit that has a
1366	combined dwelling and content replacement cost of $2 $1 million
1367	or more is not eligible for coverage by the corporation. Such
1368	dwellings insured by the corporation on December 31, 2008, may
1369	continue to be covered by the corporation until the end of the
1370	policy term. However, such dwellings that are insured by the
1371	corporation and become ineligible for coverage due to the
1372	provisions of this subparagraph may reapply and obtain coverage
1373	in the high-risk account and be considered "nonhomestead
1374	property" if the property owner provides the corporation with a
1375	sworn affidavit from one or more insurance agents, on a form
1376	provided by the corporation, stating that the agents have made
1377	their best efforts to obtain coverage and that the property has
1378	been rejected for coverage by at least one authorized insurer
1379	and at least three surplus lines insurers. If such conditions
1380	are met, the dwelling may be insured by the corporation for up
1381	to 3 years, after which time the dwelling is ineligible for
1382	coverage. The office shall approve the method used by the
1383	corporation for valuing the dwelling replacement cost for the
1384	purposes of this subparagraph. If a policyholder is insured by
1385	the corporation prior to being determined to be ineligible
1386	pursuant to this subparagraph and such policyholder files a
1387	lawsuit challenging the determination, the policyholder may
1388	remain insured by the corporation until the conclusion of the
1389	litigation.
1390	6.  For properties constructed on or after January 1, 2009,
1391	the corporation may not insure any property located within 2,500
1392	feet landward of the coastal construction control line created
1393	pursuant to s. 161.053 unless the property meets the
1394	requirements of the code-plus building standards developed by
1395	the Florida Building Commission.
1396	4.7.  It is the intent of the Legislature that
1397	policyholders, applicants, and agents of the corporation receive
1398	service and treatment of the highest possible level but never
1399	less than that generally provided in the voluntary market. It
1400	also is intended that the corporation be held to service
1401	standards no less than those applied to insurers in the
1402	voluntary market by the office with respect to responsiveness,
1403	timeliness, customer courtesy, and overall dealings with
1404	policyholders, applicants, or agents of the corporation.
1405	5.8.  Effective January 1, 2009, a personal lines
1406	residential structure that is located in the "wind-borne debris
1407	region," as defined in s. 1609.2, International Building Code
1408	(2006), and that has an insured value on the structure of
1409	$750,000 or more is not eligible for coverage by the corporation
1410	unless the structure has opening protections as required under
1411	the Florida Building Code for a newly constructed residential
1412	structure in that area. A residential structure shall be deemed
1413	to comply with the requirements of this subparagraph if it has
1414	shutters or opening protections on all openings and if such
1415	opening protections complied with the Florida Building Code at
1416	the time they were installed.
1417	(b)1.  All insurers authorized to write one or more subject
1418	lines of business in this state are subject to assessment by the
1419	corporation and, for the purposes of this subsection, are
1420	referred to collectively as "assessable insurers." Insurers
1421	writing one or more subject lines of business in this state
1422	pursuant to part VIII of chapter 626 are not assessable
1423	insurers, but insureds who procure one or more subject lines of
1424	business in this state pursuant to part VIII of chapter 626 are
1425	subject to assessment by the corporation and are referred to
1426	collectively as "assessable insureds." An authorized insurer's
1427	assessment liability shall begin on the first day of the
1428	calendar year following the year in which the insurer was issued
1429	a certificate of authority to transact insurance for subject
1430	lines of business in this state and shall terminate 1 year after
1431	the end of the first calendar year during which the insurer no
1432	longer holds a certificate of authority to transact insurance
1433	for subject lines of business in this state.
1434	2.a.  All revenues, assets, liabilities, losses, and
1435	expenses of the corporation shall be divided into three separate
1436	accounts as follows:
1437	(I)  A personal lines account for personal residential
1438	policies issued by the corporation or issued by the Residential
1439	Property and Casualty Joint Underwriting Association and renewed
1440	by the corporation that provide comprehensive, multiperil
1441	coverage on risks that are not located in areas eligible for
1442	coverage in the Florida Windstorm Underwriting Association as
1443	those areas were defined on January 1, 2002, and for such
1444	policies that do not provide coverage for the peril of wind on
1445	risks that are located in such areas;
1446	(II)  A commercial lines account for commercial residential
1447	and commercial nonresidential policies issued by the corporation
1448	or issued by the Residential Property and Casualty Joint
1449	Underwriting Association and renewed by the corporation that
1450	provide coverage for basic property perils on risks that are not
1451	located in areas eligible for coverage in the Florida Windstorm
1452	Underwriting Association as those areas were defined on January
1453	1, 2002, and for such policies that do not provide coverage for
1454	the peril of wind on risks that are located in such areas; and
1455	(III)  A high-risk account for personal residential
1456	policies and commercial residential and commercial
1457	nonresidential property policies issued by the corporation or
1458	transferred to the corporation that provide coverage for the
1459	peril of wind on risks that are located in areas eligible for
1460	coverage in the Florida Windstorm Underwriting Association as
1461	those areas were defined on January 1, 2002. Subject to the
1462	approval of a business plan by the Financial Services Commission
1463	and Legislative Budget Commission as provided in this sub-sub-
1464	subparagraph, but no earlier than March 31, 2007, The
1465	corporation may offer policies that provide multiperil coverage
1466	and the corporation shall continue to offer policies that
1467	provide coverage only for the peril of wind for risks located in
1468	areas eligible for coverage in the high-risk account. In issuing
1469	multiperil coverage, the corporation may use its approved policy
1470	forms and rates for the personal lines account. An applicant or
1471	insured who is eligible to purchase a multiperil policy from the
1472	corporation may purchase a multiperil policy from an authorized
1473	insurer without prejudice to the applicant's or insured's
1474	eligibility to prospectively purchase a policy that provides
1475	coverage only for the peril of wind from the corporation. An
1476	applicant or insured who is eligible for a corporation policy
1477	that provides coverage only for the peril of wind may elect to
1478	purchase or retain such policy and also purchase or retain
1479	coverage excluding wind from an authorized insurer without
1480	prejudice to the applicant's or insured's eligibility to
1481	prospectively purchase a policy that provides multiperil
1482	coverage from the corporation. It is the goal of the Legislature
1483	that there would be an overall average savings of 10 percent or
1484	more for a policyholder who currently has a wind-only policy
1485	with the corporation, and an ex-wind policy with a voluntary
1486	insurer or the corporation, and who then obtains a multiperil
1487	policy from the corporation. It is the intent of the Legislature
1488	that the offer of multiperil coverage in the high-risk account
1489	be made and implemented in a manner that does not adversely
1490	affect the tax-exempt status of the corporation or
1491	creditworthiness of or security for currently outstanding
1492	financing obligations or credit facilities of the high-risk
1493	account, the personal lines account, or the commercial lines
1494	account. By March 1, 2007, the corporation shall prepare and
1495	submit for approval by the Financial Services Commission and
1496	Legislative Budget Commission a report detailing the
1497	corporation's business plan for issuing multiperil coverage in
1498	the high-risk account. The business plan shall be approved or
1499	disapproved within 30 days after receipt, as submitted or
1500	modified and resubmitted by the corporation. The business plan
1501	must include: the impact of such multiperil coverage on the
1502	corporation's financial resources, the impact of such multiperil
1503	coverage on the corporation's tax-exempt status, the manner in
1504	which the corporation plans to implement the processing of
1505	applications and policy forms for new and existing
1506	policyholders, the impact of such multiperil coverage on the
1507	corporation's ability to deliver customer service at the high
1508	level required by this subsection, the ability of the
1509	corporation to process claims, the ability of the corporation to
1510	quote and issue policies, the impact of such multiperil coverage
1511	on the corporation's agents, the impact of such multiperil
1512	coverage on the corporation's existing policyholders, and the
1513	impact of such multiperil coverage on rates and premium. The
1514	high-risk account must also include quota share primary
1515	insurance under subparagraph (c)2. The area eligible for
1516	coverage under the high-risk account also includes the area
1517	within Port Canaveral, which is bordered on the south by the
1518	City of Cape Canaveral, bordered on the west by the Banana
1519	River, and bordered on the north by Federal Government property.
1520	b.  The three separate accounts must be maintained as long
1521	as financing obligations entered into by the Florida Windstorm
1522	Underwriting Association or Residential Property and Casualty
1523	Joint Underwriting Association are outstanding, in accordance
1524	with the terms of the corresponding financing documents. When
1525	the financing obligations are no longer outstanding, in
1526	accordance with the terms of the corresponding financing
1527	documents, the corporation may use a single account for all
1528	revenues, assets, liabilities, losses, and expenses of the
1529	corporation. Consistent with the requirement of this
1530	subparagraph and prudent investment policies that minimize the
1531	cost of carrying debt, the board shall exercise its best efforts
1532	to retire existing debt or to obtain approval of necessary
1533	parties to amend the terms of existing debt, so as to structure
1534	the most efficient plan to consolidate the three separate
1535	accounts into a single account. By February 1, 2007, the board
1536	shall submit a report to the Financial Services Commission, the
1537	President of the Senate, and the Speaker of the House of
1538	Representatives which includes an analysis of consolidating the
1539	accounts, the actions the board has taken to minimize the cost
1540	of carrying debt, and its recommendations for executing the most
1541	efficient plan.
1542	c.  Creditors of the Residential Property and Casualty
1543	Joint Underwriting Association and of the accounts specified in
1544	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1545	and recourse to, the accounts referred to in sub-sub-
1546	subparagraphs a.(I) and (II) and shall have no claim against, or
1547	recourse to, the account referred to in sub-sub-subparagraph
1548	a.(III). Creditors of the Florida Windstorm Underwriting
1549	Association shall have a claim against, and recourse to, the
1550	account referred to in sub-sub-subparagraph a.(III) and shall
1551	have no claim against, or recourse to, the accounts referred to
1552	in sub-sub-subparagraphs a.(I) and (II).
1553	d.  Revenues, assets, liabilities, losses, and expenses not
1554	attributable to particular accounts shall be prorated among the
1555	accounts.
1556	e.  The Legislature finds that the revenues of the
1557	corporation are revenues that are necessary to meet the
1558	requirements set forth in documents authorizing the issuance of
1559	bonds under this subsection.
1560	f.  No part of the income of the corporation may inure to
1561	the benefit of any private person.
1562	3.  With respect to a deficit in an account:
1563	a.  After accounting for the Citizens policyholder
1564	surcharge imposed under sub-subparagraph i., when the remaining
1565	projected deficit incurred in a particular calendar year is not
1566	greater than 6 10 percent of the aggregate statewide direct
1567	written premium for the subject lines of business for the prior
1568	calendar year, the entire deficit shall be recovered through
1569	regular assessments of assessable insurers under paragraph (p)
1570	and assessable insureds.
1571	b.  After accounting for the Citizens policyholder
1572	surcharge imposed under sub-subparagraph i., when the remaining
1573	projected deficit incurred in a particular calendar year exceeds
1574	6 10 percent of the aggregate statewide direct written premium
1575	for the subject lines of business for the prior calendar year,
1576	the corporation shall levy regular assessments on assessable
1577	insurers under paragraph (p) and on assessable insureds in an
1578	amount equal to the greater of 6 10 percent of the deficit or 6
1579	10 percent of the aggregate statewide direct written premium for
1580	the subject lines of business for the prior calendar year. Any
1581	remaining deficit shall be recovered through emergency
1582	assessments under sub-subparagraph d.
1583	c.  Each assessable insurer's share of the amount being
1584	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1585	be in the proportion that the assessable insurer's direct
1586	written premium for the subject lines of business for the year
1587	preceding the assessment bears to the aggregate statewide direct
1588	written premium for the subject lines of business for that year.
