Florida Senate - 2008 SB 2878

By Senator Atwater

25-03730D-08 20082878__

A bill to be entitled

An act relating to Citizens Property Insurance

Corporation; amending s. 627.351, F.S.; deleting

provisions defining the terms "homestead property" and

"nonhomestead property"; deleting a provision providing

for the classification of certain dwellings as

"nonhomestead property"; revising threshold amounts of

deficits incurred in a calendar year on which the decision

to levy assessments and the types of such assessments are

based; revising the formula used to calculate shares of

assessments owed by certain assessable insureds; requiring

that the board of governors make certain determinations

before levying emergency assessments; providing the board

of governors with discretion to set the amount of an

emergency assessment within specified limits; requiring

the board of governors to levy a Citizens policyholder

surcharge under certain conditions; deleting a provision

requiring the levy of an immediate assessment against

certain policyholders under such conditions; requiring

that funds collected from the levy of such surcharges be

used for certain purposes; providing that such surcharges

are not considered premium and are not subject to

commissions, fees, or premium taxes; requiring that the

failure to pay such surcharges be treated as failure to

pay premium; requiring that the amount of any assessment

or surcharge which exceeds the amount of deficits be

remitted to and used by the corporation for specified

purposes; deleting provisions requiring that the plan of

operation of the corporation provide for the levy of a

Citizens policyholder surcharge if regular deficit

assessments are levied as a result of deficits in certain

accounts; deleting provisions related to the calculation,

classification, and nonpayment of such surcharge;

providing legislative findings; requiring that the

corporation make an annual filing for each personal or

commercial line of business it writes, beginning on a

specified date; limiting the overall average statewide

premium increase and the increase for an individual

policyholder to a specified amount for rates established

for certain policies during a specified period; requiring

that the corporation cease issuance of new wind-only

coverage beginning on a specified date; requiring that the

corporation issue comprehensive multiperil coverage

instead of wind-only coverage; requiring that the

corporation offer only comprehensive multiperil coverage

beginning on a specified date; providing legislative

intent; providing an effective date.

Be It Enacted by the Legislature of the State of Florida:

Section 1. Paragraphs (a),(b), (c), and (m) of subsection

(6) of section 627.351, Florida Statutes, are amended, and

paragraph (gg) is added to that subsection, to read:

627.351 Insurance risk apportionment plans.--

(6) CITIZENS PROPERTY INSURANCE CORPORATION.--

(a)1. It is the public purpose of this subsection to ensure

the existence of an orderly market for property insurance for

Floridians and Florida businesses. The Legislature finds that

private insurers are unwilling or unable to provide affordable

property insurance coverage in this state to the extent sought

and needed. The absence of affordable property insurance

threatens the public health, safety, and welfare and likewise

threatens the economic health of the state. The state therefore

has a compelling public interest and a public purpose to assist

in assuring that property in the state is insured and that it is

insured at affordable rates so as to facilitate the remediation,

reconstruction, and replacement of damaged or destroyed property

in order to reduce or avoid the negative effects otherwise

resulting to the public health, safety, and welfare, to the

economy of the state, and to the revenues of the state and local

governments which are needed to provide for the public welfare.

It is necessary, therefore, to provide affordable property

insurance to applicants who are in good faith entitled to procure

insurance through the voluntary market but are unable to do so.

The Legislature intends by this subsection that affordable

property insurance be provided and that it continue to be

provided, as long as necessary, through Citizens Property

Insurance Corporation, a government entity that is an integral

part of the state, and that is not a private insurance company.

To that end, Citizens Property Insurance Corporation shall strive

to increase the availability of affordable property insurance in

this state, while achieving efficiencies and economies, and while

providing service to policyholders, applicants, and agents which

is no less than the quality generally provided in the voluntary

market, for the achievement of the foregoing public purposes.

Because it is essential for this government entity to have the

maximum financial resources to pay claims following a

catastrophic hurricane, it is the intent of the Legislature that

Citizens Property Insurance Corporation continue to be an

integral part of the state and that the income of the corporation

be exempt from federal income taxation and that interest on the

debt obligations issued by the corporation be exempt from federal

income taxation.

2. The Residential Property and Casualty Joint Underwriting

Association originally created by this statute shall be known, as

of July 1, 2002, as the Citizens Property Insurance Corporation.

The corporation shall provide insurance for residential and

commercial property, for applicants who are in good faith

entitled, but are unable, to procure insurance through the

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voluntary market. The corporation shall operate pursuant to a

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plan of operation approved by order of the Financial Services

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Commission. The plan is subject to continuous review by the

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commission. The commission may, by order, withdraw approval of

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all or part of a plan if the commission determines that

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conditions have changed since approval was granted and that the

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purposes of the plan require changes in the plan. The corporation

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shall continue to operate pursuant to the plan of operation

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approved by the Office of Insurance Regulation until October 1,

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2006. For the purposes of this subsection, residential coverage

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includes both personal lines residential coverage, which consists

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of the type of coverage provided by homeowner's, mobile home

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owner's, dwelling, tenant's, condominium unit owner's, and

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similar policies, and commercial lines residential coverage,

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which consists of the type of coverage provided by condominium

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association, apartment building, and similar policies.

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3. For the purposes of this subsection, the term "homestead

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property" means:

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a. Property that has been granted a homestead exemption

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under chapter 196;

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b. Property for which the owner has a current, written

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lease with a renter for a term of at least 7 months and for which

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the dwelling is insured by the corporation for $200,000 or less;

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c. An owner-occupied mobile home or manufactured home, as

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defined in s. 320.01, which is permanently affixed to real

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property, is owned by a Florida resident, and has been granted a

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homestead exemption under chapter 196 or, if the owner does not

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own the real property, the owner certifies that the mobile home

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or manufactured home is his or her principal place of residence;

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d. Tenant's coverage;

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e. Commercial lines residential property; or

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f. Any county, district, or municipal hospital; a hospital

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licensed by any not-for-profit corporation qualified under s.

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501(c)(3) of the United States Internal Revenue Code; or a

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continuing care retirement community that is certified under

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chapter 651 and that receives an exemption from ad valorem taxes

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under chapter 196.

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4. For the purposes of this subsection, the term

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"nonhomestead property" means property that is not homestead

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property.

