Florida Senate - 2010 CS for CS for SB 876
By the Committees on General Government Appropriations; and
Banking and Insurance; and Senators Bennett, Dockery, and Hill
601-04794-10 2010876c2
1 A bill to be entitled
2 An act relating to residential property insurance;
3 amending s. 627.062, F.S.; authorizing certain
4 insurers to use a rate different from otherwise
5 applicable filed rates; prohibiting the consideration
6 of certain policies when making a specified
7 calculation; limiting the maximum average statewide
8 increase for certain rate filings; preserving the
9 authority of the Office of Insurance Regulation to
10 disapprove rates as inadequate or disapprove a rate
11 filing for using certain rating factors; authorizing
12 the office to direct an insurer to make a specified
13 type of rate filing under certain circumstances;
14 amending s. 627.351, F.S.; providing requirements for
15 the levy of the Citizens policyholder surcharge;
16 prohibiting the corporation from levying certain
17 regular assessments until after levying the full
18 amount of a Citizens policyholder surcharge; requiring
19 the corporation’s plan of operation to require agents
20 to obtain an acknowledgement of potential surcharge
21 and assessment liability from applicants and
22 policyholders; requiring the corporation to
23 permanently retain a copy of such acknowledgments;
24 specifying that the acknowledgement creates a
25 conclusive presumption of understanding and acceptance
26 by the policyholder; creating s. 627.7031, F.S.;
27 authorizing certain insurers to offer or renew
28 policies at rates established under certain
29 circumstances; prohibiting certain insurers from
30 purchasing TICL option coverage from the Florida
31 Hurricane Catastrophe Fund under certain
32 circumstances; requiring that certain policies contain
33 a specified rate notice; requiring insurers to offer
34 applicants or insureds an estimate of the premium for
35 a policy from Citizens Property Insurance Corporation
36 reflecting similar coverage, limits, and deductibles;
37 requiring applicants or insureds to provide a signed
38 premium comparison acknowledgement; specifying
39 criteria for insurer compliance with certain
40 requirements; specifying acknowledgement contents;
41 requiring insurers and agents to retain a copy of the
42 acknowledgement for a specified time; specifying a
43 presumption created by a signed acknowledgement;
44 specifying types of residential property insurance
45 policies that are not eligible for certain rates or
46 subject to other requirements; requiring written
47 notice of certain nonrenewals; preserving insurer
48 authority to cancel policies; specifying a criterion
49 for what constitutes an offer to renew a policy;
50 providing an effective date.
51
52 Be It Enacted by the Legislature of the State of Florida:
53
54 Section 1. Paragraph (l) is added to subsection (2) of
55 section 627.062, Florida Statutes, to read:
56 627.062 Rate standards.—
57 (2) As to all such classes of insurance:
58 (l)1. An insurer complying with the requirements of s.
59 627.7031 may use a rate for residential property insurance, as
60 defined in s. 627.4025, different from the otherwise applicable
61 filed rate as provided in this paragraph.
62 2. Policies subject to this paragraph may not be counted in
63 the calculation under s. 627.171(2).
64 3. Such rates shall be filed with the office as a separate
65 filing. The filing must be accompanied by an actuary’s
66 certification stating that the filing was prepared in accordance
67 with current actuarial standards of practice of the Actuarial
68 Standards Board and that the rates are within a range consistent
69 with applicable actuarial principles or, when the percentage
70 limitations of this paragraph do not allow for a rate within a
71 range consistent with applicable actuarial principles, the
72 certification must state that the rates are below such range.
73 The initial rates used by an insurer under this paragraph may
74 not provide for rates that represent more than a 10 percent
75 statewide average rate increase over the most recently filed and
76 approved rate. A rate filing made pursuant to this paragraph
77 submitted in any year following the implementation of such
78 initial rates may not provide for rates that represent more than
79 a 10 percent statewide average rate increase in any one year
80 over the rates in effect under this paragraph at the time of the
81 filing. A rate filing made pursuant to this paragraph may not
82 provide for a percentage rate increase as to any one
83 policyholder which exceeds two times the statewide average rate
84 increase provided in the filing.
85 4. This paragraph does not affect the authority of the
86 office to disapprove a rate as inadequate or to disapprove a
87 rate filing for charging any insured or applicant a higher
88 premium solely because of the insured’s or applicant’s race,
89 color, creed, marital status, sex, or national origin. Upon
90 finding that an insurer has used any such factor in charging an
91 insured or applicant a higher premium, the office may direct the
92 insurer to make a new filing for a new rate that does not use
93 such factor.
94
95 The provisions of this subsection shall not apply to workers’
96 compensation and employer’s liability insurance and to motor
97 vehicle insurance.
98 Section 2. Paragraphs (b) and (c) of subsection (6) of
99 section 627.351, Florida Statutes, are amended, present
100 paragraphs (g) through (ff) of subsection (6) of that section
101 are redesignated as paragraphs (f) through (ee), respectively,
102 and present paragraph (f) of that subsection is redesignated as
103 paragraph (ff) of that subsection, to read:
104 627.351 Insurance risk apportionment plans.—
105 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
106 (b)1. All insurers authorized to write one or more subject
107 lines of business in this state are subject to assessment by the
108 corporation and, for the purposes of this subsection, are
109 referred to collectively as “assessable insurers.” Insurers
110 writing one or more subject lines of business in this state
111 pursuant to part VIII of chapter 626 are not assessable
112 insurers, but insureds who procure one or more subject lines of
113 business in this state pursuant to part VIII of chapter 626 are
114 subject to assessment by the corporation and are referred to
115 collectively as “assessable insureds.” An authorized insurer’s
116 assessment liability shall begin on the first day of the
117 calendar year following the year in which the insurer was issued
118 a certificate of authority to transact insurance for subject
119 lines of business in this state and shall terminate 1 year after
120 the end of the first calendar year during which the insurer no
121 longer holds a certificate of authority to transact insurance
122 for subject lines of business in this state.
