HB 803

1	A bill to be entitled
2	An act relating to property and casualty insurance;
3	amending s. 624.407, F.S.; revising the amount of surplus
4	funds required for domestic insurers applying for a
5	certificate of authority after a certain date; amending s.
6	624.408, F.S.; revising the minimum surplus that must be
7	maintained by certain insurers; authorizing the Office of
8	Insurance Regulation to reduce the surplus requirement
9	under specified circumstances; amending s. 624.4095, F.S.;
10	excluding certain premiums for federal multiple-peril crop
11	insurance from calculations for an insurer's gross writing
12	ratio; requiring insurers to disclose the gross written
13	premiums for federal multiple-peril crop insurance in a
14	financial statement; amending s. 624.424; revising the
15	frequency that an insurer may use the same accountant or
16	partner to prepare an annual audited financial report;
17	amending s. 626.854, F.S.; providing limitations on the
18	amount of compensation that may be received by a public
19	adjuster for a reopened or supplemental claim; providing
20	statements that may be considered deceptive or misleading
21	if made in any public adjuster's advertisement or
22	solicitation; providing a definition for the term "written
23	advertisement"; requiring that a disclaimer be included in
24	any public adjuster's written advertisement; providing
25	requirements for such disclaimer; requiring certain
26	persons who act on behalf of an insurer to provide notice
27	to the insurer, claimant, public adjuster, or legal
28	representative for an onsite inspection of the insured
29	property; authorizing the insured or claimant to deny
30	access to the property if notice is not provided;
31	requiring the public adjuster to ensure prompt notice of
32	certain property loss claims; providing that an insurer be
33	allowed to interview the insured directly about the loss
34	claim; prohibiting the insurer from obstructing or
35	preventing the public adjuster from communicating with the
36	insured; requiring that the insurer communicate with the
37	public adjuster in an effort to reach an agreement as to
38	the scope of the covered loss under the insurance policy;
39	prohibiting a public adjuster from restricting or
40	preventing persons acting on behalf of the insured from
41	having reasonable access to the insured or the insured's
42	property; prohibiting a public adjuster from restricting
43	or preventing the insured's adjuster from having
44	reasonable access to or inspecting the insured's property;
45	authorizing the insured's adjuster to be present for the
46	inspection; prohibiting a licensed contractor or
47	subcontractor from adjusting a claim on behalf of an
48	insured if such contractor or subcontractor is not a
49	licensed public adjuster; providing an exception; amending
50	s. 626.8651, F.S.; requiring that a public adjuster
51	apprentice complete a minimum number of hours of
52	continuing education to qualify for licensure; amending s.
53	626.8796, F.S.; providing requirements for a public
54	adjuster contract; creating s. 626.70132, F.S.; requiring
55	that notice of a claim, supplemental claim, or reopened
56	claim be given to the insurer within a specified period
57	after a windstorm or hurricane occurs; providing a
58	definition for the terms "supplemental claim" or "reopened
59	claim"; providing applicability; amending s. 627.0613,
60	F.S.; deleting the duty of the consumer advocate to
61	prepare an annual report card for each authorized personal
62	residential property insurer; amending s. 627.062, F.S.;
63	requiring that the office issue an approval rather than a
64	notice of intent to approve following its approval of a
65	file and use filing; deleting an obsolete provision;
66	prohibiting the Office of Insurance Regulation from,
67	directly or indirectly, impeding the right of an insurer
68	to acquire policyholders, advertise or appoint agents, or
69	regulate agent commissions; revising the information that
70	must be included in a rate filing relating to certain
71	reinsurance or financing products; deleting a provision
72	that prohibited an insurer from making certain rate
73	filings within a certain period of time after a rate
74	increase; deleting a provision prohibiting an insurer from
75	filing for a rate increase within 6 months after it makes
76	certain rate filings; deleting obsolete provisions
77	relating to legislation enacted during the 2003 Special
78	Session D of the Legislature; amending s. 627.0629, F.S.;
79	providing legislative intent that insurers provide
80	consumers with accurate pricing signals for alterations in
81	order to minimize losses, but that mitigation discounts
82	not result in a loss of income for the insurer; requiring
83	rate filings for residential property insurance to include
84	actuarially reasonable debits that provide proper pricing;
85	providing for an increase in base rates if mitigation
86	discounts exceed the aggregate reduction in expected
87	losses; deleting obsolete provisions; deleting a
88	requirement that the Office of Insurance Regulation
89	propose a method for establishing discounts, debits,
90	credits, and other rate differentials for hurricane
91	mitigation by a certain date; requiring the Financial
92	Services Commission to adopt rules relating to such debits
93	by a certain date; deleting a provision that prohibits an
94	insurer from including an expense or profit load in the
95	cost of reinsurance to replace the Temporary Increase in
96	Coverage Limits; conforming provisions to changes made by
97	the act; amending s. 627.351, F.S.; renaming the "high-
98	risk account" as the "coastal account"; revising the
99	conditions under which the Citizens policyholder surcharge
100	may be imposed; providing that members of the Citizens
101	Property Insurance Corporation Board of Governors are not
102	prohibited from practicing in a certain profession if not
103	prohibited by law or ordinance; prohibiting board members
104	from voting on certain measures; changing the date on
105	which the boundaries of high-risk areas eligible for
106	certain wind-only coverages will be reduced if certain
107	circumstances exist; amending s. 627.3511, F.S.;
108	conforming provisions to changes made by the act; amending
109	s. 627.4133, F.S.; reducing the amount of time before a
110	policy nonrenewal, cancellation, or termination is allowed
111	to take effect after notification of an insured; deleting
112	a prior notification period applicable to the nonrenewal,
113	cancellation, or termination of certain policies in effect
114	for a specified duration; authorizing an insurer to cancel
115	policies after 45 days' notice if the Office of Insurance
116	Regulation determines that the cancellation of policies is
117	necessary to protect the interests of the public or
118	policyholders; authorizing the Office of Insurance
119	Regulation to place an insurer under administrative
120	supervision or appoint a receiver upon the consent of the
121	insurer under certain circumstances; creating s.
122	627.43141, F.S.; providing definitions; requiring the
123	delivery of a "Notice of Change in Policy Terms" under
124	certain circumstances; specifying requirements for such
125	notice; specifying actions constituting proof of notice;
126	authorizing policy renewals to contain a change in policy
127	terms; providing that receipt of payment by an insurer is
128	deemed acceptance of new policy terms by an insured;
129	providing that the original policy remains in effect until
130	the occurrence of specified events if an insurer fails to
131	provide notice; providing intent; amending s. 627.7011,
132	F.S.; requiring that an insurer pay the actual cash value
133	of an insured loss for a dwelling, less any applicable
134	deductible, under certain circumstances; requiring that a
135	policyholder enter into a contract for the performance of
136	building and structural repairs in order to receive
137	payment; requiring that an insurer pay certain remaining
138	amounts; restricting insurers and contractors from
139	requiring advance payments for certain repairs and
140	expenses; providing an exception to requiring advance
141	payments; requiring an insurer to pay the replacement
142	costs if a total loss occurs; allowing an insurer to limit
143	its initial payment for losses to personal property;
144	authorizing an insurer to require an insured to provide
145	receipts for the purchase of property financed with
146	certain actual cash value payments; requiring an insurer
147	to use the receipts in a specified manner and as part of a
148	continuing process; requiring notice of the process in the
149	insurance contract; amending s. 627.70131, F.S.;
150	specifying application of certain time periods to initial
151	or supplemental property insurance claim notices and
152	payments; providing legislative findings with respect to
153	2005 statutory changes relating to sinkhole insurance
154	coverage and statutory changes in this act; amending s.
155	627.706, F.S.; authorizing an insurer to limit coverage
156	for catastrophic ground cover collapse to the principal
157	building and to have discretion to provide additional
158	coverage; allowing the deductible to include costs
159	relating to an investigation of whether sinkhole activity
160	is present; revising definitions; defining the term
161	"structural damage"; placing a 2-year statute of repose on
162	claims for sinkhole coverage; amending s. 627.7061, F.S.;
163	conforming provisions to changes made by the act;
164	repealing s. 627.7065, F.S., relating to the establishment
165	of a sinkhole database; amending s. 627.707, F.S.;
166	revising provisions relating to the investigation of
167	sinkholes by insurers; deleting a requirement that the
168	insurer provide a policyholder with a statement regarding
169	testing for sinkhole activity; providing a time limitation
170	for demanding sinkhole testing by a policyholder and
171	entering into a contract for repairs; requiring all
172	repairs to be completed within a certain time; providing
173	exceptions; prohibiting rebates to policyholders from
174	persons performing repairs; voiding coverage if a rebate
175	is received; requiring policyholders to refund rebates
176	from persons performing repairs to insurers; providing a
177	criminal penalty on a policyholder for accepting rebates
178	from persons performing repairs; limiting a policyholder's
179	liability for reimbursement of the costs related to
180	certain analyses and services; amending s. 627.7073, F.S.;
181	revising provisions relating to inspection reports;
182	providing that the presumption that the report is correct
183	shifts the burden of proof; requiring an insurer to file a
184	neutral evaluator's report and other specific information;
185	requiring the policyholder to file certain reports as a
186	precondition to accepting payment; requiring certain
187	filing and recording costs to be borne by a policyholder;
188	specifying that a policyholder's recording of a report
189	does not legally affect title or create certain causes of
190	action relating to real property; requiring a seller of
191	real property to provide a buyer with a copy of any
192	inspection reports and certifications; amending s.
193	627.7074, F.S.; revising provisions relating to neutral
194	evaluation; requiring evaluation in order to make certain
195	determinations; requiring that the neutral evaluator be
196	allowed access to structures being evaluated; providing
197	grounds for disqualifying an evaluator; allowing the
198	Department of Financial Services to appoint an evaluator
199	if the parties cannot come to agreement; revising the
200	timeframes for scheduling a neutral evaluation conference;
201	authorizing an evaluator to enlist another evaluator or
202	other professionals; providing a time certain for issuing
203	a report; providing that certain information is
204	confidential; revising provisions relating to compliance
205	with the evaluator's recommendations; providing that the
206	evaluator is an agent of the department for the purposes
207	of immunity from suit; requiring the department to adopt
208	rules; amending s. 627.712, F.S.; conforming provisions to
209	changes made by the act; providing legislative intent;
210	providing severability; providing effective dates.
211
212	Be It Enacted by the Legislature of the State of Florida:
213
214	Section 1.  Section 624.407, Florida Statutes, is amended
215	to read:
216	624.407  Surplus Capital funds required; new insurers.-
217	(1)  To receive authority to transact any one kind or
218	combinations of kinds of insurance, as defined in part V of this
219	chapter, an insurer applying for its original certificate of
220	authority in this state after November 10, 1993, the effective
221	date of this section shall possess surplus funds as to
222	policyholders at least not less than the greater of:
223	(a)  Five million dollars For a property and casualty
224	insurer, $5 million, or $2.5 million for any other insurer;
225	(b)  For life insurers, 4 percent of the insurer's total
226	liabilities;
227	(c)  For life and health insurers, 4 percent of the
228	insurer's total liabilities, plus 6 percent of the insurer's
229	liabilities relative to health insurance; or
230	(d)  For all insurers other than life insurers and life and
231	health insurers, 10 percent of the insurer's total liabilities;
232	or
233	(e)  Notwithstanding paragraph (a) or paragraph (d), for a
234	domestic insurer that transacts residential property insurance
235	and is:
236	1.  Not a wholly owned subsidiary of an insurer domiciled
237	in any other state on or before July 1, 2011, and until June 30,
238	2016, $5 million; on or after July 1, 2016, and until June 30,
239	2021, $10 million; and on or after July 1, 2021, $15 million.
240	2.  however, a domestic insurer that transacts residential
241	property insurance and is A wholly owned subsidiary of an
242	insurer domiciled in any other state, shall possess surplus as
243	to policyholders of at least $50 million.
244	(3)  Notwithstanding subsections (1) and (2), a new insurer
245	may not be required, but no insurer shall be required under this
246	subsection to have surplus as to policyholders greater than $100
247	million.
248	(4)(2)  The requirements of this section shall be based
249	upon all the kinds of insurance actually transacted or to be
250	transacted by the insurer in any and all areas in which it
251	operates, whether or not only a portion of such kinds of
252	insurance are to be transacted in this state.
253	(5)(3)  As to surplus funds as to policyholders required
254	for qualification to transact one or more kinds of insurance,
255	domestic mutual insurers are governed by chapter 628, and
256	domestic reciprocal insurers are governed by chapter 629.
257	(6)(4)  For the purposes of this section, liabilities do
258	shall not include liabilities required under s. 625.041(4). For
259	purposes of computing minimum surplus funds as to policyholders
260	pursuant to s. 625.305(1), liabilities shall include liabilities
261	required under s. 625.041(4).
262	(7)(5)  The provisions of this section, as amended by
263	chapter 89-360, Laws of Florida this act, shall apply only to
264	insurers applying for a certificate of authority on or after
265	October 1, 1989 the effective date of this act.
266	Section 2.  Section 624.408, Florida Statutes, is amended
267	to read:
268	624.408  Surplus funds as to policyholders required;
269	current new and existing insurers.-
270	(1)(a)  To maintain a certificate of authority to transact
271	any one kind or combinations of kinds of insurance, as defined
272	in part V of this chapter, an insurer in this state must shall
273	at all times maintain surplus funds as to policyholders at least
274	not less than the greater of:
275	(a)1.  Except as provided in paragraphs (e),(f), and (g)
276	subparagraph 5. and paragraph (b), $1.5 million.;
277	(b)2.  For life insurers, 4 percent of the insurer's total
278	liabilities.;
279	(c)3.  For life and health insurers, 4 percent of the
280	insurer's total liabilities plus 6 percent of the insurer's
281	liabilities relative to health insurance.; or
282	(d)4.  For all insurers other than mortgage guaranty
283	insurers, life insurers, and life and health insurers, 10
284	percent of the insurer's total liabilities.
285	(e)5.  For property and casualty insurers, $4 million,
286	except for property and casualty insurers authorized to
287	underwrite any line of residential property insurance.
288	(f)(b)  For residential any property insurers not and
289	casualty insurer holding a certificate of authority before July
290	1, 2011 on December 1, 1993, $15 million. the
291	(g)  For residential property insurers holding a
292	certificate of authority before July 1, 2011, and until June 30,
293	2016, $5 million; on or after July 1, 2016, and until June 30,
294	2021, $10 million; on or after July 1, 2021, $15 million. The
295	office may reduce this surplus requirement if the insurer is not
296	writing new business, has premiums in force of less than $1
297	million per year in residential property insurance, or is a
298	mutual insurance company. following amounts apply instead of the
299	$4 million required by subparagraph (a)5.:
300	1.  On December 31, 2001, and until December 30, 2002, $3
301	million.
302	2.  On December 31, 2002, and until December 30, 2003,
303	$3.25 million.
304	3.  On December 31, 2003, and until December 30, 2004, $3.6
305	million.
306	4.  On December 31, 2004, and thereafter, $4 million.
307	(2)  For purposes of this section, liabilities do shall not
308	include liabilities required under s. 625.041(4). For purposes
309	of computing minimum surplus as to policyholders pursuant to s.
310	625.305(1), liabilities shall include liabilities required under
311	s. 625.041(4).
312	(3)  This section does not require an No insurer shall be
313	required under this section to have surplus as to policyholders
314	greater than $100 million.
315	(4)  A mortgage guaranty insurer shall maintain a minimum
316	surplus as required by s. 635.042.
317	Section 3.  Subsection (7) is added to section 624.4095,
318	Florida Statutes, to read:
319	624.4095  Premiums written; restrictions.-
320	(7)  For the purposes of this section and ss. 624.407 and
321	624.408, with respect to capital and surplus requirements, gross
322	written premiums for federal multiple-peril crop insurance which
323	are ceded to the Federal Crop Insurance Corporation or
324	authorized reinsurers may not be included in the calculation of
325	an insurer's gross writing ratio. The liabilities for ceded
326	reinsurance premiums payable for federal multiple-peril crop
327	insurance ceded to the Federal Crop Insurance Corporation and
328	authorized reinsurers shall be netted against the asset for
329	amounts recoverable from reinsurers. Each insurer that writes
330	other insurance products together with federal multiple-peril
331	crop insurance must disclose in the notes to its annual and
332	quarterly financial statements, or in a supplement to those
333	statements, the gross written premiums for federal multiple-
334	peril crop insurance.
335	Section 4.  Paragraph (d) of subsection (8) of section
336	624.424, Florida Statutes, is amended to read:
337	624.424  Annual statement and other information.-
338	(8)
339	(d)  An insurer may not use the same accountant or partner
340	of an accounting firm responsible for preparing the report
341	required by this subsection for more than 5 7 consecutive years.
342	Following this period, the insurer may not use such accountant
343	or partner for a period of 5 2 years, but may use another
344	accountant or partner of the same firm. An insurer may request
345	the office to waive this prohibition based upon an unusual
346	hardship to the insurer and a determination that the accountant
347	is exercising independent judgment that is not unduly influenced
348	by the insurer considering such factors as the number of
349	partners, expertise of the partners or the number of insurance
350	clients of the accounting firm; the premium volume of the
351	insurer; and the number of jurisdictions in which the insurer
352	transacts business.
353	Section 5.  Effective June 1, 2011, subsection (11) of
354	section 626.854, Florida Statutes, is amended to read:
355	626.854  "Public adjuster" defined; prohibitions.-The
356	Legislature finds that it is necessary for the protection of the
357	public to regulate public insurance adjusters and to prevent the
358	unauthorized practice of law.
359	(11)(a)  If a public adjuster enters into a contract with
360	an insured or claimant to reopen a claim or to file a
361	supplemental claim that seeks additional payments for a claim
362	that has been previously paid in part or in full or settled by
363	the insurer, the public adjuster may not charge, agree to, or
364	accept any compensation, payment, commission, fee, or other
365	thing of value based on a previous settlement or previous claim
366	payments by the insurer for the same cause of loss. The charge,
367	compensation, payment, commission, fee, or other thing of value
368	must may be based only on the claim payments or settlement
369	obtained through the work of the public adjuster after entering
370	into the contract with the insured or claimant. Compensation for
371	the reopened or supplemental claim may not exceed 20 percent of
372	the reopened or supplemental claim payment. The contracts
373	described in this paragraph are not subject to the limitations
374	in paragraph (b).
375	(b)  A public adjuster may not charge, agree to, or accept
376	any compensation, payment, commission, fee, or other thing of
377	value in excess of:
378	1.  Ten percent of the amount of insurance claim payments
379	made by the insurer for claims based on events that are the
380	subject of a declaration of a state of emergency by the
381	Governor. This provision applies to claims made during the
382	period of 1 year after the declaration of emergency. After that
383	year, the limitations in subparagraph 2. apply.
384	2.  Twenty percent of the amount of all other insurance
385	claim payments made by the insurer for claims that are not based
386	on events that are the subject of a declaration of a state of
387	emergency by the Governor.
388
389	The provisions of subsections (5)-(13) apply only to residential
390	property insurance policies and condominium association policies
391	as defined in s. 718.111(11).
392	Section 6.  Effective January 1, 2012, section 626.854,
393	Florida Statutes, as amended by this act, is amended to read:
394	626.854  "Public adjuster" defined; prohibitions.-The
395	Legislature finds that it is necessary for the protection of the
396	public to regulate public insurance adjusters and to prevent the
397	unauthorized practice of law.
398	(1)  A "public adjuster" is any person, except a duly
399	licensed attorney at law as exempted under hereinafter in s.
400	626.860 provided, who, for money, commission, or any other thing
401	of value, prepares, completes, or files an insurance claim form
402	for an insured or third-party claimant or who, for money,
403	commission, or any other thing of value, acts or aids in any
404	manner on behalf of, or aids an insured or third-party claimant
405	in negotiating for or effecting the settlement of a claim or
406	claims for loss or damage covered by an insurance contract or
407	who advertises for employment as an adjuster of such claims. The
408	term, and also includes any person who, for money, commission,
409	or any other thing of value, solicits, investigates, or adjusts
410	such claims on behalf of a any such public adjuster.
411	(2)  This definition does not apply to:
412	(a)  A licensed health care provider or employee thereof
413	who prepares or files a health insurance claim form on behalf of
414	a patient.
415	(b)  A person who files a health claim on behalf of another
416	and does so without compensation.
417	(3)  A public adjuster may not give legal advice or. A
418	public adjuster may not act on behalf of or aid any person in
419	negotiating or settling a claim relating to bodily injury,
420	death, or noneconomic damages.
421	(4)  For purposes of this section, the term "insured"
422	includes only the policyholder and any beneficiaries named or
423	similarly identified in the policy.
424	(5)  A public adjuster may not directly or indirectly
425	through any other person or entity solicit an insured or
426	claimant by any means except on Monday through Saturday of each
427	week and only between the hours of 8 a.m. and 8 p.m. on those
428	days.
