CS/HB 803

1	A bill to be entitled
2	An act relating to property and casualty insurance;
3	amending s. 215.555, F.S.; providing that specified losses
4	are excluded from the definition of the term "losses" as
5	used in certain provisions relating to the Florida
6	Hurricane Catastrophe Fund; providing for application of
7	the revisions made by this act to the term "losses";
8	amending s. 624.407, F.S.; revising the amount of surplus
9	funds required for domestic insurers applying for a
10	certificate of authority after a certain date; amending s.
11	624.408, F.S.; revising the minimum surplus that must be
12	maintained by certain insurers; authorizing the Office of
13	Insurance Regulation to reduce specified surplus
14	requirements under specified circumstances; amending s.
15	626.852, F.S.; providing an exemption from licensure as an
16	adjuster to certain persons who provide mortgage-related
17	claims adjusting services to certain institutions;
18	amending s. 626.854, F.S.; providing limitations on the
19	amount of compensation that may be received by a public
20	adjuster for a reopened or supplemental claim; providing
21	limitations on the amount of compensation that may be
22	received by a public adjuster for a claim; applying
23	specified provisions regulating the conduct of public
24	adjusters to condominium unit owners rather than to
25	condominium associations as is currently required;
26	providing statements that may be considered deceptive or
27	misleading if made in any public adjuster's advertisement
28	or solicitation; providing a definition for the term
29	"written advertisement"; requiring that a disclaimer be
30	included in any public adjuster's written advertisement;
31	providing requirements for such disclaimer; requiring
32	certain persons who act on behalf of an insurer to provide
33	notice to the insurer, claimant, public adjuster, or legal
34	representative for an onsite inspection of the insured
35	property; authorizing the insured or claimant to deny
36	access to the property if notice is not provided;
37	requiring the public adjuster to ensure prompt notice of
38	certain property loss claims; providing that an insurer be
39	allowed to interview the insured directly about the loss
40	claim; prohibiting the insurer from excluding the public
41	adjuster from the insurer's meetings with the insured;
42	requiring that the insurer communicate with the public
43	adjuster in an effort to reach an agreement as to the
44	scope of the covered loss under the insurance policy;
45	prohibiting a public adjuster from restricting or
46	preventing persons acting on behalf of the insurer from
47	having reasonable access to the insured or the insured's
48	property; prohibiting a public adjuster from unreasonably
49	obstructing or preventing the insurer's adjuster from
50	timely conducting an inspection of the insured's property;
51	authorizing the insured's adjuster to be present for the
52	inspection; providing an exception to such authorization
53	under certain circumstances; prohibiting a licensed
54	contractor or subcontractor from adjusting a claim on
55	behalf of an insured if such contractor or subcontractor
56	is not a licensed public adjuster; providing an exception;
57	creating s. 626.70132, F.S.; requiring that notice of a
58	claim, supplemental claim, or reopened claim be given to
59	the insurer within a specified period after a windstorm or
60	hurricane occurs; providing a definition for the terms
61	"supplemental claim" or "reopened claim"; providing
62	applicability; amending s. 627.062, F.S.; deleting
63	obsolete provisions; prohibiting the Office of Insurance
64	Regulation from, directly or indirectly, impeding the
65	right of an insurer to acquire policyholders, advertise or
66	appoint agents, or regulate agent commissions for property
67	and casualty insurance; deleting obsolete provisions
68	relating to legislation enacted during the 2003 Special
69	Session D of the Legislature; revising provisions relating
70	to the certifications that are required to be made under
71	oath by certain officers or actuaries of an insurer
72	regarding information that must accompany a rate filing;
73	amending s. 627.0629, F.S.; revising legislative intent;
74	deleting obsolete provisions; deleting a requirement that
75	the Office of Insurance Regulation propose a method for
76	establishing discounts, debits, credits, and other rate
77	differentials for hurricane mitigation by a certain date;
78	conforming provisions to changes made by the act; amending
79	s. 627.4133, F.S.; authorizing an insurer to cancel
80	policies after 45 days' notice if the Office of Insurance
81	Regulation determines that the cancellation of policies is
82	necessary to protect the interests of the public or
83	policyholders; creating s. 627.43141, F.S.; providing
84	definitions; requiring the delivery of a "Notice of Change
85	in Policy Terms" under certain circumstances; specifying
86	requirements for such notice; specifying actions
87	constituting proof of notice; authorizing policy renewals
88	to contain a change in policy terms; providing that
89	receipt of payment by an insurer is deemed acceptance of
90	new policy terms by an insured; providing that the
91	original policy remains in effect until the occurrence of
92	specified events if an insurer fails to provide notice;
93	providing intent; amending s. 627.7011, F.S.; revising
94	provisions relating to an insurer's payment of replacement
95	costs without reservation or holdback of any depreciation
96	in value if a loss occurs; requiring notice of the process
97	in the insurance contract; amending s. 627.70131, F.S.;
98	specifying application of certain time periods to initial,
99	reopened, or supplemental property insurance claim notices
100	and payments; providing legislative findings with respect
101	to 2005 statutory changes relating to sinkhole insurance
102	coverage and statutory changes in this act; providing
103	legislative intent relating to sinkholes; amending s.
