Amendment
Bill No. CS/CS/CS/SB 408
Amendment No. 844961
CHAMBER ACTION
Senate House
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1Representative Wood offered the following:
2
3     Amendment (with title amendment)
4     Remove everything after the enacting clause and insert:
5     Section 1.  Subsection (2) of section 95.11, Florida
6Statutes, is amended to read:
7     95.11  Limitations other than for the recovery of real
8property.-Actions other than for recovery of real property shall
9be commenced as follows:
10     (2)  WITHIN FIVE YEARS.-
11     (a)  An action on a judgment or decree of any court, not of
12record, of this state or any court of the United States, any
13other state or territory in the United States, or a foreign
14country.
15     (b)  A legal or equitable action on a contract, obligation,
16or liability founded on a written instrument, except for an
17action to enforce a claim against a payment bond, which shall be
18governed by the applicable provisions of ss. 255.05(10) and
19713.23(1)(e).
20     (c)  An action to foreclose a mortgage.
21     (d)  An action alleging a willful violation of s. 448.110.
22     (e)  Notwithstanding paragraph (b), an action for breach of
23a property insurance contract, with the period running from the
24date of loss.
25     Section 2.  Effective June 1, 2011, paragraph (d) of
26subsection (2) of section 215.555, Florida Statutes, is amended
27to read:
28     215.555  Florida Hurricane Catastrophe Fund.-
29     (2)  DEFINITIONS.-As used in this section:
30     (d)  "Losses" means all direct incurred losses under
31covered policies, including which shall include losses for
32additional living expenses not to exceed 40 percent of the
33insured value of a residential structure or its contents and
34amounts paid as fees on behalf of or inuring to the benefit of a
35policyholder shall exclude loss adjustment expenses. The term
36"Losses" does not include:
37     1.  Losses for fair rental value, loss of rent or rental
38income, or business interruption losses;
39     2.  Losses under liability coverages;
40     3.  Property losses that are proximately caused by any
41peril other than a covered event, including, but not limited to,
42fire, theft, flood or rising water, or windstorm that does not
43constitute a covered event;
44     4.  Amounts paid as the result of a voluntary expansion of
45coverage by the insurer, including, but not limited to, a waiver
46of an applicable deductible;
47     5.  Amounts paid to reimburse a policyholder for
48condominium association or homeowners' association loss
49assessments or under similar coverages for contractual
50liabilities;
51     6.  Amounts paid as bad faith awards, punitive damage
52awards, or other court-imposed fines, sanctions, or penalties;
53     7.  Amounts in excess of the coverage limits under the
54covered policy; or
55     8.  Allocated or unallocated loss adjustment expenses.
56     Section 3.  The amendment to s. 215.555, Florida Statutes,
57made by this act applies first to the Florida Hurricane
58Catastrophe Fund reimbursement contract that takes effect June
591, 2011.
60     Section 4.  Subsection (12) is added to section 215.5595,
61Florida Statutes, to read:
62     215.5595  Insurance Capital Build-Up Incentive Program.-
63     (12)  The insurer may request that the board renegotiate
64the terms of any surplus note issued under this section before
65January 1, 2011. The request must be submitted to the board by
66January 1, 2012. If the insurer agrees to accelerate the payment
67period of the note by at least 5 years, the board must agree to
68exempt the insurer from the premium-to-surplus ratios required
69under paragraph (2)(d). If the insurer agrees to an acceleration
70of the payment period for less than 5 years, the board may,
71after consultation with the Office of Insurance Regulation,
72agree to an appropriate revision of the premium-to-surplus
73ratios required under paragraph (2)(d) for the remaining term of
74the note if the revised ratios are not lower than a minimum
75writing ratio of net premium to surplus of at least 1 to 1 and,
76alternatively, a minimum writing ratio of gross premium to
77surplus of at least 3 to 1.
78     Section 5.  Section 624.407, Florida Statutes, is amended
79to read:
80     624.407  Surplus Capital funds required; new insurers.-
81     (1)  To receive authority to transact any one kind or
82combinations of kinds of insurance, as defined in part V of this
83chapter, an insurer applying for its original certificate of
84authority in this state after the effective date of this section
85shall possess surplus as to policyholders at least not less than
86the greater of:
87     (a)  Five million dollars For a property and casualty
88insurer, $5 million, or $2.5 million for any other insurer;
89     (b)  For life insurers, 4 percent of the insurer's total
90liabilities;
91     (c)  For life and health insurers, 4 percent of the
92insurer's total liabilities, plus 6 percent of the insurer's
93liabilities relative to health insurance; or
94     (d)  For all insurers other than life insurers and life and
95health insurers, 10 percent of the insurer's total liabilities;
96or
97     (e)  Notwithstanding paragraph (a) or paragraph (d), for a
98domestic insurer that transacts residential property insurance
99and is:
100     1.  Not a wholly owned subsidiary of an insurer domiciled
101in any other state, $15 million.
102     2.  however, a domestic insurer that transacts residential
103property insurance and is A wholly owned subsidiary of an
104insurer domiciled in any other state, shall possess surplus as
105to policyholders of at least $50 million.
106     (2)  Notwithstanding subsection (1), a new insurer may not
107be required, but no insurer shall be required under this
108subsection to have surplus as to policyholders greater than $100
109million.
110     (3)(2)  The requirements of this section shall be based
111upon all the kinds of insurance actually transacted or to be
112transacted by the insurer in any and all areas in which it
113operates, whether or not only a portion of such kinds of
114insurance are to be transacted in this state.
115     (4)(3)  As to surplus as to policyholders required for
116qualification to transact one or more kinds of insurance,
117domestic mutual insurers are governed by chapter 628, and
118domestic reciprocal insurers are governed by chapter 629.
119     (5)(4)  For the purposes of this section, liabilities do
120shall not include liabilities required under s. 625.041(4). For
121purposes of computing minimum surplus as to policyholders
122pursuant to s. 625.305(1), liabilities shall include liabilities
123required under s. 625.041(4).
124     (5)  The provisions of this section, as amended by this
125act, shall apply only to insurers applying for a certificate of
126authority on or after the effective date of this act.
127     Section 6.  Section 624.408, Florida Statutes, is amended
128to read:
129     624.408  Surplus as to policyholders required; current new
130and existing insurers.-
131     (1)(a)  To maintain a certificate of authority to transact
132any one kind or combinations of kinds of insurance, as defined
133in part V of this chapter, an insurer in this state must shall
134at all times maintain surplus as to policyholders at least not
135less than the greater of:
136     (a)1.  Except as provided in paragraphs (e), (f), and (g)
137subparagraph 5. and paragraph (b), $1.5 million.;
138     (b)2.  For life insurers, 4 percent of the insurer's total
139liabilities.;
140     (c)3.  For life and health insurers, 4 percent of the
141insurer's total liabilities plus 6 percent of the insurer's
142liabilities relative to health insurance.; or
143     (d)4.  For all insurers other than mortgage guaranty
144insurers, life insurers, and life and health insurers, 10
145percent of the insurer's total liabilities.
146     (e)5.  For property and casualty insurers, $4 million,
147except for property and casualty insurers authorized to
148underwrite any line of residential property insurance.
149     (f)(b)  For residential any property insurers not and
150casualty insurer holding a certificate of authority before July
1511, 2011 on December 1, 1993, $15 million. the
152     (g)  For residential property insurers holding a
153certificate of authority before July 1, 2011, and until June 30,
1542016, $5 million; on or after July 1, 2016, and until June 30,
1552021, $10 million; on or after July 1, 2021, $15 million.
156
157The office may reduce the surplus requirement in paragraphs (f)
158and (g) if the insurer is not writing new business, has premiums
159in force of less than $1 million per year in residential
160property insurance, or is a mutual insurance company. following
161amounts apply instead of the $4 million required by subparagraph
162(a)5.:
163     1.  On December 31, 2001, and until December 30, 2002, $3
164million.
165     2.  On December 31, 2002, and until December 30, 2003,
166$3.25 million.
167     3.  On December 31, 2003, and until December 30, 2004, $3.6
168million.
169     4.  On December 31, 2004, and thereafter, $4 million.
170     (2)  For purposes of this section, liabilities do shall not
171include liabilities required under s. 625.041(4). For purposes
172of computing minimum surplus as to policyholders pursuant to s.
173625.305(1), liabilities shall include liabilities required under
174s. 625.041(4).
175     (3)  This section does not require an No insurer shall be
176required under this section to have surplus as to policyholders
177greater than $100 million.
178     (4)  A mortgage guaranty insurer shall maintain a minimum
179surplus as required by s. 635.042.
180     Section 7.  Effective June 1, 2011, section 626.854,
181Florida Statutes, is amended to read:
182     626.854  "Public adjuster" defined; prohibitions.-The
183Legislature finds that it is necessary for the protection of the
184public to regulate public insurance adjusters and to prevent the
185unauthorized practice of law.
186     (1)  A "public adjuster" is any person, except a duly
187licensed attorney at law as hereinafter in s. 626.860 provided,
188who, for money, commission, or any other thing of value,
189prepares, completes, or files an insurance claim form for an
190insured or third-party claimant or who, for money, commission,
191or any other thing of value, acts or aids in any manner on
192behalf of an insured or third-party claimant in negotiating for
193or effecting the settlement of a claim or claims for loss or
194damage covered by an insurance contract or who advertises for
195employment as an adjuster of such claims, and also includes any
196person who, for money, commission, or any other thing of value,
197solicits, investigates, or adjusts such claims on behalf of any
198such public adjuster.
199     (2)  This definition does not apply to:
200     (a)  A licensed health care provider or employee thereof
201who prepares or files a health insurance claim form on behalf of
202a patient.
203     (b)  A person who files a health claim on behalf of another
204and does so without compensation.
205     (3)  A public adjuster may not give legal advice. A public
206adjuster may not act on behalf of or aid any person in
207negotiating or settling a claim relating to bodily injury,
208death, or noneconomic damages.
209     (4)  For purposes of this section, the term "insured"
210includes only the policyholder and any beneficiaries named or
211similarly identified in the policy.
212     (5)  A public adjuster may not directly or indirectly
213through any other person or entity solicit an insured or
214claimant by any means except on Monday through Saturday of each
215week and only between the hours of 8 a.m. and 8 p.m. on those
216days.
217     (6)  A public adjuster may not directly or indirectly
218through any other person or entity initiate contact or engage in
219face-to-face or telephonic solicitation or enter into a contract
220with any insured or claimant under an insurance policy until at
221least 48 hours after the occurrence of an event that may be the
222subject of a claim under the insurance policy unless contact is
223initiated by the insured or claimant.
224     (7)  An insured or claimant may cancel a public adjuster's
225contract to adjust a claim without penalty or obligation within
2263 business days after the date on which the contract is executed
227or within 3 business days after the date on which the insured or
228claimant has notified the insurer of the claim, by phone or in
229writing, whichever is later. The public adjuster's contract
230shall disclose to the insured or claimant his or her right to
231cancel the contract and advise the insured or claimant that
232notice of cancellation must be submitted in writing and sent by
233certified mail, return receipt requested, or other form of
234mailing which provides proof thereof, to the public adjuster at
235the address specified in the contract; provided, during any
236state of emergency as declared by the Governor and for a period
237of 1 year after the date of loss, the insured or claimant shall
238have 5 business days after the date on which the contract is
239executed to cancel a public adjuster's contract.
240     (8)  It is an unfair and deceptive insurance trade practice
241pursuant to s. 626.9541 for a public adjuster or any other
242person to circulate or disseminate any advertisement,
243announcement, or statement containing any assertion,
244representation, or statement with respect to the business of
245insurance which is untrue, deceptive, or misleading.
246     (9)  A public adjuster, a public adjuster apprentice, or
247any person or entity acting on behalf of a public adjuster or
248public adjuster apprentice may not give or offer to give a
249monetary loan or advance to a client or prospective client.
250     (10)  A public adjuster, public adjuster apprentice, or any
251individual or entity acting on behalf of a public adjuster or
252public adjuster apprentice may not give or offer to give,
253directly or indirectly, any article of merchandise having a
254value in excess of $25 to any individual for the purpose of
255advertising or as an inducement to entering into a contract with
256a public adjuster.
257     (11)(a)  If a public adjuster enters into a contract with
258an insured or claimant to reopen a claim or to file a
259supplemental claim that seeks additional payments for a claim
260that has been previously paid in part or in full or settled by
261the insurer, the public adjuster may not charge, agree to, or
262accept any compensation, payment, commission, fee, or other
263thing of value based on a previous settlement or previous claim
264payments by the insurer for the same cause of loss. The charge,
265compensation, payment, commission, fee, or other thing of value
266may be based only on the claim payments or settlement obtained
267through the work of the public adjuster after entering into the
268contract with the insured or claimant. Compensation for the
269reopened or supplemental claim may not exceed 20 percent of the
270reopened or supplemental claim payment. The contracts described
271in this paragraph are not subject to the limitations in
272paragraph (b).
273     (b)  A public adjuster may not charge, agree to, or accept
274any compensation, payment, commission, fee, or other thing of
275value in excess of:
276     1.  Ten percent of the amount of insurance claim payments
277made by the insurer for claims based on events that are the
278subject of a declaration of a state of emergency by the
279Governor. This provision applies to claims made during the
280period of 1 year after the declaration of emergency. After that
2811-year period, 20 percent of the amount of insurance claim
282payments made by the insurer.
283     2.  Twenty percent of the amount of all other insurance
284claim payments made by the insurer for claims that are not based
285on events that are the subject of a declaration of a state of
286emergency by the Governor.
287     (12)  Each public adjuster shall provide to the claimant or
288insured a written estimate of the loss to assist in the
289submission of a proof of loss or any other claim for payment of
290insurance proceeds. The public adjuster shall retain such
291written estimate for at least 5 years and shall make such
292estimate available to the claimant or insured and the department
293upon request.
294     (13)  A public adjuster, public adjuster apprentice, or any
295person acting on behalf of a public adjuster or apprentice may
296not accept referrals of business from any person with whom the
297public adjuster conducts business if there is any form or manner
298of agreement to compensate the person, whether directly or
299indirectly, for referring business to the public adjuster. A
300public adjuster may not compensate any person, except for
301another public adjuster, whether directly or indirectly, for the
302principal purpose of referring business to the public adjuster.
303
304The provisions of subsections (5)-(13) apply only to residential
305property insurance policies and condominium unit owner
306association policies as defined in s. 718.111(11).
307     Section 8.  Effective January 1, 2012, section 626.854,
308Florida Statutes, as amended by this act, is amended to read:
309     626.854  "Public adjuster" defined; prohibitions.-The
310Legislature finds that it is necessary for the protection of the
311public to regulate public insurance adjusters and to prevent the
312unauthorized practice of law.
313     (1)  A "public adjuster" is any person, except a duly
314licensed attorney at law as exempted under hereinafter in s.
315626.860 provided, who, for money, commission, or any other thing
316of value, prepares, completes, or files an insurance claim form
317for an insured or third-party claimant or who, for money,
318commission, or any other thing of value, acts or aids in any
319manner on behalf of, or aids an insured or third-party claimant
320in negotiating for or effecting the settlement of a claim or
321claims for loss or damage covered by an insurance contract or
322who advertises for employment as an adjuster of such claims. The
323term, and also includes any person who, for money, commission,
324or any other thing of value, solicits, investigates, or adjusts
325such claims on behalf of a any such public adjuster.
326     (2)  This definition does not apply to:
327     (a)  A licensed health care provider or employee thereof
328who prepares or files a health insurance claim form on behalf of
329a patient.
330     (b)  A person who files a health claim on behalf of another
331and does so without compensation.
332     (3)  A public adjuster may not give legal advice or. A
333public adjuster may not act on behalf of or aid any person in
334negotiating or settling a claim relating to bodily injury,
335death, or noneconomic damages.
336     (4)  For purposes of this section, the term "insured"
337includes only the policyholder and any beneficiaries named or
338similarly identified in the policy.
339     (5)  A public adjuster may not directly or indirectly
340through any other person or entity solicit an insured or
341claimant by any means except on Monday through Saturday of each
342week and only between the hours of 8 a.m. and 8 p.m. on those
343days.
344     (6)  A public adjuster may not directly or indirectly
345through any other person or entity initiate contact or engage in
346face-to-face or telephonic solicitation or enter into a contract
347with any insured or claimant under an insurance policy until at
348least 48 hours after the occurrence of an event that may be the
349subject of a claim under the insurance policy unless contact is
350initiated by the insured or claimant.
351     (7)  An insured or claimant may cancel a public adjuster's
352contract to adjust a claim without penalty or obligation within
3533 business days after the date on which the contract is executed
354or within 3 business days after the date on which the insured or
355claimant has notified the insurer of the claim, by phone or in
356writing, whichever is later. The public adjuster's contract must
357shall disclose to the insured or claimant his or her right to
358cancel the contract and advise the insured or claimant that
359notice of cancellation must be submitted in writing and sent by
360certified mail, return receipt requested, or other form of
361mailing that which provides proof thereof, to the public
362adjuster at the address specified in the contract; provided,
363during any state of emergency as declared by the Governor and
364for a period of 1 year after the date of loss, the insured or
365claimant has shall have 5 business days after the date on which
366the contract is executed to cancel a public adjuster's contract.
367     (8)  It is an unfair and deceptive insurance trade practice
368pursuant to s. 626.9541 for a public adjuster or any other
369person to circulate or disseminate any advertisement,
370announcement, or statement containing any assertion,
371representation, or statement with respect to the business of
372insurance which is untrue, deceptive, or misleading.
373     (a)  The following statements, made in any public
374adjuster's advertisement or solicitation, are considered
375deceptive or misleading:
376     1.  A statement or representation that invites an insured
377policyholder to submit a claim when the policyholder does not
378have covered damage to insured property.
379     2.  A statement or representation that invites an insured
380policyholder to submit a claim by offering monetary or other
381valuable inducement.
382     3.  A statement or representation that invites an insured
383policyholder to submit a claim by stating that there is "no
384risk" to the policyholder by submitting such claim.
385     4.  A statement or representation, or use of a logo or
386shield, that implies or could mistakenly be construed to imply
387that the solicitation was issued or distributed by a
388governmental agency or is sanctioned or endorsed by a
389governmental agency.
390     (b)  For purposes of this paragraph, the term "written
391advertisement" includes only newspapers, magazines, flyers, and
392bulk mailers. The following disclaimer, which is not required to
393be printed on standard size business cards, must be added in
394bold print and capital letters in typeface no smaller than the
395typeface of the body of the text to all written advertisements
396by a public adjuster:
397"THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
398A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
399ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
400MAY DISREGARD THIS ADVERTISEMENT."
401
402     (9)  A public adjuster, a public adjuster apprentice, or
403any person or entity acting on behalf of a public adjuster or
404public adjuster apprentice may not give or offer to give a
405monetary loan or advance to a client or prospective client.
406     (10)  A public adjuster, public adjuster apprentice, or any
407individual or entity acting on behalf of a public adjuster or
408public adjuster apprentice may not give or offer to give,
409directly or indirectly, any article of merchandise having a
410value in excess of $25 to any individual for the purpose of
411advertising or as an inducement to entering into a contract with
412a public adjuster.
413     (11)(a)  If a public adjuster enters into a contract with
414an insured or claimant to reopen a claim or file a supplemental
415claim that seeks additional payments for a claim that has been
416previously paid in part or in full or settled by the insurer,
417the public adjuster may not charge, agree to, or accept any
418compensation, payment, commission, fee, or other thing of value
419based on a previous settlement or previous claim payments by the
420insurer for the same cause of loss. The charge, compensation,
421payment, commission, fee, or other thing of value must be based
422only on the claim payments or settlement obtained through the
423work of the public adjuster after entering into the contract
424with the insured or claimant. Compensation for the reopened or
425supplemental claim may not exceed 20 percent of the reopened or
426supplemental claim payment. The contracts described in this
427paragraph are not subject to the limitations in paragraph (b).
428     (b)  A public adjuster may not charge, agree to, or accept
429any compensation, payment, commission, fee, or other thing of
430value in excess of:
431     1.  Ten percent of the amount of insurance claim payments
432made by the insurer for claims based on events that are the
433subject of a declaration of a state of emergency by the
434Governor. This provision applies to claims made during the year
435after the declaration of emergency. After that year, the
436limitations in subparagraph 2. apply.
437     2.  Twenty percent of the amount of insurance claim
438payments made by the insurer for claims that are not based on
439events that are the subject of a declaration of a state of
440emergency by the Governor.
441     (12)  Each public adjuster must shall provide to the
442claimant or insured a written estimate of the loss to assist in
443the submission of a proof of loss or any other claim for payment
444of insurance proceeds. The public adjuster shall retain such
445written estimate for at least 5 years and shall make the such
446estimate available to the claimant or insured, the insurer, and
447the department upon request.
448     (13)  A public adjuster, public adjuster apprentice, or any
449person acting on behalf of a public adjuster or apprentice may
450not accept referrals of business from any person with whom the
451public adjuster conducts business if there is any form or manner
452of agreement to compensate the person, whether directly or
453indirectly, for referring business to the public adjuster. A
454public adjuster may not compensate any person, except for
455another public adjuster, whether directly or indirectly, for the
456principal purpose of referring business to the public adjuster.
457     (14)  A company employee adjuster, independent adjuster,
458attorney, investigator, or other persons acting on behalf of an
459insurer that needs access to an insured or claimant or to the
460insured property that is the subject of a claim must provide at
461least 48 hours' notice to the insured or claimant, public
462adjuster, or legal representative before scheduling a meeting
463with the claimant or an onsite inspection of the insured
464property. The insured or claimant may deny access to the
465property if the notice has not been provided. The insured or
466claimant may waive the 48-hour notice.
467     (15)  A public adjuster must ensure prompt notice of
468property loss claims submitted to an insurer by or through a
469public adjuster or on which a public adjuster represents the
470insured at the time the claim or notice of loss is submitted to
471the insurer. The public adjuster must ensure that notice is
472given to the insurer, the public adjuster's contract is provided
473to the insurer, the property is available for inspection of the
474loss or damage by the insurer, and the insurer is given an
475opportunity to interview the insured directly about the loss and
476claim. The insurer must be allowed to obtain necessary
477information to investigate and respond to the claim.
478     (a)  The insurer may not exclude the public adjuster from
479its in-person meetings with the insured. The insurer shall meet
480or communicate with the public adjuster in an effort to reach
481agreement as to the scope of the covered loss under the
482insurance policy. This section does not impair the terms and
483conditions of the insurance policy in effect at the time the
484claim is filed.