429	(6)  A public adjuster may not directly or indirectly
430	through any other person or entity initiate contact or engage in
431	face-to-face or telephonic solicitation or enter into a contract
432	with any insured or claimant under an insurance policy until at
433	least 48 hours after the occurrence of an event that may be the
434	subject of a claim under the insurance policy unless contact is
435	initiated by the insured or claimant.
436	(7)  An insured or claimant may cancel a public adjuster's
437	contract to adjust a claim without penalty or obligation within
438	3 business days after the date on which the contract is executed
439	or within 3 business days after the date on which the insured or
440	claimant has notified the insurer of the claim, by phone or in
441	writing, whichever is later. The public adjuster's contract must
442	shall disclose to the insured or claimant his or her right to
443	cancel the contract and advise the insured or claimant that
444	notice of cancellation must be submitted in writing and sent by
445	certified mail, return receipt requested, or other form of
446	mailing that which provides proof thereof, to the public
447	adjuster at the address specified in the contract; provided,
448	during any state of emergency as declared by the Governor and
449	for a period of 1 year after the date of loss, the insured or
450	claimant has shall have 5 business days after the date on which
451	the contract is executed to cancel a public adjuster's contract.
452	(8)  It is an unfair and deceptive insurance trade practice
453	pursuant to s. 626.9541 for a public adjuster or any other
454	person to circulate or disseminate any advertisement,
455	announcement, or statement containing any assertion,
456	representation, or statement with respect to the business of
457	insurance which is untrue, deceptive, or misleading.
458	(a)  The following statements, made in any public
459	adjuster's advertisement or solicitation, are considered
460	deceptive or misleading:
461	1.  A statement or representation that invites an insured
462	policyholder to submit a claim when the policyholder does not
463	have covered damage to insured property.
464	2.  A statement or representation that invites an insured
465	policyholder to submit a claim by offering monetary or other
466	valuable inducement.
467	3.  A statement or representation that invites an insured
468	policyholder to submit a claim by stating that there is "no
469	risk" to the policyholder by submitting such claim.
470	4.  A statement or representation, or use of a logo or
471	shield, that implies or could mistakenly be construed to imply
472	that the solicitation was issued or distributed by a
473	governmental agency or is sanctioned or endorsed by a
474	governmental agency.
475	(b)  For purposes of this paragraph, the term "written
476	advertisement" includes only newspapers, magazines, flyers, and
477	bulk mailers. The following disclaimer, which is not required to
478	be printed on standard size business cards, must be added in
479	bold print and capital letters in typeface no smaller than the
480	typeface of the body of the text to all written advertisements
481	by a public adjuster:
482	"THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
483	A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
484	ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
485	MAY DISREGARD THIS ADVERTISEMENT."
486
487	(9)  A public adjuster, a public adjuster apprentice, or
488	any person or entity acting on behalf of a public adjuster or
489	public adjuster apprentice may not give or offer to give a
490	monetary loan or advance to a client or prospective client.
491	(10)  A public adjuster, public adjuster apprentice, or any
492	individual or entity acting on behalf of a public adjuster or
493	public adjuster apprentice may not give or offer to give,
494	directly or indirectly, any article of merchandise having a
495	value in excess of $25 to any individual for the purpose of
496	advertising or as an inducement to entering into a contract with
497	a public adjuster.
498	(11)(a)  If a public adjuster enters into a contract with
499	an insured or claimant to reopen a claim or file a supplemental
500	claim that seeks additional payments for a claim that has been
501	previously paid in part or in full or settled by the insurer,
502	the public adjuster may not charge, agree to, or accept any
503	compensation, payment, commission, fee, or other thing of value
504	based on a previous settlement or previous claim payments by the
505	insurer for the same cause of loss. The charge, compensation,
506	payment, commission, fee, or other thing of value must be based
507	only on the claim payments or settlement obtained through the
508	work of the public adjuster after entering into the contract
509	with the insured or claimant. Compensation for the reopened or
510	supplemental claim may not exceed 20 percent of the reopened or
511	supplemental claim payment. The contracts described in this
512	paragraph are not subject to the limitations in paragraph (b).
513	(b)  A public adjuster may not charge, agree to, or accept
514	any compensation, payment, commission, fee, or other thing of
515	value in excess of:
516	1.  Ten percent of the amount of insurance claim payments
517	made by the insurer for claims based on events that are the
518	subject of a declaration of a state of emergency by the
519	Governor. This provision applies to claims made during the year
520	after the declaration of emergency. After that year, the
521	limitations in subparagraph 2. apply.
522	2.  Twenty percent of the amount of insurance claim
523	payments made by the insurer for claims that are not based on
524	events that are the subject of a declaration of a state of
525	emergency by the Governor.
526	(12)  Each public adjuster must shall provide to the
527	claimant or insured a written estimate of the loss to assist in
528	the submission of a proof of loss or any other claim for payment
529	of insurance proceeds. The public adjuster shall retain such
530	written estimate for at least 5 years and shall make the such
531	estimate available to the claimant or insured and the department
532	upon request.
533	(13)  A public adjuster, public adjuster apprentice, or any
534	person acting on behalf of a public adjuster or apprentice may
535	not accept referrals of business from any person with whom the
536	public adjuster conducts business if there is any form or manner
537	of agreement to compensate the person, whether directly or
538	indirectly, for referring business to the public adjuster. A
539	public adjuster may not compensate any person, except for
540	another public adjuster, whether directly or indirectly, for the
541	principal purpose of referring business to the public adjuster.
542	(14)  A company employee adjuster, independent adjuster,
543	attorney, investigator, or other persons acting on behalf of an
544	insurer that needs access to an insured or claimant or to the
545	insured property that is the subject of a claim must provide at
546	least 48 hours' notice to the insured or claimant, public
547	adjuster, or legal representative before scheduling a meeting
548	with the claimant or an onsite inspection of the insured
549	property. The insured or claimant may deny access to the
550	property if the notice has not been provided. The insured or
551	claimant may waive the 48-hour notice.
552	(15)  A public adjuster must ensure prompt notice of
553	property loss claims submitted to an insurer by or through a
554	public adjuster or on which a public adjuster represents the
555	insured at the time the claim or notice of loss is submitted to
556	the insurer. The public adjuster must ensure that notice is
557	given to the insurer, the public adjuster's contract is provided
558	to the insurer, the property is available for inspection of the
559	loss or damage by the insurer, and the insurer is given an
560	opportunity to interview the insured directly about the loss and
561	claim. The insurer must be allowed to obtain necessary
562	information to investigate and respond to the claim.
563	(a)  The insurer may not exclude the public adjuster from
564	its in-person meetings with the insured. The insurer shall meet
565	or communicate with the public adjuster in an effort to reach
566	agreement as to the scope of the covered loss under the
567	insurance policy. This section does not impair the terms and
568	conditions of the insurance policy in effect at the time the
569	claim is filed.
570	(b)  A public adjuster may not restrict or prevent an
571	insurer, company employee adjuster, independent adjuster,
572	attorney, investigator, or other person acting on behalf of the
573	insurer from having reasonable access at reasonable times to an
574	insured or claimant or to the insured property that is the
575	subject of a claim.
576	(c)  A public adjuster may not act or fail to reasonably
577	act in any manner that obstructs or prevents an insurer or
578	insurer's adjuster from timely conducting an inspection of any
579	part of the insured property for which there is a claim for loss
580	or damage. The public adjuster representing the insured may be
581	present for the insurer's inspection, but if the unavailability
582	of the public adjuster otherwise delays the insurer's timely
583	inspection of the property, the public adjuster or the insured
584	must allow the insurer to have access to the property without
585	the participation or presence of the public adjuster or insured
586	in order to facilitate the insurer's prompt inspection of the
587	loss or damage.
588	(16)  A licensed contractor under part I of chapter 489, or
589	a subcontractor, may not adjust a claim on behalf of an insured
590	unless licensed and compliant as a public adjuster under this
591	chapter. However, the contractor may discuss or explain a bid
592	for construction or repair of covered property with the
593	residential property owner who has suffered loss or damage
594	covered by a property insurance policy, or the insurer of such
595	property, if the contractor is doing so for the usual and
596	customary fees applicable to the work to be performed as stated
597	in the contract between the contractor and the insured.
598	(17)  The provisions of subsections (5)-(16) (5)-(13) apply
599	only to residential property insurance policies and condominium
600	unit owner association policies as defined in s. 718.111(11).
601	Section 7.  Effective January 1, 2012, subsection (6) of
602	section 626.8651, Florida Statutes, is amended to read:
603	626.8651  Public adjuster apprentice license;
604	qualifications.-
605	(6)  To qualify for licensure as a public adjuster, a
606	public adjuster apprentice must shall complete: at
607	(a)  A minimum of 100 hours of employment per month for 12
608	months of employment under the supervision of a licensed and
609	appointed all-lines public adjuster in order to qualify for
610	licensure as a public adjuster. The department may adopt rules
611	that establish standards for such employment requirements.
612	(b)  A minimum of 8 hours of continuing education specific
613	to the practice of a public adjuster, 2 hours of which must
614	relate to ethics. The continuing education must be designed to
615	inform the licensee about the current insurance laws of this
616	state for the purpose of enabling him or her to engage in
617	business as an insurance adjuster fairly and without injury to
618	the public and to adjust all claims in accordance with the
619	insurance contract and the laws of this state.
620	Section 8.  Effective January 1, 2012, section 626.8796,
621	Florida Statutes, is amended to read:
622	626.8796  Public adjuster contracts; fraud statement.-
623	(1)  All contracts for public adjuster services must be in
624	writing and must prominently display the following statement on
625	the contract: "Pursuant to s. 817.234, Florida Statutes, any
626	person who, with the intent to injure, defraud, or deceive an
627	any insurer or insured, prepares, presents, or causes to be
628	presented a proof of loss or estimate of cost or repair of
629	damaged property in support of a claim under an insurance policy
630	knowing that the proof of loss or estimate of claim or repairs
631	contains any false, incomplete, or misleading information
632	concerning any fact or thing material to the claim commits a
633	felony of the third degree, punishable as provided in s.
634	775.082, s. 775.083, or s. 775.084, Florida Statutes."
635	(2)  A public adjuster contract must contain the full name,
636	permanent business address, and license number of the public
637	adjuster; the full name of the public adjusting firm; and the
638	insured's full name and street address, together with a brief
639	description of the loss. The contract must state the percentage
640	of compensation for the public adjuster's services; the type of
641	claim, including an emergency claim, nonemergency claim, or
642	supplemental claim; the signatures of the public adjuster and
643	all named insureds; and the signature date. If all of the named
644	insureds' signatures are not available, the public adjuster must
645	submit an affidavit signed by the available named insureds
646	attesting that they have authority to enter into the contract
647	and settle all claim issues on behalf of the named insureds. An
648	unaltered copy of the executed contract must be remitted to the
649	insurer within 30 days after execution.
650	Section 9.  Effective June 1, 2011, section 626.70132,
651	Florida Statutes, is created to read:
652	626.70132  Notice of windstorm or hurricane claim.-A claim,
653	supplemental claim, or reopened claim under an insurance policy
654	that provides personal lines residential coverage, as defined in
655	s. 627.4025, for loss or damage caused by the peril of windstorm
656	or hurricane is barred unless notice of the claim, supplemental
657	claim, or reopened claim was given to the insurer in accordance
658	with the terms of the policy within 3 years after the hurricane
659	first made landfall or the windstorm caused the covered damage.
660	For purposes of this section, the term "supplemental claim" or
661	"reopened claim" means any additional claim for recovery from
662	the insurer for losses from the same hurricane or windstorm
663	which the insurer has previously adjusted pursuant to the
664	initial claim. This section does not affect any applicable
665	limitation on civil actions provided in s. 95.11 for claims,
666	supplemental claims, or reopened claims timely filed under this
667	section.
668	Section 10.  Subsections (4) and (5) of section 627.0613,
669	Florida Statutes, are amended to read:
670	627.0613  Consumer advocate.-The Chief Financial Officer
671	must appoint a consumer advocate who must represent the general
672	public of the state before the department and the office. The
673	consumer advocate must report directly to the Chief Financial
674	Officer, but is not otherwise under the authority of the
675	department or of any employee of the department. The consumer
676	advocate has such powers as are necessary to carry out the
677	duties of the office of consumer advocate, including, but not
678	limited to, the powers to:
679	(4)  Prepare an annual report card for each authorized
680	personal residential property insurer, on a form and using a
681	letter-grade scale developed by the commission by rule, which
682	grades each insurer based on the following factors:
683	(a)  The number and nature of consumer complaints, as a
684	market share ratio, received by the department against the
685	insurer.
686	(b)  The disposition of all complaints received by the
687	department.
688	(c)  The average length of time for payment of claims by
689	the insurer.
690	(d)  Any other factors the commission identifies as
691	assisting policyholders in making informed choices about
692	homeowner's insurance.
693	(5)  Prepare an annual budget for presentation to the
694	Legislature by the department, which budget must be adequate to
695	carry out the duties of the office of consumer advocate.
696	Section 11.  Section 627.062, Florida Statutes, is amended
697	to read:
698	627.062  Rate standards.-
699	(1)  The rates for all classes of insurance to which the
700	provisions of this part are applicable may shall not be
701	excessive, inadequate, or unfairly discriminatory.
702	(2)  As to all such classes of insurance:
703	(a)  Insurers or rating organizations shall establish and
704	use rates, rating schedules, or rating manuals that to allow the
705	insurer a reasonable rate of return on the such classes of
706	insurance written in this state. A copy of rates, rating
707	schedules, rating manuals, premium credits or discount
708	schedules, and surcharge schedules, and changes thereto, must
709	shall be filed with the office under one of the following
710	procedures except as provided in subparagraph 3.:
711	1.  If the filing is made at least 90 days before the
712	proposed effective date and the filing is not implemented during
713	the office's review of the filing and any proceeding and
714	judicial review, then such filing is shall be considered a "file
715	and use" filing. In such case, the office shall finalize its
716	review by issuance of an approval a notice of intent to approve
717	or a notice of intent to disapprove within 90 days after receipt
718	of the filing. The approval notice of intent to approve and the
719	notice of intent to disapprove constitute agency action for
720	purposes of the Administrative Procedure Act. Requests for
721	supporting information, requests for mathematical or mechanical
722	corrections, or notification to the insurer by the office of its
723	preliminary findings does shall not toll the 90-day period
724	during any such proceedings and subsequent judicial review. The
725	rate shall be deemed approved if the office does not issue an
726	approval a notice of intent to approve or a notice of intent to
727	disapprove within 90 days after receipt of the filing.
728	2.  If the filing is not made in accordance with the
729	provisions of subparagraph 1., such filing must shall be made as
730	soon as practicable, but within no later than 30 days after the
731	effective date, and is shall be considered a "use and file"
732	filing. An insurer making a "use and file" filing is potentially
733	subject to an order by the office to return to policyholders
734	those portions of rates found to be excessive, as provided in
735	paragraph (h).
736	3.  For all property insurance filings made or submitted
737	after January 25, 2007, but before December 31, 2010, an insurer
738	seeking a rate that is greater than the rate most recently
739	approved by the office shall make a "file and use" filing. For
740	purposes of this subparagraph, motor vehicle collision and
741	comprehensive coverages are not considered to be property
742	coverages.
743	(b)  Upon receiving a rate filing, the office shall review
744	the rate filing to determine if a rate is excessive, inadequate,
745	or unfairly discriminatory. In making that determination, the
746	office shall, in accordance with generally accepted and
747	reasonable actuarial techniques, consider the following factors:
748	1.  Past and prospective loss experience within and without
749	this state.
750	2.  Past and prospective expenses.
751	3.  The degree of competition among insurers for the risk
752	insured.
753	4.  Investment income reasonably expected by the insurer,
754	consistent with the insurer's investment practices, from
755	investable premiums anticipated in the filing, plus any other
756	expected income from currently invested assets representing the
757	amount expected on unearned premium reserves and loss reserves.
758	The commission may adopt rules using reasonable techniques of
759	actuarial science and economics to specify the manner in which
760	insurers shall calculate investment income attributable to such
761	classes of insurance written in this state and the manner in
762	which such investment income is shall be used to calculate
763	insurance rates. Such manner must shall contemplate allowances
764	for an underwriting profit factor and full consideration of
765	investment income which produce a reasonable rate of return;
766	however, investment income from invested surplus may not be
767	considered.
768	5.  The reasonableness of the judgment reflected in the
769	filing.
770	6.  Dividends, savings, or unabsorbed premium deposits
771	allowed or returned to Florida policyholders, members, or
772	subscribers.
773	7.  The adequacy of loss reserves.
774	8.  The cost of reinsurance. The office may shall not
775	disapprove a rate as excessive solely due to the insurer having
776	obtained catastrophic reinsurance to cover the insurer's
777	estimated 250-year probable maximum loss or any lower level of
778	loss.
779	9.  Trend factors, including trends in actual losses per
780	insured unit for the insurer making the filing.
781	10.  Conflagration and catastrophe hazards, if applicable.
782	11.  Projected hurricane losses, if applicable, which must
783	be estimated using a model or method found to be acceptable or
784	reliable by the Florida Commission on Hurricane Loss Projection
785	Methodology, and as further provided in s. 627.0628.
786	12.  A reasonable margin for underwriting profit and
787	contingencies.
788	13.  The cost of medical services, if applicable.
789	14.  Other relevant factors that affect which impact upon
790	the frequency or severity of claims or upon expenses.
791	(c)  In the case of fire insurance rates, consideration
792	must shall be given to the availability of water supplies and
793	the experience of the fire insurance business during a period of
794	not less than the most recent 5-year period for which such
795	experience is available.
796	(d)  If conflagration or catastrophe hazards are considered
797	given consideration by an insurer in its rates or rating plan,
798	including surcharges and discounts, the insurer shall establish
799	a reserve for that portion of the premium allocated to such
800	hazard and shall maintain the premium in a catastrophe reserve.
801	Any Removal of such premiums from the reserve for purposes other
802	than paying claims associated with a catastrophe or purchasing
803	reinsurance for catastrophes must be approved by shall be
804	subject to approval of the office. Any ceding commission
805	received by an insurer purchasing reinsurance for catastrophes
806	must shall be placed in the catastrophe reserve.
807	(e)  After consideration of the rate factors provided in
808	paragraphs (b), (c), and (d), the office may find a rate may be
809	found by the office to be excessive, inadequate, or unfairly
810	discriminatory based upon the following standards:
811	1.  Rates shall be deemed excessive if they are likely to
812	produce a profit from Florida business which that is
813	unreasonably high in relation to the risk involved in the class
814	of business or if expenses are unreasonably high in relation to
815	services rendered.
816	2.  Rates shall be deemed excessive if, among other things,
817	the rate structure established by a stock insurance company
818	provides for replenishment of surpluses from premiums, if when
819	the replenishment is attributable to investment losses.
820	3.  Rates shall be deemed inadequate if they are clearly
821	insufficient, together with the investment income attributable
822	to them, to sustain projected losses and expenses in the class
823	of business to which they apply.
824	4.  A rating plan, including discounts, credits, or
825	surcharges, shall be deemed unfairly discriminatory if it fails
826	to clearly and equitably reflect consideration of the
827	policyholder's participation in a risk management program
828	adopted pursuant to s. 627.0625.
829	5.  A rate shall be deemed inadequate as to the premium
830	charged to a risk or group of risks if discounts or credits are
831	allowed which exceed a reasonable reflection of expense savings
832	and reasonably expected loss experience from the risk or group
833	of risks.
834	6.  A rate shall be deemed unfairly discriminatory as to a
835	risk or group of risks if the application of premium discounts,
836	credits, or surcharges among such risks does not bear a
837	reasonable relationship to the expected loss and expense
838	experience among the various risks.
839	(f)  In reviewing a rate filing, the office may require the
840	insurer to provide, at the insurer's expense, all information
841	necessary to evaluate the condition of the company and the
842	reasonableness of the filing according to the criteria
843	enumerated in this section.
844	(g)  The office may at any time review a rate, rating
845	schedule, rating manual, or rate change; the pertinent records
846	of the insurer; and market conditions. If the office finds on a
847	preliminary basis that a rate may be excessive, inadequate, or
848	unfairly discriminatory, the office shall initiate proceedings
849	to disapprove the rate and shall so notify the insurer. However,
850	the office may not disapprove as excessive any rate for which it
851	has given final approval or which has been deemed approved for a
852	period of 1 year after the effective date of the filing unless
853	the office finds that a material misrepresentation or material
854	error was made by the insurer or was contained in the filing.
