HB 7021

1	A bill to be entitled
2	An act relating to the Florida Hurricane Catastrophe Fund;
3	amending s. 215.555, F.S.; revising legislative findings
4	and purpose; revising and providing definitions; creating
5	the Division of the Florida Hurricane Catastrophe Fund
6	within the State Board of Administration; transferring the
7	powers, duties, and responsibilities of administration of
8	the fund from the State Board of Administration to the
9	division; requiring the State Board of Administration to
10	appoint a director; revising provisions to conform;
11	providing penalties and interest for failing to collect
12	and remit certain assessments; increasing the membership
13	of the board of directors of the Florida Hurricane
14	Catastrophe Fund Finance Corporation; revising the
15	methodology for calculating TICL coverage multiples for
16	purposes of reducing an insurer's fund coverage limit;
17	increasing the percentage of reimbursement of an insurer's
18	TICL coverage under the TICL options addendum; amending
19	ss. 215.557, 215.5586, and 215.5595, F.S.; revising
20	provisions to conform; amending s. 627.0628, F.S.;
21	assigning the Florida Commission on Hurricane Loss
22	Projection Methodology to the division; revising
23	provisions to conform; amending ss. 215.559, 624.424, and
24	627.351, F.S.; correcting cross-references; providing an
25	effective date.
26
27	Be It Enacted by the Legislature of the State of Florida:
28
29	Section 1.  Section 215.555, Florida Statutes, is amended
30	to read:
31	215.555  Florida Hurricane Catastrophe Fund.--
32	(1)  FINDINGS AND PURPOSE.--The Legislature finds and
33	declares as follows:
34	(a)  There is a compelling state interest in maintaining a
35	viable and orderly private sector market for property insurance
36	in this state. To the extent that the private sector is unable
37	to maintain a viable and orderly market for property insurance
38	in this state, state actions to maintain such a viable and
39	orderly market are valid and necessary exercises of the police
40	power.
41	(b)  As a result of unprecedented levels of catastrophic
42	insured losses in recent years, and especially as a result of
43	Hurricane Andrew, numerous insurers have determined that in
44	order to protect their solvency, it is necessary for them to
45	reduce their exposure to hurricane losses. Also as a result of
46	these events, world reinsurance capacity has significantly
47	contracted, increasing the pressure on insurers to reduce their
48	catastrophic exposures.
49	(c)  Mortgages require reliable property insurance, and the
50	unavailability of reliable property insurance would therefore
51	make most real estate transactions impossible. In addition, the
52	public health, safety, and welfare demand that structures
53	damaged or destroyed in a catastrophe be repaired or
54	reconstructed as soon as possible. Therefore, the inability of
55	the private sector insurance and reinsurance markets to maintain
56	sufficient capacity to enable residents of this state to obtain
57	property insurance coverage in the private sector endangers the
58	economy of the state and endangers the public health, safety,
59	and welfare. Accordingly, state action to correct for this
60	inability of the private sector constitutes a valid and
61	necessary public and governmental purpose.
62	(d)  The insolvencies and financial impairments resulting
63	from Hurricane Andrew demonstrate that many property insurers
64	are unable or unwilling to maintain reserves, surplus, and
65	reinsurance sufficient to enable the insurers to pay all claims
66	in full in the event of a catastrophe. State action is therefore
67	necessary to protect the public from an insurer's unwillingness
68	or inability to maintain sufficient reserves, surplus, and
69	reinsurance.
70	(e)  A state program to provide a stable and ongoing source
71	of reimbursement to insurers for a portion of their catastrophic
72	hurricane losses will create additional insurance capacity
73	sufficient to ameliorate the current dangers to the state's
74	economy and to the public health, safety, and welfare.
75	(f)  It is essential to the functioning of a state program
76	to increase insurance capacity that revenues received be exempt
77	from federal taxation. It is therefore the intent of the
78	Legislature that this program be structured as a state trust
79	fund under the direction and control of the Division of the
80	Florida Hurricane Catastrophe Fund within the State Board of
81	Administration and operate exclusively for the purpose of
82	protecting and advancing the state's interest in maintaining
83	insurance capacity in this state.
84	(g)  Hurricane Andrew, which caused insured and uninsured
85	losses in excess of $20 billion, will likely not be the last
86	major windstorm to strike Florida. Recognizing that a future
87	wind catastrophe could cause damages in excess of $60 billion,
88	especially if a major urban area or series of urban areas were
89	hit, it is the intent of the Legislature to balance equitably
90	its concerns about mitigation of hurricane impact, insurance
91	affordability and availability, and the risk of insurer and
92	joint underwriting association insolvency, as well as assessment
93	and bonding limitations.
94	(2)  DEFINITIONS.--As used in this section:
95	(a)(m)  "Actual claims-paying capacity" means the sum of
96	the balance of the fund as of December 31 of a contract year,
97	plus any reinsurance purchased by the fund, plus the amount the
98	board is able to raise through the issuance of revenue bonds
99	under subsection (7) (6).
100	(b)(a)  "Actuarially indicated" means, with respect to
101	premiums paid by insurers for reimbursement provided by the
102	fund, an amount determined according to principles of actuarial
103	science to be adequate, but not excessive, in the aggregate, to
104	pay current and future obligations and expenses of the fund,
105	including additional amounts if needed to pay debt service on
106	revenue bonds issued under this section and to provide required
107	debt service coverage in excess of the amounts required to pay
108	actual debt service on revenue bonds issued under subsection (7)
109	(6), and determined according to principles of actuarial science
110	to reflect each insurer's relative exposure to hurricane losses.
111	(c)  "Board" means the governing board of the division,
112	which shall be composed of the Governor and Cabinet. The
113	Governor shall be chair of the governing board of the division,
114	the Attorney General shall be the secretary of the board, and
115	the Chief Financial Officer shall be treasurer of the board.
116	(d)(g)  "Bond" means any bond, debenture, note, or other
117	evidence of financial indebtedness issued under this section.
118	(e)(n)  "Corporation" means the Florida Hurricane
119	Catastrophe Fund Finance Corporation created in paragraph
120	(7)(6)(d).
121	(f)(b)  "Covered event" means any one storm declared to be
122	a hurricane by the National Hurricane Center, which storm causes
123	insured losses in this state.
124	(g)(c)  "Covered policy" means any insurance policy
125	covering residential property in this state, including, but not
126	limited to, any homeowner's, mobile home owner's, farm owner's,
127	condominium association, condominium unit owner's, tenant's, or
128	apartment building policy, or any other policy covering a
129	residential structure or its contents issued by any authorized
130	insurer, including a commercial self-insurance fund holding a
131	certificate of authority issued by the Office of Insurance
132	Regulation under s. 624.462, the Citizens Property Insurance
133	Corporation, and any joint underwriting association or similar
134	entity created under law. The term "covered policy" includes any
135	collateral protection insurance policy covering personal
136	residences which protects both the borrower's and the lender's
137	financial interests, in an amount at least equal to the coverage
138	for the dwelling in place under the lapsed homeowner's policy,
139	if such policy can be accurately reported as required in
140	subsection (6) (5). Additionally, covered policies include
141	policies covering the peril of wind removed from the Florida
142	Residential Property and Casualty Joint Underwriting Association
143	or from the Citizens Property Insurance Corporation, created
144	under s. 627.351(6), or from the Florida Windstorm Underwriting
145	Association, created under s. 627.351(2), by an authorized
146	insurer under the terms and conditions of an executed assumption
147	agreement between the authorized insurer and such association or
148	Citizens Property Insurance Corporation. Each assumption
149	agreement between the association and such authorized insurer or
150	Citizens Property Insurance Corporation must be approved by the
151	Office of Insurance Regulation before the effective date of the
152	assumption, and the Office of Insurance Regulation must provide
153	written notification to the division board within 15 working
154	days after such approval. "Covered policy" does not include any
155	policy that excludes wind coverage or hurricane coverage or any
156	reinsurance agreement and does not include any policy otherwise
157	meeting this definition which is issued by a surplus lines
158	insurer or a reinsurer. All commercial residential excess
159	policies and all deductible buy-back policies that, based on
160	sound actuarial principles, require individual ratemaking shall
161	be excluded by rule if the actuarial soundness of the fund is
162	not jeopardized. For this purpose, the term "excess policy"
163	means a policy that provides insurance protection for large
164	commercial property risks and that provides a layer of coverage
165	above a primary layer insured by another insurer.
166	(h)  "Debt service" means the amount required in any fiscal
167	year to pay the principal of, redemption premium, if any, and
168	interest on revenue bonds and any amounts required by the terms
169	of documents authorizing, securing, or providing liquidity for
170	revenue bonds necessary to maintain in effect any such liquidity
171	or security arrangements.
172	(i)  "Debt service coverage" means the amount, if any,
173	required by the documents under which revenue bonds are issued,
174	which amount is to be received in any fiscal year in excess of
175	the amount required to pay debt service for such fiscal year.
176	(j)  "Director" means the chief administrator of the
177	division, who shall act on behalf of the division as authorized
178	by the board.
179	(k)  "Division" means the Division of the Florida Hurricane
180	Catastrophe Fund.
181	(l)  "Estimated claims-paying capacity" means the sum of
182	the projected year-end balance of the fund as of December 31 of
183	a contract year, plus any reinsurance purchased by the fund,
184	plus the division's board's estimate of the board's borrowing
185	capacity.
186	(m)  "Fund" or "FHCF" means the Florida Hurricane
187	Catastrophe Fund.
188	(n)(j)  "Local government" means a unit of general purpose
189	local government as defined in s. 218.31(2).
190	(o)(d)  "Losses" means direct incurred losses under covered
191	policies, which shall include losses for additional living
192	expenses not to exceed 40 percent of the insured value of a
193	residential structure or its contents and shall exclude loss
194	adjustment expenses. "Losses" does not include losses for fair
195	rental value, loss of rent or rental income, or business
196	interruption losses.
197	(p)(k)  "Pledged revenues" means all or any portion of
198	revenues to be derived from reimbursement premiums under
199	subsection (6) (5) or from emergency assessments under paragraph
200	(7)(6)(b), as determined by the board.
201	(q)(e)  "Retention" means the amount of losses below which
202	an insurer is not entitled to reimbursement from the fund. An
203	insurer's retention shall be calculated as follows:
204	1.  The division board shall calculate and report to each
205	insurer the retention multiples for that year. For the contract
206	year beginning June 1, 2005, the retention multiple shall be
207	equal to $4.5 billion divided by the total estimated
208	reimbursement premium for the contract year; for subsequent
209	years, the retention multiple shall be equal to $4.5 billion,
210	adjusted based upon the reported exposure from the prior
211	contract year to reflect the percentage growth in exposure to
212	the fund for covered policies since 2004, divided by the total
213	estimated reimbursement premium for the contract year. Total
214	reimbursement premium for purposes of the calculation under this
215	subparagraph shall be estimated using the assumption that all
216	insurers have selected the 90-percent coverage level.
