CS/CS/CS/HB 1495

1	A bill to be entitled
2	An act relating to property insurance; amending s.
3	215.555, F.S.; revising the dates of an insurer's contract
4	year for purposes of calculating the insurer's retention;
5	requiring the State Board of Administration to offer an
6	additional amount of reimbursement coverage to certain
7	insurers that purchased coverage during a certain calendar
8	year; requiring an insurer that purchases certain coverage
9	to retain an amount equal to a percentage of the insurer's
10	surplus on a certain date; providing that an insurer's
11	retention will apply along with a mandatory coverage after
12	an optional coverage is exhausted; revising an expiration
13	date on the requirement for the State Board of
14	Administration to offer certain optional coverage to
15	insurers; requiring the State Board of Administration to
16	publish a statement of the estimated claims-paying
17	capacity of the Hurricane Catastrophe Fund; authorizing
18	the State Board of Administration to reimburse insurers
19	based on a formula related to the claims-paying capacity
20	of the Hurricane Catastrophe Fund; requiring the formula
21	to determine an actuarially indicated premium to include
22	specified cash build-up factors; authorizing the State
23	Board of Administration to require insurers to notarize
24	documents submitted to the board; authorizing insurers to
25	purchase temporary increased coverage limit for certain
26	future hurricane seasons; providing that a cash build-up
27	factor does not apply to temporary increased coverage
28	limit premiums; providing dates on which the claims-paying
29	capacity of the fund will increase; deleting authority for
30	the State Board of Administration to increase the claims-
31	paying capacity of the Hurricane Catastrophe Fund;
32	amending s. 215.5586, F.S.; revising legislative intent;
33	revising criteria for hurricane mitigation inspections;
34	revising criteria for eligibility for a mitigation grant;
35	expanding the list of improvements for which grants may be
36	used; correcting a reference to the Florida Division of
37	Emergency Management; deleting provisions relating to no-
38	interest loans; requiring that contracts valued at or
39	greater than a specified amount be subject to review and
40	approval of the Legislative Budget Commission; amending s.
41	626.854, F.S.; prohibiting a public adjuster from
42	accepting referrals for compensation from a person with
43	whom the public adjuster conducts business; prohibiting a
44	public adjuster from compensating a person other than a
45	public adjuster for referrals; amending s. 627.7011, F.S.;
46	providing that an insurer may repair damaged property in
47	compliance with its policy; amending s. 626.865, F.S.;
48	deleting a requirement that an applicant for a license as
49	a public adjuster pass a written examination as a
50	prerequisite to licensure; amending s. 626.8651, F.S.;
51	requiring an applicant for a public adjuster apprentice
52	license to pass a written exam and receive an Accredited
53	Claims Adjuster designation and related training before
54	licensure; limiting the number of public adjuster
55	apprentices that may be maintained by a single public
56	adjusting firm or supervised by a public adjuster;
57	amending s. 627.062, F.S.; extending the period for which
58	an insurer seeking a residential property insurance rate
59	that is greater than the rate most recently approved by
60	the Office of Insurance Regulation must make a "file and
61	use" filing; authorizing insurers to make separate filings
62	for certain rate adjustments and costs; specifying
63	limitations; providing procedural requirements; requiring
64	the office to review the filing within a specified time
65	for certain purposes; amending s. 627.0621, F.S.;
66	requiring that the Office of Insurance Regulation provide
67	certain information regarding any residential property
68	rate filing on a publicly accessible Internet website;
69	requiring that the office provide a means on its website
70	for certain persons to submit e-mail regarding any rate
71	filing; requiring that such e-mail be accessible by the
72	actuary assigned to review the subject rate filing;
73	deleting a limitation on the application of the attorney-
74	client privilege and work product doctrine in challenges
75	to actions by the Office of Insurance Regulation relating
76	to rate filings; amending s. 627.0629, F.S.; requiring
77	certain hurricane mitigation measure discounts, credits,
78	and rate differentials to supersede certain other
79	discounts, credits, and rate differentials; authorizing an
80	insurer to include in its rates the actual cost of certain
81	reinsurance; amending s. 627.351, F.S.; deleting a
82	provision requiring a seller of certain residential
83	property to disclose the structure's windstorm mitigation
84	rating to the prospective purchaser of the property;
85	providing for members of the board of governors of
86	Citizens Property Insurance Corporation to serve staggered
87	terms; requiring Citizen's Property Insurance Corporation
88	to implement rate increases until the implementation of
89	actuarially sound rates; revising the date after which the
90	State Board of Administration is required to reduce the
91	boundaries of high-risk areas eligible for wind-only
92	coverages under certain circumstances; amending s.
93	627.3512, F.S.; providing legislative findings; providing
94	for the recoupment of residual market assessments paid by
95	insurers or insurer groups; limiting the amount of a
96	recoupment factor; authorizing an insurer to apply
97	recalculated recoupment factors to policies issued or
98	renewed during specified periods under certain
99	circumstances; requiring that insurers or insurer groups
100	file a statement setting forth certain information;
101	providing for the application of recoupment factors to
102	certain policies upon issuance or renewal; requiring that
103	insurers or insurer groups file a supplemental statement
104	under certain circumstances; requiring that such entities
105	file a final accounting report documenting certain
106	information within a specified period after the completion
107	of the recoupment process; requiring that such report
108	provide certain information; amending s. 627.711, F.S.;
109	requiring that an insurer accept as valid a uniform
110	mitigation verification form certified by the Department
111	of Financial Services or signed by certain individuals or
112	entities; providing a criminal penalty for knowingly
113	submitting a false or fraudulent mitigation form with the
114	intent to receive an undeserved discount; amending s.
115	627.712, F.S.; revising the properties for which an
116	insurer must make policies available which exclude
117	windstorm coverage; amending s. 631.65, F.S.; providing
118	that an insurance agent is not prohibited from explaining
119	the existence or function of the insurance guaranty
120	association; requiring the Office of Program Policy
121	Analysis and Government Accountability to submit a report
122	to the Legislature, Commissioner of Insurance, Chief
123	Financial Officer, and Governor reviewing laws governing
124	public adjuster; specifying review requirements; amending
125	s. 627.0628, F.S.; requiring the Florida Commission on
126	Hurricane Loss Projection Methodology to hold public
127	meetings for purposes of implementing certain windstorm
128	mitigation discounts, credits, other rate differentials,
129	and deductible reductions; requiring a report to the
130	Governor, Cabinet, and Legislature; amending s. 624.46226,
131	F.S.; authorizing reinsurance companies to issue coverage
132	directly to certain public housing authorities  under
133	certain circumstances; specifying that a public housing
134	authority is considered an insurer under certain
135	circumstances; requiring that certain reinsurance
136	contracts issued to public housing authorities receive the
137	same tax treatment as contracts issued to insurance
138	companies; providing construction; providing an effective
139	date.
140
141	Be It Enacted by the Legislature of the State of Florida:
142
143	Section 1.  Paragraph (e) of subsection (2), subsection
144	(4), paragraph (b) of subsection (5), and subsections (7) and
145	(17) of section 215.555, Florida Statutes, are amended to read:
146	215.555  Florida Hurricane Catastrophe Fund.--
147	(2)  DEFINITIONS.--As used in this section:
148	(e)  "Retention" means the amount of losses below which an
149	insurer is not entitled to reimbursement from the fund. An
150	insurer's retention shall be calculated as follows:
151	1.  The board shall calculate and report to each insurer
152	the retention multiples for that year. For the contract year
153	beginning June 1, 2005, the retention multiple shall be equal to
154	$4.5 billion divided by the total estimated reimbursement
155	premium for the contract year; for subsequent years, the
156	retention multiple shall be equal to $4.5 billion, adjusted
157	based upon the reported exposure from the prior contract year to
158	reflect the percentage growth in exposure to the fund for
159	covered policies since 2004, divided by the total estimated
160	reimbursement premium for the contract year. Total reimbursement
161	premium for purposes of the calculation under this subparagraph
162	shall be estimated using the assumption that all insurers have
163	selected the 90-percent coverage level. In 2010, the contract
164	year begins June 1, 2010, and ends December 31, 2010. In 2011
165	and thereafter, the contract year begins January 1 and ends
166	December 31.
167	2.  The retention multiple as determined under subparagraph
168	1. shall be adjusted to reflect the coverage level elected by
169	the insurer. For insurers electing the 90-percent coverage
170	level, the adjusted retention multiple is 100 percent of the
171	amount determined under subparagraph 1. For insurers electing
172	the 75-percent coverage level, the retention multiple is 120
173	percent of the amount determined under subparagraph 1. For
174	insurers electing the 45-percent coverage level, the adjusted
175	retention multiple is 200 percent of the amount determined under
176	subparagraph 1.
177	3.  An insurer shall determine its provisional retention by
178	multiplying its provisional reimbursement premium by the
179	applicable adjusted retention multiple and shall determine its
180	actual retention by multiplying its actual reimbursement premium
181	by the applicable adjusted retention multiple.
182	4.  For insurers who experience multiple covered events
183	causing loss during the contract year, beginning June 1, 2005,
184	each insurer's full retention shall be applied to each of the
185	covered events causing the two largest losses for that insurer.
186	For each other covered event resulting in losses, the insurer's
187	retention shall be reduced to one-third of the full retention.
188	The reimbursement contract shall provide for the reimbursement
189	of losses for each covered event based on the full retention
190	with adjustments made to reflect the reduced retentions on or
191	after January 1 of the contract year provided the insurer
192	reports its losses as specified in the reimbursement contract.
193	(4)  REIMBURSEMENT CONTRACTS.--
194	(a)  The board shall enter into a contract with each
195	insurer writing covered policies in this state to provide to the
196	insurer the reimbursement described in paragraphs (b) and (d),
197	in exchange for the reimbursement premium paid into the fund
198	under subsection (5). As a condition of doing business in this
199	state, each such insurer shall enter into such a contract.
200	(b)1.  The contract shall contain a promise by the board to
201	reimburse the insurer for 45 percent, 75 percent, or 90 percent
202	of its losses from each covered event in excess of the insurer's
203	retention, plus 5 percent of the reimbursed losses to cover loss
204	adjustment expenses.
205	2.  The insurer must elect one of the percentage coverage
206	levels specified in this paragraph and may, upon renewal of a
207	reimbursement contract, elect a lower percentage coverage level
208	if no revenue bonds issued under subsection (6) after a covered
209	event are outstanding, or elect a higher percentage coverage
210	level, regardless of whether or not revenue bonds are
211	outstanding. All members of an insurer group must elect the same
212	percentage coverage level. Any joint underwriting association,
213	risk apportionment plan, or other entity created under s.
214	627.351 must elect the 90-percent coverage level.
215	3.  The contract shall provide that reimbursement amounts
216	shall not be reduced by reinsurance paid or payable to the
217	insurer from other sources.
218	4.  Notwithstanding any other provision contained in this
219	section, the board shall make available to insurers that
220	purchased coverage provided by this subparagraph in 2008 2007,
221	insurers qualifying as limited apportionment companies under s.
222	627.351(6)(c), and insurers that have been approved to
223	participate in the Insurance Capital Build-Up Incentive Program
224	pursuant to s. 215.5595 a contract or contract addendum that
225	provides an additional amount of reimbursement coverage of up to
226	$10 million. The premium to be charged for this additional
227	reimbursement coverage shall be 50 percent of the additional
228	reimbursement coverage provided, which shall include one prepaid
229	reinstatement. The minimum retention level that an eligible
230	participating insurer must retain associated with this
231	additional coverage layer is 30 percent of the insurer's surplus
232	as of December 31, 2008, for the 2009-2010 contract year; as of
233	December 31, 2009, for the contract year beginning June 1, 2010,
234	and ending December 31, 2010; and as of December 31, 2010, for
235	the 2011 contract year December 31, 2007. This coverage shall be
236	in addition to all other coverage that may be provided under
237	this section. The coverage provided by the fund under this
238	subparagraph shall be in addition to the claims-paying capacity
239	as defined in subparagraph (c)1., but only with respect to those
240	insurers that select the additional coverage option and meet the
241	requirements of this subparagraph. The claims-paying capacity
242	with respect to all other participating insurers and limited
243	apportionment companies that do not select the additional
244	coverage option shall be limited to their reimbursement
245	premium's proportionate share of the actual claims-paying
246	capacity otherwise defined in subparagraph (c)1. and as provided
247	for under the terms of the reimbursement contract. The optional
248	coverage retention as specified shall be accessed before the
249	mandatory coverage under the reimbursement contract, but once
250	the limit of coverage selected under this option is exhausted,
251	the insurer's retention under the mandatory coverage will apply.
252	This coverage will apply and be paid concurrently with mandatory
253	coverage. Coverage provided in the reimbursement contract shall
254	not be affected by the additional premiums paid by participating
255	insurers exercising the additional coverage option allowed in
256	this subparagraph. This subparagraph expires on December 31,
257	2011 May 31, 2009.
258	(c)1.  The contract shall also provide that the obligation
259	of the board with respect to all contracts covering a particular
260	contract year shall not exceed the actual claims-paying capacity
261	of the fund up to a limit of $15 billion for that contract year
262	adjusted based upon the reported exposure from the prior
263	contract year to reflect the percentage growth in exposure to
264	the fund for covered policies since 2003, provided the dollar
265	growth in the limit may not increase in any year by an amount
266	greater than the dollar growth of the balance of the fund as of
267	December 31, less any premiums or interest attributable to
268	optional coverage, as defined by rule which occurred over the
269	prior calendar year.
270	2.  In May before the start of the upcoming contract year
271	and in October of during the contract year, the board shall
272	publish in the Florida Administrative Weekly a statement of the
273	fund's estimated borrowing capacity, the fund's estimated
274	claims-paying capacity, and the projected balance of the fund as
275	of December 31. After the end of each calendar year, the board
276	shall notify insurers of the estimated borrowing capacity,
277	estimated claims-paying capacity, and the balance of the fund as
278	of December 31 to provide insurers with data necessary to assist
279	them in determining their retention and projected payout from
280	the fund for loss reimbursement purposes. In conjunction with
281	the development of the premium formula, as provided for in
282	subsection (5), the board shall publish factors or multiples
283	that assist insurers in determining their retention and
284	projected payout for the next contract year. For all regulatory
285	and reinsurance purposes, an insurer may calculate its projected
286	payout from the fund as its share of the total fund premium for
287	the current contract year multiplied by the sum of the projected
288	balance of the fund as of December 31 and the estimated
289	borrowing capacity for that contract year as reported under this
290	subparagraph.