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3.5. Effective January 1, 2010, January 1, 2009, a personal

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lines residential structure that has a dwelling replacement cost

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of $1 million or more, or a single condominium unit that has a

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combined dwelling and content replacement cost of $1 million or

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more is not eligible for coverage by the corporation. Such

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dwellings insured by the corporation on December 31, 2008, may

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continue to be covered by the corporation until the end of the

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policy term. However, such dwellings that are insured by the

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corporation and become ineligible for coverage due to the

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provisions of this subparagraph may reapply and obtain coverage

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in the high-risk account and be considered "nonhomestead

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property" If the property owner provides the corporation with a

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sworn affidavit from one or more insurance agents, on a form

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provided by the corporation, stating that the agents have made

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their best efforts to obtain coverage and that the property has

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been rejected for coverage by at least one authorized insurer and

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at least three surplus lines insurers. If such conditions are

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met, The dwelling may be insured by the corporation for up to 3

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years, after which time the dwelling is ineligible for coverage.

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The office shall approve the method used by the corporation for

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valuing the dwelling replacement cost for the purposes of this

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subparagraph. If a policyholder is insured by the corporation

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prior to being determined to be ineligible pursuant to this

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subparagraph and such policyholder files a lawsuit challenging

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the determination, the policyholder may remain insured by the

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corporation until the conclusion of the litigation.

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4.6. For properties constructed on or after January 1,

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2009, the corporation may not insure any property located within

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2,500 feet landward of the coastal construction control line

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created pursuant to s. 161.053 unless the property meets the

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requirements of the code-plus building standards developed by the

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Florida Building Commission.

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5.7. It is the intent of the Legislature that

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policyholders, applicants, and agents of the corporation receive

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service and treatment of the highest possible level but never

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less than that generally provided in the voluntary market. It

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also is intended that the corporation be held to service

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standards no less than those applied to insurers in the voluntary

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market by the office with respect to responsiveness, timeliness,

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customer courtesy, and overall dealings with policyholders,

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applicants, or agents of the corporation.

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6.8. Effective January 1, 2009, a personal lines

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residential structure that is located in the "wind-borne debris

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region," as defined in s. 1609.2, International Building Code

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(2006), and that has an insured value on the structure of

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$750,000 or more is not eligible for coverage by the corporation

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unless the structure has opening protections as required under

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the Florida Building Code for a newly constructed residential

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structure in that area. A residential structure shall be deemed

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to comply with the requirements of this subparagraph if it has

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shutters or opening protections on all openings and if such

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opening protections complied with the Florida Building Code at

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the time they were installed.

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(b)1. All insurers authorized to write one or more subject

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lines of business in this state are subject to assessment by the

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corporation and, for the purposes of this subsection, are

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referred to collectively as "assessable insurers." Insurers

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writing one or more subject lines of business in this state

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pursuant to part VIII of chapter 626 are not assessable insurers,

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but insureds who procure one or more subject lines of business in

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this state pursuant to part VIII of chapter 626 are subject to

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assessment by the corporation and are referred to collectively as

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"assessable insureds." An authorized insurer's assessment

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liability shall begin on the first day of the calendar year

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following the year in which the insurer was issued a certificate

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of authority to transact insurance for subject lines of business

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in this state and shall terminate 1 year after the end of the

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first calendar year during which the insurer no longer holds a

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certificate of authority to transact insurance for subject lines

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of business in this state.

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2.a. All revenues, assets, liabilities, losses, and

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expenses of the corporation shall be divided into three separate

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accounts as follows:

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(I) A personal lines account for personal residential

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policies issued by the corporation or issued by the Residential

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Property and Casualty Joint Underwriting Association and renewed

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by the corporation that provide comprehensive, multiperil

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coverage on risks that are not located in areas eligible for

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coverage in the Florida Windstorm Underwriting Association as

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those areas were defined on January 1, 2002, and for such

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policies that do not provide coverage for the peril of wind on

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risks that are located in such areas;

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(II) A commercial lines account for commercial residential

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and commercial nonresidential policies issued by the corporation

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or issued by the Residential Property and Casualty Joint

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Underwriting Association and renewed by the corporation that

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provide coverage for basic property perils on risks that are not

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located in areas eligible for coverage in the Florida Windstorm

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Underwriting Association as those areas were defined on January

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1, 2002, and for such policies that do not provide coverage for

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the peril of wind on risks that are located in such areas; and

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(III) A high-risk account for personal residential policies

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and commercial residential and commercial nonresidential property

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policies issued by the corporation or transferred to the

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corporation that provide coverage for the peril of wind on risks

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that are located in areas eligible for coverage in the Florida

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Windstorm Underwriting Association as those areas were defined on

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January 1, 2002. Subject to the approval of a business plan by

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the Financial Services Commission and Legislative Budget

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Commission as provided in this sub-sub-subparagraph, but no

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earlier than March 31, 2007, the corporation may offer policies

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that provide multiperil coverage and the corporation shall

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continue to offer policies that provide coverage only for the

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peril of wind for risks located in areas eligible for coverage in

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the high-risk account. In issuing multiperil coverage, the

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corporation may use its approved policy forms and rates for the

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personal lines account. An applicant or insured who is eligible

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to purchase a multiperil policy from the corporation may purchase

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a multiperil policy from an authorized insurer without prejudice

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to the applicant's or insured's eligibility to prospectively

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purchase a policy that provides coverage only for the peril of

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wind from the corporation. An applicant or insured who is

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eligible for a corporation policy that provides coverage only for

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the peril of wind may elect to purchase or retain such policy and

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also purchase or retain coverage excluding wind from an

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authorized insurer without prejudice to the applicant's or

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insured's eligibility to prospectively purchase a policy that

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provides multiperil coverage from the corporation. It is the goal

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of the Legislature that there would be an overall average savings

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of 10 percent or more for a policyholder who currently has a

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wind-only policy with the corporation, and an ex-wind policy with

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a voluntary insurer or the corporation, and who then obtains a

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multiperil policy from the corporation. It is the intent of the

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Legislature that the offer of multiperil coverage in the high-

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risk account be made and implemented in a manner that does not

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adversely affect the tax-exempt status of the corporation or

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creditworthiness of or security for currently outstanding

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financing obligations or credit facilities of the high-risk

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account, the personal lines account, or the commercial lines

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account. By March 1, 2007, the corporation shall prepare and

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submit for approval by the Financial Services Commission and

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Legislative Budget Commission a report detailing the

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corporation's business plan for issuing multiperil coverage in

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the high-risk account. The business plan shall be approved or

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disapproved within 30 days after receipt, as submitted or

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modified and resubmitted by the corporation. The business plan

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must include: the impact of such multiperil coverage on the

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corporation's financial resources, the impact of such multiperil

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coverage on the corporation's tax-exempt status, the manner in

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which the corporation plans to implement the processing of

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applications and policy forms for new and existing policyholders,

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the impact of such multiperil coverage on the corporation's

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ability to deliver customer service at the high level required by

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this subsection, the ability of the corporation to process

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claims, the ability of the corporation to quote and issue

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policies, the impact of such multiperil coverage on the

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corporation's agents, the impact of such multiperil coverage on

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the corporation's existing policyholders, and the impact of such

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multiperil coverage on rates and premium. The high-risk account

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must also include quota share primary insurance under

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subparagraph (c)2. The area eligible for coverage under the high-

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risk account also includes the area within Port Canaveral, which

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is bordered on the south by the City of Cape Canaveral, bordered

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on the west by the Banana River, and bordered on the north by

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Federal Government property.

