CS/HB 447

1	A bill to be entitled
2	An act relating to property insurance; amending s.
3	215.555, F.S.; extending a repeal date for an exemption of
4	medical malpractice insurance premiums from emergency
5	assessments; amending s. 624.407, F.S.; specifying an
6	additional surplus requirement for certain domestic
7	insurers; amending s. 624.408, F.S.; specifying an
8	additional surplus requirement for certain domestic
9	insurers; deleting obsolete surplus requirement
10	provisions; amending s. 627.0613, F.S.; revising annual
11	reporting requirements for the consumer advocate;
12	providing a definition; amending s. 627.062, F.S.;
13	prohibiting the Office of Insurance Regulation from
14	interfering with certain insurer rights; revising
15	provisions relating to separate filings limited to
16	adjustments of rates for reinsurance or financing costs;
17	authorizing certain insurers to use a rate different from
18	otherwise applicable filed rates; prohibiting the
19	consideration of certain policies when making a specified
20	calculation; preserving the authority of the Office of
21	Insurance Regulation to disapprove rates as inadequate or
22	disapprove a rate filing for using certain rating factors;
23	authorizing the office to direct an insurer to make a
24	specified type of rate filing under certain circumstances;
25	providing construction relating to certifications;
26	amending s. 627.0621, F.S.; revising provisions relating
27	to transparency in rate regulation; amending s. 627.0629,
28	F.S.; revising legislative intent relating to residential
29	property insurance rate filings; deleting a requirement
30	that the office develop and make available a method for
31	insurers to establish discounts, credits, or rate
32	differentials for certain hurricane mitigation measures;
33	revising restrictions relating to including the cost of
34	reinsurance for certain purposes; requiring the office to
35	contract with a private entity to develop a comprehensive
36	consumer information program; specifying program criteria;
37	requiring the office to conduct a cost benefit analysis on
38	a program implementation plan; requiring review and
39	approval by the Financial Services Commission; amending s.
40	627.351, F.S.; providing requirements for attachment and
41	payment of the Citizens policyholder surcharge;
42	prohibiting the corporation from levying certain regular
43	assessments until after levying the full amount of a
44	Citizens policyholder surcharge; requiring the
45	corporation's plan of operation to require agents to
46	obtain an acknowledgement of potential surcharge and
47	assessment liability from applicants and policyholders;
48	requiring the corporation to permanently retain a copy of
49	such acknowledgments; specifying that the acknowledgement
50	creates a conclusive presumption of understanding and
51	acceptance by the policyholder; deleting an obsolete
52	legislative intent provision; amending s. 627.4133, F.S.;
53	authorizing an insurer to cancel or nonrenew property
54	insurance policies under certain circumstances; specifying
55	duties of the office; creating s. 627.41341, F.S.;
56	specifying requirements for a notice of change in policy
57	terms; providing definitions; authorizing policy renewals
58	to contain a change in policy terms; specifying notice
59	requirements; providing procedural requirements; providing
60	intent; amending s. 627.7011, F.S.; specifying criteria
61	for payment of dwelling and personal property replacement
62	costs; creating s. 627.7031, F.S.; authorizing certain
63	insurers to offer or renew policies at rates established
64	under certain circumstances; prohibiting certain insurers
65	from purchasing TICL option coverage from the Florida
66	Hurricane Catastrophe Fund under certain circumstances;
67	requiring that certain policies contain a specified rate
68	notice; requiring insurers to offer applicants or insureds
69	an estimate of the premium for a policy from Citizens
70	Property Insurance Corporation reflecting similar
71	coverage, limits, and deductibles; requiring applicants or
72	insureds to provide a signed premium comparison
73	acknowledgement; specifying criteria for insurer
74	compliance with certain requirements; specifying
75	acknowledgement contents; requiring insurers and agents to
76	retain a copy of the acknowledgement for a specified time;
77	specifying a presumption created by a signed
78	acknowledgement; specifying types of residential property
79	insurance policies that are not eligible for certain rates
80	or subject to other requirements; requiring written notice
81	of certain nonrenewals; preserving insurer authority to
82	cancel policies; specifying a criterion for what
83	constitutes an offer to renew a policy; amending s.
84	627.707, F.S.; revising standards for investigation of
85	sinkhole claims by insurers; specifying requirements for
86	contracts for repairs to prevent additional damage to
87	buildings or structures; amending s. 627.7073, F.S.;
88	revising requirements for sinkhole reports; amending s.
89	627.7074, F.S.; revising requirements and procedures for
90	an alternative procedure for resolution of disputed
91	sinkhole insurance claims; providing a definition;
92	providing criteria and procedures for disqualification of
93	neutral evaluators; providing requirements and procedures
94	for neutral evaluators to enlist assistance from other
95	professionals under certain circumstances; amending s.
96	631.021, F.S.; specifying additional venue criteria for
97	the Circuit Court of Leon County; specifying a required
98	notice for insurance policies issued or renewed in this
99	state; providing notice requirements; repealing s.
100	627.7065, F.S., relating to database of information
101	relating to sinkholes, the Department of Financial
102	Services, and the Department of Environmental Protection;
103	providing effective dates.
104
105	Be It Enacted by the Legislature of the State of Florida:
106
107	Section 1.  Paragraph (b) of subsection (6) of section
108	215.555, Florida Statutes, is amended to read:
109	215.555  Florida Hurricane Catastrophe Fund.-
110	(6)  REVENUE BONDS.-
111	(b)  Emergency assessments.-
112	1.  If the board determines that the amount of revenue
113	produced under subsection (5) is insufficient to fund the
114	obligations, costs, and expenses of the fund and the
115	corporation, including repayment of revenue bonds and that
116	portion of the debt service coverage not met by reimbursement
117	premiums, the board shall direct the Office of Insurance
118	Regulation to levy, by order, an emergency assessment on direct
119	premiums for all property and casualty lines of business in this
120	state, including property and casualty business of surplus lines
121	insurers regulated under part VIII of chapter 626, but not
122	including any workers' compensation premiums or medical
123	malpractice premiums. As used in this subsection, the term
124	"property and casualty business" includes all lines of business
125	identified on Form 2, Exhibit of Premiums and Losses, in the
126	annual statement required of authorized insurers by s. 624.424
127	and any rule adopted under this section, except for those lines
128	identified as accident and health insurance and except for
129	policies written under the National Flood Insurance Program. The
130	assessment shall be specified as a percentage of direct written
131	premium and is subject to annual adjustments by the board in
132	order to meet debt obligations. The same percentage shall apply
133	to all policies in lines of business subject to the assessment
134	issued or renewed during the 12-month period beginning on the
135	effective date of the assessment.
136	2.  A premium is not subject to an annual assessment under
137	this paragraph in excess of 6 percent of premium with respect to
138	obligations arising out of losses attributable to any one
139	contract year, and a premium is not subject to an aggregate
140	annual assessment under this paragraph in excess of 10 percent
141	of premium. An annual assessment under this paragraph shall
142	continue as long as the revenue bonds issued with respect to
143	which the assessment was imposed are outstanding, including any
144	bonds the proceeds of which were used to refund the revenue
145	bonds, unless adequate provision has been made for the payment
146	of the bonds under the documents authorizing issuance of the
147	bonds.
148	3.  Emergency assessments shall be collected from
149	policyholders. Emergency assessments shall be remitted by
150	insurers as a percentage of direct written premium for the
151	preceding calendar quarter as specified in the order from the
152	Office of Insurance Regulation. The office shall verify the
153	accurate and timely collection and remittance of emergency
154	assessments and shall report the information to the board in a
155	form and at a time specified by the board. Each insurer
156	collecting assessments shall provide the information with
157	respect to premiums and collections as may be required by the
158	office to enable the office to monitor and verify compliance
159	with this paragraph.
160	4.  With respect to assessments of surplus lines premiums,
161	each surplus lines agent shall collect the assessment at the
162	same time as the agent collects the surplus lines tax required
163	by s. 626.932, and the surplus lines agent shall remit the
164	assessment to the Florida Surplus Lines Service Office created
165	by s. 626.921 at the same time as the agent remits the surplus
166	lines tax to the Florida Surplus Lines Service Office. The
167	emergency assessment on each insured procuring coverage and
168	filing under s. 626.938 shall be remitted by the insured to the
169	Florida Surplus Lines Service Office at the time the insured
170	pays the surplus lines tax to the Florida Surplus Lines Service
171	Office. The Florida Surplus Lines Service Office shall remit the
172	collected assessments to the fund or corporation as provided in
173	the order levied by the Office of Insurance Regulation. The
174	Florida Surplus Lines Service Office shall verify the proper
175	application of such emergency assessments and shall assist the
176	board in ensuring the accurate and timely collection and
177	remittance of assessments as required by the board. The Florida
178	Surplus Lines Service Office shall annually calculate the
179	aggregate written premium on property and casualty business,
180	other than workers' compensation and medical malpractice,
181	procured through surplus lines agents and insureds procuring
182	coverage and filing under s. 626.938 and shall report the
183	information to the board in a form and at a time specified by
184	the board.
185	5.  Any assessment authority not used for a particular
186	contract year may be used for a subsequent contract year. If,
187	for a subsequent contract year, the board determines that the
188	amount of revenue produced under subsection (5) is insufficient
189	to fund the obligations, costs, and expenses of the fund and the
190	corporation, including repayment of revenue bonds and that
191	portion of the debt service coverage not met by reimbursement
192	premiums, the board shall direct the Office of Insurance
193	Regulation to levy an emergency assessment up to an amount not
194	exceeding the amount of unused assessment authority from a
195	previous contract year or years, plus an additional 4 percent
196	provided that the assessments in the aggregate do not exceed the
197	limits specified in subparagraph 2.
198	6.  The assessments otherwise payable to the corporation
199	under this paragraph shall be paid to the fund unless and until
200	the Office of Insurance Regulation and the Florida Surplus Lines
201	Service Office have received from the corporation and the fund a
202	notice, which shall be conclusive and upon which they may rely
203	without further inquiry, that the corporation has issued bonds
204	and the fund has no agreements in effect with local governments
205	under paragraph (c). On or after the date of the notice and
206	until the date the corporation has no bonds outstanding, the
207	fund shall have no right, title, or interest in or to the
208	assessments, except as provided in the fund's agreement with the
209	corporation.
210	7.  Emergency assessments are not premium and are not
211	subject to the premium tax, to the surplus lines tax, to any
212	fees, or to any commissions. An insurer is liable for all
213	assessments that it collects and must treat the failure of an
214	insured to pay an assessment as a failure to pay the premium. An
215	insurer is not liable for uncollectible assessments.
216	8.  When an insurer is required to return an unearned
217	premium, it shall also return any collected assessment
218	attributable to the unearned premium. A credit adjustment to the
219	collected assessment may be made by the insurer with regard to
220	future remittances that are payable to the fund or corporation,
221	but the insurer is not entitled to a refund.
222	9.  When a surplus lines insured or an insured who has
223	procured coverage and filed under s. 626.938 is entitled to the
224	return of an unearned premium, the Florida Surplus Lines Service
225	Office shall provide a credit or refund to the agent or such
226	insured for the collected assessment attributable to the
227	unearned premium prior to remitting the emergency assessment
228	collected to the fund or corporation.
229	10.  The exemption of medical malpractice insurance
230	premiums from emergency assessments under this paragraph is
231	repealed May 31, 2013 2010, and medical malpractice insurance
232	premiums shall be subject to emergency assessments attributable
233	to loss events occurring in the contract years commencing on
234	June 1, 2013 2010.
235	Section 2.  Subsection (1) of section 624.407, Florida
236	Statutes, is amended to read:
237	624.407  Capital funds required; new insurers.-
238	(1)  To receive authority to transact any one kind or
239	combinations of kinds of insurance, as defined in part V of this
240	chapter, an insurer applying for its original certificate of
241	authority in this state after the effective date of this section
242	shall possess surplus as to policyholders not less than the
243	greater of:
244	(a)  Except as otherwise provided in this subsection, $5
245	five million dollars for a property and casualty insurer, or
246	$2.5 million for any other insurer;
247	(b)  For life insurers, 4 percent of the insurer's total
248	liabilities;
249	(c)  For life and health insurers, 4 percent of the
250	insurer's total liabilities, plus 6 percent of the insurer's
251	liabilities relative to health insurance; or
252	(d)  For all insurers other than life insurers and life and
253	health insurers, 10 percent of the insurer's total liabilities;
254	or
255	(e)  For a domestic insurer initially licensed on or after
256	July 1, 2010, that transacts residential property insurance and
257	is not a wholly owned subsidiary of an insurer domiciled in any
258	other state, $15 million; however, this paragraph does not apply
259	to a domestic insurer that is a subsidiary or affiliate of a
260	domestic property insurer that was licensed before July 1, 2010;
261
262	however, a domestic insurer that transacts residential property
263	insurance and is a wholly owned subsidiary of an insurer
264	domiciled in any other state shall possess surplus as to
265	policyholders of at least $50 million, but no insurer shall be
266	required under this subsection to have surplus as to
267	policyholders greater than $100 million.
268	Section 3.  Subsection (1) of section 624.408, Florida
269	Statutes, is amended to read:
270	624.408  Surplus as to policyholders required; new and
271	existing insurers.-
272	(1)(a)  To maintain a certificate of authority to transact
273	any one kind or combinations of kinds of insurance, as defined
274	in part V of this chapter, an insurer in this state shall at all
275	times maintain surplus as to policyholders not less than the
276	greater of:
277	(a)1.  Except as provided in paragraphs (e) and (f)
278	subparagraph 5. and paragraph (b), $1.5 million;
279	(b)2.  For life insurers, 4 percent of the insurer's total
280	liabilities;
281	(c)3.  For life and health insurers, 4 percent of the
282	insurer's total liabilities plus 6 percent of the insurer's
283	liabilities relative to health insurance; or
284	(d)4.  For all insurers other than mortgage guaranty
285	insurers, life insurers, and life and health insurers, 10
286	percent of the insurer's total liabilities;.