291	(d)1.  For purposes of determining potential liability and
292	to aid in the sound administration of the fund, the contract
293	shall require each insurer to report such insurer's losses from
294	each covered event on an interim basis, as directed by the
295	board. The contract shall require the insurer to report to the
296	board no later than December 31 of each year, and quarterly
297	thereafter, its reimbursable losses from covered events for the
298	year. The contract shall require the board to determine and pay,
299	as soon as practicable after receiving these reports of
300	reimbursable losses, the initial amount of reimbursement due and
301	adjustments to this amount based on later loss information. The
302	adjustments to reimbursement amounts shall require the board to
303	pay, or the insurer to return, amounts reflecting the most
304	recent calculation of losses.
305	2.  In determining reimbursements pursuant to this
306	subsection, the contract shall provide that the board shall pay
307	to each insurer such insurer's projected payout, which is the
308	amount of reimbursement it is owed, up to an amount equal to the
309	insurer's share of the actual premium paid for that contract
310	year, multiplied by the actual claims-paying capacity available
311	for that contract year.
312	3.  The board may reimburse insurers for amounts up to the
313	published factors or multiples for determining each
314	participating insurer's retention and projected payout derived
315	as a result of the development of the premium formula in those
316	situations in which the total reimbursement of losses to such
317	insurers would not exceed the estimated claims-paying capacity
318	of the fund. Otherwise, such factors or multiples shall be
319	reduced uniformly among all insurers to reflect the estimated
320	claims-paying capacity.
321	(e)1.  Except as provided in subparagraphs 2. and 3., the
322	contract shall provide that if an insurer demonstrates to the
323	board that it is likely to qualify for reimbursement under the
324	contract, and demonstrates to the board that the immediate
325	receipt of moneys from the board is likely to prevent the
326	insurer from becoming insolvent, the board shall advance the
327	insurer, at market interest rates, the amounts necessary to
328	maintain the solvency of the insurer, up to 50 percent of the
329	board's estimate of the reimbursement due the insurer. The
330	insurer's reimbursement shall be reduced by an amount equal to
331	the amount of the advance and interest thereon.
332	2.  With respect only to an entity created under s.
333	627.351, the contract shall also provide that the board may,
334	upon application by such entity, advance to such entity, at
335	market interest rates, up to 90 percent of the lesser of:
336	a.  The board's estimate of the amount of reimbursement due
337	to such entity; or
338	b.  The entity's share of the actual reimbursement premium
339	paid for that contract year, multiplied by the currently
340	available liquid assets of the fund. In order for the entity to
341	qualify for an advance under this subparagraph, the entity must
342	demonstrate to the board that the advance is essential to allow
343	the entity to pay claims for a covered event and the board must
344	determine that the fund's assets are sufficient and are
345	sufficiently liquid to allow the board to make an advance to the
346	entity and still fulfill the board's reimbursement obligations
347	to other insurers. The entity's final reimbursement for any
348	contract year in which an advance has been made under this
349	subparagraph must be reduced by an amount equal to the amount of
350	the advance and any interest on such advance. In order to
351	determine what amounts, if any, are due the entity, the board
352	may require the entity to report its exposure and its losses at
353	any time to determine retention levels and reimbursements
354	payable.
355	3.  The contract shall also provide specifically and solely
356	with respect to any limited apportionment company under s.
357	627.351(2)(b)3. that the board may, upon application by such
358	company, advance to such company the amount of the estimated
359	reimbursement payable to such company as calculated pursuant to
360	paragraph (d), at market interest rates, if the board determines
361	that the fund's assets are sufficient and are sufficiently
362	liquid to permit the board to make an advance to such company
363	and at the same time fulfill its reimbursement obligations to
364	the insurers that are participants in the fund. Such company's
365	final reimbursement for any contract year in which an advance
366	pursuant to this subparagraph has been made shall be reduced by
367	an amount equal to the amount of the advance and interest
368	thereon. In order to determine what amounts, if any, are due to
369	such company, the board may require such company to report its
370	exposure and its losses at such times as may be required to
371	determine retention levels and loss reimbursements payable.
372	(f)  In order to ensure that insurers have properly
373	reported the insured values on which the reimbursement premium
374	is based and to ensure that insurers have properly reported the
375	losses for which reimbursements have been made, the board shall
376	inspect, examine, and verify the records of each insurer's
377	covered policies at such times as the board deems appropriate
378	and according to standards established by rule for the specific
379	purpose of validating the accuracy of exposures and losses
380	required to be reported under the terms and conditions of the
381	reimbursement contract. The costs of the examinations shall be
382	borne by the board. However, in order to remove any incentive
383	for an insurer to delay preparations for an examination, the
384	board shall be reimbursed by the insurer for any examination
385	expenses incurred in addition to the usual and customary costs
386	of the examination, which additional expenses were incurred as a
387	result of an insurer's failure, despite proper notice, to be
388	prepared for the examination or as a result of an insurer's
389	failure to provide requested information while the examination
390	is in progress. If the board finds any insurer's records or
391	other necessary information to be inadequate or inadequately
392	posted, recorded, or maintained, the board may employ experts to
393	reconstruct, rewrite, record, post, or maintain such records or
394	information, at the expense of the insurer being examined, if
395	such insurer has failed to maintain, complete, or correct such
396	records or deficiencies after the board has given the insurer
397	notice and a reasonable opportunity to do so. Any information
398	contained in an examination report, which information is
399	described in s. 215.557, is confidential and exempt from the
400	provisions of s. 119.07(1) and s. 24(a), Art. I of the State
401	Constitution, as provided in s. 215.557. Nothing in this
402	paragraph expands the exemption in s. 215.557.
403	(g)  The contract shall provide that in the event of the
404	insolvency of an insurer, the fund shall pay directly to the
405	Florida Insurance Guaranty Association for the benefit of
406	Florida policyholders of the insurer the net amount of all
407	reimbursement moneys owed to the insurer. As used in this
408	paragraph, the term "net amount of all reimbursement moneys"
409	means that amount which remains after reimbursement for:
410	1.  Preliminary or duplicate payments owed to private
411	reinsurers or other inuring reinsurance payments to private
412	reinsurers that satisfy statutory or contractual obligations of
413	the insolvent insurer attributable to covered events to such
414	reinsurers; or
415	2.  Funds owed to a bank or other financial institution to
416	cover obligations of the insolvent insurer under a credit
417	agreement that assists the insolvent insurer in paying claims
418	attributable to covered events.
419
420	The private reinsurers, banks, or other financial institutions
421	shall be reimbursed or otherwise paid prior to payment to the
422	Florida Insurance Guaranty Association, notwithstanding any law
423	to the contrary. The guaranty association shall pay all claims
424	up to the maximum amount permitted by chapter 631; thereafter,
425	any remaining moneys shall be paid pro rata to claims not fully
426	satisfied. This paragraph does not apply to a joint underwriting
427	association, risk apportionment plan, or other entity created
428	under s. 627.351.
429	(5)  REIMBURSEMENT PREMIUMS.--
430	(b)  The State Board of Administration shall select an
431	independent consultant to develop a formula for determining the
432	actuarially indicated premium to be paid to the fund. The
433	formula shall specify, for each zip code or other limited
434	geographical area, the amount of premium to be paid by an
435	insurer for each $1,000 of insured value under covered policies
436	in that zip code or other area. In establishing premiums, the
437	board shall consider the coverage elected under paragraph (4)(b)
438	and any factors that tend to enhance the actuarial
439	sophistication of ratemaking for the fund, including
440	deductibles, type of construction, type of coverage provided,
441	relative concentration of risks, and other such factors deemed
442	by the board to be appropriate. The formula must provide for a
443	cash build-up factor. For the 2009-2010 contract year, the
444	factor is 5 percent. For the contract year beginning June 1,
445	2010, and ending December 31, 2010, the factor is 10 percent.
446	For the 2011 contract year, the factor is 15 percent. For the
447	2012 contract year, the factor is 20 percent. For the 2013
448	contract year and thereafter, the factor is 25 percent. The
449	formula may provide for a procedure to determine the premiums to
450	be paid by new insurers that begin writing covered policies
451	after the beginning of a contract year, taking into
452	consideration when the insurer starts writing covered policies,
453	the potential exposure of the insurer, the potential exposure of
454	the fund, the administrative costs to the insurer and to the
455	fund, and any other factors deemed appropriate by the board. The
456	formula must be approved by unanimous vote of the board. The
457	board may, at any time, revise the formula pursuant to the
458	procedure provided in this paragraph.
459	(7)  ADDITIONAL POWERS AND DUTIES.--
460	(a)  The board may procure reinsurance from reinsurers
461	acceptable to the Office of Insurance Regulation for the purpose
462	of maximizing the capacity of the fund and may enter into
463	capital market transactions, including, but not limited to,
464	industry loss warranties, catastrophe bonds, side-car
465	arrangements, or financial contracts permissible for the board's
466	usage under s. 215.47(10) and (11), consistent with prudent
467	management of the fund.
468	(b)  In addition to borrowing under subsection (6), the
469	board may also borrow from, or enter into other financing
470	arrangements with, any market sources at prevailing interest
471	rates.
472	(c)  Each fiscal year, the Legislature shall appropriate
473	from the investment income of the Florida Hurricane Catastrophe
474	Fund an amount no less than $10 million and no more than 35
475	percent of the investment income based upon the most recent
476	fiscal year-end audited financial statements for the purpose of
477	providing funding for local governments, state agencies, public
478	and private educational institutions, and nonprofit
479	organizations to support programs intended to improve hurricane
480	preparedness, reduce potential losses in the event of a
481	hurricane, provide research into means to reduce such losses,
482	educate or inform the public as to means to reduce hurricane
483	losses, assist the public in determining the appropriateness of
484	particular upgrades to structures or in the financing of such
485	upgrades, or protect local infrastructure from potential damage
486	from a hurricane. Moneys shall first be available for
487	appropriation under this paragraph in fiscal year 1997-1998.
488	Moneys in excess of the $10 million specified in this paragraph
489	shall not be available for appropriation under this paragraph if
490	the State Board of Administration finds that an appropriation of
491	investment income from the fund would jeopardize the actuarial
492	soundness of the fund.
493	(d)  The board may allow insurers to comply with reporting
494	requirements and reporting format requirements by using
495	alternative methods of reporting if the proper administration of
496	the fund is not thereby impaired and if the alternative methods
497	produce data which is consistent with the purposes of this
498	section.
499	(e)  In order to assure the equitable operation of the
500	fund, the board may impose a reasonable fee on an insurer to
501	recover costs involved in reprocessing inaccurate, incomplete,
502	or untimely exposure data submitted by the insurer.
503	(f)  The board may require insurers to notarize documents
504	submitted to the board.
505	(17)  TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.--
506	(a)  Findings and intent.--
507	1.  The Legislature finds that:
508	a.  Because of temporary disruptions in the market for
509	catastrophic reinsurance, many property insurers were unable to
510	procure sufficient amounts of reinsurance for the 2006 hurricane
511	season or were able to procure such reinsurance only by
512	incurring substantially higher costs than in prior years.
513	b.  The reinsurance market problems were responsible, at
514	least in part, for substantial premium increases to many
515	consumers and increases in the number of policies issued by
516	Citizens Property Insurance Corporation.
517	c.  It is likely that the reinsurance market disruptions
518	will not significantly abate prior to the 2007 hurricane season.
519	2.  It is the intent of the Legislature to create options
520	for insurers to purchase a temporary increased coverage limit
521	above the statutorily determined limit in subparagraph (4)(c)1.,
522	applicable for the 2007, 2008, and 2009, 2010, 2011, 2012, and
523	2013 hurricane seasons, to address market disruptions and enable
524	insurers, at their option, to procure additional coverage from
525	the Florida Hurricane Catastrophe Fund.
526	(b)  Applicability of other provisions of this
527	section.--All provisions of this section and the rules adopted
528	under this section apply to the coverage created by this
529	subsection unless specifically superseded by provisions in this
530	subsection.
531	(c)  Optional coverage.--For the contract year commencing
532	June 1, 2007, and ending May 31, 2008, the contract year
533	commencing June 1, 2008, and ending May 31, 2009, and the
534	contract year commencing June 1, 2009, and ending May 31, 2010,
535	the contract year commencing June 1, 2010, and ending December
536	31, 2010, the contract year commencing January 1, 2011, and
537	ending December 31, 2011, the contract year commencing January
538	1, 2012, and ending December 31, 2012, and the contract year
539	commencing January 1, 2013, and ending December 31, 2013, the
540	board shall offer, for each of such years, the optional coverage
541	as provided in this subsection.
542	(d)  Additional definitions.--As used in this subsection,
543	the term:
544	1.  "FHCF" means Florida Hurricane Catastrophe Fund.
545	2.  "FHCF reimbursement premium" means the premium paid by
546	an insurer for its coverage as a mandatory participant in the
547	FHCF, but does not include additional premiums for optional
548	coverages.
549	3.  "Payout multiple" means the number or multiple created
550	by dividing the statutorily defined claims-paying capacity as
551	determined in subparagraph (4)(c)1. by the aggregate
552	reimbursement premiums paid by all insurers estimated or
553	projected as of calendar year-end.
554	4.  "TICL" means the temporary increase in coverage limit.
555	5.  "TICL options" means the temporary increase in coverage
556	options created under this subsection.
557	6.  "TICL insurer" means an insurer that has opted to
558	obtain coverage under the TICL options addendum in addition to
559	the coverage provided to the insurer under its FHCF
560	reimbursement contract.
561	7.  "TICL reimbursement premium" means the premium charged
562	by the fund for coverage provided under the TICL option.
563	8.  "TICL coverage multiple" means the coverage multiple
564	when multiplied by an insurer's reimbursement premium that
565	defines the temporary increase in coverage limit.
566	9.  "TICL coverage" means the coverage for an insurer's
567	losses above the insurer's statutorily determined claims-paying
568	capacity based on the claims-paying limit in subparagraph
569	(4)(c)1., which an insurer selects as its temporary increase in
570	coverage from the fund under the TICL options selected. A TICL
571	insurer's increased coverage limit options shall be calculated
572	as follows:
573	a.  The board shall calculate and report to each TICL
574	insurer the TICL coverage multiples based on 12 options for
575	increasing the insurer's FHCF coverage limit. Each TICL coverage
576	multiple shall be calculated by dividing $1 billion, $2 billion,
577	$3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8
578	billion, $9 billion, $10 billion, $11 billion, or $12 billion by
579	the total estimated aggregate FHCF reimbursement premiums for
580	the 2007-2008 contract year, and the 2008-2009 contract year,
581	and the 2009-2010 contract year.