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b. The three separate accounts must be maintained as long

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as financing obligations entered into by the Florida Windstorm

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Underwriting Association or Residential Property and Casualty

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Joint Underwriting Association are outstanding, in accordance

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with the terms of the corresponding financing documents. When the

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financing obligations are no longer outstanding, in accordance

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with the terms of the corresponding financing documents, the

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corporation may use a single account for all revenues, assets,

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liabilities, losses, and expenses of the corporation. Consistent

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with the requirement of this subparagraph and prudent investment

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policies that minimize the cost of carrying debt, the board shall

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exercise its best efforts to retire existing debt or to obtain

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approval of necessary parties to amend the terms of existing

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debt, so as to structure the most efficient plan to consolidate

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the three separate accounts into a single account. By February 1,

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2007, the board shall submit a report to the Financial Services

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Commission, the President of the Senate, and the Speaker of the

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House of Representatives which includes an analysis of

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consolidating the accounts, the actions the board has taken to

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minimize the cost of carrying debt, and its recommendations for

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executing the most efficient plan.

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c. Creditors of the Residential Property and Casualty Joint

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Underwriting Association and of the accounts specified in sub-

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sub-subparagraphs a.(I) and (II) may have a claim against, and

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recourse to, the accounts referred to in sub-sub-subparagraphs

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a.(I) and (II) and shall have no claim against, or recourse to,

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the account referred to in sub-sub-subparagraph a.(III).

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Creditors of the Florida Windstorm Underwriting Association shall

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have a claim against, and recourse to, the account referred to in

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sub-sub-subparagraph a.(III) and shall have no claim against, or

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recourse to, the accounts referred to in sub-sub-subparagraphs

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a.(I) and (II).

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d. Revenues, assets, liabilities, losses, and expenses not

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attributable to particular accounts shall be prorated among the

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accounts.

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e. The Legislature finds that the revenues of the

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corporation are revenues that are necessary to meet the

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requirements set forth in documents authorizing the issuance of

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bonds under this subsection.

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f. No part of the income of the corporation may inure to

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the benefit of any private person.

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3. With respect to a deficit in an account:

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a. When the deficit incurred in a particular calendar year

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is not greater than 8 10 percent of the aggregate statewide

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direct written premium for the subject lines of business for the

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prior calendar year, the entire deficit shall be recovered

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through regular assessments of assessable insurers under

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paragraph (p) and assessable insureds.

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b. When the deficit incurred in a particular calendar year

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exceeds 8 10 percent of the aggregate statewide direct written

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premium for the subject lines of business for the prior calendar

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year, the corporation shall levy regular assessments on

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assessable insurers under paragraph (p) and on assessable

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insureds in an amount equal to the greater of 8 10 percent of the

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deficit or 8 10 percent of the aggregate statewide direct written

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premium for the subject lines of business for the prior calendar

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year. Any remaining deficit shall be recovered through emergency

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assessments under sub-subparagraph d.

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c. Each assessable insurer's share of the amount being

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assessed under sub-subparagraph a. or sub-subparagraph b. shall

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be in the proportion that the assessable insurer's direct written

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premium for the subject lines of business for the year preceding

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the assessment bears to the aggregate statewide direct written

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premium for the subject lines of business for that year. The

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assessment percentage applicable to each assessable insured is

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the ratio of the amount being assessed under sub-subparagraph a.

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or sub-subparagraph b. to the aggregate statewide direct written

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premium for the subject lines of business for the prior year.

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Assessments levied by the corporation on assessable insurers

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under sub-subparagraphs a. and b. shall be paid as required by

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the corporation's plan of operation and paragraph (p).

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Notwithstanding any other provision of this subsection, the

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aggregate amount of a regular assessment for a deficit incurred

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in a particular calendar year shall be reduced by the estimated

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amount to be received by the corporation from the Citizens

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policyholder surcharge under subparagraph (c)10. and the amount

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collected or estimated to be collected from the assessment on

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Citizens policyholders pursuant to sub-subparagraph i.

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Assessments levied by the corporation on assessable insureds

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under sub-subparagraphs a. and b. shall be collected by the

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surplus lines agent at the time the surplus lines agent collects

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the surplus lines tax required by s. 626.932 and shall be paid to

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the Florida Surplus Lines Service Office at the time the surplus

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lines agent pays the surplus lines tax to the Florida Surplus

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Lines Service Office. Upon receipt of regular assessments from

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surplus lines agents, the Florida Surplus Lines Service Office

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shall transfer the assessments directly to the corporation as

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determined by the corporation.

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d. Upon a determination by the board of governors that a

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deficit in an account exceeds the amount that will be recovered

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through regular assessments under sub-subparagraph a. or sub-

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subparagraph b., and the amount that is expected to be recovered

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through surcharges under sub-subparagraph i., as to the remaining

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projected deficit the board shall levy, after verification by the

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office, emergency assessments, for as many years as necessary to

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cover the deficits, to be collected by assessable insurers and

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the corporation and collected from assessable insureds upon

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issuance or renewal of policies for subject lines of business,

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excluding National Flood Insurance policies. The amount of the

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emergency assessment collected in a particular year shall be a

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uniform percentage of that year's direct written premium for

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subject lines of business and all accounts of the corporation,

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excluding National Flood Insurance Program policy premiums, as

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annually determined by the board and verified by the office. The

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office shall verify the arithmetic calculations involved in the

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board's determination within 30 days after receipt of the

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information on which the determination was based. Notwithstanding

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any other provision of law, the corporation and each assessable

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insurer that writes subject lines of business shall collect

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emergency assessments from its policyholders without such

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obligation being affected by any credit, limitation, exemption,

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or deferment. Emergency assessments levied by the corporation on

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assessable insureds shall be collected by the surplus lines agent

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at the time the surplus lines agent collects the surplus lines

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tax required by s. 626.932 and shall be paid to the Florida

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Surplus Lines Service Office at the time the surplus lines agent

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pays the surplus lines tax to the Florida Surplus Lines Service

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Office. The emergency assessments so collected shall be

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transferred directly to the corporation on a periodic basis as

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determined by the corporation and shall be held by the

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corporation solely in the applicable account. The aggregate

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amount of emergency assessments levied for an account under this

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sub-subparagraph in any calendar year may, at the discretion of

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the board of governors, be less than, but may not exceed the

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greater of 10 percent of the amount needed to cover the remaining

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original deficit, plus interest, fees, commissions, required

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reserves, and other costs associated with financing of the

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original deficit, or 10 percent of the aggregate statewide direct

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written premium for subject lines of business and for all

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accounts of the corporation for the prior year, plus interest,

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fees, commissions, required reserves, and other costs associated

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with financing the remaining original deficit.