855	Upon being so notified, the insurer or rating organization
856	shall, within 60 days, file with the office all information that
857	which, in the belief of the insurer or organization, proves the
858	reasonableness, adequacy, and fairness of the rate or rate
859	change. The office shall issue an approval a notice of intent to
860	approve or a notice of intent to disapprove pursuant to the
861	procedures of paragraph (a) within 90 days after receipt of the
862	insurer's initial response. In such instances and in any
863	administrative proceeding relating to the legality of the rate,
864	the insurer or rating organization shall carry the burden of
865	proof by a preponderance of the evidence to show that the rate
866	is not excessive, inadequate, or unfairly discriminatory. After
867	the office notifies an insurer that a rate may be excessive,
868	inadequate, or unfairly discriminatory, unless the office
869	withdraws the notification, the insurer may shall not alter the
870	rate except to conform to with the office's notice until the
871	earlier of 120 days after the date the notification was provided
872	or 180 days after the date of implementing the implementation of
873	the rate. The office may, subject to chapter 120, may disapprove
874	without the 60-day notification any rate increase filed by an
875	insurer within the prohibited time period or during the time
876	that the legality of the increased rate is being contested.
877	(h)  If In the event the office finds that a rate or rate
878	change is excessive, inadequate, or unfairly discriminatory, the
879	office shall issue an order of disapproval specifying that a new
880	rate or rate schedule, which responds to the findings of the
881	office, be filed by the insurer. The office shall further order,
882	for any "use and file" filing made in accordance with
883	subparagraph (a)2., that premiums charged each policyholder
884	constituting the portion of the rate above that which was
885	actuarially justified be returned to the such policyholder in
886	the form of a credit or refund. If the office finds that an
887	insurer's rate or rate change is inadequate, the new rate or
888	rate schedule filed with the office in response to such a
889	finding is shall be applicable only to new or renewal business
890	of the insurer written on or after the effective date of the
891	responsive filing.
892	(i)  Except as otherwise specifically provided in this
893	chapter, the office may shall not, directly or indirectly:
894	1.  Prohibit any insurer, including any residual market
895	plan or joint underwriting association, from paying acquisition
896	costs based on the full amount of premium, as defined in s.
897	627.403, applicable to any policy, or prohibit any such insurer
898	from including the full amount of acquisition costs in a rate
899	filing; or.
900	2.  Impede, abridge, or otherwise compromise an insurer's
901	right to acquire policyholders, advertise, or appoint agents,
902	including the calculation, manner, or amount of such agent
903	commissions, if any.
904	(j)  With respect to residential property insurance rate
905	filings, the rate filing must account for mitigation measures
906	undertaken by policyholders to reduce hurricane losses.
907	(k)1.  An insurer may make a separate filing limited solely
908	to an adjustment of its rates for reinsurance or financing costs
909	incurred in the purchase of reinsurance or financing products to
910	replace or finance the payment of the amount covered by the
911	Temporary Increase in Coverage Limits (TICL) portion of the
912	Florida Hurricane Catastrophe Fund including replacement
913	reinsurance for the TICL reductions made pursuant to s.
914	215.555(17)(e); the actual cost paid due to the application of
915	the TICL premium factor pursuant to s. 215.555(17)(f); and the
916	actual cost paid due to the application of the cash build-up
917	factor pursuant to s. 215.555(5)(b) if the insurer:
918	a.  Elects to purchase financing products such as a
919	liquidity instrument or line of credit, in which case the cost
920	included in the filing for the liquidity instrument or line of
921	credit may not result in a premium increase exceeding 3 percent
922	for any individual policyholder. All costs contained in the
923	filing may not result in an overall premium increase of more
924	than 10 percent for any individual policyholder.
925	b.  An insurer that makes a separate filing relating to
926	reinsurance or financing products must include Includes in the
927	filing a copy of all of its reinsurance, liquidity instrument,
928	or line of credit contracts; proof of the billing or payment for
929	the contracts; and the calculation upon which the proposed rate
930	change is based demonstrating demonstrates that the costs meet
931	the criteria of this section and are not loaded for expenses or
932	profit for the insurer making the filing.
933	c.  Includes no other changes to its rates in the filing.
934	d.  Has not implemented a rate increase within the 6 months
935	immediately preceding the filing.
936	e.  Does not file for a rate increase under any other
937	paragraph within 6 months after making a filing under this
938	paragraph.
939	c.f.  An insurer that purchases reinsurance or financing
940	products from an affiliated company may make a separate filing
941	in compliance with this paragraph does so only if the costs for
942	such reinsurance or financing products are charged at or below
943	charges made for comparable coverage by nonaffiliated reinsurers
944	or financial entities making such coverage or financing products
945	available in this state.
946	2.  An insurer may only make only one filing per in any 12-
947	month period under this paragraph.
948	3.  An insurer that elects to implement a rate change under
949	this paragraph must file its rate filing with the office at
950	least 45 days before the effective date of the rate change.
951	After an insurer submits a complete filing that meets all of the
952	requirements of this paragraph, the office has 45 days after the
953	date of the filing to review the rate filing and determine if
954	the rate is excessive, inadequate, or unfairly discriminatory.
955
956	The provisions of this subsection do shall not apply to workers'
957	compensation, and employer's liability insurance, and to motor
958	vehicle insurance.
959	(3)(a)  For individual risks that are not rated in
960	accordance with the insurer's rates, rating schedules, rating
961	manuals, and underwriting rules filed with the office and that
962	which have been submitted to the insurer for individual rating,
963	the insurer must maintain documentation on each risk subject to
964	individual risk rating. The documentation must identify the
965	named insured and specify the characteristics and classification
966	of the risk supporting the reason for the risk being
967	individually risk rated, including any modifications to existing
968	approved forms to be used on the risk. The insurer must maintain
969	these records for a period of at least 5 years after the
970	effective date of the policy.
971	(b)  Individual risk rates and modifications to existing
972	approved forms are not subject to this part or part II, except
973	for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
974	627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
975	627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
976	627.4265, 627.427, and 627.428, but are subject to all other
977	applicable provisions of this code and rules adopted thereunder.
978	(c)  This subsection does not apply to private passenger
979	motor vehicle insurance.
980	(d)1.  The following categories or kinds of insurance and
981	types of commercial lines risks are not subject to paragraph
982	(2)(a) or paragraph (2)(f):
983	a.  Excess or umbrella.
984	b.  Surety and fidelity.
985	c.  Boiler and machinery and leakage and fire extinguishing
986	equipment.
987	d.  Errors and omissions.
988	e.  Directors and officers, employment practices, and
989	management liability.
990	f.  Intellectual property and patent infringement
991	liability.
992	g.  Advertising injury and Internet liability insurance.
993	h.  Property risks rated under a highly protected risks
994	rating plan.
995	i.  Any other commercial lines categories or kinds of
996	insurance or types of commercial lines risks that the office
997	determines should not be subject to paragraph (2)(a) or
998	paragraph (2)(f) because of the existence of a competitive
999	market for such insurance, similarity of such insurance to other
1000	categories or kinds of insurance not subject to paragraph (2)(a)
1001	or paragraph (2)(f), or to improve the general operational
1002	efficiency of the office.
1003	2.  Insurers or rating organizations shall establish and
1004	use rates, rating schedules, or rating manuals to allow the
1005	insurer a reasonable rate of return on insurance and risks
1006	described in subparagraph 1. which are written in this state.
1007	3.  An insurer must notify the office of any changes to
1008	rates for insurance and risks described in subparagraph 1.
1009	within no later than 30 days after the effective date of the
1010	change. The notice must include the name of the insurer, the
1011	type or kind of insurance subject to rate change, total premium
1012	written during the immediately preceding year by the insurer for
1013	the type or kind of insurance subject to the rate change, and
1014	the average statewide percentage change in rates. Underwriting
1015	files, premiums, losses, and expense statistics with regard to
1016	such insurance and risks described in subparagraph 1. written by
1017	an insurer must shall be maintained by the insurer and subject
1018	to examination by the office. Upon examination, the office
1019	shall, in accordance with generally accepted and reasonable
1020	actuarial techniques, shall consider the rate factors in
1021	paragraphs (2)(b), (c), and (d) and the standards in paragraph
1022	(2)(e) to determine if the rate is excessive, inadequate, or
1023	unfairly discriminatory.
1024	4.  A rating organization must notify the office of any
1025	changes to loss cost for insurance and risks described in
1026	subparagraph 1. within no later than 30 days after the effective
1027	date of the change. The notice must include the name of the
1028	rating organization, the type or kind of insurance subject to a
1029	loss cost change, loss costs during the immediately preceding
1030	year for the type or kind of insurance subject to the loss cost
1031	change, and the average statewide percentage change in loss
1032	cost. Loss and exposure statistics with regard to risks
1033	applicable to loss costs for a rating organization not subject
1034	to paragraph (2)(a) or paragraph (2)(f) must shall be maintained
1035	by the rating organization and are subject to examination by the
1036	office. Upon examination, the office shall, in accordance with
1037	generally accepted and reasonable actuarial techniques, shall
1038	consider the rate factors in paragraphs (2)(b)-(d) and the
1039	standards in paragraph (2)(e) to determine if the rate is
1040	excessive, inadequate, or unfairly discriminatory.
1041	5.  In reviewing a rate, the office may require the insurer
1042	to provide, at the insurer's expense, all information necessary
1043	to evaluate the condition of the company and the reasonableness
1044	of the rate according to the applicable criteria described in
1045	this section.
1046	(4)  The establishment of any rate, rating classification,
1047	rating plan or schedule, or variation thereof in violation of
1048	part IX of chapter 626 is also in violation of this section. In
1049	order to enhance the ability of consumers to compare premiums
1050	and to increase the accuracy and usefulness of rate-comparison
1051	information provided by the office to the public, the office
1052	shall develop a proposed standard rating territory plan to be
1053	used by all authorized property and casualty insurers for
1054	residential property insurance. In adopting the proposed plan,
1055	the office may consider geographical characteristics relevant to
1056	risk, county lines, major roadways, existing rating territories
1057	used by a significant segment of the market, and other relevant
1058	factors. Such plan shall be submitted to the President of the
1059	Senate and the Speaker of the House of Representatives by
1060	January 15, 2006. The plan may not be implemented unless
1061	authorized by further act of the Legislature.
1062	(5)  With respect to a rate filing involving coverage of
1063	the type for which the insurer is required to pay a
1064	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1065	the insurer may fully recoup in its property insurance premiums
1066	any reimbursement premiums paid to the Florida Hurricane
1067	Catastrophe fund, together with reasonable costs of other
1068	reinsurance; however, but except as otherwise provided in this
1069	section, the insurer may not recoup reinsurance costs that
1070	duplicate coverage provided by the Florida Hurricane Catastrophe
1071	fund. An insurer may not recoup more than 1 year of
1072	reimbursement premium at a time. Any under-recoupment from the
1073	prior year may be added to the following year's reimbursement
1074	premium, and any over-recoupment must shall be subtracted from
1075	the following year's reimbursement premium.
1076	(6)(a)  If an insurer requests an administrative hearing
1077	pursuant to s. 120.57 related to a rate filing under this
1078	section, the director of the Division of Administrative Hearings
1079	shall expedite the hearing and assign an administrative law
1080	judge who shall commence the hearing within 30 days after the
1081	receipt of the formal request and shall enter a recommended
1082	order within 30 days after the hearing or within 30 days after
1083	receipt of the hearing transcript by the administrative law
1084	judge, whichever is later. Each party shall have be allowed 10
1085	days in which to submit written exceptions to the recommended
1086	order. The office shall enter a final order within 30 days after
1087	the entry of the recommended order. The provisions of this
1088	paragraph may be waived upon stipulation of all parties.
1089	(b)  Upon entry of a final order, the insurer may request a
1090	expedited appellate review pursuant to the Florida Rules of
1091	Appellate Procedure. It is the intent of the Legislature that
1092	the First District Court of Appeal grant an insurer's request
1093	for an expedited appellate review.
1094	(7)(a)  The provisions of this subsection apply only with
1095	respect to rates for medical malpractice insurance and shall
1096	control to the extent of any conflict with other provisions of
1097	this section.
1098	(a)(b)  Any portion of a judgment entered or settlement
1099	paid as a result of a statutory or common-law bad faith action
1100	and any portion of a judgment entered which awards punitive
1101	damages against an insurer may not be included in the insurer's
1102	rate base, and shall not be used to justify a rate or rate
1103	change. Any common-law bad faith action identified as such, any
1104	portion of a settlement entered as a result of a statutory or
1105	common-law action, or any portion of a settlement wherein an
1106	insurer agrees to pay specific punitive damages may not be used
1107	to justify a rate or rate change. The portion of the taxable
1108	costs and attorney's fees which is identified as being related
1109	to the bad faith and punitive damages in these judgments and
1110	settlements may not be included in the insurer's rate base and
1111	used may not be utilized to justify a rate or rate change.
1112	(b)(c)  Upon reviewing a rate filing and determining
1113	whether the rate is excessive, inadequate, or unfairly
1114	discriminatory, the office shall consider, in accordance with
1115	generally accepted and reasonable actuarial techniques, past and
1116	present prospective loss experience, either using loss
1117	experience solely for this state or giving greater credibility
1118	to this state's loss data after applying actuarially sound
1119	methods of assigning credibility to such data.
1120	(c)(d)  Rates shall be deemed excessive if, among other
1121	standards established by this section, the rate structure
1122	provides for replenishment of reserves or surpluses from
1123	premiums when the replenishment is attributable to investment
1124	losses.
1125	(d)(e)  The insurer must apply a discount or surcharge
1126	based on the health care provider's loss experience or shall
1127	establish an alternative method giving due consideration to the
1128	provider's loss experience. The insurer must include in the
1129	filing a copy of the surcharge or discount schedule or a
1130	description of the alternative method used, and must provide a
1131	copy of such schedule or description, as approved by the office,
1132	to policyholders at the time of renewal and to prospective
1133	policyholders at the time of application for coverage.
1134	(e)(f)  Each medical malpractice insurer must make a rate
1135	filing under this section, sworn to by at least two executive
1136	officers of the insurer, at least once each calendar year.
1137	(8)(a)1.  No later than 60 days after the effective date of
1138	medical malpractice legislation enacted during the 2003 Special
1139	Session D of the Florida Legislature, the office shall calculate
1140	a presumed factor that reflects the impact that the changes
1141	contained in such legislation will have on rates for medical
1142	malpractice insurance and shall issue a notice informing all
1143	insurers writing medical malpractice coverage of such presumed
1144	factor. In determining the presumed factor, the office shall use
1145	generally accepted actuarial techniques and standards provided
1146	in this section in determining the expected impact on losses,
1147	expenses, and investment income of the insurer. To the extent
1148	that the operation of a provision of medical malpractice
1149	legislation enacted during the 2003 Special Session D of the
1150	Florida Legislature is stayed pending a constitutional
1151	challenge, the impact of that provision shall not be included in
1152	the calculation of a presumed factor under this subparagraph.
1153	2.  No later than 60 days after the office issues its
1154	notice of the presumed rate change factor under subparagraph 1.,
1155	each insurer writing medical malpractice coverage in this state
1156	shall submit to the office a rate filing for medical malpractice
1157	insurance, which will take effect no later than January 1, 2004,
1158	and apply retroactively to policies issued or renewed on or
1159	after the effective date of medical malpractice legislation
1160	enacted during the 2003 Special Session D of the Florida
1161	Legislature. Except as authorized under paragraph (b), the
1162	filing shall reflect an overall rate reduction at least as great
1163	as the presumed factor determined under subparagraph 1. With
1164	respect to policies issued on or after the effective date of
1165	such legislation and prior to the effective date of the rate
1166	filing required by this subsection, the office shall order the
1167	insurer to make a refund of the amount that was charged in
1168	excess of the rate that is approved.
1169	(b)  Any insurer or rating organization that contends that
1170	the rate provided for in paragraph (a) is excessive, inadequate,
1171	or unfairly discriminatory shall separately state in its filing
1172	the rate it contends is appropriate and shall state with
1173	specificity the factors or data that it contends should be
1174	considered in order to produce such appropriate rate. The
1175	insurer or rating organization shall be permitted to use all of
1176	the generally accepted actuarial techniques provided in this
1177	section in making any filing pursuant to this subsection. The
1178	office shall review each such exception and approve or
1179	disapprove it prior to use. It shall be the insurer's burden to
1180	actuarially justify any deviations from the rates required to be
1181	filed under paragraph (a). The insurer making a filing under
1182	this paragraph shall include in the filing the expected impact
1183	of medical malpractice legislation enacted during the 2003
1184	Special Session D of the Florida Legislature on losses,
1185	expenses, and rates.
1186	(c)  If any provision of medical malpractice legislation
1187	enacted during the 2003 Special Session D of the Florida
1188	Legislature is held invalid by a court of competent
1189	jurisdiction, the office shall permit an adjustment of all
1190	medical malpractice rates filed under this section to reflect
1191	the impact of such holding on such rates so as to ensure that
1192	the rates are not excessive, inadequate, or unfairly
1193	discriminatory.
1194	(d)  Rates approved on or before July 1, 2003, for medical
1195	malpractice insurance shall remain in effect until the effective
1196	date of a new rate filing approved under this subsection.
1197	(e)  The calculation and notice by the office of the
1198	presumed factor pursuant to paragraph (a) is not an order or
1199	rule that is subject to chapter 120. If the office enters into a
1200	contract with an independent consultant to assist the office in
1201	calculating the presumed factor, such contract shall not be
1202	subject to the competitive solicitation requirements of s.
1203	287.057.
1204	(8)(9)(a)  The chief executive officer or chief financial
1205	officer of a property insurer and the chief actuary of a
1206	property insurer must certify under oath and subject to the
1207	penalty of perjury, on a form approved by the commission, the
1208	following information, which must accompany a rate filing:
1209	1.  The signing officer and actuary have reviewed the rate
1210	filing;
1211	2.  Based on the signing officer's and actuary's knowledge,
1212	the rate filing does not contain any untrue statement of a
1213	material fact or omit to state a material fact necessary in
1214	order to make the statements made, in light of the circumstances
1215	under which such statements were made, not misleading;
1216	3.  Based on the signing officer's and actuary's knowledge,
1217	the information and other factors described in paragraph (2)(b),
1218	including, but not limited to, investment income, fairly present
1219	in all material respects the basis of the rate filing for the
1220	periods presented in the filing; and
1221	4.  Based on the signing officer's and actuary's knowledge,
1222	the rate filing reflects all premium savings that are reasonably
1223	expected to result from legislative enactments and are in
1224	accordance with generally accepted and reasonable actuarial
1225	techniques.
1226	(b)  A signing officer or actuary who knowingly makes
1227	making a false certification under this subsection commits a
1228	violation of s. 626.9541(1)(e) and is subject to the penalties
1229	under s. 626.9521.
1230	(c)  Failure to provide such certification by the officer
1231	and actuary shall result in the rate filing being disapproved
1232	without prejudice to be refiled.
1233	(d)  A certification made pursuant to paragraph (a) is not
1234	rendered false if, after making the subject rate filing, the
1235	insurer provides the office with additional or supplementary
1236	information pursuant to a formal or informal request from the
1237	office.
1238	(e)(d)  The commission may adopt rules and forms pursuant
1239	to ss. 120.536(1) and 120.54 to administer this subsection.
1240	(9)(10)  The burden is on the office to establish that
1241	rates are excessive for personal lines residential coverage with
1242	a dwelling replacement cost of $1 million or more or for a
1243	single condominium unit with a combined dwelling and contents
1244	replacement cost of $1 million or more. Upon request of the
1245	office, the insurer shall provide to the office such loss and
1246	expense information as the office reasonably needs to meet this
1247	burden.
1248	(10)(11)  Any interest paid pursuant to s. 627.70131(5) may
1249	not be included in the insurer's rate base and may not be used
1250	to justify a rate or rate change.
1251	Section 12.  Subsections (1) and (5) and paragraph (b) of
1252	subsection (8) of section 627.0629, Florida Statutes, are
1253	amended to read:
1254	627.0629  Residential property insurance; rate filings.-
1255	(1)(a)  It is the intent of the Legislature that insurers
1256	must provide the most accurate pricing signals available in
1257	order savings to encourage consumers to who install or implement
1258	windstorm damage mitigation techniques, alterations, or
1259	solutions to their properties to prevent windstorm losses. It is
1260	also the intent of the Legislature that implementation of
1261	mitigation discounts not result in a loss of income to the
1262	insurers granting the discounts, so that the aggregate of such
1263	discounts not exceed the aggregate of the expected reduction in
1264	loss attributable to the mitigation efforts for which discounts
1265	are granted. A rate filing for residential property insurance
1266	must include actuarially reasonable discounts, credits, debits,
1267	or other rate differentials, or appropriate reductions in
1268	deductibles, which provide the proper pricing for all
1269	properties. The rate filing must take into account the presence
1270	or absence of on which fixtures or construction techniques
1271	demonstrated to reduce the amount of loss in a windstorm which
1272	have been installed or implemented. The fixtures or construction
1273	techniques must shall include, but not be limited to, fixtures
1274	or construction techniques that which enhance roof strength,
1275	roof covering performance, roof-to-wall strength, wall-to-floor-
1276	to-foundation strength, opening protection, and window, door,
1277	and skylight strength. Credits, debits, discounts, or other rate
1278	differentials, or appropriate reductions or increases in
1279	deductibles, which recognize the presence or absence of for
1280	fixtures and construction techniques that which meet the minimum
1281	requirements of the Florida Building Code must be included in
1282	the rate filing. If an insurer demonstrates that the aggregate
1283	of its mitigation discounts results in a reduction to revenue
1284	which exceeds the reduction of the aggregate loss that is
1285	expected to result from the mitigation, the insurer may recover
1286	the lost revenue through an increase in its base rates. All
1287	insurance companies must make a rate filing which includes the
1288	credits, discounts, or other rate differentials or reductions in
1289	deductibles by February 28, 2003. By July 1, 2007, the office
1290	shall reevaluate the discounts, credits, other rate
1291	differentials, and appropriate reductions in deductibles for
1292	fixtures and construction techniques that meet the minimum
1293	requirements of the Florida Building Code, based upon actual
1294	experience or any other loss relativity studies available to the
1295	office. The office shall determine the discounts, credits,
1296	debits, other rate differentials, and appropriate reductions or
1297	increases in deductibles that reflect the full actuarial value
1298	of such revaluation, which may be used by insurers in rate
1299	filings.