217	2.  The retention multiple as determined under subparagraph
218	1. shall be adjusted to reflect the coverage level elected by
219	the insurer. For insurers electing the 90-percent coverage
220	level, the adjusted retention multiple is 100 percent of the
221	amount determined under subparagraph 1. For insurers electing
222	the 75-percent coverage level, the retention multiple is 120
223	percent of the amount determined under subparagraph 1. For
224	insurers electing the 45-percent coverage level, the adjusted
225	retention multiple is 200 percent of the amount determined under
226	subparagraph 1.
227	3.  An insurer shall determine its provisional retention by
228	multiplying its provisional reimbursement premium by the
229	applicable adjusted retention multiple and shall determine its
230	actual retention by multiplying its actual reimbursement premium
231	by the applicable adjusted retention multiple.
232	4.  For insurers who experience multiple covered events
233	causing loss during the contract year, beginning June 1, 2005,
234	each insurer's full retention shall be applied to each of the
235	covered events causing the two largest losses for that insurer.
236	For each other covered event resulting in losses, the insurer's
237	retention shall be reduced to one-third of the full retention.
238	The reimbursement contract shall provide for the reimbursement
239	of losses for each covered event based on the full retention
240	with adjustments made to reflect the reduced retentions after
241	January 1 of the contract year provided the insurer reports its
242	losses as specified in the reimbursement contract.
243	(r)(f)  "Workers' compensation" includes both workers'
244	compensation and excess workers' compensation insurance.
245	(3)  DIVISION OF THE FLORIDA HURRICANE CATASTROPHE FUND
246	CREATED.--The Division of the Florida Hurricane Catastrophe Fund
247	is created within the State Board of Administration for the
248	purpose of administering the Florida Hurricane Catastrophe Fund.
249	For purposes of this section, the board of the division shall
250	consist of the Governor and Cabinet.
251	(4)(3)  FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There
252	is created the Florida Hurricane Catastrophe Fund within to be
253	administered by the State Board of Administration. Moneys in the
254	fund may not be expended, loaned, or appropriated except to pay
255	obligations of the fund arising out of reimbursement contracts
256	entered into under subsection (5) (4), payment of debt service
257	on revenue bonds issued under subsection (7) (6), costs of the
258	mitigation program under subsection (8) (7), costs of procuring
259	reinsurance, and costs of administration of the fund. The State
260	Board of Administration shall invest the moneys in the fund
261	pursuant to ss. 215.44-215.52. Except as otherwise provided in
262	this section, earnings from all investments shall be retained in
263	the fund. The State Board of Administration shall appoint a
264	director of the division who shall be responsible for the
265	administration of the fund. The appointment of the division
266	director shall be subject to approval by a majority vote of the
267	board. The division board may employ or contract with such staff
268	and professionals as the division board deems necessary for the
269	administration of the fund. The board may adopt such rules as
270	are reasonable and necessary to implement this section and shall
271	specify interest due on any delinquent remittances, which
272	interest may not exceed the fund's rate of return plus 5
273	percent. Such rules must conform to the Legislature's specific
274	intent in establishing the fund as expressed in subsection (1),
275	must enhance the fund's potential ability to respond to claims
276	for covered events, must contain general provisions so that the
277	rules can be applied with reasonable flexibility so as to
278	accommodate insurers in situations of an unusual nature or where
279	undue hardship may result, except that such flexibility may not
280	in any way impair, override, supersede, or constrain the public
281	purpose of the fund, and must be consistent with sound insurance
282	practices. The board may, by rule, provide for the exemption
283	from subsections (5) (4) and (6) (5) of insurers writing covered
284	policies with less than $10 million in aggregate exposure for
285	covered policies if the exemption does not affect the actuarial
286	soundness of the fund. The division may sue and be sued in the
287	name of the division.
288	(5)(4)  REIMBURSEMENT CONTRACTS.--
289	(a)  The division board shall enter into a contract with
290	each insurer writing covered policies in this state to provide
291	to the insurer the reimbursement described in paragraphs (b) and
292	(d), in exchange for the reimbursement premium paid into the
293	fund under subsection (6) (5). As a condition of doing business
294	in this state, each such insurer shall enter into such a
295	contract.
296	(b)1.  The contract shall contain a promise by the division
297	board to reimburse the insurer for 45 percent, 75 percent, or 90
298	percent of its losses from each covered event in excess of the
299	insurer's retention, plus 5 percent of the reimbursed losses to
300	cover loss adjustment expenses.
301	2.  The insurer must elect one of the percentage coverage
302	levels specified in this paragraph and may, upon renewal of a
303	reimbursement contract, elect a lower percentage coverage level
304	if no revenue bonds issued under subsection (7) (6) after a
305	covered event are outstanding, or elect a higher percentage
306	coverage level, regardless of whether or not revenue bonds are
307	outstanding. All members of an insurer group must elect the same
308	percentage coverage level. Any joint underwriting association,
309	risk apportionment plan, or other entity created under s.
310	627.351 must elect the 90-percent coverage level.
311	3.  The contract shall provide that reimbursement amounts
312	shall not be reduced by reinsurance paid or payable to the
313	insurer from other sources.
314	4.  Notwithstanding any other provision contained in this
315	section, the board shall make available to insurers that
316	purchased coverage provided by this subparagraph in 2006,
317	insurers qualifying as limited apportionment companies under s.
318	627.351(6)(c), and insurers that were approved to participate in
319	2006 or that are approved in 2007 for the Insurance Capital
320	Build-Up Incentive Program pursuant to s. 215.5595, a contract
321	or contract addendum that provides an additional amount of
322	reimbursement coverage of up to $10 million. The premium to be
323	charged for this additional reimbursement coverage shall be 50
324	percent of the additional reimbursement coverage provided, which
325	shall include one prepaid reinstatement. The minimum retention
326	level that an eligible participating insurer must retain
327	associated with this additional coverage layer is 30 percent of
328	the insurer's surplus as of December 31, 2006. This coverage
329	shall be in addition to all other coverage that may be provided
330	under this section. The coverage provided by the fund under this
331	subparagraph shall be in addition to the claims-paying capacity
332	as defined in subparagraph (c)1., but only with respect to those
333	insurers that select the additional coverage option and meet the
334	requirements of this subparagraph. The claims-paying capacity
335	with respect to all other participating insurers and limited
336	apportionment companies that do not select the additional
337	coverage option shall be limited to their reimbursement
338	premium's proportionate share of the actual claims-paying
339	capacity otherwise defined in subparagraph (c)1. and as provided
340	for under the terms of the reimbursement contract. Coverage
341	provided in the reimbursement contract will not be affected by
342	the additional premiums paid by participating insurers
343	exercising the additional coverage option allowed in this
344	subparagraph. This subparagraph expires on May 31, 2008.
345	(c)1.  The contract shall also provide that the obligation
346	of the division board with respect to all contracts covering a
347	particular contract year shall not exceed the actual claims-
348	paying capacity of the fund up to a limit of $15 billion for
349	that contract year adjusted based upon the reported exposure
350	from the prior contract year to reflect the percentage growth in
351	exposure to the fund for covered policies since 2003, provided
352	the dollar growth in the limit may not increase in any year by
353	an amount greater than the dollar growth of the balance of the
354	fund as of December 31, less any premiums or interest
355	attributable to optional coverage, as defined by rule which
356	occurred over the prior calendar year.
357	2.  In May before the start of the upcoming contract year
358	and in October during the contract year, the division board
359	shall publish in the Florida Administrative Weekly a statement
360	of the fund's estimated borrowing capacity and the projected
361	balance of the fund as of December 31. After the end of each
362	calendar year, the division board shall notify insurers of the
363	estimated borrowing capacity and the balance of the fund as of
364	December 31 to provide insurers with data necessary to assist
365	them in determining their retention and projected payout from
366	the fund for loss reimbursement purposes. In conjunction with
367	the development of the premium formula, as provided for in
368	subsection (6) (5), the division board shall publish factors or
369	multiples that assist insurers in determining their retention
370	and projected payout for the next contract year. For all
371	regulatory and reinsurance purposes, an insurer may calculate
372	its projected payout from the fund as its share of the total
373	fund premium for the current contract year multiplied by the sum
374	of the projected balance of the fund as of December 31 and the
375	estimated borrowing capacity for that contract year as reported
376	under this subparagraph.
377	(d)1.  For purposes of determining potential liability and
378	to aid in the sound administration of the fund, the contract
379	shall require each insurer to report such insurer's losses from
380	each covered event on an interim basis, as directed by the
381	division board. The contract shall require the insurer to report
382	to the division board no later than December 31 of each year,
383	and quarterly thereafter, its reimbursable losses from covered
384	events for the year. The contract shall require the division
385	board to determine and pay, as soon as practicable after
386	receiving these reports of reimbursable losses, the initial
387	amount of reimbursement due and adjustments to this amount based
388	on later loss information. The adjustments to reimbursement
389	amounts shall require the division board to pay, or the insurer
390	to return, amounts reflecting the most recent calculation of
391	losses.
392	2.  In determining reimbursements pursuant to this
393	subsection, the contract shall provide that the division board
394	shall pay to each insurer such insurer's projected payout, which
395	is the amount of reimbursement it is owed, up to an amount equal
396	to the insurer's share of the actual premium paid for that
397	contract year, multiplied by the actual claims-paying capacity
398	available for that contract year.
399	(e)1.  Except as provided in subparagraphs 2. and 3., the
400	contract shall provide that if an insurer demonstrates to the
401	division board that it is likely to qualify for reimbursement
402	under the contract, and demonstrates to the division board that
403	the immediate receipt of moneys from the division board is
404	likely to prevent the insurer from becoming insolvent, the
405	division board shall advance the insurer, at market interest
406	rates, the amounts necessary to maintain the solvency of the
407	insurer, up to 50 percent of the division's board's estimate of
408	the reimbursement due the insurer. The insurer's reimbursement
409	shall be reduced by an amount equal to the amount of the advance
410	and interest thereon.
411	2.  With respect only to an entity created under s.
412	627.351, the contract shall also provide that the division board
413	may, upon application by such entity, advance to such entity, at
414	market interest rates, up to 90 percent of the lesser of:
415	a.  The division's board's estimate of the amount of
416	reimbursement due to such entity; or
417	b.  The entity's share of the actual reimbursement premium
418	paid for that contract year, multiplied by the currently
419	available liquid assets of the fund. In order for the entity to
420	qualify for an advance under this subparagraph, the entity must
421	demonstrate to the division board that the advance is essential
422	to allow the entity to pay claims for a covered event and the
423	division board must determine that the fund's assets are
424	sufficient and are sufficiently liquid to allow the division
425	board to make an advance to the entity and still fulfill the
426	division's board's reimbursement obligations to other insurers.
427	The entity's final reimbursement for any contract year in which
428	an advance has been made under this subparagraph must be reduced
429	by an amount equal to the amount of the advance and any interest
430	on such advance. In order to determine what amounts, if any, are
431	due the entity, the division board may require the entity to
432	report its exposure and its losses at any time to determine
433	retention levels and reimbursements payable.