287	(e)5.  Except as provided in paragraph (f), for property
288	and casualty insurers, $4 million; or.
289	(f)  For a domestic insurer initially licensed on or after
290	July 1, 2010, that transacts residential property insurance and
291	is not a wholly owned subsidiary of an insurer domiciled in any
292	other state, $12 million; however, this paragraph does not apply
293	to a domestic insurer that is a subsidiary or affiliate of a
294	domestic property insurer that was licensed before July 1, 2010.
295	(b)  For any property and casualty insurer holding a
296	certificate of authority on December 1, 1993, the following
297	amounts apply instead of the $4 million required by subparagraph
298	(a)5.:
299	1.  On December 31, 2001, and until December 30, 2002, $3
300	million.
301	2.  On December 31, 2002, and until December 30, 2003,
302	$3.25 million.
303	3.  On December 31, 2003, and until December 30, 2004, $3.6
304	million.
305	4.  On December 31, 2004, and thereafter, $4 million.
306	Section 4.  Subsection (4) of section 627.0613, Florida
307	Statutes, is amended to read:
308	627.0613  Consumer advocate.-The Chief Financial Officer
309	must appoint a consumer advocate who must represent the general
310	public of the state before the department and the office. The
311	consumer advocate must report directly to the Chief Financial
312	Officer, but is not otherwise under the authority of the
313	department or of any employee of the department. The consumer
314	advocate has such powers as are necessary to carry out the
315	duties of the office of consumer advocate, including, but not
316	limited to, the powers to:
317	(4)(a)  By June 1, 2012, and each June 1 thereafter,
318	prepare an annual report card for each authorized personal
319	residential property insurer, on a form and using a letter-grade
320	scale developed by the commission by rule, which objectively
321	grades each insurer based on the following factors:
322	1.(a)  The number and nature of valid consumer complaints,
323	as a market share ratio, received by the department against the
324	insurer.
325	2.(b)  The disposition of all valid complaints received by
326	the department.
327	3.(c)  The average length of time for payment of claims by
328	the insurer.
329	4.(d)  Any other measurable and objective factors the
330	commission identifies as capable of assisting policyholders in
331	making informed choices about homeowner's insurance.
332	(b)  For purposes of this subsection, the term "valid
333	consumer complaint" means a written communication from a
334	consumer which expresses dissatisfaction with a specific
335	personal residential property insurer whose conduct as described
336	in the communication is found to constitute a violation of the
337	insurance laws of this state by the Division of Consumer
338	Services of the Department of Financial Services.
339	Section 5.  Paragraphs (i) and (k) of subsection (2) of
340	section 627.062, Florida Statutes, are amended, paragraph (l) is
341	added to subsection (2), and paragraph (e) is added to
342	subsection (9) of that section, to read:
343	627.062  Rate standards.-
344	(2)  As to all such classes of insurance:
345	(i)1.  Except as otherwise specifically provided in this
346	chapter, the office may shall not, directly or indirectly,
347	prohibit any insurer, including any residual market plan or
348	joint underwriting association, from paying acquisition costs
349	based on the full amount of premium, as defined in s. 627.403,
350	applicable to any policy, or prohibit, directly or indirectly,
351	any such insurer from including the full amount of acquisition
352	costs in a rate filing.
353	2.  The office may not, directly or indirectly, impede,
354	abridge, or otherwise compromise an insurer's right to acquire
355	policyholders, advertise, or appoint agents, including, but not
356	limited to, the calculation, manner, or amount of such agent
357	commissions, if any.
358	(k)1.  An insurer may make a separate filing limited solely
359	to an adjustment of its rates for reinsurance or financing costs
360	incurred in the purchase of reinsurance or financing products to
361	replace or finance the payment of the amount covered by the
362	Temporary Increase in Coverage Limits (TICL) portion of the
363	Florida Hurricane Catastrophe Fund including replacement
364	reinsurance for the TICL reductions made pursuant to s.
365	215.555(17)(e); the actual cost paid due to the application of
366	the TICL premium factor pursuant to s. 215.555(17)(f); and the
367	actual cost paid due to the application of the cash build-up
368	factor pursuant to s. 215.555(5)(b) if the insurer:
369	a.  Elects to purchase financing products such as a
370	liquidity instrument or line of credit, in which case the cost
371	included in the filing for the liquidity instrument or line of
372	credit may not result in a premium increase exceeding 3 percent
373	for any individual policyholder. All costs contained in the
374	filing may not result in an overall premium increase of more
375	than 10 percent for any individual policyholder.
376	b.  Includes in the filing a copy of all of its
377	reinsurance, liquidity instrument, or line of credit contracts;
378	proof of the billing or payment for the contracts; and the
379	calculation upon which the proposed rate change is based
380	demonstrates that the costs meet the criteria of this section
381	and are not loaded for expenses or profit for the insurer making
382	the filing.
383	c.  Includes no other changes to its rates in the filing.
384	d.  Has not implemented a rate increase within the 6 months
385	immediately preceding the filing.
386	e.  Does not file for a rate increase under any other
387	paragraph within 6 months after making a filing under this
388	paragraph.
389	f.  That purchases reinsurance or financing products from
390	an affiliated company in compliance with this paragraph does so
391	only if the costs for such reinsurance or financing products are
392	charged at or below charges made for comparable coverage by
393	nonaffiliated reinsurers or financial entities making such
394	coverage or financing products available in this state.
395	2.  An insurer may only make one filing in any 12-month
396	period under this paragraph.
397	3.  An insurer that elects to implement a rate change under
398	this paragraph must file its rate filing with the office at
399	least 45 days before the effective date of the rate change.
400	After an insurer submits a complete filing that meets all of the
401	requirements of this paragraph, the office has 45 days after the
402	date of the filing to review the rate filing and determine if
403	the rate is excessive, inadequate, or unfairly discriminatory.
404	(l)1.  On or after January 1, 2011, an insurer complying
405	with the requirements of s. 627.7031 may use a rate for
406	residential property insurance, as defined in s. 627.4025,
407	different from the otherwise applicable filed rate as provided
408	in this paragraph.
409	2.  Policies subject to this paragraph may not be counted
410	in the calculation under s. 627.171(2).
411	3.  Such rates shall be filed with the office as a separate
412	filing. The initial rates used by an insurer under this
413	paragraph may not provide for rates that represent more than a
414	5-percent statewide average rate increase over the most recently
415	filed and approved rate. A rate filing under this paragraph
416	submitted in the first year following the year of implementation
417	of such initial rates may not provide for rates that represent
418	more than a 10-percent statewide average rate increase in a year
419	over the rates in effect under this paragraph at the time of the
420	filing. A rate filing under this paragraph submitted in the
421	second year following the year of implementation of such initial
422	rates or in a subsequent year may not provide for rates that
423	represent more than a 15-percent statewide average rate increase
424	in a year over the rates in effect under this paragraph at the
425	time of the filing.
426	4.  This paragraph does not affect the authority of the
427	office to disapprove a rate as inadequate or to disapprove a
428	rate filing for charging any insured or applicant a higher
429	premium solely because of the insured's or applicant's race,
430	color, creed, marital status, sex, or national origin. Upon
431	finding that an insurer has used any such factor in charging an
432	insured or applicant a higher premium, the office may direct the
433	insurer to make a new filing for a new rate that does not use
434	such factor.
435
436	The provisions of this subsection shall not apply to workers'
437	compensation and employer's liability insurance and to motor
438	vehicle insurance.
439	(9)
440	(e)  A certification under this subsection is not rendered
441	false when, after making the subject rate filing, the insurer
442	provides the office with additional or supplementary information
443	or clarification pursuant to a formal or informal request from
444	the office or for any other reason.
445	Section 6.  Section 627.0621, Florida Statutes, is amended
446	to read:
447	627.0621  Transparency in rate regulation.-
448	(1)  DEFINITIONS.-As used in this section, the term:
449	(a)  "Rate filing" means any original or amended rate
450	residential property insurance filing.
451	(b)  "Recommendation" means any proposed, preliminary, or
452	final recommendation from an office actuary reviewing a rate
453	filing with respect to the issue of approval or disapproval of
454	the rate filing or with respect to rate indications that the
455	office would consider acceptable.
456	(2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.-
457	(1)(a)  With respect to any residential property rate
458	filing, the office shall provide the following information on a
459	publicly accessible Internet website:
460	(a)1.  The overall rate change requested by the insurer.
461	(b)2.  The rate change approved by the office along with
462	all of the actuary's assumptions and recommendations forming the
463	basis of the office's decision.
464	3.  Certification by the office's actuary that, based on
465	the actuary's knowledge, his or her recommendations are
466	consistent with accepted actuarial principles.
467	(2)(b)  For any rate filing, whether or not the filing is
468	subject to a public hearing, the office shall provide on its
469	website a means for any policyholder who may be affected by a
470	proposed rate change to send an e-mail regarding the proposed
471	rate change. Such e-mail must be accessible to the actuary
472	assigned to review the rate filing.
473	Section 7.  Subsections (1) and (5) of section 627.0629,
474	Florida Statutes, are amended, and subsection (10) is added to
475	that section, to read:
476	627.0629  Residential property insurance; rate filings.-
477	(1)(a)  It is the intent of the Legislature that insurers
478	must provide the most accurate pricing signals available savings
479	to encourage consumers who install or implement windstorm damage
480	mitigation techniques, alterations, or solutions to their
481	properties to prevent windstorm losses. It is also the intent of
482	the Legislature that implementation of mitigation discounts not
483	result in a loss of income to the insurers granting the
484	discounts, so that the aggregate of mitigation discounts should
485	not exceed the aggregate of the expected reduction in loss that
486	is attributable to the mitigation efforts for which discounts
487	are granted. A rate filing for residential property insurance
488	must include actuarially reasonable discounts, credits, debits,
489	or other rate differentials, or appropriate reductions in
490	deductibles, that provide the proper pricing for all properties.
491	The rate filing must take into account the presence or absence
492	of on which fixtures or construction techniques demonstrated to
493	reduce the amount of loss in a windstorm have been installed or
494	implemented. The fixtures or construction techniques shall
495	include, but not be limited to, fixtures or construction
496	techniques that which enhance roof strength, roof covering
497	performance, roof-to-wall strength, wall-to-floor-to-foundation
498	strength, opening protection, and window, door, and skylight
499	strength. Credits, debits, discounts, or other rate
500	differentials, or appropriate reductions or increases in
501	deductibles, that recognize the presence or absence of for
502	fixtures and construction techniques that which meet the minimum
503	requirements of the Florida Building Code must be included in
504	the rate filing. If an insurer demonstrates that the aggregate
505	of its mitigation discounts results in a reduction to revenue
506	that exceeds the reduction of the aggregate loss that is
507	expected to result from the mitigation, the insurer may recover
508	the lost revenue through an increase in its base rates. All
509	insurance companies must make a rate filing which includes the
510	credits, discounts, or other rate differentials or reductions in
511	deductibles by February 28, 2003. By July 1, 2007, the office
512	shall reevaluate the discounts, credits, other rate
513	differentials, and appropriate reductions in deductibles for
514	fixtures and construction techniques that meet the minimum
515	requirements of the Florida Building Code, based upon actual
516	experience or any other loss relativity studies available to the
517	office. The office shall determine the discounts, credits,
518	debits, other rate differentials, and appropriate reductions or
519	increases in deductibles that reflect the full actuarial value
520	of such revaluation, which may be used by insurers in rate
521	filings.
522	(b)  By February 1, 2011, the Office of Insurance
523	Regulation, in consultation with the Department of Financial
524	Services and the Department of Community Affairs, shall develop
525	and make publicly available a proposed method for insurers to
526	establish discounts, credits, or other rate differentials for
527	hurricane mitigation measures which directly correlate to the
528	numerical rating assigned to a structure pursuant to the uniform
529	home grading scale adopted by the Financial Services Commission
530	pursuant to s. 215.55865, including any proposed changes to the
531	uniform home grading scale. By October 1, 2011, the commission
532	shall adopt rules requiring insurers to make rate filings for
533	residential property insurance which revise insurers' discounts,
534	credits, or other rate differentials for hurricane mitigation
535	measures so that such rate differentials correlate directly to
536	the uniform home grading scale. The rules may include such
537	changes to the uniform home grading scale as the commission
538	determines are necessary, and may specify the minimum required
539	discounts, credits, or other rate differentials. Such rate
540	differentials must be consistent with generally accepted
541	actuarial principles and wind-loss mitigation studies. The rules
542	shall allow a period of at least 2 years after the effective
543	date of the revised mitigation discounts, credits, or other rate
544	differentials for a property owner to obtain an inspection or
545	otherwise qualify for the revised credit, during which time the
546	insurer shall continue to apply the mitigation credit that was
547	applied immediately prior to the effective date of the revised
548	credit. Discounts, credits, and other rate differentials
549	established for rate filings under this paragraph shall
550	supersede, after adoption, the discounts, credits, and other
551	rate differentials included in rate filings under paragraph (a).
552	(5)  In order to provide an appropriate transition period,
553	an insurer may, in its sole discretion, implement an approved
554	rate filing for residential property insurance over a period of
555	years. An insurer electing to phase in its rate filing must
556	provide an informational notice to the office setting out its
557	schedule for implementation of the phased-in rate filing. An
558	insurer may include in its rate the actual cost of private
559	market reinsurance that corresponds to available coverage of the
560	Temporary Increase in Coverage Limits, TICL, from the Florida
561	Hurricane Catastrophe Fund. The insurer may also include the
562	cost of reinsurance to replace the TICL reduction implemented
563	pursuant to s. 215.555(17)(d)9. However, this cost for
564	reinsurance may not include any expense or profit load or result
565	in a total annual base rate increase in excess of 10 percent.