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e. The corporation may pledge the proceeds of assessments,

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projected recoveries from the Florida Hurricane Catastrophe Fund,

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other insurance and reinsurance recoverables, policyholder

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surcharges and other surcharges, and other funds available to the

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corporation as the source of revenue for and to secure bonds

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issued under paragraph (p), bonds or other indebtedness issued

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under subparagraph (c)3., or lines of credit or other financing

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mechanisms issued or created under this subsection, or to retire

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any other debt incurred as a result of deficits or events giving

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rise to deficits, or in any other way that the board determines

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will efficiently recover such deficits. The purpose of the lines

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of credit or other financing mechanisms is to provide additional

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resources to assist the corporation in covering claims and

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expenses attributable to a catastrophe. As used in this

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subsection, the term "assessments" includes regular assessments

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under sub-subparagraph a., sub-subparagraph b., or subparagraph

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(p)1. and emergency assessments under sub-subparagraph d.

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Emergency assessments collected under sub-subparagraph d. are not

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part of an insurer's rates, are not premium, and are not subject

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to premium tax, fees, or commissions; however, failure to pay the

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emergency assessment shall be treated as failure to pay premium.

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The emergency assessments under sub-subparagraph d. shall

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continue as long as any bonds issued or other indebtedness

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incurred with respect to a deficit for which the assessment was

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imposed remain outstanding, unless adequate provision has been

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made for the payment of such bonds or other indebtedness pursuant

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to the documents governing such bonds or other indebtedness.

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f. As used in this subsection for purposes of any deficit

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incurred on or after January 25, 2007, the term "subject lines of

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business" means insurance written by assessable insurers or

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procured by assessable insureds for all property and casualty

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lines of business in this state, but not including workers'

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compensation or medical malpractice. As used in the sub-

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subparagraph, the term "property and casualty lines of business"

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includes all lines of business identified on Form 2, Exhibit of

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Premiums and Losses, in the annual statement required of

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authorized insurers by s. 624.424 and any rule adopted under this

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section, except for those lines identified as accident and health

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insurance and except for policies written under the National

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Flood Insurance Program or the Federal Crop Insurance Program.

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For purposes of this sub-subparagraph, the term "workers'

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compensation" includes both workers' compensation insurance and

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excess workers' compensation insurance.

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g. The Florida Surplus Lines Service Office shall determine

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annually the aggregate statewide written premium in subject lines

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of business procured by assessable insureds and shall report that

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information to the corporation in a form and at a time the

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corporation specifies to ensure that the corporation can meet the

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requirements of this subsection and the corporation's financing

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obligations.

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h. The Florida Surplus Lines Service Office shall verify

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the proper application by surplus lines agents of assessment

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percentages for regular assessments and emergency assessments

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levied under this subparagraph on assessable insureds and shall

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assist the corporation in ensuring the accurate, timely

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collection and payment of assessments by surplus lines agents as

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required by the corporation.

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i. If a deficit is incurred in any account in 2008 or

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thereafter, the board of governors shall levy a Citizens

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policyholder surcharge an immediate assessment against the

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premium of each nonhomestead property policyholder in all

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accounts of the corporation, as a uniform percentage of the

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premium of the policy of up to 10 percent of such premium, which

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funds shall be used to offset the deficit. If this assessment is

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insufficient to eliminate the deficit, the board of governors

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shall levy an additional assessment against all policyholders of

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the corporation, which shall be collected at the time of issuance

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or renewal of a policy, as a uniform percentage of the premium

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for the policy of up to 10 percent of such premium, which funds

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shall be used to further offset the deficit and reduce the amount

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of the regular assessment as provided in sub-subparagraph c.

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Citizens policyholder surcharges under this sub-subparagraph are

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not considered premium and are not subject to commissions, fees,

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or premium taxes. However, failure to pay such surcharges shall

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be treated as failure to pay premium.

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j. If the amount of any assessments or surcharges collected

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from corporation policyholders, assessable insurers or their

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policyholders, or assessable insureds exceeds the amount of the

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deficits, such excess amounts shall be remitted to and retained

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by the corporation in a reserve to be used by the corporation, as

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determined by the board of governors and approved by the office,

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to pay claims or reduce any past, present, or future plan-year

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deficits or to reduce outstanding debt. The board of governors

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shall maintain separate accounting records that consolidate data

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for nonhomestead properties, including, but not limited to,

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number of policies, insured values, premiums written, and losses.

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The board of governors shall annually report to the office and

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the Legislature a summary of such data.

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1. Must provide for adoption of residential property and

517

casualty insurance policy forms and commercial residential and

518

nonresidential property insurance forms, which forms must be

519

approved by the office prior to use. The corporation shall adopt

520

the following policy forms:

521

a. Standard personal lines policy forms that are

522

comprehensive multiperil policies providing full coverage of a

523

residential property equivalent to the coverage provided in the

524

private insurance market under an HO-3, HO-4, or HO-6 policy.

525

b. Basic personal lines policy forms that are policies

526

similar to an HO-8 policy or a dwelling fire policy that provide

527

coverage meeting the requirements of the secondary mortgage

528

market, but which coverage is more limited than the coverage

529

under a standard policy.

530

c. Commercial lines residential and nonresidential policy

531

forms that are generally similar to the basic perils of full

532

coverage obtainable for commercial residential structures and

533

commercial nonresidential structures in the admitted voluntary

534

market.

535

d. Personal lines and commercial lines residential property

536

insurance forms that cover the peril of wind only. The forms are

537

applicable only to residential properties located in areas

538

eligible for coverage under the high-risk account referred to in

539

sub-subparagraph (b)2.a.