123 2.a. All revenues, assets, liabilities, losses, and
124 expenses of the corporation shall be divided into three separate
125 accounts as follows:
126 (I) A personal lines account for personal residential
127 policies issued by the corporation or issued by the Residential
128 Property and Casualty Joint Underwriting Association and renewed
129 by the corporation that provide comprehensive, multiperil
130 coverage on risks that are not located in areas eligible for
131 coverage in the Florida Windstorm Underwriting Association as
132 those areas were defined on January 1, 2002, and for such
133 policies that do not provide coverage for the peril of wind on
134 risks that are located in such areas;
135 (II) A commercial lines account for commercial residential
136 and commercial nonresidential policies issued by the corporation
137 or issued by the Residential Property and Casualty Joint
138 Underwriting Association and renewed by the corporation that
139 provide coverage for basic property perils on risks that are not
140 located in areas eligible for coverage in the Florida Windstorm
141 Underwriting Association as those areas were defined on January
142 1, 2002, and for such policies that do not provide coverage for
143 the peril of wind on risks that are located in such areas; and
144 (III) A high-risk account for personal residential policies
145 and commercial residential and commercial nonresidential
146 property policies issued by the corporation or transferred to
147 the corporation that provide coverage for the peril of wind on
148 risks that are located in areas eligible for coverage in the
149 Florida Windstorm Underwriting Association as those areas were
150 defined on January 1, 2002. The corporation may offer policies
151 that provide multiperil coverage and the corporation shall
152 continue to offer policies that provide coverage only for the
153 peril of wind for risks located in areas eligible for coverage
154 in the high-risk account. In issuing multiperil coverage, the
155 corporation may use its approved policy forms and rates for the
156 personal lines account. An applicant or insured who is eligible
157 to purchase a multiperil policy from the corporation may
158 purchase a multiperil policy from an authorized insurer without
159 prejudice to the applicant’s or insured’s eligibility to
160 prospectively purchase a policy that provides coverage only for
161 the peril of wind from the corporation. An applicant or insured
162 who is eligible for a corporation policy that provides coverage
163 only for the peril of wind may elect to purchase or retain such
164 policy and also purchase or retain coverage excluding wind from
165 an authorized insurer without prejudice to the applicant’s or
166 insured’s eligibility to prospectively purchase a policy that
167 provides multiperil coverage from the corporation. It is the
168 goal of the Legislature that there would be an overall average
169 savings of 10 percent or more for a policyholder who currently
170 has a wind-only policy with the corporation, and an ex-wind
171 policy with a voluntary insurer or the corporation, and who then
172 obtains a multiperil policy from the corporation. It is the
173 intent of the Legislature that the offer of multiperil coverage
174 in the high-risk account be made and implemented in a manner
175 that does not adversely affect the tax-exempt status of the
176 corporation or creditworthiness of or security for currently
177 outstanding financing obligations or credit facilities of the
178 high-risk account, the personal lines account, or the commercial
179 lines account. The high-risk account must also include quota
180 share primary insurance under subparagraph (c)2. The area
181 eligible for coverage under the high-risk account also includes
182 the area within Port Canaveral, which is bordered on the south
183 by the City of Cape Canaveral, bordered on the west by the
184 Banana River, and bordered on the north by Federal Government
185 property.
186 b. The three separate accounts must be maintained as long
187 as financing obligations entered into by the Florida Windstorm
188 Underwriting Association or Residential Property and Casualty
189 Joint Underwriting Association are outstanding, in accordance
190 with the terms of the corresponding financing documents. When
191 the financing obligations are no longer outstanding, in
192 accordance with the terms of the corresponding financing
193 documents, the corporation may use a single account for all
194 revenues, assets, liabilities, losses, and expenses of the
195 corporation. Consistent with the requirement of this
196 subparagraph and prudent investment policies that minimize the
197 cost of carrying debt, the board shall exercise its best efforts
198 to retire existing debt or to obtain approval of necessary
199 parties to amend the terms of existing debt, so as to structure
200 the most efficient plan to consolidate the three separate
201 accounts into a single account. By February 1, 2007, the board
202 shall submit a report to the Financial Services Commission, the
203 President of the Senate, and the Speaker of the House of
204 Representatives which includes an analysis of consolidating the
205 accounts, the actions the board has taken to minimize the cost
206 of carrying debt, and its recommendations for executing the most
207 efficient plan.
208 c. Creditors of the Residential Property and Casualty Joint
209 Underwriting Association and of the accounts specified in sub
210 sub-subparagraphs a.(I) and (II) may have a claim against, and
211 recourse to, the accounts referred to in sub-sub-subparagraphs
212 a.(I) and (II) and shall have no claim against, or recourse to,
213 the account referred to in sub-sub-subparagraph a.(III).
214 Creditors of the Florida Windstorm Underwriting Association
215 shall have a claim against, and recourse to, the account
216 referred to in sub-sub-subparagraph a.(III) and shall have no
217 claim against, or recourse to, the accounts referred to in sub
218 sub-subparagraphs a.(I) and (II).
219 d. Revenues, assets, liabilities, losses, and expenses not
220 attributable to particular accounts shall be prorated among the
221 accounts.
222 e. The Legislature finds that the revenues of the
223 corporation are revenues that are necessary to meet the
224 requirements set forth in documents authorizing the issuance of
225 bonds under this subsection.
226 f. No part of the income of the corporation may inure to
227 the benefit of any private person.
228 3. With respect to a deficit in an account:
229 a. After accounting for the Citizens policyholder surcharge
230 imposed under sub-subparagraph i., when the remaining projected
231 deficit incurred in a particular calendar year is not greater
232 than 6 percent of the aggregate statewide direct written premium
233 for the subject lines of business for the prior calendar year,
234 the entire deficit shall be recovered through regular
235 assessments of assessable insurers under paragraph (p) and
236 assessable insureds.
237 b. After accounting for the Citizens policyholder surcharge
238 imposed under sub-subparagraph i., when the remaining projected
239 deficit incurred in a particular calendar year exceeds 6 percent
240 of the aggregate statewide direct written premium for the
241 subject lines of business for the prior calendar year, the
242 corporation shall levy regular assessments on assessable
243 insurers under paragraph (p) and on assessable insureds in an
244 amount equal to the greater of 6 percent of the deficit or 6
245 percent of the aggregate statewide direct written premium for
246 the subject lines of business for the prior calendar year. Any
247 remaining deficit shall be recovered through emergency
248 assessments under sub-subparagraph d.