566	(10)(a)  Contingent upon specific appropriations made to
567	implement this subsection, in order to enhance the ability of
568	consumers to compare premiums and to increase the accuracy and
569	usefulness of rate and product comparison information for
570	homeowners' insurance, the office shall develop or contract with
571	a private entity to develop a comprehensive program for
572	providing the consumer with all available information necessary
573	to make an informed purchase of the insurance product that best
574	serves the needs of the individual.
575	(b)  In developing the comprehensive program, the office
576	shall rely as much as is practical on information that is
577	currently available and shall consider:
578	1.  The most efficient means for developing, hosting, and
579	operating a separate website that consolidates all consumer
580	information for price comparisons, filed complaints, financial
581	strength, underwriting, and receivership information and other
582	data useful to consumers.
583	2.  Whether all admitted insurers should be required to
584	submit additional information to populate the composite website
585	and how often such submissions must be made.
586	3.  Whether all admitted insurers should be required to
587	provide links from the website into each individual insurer's
588	website in order to enable consumers to access product rate
589	information and apply for quotations.
590	4.  Developing a plan to publicize the existence,
591	availability, and value of the website.
592	5.  Any other provision that would make relevant
593	homeowners' insurance information more readily available so that
594	consumers can make informed product comparisons and purchasing
595	decisions.
596	(c)  Before establishing the program or website, the office
597	shall conduct a cost-benefit analysis to determine the most
598	effective approach for establishing and operating the program
599	and website. Based on the results of the analysis, the office
600	shall submit a proposed implementation plan for review and
601	approval by the Financial Services Commission. The
602	implementation plan shall include an estimated timeline for
603	establishing the program and website; a description of the data
604	and functionality to be provided by the site; a strategy for
605	publicizing the website to consumers; a recommended approach for
606	developing, hosting, and operating the website; and an estimate
607	of all major nonrecurring and recurring costs required to
608	establish and operate the website. Upon approval of the plan,
609	the office may initiate the establishment of the program.
610	Section 8.  Paragraphs (b), (c), (y), (z), (aa), (bb),
611	(cc), (dd), (ee), and (ff) of subsection (6) of section 627.351,
612	Florida Statutes, are amended to read:
613	627.351  Insurance risk apportionment plans.-
614	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
615	(b)1.  All insurers authorized to write one or more subject
616	lines of business in this state are subject to assessment by the
617	corporation and, for the purposes of this subsection, are
618	referred to collectively as "assessable insurers." Insurers
619	writing one or more subject lines of business in this state
620	pursuant to part VIII of chapter 626 are not assessable
621	insurers, but insureds who procure one or more subject lines of
622	business in this state pursuant to part VIII of chapter 626 are
623	subject to assessment by the corporation and are referred to
624	collectively as "assessable insureds." An authorized insurer's
625	assessment liability shall begin on the first day of the
626	calendar year following the year in which the insurer was issued
627	a certificate of authority to transact insurance for subject
628	lines of business in this state and shall terminate 1 year after
629	the end of the first calendar year during which the insurer no
630	longer holds a certificate of authority to transact insurance
631	for subject lines of business in this state.
632	2.a.  All revenues, assets, liabilities, losses, and
633	expenses of the corporation shall be divided into three separate
634	accounts as follows:
635	(I)  A personal lines account for personal residential
636	policies issued by the corporation or issued by the Residential
637	Property and Casualty Joint Underwriting Association and renewed
638	by the corporation that provide comprehensive, multiperil
639	coverage on risks that are not located in areas eligible for
640	coverage in the Florida Windstorm Underwriting Association as
641	those areas were defined on January 1, 2002, and for such
642	policies that do not provide coverage for the peril of wind on
643	risks that are located in such areas;
644	(II)  A commercial lines account for commercial residential
645	and commercial nonresidential policies issued by the corporation
646	or issued by the Residential Property and Casualty Joint
647	Underwriting Association and renewed by the corporation that
648	provide coverage for basic property perils on risks that are not
649	located in areas eligible for coverage in the Florida Windstorm
650	Underwriting Association as those areas were defined on January
651	1, 2002, and for such policies that do not provide coverage for
652	the peril of wind on risks that are located in such areas; and
653	(III)  A high-risk account for personal residential
654	policies and commercial residential and commercial
655	nonresidential property policies issued by the corporation or
656	transferred to the corporation that provide coverage for the
657	peril of wind on risks that are located in areas eligible for
658	coverage in the Florida Windstorm Underwriting Association as
659	those areas were defined on January 1, 2002. The corporation may
660	offer policies that provide multiperil coverage and the
661	corporation shall continue to offer policies that provide
662	coverage only for the peril of wind for risks located in areas
663	eligible for coverage in the high-risk account. In issuing
664	multiperil coverage, the corporation may use its approved policy
665	forms and rates for the personal lines account. An applicant or
666	insured who is eligible to purchase a multiperil policy from the
667	corporation may purchase a multiperil policy from an authorized
668	insurer without prejudice to the applicant's or insured's
669	eligibility to prospectively purchase a policy that provides
670	coverage only for the peril of wind from the corporation. An
671	applicant or insured who is eligible for a corporation policy
672	that provides coverage only for the peril of wind may elect to
673	purchase or retain such policy and also purchase or retain
674	coverage excluding wind from an authorized insurer without
675	prejudice to the applicant's or insured's eligibility to
676	prospectively purchase a policy that provides multiperil
677	coverage from the corporation. It is the goal of the Legislature
678	that there would be an overall average savings of 10 percent or
679	more for a policyholder who currently has a wind-only policy
680	with the corporation, and an ex-wind policy with a voluntary
681	insurer or the corporation, and who then obtains a multiperil
682	policy from the corporation. It is the intent of the Legislature
683	that the offer of multiperil coverage in the high-risk account
684	be made and implemented in a manner that does not adversely
685	affect the tax-exempt status of the corporation or
686	creditworthiness of or security for currently outstanding
687	financing obligations or credit facilities of the high-risk
688	account, the personal lines account, or the commercial lines
689	account. The high-risk account must also include quota share
690	primary insurance under subparagraph (c)2. The area eligible for
691	coverage under the high-risk account also includes the area
692	within Port Canaveral, which is bordered on the south by the
693	City of Cape Canaveral, bordered on the west by the Banana
694	River, and bordered on the north by Federal Government property.
695	b.  The three separate accounts must be maintained as long
696	as financing obligations entered into by the Florida Windstorm
697	Underwriting Association or Residential Property and Casualty
698	Joint Underwriting Association are outstanding, in accordance
699	with the terms of the corresponding financing documents. When
700	the financing obligations are no longer outstanding, in
701	accordance with the terms of the corresponding financing
702	documents, the corporation may use a single account for all
703	revenues, assets, liabilities, losses, and expenses of the
704	corporation. Consistent with the requirement of this
705	subparagraph and prudent investment policies that minimize the
706	cost of carrying debt, the board shall exercise its best efforts
707	to retire existing debt or to obtain approval of necessary
708	parties to amend the terms of existing debt, so as to structure
709	the most efficient plan to consolidate the three separate
710	accounts into a single account. By February 1, 2007, the board
711	shall submit a report to the Financial Services Commission, the
712	President of the Senate, and the Speaker of the House of
713	Representatives which includes an analysis of consolidating the
714	accounts, the actions the board has taken to minimize the cost
715	of carrying debt, and its recommendations for executing the most
716	efficient plan.
717	c.  Creditors of the Residential Property and Casualty
718	Joint Underwriting Association and of the accounts specified in
719	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
720	and recourse to, the accounts referred to in sub-sub-
721	subparagraphs a.(I) and (II) and shall have no claim against, or
722	recourse to, the account referred to in sub-sub-subparagraph
723	a.(III). Creditors of the Florida Windstorm Underwriting
724	Association shall have a claim against, and recourse to, the
725	account referred to in sub-sub-subparagraph a.(III) and shall
726	have no claim against, or recourse to, the accounts referred to
727	in sub-sub-subparagraphs a.(I) and (II).
728	d.  Revenues, assets, liabilities, losses, and expenses not
729	attributable to particular accounts shall be prorated among the
730	accounts.
731	e.  The Legislature finds that the revenues of the
732	corporation are revenues that are necessary to meet the
733	requirements set forth in documents authorizing the issuance of
734	bonds under this subsection.
735	f.  No part of the income of the corporation may inure to
736	the benefit of any private person.
737	3.  With respect to a deficit in an account:
738	a.  After accounting for the Citizens policyholder
739	surcharge imposed under sub-subparagraph i., when the remaining
740	projected deficit incurred in a particular calendar year is not
741	greater than 6 percent of the aggregate statewide direct written
742	premium for the subject lines of business for the prior calendar
743	year, the entire deficit shall be recovered through regular
744	assessments of assessable insurers under paragraph (p) and
745	assessable insureds.
746	b.  After accounting for the Citizens policyholder
747	surcharge imposed under sub-subparagraph i., when the remaining
748	projected deficit incurred in a particular calendar year exceeds
749	6 percent of the aggregate statewide direct written premium for
750	the subject lines of business for the prior calendar year, the
751	corporation shall levy regular assessments on assessable
752	insurers under paragraph (p) and on assessable insureds in an
753	amount equal to the greater of 6 percent of the deficit or 6
754	percent of the aggregate statewide direct written premium for
755	the subject lines of business for the prior calendar year. Any
756	remaining deficit shall be recovered through emergency
757	assessments under sub-subparagraph d.
758	c.  Each assessable insurer's share of the amount being
759	assessed under sub-subparagraph a. or sub-subparagraph b. shall
760	be in the proportion that the assessable insurer's direct
761	written premium for the subject lines of business for the year
762	preceding the assessment bears to the aggregate statewide direct
763	written premium for the subject lines of business for that year.
764	The assessment percentage applicable to each assessable insured
765	is the ratio of the amount being assessed under sub-subparagraph
766	a. or sub-subparagraph b. to the aggregate statewide direct
767	written premium for the subject lines of business for the prior
768	year. Assessments levied by the corporation on assessable
769	insurers under sub-subparagraphs a. and b. shall be paid as
770	required by the corporation's plan of operation and paragraph
771	(p). Assessments levied by the corporation on assessable
772	insureds under sub-subparagraphs a. and b. shall be collected by
773	the surplus lines agent at the time the surplus lines agent
774	collects the surplus lines tax required by s. 626.932 and shall
775	be paid to the Florida Surplus Lines Service Office at the time
776	the surplus lines agent pays the surplus lines tax to the
777	Florida Surplus Lines Service Office. Upon receipt of regular
778	assessments from surplus lines agents, the Florida Surplus Lines
779	Service Office shall transfer the assessments directly to the
780	corporation as determined by the corporation.
781	d.  Upon a determination by the board of governors that a
782	deficit in an account exceeds the amount that will be recovered
783	through regular assessments under sub-subparagraph a. or sub-
784	subparagraph b., plus the amount that is expected to be
785	recovered through surcharges under sub-subparagraph i., as to
786	the remaining projected deficit the board shall levy, after
787	verification by the office, emergency assessments, for as many
788	years as necessary to cover the deficits, to be collected by
789	assessable insurers and the corporation and collected from
790	assessable insureds upon issuance or renewal of policies for
791	subject lines of business, excluding National Flood Insurance
792	policies. The amount of the emergency assessment collected in a
793	particular year shall be a uniform percentage of that year's
794	direct written premium for subject lines of business and all
795	accounts of the corporation, excluding National Flood Insurance
796	Program policy premiums, as annually determined by the board and
797	verified by the office. The office shall verify the arithmetic
798	calculations involved in the board's determination within 30
799	days after receipt of the information on which the determination
800	was based. Notwithstanding any other provision of law, the
801	corporation and each assessable insurer that writes subject
802	lines of business shall collect emergency assessments from its
803	policyholders without such obligation being affected by any
804	credit, limitation, exemption, or deferment. Emergency
805	assessments levied by the corporation on assessable insureds
806	shall be collected by the surplus lines agent at the time the
807	surplus lines agent collects the surplus lines tax required by
808	s. 626.932 and shall be paid to the Florida Surplus Lines
809	Service Office at the time the surplus lines agent pays the
810	surplus lines tax to the Florida Surplus Lines Service Office.
811	The emergency assessments so collected shall be transferred
812	directly to the corporation on a periodic basis as determined by
813	the corporation and shall be held by the corporation solely in
814	the applicable account. The aggregate amount of emergency
815	assessments levied for an account under this sub-subparagraph in
816	any calendar year may, at the discretion of the board of
817	governors, be less than but may not exceed the greater of 10
818	percent of the amount needed to cover the deficit, plus
819	interest, fees, commissions, required reserves, and other costs
820	associated with financing of the original deficit, or 10 percent
821	of the aggregate statewide direct written premium for subject
822	lines of business and for all accounts of the corporation for
823	the prior year, plus interest, fees, commissions, required
824	reserves, and other costs associated with financing the deficit.
825	e.  The corporation may pledge the proceeds of assessments,
826	projected recoveries from the Florida Hurricane Catastrophe
827	Fund, other insurance and reinsurance recoverables, policyholder
828	surcharges and other surcharges, and other funds available to
829	the corporation as the source of revenue for and to secure bonds
830	issued under paragraph (p), bonds or other indebtedness issued
831	under subparagraph (c)3., or lines of credit or other financing
832	mechanisms issued or created under this subsection, or to retire
833	any other debt incurred as a result of deficits or events giving
834	rise to deficits, or in any other way that the board determines
835	will efficiently recover such deficits. The purpose of the lines
836	of credit or other financing mechanisms is to provide additional
837	resources to assist the corporation in covering claims and
838	expenses attributable to a catastrophe. As used in this
839	subsection, the term "assessments" includes regular assessments
840	under sub-subparagraph a., sub-subparagraph b., or subparagraph
841	(p)1. and emergency assessments under sub-subparagraph d.