485     (b)  A public adjuster may not restrict or prevent an
486insurer, company employee adjuster, independent adjuster,
487attorney, investigator, or other person acting on behalf of the
488insurer from having reasonable access at reasonable times to an
489insured or claimant or to the insured property that is the
490subject of a claim.
491     (c)  A public adjuster may not act or fail to reasonably
492act in any manner that obstructs or prevents an insurer or
493insurer's adjuster from timely conducting an inspection of any
494part of the insured property for which there is a claim for loss
495or damage. The public adjuster representing the insured may be
496present for the insurer's inspection, but if the unavailability
497of the public adjuster otherwise delays the insurer's timely
498inspection of the property, the public adjuster or the insured
499must allow the insurer to have access to the property without
500the participation or presence of the public adjuster or insured
501in order to facilitate the insurer's prompt inspection of the
502loss or damage.
503     (16)  A licensed contractor under part I of chapter 489, or
504a subcontractor, may not adjust a claim on behalf of an insured
505unless licensed and compliant as a public adjuster under this
506chapter. However, the contractor may discuss or explain a bid
507for construction or repair of covered property with the
508residential property owner who has suffered loss or damage
509covered by a property insurance policy, or the insurer of such
510property, if the contractor is doing so for the usual and
511customary fees applicable to the work to be performed as stated
512in the contract between the contractor and the insured.
513     (17)  The provisions of subsections (5)-(16) (5)-(13) apply
514only to residential property insurance policies and condominium
515unit owner policies as defined in s. 718.111(11).
516     Section 9.  Effective January 1, 2012, section 626.8796,
517Florida Statutes, is amended to read:
518     626.8796  Public adjuster contracts; fraud statement.-
519     (1)  All contracts for public adjuster services must be in
520writing and must prominently display the following statement on
521the contract: "Pursuant to s. 817.234, Florida Statutes, any
522person who, with the intent to injure, defraud, or deceive an
523any insurer or insured, prepares, presents, or causes to be
524presented a proof of loss or estimate of cost or repair of
525damaged property in support of a claim under an insurance policy
526knowing that the proof of loss or estimate of claim or repairs
527contains any false, incomplete, or misleading information
528concerning any fact or thing material to the claim commits a
529felony of the third degree, punishable as provided in s.
530775.082, s. 775.083, or s. 775.084, Florida Statutes."
531     (2)  A public adjuster contract relating to a property and
532casualty claim must contain the full name, permanent business
533address, and license number of the public adjuster; the full
534name of the public adjusting firm; and the insured's full name
535and street address, together with a brief description of the
536loss. The contract must state the percentage of compensation for
537the public adjuster's services; the type of claim, including an
538emergency claim, nonemergency claim, or supplemental claim; the
539signatures of the public adjuster and all named insureds; and
540the signature date. If all of the named insureds signatures are
541not available, the public adjuster must submit an affidavit
542signed by the available named insureds attesting that they have
543authority to enter into the contract and settle all claim issues
544on behalf of the named insureds. An unaltered copy of the
545executed contract must be remitted to the insurer within 30 days
546after execution.
547     Section 10.  Effective June 1, 2011, section 626.70132,
548Florida Statutes, is created to read:
549     626.70132  Notice of windstorm or hurricane claim.-A claim,
550supplemental claim, or reopened claim under an insurance policy
551that provides property insurance, as defined in s. 624.604, for
552loss or damage caused by the peril of windstorm or hurricane is
553barred unless notice of the claim, supplemental claim, or
554reopened claim was given to the insurer in accordance with the
555terms of the policy within 3 years after the hurricane first
556made landfall or the windstorm caused the covered damage. For
557purposes of this section, the term "supplemental claim" or
558"reopened claim" means any additional claim for recovery from
559the insurer for losses from the same hurricane or windstorm
560which the insurer has previously adjusted pursuant to the
561initial claim. This section does not affect any applicable
562limitation on civil actions provided in s. 95.11 for claims,
563supplemental claims, or reopened claims timely filed under this
564section.
565     Section 11.  Subsection (4) of section 627.0613, Florida
566Statutes, is repealed.
567     Section 12.  Section 627.062, Florida Statutes, is amended
568to read:
569     627.062  Rate standards.-
570     (1)  The rates for all classes of insurance to which the
571provisions of this part are applicable may shall not be
572excessive, inadequate, or unfairly discriminatory.
573     (2)  As to all such classes of insurance:
574     (a)  Insurers or rating organizations shall establish and
575use rates, rating schedules, or rating manuals that to allow the
576insurer a reasonable rate of return on the such classes of
577insurance written in this state. A copy of rates, rating
578schedules, rating manuals, premium credits or discount
579schedules, and surcharge schedules, and changes thereto, must
580shall be filed with the office under one of the following
581procedures except as provided in subparagraph 3.:
582     1.  If the filing is made at least 90 days before the
583proposed effective date and the filing is not implemented during
584the office's review of the filing and any proceeding and
585judicial review, then such filing is shall be considered a "file
586and use" filing. In such case, the office shall finalize its
587review by issuance of a notice of intent to approve or a notice
588of intent to disapprove within 90 days after receipt of the
589filing. The notice of intent to approve and the notice of intent
590to disapprove constitute agency action for purposes of the
591Administrative Procedure Act. Requests for supporting
592information, requests for mathematical or mechanical
593corrections, or notification to the insurer by the office of its
594preliminary findings does shall not toll the 90-day period
595during any such proceedings and subsequent judicial review. The
596rate shall be deemed approved if the office does not issue a
597notice of intent to approve or a notice of intent to disapprove
598within 90 days after receipt of the filing.
599     2.  If the filing is not made in accordance with the
600provisions of subparagraph 1., such filing must shall be made as
601soon as practicable, but within no later than 30 days after the
602effective date, and is shall be considered a "use and file"
603filing. An insurer making a "use and file" filing is potentially
604subject to an order by the office to return to policyholders
605those portions of rates found to be excessive, as provided in
606paragraph (h).
607     3.  For all property insurance filings made or submitted
608after January 25, 2007, but before May 1, 2012 December 31,
6092010, an insurer seeking a rate that is greater than the rate
610most recently approved by the office shall make a "file and use"
611filing. For purposes of this subparagraph, motor vehicle
612collision and comprehensive coverages are not considered to be
613property coverages.
614     (b)  Upon receiving a rate filing, the office shall review
615the rate filing to determine if a rate is excessive, inadequate,
616or unfairly discriminatory. In making that determination, the
617office shall, in accordance with generally accepted and
618reasonable actuarial techniques, consider the following factors:
619     1.  Past and prospective loss experience within and without
620this state.
621     2.  Past and prospective expenses.
622     3.  The degree of competition among insurers for the risk
623insured.
624     4.  Investment income reasonably expected by the insurer,
625consistent with the insurer's investment practices, from
626investable premiums anticipated in the filing, plus any other
627expected income from currently invested assets representing the
628amount expected on unearned premium reserves and loss reserves.
629The commission may adopt rules using reasonable techniques of
630actuarial science and economics to specify the manner in which
631insurers shall calculate investment income attributable to such
632classes of insurance written in this state and the manner in
633which such investment income is shall be used to calculate
634insurance rates. Such manner must shall contemplate allowances
635for an underwriting profit factor and full consideration of
636investment income which produce a reasonable rate of return;
637however, investment income from invested surplus may not be
638considered.
639     5.  The reasonableness of the judgment reflected in the
640filing.
641     6.  Dividends, savings, or unabsorbed premium deposits
642allowed or returned to Florida policyholders, members, or
643subscribers.
644     7.  The adequacy of loss reserves.
645     8.  The cost of reinsurance. The office may shall not
646disapprove a rate as excessive solely due to the insurer having
647obtained catastrophic reinsurance to cover the insurer's
648estimated 250-year probable maximum loss or any lower level of
649loss.
650     9.  Trend factors, including trends in actual losses per
651insured unit for the insurer making the filing.
652     10.  Conflagration and catastrophe hazards, if applicable.
653     11.  Projected hurricane losses, if applicable, which must
654be estimated using a model or method found to be acceptable or
655reliable by the Florida Commission on Hurricane Loss Projection
656Methodology, and as further provided in s. 627.0628.
657     12.  A reasonable margin for underwriting profit and
658contingencies.
659     13.  The cost of medical services, if applicable.
660     14.  Other relevant factors that affect which impact upon
661the frequency or severity of claims or upon expenses.
662     (c)  In the case of fire insurance rates, consideration
663must shall be given to the availability of water supplies and
664the experience of the fire insurance business during a period of
665not less than the most recent 5-year period for which such
666experience is available.
667     (d)  If conflagration or catastrophe hazards are considered
668given consideration by an insurer in its rates or rating plan,
669including surcharges and discounts, the insurer shall establish
670a reserve for that portion of the premium allocated to such
671hazard and shall maintain the premium in a catastrophe reserve.
672Any Removal of such premiums from the reserve for purposes other
673than paying claims associated with a catastrophe or purchasing
674reinsurance for catastrophes must be approved by shall be
675subject to approval of the office. Any ceding commission
676received by an insurer purchasing reinsurance for catastrophes
677must shall be placed in the catastrophe reserve.
678     (e)  After consideration of the rate factors provided in
679paragraphs (b), (c), and (d), the office may find a rate may be
680found by the office to be excessive, inadequate, or unfairly
681discriminatory based upon the following standards:
682     1.  Rates shall be deemed excessive if they are likely to
683produce a profit from Florida business which that is
684unreasonably high in relation to the risk involved in the class
685of business or if expenses are unreasonably high in relation to
686services rendered.
687     2.  Rates shall be deemed excessive if, among other things,
688the rate structure established by a stock insurance company
689provides for replenishment of surpluses from premiums, if when
690the replenishment is attributable to investment losses.
691     3.  Rates shall be deemed inadequate if they are clearly
692insufficient, together with the investment income attributable
693to them, to sustain projected losses and expenses in the class
694of business to which they apply.
695     4.  A rating plan, including discounts, credits, or
696surcharges, shall be deemed unfairly discriminatory if it fails
697to clearly and equitably reflect consideration of the
698policyholder's participation in a risk management program
699adopted pursuant to s. 627.0625.
700     5.  A rate shall be deemed inadequate as to the premium
701charged to a risk or group of risks if discounts or credits are
702allowed which exceed a reasonable reflection of expense savings
703and reasonably expected loss experience from the risk or group
704of risks.
705     6.  A rate shall be deemed unfairly discriminatory as to a
706risk or group of risks if the application of premium discounts,
707credits, or surcharges among such risks does not bear a
708reasonable relationship to the expected loss and expense
709experience among the various risks.
710     (f)  In reviewing a rate filing, the office may require the
711insurer to provide, at the insurer's expense, all information
712necessary to evaluate the condition of the company and the
713reasonableness of the filing according to the criteria
714enumerated in this section.
715     (g)  The office may at any time review a rate, rating
716schedule, rating manual, or rate change; the pertinent records
717of the insurer; and market conditions. If the office finds on a
718preliminary basis that a rate may be excessive, inadequate, or
719unfairly discriminatory, the office shall initiate proceedings
720to disapprove the rate and shall so notify the insurer. However,
721the office may not disapprove as excessive any rate for which it
722has given final approval or which has been deemed approved for a
723period of 1 year after the effective date of the filing unless
724the office finds that a material misrepresentation or material
725error was made by the insurer or was contained in the filing.
726Upon being so notified, the insurer or rating organization
727shall, within 60 days, file with the office all information that
728which, in the belief of the insurer or organization, proves the
729reasonableness, adequacy, and fairness of the rate or rate
730change. The office shall issue a notice of intent to approve or
731a notice of intent to disapprove pursuant to the procedures of
732paragraph (a) within 90 days after receipt of the insurer's
733initial response. In such instances and in any administrative
734proceeding relating to the legality of the rate, the insurer or
735rating organization shall carry the burden of proof by a
736preponderance of the evidence to show that the rate is not
737excessive, inadequate, or unfairly discriminatory. After the
738office notifies an insurer that a rate may be excessive,
739inadequate, or unfairly discriminatory, unless the office
740withdraws the notification, the insurer may shall not alter the
741rate except to conform to with the office's notice until the
742earlier of 120 days after the date the notification was provided
743or 180 days after the date of implementing the implementation of
744the rate. The office may, subject to chapter 120, may disapprove
745without the 60-day notification any rate increase filed by an
746insurer within the prohibited time period or during the time
747that the legality of the increased rate is being contested.
748     (h)  If In the event the office finds that a rate or rate
749change is excessive, inadequate, or unfairly discriminatory, the
750office shall issue an order of disapproval specifying that a new
751rate or rate schedule, which responds to the findings of the
752office, be filed by the insurer. The office shall further order,
753for any "use and file" filing made in accordance with
754subparagraph (a)2., that premiums charged each policyholder
755constituting the portion of the rate above that which was
756actuarially justified be returned to the such policyholder in
757the form of a credit or refund. If the office finds that an
758insurer's rate or rate change is inadequate, the new rate or
759rate schedule filed with the office in response to such a
760finding is shall be applicable only to new or renewal business
761of the insurer written on or after the effective date of the
762responsive filing.
763     (i)  Except as otherwise specifically provided in this
764chapter, for property and casualty insurance the office may
765shall not directly or indirectly:
766     1.  Prohibit any insurer, including any residual market
767plan or joint underwriting association, from paying acquisition
768costs based on the full amount of premium, as defined in s.
769627.403, applicable to any policy, or prohibit any such insurer
770from including the full amount of acquisition costs in a rate
771filing; or.
772     2.  Impede, abridge, or otherwise compromise an insurer's
773right to acquire policyholders, advertise, or appoint agents,
774including the calculation, manner, or amount of such agent
775commissions, if any.
776     (j)  With respect to residential property insurance rate
777filings, the rate filing must account for mitigation measures
778undertaken by policyholders to reduce hurricane losses.
779     (k)1.  A residential property An insurer may make a
780separate filing limited solely to an adjustment of its rates for
781reinsurance, the cost of financing products used as a
782replacement for reinsurance, or financing costs incurred in the
783purchase of reinsurance, or financing products to replace or
784finance the payment of the amount covered by the Temporary
785Increase in Coverage Limits (TICL) portion of the Florida
786Hurricane Catastrophe Fund including replacement reinsurance for
787the TICL reductions made pursuant to s. 215.555(17)(e); the
788actual cost paid due to the application of the TICL premium
789factor pursuant to s. 215.555(17)(f); and the actual cost paid
790due to the application of the cash build-up factor pursuant to
791s. 215.555(5)(b) if the insurer:
792     a.  Elects to purchase financing products such as a
793liquidity instrument or line of credit, in which case the cost
794included in the filing for the liquidity instrument or line of
795credit may not result in a premium increase exceeding 3 percent
796for any individual policyholder. All costs contained in the
797filing may not result in an overall premium increase of more
798than 15 10 percent for any individual policyholder.
799     b.  Includes in the filing a copy of all of its
800reinsurance, liquidity instrument, or line of credit contracts;
801proof of the billing or payment for the contracts; and the
802calculation upon which the proposed rate change is based
803demonstrating demonstrates that the costs meet the criteria of
804this section and are not loaded for expenses or profit for the
805insurer making the filing.
806     c.  Includes no other changes to its rates in the filing.
807     d.  Has not implemented a rate increase within the 6 months
808immediately preceding the filing.
809     e.  Does not file for a rate increase under any other
810paragraph within 6 months after making a filing under this
811paragraph.
812     2.f.  An insurer that purchases reinsurance or financing
813products from an affiliated company may make a separate filing
814in compliance with this paragraph does so only if the costs for
815such reinsurance or financing products are charged at or below
816charges made for comparable coverage by nonaffiliated reinsurers
817or financial entities making such coverage or financing products
818available in this state.
819     3.2.  An insurer may only make only one filing per in any
82012-month period under this paragraph.
821     4.3.  An insurer that elects to implement a rate change
822under this paragraph must file its rate filing with the office
823at least 45 days before the effective date of the rate change.
824After an insurer submits a complete filing that meets all of the
825requirements of this paragraph, the office has 45 days after the
826date of the filing to review the rate filing and determine if
827the rate is excessive, inadequate, or unfairly discriminatory.
828
829The provisions of this subsection do shall not apply to workers'
830compensation, and employer's liability insurance, and to motor
831vehicle insurance.
832     (3)(a)  For individual risks that are not rated in
833accordance with the insurer's rates, rating schedules, rating
834manuals, and underwriting rules filed with the office and that
835which have been submitted to the insurer for individual rating,
836the insurer must maintain documentation on each risk subject to
837individual risk rating. The documentation must identify the
838named insured and specify the characteristics and classification
839of the risk supporting the reason for the risk being
840individually risk rated, including any modifications to existing
841approved forms to be used on the risk. The insurer must maintain
842these records for a period of at least 5 years after the
843effective date of the policy.
844     (b)  Individual risk rates and modifications to existing
845approved forms are not subject to this part or part II, except
846for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
847627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
848627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
849627.4265, 627.427, and 627.428, but are subject to all other
850applicable provisions of this code and rules adopted thereunder.
851     (c)  This subsection does not apply to private passenger
852motor vehicle insurance.
853     (d)1.  The following categories or kinds of insurance and
854types of commercial lines risks are not subject to paragraph
855(2)(a) or paragraph (2)(f):
856     a.  Excess or umbrella.
857     b.  Surety and fidelity.
858     c.  Boiler and machinery and leakage and fire extinguishing
859equipment.
860     d.  Errors and omissions.
861     e.  Directors and officers, employment practices, and
862management liability.
863     f.  Intellectual property and patent infringement
864liability.
865     g.  Advertising injury and Internet liability insurance.
866     h.  Property risks rated under a highly protected risks
867rating plan.
868     i.  Any other commercial lines categories or kinds of
869insurance or types of commercial lines risks that the office
870determines should not be subject to paragraph (2)(a) or
871paragraph (2)(f) because of the existence of a competitive
872market for such insurance, similarity of such insurance to other
873categories or kinds of insurance not subject to paragraph (2)(a)
874or paragraph (2)(f), or to improve the general operational
875efficiency of the office.
876     2.  Insurers or rating organizations shall establish and
877use rates, rating schedules, or rating manuals to allow the
878insurer a reasonable rate of return on insurance and risks
879described in subparagraph 1. which are written in this state.
880     3.  An insurer must notify the office of any changes to
881rates for insurance and risks described in subparagraph 1.
882within no later than 30 days after the effective date of the
883change. The notice must include the name of the insurer, the
884type or kind of insurance subject to rate change, total premium
885written during the immediately preceding year by the insurer for
886the type or kind of insurance subject to the rate change, and
887the average statewide percentage change in rates. Underwriting
888files, premiums, losses, and expense statistics with regard to
889such insurance and risks described in subparagraph 1. written by
890an insurer must shall be maintained by the insurer and subject
891to examination by the office. Upon examination, the office
892shall, in accordance with generally accepted and reasonable
893actuarial techniques, shall consider the rate factors in
894paragraphs (2)(b), (c), and (d) and the standards in paragraph
895(2)(e) to determine if the rate is excessive, inadequate, or
896unfairly discriminatory.
897     4.  A rating organization must notify the office of any
898changes to loss cost for insurance and risks described in
899subparagraph 1. within no later than 30 days after the effective
900date of the change. The notice must include the name of the
901rating organization, the type or kind of insurance subject to a
902loss cost change, loss costs during the immediately preceding
903year for the type or kind of insurance subject to the loss cost
904change, and the average statewide percentage change in loss
905cost. Loss and exposure statistics with regard to risks
906applicable to loss costs for a rating organization not subject
907to paragraph (2)(a) or paragraph (2)(f) must shall be maintained
908by the rating organization and are subject to examination by the
909office. Upon examination, the office shall, in accordance with
910generally accepted and reasonable actuarial techniques, shall
911consider the rate factors in paragraphs (2)(b)-(d) and the
912standards in paragraph (2)(e) to determine if the rate is
913excessive, inadequate, or unfairly discriminatory.
914     5.  In reviewing a rate, the office may require the insurer
915to provide, at the insurer's expense, all information necessary
916to evaluate the condition of the company and the reasonableness
917of the rate according to the applicable criteria described in
918this section.
919     (4)  The establishment of any rate, rating classification,
920rating plan or schedule, or variation thereof in violation of
921part IX of chapter 626 is also in violation of this section. In
922order to enhance the ability of consumers to compare premiums
923and to increase the accuracy and usefulness of rate-comparison
924information provided by the office to the public, the office
925shall develop a proposed standard rating territory plan to be
926used by all authorized property and casualty insurers for
927residential property insurance. In adopting the proposed plan,
928the office may consider geographical characteristics relevant to
929risk, county lines, major roadways, existing rating territories
930used by a significant segment of the market, and other relevant
931factors. Such plan shall be submitted to the President of the
932Senate and the Speaker of the House of Representatives by
933January 15, 2006. The plan may not be implemented unless
934authorized by further act of the Legislature.
935     (5)  With respect to a rate filing involving coverage of
936the type for which the insurer is required to pay a
937reimbursement premium to the Florida Hurricane Catastrophe Fund,
938the insurer may fully recoup in its property insurance premiums
939any reimbursement premiums paid to the Florida Hurricane
940Catastrophe fund, together with reasonable costs of other
941reinsurance; however, but except as otherwise provided in this
942section, the insurer may not recoup reinsurance costs that
943duplicate coverage provided by the Florida Hurricane Catastrophe
944fund. An insurer may not recoup more than 1 year of
945reimbursement premium at a time. Any under-recoupment from the
946prior year may be added to the following year's reimbursement
947premium, and any over-recoupment must shall be subtracted from
948the following year's reimbursement premium.
949     (6)(a)  If an insurer requests an administrative hearing
950pursuant to s. 120.57 related to a rate filing under this
951section, the director of the Division of Administrative Hearings
952shall expedite the hearing and assign an administrative law
953judge who shall commence the hearing within 30 days after the
954receipt of the formal request and shall enter a recommended
955order within 30 days after the hearing or within 30 days after
956receipt of the hearing transcript by the administrative law
957judge, whichever is later. Each party shall have be allowed 10
958days in which to submit written exceptions to the recommended
959order. The office shall enter a final order within 30 days after
960the entry of the recommended order. The provisions of this
961paragraph may be waived upon stipulation of all parties.
962     (b)  Upon entry of a final order, the insurer may request a
963expedited appellate review pursuant to the Florida Rules of
964Appellate Procedure. It is the intent of the Legislature that
965the First District Court of Appeal grant an insurer's request
966for an expedited appellate review.