1589	The assessment percentage applicable to each assessable insured
1590	is the ratio of the amount being assessed under sub-subparagraph
1591	a. or sub-subparagraph b. to the aggregate statewide direct
1592	written premium for the subject lines of business for the prior
1593	year. Assessments levied by the corporation on assessable
1594	insurers under sub-subparagraphs a. and b. shall be paid as
1595	required by the corporation's plan of operation and paragraph
1596	(p). notwithstanding any other provision of this subsection, the
1597	aggregate amount of a regular assessment for a deficit incurred
1598	in a particular calendar year shall be reduced by the estimated
1599	amount to be received by the corporation from the Citizens
1600	policyholder surcharge under subparagraph (c)10. and the amount
1601	collected or estimated to be collected from the assessment on
1602	Citizens policyholders pursuant to sub-subparagraph i.
1603	Assessments levied by the corporation on assessable insureds
1604	under sub-subparagraphs a. and b. shall be collected by the
1605	surplus lines agent at the time the surplus lines agent collects
1606	the surplus lines tax required by s. 626.932 and shall be paid
1607	to the Florida Surplus Lines Service Office at the time the
1608	surplus lines agent pays the surplus lines tax to the Florida
1609	Surplus Lines Service Office. Upon receipt of regular
1610	assessments from surplus lines agents, the Florida Surplus Lines
1611	Service Office shall transfer the assessments directly to the
1612	corporation as determined by the corporation.
1613	d.  Upon a determination by the board of governors that a
1614	deficit in an account exceeds the amount that will be recovered
1615	through regular assessments under sub-subparagraph a. or sub-
1616	subparagraph b., plus the amount that is expected to be
1617	recovered through surcharges under sub-subparagraph i., as to
1618	the remaining projected deficit the board shall levy, after
1619	verification by the office, emergency assessments, for as many
1620	years as necessary to cover the deficits, to be collected by
1621	assessable insurers and the corporation and collected from
1622	assessable insureds upon issuance or renewal of policies for
1623	subject lines of business, excluding National Flood Insurance
1624	policies. The amount of the emergency assessment collected in a
1625	particular year shall be a uniform percentage of that year's
1626	direct written premium for subject lines of business and all
1627	accounts of the corporation, excluding National Flood Insurance
1628	Program policy premiums, as annually determined by the board and
1629	verified by the office. The office shall verify the arithmetic
1630	calculations involved in the board's determination within 30
1631	days after receipt of the information on which the determination
1632	was based. Notwithstanding any other provision of law, the
1633	corporation and each assessable insurer that writes subject
1634	lines of business shall collect emergency assessments from its
1635	policyholders without such obligation being affected by any
1636	credit, limitation, exemption, or deferment. Emergency
1637	assessments levied by the corporation on assessable insureds
1638	shall be collected by the surplus lines agent at the time the
1639	surplus lines agent collects the surplus lines tax required by
1640	s. 626.932 and shall be paid to the Florida Surplus Lines
1641	Service Office at the time the surplus lines agent pays the
1642	surplus lines tax to the Florida Surplus Lines Service Office.
1643	The emergency assessments so collected shall be transferred
1644	directly to the corporation on a periodic basis as determined by
1645	the corporation and shall be held by the corporation solely in
1646	the applicable account. The aggregate amount of emergency
1647	assessments levied for an account under this sub-subparagraph in
1648	any calendar year may, at the discretion of the board of
1649	governors, be less than but may not exceed the greater of 10
1650	percent of the amount needed to cover the original deficit, plus
1651	interest, fees, commissions, required reserves, and other costs
1652	associated with financing of the original deficit, or 10 percent
1653	of the aggregate statewide direct written premium for subject
1654	lines of business and for all accounts of the corporation for
1655	the prior year, plus interest, fees, commissions, required
1656	reserves, and other costs associated with financing the original
1657	deficit.
1658	e.  The corporation may pledge the proceeds of assessments,
1659	projected recoveries from the Florida Hurricane Catastrophe
1660	Fund, other insurance and reinsurance recoverables, policyholder
1661	surcharges and other surcharges, and other funds available to
1662	the corporation as the source of revenue for and to secure bonds
1663	issued under paragraph (p), bonds or other indebtedness issued
1664	under subparagraph (c)3., or lines of credit or other financing
1665	mechanisms issued or created under this subsection, or to retire
1666	any other debt incurred as a result of deficits or events giving
1667	rise to deficits, or in any other way that the board determines
1668	will efficiently recover such deficits. The purpose of the lines
1669	of credit or other financing mechanisms is to provide additional
1670	resources to assist the corporation in covering claims and
1671	expenses attributable to a catastrophe. As used in this
1672	subsection, the term "assessments" includes regular assessments
1673	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1674	(p)1. and emergency assessments under sub-subparagraph d.
1675	Emergency assessments collected under sub-subparagraph d. are
1676	not part of an insurer's rates, are not premium, and are not
1677	subject to premium tax, fees, or commissions; however, failure
1678	to pay the emergency assessment shall be treated as failure to
1679	pay premium. The emergency assessments under sub-subparagraph d.
1680	shall continue as long as any bonds issued or other indebtedness
1681	incurred with respect to a deficit for which the assessment was
1682	imposed remain outstanding, unless adequate provision has been
1683	made for the payment of such bonds or other indebtedness
1684	pursuant to the documents governing such bonds or other
1685	indebtedness.
1686	f.  As used in this subsection for purposes of any deficit
1687	incurred on or after January 25, 2007, the term "subject lines
1688	of business" means insurance written by assessable insurers or
1689	procured by assessable insureds for all property and casualty
1690	lines of business in this state, but not including workers'
1691	compensation or medical malpractice. As used in the sub-
1692	subparagraph, the term "property and casualty lines of business"
1693	includes all lines of business identified on Form 2, Exhibit of
1694	Premiums and Losses, in the annual statement required of
1695	authorized insurers by s. 624.424 and any rule adopted under
1696	this section, except for those lines identified as accident and
1697	health insurance and except for policies written under the
1698	National Flood Insurance Program or the Federal Crop Insurance
1699	Program. For purposes of this sub-subparagraph, the term
1700	"workers' compensation" includes both workers' compensation
1701	insurance and excess workers' compensation insurance.
1702	g.  The Florida Surplus Lines Service Office shall
1703	determine annually the aggregate statewide written premium in
1704	subject lines of business procured by assessable insureds and
1705	shall report that information to the corporation in a form and
1706	at a time the corporation specifies to ensure that the
1707	corporation can meet the requirements of this subsection and the
1708	corporation's financing obligations.
1709	h.  The Florida Surplus Lines Service Office shall verify
1710	the proper application by surplus lines agents of assessment
1711	percentages for regular assessments and emergency assessments
1712	levied under this subparagraph on assessable insureds and shall
1713	assist the corporation in ensuring the accurate, timely
1714	collection and payment of assessments by surplus lines agents as
1715	required by the corporation.
1716	i.  If a deficit is incurred in any account in 2008 or
1717	thereafter, the board of governors shall levy a Citizens
1718	policyholder surcharge an immediate assessment against the
1719	premium of each nonhomestead property policyholder in all
1720	accounts of the corporation, as a uniform percentage of the
1721	premium of the policy of up to 10 percent of such premium, which
1722	funds shall be used to offset the deficit. If this assessment is
1723	insufficient to eliminate the deficit, the board of governors
1724	shall levy an additional assessment against all policyholders of
1725	the corporation for a 12-month period, which shall be collected
1726	at the time of issuance or renewal of a policy, as a uniform
1727	percentage of the premium for the policy of up to 15 10 percent
1728	of such premium, which funds shall be used to further offset the
1729	deficit. Citizens policyholder surcharges under this sub-
1730	subparagraph are not considered premium and are not subject to
1731	commissions, fees, or premium taxes. However, failure to pay
1732	such surcharges shall be treated as failure to pay premium.
1733	j.  If the amount of any assessments or surcharges
1734	collected from corporation policyholders, assessable insurers or
1735	their policyholders, or assessable insureds exceeds the amount
1736	of the deficits, such excess amounts shall be remitted to and
1737	retained by the corporation in a reserve to be used by the
1738	corporation, as determined by the board of governors and
1739	approved by the office, to pay claims or reduce any past,
1740	present, or future plan-year deficits or to reduce outstanding
1741	debt. The board of governors shall maintain separate accounting
1742	records that consolidate data for nonhomestead properties,
1743	including, but not limited to, number of policies, insured
1744	values, premiums written, and losses. The board of governors
1745	shall annually report to the office and the Legislature a
1746	summary of such data.
1747	(c)  The plan of operation of the corporation:
1748	1.  Must provide for adoption of residential property and
1749	casualty insurance policy forms and commercial residential and
1750	nonresidential property insurance forms, which forms must be
1751	approved by the office prior to use. The corporation shall adopt
1752	the following policy forms:
1753	a.  Standard personal lines policy forms that are
1754	comprehensive multiperil policies providing full coverage of a
1755	residential property equivalent to the coverage provided in the
1756	private insurance market under an HO-3, HO-4, or HO-6 policy.
1757	b.  Basic personal lines policy forms that are policies
1758	similar to an HO-8 policy or a dwelling fire policy that provide
1759	coverage meeting the requirements of the secondary mortgage
1760	market, but which coverage is more limited than the coverage
1761	under a standard policy.
1762	c.  Commercial lines residential and nonresidential policy
1763	forms that are generally similar to the basic perils of full
1764	coverage obtainable for commercial residential structures and
1765	commercial nonresidential structures in the admitted voluntary
1766	market.
1767	d.  Personal lines and commercial lines residential
1768	property insurance forms that cover the peril of wind only. The
1769	forms are applicable only to residential properties located in
1770	areas eligible for coverage under the high-risk account referred
1771	to in sub-subparagraph (b)2.a.
1772	e.  Commercial lines nonresidential property insurance
1773	forms that cover the peril of wind only. The forms are
1774	applicable only to nonresidential properties located in areas
1775	eligible for coverage under the high-risk account referred to in
1776	sub-subparagraph (b)2.a.
1777	f.  The corporation may adopt variations of the policy
1778	forms listed in sub-subparagraphs a.-e. that contain more
1779	restrictive coverage.
1780	2.a.  Must provide that the corporation adopt a program in
1781	which the corporation and authorized insurers enter into quota
1782	share primary insurance agreements for hurricane coverage, as
1783	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1784	property insurance forms for eligible risks which cover the
1785	peril of wind only. As used in this subsection, the term:
1786	(I)  "Quota share primary insurance" means an arrangement
1787	in which the primary hurricane coverage of an eligible risk is
1788	provided in specified percentages by the corporation and an
1789	authorized insurer. The corporation and authorized insurer are
1790	each solely responsible for a specified percentage of hurricane
1791	coverage of an eligible risk as set forth in a quota share
1792	primary insurance agreement between the corporation and an
1793	authorized insurer and the insurance contract. The
1794	responsibility of the corporation or authorized insurer to pay
1795	its specified percentage of hurricane losses of an eligible
1796	risk, as set forth in the quota share primary insurance
1797	agreement, may not be altered by the inability of the other
1798	party to the agreement to pay its specified percentage of
1799	hurricane losses. Eligible risks that are provided hurricane
1800	coverage through a quota share primary insurance arrangement
1801	must be provided policy forms that set forth the obligations of
1802	the corporation and authorized insurer under the arrangement,
1803	clearly specify the percentages of quota share primary insurance
1804	provided by the corporation and authorized insurer, and
1805	conspicuously and clearly state that neither the authorized
1806	insurer nor the corporation may be held responsible beyond its
1807	specified percentage of coverage of hurricane losses.
1808	(II)  "Eligible risks" means personal lines residential and
1809	commercial lines residential risks that meet the underwriting
1810	criteria of the corporation and are located in areas that were
1811	eligible for coverage by the Florida Windstorm Underwriting
1812	Association on January 1, 2002.
1813	b.  The corporation may enter into quota share primary
1814	insurance agreements with authorized insurers at corporation
1815	coverage levels of 90 percent and 50 percent.
1816	c.  If the corporation determines that additional coverage
1817	levels are necessary to maximize participation in quota share
1818	primary insurance agreements by authorized insurers, the
1819	corporation may establish additional coverage levels. However,
1820	the corporation's quota share primary insurance coverage level
1821	may not exceed 90 percent.