434	3.  The contract shall also provide specifically and solely
435	with respect to any limited apportionment company under s.
436	627.351(2)(b)3. that the division board may, upon application by
437	such company, advance to such company the amount of the
438	estimated reimbursement payable to such company as calculated
439	pursuant to paragraph (d), at market interest rates, if the
440	division board determines that the fund's assets are sufficient
441	and are sufficiently liquid to permit the division board to make
442	an advance to such company and at the same time fulfill its
443	reimbursement obligations to the insurers that are participants
444	in the fund. Such company's final reimbursement for any contract
445	year in which an advance pursuant to this subparagraph has been
446	made shall be reduced by an amount equal to the amount of the
447	advance and interest thereon. In order to determine what
448	amounts, if any, are due to such company, the division board may
449	require such company to report its exposure and its losses at
450	such times as may be required to determine retention levels and
451	loss reimbursements payable.
452	(f)  In order to ensure that insurers have properly
453	reported the insured values on which the reimbursement premium
454	is based and to ensure that insurers have properly reported the
455	losses for which reimbursements have been made, the division
456	board shall inspect, examine, and verify the records of each
457	insurer's covered policies at such times as the division board
458	deems appropriate and according to standards established by rule
459	for the specific purpose of validating the accuracy of exposures
460	and losses required to be reported under the terms and
461	conditions of the reimbursement contract. The costs of the
462	examinations shall be borne by the division board. However, in
463	order to remove any incentive for an insurer to delay
464	preparations for an examination, the division board shall be
465	reimbursed by the insurer for any examination expenses incurred
466	in addition to the usual and customary costs of the examination,
467	which additional expenses were incurred as a result of an
468	insurer's failure, despite proper notice, to be prepared for the
469	examination or as a result of an insurer's failure to provide
470	requested information while the examination is in progress. If
471	the division board finds any insurer's records or other
472	necessary information to be inadequate or inadequately posted,
473	recorded, or maintained, the division board may employ experts
474	to reconstruct, rewrite, record, post, or maintain such records
475	or information, at the expense of the insurer being examined, if
476	such insurer has failed to maintain, complete, or correct such
477	records or deficiencies after the division board has given the
478	insurer notice and a reasonable opportunity to do so. Any
479	information contained in an examination report, which
480	information is described in s. 215.557, is confidential and
481	exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
482	of the State Constitution, as provided in s. 215.557. Nothing in
483	this paragraph expands the exemption in s. 215.557.
484	(g)  The contract shall provide that in the event of the
485	insolvency of an insurer, the fund shall pay directly to the
486	Florida Insurance Guaranty Association for the benefit of
487	Florida policyholders of the insurer the net amount of all
488	reimbursement moneys owed to the insurer. As used in this
489	paragraph, the term "net amount of all reimbursement moneys"
490	means that amount which remains after reimbursement for:
491	1.  Preliminary or duplicate payments owed to private
492	reinsurers or other inuring reinsurance payments to private
493	reinsurers that satisfy statutory or contractual obligations of
494	the insolvent insurer attributable to covered events to such
495	reinsurers; or
496	2.  Funds owed to a bank or other financial institution to
497	cover obligations of the insolvent insurer under a credit
498	agreement that assists the insolvent insurer in paying claims
499	attributable to covered events.
500
501	The private reinsurers, banks, or other financial institutions
502	shall be reimbursed or otherwise paid prior to payment to the
503	Florida Insurance Guaranty Association, notwithstanding any law
504	to the contrary. The guaranty association shall pay all claims
505	up to the maximum amount permitted by chapter 631; thereafter,
506	any remaining moneys shall be paid pro rata to claims not fully
507	satisfied. This paragraph does not apply to a joint underwriting
508	association, risk apportionment plan, or other entity created
509	under s. 627.351.
510	(6)(5)  REIMBURSEMENT PREMIUMS.--
511	(a)  Each reimbursement contract shall require the insurer
512	to annually pay to the fund an actuarially indicated premium for
513	the reimbursement.
514	(b)  The division State Board of Administration shall
515	select an independent consultant to develop a formula for
516	determining the actuarially indicated premium to be paid to the
517	fund. The formula shall specify, for each zip code or other
518	limited geographical area, the amount of premium to be paid by
519	an insurer for each $1,000 of insured value under covered
520	policies in that zip code or other area. In establishing
521	premiums, the division board shall consider the coverage elected
522	under paragraph (5)(4)(b) and any factors that tend to enhance
523	the actuarial sophistication of ratemaking for the fund,
524	including deductibles, type of construction, type of coverage
525	provided, relative concentration of risks, and other such
526	factors deemed by the division board to be appropriate. The
527	formula may provide for a procedure to determine the premiums to
528	be paid by new insurers that begin writing covered policies
529	after the beginning of a contract year, taking into
530	consideration when the insurer starts writing covered policies,
531	the potential exposure of the insurer, the potential exposure of
532	the fund, the administrative costs to the insurer and to the
533	fund, and any other factors deemed appropriate by the division
534	board. The formula must be approved by unanimous vote of the
535	board. The board may, at any time, revise the formula pursuant
536	to the procedure provided in this paragraph.
537	(c)  No later than September 1 of each year, each insurer
538	shall notify the division board of its insured values under
539	covered policies by zip code, as of June 30 of that year. On the
540	basis of these reports, the division board shall calculate the
541	premium due from the insurer, based on the formula adopted under
542	paragraph (b). The insurer shall pay the required annual premium
543	pursuant to a periodic payment plan specified in the contract.
544	The division board shall provide for payment of reimbursement
545	premium in periodic installments and for the adjustment of
546	provisional premium installments collected prior to submission
547	of the exposure report to reflect data in the exposure report.
548	The division board shall collect interest on late reimbursement
549	premium payments consistent with the assumptions made in
550	developing the premium formula in accordance with paragraph (b).
551	(d)  All premiums paid to the fund under reimbursement
552	contracts shall be treated as premium for approved reinsurance
553	for all accounting and regulatory purposes.
554	(e)  If Citizens Property Insurance Corporation assumes or
555	otherwise provides coverage for policies of an insurer placed in
556	liquidation under chapter 631 pursuant to s. 627.351(6), the
557	corporation may, pursuant to conditions mutually agreed to
558	between the corporation and the division State Board of
559	Administration, obtain coverage for such policies under its
560	contract with the division fund or accept an assignment of the
561	liquidated insurer's contract with the division fund. If
562	Citizens Property Insurance Corporation elects to cover these
563	policies under the corporation's contract with the division
564	fund, it shall notify the division board of its insured values
565	with respect to such policies within a specified time mutually
566	agreed to between the corporation and the division board, after
567	such assumption or other coverage transaction, and the division
568	fund shall treat such policies as having been in effect as of
569	June 30 of that year. In the event of an assignment, the
570	division fund shall apply that contract to such policies and
571	treat Citizens Property Insurance Corporation as if the
572	corporation were the liquidated insurer for the remaining term
573	of the contract, and the corporation shall have all rights and
574	duties of the liquidated insurer beginning on the date it
575	provides coverage for such policies, but the corporation is not
576	subject to any preexisting rights, liabilities, or duties of the
577	liquidated insurer. The assignment, including any unresolved
578	issues between the liquidated insurer and Citizens Property
579	Insurance Corporation under the contract, shall be provided for
580	in the liquidation order or otherwise determined by the court.
581	However, if a covered event occurs before the effective date of
582	the assignment, the corporation may not obtain coverage for such
583	policies under its contract with the division fund and shall
584	accept an assignment of the liquidated insurer's contract as
585	provided in this paragraph.
586	(7)(6)  REVENUE BONDS.--
587	(a)  General provisions.--
588	1.  Upon the occurrence of a hurricane and a determination
589	that the moneys in the fund are or will be insufficient to pay
590	reimbursement at the levels promised in the reimbursement
591	contracts, the board may take the necessary steps under
592	paragraph (c) or paragraph (d) for the issuance of revenue bonds
593	for the benefit of the fund. The proceeds of such revenue bonds
594	may be used to make reimbursement payments under reimbursement
595	contracts; to refinance or replace previously existing
596	borrowings or financial arrangements; to pay interest on bonds;
597	to fund reserves for the bonds; to pay expenses incident to the
598	issuance or sale of any bond issued under this section,
599	including costs of validating, printing, and delivering the
600	bonds, costs of printing the official statement, costs of
601	publishing notices of sale of the bonds, and related
602	administrative expenses; or for such other purposes related to
603	the financial obligations of the fund as the board may
604	determine. The term of the bonds may not exceed 30 years. The
605	board may pledge or authorize the corporation to pledge all or a
606	portion of all revenues under subsection (6) (5) and under
607	paragraph (b) to secure such revenue bonds, and the division
608	board may execute such agreements between the division board and
609	the issuer of any revenue bonds and providers of other financing
610	arrangements under paragraph (8)(7)(b) as the board deems
611	necessary to evidence, secure, preserve, and protect such
612	pledge. If reimbursement premiums received under subsection (6)
613	(5) or earnings on such premiums are used to pay debt service on
614	revenue bonds, such premiums and earnings shall be used only
615	after the use of the moneys derived from assessments under
616	paragraph (b). The funds, credit, property, or taxing power of
617	the state or political subdivisions of the state shall not be
618	pledged for the payment of such bonds. The division board may
619	also enter into agreements under paragraph (c) or paragraph (d)
620	for the purpose of issuing revenue bonds in the absence of a
621	hurricane upon a determination that such action would maximize
622	the ability of the fund to meet future obligations.
623	2.  The Legislature finds and declares that the issuance of
624	bonds under this subsection is for the public purpose of paying
625	the proceeds of the bonds to insurers, thereby enabling insurers
626	to pay the claims of policyholders to ensure assure that
627	policyholders are able to pay the cost of construction,
628	reconstruction, repair, restoration, and other costs associated
629	with damage to property of policyholders of covered policies
630	after the occurrence of a hurricane.
631	(b)  Emergency assessments.--
632	1.  If the board determines that the amount of revenue
633	produced under subsection (6) (5) is insufficient to fund the
634	obligations, costs, and expenses of the fund and the
635	corporation, including repayment of revenue bonds and that
636	portion of the debt service coverage not met by reimbursement
637	premiums, the board shall direct the Office of Insurance
638	Regulation to levy, by order, an emergency assessment on direct
639	premiums for all property and casualty lines of business in this
640	state, including property and casualty business of surplus lines
641	insurers regulated under part VIII of chapter 626, but not
642	including any workers' compensation premiums or medical
643	malpractice premiums. As used in this subsection, the term
644	"property and casualty business" includes all lines of business
645	identified on Form 2, Exhibit of Premiums and Losses, in the
646	annual statement required of authorized insurers by s. 624.424
647	and any rule adopted under this section, except for those lines
648	identified as accident and health insurance and except for
649	policies written under the National Flood Insurance Program. The
650	assessment shall be specified as a percentage of direct written
651	premium and is subject to annual adjustments by the board in
652	order to meet debt obligations. The same percentage shall apply
653	to all policies in lines of business subject to the assessment
654	issued or renewed during the 12-month period beginning on the
655	effective date of the assessment.