540

e. Commercial lines nonresidential property insurance forms

541

that cover the peril of wind only. The forms are applicable only

542

to nonresidential properties located in areas eligible for

543

coverage under the high-risk account referred to in sub-

544

subparagraph (b)2.a.

545

f. The corporation may adopt variations of the policy forms

546

listed in sub-subparagraphs a.-e. that contain more restrictive

547

coverage.

548

2.a. Must provide that the corporation adopt a program in

549

which the corporation and authorized insurers enter into quota

550

share primary insurance agreements for hurricane coverage, as

551

defined in s. 627.4025(2)(a), for eligible risks, and adopt

552

property insurance forms for eligible risks which cover the peril

553

of wind only. As used in this subsection, the term:

554

(I) "Quota share primary insurance" means an arrangement in

555

which the primary hurricane coverage of an eligible risk is

556

provided in specified percentages by the corporation and an

557

authorized insurer. The corporation and authorized insurer are

558

each solely responsible for a specified percentage of hurricane

559

coverage of an eligible risk as set forth in a quota share

560

primary insurance agreement between the corporation and an

561

authorized insurer and the insurance contract. The responsibility

562

of the corporation or authorized insurer to pay its specified

563

percentage of hurricane losses of an eligible risk, as set forth

564

in the quota share primary insurance agreement, may not be

565

altered by the inability of the other party to the agreement to

566

pay its specified percentage of hurricane losses. Eligible risks

567

that are provided hurricane coverage through a quota share

568

primary insurance arrangement must be provided policy forms that

569

set forth the obligations of the corporation and authorized

570

insurer under the arrangement, clearly specify the percentages of

571

quota share primary insurance provided by the corporation and

572

authorized insurer, and conspicuously and clearly state that

573

neither the authorized insurer nor the corporation may be held

574

responsible beyond its specified percentage of coverage of

575

hurricane losses.

576

(II) "Eligible risks" means personal lines residential and

577

commercial lines residential risks that meet the underwriting

578

criteria of the corporation and are located in areas that were

579

eligible for coverage by the Florida Windstorm Underwriting

580

Association on January 1, 2002.

581

b. The corporation may enter into quota share primary

582

insurance agreements with authorized insurers at corporation

583

coverage levels of 90 percent and 50 percent.

584

c. If the corporation determines that additional coverage

585

levels are necessary to maximize participation in quota share

586

primary insurance agreements by authorized insurers, the

587

corporation may establish additional coverage levels. However,

588

the corporation's quota share primary insurance coverage level

589

may not exceed 90 percent.

590

d. Any quota share primary insurance agreement entered into

591

between an authorized insurer and the corporation must provide

592

for a uniform specified percentage of coverage of hurricane

593

losses, by county or territory as set forth by the corporation

594

board, for all eligible risks of the authorized insurer covered

595

under the quota share primary insurance agreement.

596

e. Any quota share primary insurance agreement entered into

597

between an authorized insurer and the corporation is subject to

598

review and approval by the office. However, such agreement shall

599

be authorized only as to insurance contracts entered into between

600

an authorized insurer and an insured who is already insured by

601

the corporation for wind coverage.

602

f. For all eligible risks covered under quota share primary

603

insurance agreements, the exposure and coverage levels for both

604

the corporation and authorized insurers shall be reported by the

605

corporation to the Florida Hurricane Catastrophe Fund. For all

606

policies of eligible risks covered under quota share primary

607

insurance agreements, the corporation and the authorized insurer

608

shall maintain complete and accurate records for the purpose of

609

exposure and loss reimbursement audits as required by Florida

610

Hurricane Catastrophe Fund rules. The corporation and the

611

authorized insurer shall each maintain duplicate copies of policy

612

declaration pages and supporting claims documents.

613

g. The corporation board shall establish in its plan of

614

operation standards for quota share agreements which ensure that

615

there is no discriminatory application among insurers as to the

616

terms of quota share agreements, pricing of quota share

617

agreements, incentive provisions if any, and consideration paid

618

for servicing policies or adjusting claims.

619

h. The quota share primary insurance agreement between the

620

corporation and an authorized insurer must set forth the specific

621

terms under which coverage is provided, including, but not

622

limited to, the sale and servicing of policies issued under the

623

agreement by the insurance agent of the authorized insurer

624

producing the business, the reporting of information concerning

625

eligible risks, the payment of premium to the corporation, and

626

arrangements for the adjustment and payment of hurricane claims

627

incurred on eligible risks by the claims adjuster and personnel

628

of the authorized insurer. Entering into a quota sharing

629

insurance agreement between the corporation and an authorized

630

insurer shall be voluntary and at the discretion of the

631

authorized insurer.

632

3. May provide that the corporation may employ or otherwise

633

contract with individuals or other entities to provide

634

administrative or professional services that may be appropriate

635

to effectuate the plan. The corporation shall have the power to

636

borrow funds, by issuing bonds or by incurring other

637

indebtedness, and shall have other powers reasonably necessary to

638

effectuate the requirements of this subsection, including,

639

without limitation, the power to issue bonds and incur other

640

indebtedness in order to refinance outstanding bonds or other

641

indebtedness. The corporation may, but is not required to, seek

642

judicial validation of its bonds or other indebtedness under

643

chapter 75. The corporation may issue bonds or incur other

644

indebtedness, or have bonds issued on its behalf by a unit of

645

local government pursuant to subparagraph (p)2., in the absence

646

of a hurricane or other weather-related event, upon a

647

determination by the corporation, subject to approval by the

648

office, that such action would enable it to efficiently meet the

649

financial obligations of the corporation and that such financings

650

are reasonably necessary to effectuate the requirements of this

651

subsection. The corporation is authorized to take all actions

652

needed to facilitate tax-free status for any such bonds or

653

indebtedness, including formation of trusts or other affiliated

654

entities. The corporation shall have the authority to pledge

655

assessments, projected recoveries from the Florida Hurricane

656

Catastrophe Fund, other reinsurance recoverables, market

657

equalization and other surcharges, and other funds available to

658

the corporation as security for bonds or other indebtedness. In

659

recognition of s. 10, Art. I of the State Constitution,

660

prohibiting the impairment of obligations of contracts, it is the

661

intent of the Legislature that no action be taken whose purpose

662

is to impair any bond indenture or financing agreement or any

663

revenue source committed by contract to such bond or other

664

indebtedness.