1822	d.  Any quota share primary insurance agreement entered
1823	into between an authorized insurer and the corporation must
1824	provide for a uniform specified percentage of coverage of
1825	hurricane losses, by county or territory as set forth by the
1826	corporation board, for all eligible risks of the authorized
1827	insurer covered under the quota share primary insurance
1828	agreement.
1829	e.  Any quota share primary insurance agreement entered
1830	into between an authorized insurer and the corporation is
1831	subject to review and approval by the office. However, such
1832	agreement shall be authorized only as to insurance contracts
1833	entered into between an authorized insurer and an insured who is
1834	already insured by the corporation for wind coverage.
1835	f.  For all eligible risks covered under quota share
1836	primary insurance agreements, the exposure and coverage levels
1837	for both the corporation and authorized insurers shall be
1838	reported by the corporation to the Florida Hurricane Catastrophe
1839	Fund. For all policies of eligible risks covered under quota
1840	share primary insurance agreements, the corporation and the
1841	authorized insurer shall maintain complete and accurate records
1842	for the purpose of exposure and loss reimbursement audits as
1843	required by Florida Hurricane Catastrophe Fund rules. The
1844	corporation and the authorized insurer shall each maintain
1845	duplicate copies of policy declaration pages and supporting
1846	claims documents.
1847	g.  The corporation board shall establish in its plan of
1848	operation standards for quota share agreements which ensure that
1849	there is no discriminatory application among insurers as to the
1850	terms of quota share agreements, pricing of quota share
1851	agreements, incentive provisions if any, and consideration paid
1852	for servicing policies or adjusting claims.
1853	h.  The quota share primary insurance agreement between the
1854	corporation and an authorized insurer must set forth the
1855	specific terms under which coverage is provided, including, but
1856	not limited to, the sale and servicing of policies issued under
1857	the agreement by the insurance agent of the authorized insurer
1858	producing the business, the reporting of information concerning
1859	eligible risks, the payment of premium to the corporation, and
1860	arrangements for the adjustment and payment of hurricane claims
1861	incurred on eligible risks by the claims adjuster and personnel
1862	of the authorized insurer. Entering into a quota sharing
1863	insurance agreement between the corporation and an authorized
1864	insurer shall be voluntary and at the discretion of the
1865	authorized insurer.
1866	3.  May provide that the corporation may employ or
1867	otherwise contract with individuals or other entities to provide
1868	administrative or professional services that may be appropriate
1869	to effectuate the plan. The corporation shall have the power to
1870	borrow funds, by issuing bonds or by incurring other
1871	indebtedness, and shall have other powers reasonably necessary
1872	to effectuate the requirements of this subsection, including,
1873	without limitation, the power to issue bonds and incur other
1874	indebtedness in order to refinance outstanding bonds or other
1875	indebtedness. The corporation may, but is not required to, seek
1876	judicial validation of its bonds or other indebtedness under
1877	chapter 75. The corporation may issue bonds or incur other
1878	indebtedness, or have bonds issued on its behalf by a unit of
1879	local government pursuant to subparagraph (p)2., in the absence
1880	of a hurricane or other weather-related event, upon a
1881	determination by the corporation, subject to approval by the
1882	office, that such action would enable it to efficiently meet the
1883	financial obligations of the corporation and that such
1884	financings are reasonably necessary to effectuate the
1885	requirements of this subsection. The corporation is authorized
1886	to take all actions needed to facilitate tax-free status for any
1887	such bonds or indebtedness, including formation of trusts or
1888	other affiliated entities. The corporation shall have the
1889	authority to pledge assessments, projected recoveries from the
1890	Florida Hurricane Catastrophe Fund, other reinsurance
1891	recoverables, market equalization and other surcharges, and
1892	other funds available to the corporation as security for bonds
1893	or other indebtedness. In recognition of s. 10, Art. I of the
1894	State Constitution, prohibiting the impairment of obligations of
1895	contracts, it is the intent of the Legislature that no action be
1896	taken whose purpose is to impair any bond indenture or financing
1897	agreement or any revenue source committed by contract to such
1898	bond or other indebtedness.
1899	4.a.  Must require that the corporation operate subject to
1900	the supervision and approval of a board of governors consisting
1901	of eight individuals who are residents of this state, from
1902	different geographical areas of this state. The Governor, the
1903	Chief Financial Officer, the President of the Senate, and the
1904	Speaker of the House of Representatives shall each appoint two
1905	members of the board. At least one of the two members appointed
1906	by each appointing officer must have demonstrated expertise in
1907	insurance. The Chief Financial Officer shall designate one of
1908	the appointees as chair. All board members serve at the pleasure
1909	of the appointing officer. All members of the board of governors
1910	are subject to removal at will by the officers who appointed
1911	them. All board members, including the chair, must be appointed
1912	to serve for 3-year terms beginning annually on a date
1913	designated by the plan. Any board vacancy shall be filled for
1914	the unexpired term by the appointing officer. The Chief
1915	Financial Officer shall appoint a technical advisory group to
1916	provide information and advice to the board of governors in
1917	connection with the board's duties under this subsection. The
1918	executive director and senior managers of the corporation shall
1919	be engaged by the board and serve at the pleasure of the board.
1920	Any executive director appointed on or after July 1, 2006, is
1921	subject to confirmation by the Senate. The executive director is
1922	responsible for employing other staff as the corporation may
1923	require, subject to review and concurrence by the board.
1924	b.  The board shall create a Market Accountability Advisory
1925	Committee to assist the corporation in developing awareness of
1926	its rates and its customer and agent service levels in
1927	relationship to the voluntary market insurers writing similar
1928	coverage. The members of the advisory committee shall consist of
1929	the following 11 persons, one of whom must be elected chair by
1930	the members of the committee: four representatives, one
1931	appointed by the Florida Association of Insurance Agents, one by
1932	the Florida Association of Insurance and Financial Advisors, one
1933	by the Professional Insurance Agents of Florida, and one by the
1934	Latin American Association of Insurance Agencies; three
1935	representatives appointed by the insurers with the three highest
1936	voluntary market share of residential property insurance
1937	business in the state; one representative from the Office of
1938	Insurance Regulation; one consumer appointed by the board who is
1939	insured by the corporation at the time of appointment to the
1940	committee; one representative appointed by the Florida
1941	Association of Realtors; and one representative appointed by the
1942	Florida Bankers Association. All members must serve for 3-year
1943	terms and may serve for consecutive terms. The committee shall
1944	report to the corporation at each board meeting on insurance
1945	market issues which may include rates and rate competition with
1946	the voluntary market; service, including policy issuance, claims
1947	processing, and general responsiveness to policyholders,
1948	applicants, and agents; and matters relating to depopulation.
1949	5.  Must provide a procedure for determining the
1950	eligibility of a risk for coverage, as follows:
1951	a.  Subject to the provisions of s. 627.3517, with respect
1952	to personal lines residential risks, if the risk is offered
1953	coverage from an authorized insurer at the insurer's approved
1954	rate under either a standard policy including wind coverage or,
1955	if consistent with the insurer's underwriting rules as filed
1956	with the office, a basic policy including wind coverage, for a
1957	new application to the corporation for coverage, the risk is not
1958	eligible for any policy issued by the corporation unless the
1959	premium for coverage from the authorized insurer is more than 15
1960	percent greater than the premium for comparable coverage from
1961	the corporation. If the risk is not able to obtain any such
1962	offer, the risk is eligible for either a standard policy
1963	including wind coverage or a basic policy including wind
1964	coverage issued by the corporation; however, if the risk could
1965	not be insured under a standard policy including wind coverage
1966	regardless of market conditions, the risk shall be eligible for
1967	a basic policy including wind coverage unless rejected under
1968	subparagraph 9. However, with regard to a policyholder of the
1969	corporation or a policyholder removed from the corporation
1970	through an assumption agreement until the end of the assumption
1971	period, the policyholder remains eligible for coverage from the
1972	corporation regardless of any offer of coverage from an
1973	authorized insurer or surplus lines insurer. The corporation
1974	shall determine the type of policy to be provided on the basis
1975	of objective standards specified in the underwriting manual and
1976	based on generally accepted underwriting practices.
1977	(I)  If the risk accepts an offer of coverage through the
1978	market assistance plan or an offer of coverage through a
1979	mechanism established by the corporation before a policy is
1980	issued to the risk by the corporation or during the first 30
1981	days of coverage by the corporation, and the producing agent who
1982	submitted the application to the plan or to the corporation is
1983	not currently appointed by the insurer, the insurer shall:
1984	(A)  Pay to the producing agent of record of the policy,
1985	for the first year, an amount that is the greater of the
1986	insurer's usual and customary commission for the type of policy
1987	written or a fee equal to the usual and customary commission of
1988	the corporation; or
1989	(B)  Offer to allow the producing agent of record of the
1990	policy to continue servicing the policy for a period of not less
1991	than 1 year and offer to pay the agent the greater of the
1992	insurer's or the corporation's usual and customary commission
1993	for the type of policy written.
1994
1995	If the producing agent is unwilling or unable to accept
1996	appointment, the new insurer shall pay the agent in accordance
1997	with sub-sub-sub-subparagraph (A).
1998	(II)  When the corporation enters into a contractual
1999	agreement for a take-out plan, the producing agent of record of
2000	the corporation policy is entitled to retain any unearned
2001	commission on the policy, and the insurer shall:
2002	(A)  Pay to the producing agent of record of the
2003	corporation policy, for the first year, an amount that is the
2004	greater of the insurer's usual and customary commission for the
2005	type of policy written or a fee equal to the usual and customary
2006	commission of the corporation; or
2007	(B)  Offer to allow the producing agent of record of the
2008	corporation policy to continue servicing the policy for a period
2009	of not less than 1 year and offer to pay the agent the greater
2010	of the insurer's or the corporation's usual and customary
2011	commission for the type of policy written.
2012
2013	If the producing agent is unwilling or unable to accept
2014	appointment, the new insurer shall pay the agent in accordance
2015	with sub-sub-sub-subparagraph (A).
2016	b.  With respect to commercial lines residential risks, for
2017	a new application to the corporation for coverage, if the risk
2018	is offered coverage under a policy including wind coverage from
2019	an authorized insurer at its approved rate, the risk is not
2020	eligible for any policy issued by the corporation unless the
2021	premium for coverage from the authorized insurer is more than 15
2022	percent greater than the premium for comparable coverage from
2023	the corporation. If the risk is not able to obtain any such
2024	offer, the risk is eligible for a policy including wind coverage
2025	issued by the corporation. However, with regard to a
2026	policyholder of the corporation or a policyholder removed from
2027	the corporation through an assumption agreement until the end of
2028	the assumption period, the policyholder remains eligible for
2029	coverage from the corporation regardless of any offer of
2030	coverage from an authorized insurer or surplus lines insurer.
2031	(I)  If the risk accepts an offer of coverage through the
2032	market assistance plan or an offer of coverage through a
2033	mechanism established by the corporation before a policy is
2034	issued to the risk by the corporation or during the first 30
2035	days of coverage by the corporation, and the producing agent who
2036	submitted the application to the plan or the corporation is not
2037	currently appointed by the insurer, the insurer shall:
2038	(A)  Pay to the producing agent of record of the policy,
2039	for the first year, an amount that is the greater of the
2040	insurer's usual and customary commission for the type of policy
2041	written or a fee equal to the usual and customary commission of
2042	the corporation; or
2043	(B)  Offer to allow the producing agent of record of the
2044	policy to continue servicing the policy for a period of not less
2045	than 1 year and offer to pay the agent the greater of the
2046	insurer's or the corporation's usual and customary commission
2047	for the type of policy written.
2048
2049	If the producing agent is unwilling or unable to accept
2050	appointment, the new insurer shall pay the agent in accordance
2051	with sub-sub-sub-subparagraph (A).