842	Emergency assessments collected under sub-subparagraph d. are
843	not part of an insurer's rates, are not premium, and are not
844	subject to premium tax, fees, or commissions; however, failure
845	to pay the emergency assessment shall be treated as failure to
846	pay premium. The emergency assessments under sub-subparagraph d.
847	shall continue as long as any bonds issued or other indebtedness
848	incurred with respect to a deficit for which the assessment was
849	imposed remain outstanding, unless adequate provision has been
850	made for the payment of such bonds or other indebtedness
851	pursuant to the documents governing such bonds or other
852	indebtedness.
853	f.  As used in this subsection for purposes of any deficit
854	incurred on or after January 25, 2007, the term "subject lines
855	of business" means insurance written by assessable insurers or
856	procured by assessable insureds for all property and casualty
857	lines of business in this state, but not including workers'
858	compensation or medical malpractice. As used in the sub-
859	subparagraph, the term "property and casualty lines of business"
860	includes all lines of business identified on Form 2, Exhibit of
861	Premiums and Losses, in the annual statement required of
862	authorized insurers by s. 624.424 and any rule adopted under
863	this section, except for those lines identified as accident and
864	health insurance and except for policies written under the
865	National Flood Insurance Program or the Federal Crop Insurance
866	Program. For purposes of this sub-subparagraph, the term
867	"workers' compensation" includes both workers' compensation
868	insurance and excess workers' compensation insurance.
869	g.  The Florida Surplus Lines Service Office shall
870	determine annually the aggregate statewide written premium in
871	subject lines of business procured by assessable insureds and
872	shall report that information to the corporation in a form and
873	at a time the corporation specifies to ensure that the
874	corporation can meet the requirements of this subsection and the
875	corporation's financing obligations.
876	h.  The Florida Surplus Lines Service Office shall verify
877	the proper application by surplus lines agents of assessment
878	percentages for regular assessments and emergency assessments
879	levied under this subparagraph on assessable insureds and shall
880	assist the corporation in ensuring the accurate, timely
881	collection and payment of assessments by surplus lines agents as
882	required by the corporation.
883	i.(I)  If a deficit is incurred in any account in 2008 or
884	thereafter, the board of governors shall levy a Citizens
885	policyholder surcharge against all policyholders of the
886	corporation.
887	(II)  The policyholder's liability for the Citizens
888	policyholder surcharge attaches on the date of the order levying
889	the surcharge. The Citizens policyholder surcharge is payable
890	upon cancellation or termination of the policy, upon renewal of
891	the policy, or upon issuance of a new policy by Citizens within
892	the first 12 months after the date of the levy or the period of
893	time necessary to fully collect the Citizens policyholder
894	surcharge amount.
895	(III)  The Citizens policyholder surcharge for a 12-month
896	period, which shall be levied collected at the time of issuance
897	or renewal of a policy, as a uniform percentage
898	for the policy of up to 15 percent of such premium, which funds
899	shall be used to offset the deficit.
900	(IV)  The corporation may not levy any regular assessments
901	under sub-subparagraph a. or sub-subparagraph b. with respect to
902	a particular year's deficit until the corporation has first
903	levied a Citizens policyholder surcharge under this sub-
904	subparagraph in the full amount authorized by this sub-
905	subparagraph.
906	(V)  Citizens policyholder surcharges under this sub-
907	subparagraph are not considered premium and are not subject to
908	commissions, fees, or premium taxes. However, failure to pay
909	such surcharges shall be treated as failure to pay premium.
910	j.  If the amount of any assessments or surcharges
911	collected from corporation policyholders, assessable insurers or
912	their policyholders, or assessable insureds exceeds the amount
913	of the deficits, such excess amounts shall be remitted to and
914	retained by the corporation in a reserve to be used by the
915	corporation, as determined by the board of governors and
916	approved by the office, to pay claims or reduce any past,
917	present, or future plan-year deficits or to reduce outstanding
918	debt.
919	(c)  The plan of operation of the corporation:
920	1.  Must provide for adoption of residential property and
921	casualty insurance policy forms and commercial residential and
922	nonresidential property insurance forms, which forms must be
923	approved by the office prior to use. The corporation shall adopt
924	the following policy forms:
925	a.  Standard personal lines policy forms that are
926	comprehensive multiperil policies providing full coverage of a
927	residential property equivalent to the coverage provided in the
928	private insurance market under an HO-3, HO-4, or HO-6 policy.
929	b.  Basic personal lines policy forms that are policies
930	similar to an HO-8 policy or a dwelling fire policy that provide
931	coverage meeting the requirements of the secondary mortgage
932	market, but which coverage is more limited than the coverage
933	under a standard policy.
934	c.  Commercial lines residential and nonresidential policy
935	forms that are generally similar to the basic perils of full
936	coverage obtainable for commercial residential structures and
937	commercial nonresidential structures in the admitted voluntary
938	market.
939	d.  Personal lines and commercial lines residential
940	property insurance forms that cover the peril of wind only. The
941	forms are applicable only to residential properties located in
942	areas eligible for coverage under the high-risk account referred
943	to in sub-subparagraph (b)2.a.
944	e.  Commercial lines nonresidential property insurance
945	forms that cover the peril of wind only. The forms are
946	applicable only to nonresidential properties located in areas
947	eligible for coverage under the high-risk account referred to in
948	sub-subparagraph (b)2.a.
949	f.  The corporation may adopt variations of the policy
950	forms listed in sub-subparagraphs a.-e. that contain more
951	restrictive coverage.
952	2.a.  Must provide that the corporation adopt a program in
953	which the corporation and authorized insurers enter into quota
954	share primary insurance agreements for hurricane coverage, as
955	defined in s. 627.4025(2)(a), for eligible risks, and adopt
956	property insurance forms for eligible risks which cover the
957	peril of wind only. As used in this subsection, the term:
958	(I)  "Quota share primary insurance" means an arrangement
959	in which the primary hurricane coverage of an eligible risk is
960	provided in specified percentages by the corporation and an
961	authorized insurer. The corporation and authorized insurer are
962	each solely responsible for a specified percentage of hurricane
963	coverage of an eligible risk as set forth in a quota share
964	primary insurance agreement between the corporation and an
965	authorized insurer and the insurance contract. The
966	responsibility of the corporation or authorized insurer to pay
967	its specified percentage of hurricane losses of an eligible
968	risk, as set forth in the quota share primary insurance
969	agreement, may not be altered by the inability of the other
970	party to the agreement to pay its specified percentage of
971	hurricane losses. Eligible risks that are provided hurricane
972	coverage through a quota share primary insurance arrangement
973	must be provided policy forms that set forth the obligations of
974	the corporation and authorized insurer under the arrangement,
975	clearly specify the percentages of quota share primary insurance
976	provided by the corporation and authorized insurer, and
977	conspicuously and clearly state that neither the authorized
978	insurer nor the corporation may be held responsible beyond its
979	specified percentage of coverage of hurricane losses.
980	(II)  "Eligible risks" means personal lines residential and
981	commercial lines residential risks that meet the underwriting
982	criteria of the corporation and are located in areas that were
983	eligible for coverage by the Florida Windstorm Underwriting
984	Association on January 1, 2002.
985	b.  The corporation may enter into quota share primary
986	insurance agreements with authorized insurers at corporation
987	coverage levels of 90 percent and 50 percent.
988	c.  If the corporation determines that additional coverage
989	levels are necessary to maximize participation in quota share
990	primary insurance agreements by authorized insurers, the
991	corporation may establish additional coverage levels. However,
992	the corporation's quota share primary insurance coverage level
993	may not exceed 90 percent.
994	d.  Any quota share primary insurance agreement entered
995	into between an authorized insurer and the corporation must
996	provide for a uniform specified percentage of coverage of
997	hurricane losses, by county or territory as set forth by the
998	corporation board, for all eligible risks of the authorized
999	insurer covered under the quota share primary insurance
1000	agreement.
1001	e.  Any quota share primary insurance agreement entered
1002	into between an authorized insurer and the corporation is
1003	subject to review and approval by the office. However, such
1004	agreement shall be authorized only as to insurance contracts
1005	entered into between an authorized insurer and an insured who is
1006	already insured by the corporation for wind coverage.
1007	f.  For all eligible risks covered under quota share
1008	primary insurance agreements, the exposure and coverage levels
1009	for both the corporation and authorized insurers shall be
1010	reported by the corporation to the Florida Hurricane Catastrophe
1011	Fund. For all policies of eligible risks covered under quota
1012	share primary insurance agreements, the corporation and the
1013	authorized insurer shall maintain complete and accurate records
1014	for the purpose of exposure and loss reimbursement audits as
1015	required by Florida Hurricane Catastrophe Fund rules. The
1016	corporation and the authorized insurer shall each maintain
1017	duplicate copies of policy declaration pages and supporting
1018	claims documents.
1019	g.  The corporation board shall establish in its plan of
1020	operation standards for quota share agreements which ensure that
1021	there is no discriminatory application among insurers as to the
1022	terms of quota share agreements, pricing of quota share
1023	agreements, incentive provisions if any, and consideration paid
1024	for servicing policies or adjusting claims.
1025	h.  The quota share primary insurance agreement between the
1026	corporation and an authorized insurer must set forth the
1027	specific terms under which coverage is provided, including, but
1028	not limited to, the sale and servicing of policies issued under
1029	the agreement by the insurance agent of the authorized insurer
1030	producing the business, the reporting of information concerning
1031	eligible risks, the payment of premium to the corporation, and
1032	arrangements for the adjustment and payment of hurricane claims
1033	incurred on eligible risks by the claims adjuster and personnel
1034	of the authorized insurer. Entering into a quota sharing
1035	insurance agreement between the corporation and an authorized
1036	insurer shall be voluntary and at the discretion of the
1037	authorized insurer.
1038	3.  May provide that the corporation may employ or
1039	otherwise contract with individuals or other entities to provide
1040	administrative or professional services that may be appropriate
1041	to effectuate the plan. The corporation shall have the power to
1042	borrow funds, by issuing bonds or by incurring other
1043	indebtedness, and shall have other powers reasonably necessary
1044	to effectuate the requirements of this subsection, including,
1045	without limitation, the power to issue bonds and incur other
1046	indebtedness in order to refinance outstanding bonds or other
1047	indebtedness. The corporation may, but is not required to, seek
1048	judicial validation of its bonds or other indebtedness under
1049	chapter 75. The corporation may issue bonds or incur other
1050	indebtedness, or have bonds issued on its behalf by a unit of
1051	local government pursuant to subparagraph (p)2., in the absence
1052	of a hurricane or other weather-related event, upon a
1053	determination by the corporation, subject to approval by the
1054	office, that such action would enable it to efficiently meet the
1055	financial obligations of the corporation and that such
1056	financings are reasonably necessary to effectuate the
1057	requirements of this subsection. The corporation is authorized
1058	to take all actions needed to facilitate tax-free status for any
1059	such bonds or indebtedness, including formation of trusts or
1060	other affiliated entities. The corporation shall have the
1061	authority to pledge assessments, projected recoveries from the
1062	Florida Hurricane Catastrophe Fund, other reinsurance
1063	recoverables, market equalization and other surcharges, and
1064	other funds available to the corporation as security for bonds
1065	or other indebtedness. In recognition of s. 10, Art. I of the
1066	State Constitution, prohibiting the impairment of obligations of
1067	contracts, it is the intent of the Legislature that no action be
1068	taken whose purpose is to impair any bond indenture or financing
1069	agreement or any revenue source committed by contract to such
1070	bond or other indebtedness.
1071	4.a.  Must require that the corporation operate subject to
1072	the supervision and approval of a board of governors consisting
1073	of eight individuals who are residents of this state, from
1074	different geographical areas of this state. The Governor, the
1075	Chief Financial Officer, the President of the Senate, and the
1076	Speaker of the House of Representatives shall each appoint two
1077	members of the board. At least one of the two members appointed
1078	by each appointing officer must have demonstrated expertise in
1079	insurance. The Chief Financial Officer shall designate one of
1080	the appointees as chair. All board members serve at the pleasure
1081	of the appointing officer. All members of the board of governors
1082	are subject to removal at will by the officers who appointed
1083	them. All board members, including the chair, must be appointed
1084	to serve for 3-year terms beginning annually on a date
1085	designated by the plan. However, for the first term beginning on
1086	or after July 1, 2009, each appointing officer shall appoint one
1087	member of the board for a 2-year term and one member for a 3-
1088	year term. Any board vacancy shall be filled for the unexpired
1089	term by the appointing officer. The Chief Financial Officer
1090	shall appoint a technical advisory group to provide information
1091	and advice to the board of governors in connection with the
1092	board's duties under this subsection. The executive director and
1093	senior managers of the corporation shall be engaged by the board
1094	and serve at the pleasure of the board. Any executive director
1095	appointed on or after July 1, 2006, is subject to confirmation
1096	by the Senate. The executive director is responsible for
1097	employing other staff as the corporation may require, subject to
1098	review and concurrence by the board.
1099	b.  The board shall create a Market Accountability Advisory
1100	Committee to assist the corporation in developing awareness of
1101	its rates and its customer and agent service levels in
1102	relationship to the voluntary market insurers writing similar
1103	coverage. The members of the advisory committee shall consist of
1104	the following 11 persons, one of whom must be elected chair by
1105	the members of the committee: four representatives, one
1106	appointed by the Florida Association of Insurance Agents, one by
1107	the Florida Association of Insurance and Financial Advisors, one
1108	by the Professional Insurance Agents of Florida, and one by the
1109	Latin American Association of Insurance Agencies; three
1110	representatives appointed by the insurers with the three highest
1111	voluntary market share of residential property insurance
1112	business in the state; one representative from the Office of
1113	Insurance Regulation; one consumer appointed by the board who is
1114	insured by the corporation at the time of appointment to the
1115	committee; one representative appointed by the Florida
1116	Association of Realtors; and one representative appointed by the
1117	Florida Bankers Association. All members must serve for 3-year
1118	terms and may serve for consecutive terms. The committee shall
1119	report to the corporation at each board meeting on insurance
1120	market issues which may include rates and rate competition with
1121	the voluntary market; service, including policy issuance, claims
1122	processing, and general responsiveness to policyholders,
1123	applicants, and agents; and matters relating to depopulation.