656	2.  A premium is not subject to an annual assessment under
657	this paragraph in excess of 6 percent of premium with respect to
658	obligations arising out of losses attributable to any one
659	contract year, and a premium is not subject to an aggregate
660	annual assessment under this paragraph in excess of 10 percent
661	of premium. An annual assessment under this paragraph shall
662	continue as long as the revenue bonds issued with respect to
663	which the assessment was imposed are outstanding, including any
664	bonds the proceeds of which were used to refund the revenue
665	bonds, unless adequate provision has been made for the payment
666	of the bonds under the documents authorizing issuance of the
667	bonds.
668	3.  Emergency assessments shall be collected from
669	policyholders. Emergency assessments shall be remitted by
670	insurers as a percentage of direct written premium for the
671	preceding calendar quarter as specified in the order from the
672	Office of Insurance Regulation. The office shall verify the
673	accurate and timely collection and remittance of emergency
674	assessments and shall report the information to the division
675	board in a form and at a time specified by the division board.
676	Each insurer collecting assessments shall provide the
677	information with respect to premiums and collections as may be
678	required by the office to enable the office to monitor and
679	verify compliance with this paragraph.
680	4.  With respect to assessments of surplus lines premiums,
681	each surplus lines agent shall collect the assessment at the
682	same time as the agent collects the surplus lines tax required
683	by s. 626.932, and the surplus lines agent shall remit the
684	assessment to the Florida Surplus Lines Service Office created
685	by s. 626.921 at the same time as the agent remits the surplus
686	lines tax to the Florida Surplus Lines Service Office. The
687	emergency assessment on each insured procuring coverage and
688	filing under s. 626.938 shall be remitted by the insured to the
689	Florida Surplus Lines Service Office at the time the insured
690	pays the surplus lines tax to the Florida Surplus Lines Service
691	Office. Failure to collect and remit the assessment as required
692	by this subparagraph is a violation of this subparagraph, and
693	the surplus lines agent and insureds procuring coverage shall
694	pay penalties and interest as provided by s. 626.936(2). The
695	Florida Surplus Lines Service Office shall remit the collected
696	assessments to the fund or corporation as provided in the order
697	levied by the Office of Insurance Regulation. The Florida
698	Surplus Lines Service Office shall verify the proper application
699	of such emergency assessments and shall assist the division
700	board in ensuring the accurate and timely collection and
701	remittance of assessments as required by the board. The Florida
702	Surplus Lines Service Office shall annually calculate the
703	aggregate written premium on property and casualty business,
704	other than workers' compensation and medical malpractice,
705	procured through surplus lines agents and insureds procuring
706	coverage and filing under s. 626.938 and shall report the
707	information to the division board in a form and at a time
708	specified by the division board.
709	5.  Any assessment authority not used for a particular
710	contract year may be used for a subsequent contract year. If,
711	for a subsequent contract year, the board determines that the
712	amount of revenue produced under subsection (6) (5) is
713	insufficient to fund the obligations, costs, and expenses of the
714	fund and the corporation, including repayment of revenue bonds
715	and that portion of the debt service coverage not met by
716	reimbursement premiums, the board shall direct the Office of
717	Insurance Regulation to levy an emergency assessment up to an
718	amount not exceeding the amount of unused assessment authority
719	from a previous contract year or years, plus an additional 4
720	percent provided that the assessments in the aggregate do not
721	exceed the limits specified in subparagraph 2.
722	6.  The assessments otherwise payable to the corporation
723	under this paragraph shall be paid to the fund unless and until
724	the Office of Insurance Regulation and the Florida Surplus Lines
725	Service Office have received from the corporation and the
726	division fund a notice, which shall be conclusive and upon which
727	they may rely without further inquiry, that the corporation has
728	issued bonds and the division fund has no agreements in effect
729	with local governments under paragraph (c). On or after the date
730	of the notice and until the date the corporation has no bonds
731	outstanding, the division fund shall have no right, title, or
732	interest in or to the assessments, except as provided in the
733	division's fund's agreement with the corporation.
734	7.  Emergency assessments are not premium and are not
735	subject to the premium tax, to the surplus lines tax, to any
736	fees, or to any commissions. An insurer is liable for all
737	assessments that it collects and must treat the failure of an
738	insured to pay an assessment as a failure to pay the premium. An
739	insurer is not liable for uncollectible assessments.
740	8.  When an insurer is required to return an unearned
741	premium, it shall also return any collected assessment
742	attributable to the unearned premium. A credit adjustment to the
743	collected assessment may be made by the insurer with regard to
744	future remittances that are payable to the fund or corporation,
745	but the insurer is not entitled to a refund.
746	9.  When a surplus lines insured or an insured who has
747	procured coverage and filed under s. 626.938 is entitled to the
748	return of an unearned premium, the Florida Surplus Lines Service
749	Office shall provide a credit or refund to the agent or such
750	insured for the collected assessment attributable to the
751	unearned premium prior to remitting the emergency assessment
752	collected to the fund or corporation.
753	10.  The exemption of medical malpractice insurance
754	premiums from emergency assessments under this paragraph is
755	repealed May 31, 2010, and medical malpractice insurance
756	premiums shall be subject to emergency assessments attributable
757	to loss events occurring in the contract years commencing on
758	June 1, 2010.
759	(c)  Revenue bond issuance through counties or
760	municipalities.--
761	1.  If the board elects to enter into agreements with local
762	governments for the issuance of revenue bonds for the benefit of
763	the fund, the division board shall enter into such contracts
764	with one or more local governments, including agreements
765	providing for the pledge of revenues, as are necessary to effect
766	such issuance. The governing body of a county or municipality is
767	authorized to issue bonds as defined in s. 125.013 or s. 166.101
768	from time to time to fund an assistance program, in conjunction
769	with the Florida Hurricane Catastrophe Fund, for the purposes
770	set forth in this section or for the purpose of paying the costs
771	of construction, reconstruction, repair, restoration, and other
772	costs associated with damage to properties of policyholders of
773	covered policies due to the occurrence of a hurricane by
774	assuring that policyholders located in this state are able to
775	recover claims under property insurance policies after a covered
776	event.
777	2.  In order to avoid needless and indiscriminate
778	proliferation, duplication, and fragmentation of such assistance
779	programs, any local government may provide for the payment of
780	fund reimbursements, regardless of whether or not the losses for
781	which reimbursement is made occurred within or outside of the
782	territorial jurisdiction of the local government.
783	3.  The state hereby covenants with holders of bonds issued
784	under this paragraph that the state will not repeal or abrogate
785	the power of the board to direct the Office of Insurance
786	Regulation to levy the assessments and to collect the proceeds
787	of the revenues pledged to the payment of such bonds as long as
788	any such bonds remain outstanding unless adequate provision has
789	been made for the payment of such bonds pursuant to the
790	documents authorizing the issuance of such bonds.
791	4.  There shall be no liability on the part of, and no
792	cause of action shall arise against, any members or employees of
793	the governing body of a local government for any actions taken
794	by them in the performance of their duties under this paragraph.
795	(d)  Florida Hurricane Catastrophe Fund Finance
796	Corporation.--
797	1.  In addition to the findings and declarations in
798	subsection (1), the Legislature also finds and declares that:
799	a.  The public benefits corporation created under this
800	paragraph will provide a mechanism necessary for the cost-
801	effective and efficient issuance of bonds. This mechanism will
802	eliminate unnecessary costs in the bond issuance process,
803	thereby increasing the amounts available to pay reimbursement
804	for losses to property sustained as a result of hurricane
805	damage.
806	b.  The purpose of such bonds is to fund reimbursements
807	through the Florida Hurricane Catastrophe Fund to pay for the
808	costs of construction, reconstruction, repair, restoration, and
809	other costs associated with damage to properties of
810	policyholders of covered policies due to the occurrence of a
811	hurricane.
812	c.  The efficacy of the financing mechanism will be
813	enhanced by the corporation's ownership of the assessments, by
814	the insulation of the assessments from possible bankruptcy
815	proceedings, and by covenants of the state with the
816	corporation's bondholders.
817	2.a.  There is created a public benefits corporation, which
818	is an instrumentality of the state, to be known as the Florida
819	Hurricane Catastrophe Fund Finance Corporation.
820	b.  The corporation shall operate under a six-member five-
821	member board of directors consisting of the Governor or a
822	designee, the Chief Financial Officer or a designee, the
823	Attorney General or a designee, the Commissioner of Agriculture
824	or a designee, the director of the Division of Bond Finance of
825	the State Board of Administration, and the director senior
826	employee of the Division State Board of Administration
827	responsible for operations of the Florida Hurricane Catastrophe
828	Fund.
829	c.  The corporation has all of the powers of corporations
830	under chapter 607 and under chapter 617, subject only to the
831	provisions of this subsection.
832	d.  The corporation may issue bonds and engage in such
833	other financial transactions as are necessary to provide
834	sufficient funds to achieve the purposes of this section.
835	e.  The corporation may invest in any of the investments
836	authorized under s. 215.47.
837	f.  There shall be no liability on the part of, and no
838	cause of action shall arise against, any board members or
839	employees of the corporation for any actions taken by them in
840	the performance of their duties under this paragraph.
841	3.a.  In actions under chapter 75 to validate any bonds
842	issued by the corporation, the notice required by s. 75.06 shall
843	be published only in Leon County and in two newspapers of
844	general circulation in the state, and the complaint and order of
845	the court shall be served only on the State Attorney of the
846	Second Judicial Circuit.
847	b.  The state hereby covenants with holders of bonds of the
848	corporation that the state will not repeal or abrogate the power
849	of the board to direct the Office of Insurance Regulation to
850	levy the assessments and to collect the proceeds of the revenues
851	pledged to the payment of such bonds as long as any such bonds
852	remain outstanding unless adequate provision has been made for
853	the payment of such bonds pursuant to the documents authorizing
854	the issuance of such bonds.
855	4.  The bonds of the corporation are not a debt of the
856	state or of any political subdivision, and neither the state nor
857	any political subdivision is liable on such bonds. The
858	corporation does not have the power to pledge the credit, the
859	revenues, or the taxing power of the state or of any political
860	subdivision. The credit, revenues, or taxing power of the state
861	or of any political subdivision shall not be deemed to be
862	pledged to the payment of any bonds of the corporation.