967     (7)(a)  The provisions of this subsection apply only with
968respect to rates for medical malpractice insurance and shall
969control to the extent of any conflict with other provisions of
970this section.
971     (a)(b)  Any portion of a judgment entered or settlement
972paid as a result of a statutory or common-law bad faith action
973and any portion of a judgment entered which awards punitive
974damages against an insurer may not be included in the insurer's
975rate base, and shall not be used to justify a rate or rate
976change. Any common-law bad faith action identified as such, any
977portion of a settlement entered as a result of a statutory or
978common-law action, or any portion of a settlement wherein an
979insurer agrees to pay specific punitive damages may not be used
980to justify a rate or rate change. The portion of the taxable
981costs and attorney's fees which is identified as being related
982to the bad faith and punitive damages in these judgments and
983settlements may not be included in the insurer's rate base and
984used may not be utilized to justify a rate or rate change.
985     (b)(c)  Upon reviewing a rate filing and determining
986whether the rate is excessive, inadequate, or unfairly
987discriminatory, the office shall consider, in accordance with
988generally accepted and reasonable actuarial techniques, past and
989present prospective loss experience, either using loss
990experience solely for this state or giving greater credibility
991to this state's loss data after applying actuarially sound
992methods of assigning credibility to such data.
993     (c)(d)  Rates shall be deemed excessive if, among other
994standards established by this section, the rate structure
995provides for replenishment of reserves or surpluses from
996premiums when the replenishment is attributable to investment
997losses.
998     (d)(e)  The insurer must apply a discount or surcharge
999based on the health care provider's loss experience or shall
1000establish an alternative method giving due consideration to the
1001provider's loss experience. The insurer must include in the
1002filing a copy of the surcharge or discount schedule or a
1003description of the alternative method used, and must provide a
1004copy of such schedule or description, as approved by the office,
1005to policyholders at the time of renewal and to prospective
1006policyholders at the time of application for coverage.
1007     (e)(f)  Each medical malpractice insurer must make a rate
1008filing under this section, sworn to by at least two executive
1009officers of the insurer, at least once each calendar year.
1010     (8)(a)1.  No later than 60 days after the effective date of
1011medical malpractice legislation enacted during the 2003 Special
1012Session D of the Florida Legislature, the office shall calculate
1013a presumed factor that reflects the impact that the changes
1014contained in such legislation will have on rates for medical
1015malpractice insurance and shall issue a notice informing all
1016insurers writing medical malpractice coverage of such presumed
1017factor. In determining the presumed factor, the office shall use
1018generally accepted actuarial techniques and standards provided
1019in this section in determining the expected impact on losses,
1020expenses, and investment income of the insurer. To the extent
1021that the operation of a provision of medical malpractice
1022legislation enacted during the 2003 Special Session D of the
1023Florida Legislature is stayed pending a constitutional
1024challenge, the impact of that provision shall not be included in
1025the calculation of a presumed factor under this subparagraph.
1026     2.  No later than 60 days after the office issues its
1027notice of the presumed rate change factor under subparagraph 1.,
1028each insurer writing medical malpractice coverage in this state
1029shall submit to the office a rate filing for medical malpractice
1030insurance, which will take effect no later than January 1, 2004,
1031and apply retroactively to policies issued or renewed on or
1032after the effective date of medical malpractice legislation
1033enacted during the 2003 Special Session D of the Florida
1034Legislature. Except as authorized under paragraph (b), the
1035filing shall reflect an overall rate reduction at least as great
1036as the presumed factor determined under subparagraph 1. With
1037respect to policies issued on or after the effective date of
1038such legislation and prior to the effective date of the rate
1039filing required by this subsection, the office shall order the
1040insurer to make a refund of the amount that was charged in
1041excess of the rate that is approved.
1042     (b)  Any insurer or rating organization that contends that
1043the rate provided for in paragraph (a) is excessive, inadequate,
1044or unfairly discriminatory shall separately state in its filing
1045the rate it contends is appropriate and shall state with
1046specificity the factors or data that it contends should be
1047considered in order to produce such appropriate rate. The
1048insurer or rating organization shall be permitted to use all of
1049the generally accepted actuarial techniques provided in this
1050section in making any filing pursuant to this subsection. The
1051office shall review each such exception and approve or
1052disapprove it prior to use. It shall be the insurer's burden to
1053actuarially justify any deviations from the rates required to be
1054filed under paragraph (a). The insurer making a filing under
1055this paragraph shall include in the filing the expected impact
1056of medical malpractice legislation enacted during the 2003
1057Special Session D of the Florida Legislature on losses,
1058expenses, and rates.
1059     (c)  If any provision of medical malpractice legislation
1060enacted during the 2003 Special Session D of the Florida
1061Legislature is held invalid by a court of competent
1062jurisdiction, the office shall permit an adjustment of all
1063medical malpractice rates filed under this section to reflect
1064the impact of such holding on such rates so as to ensure that
1065the rates are not excessive, inadequate, or unfairly
1066discriminatory.
1067     (d)  Rates approved on or before July 1, 2003, for medical
1068malpractice insurance shall remain in effect until the effective
1069date of a new rate filing approved under this subsection.
1070     (e)  The calculation and notice by the office of the
1071presumed factor pursuant to paragraph (a) is not an order or
1072rule that is subject to chapter 120. If the office enters into a
1073contract with an independent consultant to assist the office in
1074calculating the presumed factor, such contract shall not be
1075subject to the competitive solicitation requirements of s.
1076287.057.
1077     (8)(9)(a)  The chief executive officer or chief financial
1078officer of a property insurer and the chief actuary of a
1079property insurer must certify under oath and subject to the
1080penalty of perjury, on a form approved by the commission, the
1081following information, which must accompany a rate filing:
1082     1.  The signing officer and actuary have reviewed the rate
1083filing;
1084     2.  Based on the signing officer's and actuary's knowledge,
1085the rate filing does not contain any untrue statement of a
1086material fact or omit to state a material fact necessary in
1087order to make the statements made, in light of the circumstances
1088under which such statements were made, not misleading;
1089     3.  Based on the signing officer's and actuary's knowledge,
1090the information and other factors described in paragraph (2)(b),
1091including, but not limited to, investment income, fairly present
1092in all material respects the basis of the rate filing for the
1093periods presented in the filing; and
1094     4.  Based on the signing officer's and actuary's knowledge,
1095the rate filing reflects all premium savings that are reasonably
1096expected to result from legislative enactments and are in
1097accordance with generally accepted and reasonable actuarial
1098techniques.
1099     (b)  A signing officer or actuary who knowingly makes
1100making a false certification under this subsection commits a
1101violation of s. 626.9541(1)(e) and is subject to the penalties
1102under s. 626.9521.
1103     (c)  Failure to provide such certification by the officer
1104and actuary shall result in the rate filing being disapproved
1105without prejudice to be refiled.
1106     (d)  The certification made pursuant to paragraph (a) is
1107not rendered false if, after making the subject rate filing, the
1108insurer provides the office with additional or supplementary
1109information pursuant to a formal or informal request from the
1110office. However, the actuary who is primarily responsible for
1111preparing and submitting such information must certify the
1112information in accordance with the certification required under
1113paragraph (a) and the penalties in paragraph (b), except that
1114the chief executive officer, chief financial officer, or chief
1115actuary need not certify the additional or supplementary
1116information.
1117     (e)(d)  The commission may adopt rules and forms pursuant
1118to ss. 120.536(1) and 120.54 to administer this subsection.
1119     (9)(10)  The burden is on the office to establish that
1120rates are excessive for personal lines residential coverage with
1121a dwelling replacement cost of $1 million or more or for a
1122single condominium unit with a combined dwelling and contents
1123replacement cost of $1 million or more. Upon request of the
1124office, the insurer shall provide to the office such loss and
1125expense information as the office reasonably needs to meet this
1126burden.
1127     (10)(11)  Any interest paid pursuant to s. 627.70131(5) may
1128not be included in the insurer's rate base and may not be used
1129to justify a rate or rate change.
1130     Section 13.  Paragraph (b) of subsection (3) of section
1131627.06281, Florida Statutes, is amended to read:
1132     627.06281  Public hurricane loss projection model;
1133reporting of data by insurers.-
1134     (3)
1135     (b)  The fees charged for private sector access and use of
1136the model shall be the reasonable costs associated with the
1137operation and maintenance of the model by the office. Such fees
1138do not apply to access and use of the model by the office. By
1139January 1, 2009, The office shall establish by rule a fee
1140schedule for access to and the use of the model. The fee
1141schedule must be reasonably calculated to cover only the actual
1142costs of providing access to and the use of the model.
1143     Section 14.  Subsections (1) and (5) of section 627.0629,
1144Florida Statutes, are amended to read:
1145     627.0629  Residential property insurance; rate filings.-
1146     (1)(a)  It is the intent of the Legislature that insurers
1147must provide savings to consumers who install or implement
1148windstorm damage mitigation techniques, alterations, or
1149solutions to their properties to prevent windstorm losses. A
1150rate filing for residential property insurance must include
1151actuarially reasonable discounts, credits, or other rate
1152differentials, or appropriate reductions in deductibles, for
1153properties on which fixtures or construction techniques
1154demonstrated to reduce the amount of loss in a windstorm have
1155been installed or implemented. The fixtures or construction
1156techniques must shall include, but are not be limited to,
1157fixtures or construction techniques that which enhance roof
1158strength, roof covering performance, roof-to-wall strength,
1159wall-to-floor-to-foundation strength, opening protection, and
1160window, door, and skylight strength. Credits, discounts, or
1161other rate differentials, or appropriate reductions in
1162deductibles, for fixtures and construction techniques that which
1163meet the minimum requirements of the Florida Building Code must
1164be included in the rate filing. All insurance companies must
1165make a rate filing which includes the credits, discounts, or
1166other rate differentials or reductions in deductibles by
1167February 28, 2003. By July 1, 2007, the office shall reevaluate
1168the discounts, credits, other rate differentials, and
1169appropriate reductions in deductibles for fixtures and
1170construction techniques that meet the minimum requirements of
1171the Florida Building Code, based upon actual experience or any
1172other loss relativity studies available to the office. The
1173office shall determine the discounts, credits, other rate
1174differentials, and appropriate reductions in deductibles that
1175reflect the full actuarial value of such revaluation, which may
1176be used by insurers in rate filings.
1177     (b)  By February 1, 2011, the Office of Insurance
1178Regulation, in consultation with the Department of Financial
1179Services and the Department of Community Affairs, shall develop
1180and make publicly available a proposed method for insurers to
1181establish discounts, credits, or other rate differentials for
1182hurricane mitigation measures which directly correlate to the
1183numerical rating assigned to a structure pursuant to the uniform
1184home grading scale adopted by the Financial Services Commission
1185pursuant to s. 215.55865, including any proposed changes to the
1186uniform home grading scale. By October 1, 2011, the commission
1187shall adopt rules requiring insurers to make rate filings for
1188residential property insurance which revise insurers' discounts,
1189credits, or other rate differentials for hurricane mitigation
1190measures so that such rate differentials correlate directly to
1191the uniform home grading scale. The rules may include such
1192changes to the uniform home grading scale as the commission
1193determines are necessary, and may specify the minimum required
1194discounts, credits, or other rate differentials. Such rate
1195differentials must be consistent with generally accepted
1196actuarial principles and wind-loss mitigation studies. The rules
1197shall allow a period of at least 2 years after the effective
1198date of the revised mitigation discounts, credits, or other rate
1199differentials for a property owner to obtain an inspection or
1200otherwise qualify for the revised credit, during which time the
1201insurer shall continue to apply the mitigation credit that was
1202applied immediately prior to the effective date of the revised
1203credit. Discounts, credits, and other rate differentials
1204established for rate filings under this paragraph shall
1205supersede, after adoption, the discounts, credits, and other
1206rate differentials included in rate filings under paragraph (a).
1207     (5)  In order to provide an appropriate transition period,
1208an insurer may, in its sole discretion, implement an approved
1209rate filing for residential property insurance over a period of
1210years. Such An insurer electing to phase in its rate filing must
1211provide an informational notice to the office setting out its
1212schedule for implementation of the phased-in rate filing. The An
1213insurer may include in its rate the actual cost of private
1214market reinsurance that corresponds to available coverage of the
1215Temporary Increase in Coverage Limits, TICL, from the Florida
1216Hurricane Catastrophe Fund. The insurer may also include the
1217cost of reinsurance to replace the TICL reduction implemented
1218pursuant to s. 215.555(17)(d)9. However, this cost for
1219reinsurance may not include any expense or profit load or result
1220in a total annual base rate increase in excess of 10 percent.
1221     Section 15.  Paragraphs (a), (b), (c), (d), (n), (v), and
1222(y) of subsection (6) of section 627.351, Florida Statutes, are
1223amended to read:
1224     627.351  Insurance risk apportionment plans.-
1225     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
1226     (a)1.  It is The public purpose of this subsection is to
1227ensure that there is the existence of an orderly market for
1228property insurance for residents Floridians and Florida
1229businesses of this state.
1230     1.  The Legislature finds that private insurers are
1231unwilling or unable to provide affordable property insurance
1232coverage in this state to the extent sought and needed. The
1233absence of affordable property insurance threatens the public
1234health, safety, and welfare and likewise threatens the economic
1235health of the state. The state therefore has a compelling public
1236interest and a public purpose to assist in assuring that
1237property in the state is insured and that it is insured at
1238affordable rates so as to facilitate the remediation,
1239reconstruction, and replacement of damaged or destroyed property
1240in order to reduce or avoid the negative effects otherwise
1241resulting to the public health, safety, and welfare, to the
1242economy of the state, and to the revenues of the state and local
1243governments which are needed to provide for the public welfare.
1244It is necessary, therefore, to provide affordable property
1245insurance to applicants who are in good faith entitled to
1246procure insurance through the voluntary market but are unable to
1247do so. The Legislature intends, therefore, by this subsection
1248that affordable property insurance be provided and that it
1249continue to be provided, as long as necessary, through Citizens
1250Property Insurance Corporation, a government entity that is an
1251integral part of the state, and that is not a private insurance
1252company. To that end, the Citizens Property Insurance
1253corporation shall strive to increase the availability of
1254affordable property insurance in this state, while achieving
1255efficiencies and economies, and while providing service to
1256policyholders, applicants, and agents which is no less than the
1257quality generally provided in the voluntary market, for the
1258achievement of the foregoing public purposes. Because it is
1259essential for this government entity to have the maximum
1260financial resources to pay claims following a catastrophic
1261hurricane, it is the intent of the Legislature that the Citizens
1262Property Insurance corporation continue to be an integral part
1263of the state and that the income of the corporation be exempt
1264from federal income taxation and that interest on the debt
1265obligations issued by the corporation be exempt from federal
1266income taxation.
1267     2.  The Residential Property and Casualty Joint
1268Underwriting Association originally created by this statute
1269shall be known, as of July 1, 2002, as the Citizens Property
1270Insurance Corporation. The corporation shall provide insurance
1271for residential and commercial property, for applicants who are
1272in good faith entitled, but, in good faith, are unable, to
1273procure insurance through the voluntary market. The corporation
1274shall operate pursuant to a plan of operation approved by order
1275of the Financial Services Commission. The plan is subject to
1276continuous review by the commission. The commission may, by
1277order, withdraw approval of all or part of a plan if the
1278commission determines that conditions have changed since
1279approval was granted and that the purposes of the plan require
1280changes in the plan. The corporation shall continue to operate
1281pursuant to the plan of operation approved by the Office of
1282Insurance Regulation until October 1, 2006. For the purposes of
1283this subsection, residential coverage includes both personal
1284lines residential coverage, which consists of the type of
1285coverage provided by homeowner's, mobile home owner's, dwelling,
1286tenant's, condominium unit owner's, and similar policies;, and
1287commercial lines residential coverage, which consists of the
1288type of coverage provided by condominium association, apartment
1289building, and similar policies.
1290     3.  Effective January 1, 2009, a personal lines residential
1291structure that has a dwelling replacement cost of $2 million or
1292more, or a single condominium unit that has a combined dwelling
1293and contents content replacement cost of $2 million or more is
1294not eligible for coverage by the corporation. Such dwellings
1295insured by the corporation on December 31, 2008, may continue to
1296be covered by the corporation until the end of the policy term.
1297However, such dwellings that are insured by the corporation and
1298become ineligible for coverage due to the provisions of this
1299subparagraph may reapply and obtain coverage if the property
1300owner provides the corporation with a sworn affidavit from one
1301or more insurance agents, on a form provided by the corporation,
1302stating that the agents have made their best efforts to obtain
1303coverage and that the property has been rejected for coverage by
1304at least one authorized insurer and at least three surplus lines
1305insurers. If such conditions are met, the dwelling may be
1306insured by the corporation for up to 3 years, after which time
1307the dwelling is ineligible for coverage. The office shall
1308approve the method used by the corporation for valuing the
1309dwelling replacement cost for the purposes of this subparagraph.
1310If a policyholder is insured by the corporation prior to being
1311determined to be ineligible pursuant to this subparagraph and
1312such policyholder files a lawsuit challenging the determination,
1313the policyholder may remain insured by the corporation until the
1314conclusion of the litigation.
1315     4.  It is the intent of the Legislature that policyholders,
1316applicants, and agents of the corporation receive service and
1317treatment of the highest possible level but never less than that
1318generally provided in the voluntary market. It is also is
1319intended that the corporation be held to service standards no
1320less than those applied to insurers in the voluntary market by
1321the office with respect to responsiveness, timeliness, customer
1322courtesy, and overall dealings with policyholders, applicants,
1323or agents of the corporation.
1324     5.  Effective January 1, 2009, a personal lines residential
1325structure that is located in the "wind-borne debris region," as
1326defined in s. 1609.2, International Building Code (2006), and
1327that has an insured value on the structure of $750,000 or more
1328is not eligible for coverage by the corporation unless the
1329structure has opening protections as required under the Florida
1330Building Code for a newly constructed residential structure in
1331that area. A residential structure shall be deemed to comply
1332with the requirements of this subparagraph if it has shutters or
1333opening protections on all openings and if such opening
1334protections complied with the Florida Building Code at the time
1335they were installed.
1336     6.  For any claim filed under any policy of the
1337corporation, a public adjuster may not charge, agree to, or
1338accept any compensation, payment, commission, fee, or other
1339thing of value greater than 10 percent of the additional amount
1340actually paid over the amount that was originally offered by the
1341corporation for any one claim.
1342     (b)1.  All insurers authorized to write one or more subject
1343lines of business in this state are subject to assessment by the
1344corporation and, for the purposes of this subsection, are
1345referred to collectively as "assessable insurers." Insurers
1346writing one or more subject lines of business in this state
1347pursuant to part VIII of chapter 626 are not assessable
1348insurers, but insureds who procure one or more subject lines of
1349business in this state pursuant to part VIII of chapter 626 are
1350subject to assessment by the corporation and are referred to
1351collectively as "assessable insureds." An authorized insurer's
1352assessment liability begins shall begin on the first day of the
1353calendar year following the year in which the insurer was issued
1354a certificate of authority to transact insurance for subject
1355lines of business in this state and terminates shall terminate 1
1356year after the end of the first calendar year during which the
1357insurer no longer holds a certificate of authority to transact
1358insurance for subject lines of business in this state.
1359     2.a.  All revenues, assets, liabilities, losses, and
1360expenses of the corporation shall be divided into three separate
1361accounts as follows:
1362     (I)  A personal lines account for personal residential
1363policies issued by the corporation, or issued by the Residential
1364Property and Casualty Joint Underwriting Association and renewed
1365by the corporation, which provides that provide comprehensive,
1366multiperil coverage on risks that are not located in areas
1367eligible for coverage by in the Florida Windstorm Underwriting
1368Association as those areas were defined on January 1, 2002, and
1369for such policies that do not provide coverage for the peril of
1370wind on risks that are located in such areas;
1371     (II)  A commercial lines account for commercial residential
1372and commercial nonresidential policies issued by the
1373corporation, or issued by the Residential Property and Casualty
1374Joint Underwriting Association and renewed by the corporation,
1375which provides that provide coverage for basic property perils
1376on risks that are not located in areas eligible for coverage by
1377in the Florida Windstorm Underwriting Association as those areas
1378were defined on January 1, 2002, and for such policies that do
1379not provide coverage for the peril of wind on risks that are
1380located in such areas; and
1381     (III)  A coastal high-risk account for personal residential
1382policies and commercial residential and commercial
1383nonresidential property policies issued by the corporation, or
1384transferred to the corporation, which provides that provide
1385coverage for the peril of wind on risks that are located in
1386areas eligible for coverage by in the Florida Windstorm
1387Underwriting Association as those areas were defined on January
13881, 2002. The corporation may offer policies that provide
1389multiperil coverage and the corporation shall continue to offer
1390policies that provide coverage only for the peril of wind for
1391risks located in areas eligible for coverage in the coastal
1392high-risk account. In issuing multiperil coverage, the
1393corporation may use its approved policy forms and rates for the
1394personal lines account. An applicant or insured who is eligible
1395to purchase a multiperil policy from the corporation may
1396purchase a multiperil policy from an authorized insurer without
1397prejudice to the applicant's or insured's eligibility to
1398prospectively purchase a policy that provides coverage only for
1399the peril of wind from the corporation. An applicant or insured
1400who is eligible for a corporation policy that provides coverage
1401only for the peril of wind may elect to purchase or retain such
1402policy and also purchase or retain coverage excluding wind from
1403an authorized insurer without prejudice to the applicant's or
1404insured's eligibility to prospectively purchase a policy that
1405provides multiperil coverage from the corporation. It is the
1406goal of the Legislature that there would be an overall average
1407savings of 10 percent or more for a policyholder who currently
1408has a wind-only policy with the corporation, and an ex-wind
1409policy with a voluntary insurer or the corporation, and who then
1410obtains a multiperil policy from the corporation. It is the
1411intent of the Legislature that the offer of multiperil coverage
1412in the coastal high-risk account be made and implemented in a
1413manner that does not adversely affect the tax-exempt status of
1414the corporation or creditworthiness of or security for currently
1415outstanding financing obligations or credit facilities of the
1416coastal high-risk account, the personal lines account, or the
1417commercial lines account. The coastal high-risk account must
1418also include quota share primary insurance under subparagraph
1419(c)2. The area eligible for coverage under the coastal high-risk
1420account also includes the area within Port Canaveral, which is
1421bordered on the south by the City of Cape Canaveral, bordered on
1422the west by the Banana River, and bordered on the north by
1423Federal Government property.