2052	(II)  When the corporation enters into a contractual
2053	agreement for a take-out plan, the producing agent of record of
2054	the corporation policy is entitled to retain any unearned
2055	commission on the policy, and the insurer shall:
2056	(A)  Pay to the producing agent of record of the
2057	corporation policy, for the first year, an amount that is the
2058	greater of the insurer's usual and customary commission for the
2059	type of policy written or a fee equal to the usual and customary
2060	commission of the corporation; or
2061	(B)  Offer to allow the producing agent of record of the
2062	corporation policy to continue servicing the policy for a period
2063	of not less than 1 year and offer to pay the agent the greater
2064	of the insurer's or the corporation's usual and customary
2065	commission for the type of policy written.
2066
2067	If the producing agent is unwilling or unable to accept
2068	appointment, the new insurer shall pay the agent in accordance
2069	with sub-sub-sub-subparagraph (A).
2070	c.  For purposes of determining comparable coverage under
2071	sub-subparagraphs a. and b., the comparison shall be based on
2072	those forms and coverages that are reasonably comparable. The
2073	corporation may rely on a determination of comparable coverage
2074	and premium made by the producing agent who submits the
2075	application to the corporation, made in the agent's capacity as
2076	the corporation's agent. A comparison may be made solely of the
2077	premium with respect to the main building or structure only on
2078	the following basis: the same coverage A or other building
2079	limits; the same percentage hurricane deductible that applies on
2080	an annual basis or that applies to each hurricane for commercial
2081	residential property; the same percentage of ordinance and law
2082	coverage, if the same limit is offered by both the corporation
2083	and the authorized insurer; the same mitigation credits, to the
2084	extent the same types of credits are offered both by the
2085	corporation and the authorized insurer; the same method for loss
2086	payment, such as replacement cost or actual cash value, if the
2087	same method is offered both by the corporation and the
2088	authorized insurer in accordance with underwriting rules; and
2089	any other form or coverage that is reasonably comparable as
2090	determined by the board. If an application is submitted to the
2091	corporation for wind-only coverage in the high-risk account, the
2092	premium for the corporation's wind-only policy plus the premium
2093	for the ex-wind policy that is offered by an authorized insurer
2094	to the applicant shall be compared to the premium for multiperil
2095	coverage offered by an authorized insurer, subject to the
2096	standards for comparison specified in this subparagraph. If the
2097	corporation or the applicant requests from the authorized
2098	insurer a breakdown of the premium of the offer by types of
2099	coverage so that a comparison may be made by the corporation or
2100	its agent and the authorized insurer refuses or is unable to
2101	provide such information, the corporation may treat the offer as
2102	not being an offer of coverage from an authorized insurer at the
2103	insurer's approved rate.
2104	6.  Must include rules for classifications of risks and
2105	rates therefor.
2106	7.  Must provide that if premium and investment income for
2107	an account attributable to a particular calendar year are in
2108	excess of projected losses and expenses for the account
2109	attributable to that year, such excess shall be held in surplus
2110	in the account. Such surplus shall be available to defray
2111	deficits in that account as to future years and shall be used
2112	for that purpose prior to assessing assessable insurers and
2113	assessable insureds as to any calendar year.
2114	8.  Must provide objective criteria and procedures to be
2115	uniformly applied for all applicants in determining whether an
2116	individual risk is so hazardous as to be uninsurable. In making
2117	this determination and in establishing the criteria and
2118	procedures, the following shall be considered:
2119	a.  Whether the likelihood of a loss for the individual
2120	risk is substantially higher than for other risks of the same
2121	class; and
2122	b.  Whether the uncertainty associated with the individual
2123	risk is such that an appropriate premium cannot be determined.
2124
2125	The acceptance or rejection of a risk by the corporation shall
2126	be construed as the private placement of insurance, and the
2127	provisions of chapter 120 shall not apply.
2128	9.  Must provide that the corporation shall make its best
2129	efforts to procure catastrophe reinsurance at reasonable rates,
2130	to cover its projected 100-year probable maximum loss as
2131	determined by the board of governors.
2132	10.  Must provide that in the event of regular deficit
2133	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2134	(b)3.b., in the personal lines account, the commercial lines
2135	residential account, or the high-risk account, the corporation
2136	shall levy upon corporation policyholders in its next rate
2137	filing, or by a separate rate filing solely for this purpose, a
2138	Citizens policyholder surcharge arising from a regular
2139	assessment in such account in a percentage equal to the total
2140	amount of such regular assessments divided by the aggregate
2141	statewide direct written premium for subject lines of business
2142	for the prior calendar year. For purposes of calculating the
2143	Citizens policyholder surcharge to be levied under this
2144	subparagraph, the total amount of the regular assessment to
2145	which this surcharge is related shall be determined as set forth
2146	in subparagraph (b)3., without deducting the estimated Citizens
2147	policyholder surcharge. Citizens policyholder surcharges under
2148	this subparagraph are not considered premium and are not subject
2149	to commissions, fees, or premium taxes; however, failure to pay
2150	a market equalization surcharge shall be treated as failure to
2151	pay premium.
2152	10.11.  The policies issued by the corporation must provide
2153	that, if the corporation or the market assistance plan obtains
2154	an offer from an authorized insurer to cover the risk at its
2155	approved rates, the risk is no longer eligible for renewal
2156	through the corporation, except as otherwise provided in this
2157	subsection.
2158	11.12.  Corporation policies and applications must include
2159	a notice that the corporation policy could, under this section,
2160	be replaced with a policy issued by an authorized insurer that
2161	does not provide coverage identical to the coverage provided by
2162	the corporation. The notice shall also specify that acceptance
2163	of corporation coverage creates a conclusive presumption that
2164	the applicant or policyholder is aware of this potential.
2165	12.13.  May establish, subject to approval by the office,
2166	different eligibility requirements and operational procedures
2167	for any line or type of coverage for any specified county or
2168	area if the board determines that such changes to the
2169	eligibility requirements and operational procedures are
2170	justified due to the voluntary market being sufficiently stable
2171	and competitive in such area or for such line or type of
2172	coverage and that consumers who, in good faith, are unable to
2173	obtain insurance through the voluntary market through ordinary
2174	methods would continue to have access to coverage from the
2175	corporation. When coverage is sought in connection with a real
2176	property transfer, such requirements and procedures shall not
2177	provide for an effective date of coverage later than the date of
2178	the closing of the transfer as established by the transferor,
2179	the transferee, and, if applicable, the lender.
2180	13.14.  Must provide that, with respect to the high-risk
2181	account, any assessable insurer with a surplus as to
2182	policyholders of $25 million or less writing 25 percent or more
2183	of its total countrywide property insurance premiums in this
2184	state may petition the office, within the first 90 days of each
2185	calendar year, to qualify as a limited apportionment company. A
2186	regular assessment levied by the corporation on a limited
2187	apportionment company for a deficit incurred by the corporation
2188	for the high-risk account in 2006 or thereafter may be paid to
2189	the corporation on a monthly basis as the assessments are
2190	collected by the limited apportionment company from its insureds
2191	pursuant to s. 627.3512, but the regular assessment must be paid
2192	in full within 12 months after being levied by the corporation.
2193	A limited apportionment company shall collect from its
2194	policyholders any emergency assessment imposed under sub-
2195	subparagraph (b)3.d. The plan shall provide that, if the office
2196	determines that any regular assessment will result in an
2197	impairment of the surplus of a limited apportionment company,
2198	the office may direct that all or part of such assessment be
2199	deferred as provided in subparagraph (p)4. However, there shall
2200	be no limitation or deferment of an emergency assessment to be
2201	collected from policyholders under sub-subparagraph (b)3.d.
2202	14.15.  Must provide that the corporation appoint as its
2203	licensed agents only those agents who also hold an appointment
2204	as defined in s. 626.015(3) with an insurer who at the time of
2205	the agent's initial appointment by the corporation is authorized
2206	to write and is actually writing personal lines residential
2207	property coverage, commercial residential property coverage, or
2208	commercial nonresidential property coverage within the state.
2209	15.16.  Must provide, by July 1, 2007, a premium payment
2210	plan option to its policyholders which allows at a minimum for
2211	quarterly and semiannual payment of premiums. A monthly payment
2212	plan may, but is not required to, be offered.
2213	16.17.  Must limit coverage on mobile homes or manufactured
2214	homes built prior to 1994 to actual cash value of the dwelling
2215	rather than replacement costs of the dwelling.
2216	17.18.  May provide such limits of coverage as the board
2217	determines, consistent with the requirements of this subsection.
2218	18.19.  May require commercial property to meet specified
2219	hurricane mitigation construction features as a condition of
2220	eligibility for coverage.
2221	(m)1.  Rates for coverage provided by the corporation shall
2222	be actuarially sound and subject to the requirements of s.
2223	627.062, except as otherwise provided in this paragraph. The
2224	corporation shall file its recommended rates with the office at
2225	least annually. The corporation shall provide any additional
2226	information regarding the rates which the office requires. The
2227	office shall consider the recommendations of the board and issue
2228	a final order establishing the rates for the corporation within
2229	45 days after the recommended rates are filed. The corporation
2230	may not pursue an administrative challenge or judicial review of
2231	the final order of the office.
2232	2.  In addition to the rates otherwise determined pursuant
2233	to this paragraph, the corporation shall impose and collect an
2234	amount equal to the premium tax provided for in s. 624.509 to
2235	augment the financial resources of the corporation.
2236	3.  After the public hurricane loss-projection model under
2237	s. 627.06281 has been found to be accurate and reliable by the
2238	Florida Commission on Hurricane Loss Projection Methodology,
2239	that model shall serve as the minimum benchmark for determining
2240	the windstorm portion of the corporation's rates. This
2241	subparagraph does not require or allow the corporation to adopt
2242	rates lower than the rates otherwise required or allowed by this
2243	paragraph.
2244	4.  The rate filings for the corporation which were
2245	approved by the office and which took effect January 1, 2007,
2246	are rescinded, except for those rates that were lowered. As soon
2247	as possible, the corporation shall begin using the lower rates
2248	that were in effect on December 31, 2006, and shall provide
2249	refunds to policyholders who have paid higher rates as a result
2250	of that rate filing. The rates in effect on December 31, 2006,
2251	shall remain in effect for the 2007 and 2008 calendar years
2252	except for any rate change that results in a lower rate. The
2253	next rate change that may increase rates shall take effect
2254	January 1, 2009, pursuant to a new rate filing recommended by
2255	the corporation and established by the office, subject to the
2256	requirements of this paragraph.
2257	5.a.  Beginning on January 15, 2009, and each year
2258	thereafter, the corporation must make a recommended actuarially
2259	sound rate filing for each personal and commercial line of
2260	business it writes, to be effective no earlier than July 1,
2261	2009.
2262	b.  For the 36-month period beginning with the effective
2263	date for each of the rate filings made by the corporation on
2264	January 15, 2009, the rates established by the office for the
2265	corporation for its personal residential multiperil policies,
2266	its commercial residential multiperil policies, and its
2267	commercial nonresidential multiperil policies may not result in
2268	an overall average statewide premium increase of more than 10
2269	percent or an increase for any single policyholder of more than
2270	10 percent, during the first 12-month period, and may not result
2271	in an overall average statewide premium increase of more than 10
2272	percent, or an increase for any single policyholder of more than
2273	10 percent, during each of the two subsequent 12-month periods,
2274	excluding coverage changes and surcharges.
2275	c.  For the 36-month period beginning with the effective
2276	date for the rate filings made by the corporation on January 15,
2277	2009, the rates established by the office for the corporation
2278	for its personal residential wind-only policies, its commercial
2279	residential wind-only policies, and its commercial
2280	nonresidential wind-only policies may not result in an overall
2281	average statewide premium increase of more than 10 percent, or
2282	an increase for any single policyholder of more than 10 percent,
2283	during the first 12-month period, and may not result in an
2284	overall average statewide premium increase of more than 10
2285	percent, or an increase for any single policyholder of more than
2286	10 percent, during each of the two subsequent 12-month periods,
2287	excluding coverage changes and surcharges.