582	b.  For the 2009-2010 contract year, the board shall
583	calculate and report to each TICL insurer the TICL coverage
584	multiples based on 10 options for increasing the insurer's FHCF
585	coverage limit. Each TICL coverage multiple shall be calculated
586	by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
587	billion, $6 billion, $7 billion, $8 billion, $9 billion, and $10
588	billion by the total estimated aggregate FHCF reimbursement
589	premiums for the 2009-2010 contract year.
590	c.  For the contract year beginning June 1, 2010, and
591	ending December 31, 2010, the board shall calculate and report
592	to each TICL insurer the TICL coverage multiples based on eight
593	options for increasing the insurer's FHCF coverage limit. Each
594	TICL coverage multiple shall be calculated by dividing $1
595	billion, $2 billion, $3 billion, $4 billion, $5 billion, $6
596	billion, $7 billion, and $8 billion by the total estimated
597	aggregate FHCF reimbursement premiums for the contract year.
598	d.  For the 2011 contract year, the board shall calculate
599	and report to each TICL insurer the TICL coverage multiples
600	based on six options for increasing the insurer's FHCF coverage
601	limit. Each TICL coverage multiple shall be calculated by
602	dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
603	billion, and $6 billion by the total estimated aggregate FHCF
604	reimbursement premiums for the 2011 contract year.
605	e.  For the 2012 contract year, the board shall calculate
606	and report to each TICL insurer the TICL coverage multiples
607	based on four options for increasing the insurer's FHCF coverage
608	limit. Each TICL coverage multiple shall be calculated by
609	dividing $1 billion, $2 billion, $3 billion, and $4 billion by
610	the total estimated aggregate FHCF reimbursement premiums for
611	the 2012 contract year.
612	f.  For the 2013 contract year, the board shall calculate
613	and report to each TICL insurer the TICL coverage multiples
614	based on two options for increasing the insurer's FHCF coverage
615	limit. Each TICL coverage multiple shall be calculated by
616	dividing $1 billion and $2 billion by the total estimated
617	aggregate FHCF reimbursement premiums for the 2013 contract
618	year.
619	g.b.  The TICL insurer's increased coverage shall be the
620	FHCF reimbursement premium multiplied by the TICL coverage
621	multiple. In order to determine an insurer's total limit of
622	coverage, an insurer shall add its TICL coverage multiple to its
623	payout multiple. The total shall represent a number that, when
624	multiplied by an insurer's FHCF reimbursement premium for a
625	given reimbursement contract year, defines an insurer's total
626	limit of FHCF reimbursement coverage for that reimbursement
627	contract year.
628	10.  "TICL options addendum" means an addendum to the
629	reimbursement contract reflecting the obligations of the fund
630	and insurers selecting an option to increase an insurer's FHCF
631	coverage limit.
632	(e)  TICL options addendum.--
633	1.  The TICL options addendum shall provide for
634	reimbursement of TICL insurers for covered events occurring
635	between June 1, 2007, and May 31, 2008, and between June 1,
636	2008, and May 31, 2009, or between June 1, 2009, and May 31,
637	2010, between June 1, 2010, and December 31, 2010, between
638	January 1, 2011, and December 31, 2011, between January 1, 2012,
639	and December 31, 2012, or between January 1, 2013, and December
640	31, 2013, in exchange for the TICL reimbursement premium paid
641	into the fund under paragraph (f). Any insurer writing covered
642	policies has the option of selecting an increased limit of
643	coverage under the TICL options addendum and shall select such
644	coverage at the time that it executes the FHCF reimbursement
645	contract.
646	2.  The TICL addendum shall contain a promise by the board
647	to reimburse the TICL insurer for 45 percent, 75 percent, or 90
648	percent of its losses from each covered event in excess of the
649	insurer's retention, plus 5 percent of the reimbursed losses to
650	cover loss adjustment expenses. The percentage shall be the same
651	as the coverage level selected by the insurer under paragraph
652	(4)(b).
653	3.  The TICL addendum shall provide that reimbursement
654	amounts shall not be reduced by reinsurance paid or payable to
655	the insurer from other sources.
656	4.  The priorities, schedule, and method of reimbursements
657	under the TICL addendum shall be the same as provided under
658	subsection (4).
659	(f)  TICL reimbursement premiums.--Each TICL insurer shall
660	pay to the fund, in the manner and at the time provided in the
661	reimbursement contract for payment of reimbursement premiums, a
662	TICL reimbursement premium determined as specified in subsection
663	(5), except that a cash build-up factor does not apply to the
664	TICL reimbursement premiums. However, the TICL reimbursement
665	premium shall be increased in contract year 2009-2010 by a
666	factor of two, in the contract year beginning June 1, 2010, and
667	ending December 31, 2010, by a factor of three, in the 2011
668	contract year by a factor of four, in the 2012 contract year by
669	a factor of five, and in the 2013 contract year by a factor of
670	six.
671	(g)  Effect on claims-paying capacity of the fund.--For the
672	contract terms commencing June 1, 2007, June 1, 2008, and June
673	1, 2009, June 1, 2010, January 1, 2011, January 1, 2012, and
674	January 1, 2013, the program created by this subsection shall
675	increase the claims-paying capacity of the fund as provided in
676	subparagraph (4)(c)1. by an amount not to exceed $12 billion and
677	shall depend on the TICL coverage options selected and the
678	number of insurers that select the TICL optional coverage. The
679	additional capacity shall apply only to the additional coverage
680	provided under the TICL options and shall not otherwise affect
681	any insurer's reimbursement from the fund if the insurer chooses
682	not to select the temporary option to increase its limit of
683	coverage under the FHCF.
684	(h)  Increasing the claims-paying capacity of the
685	fund.--For the contract years commencing June 1, 2007, June 1,
686	2008, and June 1, 2009, the board may increase the claims-paying
687	capacity of the fund as provided in paragraph (g) by an amount
688	not to exceed $4 billion in four $1 billion options and shall
689	depend on the TICL coverage options selected and the number of
690	insurers that select the TICL optional coverage. Each insurer's
691	TICL premium shall be calculated based upon the additional limit
692	of increased coverage that the insurer selects. Such limit is
693	determined by multiplying the TICL multiple associated with one
694	of the four options times the insurer's FHCF reimbursement
695	premium. The reimbursement premium associated with the
696	additional coverage provided in this paragraph shall be
697	determined as specified in subsection (5).
698	Section 2.  Section 215.5586, Florida Statutes, as amended
699	by section 1 of chapter 2009-10, Laws of Florida, is amended to
700	read:
701	215.5586  My Safe Florida Home Program.--There is
702	established within the Department of Financial Services the My
703	Safe Florida Home Program. The department shall provide fiscal
704	accountability, contract management, and strategic leadership
705	for the program, consistent with this section. This section does
706	not create an entitlement for property owners or obligate the
707	state in any way to fund the inspection or retrofitting of
708	residential property in this state. Implementation of this
709	program is subject to annual legislative appropriations. It is
710	the intent of the Legislature that the My Safe Florida Home
711	Program provide trained and certified inspectors to perform
712	inspections for owners of for at least 400,000 site-built,
713	single-family, residential properties and provide grants to
714	eligible at least 35,000 applicants as funding allows before
715	June 30, 2009. The program shall develop and implement a
716	comprehensive and coordinated approach for hurricane damage
717	mitigation that may shall include the following:
718	(1)  HURRICANE MITIGATION INSPECTIONS.--
719	(a)  Certified inspectors to provide free home-retrofit
720	inspections of site-built, single-family, residential property
721	may shall be offered throughout the state to determine what
722	mitigation measures are needed, what insurance premium discounts
723	may be available, and what improvements to existing residential
724	properties are needed to reduce the property's vulnerability to
725	hurricane damage. The Department of Financial Services shall
726	contract with wind certification entities to provide free
727	hurricane mitigation inspections. The inspections provided to
728	homeowners, at a minimum, must include:
729	1.  A home inspection and report that summarizes the
730	results and identifies recommended improvements a homeowner may
731	take to mitigate hurricane damage.
732	2.  A range of cost estimates regarding the recommended
733	mitigation improvements.
734	3.  Insurer-specific information regarding premium
735	discounts correlated to the current mitigation features and the
736	recommended mitigation improvements identified by the
737	inspection.
738	4.  A hurricane resistance rating scale specifying the
739	home's current as well as projected wind resistance
740	capabilities. As soon as practical, the rating scale must be the
741	uniform home grading scale adopted by the Financial Services
742	Commission pursuant to s. 215.55865.
743	(b)  To qualify for selection by the department as a wind
744	certification entity to provide hurricane mitigation
745	inspections, the entity shall, at a minimum, meet the following
746	requirements:
747	1.  Use hurricane mitigation inspectors who:
748	a.  Are certified as a building inspector under s. 468.607;
749	b.  Are licensed as a general or residential contractor
750	under s. 489.111;
751	c.  Are licensed as a professional engineer under s.
752	471.015 and who have passed the appropriate equivalency test of
753	the Building Code Training Program as required by s. 553.841;
754	d.  Are licensed as a professional architect under s.
755	481.213; or
756	e.  Have at least 2 years of experience in residential
757	construction or residential building inspection and have
758	received specialized training in hurricane mitigation
759	procedures. Such training may be provided by a class offered
760	online or in person.
761	2.  Use hurricane mitigation inspectors who also:
762	a.  Have undergone drug testing and level 2 background
763	checks pursuant to s. 435.04. The department may conduct
764	criminal record checks of inspectors used by wind certification
765	entities. Inspectors must submit a set of the fingerprints to
766	the department for state and national criminal history checks
767	and must pay the fingerprint processing fee set forth in s.
768	624.501. The fingerprints shall be sent by the department to the
769	Department of Law Enforcement and forwarded to the Federal
770	Bureau of Investigation for processing. The results shall be
771	returned to the department for screening. The fingerprints shall
772	be taken by a law enforcement agency, designated examination
773	center, or other department-approved entity; and
774	b.  Have been certified, in a manner satisfactory to the
775	department, to conduct the inspections.
776	3.  Provide a quality assurance program including a
777	reinspection component.
778	(c)  The department shall implement a quality assurance
779	program that includes a statistically valid number of
780	reinspections.
781	(d)  An application for an inspection must contain a signed
782	or electronically verified statement made under penalty of
783	perjury that the applicant has submitted only a single
784	application for that home.
785	(e)  The owner of a site-built, single-family, residential
786	property may apply for and receive an inspection without also
787	applying for a grant pursuant to subsection (2) and without
788	meeting the requirements of paragraph (2)(a).
789	(2)  MITIGATION GRANTS.--Financial grants shall be used to
790	encourage single-family, site-built, owner-occupied, residential
791	property owners to retrofit their properties to make them less
792	vulnerable to hurricane damage.
793	(a)  For a homeowner to be eligible for a grant, the
794	following criteria for persons who have obtained a completed
795	inspection after May 1, 2007, a residential property must be
796	met:
797	1.  The homeowner must have been granted a homestead
798	exemption on the home under chapter 196.
799	2.  The home must be a dwelling with an insured value of
800	$300,000 or less. Homeowners who are low-income persons, as
801	defined in s. 420.0004(10), are exempt from this requirement.
802	3.  The home must have undergone an acceptable hurricane
803	mitigation inspection after May 1, 2007.
804	4.  The home must be located in the "wind-borne debris
805	region" as that term is defined in s. 1609.2, International
806	Building Code (2006), or as subsequently amended.
807	5.  Be a home for which The building permit application for
808	initial construction of the home must have been was made before
809	March 1, 2002.
810
811	An application for a grant must contain a signed or
812	electronically verified statement made under penalty of perjury
813	that the applicant has submitted only a single application and
814	must have attached documents demonstrating the applicant meets
815	the requirements of this paragraph.
816	(b)  All grants must be matched on a dollar-for-dollar
817	basis up to for a total of $10,000 for the actual cost of the
818	mitigation project with the state's contribution not to exceed
819	$5,000.
820	(c)  The program shall create a process in which
821	contractors agree to participate and homeowners select from a
822	list of participating contractors. All mitigation must be based
823	upon the securing of all required local permits and inspections
824	and must be performed by properly licensed contractors.
825	Mitigation projects are subject to random reinspection of up to
826	at least 5 percent of all projects. Hurricane mitigation
827	inspectors qualifying for the program may also participate as
828	mitigation contractors as long as the inspectors meet the
829	department's qualifications and certification requirements for
830	mitigation contractors.
831	(d)  Matching fund grants shall also be made available to
832	local governments and nonprofit entities for projects that will
833	reduce hurricane damage to single-family, site-built, owner-
834	occupied, residential property. The department shall liberally
835	construe those requirements in favor of availing the state of
836	the opportunity to leverage funding for the My Safe Florida Home
837	Program with other sources of funding.
838	(e)  When recommended by a hurricane mitigation inspection,
839	grants may be used for the following improvements only:
840	1.  Opening protection.
841	2.  Exterior doors, including garage doors.
842	3.  Brace gable ends.
843	4.  Reinforcing roof-to-wall connections.
844	5.  Improving the strength of roof-deck attachments.
845	6.  Upgrading roof covering from code to code plus.
846	7.  Secondary water barrier for roof.
847
848	The department may require that improvements be made to all
849	openings, including exterior doors and garage doors, as a
850	condition of reimbursing a homeowner approved for a grant. The
851	department may adopt, by rule, the maximum grant allowances for
852	any improvement allowable under this paragraph.
853	(f)  Grants may be used on a previously inspected existing
854	structure or on a rebuild. A rebuild is defined as a site-built,
855	single-family dwelling under construction to replace a home that
856	was destroyed or significantly damaged by a hurricane and deemed
857	unlivable by a regulatory authority. The homeowner must be a
858	low-income homeowner as defined in paragraph (g), must have had
859	a homestead exemption for that home prior to the hurricane, and
860	must be intending to rebuild the home as that homeowner's
861	homestead.
862	(g)  Low-income homeowners, as defined in s. 420.0004(10),
863	who otherwise meet the requirements of paragraphs (a), (c), (e),
864	and (f) are eligible for a grant of up to $5,000 and are not
865	required to provide a matching amount to receive the grant.