863	5.a.  The property, revenues, and other assets of the
864	corporation; the transactions and operations of the corporation
865	and the income from such transactions and operations; and all
866	bonds issued under this paragraph and interest on such bonds are
867	exempt from taxation by the state and any political subdivision,
868	including the intangibles tax under chapter 199 and the income
869	tax under chapter 220. This exemption does not apply to any tax
870	imposed by chapter 220 on interest, income, or profits on debt
871	obligations owned by corporations other than the Florida
872	Hurricane Catastrophe Fund Finance Corporation.
873	b.  All bonds of the corporation shall be and constitute
874	legal investments without limitation for all public bodies of
875	this state; for all banks, trust companies, savings banks,
876	savings associations, savings and loan associations, and
877	investment companies; for all administrators, executors,
878	trustees, and other fiduciaries; for all insurance companies and
879	associations and other persons carrying on an insurance
880	business; and for all other persons who are now or may hereafter
881	be authorized to invest in bonds or other obligations of the
882	state and shall be and constitute eligible securities to be
883	deposited as collateral for the security of any state, county,
884	municipal, or other public funds. This sub-subparagraph shall be
885	considered as additional and supplemental authority and shall
886	not be limited without specific reference to this sub-
887	subparagraph.
888	6.  The corporation and its corporate existence shall
889	continue until terminated by law; however, no such law shall
890	take effect as long as the corporation has bonds outstanding
891	unless adequate provision has been made for the payment of such
892	bonds pursuant to the documents authorizing the issuance of such
893	bonds. Upon termination of the existence of the corporation, all
894	of its rights and properties in excess of its obligations shall
895	pass to and be vested in the state.
896	(e)  Protection of bondholders.--
897	1.  As long as the corporation has any bonds outstanding,
898	neither the division fund nor the corporation shall have the
899	authority to file a voluntary petition under chapter 9 of the
900	federal Bankruptcy Code or such corresponding chapter or
901	sections as may be in effect, from time to time, and neither any
902	public officer nor any organization, entity, or other person
903	shall authorize the division fund or the corporation to be or
904	become a debtor under chapter 9 of the federal Bankruptcy Code
905	or such corresponding chapter or sections as may be in effect,
906	from time to time, during any such period.
907	2.  The state hereby covenants with holders of bonds of the
908	corporation that the state will not limit or alter the denial of
909	authority under this paragraph or the rights under this section
910	vested in the division fund or the corporation to fulfill the
911	terms of any agreements made with such bondholders or in any way
912	impair the rights and remedies of such bondholders as long as
913	any such bonds remain outstanding unless adequate provision has
914	been made for the payment of such bonds pursuant to the
915	documents authorizing the issuance of such bonds.
916	3.  Notwithstanding any other provision of law, any pledge
917	of or other security interest in revenue, money, accounts,
918	contract rights, general intangibles, or other personal property
919	made or created by the fund or the corporation shall be valid,
920	binding, and perfected from the time such pledge is made or
921	other security interest attaches without any physical delivery
922	of the collateral or further act and the lien of any such pledge
923	or other security interest shall be valid, binding, and
924	perfected against all parties having claims of any kind in tort,
925	contract, or otherwise against the division fund or the
926	corporation irrespective of whether or not such parties have
927	notice of such claims. No instrument by which such a pledge or
928	security interest is created nor any financing statement need be
929	recorded or filed.
930	(8)(7)  ADDITIONAL POWERS AND DUTIES.--
931	(a)  The board may authorize the division to procure
932	reinsurance from reinsurers acceptable to the Office of
933	Insurance Regulation for the purpose of maximizing the capacity
934	of the fund and may enter into capital market transactions,
935	including, but not limited to, industry loss warranties,
936	catastrophe bonds, side-car arrangements, or financial contracts
937	permissible for the State Board of Administration's board's
938	usage under s. 215.47(10) and (11), consistent with prudent
939	management of the fund.
940	(b)  In addition to borrowing under subsection (7) (6), the
941	board may also authorize the division to borrow from, or enter
942	into other financing arrangements with, any market sources at
943	prevailing interest rates.
944	(c)  Each fiscal year, the Legislature shall appropriate
945	from the investment income of the Florida Hurricane Catastrophe
946	Fund an amount no less than $10 million and no more than 35
947	percent of the investment income based upon the most recent
948	fiscal year-end audited financial statements for the purpose of
949	providing funding for local governments, state agencies, public
950	and private educational institutions, and nonprofit
951	organizations to support programs intended to improve hurricane
952	preparedness, reduce potential losses in the event of a
953	hurricane, provide research into means to reduce such losses,
954	educate or inform the public as to means to reduce hurricane
955	losses, assist the public in determining the appropriateness of
956	particular upgrades to structures or in the financing of such
957	upgrades, or protect local infrastructure from potential damage
958	from a hurricane. Moneys shall first be available for
959	appropriation under this paragraph in fiscal year 1997-1998.
960	Moneys in excess of the $10 million specified in this paragraph
961	shall not be available for appropriation under this paragraph if
962	the State board of Administration finds that an appropriation of
963	investment income from the fund would jeopardize the actuarial
964	soundness of the fund.
965	(d)  The division board may allow insurers to comply with
966	reporting requirements and reporting format requirements by
967	using alternative methods of reporting if the proper
968	administration of the fund is not thereby impaired and if the
969	alternative methods produce data which is consistent with the
970	purposes of this section.
971	(e)  In order to ensure assure the equitable operation of
972	the fund, the division board may impose a reasonable fee on an
973	insurer to recover costs involved in reprocessing inaccurate,
974	incomplete, or untimely exposure data submitted by the insurer.
975	(9)(8)  ADVISORY COUNCIL.--The State Board of
976	Administration shall appoint a nine-member advisory council that
977	consists of an actuary, a meteorologist, an engineer, a
978	representative of insurers, a representative of insurance
979	agents, a representative of reinsurers, and three consumers who
980	shall also be representatives of other affected professions and
981	industries, to provide the board with information and advice in
982	connection with its duties under this section. Members of the
983	advisory council shall serve at the pleasure of the board and
984	are eligible for per diem and travel expenses under s. 112.061.
985	(10)(9)  APPLICABILITY OF S. 19, ART. III OF THE STATE
986	CONSTITUTION.--The Legislature finds that the Florida Hurricane
987	Catastrophe Fund created by this section is a trust fund
988	established for bond covenants, indentures, or resolutions
989	within the meaning of s. 19(f)(3), Art. III of the State
990	Constitution.
991	(11)(10)  VIOLATIONS.--Any violation of this section or of
992	rules adopted under this section constitutes a violation of the
993	insurance code.
994	(12)(11)  LEGAL PROCEEDINGS.--The division may board is
995	authorized to take any action necessary to enforce the rules,
996	and the provisions and requirements of the reimbursement
997	contract, required by and adopted pursuant to this section.
998	(13)(12)  FEDERAL OR MULTISTATE CATASTROPHIC FUNDS.--Upon
999	the creation of a federal or multistate catastrophic insurance
1000	or reinsurance program intended to serve purposes similar to the
1001	purposes of the fund created by this section, the division, upon
1002	approval by the State board, of Administration shall promptly
1003	make recommendations to the Legislature for coordination with
1004	the federal or multistate program, for termination of the fund,
1005	or for such other actions as the division board finds
1006	appropriate in the circumstances.
1007	(14)(13)  REVERSION OF FUND ASSETS UPON TERMINATION.--The
1008	fund, the division, and the duties of the board under this
1009	section may be terminated only by law. Upon termination of the
1010	fund, all assets of the fund shall revert to the General Revenue
1011	Fund.
1012	(15)(14)  SEVERABILITY.--If any provision of this section
1013	or its application to any person or circumstance is held
1014	invalid, the invalidity does not affect other provisions or
1015	applications of the section which can be given effect without
1016	the invalid provision or application, and to this end the
1017	provisions of this section are declared severable.
1018	(16)(15)  COLLATERAL PROTECTION INSURANCE.--As used in this
1019	section and ss. 627.311 and 627.351, the term "collateral
1020	protection insurance" means commercial property insurance of
1021	which a creditor is the primary beneficiary and policyholder and
1022	which protects or covers an interest of the creditor arising out
1023	of a credit transaction secured by real or personal property.
1024	Initiation of such coverage is triggered by the mortgagor's
1025	failure to maintain insurance coverage as required by the
1026	mortgage or other lending document. Collateral protection
1027	insurance is not residential coverage.
1028	(17)(16)  TEMPORARY EMERGENCY ADDITIONAL COVERAGE OPTIONS
1029	FOR ADDITIONAL COVERAGE.--
1030	(a)  Findings and intent.--
1031	1.  The Legislature finds that:
1032	a.  Because of temporary disruptions in the market for
1033	catastrophic reinsurance, many property insurers were unable to
1034	procure reinsurance for the 2006 hurricane season with an
1035	attachment point below the insurers' respective Florida
1036	Hurricane Catastrophe Fund attachment points, were unable to
1037	procure sufficient amounts of such reinsurance, or were able to
1038	procure such reinsurance only by incurring substantially higher
1039	costs than in prior years.
1040	b.  The reinsurance market problems were responsible, at
1041	least in part, for substantial premium increases to many
1042	consumers and increases in the number of policies issued by the
1043	Citizens Property Insurance Corporation.
1044	c.  It is likely that the reinsurance market disruptions
1045	will not significantly abate prior to the 2007 hurricane season.
1046	2.  It is the intent of the Legislature to create a
1047	temporary emergency program, applicable to the 2007, 2008, and
1048	2009 hurricane seasons, to address these market disruptions and
1049	enable insurers, at their option, to procure additional coverage
1050	from the Florida Hurricane Catastrophe Fund.
1051	(b)  Applicability of other provisions of this
1052	section.--All provisions of this section and the rules adopted
1053	under this section apply to the program created by this
1054	subsection unless specifically superseded by this subsection.
1055	(c)  Optional coverage.--For the contract year commencing
1056	June 1, 2007, and ending May 31, 2008, the contract year
1057	commencing June 1, 2008, and ending May 31, 2009, and the
1058	contract year commencing June 1, 2009, and ending May 31, 2010,
1059	the board shall offer for each of such years the optional
1060	coverage as provided in this subsection.
1061	(d)  Additional definitions.--As used in this subsection,
1062	the term:
1063	1.  "TEACO options" means the temporary emergency
1064	additional coverage options created under this subsection.
1065	2.  "TEACO insurer" means an insurer that has opted to
1066	obtain coverage under the TEACO options in addition to the
1067	coverage provided to the insurer under its reimbursement
1068	contract.
1069	3.  "TEACO reimbursement premium" means the premium charged
1070	by the fund for coverage provided under the TEACO options.
1071	4.  "TEACO retention" means the amount of losses below
1072	which a TEACO insurer is not entitled to reimbursement from the
1073	fund under the TEACO option selected. A TEACO insurer's
1074	retention options shall be calculated as follows:
1075	a.  The division board shall calculate and report to each
1076	TEACO insurer the TEACO retention multiples. There shall be
1077	three TEACO retention multiples for defining coverage. Each
1078	multiple shall be calculated by dividing $3 billion, $4 billion,
1079	or $5 billion by the total estimated mandatory FHCF
1080	reimbursement premium assuming all insurers selected the 90-
1081	percent coverage level.