1300	(b)  By February 1, 2011, the Office of Insurance
1301	Regulation, in consultation with the Department of Financial
1302	Services and the Department of Community Affairs, shall develop
1303	and make publicly available a proposed method for insurers to
1304	establish discounts, credits, or other rate differentials for
1305	hurricane mitigation measures which directly correlate to the
1306	numerical rating assigned to a structure pursuant to the uniform
1307	home grading scale adopted by the Financial Services Commission
1308	pursuant to s. 215.55865, including any proposed changes to the
1309	uniform home grading scale. By October 1, 2011, the commission
1310	shall adopt rules requiring insurers to make rate filings for
1311	residential property insurance which revise insurers' discounts,
1312	credits, or other rate differentials for hurricane mitigation
1313	measures so that such rate differentials correlate directly to
1314	the uniform home grading scale. The rules may include such
1315	changes to the uniform home grading scale as the commission
1316	determines are necessary, and may specify the minimum required
1317	discounts, credits, or other rate differentials. Such rate
1318	differentials must be consistent with generally accepted
1319	actuarial principles and wind-loss mitigation studies. The rules
1320	shall allow a period of at least 2 years after the effective
1321	date of the revised mitigation discounts, credits, or other rate
1322	differentials for a property owner to obtain an inspection or
1323	otherwise qualify for the revised credit, during which time the
1324	insurer shall continue to apply the mitigation credit that was
1325	applied immediately prior to the effective date of the revised
1326	credit. Discounts, credits, and other rate differentials
1327	established for rate filings under this paragraph shall
1328	supersede, after adoption, the discounts, credits, and other
1329	rate differentials included in rate filings under paragraph (a).
1330	(5)  In order to provide an appropriate transition period,
1331	an insurer may, in its sole discretion, implement an approved
1332	rate filing for residential property insurance over a period of
1333	years. Such An insurer electing to phase in its rate filing must
1334	provide an informational notice to the office setting out its
1335	schedule for implementation of the phased-in rate filing. The An
1336	insurer may include in its rate the actual cost of private
1337	market reinsurance that corresponds to available coverage of the
1338	Temporary Increase in Coverage Limits, TICL, from the Florida
1339	Hurricane Catastrophe Fund. The insurer may also include the
1340	cost of reinsurance to replace the TICL reduction implemented
1341	pursuant to s. 215.555(17)(d)9. However, this cost for
1342	reinsurance may not include any expense or profit load or result
1343	in a total annual base rate increase in excess of 10 percent.
1344	(8)  EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
1345	SOUNDNESS.-
1346	(b)  To the extent that funds are provided for this purpose
1347	in the General Appropriations Act, the Legislature hereby
1348	authorizes the establishment of a program to be administered by
1349	the Citizens Property Insurance Corporation for homeowners
1350	insured in the coastal high-risk account is authorized.
1351	Section 13.  Paragraphs (b), (c), (d), (v), and (y) of
1352	subsection (6) of section 627.351, Florida Statutes, are amended
1353	to read:
1354	627.351  Insurance risk apportionment plans.-
1355	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
1356	(b)1.  All insurers authorized to write one or more subject
1357	lines of business in this state are subject to assessment by the
1358	corporation and, for the purposes of this subsection, are
1359	referred to collectively as "assessable insurers." Insurers
1360	writing one or more subject lines of business in this state
1361	pursuant to part VIII of chapter 626 are not assessable
1362	insurers, but insureds who procure one or more subject lines of
1363	business in this state pursuant to part VIII of chapter 626 are
1364	subject to assessment by the corporation and are referred to
1365	collectively as "assessable insureds." An authorized insurer's
1366	assessment liability begins shall begin on the first day of the
1367	calendar year following the year in which the insurer was issued
1368	a certificate of authority to transact insurance for subject
1369	lines of business in this state and terminates shall terminate 1
1370	year after the end of the first calendar year during which the
1371	insurer no longer holds a certificate of authority to transact
1372	insurance for subject lines of business in this state.
1373	2.a.  All revenues, assets, liabilities, losses, and
1374	expenses of the corporation shall be divided into three separate
1375	accounts as follows:
1376	(I)  A personal lines account for personal residential
1377	policies issued by the corporation, or issued by the Residential
1378	Property and Casualty Joint Underwriting Association and renewed
1379	by the corporation, which provides that provide comprehensive,
1380	multiperil coverage on risks that are not located in areas
1381	eligible for coverage by in the Florida Windstorm Underwriting
1382	Association as those areas were defined on January 1, 2002, and
1383	for such policies that do not provide coverage for the peril of
1384	wind on risks that are located in such areas;
1385	(II)  A commercial lines account for commercial residential
1386	and commercial nonresidential policies issued by the
1387	corporation, or issued by the Residential Property and Casualty
1388	Joint Underwriting Association and renewed by the corporation,
1389	which provides that provide coverage for basic property perils
1390	on risks that are not located in areas eligible for coverage by
1391	in the Florida Windstorm Underwriting Association as those areas
1392	were defined on January 1, 2002, and for such policies that do
1393	not provide coverage for the peril of wind on risks that are
1394	located in such areas; and
1395	(III)  A coastal high-risk account for personal residential
1396	policies and commercial residential and commercial
1397	nonresidential property policies issued by the corporation, or
1398	transferred to the corporation, which provides that provide
1399	coverage for the peril of wind on risks that are located in
1400	areas eligible for coverage by in the Florida Windstorm
1401	Underwriting Association as those areas were defined on January
1402	1, 2002. The corporation may offer policies that provide
1403	multiperil coverage and the corporation shall continue to offer
1404	policies that provide coverage only for the peril of wind for
1405	risks located in areas eligible for coverage in the coastal
1406	high-risk account. In issuing multiperil coverage, the
1407	corporation may use its approved policy forms and rates for the
1408	personal lines account. An applicant or insured who is eligible
1409	to purchase a multiperil policy from the corporation may
1410	purchase a multiperil policy from an authorized insurer without
1411	prejudice to the applicant's or insured's eligibility to
1412	prospectively purchase a policy that provides coverage only for
1413	the peril of wind from the corporation. An applicant or insured
1414	who is eligible for a corporation policy that provides coverage
1415	only for the peril of wind may elect to purchase or retain such
1416	policy and also purchase or retain coverage excluding wind from
1417	an authorized insurer without prejudice to the applicant's or
1418	insured's eligibility to prospectively purchase a policy that
1419	provides multiperil coverage from the corporation. It is the
1420	goal of the Legislature that there would be an overall average
1421	savings of 10 percent or more for a policyholder who currently
1422	has a wind-only policy with the corporation, and an ex-wind
1423	policy with a voluntary insurer or the corporation, and who then
1424	obtains a multiperil policy from the corporation. It is the
1425	intent of the Legislature that the offer of multiperil coverage
1426	in the coastal high-risk account be made and implemented in a
1427	manner that does not adversely affect the tax-exempt status of
1428	the corporation or creditworthiness of or security for currently
1429	outstanding financing obligations or credit facilities of the
1430	coastal high-risk account, the personal lines account, or the
1431	commercial lines account. The coastal high-risk account must
1432	also include quota share primary insurance under subparagraph
1433	(c)2. The area eligible for coverage under the coastal high-risk
1434	account also includes the area within Port Canaveral, which is
1435	bordered on the south by the City of Cape Canaveral, bordered on
1436	the west by the Banana River, and bordered on the north by
1437	Federal Government property.
1438	b.  The three separate accounts must be maintained as long
1439	as financing obligations entered into by the Florida Windstorm
1440	Underwriting Association or Residential Property and Casualty
1441	Joint Underwriting Association are outstanding, in accordance
1442	with the terms of the corresponding financing documents. If When
1443	the financing obligations are no longer outstanding, in
1444	accordance with the terms of the corresponding financing
1445	documents, the corporation may use a single account for all
1446	revenues, assets, liabilities, losses, and expenses of the
1447	corporation. Consistent with the requirement of this
1448	subparagraph and prudent investment policies that minimize the
1449	cost of carrying debt, the board shall exercise its best efforts
1450	to retire existing debt or to obtain the approval of necessary
1451	parties to amend the terms of existing debt, so as to structure
1452	the most efficient plan to consolidate the three separate
1453	accounts into a single account.
1454	c.  Creditors of the Residential Property and Casualty
1455	Joint Underwriting Association and of the accounts specified in
1456	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1457	and recourse to, those the accounts referred to in sub-sub-
1458	subparagraphs a.(I) and (II) and shall have no claim against, or
1459	recourse to, the account referred to in sub-sub-subparagraph
1460	a.(III). Creditors of the Florida Windstorm Underwriting
1461	Association shall have a claim against, and recourse to, the
1462	account referred to in sub-sub-subparagraph a.(III) and shall
1463	have no claim against, or recourse to, the accounts referred to
1464	in sub-sub-subparagraphs a.(I) and (II).
1465	d.  Revenues, assets, liabilities, losses, and expenses not
1466	attributable to particular accounts shall be prorated among the
1467	accounts.
1468	e.  The Legislature finds that the revenues of the
1469	corporation are revenues that are necessary to meet the
1470	requirements set forth in documents authorizing the issuance of
1471	bonds under this subsection.
1472	f.  No part of the income of the corporation may inure to
1473	the benefit of any private person.
1474	3.  With respect to a deficit in an account:
1475	a.  After accounting for the Citizens policyholder
1476	surcharge imposed under sub-subparagraph h. i., if when the
1477	remaining projected deficit incurred in a particular calendar
1478	year:
1479	(I)  Is not greater than 6 percent of the aggregate
1480	statewide direct written premium for the subject lines of
1481	business for the prior calendar year, the entire deficit shall
1482	be recovered through regular assessments of assessable insurers
1483	under paragraph (q) and assessable insureds.
1484	(II)b.  After accounting for the Citizens policyholder
1485	surcharge imposed under sub-subparagraph i., when the remaining
1486	projected deficit incurred in a particular calendar year Exceeds
1487	6 percent of the aggregate statewide direct written premium for
1488	the subject lines of business for the prior calendar year, the
1489	corporation shall levy regular assessments on assessable
1490	insurers under paragraph (q) and on assessable insureds in an
1491	amount equal to the greater of 6 percent of the deficit or 6
1492	percent of the aggregate statewide direct written premium for
1493	the subject lines of business for the prior calendar year. Any
1494	remaining deficit shall be recovered through emergency
1495	assessments under sub-subparagraph c. d.
1496	b.c.  Each assessable insurer's share of the amount being
1497	assessed under sub-subparagraph a. must or sub-subparagraph b.
1498	shall be in the proportion that the assessable insurer's direct
1499	written premium for the subject lines of business for the year
1500	preceding the assessment bears to the aggregate statewide direct
1501	written premium for the subject lines of business for that year.
1502	The applicable assessment percentage applicable to each
1503	assessable insured is the ratio of the amount being assessed
1504	under sub-subparagraph a. or sub-subparagraph b. to the
1505	aggregate statewide direct written premium for the subject lines
1506	of business for the prior year. Assessments levied by the
1507	corporation on assessable insurers under sub-subparagraphs a.
1508	and b. must shall be paid as required by the corporation's plan
1509	of operation and paragraph (q),. Assessments levied by the
1510	corporation on assessable insureds under sub-subparagraphs a.
1511	and b. shall be collected by the surplus lines agent at the time
1512	the surplus lines agent collects the surplus lines tax required
1513	by s. 626.932, and shall be paid to the Florida Surplus Lines
1514	Service Office at the time the surplus lines agent pays the
1515	surplus lines tax to that the Florida Surplus Lines Service
1516	office. Upon receipt of regular assessments from surplus lines
1517	agents, the Florida Surplus Lines Service Office shall transfer
1518	the assessments directly to the corporation as determined by the
1519	corporation.
1520	c.d.  Upon a determination by the board of governors that a
1521	deficit in an account exceeds the amount that will be recovered
1522	through regular assessments under sub-subparagraph a. or sub-
1523	subparagraph b., plus the amount that is expected to be
1524	recovered through surcharges under sub-subparagraph h. i., as to
1525	the remaining projected deficit the board shall levy, after
1526	verification by the office, shall levy emergency assessments,
1527	for as many years as necessary to cover the deficits, to be
1528	collected by assessable insurers and the corporation and
1529	collected from assessable insureds upon issuance or renewal of
1530	policies for subject lines of business, excluding National Flood
1531	Insurance policies. The amount of the emergency assessment
1532	collected in a particular year must shall be a uniform
1533	percentage of that year's direct written premium for subject
1534	lines of business and all accounts of the corporation, excluding
1535	National Flood Insurance Program policy premiums, as annually
1536	determined by the board and verified by the office. The office
1537	shall verify the arithmetic calculations involved in the board's
1538	determination within 30 days after receipt of the information on
1539	which the determination was based. Notwithstanding any other
1540	provision of law, the corporation and each assessable insurer
1541	that writes subject lines of business shall collect emergency
1542	assessments from its policyholders without such obligation being
1543	affected by any credit, limitation, exemption, or deferment.
1544	Emergency assessments levied by the corporation on assessable
1545	insureds shall be collected by the surplus lines agent at the
1546	time the surplus lines agent collects the surplus lines tax
1547	required by s. 626.932 and shall be paid to the Florida Surplus
1548	Lines Service Office at the time the surplus lines agent pays
1549	the surplus lines tax to that the Florida Surplus Lines Service
1550	office. The emergency assessments so collected shall be
1551	transferred directly to the corporation on a periodic basis as
1552	determined by the corporation and shall be held by the
1553	corporation solely in the applicable account. The aggregate
1554	amount of emergency assessments levied for an account under this
1555	sub-subparagraph in any calendar year may, at the discretion of
1556	the board of governors, be less than but may not exceed the
1557	greater of 10 percent of the amount needed to cover the deficit,
1558	plus interest, fees, commissions, required reserves, and other
1559	costs associated with financing of the original deficit, or 10
1560	percent of the aggregate statewide direct written premium for
1561	subject lines of business and for all accounts of the
1562	corporation for the prior year, plus interest, fees,
1563	commissions, required reserves, and other costs associated with
1564	financing the deficit.
1565	d.e.  The corporation may pledge the proceeds of
1566	assessments, projected recoveries from the Florida Hurricane
1567	Catastrophe Fund, other insurance and reinsurance recoverables,
1568	policyholder surcharges and other surcharges, and other funds
1569	available to the corporation as the source of revenue for and to
1570	secure bonds issued under paragraph (q), bonds or other
1571	indebtedness issued under subparagraph (c)3., or lines of credit
1572	or other financing mechanisms issued or created under this
1573	subsection, or to retire any other debt incurred as a result of
1574	deficits or events giving rise to deficits, or in any other way
1575	that the board determines will efficiently recover such
1576	deficits. The purpose of the lines of credit or other financing
1577	mechanisms is to provide additional resources to assist the
1578	corporation in covering claims and expenses attributable to a
1579	catastrophe. As used in this subsection, the term "assessments"
1580	includes regular assessments under sub-subparagraph a., sub-
1581	subparagraph b., or subparagraph (q)1. and emergency assessments
1582	under sub-subparagraph d. Emergency assessments collected under
1583	sub-subparagraph d. are not part of an insurer's rates, are not
1584	premium, and are not subject to premium tax, fees, or
1585	commissions; however, failure to pay the emergency assessment
1586	shall be treated as failure to pay premium. The emergency
1587	assessments under sub-subparagraph c. d. shall continue as long
1588	as any bonds issued or other indebtedness incurred with respect
1589	to a deficit for which the assessment was imposed remain
1590	outstanding, unless adequate provision has been made for the
1591	payment of such bonds or other indebtedness pursuant to the
1592	documents governing such bonds or other indebtedness.
1593	e.f.  As used in this subsection for purposes of any
1594	deficit incurred on or after January 25, 2007, the term "subject
1595	lines of business" means insurance written by assessable
1596	insurers or procured by assessable insureds for all property and
1597	casualty lines of business in this state, but not including
1598	workers' compensation or medical malpractice. As used in this
1599	the sub-subparagraph, the term "property and casualty lines of
1600	business" includes all lines of business identified on Form 2,
1601	Exhibit of Premiums and Losses, in the annual statement required
1602	of authorized insurers under by s. 624.424 and any rule adopted
1603	under this section, except for those lines identified as
1604	accident and health insurance and except for policies written
1605	under the National Flood Insurance Program or the Federal Crop
1606	Insurance Program. For purposes of this sub-subparagraph, the
1607	term "workers' compensation" includes both workers' compensation
1608	insurance and excess workers' compensation insurance.
1609	f.g.  The Florida Surplus Lines Service Office shall
1610	determine annually the aggregate statewide written premium in
1611	subject lines of business procured by assessable insureds and
1612	shall report that information to the corporation in a form and
1613	at a time the corporation specifies to ensure that the
1614	corporation can meet the requirements of this subsection and the
1615	corporation's financing obligations.
1616	g.h.  The Florida Surplus Lines Service Office shall verify
1617	the proper application by surplus lines agents of assessment
1618	percentages for regular assessments and emergency assessments
1619	levied under this subparagraph on assessable insureds and shall
1620	assist the corporation in ensuring the accurate, timely
1621	collection and payment of assessments by surplus lines agents as
1622	required by the corporation.
1623	h.i.  If a deficit is incurred in any account in 2008 or
1624	thereafter, the board of governors shall levy a Citizens
1625	policyholder surcharge against all policyholders of the
1626	corporation. for a 12-month period, which
1627	(I)  The surcharge shall be levied collected at the time of
1628	issuance or renewal of a policy, as a uniform percentage of the
1629	premium for the policy of up to 15 percent of such premium,
1630	which funds shall be used to offset the deficit.
1631	(II)  The surcharge is payable upon cancellation or
1632	termination of the policy, upon renewal of the policy, or upon
1633	issuance of a new policy by the corporation within the first 12
1634	months after the date of the levy or the period of time
1635	necessary to fully collect the surcharge amount.
1636	(III)  The corporation may not levy any regular assessments
1637	under paragraph (q) pursuant to sub-subparagraph a. or sub-
1638	subparagraph b. with respect to a particular year's deficit
1639	until the corporation has first levied the full amount of the
1640	surcharge authorized by this sub-subparagraph.
1641	(IV)  The surcharge is Citizens policyholder surcharges
1642	under this sub-subparagraph are not considered premium and is
1643	are not subject to commissions, fees, or premium taxes. However,
1644	failure to pay the surcharge such surcharges shall be treated as
1645	failure to pay premium.
1646	i.j.  If the amount of any assessments or surcharges
1647	collected from corporation policyholders, assessable insurers or
1648	their policyholders, or assessable insureds exceeds the amount
1649	of the deficits, such excess amounts shall be remitted to and
1650	retained by the corporation in a reserve to be used by the
1651	corporation, as determined by the board of governors and
1652	approved by the office, to pay claims or reduce any past,
1653	present, or future plan-year deficits or to reduce outstanding
1654	debt.
1655	(c)  The corporation's plan of operation of the
1656	corporation:
1657	1.  Must provide for adoption of residential property and
1658	casualty insurance policy forms and commercial residential and
1659	nonresidential property insurance forms, which forms must be
1660	approved by the office before prior to use. The corporation
1661	shall adopt the following policy forms:
1662	a.  Standard personal lines policy forms that are
1663	comprehensive multiperil policies providing full coverage of a
1664	residential property equivalent to the coverage provided in the
1665	private insurance market under an HO-3, HO-4, or HO-6 policy.
1666	b.  Basic personal lines policy forms that are policies
1667	similar to an HO-8 policy or a dwelling fire policy that provide
1668	coverage meeting the requirements of the secondary mortgage
1669	market, but which coverage is more limited than the coverage
1670	under a standard policy.
1671	c.  Commercial lines residential and nonresidential policy
1672	forms that are generally similar to the basic perils of full
1673	coverage obtainable for commercial residential structures and
1674	commercial nonresidential structures in the admitted voluntary
1675	market.