866	Additionally, for low-income homeowners, grant funding may be
867	used for repair to existing structures leading to any of the
868	mitigation improvements provided in paragraph (e), limited to 20
869	percent of the grant value. The program may accept a
870	certification directly from a low-income homeowner that the
871	homeowner meets the requirements of s. 420.0004(10) if the
872	homeowner provides such certification in a signed or
873	electronically verified statement made under penalty of perjury.
874	(h)  The department shall establish objective, reasonable
875	criteria for prioritizing grant applications, consistent with
876	the requirements of this section.
877	(i)  The department shall develop a process that ensures
878	the most efficient means to collect and verify grant
879	applications to determine eligibility and may direct hurricane
880	mitigation inspectors to collect and verify grant application
881	information or use the Internet or other electronic means to
882	collect information and determine eligibility.
883	(3)  EDUCATION AND CONSUMER AWARENESS.--The department may
884	undertake a statewide multimedia public outreach and advertising
885	campaign to inform consumers of the availability and benefits of
886	hurricane inspections and of the safety and financial benefits
887	of residential hurricane damage mitigation. The department may
888	seek out and use local, state, federal, and private funds to
889	support the campaign.
890	(4)  ADVISORY COUNCIL.--There is created an advisory
891	council to provide advice and assistance to the department
892	regarding administration of the program. The advisory council
893	shall consist of:
894	(a)  A representative of lending institutions, selected by
895	the Financial Services Commission from a list of at least three
896	persons recommended by the Florida Bankers Association.
897	(b)  A representative of residential property insurers,
898	selected by the Financial Services Commission from a list of at
899	least three persons recommended by the Florida Insurance
900	Council.
901	(c)  A representative of home builders, selected by the
902	Financial Services Commission from a list of at least three
903	persons recommended by the Florida Home Builders Association.
904	(d)  A faculty member of a state university, selected by
905	the Financial Services Commission, who is an expert in
906	hurricane-resistant construction methodologies and materials.
907	(e)  Two members of the House of Representatives, selected
908	by the Speaker of the House of Representatives.
909	(f)  Two members of the Senate, selected by the President
910	of the Senate.
911	(g)  The Chief Executive Officer of the Federal Alliance
912	for Safe Homes, Inc., or his or her designee.
913	(h)  The senior officer of the Florida Hurricane
914	Catastrophe Fund.
915	(i)  The executive director of Citizens Property Insurance
916	Corporation.
917	(j)  The director of the Florida Division of Emergency
918	Management of the Department of Community Affairs.
919
920	Members appointed under paragraphs (a)-(d) shall serve at the
921	pleasure of the Financial Services Commission. Members appointed
922	under paragraphs (e) and (f) shall serve at the pleasure of the
923	appointing officer. All other members shall serve as voting ex
924	officio members. Members of the advisory council shall serve
925	without compensation but may receive reimbursement as provided
926	in s. 112.061 for per diem and travel expenses incurred in the
927	performance of their official duties.
928	(5)  FUNDING.--The department may seek out and leverage
929	local, state, federal, or private funds to enhance the financial
930	resources of the program.
931	(6)  RULES.--The Department of Financial Services shall
932	adopt rules pursuant to ss. 120.536(1) and 120.54 to govern the
933	program; implement the provisions of this section; including
934	rules governing hurricane mitigation inspections and grants,
935	mitigation contractors, and training of inspectors and
936	contractors; and carry out the duties of the department under
937	this section.
938	(7)  HURRICANE MITIGATION INSPECTOR LIST.--The department
939	shall develop and maintain as a public record a current list of
940	hurricane mitigation inspectors authorized to conduct hurricane
941	mitigation inspections pursuant to this section.
942	(8)  NO-INTEREST LOANS.--The department shall implement a
943	no-interest loan program by October 1, 2008, contingent upon the
944	selection of a qualified vendor and execution of a contract
945	acceptable to the department and the vendor. The department
946	shall enter into partnerships with the private sector to provide
947	loans to owners of site-built, single-family, residential
948	property to pay for mitigation measures listed in subsection
949	(2). A loan eligible for interest payments pursuant to this
950	subsection may be for a term of up to 3 years and cover up to
951	$5,000 in mitigation measures. The department shall pay the
952	creditor the market rate of interest using funds appropriated
953	for the My Safe Florida Home Program. In no case shall the
954	department pay more than the interest rate set by s. 687.03. To
955	be eligible for a loan, a loan applicant must first obtain a
956	home inspection and report that specifies what improvements are
957	needed to reduce the property's vulnerability to windstorm
958	damage pursuant to this section and meet loan underwriting
959	requirements set by the lender. The department may adopt rules
960	pursuant to ss. 120.536(1) and 120.54 to implement this
961	subsection which may include eligibility criteria.
962	(8)(9)  PUBLIC OUTREACH FOR CONTRACTORS AND REAL ESTATE
963	BROKERS AND SALES ASSOCIATES.--The program shall develop
964	brochures for distribution to general contractors, roofing
965	contractors, and real estate brokers and sales associates
966	licensed under part I of chapter 475 explaining the benefits to
967	homeowners of residential hurricane damage mitigation. The
968	program shall encourage contractors to distribute the brochures
969	to homeowners at the first meeting with a homeowner who is
970	considering contracting for home or roof repairs or contracting
971	for the construction of a new home. The program shall encourage
972	real estate brokers and sales associates licensed under part I
973	of chapter 475 to distribute the brochures to clients prior to
974	the purchase of a home. The brochures may be made available
975	electronically.
976	(9)(10)  CONTRACT MANAGEMENT.--The department may contract
977	with third parties for grants management, inspection services,
978	contractor services for low-income homeowners, information
979	technology, educational outreach, and auditing services. Such
980	contracts shall be considered direct costs of the program and
981	shall not be subject to administrative cost limits, but
982	contracts valued at $1 million $500,000 or more shall be subject
983	to review and approval by the Legislative Budget Commission. The
984	department shall contract with providers that have a
985	demonstrated record of successful business operations in areas
986	directly related to the services to be provided and shall ensure
987	the highest accountability for use of state funds, consistent
988	with this section.
989	(10)(11)  INTENT.--It is the intent of the Legislature that
990	grants made to residential property owners under this section
991	shall be considered disaster-relief assistance within the
992	meaning of s. 139 of the Internal Revenue Code of 1986, as
993	amended.
994	(11)(12)  REPORTS.--The department shall make an annual
995	report on the activities of the program that shall account for
996	the use of state funds and indicate the number of inspections
997	requested, the number of inspections performed, the number of
998	grant applications received, and the number and value of grants
999	approved. The report shall be delivered to the President of the
1000	Senate and the Speaker of the House of Representatives by
1001	February 1 of each year.
1002	Section 3.  Subsection (13) is added to section 626.854,
1003	Florida Statutes, to read:
1004	626.854  "Public adjuster" defined; prohibitions.--The
1005	Legislature finds that it is necessary for the protection of the
1006	public to regulate public insurance adjusters and to prevent the
1007	unauthorized practice of law.
1008	(13)  A public adjuster, public adjuster apprentice, or any
1009	person acting on behalf of a public adjuster or apprentice may
1010	not accept referrals of business from any person with whom the
1011	public adjuster conducts business if there is any form or manner
1012	of agreement to compensate the person, whether directly or
1013	indirectly, for referring business to the public adjuster. A
1014	public adjuster may not compensate any person, except for
1015	another public adjuster, whether directly or indirectly, for the
1016	principal purpose of referring business to the public adjuster.
1017
1018	The provisions of subsections (5)-(13) subsections (5)-(12)
1019	apply only to residential property insurance policies and
1020	condominium association policies as defined in s. 718.111(11).
1021	Section 4.  Subsection (7) is added to section 627.7011,
1022	Florida Statutes, to read:
1023	627.7011  Homeowners' policies; offer of replacement cost
1024	coverage and law and ordinance coverage.--
1025	(7)  This section does not prohibit an insurer from
1026	exercising its right to repair damaged property in compliance
1027	with its policy and s. 627.702(7).
1028	Section 5.  Subsection (1) of section 626.865, Florida
1029	Statutes, is amended to read:
1030	626.865  Public adjuster's qualifications, bond.--
1031	(1)  The department shall issue a license to an applicant
1032	for a public adjuster's license upon determining that the
1033	applicant has paid the applicable fees specified in s. 624.501
1034	and possesses the following qualifications:
1035	(a)  Is a natural person at least 18 years of age.
1036	(b)  Is a United States citizen or legal alien who
1037	possesses work authorization from the United States Bureau of
1038	Citizenship and Immigration Services and a bona fide resident of
1039	this state.
1040	(c)  Is trustworthy and has such business reputation as
1041	would reasonably assure that the applicant will conduct his or
1042	her business as insurance adjuster fairly and in good faith and
1043	without detriment to the public.
1044	(d)  Has had sufficient experience, training, or
1045	instruction concerning the adjusting of damages or losses under
1046	insurance contracts, other than life and annuity contracts, is
1047	sufficiently informed as to the terms and effects of the
1048	provisions of those types of insurance contracts, and possesses
1049	adequate knowledge of the laws of this state relating to such
1050	contracts as to enable and qualify him or her to engage in the
1051	business of insurance adjuster fairly and without injury to the
1052	public or any member thereof with whom the applicant may have
1053	business as a public adjuster.
1054	(e)  Has passed the required written examination.
1055	Section 6.  Section 626.8651, Florida Statutes, is amended
1056	to read:
1057	626.8651  Public adjuster apprentice license;
1058	qualifications.--
1059	(1)  The department shall issue a license as a public
1060	adjuster apprentice to an applicant who is:
1061	(a)  A natural person at least 18 years of age.
1062	(b)  A United States citizen or legal alien who possesses
1063	work authorization from the United States Bureau of Citizenship
1064	and Immigration Services and is a resident of this state.
1065	(c)  Trustworthy and has such business reputation as would
1066	reasonably ensure that the applicant will conduct business as a
1067	public adjuster apprentice fairly and in good faith and without
1068	detriment to the public.
1069	(2)  All applicable license fees, as prescribed in s.
1070	624.501, must be paid in full before issuance of the license.
1071	(3)  An applicant must pass the required written
1072	examination before a license may be issued.
1073	(4)  An applicant must have received designation as an
1074	Accredited Claims Adjuster (ACA) after completion of training
1075	that qualifies the applicant to engage in the business of a
1076	public adjuster apprentice fairly and without injury to the
1077	public. Such training and instruction must address adjusting
1078	damages and losses under insurance contracts, the terms and
1079	effects of insurance contracts, and knowledge of the laws of
1080	this state relating to insurance contracts.
1081	(5)  At the time of application for license as a public
1082	adjuster apprentice, the applicant shall file with the
1083	department a bond executed and issued by a surety insurer
1084	authorized to transact such business in this state in the amount
1085	of $50,000, conditioned upon the faithful performance of his or
1086	her duties as a public adjuster apprentice under the license for
1087	which the applicant has applied, and thereafter maintain the
1088	bond unimpaired throughout the existence of the license and for
1089	at least 1 year after termination of the license. The bond shall
1090	be in favor of the department and shall specifically authorize
1091	recovery by the department of the damages sustained in case the
1092	licensee commits fraud or unfair practices in connection with
1093	his or her business as a public adjuster apprentice. The
1094	aggregate liability of the surety for all such damages may not
1095	exceed the amount of the bond, and the bond may not be
1096	terminated by the issuing insurer unless written notice of at
1097	least 30 days is given to the licensee and filed with the
1098	department.
1099	(6)(4)  A public adjuster apprentice shall complete at a
1100	minimum 100 hours of employment per month for 12 months of
1101	employment under the supervision of a licensed and appointed
1102	all-lines public adjuster in order to qualify for licensure as a
1103	public adjuster. The department may adopt rules that establish
1104	standards for such employment requirements.
1105	(7)(5)  An appointing public adjusting firm may not
1106	maintain more than 12 public adjuster apprentices
1107	simultaneously. However, a supervising public adjuster may not
1108	shall be responsible for more than 3 public adjuster apprentices
1109	simultaneously and shall be accountable for the acts of all a
1110	public adjuster apprentices apprentice which are related to
1111	transacting business as a public adjuster apprentice.
1112	(8)(6)  An apprentice license is effective for 18 months
1113	unless the license expires due to lack of maintaining an
1114	appointment; is surrendered by the licensee; is terminated,
1115	suspended, or revoked by the department; or is canceled by the
1116	department upon issuance of a public adjuster license. The
1117	department may not issue a public adjuster apprentice license to
1118	any individual who has held such a license in this state within
1119	2 years after expiration, surrender, termination, revocation, or
1120	cancellation of the license.
1121	(9)(7)  After completing the requirements for employment as
1122	a public adjuster apprentice, the licensee may file an
1123	application for a public adjuster license. The applicant and
1124	supervising public adjuster or public adjusting firm must each
1125	file a sworn affidavit, on a form prescribed by the department,
1126	verifying that the employment of the public adjuster apprentice
1127	meets the requirements of this section.
1128	(10)(8)  In no event shall a public adjuster apprentice
1129	licensed under this section perform any of the functions for
1130	which a public adjuster's license is required after expiration
1131	of the public adjuster apprentice license without having
1132	obtained a public adjuster license.
1133	(11)(9)  A public adjuster apprentice has the same
1134	authority as the licensed public adjuster or public adjusting
1135	firm that employs the apprentice except that an apprentice may
1136	not execute contracts for the services of a public adjuster or
1137	public adjusting firm and may not solicit contracts for the
1138	services except under the direct supervision and guidance of the
1139	supervisory public adjuster. An individual may not be, act as,
1140	or hold himself or herself out to be a public adjuster
1141	apprentice unless the individual is licensed and holds a current
1142	appointment by a licensed public all-lines adjuster or a public
1143	adjusting firm that employs a licensed all-lines public
1144	adjuster.