1124	5.  Must provide a procedure for determining the
1125	eligibility of a risk for coverage, as follows:
1126	a.  Subject to the provisions of s. 627.3517, with respect
1127	to personal lines residential risks, if the risk is offered
1128	coverage from an authorized insurer at the insurer's approved
1129	rate under either a standard policy including wind coverage or,
1130	if consistent with the insurer's underwriting rules as filed
1131	with the office, a basic policy including wind coverage, for a
1132	new application to the corporation for coverage, the risk is not
1133	eligible for any policy issued by the corporation unless the
1134	premium for coverage from the authorized insurer is more than 15
1135	percent greater than the premium for comparable coverage from
1136	the corporation. If the risk is not able to obtain any such
1137	offer, the risk is eligible for either a standard policy
1138	including wind coverage or a basic policy including wind
1139	coverage issued by the corporation; however, if the risk could
1140	not be insured under a standard policy including wind coverage
1141	regardless of market conditions, the risk shall be eligible for
1142	a basic policy including wind coverage unless rejected under
1143	subparagraph 8. However, with regard to a policyholder of the
1144	corporation or a policyholder removed from the corporation
1145	through an assumption agreement until the end of the assumption
1146	period, the policyholder remains eligible for coverage from the
1147	corporation regardless of any offer of coverage from an
1148	authorized insurer or surplus lines insurer. The corporation
1149	shall determine the type of policy to be provided on the basis
1150	of objective standards specified in the underwriting manual and
1151	based on generally accepted underwriting practices.
1152	(I)  If the risk accepts an offer of coverage through the
1153	market assistance plan or an offer of coverage through a
1154	mechanism established by the corporation before a policy is
1155	issued to the risk by the corporation or during the first 30
1156	days of coverage by the corporation, and the producing agent who
1157	submitted the application to the plan or to the corporation is
1158	not currently appointed by the insurer, the insurer shall:
1159	(A)  Pay to the producing agent of record of the policy,
1160	for the first year, an amount that is the greater of the
1161	insurer's usual and customary commission for the type of policy
1162	written or a fee equal to the usual and customary commission of
1163	the corporation; or
1164	(B)  Offer to allow the producing agent of record of the
1165	policy to continue servicing the policy for a period of not less
1166	than 1 year and offer to pay the agent the greater of the
1167	insurer's or the corporation's usual and customary commission
1168	for the type of policy written.
1169
1170	If the producing agent is unwilling or unable to accept
1171	appointment, the new insurer shall pay the agent in accordance
1172	with sub-sub-sub-subparagraph (A).
1173	(II)  When the corporation enters into a contractual
1174	agreement for a take-out plan, the producing agent of record of
1175	the corporation policy is entitled to retain any unearned
1176	commission on the policy, and the insurer shall:
1177	(A)  Pay to the producing agent of record of the
1178	corporation policy, for the first year, an amount that is the
1179	greater of the insurer's usual and customary commission for the
1180	type of policy written or a fee equal to the usual and customary
1181	commission of the corporation; or
1182	(B)  Offer to allow the producing agent of record of the
1183	corporation policy to continue servicing the policy for a period
1184	of not less than 1 year and offer to pay the agent the greater
1185	of the insurer's or the corporation's usual and customary
1186	commission for the type of policy written.
1187
1188	If the producing agent is unwilling or unable to accept
1189	appointment, the new insurer shall pay the agent in accordance
1190	with sub-sub-sub-subparagraph (A).
1191	b.  With respect to commercial lines residential risks, for
1192	a new application to the corporation for coverage, if the risk
1193	is offered coverage under a policy including wind coverage from
1194	an authorized insurer at its approved rate, the risk is not
1195	eligible for any policy issued by the corporation unless the
1196	premium for coverage from the authorized insurer is more than 15
1197	percent greater than the premium for comparable coverage from
1198	the corporation. If the risk is not able to obtain any such
1199	offer, the risk is eligible for a policy including wind coverage
1200	issued by the corporation. However, with regard to a
1201	policyholder of the corporation or a policyholder removed from
1202	the corporation through an assumption agreement until the end of
1203	the assumption period, the policyholder remains eligible for
1204	coverage from the corporation regardless of any offer of
1205	coverage from an authorized insurer or surplus lines insurer.
1206	(I)  If the risk accepts an offer of coverage through the
1207	market assistance plan or an offer of coverage through a
1208	mechanism established by the corporation before a policy is
1209	issued to the risk by the corporation or during the first 30
1210	days of coverage by the corporation, and the producing agent who
1211	submitted the application to the plan or the corporation is not
1212	currently appointed by the insurer, the insurer shall:
1213	(A)  Pay to the producing agent of record of the policy,
1214	for the first year, an amount that is the greater of the
1215	insurer's usual and customary commission for the type of policy
1216	written or a fee equal to the usual and customary commission of
1217	the corporation; or
1218	(B)  Offer to allow the producing agent of record of the
1219	policy to continue servicing the policy for a period of not less
1220	than 1 year and offer to pay the agent the greater of the
1221	insurer's or the corporation's usual and customary commission
1222	for the type of policy written.
1223
1224	If the producing agent is unwilling or unable to accept
1225	appointment, the new insurer shall pay the agent in accordance
1226	with sub-sub-sub-subparagraph (A).
1227	(II)  When the corporation enters into a contractual
1228	agreement for a take-out plan, the producing agent of record of
1229	the corporation policy is entitled to retain any unearned
1230	commission on the policy, and the insurer shall:
1231	(A)  Pay to the producing agent of record of the
1232	corporation policy, for the first year, an amount that is the
1233	greater of the insurer's usual and customary commission for the
1234	type of policy written or a fee equal to the usual and customary
1235	commission of the corporation; or
1236	(B)  Offer to allow the producing agent of record of the
1237	corporation policy to continue servicing the policy for a period
1238	of not less than 1 year and offer to pay the agent the greater
1239	of the insurer's or the corporation's usual and customary
1240	commission for the type of policy written.
1241
1242	If the producing agent is unwilling or unable to accept
1243	appointment, the new insurer shall pay the agent in accordance
1244	with sub-sub-sub-subparagraph (A).
1245	c.  For purposes of determining comparable coverage under
1246	sub-subparagraphs a. and b., the comparison shall be based on
1247	those forms and coverages that are reasonably comparable. The
1248	corporation may rely on a determination of comparable coverage
1249	and premium made by the producing agent who submits the
1250	application to the corporation, made in the agent's capacity as
1251	the corporation's agent. A comparison may be made solely of the
1252	premium with respect to the main building or structure only on
1253	the following basis: the same coverage A or other building
1254	limits; the same percentage hurricane deductible that applies on
1255	an annual basis or that applies to each hurricane for commercial
1256	residential property; the same percentage of ordinance and law
1257	coverage, if the same limit is offered by both the corporation
1258	and the authorized insurer; the same mitigation credits, to the
1259	extent the same types of credits are offered both by the
1260	corporation and the authorized insurer; the same method for loss
1261	payment, such as replacement cost or actual cash value, if the
1262	same method is offered both by the corporation and the
1263	authorized insurer in accordance with underwriting rules; and
1264	any other form or coverage that is reasonably comparable as
1265	determined by the board. If an application is submitted to the
1266	corporation for wind-only coverage in the high-risk account, the
1267	premium for the corporation's wind-only policy plus the premium
1268	for the ex-wind policy that is offered by an authorized insurer
1269	to the applicant shall be compared to the premium for multiperil
1270	coverage offered by an authorized insurer, subject to the
1271	standards for comparison specified in this subparagraph. If the
1272	corporation or the applicant requests from the authorized
1273	insurer a breakdown of the premium of the offer by types of
1274	coverage so that a comparison may be made by the corporation or
1275	its agent and the authorized insurer refuses or is unable to
1276	provide such information, the corporation may treat the offer as
1277	not being an offer of coverage from an authorized insurer at the
1278	insurer's approved rate.
1279	6.  Must include rules for classifications of risks and
1280	rates therefor.
1281	7.  Must provide that if premium and investment income for
1282	an account attributable to a particular calendar year are in
1283	excess of projected losses and expenses for the account
1284	attributable to that year, such excess shall be held in surplus
1285	in the account. Such surplus shall be available to defray
1286	deficits in that account as to future years and shall be used
1287	for that purpose prior to assessing assessable insurers and
1288	assessable insureds as to any calendar year.
1289	8.  Must provide objective criteria and procedures to be
1290	uniformly applied for all applicants in determining whether an
1291	individual risk is so hazardous as to be uninsurable. In making
1292	this determination and in establishing the criteria and
1293	procedures, the following shall be considered:
1294	a.  Whether the likelihood of a loss for the individual
1295	risk is substantially higher than for other risks of the same
1296	class; and
1297	b.  Whether the uncertainty associated with the individual
1298	risk is such that an appropriate premium cannot be determined.
1299
1300	The acceptance or rejection of a risk by the corporation shall
1301	be construed as the private placement of insurance, and the
1302	provisions of chapter 120 shall not apply.
1303	9.  Must provide that the corporation shall make its best
1304	efforts to procure catastrophe reinsurance at reasonable rates,
1305	to cover its projected 100-year probable maximum loss as
1306	determined by the board of governors.
1307	10.  The policies issued by the corporation must provide
1308	that, if the corporation or the market assistance plan obtains
1309	an offer from an authorized insurer to cover the risk at its
1310	approved rates, the risk is no longer eligible for renewal
1311	through the corporation, except as otherwise provided in this
1312	subsection.
1313	11.  Corporation policies and applications must include a
1314	notice that the corporation policy could, under this section, be
1315	replaced with a policy issued by an authorized insurer that does
1316	not provide coverage identical to the coverage provided by the
1317	corporation. The notice shall also specify that acceptance of
1318	corporation coverage creates a conclusive presumption that the
1319	applicant or policyholder is aware of this potential.
1320	12.  May establish, subject to approval by the office,
1321	different eligibility requirements and operational procedures
1322	for any line or type of coverage for any specified county or
1323	area if the board determines that such changes to the
1324	eligibility requirements and operational procedures are
1325	justified due to the voluntary market being sufficiently stable
1326	and competitive in such area or for such line or type of
1327	coverage and that consumers who, in good faith, are unable to
1328	obtain insurance through the voluntary market through ordinary
1329	methods would continue to have access to coverage from the
1330	corporation. When coverage is sought in connection with a real
1331	property transfer, such requirements and procedures shall not
1332	provide for an effective date of coverage later than the date of
1333	the closing of the transfer as established by the transferor,
1334	the transferee, and, if applicable, the lender.
1335	13.  Must provide that, with respect to the high-risk
1336	account, any assessable insurer with a surplus as to
1337	policyholders of $25 million or less writing 25 percent or more
1338	of its total countrywide property insurance premiums in this
1339	state may petition the office, within the first 90 days of each
1340	calendar year, to qualify as a limited apportionment company. A
1341	regular assessment levied by the corporation on a limited
1342	apportionment company for a deficit incurred by the corporation
1343	for the high-risk account in 2006 or thereafter may be paid to
1344	the corporation on a monthly basis as the assessments are
1345	collected by the limited apportionment company from its insureds
1346	pursuant to s. 627.3512, but the regular assessment must be paid
1347	in full within 12 months after being levied by the corporation.
1348	A limited apportionment company shall collect from its
1349	policyholders any emergency assessment imposed under sub-
1350	subparagraph (b)3.d. The plan shall provide that, if the office
1351	determines that any regular assessment will result in an
1352	impairment of the surplus of a limited apportionment company,
1353	the office may direct that all or part of such assessment be
1354	deferred as provided in subparagraph (p)4. However, there shall
1355	be no limitation or deferment of an emergency assessment to be
1356	collected from policyholders under sub-subparagraph (b)3.d.
1357	14.  Must provide that the corporation appoint as its
1358	licensed agents only those agents who also hold an appointment
1359	as defined in s. 626.015(3) with an insurer who at the time of
1360	the agent's initial appointment by the corporation is authorized
1361	to write and is actually writing personal lines residential
1362	property coverage, commercial residential property coverage, or
1363	commercial nonresidential property coverage within the state.
1364	15.  Must provide, by July 1, 2007, a premium payment plan
1365	option to its policyholders which allows at a minimum for
1366	quarterly and semiannual payment of premiums. A monthly payment
1367	plan may, but is not required to, be offered.
1368	16.  Must limit coverage on mobile homes or manufactured
1369	homes built prior to 1994 to actual cash value of the dwelling
1370	rather than replacement costs of the dwelling.
1371	17.  May provide such limits of coverage as the board
1372	determines, consistent with the requirements of this subsection.
1373	18.  May require commercial property to meet specified
1374	hurricane mitigation construction features as a condition of
1375	eligibility for coverage.
1376	19.a.  Shall require the agent to obtain from any applicant
1377	for coverage the following acknowledgement, signed by the
1378	applicant, and shall require the agent of record to obtain the
1379	following acknowledgment from each corporation policyholder
1380	prior to the policy's first renewal after the effective date of
1381	this act:
1382
1383	ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
1384	LIABILITY:
1385	1.  I UNDERSTAND, AS A CITIZENS PROPERTY
1386	INSURANCE CORPORATION POLICYHOLDER, THAT IF THE
1387	CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
1388	HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
1389	COULD BE SUBJECT TO CITIZENS POLICYHOLDER SURCHARGES,
1390	WHICH WOULD BE DUE AND PAYABLE UPON ISSUANCE, RENEWAL,
1391	CANCELLATION, OR TERMINATION OF THE POLICY, AND THAT
1392	THE SURCHARGES COULD BE AS HIGH AS 15 PERCENT OF MY
1393	PREMIUM FOR DEFICITS IN EACH OF THREE CITIZENS
1394	ACCOUNTS, OR A DIFFERENT AMOUNT AS ESTABLISHED BY THE
1395	FLORIDA LEGISLATURE.
1396	2.  I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
1397	EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
1398	POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
1399
1400	b.  The corporation shall permanently maintain a signed
1401	copy of the signed acknowledgement required by this
1402	subparagraph, and the agent may also retain a copy.