2288	(p)1.  The corporation shall certify to the office its
2289	needs for annual assessments as to a particular calendar year,
2290	and for any interim assessments that it deems to be necessary to
2291	sustain operations as to a particular year pending the receipt
2292	of annual assessments. Upon verification, the office shall
2293	approve such certification, and the corporation shall levy such
2294	annual or interim assessments. Such assessments shall be
2295	prorated as provided in paragraph (b). The corporation shall
2296	take all reasonable and prudent steps necessary to collect the
2297	amount of assessment due from each assessable insurer,
2298	including, if prudent, filing suit to collect such assessment.
2299	If the corporation is unable to collect an assessment from any
2300	assessable insurer, the uncollected assessments shall be levied
2301	as an additional assessment against the assessable insurers and
2302	any assessable insurer required to pay an additional assessment
2303	as a result of such failure to pay shall have a cause of action
2304	against such nonpaying assessable insurer. Assessments shall be
2305	included as an appropriate factor in the making of rates. The
2306	failure of a surplus lines agent to collect and remit any
2307	regular or emergency assessment levied by the corporation is
2308	considered to be a violation of s. 626.936 and subjects the
2309	surplus lines agent to the penalties provided in that section.
2310	2.  The governing body of any unit of local government, any
2311	residents of which are insured by the corporation, may issue
2312	bonds as defined in s. 125.013 or s. 166.101 from time to time
2313	to fund an assistance program, in conjunction with the
2314	corporation, for the purpose of defraying deficits of the
2315	corporation. In order to avoid needless and indiscriminate
2316	proliferation, duplication, and fragmentation of such assistance
2317	programs, any unit of local government, any residents of which
2318	are insured by the corporation, may provide for the payment of
2319	losses, regardless of whether or not the losses occurred within
2320	or outside of the territorial jurisdiction of the local
2321	government. Revenue bonds under this subparagraph may not be
2322	issued until validated pursuant to chapter 75, unless a state of
2323	emergency is declared by executive order or proclamation of the
2324	Governor pursuant to s. 252.36 making such findings as are
2325	necessary to determine that it is in the best interests of, and
2326	necessary for, the protection of the public health, safety, and
2327	general welfare of residents of this state and declaring it an
2328	essential public purpose to permit certain municipalities or
2329	counties to issue such bonds as will permit relief to claimants
2330	and policyholders of the corporation. Any such unit of local
2331	government may enter into such contracts with the corporation
2332	and with any other entity created pursuant to this subsection as
2333	are necessary to carry out this paragraph. Any bonds issued
2334	under this subparagraph shall be payable from and secured by
2335	moneys received by the corporation from emergency assessments
2336	under sub-subparagraph (b)3.d., and assigned and pledged to or
2337	on behalf of the unit of local government for the benefit of the
2338	holders of such bonds. The funds, credit, property, and taxing
2339	power of the state or of the unit of local government shall not
2340	be pledged for the payment of such bonds. If any of the bonds
2341	remain unsold 60 days after issuance, the office shall require
2342	all insurers subject to assessment to purchase the bonds, which
2343	shall be treated as admitted assets; each insurer shall be
2344	required to purchase that percentage of the unsold portion of
2345	the bond issue that equals the insurer's relative share of
2346	assessment liability under this subsection. An insurer shall not
2347	be required to purchase the bonds to the extent that the office
2348	determines that the purchase would endanger or impair the
2349	solvency of the insurer.
2350	3.a.  The corporation shall adopt one or more programs
2351	subject to approval by the office for the reduction of both new
2352	and renewal writings in the corporation. Beginning January 1,
2353	2008, any program the corporation adopts for the payment of
2354	bonuses to an insurer for each risk the insurer removes from the
2355	corporation shall comply with s. 627.3511(2) and may not exceed
2356	the amount referenced in s. 627.3511(2) for each risk removed.
2357	The corporation may consider any prudent and not unfairly
2358	discriminatory approach to reducing corporation writings, and
2359	may adopt a credit against assessment liability or other
2360	liability that provides an incentive for insurers to take risks
2361	out of the corporation and to keep risks out of the corporation
2362	by maintaining or increasing voluntary writings in counties or
2363	areas in which corporation risks are highly concentrated and a
2364	program to provide a formula under which an insurer voluntarily
2365	taking risks out of the corporation by maintaining or increasing
2366	voluntary writings will be relieved wholly or partially from
2367	assessments under sub-subparagraphs (b)3.a. and b. However, any
2368	"take-out bonus" or payment to an insurer must be conditioned on
2369	the property being insured for at least 5 years by the insurer,
2370	unless canceled or nonrenewed by the policyholder. If the policy
2371	is canceled or nonrenewed by the policyholder before the end of
2372	the 5-year period, the amount of the take-out bonus must be
2373	prorated for the time period the policy was insured. When the
2374	corporation enters into a contractual agreement for a take-out
2375	plan, the producing agent of record of the corporation policy is
2376	entitled to retain any unearned commission on such policy, and
2377	the insurer shall either:
2378	(I)  Pay to the producing agent of record of the policy,
2379	for the first year, an amount which is the greater of the
2380	insurer's usual and customary commission for the type of policy
2381	written or a policy fee equal to the usual and customary
2382	commission of the corporation; or
2383	(II)  Offer to allow the producing agent of record of the
2384	policy to continue servicing the policy for a period of not less
2385	than 1 year and offer to pay the agent the insurer's usual and
2386	customary commission for the type of policy written. If the
2387	producing agent is unwilling or unable to accept appointment by
2388	the new insurer, the new insurer shall pay the agent in
2389	accordance with sub-sub-subparagraph (I).
2390	b.  Any credit or exemption from regular assessments
2391	adopted under this subparagraph shall last no longer than the 3
2392	years following the cancellation or expiration of the policy by
2393	the corporation. With the approval of the office, the board may
2394	extend such credits for an additional year if the insurer
2395	guarantees an additional year of renewability for all policies
2396	removed from the corporation, or for 2 additional years if the
2397	insurer guarantees 2 additional years of renewability for all
2398	policies so removed.
2399	c.  There shall be no credit, limitation, exemption, or
2400	deferment from emergency assessments to be collected from
2401	policyholders pursuant to sub-subparagraph (b)3.d.
2402	4.  The plan shall provide for the deferment, in whole or
2403	in part, of the assessment of an assessable insurer, other than
2404	an emergency assessment collected from policyholders pursuant to
2405	sub-subparagraph (b)3.d., if the office finds that payment of
2406	the assessment would endanger or impair the solvency of the
2407	insurer. In the event an assessment against an assessable
2408	insurer is deferred in whole or in part, the amount by which
2409	such assessment is deferred may be assessed against the other
2410	assessable insurers in a manner consistent with the basis for
2411	assessments set forth in paragraph (b).
2412	5.  Effective July 1, 2007, in order to evaluate the costs
2413	and benefits of approved take-out plans, if the corporation pays
2414	a bonus or other payment to an insurer for an approved take-out
2415	plan, it shall maintain a record of the address or such other
2416	identifying information on the property or risk removed in order
2417	to track if and when the property or risk is later insured by
2418	the corporation.
2419	6.  Any policy taken out, assumed, or removed from the
2420	corporation is, as of the effective date of the take-out,
2421	assumption, or removal, direct insurance issued by the insurer
2422	and not by the corporation, even if the corporation continues to
2423	service the policies. This subparagraph applies to policies of
2424	the corporation and not policies taken out, assumed, or removed
2425	from any other entity.
2426	(w)1.  The following records of the corporation are
2427	confidential and exempt from the provisions of s. 119.07(1) and
2428	s. 24(a), Art. I of the State Constitution:
2429	a.  Underwriting files, except that a policyholder or an
2430	applicant shall have access to his or her own underwriting
2431	files. Confidential and exempt underwriting file records may
2432	also be released to other governmental agencies upon written
2433	request and demonstration of need; such records held by the
2434	receiving agency remain confidential and exempt as provided
2435	herein.
2436	b.  Claims files, until termination of all litigation and
2437	settlement of all claims arising out of the same incident,
2438	although portions of the claims files may remain exempt, as
2439	otherwise provided by law. Confidential and exempt claims file
2440	records may be released to other governmental agencies upon
2441	written request and demonstration of need; such records held by
2442	the receiving agency remain confidential and exempt as provided
2443	for herein.
2444	c.  Records obtained or generated by an internal auditor
2445	pursuant to a routine audit, until the audit is completed, or if
2446	the audit is conducted as part of an investigation, until the
2447	investigation is closed or ceases to be active. An investigation
2448	is considered "active" while the investigation is being
2449	conducted with a reasonable, good faith belief that it could
2450	lead to the filing of administrative, civil, or criminal
2451	proceedings.
2452	d.  Matters reasonably encompassed in privileged attorney-
2453	client communications.
2454	e.  Proprietary information licensed to the corporation
2455	under contract and the contract provides for the confidentiality
2456	of such proprietary information.
2457	f.  All information relating to the medical condition or
2458	medical status of a corporation employee which is not relevant
2459	to the employee's capacity to perform his or her duties, except
2460	as otherwise provided in this paragraph. Information that which
2461	is exempt shall include, but is not limited to, information
2462	relating to workers' compensation, insurance benefits, and
2463	retirement or disability benefits.
2464	g.  Upon an employee's entrance into the employee
2465	assistance program, a program to assist any employee who has a
2466	behavioral or medical disorder, substance abuse problem, or
2467	emotional difficulty which affects the employee's job
2468	performance, all records relative to that participation shall be
2469	confidential and exempt from the provisions of s. 119.07(1) and
2470	s. 24(a), Art. I of the State Constitution, except as otherwise
2471	provided in s. 112.0455(11).
2472	h.  Information relating to negotiations for financing,
2473	reinsurance, depopulation, or contractual services, until the
2474	conclusion of the negotiations.
2475	i.  Minutes of closed meetings regarding underwriting
2476	files, and minutes of closed meetings regarding an open claims
2477	file until termination of all litigation and settlement of all
2478	claims with regard to that claim, except that information
2479	otherwise confidential or exempt by law shall will be redacted.
2480	2.  If When an authorized insurer is considering
2481	underwriting a risk insured by the corporation, relevant
2482	underwriting files and confidential claims files may be released
2483	to the insurer provided the insurer agrees in writing, notarized
2484	and under oath, to maintain the confidentiality of such files.
2485	If When a file is transferred to an insurer that file is no
2486	longer a public record because it is not held by an agency
2487	subject to the provisions of the public records law.
2488	Underwriting files and confidential claims files may also be
2489	released to staff of and the board of governors of the market
2490	assistance plan established pursuant to s. 627.3515, who must
2491	retain the confidentiality of such files, except such files may
2492	be released to authorized insurers that are considering assuming
2493	the risks to which the files apply, provided the insurer agrees
2494	in writing, notarized and under oath, to maintain the
2495	confidentiality of such files. Finally, the corporation or the
2496	board or staff of the market assistance plan may make the
2497	following information obtained from underwriting files and
2498	confidential claims files available to licensed general lines
2499	insurance agents: name, address, and telephone number of the
2500	residential property owner or insured; location of the risk;
2501	rating information; loss history; and policy type. The receiving
2502	licensed general lines insurance agent must retain the
2503	confidentiality of the information received.
2504	3.  A policyholder who has filed suit against the
2505	corporation has the right to discover the contents of his or her
2506	own claims file to the same extent that discovery of such
2507	contents would be available from a private insurer in litigation
2508	as provided by the Florida Rules of Civil Procedure, the Florida
2509	Evidence Code, and other applicable law. Pursuant to subpoena, a
2510	third party has the right to discover the contents of an
2511	insured's or applicant's underwriting or claims file to the same
2512	extent that discovery of such contents would be available from a
2513	private insurer by subpoena as provided by the Florida Rules of
2514	Civil Procedure, the Florida Evidence Code, and other applicable
2515	law, and subject to any confidentiality protections requested by
2516	the corporation and agreed to by the seeking party or ordered by
2517	the court. The corporation may release confidential underwriting
2518	and claims file contents and information as it deems necessary
2519	and appropriate to underwrite or service insurance policies and
2520	claims, subject to any confidentiality protections deemed
2521	necessary and appropriate by the corporation.