1424     b.  The three separate accounts must be maintained as long
1425as financing obligations entered into by the Florida Windstorm
1426Underwriting Association or Residential Property and Casualty
1427Joint Underwriting Association are outstanding, in accordance
1428with the terms of the corresponding financing documents. If When
1429the financing obligations are no longer outstanding, in
1430accordance with the terms of the corresponding financing
1431documents, the corporation may use a single account for all
1432revenues, assets, liabilities, losses, and expenses of the
1433corporation. Consistent with the requirement of this
1434subparagraph and prudent investment policies that minimize the
1435cost of carrying debt, the board shall exercise its best efforts
1436to retire existing debt or to obtain the approval of necessary
1437parties to amend the terms of existing debt, so as to structure
1438the most efficient plan to consolidate the three separate
1439accounts into a single account.
1440     c.  Creditors of the Residential Property and Casualty
1441Joint Underwriting Association and of the accounts specified in
1442sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1443and recourse to, those the accounts referred to in sub-sub-
1444subparagraphs a.(I) and (II) and shall have no claim against, or
1445recourse to, the account referred to in sub-sub-subparagraph
1446a.(III). Creditors of the Florida Windstorm Underwriting
1447Association shall have a claim against, and recourse to, the
1448account referred to in sub-sub-subparagraph a.(III) and shall
1449have no claim against, or recourse to, the accounts referred to
1450in sub-sub-subparagraphs a.(I) and (II).
1451     d.  Revenues, assets, liabilities, losses, and expenses not
1452attributable to particular accounts shall be prorated among the
1453accounts.
1454     e.  The Legislature finds that the revenues of the
1455corporation are revenues that are necessary to meet the
1456requirements set forth in documents authorizing the issuance of
1457bonds under this subsection.
1458     f.  No part of the income of the corporation may inure to
1459the benefit of any private person.
1460     3.  With respect to a deficit in an account:
1461     a.  After accounting for the Citizens policyholder
1462surcharge imposed under sub-subparagraph h. i., if when the
1463remaining projected deficit incurred in a particular calendar
1464year:
1465     (I)  Is not greater than 6 percent of the aggregate
1466statewide direct written premium for the subject lines of
1467business for the prior calendar year, the entire deficit shall
1468be recovered through regular assessments of assessable insurers
1469under paragraph (q) and assessable insureds.
1470     (II)b.  After accounting for the Citizens policyholder
1471surcharge imposed under sub-subparagraph i., when the remaining
1472projected deficit incurred in a particular calendar year Exceeds
14736 percent of the aggregate statewide direct written premium for
1474the subject lines of business for the prior calendar year, the
1475corporation shall levy regular assessments on assessable
1476insurers under paragraph (q) and on assessable insureds in an
1477amount equal to the greater of 6 percent of the deficit or 6
1478percent of the aggregate statewide direct written premium for
1479the subject lines of business for the prior calendar year. Any
1480remaining deficit shall be recovered through emergency
1481assessments under sub-subparagraph c. d.
1482     b.c.  Each assessable insurer's share of the amount being
1483assessed under sub-subparagraph a. must or sub-subparagraph b.
1484shall be in the proportion that the assessable insurer's direct
1485written premium for the subject lines of business for the year
1486preceding the assessment bears to the aggregate statewide direct
1487written premium for the subject lines of business for that year.
1488The assessment percentage applicable to each assessable insured
1489is the ratio of the amount being assessed under sub-subparagraph
1490a. or sub-subparagraph b. to the aggregate statewide direct
1491written premium for the subject lines of business for the prior
1492year. Assessments levied by the corporation on assessable
1493insurers under sub-subparagraph a. must sub-subparagraphs a. and
1494b. shall be paid as required by the corporation's plan of
1495operation and paragraph (q). Assessments levied by the
1496corporation on assessable insureds under sub-subparagraph a.
1497sub-subparagraphs a. and b. shall be collected by the surplus
1498lines agent at the time the surplus lines agent collects the
1499surplus lines tax required by s. 626.932, and shall be paid to
1500the Florida Surplus Lines Service Office at the time the surplus
1501lines agent pays the surplus lines tax to that the Florida
1502Surplus Lines Service office. Upon receipt of regular
1503assessments from surplus lines agents, the Florida Surplus Lines
1504Service Office shall transfer the assessments directly to the
1505corporation as determined by the corporation.
1506     c.d.  Upon a determination by the board of governors that a
1507deficit in an account exceeds the amount that will be recovered
1508through regular assessments under sub-subparagraph a. or sub-
1509subparagraph b., plus the amount that is expected to be
1510recovered through surcharges under sub-subparagraph h. i., as to
1511the remaining projected deficit the board shall levy, after
1512verification by the office, shall levy emergency assessments,
1513for as many years as necessary to cover the deficits, to be
1514collected by assessable insurers and the corporation and
1515collected from assessable insureds upon issuance or renewal of
1516policies for subject lines of business, excluding National Flood
1517Insurance policies. The amount of the emergency assessment
1518collected in a particular year must shall be a uniform
1519percentage of that year's direct written premium for subject
1520lines of business and all accounts of the corporation, excluding
1521National Flood Insurance Program policy premiums, as annually
1522determined by the board and verified by the office. The office
1523shall verify the arithmetic calculations involved in the board's
1524determination within 30 days after receipt of the information on
1525which the determination was based. Notwithstanding any other
1526provision of law, the corporation and each assessable insurer
1527that writes subject lines of business shall collect emergency
1528assessments from its policyholders without such obligation being
1529affected by any credit, limitation, exemption, or deferment.
1530Emergency assessments levied by the corporation on assessable
1531insureds shall be collected by the surplus lines agent at the
1532time the surplus lines agent collects the surplus lines tax
1533required by s. 626.932 and shall be paid to the Florida Surplus
1534Lines Service Office at the time the surplus lines agent pays
1535the surplus lines tax to that the Florida Surplus Lines Service
1536office. The emergency assessments so collected shall be
1537transferred directly to the corporation on a periodic basis as
1538determined by the corporation and shall be held by the
1539corporation solely in the applicable account. The aggregate
1540amount of emergency assessments levied for an account under this
1541sub-subparagraph in any calendar year may, at the discretion of
1542the board of governors, be less than but may not exceed the
1543greater of 10 percent of the amount needed to cover the deficit,
1544plus interest, fees, commissions, required reserves, and other
1545costs associated with financing of the original deficit, or 10
1546percent of the aggregate statewide direct written premium for
1547subject lines of business and for all accounts of the
1548corporation for the prior year, plus interest, fees,
1549commissions, required reserves, and other costs associated with
1550financing the deficit.
1551     d.e.  The corporation may pledge the proceeds of
1552assessments, projected recoveries from the Florida Hurricane
1553Catastrophe Fund, other insurance and reinsurance recoverables,
1554policyholder surcharges and other surcharges, and other funds
1555available to the corporation as the source of revenue for and to
1556secure bonds issued under paragraph (q), bonds or other
1557indebtedness issued under subparagraph (c)3., or lines of credit
1558or other financing mechanisms issued or created under this
1559subsection, or to retire any other debt incurred as a result of
1560deficits or events giving rise to deficits, or in any other way
1561that the board determines will efficiently recover such
1562deficits. The purpose of the lines of credit or other financing
1563mechanisms is to provide additional resources to assist the
1564corporation in covering claims and expenses attributable to a
1565catastrophe. As used in this subsection, the term "assessments"
1566includes regular assessments under sub-subparagraph a., sub-
1567subparagraph b., or subparagraph (q)1. and emergency assessments
1568under sub-subparagraph d. Emergency assessments collected under
1569sub-subparagraph d. are not part of an insurer's rates, are not
1570premium, and are not subject to premium tax, fees, or
1571commissions; however, failure to pay the emergency assessment
1572shall be treated as failure to pay premium. The emergency
1573assessments under sub-subparagraph c. d. shall continue as long
1574as any bonds issued or other indebtedness incurred with respect
1575to a deficit for which the assessment was imposed remain
1576outstanding, unless adequate provision has been made for the
1577payment of such bonds or other indebtedness pursuant to the
1578documents governing such bonds or other indebtedness.
1579     e.f.  As used in this subsection for purposes of any
1580deficit incurred on or after January 25, 2007, the term "subject
1581lines of business" means insurance written by assessable
1582insurers or procured by assessable insureds for all property and
1583casualty lines of business in this state, but not including
1584workers' compensation or medical malpractice. As used in this
1585the sub-subparagraph, the term "property and casualty lines of
1586business" includes all lines of business identified on Form 2,
1587Exhibit of Premiums and Losses, in the annual statement required
1588of authorized insurers under by s. 624.424 and any rule adopted
1589under this section, except for those lines identified as
1590accident and health insurance and except for policies written
1591under the National Flood Insurance Program or the Federal Crop
1592Insurance Program. For purposes of this sub-subparagraph, the
1593term "workers' compensation" includes both workers' compensation
1594insurance and excess workers' compensation insurance.
1595     f.g.  The Florida Surplus Lines Service Office shall
1596determine annually the aggregate statewide written premium in
1597subject lines of business procured by assessable insureds and
1598shall report that information to the corporation in a form and
1599at a time the corporation specifies to ensure that the
1600corporation can meet the requirements of this subsection and the
1601corporation's financing obligations.
1602     g.h.  The Florida Surplus Lines Service Office shall verify
1603the proper application by surplus lines agents of assessment
1604percentages for regular assessments and emergency assessments
1605levied under this subparagraph on assessable insureds and shall
1606assist the corporation in ensuring the accurate, timely
1607collection and payment of assessments by surplus lines agents as
1608required by the corporation.
1609     h.i.  If a deficit is incurred in any account in 2008 or
1610thereafter, the board of governors shall levy a Citizens
1611policyholder surcharge against all policyholders of the
1612corporation. for a 12-month period, which
1613     (I)  The surcharge shall be levied collected at the time of
1614issuance or renewal of a policy, as a uniform percentage of the
1615premium for the policy of up to 15 percent of such premium,
1616which funds shall be used to offset the deficit.
1617     (II)  The surcharge is payable upon cancellation or
1618termination of the policy, upon renewal of the policy, or upon
1619issuance of a new policy by the corporation within the first 12
1620months after the date of the levy or the period of time
1621necessary to fully collect the surcharge amount.
1622     (III)  The corporation may not levy any regular assessments
1623under paragraph (q) pursuant to sub-subparagraph a. or sub-
1624subparagraph b. with respect to a particular year's deficit
1625until the corporation has first levied the full amount of the
1626surcharge authorized by this sub-subparagraph.
1627     (IV)  The surcharge is Citizens policyholder surcharges
1628under this sub-subparagraph are not considered premium and is
1629are not subject to commissions, fees, or premium taxes. However,
1630failure to pay the surcharge such surcharges shall be treated as
1631failure to pay premium.
1632     i.j.  If the amount of any assessments or surcharges
1633collected from corporation policyholders, assessable insurers or
1634their policyholders, or assessable insureds exceeds the amount
1635of the deficits, such excess amounts shall be remitted to and
1636retained by the corporation in a reserve to be used by the
1637corporation, as determined by the board of governors and
1638approved by the office, to pay claims or reduce any past,
1639present, or future plan-year deficits or to reduce outstanding
1640debt.
1641     (c)  The corporation's plan of operation of the
1642corporation:
1643     1.  Must provide for adoption of residential property and
1644casualty insurance policy forms and commercial residential and
1645nonresidential property insurance forms, which forms must be
1646approved by the office before prior to use. The corporation
1647shall adopt the following policy forms:
1648     a.  Standard personal lines policy forms that are
1649comprehensive multiperil policies providing full coverage of a
1650residential property equivalent to the coverage provided in the
1651private insurance market under an HO-3, HO-4, or HO-6 policy.
1652     b.  Basic personal lines policy forms that are policies
1653similar to an HO-8 policy or a dwelling fire policy that provide
1654coverage meeting the requirements of the secondary mortgage
1655market, but which coverage is more limited than the coverage
1656under a standard policy.
1657     c.  Commercial lines residential and nonresidential policy
1658forms that are generally similar to the basic perils of full
1659coverage obtainable for commercial residential structures and
1660commercial nonresidential structures in the admitted voluntary
1661market.
1662     d.  Personal lines and commercial lines residential
1663property insurance forms that cover the peril of wind only. The
1664forms are applicable only to residential properties located in
1665areas eligible for coverage under the coastal high-risk account
1666referred to in sub-subparagraph (b)2.a.
1667     e.  Commercial lines nonresidential property insurance
1668forms that cover the peril of wind only. The forms are
1669applicable only to nonresidential properties located in areas
1670eligible for coverage under the coastal high-risk account
1671referred to in sub-subparagraph (b)2.a.
1672     f.  The corporation may adopt variations of the policy
1673forms listed in sub-subparagraphs a.-e. which that contain more
1674restrictive coverage.
1675     2.a.  Must provide that the corporation adopt a program in
1676which the corporation and authorized insurers enter into quota
1677share primary insurance agreements for hurricane coverage, as
1678defined in s. 627.4025(2)(a), for eligible risks, and adopt
1679property insurance forms for eligible risks which cover the
1680peril of wind only.
1681     a.  As used in this subsection, the term:
1682     (I)  "Quota share primary insurance" means an arrangement
1683in which the primary hurricane coverage of an eligible risk is
1684provided in specified percentages by the corporation and an
1685authorized insurer. The corporation and authorized insurer are
1686each solely responsible for a specified percentage of hurricane
1687coverage of an eligible risk as set forth in a quota share
1688primary insurance agreement between the corporation and an
1689authorized insurer and the insurance contract. The
1690responsibility of the corporation or authorized insurer to pay
1691its specified percentage of hurricane losses of an eligible
1692risk, as set forth in the quota share primary insurance
1693agreement, may not be altered by the inability of the other
1694party to the agreement to pay its specified percentage of
1695hurricane losses. Eligible risks that are provided hurricane
1696coverage through a quota share primary insurance arrangement
1697must be provided policy forms that set forth the obligations of
1698the corporation and authorized insurer under the arrangement,
1699clearly specify the percentages of quota share primary insurance
1700provided by the corporation and authorized insurer, and
1701conspicuously and clearly state that neither the authorized
1702insurer and nor the corporation may not be held responsible
1703beyond their its specified percentage of coverage of hurricane
1704losses.
1705     (II)  "Eligible risks" means personal lines residential and
1706commercial lines residential risks that meet the underwriting
1707criteria of the corporation and are located in areas that were
1708eligible for coverage by the Florida Windstorm Underwriting
1709Association on January 1, 2002.
1710     b.  The corporation may enter into quota share primary
1711insurance agreements with authorized insurers at corporation
1712coverage levels of 90 percent and 50 percent.
1713     c.  If the corporation determines that additional coverage
1714levels are necessary to maximize participation in quota share
1715primary insurance agreements by authorized insurers, the
1716corporation may establish additional coverage levels. However,
1717the corporation's quota share primary insurance coverage level
1718may not exceed 90 percent.
1719     d.  Any quota share primary insurance agreement entered
1720into between an authorized insurer and the corporation must
1721provide for a uniform specified percentage of coverage of
1722hurricane losses, by county or territory as set forth by the
1723corporation board, for all eligible risks of the authorized
1724insurer covered under the quota share primary insurance
1725agreement.
1726     e.  Any quota share primary insurance agreement entered
1727into between an authorized insurer and the corporation is
1728subject to review and approval by the office. However, such
1729agreement shall be authorized only as to insurance contracts
1730entered into between an authorized insurer and an insured who is
1731already insured by the corporation for wind coverage.
1732     f.  For all eligible risks covered under quota share
1733primary insurance agreements, the exposure and coverage levels
1734for both the corporation and authorized insurers shall be
1735reported by the corporation to the Florida Hurricane Catastrophe
1736Fund. For all policies of eligible risks covered under such
1737quota share primary insurance agreements, the corporation and
1738the authorized insurer must shall maintain complete and accurate
1739records for the purpose of exposure and loss reimbursement
1740audits as required by Florida Hurricane Catastrophe fund rules.
1741The corporation and the authorized insurer shall each maintain
1742duplicate copies of policy declaration pages and supporting
1743claims documents.
1744     g.  The corporation board shall establish in its plan of
1745operation standards for quota share agreements which ensure that
1746there is no discriminatory application among insurers as to the
1747terms of the quota share agreements, pricing of the quota share
1748agreements, incentive provisions if any, and consideration paid
1749for servicing policies or adjusting claims.
1750     h.  The quota share primary insurance agreement between the
1751corporation and an authorized insurer must set forth the
1752specific terms under which coverage is provided, including, but
1753not limited to, the sale and servicing of policies issued under
1754the agreement by the insurance agent of the authorized insurer
1755producing the business, the reporting of information concerning
1756eligible risks, the payment of premium to the corporation, and
1757arrangements for the adjustment and payment of hurricane claims
1758incurred on eligible risks by the claims adjuster and personnel
1759of the authorized insurer. Entering into a quota sharing
1760insurance agreement between the corporation and an authorized
1761insurer is shall be voluntary and at the discretion of the
1762authorized insurer.
1763     3.a.  May provide that the corporation may employ or
1764otherwise contract with individuals or other entities to provide
1765administrative or professional services that may be appropriate
1766to effectuate the plan. The corporation may shall have the power
1767to borrow funds, by issuing bonds or by incurring other
1768indebtedness, and shall have other powers reasonably necessary
1769to effectuate the requirements of this subsection, including,
1770without limitation, the power to issue bonds and incur other
1771indebtedness in order to refinance outstanding bonds or other
1772indebtedness. The corporation may, but is not required to, seek
1773judicial validation of its bonds or other indebtedness under
1774chapter 75. The corporation may issue bonds or incur other
1775indebtedness, or have bonds issued on its behalf by a unit of
1776local government pursuant to subparagraph (q)2., in the absence
1777of a hurricane or other weather-related event, upon a
1778determination by the corporation, subject to approval by the
1779office, that such action would enable it to efficiently meet the
1780financial obligations of the corporation and that such
1781financings are reasonably necessary to effectuate the
1782requirements of this subsection. The corporation may is
1783authorized to take all actions needed to facilitate tax-free
1784status for any such bonds or indebtedness, including formation
1785of trusts or other affiliated entities. The corporation may
1786shall have the authority to pledge assessments, projected
1787recoveries from the Florida Hurricane Catastrophe Fund, other
1788reinsurance recoverables, market equalization and other
1789surcharges, and other funds available to the corporation as
1790security for bonds or other indebtedness. In recognition of s.
179110, Art. I of the State Constitution, prohibiting the impairment
1792of obligations of contracts, it is the intent of the Legislature
1793that no action be taken whose purpose is to impair any bond
1794indenture or financing agreement or any revenue source committed
1795by contract to such bond or other indebtedness.
1796     b.  To ensure that the corporation is operating in an
1797efficient and economic manner while providing quality service to
1798policyholders, applicants, and agents, the board shall
1799commission an independent third-party consultant having
1800expertise in insurance company management or insurance company
1801management consulting to prepare a report and make
1802recommendations on the relative costs and benefits of
1803outsourcing various policy issuance and service functions to
1804private servicing carriers or entities performing similar
1805functions in the private market for a fee, rather than
1806performing such functions in house. In making such
1807recommendations, the consultant shall consider how other
1808residual markets, both in this state and around the country,
1809outsource appropriate functions or use servicing carriers to
1810better match expenses with revenues that fluctuate based on a
1811widely varying policy count. The report must be completed by
1812July 1, 2012. Upon receiving the report, the board shall develop
1813a plan to implement the report and submit the plan for review,
1814modification, and approval to the Financial Services Commission.
1815Upon the commission's approval of the plan, the board shall
1816begin implementing the plan by January 1, 2013.
1817     4.a.  Must require that the corporation operate subject to
1818the supervision and approval of a board of governors consisting
1819of eight individuals who are residents of this state, from
1820different geographical areas of this state.
1821     a.  The Governor, the Chief Financial Officer, the
1822President of the Senate, and the Speaker of the House of
1823Representatives shall each appoint two members of the board. At
1824least one of the two members appointed by each appointing
1825officer must have demonstrated expertise in insurance, and is
1826deemed to be within the scope of the exemption provided in s.
1827112.313(7)(b). The Chief Financial Officer shall designate one
1828of the appointees as chair. All board members serve at the
1829pleasure of the appointing officer. All members of the board of
1830governors are subject to removal at will by the officers who
1831appointed them. All board members, including the chair, must be
1832appointed to serve for 3-year terms beginning annually on a date
1833designated by the plan. However, for the first term beginning on
1834or after July 1, 2009, each appointing officer shall appoint one
1835member of the board for a 2-year term and one member for a 3-
1836year term. A Any board vacancy shall be filled for the unexpired
1837term by the appointing officer. The Chief Financial Officer
1838shall appoint a technical advisory group to provide information
1839and advice to the board of governors in connection with the
1840board's duties under this subsection. The executive director and
1841senior managers of the corporation shall be engaged by the board
1842and serve at the pleasure of the board. Any executive director
1843appointed on or after July 1, 2006, is subject to confirmation
1844by the Senate. The executive director is responsible for
1845employing other staff as the corporation may require, subject to
1846review and concurrence by the board.
1847     b.  The board shall create a Market Accountability Advisory
1848Committee to assist the corporation in developing awareness of
1849its rates and its customer and agent service levels in
1850relationship to the voluntary market insurers writing similar
1851coverage.
1852     (I)  The members of the advisory committee shall consist of
1853the following 11 persons, one of whom must be elected chair by
1854the members of the committee: four representatives, one
1855appointed by the Florida Association of Insurance Agents, one by
1856the Florida Association of Insurance and Financial Advisors, one
1857by the Professional Insurance Agents of Florida, and one by the
1858Latin American Association of Insurance Agencies; three
1859representatives appointed by the insurers with the three highest
1860voluntary market share of residential property insurance
1861business in the state; one representative from the Office of
1862Insurance Regulation; one consumer appointed by the board who is
1863insured by the corporation at the time of appointment to the
1864committee; one representative appointed by the Florida
1865Association of Realtors; and one representative appointed by the
1866Florida Bankers Association. All members shall be appointed to
1867must serve for 3-year terms and may serve for consecutive terms.
1868     (II)  The committee shall report to the corporation at each
1869board meeting on insurance market issues which may include rates
1870and rate competition with the voluntary market; service,
1871including policy issuance, claims processing, and general
1872responsiveness to policyholders, applicants, and agents; and
1873matters relating to depopulation.