249 c. Each assessable insurer’s share of the amount being
250 assessed under sub-subparagraph a. or sub-subparagraph b. shall
251 be in the proportion that the assessable insurer’s direct
252 written premium for the subject lines of business for the year
253 preceding the assessment bears to the aggregate statewide direct
254 written premium for the subject lines of business for that year.
255 The assessment percentage applicable to each assessable insured
256 is the ratio of the amount being assessed under sub-subparagraph
257 a. or sub-subparagraph b. to the aggregate statewide direct
258 written premium for the subject lines of business for the prior
259 year. Assessments levied by the corporation on assessable
260 insurers under sub-subparagraphs a. and b. shall be paid as
261 required by the corporation’s plan of operation and paragraph
262 (p). Assessments levied by the corporation on assessable
263 insureds under sub-subparagraphs a. and b. shall be collected by
264 the surplus lines agent at the time the surplus lines agent
265 collects the surplus lines tax required by s. 626.932 and shall
266 be paid to the Florida Surplus Lines Service Office at the time
267 the surplus lines agent pays the surplus lines tax to the
268 Florida Surplus Lines Service Office. Upon receipt of regular
269 assessments from surplus lines agents, the Florida Surplus Lines
270 Service Office shall transfer the assessments directly to the
271 corporation as determined by the corporation.
272 d. Upon a determination by the board of governors that a
273 deficit in an account exceeds the amount that will be recovered
274 through regular assessments under sub-subparagraph a. or sub
275 subparagraph b., plus the amount that is expected to be
276 recovered through surcharges under sub-subparagraph i., as to
277 the remaining projected deficit the board shall levy, after
278 verification by the office, emergency assessments, for as many
279 years as necessary to cover the deficits, to be collected by
280 assessable insurers and the corporation and collected from
281 assessable insureds upon issuance or renewal of policies for
282 subject lines of business, excluding National Flood Insurance
283 policies. The amount of the emergency assessment collected in a
284 particular year shall be a uniform percentage of that year’s
285 direct written premium for subject lines of business and all
286 accounts of the corporation, excluding National Flood Insurance
287 Program policy premiums, as annually determined by the board and
288 verified by the office. The office shall verify the arithmetic
289 calculations involved in the board’s determination within 30
290 days after receipt of the information on which the determination
291 was based. Notwithstanding any other provision of law, the
292 corporation and each assessable insurer that writes subject
293 lines of business shall collect emergency assessments from its
294 policyholders without such obligation being affected by any
295 credit, limitation, exemption, or deferment. Emergency
296 assessments levied by the corporation on assessable insureds
297 shall be collected by the surplus lines agent at the time the
298 surplus lines agent collects the surplus lines tax required by
299 s. 626.932 and shall be paid to the Florida Surplus Lines
300 Service Office at the time the surplus lines agent pays the
301 surplus lines tax to the Florida Surplus Lines Service Office.
302 The emergency assessments so collected shall be transferred
303 directly to the corporation on a periodic basis as determined by
304 the corporation and shall be held by the corporation solely in
305 the applicable account. The aggregate amount of emergency
306 assessments levied for an account under this sub-subparagraph in
307 any calendar year may, at the discretion of the board of
308 governors, be less than but may not exceed the greater of 10
309 percent of the amount needed to cover the deficit, plus
310 interest, fees, commissions, required reserves, and other costs
311 associated with financing of the original deficit, or 10 percent
312 of the aggregate statewide direct written premium for subject
313 lines of business and for all accounts of the corporation for
314 the prior year, plus interest, fees, commissions, required
315 reserves, and other costs associated with financing the deficit.
316 e. The corporation may pledge the proceeds of assessments,
317 projected recoveries from the Florida Hurricane Catastrophe
318 Fund, other insurance and reinsurance recoverables, policyholder
319 surcharges and other surcharges, and other funds available to
320 the corporation as the source of revenue for and to secure bonds
321 issued under paragraph (p), bonds or other indebtedness issued
322 under subparagraph (c)3., or lines of credit or other financing
323 mechanisms issued or created under this subsection, or to retire
324 any other debt incurred as a result of deficits or events giving
325 rise to deficits, or in any other way that the board determines
326 will efficiently recover such deficits. The purpose of the lines
327 of credit or other financing mechanisms is to provide additional
328 resources to assist the corporation in covering claims and
329 expenses attributable to a catastrophe. As used in this
330 subsection, the term “assessments” includes regular assessments
331 under sub-subparagraph a., sub-subparagraph b., or subparagraph
332 (p)1. and emergency assessments under sub-subparagraph d.
333 Emergency assessments collected under sub-subparagraph d. are
334 not part of an insurer’s rates, are not premium, and are not
335 subject to premium tax, fees, or commissions; however, failure
336 to pay the emergency assessment shall be treated as failure to
337 pay premium. The emergency assessments under sub-subparagraph d.
338 shall continue as long as any bonds issued or other indebtedness
339 incurred with respect to a deficit for which the assessment was
340 imposed remain outstanding, unless adequate provision has been
341 made for the payment of such bonds or other indebtedness
342 pursuant to the documents governing such bonds or other
343 indebtedness.
344 f. As used in this subsection for purposes of any deficit
345 incurred on or after January 25, 2007, the term “subject lines
346 of business” means insurance written by assessable insurers or
347 procured by assessable insureds for all property and casualty
348 lines of business in this state, but not including workers’
349 compensation or medical malpractice. As used in the sub
350 subparagraph, the term “property and casualty lines of business”
351 includes all lines of business identified on Form 2, Exhibit of
352 Premiums and Losses, in the annual statement required of
353 authorized insurers by s. 624.424 and any rule adopted under
354 this section, except for those lines identified as accident and
355 health insurance and except for policies written under the
356 National Flood Insurance Program or the Federal Crop Insurance
357 Program. For purposes of this sub-subparagraph, the term
358 “workers’ compensation” includes both workers’ compensation
359 insurance and excess workers’ compensation insurance.