2522	4.2.  Portions of meetings of the corporation are exempt
2523	from the provisions of s. 286.011 and s. 24(b), Art. I of the
2524	State Constitution wherein confidential underwriting files or
2525	confidential open claims files are discussed. All portions of
2526	corporation meetings which are closed to the public shall be
2527	recorded by a court reporter. The court reporter shall record
2528	the times of commencement and termination of the meeting, all
2529	discussion and proceedings, the names of all persons present at
2530	any time, and the names of all persons speaking. No portion of
2531	any closed meeting shall be off the record. Subject to the
2532	provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2533	notes of any closed meeting shall be retained by the corporation
2534	for a minimum of 5 years. A copy of the transcript, less any
2535	exempt matters, of any closed meeting wherein claims are
2536	discussed shall become public as to individual claims after
2537	settlement of the claim.
2538	(dd)1.  For policies subject to nonrenewal as a result of
2539	the risk being no longer eligible for coverage due to being
2540	valued at $1 million or more, the corporation shall, directly or
2541	through the market assistance plan, make information from
2542	confidential underwriting and claims files of policyholders
2543	available only to licensed general lines agents who register
2544	with the corporation to receive such information according to
2545	the following procedures:
2546	2.  By August 1, 2006, the corporation shall provide such
2547	policyholders who are not eligible for renewal the opportunity
2548	to request in writing, within 30 days after the notification is
2549	sent, that information from their confidential underwriting and
2550	claims files not be released to licensed general lines agents
2551	registered pursuant to this paragraph.
2552	3.  By August 1, 2006, the corporation shall make available
2553	to licensed general lines agents the registration procedures to
2554	be used to obtain confidential information from underwriting and
2555	claims files for such policies not eligible for renewal. As a
2556	condition of registration, the corporation shall require the
2557	licensed general lines agent to attest that the agent has the
2558	experience and relationships with authorized or surplus lines
2559	carriers to attempt to offer replacement coverage for such
2560	policies.
2561	4.  By September 1, 2006, the corporation shall make
2562	available through a secured website to licensed general lines
2563	agents registered pursuant to this paragraph application,
2564	rating, loss history, mitigation, and policy type information
2565	relating to such policies not eligible for renewal and for which
2566	the policyholder has not requested the corporation withhold such
2567	information. The registered licensed general lines agent may use
2568	such information to contact and assist the policyholder in
2569	securing replacement policies, and the agent may disclose to the
2570	policyholder that such information was obtained from the
2571	corporation.
2572	(dd)(ee)  The assets of the corporation may be invested and
2573	managed by the State Board of Administration.
2574	(ee)(ff)  The office may establish a pilot program to offer
2575	optional sinkhole coverage in one or more counties or other
2576	territories of the corporation for the purpose of implementing
2577	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2578	Florida. Under the pilot program, the corporation is not
2579	required to issue a notice of nonrenewal to exclude sinkhole
2580	coverage upon the renewal of existing policies, but may exclude
2581	such coverage using a notice of coverage change.
2582	(ff)  The corporation shall report claims data and
2583	histories to a consumer reporting agency, as defined by the
2584	federal Fair Credit Reporting Act, 15 U.S.C. 1681 et seq., that
2585	maintains a national database of similar data for use in
2586	connection with the underwriting of insurance involving a
2587	consumer.
2588	Section 12.  Paragraph (b) of subsection (2) of section
2589	627.4133, Florida Statutes, is amended to read:
2590	627.4133  Notice of cancellation, nonrenewal, or renewal
2591	premium.--
2592	(2)  With respect to any personal lines or commercial
2593	residential property insurance policy, including, but not
2594	limited to, any homeowner's, mobile home owner's, farmowner's,
2595	condominium association, condominium unit owner's, apartment
2596	building, or other policy covering a residential structure or
2597	its contents:
2598	(b)  The insurer shall give the named insured written
2599	notice of nonrenewal, cancellation, or termination at least 100
2600	days prior to the effective date of the nonrenewal,
2601	cancellation, or termination. However, the insurer shall give at
2602	least 100 days' written notice, or written notice by June 1,
2603	whichever is earlier, for any nonrenewal, cancellation, or
2604	termination that would be effective between June 1 and November
2605	30. The notice must include the reason or reasons for the
2606	nonrenewal, cancellation, or termination, except that:
2607	1.  The insurer shall give the named insured written notice
2608	of nonrenewal, cancellation, or termination at least 180 days
2609	prior to the effective date of the nonrenewal, cancellation, or
2610	termination for a named insured whose residential structure has
2611	been insured by that insurer or an affiliated insurer for at
2612	least a 5-year period immediately prior to date of the written
2613	notice.
2614	2.1.  When cancellation is for nonpayment of premium, at
2615	least 10 days' written notice of cancellation accompanied by the
2616	reason therefor shall be given. As used in this subparagraph,
2617	the term "nonpayment of premium" means failure of the named
2618	insured to discharge when due any of her or his obligations in
2619	connection with the payment of premiums on a policy or any
2620	installment of such premium, whether the premium is payable
2621	directly to the insurer or its agent or indirectly under any
2622	premium finance plan or extension of credit, or failure to
2623	maintain membership in an organization if such membership is a
2624	condition precedent to insurance coverage. "Nonpayment of
2625	premium" also means the failure of a financial institution to
2626	honor an insurance applicant's check after delivery to a
2627	licensed agent for payment of a premium, even if the agent has
2628	previously delivered or transferred the premium to the insurer.
2629	If a dishonored check represents the initial premium payment,
2630	the contract and all contractual obligations shall be void ab
2631	initio unless the nonpayment is cured within the earlier of 5
2632	days after actual notice by certified mail is received by the
2633	applicant or 15 days after notice is sent to the applicant by
2634	certified mail or registered mail, and if the contract is void,
2635	any premium received by the insurer from a third party shall be
2636	refunded to that party in full.
2637	3.2.  When such cancellation or termination occurs during
2638	the first 90 days during which the insurance is in force and the
2639	insurance is canceled or terminated for reasons other than
2640	nonpayment of premium, at least 20 days' written notice of
2641	cancellation or termination accompanied by the reason therefor
2642	shall be given except where there has been a material
2643	misstatement or misrepresentation or failure to comply with the
2644	underwriting requirements established by the insurer.
2645	4.3.  The requirement for providing written notice of
2646	nonrenewal by June 1 of any nonrenewal that would be effective
2647	between June 1 and November 30 does not apply to the following
2648	situations, but the insurer remains subject to the requirement
2649	to provide such notice at least 100 days prior to the effective
2650	date of nonrenewal:
2651	a.  A policy that is nonrenewed due to a revision in the
2652	coverage for sinkhole losses and catastrophic ground cover
2653	collapse pursuant to s. 627.730, as amended by s. 30, chapter
2654	2007-1, Laws of Florida.
2655	b.  A policy that is nonrenewed by Citizens Property
2656	Insurance Corporation, pursuant to s. 627.351(6), for a policy
2657	that has been assumed by an authorized insurer offering
2658	replacement or renewal coverage to the policyholder.
2659
2660	After the policy has been in effect for 90 days, the policy
2661	shall not be canceled by the insurer except when there has been
2662	a material misstatement, a nonpayment of premium, a failure to
2663	comply with underwriting requirements established by the insurer
2664	within 90 days of the date of effectuation of coverage, or a
2665	substantial change in the risk covered by the policy or when the
2666	cancellation is for all insureds under such policies for a given
2667	class of insureds. This paragraph does not apply to individually
2668	rated risks having a policy term of less than 90 days.
2669	Section 13.  Effective January 1, 2011, section 689.262,
2670	Florida Statutes, is created to read:
2671	689.262  Sale of residential property; disclosure of
2672	windstorm mitigation rating.--A purchaser of residential
2673	property must be informed of the windstorm mitigation rating of
2674	the structure, based on the uniform home grading scale adopted
2675	pursuant to s. 215.55865. The rating must be included in the
2676	contract for sale or as a separate document attached to the
2677	contract for sale. The Financial Services Commission may adopt
2678	rules, consistent with other state laws, to administer this
2679	section, including the form of the disclosure and the
2680	requirements for the windstorm mitigation inspection or report
2681	that is required for purposes of determining the rating.
2682	Section 14.  (1)  By December 15, 2008, Citizens Property
2683	Insurance Corporation shall transfer $250 million to the General
2684	Revenue Fund if the combined surplus of each account as defined
2685	in s. 627.351(6), Florida Statutes, exceeds $1 billion. The
2686	board of governors of Citizens Property Insurance Corporation
2687	must make a reasonable estimate of such surplus on or after
2688	December 1, 2008, and no later than December 14, 2008, using
2689	generally accepted actuarial and accounting practices,
2690	recognizing that audited financial statements will not yet be
2691	available.
2692	(2)  Beginning July 1, 2009, the board shall make quarterly
2693	transfers of any interest earned prior to the issuance of any
2694	surplus notes, interest paid, and principal repaid to the state
2695	for any surplus notes issued by the program after December 1,
2696	2008, to Citizens Property Insurance Corporation, provided such
2697	surplus notes were funded exclusively by an appropriation to the
2698	program by the Legislature for the 2008-2009 fiscal year. The
2699	corporation shall credit each account as defined in s.
2700	627.351(6) in a pro rata manner for the funds removed from each
2701	account to make the transfer required by subsection (11).
2702	Section 15.  Citizens Property Insurance Corporation may
2703	not use any amendments made to s. 215.5595, Florida Statutes, by
2704	this act or any transfer of funds authorized by this act as
2705	justification or cause in seeking any rate or assessment
2706	increase.
2707	Section 16.  Subsection (3) is added to section 627.06281,
2708	Florida Statutes, to read:
2709	627.06281  Public hurricane loss projection model;
2710	reporting of data by insurers.--
2711	(3)(a)  A residential property insurer may have access to
2712	and use the public hurricane loss projection model, including
2713	all assumptions and factors and all detailed loss results, for
2714	the purpose of calculating rate indications in a rate filing and
2715	for analytical purposes, including any analysis or evaluation of
2716	the model required under actuarial standards of practice.
2717	(b)  By January 1, 2009, the office shall establish by rule
2718	a fee schedule for access to and the use of the model. The fee
2719	schedule must be reasonably calculated to cover only the actual
2720	costs of providing access to and the use of the model.
2721	Section 17.  Section 627.0655, Florida Statutes, is amended
2722	to read:
2723	627.0655  Policyholder loss or expense-related premium
2724	discounts.--An insurer or person authorized to engage in the
2725	business of insurance in this state may include, in the premium
2726	charged an insured for any policy, contract, or certificate of
2727	insurance, a discount based on the fact that another policy,
2728	contract, or certificate of any type has been purchased by the
2729	insured from the same insurer or insurer group, the Citizens
2730	Property Insurance Corporation created under s. 627.351(6) if
2731	the same insurance agent is servicing both policies, or an
2732	insurer that has removed the policy from the Citizens Property
2733	Insurance Corporation if the same insurance agent is servicing
2734	both policies.
2735	Section 18.  (1)  The Citizens Property Insurance
2736	Corporation Mission Review Task Force is created to analyze and
2737	compile available data and to develop a report setting forth the
2738	statutory and operational changes needed to return Citizens
2739	Property Insurance Corporation to its former role as a state-
2740	created, noncompetitive residual market mechanism that provides
2741	property insurance coverage to risks that are otherwise entitled
2742	but unable to obtain such coverage in the private insurance
2743	market. The task force shall submit a report to the Governor,
2744	the President of the Senate, and the Speaker of the House of
2745	Representatives by January 31, 2009. At a minimum, the task
2746	force shall analyze and evaluate relevant and applicable
2747	information and data and develop recommendations concerning:
2748	(a)  The nature of Citizens Property Insurance
2749	Corporation's role in providing property insurance coverage only
2750	if such coverage is not available from private insurers.