1082	b.  The TEACO retention multiples as determined under sub-
1083	subparagraph a. shall be adjusted to reflect the coverage level
1084	elected by the insurer. For insurers electing the 90-percent
1085	coverage level, the adjusted retention multiple is 100 percent
1086	of the amount determined under sub-subparagraph a. For insurers
1087	electing the 75-percent coverage level, the retention multiple
1088	is 120 percent of the amount determined under sub-subparagraph
1089	a. For insurers electing the 45-percent coverage level, the
1090	adjusted retention multiple is 200 percent of the amount
1091	determined under sub-subparagraph a.
1092	c.  An insurer shall determine its provisional TEACO
1093	retention by multiplying its estimated mandatory FHCF
1094	reimbursement premium by the applicable adjusted TEACO retention
1095	multiple and shall determine its actual TEACO retention by
1096	multiplying its actual mandatory FHCF reimbursement premium by
1097	the applicable adjusted TEACO retention multiple.
1098	d.  For TEACO insurers who experience multiple covered
1099	events causing loss during the contract year, the insurer's full
1100	TEACO retention shall be applied to each of the covered events
1101	causing the two largest losses for that insurer. For other
1102	covered events resulting in losses, the TEACO option does not
1103	apply and the insurer's retention shall be one-third of the full
1104	retention as calculated under paragraph (2)(q)(e).
1105	5.  "TEACO addendum" means an addendum to the reimbursement
1106	contract reflecting the obligations of the fund and TEACO
1107	insurers under the program created by this subsection.
1108	6.  "FHCF" means the Florida Hurricane Catastrophe Fund.
1109	(e)  TEACO addendum.--
1110	1.  The TEACO addendum shall provide for reimbursement of
1111	TEACO insurers for covered events occurring during the contract
1112	year, in exchange for the TEACO reimbursement premium paid into
1113	the fund under paragraph (f). Any insurer writing covered
1114	policies has the option of choosing to accept the TEACO addendum
1115	for any of the 3 contract years that the coverage is offered.
1116	2.  The TEACO addendum shall contain a promise by the
1117	division board to reimburse the TEACO insurer for 45 percent, 75
1118	percent, or 90 percent of its losses from each covered event in
1119	excess of the insurer's TEACO retention, plus 5 percent of the
1120	reimbursed losses to cover loss adjustment expenses. The
1121	percentage shall be the same as the coverage level selected by
1122	the insurer under paragraph (5)(4)(b).
1123	3.  The TEACO addendum shall provide that reimbursement
1124	amounts shall not be reduced by reinsurance paid or payable to
1125	the insurer from other sources.
1126	4.  The TEACO addendum shall also provide that the
1127	obligation of the division board with respect to all TEACO
1128	addenda shall not exceed an amount equal to two times the
1129	difference between the industry retention level calculated under
1130	paragraph (2)(q)(e) and the $3 billion, $4 billion, or $5
1131	billion industry TEACO retention level options actually
1132	selected, but in no event may the division's board's obligation
1133	exceed the actual claims-paying capacity of the fund plus the
1134	additional capacity created in paragraph (g). If the actual
1135	claims-paying capacity and the additional capacity created under
1136	paragraph (g) fall short of the division's board's obligations
1137	under the reimbursement contract, each insurer's share of the
1138	fund's capacity shall be prorated based on the premium an
1139	insurer pays for its mandatory reimbursement coverage and the
1140	premium paid for its optional TEACO coverage as each such
1141	premium bears to the total premiums paid to the fund times the
1142	available capacity.
1143	5.  The priorities, schedule, and method of reimbursements
1144	under the TEACO addendum shall be the same as provided under
1145	subsection (5) (4).
1146	6.  A TEACO insurer's maximum reimbursement for a single
1147	event shall be equal to the product of multiplying its mandatory
1148	FHCF premium by the difference between its FHCF retention
1149	multiple and its TEACO retention multiple under the TEACO option
1150	selected and by the coverage selected under paragraph (5)(4)(b),
1151	plus an additional 5 percent for loss adjustment expenses. A
1152	TEACO insurer's maximum reimbursement under the TEACO option
1153	selected for a TEACO insurer's two largest events shall be twice
1154	its maximum reimbursement for a single event.
1155	(f)  TEACO reimbursement premiums.--
1156	1.  Each TEACO insurer shall pay to the fund, in the manner
1157	and at the time provided in the reimbursement contract for
1158	payment of reimbursement premiums, a TEACO reimbursement premium
1159	calculated as specified in this paragraph.
1160	2.  The insurer's TEACO reimbursement premium associated
1161	with the $3 billion retention option shall be equal to 85
1162	percent of a TEACO insurer's maximum reimbursement for a single
1163	event as calculated under subparagraph (e)6. The TEACO
1164	reimbursement premium associated with the $4 billion retention
1165	option shall be equal to 80 percent of a TEACO insurer's maximum
1166	reimbursement for a single event as calculated under
1167	subparagraph (e)6. The TEACO premium associated with the $5
1168	billion retention option shall be equal to 75 percent of a TEACO
1169	insurer's maximum reimbursement for a single event as calculated
1170	under subparagraph (e)6.
1171	(g)  Effect on claims-paying capacity of the fund.--For the
1172	contract term commencing June 1, 2007, the contract year
1173	commencing June 1, 2008, and the contract term beginning June 1,
1174	2009, the program created by this subsection shall increase the
1175	claims-paying capacity of the fund as provided in subparagraph
1176	(5)(4)(c)1. by an amount equal to two times the difference
1177	between the industry retention level calculated under paragraph
1178	(2)(q)(e) and the $3 billion industry TEACO retention level
1179	specified in sub-subparagraph (d)4.a. The additional capacity
1180	shall apply only to the additional coverage provided by the
1181	TEACO option and shall not otherwise affect any insurer's
1182	reimbursement from the fund.
1183	(18)(17)  TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.--
1184	(a)  Findings and intent.--
1185	1.  The Legislature finds that:
1186	a.  Because of temporary disruptions in the market for
1187	catastrophic reinsurance, many property insurers were unable to
1188	procure sufficient amounts of reinsurance for the 2006 hurricane
1189	season or were able to procure such reinsurance only by
1190	incurring substantially higher costs than in prior years.
1191	b.  The reinsurance market problems were responsible, at
1192	least in part, for substantial premium increases to many
1193	consumers and increases in the number of policies issued by
1194	Citizens Property Insurance Corporation.
1195	c.  It is likely that the reinsurance market disruptions
1196	will not significantly abate prior to the 2008 2007 hurricane
1197	season.
1198	2.  It is the intent of the Legislature to create options
1199	for insurers to purchase a temporary increased coverage limit
1200	above the statutorily determined limit in subparagraph
1201	(5)(4)(c)1., applicable for the 2007, 2008, and 2009 hurricane
1202	seasons, to address market disruptions and enable insurers, at
1203	their option, to procure additional coverage from the Florida
1204	Hurricane Catastrophe Fund.
1205	(b)  Applicability of other provisions of this
1206	section.--All provisions of this section and the rules adopted
1207	under this section apply to the coverage created by this
1208	subsection unless specifically superseded by provisions in this
1209	subsection.
1210	(c)  Optional coverage.--For the contract year commencing
1211	June 1, 2007, and ending May 31, 2008, the contract year
1212	commencing June 1, 2008, and ending May 31, 2009, and the
1213	contract year commencing June 1, 2009, and ending May 31, 2010,
1214	the board shall offer, for each of such years, the optional
1215	coverage as provided in this subsection.
1216	(d)  Additional definitions.--As used in this subsection,
1217	the term:
1218	1.  "FHCF" means Florida Hurricane Catastrophe Fund.
1219	2.  "FHCF reimbursement premium" means the premium paid by
1220	an insurer for its coverage as a mandatory participant in the
1221	FHCF, but does not include additional premiums for optional
1222	coverages.
1223	3.  "Payout multiple" means the number or multiple created
1224	by dividing the statutorily defined claims-paying capacity as
1225	determined in subparagraph (5)(4)(c)1. by the aggregate
1226	reimbursement premiums paid by all insurers estimated or
1227	projected as of calendar year-end.
1228	4.  "TICL" means the temporary increase in coverage limit.
1229	5.  "TICL options" means the temporary increase in coverage
1230	options created under this subsection.
1231	6.  "TICL insurer" means an insurer that has opted to
1232	obtain coverage under the TICL options addendum in addition to
1233	the coverage provided to the insurer under its FHCF
1234	reimbursement contract.
1235	7.  "TICL reimbursement premium" means the premium charged
1236	by the fund for coverage provided under the TICL option.
1237	8.  "TICL coverage multiple" means the coverage multiple
1238	when multiplied by an insurer's FHCF reimbursement premium that
1239	defines the temporary increase in coverage limit.
1240	9.  "TICL coverage" means the coverage for an insurer's
1241	losses above the insurer's statutorily determined claims-paying
1242	capacity based on the claims-paying limit in subparagraph
1243	(5)(4)(c)1., which an insurer selects as its temporary increase
1244	in coverage from the fund under the TICL options selected. A
1245	TICL insurer's increased coverage limit options shall be
1246	calculated as follows:
1247	a.  The division board shall calculate and report to each
1248	TICL insurer the TICL coverage multiples based on 9 12 options
1249	for increasing the insurer's FHCF coverage limit. Each TICL
1250	coverage multiple shall be calculated by dividing $1 billion, $2
1251	billion, $3 billion, $4 billion, $5 billion, $6 billion, $7
1252	billion, $8 billion, and $9 billion, $10 billion, $11 billion,
1253	or $12 billion by the total estimated aggregate FHCF
1254	reimbursement premiums for the 2007-2008 contract year, the
1255	2008-2009 contract year, and the 2009-2010 contract year.
1256	b.  The TICL insurer's increased coverage shall be the FHCF
1257	reimbursement premium multiplied by the TICL coverage multiple
1258	for the TICL option selected. In order to determine an insurer's
1259	total limit of coverage, an insurer shall add its TICL coverage
1260	multiple to its payout multiple. The total shall represent a
1261	number that, when multiplied by an insurer's FHCF reimbursement
1262	premium for a given reimbursement contract year, defines an
1263	insurer's total limit of FHCF reimbursement coverage for that
1264	reimbursement contract year.
1265	10.  "TICL options addendum" means an addendum to the
1266	reimbursement contract reflecting the obligations of the fund
1267	and insurers selecting an option to increase an insurer's FHCF
1268	coverage limit.
1269	(e)  TICL options addendum.--
1270	1.  The TICL options addendum shall provide for
1271	reimbursement of TICL insurers for covered events occurring
1272	between June 1, 2007, and May 31, 2008, and between June 1,
1273	2008, and May 31, 2009, or between June 1, 2009, and May 31,
1274	2010, in exchange for the TICL reimbursement premium paid into
1275	the fund under paragraph (f). Any insurer writing covered
1276	policies has the option of selecting an increased limit of
1277	coverage under the TICL options addendum and shall select such
1278	coverage at the time that it executes the FHCF reimbursement
1279	contract.