1676	d.  Personal lines and commercial lines residential
1677	property insurance forms that cover the peril of wind only. The
1678	forms are applicable only to residential properties located in
1679	areas eligible for coverage under the coastal high-risk account
1680	referred to in sub-subparagraph (b)2.a.
1681	e.  Commercial lines nonresidential property insurance
1682	forms that cover the peril of wind only. The forms are
1683	applicable only to nonresidential properties located in areas
1684	eligible for coverage under the coastal high-risk account
1685	referred to in sub-subparagraph (b)2.a.
1686	f.  The corporation may adopt variations of the policy
1687	forms listed in sub-subparagraphs a.-e. which that contain more
1688	restrictive coverage.
1689	2.a.  Must provide that the corporation adopt a program in
1690	which the corporation and authorized insurers enter into quota
1691	share primary insurance agreements for hurricane coverage, as
1692	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1693	property insurance forms for eligible risks which cover the
1694	peril of wind only.
1695	a.  As used in this subsection, the term:
1696	(I)  "Quota share primary insurance" means an arrangement
1697	in which the primary hurricane coverage of an eligible risk is
1698	provided in specified percentages by the corporation and an
1699	authorized insurer. The corporation and authorized insurer are
1700	each solely responsible for a specified percentage of hurricane
1701	coverage of an eligible risk as set forth in a quota share
1702	primary insurance agreement between the corporation and an
1703	authorized insurer and the insurance contract. The
1704	responsibility of the corporation or authorized insurer to pay
1705	its specified percentage of hurricane losses of an eligible
1706	risk, as set forth in the quota share primary insurance
1707	agreement, may not be altered by the inability of the other
1708	party to the agreement to pay its specified percentage of
1709	hurricane losses. Eligible risks that are provided hurricane
1710	coverage through a quota share primary insurance arrangement
1711	must be provided policy forms that set forth the obligations of
1712	the corporation and authorized insurer under the arrangement,
1713	clearly specify the percentages of quota share primary insurance
1714	provided by the corporation and authorized insurer, and
1715	conspicuously and clearly state that neither the authorized
1716	insurer and nor the corporation may not be held responsible
1717	beyond their its specified percentage of coverage of hurricane
1718	losses.
1719	(II)  "Eligible risks" means personal lines residential and
1720	commercial lines residential risks that meet the underwriting
1721	criteria of the corporation and are located in areas that were
1722	eligible for coverage by the Florida Windstorm Underwriting
1723	Association on January 1, 2002.
1724	b.  The corporation may enter into quota share primary
1725	insurance agreements with authorized insurers at corporation
1726	coverage levels of 90 percent and 50 percent.
1727	c.  If the corporation determines that additional coverage
1728	levels are necessary to maximize participation in quota share
1729	primary insurance agreements by authorized insurers, the
1730	corporation may establish additional coverage levels. However,
1731	the corporation's quota share primary insurance coverage level
1732	may not exceed 90 percent.
1733	d.  Any quota share primary insurance agreement entered
1734	into between an authorized insurer and the corporation must
1735	provide for a uniform specified percentage of coverage of
1736	hurricane losses, by county or territory as set forth by the
1737	corporation board, for all eligible risks of the authorized
1738	insurer covered under the quota share primary insurance
1739	agreement.
1740	e.  Any quota share primary insurance agreement entered
1741	into between an authorized insurer and the corporation is
1742	subject to review and approval by the office. However, such
1743	agreement shall be authorized only as to insurance contracts
1744	entered into between an authorized insurer and an insured who is
1745	already insured by the corporation for wind coverage.
1746	f.  For all eligible risks covered under quota share
1747	primary insurance agreements, the exposure and coverage levels
1748	for both the corporation and authorized insurers shall be
1749	reported by the corporation to the Florida Hurricane Catastrophe
1750	Fund. For all policies of eligible risks covered under such
1751	quota share primary insurance agreements, the corporation and
1752	the authorized insurer must shall maintain complete and accurate
1753	records for the purpose of exposure and loss reimbursement
1754	audits as required by Florida Hurricane Catastrophe fund rules.
1755	The corporation and the authorized insurer shall each maintain
1756	duplicate copies of policy declaration pages and supporting
1757	claims documents.
1758	g.  The corporation board shall establish in its plan of
1759	operation standards for quota share agreements which ensure that
1760	there is no discriminatory application among insurers as to the
1761	terms of the quota share agreements, pricing of the quota share
1762	agreements, incentive provisions if any, and consideration paid
1763	for servicing policies or adjusting claims.
1764	h.  The quota share primary insurance agreement between the
1765	corporation and an authorized insurer must set forth the
1766	specific terms under which coverage is provided, including, but
1767	not limited to, the sale and servicing of policies issued under
1768	the agreement by the insurance agent of the authorized insurer
1769	producing the business, the reporting of information concerning
1770	eligible risks, the payment of premium to the corporation, and
1771	arrangements for the adjustment and payment of hurricane claims
1772	incurred on eligible risks by the claims adjuster and personnel
1773	of the authorized insurer. Entering into a quota sharing
1774	insurance agreement between the corporation and an authorized
1775	insurer is shall be voluntary and at the discretion of the
1776	authorized insurer.
1777	3.  May provide that the corporation may employ or
1778	otherwise contract with individuals or other entities to provide
1779	administrative or professional services that may be appropriate
1780	to effectuate the plan. The corporation may shall have the power
1781	to borrow funds, by issuing bonds or by incurring other
1782	indebtedness, and shall have other powers reasonably necessary
1783	to effectuate the requirements of this subsection, including,
1784	without limitation, the power to issue bonds and incur other
1785	indebtedness in order to refinance outstanding bonds or other
1786	indebtedness. The corporation may, but is not required to, seek
1787	judicial validation of its bonds or other indebtedness under
1788	chapter 75. The corporation may issue bonds or incur other
1789	indebtedness, or have bonds issued on its behalf by a unit of
1790	local government pursuant to subparagraph (q)2., in the absence
1791	of a hurricane or other weather-related event, upon a
1792	determination by the corporation, subject to approval by the
1793	office, that such action would enable it to efficiently meet the
1794	financial obligations of the corporation and that such
1795	financings are reasonably necessary to effectuate the
1796	requirements of this subsection. The corporation may is
1797	authorized to take all actions needed to facilitate tax-free
1798	status for any such bonds or indebtedness, including formation
1799	of trusts or other affiliated entities. The corporation may
1800	shall have the authority to pledge assessments, projected
1801	recoveries from the Florida Hurricane Catastrophe Fund, other
1802	reinsurance recoverables, market equalization and other
1803	surcharges, and other funds available to the corporation as
1804	security for bonds or other indebtedness. In recognition of s.
1805	10, Art. I of the State Constitution, prohibiting the impairment
1806	of obligations of contracts, it is the intent of the Legislature
1807	that no action be taken whose purpose is to impair any bond
1808	indenture or financing agreement or any revenue source committed
1809	by contract to such bond or other indebtedness.
1810	4.a.  Must require that the corporation operate subject to
1811	the supervision and approval of a board of governors consisting
1812	of eight individuals who are residents of this state, from
1813	different geographical areas of this state.
1814	a.  The Governor, the Chief Financial Officer, the
1815	President of the Senate, and the Speaker of the House of
1816	Representatives shall each appoint two members of the board. At
1817	least one of the two members appointed by each appointing
1818	officer must have demonstrated expertise in insurance, and is
1819	deemed to be within the scope of the exemption provided in s.
1820	112.313(7)(b). The Chief Financial Officer shall designate one
1821	of the appointees as chair. All board members serve at the
1822	pleasure of the appointing officer. All members of the board of
1823	governors are subject to removal at will by the officers who
1824	appointed them. All board members, including the chair, must be
1825	appointed to serve for 3-year terms beginning annually on a date
1826	designated by the plan. However, for the first term beginning on
1827	or after July 1, 2009, each appointing officer shall appoint one
1828	member of the board for a 2-year term and one member for a 3-
1829	year term. A Any board vacancy shall be filled for the unexpired
1830	term by the appointing officer. The Chief Financial Officer
1831	shall appoint a technical advisory group to provide information
1832	and advice to the board of governors in connection with the
1833	board's duties under this subsection. The executive director and
1834	senior managers of the corporation shall be engaged by the board
1835	and serve at the pleasure of the board. Any executive director
1836	appointed on or after July 1, 2006, is subject to confirmation
1837	by the Senate. The executive director is responsible for
1838	employing other staff as the corporation may require, subject to
1839	review and concurrence by the board.
1840	b.  The board shall create a Market Accountability Advisory
1841	Committee to assist the corporation in developing awareness of
1842	its rates and its customer and agent service levels in
1843	relationship to the voluntary market insurers writing similar
1844	coverage.
1845	(I)  The members of the advisory committee shall consist of
1846	the following 11 persons, one of whom must be elected chair by
1847	the members of the committee: four representatives, one
1848	appointed by the Florida Association of Insurance Agents, one by
1849	the Florida Association of Insurance and Financial Advisors, one
1850	by the Professional Insurance Agents of Florida, and one by the
1851	Latin American Association of Insurance Agencies; three
1852	representatives appointed by the insurers with the three highest
1853	voluntary market share of residential property insurance
1854	business in the state; one representative from the Office of
1855	Insurance Regulation; one consumer appointed by the board who is
1856	insured by the corporation at the time of appointment to the
1857	committee; one representative appointed by the Florida
1858	Association of Realtors; and one representative appointed by the
1859	Florida Bankers Association. All members shall be appointed to
1860	must serve for 3-year terms and may serve for consecutive terms.
1861	(II)  The committee shall report to the corporation at each
1862	board meeting on insurance market issues which may include rates
1863	and rate competition with the voluntary market; service,
1864	including policy issuance, claims processing, and general
1865	responsiveness to policyholders, applicants, and agents; and
1866	matters relating to depopulation.
1867	5.  Must provide a procedure for determining the
1868	eligibility of a risk for coverage, as follows:
1869	a.  Subject to the provisions of s. 627.3517, with respect
1870	to personal lines residential risks, if the risk is offered
1871	coverage from an authorized insurer at the insurer's approved
1872	rate under either a standard policy including wind coverage or,
1873	if consistent with the insurer's underwriting rules as filed
1874	with the office, a basic policy including wind coverage, for a
1875	new application to the corporation for coverage, the risk is not
1876	eligible for any policy issued by the corporation unless the
1877	premium for coverage from the authorized insurer is more than 15
1878	percent greater than the premium for comparable coverage from
1879	the corporation. If the risk is not able to obtain any such
1880	offer, the risk is eligible for either a standard policy
1881	including wind coverage or a basic policy including wind
1882	coverage issued by the corporation; however, if the risk could
1883	not be insured under a standard policy including wind coverage
1884	regardless of market conditions, the risk is shall be eligible
1885	for a basic policy including wind coverage unless rejected under
1886	subparagraph 8. However, with regard to a policyholder of the
1887	corporation or a policyholder removed from the corporation
1888	through an assumption agreement until the end of the assumption
1889	period, the policyholder remains eligible for coverage from the
1890	corporation regardless of any offer of coverage from an
1891	authorized insurer or surplus lines insurer. The corporation
1892	shall determine the type of policy to be provided on the basis
1893	of objective standards specified in the underwriting manual and
1894	based on generally accepted underwriting practices.
1895	(I)  If the risk accepts an offer of coverage through the
1896	market assistance plan or an offer of coverage through a
1897	mechanism established by the corporation before a policy is
1898	issued to the risk by the corporation or during the first 30
1899	days of coverage by the corporation, and the producing agent who
1900	submitted the application to the plan or to the corporation is
1901	not currently appointed by the insurer, the insurer shall:
1902	(A)  Pay to the producing agent of record of the policy,
1903	for the first year, an amount that is the greater of the
1904	insurer's usual and customary commission for the type of policy
1905	written or a fee equal to the usual and customary commission of
1906	the corporation; or
1907	(B)  Offer to allow the producing agent of record of the
1908	policy to continue servicing the policy for at least a period of
1909	not less than 1 year and offer to pay the agent the greater of
1910	the insurer's or the corporation's usual and customary
1911	commission for the type of policy written.
1912
1913	If the producing agent is unwilling or unable to accept
1914	appointment, the new insurer shall pay the agent in accordance
1915	with sub-sub-sub-subparagraph (A).
1916	(II)  If When the corporation enters into a contractual
1917	agreement for a take-out plan, the producing agent of record of
1918	the corporation policy is entitled to retain any unearned
1919	commission on the policy, and the insurer shall:
1920	(A)  Pay to the producing agent of record of the
1921	corporation policy, for the first year, an amount that is the
1922	greater of the insurer's usual and customary commission for the
1923	type of policy written or a fee equal to the usual and customary
1924	commission of the corporation; or
1925	(B)  Offer to allow the producing agent of record of the
1926	corporation policy to continue servicing the policy for at least
1927	a period of not less than 1 year and offer to pay the agent the
1928	greater of the insurer's or the corporation's usual and
1929	customary commission for the type of policy written.
1930
1931	If the producing agent is unwilling or unable to accept
1932	appointment, the new insurer shall pay the agent in accordance
1933	with sub-sub-sub-subparagraph (A).
1934	b.  With respect to commercial lines residential risks, for
1935	a new application to the corporation for coverage, if the risk
1936	is offered coverage under a policy including wind coverage from
1937	an authorized insurer at its approved rate, the risk is not
1938	eligible for a any policy issued by the corporation unless the
1939	premium for coverage from the authorized insurer is more than 15
1940	percent greater than the premium for comparable coverage from
1941	the corporation. If the risk is not able to obtain any such
1942	offer, the risk is eligible for a policy including wind coverage
1943	issued by the corporation. However, with regard to a
1944	policyholder of the corporation or a policyholder removed from
1945	the corporation through an assumption agreement until the end of
1946	the assumption period, the policyholder remains eligible for
1947	coverage from the corporation regardless of an any offer of
1948	coverage from an authorized insurer or surplus lines insurer.
1949	(I)  If the risk accepts an offer of coverage through the
1950	market assistance plan or an offer of coverage through a
1951	mechanism established by the corporation before a policy is
1952	issued to the risk by the corporation or during the first 30
1953	days of coverage by the corporation, and the producing agent who
1954	submitted the application to the plan or the corporation is not
1955	currently appointed by the insurer, the insurer shall:
1956	(A)  Pay to the producing agent of record of the policy,
1957	for the first year, an amount that is the greater of the
1958	insurer's usual and customary commission for the type of policy
1959	written or a fee equal to the usual and customary commission of
1960	the corporation; or
1961	(B)  Offer to allow the producing agent of record of the
1962	policy to continue servicing the policy for at least a period of
1963	not less than 1 year and offer to pay the agent the greater of
1964	the insurer's or the corporation's usual and customary
1965	commission for the type of policy written.
1966
1967	If the producing agent is unwilling or unable to accept
1968	appointment, the new insurer shall pay the agent in accordance
1969	with sub-sub-sub-subparagraph (A).
1970	(II)  If When the corporation enters into a contractual
1971	agreement for a take-out plan, the producing agent of record of
1972	the corporation policy is entitled to retain any unearned
1973	commission on the policy, and the insurer shall:
1974	(A)  Pay to the producing agent of record of the
1975	corporation policy, for the first year, an amount that is the
1976	greater of the insurer's usual and customary commission for the
1977	type of policy written or a fee equal to the usual and customary
1978	commission of the corporation; or
1979	(B)  Offer to allow the producing agent of record of the
1980	corporation policy to continue servicing the policy for at least
1981	a period of not less than 1 year and offer to pay the agent the
1982	greater of the insurer's or the corporation's usual and
1983	customary commission for the type of policy written.
1984
1985	If the producing agent is unwilling or unable to accept
1986	appointment, the new insurer shall pay the agent in accordance
1987	with sub-sub-sub-subparagraph (A).
1988	c.  For purposes of determining comparable coverage under
1989	sub-subparagraphs a. and b., the comparison must shall be based
1990	on those forms and coverages that are reasonably comparable. The
1991	corporation may rely on a determination of comparable coverage
1992	and premium made by the producing agent who submits the
1993	application to the corporation, made in the agent's capacity as
1994	the corporation's agent. A comparison may be made solely of the
1995	premium with respect to the main building or structure only on
1996	the following basis: the same coverage A or other building
1997	limits; the same percentage hurricane deductible that applies on
1998	an annual basis or that applies to each hurricane for commercial
1999	residential property; the same percentage of ordinance and law
2000	coverage, if the same limit is offered by both the corporation
2001	and the authorized insurer; the same mitigation credits, to the
2002	extent the same types of credits are offered both by the
2003	corporation and the authorized insurer; the same method for loss
2004	payment, such as replacement cost or actual cash value, if the
2005	same method is offered both by the corporation and the
2006	authorized insurer in accordance with underwriting rules; and
2007	any other form or coverage that is reasonably comparable as
2008	determined by the board. If an application is submitted to the
2009	corporation for wind-only coverage in the coastal high-risk
2010	account, the premium for the corporation's wind-only policy plus
2011	the premium for the ex-wind policy that is offered by an
2012	authorized insurer to the applicant must shall be compared to
2013	the premium for multiperil coverage offered by an authorized
2014	insurer, subject to the standards for comparison specified in
2015	this subparagraph. If the corporation or the applicant requests
2016	from the authorized insurer a breakdown of the premium of the
2017	offer by types of coverage so that a comparison may be made by
2018	the corporation or its agent and the authorized insurer refuses
2019	or is unable to provide such information, the corporation may
2020	treat the offer as not being an offer of coverage from an
2021	authorized insurer at the insurer's approved rate.
2022	6.  Must include rules for classifications of risks and
2023	rates therefor.
2024	7.  Must provide that if premium and investment income for
2025	an account attributable to a particular calendar year are in
2026	excess of projected losses and expenses for the account
2027	attributable to that year, such excess shall be held in surplus
2028	in the account. Such surplus must shall be available to defray
2029	deficits in that account as to future years and shall be used
2030	for that purpose before prior to assessing assessable insurers
2031	and assessable insureds as to any calendar year.
2032	8.  Must provide objective criteria and procedures to be
2033	uniformly applied to for all applicants in determining whether
2034	an individual risk is so hazardous as to be uninsurable. In
2035	making this determination and in establishing the criteria and
2036	procedures, the following must shall be considered:
2037	a.  Whether the likelihood of a loss for the individual
2038	risk is substantially higher than for other risks of the same
2039	class; and
2040	b.  Whether the uncertainty associated with the individual
2041	risk is such that an appropriate premium cannot be determined.
2042
2043	The acceptance or rejection of a risk by the corporation shall
2044	be construed as the private placement of insurance, and the
2045	provisions of chapter 120 do shall not apply.
2046	9.  Must provide that the corporation shall make its best
2047	efforts to procure catastrophe reinsurance at reasonable rates,
2048	to cover its projected 100-year probable maximum loss as
2049	determined by the board of governors.
2050	10.  The policies issued by the corporation must provide
2051	that, if the corporation or the market assistance plan obtains
2052	an offer from an authorized insurer to cover the risk at its
2053	approved rates, the risk is no longer eligible for renewal
2054	through the corporation, except as otherwise provided in this
2055	subsection.
2056	11.  Corporation policies and applications must include a
2057	notice that the corporation policy could, under this section, be
2058	replaced with a policy issued by an authorized insurer which
2059	that does not provide coverage identical to the coverage
2060	provided by the corporation. The notice must shall also specify
2061	that acceptance of corporation coverage creates a conclusive
2062	presumption that the applicant or policyholder is aware of this
2063	potential.
2064	12.  May establish, subject to approval by the office,
2065	different eligibility requirements and operational procedures
2066	for any line or type of coverage for any specified county or
2067	area if the board determines that such changes to the
2068	eligibility requirements and operational procedures are
2069	justified due to the voluntary market being sufficiently stable
2070	and competitive in such area or for such line or type of
2071	coverage and that consumers who, in good faith, are unable to
2072	obtain insurance through the voluntary market through ordinary
2073	methods would continue to have access to coverage from the
2074	corporation. If When coverage is sought in connection with a
2075	real property transfer, the such requirements and procedures may
2076	shall not provide for an effective date of coverage later than
2077	the date of the closing of the transfer as established by the
2078	transferor, the transferee, and, if applicable, the lender.
2079	13.  Must provide that, with respect to the coastal high-
2080	risk account, any assessable insurer with a surplus as to
2081	policyholders of $25 million or less writing 25 percent or more
2082	of its total countrywide property insurance premiums in this
2083	state may petition the office, within the first 90 days of each
2084	calendar year, to qualify as a limited apportionment company. A
2085	regular assessment levied by the corporation on a limited
2086	apportionment company for a deficit incurred by the corporation
2087	for the coastal high-risk account in 2006 or thereafter may be
2088	paid to the corporation on a monthly basis as the assessments
2089	are collected by the limited apportionment company from its
2090	insureds pursuant to s. 627.3512, but the regular assessment
2091	must be paid in full within 12 months after being levied by the
2092	corporation. A limited apportionment company shall collect from
2093	its policyholders any emergency assessment imposed under sub-
2094	subparagraph (b)3.d. The plan must shall provide that, if the
2095	office determines that any regular assessment will result in an
2096	impairment of the surplus of a limited apportionment company,
2097	the office may direct that all or part of such assessment be
2098	deferred as provided in subparagraph (q)4. However, there shall
2099	be no limitation or deferment of an emergency assessment to be
2100	collected from policyholders under sub-subparagraph (b)3.d. may
2101	not be limited or deferred.