1874     5.  Must provide a procedure for determining the
1875eligibility of a risk for coverage, as follows:
1876     a.  Subject to the provisions of s. 627.3517, with respect
1877to personal lines residential risks, if the risk is offered
1878coverage from an authorized insurer at the insurer's approved
1879rate under either a standard policy including wind coverage or,
1880if consistent with the insurer's underwriting rules as filed
1881with the office, a basic policy including wind coverage, for a
1882new application to the corporation for coverage, the risk is not
1883eligible for any policy issued by the corporation unless the
1884premium for coverage from the authorized insurer is more than 15
1885percent greater than the premium for comparable coverage from
1886the corporation. If the risk is not able to obtain any such
1887offer, the risk is eligible for either a standard policy
1888including wind coverage or a basic policy including wind
1889coverage issued by the corporation; however, if the risk could
1890not be insured under a standard policy including wind coverage
1891regardless of market conditions, the risk is shall be eligible
1892for a basic policy including wind coverage unless rejected under
1893subparagraph 8. However, with regard to a policyholder of the
1894corporation or a policyholder removed from the corporation
1895through an assumption agreement until the end of the assumption
1896period, the policyholder remains eligible for coverage from the
1897corporation regardless of any offer of coverage from an
1898authorized insurer or surplus lines insurer. The corporation
1899shall determine the type of policy to be provided on the basis
1900of objective standards specified in the underwriting manual and
1901based on generally accepted underwriting practices.
1902     (I)  If the risk accepts an offer of coverage through the
1903market assistance plan or an offer of coverage through a
1904mechanism established by the corporation before a policy is
1905issued to the risk by the corporation or during the first 30
1906days of coverage by the corporation, and the producing agent who
1907submitted the application to the plan or to the corporation is
1908not currently appointed by the insurer, the insurer shall:
1909     (A)  Pay to the producing agent of record of the policy,
1910for the first year, an amount that is the greater of the
1911insurer's usual and customary commission for the type of policy
1912written or a fee equal to the usual and customary commission of
1913the corporation; or
1914     (B)  Offer to allow the producing agent of record of the
1915policy to continue servicing the policy for at least a period of
1916not less than 1 year and offer to pay the agent the greater of
1917the insurer's or the corporation's usual and customary
1918commission for the type of policy written.
1919
1920If the producing agent is unwilling or unable to accept
1921appointment, the new insurer shall pay the agent in accordance
1922with sub-sub-sub-subparagraph (A).
1923     (II)  If When the corporation enters into a contractual
1924agreement for a take-out plan, the producing agent of record of
1925the corporation policy is entitled to retain any unearned
1926commission on the policy, and the insurer shall:
1927     (A)  Pay to the producing agent of record of the
1928corporation policy, for the first year, an amount that is the
1929greater of the insurer's usual and customary commission for the
1930type of policy written or a fee equal to the usual and customary
1931commission of the corporation; or
1932     (B)  Offer to allow the producing agent of record of the
1933corporation policy to continue servicing the policy for at least
1934a period of not less than 1 year and offer to pay the agent the
1935greater of the insurer's or the corporation's usual and
1936customary commission for the type of policy written.
1937
1938If the producing agent is unwilling or unable to accept
1939appointment, the new insurer shall pay the agent in accordance
1940with sub-sub-sub-subparagraph (A).
1941     b.  With respect to commercial lines residential risks, for
1942a new application to the corporation for coverage, if the risk
1943is offered coverage under a policy including wind coverage from
1944an authorized insurer at its approved rate, the risk is not
1945eligible for a any policy issued by the corporation unless the
1946premium for coverage from the authorized insurer is more than 15
1947percent greater than the premium for comparable coverage from
1948the corporation. If the risk is not able to obtain any such
1949offer, the risk is eligible for a policy including wind coverage
1950issued by the corporation. However, with regard to a
1951policyholder of the corporation or a policyholder removed from
1952the corporation through an assumption agreement until the end of
1953the assumption period, the policyholder remains eligible for
1954coverage from the corporation regardless of an any offer of
1955coverage from an authorized insurer or surplus lines insurer.
1956     (I)  If the risk accepts an offer of coverage through the
1957market assistance plan or an offer of coverage through a
1958mechanism established by the corporation before a policy is
1959issued to the risk by the corporation or during the first 30
1960days of coverage by the corporation, and the producing agent who
1961submitted the application to the plan or the corporation is not
1962currently appointed by the insurer, the insurer shall:
1963     (A)  Pay to the producing agent of record of the policy,
1964for the first year, an amount that is the greater of the
1965insurer's usual and customary commission for the type of policy
1966written or a fee equal to the usual and customary commission of
1967the corporation; or
1968     (B)  Offer to allow the producing agent of record of the
1969policy to continue servicing the policy for at least a period of
1970not less than 1 year and offer to pay the agent the greater of
1971the insurer's or the corporation's usual and customary
1972commission for the type of policy written.
1973
1974If the producing agent is unwilling or unable to accept
1975appointment, the new insurer shall pay the agent in accordance
1976with sub-sub-sub-subparagraph (A).
1977     (II)  If When the corporation enters into a contractual
1978agreement for a take-out plan, the producing agent of record of
1979the corporation policy is entitled to retain any unearned
1980commission on the policy, and the insurer shall:
1981     (A)  Pay to the producing agent of record of the
1982corporation policy, for the first year, an amount that is the
1983greater of the insurer's usual and customary commission for the
1984type of policy written or a fee equal to the usual and customary
1985commission of the corporation; or
1986     (B)  Offer to allow the producing agent of record of the
1987corporation policy to continue servicing the policy for at least
1988a period of not less than 1 year and offer to pay the agent the
1989greater of the insurer's or the corporation's usual and
1990customary commission for the type of policy written.
1991
1992If the producing agent is unwilling or unable to accept
1993appointment, the new insurer shall pay the agent in accordance
1994with sub-sub-sub-subparagraph (A).
1995     c.  For purposes of determining comparable coverage under
1996sub-subparagraphs a. and b., the comparison must shall be based
1997on those forms and coverages that are reasonably comparable. The
1998corporation may rely on a determination of comparable coverage
1999and premium made by the producing agent who submits the
2000application to the corporation, made in the agent's capacity as
2001the corporation's agent. A comparison may be made solely of the
2002premium with respect to the main building or structure only on
2003the following basis: the same coverage A or other building
2004limits; the same percentage hurricane deductible that applies on
2005an annual basis or that applies to each hurricane for commercial
2006residential property; the same percentage of ordinance and law
2007coverage, if the same limit is offered by both the corporation
2008and the authorized insurer; the same mitigation credits, to the
2009extent the same types of credits are offered both by the
2010corporation and the authorized insurer; the same method for loss
2011payment, such as replacement cost or actual cash value, if the
2012same method is offered both by the corporation and the
2013authorized insurer in accordance with underwriting rules; and
2014any other form or coverage that is reasonably comparable as
2015determined by the board. If an application is submitted to the
2016corporation for wind-only coverage in the coastal high-risk
2017account, the premium for the corporation's wind-only policy plus
2018the premium for the ex-wind policy that is offered by an
2019authorized insurer to the applicant must shall be compared to
2020the premium for multiperil coverage offered by an authorized
2021insurer, subject to the standards for comparison specified in
2022this subparagraph. If the corporation or the applicant requests
2023from the authorized insurer a breakdown of the premium of the
2024offer by types of coverage so that a comparison may be made by
2025the corporation or its agent and the authorized insurer refuses
2026or is unable to provide such information, the corporation may
2027treat the offer as not being an offer of coverage from an
2028authorized insurer at the insurer's approved rate.
2029     6.  Must include rules for classifications of risks and
2030rates therefor.
2031     7.  Must provide that if premium and investment income for
2032an account attributable to a particular calendar year are in
2033excess of projected losses and expenses for the account
2034attributable to that year, such excess shall be held in surplus
2035in the account. Such surplus must shall be available to defray
2036deficits in that account as to future years and shall be used
2037for that purpose before prior to assessing assessable insurers
2038and assessable insureds as to any calendar year.
2039     8.  Must provide objective criteria and procedures to be
2040uniformly applied to for all applicants in determining whether
2041an individual risk is so hazardous as to be uninsurable. In
2042making this determination and in establishing the criteria and
2043procedures, the following must shall be considered:
2044     a.  Whether the likelihood of a loss for the individual
2045risk is substantially higher than for other risks of the same
2046class; and
2047     b.  Whether the uncertainty associated with the individual
2048risk is such that an appropriate premium cannot be determined.
2049
2050The acceptance or rejection of a risk by the corporation shall
2051be construed as the private placement of insurance, and the
2052provisions of chapter 120 do shall not apply.
2053     9.  Must provide that the corporation shall make its best
2054efforts to procure catastrophe reinsurance at reasonable rates,
2055to cover its projected 100-year probable maximum loss as
2056determined by the board of governors.
2057     10.  The policies issued by the corporation must provide
2058that, if the corporation or the market assistance plan obtains
2059an offer from an authorized insurer to cover the risk at its
2060approved rates, the risk is no longer eligible for renewal
2061through the corporation, except as otherwise provided in this
2062subsection.
2063     11.  Corporation policies and applications must include a
2064notice that the corporation policy could, under this section, be
2065replaced with a policy issued by an authorized insurer which
2066that does not provide coverage identical to the coverage
2067provided by the corporation. The notice must shall also specify
2068that acceptance of corporation coverage creates a conclusive
2069presumption that the applicant or policyholder is aware of this
2070potential.
2071     12.  May establish, subject to approval by the office,
2072different eligibility requirements and operational procedures
2073for any line or type of coverage for any specified county or
2074area if the board determines that such changes to the
2075eligibility requirements and operational procedures are
2076justified due to the voluntary market being sufficiently stable
2077and competitive in such area or for such line or type of
2078coverage and that consumers who, in good faith, are unable to
2079obtain insurance through the voluntary market through ordinary
2080methods would continue to have access to coverage from the
2081corporation. If When coverage is sought in connection with a
2082real property transfer, the such requirements and procedures may
2083shall not provide for an effective date of coverage later than
2084the date of the closing of the transfer as established by the
2085transferor, the transferee, and, if applicable, the lender.
2086     13.  Must provide that, with respect to the coastal high-
2087risk account, any assessable insurer with a surplus as to
2088policyholders of $25 million or less writing 25 percent or more
2089of its total countrywide property insurance premiums in this
2090state may petition the office, within the first 90 days of each
2091calendar year, to qualify as a limited apportionment company. A
2092regular assessment levied by the corporation on a limited
2093apportionment company for a deficit incurred by the corporation
2094for the coastal high-risk account in 2006 or thereafter may be
2095paid to the corporation on a monthly basis as the assessments
2096are collected by the limited apportionment company from its
2097insureds pursuant to s. 627.3512, but the regular assessment
2098must be paid in full within 12 months after being levied by the
2099corporation. A limited apportionment company shall collect from
2100its policyholders any emergency assessment imposed under sub-
2101subparagraph (b)3.d. The plan must shall provide that, if the
2102office determines that any regular assessment will result in an
2103impairment of the surplus of a limited apportionment company,
2104the office may direct that all or part of such assessment be
2105deferred as provided in subparagraph (q)4. However, there shall
2106be no limitation or deferment of an emergency assessment to be
2107collected from policyholders under sub-subparagraph (b)3.d. may
2108not be limited or deferred.
2109     14.  Must provide that the corporation appoint as its
2110licensed agents only those agents who also hold an appointment
2111as defined in s. 626.015(3) with an insurer who at the time of
2112the agent's initial appointment by the corporation is authorized
2113to write and is actually writing personal lines residential
2114property coverage, commercial residential property coverage, or
2115commercial nonresidential property coverage within the state.
2116     15.  Must provide, by July 1, 2007, a premium payment plan
2117option to its policyholders which, allows at a minimum, allows
2118for quarterly and semiannual payment of premiums. A monthly
2119payment plan may, but is not required to, be offered.
2120     16.  Must limit coverage on mobile homes or manufactured
2121homes built before prior to 1994 to actual cash value of the
2122dwelling rather than replacement costs of the dwelling.
2123     17.  May provide such limits of coverage as the board
2124determines, consistent with the requirements of this subsection.
2125     18.  May require commercial property to meet specified
2126hurricane mitigation construction features as a condition of
2127eligibility for coverage.
2128     19.  Must provide that new or renewal policies issued by
2129the corporation on or after January 1, 2012, which cover
2130sinkhole loss do not include coverage for any loss to
2131appurtenant structures, driveways, sidewalks, decks, or patios
2132that are directly or indirectly caused by sinkhole activity. The
2133corporation shall exclude such coverage using a notice of
2134coverage change, which may be included with the policy renewal,
2135and not by issuance of a notice of nonrenewal of the excluded
2136coverage upon renewal of the current policy.
2137     20.  As of January 1, 2012, must require that the agent
2138obtain from an applicant for coverage from the corporation an
2139acknowledgement signed by the applicant, which includes, at a
2140minimum, the following statement:
2141
2142
ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE
2143
AND ASSESSMENT LIABILITY:
2144
2145     1.  AS A POLICYHOLDER OF CITIZENS PROPERTY
2146INSURANCE CORPORATION, I UNDERSTAND THAT IF THE
2147CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
2148HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
2149COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
2150PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF
2151THE POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH
2152AS 45 PERCENT OF MY PREMIUM, OR A DIFFERENT AMOUNT AS
2153IMPOSED BY THE FLORIDA LEGISLATURE.
2154     2.  I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
2155EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
2156POLICYHOLDERS OF OTHER INSURANCE COMPANIES, OR A
2157DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
2158LEGISLATURE.
2159     3.  I ALSO UNDERSTAND THAT CITIZENS PROPERTY
2160INSURANCE CORPORATION IS NOT SUPPORTED BY THE FULL
2161FAITH AND CREDIT OF THE STATE OF FLORIDA.
2162
2163     a.  The corporation shall maintain, in electronic format or
2164otherwise, a copy of the applicant's signed acknowledgement and
2165provide a copy of the statement to the policyholder as part of
2166the first renewal after the effective date of this subparagraph.
2167     b.  The signed acknowledgement form creates a conclusive
2168presumption that the policyholder understood and accepted his or
2169her potential surcharge and assessment liability as a
2170policyholder of the corporation.
2171     (d)1.  All prospective employees for senior management
2172positions, as defined by the plan of operation, are subject to
2173background checks as a prerequisite for employment. The office
2174shall conduct the background checks on such prospective
2175employees pursuant to ss. 624.34, 624.404(3), and 628.261.
2176     2.  On or before July 1 of each year, employees of the
2177corporation must are required to sign and submit a statement
2178attesting that they do not have a conflict of interest, as
2179defined in part III of chapter 112. As a condition of
2180employment, all prospective employees must are required to sign
2181and submit to the corporation a conflict-of-interest statement.
2182     3.  Senior managers and members of the board of governors
2183are subject to the provisions of part III of chapter 112,
2184including, but not limited to, the code of ethics and public
2185disclosure and reporting of financial interests, pursuant to s.
2186112.3145. Notwithstanding s. 112.3143(2), a board member may not
2187vote on any measure that would inure to his or her special
2188private gain or loss; that he or she knows would inure to the
2189special private gain or loss of any principal by whom he or she
2190is retained or to the parent organization or subsidiary of a
2191corporate principal by which he or she is retained, other than
2192an agency as defined in s. 112.312; or that he or she knows
2193would inure to the special private gain or loss of a relative or
2194business associate of the public officer. Before the vote is
2195taken, such member shall publicly state to the assembly the
2196nature of his or her interest in the matter from which he or she
2197is abstaining from voting and, within 15 days after the vote
2198occurs, disclose the nature of his or her interest as a public
2199record in a memorandum filed with the person responsible for
2200recording the minutes of the meeting, who shall incorporate the
2201memorandum in the minutes. Senior managers and board members are
2202also required to file such disclosures with the Commission on
2203Ethics and the Office of Insurance Regulation. The executive
2204director of the corporation or his or her designee shall notify
2205each existing and newly appointed and existing appointed member
2206of the board of governors and senior managers of their duty to
2207comply with the reporting requirements of part III of chapter
2208112. At least quarterly, the executive director or his or her
2209designee shall submit to the Commission on Ethics a list of
2210names of the senior managers and members of the board of
2211governors who are subject to the public disclosure requirements
2212under s. 112.3145.
2213     4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
2214other provision of law, an employee or board member may not
2215knowingly accept, directly or indirectly, any gift or
2216expenditure from a person or entity, or an employee or
2217representative of such person or entity, which that has a
2218contractual relationship with the corporation or who is under
2219consideration for a contract. An employee or board member who
2220fails to comply with subparagraph 3. or this subparagraph is
2221subject to penalties provided under ss. 112.317 and 112.3173.
2222     5.  Any senior manager of the corporation who is employed
2223on or after January 1, 2007, regardless of the date of hire, who
2224subsequently retires or terminates employment is prohibited from
2225representing another person or entity before the corporation for
22262 years after retirement or termination of employment from the
2227corporation.
2228     6.  Any senior manager of the corporation who is employed
2229on or after January 1, 2007, regardless of the date of hire, who
2230subsequently retires or terminates employment is prohibited from
2231having any employment or contractual relationship for 2 years
2232with an insurer that has entered into a take-out bonus agreement
2233with the corporation.
2234     (n)1.  Rates for coverage provided by the corporation must
2235shall be actuarially sound and subject to the requirements of s.
2236627.062, except as otherwise provided in this paragraph. The
2237corporation shall file its recommended rates with the office at
2238least annually. The corporation shall provide any additional
2239information regarding the rates which the office requires. The
2240office shall consider the recommendations of the board and issue
2241a final order establishing the rates for the corporation within
224245 days after the recommended rates are filed. The corporation
2243may not pursue an administrative challenge or judicial review of
2244the final order of the office.
2245     2.  In addition to the rates otherwise determined pursuant
2246to this paragraph, the corporation shall impose and collect an
2247amount equal to the premium tax provided for in s. 624.509 to
2248augment the financial resources of the corporation.
2249     3.  After the public hurricane loss-projection model under
2250s. 627.06281 has been found to be accurate and reliable by the
2251Florida Commission on Hurricane Loss Projection Methodology, the
2252that model shall serve as the minimum benchmark for determining
2253the windstorm portion of the corporation's rates. This
2254subparagraph does not require or allow the corporation to adopt
2255rates lower than the rates otherwise required or allowed by this
2256paragraph.
2257     4.  The rate filings for the corporation which were
2258approved by the office and which took effect January 1, 2007,
2259are rescinded, except for those rates that were lowered. As soon
2260as possible, the corporation shall begin using the lower rates
2261that were in effect on December 31, 2006, and shall provide
2262refunds to policyholders who have paid higher rates as a result
2263of that rate filing. The rates in effect on December 31, 2006,
2264shall remain in effect for the 2007 and 2008 calendar years
2265except for any rate change that results in a lower rate. The
2266next rate change that may increase rates shall take effect
2267pursuant to a new rate filing recommended by the corporation and
2268established by the office, subject to the requirements of this
2269paragraph.
2270     5.  Beginning on July 15, 2009, and annually each year
2271thereafter, the corporation must make a recommended actuarially
2272sound rate filing for each personal and commercial line of
2273business it writes, to be effective no earlier than January 1,
22742010.
2275     6.  Beginning on or after January 1, 2010, and
2276notwithstanding the board's recommended rates and the office's
2277final order regarding the corporation's filed rates under
2278subparagraph 1., the corporation shall annually implement a rate
2279increase each year which, except for sinkhole coverage, does not
2280exceed 10 percent for any single policy issued by the
2281corporation, excluding coverage changes and surcharges.
2282     7.  The corporation may also implement an increase to
2283reflect the effect on the corporation of the cash buildup factor
2284pursuant to s. 215.555(5)(b).
2285     8.  The corporation's implementation of rates as prescribed
2286in subparagraph 6. shall cease for any line of business written
2287by the corporation upon the corporation's implementation of
2288actuarially sound rates. Thereafter, the corporation shall
2289annually make a recommended actuarially sound rate filing for
2290each commercial and personal line of business the corporation
2291writes.
2292     (v)1.  Effective July 1, 2002, policies of the Residential
2293Property and Casualty Joint Underwriting Association shall
2294become policies of the corporation. All obligations, rights,
2295assets and liabilities of the Residential Property and Casualty
2296Joint Underwriting association, including bonds, note and debt
2297obligations, and the financing documents pertaining to them
2298become those of the corporation as of July 1, 2002. The
2299corporation is not required to issue endorsements or
2300certificates of assumption to insureds during the remaining term
2301of in-force transferred policies.
2302     2.  Effective July 1, 2002, policies of the Florida
2303Windstorm Underwriting Association are transferred to the
2304corporation and shall become policies of the corporation. All
2305obligations, rights, assets, and liabilities of the Florida
2306Windstorm Underwriting association, including bonds, note and
2307debt obligations, and the financing documents pertaining to them
2308are transferred to and assumed by the corporation on July 1,
23092002. The corporation is not required to issue endorsements or
2310certificates of assumption to insureds during the remaining term
2311of in-force transferred policies.
2312     3.  The Florida Windstorm Underwriting Association and the
2313Residential Property and Casualty Joint Underwriting Association
2314shall take all actions necessary as may be proper to further
2315evidence the transfers and shall provide the documents and
2316instruments of further assurance as may reasonably be requested
2317by the corporation for that purpose. The corporation shall
2318execute assumptions and instruments as the trustees or other
2319parties to the financing documents of the Florida Windstorm
2320Underwriting Association or the Residential Property and
2321Casualty Joint Underwriting Association may reasonably request
2322to further evidence the transfers and assumptions, which
2323transfers and assumptions, however, are effective on the date
2324provided under this paragraph whether or not, and regardless of
2325the date on which, the assumptions or instruments are executed
2326by the corporation. Subject to the relevant financing documents
2327pertaining to their outstanding bonds, notes, indebtedness, or
2328other financing obligations, the moneys, investments,
2329receivables, choses in action, and other intangibles of the
2330Florida Windstorm Underwriting Association shall be credited to
2331the coastal high-risk account of the corporation, and those of
2332the personal lines residential coverage account and the
2333commercial lines residential coverage account of the Residential
2334Property and Casualty Joint Underwriting Association shall be
2335credited to the personal lines account and the commercial lines
2336account, respectively, of the corporation.
2337     4.  Effective July 1, 2002, a new applicant for property
2338insurance coverage who would otherwise have been eligible for
2339coverage in the Florida Windstorm Underwriting Association is
2340eligible for coverage from the corporation as provided in this
2341subsection.