104	627.706, F.S.; authorizing an insurer to require an
105	inspection of property before issuing sinkhole coverage;
106	authorizing an insurer to limit coverage for catastrophic
107	ground cover collapse and sinkhole loss to the principal
108	building; revising definitions relating to sinkhole
109	coverage; providing definitions relating to sinkhole
110	coverage for the terms "neutral evaluation," "neutral
111	evaluator," and "structural damage"; revising
112	applicability of nonrenewals for sinkhole coverage;
113	placing a 3-year statute of repose on claims for sinkhole
114	coverage; repealing s. 627.7065, F.S., relating to the
115	establishment of a sinkhole database; amending s. 627.707,
116	F.S.; revising provisions relating to the investigation of
117	sinkholes by insurers; providing a time limitation for
118	demanding sinkhole testing by a policyholder and entering
119	into a contract for repairs; requiring payment for
120	analyses and services; allowing for reimbursement of
121	payment for analyses and services; requiring all repairs
122	to be completed within a certain time; providing
123	exceptions; prohibiting rebates to policyholders from
124	persons performing repairs; voiding coverage if a rebate
125	is received; requiring policyholders to refund rebates
126	from persons performing repairs to insurers; providing
127	criminal penalties applicable to persons performing
128	repairs who offer or policyholders who accept rebates;
129	limiting a policyholder's liability for reimbursement of
130	the costs related to certain analyses and services under
131	certain circumstances; amending s. 627.7073, F.S.;
132	revising provisions relating to sinkhole inspection
133	reports; requiring an insurer to file a neutral
134	evaluator's report and other specific information;
135	requiring the policyholder to file certain reports as a
136	precondition to accepting payment; requiring certain
137	filing and recording costs to be borne by a policyholder;
138	specifying that a policyholder's recording of a report
139	does not legally affect title or create certain causes of
140	action relating to real property; amending s. 627.7074,
141	F.S.; revising provisions relating to neutral evaluation
142	of sinkhole insurance claims; requiring evaluation in
143	order to make certain determinations; requiring that the
144	neutral evaluator be allowed access to structures being
145	evaluated; providing grounds for disqualifying an
146	evaluator; allowing the Department of Financial Services
147	to appoint an evaluator if the parties cannot come to
148	agreement; revising the timeframes for scheduling a
149	neutral evaluation conference; authorizing an evaluator to
150	enlist another evaluator or other professionals; providing
151	a time certain for issuing a report; revising provisions
152	relating to compliance with the evaluator's
153	recommendations; providing that the evaluator is an agent
154	of the department for the purposes of immunity from suit;
155	requiring the department to adopt rules; amending s.
156	627.711, F.S.; allowing an insurer to independently verify
157	mitigation forms from additional sources; amending s.
158	631.54, F.S.; revising the definition of the term "covered
159	claim" for purposes of the Florida Insurance Guaranty
160	Association Act; providing severability; providing
161	effective dates.
162
163	Be It Enacted by the Legislature of the State of Florida:
164
165	Section 1.  Paragraph (d) of subsection (2) of section
166	215.555, Florida Statutes, is amended to read:
167	215.555  Florida Hurricane Catastrophe Fund.-
168	(2)  DEFINITIONS.-As used in this section:
169	(d)  "Losses" means direct incurred losses under covered
170	policies, including which shall include losses for additional
171	living expenses not to exceed 40 percent of the insured value of
172	a residential structure or its contents and shall exclude loss
173	adjustment expenses. The term "Losses" does not include:
174	1.  Losses for fair rental value, loss of rent or rental
175	income, or business interruption losses;.