2102	14.  Must provide that the corporation appoint as its
2103	licensed agents only those agents who also hold an appointment
2104	as defined in s. 626.015(3) with an insurer who at the time of
2105	the agent's initial appointment by the corporation is authorized
2106	to write and is actually writing personal lines residential
2107	property coverage, commercial residential property coverage, or
2108	commercial nonresidential property coverage within the state.
2109	15.  Must provide, by July 1, 2007, a premium payment plan
2110	option to its policyholders which, allows at a minimum, allows
2111	for quarterly and semiannual payment of premiums. A monthly
2112	payment plan may, but is not required to, be offered.
2113	16.  Must limit coverage on mobile homes or manufactured
2114	homes built before prior to 1994 to actual cash value of the
2115	dwelling rather than replacement costs of the dwelling.
2116	17.  May provide such limits of coverage as the board
2117	determines, consistent with the requirements of this subsection.
2118	18.  May require commercial property to meet specified
2119	hurricane mitigation construction features as a condition of
2120	eligibility for coverage.
2121	(d)1.  All prospective employees for senior management
2122	positions, as defined by the plan of operation, are subject to
2123	background checks as a prerequisite for employment. The office
2124	shall conduct the background checks on such prospective
2125	employees pursuant to ss. 624.34, 624.404(3), and 628.261.
2126	2.  On or before July 1 of each year, employees of the
2127	corporation must are required to sign and submit a statement
2128	attesting that they do not have a conflict of interest, as
2129	defined in part III of chapter 112. As a condition of
2130	employment, all prospective employees must are required to sign
2131	and submit to the corporation a conflict-of-interest statement.
2132	3.  Senior managers and members of the board of governors
2133	are subject to the provisions of part III of chapter 112,
2134	including, but not limited to, the code of ethics and public
2135	disclosure and reporting of financial interests, pursuant to s.
2136	112.3145. Notwithstanding s. 112.3143(2), a board member may not
2137	vote on any measure that would inure to his or her special
2138	private gain or loss; that he or she knows would inure to the
2139	special private gain or loss of any principal by whom he or she
2140	is retained or to the parent organization or subsidiary of a
2141	corporate principal by which he or she is retained, other than
2142	an agency as defined in s. 112.312; or that he or she knows
2143	would inure to the special private gain or loss of a relative or
2144	business associate of the public officer. Before the vote is
2145	taken, such member shall publicly state to the assembly the
2146	nature of his or her interest in the matter from which he or she
2147	is abstaining from voting and, within 15 days after the vote
2148	occurs, disclose the nature of his or her interest as a public
2149	record in a memorandum filed with the person responsible for
2150	recording the minutes of the meeting, who shall incorporate the
2151	memorandum in the minutes. Senior managers and board members are
2152	also required to file such disclosures with the Commission on
2153	Ethics and the Office of Insurance Regulation. The executive
2154	director of the corporation or his or her designee shall notify
2155	each existing and newly appointed and existing appointed member
2156	of the board of governors and senior managers of their duty to
2157	comply with the reporting requirements of part III of chapter
2158	112. At least quarterly, the executive director or his or her
2159	designee shall submit to the Commission on Ethics a list of
2160	names of the senior managers and members of the board of
2161	governors who are subject to the public disclosure requirements
2162	under s. 112.3145.
2163	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
2164	other provision of law, an employee or board member may not
2165	knowingly accept, directly or indirectly, any gift or
2166	expenditure from a person or entity, or an employee or
2167	representative of such person or entity, which that has a
2168	contractual relationship with the corporation or who is under
2169	consideration for a contract. An employee or board member who
2170	fails to comply with subparagraph 3. or this subparagraph is
2171	subject to penalties provided under ss. 112.317 and 112.3173.
2172	5.  Any senior manager of the corporation who is employed
2173	on or after January 1, 2007, regardless of the date of hire, who
2174	subsequently retires or terminates employment is prohibited from
2175	representing another person or entity before the corporation for
2176	2 years after retirement or termination of employment from the
2177	corporation.
2178	6.  Any senior manager of the corporation who is employed
2179	on or after January 1, 2007, regardless of the date of hire, who
2180	subsequently retires or terminates employment is prohibited from
2181	having any employment or contractual relationship for 2 years
2182	with an insurer that has entered into a take-out bonus agreement
2183	with the corporation.
2184	(v)1.  Effective July 1, 2002, policies of the Residential
2185	Property and Casualty Joint Underwriting Association shall
2186	become policies of the corporation. All obligations, rights,
2187	assets and liabilities of the Residential Property and Casualty
2188	Joint Underwriting association, including bonds, note and debt
2189	obligations, and the financing documents pertaining to them
2190	become those of the corporation as of July 1, 2002. The
2191	corporation is not required to issue endorsements or
2192	certificates of assumption to insureds during the remaining term
2193	of in-force transferred policies.
2194	2.  Effective July 1, 2002, policies of the Florida
2195	Windstorm Underwriting Association are transferred to the
2196	corporation and shall become policies of the corporation. All
2197	obligations, rights, assets, and liabilities of the Florida
2198	Windstorm Underwriting association, including bonds, note and
2199	debt obligations, and the financing documents pertaining to them
2200	are transferred to and assumed by the corporation on July 1,
2201	2002. The corporation is not required to issue endorsements or
2202	certificates of assumption to insureds during the remaining term
2203	of in-force transferred policies.
2204	3.  The Florida Windstorm Underwriting Association and the
2205	Residential Property and Casualty Joint Underwriting Association
2206	shall take all actions necessary as may be proper to further
2207	evidence the transfers and shall provide the documents and
2208	instruments of further assurance as may reasonably be requested
2209	by the corporation for that purpose. The corporation shall
2210	execute assumptions and instruments as the trustees or other
2211	parties to the financing documents of the Florida Windstorm
2212	Underwriting Association or the Residential Property and
2213	Casualty Joint Underwriting Association may reasonably request
2214	to further evidence the transfers and assumptions, which
2215	transfers and assumptions, however, are effective on the date
2216	provided under this paragraph whether or not, and regardless of
2217	the date on which, the assumptions or instruments are executed
2218	by the corporation. Subject to the relevant financing documents
2219	pertaining to their outstanding bonds, notes, indebtedness, or
2220	other financing obligations, the moneys, investments,
2221	receivables, choses in action, and other intangibles of the
2222	Florida Windstorm Underwriting Association shall be credited to
2223	the coastal high-risk account of the corporation, and those of
2224	the personal lines residential coverage account and the
2225	commercial lines residential coverage account of the Residential
2226	Property and Casualty Joint Underwriting Association shall be
2227	credited to the personal lines account and the commercial lines
2228	account, respectively, of the corporation.
2229	4.  Effective July 1, 2002, a new applicant for property
2230	insurance coverage who would otherwise have been eligible for
2231	coverage in the Florida Windstorm Underwriting Association is
2232	eligible for coverage from the corporation as provided in this
2233	subsection.
2234	5.  The transfer of all policies, obligations, rights,
2235	assets, and liabilities from the Florida Windstorm Underwriting
2236	Association to the corporation and the renaming of the
2237	Residential Property and Casualty Joint Underwriting Association
2238	as the corporation does not shall in no way affect the coverage
2239	with respect to covered policies as defined in s. 215.555(2)(c)
2240	provided to these entities by the Florida Hurricane Catastrophe
2241	Fund. The coverage provided by the Florida Hurricane Catastrophe
2242	fund to the Florida Windstorm Underwriting Association based on
2243	its exposures as of June 30, 2002, and each June 30 thereafter
2244	shall be redesignated as coverage for the coastal high-risk
2245	account of the corporation. Notwithstanding any other provision
2246	of law, the coverage provided by the Florida Hurricane
2247	Catastrophe fund to the Residential Property and Casualty Joint
2248	Underwriting Association based on its exposures as of June 30,
2249	2002, and each June 30 thereafter shall be transferred to the
2250	personal lines account and the commercial lines account of the
2251	corporation. Notwithstanding any other provision of law, the
2252	coastal high-risk account shall be treated, for all Florida
2253	Hurricane Catastrophe Fund purposes, as if it were a separate
2254	participating insurer with its own exposures, reimbursement
2255	premium, and loss reimbursement. Likewise, the personal lines
2256	and commercial lines accounts shall be viewed together, for all
2257	Florida Hurricane Catastrophe fund purposes, as if the two
2258	accounts were one and represent a single, separate participating
2259	insurer with its own exposures, reimbursement premium, and loss
2260	reimbursement. The coverage provided by the Florida Hurricane
2261	Catastrophe fund to the corporation shall constitute and operate
2262	as a full transfer of coverage from the Florida Windstorm
2263	Underwriting Association and Residential Property and Casualty
2264	Joint Underwriting to the corporation.
2265	(y)  It is the intent of the Legislature that the
2266	amendments to this subsection enacted in 2002 should, over time,
2267	reduce the probable maximum windstorm losses in the residual
2268	markets and should reduce the potential assessments to be levied
2269	on property insurers and policyholders statewide. In furtherance
2270	of this intent:
2271	1.  The board shall, on or before February 1 of each year,
2272	provide a report to the President of the Senate and the Speaker
2273	of the House of Representatives showing the reduction or
2274	increase in the 100-year probable maximum loss attributable to
2275	wind-only coverages and the quota share program under this
2276	subsection combined, as compared to the benchmark 100-year
2277	probable maximum loss of the Florida Windstorm Underwriting
2278	Association. For purposes of this paragraph, the benchmark 100-
2279	year probable maximum loss of the Florida Windstorm Underwriting
2280	Association is shall be the calculation dated February 2001 and
2281	based on November 30, 2000, exposures. In order to ensure
2282	comparability of data, the board shall use the same methods for
2283	calculating its probable maximum loss as were used to calculate
2284	the benchmark probable maximum loss.
2285	2.  Beginning December 1, 2013 2010, if the report under
2286	subparagraph 1. for any year indicates that the 100-year
2287	probable maximum loss attributable to wind-only coverages and
2288	the quota share program combined does not reflect a reduction of
2289	at least 25 percent from the benchmark, the board shall reduce
2290	the boundaries of the high-risk area eligible for wind-only
2291	coverages under this subsection in a manner calculated to reduce
2292	the such probable maximum loss to an amount at least 25 percent
2293	below the benchmark.
2294	3.  Beginning February 1, 2015, if the report under
2295	subparagraph 1. for any year indicates that the 100-year
2296	probable maximum loss attributable to wind-only coverages and
2297	the quota share program combined does not reflect a reduction of
2298	at least 50 percent from the benchmark, the boundaries of the
2299	high-risk area eligible for wind-only coverages under this
2300	subsection shall be reduced by the elimination of any area that
2301	is not seaward of a line 1,000 feet inland from the Intracoastal
2302	Waterway.
2303	Section 14.  Paragraph (a) of subsection (5) of section
2304	627.3511, Florida Statutes, is amended to read:
2305	627.3511  Depopulation of Citizens Property Insurance
2306	Corporation.-
2307	(5)  APPLICABILITY.-
2308	(a)  The take-out bonus provided by subsection (2) and the
2309	exemption from assessment provided by paragraph (3)(a) apply
2310	only if the corporation policy is replaced by either a standard
2311	policy including wind coverage or, if consistent with the
2312	insurer's underwriting rules as filed with the office, a basic
2313	policy including wind coverage; however, for with respect to
2314	risks located in areas where coverage through the coastal high-
2315	risk account of the corporation is available, the replacement
2316	policy need not provide wind coverage. The insurer must renew
2317	the replacement policy at approved rates on substantially
2318	similar terms for four additional 1-year terms, unless canceled
2319	or not renewed by the policyholder. If an insurer assumes the
2320	corporation's obligations for a policy, it must issue a
2321	replacement policy for a 1-year term upon expiration of the
2322	corporation policy and must renew the replacement policy at
2323	approved rates on substantially similar terms for four
2324	additional 1-year terms, unless canceled or not renewed by the
2325	policyholder. For each replacement policy canceled or nonrenewed
2326	by the insurer for any reason during the 5-year coverage period
2327	required by this paragraph, the insurer must remove from the
2328	corporation one additional policy covering a risk similar to the
2329	risk covered by the canceled or nonrenewed policy. In addition
2330	to these requirements, the corporation must place the bonus
2331	moneys in escrow for a period of 5 years; such moneys may be
2332	released from escrow only to pay claims. If the policy is
2333	canceled or nonrenewed before the end of the 5-year period, the
2334	amount of the take-out bonus must be prorated for the time
2335	period the policy was insured. A take-out bonus provided by
2336	subsection (2) or subsection (6) is shall not be considered
2337	premium income for purposes of taxes and assessments under the
2338	Florida Insurance Code and shall remain the property of the
2339	corporation, subject to the prior security interest of the
2340	insurer under the escrow agreement until it is released from
2341	escrow;, and after it is released from escrow it is shall be
2342	considered an asset of the insurer and credited to the insurer's
2343	capital and surplus.
2344	Section 15.  Paragraph (b) of subsection (2) of section
2345	627.4133, Florida Statutes, is amended to read:
2346	627.4133  Notice of cancellation, nonrenewal, or renewal
2347	premium.-
2348	(2)  With respect to any personal lines or commercial
2349	residential property insurance policy, including, but not
2350	limited to, any homeowner's, mobile home owner's, farmowner's,
2351	condominium association, condominium unit owner's, apartment
2352	building, or other policy covering a residential structure or
2353	its contents:
2354	(b)  The insurer shall give the named insured written
2355	notice of nonrenewal, cancellation, or termination at least 90
2356	100 days before prior to the effective date of the nonrenewal,
2357	cancellation, or termination. However, the insurer shall give at
2358	least 100 days' written notice, or written notice by June 1,
2359	whichever is earlier, for any nonrenewal, cancellation, or
2360	termination that would be effective between June 1 and November
2361	30. The notice must include the reason or reasons for the
2362	nonrenewal, cancellation, or termination, except that:
2363	1.  The insurer shall give the named insured written notice
2364	of nonrenewal, cancellation, or termination at least 180 days
2365	prior to the effective date of the nonrenewal, cancellation, or
2366	termination for a named insured whose residential structure has
2367	been insured by that insurer or an affiliated insurer for at
2368	least a 5-year period immediately prior to the date of the
2369	written notice.
2370	1.2.  If When cancellation is for nonpayment of premium, at
2371	least 10 days' written notice of cancellation accompanied by the
2372	reason therefor must shall be given. As used in this
2373	subparagraph, the term "nonpayment of premium" means failure of
2374	the named insured to discharge when due any of her or his
2375	obligations in connection with the payment of premiums on a
2376	policy or any installment of such premium, whether the premium
2377	is payable directly to the insurer or its agent or indirectly
2378	under any premium finance plan or extension of credit, or
2379	failure to maintain membership in an organization if such
2380	membership is a condition precedent to insurance coverage. The
2381	term "Nonpayment of premium" also means the failure of a
2382	financial institution to honor an insurance applicant's check
2383	after delivery to a licensed agent for payment of a premium,
2384	even if the agent has previously delivered or transferred the
2385	premium to the insurer. If a dishonored check represents the
2386	initial premium payment, the contract and all contractual
2387	obligations are shall be void ab initio unless the nonpayment is
2388	cured within the earlier of 5 days after actual notice by
2389	certified mail is received by the applicant or 15 days after
2390	notice is sent to the applicant by certified mail or registered
2391	mail, and if the contract is void, any premium received by the
2392	insurer from a third party must shall be refunded to that party
2393	in full.
2394	2.3.  If When such cancellation or termination occurs
2395	during the first 90 days during which the insurance is in force
2396	and the insurance is canceled or terminated for reasons other
2397	than nonpayment of premium, at least 20 days' written notice of
2398	cancellation or termination accompanied by the reason therefor
2399	must shall be given unless except where there has been a
2400	material misstatement or misrepresentation or failure to comply
2401	with the underwriting requirements established by the insurer.
2402	3.4.  The requirement for providing written notice of
2403	nonrenewal by June 1 of any nonrenewal that would be effective
2404	between June 1 and November 30 does not apply to the following
2405	situations, but the insurer remains subject to the requirement
2406	to provide such notice at least 100 days before prior to the
2407	effective date of nonrenewal:
2408	a.  A policy that is nonrenewed due to a revision in the
2409	coverage for sinkhole losses and catastrophic ground cover
2410	collapse pursuant to s. 627.706, as amended by s. 30, chapter
2411	2007-1, Laws of Florida.
2412	b.  A policy that is nonrenewed by Citizens Property
2413	Insurance Corporation, pursuant to s. 627.351(6), for a policy
2414	that has been assumed by an authorized insurer offering
2415	replacement or renewal coverage to the policyholder is exempt
2416	from the notice requirements of paragraph (a) and this
2417	paragraph. In such cases, the corporation must give the named
2418	insured written notice of nonrenewal at least 45 days before the
2419	effective date of the nonrenewal.
2420
2421	After the policy has been in effect for 90 days, the policy may
2422	shall not be canceled by the insurer unless except when there
2423	has been a material misstatement, a nonpayment of premium, a
2424	failure to comply with underwriting requirements established by
2425	the insurer within 90 days after of the date of effectuation of
2426	coverage, or a substantial change in the risk covered by the
2427	policy or if when the cancellation is for all insureds under
2428	such policies for a given class of insureds. This paragraph does
2429	not apply to individually rated risks having a policy term of
2430	less than 90 days.
2431	4.  Notwithstanding any other provision of law, an insurer
2432	may cancel or nonrenew a property insurance policy after at
2433	least 45 days' notice if the office finds that the early
2434	cancellation of some or all of the insurer's policies is
2435	necessary to protect the best interests of the public or
2436	policyholders and the office approves the insurer's plan for
2437	early cancellation or nonrenewal of some or all of its policies.
2438	The office may base such finding upon the financial condition of
2439	the insurer, lack of adequate reinsurance coverage for hurricane
2440	risk, or other relevant factors. The office may condition its
2441	finding on the consent of the insurer to be placed under
2442	administrative supervision pursuant to s. 624.81 or to the
2443	appointment of a receiver under chapter 631.
2444	Section 16.  Section 627.43141, Florida Statutes, is
2445	created to read:
2446	627.43141  Notice of change in policy terms.-
2447	(1)  As used in this section, the term:
2448	(a)  "Change in policy terms" means the modification,
2449	addition, or deletion of any term, coverage, duty, or condition
2450	from the previous policy. The correction of typographical or
2451	scrivener's errors or the application of mandated legislative
2452	changes is not a change in policy terms.
2453	(b)  "Policy" means a written contract of personal lines
2454	property and casualty insurance or a written agreement for
2455	insurance, or the certificate of such insurance, by whatever
2456	name called, and includes all clauses, riders, endorsements, and
2457	papers that are a part of such policy. The term does not include
2458	a binder as defined in s. 627.420 unless the duration of the
2459	binder period exceeds 60 days.
2460	(c)  "Renewal" means the issuance and delivery by an
2461	insurer of a policy superseding at the end of the policy period
2462	a policy previously issued and delivered by the same insurer or
2463	the issuance and delivery of a certificate or notice extending
2464	the term of a policy beyond its policy period or term. Any
2465	policy that has a policy period or term of less than 6 months or
2466	that does not have a fixed expiration date shall, for purposes
2467	of this section, be considered as written for successive policy
2468	periods or terms of 6 months.
2469	(2)  A renewal policy may contain a change in policy terms.
2470	If a renewal policy does contains such change, the insurer must
2471	give the named insured written notice of the change, which must
2472	be enclosed along with the written notice of renewal premium
2473	required by ss. 627.4133 and 627.728. Such notice shall be
2474	entitled "Notice of Change in Policy Terms."
2475	(3)  Although not required, proof of mailing or registered
2476	mailing through the United States Postal Service of the Notice
2477	of Change in Policy Terms to the named insured at the address
2478	shown in the policy is sufficient proof of notice.
2479	(4)  Receipt of the premium payment for the renewal policy
2480	by the insurer is deemed to be acceptance of the new policy
2481	terms by the named insured.
2482	(5)  If an insurer fails to provide the notice required in
2483	subsection (2), the original policy terms remain in effect until
2484	the next renewal and the proper service of the notice, or until
2485	the effective date of replacement coverage obtained by the named
2486	insured, whichever occurs first.
2487	(6)  The intent of this section is to:
2488	(a)  Allow an insurer to make a change in policy terms
2489	without nonrenewing those policyholders that the insurer wishes
2490	to continue insuring.