665

4.a. Must require that the corporation operate subject to

666

the supervision and approval of a board of governors consisting

667

of eight individuals who are residents of this state, from

668

different geographical areas of this state. The Governor, the

669

Chief Financial Officer, the President of the Senate, and the

670

Speaker of the House of Representatives shall each appoint two

671

members of the board. At least one of the two members appointed

672

by each appointing officer must have demonstrated expertise in

673

insurance. The Chief Financial Officer shall designate one of the

674

appointees as chair. All board members serve at the pleasure of

675

the appointing officer. All members of the board of governors are

676

subject to removal at will by the officers who appointed them.

677

All board members, including the chair, must be appointed to

678

serve for 3-year terms beginning annually on a date designated by

679

the plan. Any board vacancy shall be filled for the unexpired

680

term by the appointing officer. The Chief Financial Officer shall

681

appoint a technical advisory group to provide information and

682

advice to the board of governors in connection with the board's

683

duties under this subsection. The executive director and senior

684

managers of the corporation shall be engaged by the board and

685

serve at the pleasure of the board. Any executive director

686

appointed on or after July 1, 2006, is subject to confirmation by

687

the Senate. The executive director is responsible for employing

688

other staff as the corporation may require, subject to review and

689

concurrence by the board.

690

b. The board shall create a Market Accountability Advisory

691

Committee to assist the corporation in developing awareness of

692

its rates and its customer and agent service levels in

693

relationship to the voluntary market insurers writing similar

694

coverage. The members of the advisory committee shall consist of

695

the following 11 persons, one of whom must be elected chair by

696

the members of the committee: four representatives, one appointed

697

by the Florida Association of Insurance Agents, one by the

698

Florida Association of Insurance and Financial Advisors, one by

699

the Professional Insurance Agents of Florida, and one by the

700

Latin American Association of Insurance Agencies; three

701

representatives appointed by the insurers with the three highest

702

voluntary market share of residential property insurance business

703

in the state; one representative from the Office of Insurance

704

Regulation; one consumer appointed by the board who is insured by

705

the corporation at the time of appointment to the committee; one

706

representative appointed by the Florida Association of Realtors;

707

and one representative appointed by the Florida Bankers

708

Association. All members must serve for 3-year terms and may

709

serve for consecutive terms. The committee shall report to the

710

corporation at each board meeting on insurance market issues

711

which may include rates and rate competition with the voluntary

712

market; service, including policy issuance, claims processing,

713

and general responsiveness to policyholders, applicants, and

714

agents; and matters relating to depopulation.

715

5. Must provide a procedure for determining the eligibility

716

of a risk for coverage, as follows:

717

a. Subject to the provisions of s. 627.3517, with respect

718

to personal lines residential risks, if the risk is offered

719

coverage from an authorized insurer at the insurer's approved

720

rate under either a standard policy including wind coverage or,

721

if consistent with the insurer's underwriting rules as filed with

722

the office, a basic policy including wind coverage, for a new

723

application to the corporation for coverage, the risk is not

724

eligible for any policy issued by the corporation unless the

725

premium for coverage from the authorized insurer is more than 15

726

percent greater than the premium for comparable coverage from the

727

corporation. If the risk is not able to obtain any such offer,

728

the risk is eligible for either a standard policy including wind

729

coverage or a basic policy including wind coverage issued by the

730

corporation; however, if the risk could not be insured under a

731

standard policy including wind coverage regardless of market

732

conditions, the risk shall be eligible for a basic policy

733

including wind coverage unless rejected under subparagraph 9.

734

However, with regard to a policyholder of the corporation or a

735

policyholder removed from the corporation through an assumption

736

agreement until the end of the assumption period, the

737

policyholder remains eligible for coverage from the corporation

738

regardless of any offer of coverage from an authorized insurer or

739

surplus lines insurer. The corporation shall determine the type

740

of policy to be provided on the basis of objective standards

741

specified in the underwriting manual and based on generally

742

accepted underwriting practices.

743

(I) If the risk accepts an offer of coverage through the

744

market assistance plan or an offer of coverage through a

745

mechanism established by the corporation before a policy is

746

issued to the risk by the corporation or during the first 30 days

747

of coverage by the corporation, and the producing agent who

748

submitted the application to the plan or to the corporation is

749

not currently appointed by the insurer, the insurer shall:

750

(A) Pay to the producing agent of record of the policy, for

751

the first year, an amount that is the greater of the insurer's

752

usual and customary commission for the type of policy written or

753

a fee equal to the usual and customary commission of the

754

corporation; or

755

(B) Offer to allow the producing agent of record of the

756

policy to continue servicing the policy for a period of not less

757

than 1 year and offer to pay the agent the greater of the

758

insurer's or the corporation's usual and customary commission for

759

the type of policy written.

760

761

If the producing agent is unwilling or unable to accept

762

appointment, the new insurer shall pay the agent in accordance

763

with sub-sub-sub-subparagraph (A).

764

(II) When the corporation enters into a contractual

765

agreement for a take-out plan, the producing agent of record of

766

the corporation policy is entitled to retain any unearned

767

commission on the policy, and the insurer shall:

768

(A) Pay to the producing agent of record of the corporation

769

policy, for the first year, an amount that is the greater of the

770

insurer's usual and customary commission for the type of policy

771

written or a fee equal to the usual and customary commission of

772

the corporation; or

773

(B) Offer to allow the producing agent of record of the

774

corporation policy to continue servicing the policy for a period

775

of not less than 1 year and offer to pay the agent the greater of

776

the insurer's or the corporation's usual and customary commission

777

for the type of policy written.

778

779

If the producing agent is unwilling or unable to accept

780

appointment, the new insurer shall pay the agent in accordance

781

with sub-sub-sub-subparagraph (A).

782

b. With respect to commercial lines residential risks, for

783

a new application to the corporation for coverage, if the risk is

784

offered coverage under a policy including wind coverage from an

785

authorized insurer at its approved rate, the risk is not eligible

786

for any policy issued by the corporation unless the premium for

787

coverage from the authorized insurer is more than 15 percent

788

greater than the premium for comparable coverage from the

789

corporation. If the risk is not able to obtain any such offer,

790

the risk is eligible for a policy including wind coverage issued

791

by the corporation. However, with regard to a policyholder of the

792

corporation or a policyholder removed from the corporation

793

through an assumption agreement until the end of the assumption

794

period, the policyholder remains eligible for coverage from the

795

corporation regardless of any offer of coverage from an

796

authorized insurer or surplus lines insurer.