176	2.  Losses under liability coverages;
177	3.  Property losses that are proximately caused by any
178	peril other than a covered event, including, but not limited to,
179	fire, theft, flood or rising water, or a windstorm that does not
180	constitute a covered event;
181	4.  Amounts paid as the result of a voluntary expansion of
182	coverage by the insurer, including, but not limited to, a waiver
183	of an applicable deductible;
184	5.  Amounts paid to reimburse a policyholder for
185	condominium association or homeowners' association loss
186	assessments or under similar coverages for contractual
187	liabilities;
188	6.  Amounts paid as bad faith awards, punitive damage
189	awards, or other court-imposed fines, sanctions, or penalties;
190	7.  Amounts in excess of the coverage limits under the
191	covered policy; or
192	8.  Allocated or unallocated loss adjustment expenses.
193	Section 2.  The amendments made by this act to s. 215.555,
194	Florida Statutes, apply first to the Florida Hurricane
195	Catastrophe Fund reimbursement contract that takes effect on
196	June 1, 2011.
197	Section 3.  Section 624.407, Florida Statutes, is amended
198	to read:
199	624.407  Surplus Capital funds required; new insurers.-
200	(1)  To receive authority to transact any one kind or
201	combinations of kinds of insurance, as defined in part V of this
202	chapter, an insurer applying for its original certificate of
203	authority in this state after November 10, 1993, the effective
204	date of this section shall possess surplus as to policyholders
205	at least not less than the greater of:
206	(a)  Five million dollars For a property and casualty
207	insurer, $5 million, or $2.5 million for any other insurer;
208	(b)  For life insurers, 4 percent of the insurer's total
209	liabilities;
210	(c)  For life and health insurers, 4 percent of the
211	insurer's total liabilities, plus 6 percent of the insurer's
212	liabilities relative to health insurance; or
213	(d)  For all insurers other than life insurers and life and
214	health insurers, 10 percent of the insurer's total liabilities;
215	or
216	(e)  Notwithstanding paragraph (a) or paragraph (d), for a
217	domestic insurer that transacts residential property insurance
218	and is:
219	1.  Not a wholly owned subsidiary of an insurer domiciled
220	in any other state, $15 million.
221	2.  however, a domestic insurer that transacts residential
222	property insurance and is A wholly owned subsidiary of an
223	insurer domiciled in any other state, shall possess surplus as
224	to policyholders of at least $50 million.
225	(2)  Notwithstanding subsection (1), a new insurer may not
226	be required, but no insurer shall be required under this
227	subsection to have surplus as to policyholders greater than $100
228	million.
229	(3)(2)  The requirements of this section shall be based
230	upon all the kinds of insurance actually transacted or to be
231	transacted by the insurer in any and all areas in which it
232	operates, whether or not only a portion of such kinds of
233	insurance are to be transacted in this state.
234	(4)(3)  As to surplus as to policyholders required for
235	qualification to transact one or more kinds of insurance,
236	domestic mutual insurers are governed by chapter 628, and
237	domestic reciprocal insurers are governed by chapter 629.
238	(5)(4)  For the purposes of this section, liabilities do
239	shall not include liabilities required under s. 625.041(4). For
240	purposes of computing minimum surplus as to policyholders
241	pursuant to s. 625.305(1), liabilities shall include liabilities
242	required under s. 625.041(4).
243	(6)(5)  The provisions of this section, as amended by
244	chapter 89-360, Laws of Florida this act, shall apply only to
245	insurers applying for a certificate of authority on or after
246	October 1, 1989 the effective date of this act.
247	Section 4.  Section 624.408, Florida Statutes, is amended
248	to read:
249	624.408  Surplus as to policyholders required; current new
250	and existing insurers.-
251	(1)(a)  To maintain a certificate of authority to transact
252	any one kind or combinations of kinds of insurance, as defined
253	in part V of this chapter, an insurer in this state must shall
254	at all times maintain surplus as to policyholders at least not
255	less than the greater of:
256	(a)1.  Except as provided in paragraphs (e), (f), and (g)
257	subparagraph 5. and paragraph (b), $1.5 million.;
258	(b)2.  For life insurers, 4 percent of the insurer's total
259	liabilities.;
260	(c)3.  For life and health insurers, 4 percent of the
261	insurer's total liabilities plus 6 percent of the insurer's
262	liabilities relative to health insurance.; or
263	(d)4.  For all insurers other than mortgage guaranty
264	insurers, life insurers, and life and health insurers, 10
265	percent of the insurer's total liabilities.