360 g. The Florida Surplus Lines Service Office shall determine
361 annually the aggregate statewide written premium in subject
362 lines of business procured by assessable insureds and shall
363 report that information to the corporation in a form and at a
364 time the corporation specifies to ensure that the corporation
365 can meet the requirements of this subsection and the
366 corporation’s financing obligations.
367 h. The Florida Surplus Lines Service Office shall verify
368 the proper application by surplus lines agents of assessment
369 percentages for regular assessments and emergency assessments
370 levied under this subparagraph on assessable insureds and shall
371 assist the corporation in ensuring the accurate, timely
372 collection and payment of assessments by surplus lines agents as
373 required by the corporation.
374 i.(I) If a deficit is incurred in any account in 2008 or
375 thereafter, the board of governors shall levy a Citizens
376 policyholder surcharge against all policyholders of the
377 corporation.
378 (II) The Citizens policyholder surcharge for a 12-month
379 period, which shall be levied collected at the time of issuance
380 or renewal of a policy, as a uniform percentage of the premium
381 for the policy of up to 15 percent of such premium, which funds
382 shall be used to offset the deficit.
383 (III) The Citizens policyholder surcharge is payable upon
384 cancellation or termination of the policy, upon renewal of the
385 policy, or upon issuance of a new policy by Citizens within the
386 first 12 months after the date of the levy or the period of time
387 necessary to fully collect the Citizens policyholder surcharge
388 amount.
389 (IV) The corporation may not levy any regular assessments
390 under paragraph (q) pursuant to sub-subparagraph a. or sub
391 subparagraph b. with respect to a particular year’s deficit
392 until the corporation has first levied a Citizens policyholder
393 surcharge under this sub-subparagraph in the full amount
394 authorized by this sub-subparagraph.
395 (V) Citizens policyholder surcharges under this sub
396 subparagraph are not considered premium and are not subject to
397 commissions, fees, or premium taxes. However, failure to pay
398 such surcharges shall be treated as failure to pay premium.
399 j. If the amount of any assessments or surcharges collected
400 from corporation policyholders, assessable insurers or their
401 policyholders, or assessable insureds exceeds the amount of the
402 deficits, such excess amounts shall be remitted to and retained
403 by the corporation in a reserve to be used by the corporation,
404 as determined by the board of governors and approved by the
405 office, to pay claims or reduce any past, present, or future
406 plan-year deficits or to reduce outstanding debt.
407 (c) The plan of operation of the corporation:
408 1. Must provide for adoption of residential property and
409 casualty insurance policy forms and commercial residential and
410 nonresidential property insurance forms, which forms must be
411 approved by the office prior to use. The corporation shall adopt
412 the following policy forms:
413 a. Standard personal lines policy forms that are
414 comprehensive multiperil policies providing full coverage of a
415 residential property equivalent to the coverage provided in the
416 private insurance market under an HO-3, HO-4, or HO-6 policy.
417 b. Basic personal lines policy forms that are policies
418 similar to an HO-8 policy or a dwelling fire policy that provide
419 coverage meeting the requirements of the secondary mortgage
420 market, but which coverage is more limited than the coverage
421 under a standard policy.
422 c. Commercial lines residential and nonresidential policy
423 forms that are generally similar to the basic perils of full
424 coverage obtainable for commercial residential structures and
425 commercial nonresidential structures in the admitted voluntary
426 market.
427 d. Personal lines and commercial lines residential property
428 insurance forms that cover the peril of wind only. The forms are
429 applicable only to residential properties located in areas
430 eligible for coverage under the high-risk account referred to in
431 sub-subparagraph (b)2.a.
432 e. Commercial lines nonresidential property insurance forms
433 that cover the peril of wind only. The forms are applicable only
434 to nonresidential properties located in areas eligible for
435 coverage under the high-risk account referred to in sub
436 subparagraph (b)2.a.
437 f. The corporation may adopt variations of the policy forms
438 listed in sub-subparagraphs a.-e. that contain more restrictive
439 coverage.
440 2.a. Must provide that the corporation adopt a program in
441 which the corporation and authorized insurers enter into quota
442 share primary insurance agreements for hurricane coverage, as
443 defined in s. 627.4025(2)(a), for eligible risks, and adopt
444 property insurance forms for eligible risks which cover the
445 peril of wind only. As used in this subsection, the term:
446 (I) “Quota share primary insurance” means an arrangement in
447 which the primary hurricane coverage of an eligible risk is
448 provided in specified percentages by the corporation and an
449 authorized insurer. The corporation and authorized insurer are
450 each solely responsible for a specified percentage of hurricane
451 coverage of an eligible risk as set forth in a quota share
452 primary insurance agreement between the corporation and an
453 authorized insurer and the insurance contract. The
454 responsibility of the corporation or authorized insurer to pay
455 its specified percentage of hurricane losses of an eligible
456 risk, as set forth in the quota share primary insurance
457 agreement, may not be altered by the inability of the other
458 party to the agreement to pay its specified percentage of
459 hurricane losses. Eligible risks that are provided hurricane
460 coverage through a quota share primary insurance arrangement
461 must be provided policy forms that set forth the obligations of
462 the corporation and authorized insurer under the arrangement,
463 clearly specify the percentages of quota share primary insurance
464 provided by the corporation and authorized insurer, and
465 conspicuously and clearly state that neither the authorized
466 insurer nor the corporation may be held responsible beyond its
467 specified percentage of coverage of hurricane losses.
468 (II) “Eligible risks” means personal lines residential and
469 commercial lines residential risks that meet the underwriting
470 criteria of the corporation and are located in areas that were
471 eligible for coverage by the Florida Windstorm Underwriting
472 Association on January 1, 2002.
473 b. The corporation may enter into quota share primary
474 insurance agreements with authorized insurers at corporation
475 coverage levels of 90 percent and 50 percent.
476 c. If the corporation determines that additional coverage
477 levels are necessary to maximize participation in quota share
478 primary insurance agreements by authorized insurers, the
479 corporation may establish additional coverage levels. However,
480 the corporation’s quota share primary insurance coverage level
481 may not exceed 90 percent.
482 d. Any quota share primary insurance agreement entered into
483 between an authorized insurer and the corporation must provide
484 for a uniform specified percentage of coverage of hurricane
485 losses, by county or territory as set forth by the corporation
486 board, for all eligible risks of the authorized insurer covered
487 under the quota share primary insurance agreement.