2342     5.  The transfer of all policies, obligations, rights,
2343assets, and liabilities from the Florida Windstorm Underwriting
2344Association to the corporation and the renaming of the
2345Residential Property and Casualty Joint Underwriting Association
2346as the corporation does not shall in no way affect the coverage
2347with respect to covered policies as defined in s. 215.555(2)(c)
2348provided to these entities by the Florida Hurricane Catastrophe
2349Fund. The coverage provided by the Florida Hurricane Catastrophe
2350fund to the Florida Windstorm Underwriting Association based on
2351its exposures as of June 30, 2002, and each June 30 thereafter
2352shall be redesignated as coverage for the coastal high-risk
2353account of the corporation. Notwithstanding any other provision
2354of law, the coverage provided by the Florida Hurricane
2355Catastrophe fund to the Residential Property and Casualty Joint
2356Underwriting Association based on its exposures as of June 30,
23572002, and each June 30 thereafter shall be transferred to the
2358personal lines account and the commercial lines account of the
2359corporation. Notwithstanding any other provision of law, the
2360coastal high-risk account shall be treated, for all Florida
2361Hurricane Catastrophe Fund purposes, as if it were a separate
2362participating insurer with its own exposures, reimbursement
2363premium, and loss reimbursement. Likewise, the personal lines
2364and commercial lines accounts shall be viewed together, for all
2365Florida Hurricane Catastrophe fund purposes, as if the two
2366accounts were one and represent a single, separate participating
2367insurer with its own exposures, reimbursement premium, and loss
2368reimbursement. The coverage provided by the Florida Hurricane
2369Catastrophe fund to the corporation shall constitute and operate
2370as a full transfer of coverage from the Florida Windstorm
2371Underwriting Association and Residential Property and Casualty
2372Joint Underwriting to the corporation.
2373     (y)  It is the intent of the Legislature that the
2374amendments to this subsection enacted in 2002 should, over time,
2375reduce the probable maximum windstorm losses in the residual
2376markets and should reduce the potential assessments to be levied
2377on property insurers and policyholders statewide. In furtherance
2378of this intent:
2379     1.  the board shall, on or before February 1 of each year,
2380provide a report to the President of the Senate and the Speaker
2381of the House of Representatives showing the reduction or
2382increase in the 100-year probable maximum loss attributable to
2383wind-only coverages and the quota share program under this
2384subsection combined, as compared to the benchmark 100-year
2385probable maximum loss of the Florida Windstorm Underwriting
2386Association. For purposes of this paragraph, the benchmark 100-
2387year probable maximum loss of the Florida Windstorm Underwriting
2388Association shall be the calculation dated February 2001 and
2389based on November 30, 2000, exposures. In order to ensure
2390comparability of data, the board shall use the same methods for
2391calculating its probable maximum loss as were used to calculate
2392the benchmark probable maximum loss.
2393     2.  Beginning December 1, 2010, if the report under
2394subparagraph 1. for any year indicates that the 100-year
2395probable maximum loss attributable to wind-only coverages and
2396the quota share program combined does not reflect a reduction of
2397at least 25 percent from the benchmark, the board shall reduce
2398the boundaries of the high-risk area eligible for wind-only
2399coverages under this subsection in a manner calculated to reduce
2400such probable maximum loss to an amount at least 25 percent
2401below the benchmark.
2402     3.  Beginning February 1, 2015, if the report under
2403subparagraph 1. for any year indicates that the 100-year
2404probable maximum loss attributable to wind-only coverages and
2405the quota share program combined does not reflect a reduction of
2406at least 50 percent from the benchmark, the boundaries of the
2407high-risk area eligible for wind-only coverages under this
2408subsection shall be reduced by the elimination of any area that
2409is not seaward of a line 1,000 feet inland from the Intracoastal
2410Waterway.
2411     Section 16.  Paragraph (a) of subsection (5) of section
2412627.3511, Florida Statutes, is amended to read:
2413     627.3511  Depopulation of Citizens Property Insurance
2414Corporation.-
2415     (5)  APPLICABILITY.-
2416     (a)  The take-out bonus provided by subsection (2) and the
2417exemption from assessment provided by paragraph (3)(a) apply
2418only if the corporation policy is replaced by either a standard
2419policy including wind coverage or, if consistent with the
2420insurer's underwriting rules as filed with the office, a basic
2421policy including wind coverage; however, for with respect to
2422risks located in areas where coverage through the coastal high-
2423risk account of the corporation is available, the replacement
2424policy need not provide wind coverage. The insurer must renew
2425the replacement policy at approved rates on substantially
2426similar terms for four additional 1-year terms, unless canceled
2427or not renewed by the policyholder. If an insurer assumes the
2428corporation's obligations for a policy, it must issue a
2429replacement policy for a 1-year term upon expiration of the
2430corporation policy and must renew the replacement policy at
2431approved rates on substantially similar terms for four
2432additional 1-year terms, unless canceled or not renewed by the
2433policyholder. For each replacement policy canceled or nonrenewed
2434by the insurer for any reason during the 5-year coverage period
2435required by this paragraph, the insurer must remove from the
2436corporation one additional policy covering a risk similar to the
2437risk covered by the canceled or nonrenewed policy. In addition
2438to these requirements, the corporation must place the bonus
2439moneys in escrow for a period of 5 years; such moneys may be
2440released from escrow only to pay claims. If the policy is
2441canceled or nonrenewed before the end of the 5-year period, the
2442amount of the take-out bonus must be prorated for the time
2443period the policy was insured. A take-out bonus provided by
2444subsection (2) or subsection (6) is shall not be considered
2445premium income for purposes of taxes and assessments under the
2446Florida Insurance Code and shall remain the property of the
2447corporation, subject to the prior security interest of the
2448insurer under the escrow agreement until it is released from
2449escrow;, and after it is released from escrow it is shall be
2450considered an asset of the insurer and credited to the insurer's
2451capital and surplus.
2452     Section 17.  Paragraph (b) of subsection (2) of section
2453627.4133, Florida Statutes, is amended to read:
2454     627.4133  Notice of cancellation, nonrenewal, or renewal
2455premium.-
2456     (2)  With respect to any personal lines or commercial
2457residential property insurance policy, including, but not
2458limited to, any homeowner's, mobile home owner's, farmowner's,
2459condominium association, condominium unit owner's, apartment
2460building, or other policy covering a residential structure or
2461its contents:
2462     (b)  The insurer shall give the named insured written
2463notice of nonrenewal, cancellation, or termination at least 100
2464days before prior to the effective date of the nonrenewal,
2465cancellation, or termination. However, the insurer shall give at
2466least 100 days' written notice, or written notice by June 1,
2467whichever is earlier, for any nonrenewal, cancellation, or
2468termination that would be effective between June 1 and November
246930. The notice must include the reason or reasons for the
2470nonrenewal, cancellation, or termination, except that:
2471     1.  The insurer shall give the named insured written notice
2472of nonrenewal, cancellation, or termination at least 120 180
2473days prior to the effective date of the nonrenewal,
2474cancellation, or termination for a named insured whose
2475residential structure has been insured by that insurer or an
2476affiliated insurer for at least a 5-year period immediately
2477prior to the date of the written notice.
2478     2.  If When cancellation is for nonpayment of premium, at
2479least 10 days' written notice of cancellation accompanied by the
2480reason therefor must shall be given. As used in this
2481subparagraph, the term "nonpayment of premium" means failure of
2482the named insured to discharge when due any of her or his
2483obligations in connection with the payment of premiums on a
2484policy or any installment of such premium, whether the premium
2485is payable directly to the insurer or its agent or indirectly
2486under any premium finance plan or extension of credit, or
2487failure to maintain membership in an organization if such
2488membership is a condition precedent to insurance coverage. The
2489term "Nonpayment of premium" also means the failure of a
2490financial institution to honor an insurance applicant's check
2491after delivery to a licensed agent for payment of a premium,
2492even if the agent has previously delivered or transferred the
2493premium to the insurer. If a dishonored check represents the
2494initial premium payment, the contract and all contractual
2495obligations are shall be void ab initio unless the nonpayment is
2496cured within the earlier of 5 days after actual notice by
2497certified mail is received by the applicant or 15 days after
2498notice is sent to the applicant by certified mail or registered
2499mail, and if the contract is void, any premium received by the
2500insurer from a third party must shall be refunded to that party
2501in full.
2502     3.  If When such cancellation or termination occurs during
2503the first 90 days during which the insurance is in force and the
2504insurance is canceled or terminated for reasons other than
2505nonpayment of premium, at least 20 days' written notice of
2506cancellation or termination accompanied by the reason therefor
2507must shall be given unless except where there has been a
2508material misstatement or misrepresentation or failure to comply
2509with the underwriting requirements established by the insurer.
2510     4.  The requirement for providing written notice of
2511nonrenewal by June 1 of any nonrenewal that would be effective
2512between June 1 and November 30 does not apply to the following
2513situations, but the insurer remains subject to the requirement
2514to provide such notice at least 100 days before prior to the
2515effective date of nonrenewal:
2516     a.  A policy that is nonrenewed due to a revision in the
2517coverage for sinkhole losses and catastrophic ground cover
2518collapse pursuant to s. 627.706, as amended by s. 30, chapter
25192007-1, Laws of Florida.
2520     b.  A policy that is nonrenewed by Citizens Property
2521Insurance Corporation, pursuant to s. 627.351(6), for a policy
2522that has been assumed by an authorized insurer offering
2523replacement or renewal coverage to the policyholder is exempt
2524from the notice requirements of paragraph (a) and this
2525paragraph. In such cases, the corporation must give the named
2526insured written notice of nonrenewal at least 45 days before the
2527effective date of the nonrenewal.
2528
2529After the policy has been in effect for 90 days, the policy may
2530shall not be canceled by the insurer unless except when there
2531has been a material misstatement, a nonpayment of premium, a
2532failure to comply with underwriting requirements established by
2533the insurer within 90 days after of the date of effectuation of
2534coverage, or a substantial change in the risk covered by the
2535policy or if when the cancellation is for all insureds under
2536such policies for a given class of insureds. This paragraph does
2537not apply to individually rated risks having a policy term of
2538less than 90 days.
2539     5.  Notwithstanding any other provision of law, an insurer
2540may cancel or nonrenew a property insurance policy after at
2541least 45 days' notice if the office finds that the early
2542cancellation of some or all of the insurer's policies is
2543necessary to protect the best interests of the public or
2544policyholders and the office approves the insurer's plan for
2545early cancellation or nonrenewal of some or all of its policies.
2546The office may base such finding upon the financial condition of
2547the insurer, lack of adequate reinsurance coverage for hurricane
2548risk, or other relevant factors. The office may condition its
2549finding on the consent of the insurer to be placed under
2550administrative supervision pursuant to s. 624.81 or to the
2551appointment of a receiver under chapter 631.
2552     6.  A policy covering both a home and motor vehicle may be
2553nonrenewed for any reason applicable to either the property or
2554motor vehicle insurance after providing 90 days' notice.
2555     Section 18.  Section 627.43141, Florida Statutes, is
2556created to read:
2557     627.43141  Notice of change in policy terms.-
2558     (1)  As used in this section, the term:
2559     (a)  "Change in policy terms" means the modification,
2560addition, or deletion of any term, coverage, duty, or condition
2561from the previous policy. The correction of typographical or
2562scrivener's errors or the application of mandated legislative
2563changes is not a change in policy terms.
2564     (b)  "Policy" means a written contract of property and
2565casualty insurance or written agreement for such insurance, by
2566whatever name called, and includes all clauses, riders,
2567endorsements, and papers that are a part of such policy. The
2568term does not include a binder as defined in s. 627.420 unless
2569the duration of the binder period exceeds 60 days.
2570     (c)  "Renewal" means the issuance and delivery by an
2571insurer of a policy superseding at the end of the policy period
2572a policy previously issued and delivered by the same insurer or
2573the issuance and delivery of a certificate or notice extending
2574the term of a policy beyond its policy period or term. Any
2575policy that has a policy period or term of less than 6 months or
2576that does not have a fixed expiration date shall, for purposes
2577of this section, be considered as written for successive policy
2578periods or terms of 6 months.
2579     (2)  A renewal policy may contain a change in policy terms.
2580If a renewal policy does contains such change, the insurer must
2581give the named insured written notice of the change, which must
2582be enclosed along with the written notice of renewal premium
2583required by ss. 627.4133 and 627.728. Such notice shall be
2584entitled "Notice of Change in Policy Terms."
2585     (3)  Although not required, proof of mailing or registered
2586mailing through the United States Postal Service of the Notice
2587of Change in Policy Terms to the named insured at the address
2588shown in the policy is sufficient proof of notice.
2589     (4)  Receipt of the premium payment for the renewal policy
2590by the insurer is deemed to be acceptance of the new policy
2591terms by the named insured.
2592     (5)  If an insurer fails to provide the notice required in
2593subsection (2), the original policy terms remain in effect until
2594the next renewal and the proper service of the notice, or until
2595the effective date of replacement coverage obtained by the named
2596insured, whichever occurs first.
2597     (6)  The intent of this section is to:
2598     (a)  Allow an insurer to make a change in policy terms
2599without nonrenewing those policyholders that the insurer wishes
2600to continue insuring.
2601     (b)  Alleviate concern and confusion to the policyholder
2602caused by the required policy nonrenewal for the limited issue
2603if an insurer intends to renew the insurance policy, but the new
2604policy contains a change in policy terms.
2605     (c)  Encourage policyholders to discuss their coverages
2606with their insurance agents.
2607     Section 19.  Section 627.7011, Florida Statutes, is amended
2608to read:
2609     627.7011  Homeowners' policies; offer of replacement cost
2610coverage and law and ordinance coverage.-
2611     (1)  Prior to issuing a homeowner's insurance policy on or
2612after October 1, 2005, or prior to the first renewal of a
2613homeowner's insurance policy on or after October 1, 2005, the
2614insurer must offer each of the following:
2615     (a)  A policy or endorsement providing that any loss that
2616which is repaired or replaced will be adjusted on the basis of
2617replacement costs to the dwelling not exceeding policy limits as
2618to the dwelling, rather than actual cash value, but not
2619including costs necessary to meet applicable laws and ordinances
2620regulating the construction, use, or repair of any property or
2621requiring the tearing down of any property, including the costs
2622of removing debris.
2623     (b)  A policy or endorsement providing that, subject to
2624other policy provisions, any loss that which is repaired or
2625replaced at any location will be adjusted on the basis of
2626replacement costs to the dwelling not exceeding policy limits as
2627to the dwelling, rather than actual cash value, and also
2628including costs necessary to meet applicable laws and ordinances
2629regulating the construction, use, or repair of any property or
2630requiring the tearing down of any property, including the costs
2631of removing debris.; However, such additional costs necessary to
2632meet applicable laws and ordinances may be limited to either 25
2633percent or 50 percent of the dwelling limit, as selected by the
2634policyholder, and such coverage applies shall apply only to
2635repairs of the damaged portion of the structure unless the total
2636damage to the structure exceeds 50 percent of the replacement
2637cost of the structure.
2638
2639An insurer is not required to make the offers required by this
2640subsection with respect to the issuance or renewal of a
2641homeowner's policy that contains the provisions specified in
2642paragraph (b) for law and ordinance coverage limited to 25
2643percent of the dwelling limit, except that the insurer must
2644offer the law and ordinance coverage limited to 50 percent of
2645the dwelling limit. This subsection does not prohibit the offer
2646of a guaranteed replacement cost policy.
2647     (2)  Unless the insurer obtains the policyholder's written
2648refusal of the policies or endorsements specified in subsection
2649(1), any policy covering the dwelling is deemed to include the
2650law and ordinance coverage limited to 25 percent of the dwelling
2651limit. The rejection or selection of alternative coverage shall
2652be made on a form approved by the office. The form must shall
2653fully advise the applicant of the nature of the coverage being
2654rejected. If this form is signed by a named insured, it is will
2655be conclusively presumed that there was an informed, knowing
2656rejection of the coverage or election of the alternative
2657coverage on behalf of all insureds. Unless the policyholder
2658requests in writing the coverage specified in this section, it
2659need not be provided in or supplemental to any other policy that
2660renews, insures, extends, changes, supersedes, or replaces an
2661existing policy if when the policyholder has rejected the
2662coverage specified in this section or has selected alternative
2663coverage. The insurer must provide the such policyholder with
2664notice of the availability of such coverage in a form approved
2665by the office at least once every 3 years. The failure to
2666provide such notice constitutes a violation of this code, but
2667does not affect the coverage provided under the policy.
2668     (3)  In the event of a loss for which a dwelling or
2669personal property is insured on the basis of replacement costs:
2670     (a)  For a dwelling, the insurer must initially pay at
2671least the actual cash value of the insured loss, less any
2672applicable deductible. The insurer shall pay any remaining
2673amounts necessary to perform such repairs as work is performed
2674and expenses are incurred. If a total loss of a dwelling occurs,
2675the insurer shall pay the replacement cost coverage without
2676reservation or holdback of any depreciation in value, pursuant
2677to s. 627.702.
2678     (b)  For personal property:
2679     1.  The insurer must offer coverage under which the insurer
2680is obligated to pay the replacement cost without reservation or
2681holdback for any depreciation in value, whether or not the
2682insured replaces the property.
2683     2.  The insurer may also offer coverage under which the
2684insurer may limit the initial payment to the actual cash value
2685of the personal property to be replaced, require the insured to
2686provide receipts for the purchase of the property financed by
2687the initial payment, use such receipts to make the next payment
2688requested by the insured for the replacement of insured
2689property, and continue this process until the insured remits all
2690receipts up to the policy limits for replacement costs. The
2691insurer must provide clear notice of this process before the
2692policy is bound. A policyholder must be provided an actuarially
2693reasonable premium credit or discount for this coverage. The
2694insurer may not require the policyholder to advance payment for
2695the replaced property, the insurer shall pay the replacement
2696cost without reservation or holdback of any depreciation in
2697value, whether or not the insured replaces or repairs the
2698dwelling or property.
2699     (4)  A Any homeowner's insurance policy issued or renewed
2700on or after October 1, 2005, must include in bold type no
2701smaller than 18 points the following statement:
2702"LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
2703THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
2704CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
2705NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
2706COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
2707DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT."
2708
2709The intent of this subsection is to encourage policyholders to
2710purchase sufficient coverage to protect them in case events
2711excluded from the standard homeowners policy, such as law and
2712ordinance enforcement and flood, combine with covered events to
2713produce damage or loss to the insured property. The intent is
2714also to encourage policyholders to discuss these issues with
2715their insurance agent.
2716     (5)  Nothing in This section does not: shall be construed
2717to
2718     (a)  Apply to policies not considered to be "homeowners'
2719policies," as that term is commonly understood in the insurance
2720industry. This section specifically does not
2721     (b)  Apply to mobile home policies. Nothing in this section
2722     (c)  Limit shall be construed as limiting the ability of an
2723any insurer to reject or nonrenew any insured or applicant on
2724the grounds that the structure does not meet underwriting
2725criteria applicable to replacement cost or law and ordinance
2726policies or for other lawful reasons.
2727     (d)(6)  This section does not Prohibit an insurer from
2728limiting its liability under a policy or endorsement providing
2729that loss will be adjusted on the basis of replacement costs to
2730the lesser of:
2731     1.(a)  The limit of liability shown on the policy
2732declarations page;
2733     2.(b)  The reasonable and necessary cost to repair the
2734damaged, destroyed, or stolen covered property; or
2735     3.(c)  The reasonable and necessary cost to replace the
2736damaged, destroyed, or stolen covered property.
2737     (e)(7)  This section does not Prohibit an insurer from
2738exercising its right to repair damaged property in compliance
2739with its policy and s. 627.702(7).
2740     Section 20.  Paragraph (a) of subsection (5) of section
2741627.70131, Florida Statutes, is amended to read:
2742     627.70131  Insurer's duty to acknowledge communications
2743regarding claims; investigation.-
2744     (5)(a)  Within 90 days after an insurer receives notice of
2745an initial, reopened, or supplemental a property insurance claim
2746from a policyholder, the insurer shall pay or deny such claim or
2747a portion of the claim unless the failure to pay such claim or a
2748portion of the claim is caused by factors beyond the control of
2749the insurer which reasonably prevent such payment. Any payment
2750of an initial or supplemental a claim or portion of such a claim
2751made paid 90 days after the insurer receives notice of the
2752claim, or made paid more than 15 days after there are no longer
2753factors beyond the control of the insurer which reasonably
2754prevented such payment, whichever is later, bears shall bear
2755interest at the rate set forth in s. 55.03. Interest begins to
2756accrue from the date the insurer receives notice of the claim.
2757The provisions of this subsection may not be waived, voided, or
2758nullified by the terms of the insurance policy. If there is a
2759right to prejudgment interest, the insured shall select whether
2760to receive prejudgment interest or interest under this
2761subsection. Interest is payable when the claim or portion of the
2762claim is paid. Failure to comply with this subsection
2763constitutes a violation of this code. However, failure to comply
2764with this subsection does shall not form the sole basis for a
2765private cause of action.
2766     Section 21.  The Legislature finds and declares:
2767     (1)  There is a compelling state interest in maintaining a
2768viable and orderly private-sector market for property insurance
2769in this state. The lack of a viable and orderly property market
2770reduces the availability of property insurance coverage to state
2771residents, increases the cost of property insurance, and
2772increases the state's reliance on a residual property insurance
2773market and its potential for imposing assessments on
2774policyholders throughout the state.
2775     (2)  In 2005, the Legislature revised ss. 627.706-627.7074,
2776Florida Statutes, to adopt certain geological or technical
2777terms; to increase reliance on objective, scientific testing
2778requirements; and generally to reduce the number of sinkhole
2779claims and related disputes arising under prior law. The
2780Legislature determined that since the enactment of these
2781statutory revisions, both private-sector insurers and Citizens
2782Property Insurance Corporation have, nevertheless, continued to
2783experience high claims frequency and severity for sinkhole
2784insurance claims. In addition, many properties remain unrepaired
2785even after loss payments, which reduces the local property tax
2786base and adversely affects the real estate market. Therefore,
2787the Legislature finds that losses associated with sinkhole
2788claims adversely affect the public health, safety, and welfare
2789of this state and its citizens.
2790     (3)  Pursuant to sections 23 through 28 of this act,
2791technical or scientific definitions adopted in the 2005
2792legislation are clarified to implement and advance the
2793Legislature's intended reduction of sinkhole claims and
2794disputes. Certain other revisions to ss. 627.706-627.7074,
2795Florida Statutes, are enacted to advance legislative intent to
2796rely on scientific or technical determinations relating to
2797sinkholes and sinkhole claims, reduce the number and cost of
2798disputes relating to sinkhole claims, and ensure that repairs
2799are made commensurate with the scientific and technical
2800determinations and insurance claims payments.