266	(e)5.  For property and casualty insurers, $4 million,
267	except for property and casualty insurers authorized to
268	underwrite any line of residential property insurance.
269	(f)(b)  For residential any property insurers not and
270	casualty insurer holding a certificate of authority before July
271	1, 2011 on December 1, 1993, $15 million. the
272	(g)  For residential property insurers holding a
273	certificate of authority before July 1, 2011, and until June 30,
274	2016, $5 million; on or after July 1, 2016, and until June 30,
275	2021, $10 million; on or after July 1, 2021, $15 million.
276
277	The office may reduce the surplus requirement in paragraphs (f)
278	and (g) if the insurer is not writing new business, has premiums
279	in force of less than $1 million per year in residential
280	property insurance, or is a mutual insurance company. following
281	amounts apply instead of the $4 million required by subparagraph
282	(a)5.:
283	1.  On December 31, 2001, and until December 30, 2002, $3
284	million.
285	2.  On December 31, 2002, and until December 30, 2003,
286	$3.25 million.
287	3.  On December 31, 2003, and until December 30, 2004, $3.6
288	million.
289	4.  On December 31, 2004, and thereafter, $4 million.
290	(2)  For purposes of this section, liabilities do shall not
291	include liabilities required under s. 625.041(4). For purposes
292	of computing minimum surplus as to policyholders pursuant to s.
293	625.305(1), liabilities shall include liabilities required under
294	s. 625.041(4).
295	(3)  This section does not require an No insurer shall be
296	required under this section to have surplus as to policyholders
297	greater than $100 million.
298	(4)  A mortgage guaranty insurer shall maintain a minimum
299	surplus as required by s. 635.042.
300	Section 5.  Subsection (7) is added to section 626.852,
301	Florida Statutes, to read:
302	626.852  Scope of this part.-
303	(7)  Notwithstanding any other provision of law, a person
304	providing claims adjusting services solely to institutions
305	servicing or guaranteeing mortgages shall be exempt from
306	licensure as an adjuster for services provided to the mortgage
307	institution with regards to policies covering the mortgaged
308	properties.
309	Section 6.  Effective June 1, 2011, section 626.854,
310	Florida Statutes, is amended to read:
311	626.854  "Public adjuster" defined; prohibitions.-The
312	Legislature finds that it is necessary for the protection of the
313	public to regulate public insurance adjusters and to prevent the
314	unauthorized practice of law.
315	(1)  A "public adjuster" is any person, except a duly
316	licensed attorney at law as hereinafter in s. 626.860 provided,
317	who, for money, commission, or any other thing of value,
318	prepares, completes, or files an insurance claim form for an
319	insured or third-party claimant or who, for money, commission,
320	or any other thing of value, acts or aids in any manner on
321	behalf of an insured or third-party claimant in negotiating for
322	or effecting the settlement of a claim or claims for loss or
323	damage covered by an insurance contract or who advertises for
324	employment as an adjuster of such claims, and also includes any
325	person who, for money, commission, or any other thing of value,
326	solicits, investigates, or adjusts such claims on behalf of any
327	such public adjuster.
328	(2)  This definition does not apply to:
329	(a)  A licensed health care provider or employee thereof
330	who prepares or files a health insurance claim form on behalf of
331	a patient.
332	(b)  A person who files a health claim on behalf of another
333	and does so without compensation.
334	(3)  A public adjuster may not give legal advice. A public
335	adjuster may not act on behalf of or aid any person in
336	negotiating or settling a claim relating to bodily injury,
337	death, or noneconomic damages.
338	(4)  For purposes of this section, the term "insured"
339	includes only the policyholder and any beneficiaries named or
340	similarly identified in the policy.
341	(5)  A public adjuster may not directly or indirectly
342	through any other person or entity solicit an insured or
343	claimant by any means except on Monday through Saturday of each
344	week and only between the hours of 8 a.m. and 8 p.m. on those
345	days.
346	(6)  A public adjuster may not directly or indirectly
347	through any other person or entity initiate contact or engage in
348	face-to-face or telephonic solicitation or enter into a contract
349	with any insured or claimant under an insurance policy until at
350	least 48 hours after the occurrence of an event that may be the
351	subject of a claim under the insurance policy unless contact is
352	initiated by the insured or claimant.