1280	2.  The TICL addendum shall contain a promise by the board
1281	to reimburse the TICL insurer for 70 45 percent of the TICL
1282	coverage based on the TICL option selected for the insurer's, 75
1283	percent, or 90 percent of its losses from each covered event in
1284	excess of the insurer's retention, plus 5 percent of the
1285	reimbursed losses to cover loss adjustment expenses. The
1286	percentage shall be the same as the coverage level selected by
1287	the insurer under paragraph (4)(b).
1288	3.  The TICL addendum shall provide that reimbursement
1289	amounts shall not be reduced by reinsurance paid or payable to
1290	the insurer from other sources.
1291	4.  The priorities, schedule, and method of reimbursements
1292	under the TICL addendum shall be the same as provided under
1293	subsection (5) (4).
1294	(f)  TICL reimbursement premiums.--Each TICL insurer shall
1295	pay to the fund, in the manner and at the time provided in the
1296	reimbursement contract for payment of reimbursement premiums, a
1297	TICL reimbursement premium determined as specified in subsection
1298	(6) (5).
1299	(g)  Effect on claims-paying capacity of the fund.--For the
1300	contract terms commencing June 1, 2007, June 1, 2008, and June
1301	1, 2009, the program created by this subsection shall increase
1302	the claims-paying capacity of the fund as provided in
1303	subparagraph (5)(4)(c)1. by an amount not to exceed $9 $12
1304	billion and shall depend on the TICL coverage options selected
1305	and the number of insurers that select the TICL optional
1306	coverage. The additional capacity shall apply only to the
1307	additional coverage provided under the TICL options and shall
1308	not otherwise affect any insurer's reimbursement from the fund
1309	if the insurer chooses not to select the temporary option to
1310	increase its limit of coverage under the FHCF.
1311	(h)  Increasing the claims-paying capacity of the
1312	fund.--For the contract years commencing June 1, 2007, June 1,
1313	2008, and June 1, 2009, the board may increase the claims-paying
1314	capacity of the fund as provided in paragraph (g) by an amount
1315	not to exceed $4 billion in four $1 billion options and shall
1316	depend on the TICL coverage options selected and the number of
1317	insurers that select the TICL optional coverage. Each insurer's
1318	TICL premium shall be calculated based upon the additional limit
1319	of increased coverage that the insurer selects. Such limit is
1320	determined by multiplying the TICL multiple associated with one
1321	of the four options times the insurer's FHCF reimbursement
1322	premium. The reimbursement premium associated with the
1323	additional coverage provided in this paragraph shall be
1324	determined as specified in subsection (6) (5).
1325	Section 2.  Section 215.557, Florida Statutes, is amended
1326	to read:
1327	215.557  Reports of insured values.--The reports of insured
1328	values under covered policies by zip code submitted to the
1329	Division of the Florida Hurricane Catastrophe Fund State Board
1330	of Administration pursuant to s. 215.555, as created by s. 1,
1331	ch. 93-409, Laws of Florida, or similar legislation, are
1332	confidential and exempt from the provisions of s. 119.07(1) and
1333	s. 24(a), Art. I of the State Constitution.
1334	Section 3.  Paragraph (h) of subsection (4) of section
1335	215.5586, Florida Statutes, is amended to read:
1336	215.5586  My Safe Florida Home Program.--There is
1337	established within the Department of Financial Services the My
1338	Safe Florida Home Program. The department shall provide fiscal
1339	accountability, contract management, and strategic leadership
1340	for the program, consistent with this section. This section does
1341	not create an entitlement for property owners or obligate the
1342	state in any way to fund the inspection or retrofitting of
1343	residential property in this state. Implementation of this
1344	program is subject to annual legislative appropriations. It is
1345	the intent of the Legislature that the My Safe Florida Home
1346	Program provide inspections for at least 400,000 site-built,
1347	single-family, residential properties and provide grants to at
1348	least 35,000 applicants before June 30, 2009. The program shall
1349	develop and implement a comprehensive and coordinated approach
1350	for hurricane damage mitigation that shall include the
1351	following:
1352	(4)  ADVISORY COUNCIL.--There is created an advisory
1353	council to provide advice and assistance to the department
1354	regarding administration of the program. The advisory council
1355	shall consist of:
1356	(h)  The director senior officer of the Division of the
1357	Florida Hurricane Catastrophe Fund.
1358
1359	Members appointed under paragraphs (a)-(d) shall serve at the
1360	pleasure of the Financial Services Commission. Members appointed
1361	under paragraphs (e) and (f) shall serve at the pleasure of the
1362	appointing officer. All other members shall serve voting ex
1363	officio. Members of the advisory council shall serve without
1364	compensation but may receive reimbursement as provided in s.
1365	112.061 for per diem and travel expenses incurred in the
1366	performance of their official duties.
1367	Section 4.  Subsection (1) of section 215.559, Florida
1368	Statutes, is amended to read:
1369	215.559  Hurricane Loss Mitigation Program.--
1370	(1)  There is created a Hurricane Loss Mitigation Program.
1371	The Legislature shall annually appropriate $10 million of the
1372	moneys authorized for appropriation under s. 215.555(8)(7)(c)
1373	from the Florida Hurricane Catastrophe Fund to the Department of
1374	Community Affairs for the purposes set forth in this section.
1375	Section 5.  Subsections (2), (3), (6), and (7) of section
1376	215.5595, Florida Statutes, are amended to read:
1377	215.5595  Insurance Capital Build-Up Incentive Program.--
1378	(2)  The purpose of this section is to provide surplus
1379	notes to new or existing authorized residential property
1380	insurers under the Insurance Capital Build-Up Incentive Program
1381	administered by the division State Board of Administration,
1382	under the following conditions:
1383	(a)  The amount of the surplus note for any insurer or
1384	insurer group, other than an insurer writing only manufactured
1385	housing policies, may not exceed $25 million or 20 percent of
1386	the total amount of funds available under the program, whichever
1387	is greater. The amount of the surplus note for any insurer or
1388	insurer group writing residential property insurance covering
1389	only manufactured housing may not exceed $7 million.
1390	(b)  The insurer must contribute an amount of new capital
1391	to its surplus which is at least equal to the amount of the
1392	surplus note and must apply to the board by July 1, 2006. If an
1393	insurer applies after July 1, 2006, but before June 1, 2007, the
1394	amount of the surplus note is limited to one-half of the new
1395	capital that the insurer contributes to its surplus, except that
1396	an insurer writing only manufactured housing policies is
1397	eligible to receive a surplus note of up to $7 million. For
1398	purposes of this section, new capital must be in the form of
1399	cash or cash equivalents as specified in s. 625.012(1).
1400	(c)  The insurer's surplus, new capital, and the surplus
1401	note must total at least $50 million, except for insurers
1402	writing residential property insurance covering only
1403	manufactured housing. The insurer's surplus, new capital, and
1404	the surplus note must total at least $14 million for insurers
1405	writing only residential property insurance covering
1406	manufactured housing policies as provided in paragraph (a).
1407	(d)  The insurer must commit to meeting a minimum writing
1408	ratio of net written premium to surplus of at least 2:1 for the
1409	term of the surplus note, which shall be determined by the
1410	Office of Insurance Regulation and certified quarterly to the
1411	board. For this purpose, the term "net written premium" means
1412	net written premium for residential property insurance in this
1413	state Florida, including the peril of wind, and "surplus" refers
1414	to the entire surplus of the insurer. If the required ratio is
1415	not maintained during the term of the surplus note, the division
1416	board may increase the interest rate, accelerate the repayment
1417	of interest and principal, or shorten the term of the surplus
1418	note, subject to approval by the Commissioner of Insurance of
1419	payments by the insurer of principal and interest as provided in
1420	paragraph (f).
1421	(e)  If the requirements of this section are met, the
1422	division board may approve an application by an insurer for a
1423	surplus note, unless the division board determines that the
1424	financial condition of the insurer and its business plan for
1425	writing residential property insurance in this state Florida
1426	places an unreasonably high level of financial risk to the state
1427	of nonpayment in full of the interest and principal. The
1428	division board shall consult with the Office of Insurance
1429	Regulation and may contract with independent financial and
1430	insurance consultants in making this determination.
1431	(f)  The surplus note must be repayable to the state with a
1432	term of 20 years. The surplus note shall accrue interest on the
1433	unpaid principal balance at a rate equivalent to the 10-year
1434	U.S. Treasury Bond rate, require the payment only of interest
1435	during the first 3 years, and include such other terms as
1436	approved by the division board. Payment of principal or interest
1437	by the insurer on the surplus note must be approved by the
1438	Commissioner of Insurance, who shall approve such payment unless
1439	the commissioner determines that such payment will substantially
1440	impair the financial condition of the insurer. If such a
1441	determination is made, the commissioner shall approve such
1442	payment that will not substantially impair the financial
1443	condition of the insurer.
1444	(g)  The total amount of funds available for the program is
1445	limited to the amount appropriated by the Legislature for this
1446	purpose. If the amount of surplus notes requested by insurers
1447	exceeds the amount of funds available, the division board may
1448	prioritize insurers that are eligible and approved, with
1449	priority for funding given to insurers writing only manufactured
1450	housing policies, regardless of the date of application, based
1451	on the financial strength of the insurer, the viability of its
1452	proposed business plan for writing additional residential
1453	property insurance in the state, and the effect on competition
1454	in the residential property insurance market. Between insurers
1455	writing residential property insurance covering manufactured
1456	housing, priority shall be given to the insurer writing the
1457	highest percentage of its policies covering manufactured
1458	housing.
1459	(h)  The division board may allocate portions of the funds
1460	available for the program and establish dates for insurers to
1461	apply for surplus notes from such allocation which are earlier
1462	than the dates established in paragraph (b).
1463	(i)  Notwithstanding paragraph (d), a newly formed
1464	manufactured housing insurer that is eligible for a surplus note
1465	under this section shall meet the premium to surplus ratio
1466	provisions of s. 624.4095.
1467	(j)  As used in this section, "an insurer writing only
1468	manufactured housing policies" includes:
1469	1.  A Florida domiciled insurer that begins writing
1470	personal lines residential manufactured housing policies in
1471	Florida after March 1, 2007, and that removes a minimum of
1472	50,000 policies from Citizens Property Insurance Corporation
1473	without accepting a bonus, provided at least 25 percent of its
1474	policies cover manufactured housing. Such an insurer may count
1475	any funds above the minimum capital and surplus requirement that
1476	were contributed into the insurer after March 1, 2007, as new
1477	capital under this section.
1478	2.  A Florida domiciled insurer that writes at least 40
1479	percent of its policies covering manufactured housing in this
1480	state Florida.
1481	(3)  As used in this section, the term:
1482	(a)  "Division Board" means the Division of the Florida
1483	Hurricane Catastrophe Fund of the State Board of Administration
1484	established in s. 215.555.