1145	Section 7.  Paragraph (a) of subsection (2) and subsection
1146	(5) of section 627.062, Florida Statutes, are amended, and
1147	paragraph (k) is added to subsection (2) of that section, to
1148	read:
1149	627.062  Rate standards.--
1150	(2)  As to all such classes of insurance:
1151	(a)  Insurers or rating organizations shall establish and
1152	use rates, rating schedules, or rating manuals to allow the
1153	insurer a reasonable rate of return on such classes of insurance
1154	written in this state. A copy of rates, rating schedules, rating
1155	manuals, premium credits or discount schedules, and surcharge
1156	schedules, and changes thereto, shall be filed with the office
1157	under one of the following procedures except as provided in
1158	subparagraph 3.:
1159	1.  If the filing is made at least 90 days before the
1160	proposed effective date and the filing is not implemented during
1161	the office's review of the filing and any proceeding and
1162	judicial review, then such filing shall be considered a "file
1163	and use" filing. In such case, the office shall finalize its
1164	review by issuance of a notice of intent to approve or a notice
1165	of intent to disapprove within 90 days after receipt of the
1166	filing. The notice of intent to approve and the notice of intent
1167	to disapprove constitute agency action for purposes of the
1168	Administrative Procedure Act. Requests for supporting
1169	information, requests for mathematical or mechanical
1170	corrections, or notification to the insurer by the office of its
1171	preliminary findings shall not toll the 90-day period during any
1172	such proceedings and subsequent judicial review. The rate shall
1173	be deemed approved if the office does not issue a notice of
1174	intent to approve or a notice of intent to disapprove within 90
1175	days after receipt of the filing.
1176	2.  If the filing is not made in accordance with the
1177	provisions of subparagraph 1., such filing shall be made as soon
1178	as practicable, but no later than 30 days after the effective
1179	date, and shall be considered a "use and file" filing. An
1180	insurer making a "use and file" filing is potentially subject to
1181	an order by the office to return to policyholders portions of
1182	rates found to be excessive, as provided in paragraph (h).
1183	3.  For all property insurance filings made or submitted
1184	after January 25, 2007, but before December 31, 2010 2009, an
1185	insurer seeking a rate that is greater than the rate most
1186	recently approved by the office shall make a "file and use"
1187	filing. For purposes of this subparagraph, motor vehicle
1188	collision and comprehensive coverages are not considered to be
1189	property coverages.
1190	(k)1.  An insurer may make a separate filing limited solely
1191	to an adjustment of its rates for reinsurance or financing costs
1192	incurred in the purchase of reinsurance or financing products to
1193	replace or finance the payment of the amount covered by the
1194	Temporary Increase in Coverage Limits (TICL) portion of the
1195	Florida Hurricane Catastrophe Fund including replacement
1196	reinsurance for the TICL reductions made pursuant to s.
1197	215.555(17)(e); the actual cost paid due to the application of
1198	the TICL premium factor pursuant to s. 215.555 (17)(f); and the
1199	actual cost paid due to the application of the cash build-up
1200	factor pursuant to s. 215.555(5)(b) if the insurer:
1201	a.  Elects to purchase financing products such as a
1202	liquidity instrument or line of credit, in which case the cost
1203	included in the filing for the liquidity instrument or line of
1204	credit may not result in a premium increase exceeding 3 percent
1205	for any individual policyholder.  All costs contained in the
1206	filing may not result in an overall premium increase of more
1207	than 10 percent for any individual policyholder.
1208	b.  Includes in the filing a copy of all of its
1209	reinsurance, liquidity instrument, or line of credit contracts;
1210	proof of the billing or payment for the contracts; and the
1211	calculation upon which the proposed rate change is based
1212	demonstrates that the costs meet the criteria of this section
1213	and are not loaded for expenses or profit for the insurer making
1214	the filing.
1215	c.  Includes no other changes to its rates in the filing.
1216	d.  Has not implemented a rate increase within the 6 months
1217	immediately preceding the filing.
1218	e.  Does not file for a rate increase under any other
1219	paragraph within 6 months after making a filing under this
1220	paragraph.
1221	f.  That purchases reinsurance or financing products from
1222	an affiliated company in compliance with this paragraph does so
1223	only if the costs for such reinsurance or financing products are
1224	charged at or below charges made for comparable coverage by
1225	nonaffiliated reinsurers or financial entities making such
1226	coverage or financing products available in this state.
1227	2.  An insurer may only make one filing in any 12-month
1228	period under this paragraph.
1229	3.  An insurer that elects to implement a rate change under
1230	this paragraph must file its rate filing with the office at
1231	least 45 days before the effective date of the rate change.
1232	After an insurer submits a complete filing that meets all of the
1233	requirements of this paragraph, the office has 45 days after the
1234	date of the filing to review the rate filing and determine if
1235	the rate is excessive, inadequate, or unfairly discriminatory.
1236
1237	The provisions of this subsection shall not apply to workers'
1238	compensation and employer's liability insurance and to motor
1239	vehicle insurance.
1240	(5)  With respect to a rate filing involving coverage of
1241	the type for which the insurer is required to pay a
1242	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1243	the insurer may fully recoup in its property insurance premiums
1244	any reimbursement premiums paid to the Florida Hurricane
1245	Catastrophe Fund, together with reasonable costs of other
1246	reinsurance, but except as otherwise provided in this section,
1247	may not recoup reinsurance costs that duplicate coverage
1248	provided by the Florida Hurricane Catastrophe Fund. An insurer
1249	may not recoup more than 1 year of reimbursement premium at a
1250	time. Any under-recoupment from the prior year may be added to
1251	the following year's reimbursement premium and any over-
1252	recoupment shall be subtracted from the following year's
1253	reimbursement premium.
1254	Section 8.  Section 627.0621, Florida Statutes, is amended
1255	to read:
1256	627.0621  Transparency in rate regulation.--
1257	(1)  DEFINITIONS.--As used in this section, the term:
1258	(a)  "Rate filing" means any original or amended rate
1259	residential property insurance filing.
1260	(b)  "Recommendation" means any proposed, preliminary, or
1261	final recommendation from an office actuary reviewing a rate
1262	filing with respect to the issue of approval or disapproval of
1263	the rate filing or with respect to rate indications that the
1264	office would consider acceptable.
1265	(2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
1266	INFORMATION.--
1267	(a)  With respect to any residential property rate filing
1268	made on or after July 1, 2008, the office shall provide the
1269	following information on a publicly accessible Internet website:
1270	1.(a)  The overall rate change requested by the insurer.
1271	2.  The rate change approved by the office along with all
1272	of the actuary's assumptions and recommendations forming the
1273	basis of the office's decision.
1274	3.  Certification by the office's actuary that, based on
1275	the actuary's knowledge, his or her recommendations are
1276	consistent with accepted actuarial principles.
1277	(b)  For any rate filing, whether or not the filing is
1278	subject to a public hearing, the office shall provide on its
1279	website a means for any policyholder who may be affected by a
1280	proposed rate change to send an e-mail regarding the proposed
1281	rate change. Such e-mail must be accessible to the actuary
1282	assigned to review the rate filing.
1283	(b)  All assumptions made by the office's actuaries.
1284	(c)  A statement describing any assumptions or methods that
1285	deviate from the actuarial standards of practice of the Casualty
1286	Actuarial Society or the American Academy of Actuaries,
1287	including an explanation of the nature, rationale, and effect of
1288	the deviation.
1289	(d)  All recommendations made by any office actuary who
1290	reviewed the rate filing.
1291	(e)  Certification by the office's actuary that, based on
1292	the actuary's knowledge, his or her recommendations are
1293	consistent with accepted actuarial principles.
1294	(f)  The overall rate change approved by the office.
1295	(3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--It is the
1296	intent of the Legislature that the principles of the public
1297	records and open meetings laws apply to the assertion of
1298	attorney-client privilege and work product confidentiality by
1299	the office in connection with a challenge to its actions on a
1300	rate filing. Therefore, in any administrative or judicial
1301	proceeding relating to a rate filing, attorney-client privilege
1302	and work product exemptions from disclosure do not apply to
1303	communications with office attorneys or records prepared by or
1304	at the direction of an office attorney, except when the
1305	conditions of paragraphs (a) and (b) have been met:
1306	(a)  The communication or record reflects a mental
1307	impression, conclusion, litigation strategy, or legal theory of
1308	the attorney or office that was prepared exclusively for civil
1309	or criminal litigation or adversarial administrative
1310	proceedings.
1311	(b)  The communication occurred or the record was prepared
1312	after the initiation of an action in a court of competent
1313	jurisdiction, after the issuance of a notice of intent to deny a
1314	rate filing, or after the filing of a request for a proceeding
1315	under ss. 120.569 and 120.57.
1316	Section 9.  Paragraph (b) of subsection (1) and subsection
1317	(5) of section 627.0629, Florida Statutes, are amended to read:
1318	627.0629  Residential property insurance; rate filings.--
1319	(1)
1320	(b)  By February 1, 2011, the Office of Insurance
1321	Regulation, in consultation with the Department of Financial
1322	Services and the Department of Community Affairs, shall develop
1323	and make publicly available a proposed method for insurers to
1324	establish discounts, credits, or other rate differentials for
1325	hurricane mitigation measures which directly correlate to the
1326	numerical rating assigned to a structure pursuant to the uniform
1327	home grading scale adopted by the Financial Services Commission
1328	pursuant to s. 215.55865, including any proposed changes to the
1329	uniform home grading scale. By October 1, 2011, the commission
1330	shall adopt rules requiring insurers to make rate filings for
1331	residential property insurance which revise insurers' discounts,
1332	credits, or other rate differentials for hurricane mitigation
1333	measures so that such rate differentials correlate directly to
1334	the uniform home grading scale. The rules may include such
1335	changes to the uniform home grading scale as the commission
1336	determines are necessary, and may specify the minimum required
1337	discounts, credits, or other rate differentials. Such rate
1338	differentials must be consistent with generally accepted
1339	actuarial principles and wind-loss mitigation studies. The rules
1340	shall allow a period of at least 2 years after the effective
1341	date of the revised mitigation discounts, credits, or other rate
1342	differentials for a property owner to obtain an inspection or
1343	otherwise qualify for the revised credit, during which time the
1344	insurer shall continue to apply the mitigation credit that was
1345	applied immediately prior to the effective date of the revised
1346	credit. Discounts, credits, and other rate differentials
1347	established for rate filings under this paragraph shall
1348	supersede, after adoption, the discounts, credits, and other
1349	rate differentials included in rate filings under paragraph (a).
1350	(5)  In order to provide an appropriate transition period,
1351	an insurer may, in its sole discretion, implement an approved
1352	rate filing for residential property insurance over a period of
1353	years. An insurer electing to phase in its rate filing must
1354	provide an informational notice to the office setting out its
1355	schedule for implementation of the phased-in rate filing. An
1356	insurer may include in its rate the actual cost of private
1357	market reinsurance that corresponds to available coverage of the
1358	Temporary Increase in Coverage Limits, TICL, from the Florida
1359	Hurricane Catastrophe Fund. The insurer may also include the
1360	cost of reinsurance to replace the TICL reduction implemented
1361	pursuant to s. 215.555(17)(d)9. However, this cost for
1362	reinsurance may not include any expense or profit load or result
1363	in a total annual base rate increase in excess of 10 percent.
1364	Section 10.  Paragraphs (a), (c), (m), and (x) of
1365	subsection (6) of section 627.351, Florida Statutes, are amended
1366	to read:
1367	627.351  Insurance risk apportionment plans.--
1368	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1369	(a)1.  It is the public purpose of this subsection to
1370	ensure the existence of an orderly market for property insurance
1371	for Floridians and Florida businesses. The Legislature finds
1372	that private insurers are unwilling or unable to provide
1373	affordable property insurance coverage in this state to the
1374	extent sought and needed. The absence of affordable property
1375	insurance threatens the public health, safety, and welfare and
1376	likewise threatens the economic health of the state. The state
1377	therefore has a compelling public interest and a public purpose
1378	to assist in assuring that property in the state is insured and
1379	that it is insured at affordable rates so as to facilitate the
1380	remediation, reconstruction, and replacement of damaged or
1381	destroyed property in order to reduce or avoid the negative
1382	effects otherwise resulting to the public health, safety, and
1383	welfare, to the economy of the state, and to the revenues of the
1384	state and local governments which are needed to provide for the
1385	public welfare. It is necessary, therefore, to provide
1386	affordable property insurance to applicants who are in good
1387	faith entitled to procure insurance through the voluntary market
1388	but are unable to do so. The Legislature intends by this
1389	subsection that affordable property insurance be provided and
1390	that it continue to be provided, as long as necessary, through
1391	Citizens Property Insurance Corporation, a government entity
1392	that is an integral part of the state, and that is not a private
1393	insurance company. To that end, Citizens Property Insurance
1394	Corporation shall strive to increase the availability of
1395	affordable property insurance in this state, while achieving
1396	efficiencies and economies, and while providing service to
1397	policyholders, applicants, and agents which is no less than the
1398	quality generally provided in the voluntary market, for the
1399	achievement of the foregoing public purposes. Because it is
1400	essential for this government entity to have the maximum
1401	financial resources to pay claims following a catastrophic
1402	hurricane, it is the intent of the Legislature that Citizens
1403	Property Insurance Corporation continue to be an integral part
1404	of the state and that the income of the corporation be exempt
1405	from federal income taxation and that interest on the debt
1406	obligations issued by the corporation be exempt from federal
1407	income taxation.
1408	2.  The Residential Property and Casualty Joint
1409	Underwriting Association originally created by this statute
1410	shall be known, as of July 1, 2002, as the Citizens Property
1411	Insurance Corporation. The corporation shall provide insurance
1412	for residential and commercial property, for applicants who are
1413	in good faith entitled, but are unable, to procure insurance
1414	through the voluntary market. The corporation shall operate
1415	pursuant to a plan of operation approved by order of the
1416	Financial Services Commission. The plan is subject to continuous
1417	review by the commission. The commission may, by order, withdraw
1418	approval of all or part of a plan if the commission determines
1419	that conditions have changed since approval was granted and that
1420	the purposes of the plan require changes in the plan. The
1421	corporation shall continue to operate pursuant to the plan of
1422	operation approved by the Office of Insurance Regulation until
1423	October 1, 2006. For the purposes of this subsection,
1424	residential coverage includes both personal lines residential
1425	coverage, which consists of the type of coverage provided by
1426	homeowner's, mobile home owner's, dwelling, tenant's,
1427	condominium unit owner's, and similar policies, and commercial
1428	lines residential coverage, which consists of the type of
1429	coverage provided by condominium association, apartment
1430	building, and similar policies.
1431	3.  Effective January 1, 2009, a personal lines residential
1432	structure that has a dwelling replacement cost of $2 million or
1433	more, or a single condominium unit that has a combined dwelling
1434	and content replacement cost of $2 million or more is not
1435	eligible for coverage by the corporation. Such dwellings insured
1436	by the corporation on December 31, 2008, may continue to be
1437	covered by the corporation until the end of the policy term.