353	(7)  An insured or claimant may cancel a public adjuster's
354	contract to adjust a claim without penalty or obligation within
355	3 business days after the date on which the contract is executed
356	or within 3 business days after the date on which the insured or
357	claimant has notified the insurer of the claim, by phone or in
358	writing, whichever is later. The public adjuster's contract
359	shall disclose to the insured or claimant his or her right to
360	cancel the contract and advise the insured or claimant that
361	notice of cancellation must be submitted in writing and sent by
362	certified mail, return receipt requested, or other form of
363	mailing which provides proof thereof, to the public adjuster at
364	the address specified in the contract; provided, during any
365	state of emergency as declared by the Governor and for a period
366	of 1 year after the date of loss, the insured or claimant shall
367	have 5 business days after the date on which the contract is
368	executed to cancel a public adjuster's contract.
369	(8)  It is an unfair and deceptive insurance trade practice
370	pursuant to s. 626.9541 for a public adjuster or any other
371	person to circulate or disseminate any advertisement,
372	announcement, or statement containing any assertion,
373	representation, or statement with respect to the business of
374	insurance which is untrue, deceptive, or misleading.
375	(9)  A public adjuster, a public adjuster apprentice, or
376	any person or entity acting on behalf of a public adjuster or
377	public adjuster apprentice may not give or offer to give a
378	monetary loan or advance to a client or prospective client.
379	(10)  A public adjuster, public adjuster apprentice, or any
380	individual or entity acting on behalf of a public adjuster or
381	public adjuster apprentice may not give or offer to give,
382	directly or indirectly, any article of merchandise having a
383	value in excess of $25 to any individual for the purpose of
384	advertising or as an inducement to entering into a contract with
385	a public adjuster.
386	(11)(a)  If a public adjuster enters into a contract with
387	an insured or claimant to reopen a claim or to file a
388	supplemental claim that seeks additional payments for a claim
389	that has been previously paid in part or in full or settled by
390	the insurer, the public adjuster may not charge, agree to, or
391	accept any compensation, payment, commission, fee, or other
392	thing of value based on a previous settlement or previous claim
393	payments by the insurer for the same cause of loss. The charge,
394	compensation, payment, commission, fee, or other thing of value
395	may be based only on the claim payments or settlement obtained
396	through the work of the public adjuster after entering into the
397	contract with the insured or claimant. Compensation for the
398	reopened or supplemental claim may not exceed 20 percent of the
399	reopened or supplemental claim payment. The contracts described
400	in this paragraph are not subject to the limitations in
401	paragraph (b).
402	(b)  A public adjuster may not charge, agree to, or accept
403	any compensation, payment, commission, fee, or other thing of
404	value in excess of:
405	1.  Ten percent of the amount of insurance claim payments
406	made by the insurer for claims based on events that are the
407	subject of a declaration of a state of emergency by the
408	Governor. This provision applies to claims made during the
409	period of 1 year after the declaration of emergency. After that
410	1-year period, 20 percent of the amount of insurance claim
411	payments made by the insurer.
412	2.  Twenty percent of the amount of all other insurance
413	claim payments made by the insurer for claims that are not based
414	on events that are the subject of a declaration of a state of
415	emergency by the Governor.
416	(12)  Each public adjuster shall provide to the claimant or
417	insured a written estimate of the loss to assist in the
418	submission of a proof of loss or any other claim for payment of
419	insurance proceeds. The public adjuster shall retain such
420	written estimate for at least 5 years and shall make such
421	estimate available to the claimant or insured and the department
422	upon request.
423	(13)  A public adjuster, public adjuster apprentice, or any
424	person acting on behalf of a public adjuster or apprentice may
425	not accept referrals of business from any person with whom the
426	public adjuster conducts business if there is any form or manner
427	of agreement to compensate the person, whether directly or
428	indirectly, for referring business to the public adjuster. A
429	public adjuster may not compensate any person, except for
430	another public adjuster, whether directly or indirectly, for the
431	principal purpose of referring business to the public adjuster.
432
433	The provisions of subsections (5)-(13) apply only to residential
434	property insurance policies and condominium unit owner
435	association policies as defined in s. 718.111(11).
436	Section 7.  Effective January 1, 2012, section 626.854,
437	Florida Statutes, as amended by this act, is amended to read:
438	626.854  "Public adjuster" defined; prohibitions.-The
439	Legislature finds that it is necessary for the protection of the
440	public to regulate public insurance adjusters and to prevent the
441	unauthorized practice of law.
442	(1)  A "public adjuster" is any person, except a duly
443	licensed attorney at law as exempted under hereinafter in s.