1485	(b)  "Program" means the Insurance Capital Build-Up
1486	Incentive Program established by this section.
1487	(6)  The division board shall adopt rules prescribing the
1488	procedures, administration, and criteria for approving the
1489	issuance of surplus notes pursuant to this section, which may be
1490	adopted pursuant to the procedures for emergency rules of
1491	chapter 120. Otherwise, actions and determinations by the
1492	division board pursuant to this section are exempt from chapter
1493	120.
1494	(7)  The division board shall invest and reinvest the funds
1495	appropriated for the program in accordance with s. 215.47 and
1496	consistent with division board policy.
1497	Section 6.  Paragraph (c) of subsection (1), paragraphs
1498	(a), (b), (d), (f), and (g) of subsection (2), and paragraph (b)
1499	of subsection (3) of section 627.0628, Florida Statutes, are
1500	amended to read:
1501	627.0628  Florida Commission on Hurricane Loss Projection
1502	Methodology; public records exemption; public meetings
1503	exemption.--
1504	(1)  LEGISLATIVE FINDINGS AND INTENT.--
1505	(c)  It is the intent of the Legislature to create the
1506	Florida Commission on Hurricane Loss Projection Methodology as a
1507	panel of experts to provide the most actuarially sophisticated
1508	guidelines and standards for projection of hurricane losses
1509	possible, given the current state of actuarial science. It is
1510	the further intent of the Legislature that such standards and
1511	guidelines must be used by the Division of the Florida Hurricane
1512	Catastrophe Fund of the State Board of Administration in
1513	developing reimbursement premium rates for the Florida Hurricane
1514	Catastrophe Fund, and, subject to paragraph (3)(c), may be used
1515	by insurers in rate filings under s. 627.062 unless the way in
1516	which such standards and guidelines were applied by the insurer
1517	was erroneous, as shown by a preponderance of the evidence.
1518	(2)  COMMISSION CREATED.--
1519	(a)  There is created the Florida Commission on Hurricane
1520	Loss Projection Methodology, which is assigned to the Division
1521	of the Florida Hurricane Catastrophe Fund of the State Board of
1522	Administration. For the purposes of this section, the term
1523	"commission" means the Florida Commission on Hurricane Loss
1524	Projection Methodology. The commission shall be administratively
1525	housed within the State Board of Administration, but it shall
1526	independently exercise the powers and duties specified in this
1527	section.
1528	(b)  The commission shall consist of the following 11
1529	members:
1530	1.  The insurance consumer advocate.
1531	2.  The director of the Division of the Florida Hurricane
1532	Catastrophe Fund senior employee of the State Board of
1533	Administration responsible for operations of the Florida
1534	Hurricane Catastrophe Fund.
1535	3.  The Executive Director of the Citizens Property
1536	Insurance Corporation.
1537	4.  The Director of the Division of Emergency Management of
1538	the Department of Community Affairs.
1539	5.  The actuary member of the Florida Hurricane Catastrophe
1540	Fund Advisory Council.
1541	6.  An employee of the office who is an actuary responsible
1542	for property insurance rate filings and who is appointed by the
1543	director of the office.
1544	7.  Five members appointed by the Chief Financial Officer,
1545	as follows:
1546	a.  An actuary who is employed full time by a property and
1547	casualty insurer which was responsible for at least 1 percent of
1548	the aggregate statewide direct written premium for homeowner's
1549	insurance in the calendar year preceding the member's
1550	appointment to the commission.
1551	b.  An expert in insurance finance who is a full-time
1552	member of the faculty of the State University System and who has
1553	a background in actuarial science.
1554	c.  An expert in statistics who is a full-time member of
1555	the faculty of the State University System and who has a
1556	background in insurance.
1557	d.  An expert in computer system design who is a full-time
1558	member of the faculty of the State University System.
1559	e.  An expert in meteorology who is a full-time member of
1560	the faculty of the State University System and who specializes
1561	in hurricanes.
1562	(d)  The board of the Division of the Florida Hurricane
1563	Catastrophe Fund of the State Board of Administration shall
1564	annually appoint one of the members of the commission to serve
1565	as chair.
1566	(f)  The Division of the Florida Hurricane Catastrophe Fund
1567	of the State Board of Administration shall, as a cost of
1568	administration of the Florida Hurricane Catastrophe Fund,
1569	provide for travel, expenses, and staff support for the
1570	commission.
1571	(g)  There shall be no liability on the part of, and no
1572	cause of action of any nature shall arise against, any member of
1573	the commission, any member of the Division of the Florida
1574	Hurricane Catastrophe Fund State Board of Administration, or any
1575	employee of the Division of the Florida Hurricane Catastrophe
1576	Fund State Board of Administration for any action taken in the
1577	performance of their duties under this section. In addition, the
1578	commission may, in writing, waive any potential cause of action
1579	for negligence of a consultant, contractor, or contract employee
1580	engaged to assist the commission.
1581	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1582	(b)  In establishing reimbursement premiums for the Florida
1583	Hurricane Catastrophe Fund, the Division of the Florida
1584	Hurricane Catastrophe Fund State Board of Administration must,
1585	to the extent feasible, employ actuarial methods, principles,
1586	standards, models, or output ranges found by the commission to
1587	be accurate or reliable.
1588	Section 7.  Subsection (10) of section 624.424, Florida
1589	Statutes, is amended to read:
1590	624.424  Annual statement and other information.--
1591	(10)  Each insurer or insurer group doing business in this
1592	state shall file on a quarterly basis in conjunction with
1593	financial reports required by paragraph (1)(a) a supplemental
1594	report on an individual and group basis on a form prescribed by
1595	the commission with information on personal lines and commercial
1596	lines residential property insurance policies in this state. The
1597	supplemental report shall include separate information for
1598	personal lines property policies and for commercial lines
1599	property policies and totals for each item specified, including
1600	premiums written for each of the property lines of business as
1601	described in ss. 215.555(2)(g)(c) and 627.351(6)(a). The report
1602	shall include the following information for each county on a
1603	monthly basis:
1604	(a)  Total number of policies in force at the end of each
1605	month.
1606	(b)  Total number of policies canceled.
1607	(c)  Total number of policies nonrenewed.
1608	(d)  Number of policies canceled due to hurricane risk.
1609	(e)  Number of policies nonrenewed due to hurricane risk.
1610	(f)  Number of new policies written.
1611	(g)  Total dollar value of structure exposure under
1612	policies that include wind coverage.
1613	(h)  Number of policies that exclude wind coverage.
1614	Section 8.  Paragraph (u) of subsection (6) of section
1615	627.351, Florida Statutes, is amended to read:
1616	627.351  Insurance risk apportionment plans.--
1617	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1618	(u)1.  Effective July 1, 2002, policies of the Residential
1619	Property and Casualty Joint Underwriting Association shall
1620	become policies of the corporation. All obligations, rights,
1621	assets and liabilities of the Residential Property and Casualty
1622	Joint Underwriting Association, including bonds, note and debt
1623	obligations, and the financing documents pertaining to them
1624	become those of the corporation as of July 1, 2002. The
1625	corporation is not required to issue endorsements or
1626	certificates of assumption to insureds during the remaining term
1627	of in-force transferred policies.
1628	2.  Effective July 1, 2002, policies of the Florida
1629	Windstorm Underwriting Association are transferred to the
1630	corporation and shall become policies of the corporation. All
1631	obligations, rights, assets, and liabilities of the Florida
1632	Windstorm Underwriting Association, including bonds, note and
1633	debt obligations, and the financing documents pertaining to them
1634	are transferred to and assumed by the corporation on July 1,
1635	2002. The corporation is not required to issue endorsements or
1636	certificates of assumption to insureds during the remaining term
1637	of in-force transferred policies.
1638	3.  The Florida Windstorm Underwriting Association and the
1639	Residential Property and Casualty Joint Underwriting Association
1640	shall take all actions as may be proper to further evidence the
1641	transfers and shall provide the documents and instruments of
1642	further assurance as may reasonably be requested by the
1643	corporation for that purpose. The corporation shall execute
1644	assumptions and instruments as the trustees or other parties to
1645	the financing documents of the Florida Windstorm Underwriting
1646	Association or the Residential Property and Casualty Joint
1647	Underwriting Association may reasonably request to further
1648	evidence the transfers and assumptions, which transfers and
1649	assumptions, however, are effective on the date provided under
1650	this paragraph whether or not, and regardless of the date on
1651	which, the assumptions or instruments are executed by the
1652	corporation. Subject to the relevant financing documents
1653	pertaining to their outstanding bonds, notes, indebtedness, or
1654	other financing obligations, the moneys, investments,
1655	receivables, choses in action, and other intangibles of the
1656	Florida Windstorm Underwriting Association shall be credited to
1657	the high-risk account of the corporation, and those of the
1658	personal lines residential coverage account and the commercial
1659	lines residential coverage account of the Residential Property
1660	and Casualty Joint Underwriting Association shall be credited to
1661	the personal lines account and the commercial lines account,
1662	respectively, of the corporation.
1663	4.  Effective July 1, 2002, a new applicant for property
1664	insurance coverage who would otherwise have been eligible for
1665	coverage in the Florida Windstorm Underwriting Association is
1666	eligible for coverage from the corporation as provided in this
1667	subsection.
1668	5.  The transfer of all policies, obligations, rights,
1669	assets, and liabilities from the Florida Windstorm Underwriting
1670	Association to the corporation and the renaming of the
1671	Residential Property and Casualty Joint Underwriting Association
1672	as the corporation shall in no way affect the coverage with
1673	respect to covered policies as defined in s. 215.555(2)(g)(c)
1674	provided to these entities by the Florida Hurricane Catastrophe
1675	Fund. The coverage provided by the Florida Hurricane Catastrophe
1676	Fund to the Florida Windstorm Underwriting Association based on
1677	its exposures as of June 30, 2002, and each June 30 thereafter
1678	shall be redesignated as coverage for the high-risk account of
1679	the corporation. Notwithstanding any other provision of law, the
1680	coverage provided by the Florida Hurricane Catastrophe Fund to
1681	the Residential Property and Casualty Joint Underwriting
1682	Association based on its exposures as of June 30, 2002, and each
1683	June 30 thereafter shall be transferred to the personal lines
1684	account and the commercial lines account of the corporation.
1685	Notwithstanding any other provision of law, the high-risk
1686	account shall be treated, for all Florida Hurricane Catastrophe
1687	Fund purposes, as if it were a separate participating insurer
1688	with its own exposures, reimbursement premium, and loss
1689	reimbursement. Likewise, the personal lines and commercial lines
1690	accounts shall be viewed together, for all Florida Hurricane
1691	Catastrophe Fund purposes, as if the two accounts were one and
1692	represent a single, separate participating insurer with its own
1693	exposures, reimbursement premium, and loss reimbursement. The
1694	coverage provided by the Florida Hurricane Catastrophe Fund to
1695	the corporation shall constitute and operate as a full transfer
1696	of coverage from the Florida Windstorm Underwriting Association
1697	and Residential Property and Casualty Joint Underwriting to the
1698	corporation.
1699	Section 9.  This act shall take effect July 1, 2008.

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