488 e. Any quota share primary insurance agreement entered into
489 between an authorized insurer and the corporation is subject to
490 review and approval by the office. However, such agreement shall
491 be authorized only as to insurance contracts entered into
492 between an authorized insurer and an insured who is already
493 insured by the corporation for wind coverage.
494 f. For all eligible risks covered under quota share primary
495 insurance agreements, the exposure and coverage levels for both
496 the corporation and authorized insurers shall be reported by the
497 corporation to the Florida Hurricane Catastrophe Fund. For all
498 policies of eligible risks covered under quota share primary
499 insurance agreements, the corporation and the authorized insurer
500 shall maintain complete and accurate records for the purpose of
501 exposure and loss reimbursement audits as required by Florida
502 Hurricane Catastrophe Fund rules. The corporation and the
503 authorized insurer shall each maintain duplicate copies of
504 policy declaration pages and supporting claims documents.
505 g. The corporation board shall establish in its plan of
506 operation standards for quota share agreements which ensure that
507 there is no discriminatory application among insurers as to the
508 terms of quota share agreements, pricing of quota share
509 agreements, incentive provisions if any, and consideration paid
510 for servicing policies or adjusting claims.
511 h. The quota share primary insurance agreement between the
512 corporation and an authorized insurer must set forth the
513 specific terms under which coverage is provided, including, but
514 not limited to, the sale and servicing of policies issued under
515 the agreement by the insurance agent of the authorized insurer
516 producing the business, the reporting of information concerning
517 eligible risks, the payment of premium to the corporation, and
518 arrangements for the adjustment and payment of hurricane claims
519 incurred on eligible risks by the claims adjuster and personnel
520 of the authorized insurer. Entering into a quota sharing
521 insurance agreement between the corporation and an authorized
522 insurer shall be voluntary and at the discretion of the
523 authorized insurer.
524 3. May provide that the corporation may employ or otherwise
525 contract with individuals or other entities to provide
526 administrative or professional services that may be appropriate
527 to effectuate the plan. The corporation shall have the power to
528 borrow funds, by issuing bonds or by incurring other
529 indebtedness, and shall have other powers reasonably necessary
530 to effectuate the requirements of this subsection, including,
531 without limitation, the power to issue bonds and incur other
532 indebtedness in order to refinance outstanding bonds or other
533 indebtedness. The corporation may, but is not required to, seek
534 judicial validation of its bonds or other indebtedness under
535 chapter 75. The corporation may issue bonds or incur other
536 indebtedness, or have bonds issued on its behalf by a unit of
537 local government pursuant to subparagraph (p)2., in the absence
538 of a hurricane or other weather-related event, upon a
539 determination by the corporation, subject to approval by the
540 office, that such action would enable it to efficiently meet the
541 financial obligations of the corporation and that such
542 financings are reasonably necessary to effectuate the
543 requirements of this subsection. The corporation is authorized
544 to take all actions needed to facilitate tax-free status for any
545 such bonds or indebtedness, including formation of trusts or
546 other affiliated entities. The corporation shall have the
547 authority to pledge assessments, projected recoveries from the
548 Florida Hurricane Catastrophe Fund, other reinsurance
549 recoverables, market equalization and other surcharges, and
550 other funds available to the corporation as security for bonds
551 or other indebtedness. In recognition of s. 10, Art. I of the
552 State Constitution, prohibiting the impairment of obligations of
553 contracts, it is the intent of the Legislature that no action be
554 taken whose purpose is to impair any bond indenture or financing
555 agreement or any revenue source committed by contract to such
556 bond or other indebtedness.
557 4.a. Must require that the corporation operate subject to
558 the supervision and approval of a board of governors consisting
559 of eight individuals who are residents of this state, from
560 different geographical areas of this state. The Governor, the
561 Chief Financial Officer, the President of the Senate, and the
562 Speaker of the House of Representatives shall each appoint two
563 members of the board. At least one of the two members appointed
564 by each appointing officer must have demonstrated expertise in
565 insurance. The Chief Financial Officer shall designate one of
566 the appointees as chair. All board members serve at the pleasure
567 of the appointing officer. All members of the board of governors
568 are subject to removal at will by the officers who appointed
569 them. All board members, including the chair, must be appointed
570 to serve for 3-year terms beginning annually on a date
571 designated by the plan. However, for the first term beginning on
572 or after July 1, 2009, each appointing officer shall appoint one
573 member of the board for a 2-year term and one member for a 3
574 year term. Any board vacancy shall be filled for the unexpired
575 term by the appointing officer. The Chief Financial Officer
576 shall appoint a technical advisory group to provide information
577 and advice to the board of governors in connection with the
578 board’s duties under this subsection. The executive director and
579 senior managers of the corporation shall be engaged by the board
580 and serve at the pleasure of the board. Any executive director
581 appointed on or after July 1, 2006, is subject to confirmation
582 by the Senate. The executive director is responsible for
583 employing other staff as the corporation may require, subject to
584 review and concurrence by the board.
585 b. The board shall create a Market Accountability Advisory
586 Committee to assist the corporation in developing awareness of
587 its rates and its customer and agent service levels in
588 relationship to the voluntary market insurers writing similar
589 coverage. The members of the advisory committee shall consist of
590 the following 11 persons, one of whom must be elected chair by
591 the members of the committee: four representatives, one
592 appointed by the Florida Association of Insurance Agents, one by
593 the Florida Association of Insurance and Financial Advisors, one
594 by the Professional Insurance Agents of Florida, and one by the
595 Latin American Association of Insurance Agencies; three
596 representatives appointed by the insurers with the three highest
597 voluntary market share of residential property insurance
598 business in the state; one representative from the Office of
599 Insurance Regulation; one consumer appointed by the board who is
600 insured by the corporation at the time of appointment to the
601 committee; one representative appointed by the Florida
602 Association of Realtors; and one representative appointed by the
603 Florida Bankers Association. All members must serve for 3-year
604 terms and may serve for consecutive terms. The committee shall
605 report to the corporation at each board meeting on insurance
606 market issues which may include rates and rate competition with
607 the voluntary market; service, including policy issuance, claims
608 processing, and general responsiveness to policyholders,
609 applicants, and agents; and matters relating to depopulation.