2801     Section 22.  Section 627.706, Florida Statutes, is
2802reordered and amended to read:
2803     627.706  Sinkhole insurance; catastrophic ground cover
2804collapse; definitions.-
2805     (1)(a)  Every insurer authorized to transact property
2806insurance in this state must shall provide coverage for a
2807catastrophic ground cover collapse.
2808     (b)  The insurer and shall make available, for an
2809appropriate additional premium, coverage for sinkhole losses on
2810any structure, including the contents of personal property
2811contained therein, to the extent provided in the form to which
2812the coverage attaches. The insurer may require an inspection of
2813the property before issuance of sinkhole loss coverage. A policy
2814for residential property insurance may include a deductible
2815amount applicable to sinkhole losses equal to 1 percent, 2
2816percent, 5 percent, or 10 percent of the policy dwelling limits,
2817with appropriate premium discounts offered with each deductible
2818amount.
2819     (c)  The insurer may restrict catastrophic ground cover
2820collapse and sinkhole loss coverage to the principal building,
2821as defined in the applicable policy.
2822     (2)  As used in ss. 627.706-627.7074, and as used in
2823connection with any policy providing coverage for a catastrophic
2824ground cover collapse or for sinkhole losses, the term:
2825     (a)  "Catastrophic ground cover collapse" means geological
2826activity that results in all the following:
2827     1.  The abrupt collapse of the ground cover;
2828     2.  A depression in the ground cover clearly visible to the
2829naked eye;
2830     3.  Structural damage to the covered building, including
2831the foundation; and
2832     4.  The insured structure being condemned and ordered to be
2833vacated by the governmental agency authorized by law to issue
2834such an order for that structure.
2835
2836Contents coverage applies if there is a loss resulting from a
2837catastrophic ground cover collapse. Structural Damage consisting
2838merely of the settling or cracking of a foundation, structure,
2839or building does not constitute a loss resulting from a
2840catastrophic ground cover collapse.
2841     (b)  "Neutral evaluation" means the alternative dispute
2842resolution provided in s. 627.7074.
2843     (c)  "Neutral evaluator" means a professional engineer or a
2844professional geologist who has completed a course of study in
2845alternative dispute resolution designed or approved by the
2846department for use in the neutral evaluation process and who is
2847determined by the department to be fair and impartial.
2848     (h)(b)  "Sinkhole" means a landform created by subsidence
2849of soil, sediment, or rock as underlying strata are dissolved by
2850groundwater. A sinkhole forms may form by collapse into
2851subterranean voids created by dissolution of limestone or
2852dolostone or by subsidence as these strata are dissolved.
2853     (j)(c)  "Sinkhole loss" means structural damage to the
2854covered building, including the foundation, caused by sinkhole
2855activity. Contents coverage and additional living expenses shall
2856apply only if there is structural damage to the covered building
2857caused by sinkhole activity.
2858     (i)(d)  "Sinkhole activity" means settlement or systematic
2859weakening of the earth supporting the covered building such
2860property only if the when such settlement or systematic
2861weakening results from contemporaneous movement or raveling of
2862soils, sediments, or rock materials into subterranean voids
2863created by the effect of water on a limestone or similar rock
2864formation.
2865     (f)(e)  "Professional engineer" means a person, as defined
2866in s. 471.005, who has a bachelor's degree or higher in
2867engineering with a specialty in the geotechnical engineering
2868field. A professional engineer must also have geotechnical
2869experience and expertise in the identification of sinkhole
2870activity as well as other potential causes of structural damage
2871to the structure.
2872     (g)(f)  "Professional geologist" means a person, as defined
2873in by s. 492.102, who has a bachelor's degree or higher in
2874geology or related earth science and with expertise in the
2875geology of Florida. A professional geologist must have
2876geological experience and expertise in the identification of
2877sinkhole activity as well as other potential geologic causes of
2878structural damage to the structure.
2879     (k)  "Structural damage" means a covered building,
2880regardless of the date of its construction, has experienced the
2881following:
2882     1.  Interior floor displacement or deflection in excess of
2883acceptable variances as defined in ACI 117-90 or the Florida
2884Building Code, which results in settlement related damage to the
2885interior such that the interior building structure or members
2886become unfit for service or represents a safety hazard as
2887defined within the Florida Building Code;
2888     2.  Foundation displacement or deflection in excess of
2889acceptable variances as defined in ACI 318-95 or the Florida
2890Building Code, which results in settlement related damage to the
2891primary structural members or primary structural systems that
2892prevents those members or systems from supporting the loads and
2893forces they were designed to support to the extent that stresses
2894in those primary structural members or primary structural
2895systems exceeds one and one-third the nominal strength allowed
2896under the Florida Building Code for new buildings of similar
2897structure, purpose, or location;
2898     3.  Damage that results in listing, leaning, or buckling of
2899the exterior load bearing walls or other vertical primary
2900structural members to such an extent that a plumb line passing
2901through the center of gravity does not fall inside the middle
2902one-third of the base as defined within the Florida Building
2903Code;
2904     4.  Damage that results in the building, or any portion of
2905the building containing primary structural members or primary
2906structural systems, being significantly likely to imminently
2907collapse because of the movement or instability of the ground
2908within the influence zone of the supporting ground within the
2909sheer plane necessary for the purpose of supporting such
2910building as defined within the Florida Building Code; or
2911     5.  Damage occurring on or after October 15, 2005, that
2912qualifies as "substantial structural damage" as defined in the
2913Florida Building Code.
2914     (d)  "Primary structural member" means a structural element
2915designed to provide support and stability for the vertical or
2916lateral loads of the overall structure.
2917     (e)  "Primary structural system" means an assemblage of
2918primary structural members.
2919     (3)  On or before June 1, 2007, Every insurer authorized to
2920transact property insurance in this state shall make a proper
2921filing with the office for the purpose of extending the
2922appropriate forms of property insurance to include coverage for
2923catastrophic ground cover collapse or for sinkhole losses.
2924coverage for catastrophic ground cover collapse may not go into
2925effect until the effective date provided for in the filing
2926approved by the office.
2927     (3)(4)  Insurers offering policies that exclude coverage
2928for sinkhole losses must shall inform policyholders in bold type
2929of not less than 14 points as follows: "YOUR POLICY PROVIDES
2930COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS
2931IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE,
2932YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU
2933MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN
2934ADDITIONAL PREMIUM."
2935     (4)(5)  An insurer offering sinkhole coverage to
2936policyholders before or after the adoption of s. 30, chapter
29372007-1, Laws of Florida, may nonrenew the policies of
2938policyholders maintaining sinkhole coverage in Pasco County or
2939Hernando County, at the option of the insurer, and provide an
2940offer of coverage that to such policyholders which includes
2941catastrophic ground cover collapse and excludes sinkhole
2942coverage. Insurers acting in accordance with this subsection are
2943subject to the following requirements:
2944     (a)  Policyholders must be notified that a nonrenewal is
2945for purposes of removing sinkhole coverage, and that the
2946policyholder is still being offered a policy that provides
2947coverage for catastrophic ground cover collapse.
2948     (b)  Policyholders must be provided an actuarially
2949reasonable premium credit or discount for the removal of
2950sinkhole coverage and provision of only catastrophic ground
2951cover collapse.
2952     (c)  Subject to the provisions of this subsection and the
2953insurer's approved underwriting or insurability guidelines, the
2954insurer shall provide each policyholder with the opportunity to
2955purchase an endorsement to his or her policy providing sinkhole
2956coverage and may require an inspection of the property before
2957issuance of a sinkhole coverage endorsement.
2958     (d)  Section 624.4305 does not apply to nonrenewal notices
2959issued pursuant to this subsection.
2960     (5)  Any claim, including, but not limited to, initial,
2961supplemental, and reopened claims under an insurance policy that
2962provides sinkhole coverage is barred unless notice of the claim
2963was given to the insurer in accordance with the terms of the
2964policy within 2 years after the policyholder knew or reasonably
2965should have known about the sinkhole loss.
2966     Section 23.  Section 627.7061, Florida Statutes, is amended
2967to read:
2968     627.7061  Coverage inquiries.-Inquiries about coverage on a
2969property insurance contract are not claim activity, unless an
2970actual claim is filed by the policyholder which insured that
2971results in a company investigation of the claim.
2972     Section 24.  Section 627.7065, Florida Statutes, is
2973repealed.
2974     Section 25.  Section 627.707, Florida Statutes, is amended
2975to read:
2976     627.707  Standards for Investigation of sinkhole claims by
2977insurers; insurer payment; nonrenewals.-Upon receipt of a claim
2978for a sinkhole loss to a covered building, an insurer must meet
2979the following standards in investigating a claim:
2980     (1)  The insurer must inspect make an inspection of the
2981policyholder's insured's premises to determine if there is
2982structural has been physical damage that to the structure which
2983may be the result of sinkhole activity.
2984     (2)  If the insurer confirms that structural damage exists
2985but is unable to identify a valid cause of such damage or
2986discovers that such damage is consistent with sinkhole loss
2987Following the insurer's initial inspection, the insurer shall
2988engage a professional engineer or a professional geologist to
2989conduct testing as provided in s. 627.7072 to determine the
2990cause of the loss within a reasonable professional probability
2991and issue a report as provided in s. 627.7073, only if sinkhole
2992loss is covered under the policy. Except as provided in
2993subsections (4) and (6), the fees and costs of the professional
2994engineer or professional geologist shall be paid by the
2995insurer.:
2996     (a)  The insurer is unable to identify a valid cause of the
2997damage or discovers damage to the structure which is consistent
2998with sinkhole loss; or
2999     (b)  The policyholder demands testing in accordance with
3000this section or s. 627.7072.
3001     (3)  Following the initial inspection of the policyholder's
3002insured premises, the insurer shall provide written notice to
3003the policyholder disclosing the following information:
3004     (a)  What the insurer has determined to be the cause of
3005damage, if the insurer has made such a determination.
3006     (b)  A statement of the circumstances under which the
3007insurer is required to engage a professional engineer or a
3008professional geologist to verify or eliminate sinkhole loss and
3009to engage a professional engineer to make recommendations
3010regarding land and building stabilization and foundation repair.
3011     (c)  A statement regarding the right of the policyholder to
3012request testing by a professional engineer or a professional
3013geologist, and the circumstances under which the policyholder
3014may demand certain testing, and the circumstances under which
3015the policyholder may incur costs associated with testing.
3016     (4)(a)  If the insurer determines that there is no sinkhole
3017loss, the insurer may deny the claim.
3018     (b)  If coverage for sinkhole loss is available and If the
3019insurer denies the claim, without performing testing under s.
3020627.7072, the policyholder may demand testing by the insurer
3021under s. 627.7072.
3022     1.  The policyholder's demand for testing must be
3023communicated to the insurer in writing within 60 days after the
3024policyholder's receipt of the insurer's denial of the claim.
3025     2.  The policyholder shall pay 50 percent of the actual
3026costs of the analyses and services provided under ss. 627.7072
3027and 627.7073 or $2,500, whichever is less.
3028     3.  The insurer shall reimburse the policyholder for the
3029costs if the insurer's engineer or geologist provides written
3030certification pursuant to s. 627.7073 that there is sinkhole
3031loss.
3032     (5)(a)  Subject to paragraph (b), If a sinkhole loss is
3033verified, the insurer shall pay to stabilize the land and
3034building and repair the foundation in accordance with the
3035recommendations of the professional engineer retained pursuant
3036to subsection (2), as provided under s. 627.7073, and in
3037consultation with notice to the policyholder, subject to the
3038coverage and terms of the policy. The insurer shall pay for
3039other repairs to the structure and contents in accordance with
3040the terms of the policy. If a covered building suffers a
3041sinkhole loss or a catastrophic ground cover collapse, the
3042insured must repair such damage or loss in accordance with the
3043insurer's professional engineer's recommended repairs. However,
3044if the insurer's professional engineer determines that the
3045repair cannot be completed within policy limits, the insurer
3046must pay to complete the repairs recommended by the insurer's
3047professional engineer or tender the policy limits to the
3048policyholder.
3049     (a)(b)  The insurer may limit its total claims payment to
3050the actual cash value of the sinkhole loss, which does not
3051include including underpinning or grouting or any other repair
3052technique performed below the existing foundation of the
3053building, until the policyholder enters into a contract for the
3054performance of building stabilization or foundation repairs in
3055accordance with the recommendations set forth in the insurer's
3056report issued pursuant to s. 627.7073.
3057     (b)  In order to prevent additional damage to the building
3058or structure, the policyholder must enter into a contract for
3059the performance of building stabilization and foundation repairs
3060within 90 days after the insurance company confirms coverage for
3061the sinkhole loss and notifies the policyholder of such
3062confirmation. This time period is tolled if either party invokes
3063the neutral evaluation process, and begins again 10 days after
3064the conclusion of the neutral evaluation process.
3065     (c)  After the policyholder enters into the contract for
3066the performance of building stabilization and foundation
3067repairs, the insurer shall pay the amounts necessary to begin
3068and perform such repairs as the work is performed and the
3069expenses are incurred. The insurer may not require the
3070policyholder to advance payment for such repairs. If repair
3071covered by a personal lines residential property insurance
3072policy has begun and the professional engineer selected or
3073approved by the insurer determines that the repair cannot be
3074completed within the policy limits, the insurer must either
3075complete the professional engineer's recommended repair or
3076tender the policy limits to the policyholder without a reduction
3077for the repair expenses incurred.
3078     (d)  The stabilization and all other repairs to the
3079structure and contents must be completed within 12 months after
3080entering into the contract for repairs described in paragraph
3081(b) unless:
3082     1.  There is a mutual agreement between the insurer and the
3083policyholder;
3084     2.  The claim is involved with the neutral evaluation
3085process;
3086     3.  The claim is in litigation; or
3087     4.  The claim is under appraisal or mediation.
3088     (e)(c)  Upon the insurer's obtaining the written approval
3089of the policyholder and any lienholder, the insurer may make
3090payment directly to the persons selected by the policyholder to
3091perform the land and building stabilization and foundation
3092repairs. The decision by the insurer to make payment to such
3093persons does not hold the insurer liable for the work performed.
3094The policyholder may not accept a rebate from any person
3095performing the repairs specified in this section. If a
3096policyholder does receive a rebate, coverage is void and the
3097policyholder must refund the amount of the rebate to the
3098insurer. Any person making the repairs specified in this section
3099who offers a rebate commits insurance fraud punishable as a
3100third degree felony as provided in s. 775.082, s. 775.083, or s.
3101775.084.
3102     (6)  Except as provided in subsection (7), the fees and
3103costs of the professional engineer or the professional geologist
3104shall be paid by the insurer.
3105     (6)(7)  If the insurer obtains, pursuant to s. 627.7073,
3106written certification that there is no sinkhole loss or that the
3107cause of the damage was not sinkhole activity, and if the
3108policyholder has submitted the sinkhole claim without good faith
3109grounds for submitting such claim, the policyholder shall
3110reimburse the insurer for 50 percent of the actual costs of the
3111analyses and services provided under ss. 627.7072 and 627.7073;
3112however, a policyholder is not required to reimburse an insurer
3113more than $2,500 with respect to any claim. A policyholder is
3114required to pay reimbursement under this subsection only if the
3115policyholder requested the analysis and services provided under
3116ss. 627.7072 and 627.7073 and the insurer, before prior to
3117ordering the analysis under s. 627.7072, informs the
3118policyholder in writing of the policyholder's potential
3119liability for reimbursement and gives the policyholder the
3120opportunity to withdraw the claim.
3121     (7)(8)  An No insurer may not shall nonrenew any policy of
3122property insurance on the basis of filing of claims for sinkhole
3123partial loss if caused by sinkhole damage or clay shrinkage as
3124long as the total of such payments does not equal or exceed the
3125current policy limits of coverage for the policy in effect on
3126the date of loss, for property damage to the covered building,
3127as set forth on the declarations page, or if and provided the
3128policyholder insured has repaired the structure in accordance
3129with the engineering recommendations made pursuant to subsection
3130(2) upon which any payment or policy proceeds were based. If the
3131insurer pays such limits, it may nonrenew the policy.
3132     (8)(9)  The insurer may engage a professional structural
3133engineer to make recommendations as to the repair of the
3134structure.
3135     Section 26.  Section 627.7073, Florida Statutes, is amended
3136to read:
3137     627.7073  Sinkhole reports.-
3138     (1)  Upon completion of testing as provided in s. 627.7072,
3139the professional engineer or professional geologist shall issue
3140a report and certification to the insurer and the policyholder
3141as provided in this section.
3142     (a)  Sinkhole loss is verified if, based upon tests
3143performed in accordance with s. 627.7072, a professional
3144engineer or a professional geologist issues a written report and
3145certification stating:
3146     1.  That structural damage to the covered building has been
3147identified within a reasonable professional probability.
3148     2.1.  That the cause of the actual physical and structural
3149damage is sinkhole activity within a reasonable professional
3150probability.
3151     3.2.  That the analyses conducted were of sufficient scope
3152to identify sinkhole activity as the cause of damage within a
3153reasonable professional probability.
3154     4.3.  A description of the tests performed.
3155     5.4.  A recommendation by the professional engineer of
3156methods for stabilizing the land and building and for making
3157repairs to the foundation.
3158     (b)  If there is no structural damage or if sinkhole
3159activity is eliminated as the cause of such damage to the
3160covered building structure, the professional engineer or
3161professional geologist shall issue a written report and
3162certification to the policyholder and the insurer stating:
3163     1.  That there is no structural damage or the cause of such
3164the damage is not sinkhole activity within a reasonable
3165professional probability.
3166     2.  That the analyses and tests conducted were of
3167sufficient scope to eliminate sinkhole activity as the cause of
3168the structural damage within a reasonable professional
3169probability.
3170     3.  A statement of the cause of the structural damage
3171within a reasonable professional probability.
3172     4.  A description of the tests performed.
3173     (c)  The respective findings, opinions, and recommendations
3174of the insurer's professional engineer or professional geologist
3175as to the cause of distress to the property and the findings,
3176opinions, and recommendations of the insurer's professional
3177engineer as to land and building stabilization and foundation
3178repair set forth by s. 627.7072 shall be presumed correct.
3179     (2)(a)  An Any insurer that has paid a claim for a sinkhole
3180loss shall file a copy of the report and certification, prepared
3181pursuant to subsection (1), including the legal description of
3182the real property and the name of the property owner, the
3183neutral evaluator's report, if any, which indicates that
3184sinkhole activity caused the damage claimed, a copy of the
3185certification indicating that stabilization has been completed,
3186if applicable, and the amount of the payment, with the county
3187clerk of court, who shall record the report and certification.
3188The insurer shall bear the cost of filing and recording one or
3189more reports and certifications the report and certification.
3190There shall be no cause of action or liability against an
3191insurer for compliance with this section.
3192     (a)  The recording of the report and certification does
3193not:
3194     1.  Constitute a lien, encumbrance, or restriction on the
3195title to the real property or constitute a defect in the title
3196to the real property;
3197     2.  Create any cause of action or liability against any
3198grantor of the real property for breach of any warranty of good
3199title or warranty against encumbrances; or
3200     3.  Create any cause of action or liability against any
3201title insurer that insures the title to the real property.
3202     (b)  As a precondition to accepting payment for a sinkhole
3203loss, the policyholder must file a copy of any sinkhole report
3204regarding the insured property which was prepared on behalf or
3205at the request of the policyholder. The policyholder shall bear
3206the cost of filing and recording the sinkhole report. The
3207recording of the report does not:
3208     1.  Constitute a lien, encumbrance, or restriction on the
3209title to the real property or constitute a defect in the title
3210to the real property;
3211     2.  Create any cause of action or liability against any
3212grantor of the real property for breach of any warranty of good
3213title or warranty against encumbrances; or
3214     3.  Create any cause of action or liability against a title
3215insurer that insures the title to the real property.
3216     (c)(b)  The seller of real property upon which a sinkhole
3217claim has been made by the seller and paid by the insurer must
3218shall disclose to the buyer of such property, before the
3219closing, that a claim has been paid and whether or not the full
3220amount of the proceeds were used to repair the sinkhole damage.
3221     (3)  Upon completion of any building stabilization or
3222foundation repairs for a verified sinkhole loss, the
3223professional engineer responsible for monitoring the repairs
3224shall issue a report to the property owner which specifies what
3225repairs have been performed and certifies within a reasonable
3226degree of professional probability that such repairs have been
3227properly performed. The professional engineer issuing the report
3228shall file a copy of the report and certification, which
3229includes a legal description of the real property and the name
3230of the property owner, with the county clerk of the court, who
3231shall record the report and certification. This subsection does
3232not create liability for an insurer based on any representation
3233or certification by a professional engineer related to the
3234stabilization or foundation repairs for the verified sinkhole
3235loss.
3236     Section 27.  Section 627.7074, Florida Statutes, is amended
3237to read:
3238     627.7074  Alternative procedure for resolution of disputed
3239sinkhole insurance claims.-
3240     (1)  As used in this section, the term:
3241     (a)  "Neutral evaluation" means the alternative dispute
3242resolution provided for in this section.
3243     (b)  "Neutral evaluator" means a professional engineer or a
3244professional geologist who has completed a course of study in
3245alternative dispute resolution designed or approved by the
3246department for use in the neutral evaluation process, who is
3247determined to be fair and impartial.
3248     (1)(2)(a)  The department shall:
3249     (a)  Certify and maintain a list of persons who are neutral
3250evaluators.
3251     (b)  The department shall Prepare a consumer information
3252pamphlet for distribution by insurers to policyholders which
3253clearly describes the neutral evaluation process and includes
3254information and forms necessary for the policyholder to request
3255a neutral evaluation.
3256     (2)  Neutral evaluation is available to either party if a
3257sinkhole report has been issued pursuant to s. 627.7073. At a
3258minimum, neutral evaluation must determine:
3259     (a)  Causation;
3260     (b)  All methods of stabilization and repair both above and
3261below ground;
3262     (c)  The costs for stabilization and all repairs; and
3263     (d)  Information necessary to carry out subsection (12).
3264     (3)  Following the receipt of the report provided under s.
3265627.7073 or the denial of a claim for a sinkhole loss, the
3266insurer shall notify the policyholder of his or her right to
3267participate in the neutral evaluation program under this
3268section. Neutral evaluation supersedes the alternative dispute
3269resolution process under s. 627.7015, but does not invalidate
3270the appraisal clause of the insurance policy. The insurer shall
3271provide to the policyholder the consumer information pamphlet
3272prepared by the department pursuant to subsection (1)
3273electronically or by United States mail paragraph (2)(b).