444	626.860 provided, who, for money, commission, or any other thing
445	of value, prepares, completes, or files an insurance claim form
446	for an insured or third-party claimant or who, for money,
447	commission, or any other thing of value, acts or aids in any
448	manner on behalf of, or aids an insured or third-party claimant
449	in negotiating for or effecting the settlement of a claim or
450	claims for loss or damage covered by an insurance contract or
451	who advertises for employment as an adjuster of such claims. The
452	term, and also includes any person who, for money, commission,
453	or any other thing of value, solicits, investigates, or adjusts
454	such claims on behalf of a any such public adjuster.
455	(2)  This definition does not apply to:
456	(a)  A licensed health care provider or employee thereof
457	who prepares or files a health insurance claim form on behalf of
458	a patient.
459	(b)  A person who files a health claim on behalf of another
460	and does so without compensation.
461	(3)  A public adjuster may not give legal advice or. A
462	public adjuster may not act on behalf of or aid any person in
463	negotiating or settling a claim relating to bodily injury,
464	death, or noneconomic damages.
465	(4)  For purposes of this section, the term "insured"
466	includes only the policyholder and any beneficiaries named or
467	similarly identified in the policy.
468	(5)  A public adjuster may not directly or indirectly
469	through any other person or entity solicit an insured or
470	claimant by any means except on Monday through Saturday of each
471	week and only between the hours of 8 a.m. and 8 p.m. on those
472	days.
473	(6)  A public adjuster may not directly or indirectly
474	through any other person or entity initiate contact or engage in
475	face-to-face or telephonic solicitation or enter into a contract
476	with any insured or claimant under an insurance policy until at
477	least 48 hours after the occurrence of an event that may be the
478	subject of a claim under the insurance policy unless contact is
479	initiated by the insured or claimant.
480	(7)  An insured or claimant may cancel a public adjuster's
481	contract to adjust a claim without penalty or obligation within
482	3 business days after the date on which the contract is executed
483	or within 3 business days after the date on which the insured or
484	claimant has notified the insurer of the claim, by phone or in
485	writing, whichever is later. The public adjuster's contract must
486	shall disclose to the insured or claimant his or her right to
487	cancel the contract and advise the insured or claimant that
488	notice of cancellation must be submitted in writing and sent by
489	certified mail, return receipt requested, or other form of
490	mailing that which provides proof thereof, to the public
491	adjuster at the address specified in the contract; provided,
492	during any state of emergency as declared by the Governor and
493	for a period of 1 year after the date of loss, the insured or
494	claimant has shall have 5 business days after the date on which
495	the contract is executed to cancel a public adjuster's contract.
496	(8)  It is an unfair and deceptive insurance trade practice
497	pursuant to s. 626.9541 for a public adjuster or any other
498	person to circulate or disseminate any advertisement,
499	announcement, or statement containing any assertion,
500	representation, or statement with respect to the business of
501	insurance which is untrue, deceptive, or misleading.
502	(a)  The following statements, made in any public
503	adjuster's advertisement or solicitation, are considered
504	deceptive or misleading:
505	1.  A statement or representation that invites an insured
506	policyholder to submit a claim when the policyholder does not
507	have covered damage to insured property.
508	2.  A statement or representation that invites an insured
509	policyholder to submit a claim by offering monetary or other
510	valuable inducement.
511	3.  A statement or representation that invites an insured
512	policyholder to submit a claim by stating that there is "no
513	risk" to the policyholder by submitting such claim.
514	4.  A statement or representation, or use of a logo or
515	shield, that implies or could mistakenly be construed to imply
516	that the solicitation was issued or distributed by a
517	governmental agency or is sanctioned or endorsed by a
518	governmental agency.
519	(b)  For purposes of this paragraph, the term "written
520	advertisement" includes only newspapers, magazines, flyers, and
521	bulk mailers. The following disclaimer, which is not required to
522	be printed on standard size business cards, must be added in
523	bold print and capital letters in typeface no smaller than the
524	typeface of the body of the text to all written advertisements
525	by a public adjuster:
526
527	"THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
528	A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
529	ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
530	MAY DISREGARD THIS ADVERTISEMENT."
531
532	(9)  A public adjuster, a public adjuster apprentice, or
533	any person or entity acting on behalf of a public adjuster or
534	public adjuster apprentice may not give or offer to give a
535	monetary loan or advance to a client or prospective client.