1403	c.  The signed acknowledgement form creates a conclusive
1404	presumption that the policyholder understood and accepted his or
1405	her potential surcharge and assessment liability as a Citizens
1406	policyholder.
1407	(y)  It is the intent of the Legislature that the
1408	amendments to this subsection enacted in 2002 should, over time,
1409	reduce the probable maximum windstorm losses in the residual
1410	markets and should reduce the potential assessments to be levied
1411	on property insurers and policyholders statewide. In furtherance
1412	of this intent:
1413	1.  The board shall, on or before February 1 of each year,
1414	provide a report to the President of the Senate and the Speaker
1415	of the House of Representatives showing the reduction or
1416	increase in the 100-year probable maximum loss attributable to
1417	wind-only coverages and the quota share program under this
1418	subsection combined, as compared to the benchmark 100-year
1419	probable maximum loss of the Florida Windstorm Underwriting
1420	Association. For purposes of this paragraph, the benchmark 100-
1421	year probable maximum loss of the Florida Windstorm Underwriting
1422	Association shall be the calculation dated February 2001 and
1423	based on November 30, 2000, exposures. In order to ensure
1424	comparability of data, the board shall use the same methods for
1425	calculating its probable maximum loss as were used to calculate
1426	the benchmark probable maximum loss.
1427	2.  Beginning December 1, 2010, if the report under
1428	subparagraph 1. for any year indicates that the 100-year
1429	probable maximum loss attributable to wind-only coverages and
1430	the quota share program combined does not reflect a reduction of
1431	at least 25 percent from the benchmark, the board shall reduce
1432	the boundaries of the high-risk area eligible for wind-only
1433	coverages under this subsection in a manner calculated to reduce
1434	such probable maximum loss to an amount at least 25 percent
1435	below the benchmark.
1436	3.  Beginning February 1, 2015, if the report under
1437	subparagraph 1. for any year indicates that the 100-year
1438	probable maximum loss attributable to wind-only coverages and
1439	the quota share program combined does not reflect a reduction of
1440	at least 50 percent from the benchmark, the boundaries of the
1441	high-risk area eligible for wind-only coverages under this
1442	subsection shall be reduced by the elimination of any area that
1443	is not seaward of a line 1,000 feet inland from the Intracoastal
1444	Waterway.
1445	(y)(z)  In enacting the provisions of this section, the
1446	Legislature recognizes that both the Florida Windstorm
1447	Underwriting Association and the Residential Property and
1448	Casualty Joint Underwriting Association have entered into
1449	financing arrangements that obligate each entity to service its
1450	debts and maintain the capacity to repay funds secured under
1451	these financing arrangements. It is the intent of the
1452	Legislature that nothing in this section be construed to
1453	compromise, diminish, or interfere with the rights of creditors
1454	under such financing arrangements. It is further the intent of
1455	the Legislature to preserve the obligations of the Florida
1456	Windstorm Underwriting Association and Residential Property and
1457	Casualty Joint Underwriting Association with regard to
1458	outstanding financing arrangements, with such obligations
1459	passing entirely and unchanged to the corporation and,
1460	specifically, to the applicable account of the corporation. So
1461	long as any bonds, notes, indebtedness, or other financing
1462	obligations of the Florida Windstorm Underwriting Association or
1463	the Residential Property and Casualty Joint Underwriting
1464	Association are outstanding, under the terms of the financing
1465	documents pertaining to them, the governing board of the
1466	corporation shall have and shall exercise the authority to levy,
1467	charge, collect, and receive all premiums, assessments,
1468	surcharges, charges, revenues, and receipts that the
1469	associations had authority to levy, charge, collect, or receive
1470	under the provisions of subsection (2) and this subsection,
1471	respectively, as they existed on January 1, 2002, to provide
1472	moneys, without exercise of the authority provided by this
1473	subsection, in at least the amounts, and by the times, as would
1474	be provided under those former provisions of subsection (2) or
1475	this subsection, respectively, so that the value, amount, and
1476	collectability of any assets, revenues, or revenue source
1477	pledged or committed to, or any lien thereon securing such
1478	outstanding bonds, notes, indebtedness, or other financing
1479	obligations will not be diminished, impaired, or adversely
1480	affected by the amendments made by this act and to permit
1481	compliance with all provisions of financing documents pertaining
1482	to such bonds, notes, indebtedness, or other financing
1483	obligations, or the security or credit enhancement for them, and
1484	any reference in this subsection to bonds, notes, indebtedness,
1485	financing obligations, or similar obligations, of the
1486	corporation shall include like instruments or contracts of the
1487	Florida Windstorm Underwriting Association and the Residential
1488	Property and Casualty Joint Underwriting Association to the
1489	extent not inconsistent with the provisions of the financing
1490	documents pertaining to them.
1491	(z)(aa)  The corporation shall not require the securing of
1492	flood insurance as a condition of coverage if the insured or
1493	applicant executes a form approved by the office affirming that
1494	flood insurance is not provided by the corporation and that if
1495	flood insurance is not secured by the applicant or insured in
1496	addition to coverage by the corporation, the risk will not be
1497	covered for flood damage. A corporation policyholder electing
1498	not to secure flood insurance and executing a form as provided
1499	herein making a claim for water damage against the corporation
1500	shall have the burden of proving the damage was not caused by
1501	flooding. Notwithstanding other provisions of this subsection,
1502	the corporation may deny coverage to an applicant or insured who
1503	refuses to execute the form described herein.
1504	(aa)(bb)  A salaried employee of the corporation who
1505	performs policy administration services subsequent to the
1506	effectuation of a corporation policy is not required to be
1507	licensed as an agent under the provisions of s. 626.112.
1508	(bb)(cc)  By February 1, 2007, the corporation shall submit
1509	a report to the President of the Senate, the Speaker of the
1510	House of Representatives, the minority party leaders of the
1511	Senate and the House of Representatives, and the chairs of the
1512	standing committees of the Senate and the House of
1513	Representatives having jurisdiction over matters relating to
1514	property and casualty insurance. In preparing the report, the
1515	corporation shall consult with the Office of Insurance
1516	Regulation, the Department of Financial Services, and any other
1517	party the corporation determines appropriate. The report must
1518	include all findings and recommendations on the feasibility of
1519	requiring authorized insurers that issue and service personal
1520	and commercial residential policies and commercial
1521	nonresidential policies that provide coverage for basic property
1522	perils except for the peril of wind to issue and service for a
1523	fee personal and commercial residential policies and commercial
1524	nonresidential policies providing coverage for the peril of wind
1525	issued by the corporation. The report must include:
1526	1.  The expense savings to the corporation of issuing and
1527	servicing such policies as determined by a cost-benefit
1528	analysis.
1529	2.  The expenses and liability to authorized insurers
1530	associated with issuing and servicing such policies.
1531	3.  The effect on service to policyholders of the
1532	corporation relating to issuing and servicing such policies.
1533	4.  The effect on the producing agent of the corporation of
1534	issuing and servicing such policies.
1535	5.  Recommendations as to the amount of the fee which
1536	should be paid to authorized insurers for issuing and servicing
1537	such policies.
1538	6.  The effect that issuing and servicing such policies
1539	will have on the corporation's number of policies, total insured
1540	value, and probable maximum loss.
1541	(cc)(dd)  There shall be no liability on the part of, and
1542	no cause of action of any nature shall arise against, producing
1543	agents of record of the corporation or employees of such agents
1544	for insolvency of any take-out insurer.
1545	(dd)(ee)  The assets of the corporation may be invested and
1546	managed by the State Board of Administration.
1547	(ee)(ff)  The office may establish a pilot program to offer
1548	optional sinkhole coverage in one or more counties or other
1549	territories of the corporation for the purpose of implementing
1550	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
1551	Florida. Under the pilot program, the corporation is not
1552	required to issue a notice of nonrenewal to exclude sinkhole
1553	coverage upon the renewal of existing policies, but may exclude
1554	such coverage using a notice of coverage change.
1555	Section 9.  Paragraph (b) of subsection (2) of section
1556	627.4133, Florida Statutes, is amended to read:
1557	627.4133  Notice of cancellation, nonrenewal, or renewal
1558	premium.-
1559	(2)  With respect to any personal lines or commercial
1560	residential property insurance policy, including, but not
1561	limited to, any homeowner's, mobile home owner's, farmowner's,
1562	condominium association, condominium unit owner's, apartment
1563	building, or other policy covering a residential structure or
1564	its contents:
1565	(b)  The insurer shall give the named insured written
1566	notice of nonrenewal, cancellation, or termination at least 100
1567	days prior to the effective date of the nonrenewal,
1568	cancellation, or termination. However, the insurer shall give at
1569	least 100 days' written notice, or written notice by June 1,
1570	whichever is earlier, for any nonrenewal, cancellation, or
1571	termination that would be effective between June 1 and November
1572	30. The notice must include the reason or reasons for the
1573	nonrenewal, cancellation, or termination, except that:
1574	1.  The insurer shall give the named insured written notice
1575	of nonrenewal, cancellation, or termination at least 180 days
1576	prior to the effective date of the nonrenewal, cancellation, or
1577	termination for a named insured whose residential structure has
1578	been insured by that insurer or an affiliated insurer for at
1579	least a 5-year period immediately prior to the date of the
1580	written notice.
1581	2.  When cancellation is for nonpayment of premium, at
1582	least 10 days' written notice of cancellation accompanied by the
1583	reason therefor shall be given. As used in this subparagraph,
1584	the term "nonpayment of premium" means failure of the named
1585	insured to discharge when due any of her or his obligations in
1586	connection with the payment of premiums on a policy or any
1587	installment of such premium, whether the premium is payable
1588	directly to the insurer or its agent or indirectly under any
1589	premium finance plan or extension of credit, or failure to
1590	maintain membership in an organization if such membership is a
1591	condition precedent to insurance coverage. "Nonpayment of
1592	premium" also means the failure of a financial institution to
1593	honor an insurance applicant's check after delivery to a
1594	licensed agent for payment of a premium, even if the agent has
1595	previously delivered or transferred the premium to the insurer.
1596	If a dishonored check represents the initial premium payment,
1597	the contract and all contractual obligations shall be void ab
1598	initio unless the nonpayment is cured within the earlier of 5
1599	days after actual notice by certified mail is received by the
1600	applicant or 15 days after notice is sent to the applicant by
1601	certified mail or registered mail, and if the contract is void,
1602	any premium received by the insurer from a third party shall be
1603	refunded to that party in full.
1604	3.  When such cancellation or termination occurs during the
1605	first 90 days during which the insurance is in force and the
1606	insurance is canceled or terminated for reasons other than
1607	nonpayment of premium, at least 20 days' written notice of
1608	cancellation or termination accompanied by the reason therefor
1609	shall be given except where there has been a material
1610	misstatement or misrepresentation or failure to comply with the
1611	underwriting requirements established by the insurer.
1612	4.  The requirement for providing written notice of
1613	nonrenewal by June 1 of any nonrenewal that would be effective
1614	between June 1 and November 30 does not apply to the following
1615	situations, but the insurer remains subject to the requirement
1616	to provide such notice at least 100 days prior to the effective
1617	date of nonrenewal:
1618	a.  A policy that is nonrenewed due to a revision in the
1619	coverage for sinkhole losses and catastrophic ground cover
1620	collapse pursuant to s. 627.706, as amended by s. 30, chapter
1621	2007-1, Laws of Florida.
1622	b.  A policy that is nonrenewed by Citizens Property
1623	Insurance Corporation, pursuant to s. 627.351(6), for a policy
1624	that has been assumed by an authorized insurer offering
1625	replacement or renewal coverage to the policyholder.
1626	5.  Notwithstanding any other provision of law, an insurer
1627	may cancel or nonrenew a property insurance policy upon a
1628	minimum of 45 days' notice if the office finds that the early
1629	cancellation of some or all of the insurer's policies is
1630	necessary to protect the best interests of the public or
1631	policyholders and the office approves the insurer's plan for
1632	early cancellation or nonrenewal of some or all of its policies.
1633	The office may base such a finding upon the financial condition
1634	of the insurer, lack of adequate reinsurance coverage for
1635	hurricane risk, or other relevant factors. The office may
1636	condition its finding on the consent of the insurer to be placed
1637	in administrative supervision pursuant to s. 624.81 or consent
1638	to the appointment of a receiver under chapter 631.
1639
1640	After the policy has been in effect for 90 days, the policy
1641	shall not be canceled by the insurer except when there has been
1642	a material misstatement, a nonpayment of premium, a failure to
1643	comply with underwriting requirements established by the insurer
1644	within 90 days of the date of effectuation of coverage, or a
1645	substantial change in the risk covered by the policy or when the
1646	cancellation is for all insureds under such policies for a given
1647	class of insureds. This paragraph does not apply to individually
1648	rated risks having a policy term of less than 90 days.
1649	Section 10.  Section 627.41341, Florida Statutes, is
1650	created to read:
1651	627.41341  Notice of change in policy terms.-
1652	(1)  As used in this section, the term:
1653	(a)  "Change in policy terms" means the modification,
1654	addition, or deletion of any term, coverage, duty, or condition
1655	from the prior policy. The correction of typographical or
1656	scrivener's errors or the application of mandated legislative
1657	changes is not a change in policy terms.
1658	(b)  "Policy" means a written contract of personal lines
1659	insurance or a written agreement for or effecting insurance, or
1660	the certificate of such insurance, by whatever name called, and
1661	includes all clauses, riders, endorsements, and papers which are
1662	a part of such policy. The term "policy" does not include a
1663	binder as defined in s. 627.420 unless the duration of the
1664	binder period exceeds 60 days.