1438	However, such dwellings that are insured by the corporation and
1439	become ineligible for coverage due to the provisions of this
1440	subparagraph may reapply and obtain coverage if the property
1441	owner provides the corporation with a sworn affidavit from one
1442	or more insurance agents, on a form provided by the corporation,
1443	stating that the agents have made their best efforts to obtain
1444	coverage and that the property has been rejected for coverage by
1445	at least one authorized insurer and at least three surplus lines
1446	insurers. If such conditions are met, the dwelling may be
1447	insured by the corporation for up to 3 years, after which time
1448	the dwelling is ineligible for coverage. The office shall
1449	approve the method used by the corporation for valuing the
1450	dwelling replacement cost for the purposes of this subparagraph.
1451	If a policyholder is insured by the corporation prior to being
1452	determined to be ineligible pursuant to this subparagraph and
1453	such policyholder files a lawsuit challenging the determination,
1454	the policyholder may remain insured by the corporation until the
1455	conclusion of the litigation.
1456	4.  It is the intent of the Legislature that policyholders,
1457	applicants, and agents of the corporation receive service and
1458	treatment of the highest possible level but never less than that
1459	generally provided in the voluntary market. It also is intended
1460	that the corporation be held to service standards no less than
1461	those applied to insurers in the voluntary market by the office
1462	with respect to responsiveness, timeliness, customer courtesy,
1463	and overall dealings with policyholders, applicants, or agents
1464	of the corporation.
1465	5.  Effective January 1, 2009, a personal lines residential
1466	structure that is located in the "wind-borne debris region," as
1467	defined in s. 1609.2, International Building Code (2006), and
1468	that has an insured value on the structure of $750,000 or more
1469	is not eligible for coverage by the corporation unless the
1470	structure has opening protections as required under the Florida
1471	Building Code for a newly constructed residential structure in
1472	that area. A residential structure shall be deemed to comply
1473	with the requirements of this subparagraph if it has shutters or
1474	opening protections on all openings and if such opening
1475	protections complied with the Florida Building Code at the time
1476	they were installed. Effective January 1, 2010, for personal
1477	lines residential property insured by the corporation that is
1478	located in the wind-borne debris region and has an insured value
1479	on the structure of $500,000 or more, a prospective purchaser of
1480	any such residential property must be provided by the seller a
1481	written disclosure that contains the structure's windstorm
1482	mitigation rating based on the uniform home grading scale
1483	adopted under s. 215.55865. Such rating shall be provided to the
1484	purchaser at or before the time the purchaser executes a
1485	contract for sale and purchase.
1486	(c)  The plan of operation of the corporation:
1487	1.  Must provide for adoption of residential property and
1488	casualty insurance policy forms and commercial residential and
1489	nonresidential property insurance forms, which forms must be
1490	approved by the office prior to use. The corporation shall adopt
1491	the following policy forms:
1492	a.  Standard personal lines policy forms that are
1493	comprehensive multiperil policies providing full coverage of a
1494	residential property equivalent to the coverage provided in the
1495	private insurance market under an HO-3, HO-4, or HO-6 policy.
1496	b.  Basic personal lines policy forms that are policies
1497	similar to an HO-8 policy or a dwelling fire policy that provide
1498	coverage meeting the requirements of the secondary mortgage
1499	market, but which coverage is more limited than the coverage
1500	under a standard policy.
1501	c.  Commercial lines residential and nonresidential policy
1502	forms that are generally similar to the basic perils of full
1503	coverage obtainable for commercial residential structures and
1504	commercial nonresidential structures in the admitted voluntary
1505	market.
1506	d.  Personal lines and commercial lines residential
1507	property insurance forms that cover the peril of wind only. The
1508	forms are applicable only to residential properties located in
1509	areas eligible for coverage under the high-risk account referred
1510	to in sub-subparagraph (b)2.a.
1511	e.  Commercial lines nonresidential property insurance
1512	forms that cover the peril of wind only. The forms are
1513	applicable only to nonresidential properties located in areas
1514	eligible for coverage under the high-risk account referred to in
1515	sub-subparagraph (b)2.a.
1516	f.  The corporation may adopt variations of the policy
1517	forms listed in sub-subparagraphs a.-e. that contain more
1518	restrictive coverage.
1519	2.a.  Must provide that the corporation adopt a program in
1520	which the corporation and authorized insurers enter into quota
1521	share primary insurance agreements for hurricane coverage, as
1522	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1523	property insurance forms for eligible risks which cover the
1524	peril of wind only. As used in this subsection, the term:
1525	(I)  "Quota share primary insurance" means an arrangement
1526	in which the primary hurricane coverage of an eligible risk is
1527	provided in specified percentages by the corporation and an
1528	authorized insurer. The corporation and authorized insurer are
1529	each solely responsible for a specified percentage of hurricane
1530	coverage of an eligible risk as set forth in a quota share
1531	primary insurance agreement between the corporation and an
1532	authorized insurer and the insurance contract. The
1533	responsibility of the corporation or authorized insurer to pay
1534	its specified percentage of hurricane losses of an eligible
1535	risk, as set forth in the quota share primary insurance
1536	agreement, may not be altered by the inability of the other
1537	party to the agreement to pay its specified percentage of
1538	hurricane losses. Eligible risks that are provided hurricane
1539	coverage through a quota share primary insurance arrangement
1540	must be provided policy forms that set forth the obligations of
1541	the corporation and authorized insurer under the arrangement,
1542	clearly specify the percentages of quota share primary insurance
1543	provided by the corporation and authorized insurer, and
1544	conspicuously and clearly state that neither the authorized
1545	insurer nor the corporation may be held responsible beyond its
1546	specified percentage of coverage of hurricane losses.
1547	(II)  "Eligible risks" means personal lines residential and
1548	commercial lines residential risks that meet the underwriting
1549	criteria of the corporation and are located in areas that were
1550	eligible for coverage by the Florida Windstorm Underwriting
1551	Association on January 1, 2002.
1552	b.  The corporation may enter into quota share primary
1553	insurance agreements with authorized insurers at corporation
1554	coverage levels of 90 percent and 50 percent.
1555	c.  If the corporation determines that additional coverage
1556	levels are necessary to maximize participation in quota share
1557	primary insurance agreements by authorized insurers, the
1558	corporation may establish additional coverage levels. However,
1559	the corporation's quota share primary insurance coverage level
1560	may not exceed 90 percent.
1561	d.  Any quota share primary insurance agreement entered
1562	into between an authorized insurer and the corporation must
1563	provide for a uniform specified percentage of coverage of
1564	hurricane losses, by county or territory as set forth by the
1565	corporation board, for all eligible risks of the authorized
1566	insurer covered under the quota share primary insurance
1567	agreement.
1568	e.  Any quota share primary insurance agreement entered
1569	into between an authorized insurer and the corporation is
1570	subject to review and approval by the office. However, such
1571	agreement shall be authorized only as to insurance contracts
1572	entered into between an authorized insurer and an insured who is
1573	already insured by the corporation for wind coverage.
1574	f.  For all eligible risks covered under quota share
1575	primary insurance agreements, the exposure and coverage levels
1576	for both the corporation and authorized insurers shall be
1577	reported by the corporation to the Florida Hurricane Catastrophe
1578	Fund. For all policies of eligible risks covered under quota
1579	share primary insurance agreements, the corporation and the
1580	authorized insurer shall maintain complete and accurate records
1581	for the purpose of exposure and loss reimbursement audits as
1582	required by Florida Hurricane Catastrophe Fund rules. The
1583	corporation and the authorized insurer shall each maintain
1584	duplicate copies of policy declaration pages and supporting
1585	claims documents.
1586	g.  The corporation board shall establish in its plan of
1587	operation standards for quota share agreements which ensure that
1588	there is no discriminatory application among insurers as to the
1589	terms of quota share agreements, pricing of quota share
1590	agreements, incentive provisions if any, and consideration paid
1591	for servicing policies or adjusting claims.
1592	h.  The quota share primary insurance agreement between the
1593	corporation and an authorized insurer must set forth the
1594	specific terms under which coverage is provided, including, but
1595	not limited to, the sale and servicing of policies issued under
1596	the agreement by the insurance agent of the authorized insurer
1597	producing the business, the reporting of information concerning
1598	eligible risks, the payment of premium to the corporation, and
1599	arrangements for the adjustment and payment of hurricane claims
1600	incurred on eligible risks by the claims adjuster and personnel
1601	of the authorized insurer. Entering into a quota sharing
1602	insurance agreement between the corporation and an authorized
1603	insurer shall be voluntary and at the discretion of the
1604	authorized insurer.
1605	3.  May provide that the corporation may employ or
1606	otherwise contract with individuals or other entities to provide
1607	administrative or professional services that may be appropriate
1608	to effectuate the plan. The corporation shall have the power to
1609	borrow funds, by issuing bonds or by incurring other
1610	indebtedness, and shall have other powers reasonably necessary
1611	to effectuate the requirements of this subsection, including,
1612	without limitation, the power to issue bonds and incur other
1613	indebtedness in order to refinance outstanding bonds or other
1614	indebtedness. The corporation may, but is not required to, seek
1615	judicial validation of its bonds or other indebtedness under
1616	chapter 75. The corporation may issue bonds or incur other
1617	indebtedness, or have bonds issued on its behalf by a unit of
1618	local government pursuant to subparagraph (p)2., in the absence
1619	of a hurricane or other weather-related event, upon a
1620	determination by the corporation, subject to approval by the
1621	office, that such action would enable it to efficiently meet the
1622	financial obligations of the corporation and that such
1623	financings are reasonably necessary to effectuate the
1624	requirements of this subsection. The corporation is authorized
1625	to take all actions needed to facilitate tax-free status for any
1626	such bonds or indebtedness, including formation of trusts or
1627	other affiliated entities. The corporation shall have the
1628	authority to pledge assessments, projected recoveries from the
1629	Florida Hurricane Catastrophe Fund, other reinsurance
1630	recoverables, market equalization and other surcharges, and
1631	other funds available to the corporation as security for bonds
1632	or other indebtedness. In recognition of s. 10, Art. I of the
1633	State Constitution, prohibiting the impairment of obligations of
1634	contracts, it is the intent of the Legislature that no action be
1635	taken whose purpose is to impair any bond indenture or financing
1636	agreement or any revenue source committed by contract to such
1637	bond or other indebtedness.
1638	4.a.  Must require that the corporation operate subject to
1639	the supervision and approval of a board of governors consisting
1640	of eight individuals who are residents of this state, from
1641	different geographical areas of this state. The Governor, the
1642	Chief Financial Officer, the President of the Senate, and the
1643	Speaker of the House of Representatives shall each appoint two
1644	members of the board. At least one of the two members appointed
1645	by each appointing officer must have demonstrated expertise in
1646	insurance. The Chief Financial Officer shall designate one of
1647	the appointees as chair. All board members serve at the pleasure
1648	of the appointing officer. All members of the board of governors
1649	are subject to removal at will by the officers who appointed
1650	them. All board members, including the chair, must be appointed
1651	to serve for 3-year terms beginning annually on a date
1652	designated by the plan. However, for the first term beginning on
1653	or after July 1, 2009, each appointing officer shall appoint one
1654	member of the board for a 2-year term and one member for a 3-
1655	year term. Any board vacancy shall be filled for the unexpired
1656	term by the appointing officer. The Chief Financial Officer
1657	shall appoint a technical advisory group to provide information
1658	and advice to the board of governors in connection with the
1659	board's duties under this subsection. The executive director and
1660	senior managers of the corporation shall be engaged by the board
1661	and serve at the pleasure of the board. Any executive director
1662	appointed on or after July 1, 2006, is subject to confirmation
1663	by the Senate. The executive director is responsible for
1664	employing other staff as the corporation may require, subject to
1665	review and concurrence by the board.
1666	b.  The board shall create a Market Accountability Advisory
1667	Committee to assist the corporation in developing awareness of
1668	its rates and its customer and agent service levels in
1669	relationship to the voluntary market insurers writing similar
1670	coverage. The members of the advisory committee shall consist of
1671	the following 11 persons, one of whom must be elected chair by
1672	the members of the committee: four representatives, one
1673	appointed by the Florida Association of Insurance Agents, one by
1674	the Florida Association of Insurance and Financial Advisors, one
1675	by the Professional Insurance Agents of Florida, and one by the
1676	Latin American Association of Insurance Agencies; three
1677	representatives appointed by the insurers with the three highest
1678	voluntary market share of residential property insurance
1679	business in the state; one representative from the Office of
1680	Insurance Regulation; one consumer appointed by the board who is
1681	insured by the corporation at the time of appointment to the
1682	committee; one representative appointed by the Florida
1683	Association of Realtors; and one representative appointed by the
1684	Florida Bankers Association. All members must serve for 3-year
1685	terms and may serve for consecutive terms. The committee shall
1686	report to the corporation at each board meeting on insurance
1687	market issues which may include rates and rate competition with
1688	the voluntary market; service, including policy issuance, claims
1689	processing, and general responsiveness to policyholders,
1690	applicants, and agents; and matters relating to depopulation.
1691	5.  Must provide a procedure for determining the
1692	eligibility of a risk for coverage, as follows:
1693	a.  Subject to the provisions of s. 627.3517, with respect
1694	to personal lines residential risks, if the risk is offered
1695	coverage from an authorized insurer at the insurer's approved
1696	rate under either a standard policy including wind coverage or,
1697	if consistent with the insurer's underwriting rules as filed
1698	with the office, a basic policy including wind coverage, for a
1699	new application to the corporation for coverage, the risk is not
1700	eligible for any policy issued by the corporation unless the
1701	premium for coverage from the authorized insurer is more than 15
1702	percent greater than the premium for comparable coverage from
1703	the corporation. If the risk is not able to obtain any such
1704	offer, the risk is eligible for either a standard policy
1705	including wind coverage or a basic policy including wind
1706	coverage issued by the corporation; however, if the risk could
1707	not be insured under a standard policy including wind coverage
1708	regardless of market conditions, the risk shall be eligible for
1709	a basic policy including wind coverage unless rejected under
1710	subparagraph 8. However, with regard to a policyholder of the
1711	corporation or a policyholder removed from the corporation
1712	through an assumption agreement until the end of the assumption
1713	period, the policyholder remains eligible for coverage from the
1714	corporation regardless of any offer of coverage from an
1715	authorized insurer or surplus lines insurer. The corporation
1716	shall determine the type of policy to be provided on the basis
1717	of objective standards specified in the underwriting manual and
1718	based on generally accepted underwriting practices.