610 5. Must provide a procedure for determining the eligibility
611 of a risk for coverage, as follows:
612 a. Subject to the provisions of s. 627.3517, with respect
613 to personal lines residential risks, if the risk is offered
614 coverage from an authorized insurer at the insurer’s approved
615 rate under either a standard policy including wind coverage or,
616 if consistent with the insurer’s underwriting rules as filed
617 with the office, a basic policy including wind coverage, for a
618 new application to the corporation for coverage, the risk is not
619 eligible for any policy issued by the corporation unless the
620 premium for coverage from the authorized insurer is more than 15
621 percent greater than the premium for comparable coverage from
622 the corporation. If the risk is not able to obtain any such
623 offer, the risk is eligible for either a standard policy
624 including wind coverage or a basic policy including wind
625 coverage issued by the corporation; however, if the risk could
626 not be insured under a standard policy including wind coverage
627 regardless of market conditions, the risk shall be eligible for
628 a basic policy including wind coverage unless rejected under
629 subparagraph 8. However, with regard to a policyholder of the
630 corporation or a policyholder removed from the corporation
631 through an assumption agreement until the end of the assumption
632 period, the policyholder remains eligible for coverage from the
633 corporation regardless of any offer of coverage from an
634 authorized insurer or surplus lines insurer. The corporation
635 shall determine the type of policy to be provided on the basis
636 of objective standards specified in the underwriting manual and
637 based on generally accepted underwriting practices.
638 (I) If the risk accepts an offer of coverage through the
639 market assistance plan or an offer of coverage through a
640 mechanism established by the corporation before a policy is
641 issued to the risk by the corporation or during the first 30
642 days of coverage by the corporation, and the producing agent who
643 submitted the application to the plan or to the corporation is
644 not currently appointed by the insurer, the insurer shall:
645 (A) Pay to the producing agent of record of the policy, for
646 the first year, an amount that is the greater of the insurer’s
647 usual and customary commission for the type of policy written or
648 a fee equal to the usual and customary commission of the
649 corporation; or
650 (B) Offer to allow the producing agent of record of the
651 policy to continue servicing the policy for a period of not less
652 than 1 year and offer to pay the agent the greater of the
653 insurer’s or the corporation’s usual and customary commission
654 for the type of policy written.
655
656 If the producing agent is unwilling or unable to accept
657 appointment, the new insurer shall pay the agent in accordance
658 with sub-sub-sub-subparagraph (A).
659 (II) When the corporation enters into a contractual
660 agreement for a take-out plan, the producing agent of record of
661 the corporation policy is entitled to retain any unearned
662 commission on the policy, and the insurer shall:
663 (A) Pay to the producing agent of record of the corporation
664 policy, for the first year, an amount that is the greater of the
665 insurer’s usual and customary commission for the type of policy
666 written or a fee equal to the usual and customary commission of
667 the corporation; or
668 (B) Offer to allow the producing agent of record of the
669 corporation policy to continue servicing the policy for a period
670 of not less than 1 year and offer to pay the agent the greater
671 of the insurer’s or the corporation’s usual and customary
672 commission for the type of policy written.
673
674 If the producing agent is unwilling or unable to accept
675 appointment, the new insurer shall pay the agent in accordance
676 with sub-sub-sub-subparagraph (A).
677 b. With respect to commercial lines residential risks, for
678 a new application to the corporation for coverage, if the risk
679 is offered coverage under a policy including wind coverage from
680 an authorized insurer at its approved rate, the risk is not
681 eligible for any policy issued by the corporation unless the
682 premium for coverage from the authorized insurer is more than 15
683 percent greater than the premium for comparable coverage from
684 the corporation. If the risk is not able to obtain any such
685 offer, the risk is eligible for a policy including wind coverage
686 issued by the corporation. However, with regard to a
687 policyholder of the corporation or a policyholder removed from
688 the corporation through an assumption agreement until the end of
689 the assumption period, the policyholder remains eligible for
690 coverage from the corporation regardless of any offer of
691 coverage from an authorized insurer or surplus lines insurer.
692 (I) If the risk accepts an offer of coverage through the
693 market assistance plan or an offer of coverage through a
694 mechanism established by the corporation before a policy is
695 issued to the risk by the corporation or during the first 30
696 days of coverage by the corporation, and the producing agent who
697 submitted the application to the plan or the corporation is not
698 currently appointed by the insurer, the insurer shall:
699 (A) Pay to the producing agent of record of the policy, for
700 the first year, an amount that is the greater of the insurer’s
701 usual and customary commission for the type of policy written or
702 a fee equal to the usual and customary commission of the
703 corporation; or
704 (B) Offer to allow the producing agent of record of the
705 policy to continue servicing the policy for a period of not less
706 than 1 year and offer to pay the agent the greater of the
707 insurer’s or the corporation’s usual and customary commission
708 for the type of policy written.
709
710 If the producing agent is unwilling or unable to accept
711 appointment, the new insurer shall pay the agent in accordance
712 with sub-sub-sub-subparagraph (A).
713 (II) When the corporation enters into a contractual
714 agreement for a take-out plan, the producing agent of record of
715 the corporation policy is entitled to retain any unearned
716 commission on the policy, and the insurer shall:
717 (A) Pay to the producing agent of record of the corporation
718 policy, for the first year, an amount that is the greater of the
719 insurer’s usual and customary commission for the type of policy
720 written or a fee equal to the usual and customary commission of
721 the corporation; or
722 (B) Offer to allow the producing agent of record of the
723 corporation policy to continue servicing the policy for a period
724 of not less than 1 year and offer to pay the agent the greater
725 of the insurer’s or the corporation’s usual and customary
726 commission for the type of policy written.
727
728 If the producing agent is unwilling or unable to accept
729 appointment, the new insurer shall pay the agent in accordance
730 with sub-sub-sub-subparagraph (A).