797

(I) If the risk accepts an offer of coverage through the

798

market assistance plan or an offer of coverage through a

799

mechanism established by the corporation before a policy is

800

issued to the risk by the corporation or during the first 30 days

801

of coverage by the corporation, and the producing agent who

802

submitted the application to the plan or the corporation is not

803

currently appointed by the insurer, the insurer shall:

804

(A) Pay to the producing agent of record of the policy, for

805

the first year, an amount that is the greater of the insurer's

806

usual and customary commission for the type of policy written or

807

a fee equal to the usual and customary commission of the

808

corporation; or

809

(B) Offer to allow the producing agent of record of the

810

policy to continue servicing the policy for a period of not less

811

than 1 year and offer to pay the agent the greater of the

812

insurer's or the corporation's usual and customary commission for

813

the type of policy written.

814

815

If the producing agent is unwilling or unable to accept

816

appointment, the new insurer shall pay the agent in accordance

817

with sub-sub-sub-subparagraph (A).

818

(II) When the corporation enters into a contractual

819

agreement for a take-out plan, the producing agent of record of

820

the corporation policy is entitled to retain any unearned

821

commission on the policy, and the insurer shall:

822

(A) Pay to the producing agent of record of the corporation

823

policy, for the first year, an amount that is the greater of the

824

insurer's usual and customary commission for the type of policy

825

written or a fee equal to the usual and customary commission of

826

the corporation; or

827

(B) Offer to allow the producing agent of record of the

828

corporation policy to continue servicing the policy for a period

829

of not less than 1 year and offer to pay the agent the greater of

830

the insurer's or the corporation's usual and customary commission

831

for the type of policy written.

832

833

If the producing agent is unwilling or unable to accept

834

appointment, the new insurer shall pay the agent in accordance

835

with sub-sub-sub-subparagraph (A).

836

c. For purposes of determining comparable coverage under

837

sub-subparagraphs a. and b., the comparison shall be based on

838

those forms and coverages that are reasonably comparable. The

839

corporation may rely on a determination of comparable coverage

840

and premium made by the producing agent who submits the

841

application to the corporation, made in the agent's capacity as

842

the corporation's agent. A comparison may be made solely of the

843

premium with respect to the main building or structure only on

844

the following basis: the same coverage A or other building

845

limits; the same percentage hurricane deductible that applies on

846

an annual basis or that applies to each hurricane for commercial

847

residential property; the same percentage of ordinance and law

848

coverage, if the same limit is offered by both the corporation

849

and the authorized insurer; the same mitigation credits, to the

850

extent the same types of credits are offered both by the

851

corporation and the authorized insurer; the same method for loss

852

payment, such as replacement cost or actual cash value, if the

853

same method is offered both by the corporation and the authorized

854

insurer in accordance with underwriting rules; and any other form

855

or coverage that is reasonably comparable as determined by the

856

board. If an application is submitted to the corporation for

857

wind-only coverage in the high-risk account, the premium for the

858

corporation's wind-only policy plus the premium for the ex-wind

859

policy that is offered by an authorized insurer to the applicant

860

shall be compared to the premium for multiperil coverage offered

861

by an authorized insurer, subject to the standards for comparison

862

specified in this subparagraph. If the corporation or the

863

applicant requests from the authorized insurer a breakdown of the

864

premium of the offer by types of coverage so that a comparison

865

may be made by the corporation or its agent and the authorized

866

insurer refuses or is unable to provide such information, the

867

corporation may treat the offer as not being an offer of coverage

868

from an authorized insurer at the insurer's approved rate.

869

6. Must include rules for classifications of risks and

870

rates therefor.

871

7. Must provide that if premium and investment income for

872

an account attributable to a particular calendar year are in

873

excess of projected losses and expenses for the account

874

attributable to that year, such excess shall be held in surplus

875

in the account. Such surplus shall be available to defray

876

deficits in that account as to future years and shall be used for

877

that purpose prior to assessing assessable insurers and

878

assessable insureds as to any calendar year.

879

8. Must provide objective criteria and procedures to be

880

uniformly applied for all applicants in determining whether an

881

individual risk is so hazardous as to be uninsurable. In making

882

this determination and in establishing the criteria and

883

procedures, the following shall be considered:

884

a. Whether the likelihood of a loss for the individual risk

885

is substantially higher than for other risks of the same class;

886

and

887

b. Whether the uncertainty associated with the individual

888

risk is such that an appropriate premium cannot be determined.

889

890

The acceptance or rejection of a risk by the corporation shall be

891

construed as the private placement of insurance, and the

892

provisions of chapter 120 shall not apply.

893

9. Must provide that the corporation shall make its best

894

efforts to procure catastrophe reinsurance at reasonable rates,

895

to cover its projected 100-year probable maximum loss as

896

determined by the board of governors.

897

10. Must provide that in the event of regular deficit

898

assessments under sub-subparagraph (b)3.a. or sub-subparagraph

899

(b)3.b., in the personal lines account, the commercial lines

900

residential account, or the high-risk account, the corporation

901

shall levy upon corporation policyholders in its next rate

902

filing, or by a separate rate filing solely for this purpose, a

903

Citizens policyholder surcharge arising from a regular assessment

904

in such account in a percentage equal to the total amount of such

905

regular assessments divided by the aggregate statewide direct

906

written premium for subject lines of business for the prior

907

calendar year. For purposes of calculating the Citizens

908

policyholder surcharge to be levied under this subparagraph, the

909

total amount of the regular assessment to which this surcharge is

910

related shall be determined as set forth in subparagraph (b)3.,

911

without deducting the estimated Citizens policyholder surcharge.

912

Citizens policyholder surcharges under this subparagraph are not

913

considered premium and are not subject to commissions, fees, or

914

premium taxes; however, failure to pay a market equalization

915

surcharge shall be treated as failure to pay premium.

916

10.11. The policies issued by the corporation must provide

917

that, if the corporation or the market assistance plan obtains an

918

offer from an authorized insurer to cover the risk at its

919

approved rates, the risk is no longer eligible for renewal

920

through the corporation, except as otherwise provided in this

921

subsection.

922

11.12. Corporation policies and applications must include a

923

notice that the corporation policy could, under this section, be

924

replaced with a policy issued by an authorized insurer that does

925

not provide coverage identical to the coverage provided by the

926

corporation. The notice shall also specify that acceptance of

927

corporation coverage creates a conclusive presumption that the

928

applicant or policyholder is aware of this potential.