1719	(I)  If the risk accepts an offer of coverage through the
1720	market assistance plan or an offer of coverage through a
1721	mechanism established by the corporation before a policy is
1722	issued to the risk by the corporation or during the first 30
1723	days of coverage by the corporation, and the producing agent who
1724	submitted the application to the plan or to the corporation is
1725	not currently appointed by the insurer, the insurer shall:
1726	(A)  Pay to the producing agent of record of the policy,
1727	for the first year, an amount that is the greater of the
1728	insurer's usual and customary commission for the type of policy
1729	written or a fee equal to the usual and customary commission of
1730	the corporation; or
1731	(B)  Offer to allow the producing agent of record of the
1732	policy to continue servicing the policy for a period of not less
1733	than 1 year and offer to pay the agent the greater of the
1734	insurer's or the corporation's usual and customary commission
1735	for the type of policy written.
1736
1737	If the producing agent is unwilling or unable to accept
1738	appointment, the new insurer shall pay the agent in accordance
1739	with sub-sub-sub-subparagraph (A).
1740	(II)  When the corporation enters into a contractual
1741	agreement for a take-out plan, the producing agent of record of
1742	the corporation policy is entitled to retain any unearned
1743	commission on the policy, and the insurer shall:
1744	(A)  Pay to the producing agent of record of the
1745	corporation policy, for the first year, an amount that is the
1746	greater of the insurer's usual and customary commission for the
1747	type of policy written or a fee equal to the usual and customary
1748	commission of the corporation; or
1749	(B)  Offer to allow the producing agent of record of the
1750	corporation policy to continue servicing the policy for a period
1751	of not less than 1 year and offer to pay the agent the greater
1752	of the insurer's or the corporation's usual and customary
1753	commission for the type of policy written.
1754
1755	If the producing agent is unwilling or unable to accept
1756	appointment, the new insurer shall pay the agent in accordance
1757	with sub-sub-sub-subparagraph (A).
1758	b.  With respect to commercial lines residential risks, for
1759	a new application to the corporation for coverage, if the risk
1760	is offered coverage under a policy including wind coverage from
1761	an authorized insurer at its approved rate, the risk is not
1762	eligible for any policy issued by the corporation unless the
1763	premium for coverage from the authorized insurer is more than 15
1764	percent greater than the premium for comparable coverage from
1765	the corporation. If the risk is not able to obtain any such
1766	offer, the risk is eligible for a policy including wind coverage
1767	issued by the corporation. However, with regard to a
1768	policyholder of the corporation or a policyholder removed from
1769	the corporation through an assumption agreement until the end of
1770	the assumption period, the policyholder remains eligible for
1771	coverage from the corporation regardless of any offer of
1772	coverage from an authorized insurer or surplus lines insurer.
1773	(I)  If the risk accepts an offer of coverage through the
1774	market assistance plan or an offer of coverage through a
1775	mechanism established by the corporation before a policy is
1776	issued to the risk by the corporation or during the first 30
1777	days of coverage by the corporation, and the producing agent who
1778	submitted the application to the plan or the corporation is not
1779	currently appointed by the insurer, the insurer shall:
1780	(A)  Pay to the producing agent of record of the policy,
1781	for the first year, an amount that is the greater of the
1782	insurer's usual and customary commission for the type of policy
1783	written or a fee equal to the usual and customary commission of
1784	the corporation; or
1785	(B)  Offer to allow the producing agent of record of the
1786	policy to continue servicing the policy for a period of not less
1787	than 1 year and offer to pay the agent the greater of the
1788	insurer's or the corporation's usual and customary commission
1789	for the type of policy written.
1790
1791	If the producing agent is unwilling or unable to accept
1792	appointment, the new insurer shall pay the agent in accordance
1793	with sub-sub-sub-subparagraph (A).
1794	(II)  When the corporation enters into a contractual
1795	agreement for a take-out plan, the producing agent of record of
1796	the corporation policy is entitled to retain any unearned
1797	commission on the policy, and the insurer shall:
1798	(A)  Pay to the producing agent of record of the
1799	corporation policy, for the first year, an amount that is the
1800	greater of the insurer's usual and customary commission for the
1801	type of policy written or a fee equal to the usual and customary
1802	commission of the corporation; or
1803	(B)  Offer to allow the producing agent of record of the
1804	corporation policy to continue servicing the policy for a period
1805	of not less than 1 year and offer to pay the agent the greater
1806	of the insurer's or the corporation's usual and customary
1807	commission for the type of policy written.
1808
1809	If the producing agent is unwilling or unable to accept
1810	appointment, the new insurer shall pay the agent in accordance
1811	with sub-sub-sub-subparagraph (A).
1812	c.  For purposes of determining comparable coverage under
1813	sub-subparagraphs a. and b., the comparison shall be based on
1814	those forms and coverages that are reasonably comparable. The
1815	corporation may rely on a determination of comparable coverage
1816	and premium made by the producing agent who submits the
1817	application to the corporation, made in the agent's capacity as
1818	the corporation's agent. A comparison may be made solely of the
1819	premium with respect to the main building or structure only on
1820	the following basis: the same coverage A or other building
1821	limits; the same percentage hurricane deductible that applies on
1822	an annual basis or that applies to each hurricane for commercial
1823	residential property; the same percentage of ordinance and law
1824	coverage, if the same limit is offered by both the corporation
1825	and the authorized insurer; the same mitigation credits, to the
1826	extent the same types of credits are offered both by the
1827	corporation and the authorized insurer; the same method for loss
1828	payment, such as replacement cost or actual cash value, if the
1829	same method is offered both by the corporation and the
1830	authorized insurer in accordance with underwriting rules; and
1831	any other form or coverage that is reasonably comparable as
1832	determined by the board. If an application is submitted to the
1833	corporation for wind-only coverage in the high-risk account, the
1834	premium for the corporation's wind-only policy plus the premium
1835	for the ex-wind policy that is offered by an authorized insurer
1836	to the applicant shall be compared to the premium for multiperil
1837	coverage offered by an authorized insurer, subject to the
1838	standards for comparison specified in this subparagraph. If the
1839	corporation or the applicant requests from the authorized
1840	insurer a breakdown of the premium of the offer by types of
1841	coverage so that a comparison may be made by the corporation or
1842	its agent and the authorized insurer refuses or is unable to
1843	provide such information, the corporation may treat the offer as
1844	not being an offer of coverage from an authorized insurer at the
1845	insurer's approved rate.
1846	6.  Must include rules for classifications of risks and
1847	rates therefor.
1848	7.  Must provide that if premium and investment income for
1849	an account attributable to a particular calendar year are in
1850	excess of projected losses and expenses for the account
1851	attributable to that year, such excess shall be held in surplus
1852	in the account. Such surplus shall be available to defray
1853	deficits in that account as to future years and shall be used
1854	for that purpose prior to assessing assessable insurers and
1855	assessable insureds as to any calendar year.
1856	8.  Must provide objective criteria and procedures to be
1857	uniformly applied for all applicants in determining whether an
1858	individual risk is so hazardous as to be uninsurable. In making
1859	this determination and in establishing the criteria and
1860	procedures, the following shall be considered:
1861	a.  Whether the likelihood of a loss for the individual
1862	risk is substantially higher than for other risks of the same
1863	class; and
1864	b.  Whether the uncertainty associated with the individual
1865	risk is such that an appropriate premium cannot be determined.
1866
1867	The acceptance or rejection of a risk by the corporation shall
1868	be construed as the private placement of insurance, and the
1869	provisions of chapter 120 shall not apply.
1870	9.  Must provide that the corporation shall make its best
1871	efforts to procure catastrophe reinsurance at reasonable rates,
1872	to cover its projected 100-year probable maximum loss as
1873	determined by the board of governors.
1874	10.  The policies issued by the corporation must provide
1875	that, if the corporation or the market assistance plan obtains
1876	an offer from an authorized insurer to cover the risk at its
1877	approved rates, the risk is no longer eligible for renewal
1878	through the corporation, except as otherwise provided in this
1879	subsection.
1880	11.  Corporation policies and applications must include a
1881	notice that the corporation policy could, under this section, be
1882	replaced with a policy issued by an authorized insurer that does
1883	not provide coverage identical to the coverage provided by the
1884	corporation. The notice shall also specify that acceptance of
1885	corporation coverage creates a conclusive presumption that the
1886	applicant or policyholder is aware of this potential.
1887	12.  May establish, subject to approval by the office,
1888	different eligibility requirements and operational procedures
1889	for any line or type of coverage for any specified county or
1890	area if the board determines that such changes to the
1891	eligibility requirements and operational procedures are
1892	justified due to the voluntary market being sufficiently stable
1893	and competitive in such area or for such line or type of
1894	coverage and that consumers who, in good faith, are unable to
1895	obtain insurance through the voluntary market through ordinary
1896	methods would continue to have access to coverage from the
1897	corporation. When coverage is sought in connection with a real
1898	property transfer, such requirements and procedures shall not
1899	provide for an effective date of coverage later than the date of
1900	the closing of the transfer as established by the transferor,
1901	the transferee, and, if applicable, the lender.
1902	13.  Must provide that, with respect to the high-risk
1903	account, any assessable insurer with a surplus as to
1904	policyholders of $25 million or less writing 25 percent or more
1905	of its total countrywide property insurance premiums in this
1906	state may petition the office, within the first 90 days of each
1907	calendar year, to qualify as a limited apportionment company. A
1908	regular assessment levied by the corporation on a limited
1909	apportionment company for a deficit incurred by the corporation
1910	for the high-risk account in 2006 or thereafter may be paid to
1911	the corporation on a monthly basis as the assessments are
1912	collected by the limited apportionment company from its insureds
1913	pursuant to s. 627.3512, but the regular assessment must be paid
1914	in full within 12 months after being levied by the corporation.
1915	A limited apportionment company shall collect from its
1916	policyholders any emergency assessment imposed under sub-
1917	subparagraph (b)3.d. The plan shall provide that, if the office
1918	determines that any regular assessment will result in an
1919	impairment of the surplus of a limited apportionment company,
1920	the office may direct that all or part of such assessment be
1921	deferred as provided in subparagraph (p)4. However, there shall
1922	be no limitation or deferment of an emergency assessment to be
1923	collected from policyholders under sub-subparagraph (b)3.d.
1924	14.  Must provide that the corporation appoint as its
1925	licensed agents only those agents who also hold an appointment
1926	as defined in s. 626.015(3) with an insurer who at the time of
1927	the agent's initial appointment by the corporation is authorized
1928	to write and is actually writing personal lines residential
1929	property coverage, commercial residential property coverage, or
1930	commercial nonresidential property coverage within the state.
1931	15.  Must provide, by July 1, 2007, a premium payment plan
1932	option to its policyholders which allows at a minimum for
1933	quarterly and semiannual payment of premiums. A monthly payment
1934	plan may, but is not required to, be offered.
1935	16.  Must limit coverage on mobile homes or manufactured
1936	homes built prior to 1994 to actual cash value of the dwelling
1937	rather than replacement costs of the dwelling.
1938	17.  May provide such limits of coverage as the board
1939	determines, consistent with the requirements of this subsection.
1940	18.  May require commercial property to meet specified
1941	hurricane mitigation construction features as a condition of
1942	eligibility for coverage.
1943	(m)1.  Rates for coverage provided by the corporation shall
1944	be actuarially sound and subject to the requirements of s.
1945	627.062, except as otherwise provided in this paragraph. The
1946	corporation shall file its recommended rates with the office at
1947	least annually. The corporation shall provide any additional
1948	information regarding the rates which the office requires. The
1949	office shall consider the recommendations of the board and issue
1950	a final order establishing the rates for the corporation within
1951	45 days after the recommended rates are filed. The corporation
1952	may not pursue an administrative challenge or judicial review of
1953	the final order of the office.
1954	2.  In addition to the rates otherwise determined pursuant
1955	to this paragraph, the corporation shall impose and collect an
1956	amount equal to the premium tax provided for in s. 624.509 to
1957	augment the financial resources of the corporation.
1958	3.  After the public hurricane loss-projection model under
1959	s. 627.06281 has been found to be accurate and reliable by the
1960	Florida Commission on Hurricane Loss Projection Methodology,
1961	that model shall serve as the minimum benchmark for determining
1962	the windstorm portion of the corporation's rates. This
1963	subparagraph does not require or allow the corporation to adopt
1964	rates lower than the rates otherwise required or allowed by this
1965	paragraph.
1966	4.  The rate filings for the corporation which were
1967	approved by the office and which took effect January 1, 2007,
1968	are rescinded, except for those rates that were lowered. As soon
1969	as possible, the corporation shall begin using the lower rates
1970	that were in effect on December 31, 2006, and shall provide
1971	refunds to policyholders who have paid higher rates as a result
1972	of that rate filing. The rates in effect on December 31, 2006,
1973	shall remain in effect for the 2007 and 2008 calendar years
1974	except for any rate change that results in a lower rate. The
1975	next rate change that may increase rates shall take effect
1976	pursuant to a new rate filing recommended by the corporation and
1977	established by the office, subject to the requirements of this
1978	paragraph.
1979	5.  Beginning on July 15, 2009, and each year thereafter,
1980	the corporation must make a recommended actuarially sound rate
1981	filing for each personal and commercial line of business it
1982	writes, to be effective no earlier than January 1, 2010.
1983	6.  Beginning on or after January 1, 2010, and
1984	notwithstanding the board's recommended rates and the office's
1985	final order regarding the corporation's filed rates under
1986	subparagraph 1., the corporation shall implement a rate increase
1987	each year which does not exceed 10 percent for any single policy
1988	issued by the corporation, excluding coverage changes and
1989	surcharges.
1990	7.  The corporation may also implement an increase to
1991	reflect the effect on the corporation of the cash buildup factor
1992	pursuant to s. 215.555(5)(b).
1993	8.  The corporation's implementation of rates as prescribed
1994	in subparagraph 6. shall cease for any line of business written
1995	by the corporation upon the corporation's implementation of
1996	actuarially sound rates. Thereafter, the corporation shall
1997	annually make a recommended actuarially sound rate filing for
1998	each commercial and personal line of business the corporation
1999	writes.