731 c. For purposes of determining comparable coverage under
732 sub-subparagraphs a. and b., the comparison shall be based on
733 those forms and coverages that are reasonably comparable. The
734 corporation may rely on a determination of comparable coverage
735 and premium made by the producing agent who submits the
736 application to the corporation, made in the agent’s capacity as
737 the corporation’s agent. A comparison may be made solely of the
738 premium with respect to the main building or structure only on
739 the following basis: the same coverage A or other building
740 limits; the same percentage hurricane deductible that applies on
741 an annual basis or that applies to each hurricane for commercial
742 residential property; the same percentage of ordinance and law
743 coverage, if the same limit is offered by both the corporation
744 and the authorized insurer; the same mitigation credits, to the
745 extent the same types of credits are offered both by the
746 corporation and the authorized insurer; the same method for loss
747 payment, such as replacement cost or actual cash value, if the
748 same method is offered both by the corporation and the
749 authorized insurer in accordance with underwriting rules; and
750 any other form or coverage that is reasonably comparable as
751 determined by the board. If an application is submitted to the
752 corporation for wind-only coverage in the high-risk account, the
753 premium for the corporation’s wind-only policy plus the premium
754 for the ex-wind policy that is offered by an authorized insurer
755 to the applicant shall be compared to the premium for multiperil
756 coverage offered by an authorized insurer, subject to the
757 standards for comparison specified in this subparagraph. If the
758 corporation or the applicant requests from the authorized
759 insurer a breakdown of the premium of the offer by types of
760 coverage so that a comparison may be made by the corporation or
761 its agent and the authorized insurer refuses or is unable to
762 provide such information, the corporation may treat the offer as
763 not being an offer of coverage from an authorized insurer at the
764 insurer’s approved rate.
765 6. Must include rules for classifications of risks and
766 rates therefor.
767 7. Must provide that if premium and investment income for
768 an account attributable to a particular calendar year are in
769 excess of projected losses and expenses for the account
770 attributable to that year, such excess shall be held in surplus
771 in the account. Such surplus shall be available to defray
772 deficits in that account as to future years and shall be used
773 for that purpose prior to assessing assessable insurers and
774 assessable insureds as to any calendar year.
775 8. Must provide objective criteria and procedures to be
776 uniformly applied for all applicants in determining whether an
777 individual risk is so hazardous as to be uninsurable. In making
778 this determination and in establishing the criteria and
779 procedures, the following shall be considered:
780 a. Whether the likelihood of a loss for the individual risk
781 is substantially higher than for other risks of the same class;
782 and
783 b. Whether the uncertainty associated with the individual
784 risk is such that an appropriate premium cannot be determined.
785
786 The acceptance or rejection of a risk by the corporation shall
787 be construed as the private placement of insurance, and the
788 provisions of chapter 120 shall not apply.
789 9. Must provide that the corporation shall make its best
790 efforts to procure catastrophe reinsurance at reasonable rates,
791 to cover its projected 100-year probable maximum loss as
792 determined by the board of governors.
793 10. The policies issued by the corporation must provide
794 that, if the corporation or the market assistance plan obtains
795 an offer from an authorized insurer to cover the risk at its
796 approved rates, the risk is no longer eligible for renewal
797 through the corporation, except as otherwise provided in this
798 subsection.
799 11. Corporation policies and applications must include a
800 notice that the corporation policy could, under this section, be
801 replaced with a policy issued by an authorized insurer that does
802 not provide coverage identical to the coverage provided by the
803 corporation. The notice shall also specify that acceptance of
804 corporation coverage creates a conclusive presumption that the
805 applicant or policyholder is aware of this potential.
806 12. May establish, subject to approval by the office,
807 different eligibility requirements and operational procedures
808 for any line or type of coverage for any specified county or
809 area if the board determines that such changes to the
810 eligibility requirements and operational procedures are
811 justified due to the voluntary market being sufficiently stable
812 and competitive in such area or for such line or type of
813 coverage and that consumers who, in good faith, are unable to
814 obtain insurance through the voluntary market through ordinary
815 methods would continue to have access to coverage from the
816 corporation. When coverage is sought in connection with a real
817 property transfer, such requirements and procedures shall not
818 provide for an effective date of coverage later than the date of
819 the closing of the transfer as established by the transferor,
820 the transferee, and, if applicable, the lender.
821 13. Must provide that, with respect to the high-risk
822 account, any assessable insurer with a surplus as to
823 policyholders of $25 million or less writing 25 percent or more
824 of its total countrywide property insurance premiums in this
825 state may petition the office, within the first 90 days of each
826 calendar year, to qualify as a limited apportionment company. A
827 regular assessment levied by the corporation on a limited
828 apportionment company for a deficit incurred by the corporation
829 for the high-risk account in 2006 or thereafter may be paid to
830 the corporation on a monthly basis as the assessments are
831 collected by the limited apportionment company from its insureds
832 pursuant to s. 627.3512, but the regular assessment must be paid
833 in full within 12 months after being levied by the corporation.
834 A limited apportionment company shall collect from its
835 policyholders any emergency assessment imposed under sub
836 subparagraph (b)3.d. The plan shall provide that, if the office
837 determines that any regular assessment will result in an
838 impairment of the surplus of a limited apportionment company,
839 the office may direct that all or part of such assessment be
840 deferred as provided in subparagraph (p)4. However, there shall
841 be no limitation or deferment of an emergency assessment to be
842 collected from policyholders under sub-subparagraph (b)3.d.
843 14. Must provide that the corporation appoint as its
844 licensed agents only those agents who also hold an appointment
845 as defined in s. 626.015(3) with an insurer who at the time of
846 the agent’s initial appointment by the corporation is authorized
847 to write and is actually writing personal lines residential
848 property coverage, commercial residential property coverage, or
849 commercial nonresidential property coverage within the state.
850 15. Must provide, by July 1, 2007, a premium payment plan
851 option to its policyholders which allows at a minimum for
852 quarterly and semiannual payment of premiums. A monthly payment
853 plan may, but is not required to, be offered.
854 16. Must limit coverage on mobile homes or manufactured
855 homes built prior to 1994 to actual cash value of the dwelling
856 rather than replacement costs of the dwelling.
857 17. May provide such limits of coverage as the board
858 determines, consistent with the requirements of this subsection.
859 18. May require commercial property to meet specified
860 hurricane mitigation construction features as a condition of
861 eligibility for coverage.