2751	(b)  The ability of the admitted market to offer policies
2752	to those consumers formerly insured through Citizens Property
2753	Insurance Corporation. This consideration shall include, but not
2754	be limited to, the availability of private market reinsurance
2755	and coverage through the Florida Hurricane Catastrophe Fund, the
2756	general adequacy of the admitted market's current rates, and the
2757	capacity of the industry to offer policies to former Citizens
2758	Property Insurance Corporation policyholders within existing
2759	writing ratio limitations.
2760	(c)  The appropriate relationship of rates charged by
2761	Citizens Property Insurance Corporation to rates charged by
2762	private insurers, with due consideration for the corporation's
2763	role as a noncompetitive residual market mechanism.
2764	(d)  The relationships between the exposure of Citizens
2765	Property Insurance Corporation to catastrophic hurricane losses,
2766	the corporation's history of purchasing inadequate or no
2767	reinsurance coverage, and the corporation's lack of adequate
2768	capital to meet its potential claim obligations without
2769	incurring large deficits.
2770	(e)  The adverse effects on the people and the economy of
2771	this state of the large, multiyear deficit assessments by
2772	Citizens Property Insurance Corporation that may be levied on
2773	businesses and households in this state, and steps that can be
2774	taken to reduce those effects.
2775	(f)  The operational implications of the variation in the
2776	number of policies in force over time in Citizens Property
2777	Insurance Corporation and the merits of outsourcing some or all
2778	of its operational responsibilities.
2779	(g)  Changes in the mission and operations of Citizens
2780	Property Insurance Corporation to reduce or eliminate any
2781	adverse effect such mission and operations may be having on the
2782	promotion of sound and economic growth and development of the
2783	coastal areas of this state.
2784	(h)  Appropriate and consistent geographic boundaries of
2785	the high-risk account.
2786	(2)  The task force shall be composed of 19 members as
2787	follows:
2788	(a)  Three members appointed by the Speaker of the House of
2789	Representatives.
2790	(b)  Three members appointed by the President of the
2791	Senate.
2792	(c)  Four members appointed by the Governor who are not
2793	employed by or professionally affiliated with an insurance
2794	company or a subsidiary of an insurance company, at least two of
2795	whom must be consumer advocates or members of a consumer
2796	advocacy organization or agency.
2797	(d)  Nine members appointed as representatives of private
2798	insurance companies as follows:
2799	1.  Two members representing two separate insurance
2800	companies that each provide at least 150,000 homeowner's
2801	insurance policies in this state at the time of the creation of
2802	the task force.
2803	2.  Two members representing two separate insurance
2804	companies that each provide fewer than 150,000 homeowner's
2805	insurance policies in this state at the time of the creation of
2806	the task force.
2807	3.  Two members representing two separate insurance
2808	companies among the 10 insurance companies writing the greatest
2809	amount of commercial multiperil insurance premium in this state
2810	at the time of the creation of the task force.
2811	4.  Three members appointed by the Chief Financial Officer
2812	representing insurance agents in this state.
2813
2814	Of each pair of members appointed under subparagraphs 1., 2.,
2815	and 3., one shall be appointed by the President of the Senate
2816	and one by the Speaker of the House of Representatives.
2817	(3)  The task force shall conduct research, hold public
2818	meetings, receive testimony, employ consultants and
2819	administrative staff, and undertake other activities determined
2820	by its members to be necessary to complete its responsibilities.
2821	Citizens Property Insurance Corporation shall have appropriate
2822	senior staff attend task force meetings, shall respond to
2823	requests for testimony and data by the task force, shall
2824	otherwise cooperate with the task force, and shall provide
2825	funding for the necessary costs of implementing the provisions
2826	of this section.
2827	(4)  A member of the task force may not delegate his or her
2828	attendance or voting power to a designee.
2829	(5)  Members of the task force shall serve without
2830	compensation but are entitled to receive reimbursement for
2831	travel and per diem as provided in s. 112.061, Florida Statutes.
2832	(6)  The appointments to the task force must be completed
2833	within 30 calendar days after the effective date of this act,
2834	and the task force must hold its initial meeting within 1 month
2835	after appointment of all members. The task force shall expire no
2836	later than 60 calendar days after submission of the report
2837	required in subsection (1).
2838	Section 19.  Section 627.0621, Florida Statutes, is created
2839	to read:
2840	627.0621  Transparency in rate regulation.--
2841	(1)  DEFINITIONS.-As used in this section, the term:
2842	(a)  "Rate Filing" means any original or amended rate
2843	filing required or authorized under s. 627.062, s. 627.0651, or
2844	chapter 2007-1, Laws of Florida.
2845	(b)  "Recommendation" means any proposed, preliminary, or
2846	final recommendation from an office actuary reviewing a rate
2847	filing with respect to the issue of approval or disapproval of
2848	the rate filing or with respect to rate indications that the
2849	office would consider acceptable.
2850	(2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2851	INFORMATION.--With respect to any rate filing made on after July
2852	1, 2008, the office shall provide the following information on a
2853	publicly accessible Internet website:
2854	(a)  The overall rate change requested by the insurer.
2855	(b)  All assumptions made by the office's actuaries.
2856	(c)  A statement describing any assumptions or methods that
2857	deviate from the actuarial standards of practice of the Casualty
2858	Actuarial Society or the American Academy of Actuaries,
2859	including an explanation of the nature, rationale, and effect of
2860	the deviation.
2861	(d)  All recommendations made by any office actuary who
2862	reviewed the rate filing.
2863	(e)  Certification by the office's actuary under oath and
2864	subject to the penalty of perjury that, based on the actuary's
2865	knowledge, his or her recommendations did not contain any untrue
2866	statement of a material fact or omit to state a material fact
2867	necessary to make a recommendation and, in light of the
2868	circumstances under which such recommendation was made, was not
2869	misleading.
2870	(f)  The overall rate change approved by the office.
2871	(3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--In any
2872	administrative or judicial proceeding relating to a rate filing,
2873	attorney-client privilege and work product exemptions from
2874	disclosure do not apply to communications, including
2875	communications with office attorneys or records prepared by or
2876	at the direction of an office attorney, except when conditions
2877	of paragraphs (a) and (b) have been met:
2878	(a)  The communication or record reflects a mental
2879	impression, conclusion, litigation strategy, or legal theory of
2880	the attorney or office.
2881	(b)  The communication or record was prepared after the
2882	initiation of an action in a court of competent jurisdiction or
2883	after the filing of a request for a proceeding under ss. 120.569
2884	and 120.57.
2885
2886	Work product privilege claims that do not meet the conditions of
2887	paragraphs (a) and (b) shall be deemed waived.
2888	Section 20.  Paragraph (b) of subsection (4) of section
2889	215.555, Florida Statutes, is amended to read:
2890	215.555  Florida Hurricane Catastrophe Fund.--
2891	(4)  REIMBURSEMENT CONTRACTS.--
2892	(b)1.  The contract shall contain a promise by the board to
2893	reimburse the insurer for 45 percent, 75 percent, or 90 percent
2894	of its losses from each covered event in excess of the insurer's
2895	retention, plus 5 percent of the reimbursed losses to cover loss
2896	adjustment expenses.
2897	2.  The insurer must elect one of the percentage coverage
2898	levels specified in this paragraph and may, upon renewal of a
2899	reimbursement contract, elect a lower percentage coverage level
2900	if no revenue bonds issued under subsection (6) after a covered
2901	event are outstanding, or elect a higher percentage coverage
2902	level, regardless of whether or not revenue bonds are
2903	outstanding. All members of an insurer group must elect the same
2904	percentage coverage level. Any joint underwriting association,
2905	risk apportionment plan, or other entity created under s.
2906	627.351 must elect the 90-percent coverage level.
2907	3.  The contract shall provide that reimbursement amounts
2908	shall not be reduced by reinsurance paid or payable to the
2909	insurer from other sources.
2910	4.  Notwithstanding any other provision contained in this
2911	section, the board shall make available to insurers that
2912	purchased coverage provided by this subparagraph in 2007 2006,
2913	insurers qualifying as limited apportionment companies under s.
2914	627.351(6)(c), and insurers that have been were approved to
2915	participate in 2006 or that are approved in 2007 for the
2916	Insurance Capital Build-Up Incentive Program pursuant to s.
2917	215.5595, a contract or contract addendum that provides an
2918	additional amount of reimbursement coverage of up to $10
2919	million. The premium to be charged for this additional
2920	reimbursement coverage shall be 50 percent of the additional
2921	reimbursement coverage provided, which shall include one prepaid
2922	reinstatement. The minimum retention level that an eligible
2923	participating insurer must retain associated with this
2924	additional coverage layer is 30 percent of the insurer's surplus
2925	as of December 31, 2007 2006. This coverage shall be in addition
2926	to all other coverage that may be provided under this section.
2927	The coverage provided by the fund under this subparagraph shall
2928	be in addition to the claims-paying capacity as defined in
2929	subparagraph (c)1., but only with respect to those insurers that
2930	select the additional coverage option and meet the requirements
2931	of this subparagraph. The claims-paying capacity with respect to
2932	all other participating insurers and limited apportionment
2933	companies that do not select the additional coverage option
2934	shall be limited to their reimbursement premium's proportionate
2935	share of the actual claims-paying capacity otherwise defined in
2936	subparagraph (c)1. and as provided for under the terms of the
2937	reimbursement contract. Coverage provided in the reimbursement
2938	contract shall will not be affected by the additional premiums
2939	paid by participating insurers exercising the additional
2940	coverage option allowed in this subparagraph. This subparagraph
2941	expires on May 31, 2009 2008.
2942	Section 21.  Subsection (1) of section 627.0613, Florida
2943	Statutes, is amended to read:
2944	627.0613  Consumer advocate.--The Chief Financial Officer
2945	must appoint a consumer advocate who must represent the general
2946	public of the state before the department and the office. The
2947	consumer advocate must report directly to the Chief Financial
2948	Officer, but is not otherwise under the authority of the
2949	department or of any employee of the department. The consumer
2950	advocate has such powers as are necessary to carry out the
2951	duties of the office of consumer advocate, including, but not
2952	limited to, the powers to:
2953	(1)  Recommend to the department or office, by petition,
2954	the commencement of any proceeding or action; appear in any
2955	proceeding or action before the department or office; or appear
2956	in any proceeding before the Division of Administrative Hearings
2957	or arbitration panel specified in s. 627.062(6) relating to
2958	subject matter under the jurisdiction of the department or
2959	office.
2960	Section 22.  Subsections (1) and (2) of section 627.712,
2961	Florida Statutes, are amended to read:
2962	627.712  Residential windstorm coverage required;
2963	availability of exclusions for windstorm or contents.--
2964	(1)  An insurer issuing a residential property insurance
2965	policy must provide windstorm coverage. Except as provided in
2966	paragraph (2)(c), this section subsection does not apply with
2967	respect to risks that are eligible for wind-only coverage from
2968	Citizens Property Insurance Corporation under s. 627.351(6).
2969	(2)  A property insurer must make available, at the option
2970	of the policyholder, an exclusion of windstorm coverage.
2971	(a)  The coverage may be excluded only if:
2972	(a)1.  When the policyholder is a natural person, the
2973	policyholder personally writes and provides to the insurer the
2974	following statement in his or her own handwriting and signs his
2975	or her name, which must also be signed by every other named
2976	insured on the policy, and dated: "I do not want the insurance
2977	on my (home/mobile home/condominium unit) to pay for damage from
2978	windstorms. I will pay those costs. My insurance will not."
2979	2.  When the policyholder is other than a natural person,
2980	the policyholder provides to the insurer on the policyholder's
2981	letterhead the following statement that must be signed by the
2982	policyholder's authorized representative and dated: "  (Name of
2983	entity)   does not want the insurance on its   (type of
2984	structure)   to pay for damage from windstorms.   (Name of
2985	entity)   will be responsible for these costs.   (Name of
2986	entity's)   insurance will not."