536	(10)  A public adjuster, public adjuster apprentice, or any
537	individual or entity acting on behalf of a public adjuster or
538	public adjuster apprentice may not give or offer to give,
539	directly or indirectly, any article of merchandise having a
540	value in excess of $25 to any individual for the purpose of
541	advertising or as an inducement to entering into a contract with
542	a public adjuster.
543	(11)(a)  If a public adjuster enters into a contract with
544	an insured or claimant to reopen a claim or file a supplemental
545	claim that seeks additional payments for a claim that has been
546	previously paid in part or in full or settled by the insurer,
547	the public adjuster may not charge, agree to, or accept any
548	compensation, payment, commission, fee, or other thing of value
549	based on a previous settlement or previous claim payments by the
550	insurer for the same cause of loss. The charge, compensation,
551	payment, commission, fee, or other thing of value may be based
552	only on the claim payments or settlement obtained through the
553	work of the public adjuster after entering into the contract
554	with the insured or claimant. Compensation for the reopened or
555	supplemental claim may not exceed 20 percent of the reopened or
556	supplemental claim payment. The contracts described in this
557	paragraph are not subject to the limitations in paragraph (b).
558	(b)  A public adjuster may not charge, agree to, or accept
559	any compensation, payment, commission, fee, or other thing of
560	value in excess of:
561	1.  Ten percent of the amount of insurance claim payments
562	made by the insurer for claims based on events that are the
563	subject of a declaration of a state of emergency by the
564	Governor. This provision applies to claims made during the
565	period of 1 year after the declaration of emergency. After that
566	1-year period, 20 percent of the amount of insurance claim
567	payments made by the insurer.
568	2.  Twenty percent of the amount of insurance claim
569	payments made by the insurer for claims that are not based on
570	events that are the subject of a declaration of a state of
571	emergency by the Governor.
572	(12)  Each public adjuster must shall provide to the
573	claimant or insured a written estimate of the loss to assist in
574	the submission of a proof of loss or any other claim for payment
575	of insurance proceeds. The public adjuster shall retain such
576	written estimate for at least 5 years and shall make the such
577	estimate available to the claimant or insured and the department
578	upon request.
579	(13)  A public adjuster, public adjuster apprentice, or any
580	person acting on behalf of a public adjuster or apprentice may
581	not accept referrals of business from any person with whom the
582	public adjuster conducts business if there is any form or manner
583	of agreement to compensate the person, whether directly or
584	indirectly, for referring business to the public adjuster. A
585	public adjuster may not compensate any person, except for
586	another public adjuster, whether directly or indirectly, for the
587	principal purpose of referring business to the public adjuster.
588	(14)  A company employee adjuster, independent adjuster,
589	attorney, investigator, or other persons acting on behalf of an
590	insurer that needs access to an insured or claimant or to the
591	insured property that is the subject of a claim must provide at
592	least 48 hours' notice to the insured or claimant, public
593	adjuster, or legal representative before scheduling a meeting
594	with the claimant or an onsite inspection of the insured
595	property. The insured or claimant may deny access to the
596	property if the notice has not been provided. The insured or
597	claimant may waive the 48-hour notice.
598	(15)  A public adjuster must ensure prompt notice of
599	property loss claims submitted to an insurer by or through a
600	public adjuster or on which a public adjuster represents the
601	insured at the time the claim or notice of loss is submitted to
602	the insurer. The public adjuster must ensure that notice is
603	given to the insurer, the public adjuster's contract is provided
604	to the insurer, the property is available for inspection of the
605	loss or damage by the insurer, and the insurer is given an
606	opportunity to interview the insured directly about the loss and
607	claim. The insurer must be allowed to obtain necessary
608	information to investigate and respond to the claim.
609	(a)  The insurer may not exclude the public adjuster from
610	its in-person meetings with the insured. The insurer shall meet
611	or communicate with the public adjuster in an effort to reach
612	agreement as to the scope of the covered loss under the
613	insurance policy. This section does not impair the terms and
614	conditions of the insurance policy in effect at the time the
615	claim is filed.
616	(b)  A public adjuster may not restrict or prevent an
617	insurer, company employee adjuster, independent adjuster,
618	attorney, investigator, or other person acting on behalf of the
619	insurer from having reasonable access at reasonable times to an
620	insured or claimant or to the insured property that is the
621	subject of a claim.