862 19.a. Shall require the agent to obtain from any applicant
863 for coverage the following acknowledgement, signed by the
864 applicant, and shall require the agent of record to obtain the
865 following acknowledgment from each corporation policyholder,
866 signed by the policyholder, prior to the policy’s first renewal
867 after the effective date of this act:
868
869 ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
870 LIABILITY:
871 1. I UNDERSTAND, AS A CITIZENS PROPERTY INSURANCE
872 CORPORATION POLICYHOLDER, THAT IF THE CORPORATION
873 SUSTAINS A DEFICIT AS A RESULT OF HURRICANE LOSSES OR
874 FOR ANY OTHER REASON, MY POLICY COULD BE SUBJECT TO
875 CITIZENS POLICYHOLDER SURCHARGES, WHICH WOULD BE DUE
876 AND PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION
877 OF THE POLICY, AND THAT THE SURCHARGES COULD BE AS
878 HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH
879 OF THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS
880 ESTABLISHED BY THE FLORIDA LEGISLATURE.
881 2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
882 EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
883 POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
884
885 b. The corporation shall permanently maintain a signed copy
886 of the signed acknowledgement required by this subparagraph, and
887 the agent may also retain a copy.
888 c. The signed acknowledgement form creates a conclusive
889 presumption that the policyholder understood and accepted his or
890 her potential surcharge and assessment liability as a Citizens
891 policyholder.
892 Section 3. Section 627.7031, Florida Statutes, is created
893 to read:
894 627.7031 Residential property insurance option.—
895 (1) An insurer holding a certificate of authority to write
896 property insurance in this state may offer or renew policies at
897 rates established in accordance with s. 627.062(2)(l), subject
898 to all of the requirements and prohibitions of this section.
899 (2) An insurer offering or renewing policies at rates
900 established in accordance with s. 627.062(2)(l) may not purchase
901 coverage from the Florida Hurricane Catastrophe Fund under the
902 temporary increase in coverage limit option under s.
903 215.555(17).
904 (3)(a) Before the effective date of a newly issued or
905 renewal policy at rates established in accordance with s.
906 627.062(2)(l), the applicant or insured must be given the
907 following notice, printed in at least 12-point boldfaced type:
908
909 THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
910 REGULATION BY THE FLORIDA OFFICE OF INSURANCE
911 REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
912 THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
913 FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
914 FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
915 PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
916 POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
917 A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
918 INSURANCE REGULATION’S WEBSITE AT
919 WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
920 CHOICES AVAILABLE TO YOU.
921
922 (b) For policies renewed at a rate established in
923 accordance with s. 627.062(2)(l), the notice described in
924 paragraph (a) must be provided in writing at the same time as
925 the renewal notice on a document separate from the renewal
926 notice, but may be contained within the same mailing as the
927 renewal notice.
928 (4) Before the effective date of a newly issued policy at
929 rates established in accordance with s. 627.062(2)(l), or before
930 the effective date of the first renewal at rates established in
931 accordance with s. 627.062(2)(l) of a policy originally issued
932 before the effective date of this section, the applicant or
933 insured must:
934 (a) Be provided or offered, for comparison purposes, an
935 estimate of the premium for a policy from Citizens Property
936 Insurance Corporation reflecting substantially similar
937 coverages, limits, and deductibles to the extent available.
938 (b) Provide the insurer or agent with a signed copy of the
939 following acknowledgement form, which must be retained by the
940 insurer or agent for at least 3 years. If the acknowledgement
941 form is signed by the insured or if the insured remits payment
942 in the amount of the rate established in accordance with s.
943 627.062(2)(l) after being mailed or otherwise provided the
944 acknowledgement form specified in this paragraph, and after
945 being mailed, otherwise provided, or offered the comparison
946 specified in paragraph (a), an insurer renewing a policy at such
947 rate shall be deemed to comply with this section, and it is
948 presumed that the insured has been informed and understands the
949 information contained in the comparison and acknowledgement
950 forms:
951
952 ACKNOWLEDGEMENT
953 1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
954 THE REQUIRED PREMIUM COMPARISON.
955 2. I UNDERSTAND THAT THE RATE FOR THIS
956 RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
957 TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
958 INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
959 APPROVED BY THAT OFFICE.
960 3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY
961 INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
962 REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
963 INSURANCE CORPORATION.
964 4. I UNDERSTAND THAT THE FLORIDA OFFICE OF
965 INSURANCE REGULATION’S WEBSITE
966 WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
967 PROPERTY INSURANCE RATE COMPARISON INFORMATION.
968 5. I UNDERSTAND THAT IF CITIZENS PROPERTY
969 INSURANCE CORPORATION INCURS A DEFICIT BECAUSE OF
970 HURRICANE LOSSES OR OTHER LOSSES, I MAY BE REQUIRED TO
971 PAY AN ASSESSMENT BASED UPON THE PREMIUM FOR THIS
972 POLICY AND THAT A POLICYHOLDER OF CITIZENS PROPERTY
973 INSURANCE CORPORATION MAY BE REQUIRED TO PAY A
974 DIFFERENT ASSESSMENT.
975
976 (5) The following types of residential property insurance
977 policies are not eligible for rates established in accordance
978 with s. 627.062(2)(l) and are not subject to the other
979 provisions of this section:
980 (a) Residential property insurance policies that exclude
981 coverage for the perils of windstorm or hurricane.
982 (b) Residential property insurance policies that are
983 subject to a consent decree, agreement, understanding, or other
984 arrangement between the insurer and the office relating to rates
985 or premiums for policies removed from Citizens Property
986 Insurance Corporation.
987 (6) Notwithstanding s. 627.4133, an insurer that has issued
988 a policy under this section shall provide the named insured
989 written notice of nonrenewal at least 180 days before the
990 effective date of the nonrenewal as to subsequent nonrenewals.
991 However, this subsection does not prohibit an insurer from
992 cancelling a policy as permitted under s. 627.4133. The offer of
993 a policy at rates authorized by this section constitutes an
994 offer to renew the policy at the rates specified in the offer
995 and does not constitute a nonrenewal.
996 Section 4. This act shall take effect January 1, 2011.