3274     (4)  Neutral evaluation is nonbinding, but mandatory if
3275requested by either party. A request for neutral evaluation may
3276be filed with the department by the policyholder or the insurer
3277on a form approved by the department. The request for neutral
3278evaluation must state the reason for the request and must
3279include an explanation of all the issues in dispute at the time
3280of the request. Filing a request for neutral evaluation tolls
3281the applicable time requirements for filing suit for a period of
328260 days following the conclusion of the neutral evaluation
3283process or the time prescribed in s. 95.11, whichever is later.
3284     (5)  Neutral evaluation shall be conducted as an informal
3285process in which formal rules of evidence and procedure need not
3286be observed. A party to neutral evaluation is not required to
3287attend neutral evaluation if a representative of the party
3288attends and has the authority to make a binding decision on
3289behalf of the party. All parties shall participate in the
3290evaluation in good faith. The neutral evaluator must be allowed
3291reasonable access to the interior and exterior of insured
3292structures to be evaluated or for which a claim has been made.
3293Any reports initiated by the policyholder, or an agent of the
3294policyholder, confirming a sinkhole loss or disputing another
3295sinkhole report regarding insured structures must be provided to
3296the neutral evaluator before the evaluator's physical inspection
3297of the insured property.
3298     (6)  The insurer shall pay reasonable the costs associated
3299with the neutral evaluation. However, if a party chooses to hire
3300a court reporter or stenographer to contemporaneously record and
3301document the neutral evaluation, that party must bear such
3302costs.
3303     (7)  Upon receipt of a request for neutral evaluation, the
3304department shall provide the parties a list of certified neutral
3305evaluators. The parties shall mutually select a neutral
3306evaluator from the list and promptly inform the department. If
3307the parties cannot agree to a neutral evaluator within 10
3308business days, The department shall allow the parties to submit
3309requests to disqualify evaluators on the list for cause.
3310     (a)  The department shall disqualify neutral evaluators for
3311cause based only on any of the following grounds:
3312     1.  A familial relationship exists between the neutral
3313evaluator and either party or a representative of either party
3314within the third degree.
3315     2.  The proposed neutral evaluator has, in a professional
3316capacity, previously represented either party or a
3317representative of either party, in the same or a substantially
3318related matter.
3319     3.  The proposed neutral evaluator has, in a professional
3320capacity, represented another person in the same or a
3321substantially related matter and that person's interests are
3322materially adverse to the interests of the parties. The term
3323"substantially related matter" means participation by the
3324neutral evaluator on the same claim, property, or adjacent
3325property.
3326     4.  The proposed neutral evaluator has, within the
3327preceding 5 years, worked as an employer or employee of any
3328party to the case.
3329     (b)  The parties shall appoint a neutral evaluator from the
3330department list and promptly inform the department. If the
3331parties cannot agree to a neutral evaluator within 14 business
3332days, the department shall appoint a neutral evaluator from the
3333list of certified neutral evaluators. The department shall allow
3334each party to disqualify two neutral evaluators without cause.
3335Upon selection or appointment, the department shall promptly
3336refer the request to the neutral evaluator.
3337     (c)  Within 14 5 business days after the referral, the
3338neutral evaluator shall notify the policyholder and the insurer
3339of the date, time, and place of the neutral evaluation
3340conference. The conference may be held by telephone, if feasible
3341and desirable. The neutral evaluator shall make reasonable
3342efforts to hold the neutral evaluation conference shall be held
3343within 90 45 days after the receipt of the request by the
3344department. Failure of the neutral evaluator to hold the
3345conference within 90 days does not invalidate either party's
3346right to neutral evaluation or to a neutral evaluation
3347conference held outside this timeframe.
3348     (8)  The department shall adopt rules of procedure for the
3349neutral evaluation process.
3350     (8)(9)  For policyholders not represented by an attorney, a
3351consumer affairs specialist of the department or an employee
3352designated as the primary contact for consumers on issues
3353relating to sinkholes under s. 20.121 shall be available for
3354consultation to the extent that he or she may lawfully do so.
3355     (9)(10)  Evidence of an offer to settle a claim during the
3356neutral evaluation process, as well as any relevant conduct or
3357statements made in negotiations concerning the offer to settle a
3358claim, is inadmissible to prove liability or absence of
3359liability for the claim or its value, except as provided in
3360subsection (14) (13).
3361     (10)(11)  Regardless of when noticed, any court proceeding
3362related to the subject matter of the neutral evaluation shall be
3363stayed pending completion of the neutral evaluation and for 5
3364days after the filing of the neutral evaluator's report with the
3365court.
3366     (11)  If, based upon his or her professional training and
3367credentials, a neutral evaluator is qualified to determine only
3368disputes relating to causation or method of repair, the
3369department shall allow the neutral evaluator to enlist the
3370assistance of another professional from the neutral evaluators
3371list not previously stricken, who, based upon his or her
3372professional training and credentials, is able to provide an
3373opinion as to other disputed issues. A professional who would be
3374disqualified for any reason listed in subsection (7) must be
3375disqualified. The neutral evaluator may also use the services of
3376professional engineers and professional geologists who are not
3377certified as neutral evaluators, as well as licensed building
3378contractors, in order to ensure that all items in dispute are
3379addressed and the neutral evaluation can be completed. Any
3380professional engineer, professional geologist, or licensed
3381building contractor retained may be disqualified for any of the
3382reasons listed in subsection (7). The neutral evaluator may
3383request the entity that performed the investigation pursuant to
3384s. 627.7072 perform such additional and reasonable testing as
3385deemed necessary in the professional opinion of the neutral
3386evaluator.
3387     (12)  At For matters that are not resolved by the parties
3388at the conclusion of the neutral evaluation, the neutral
3389evaluator shall prepare a report describing all matters that are
3390the subject of the neutral evaluation, including whether,
3391stating that in his or her opinion, the sinkhole loss has been
3392verified or eliminated within a reasonable degree of
3393professional probability and, if verified, whether the sinkhole
3394activity caused structural damage to the covered building, and
3395if so, the need for and estimated costs of stabilizing the land
3396and any covered structures or buildings and other appropriate
3397remediation or necessary building structural repairs due to the
3398sinkhole loss. The evaluator's report shall be sent to all
3399parties in attendance at the neutral evaluation and to the
3400department, within 14 days after completing the neutral
3401evaluation conference.
3402     (13)  The recommendation of the neutral evaluator is not
3403binding on any party, and the parties retain access to the
3404court. The neutral evaluator's written recommendation, oral
3405testimony, and full report shall be admitted is admissible in
3406any subsequent action, litigation, or proceeding relating to the
3407claim or to the cause of action giving rise to the claim.
3408     (14)  If the neutral evaluator first verifies the existence
3409of a sinkhole that caused structural damage and, second,
3410recommends the need for and estimates costs of stabilizing the
3411land and any covered structures or buildings and other
3412appropriate remediation or building structural repairs, which
3413costs exceed the amount that the insurer has offered to pay the
3414policyholder, the insurer is liable to the policyholder for up
3415to $2,500 in attorney's fees for the attorney's participation in
3416the neutral evaluation process. For purposes of this subsection,
3417the term "offer to pay" means a written offer signed by the
3418insurer or its legal representative and delivered to the
3419policyholder within 10 days after the insurer receives notice
3420that a request for neutral evaluation has been made under this
3421section.
3422     (15)  If the insurer timely agrees in writing to comply and
3423timely complies with the recommendation of the neutral
3424evaluator, but the policyholder declines to resolve the matter
3425in accordance with the recommendation of the neutral evaluator
3426pursuant to this section:
3427     (a)  The insurer is not liable for extracontractual damages
3428related to a claim for a sinkhole loss but only as related to
3429the issues determined by the neutral evaluation process. This
3430section does not affect or impair claims for extracontractual
3431damages unrelated to the issues determined by the neutral
3432evaluation process contained in this section; and
3433     (b)  The actions of the insurer are not a confession of
3434judgment or admission of liability, and the insurer is not
3435liable for attorney's fees under s. 627.428 or other provisions
3436of the insurance code unless the policyholder obtains a judgment
3437that is more favorable than the recommendation of the neutral
3438evaluator.
3439     (16)  If the insurer agrees to comply with the neutral
3440evaluator's report, payments shall be made in accordance with
3441the terms and conditions of the applicable insurance policy
3442pursuant to s. 627.707(5).
3443     (17)  Neutral evaluators are deemed to be agents of the
3444department and have immunity from suit as provided in s. 44.107.
3445     (18)  The department shall adopt rules of procedure for the
3446neutral evaluation process.
3447     Section 28.  Subsection (8) of section 627.711, Florida
3448Statutes, is amended to read:
3449     627.711  Notice of premium discounts for hurricane loss
3450mitigation; uniform mitigation verification inspection form.-
3451     (8)  At its expense, the insurer may require that a any
3452uniform mitigation verification form provided by a policyholder,
3453a policyholder's agent, or an authorized mitigation inspector or
3454inspection company be independently verified by an inspector, an
3455inspection company, or an independent third-party quality
3456assurance provider which possesses does possess a quality
3457assurance program before prior to accepting the uniform
3458mitigation verification form as valid.
3459     Section 29.  Subsection (1) of section 627.712, Florida
3460Statutes, is amended to read:
3461     627.712  Residential windstorm coverage required;
3462availability of exclusions for windstorm or contents.-
3463     (1)  An insurer issuing a residential property insurance
3464policy must provide windstorm coverage. Except as provided in
3465paragraph (2)(c), this section does not apply with respect to
3466risks that are eligible for wind-only coverage from Citizens
3467Property Insurance Corporation under s. 627.351(6), and with
3468respect to risks that are not eligible for coverage from
3469Citizens Property Insurance Corporation under s. 627.351(6)(a)3.
3470or 5. A risk ineligible for Citizens coverage by the corporation
3471under s. 627.351(6)(a)3. or 5. is exempt from the requirements
3472of this section only if the risk is located within the
3473boundaries of the coastal high-risk account of the corporation.
3474     Section 30.  Subsection (3) of section 631.54, Florida
3475Statutes, is amended to read:
3476     631.54  Definitions.-As used in this part:
3477     (3)  "Covered claim" means an unpaid claim, including one
3478of unearned premiums, which arises out of, and is within the
3479coverage, and not in excess of, the applicable limits of an
3480insurance policy to which this part applies, issued by an
3481insurer, if such insurer becomes an insolvent insurer and the
3482claimant or insured is a resident of this state at the time of
3483the insured event or the property from which the claim arises is
3484permanently located in this state. For entities other than
3485individuals, the residence of a claimant, insured, or
3486policyholder is the state in which the entity's principal place
3487of business is located at the time of the insured event. The
3488term does "Covered claim" shall not include:
3489     (a)  Any amount due any reinsurer, insurer, insurance pool,
3490or underwriting association, sought directly or indirectly
3491through a third party, as subrogation, contribution,
3492indemnification, or otherwise; or
3493     (b)  Any claim that would otherwise be a covered claim
3494under this part that has been rejected by any other state
3495guaranty fund on the grounds that an insured's net worth is
3496greater than that allowed under that state's guaranty law.
3497Member insurers shall have no right of subrogation,
3498contribution, indemnification, or otherwise, sought directly or
3499indirectly through a third party, against the insured of any
3500insolvent member; or
3501     (c)  Any amount payable for a sinkhole loss other than
3502testing deemed appropriate by the association or payable for the
3503actual repair of the loss, except that the association may not
3504pay for attorney's fees or public adjuster's fees in connection
3505with a sinkhole loss or pay the policyholder. The association
3506may pay for actual repairs to the property, but is not liable
3507for amounts in excess of policy limits.
3508     Section 31.  If any provision of this act, or the
3509application thereof to any person or circumstance is held
3510invalid, such invalidity shall not affect other provisions or
3511applications of this act which can be given effect without the
3512invalid provision or application. It is the express intent of
3513the Legislature to enact multiple important, but independent,
3514reforms to Florida law relating to sinkhole insurance coverage
3515and related claims. The Legislature further intends that the
3516multiple reforms in the act could and should be enforced if one
3517or more provisions are held invalid. To this end, the provisions
3518of this act are declared to be severable.
3519     Section 32.  Except as otherwise expressly provided in this
3520act, this act shall take effect upon becoming a law.
3521
3522
3523
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3524
T I T L E  A M E N D M E N T
3525     Remove the entire title and insert:
3526
A bill to be entitled
3527An act relating to property and casualty insurance;
3528amending s. 95.11, F.S.; specifying a statute of
3529limitation for a breach of a property insurance contract
3530runs from the date of loss; amending s. 215.555, F.S.;
3531revising the definition of "losses," relating to the
3532Florida Hurricane Catastrophe Fund, to include and exclude
3533certain losses; providing applicability; amending s.
3534215.5595, F.S.; authorizing an insurer to renegotiate the
3535terms a surplus note issued before a certain date;
3536providing limitations; amending s. 624.407, F.S.; revising
3537the amount of surplus funds required for domestic insurers
3538applying for a certificate of authority; amending s.
3539624.408, F.S.; revising the minimum surplus that must be
3540maintained by certain insurers; authorizing the Office of
3541Insurance Regulation to reduce the surplus requirement
3542under specified circumstances; amending s. 626.854, F.S.;
3543providing limitations on the amount of compensation that
3544may be received by a public adjuster for a reopened or
3545supplemental claim; providing limitations on the amount of
3546compensation that may be received by a public adjuster for
3547a claim; applying specified provisions regulating the
3548conduct of public adjusters to condominium unit owners
3549rather than to condominium associations as is currently
3550required; providing statements that may be considered
3551deceptive or misleading if made in any public adjuster's
3552advertisement or solicitation; providing a definition for
3553the term "written advertisement"; requiring that a
3554disclaimer be included in any public adjuster's written
3555advertisement; providing requirements for such disclaimer;
3556requiring certain persons who act on behalf of an insurer
3557to provide notice to the insurer, claimant, public
3558adjuster, or legal representative for an onsite inspection
3559of the insured property; authorizing the insured or
3560claimant to deny access to the property if notice is not
3561provided; requiring the public adjuster to ensure prompt
3562notice of certain property loss claims; providing that an
3563insurer be allowed to interview the insured directly about
3564the loss claim; prohibiting the insurer from obstructing
3565or preventing the public adjuster from communicating with
3566the insured; requiring that the insurer communicate with
3567the public adjuster in an effort to reach an agreement as
3568to the scope of the covered loss under the insurance
3569policy; prohibiting a public adjuster from restricting or
3570preventing persons acting on behalf of the insured from
3571having reasonable access to the insured or the insured's
3572property; prohibiting a public adjuster from restricting
3573or preventing the insured's adjuster from having
3574reasonable access to or inspecting the insured's property;
3575authorizing the insured's adjuster to be present for the
3576inspection; prohibiting a licensed contractor or
3577subcontractor from adjusting a claim on behalf of an
3578insured if such contractor or subcontractor is not a
3579licensed public adjuster; providing an exception; amending
3580s. 626.8796, F.S.; providing requirements for a public
3581adjuster contract; creating s. 626.70132, F.S.; requiring
3582that notice of a claim, supplemental claim, or reopened
3583claim be given to the insurer within a specified period
3584after a windstorm or hurricane occurs; providing a
3585definition for the terms "supplemental claim" or "reopened
3586claim"; providing applicability; repealing s. 627.0613(4),
3587F.S., relating to the requirement that the consumer
3588advocate for the Chief Financial Officer prepare an annual
3589report card for each personal residential property
3590insurer; amending s. 627.062, F.S.; extending the
3591expiration date for making a "file and use" filing;
3592prohibiting the Office of Insurance Regulation from,
3593directly or indirectly, impeding the right of an insurer
3594to acquire policyholders, advertise or appoint agents, or
3595regulate agent commissions; revising the information that
3596must be included in a rate filing relating to certain
3597reinsurance or financing products; deleting a provision
3598that prohibited an insurer from making certain rate
3599filings within a certain period of time after a rate
3600increase; deleting a provision prohibiting an insurer from
3601filing for a rate increase within 6 months after it makes
3602certain rate filings; deleting obsolete provisions
3603relating to legislation enacted during the 2003 Special
3604Session D of the Legislature; providing for the submission
3605of additional or supplementary information pursuant to a
3606rate filing; revising provisions relating to the
3607certifications that are required to be made under oath by
3608certain officers or actuaries of an insurer regarding
3609information that must accompany a rate filing; amending s.
3610627.06281, F.S.; providing limitations on fees charged for
3611use of the public hurricane model; amending s. 627.0629,
3612F.S.; deleting obsolete provisions; deleting a requirement
3613that the Office of Insurance Regulation propose a method
3614for establishing discounts, debits, credits, and other
3615rate differentials for hurricane mitigation by a certain
3616date; conforming provisions to changes made by the act;
3617amending s. 627.351, F.S.; limiting an adjuster's fee for
3618a claim against the corporation; renaming the "high-risk
3619account" as the "coastal account"; revising the conditions
3620under which the Citizens policyholder surcharge may be
3621imposed; providing that members of the Citizens Property
3622Insurance Corporation Board of Governors are not
3623prohibited from practicing in a certain profession if not
3624prohibited by law or ordinance; requiring the corporation
3625to commission a consultant to prepare a report on
3626outsourcing various functions and to submit such report to
3627the Financial Services Commission by a certain date;
3628limiting coverage for damage from sinkholes after a
3629certain date; requiring the policyholders to sign a
3630statement acknowledging that they may be assessed
3631surcharges to cover corporate deficits; prohibiting board
3632members from voting on certain measures; exempting
3633sinkhole coverage from the corporation's annual rate
3634increase requirements; deleting a requirement that the
3635board provide an annual report to the Legislature relating
3636to certain coverages; deleting a requirement that the
3637board reduce the boundaries of certain high-risk areas
3638eligible for wind-only coverages under certain
3639circumstances; amending s. 627.3511, F.S.; conforming
3640provisions to changes made by the act; amending s.
3641627.4133, F.S.; revising the requirements for providing an
3642insured with notice of nonrenewal, cancellation, or
3643termination of personal lines or commercial residential
3644property insurance; authorizing an insurer to cancel
3645policies after 45 days' notice if the Office of Insurance
3646Regulation determines that the cancellation of policies is
3647necessary to protect the interests of the public or
3648policyholders; authorizing the Office of Insurance
3649Regulation to place an insurer under administrative
3650supervision or appoint a receiver upon the consent of the
3651insurer under certain circumstances; providing criteria
3652and notice requirements relating to the nonrenewal of
3653policy covering both a home and motor vehicle; creating s.
3654627.43141, F.S.; providing definitions; requiring the
3655delivery of a "Notice of Change in Policy Terms" under
3656certain circumstances; specifying requirements for such
3657notice; specifying actions constituting proof of notice;
3658authorizing policy renewals to contain a change in policy
3659terms; providing that receipt of payment by an insurer is
3660deemed acceptance of new policy terms by an insured;
3661providing that the original policy remains in effect until
3662the occurrence of specified events if an insurer fails to
3663provide notice; providing intent; amending s. 627.7011,
3664F.S.; requiring the insurer to pay the actual cash value
3665of an insured loss for a dwelling, less any applicable
3666deductible; requiring the insurer to offer coverage under
3667which the insurer is obligated to pay replacement costs;
3668authorizing the insurer to offer coverage that limits the
3669initial payment for personal property to the actual cash
3670value of the property to be replaced and to require the
3671insured to provide receipts for purchases; requiring the
3672insurer to provide notice of this process before the
3673policy is bound; requiring certain premium credits or
3674discounts for such coverage; prohibiting an insurer from
3675requiring the insured to advance payment; amending s.
3676627.70131, F.S.; specifying application of certain time
3677periods to initial or supplemental property insurance
3678claim notices and payments; providing legislative findings
3679with respect to 2005 statutory changes relating to
3680sinkhole insurance coverage and statutory changes in this
3681act; amending s. 627.706, F.S.; authorizing an insurer to
3682limit coverage for catastrophic ground cover collapse to
3683the principal building; authorizing an insurer to require
3684an inspection before issuance of sinkhole loss coverage;
3685revising definitions; defining the term "structural
3686damage"; placing a 2-year statute of repose on claims for
3687sinkhole coverage; amending s. 627.7061, F.S.; conforming
3688provisions to changes made by the act; repealing s.
3689627.7065, F.S., relating to the establishment of a
3690sinkhole database; amending s. 627.707, F.S.; revising
3691provisions relating to the investigation of sinkholes by
3692insurers; providing a time limitation for demanding
3693sinkhole testing by a policyholder and entering into a
3694contract for repairs; requiring the insurer to provide
3695repairs in accordance with the insurer's engineer's
3696recommendations or tender the policy limits to the
3697policyholder; requiring all repairs to be completed within
3698a certain time; providing exceptions; providing criminal
3699penalties for a person performing repairs who offers a
3700rebate; amending s. 627.7073, F.S.; revising provisions
3701relating to inspection reports; revising the reports that
3702an insurer must file with the clerk of the court;
3703requiring the policyholder to file certain reports as a
3704precondition to accepting payment; requiring the
3705professional engineer responsible for monitoring sinkhole
3706repairs to issue a report and certification to the
3707property owner and file such report with the court;
3708providing that the act does not create liability for an
3709insurer based on a representation or certification by the
3710engineer; amending s. 627.7074, F.S.; revising provisions
3711relating to neutral evaluation; requiring evaluation in
3712order to make certain determinations; requiring that the
3713neutral evaluator be allowed access to structures being
3714evaluated; providing grounds for disqualifying an
3715evaluator; allowing the Department of Financial Services
3716to appoint an evaluator if the parties cannot come to
3717agreement; revising the timeframes for scheduling a
3718neutral evaluation conference; authorizing an evaluator to
3719enlist another evaluator or other professionals; providing
3720a time certain for issuing a report; requiring admission
3721of certain information relating to the neutral evaluation
3722into evidence; revising provisions relating to compliance
3723with the evaluator's recommendations; providing that the
3724evaluator is an agent of the department for the purposes
3725of immunity from suit; requiring the department to adopt
3726rules; amending s. 627.711, F.S.; revising the requirement
3727that the insurer pay for verification of a uniform
3728mitigation verification form that the insurer requires;
3729amending s. 627.712, F.S.; conforming provisions to
3730changes made by the act; amending s. 631.54, F.S.;
3731revising the definition of the term "covered claim" for
3732purposes of the Florida Insurance Guaranty Association
3733Act; providing for applicability; providing severability;
3734providing effective dates.


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