2491	(b)  Alleviate concern and confusion to the policyholder
2492	caused by the required policy nonrenewal for the limited issue
2493	if an insurer intends to renew the insurance policy, but the new
2494	policy contains a change in policy terms.
2495	(c)  Encourage policyholders to discuss their coverages
2496	with their insurance agents.
2497	Section 17.  Section 627.7011, Florida Statutes, is amended
2498	to read:
2499	627.7011  Homeowners' policies; offer of replacement cost
2500	coverage and law and ordinance coverage.-
2501	(1)  Before Prior to issuing or renewing a homeowner's
2502	insurance policy on or after October 1, 2005, or prior to the
2503	first renewal of a homeowner's insurance policy on or after
2504	October 1, 2005, the insurer must offer each of the following:
2505	(a)  A policy or endorsement providing that any loss that
2506	which is repaired or replaced will be adjusted on the basis of
2507	replacement costs to the dwelling not exceeding policy limits as
2508	to the dwelling, rather than actual cash value, but not
2509	including costs necessary to meet applicable laws and ordinances
2510	regulating the construction, use, or repair of any property or
2511	requiring the tearing down of any property, including the costs
2512	of removing debris.
2513	(b)  A policy or endorsement providing that, subject to
2514	other policy provisions, any loss that which is repaired or
2515	replaced at any location will be adjusted on the basis of
2516	replacement costs to the dwelling not exceeding policy limits as
2517	to the dwelling, rather than actual cash value, and also
2518	including costs necessary to meet applicable laws and ordinances
2519	regulating the construction, use, or repair of any property or
2520	requiring the tearing down of any property, including the costs
2521	of removing debris.; However, such additional costs necessary to
2522	meet applicable laws and ordinances may be limited to either 25
2523	percent or 50 percent of the dwelling limit, as selected by the
2524	policyholder, and such coverage applies shall apply only to
2525	repairs of the damaged portion of the structure unless the total
2526	damage to the structure exceeds 50 percent of the replacement
2527	cost of the structure.
2528
2529	An insurer is not required to make the offers required by this
2530	subsection with respect to the issuance or renewal of a
2531	homeowner's policy that contains the provisions specified in
2532	paragraph (b) for law and ordinance coverage limited to 25
2533	percent of the dwelling limit, except that the insurer must
2534	offer the law and ordinance coverage limited to 50 percent of
2535	the dwelling limit. This subsection does not prohibit the offer
2536	of a guaranteed replacement cost policy.
2537	(2)  Unless the insurer obtains the policyholder's written
2538	refusal of the policies or endorsements specified in subsection
2539	(1), any policy covering the dwelling is deemed to include the
2540	law and ordinance coverage limited to 25 percent of the dwelling
2541	limit. The rejection or selection of alternative coverage shall
2542	be made on a form approved by the office. The form must shall
2543	fully advise the applicant of the nature of the coverage being
2544	rejected. If this form is signed by a named insured, it is will
2545	be conclusively presumed that there was an informed, knowing
2546	rejection of the coverage or election of the alternative
2547	coverage on behalf of all insureds. Unless the policyholder
2548	requests in writing the coverage specified in this section, it
2549	need not be provided in or supplemental to any other policy that
2550	renews, insures, extends, changes, supersedes, or replaces an
2551	existing policy if when the policyholder has rejected the
2552	coverage specified in this section or has selected alternative
2553	coverage. The insurer must provide the such policyholder with
2554	notice of the availability of such coverage in a form approved
2555	by the office at least once every 3 years. The failure to
2556	provide such notice constitutes a violation of this code, but
2557	does not affect the coverage provided under the policy.
2558	(3)(a)  If In the event of a loss occurs for which a
2559	dwelling or personal property is insured on the basis of
2560	replacement costs, the insurer shall initially pay at least the
2561	actual cash value of the insured loss, less any applicable
2562	deductible. In order to receive payment from an insurer under
2563	this paragraph, a policyholder must enter into a contract for
2564	the performance of building and structural repairs. The insurer
2565	shall pay any remaining amounts necessary to perform such
2566	repairs as work is performed and expenses are incurred. Other
2567	than incidental expenses to mitigate further damage, the insurer
2568	or any contractor or subcontractor may not require the
2569	policyholder to advance payment for such repairs or expenses.
2570	The insurer may waive the requirement for a contract under this
2571	paragraph. If a total loss for a dwelling occurs, the insurer
2572	shall pay the replacement cost coverage without reservation or
2573	holdback of any depreciation in value, whether or not the
2574	insured replaces or repairs the dwelling or property.
2575	(b)  If a loss occurs for which personal property is
2576	insured on the basis of replacement costs, the insurer may limit
2577	an initial payment to the actual cash value of the personal
2578	property to be replaced. An insurer may require that an insured
2579	provide the receipts from the purchase of property financed by
2580	the initial actual cash value payment mandated under this
2581	paragraph, and the insurer shall use such receipts to make the
2582	next payment requested by the insured for the replacement of
2583	insured personal property. The insurer shall continue this
2584	process until the insured remits all receipts up to the policy
2585	limits for replacement costs. The insurer must provide clear
2586	notice of this process in the insurance contract. The insurer
2587	may not require the policyholder to advance payment for the
2588	replaced property.
2589	(4)  A Any homeowner's insurance policy issued or renewed
2590	on or after October 1, 2005, must include in bold type no
2591	smaller than 18 points the following statement:
2592
2593	"LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
2594	THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
2595	CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
2596	NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
2597	COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
2598	DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT."
2599
2600	The intent of this subsection is to encourage policyholders to
2601	purchase sufficient coverage to protect them in case events
2602	excluded from the standard homeowners policy, such as law and
2603	ordinance enforcement and flood, combine with covered events to
2604	produce damage or loss to the insured property. The intent is
2605	also to encourage policyholders to discuss these issues with
2606	their insurance agent.
2607	(5)  Nothing in This section does not: shall be construed
2608	to
2609	(a)  Apply to policies not considered to be "homeowners'
2610	policies," as that term is commonly understood in the insurance
2611	industry. This section specifically does not
2612	(b)  Apply to mobile home policies. Nothing in this section
2613	(c)  Limit shall be construed as limiting the ability of an
2614	any insurer to reject or nonrenew any insured or applicant on
2615	the grounds that the structure does not meet underwriting
2616	criteria applicable to replacement cost or law and ordinance
2617	policies or for other lawful reasons.
2618	(d)(6)  This section does not Prohibit an insurer from
2619	limiting its liability under a policy or endorsement providing
2620	that loss will be adjusted on the basis of replacement costs to
2621	the lesser of:
2622	1.(a)  The limit of liability shown on the policy
2623	declarations page;
2624	2.(b)  The reasonable and necessary cost to repair the
2625	damaged, destroyed, or stolen covered property; or
2626	3.(c)  The reasonable and necessary cost to replace the
2627	damaged, destroyed, or stolen covered property.
2628	(e)(7)  This section does not Prohibit an insurer from
2629	exercising its right to repair damaged property in compliance
2630	with its policy and s. 627.702(7).
2631	Section 18.  Paragraph (a) of subsection (5) of section
2632	627.70131, Florida Statutes, is amended to read:
2633	627.70131  Insurer's duty to acknowledge communications
2634	regarding claims; investigation.-
2635	(5)(a)  Within 90 days after an insurer receives notice of
2636	an initial, reopened, or supplemental a property insurance claim
2637	from a policyholder, the insurer shall pay or deny such claim or
2638	a portion of the claim unless the failure to pay such claim or a
2639	portion of the claim is caused by factors beyond the control of
2640	the insurer which reasonably prevent such payment. Any payment
2641	of an initial or supplemental a claim or portion of such a claim
2642	made paid 90 days after the insurer receives notice of the
2643	claim, or made paid more than 15 days after there are no longer
2644	factors beyond the control of the insurer which reasonably
2645	prevented such payment, whichever is later, bears shall bear
2646	interest at the rate set forth in s. 55.03. Interest begins to
2647	accrue from the date the insurer receives notice of the claim.
2648	The provisions of this subsection may not be waived, voided, or
2649	nullified by the terms of the insurance policy. If there is a
2650	right to prejudgment interest, the insured shall select whether
2651	to receive prejudgment interest or interest under this
2652	subsection. Interest is payable when the claim or portion of the
2653	claim is paid. Failure to comply with this subsection
2654	constitutes a violation of this code. However, failure to comply
2655	with this subsection does shall not form the sole basis for a
2656	private cause of action.
2657	Section 19.  The Legislature finds and declares:
2658	(1)  There is a compelling state interest in maintaining a
2659	viable and orderly private-sector market for property insurance
2660	in this state. The lack of a viable and orderly property market
2661	reduces the availability of property insurance coverage to state
2662	residents, increases the cost of property insurance, and
2663	increases the state's reliance on a residual property insurance
2664	market and its potential for imposing assessments on
2665	policyholders throughout the state.
2666	(2)  In 2005, the Legislature revised ss. 627.706-627.7074,
2667	Florida Statutes, to adopt certain geological or technical
2668	terms; to increase reliance on objective, scientific testing
2669	requirements; and generally to reduce the number of sinkhole
2670	claims and related disputes arising under prior law. The
2671	Legislature determined that since the enactment of these
2672	statutory revisions, both private-sector insurers and Citizens
2673	Property Insurance Corporation have, nevertheless, continued to
2674	experience high claims frequency and severity for sinkhole
2675	insurance claims. In addition, many properties remain unrepaired
2676	even after loss payments, which reduces the local property tax
2677	base and adversely affects the real estate market. Therefore,
2678	the Legislature finds that losses associated with sinkhole
2679	claims adversely affect the public health, safety, and welfare
2680	of this state and its citizens.
2681	(3)  Pursuant to sections 19 through 24 of this act,
2682	technical or scientific definitions adopted in the 2005
2683	legislation are clarified to implement and advance the
2684	Legislature's intended reduction of sinkhole claims and
2685	disputes. The legal presumption intended by the Legislature is
2686	clarified to reduce disputes and litigation associated with the
2687	technical reviews associated with sinkhole claims. Certain other
2688	revisions to ss. 627.706-627.7074, Florida Statutes, are enacted
2689	to advance legislative intent to rely on scientific or technical
2690	determinations relating to sinkholes and sinkhole claims, reduce
2691	the number and cost of disputes relating to sinkhole claims, and
2692	ensure that repairs are made commensurate with the scientific
2693	and technical determinations and insurance claims payments.
2694	Section 20.  Section 627.706, Florida Statutes, is
2695	reordered and amended to read:
2696	627.706  Sinkhole insurance; catastrophic ground cover
2697	collapse; definitions.-
2698	(1)  Every insurer authorized to transact residential
2699	property insurance, as described in s. 627.4025, in this state
2700	must shall provide coverage for a catastrophic ground cover
2701	collapse. However, the insurer may restrict such coverage to the
2702	principal building, as defined in the applicable policy. The
2703	insurer may and shall make available, for an appropriate
2704	additional premium, coverage for sinkhole losses on any
2705	structure, including the contents of personal property contained
2706	therein, to the extent provided in the form to which the
2707	coverage attaches. A policy for residential property insurance
2708	may include a deductible amount applicable to sinkhole losses,
2709	including any expenses incurred by an insurer investigating
2710	whether sinkhole activity is present. The deductible may be
2711	equal to 1 percent, 2 percent, 5 percent, or 10 percent of the
2712	policy dwelling limits, with appropriate premium discounts
2713	offered with each deductible amount.
2714	(2)  As used in ss. 627.706-627.7074, and as used in
2715	connection with any policy providing coverage for a catastrophic
2716	ground cover collapse or for sinkhole losses, the term:
2717	(a)  "Catastrophic ground cover collapse" means geological
2718	activity that results in all the following:
2719	1.  The abrupt collapse of the ground cover;
2720	2.  A depression in the ground cover clearly visible to the
2721	naked eye;
2722	3.  Structural damage to the covered building, including
2723	the foundation; and
2724	4.  The insured structure being condemned and ordered to be
2725	vacated by the governmental agency authorized by law to issue
2726	such an order for that structure.
2727
2728	Contents coverage applies if there is a loss resulting from a
2729	catastrophic ground cover collapse. Structural Damage consisting
2730	merely of the settling or cracking of a foundation, structure,
2731	or building does not constitute a loss resulting from a
2732	catastrophic ground cover collapse.
2733	(b)  "Neutral evaluation" means the alternative dispute
2734	resolution provided in s. 627.7074.
2735	(c)  "Neutral evaluator" means a professional engineer or a
2736	professional geologist who has completed a course of study in
2737	alternative dispute resolution designed or approved by the
2738	department for use in the neutral evaluation process and who is
2739	determined to be fair and impartial.
2740	(f)(b)  "Sinkhole" means a landform created by subsidence
2741	of soil, sediment, or rock as underlying strata are dissolved by
2742	groundwater. A sinkhole forms may form by collapse into
2743	subterranean voids created by dissolution of limestone or
2744	dolostone or by subsidence as these strata are dissolved.
2745	(h)(c)  "Sinkhole loss" means structural damage to the
2746	covered building, including the foundation, caused by sinkhole
2747	activity. Contents coverage and additional living expenses shall
2748	apply only if there is structural damage to the covered building
2749	caused by sinkhole activity.
2750	(g)(d)  "Sinkhole activity" means settlement or systematic
2751	weakening of the earth supporting such property only if the when
2752	such settlement or systematic weakening results from
2753	contemporary movement or raveling of soils, sediments, or rock
2754	materials into subterranean voids created by the effect of water
2755	on a limestone or similar rock formation.
2756	(d)(e)  "Professional engineer" means a person, as defined
2757	in s. 471.005, who has a bachelor's degree or higher in
2758	engineering and has successfully completed at least five courses
2759	in any combination of the following: geotechnical engineering,
2760	structural engineering, soil mechanics, foundations, or geology
2761	with a specialty in the geotechnical engineering field. A
2762	professional engineer must also have geotechnical experience and
2763	expertise in the identification of sinkhole activity as well as
2764	other potential causes of structural damage to the structure.
2765	(e)(f)  "Professional geologist" means a person, as defined
2766	in by s. 492.102, who has a bachelor's degree or higher in
2767	geology or related earth science and with expertise in the
2768	geology of Florida. A professional geologist must have
2769	geological experience and expertise in the identification of
2770	sinkhole activity as well as other potential geologic causes of
2771	structural damage to the structure.
2772	(i)  "Structural damage" means:
2773	1.  A covered building that suffers foundation movement
2774	outside an acceptable variance under the applicable building
2775	code;
2776	2.  Damage to a covered building, including the foundation,
2777	which prevents the primary structural members or primary
2778	structural systems from supporting the loads and forces they
2779	were designed to support; and
2780	3.  As may be further defined by the applicable policy.
2781	(3)  On or before June 1, 2007, Every insurer authorized to
2782	transact property insurance in this state shall make a proper
2783	filing with the office for the purpose of extending the
2784	appropriate forms of property insurance to include coverage for
2785	catastrophic ground cover collapse or for sinkhole losses.
2786	coverage for catastrophic ground cover collapse may not go into
2787	effect until the effective date provided for in the filing
2788	approved by the office.
2789	(3)(4)  Insurers offering policies that exclude coverage
2790	for sinkhole losses must shall inform policyholders in bold type
2791	of not less than 14 points as follows: "YOUR POLICY PROVIDES
2792	COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS
2793	IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE,
2794	YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU
2795	MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN
2796	ADDITIONAL PREMIUM."
2797	(4)(5)  An insurer offering sinkhole coverage to
2798	policyholders before or after the adoption of s. 30, chapter
2799	2007-1, Laws of Florida, may nonrenew the policies of
2800	policyholders maintaining sinkhole coverage in Pasco County or
2801	Hernando County, at the option of the insurer, and provide an
2802	offer of coverage that to such policyholders which includes
2803	catastrophic ground cover collapse and excludes sinkhole
2804	coverage. Insurers acting in accordance with this subsection are
2805	subject to the following requirements:
2806	(a)  Policyholders must be notified that a nonrenewal is
2807	for purposes of removing sinkhole coverage, and that the
2808	policyholder is still being offered a policy that provides
2809	coverage for catastrophic ground cover collapse.
2810	(b)  Policyholders must be provided an actuarially
2811	reasonable premium credit or discount for the removal of
2812	sinkhole coverage and provision of only catastrophic ground
2813	cover collapse.
2814	(c)  Subject to the provisions of this subsection and the
2815	insurer's approved underwriting or insurability guidelines, the
2816	insurer may shall provide each policyholder with the opportunity
2817	to purchase an endorsement to his or her policy providing
2818	sinkhole coverage and may require an inspection of the property
2819	before issuance of a sinkhole coverage endorsement.
2820	(d)  Section 624.4305 does not apply to nonrenewal notices
2821	issued pursuant to this subsection.
2822	(5)  Any claim, including, but not limited to, initial,
2823	supplemental, and reopened claims under an insurance policy that
2824	provides sinkhole coverage is barred unless notice of the claim
2825	was given to the insurer in accordance with the terms of the
2826	policy within 2 years after the policyholder knew or reasonably
2827	should have known about the sinkhole loss.
2828	Section 21.  Section 627.7061, Florida Statutes, is amended
2829	to read:
2830	627.7061  Coverage inquiries.-Inquiries about coverage on a
2831	property insurance contract are not claim activity, unless an
2832	actual claim is filed by the policyholder which insured that
2833	results in a company investigation of the claim.
2834	Section 22.  Section 627.7065, Florida Statutes, is
2835	repealed.
2836	Section 23.  Section 627.707, Florida Statutes, is amended
2837	to read:
2838	627.707  Standards for Investigation of sinkhole claims by
2839	policyholders insurers; insurer payment; nonrenewals.-Upon
2840	receipt of a claim for a sinkhole loss to a covered building, an
2841	insurer must meet the following standards in investigating a
2842	claim:
2843	(1)  The insurer must inspect make an inspection of the
2844	policyholder's insured's premises to determine if there is
2845	structural has been physical damage that to the structure which
2846	may be the result of sinkhole activity.
2847	(2)  If the insurer confirms that structural damage exists
2848	but is unable to identify a valid cause of such damage or
2849	discovers that such damage is consistent with sinkhole loss
2850	Following the insurer's initial inspection, the insurer shall
2851	engage a professional engineer or a professional geologist to
2852	conduct testing as provided in s. 627.7072 to determine the
2853	cause of the loss within a reasonable professional probability
2854	and issue a report as provided in s. 627.7073, only if sinkhole
2855	loss is covered under the policy. Except as provided in
2856	subsection (6), the fees and costs of the professional engineer
2857	or professional geologist shall be paid by the insurer.:
2858	(a)  The insurer is unable to identify a valid cause of the
2859	damage or discovers damage to the structure which is consistent
2860	with sinkhole loss; or
2861	(b)  The policyholder demands testing in accordance with
2862	this section or s. 627.7072.
2863	(3)  Following the initial inspection of the policyholder's
2864	insured premises, the insurer shall provide written notice to
2865	the policyholder disclosing the following information:
2866	(a)  What the insurer has determined to be the cause of
2867	damage, if the insurer has made such a determination.
2868	(b)  A statement of the circumstances under which the
2869	insurer is required to engage a professional engineer or a
2870	professional geologist to verify or eliminate sinkhole loss and
2871	to engage a professional engineer to make recommendations
2872	regarding land and building stabilization and foundation repair.
2873	(c)  A statement regarding the right of the policyholder to
2874	request testing by a professional engineer or a professional
2875	geologist and the circumstances under which the policyholder may
2876	demand certain testing.
2877	(4)  If the insurer determines that there is no sinkhole
2878	loss, the insurer may deny the claim. If coverage for sinkhole
2879	loss is available and If the insurer denies the claim on such
2880	basis, without performing testing under s. 627.7072, the
2881	policyholder may demand testing by the insurer under s.
2882	627.7072. The policyholder's demand for testing must be
2883	communicated to the insurer in writing within 60 days after the
2884	policyholder's receipt of the insurer's denial of the claim.
2885	(5)(a)  Subject to paragraph (b), If a sinkhole loss is
2886	verified, the insurer shall pay to stabilize the land and
2887	building and repair the foundation in accordance with the
2888	recommendations of the professional engineer retained pursuant
2889	to subsection (2), as provided under s. 627.7073, and in
2890	consultation with notice to the policyholder, subject to the
2891	coverage and terms of the policy. The insurer shall pay for
2892	other repairs to the structure and contents in accordance with
2893	the terms of the policy.
2894	(a)(b)  The insurer may limit its total claims payment to
2895	the actual cash value of the sinkhole loss, which does not
2896	include including underpinning or grouting or any other repair
2897	technique performed below the existing foundation of the
2898	building, until the policyholder enters into a contract for the
2899	performance of building stabilization or foundation repairs in
2900	the insurer's report issued pursuant to s. 627.7073.