1665	(c)  "Renewal" means the issuance and delivery by an
1666	insurer of a policy superseding at the end of the policy period
1667	a policy previously issued and delivered by the same insurer or
1668	the issuance and delivery of a certificate or notice extending
1669	the term of a policy beyond its policy period or term. Any
1670	policy with a policy period or term of less than 6 months or any
1671	policy with no fixed expiration date shall for the purpose of
1672	this section be considered as if written for successive policy
1673	periods or terms of 6 months.
1674	(2)  A renewal policy may contain a change in policy terms.
1675	If a renewal policy contains a change in policy terms, the
1676	insurer shall give the named insured a written notice of change
1677	in policy terms that shall be enclosed with the written notice
1678	of renewal premium required by ss. 627.4133 and 627.728, stated
1679	separately, and entitled "Notice of Change in Policy Terms."
1680	(3)  Although not required, United States Postal Service
1681	proof of mailing or registered mailing of the notice of change
1682	in policy terms to the named insured at the address shown in the
1683	policy shall be sufficient proof of notice.
1684	(4)  Receipt of payment of the premium for the renewal
1685	policy by the insurer shall be deemed to be acceptance of the
1686	new policy terms by the named insured.
1687	(5)  If an insurer fails to provide the notice of change in
1688	policy terms required under subsection (2), the original policy
1689	terms shall remain in effect until the next renewal and the
1690	proper service of the notice of change in policy terms or until
1691	the effective date of replacement coverage obtained by the named
1692	insured, whichever occurs first.
1693	(6)  The intent of this section is to:
1694	(a)  Allow an insurer to make a change in policy terms
1695	without nonrenewing policyholders that the insurer wishes to
1696	continue insuring.
1697	(b)  Alleviate the concern and confusion to the
1698	policyholders caused by the required policy nonrenewal for the
1699	limited issue when an insurer intends to renew the insurance
1700	policy but the new policy contains a change in policy terms.
1701	(c)  Encourage policyholders to discuss their coverages
1702	with their insurance agent.
1703	Section 11.  Subsection (3) of section 627.7011, Florida
1704	Statutes, is amended to read:
1705	627.7011  Homeowners' policies; offer of replacement cost
1706	coverage and law and ordinance coverage.-
1707	(3)  In the event of a loss for which a dwelling or
1708	personal property is insured on the basis of replacement costs,
1709	the insurer shall initially pay only the depreciated value for
1710	structure and contents repair or replacement, or shall pay 40
1711	percent of the replacement cost value, whichever is higher, and
1712	shall thereafter pay the remaining cost for repair or
1713	replacement of covered property up to the total replacement cost
1714	as the insured submits invoices or receipts for completed
1715	repairs or replacement of covered property the replacement cost
1716	without reservation or holdback of any depreciation in value,
1717	whether or not the insured replaces or repairs the dwelling or
1718	property.
1719	Section 12.  Effective January 1, 2011, section 627.7031,
1720	Florida Statutes, is created to read:
1721	627.7031  Residential property insurance option.-
1722	(1)  An insurer holding a certificate of authority to write
1723	property insurance in this state may offer or renew policies at
1724	rates established in accordance with s. 627.062(2)(l), subject
1725	to all of the requirements and prohibitions of this section.
1726	(2)  An insurer offering or renewing policies at rates
1727	established in accordance with s. 627.062(2)(l) may not purchase
1728	coverage from the Florida Hurricane Catastrophe Fund under the
1729	temporary increase in coverage limit option under s.
1730	215.555(17).
1731	(3)(a)  Before the effective date of a newly issued policy
1732	at rates established in accordance with s. 627.062(2)(l) or
1733	before the effective date of a renewal policy at rates
1734	established in accordance with s. 627.062(2)(k), the applicant
1735	or insured must be given the following notice, printed in at
1736	least 12-point boldfaced type:
1737
1738	THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
1739	REGULATION BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY
1740	BE HIGHER THAN RATES APPROVED BY THAT OFFICE. A RESIDENTIAL
1741	PROPERTY POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY
1742	BE AVAILABLE FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
1743	PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR POLICY
1744	OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE A CITIZENS
1745	QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF INSURANCE REGULATION'S
1746	WEBSITE AT WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION
1747	ABOUT CHOICES AVAILABLE TO YOU.
1748
1749	(b)  For policies renewed at a rate established in
1750	accordance with s. 627.062(2)(l), the notice described in
1751	paragraph (a) must be provided in writing at the same time as
1752	the renewal notice on a document separate from the renewal
1753	notice, but may be contained within the same mailing as the
1754	renewal notice.
1755	(4)  Before the effective date of a newly issued policy at
1756	rates established in accordance with s. 627.062(2)(l), or before
1757	the effective date of the first renewal at rates established in
1758	accordance with s. 627.062(2)(l) of a policy originally issued
1759	before the effective date of this section, the applicant or
1760	insured must:
1761	(a)  Be provided or offered, for comparison purposes, an
1762	estimate of the premium for a policy from Citizens Property
1763	Insurance Corporation reflecting substantially similar
1764	coverages, limits, and deductibles to the extent available.
1765	(b)  Provide the insurer or agent with a signed copy of the
1766	following acknowledgement form, which must be retained by the
1767	insurer or agent for at least 3 years. If the acknowledgement
1768	form is signed by the insured or if the insured remits payment
1769	in the amount of the rate established in accordance with s.
1770	627.062(2)(l) after being mailed, otherwise provided, or offered
1771	the comparison specified in paragraph (a), an insurer renewing a
1772	policy at such rate shall be deemed to comply with this section,
1773	and it is presumed that the insured has been informed and
1774	understands the information contained in the comparison and
1775	acknowledgement forms:
1776
1777	ACKNOWLEDGEMENT
1778	1.  I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
1779	REQUIRED PREMIUM COMPARISON.
1780	2.  I UNDERSTAND THAT THE RATE FOR THIS RESIDENTIAL
1781	PROPERTY INSURANCE POLICY IS NOT SUBJECT TO FULL RATE REGULATION
1782	BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY BE HIGHER
1783	THAN RATES APPROVED BY THAT OFFICE.
1784	3.  I UNDERSTAND THAT A RESIDENTIAL PROPERTY INSURANCE
1785	POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY BE
1786	AVAILABLE FROM CITIZENS PROPERTY INSURANCE CORPORATION.
1787	4.  I UNDERSTAND THAT THE FLORIDA OFFICE OF INSURANCE
1788	REGULATION'S WEBSITE WWW.SHOPANDCOMPARERATES.COM CONTAINS
1789	RESIDENTIAL PROPERTY INSURANCE RATE COMPARISON INFORMATION.
1790	5.  I UNDERSTAND THAT IF CITIZENS PROPERTY INSURANCE
1791	CORPORATION INCURS A DEFICIT BECAUSE OF HURRICANE LOSSES OR
1792	OTHER LOSSES, I MAY BE REQUIRED TO PAY AN ASSESSMENT BASED UPON
1793	THE PREMIUM FOR THIS POLICY AND THAT A POLICYHOLDER OF CITIZENS
1794	PROPERTY INSURANCE CORPORATION MAY BE REQUIRED TO PAY A
1795	DIFFERENT ASSESSMENT.
1796
1797	(5)  The following types of residential property insurance
1798	policies are not eligible for rates established in accordance
1799	with s. 627.062(2)(l) and are not subject to the other
1800	provisions of this section:
1801	(a)  Residential property insurance policies that exclude
1802	coverage for the perils of windstorm or hurricane.
1803	(b)  Residential property insurance policies that are
1804	subject to a consent decree, agreement, understanding, or other
1805	arrangement between the insurer and the office relating to rates
1806	or premiums for policies removed from Citizens Property
1807	Insurance Corporation.
1808	(6)  Notwithstanding s. 627.4133, an insurer that has
1809	issued a policy under this section shall provide the named
1810	insured written notice of nonrenewal at least 180 days before
1811	the effective date of the nonrenewal as to subsequent
1812	nonrenewals. However, this subsection does not prohibit an
1813	insurer from canceling a policy as permitted under s. 627.4133.
1814	The offer of a policy at rates authorized by this section
1815	constitutes an offer to renew the policy at the rates specified
1816	in the offer and does not constitute a nonrenewal.
1817	Section 13.  Subsection (1), paragraph (b) of subsection
1818	(2), and subsections (5), (7), and (8) of section 627.707,
1819	Florida Statutes, are amended to read:
1820	627.707  Standards for investigation of sinkhole claims by
1821	insurers; nonrenewals.-Upon receipt of a claim for a sinkhole
1822	loss, an insurer must meet the following standards in
1823	investigating a claim:
1824	(1)  The insurer must make an inspection of the insured's
1825	premises to determine if there has been physical damage to the
1826	structure which is consistent with may be the result of sinkhole
1827	loss activity.
1828	(2)  Following the insurer's initial inspection, the
1829	insurer shall engage a professional engineer or a professional
1830	geologist to conduct testing as provided in s. 627.7072 to
1831	determine the cause of the loss within a reasonable professional
1832	probability and issue a report as provided in s. 627.7073, if:
1833	(b)  The policyholder demands testing in accordance with
1834	this section or s. 627.7072 and coverage under the policy is
1835	available if sinkhole loss is verified.
1836	(5)(a)  Subject to paragraph (b), if a sinkhole loss is
1837	verified, the insurer shall pay to stabilize the land and
1838	building and repair the foundation in accordance with the
1839	recommendations of the professional engineer as provided under
1840	s. 627.7073, with notice to and in consultation with the
1841	policyholder, subject to the coverage and terms of the policy.
1842	The insurer shall pay for other repairs to the structure and
1843	contents in accordance with the terms of the policy.
1844	(b)  The insurer may limit its payment to the actual cash
1845	value of the sinkhole loss, not including underpinning or
1846	grouting or any other repair technique performed below the
1847	existing foundation of the building, until the policyholder
1848	enters into a contract for the performance of building
1849	stabilization or foundation repairs. After the policyholder
1850	enters into the contract, the insurer shall pay the amounts
1851	necessary to begin and perform such repairs as the work is
1852	performed and the expenses are incurred. The insurer may not
1853	require the policyholder to advance payment for such repairs. If
1854	repair covered by a personal lines residential property
1855	insurance policy has begun and the professional engineer
1856	selected or approved by the insurer determines that the repair
1857	cannot be completed within the policy limits, the insurer must
1858	either complete the professional engineer's recommended repair
1859	or tender the policy limits to the policyholder without a
1860	reduction for the repair expenses incurred.
1861	1.  The policyholder shall enter into such contract for
1862	repairs within 90 days after the insurance company approves
1863	coverage for a sinkhole loss to prevent additional damage to the
1864	building or structure. The 90-day time period may be extended
1865	for an additional reasonable time period if the policyholder is
1866	unable to find a qualified person or entity to contract for such
1867	repairs within the 90-day time period based upon factors beyond
1868	the policyholder's control.
1869	2.  The stabilization and all other repairs to the
1870	structure and contents must be completed within 12 months after
1871	entering into the contract for repairs as described in
1872	subparagraph 1. unless there is a mutual agreement between the
1873	insurer and the insured, the stabilization and all other repairs
1874	cannot be completed due to factors beyond the control of the
1875	insured which reasonably prevent completion, the claim is
1876	involved with the neutral evaluation process under s. 627.7074,
1877	or the claim is in litigation.
1878	(c)  Upon the insurer's obtaining the written approval of
1879	the policyholder and any lienholder, the insurer may make
1880	payment directly to the persons selected by the policyholder to
1881	perform the land and building stabilization and foundation
1882	repairs. The decision by the insurer to make payment to such
1883	persons does not hold the insurer liable for the work performed.
1884	(7)  If the insurer obtains, pursuant to s. 627.7073,
1885	written certification that there is no sinkhole loss or that the
1886	cause of the damage was not sinkhole activity, and if the
1887	policyholder has submitted the sinkhole claim without good faith
1888	grounds for submitting such claim, the policyholder shall
1889	reimburse the insurer for 50 percent of the actual costs of the
1890	analyses and services provided under ss. 627.7072 and 627.7073;
1891	however, a policyholder is not required to reimburse an insurer
1892	more than $2,500 with respect to any claim. A policyholder is
1893	required to pay reimbursement under this subsection only if the
1894	insurer, prior to ordering the analysis under s. 627.7072,
1895	informs the policyholder in writing of the policyholder's
1896	potential liability for reimbursement and gives the policyholder
1897	the opportunity to withdraw the claim.
1898	(8)  No insurer shall nonrenew any policy of property
1899	insurance on the basis of filing of claims for partial loss
1900	caused by sinkhole damage or clay shrinkage as long as the total
1901	of such payments does not exceed the current policy limits of
1902	coverage for property damage for the policy in effect on the
1903	date of the loss, and provided the insured has repaired the
1904	structure in accordance with the engineering recommendations
1905	upon which any payment or policy proceeds were based.
1906	Section 14.  Section 627.7073, Florida Statutes, is amended
1907	to read:
1908	627.7073  Sinkhole reports.-
1909	(1)  Upon completion of testing as provided in s. 627.7072,
1910	the professional engineer or professional geologist shall issue
1911	a report and certification to the insurer, with an additional
1912	copy and certification for the insurer to forward to and the
1913	policyholder as provided in this section.
1914	(a)  Sinkhole loss is verified if, based upon tests
1915	performed in accordance with s. 627.7072, a professional
1916	engineer or a professional geologist issues a written report and
1917	certification stating:
1918	1.  That the cause of the actual physical and structural
1919	damage is sinkhole activity within a reasonable professional
1920	probability.
1921	2.  That the analyses conducted were of sufficient scope to
1922	identify sinkhole activity as the cause of damage within a
1923	reasonable professional probability.
1924	3.  A description of the tests performed.