2987	(b)  If the structure insured by the policy is subject to a
2988	mortgage or lien, the policyholder must provide the insurer with
2989	a written statement from the mortgageholder or lienholder
2990	indicating that the mortgageholder or lienholder approves the
2991	policyholder electing to exclude windstorm coverage or hurricane
2992	coverage from his or her or its property insurance policy.
2993	(c)  If the residential structure is eligible for wind-only
2994	coverage from Citizens Property Insurance Corporation, an
2995	insurer nonrenewing a policy and issuing a replacement policy,
2996	or issuing a new policy, that does not provide wind coverage
2997	shall provide a notice to the mortgageholder or lienholder
2998	indicating the policyholder has elected coverage that does not
2999	cover wind.
3000	Section 23.  Except as otherwise expressly provided in this
3001	act, this act shall take effect July 1, 2008.
3002
3003
3004
3005	-----------------------------------------------------
3006	T I T L E  A M E N D M E N T
3007	Remove the entire title and insert:
3008	A bill to be entitled
3009	An act relating to insurance; amending s. 215.5595, F.S.;
3010	revising legislative findings; providing for an appropriation of
3011	state funds in exchange for surplus notes issued by residential
3012	property insurers under the program; revising the conditions and
3013	requirements for providing funds to insurers under the program;
3014	requiring a commitment by the insurer to meet minimum premium-
3015	to-surplus writing ratios for residential property insurance and
3016	for taking policies out of Citizens Property Insurance
3017	Corporation; requiring insurers to commit to maintaining certain
3018	levels of surplus and reinsurance; authorizing the State Board
3019	of Administration to charge a fee for late payments; providing
3020	for payment of costs and fees incurred by the board in
3021	administering the program from funds appropriated to the
3022	program, subject to a specified limit; requiring the board to
3023	submit an annual report to the Legislature on the program and
3024	insurer compliance with certain requirements; providing that
3025	amendments made by the act do not affect the terms of surplus
3026	notes approved prior to a specified date; authorizing the State
3027	Board of Administration and an insurer to renegotiate such terms
3028	consistent with such amendments; amending s. 624.3161, F.S.;
3029	authorizing the Office of Insurance Regulation to require an
3030	insurer to file its claims handling practices and procedures as
3031	a public record based on findings of a market conduct
3032	examination; amending s. 624.4211, F.S.; increasing the maximum
3033	amounts of administrative fines that may be imposed upon an
3034	insurer by the Office of Insurance Regulation for nonwillful and
3035	willful violations of an order or rule of the office or any
3036	provision of the Florida Insurance Code; creating s. 624.4213,
3037	F.S.; specifying requirements for submission of a document or
3038	information to the Office of Insurance Regulation or the
3039	Department of Financial Services in order for a person to claim
3040	that the document is a trade secret; requiring each page or
3041	portion to be labeled as a trade secret and be separated from
3042	non-trade secret material; requiring the submitting party to
3043	include an affidavit certifying certain information about the
3044	documents claimed to be trade secrets; requiring the office or
3045	department to notify persons who submit trade secret documents
3046	of any public-records request and the opportunity to file a
3047	court action to bar disclosure; specifying conditions for the
3048	office to retain or release such documents; creating s.
3049	624.4305, F.S.; requiring that an insurer planning to nonrenew
3050	more than a specified number of residential property insurance
3051	polices notify the Office of Insurance Regulation and obtain
3052	approval for such nonrenewals; specifying procedures for
3053	issuance of such notice; amending s. 626.9521, F.S.; increasing
3054	the maximum fines that may be imposed by the office or
3055	department for nonwillful and willful violations of state law
3056	regarding unfair methods of competition and unfair or deceptive
3057	acts or practices related to insurance; amending s. 627.0612,
3058	F.S.; providing criteria for administrative hearings to
3059	determine whether an insurer's property insurance rates, rating
3060	manuals, premium credits, discount schedules, and surcharge
3061	schedules comply with the law; providing for entry of certain
3062	orders; amending s. 627.062, F.S.; requiring that an insurer
3063	seeking a rate for property insurance that is greater than the
3064	rate most recently approved by the Office of Insurance
3065	Regulation make a "file and use" filing for all such rate
3066	filings made after a specified date; revising the factors the
3067	office must consider in reviewing a rate filing; prohibiting the
3068	Office of Insurance Regulation from disapproving as excessive a
3069	rate solely because the insurer obtained reinsurance covering a
3070	specified probably maximum loss; allowing the office to
3071	disapprove a rate as excessive within 1 year after the rate has
3072	been approved under certain conditions related to nonrenewal of
3073	policies by the insurer; requiring the Division of
3074	Administrative Hearings to expedite a hearing request by an
3075	insurer and for the administrative law judge to commence the
3076	hearing within a specified time; authorizing an insurer to
3077	request an expedited appellate review pursuant to the Florida
3078	Rules of Appellate Procedure; expressing legislative intent for
3079	an expedited appellate review; revising provisions relating to
3080	the submission of a disputed rate filing, other than a rate
3081	filing for medical malpractice insurance, to an arbitration
3082	panel in lieu of an administrative hearing if the rate is filed
3083	before a specified date; deleting provisions relating to
3084	mandatory arbitration in lieu of certain hearings; amending s.
3085	627.0628, F.S.; providing legislative findings relating to final
3086	agency action for insurance ratemaking; requiring that with
3087	respect to rate filings, insurers must use actuarial methods or
3088	models found to be accurate or reliable by the Florida
3089	Commission on Hurricane Loss Projection Methodology; providing
3090	for use of other models under certain circumstances; deleting
3091	the requirement for the Office of Insurance Regulation and the
3092	Consumer Advocate to have access to all assumptions of a
3093	hurricane loss model in order for a model that has been found to
3094	be accurate and reliable by the Florida Commission on Hurricane
3095	Loss Projection Methodology to be admissible in a rate
3096	proceeding; deleting cross-references to conform to changes made
3097	by the act; amending s. 627.0629, F.S.; requiring that the
3098	Office of Insurance Regulation develop and make publicly
3099	available before a specified deadline a proposed method for
3100	insurers to establish windstorm mitigation premium discounts
3101	that correlate to the uniform home rating scale; requiring that
3102	the Financial Services Commission adopt rules before a specified
3103	deadline; requiring insurers to make rate filings pursuant to
3104	such method; authorizing the commission to make changes by rule
3105	to the uniform home grading scale and specify by rule the
3106	minimum required discounts, credits, or other rate
3107	differentials; requiring that such rate differentials be
3108	consistent with generally accepted actuarial principles and wind
3109	loss mitigation studies; amending s. 627.351, F.S., relating to
3110	Citizens Property Insurance Corporation; deleting a provision to
3111	conform to changes made in the act; deleting provisions defining
3112	the terms "homestead property" and "nonhomestead property";
3113	increasing threshold replacement costs of certain structures for
3114	eligibility for coverage by the corporation; deleting
3115	requirements for certain properties to meeting building code
3116	plus requirements as a condition of eligibility for coverage by
3117	the corporation; deleting outdated provisions requiring the
3118	corporation to submit a report for approval of offering
3119	multiperil coverage; revising threshold amounts of deficits
3120	incurred in a calendar year on which the decision to levy
3121	assessments and the types of such assessments are based;
3122	revising the formula used to calculate shares of assessments
3123	owed by certain assessable insureds; requiring that the board of
3124	governors make certain determinations before levying emergency
3125	assessments; providing the board of governors with discretion to
3126	set the amount of an emergency assessment within specified
3127	limits; requiring the board of governors to levy a Citizens
3128	policyholder surcharge under certain conditions; increasing the
3129	amount of the surcharge; deleting a provision requiring the levy
3130	of an immediate assessment against certain policyholders under
3131	such conditions; requiring that funds collected from the levy of
3132	such surcharges be used for certain purposes; providing that
3133	such surcharges are not considered premium and are not subject
3134	to commissions, fees, or premium taxes; requiring that the
3135	failure to pay such surcharges be treated as failure to pay
3136	premium; requiring that the amount of any assessment or
3137	surcharge which exceeds the amount of deficits be remitted to
3138	and used by the corporation for specified purposes; deleting
3139	provisions requiring that the plan of operation of the
3140	corporation provide for the levy of a Citizens policyholder
3141	surcharge if regular deficit assessments are levied as a result
3142	of deficits in certain accounts; deleting provisions related to
3143	the calculation, classification, and nonpayment of such
3144	surcharge; requiring that the corporation make an annual filing
3145	for each personal or commercial line of business it writes,
3146	beginning on a specified date; limiting the overall average
3147	statewide premium increase and the increase for an individual
3148	policyholder to a specified amount for rates established for
3149	certain policies during a specified period; deleting a provision
3150	requiring an insurer to purchase bonds that remain unsold;
3151	deleting provisions requiring the corporation to make certain
3152	confidential underwriting and claims files available to agents
3153	to conform to changes made by the act relating to ineligibility
3154	of certain dwellings; clarifying the right of certain parties to
3155	discover underwriting and claims file records; authorizing the
3156	corporation to release such records as it deems necessary;
3157	requiring the corporation to report certain information to a
3158	consumer reporting agency; amending s. 627.4133, F.S.; requiring
3159	insurers to provide written notice of certain cancellations,
3160	nonrenewals, or terminations; creating s. 689.262, F.S.;
3161	requiring a purchaser of residential property to be presented
3162	with the windstorm mitigation rating of the structure;
3163	authorizing the Financial Services Commission to adopt rules;
3164	requiring Citizens Property Insurance Corporation to transfer
3165	funds to the General Revenue Fund if the losses due to a
3166	hurricane do not exceed a specified amount; requiring the board
3167	of governors of Citizens Property Insurance Corporation to make
3168	a reasonable estimate of such losses by a certain date;
3169	requiring the board to make quarterly transfers of funds to the
3170	corporation under certain circumstances; requiring the
3171	corporation to credit certain accounts for funds removed to make
3172	certain transfers; prohibiting Citizens Property Insurance
3173	Corporation from using certain statutory changes or authorized
3174	transfers of funds as justification or cause to seek any rate or
3175	assessment increase; amending s. 627.06281, F.S.; providing for
3176	residential property insurers to have access to and use a public
3177	hurricane loss projection model; requiring the office to
3178	establish a fee schedule for such model access and use; amending
3179	s. 627.0655, F.S.; expanding application of policyholder loss or
3180	expense-related premium discounts; creating the Citizens
3181	Property Insurance Corporation Mission Review Task Force;
3182	providing purposes; requiring a report; providing report
3183	requirements; providing for appointment of members; providing
3184	responsibilities; specifying service without compensation;
3185	providing for reimbursement of per diem and travel expenses;
3186	providing meeting requirements; requiring the corporation to
3187	assist the task force; providing for the expiration of the task
3188	force; requiring the Chief Financial Officer to provide a report
3189	on the economic impact on the state of certain hurricanes;
3190	providing report requirements; creating s. 627.0621, F.S.;
3191	providing requirements for transparency in rate regulation;
3192	providing definitions; providing for a website for public access
3193	to rate filing information; providing requirements; providing
3194	for application of public meeting requirements; specifying
3195	nonapplication of attorney-client or work-product privileges to
3196	certain communications in certain administrative or judicial
3197	proceedings under certain circumstances; specifying criteria;
3198	providing for waiver of such privileges under certain
3199	circumstances; amending s. 215.555, F.S.; extending for an
3200	additional year the offer of reimbursement coverage for
3201	specified insurers; revising the qualifying criteria for such
3202	insurers; revising provisions to conform; amending s. 627.0613,
3203	F.S.; deleting cross-references to conform to changes made by
3204	the act; amending s. 627.712, F.S.; requiring insurers to
3205	provide notice to mortgageholders or lienholders of certain
3206	policies not providing wind coverage for certain structures;
3207	providing effective dates.
3208

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