2901	(b)  In order to prevent additional damage to the building
2902	or structure, the policyholder must enter into a contract for
2903	the performance of building stabilization or foundation repairs
2904	within 90 days after the insurance company confirms coverage for
2905	the sinkhole loss and notifies the policyholder of such
2906	confirmation. This time period is tolled if either party invokes
2907	the neutral evaluation process.
2908	(c)  After the policyholder enters into the contract for
2909	the performance of building stabilization or foundation repairs,
2910	the insurer shall pay the amounts necessary to begin and perform
2911	such repairs as the work is performed and the expenses are
2912	incurred. The insurer may not require the policyholder to
2913	advance payment for such repairs. If repair covered by a
2914	personal lines residential property insurance policy has begun
2915	and the professional engineer selected or approved by the
2916	insurer determines that the repair cannot be completed within
2917	the policy limits, the insurer must either complete the
2918	professional engineer's recommended repair or tender the policy
2919	limits to the policyholder without a reduction for the repair
2920	expenses incurred.
2921	(d)  The stabilization and all other repairs to the
2922	structure and contents must be completed within 12 months after
2923	entering into the contract for repairs described in paragraph
2924	(b) unless:
2925	1.  There is a mutual agreement between the insurer and the
2926	policyholder;
2927	2.  The claim is involved with the neutral evaluation
2928	process;
2929	3.  The claim is in litigation; or
2930	4.  The claim is under appraisal.
2931	(e)(c)  Upon the insurer's obtaining the written approval
2932	of the policyholder and any lienholder, the insurer may make
2933	payment directly to the persons selected by the policyholder to
2934	perform the land and building stabilization and foundation
2935	repairs. The decision by the insurer to make payment to such
2936	persons does not hold the insurer liable for the work performed.
2937	The policyholder may not accept a rebate from any person
2938	performing the repairs specified in this section. If a
2939	policyholder does receive a rebate, coverage is void and the
2940	policyholder must refund the amount of the rebate to the
2941	insurer. Any person making the repairs specified in this section
2942	who offers a rebate, or any policyholder who accepts a rebate
2943	for such repairs, commits insurance fraud, a felony of the third
2944	degree punishable as provided in s. 775.082, s. 775.083, or s.
2945	775.084.
2946	(6)  Except as provided in subsection (7), the fees and
2947	costs of the professional engineer or the professional geologist
2948	shall be paid by the insurer.
2949	(6)(7)  If the insurer obtains, pursuant to s. 627.7073,
2950	written certification that there is no sinkhole loss or that the
2951	cause of the damage was not sinkhole activity, and if the
2952	policyholder has submitted the sinkhole claim without good faith
2953	grounds for submitting such claim, the policyholder shall
2954	reimburse the insurer for 50 percent of the actual costs of the
2955	analyses and services provided under ss. 627.7072 and 627.7073;
2956	however, a policyholder is not required to reimburse an insurer
2957	more than the deductible or $2,500, whichever is greater, with
2958	respect to any claim. A policyholder is required to pay
2959	reimbursement under this subsection only if the policyholder
2960	requested the analysis and services provided under ss. 627.7072
2961	and 627.7073 and the insurer, before prior to ordering the
2962	analysis under s. 627.7072, informs the policyholder in writing
2963	of the policyholder's potential liability for reimbursement and
2964	gives the policyholder the opportunity to withdraw the claim.
2965	(7)(8)  An No insurer may not shall nonrenew any policy of
2966	property insurance on the basis of filing of claims for partial
2967	loss caused by sinkhole damage or clay shrinkage if as long as
2968	the total of such payments does not equal or exceed the current
2969	policy limits of coverage for the policy in effect on the date
2970	of loss, for property damage to the covered building, as set
2971	forth on the declarations page, or if and provided the
2972	policyholder insured has repaired the structure in accordance
2973	with the engineering recommendations made pursuant to subsection
2974	(2) upon which any payment or policy proceeds were based. If the
2975	insurer pays such limits, it may nonrenew the policy.
2976	(8)(9)  The insurer may engage a professional structural
2977	engineer to make recommendations as to the repair of the
2978	structure.
2979	Section 24.  Section 627.7073, Florida Statutes, is amended
2980	to read:
2981	627.7073  Sinkhole reports.-
2982	(1)  Upon completion of testing as provided in s. 627.7072,
2983	the professional engineer or professional geologist shall issue
2984	a report and certification to the insurer and the policyholder
2985	as provided in this section.
2986	(a)  Sinkhole loss is verified if, based upon tests
2987	performed in accordance with s. 627.7072, a professional
2988	engineer or a professional geologist issues a written report and
2989	certification stating:
2990	1.  That structural damage to the covered building has been
2991	identified within a reasonable professional probability.
2992	2.1.  That the cause of the actual physical and structural
2993	damage is sinkhole activity within a reasonable professional
2994	probability.
2995	3.2.  That the analyses conducted were of sufficient scope
2996	to identify sinkhole activity as the cause of damage within a
2997	reasonable professional probability.
2998	4.3.  A description of the tests performed.
2999	5.4.  A recommendation by the professional engineer of
3000	methods for stabilizing the land and building and for making
3001	repairs to the foundation.
3002	(b)  If there is no structural damage or if sinkhole
3003	activity is eliminated as the cause of such damage to the
3004	covered building structure, the professional engineer or
3005	professional geologist shall issue a written report and
3006	certification to the policyholder and the insurer stating:
3007	1.  That there is no structural damage or the cause of such
3008	the damage is not sinkhole activity within a reasonable
3009	professional probability.
3010	2.  That the analyses and tests conducted were of
3011	sufficient scope to eliminate sinkhole activity as the cause of
3012	the structural damage within a reasonable professional
3013	probability.
3014	3.  A statement of the cause of the structural damage
3015	within a reasonable professional probability.
3016	4.  A description of the tests performed.
3017	(c)  The respective findings, opinions, and recommendations
3018	of the professional engineer or professional geologist as to the
3019	cause of distress to the property and the findings, opinions,
3020	and recommendations of the insurer's professional engineer as to
3021	land and building stabilization and foundation repair set forth
3022	by s. 627.7072 shall be presumed correct, which presumption
3023	shifts the burden of proof in accordance with s. 90.302(2). The
3024	presumption of correctness is based upon public policy concerns
3025	regarding the affordability of sinkhole coverage, consistency in
3026	claims handling, and a reduction in the number of disputed
3027	sinkhole claims.
3028	(2)(a)  Any insurer that has paid a claim for a sinkhole
3029	loss shall file a copy of the report and certification, prepared
3030	pursuant to subsection (1), including the legal description of
3031	the real property and the name of the property owner, the
3032	neutral evaluator's report, if any, that indicates that sinkhole
3033	activity caused the damage claimed, a copy of the certification
3034	indicating that stabilization has been completed, if applicable,
3035	and the amount of the payment, with the county clerk of court,
3036	who shall record the report and certification. The insurer shall
3037	bear the cost of filing and recording one or more reports and
3038	certifications the report and certification. There shall be no
3039	cause of action or liability against an insurer for compliance
3040	with this section.
3041	(a)  The recording of the report and certification does
3042	not:
3043	1.  Constitute a lien, encumbrance, or restriction on the
3044	title to the real property or constitute a defect in the title
3045	to the real property;
3046	2.  Create any cause of action or liability against any
3047	grantor of the real property for breach of any warranty of good
3048	title or warranty against encumbrances; or
3049	3.  Create any cause of action or liability against any
3050	title insurer that insures the title to the real property.
3051	(b)  As a precondition to accepting payment for a sinkhole
3052	loss, the policyholder must file a copy of any report prepared
3053	on behalf or at the request of the policyholder regarding the
3054	insured property. The policyholder shall bear the cost of filing
3055	and recording such sinkhole report. The recording of the report
3056	does not:
3057	1.  Constitute a lien, encumbrance, or restriction on the
3058	title to the real property or constitute a defect in the title
3059	to the real property;
3060	2.  Create any cause of action or liability against any
3061	grantor of the real property for breach of any warranty of good
3062	title or warranty against encumbrances; or
3063	3.  Create any cause of action or liability against any
3064	title insurer that insures the title to the real property.
3065	(c)(b)  The seller of real property upon which a sinkhole
3066	claim has been made by the seller and paid by the insurer must
3067	shall disclose to the buyer of such property, before the
3068	closing, that a claim has been paid, the amount of the payment,
3069	and whether or not the full amount of the proceeds were used to
3070	repair the sinkhole damage.
3071	Section 25.  Section 627.7074, Florida Statutes, is amended
3072	to read:
3073	627.7074  Alternative procedure for resolution of disputed
3074	sinkhole insurance claims.-
3075	(1)  As used in this section, the term:
3076	(a)  "Neutral evaluation" means the alternative dispute
3077	resolution provided for in this section.
3078	(b)  "Neutral evaluator" means a professional engineer or a
3079	professional geologist who has completed a course of study in
3080	alternative dispute resolution designed or approved by the
3081	department for use in the neutral evaluation process, who is
3082	determined to be fair and impartial.
3083	(1)(2)(a)  The department shall:
3084	(a)  Certify and maintain a list of persons who are neutral
3085	evaluators.
3086	(b)  The department shall Prepare a consumer information
3087	pamphlet for distribution by insurers to policyholders which
3088	clearly describes the neutral evaluation process and includes
3089	information and forms necessary for the policyholder to request
3090	a neutral evaluation.
3091	(2)  Neutral evaluation is available to either party if a
3092	sinkhole report has been issued pursuant to s. 627.7073. At a
3093	minimum, neutral evaluation must determine:
3094	(a)  Causation;
3095	(b)  All methods of stabilization and repair both above and
3096	below ground;
3097	(c)  The costs for stabilization and all repairs; and
3098	(d)  Information necessary to carry out subsection (12).
3099	(3)  Following the receipt of the report provided under s.
3100	627.7073 or the denial of a claim for a sinkhole loss, the
3101	insurer shall notify the policyholder of his or her right to
3102	participate in the neutral evaluation program under this
3103	section. Neutral evaluation supersedes the alternative dispute
3104	resolution process under s. 627.7015, but does not invalidate
3105	the appraisal clause of the insurance policy. The insurer shall
3106	provide to the policyholder the consumer information pamphlet
3107	prepared by the department pursuant to subsection (1)
3108	electronically or by United States mail paragraph (2)(b).
3109	(4)  Neutral evaluation is nonbinding, but mandatory if
3110	requested by either party. A request for neutral evaluation may
3111	be filed with the department by the policyholder or the insurer
3112	on a form approved by the department. The request for neutral
3113	evaluation must state the reason for the request and must
3114	include an explanation of all the issues in dispute at the time
3115	of the request. Filing a request for neutral evaluation tolls
3116	the applicable time requirements for filing suit for a period of
3117	60 days following the conclusion of the neutral evaluation
3118	process or the time prescribed in s. 95.11, whichever is later.
3119	(5)  Neutral evaluation shall be conducted as an informal
3120	process in which formal rules of evidence and procedure need not
3121	be observed. A party to neutral evaluation is not required to
3122	attend neutral evaluation if a representative of the party
3123	attends and has the authority to make a binding decision on
3124	behalf of the party. All parties shall participate in the
3125	evaluation in good faith. The neutral evaluator must be allowed
3126	reasonable access to the interior and exterior of insured
3127	structures to be evaluated or for which a claim has been made.
3128	Any reports initiated by the policyholder, or an agent of the
3129	policyholder, confirming a sinkhole loss or disputing another
3130	sinkhole report regarding insured structures must be provided to
3131	the neutral evaluator before the evaluator's physical inspection
3132	of the insured property.
3133	(6)  The insurer shall pay reasonable the costs associated
3134	with the neutral evaluation. However, if a party chooses to hire
3135	a court reporter or stenographer to contemporaneously record and
3136	document the neutral evaluation, that party must bear such
3137	costs.
3138	(7)  Upon receipt of a request for neutral evaluation, the
3139	department shall provide the parties a list of certified neutral
3140	evaluators. The parties shall mutually select a neutral
3141	evaluator from the list and promptly inform the department. If
3142	the parties cannot agree to a neutral evaluator within 10
3143	business days, The department shall allow the parties to submit
3144	requests to disqualify evaluators on the list for cause.
3145	(a)  The department shall disqualify neutral evaluators for
3146	cause based only on any of the following grounds:
3147	1.  A familial relationship exists between the neutral
3148	evaluator and either party or a representative of either party
3149	within the third degree.
3150	2.  The proposed neutral evaluator has, in a professional
3151	capacity, previously represented either party or a
3152	representative of either party, in the same or a substantially
3153	related matter.
3154	3.  The proposed neutral evaluator has, in a professional
3155	capacity, represented another person in the same or a
3156	substantially related matter and that person's interests are
3157	materially adverse to the interests of the parties. The term
3158	"substantially related matter" means participation by the
3159	neutral evaluator on the same claim, property, or adjacent
3160	property.
3161	4.  The proposed neutral evaluator has, within the
3162	preceding 5 years, worked as an employer or employee of any
3163	party to the case.
3164	(b)  The parties shall appoint a neutral evaluator from the
3165	department list and promptly inform the department. If the
3166	parties cannot agree to a neutral evaluator within 14 days, the
3167	department shall appoint a neutral evaluator from the list of
3168	certified neutral evaluators. The department shall allow each
3169	party to disqualify two neutral evaluators without cause. Upon
3170	selection or appointment, the department shall promptly refer
3171	the request to the neutral evaluator.
3172	(c)  Within 14 5 business days after the referral, the
3173	neutral evaluator shall notify the policyholder and the insurer
3174	of the date, time, and place of the neutral evaluation
3175	conference. The conference may be held by telephone, if feasible
3176	and desirable. The neutral evaluator shall make reasonable
3177	efforts to hold the neutral evaluation conference shall be held
3178	within 90 45 days after the receipt of the request by the
3179	department. Failure of the neutral evaluator to hold the
3180	conference within 90 days does not invalidate either party's
3181	right to neutral evaluation or to a neutral evaluation
3182	conference held outside this timeframe.
3183	(8)  The department shall adopt rules of procedure for the
3184	neutral evaluation process.
3185	(8)(9)  For policyholders not represented by an attorney, a
3186	consumer affairs specialist of the department or an employee
3187	designated as the primary contact for consumers on issues
3188	relating to sinkholes under s. 20.121 shall be available for
3189	consultation to the extent that he or she may lawfully do so.
3190	(9)(10)  Evidence of an offer to settle a claim during the
3191	neutral evaluation process, as well as any relevant conduct or
3192	statements made in negotiations concerning the offer to settle a
3193	claim, is inadmissible to prove liability or absence of
3194	liability for the claim or its value, except as provided in
3195	subsection (14) (13).
3196	(10)(11)  Regardless of when noticed, any court proceeding
3197	related to the subject matter of the neutral evaluation shall be
3198	stayed pending completion of the neutral evaluation and for 5
3199	days after the filing of the neutral evaluator's report with the
3200	court.
3201	(11)  If, based upon his or her professional training and
3202	credentials, a neutral evaluator is qualified to determine only
3203	disputes relating to causation or method of repair, the
3204	department shall allow the neutral evaluator to enlist the
3205	assistance of another professional from the neutral evaluators
3206	list not previously stricken, who, based upon his or her
3207	professional training and credentials, is able to provide an
3208	opinion as to other disputed issues. A professional who would be
3209	disqualified for any reason listed in subsection (7) must be
3210	disqualified. The neutral evaluator may also use the services of
3211	professional engineers and professional geologists who are not
3212	certified as neutral evaluators, as well as licensed building
3213	contractors, in order to ensure that all items in dispute are
3214	addressed and the neutral evaluation can be completed. Any
3215	professional engineer, professional geologist, or licensed
3216	building contractor retained may be disqualified for any of the
3217	reasons listed in subsection (7). The neutral evaluator may
3218	request the entity that performed the investigation pursuant to
3219	s. 627.7072 perform such additional and reasonable testing as
3220	deemed necessary in the professional opinion of the neutral
3221	evaluator.
3222	(12)  At For matters that are not resolved by the parties
3223	at the conclusion of the neutral evaluation, the neutral
3224	evaluator shall prepare a report describing all matters that are
3225	the subject of the neutral evaluation, including whether,
3226	stating that in his or her opinion, the sinkhole loss has been
3227	verified or eliminated within a reasonable degree of
3228	professional probability and, if verified, whether the sinkhole
3229	activity caused structural damage to the covered building, and
3230	if so, the need for and estimated costs of stabilizing the land
3231	and any covered structures or buildings and other appropriate
3232	remediation or necessary building structural repairs due to the
3233	sinkhole loss. The evaluator's report shall be sent to all
3234	parties in attendance at the neutral evaluation and to the
3235	department, within 14 days after completing the neutral
3236	evaluation conference.
3237	(13)  The recommendation of the neutral evaluator is not
3238	binding on any party, and the parties retain access to the
3239	court. The neutral evaluator's written recommendation, oral
3240	testimony, and full report shall be admitted is admissible in
3241	any subsequent action, litigation, or proceeding relating to the
3242	claim or to the cause of action giving rise to the claim.
3243	However, oral or written statements or nonverbal conduct
3244	intended to make an assertion made by a party or neutral
3245	evaluator during the course of neutral evaluation, other than
3246	those statements or conduct expressly required to be admitted by
3247	this subsection, are confidential and may not be disclosed to a
3248	person other than a party to neutral evaluation or a party's
3249	counsel.
3250	(14)  If the neutral evaluator first verifies the existence
3251	of a sinkhole that caused structural damage and, second,
3252	recommends the need for and estimates costs of stabilizing the
3253	land and any covered structures or buildings and other
3254	appropriate remediation or building structural repairs, which
3255	costs exceed the amount that the insurer estimates as necessary
3256	to stabilize and repair, and the insurer refuses to comply with
3257	the neutral evaluator's findings and recommendations has offered
3258	to pay the policyholder, the insurer is liable to the
3259	policyholder for up to $2,500 in attorney's fees for the
3260	attorney's participation in the neutral evaluation process. For
3261	purposes of this subsection, the term "offer to pay" means a
3262	written offer signed by the insurer or its legal representative
3263	and delivered to the policyholder within 10 days after the
3264	insurer receives notice that a request for neutral evaluation
3265	has been made under this section.
3266	(15)  If the insurer timely agrees in writing to comply and
3267	timely complies with the recommendation of the neutral
3268	evaluator, but the policyholder declines to resolve the matter
3269	in accordance with the recommendation of the neutral evaluator
3270	pursuant to this section:
3271	(a)  The insurer is not liable for extracontractual damages
3272	related to a claim for a sinkhole loss but only as related to
3273	the issues determined by the neutral evaluation process. This
3274	section does not affect or impair claims for extracontractual
3275	damages unrelated to the issues determined by the neutral
3276	evaluation process contained in this section; and
3277	(b)  The actions of the insurer are not a confession of
3278	judgment or admission of liability, and the insurer is not
3279	liable for attorney's fees under s. 627.428 or other provisions
3280	of the insurance code unless the policyholder obtains a judgment
3281	that is more favorable than the recommendation of the neutral
3282	evaluator.
3283	(16)  If the insurer agrees to comply with the neutral
3284	evaluator's report, payments shall be made in accordance with
3285	the terms and conditions of the applicable insurance policy
3286	pursuant to s. 627.707(5).
3287	(17)  Neutral evaluators are deemed to be agents of the
3288	department and have immunity from suit as provided in s. 44.107.
3289	(18)  The department shall adopt rules of procedure for the
3290	neutral evaluation process.
3291	Section 26.  Subsection (1) of section 627.712, Florida
3292	Statutes, is amended to read:
3293	627.712  Residential windstorm coverage required;
3294	availability of exclusions for windstorm or contents.-
3295	(1)  An insurer issuing a residential property insurance
3296	policy must provide windstorm coverage. Except as provided in
3297	paragraph (2)(c), this section does not apply with respect to
3298	risks that are eligible for wind-only coverage from Citizens
3299	Property Insurance Corporation under s. 627.351(6), and with
3300	respect to risks that are not eligible for coverage from
3301	Citizens Property Insurance Corporation under s. 627.351(6)(a)3.
3302	or 5. A risk ineligible for Citizens coverage by the corporation
3303	under s. 627.351(6)(a)3. or 5. is exempt from the requirements
3304	of this section only if the risk is located within the
3305	boundaries of the coastal high-risk account of the corporation.
3306	Section 27.  If any provision of this act, or the
3307	application thereof to any person or circumstance is held
3308	invalid, such invalidity shall not affect other provisions or
3309	applications of this act which can be given effect without the
3310	invalid provision or application. It is the express intent of
3311	the Legislature to enact multiple important, but independent,
3312	reforms to Florida law relating to sinkhole insurance coverage
3313	and related claims. The Legislature further intends that the
3314	multiple reforms in the act could and should be enforced if one
3315	or more provisions are held invalid. To this end, the provisions
3316	of this act are declared to be severable.
3317	Section 28.  Except as otherwise expressly provided in this
3318	act and except for this section, which shall take effect June 1,
3319	2011, this act shall take effect July 1, 2011.

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