2000	(x)  It is the intent of the Legislature that the
2001	amendments to this subsection enacted in 2002 should, over time,
2002	reduce the probable maximum windstorm losses in the residual
2003	markets and should reduce the potential assessments to be levied
2004	on property insurers and policyholders statewide. In furtherance
2005	of this intent:
2006	1.  The board shall, on or before February 1 of each year,
2007	provide a report to the President of the Senate and the Speaker
2008	of the House of Representatives showing the reduction or
2009	increase in the 100-year probable maximum loss attributable to
2010	wind-only coverages and the quota share program under this
2011	subsection combined, as compared to the benchmark 100-year
2012	probable maximum loss of the Florida Windstorm Underwriting
2013	Association. For purposes of this paragraph, the benchmark 100-
2014	year probable maximum loss of the Florida Windstorm Underwriting
2015	Association shall be the calculation dated February 2001 and
2016	based on November 30, 2000, exposures. In order to ensure
2017	comparability of data, the board shall use the same methods for
2018	calculating its probable maximum loss as were used to calculate
2019	the benchmark probable maximum loss.
2020	2.  Beginning December 1, 2010 February 1, 2010, if the
2021	report under subparagraph 1. for any year indicates that the
2022	100-year probable maximum loss attributable to wind-only
2023	coverages and the quota share program combined does not reflect
2024	a reduction of at least 25 percent from the benchmark, the board
2025	shall reduce the boundaries of the high-risk area eligible for
2026	wind-only coverages under this subsection in a manner calculated
2027	to reduce such probable maximum loss to an amount at least 25
2028	percent below the benchmark.
2029	3.  Beginning February 1, 2015, if the report under
2030	subparagraph 1. for any year indicates that the 100-year
2031	probable maximum loss attributable to wind-only coverages and
2032	the quota share program combined does not reflect a reduction of
2033	at least 50 percent from the benchmark, the boundaries of the
2034	high-risk area eligible for wind-only coverages under this
2035	subsection shall be reduced by the elimination of any area that
2036	is not seaward of a line 1,000 feet inland from the Intracoastal
2037	Waterway.
2038	Section 11.  Section 627.3512, Florida Statutes, is amended
2039	to read:
2040	627.3512  Recoupment of residual market deficit
2041	assessments.--
2042	(1)  The Legislature finds and declares that all
2043	assessments paid by an insurer or insurer group as a result of a
2044	levy by any residual market entity, including regular
2045	assessments levied on insurers by Citizens Property Insurance
2046	Corporation and any other assessments levied on insurers by an
2047	insurance risk apportionment plan or assigned risk plan under s.
2048	627.311 or s. 627.351 constitute advances of funds from the
2049	insurer to the residual market entity, and that the insurer is
2050	entitled to fully recoup such advances. An insurer or insurer
2051	group may recoup any assessments that have been paid during or
2052	after 1995 by the insurer or insurer group to defray deficits of
2053	an insurance risk apportionment plan or assigned risk plan under
2054	ss. 627.311 and 627.351, net of any earnings returned to the
2055	insurer or insurer group by the association or plan for any year
2056	after 1993. A limited apportionment company as defined in s.
2057	627.351(6)(c) may recoup any regular assessment that has been
2058	levied by, or paid to, Citizens Property Insurance Corporation.
2059	(2)  The recoupment shall be made by applying a separate
2060	recoupment assessment factor on policies of the same line or
2061	type as were considered by the residual markets in determining
2062	the assessment liability of the insurer or insurer group. An
2063	insurer or insurer group shall calculate a separate assessment
2064	factor for personal lines and commercial lines. The separate
2065	assessment factor shall provide for full recoupment of the
2066	assessments over a period of 1 year, unless the insurer or
2067	insurer group, at its option, elects to recoup the assessments
2068	over a longer period. The assessment factor expires upon
2069	collection of the full amount allowed to be recouped. Amounts
2070	recouped under this section are not subject to premium taxes,
2071	fees, or commissions.
2072	(3)(2)  The recoupment assessment factor may must not be
2073	more than 3 percentage points above the ratio of the deficit
2074	assessment to the Florida direct written premium for policies
2075	for the lines or types of business as to which the assessment
2076	was calculated, as written in the year the deficit assessment
2077	was paid. If an insurer or insurer group does not fails to
2078	collect the full amount of the deficit assessment during one 12-
2079	month period, the insurer or insurer group may apply
2080	recalculated recoupment factors to policies issued or renewed
2081	during one or more succeeding 12-month periods must carry
2082	forward the amount of the deficit and adjust the deficit
2083	assessment to be recouped in a subsequent year by that amount.
2084	(4)(3)  The insurer or insurer group shall file with the
2085	office a statement for informational purposes only setting forth
2086	the amount of the recoupment assessment factor and an
2087	explanation of how the factor will be applied, at least 15 days
2088	prior to the factor being applied to any policies. The
2089	informational statement shall include documentation of the
2090	assessment paid by the insurer or insurer group and the
2091	arithmetic calculations supporting the recoupment assessment
2092	factor. The office shall complete its review within 15 days
2093	after receipt of the filing and shall limit its review to
2094	verification of the arithmetic calculations. The insurer or
2095	insurer group may use the recoupment assessment factor at any
2096	time after the expiration of the 15-day period unless the office
2097	has notified the insurer or insurer group in writing that the
2098	arithmetic calculations are incorrect. The recoupment factor
2099	shall apply to all policies described in subsection (3) that are
2100	issued or renewed by the insurer or insurer group during a 12-
2101	month period. If full recoupment requires the insurer or insurer
2102	group to apply a recoupment factor over a subsequent 12-month
2103	period, the insurer or insurer group must file a supplemental
2104	informational statement pursuant to this subsection.
2105	(5)  No later than 90 days after the insurer or insurer
2106	group has completed the recoupment process, it shall file with
2107	the office a final accounting report documenting the recoupment.
2108	The report shall provide the amounts of assessments paid by the
2109	insurer or insurer group, the amounts and percentages recouped
2110	by year from each affected line of business, and the direct
2111	written premium subject to recoupment by year.
2112	(6)(4)  The commission may adopt rules to implement this
2113	section.
2114	Section 12.  Subsection (2) of section 627.711, Florida
2115	Statutes, is amended, and subsection (3) is added to that
2116	section, to read:
2117	627.711  Notice of premium discounts for hurricane loss
2118	mitigation; uniform mitigation verification inspection form.--
2119	(2)  By July 1, 2007, the Financial Services Commission
2120	shall develop by rule a uniform mitigation verification
2121	inspection form that shall be used by all insurers when
2122	submitted by policyholders for the purpose of factoring
2123	discounts for wind insurance. In developing the form, the
2124	commission shall seek input from insurance, construction, and
2125	building code representatives. Further, the commission shall
2126	provide guidance as to the length of time the inspection results
2127	are valid. An insurer shall accept as valid a uniform mitigation
2128	verification form certified by the Department of Financial
2129	Services or signed by:
2130	(a)  A hurricane mitigation inspector certified employed by
2131	the an approved My Safe Florida Home program wind certification
2132	entity;
2133	(b)  A building code inspector certified under s. 468.607;
2134	(c)  A general, building, or residential contractor
2135	licensed under s. 489.111;
2136	(d)  A professional engineer licensed under s. 471.015 who
2137	has passed the appropriate equivalency test of the Building Code
2138	Training Program as required by s. 553.841; or
2139	(e)  A professional architect licensed under s. 481.213; or
2140	(f)  Any other individual or entity recognized by the
2141	insurer as possessing the necessary qualifications to properly
2142	complete a uniform mitigation verification form.
2143	(3)  An individual or entity who knowingly provides or
2144	utters a false or fraudulent mitigation verification form with
2145	the intent to obtain or receive a discount on an insurance
2146	premium to which the individual or entity is not entitled
2147	commits a misdemeanor of the first degree, punishable as
2148	provided in s. 775.082 or s. 775.083.
2149	Section 13.  Subsections (1) and (2) of section 627.712,
2150	Florida Statutes, are amended to read:
2151	627.712  Residential windstorm coverage required;
2152	availability of exclusions for windstorm or contents.--
2153	(1)  An insurer issuing a residential property insurance
2154	policy must provide windstorm coverage. Except as provided in
2155	paragraph (2)(c), this section does not apply with respect to
2156	risks that are eligible for wind-only coverage from Citizens
2157	Property Insurance Corporation under s. 627.351(6), and with
2158	respect to risks that are not eligible for coverage from
2159	Citizens Property Insurance Corporation under s. 627.351(6)(a)3.
2160	or s. 627.351(6)(a)5. A risk ineligible for Citizens coverage
2161	under s. 627.351(6)(a)3. or s. 627.351(6)(a)5. is exempt from
2162	the requirements of this section only if the risk is located
2163	within the boundaries of the high-risk account of the
2164	corporation.
2165	(2)  A property insurer must make available, at the option
2166	of the policyholder, an exclusion of windstorm coverage.
2167	(a)  The coverage may be excluded only if:
2168	1.  When the policyholder is a natural person, the
2169	policyholder personally writes and provides to the insurer the
2170	following statement in his or her own handwriting and signs his
2171	or her name, which must also be signed by every other named
2172	insured on the policy, and dated: "I do not want the insurance
2173	on my (home/mobile home/condominium unit) to pay for damage from
2174	windstorms. I will pay those costs. My insurance will not."
2175	2.  When the policyholder is other than a natural person,
2176	the policyholder provides to the insurer on the policyholder's
2177	letterhead the following statement that must be signed by the
2178	policyholder's authorized representative and dated: "...(Name of
2179	entity)... does not want the insurance on its ...(type of
2180	structure)... to pay for damage from windstorms. ...(Name of
2181	entity)... will be responsible for these costs. ...(Name of
2182	entity's)... insurance will not."
2183	(b)  If the structure insured by the policy is subject to a
2184	mortgage or lien, the policyholder must provide the insurer with
2185	a written statement from the mortgageholder or lienholder
2186	indicating that the mortgageholder or lienholder approves the
2187	policyholder electing to exclude windstorm coverage or hurricane
2188	coverage from his or her or its property insurance policy.
2189	(c)  If the residential structure is eligible for wind-only
2190	coverage from Citizens Property Insurance Corporation, An
2191	insurer nonrenewing a policy and issuing a replacement policy,
2192	or issuing a new policy, that does not provide wind coverage
2193	shall provide a notice to the mortgageholder or lienholder
2194	indicating the policyholder has elected coverage that does not
2195	cover wind.
2196	Section 14.  Section 631.65, Florida Statutes, is amended
2197	to read:
2198	631.65  Prohibited advertisement or solicitation.--No
2199	person shall make, publish, disseminate, circulate, or place
2200	before the public, or cause, directly or indirectly, to be made,
2201	published, disseminated, circulated, or placed before the
2202	public, in a newspaper, magazine, or other publication, or in
2203	the form of a notice, circular, pamphlet, letter, or poster, or
2204	over any radio station or television station, or in any other
2205	way, any advertisement, announcement, or statement which uses
2206	the existence of the insurance guaranty association for the
2207	purpose of sales, solicitation, or inducement to purchase any
2208	form of insurance covered under this part. However, this section
2209	does not prohibit a duly licensed insurance agent from
2210	explaining the existence or function of the insurance guaranty
2211	association to policyholders, prospects, or applicants for
2212	coverage.
2213	Section 15.  By February 1, 2010, the Office of Program
2214	Policy Analysis and Government Accountability shall submit a
2215	report to the Speaker of the House of Representatives, the
2216	President of the Senate, the Commissioner of Insurance, the
2217	Chief Financial Officer, and the Governor reviewing the laws
2218	governing public adjusters as defined in s. 626.854, Florida
2219	Statutes. The report shall include a review of relevant Citizens
2220	Property Insurance Corporation claims and statistics involving
2221	public adjusters, public adjuster claims submission practices,
2222	and a review of the laws of this state and rules governing
2223	public adjusters. The report shall also review state laws
2224	governing public adjusters throughout the United States. The
2225	review shall encompass a review of both catastrophe and
2226	noncatastrophe related claims, with a specific focus on new and
2227	supplemental or reopened catastrophe claims originated in 2009
2228	which relate to hurricanes that occurred in 2004 and 2005. The
2229	study shall review the effects on consumers of the laws of this
2230	state relating to public adjusters.
2231	Section 16.  Subsection (4) is added to section 627.0628,
2232	Florida Statutes, to read:
2233	627.0628  Florida Commission on Hurricane Loss Projection
2234	Methodology; public records exemption; public meetings
2235	exemption.--
2236	(4)  REVIEW OF DISCOUNTS, CREDITS, OTHER RATE
2237	DIFFERENTIALS, AND REDUCTIONS IN DEDUCTIBLES RELATING TO
2238	WINDSTORM MITIGATION.--The commission shall hold public meetings
2239	for the purpose of receiving testimony and data regarding the
2240	implementation of windstorm mitigation discounts, credits, other
2241	rate differentials, and appropriate reductions in deductibles
2242	pursuant to s. 627.0629. After reviewing the testimony and data
2243	as well as any other information the commission deems
2244	appropriate, the commission shall present a report by February
2245	1, 2010, to the Governor, the Cabinet, the President of the
2246	Senate, and the Speaker of the House of Representatives,
2247	including recommendations on improving the process of assessing,
2248	determining, and applying windstorm mitigation discounts,
2249	credits, other rate differentials, and appropriate reductions in
2250	deductibles pursuant to s. 627.0629.
2251	Section 17.  Subsection (7) is added to section 624.46226,
2252	Florida Statutes, to read:
2253	624.46226  Public housing authorities self-insurance funds;
2254	exemption for taxation and assessments.--
2255	(7)  Reinsurance companies complying with s. 624.610 may
2256	issue coverage directly to a public housing authority self-
2257	insuring its liabilities under this section. A public housing
2258	authority purchasing reinsurance shall be considered an insurer
2259	for the sole purpose of entering into such reinsurance
2260	contracts. Contracts of reinsurance issued to public housing
2261	authorities self-insuring under this section shall receive the
2262	same tax treatment as reinsurance contracts issued to insurance
2263	companies. However, the purchase of reinsurance coverage by a
2264	public housing authority self-insuring under this section shall
2265	not be construed as authorization to otherwise act as an
2266	insurer.
2267	Section 18.  This act shall take effect upon becoming a
2268	law.

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