1925	4.  A recommendation by the professional engineer of
1926	methods for stabilizing the land and building and for making
1927	repairs to the foundation.
1928	(b)  If sinkhole activity is eliminated as the cause of
1929	damage to the structure, the professional engineer or
1930	professional geologist shall issue a written report and
1931	certification to the policyholder and the insurer stating:
1932	1.  That the cause of the damage is not sinkhole activity
1933	within a reasonable professional probability.
1934	2.  That the analyses and tests conducted were of
1935	sufficient scope to eliminate sinkhole activity as the cause of
1936	damage within a reasonable professional probability.
1937	3.  A statement of the cause of the damage within a
1938	reasonable professional probability.
1939	4.  A description of the tests performed.
1940	(c)  The respective findings, opinions, and recommendations
1941	of the professional engineer or professional geologist as to the
1942	cause of distress to the property and the findings, opinions,
1943	and recommendations of the professional engineer as to land and
1944	building stabilization and foundation repair as required by s.
1945	627.707(2), shall be presumed correct. The presumption of
1946	correctness is based upon the public policy concerns relating to
1947	the availability and affordability of sinkhole coverage, to
1948	provide consistency in claims handling and reduce the number of
1949	disputed sinkhole claims and is therefore a presumption shifting
1950	the burden of proof by clear and convincing evidence under s.
1951	90.304.
1952	(2)(a)  Any insurer that has paid a claim for a sinkhole
1953	loss shall file a copy of the report and certification, prepared
1954	pursuant to subsection (1), including the legal description of
1955	the real property, and the name of the property owner, and the
1956	amount paid by the insurer, with the county clerk of court, who
1957	shall record the report and certification. The insurer shall
1958	also file a copy of any report prepared on behalf of the insured
1959	or the insured's representative which indicates that sinkhole
1960	loss caused the damage claimed. The insurer shall bear the cost
1961	of filing and recording of one or more reports the report and
1962	certifications certification. There shall be no cause of action
1963	or liability against an insurer for compliance with this
1964	section. The recording of the report and certification does not:
1965	1.  Constitute a lien, encumbrance, or restriction on the
1966	title to the real property or constitute a defect in the title
1967	to the real property;
1968	2.  Create any cause of action or liability against any
1969	grantor of the real property for breach of any warranty of good
1970	title or warranty against encumbrances; or
1971	3.  Create any cause of action or liability against any
1972	title insurer that insures the title to the real property.
1973	(b)  The seller of real property upon which a sinkhole
1974	claim has been made by the seller and paid by the insurer shall
1975	disclose to the buyer of such property that a claim has been
1976	paid, the amount of the payment, and whether or not the full
1977	amount of the proceeds were used to repair the sinkhole damage.
1978	The seller shall also provide to the buyer a copy of the report
1979	prepared pursuant to subsection (1) and any report prepared on
1980	behalf of the insured.
1981	Section 15.  Section 627.7074, Florida Statutes, is amended
1982	to read:
1983	627.7074  Alternative procedure for resolution of disputed
1984	sinkhole insurance claims.-
1985	(1)  As used in this section, the term:
1986	(a)  "Neutral evaluation" means the alternative dispute
1987	resolution provided for in this section.
1988	(b)  "Neutral evaluator" means a professional engineer or a
1989	professional geologist who has completed a course of study in
1990	alternative dispute resolution designed or approved by the
1991	department for use in the neutral evaluation process, who is
1992	determined to be fair and impartial.
1993	(2)(a)  The department shall certify and maintain a list of
1994	persons who are neutral evaluators.
1995	(b)  The department shall prepare a consumer information
1996	pamphlet for distribution by insurers to policyholders which
1997	clearly describes the neutral evaluation process and includes
1998	information and forms necessary for the policyholder to request
1999	a neutral evaluation.
2000	(3)  Neutral evaluation is available to either party if a
2001	sinkhole report has been issued pursuant to s. 627.7073.
2002	Following the receipt of the report provided under s. 627.7073
2003	or the denial of a claim for a sinkhole loss, the insurer shall
2004	notify the policyholder of his or her right to participate in
2005	the neutral evaluation program under this section. Neutral
2006	evaluation supersedes the alternative dispute resolution process
2007	under s. 627.7015 but does not supersede the appraisal clause,
2008	if provided by the insurance policy. The insurer shall provide
2009	to the policyholder the consumer information pamphlet prepared
2010	by the department pursuant to paragraph (2)(b).
2011	(4)  Neutral evaluation is nonbinding, but mandatory if
2012	requested by either party. A request for neutral evaluation may
2013	be filed with the department by the policyholder or the insurer
2014	on a form approved by the department. The request for neutral
2015	evaluation must state the reason for the request and must
2016	include an explanation of all the issues in dispute at the time
2017	of the request. Filing a request for neutral evaluation tolls
2018	the applicable time requirements for filing suit for a period of
2019	60 days following the conclusion of the neutral evaluation
2020	process or the time prescribed in s. 95.11, whichever is later.
2021	(5)  Neutral evaluation shall be conducted as an informal
2022	process in which formal rules of evidence and procedure need not
2023	be observed. A party to neutral evaluation is not required to
2024	attend neutral evaluation if a representative of the party
2025	attends and has the authority to make a binding decision on
2026	behalf of the party. All parties shall participate in the
2027	evaluation in good faith.
2028	(6)  The insurer shall pay the costs associated with the
2029	neutral evaluation.
2030	(7)  Upon receipt of a request for neutral evaluation, the
2031	department shall provide the parties a list of certified neutral
2032	evaluators from which. the parties shall mutually select a
2033	neutral evaluator from the list and promptly inform the
2034	department.
2035	(a)  If the parties cannot agree to a neutral evaluator
2036	within 10 business days, the department shall allow the parties
2037	to submit requests to disqualify neutral evaluators on the list
2038	for cause. The department shall find a ground for cause under
2039	this paragraph only if:
2040	1.  A familial relationship exists between the neutral
2041	evaluator and either party or a representative of either party
2042	within the third degree;
2043	2.  The proposed neutral evaluator has, in a professional
2044	capacity, previously represented either party or a
2045	representative of either party in the same or a substantially
2046	related matter;
2047	3.  The proposed neutral evaluator has, in a professional
2048	capacity, represented another person in the same or a
2049	substantially related matter and that person's interests are
2050	materially adverse to the interests of the parties; or
2051	4.  The proposed neutral evaluator works in the same firm
2052	or corporation as a person who has, in a professional capacity,
2053	previously represented either party or a representative of
2054	either party in the same or a substantially related matter.
2055	(b)  The department shall appoint a neutral evaluator from
2056	the department list and, if requested by either party, shall
2057	appoint a neutral evaluator who can determine both causation and
2058	method of repair. The department shall allow each party to
2059	disqualify one neutral evaluator without cause. Upon selection
2060	or appointment, the department shall promptly refer the request
2061	to the neutral evaluator.
2062	(c)  Within 5 business days after the referral, the neutral
2063	evaluator shall notify the policyholder and the insurer of the
2064	date, time, and place of the neutral evaluation conference. The
2065	conference may be held by telephone, if feasible and desirable.
2066	The neutral evaluation conference shall be held within 45 days
2067	after the receipt of the request by the department.
2068	(d)  As used in this subsection, the term "substantially
2069	related matter" means participation by the neutral evaluator on
2070	the same claim, property, or any adjacent property.
2071	(8)  The department shall adopt rules of procedure for the
2072	neutral evaluation process.
2073	(9)  For policyholders not represented by an attorney, a
2074	consumer affairs specialist of the department or an employee
2075	designated as the primary contact for consumers on issues
2076	relating to sinkholes under s. 20.121 shall be available for
2077	consultation to the extent that he or she may lawfully do so.
2078	(10)  Evidence of an offer to settle a claim during the
2079	neutral evaluation process, as well as any relevant conduct or
2080	statements made in negotiations concerning the offer to settle a
2081	claim, is inadmissible to prove liability or absence of
2082	liability for the claim or its value, except as provided in
2083	subsection (14) (13).
2084	(11)  Regardless of when invoked, any court proceeding
2085	related to the subject matter of the neutral evaluation shall be
2086	stayed pending completion of the neutral evaluation and for 5
2087	days after the filing of the neutral evaluator's report with the
2088	court.
2089	(12)  If the neutral evaluator, based upon his or her
2090	professional training and credentials, is only qualified to
2091	determine the causation issue or the method of repair issue, the
2092	department shall allow the neutral evaluator to enlist the
2093	assistance of another professional from the qualified neutral
2094	evaluators list, not previously stricken by parties with respect
2095	to the subject evaluation, who, based upon his or her
2096	professional training and credentials, is able to provide an
2097	opinion as to the other disputed issue. Any professional who, if
2098	appointed as the neutral evaluator, would be disqualified for
2099	any reason enumerated in subsection (7) must be disqualified. In
2100	addition, the neutral evaluator may use the service of other
2101	experts or professionals on the qualified neutral evaluators
2102	list as necessary to ensure that all items in dispute are
2103	addressed in order to complete the neutral evaluation. The
2104	neutral evaluator may request that the entity that performed
2105	testing pursuant to s. 627.7072 perform such additional
2106	reasonable testing deemed necessary in the professional opinion
2107	of the neutral evaluator to complete the neutral evaluation.
2108	(13)(12)  For all matters that are not resolved by the
2109	parties at the conclusion of the neutral evaluation, the neutral
2110	evaluator shall prepare a report stating that in his or her
2111	opinion the sinkhole loss has been verified or eliminated within
2112	a reasonable degree of professional probability and, if
2113	verified, whether the sinkhole loss has caused structural or
2114	cosmetic damage to the building and, if so, the need for and
2115	estimated costs of stabilizing the land and any covered
2116	structures or buildings and other appropriate remediation or
2117	structural repairs that are necessary due to the sinkhole loss.
2118	The evaluator's report shall be sent to all parties in
2119	attendance at the neutral evaluation and to the department.
2120	(14)(13)  The recommendation of the neutral evaluator is
2121	not binding on any party, and the parties retain access to
2122	court. The neutral evaluator's written recommendation is
2123	admissible in any subsequent action or proceeding relating to
2124	the claim or to the cause of action giving rise to the claim.
2125	(15)(14)  If the neutral evaluator first verifies the
2126	existence of a sinkhole and, second, recommends the need for and
2127	estimates costs of stabilizing the land and any covered
2128	structures or buildings and other appropriate remediation or
2129	structural repairs, which costs exceed the amount that the
2130	insurer has offered to pay the policyholder, the insurer is
2131	liable to the policyholder for up to $2,500 in attorney's fees
2132	for the attorney's participation in the neutral evaluation
2133	process. For purposes of this subsection, the term "offer to
2134	pay" means a written offer signed by the insurer or its legal
2135	representative and delivered to the policyholder within 10 days
2136	after the insurer receives notice that a request for neutral
2137	evaluation has been made under this section.
2138	(16)(15)  If the insurer timely agrees in writing to comply
2139	and timely complies with the recommendation of the neutral
2140	evaluator, but the policyholder declines to resolve the matter
2141	in accordance with the recommendation of the neutral evaluator
2142	pursuant to this section:
2143	(a)  The insurer is not liable for extracontractual damages
2144	related to a claim for a sinkhole loss but only as related to
2145	the issues determined by the neutral evaluation process. This
2146	section does not affect or impair claims for extracontractual
2147	damages unrelated to the issues determined by the neutral
2148	evaluation process contained in this section; and
2149	(b)  The actions of the insurer are not a confession of
2150	judgment or an admission of liability, and the insurer may is
2151	not be liable for attorney's fees under s. 627.428 or other
2152	provisions of the insurance code unless the policyholder obtains
2153	a judgment that is more favorable than the recommendation of the
2154	neutral evaluator.
2155	(17)  If the insurer agrees to comply with the neutral
2156	evaluator's report, payment for stabilizing the land and
2157	building and repairing the foundation shall be made in
2158	accordance with the terms and conditions of the applicable
2159	insurance policy.
2160	Section 16.  Subsection (2) of section 631.021, Florida
2161	Statutes, is amended to read:
2162	631.021  Jurisdiction of delinquency proceeding; venue;
2163	change of venue; exclusiveness of remedy; appeal.-
2164	(2)  The venue of a delinquency proceeding or summary
2165	proceeding against a domestic, foreign, or alien insurer shall
2166	be in the Circuit Court of Leon County. The Circuit Court of
2167	Leon County is also the venue for any collateral actions against
2168	an insurer's affiliate, including, but not limited to, voidable
2169	or fraudulent transfers made by an insurer or affiliate; actions
2170	that constitute a breach of fiduciary duty by an officer,
2171	director, or agent; or misreporting or misrepresenting what is
2172	property, funds, or assets of the insurer, including premium and
2173	unearned commissions.
2174	Section 17.  In the interest of full disclosure and
2175	transparency to insurance policy owners, and because most
2176	insurance policies sold in this state are subject to assessments
2177	to make up for the funding deficiencies of the Citizens Property
2178	Insurance Corporation or the Florida Hurricane Catastrophe Fund,
2179	the following warning shall be printed in bold type of not less
2180	than 16 points and shall be displayed on the declarations page
2181	or on the renewal notice of every insurance policy sold or
2182	issued in this state that is or may be subject to assessment by
2183	the Citizens Property Insurance Corporation or the Florida
2184	Hurricane Catastrophe Fund:
2185
2186	WARNING
2187	The premium you are about to pay may NOT be the full cost
2188	of this insurance policy. If a hurricane strikes Florida,
2189	you may be forced to pay additional moneys to offset the
2190	inability of the state-owned Citizens Property Insurance
2191	Corporation or the Florida Hurricane Catastrophe Fund to
2192	pay claims resulting from the losses due to the
2193	hurricane.
2194	Section 18.  Section 627.7065, Florida Statutes, is
2195	repealed.
2196	Section 19.  Except as otherwise expressly provided in this
2197	act, this act shall take effect July 1, 2010.

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