929

12.13. May establish, subject to approval by the office,

930

different eligibility requirements and operational procedures for

931

any line or type of coverage for any specified county or area if

932

the board determines that such changes to the eligibility

933

requirements and operational procedures are justified due to the

934

voluntary market being sufficiently stable and competitive in

935

such area or for such line or type of coverage and that consumers

936

who, in good faith, are unable to obtain insurance through the

937

voluntary market through ordinary methods would continue to have

938

access to coverage from the corporation. When coverage is sought

939

in connection with a real property transfer, such requirements

940

and procedures shall not provide for an effective date of

941

coverage later than the date of the closing of the transfer as

942

established by the transferor, the transferee, and, if

943

applicable, the lender.

944

13.14. Must provide that, with respect to the high-risk

945

account, any assessable insurer with a surplus as to

946

policyholders of $25 million or less writing 25 percent or more

947

of its total countrywide property insurance premiums in this

948

state may petition the office, within the first 90 days of each

949

calendar year, to qualify as a limited apportionment company. A

950

regular assessment levied by the corporation on a limited

951

apportionment company for a deficit incurred by the corporation

952

for the high-risk account in 2006 or thereafter may be paid to

953

the corporation on a monthly basis as the assessments are

954

collected by the limited apportionment company from its insureds

955

pursuant to s. 627.3512, but the regular assessment must be paid

956

in full within 12 months after being levied by the corporation. A

957

limited apportionment company shall collect from its

958

policyholders any emergency assessment imposed under sub-

959

subparagraph (b)3.d. The plan shall provide that, if the office

960

determines that any regular assessment will result in an

961

impairment of the surplus of a limited apportionment company, the

962

office may direct that all or part of such assessment be deferred

963

as provided in subparagraph (p)4. However, there shall be no

964

limitation or deferment of an emergency assessment to be

965

collected from policyholders under sub-subparagraph (b)3.d.

966

14.15. Must provide that the corporation appoint as its

967

licensed agents only those agents who also hold an appointment as

968

defined in s. 626.015(3) with an insurer who at the time of the

969

agent's initial appointment by the corporation is authorized to

970

write and is actually writing personal lines residential property

971

coverage, commercial residential property coverage, or commercial

972

nonresidential property coverage within the state.

973

15.16. Must provide, by July 1, 2007, a premium payment

974

plan option to its policyholders which allows at a minimum for

975

quarterly and semiannual payment of premiums. A monthly payment

976

plan may, but is not required to, be offered.

977

16.17. Must limit coverage on mobile homes or manufactured

978

homes built prior to 1994 to actual cash value of the dwelling

979

rather than replacement costs of the dwelling.

980

17.18. May provide such limits of coverage as the board

981

determines, consistent with the requirements of this subsection.

982

18.19. May require commercial property to meet specified

983

hurricane mitigation construction features as a condition of

984

eligibility for coverage.

985

(m)1. Rates for coverage provided by the corporation shall

986

be actuarially sound and subject to the requirements of s.

987

627.062, except as otherwise provided in this paragraph. The

988

corporation shall file its recommended rates with the office at

989

least annually. The corporation shall provide any additional

990

information regarding the rates which the office requires. The

991

office shall consider the recommendations of the board and issue

992

a final order establishing the rates for the corporation within

993

45 days after the recommended rates are filed. The corporation

994

may not pursue an administrative challenge or judicial review of

995

the final order of the office.

996

2. In addition to the rates otherwise determined pursuant

997

to this paragraph, the corporation shall impose and collect an

998

amount equal to the premium tax provided for in s. 624.509 to

999

augment the financial resources of the corporation.

1000

3. After the public hurricane loss-projection model under

1001

s. 627.06281 has been found to be accurate and reliable by the

1002

Florida Commission on Hurricane Loss Projection Methodology, that

1003

model shall serve as the minimum benchmark for determining the

1004

windstorm portion of the corporation's rates. This subparagraph

1005

does not require or allow the corporation to adopt rates lower

1006

than the rates otherwise required or allowed by this paragraph.

1007

4. The rate filings for the corporation which were approved

1008

by the office and which took effect January 1, 2007, are

1009

rescinded, except for those rates that were lowered. As soon as

1010

possible, the corporation shall begin using the lower rates that

1011

were in effect on December 31, 2006, and shall provide refunds to

1012

policyholders who have paid higher rates as a result of that rate

1013

filing. The rates in effect on December 31, 2006, shall remain in

1014

effect for the 2007 and 2008 calendar years except for any rate

1015

change that results in a lower rate. The next rate change that

1016

may increase rates shall take effect no earlier than January 1,

1017

2010, January 1, 2009, pursuant to a new rate filing recommended

1018

by the corporation and established by the office, subject to the

1019

requirements of this paragraph.

1020

5. The Legislature finds that it is in the public interest

1021

to ensure that increased rates for coverage by the corporation be

1022

implemented incrementally to provide rate stability and

1023

predictability to its policyholders.

1024

a. Beginning on or after January 1, 2010, the corporation

1025

must make an annual filing for each personal and commercial line

1026

of business it writes.

1027

b. For the years 2010 through 2012, rates established by

1028

the office for the corporation for its personal residential

1029

multiperil policies, its commercial residential multiperil

1030

policies, and its commercial nonresidential multiperil policies

1031

may not result in any year in an overall average statewide

1032

premium increase of more than 10 percent or an increase for any

1033

single policyholder or more than 10 percent, excluding coverage

1034

changes and surcharges.

1035

c. For the years 2010 through 2012, rates established by

1036

the office for the corporation for its personal residential wind-

1037

only policies, its commercial residential wind-only policies, and

1038

its commercial nonresidential wind-only policies may not result

1039

in any year in an overall average statewide premium increase of

1040

more than 15 percent or an increase for any single policyholder

1041

of more than 15 percent, excluding coverage changes and

1042

surcharges.

1043

(gg)1. Notwithstanding any other provision of ss.

1044

627.351(6), beginning January 1, 2009, the corporation shall no

1045

longer issue new wind-only coverage and shall instead issue

1046

comprehensive multiperil coverage for all accounts. Beginning

1047

January 1, 2010, the corporation shall offer only comprehensive

1048

multiperil coverage for all accounts. When issuing such policies,

1049

the corporation shall use its approved multiperil policy forms

1050

and rates.

1051

2. It is the intent of the Legislature that the offer of

1052

multiperil coverage in a high-risk account be made and

1053

implemented in a manner that does not adversely affect the tax-

1054

exempt status of the corporation or creditworthiness of or

1055

security for currently outstanding financing obligations or

1056

credit facilities of the high-risk account, the personal lines

1057

account, or the commercial lines account.

1058

Section 2. This act shall take effect July 1, 2008.

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