622	(c)  A public adjuster may not act or fail to reasonably
623	act in any manner that obstructs or prevents an insurer or
624	insurer's adjuster from timely conducting an inspection of any
625	part of the insured property for which there is a claim for loss
626	or damage. The public adjuster representing the insured may be
627	present for the insurer's inspection, but if the unavailability
628	of the public adjuster otherwise delays the insurer's timely
629	inspection of the property, the public adjuster or the insured
630	must allow the insurer to have access to the property without
631	the participation or presence of the public adjuster or insured
632	in order to facilitate the insurer's prompt inspection of the
633	loss or damage.
634	(16)  A licensed contractor under part I of chapter 489, or
635	a subcontractor, may not adjust a claim on behalf of an insured
636	unless licensed and compliant as a public adjuster under this
637	chapter. However, the contractor may discuss or explain a bid
638	for construction or repair of covered property with the
639	residential property owner who has suffered loss or damage
640	covered by a property insurance policy, or the insurer of such
641	property, if the contractor is doing so for the usual and
642	customary fees applicable to the work to be performed as stated
643	in the contract between the contractor and the insured.
644	(17)  The provisions of subsections (5)-(16) (5)-(13) apply
645	only to residential property insurance policies and condominium
646	unit owner policies as defined in s. 718.111(11).
647	Section 8.  Effective June 1, 2011, section 626.70132,
648	Florida Statutes, is created to read:
649	626.70132  Notice of windstorm or hurricane claim.-A claim,
650	supplemental claim, or reopened claim under an insurance policy
651	that provides personal lines residential coverage, as defined in
652	s. 627.4025, for loss or damage caused by the peril of windstorm
653	or hurricane is barred unless notice of the claim, supplemental
654	claim, or reopened claim was given to the insurer in accordance
655	with the terms of the policy within 3 years after the hurricane
656	first made landfall or the windstorm caused the covered damage.
657	For purposes of this section, the term "supplemental claim" or
658	"reopened claim" means any additional claim for recovery from
659	the insurer for losses from the same hurricane or windstorm
660	which the insurer has previously adjusted pursuant to the
661	initial claim. This section does not affect any applicable
662	limitation on civil actions provided in s. 95.11 for claims,
663	supplemental claims, or reopened claims timely filed under this
664	section.
665	Section 9.  Section 627.062, Florida Statutes, is amended
666	to read:
667	627.062  Rate standards.-
668	(1)  The rates for all classes of insurance to which the
669	provisions of this part are applicable may shall not be
670	excessive, inadequate, or unfairly discriminatory.
671	(2)  As to all such classes of insurance:
672	(a)  Insurers or rating organizations shall establish and
673	use rates, rating schedules, or rating manuals that to allow the
674	insurer a reasonable rate of return on the such classes of
675	insurance written in this state. A copy of rates, rating
676	schedules, rating manuals, premium credits or discount
677	schedules, and surcharge schedules, and changes thereto, must
678	shall be filed with the office under one of the following
679	procedures except as provided in subparagraph 3.:
680	1.  If the filing is made at least 90 days before the
681	proposed effective date and the filing is not implemented during
682	the office's review of the filing and any proceeding and
683	judicial review, then such filing is shall be considered a "file
684	and use" filing. In such case, the office shall finalize its
685	review by issuance of a notice of intent to approve or a notice
686	of intent to disapprove within 90 days after receipt of the
687	filing. The notice of intent to approve and the notice of intent
688	to disapprove constitute agency action for purposes of the
689	Administrative Procedure Act. Requests for supporting
690	information, requests for mathematical or mechanical
691	corrections, or notification to the insurer by the office of its
692	preliminary findings does shall not toll the 90-day period
693	during any such proceedings and subsequent judicial review. The
694	rate shall be deemed approved if the office does not issue a
695	notice of intent to approve or a notice of intent to disapprove
696	within 90 days after receipt of the filing.
697	2.  If the filing is not made in accordance with the
698	provisions of subparagraph 1., such filing must shall be made as
699	soon as practicable, but within no later than 30 days after the
700	effective date, and is shall be considered a "use and file"
701	filing. An insurer making a "use and file" filing is potentially
702	subject to an order by the office to return to policyholders
703	those portions of rates found to be excessive, as provided in
704	paragraph (h).
705	3.  For all property insurance filings made or submitted
706	after January 25, 2007, but before December 31, 2010, an insurer
707	seeking a rate that is greater than the rate most recently
708	approved by the office shall make a "file and use" filing. For
709	purposes of this subparagraph, motor vehicle collision and
710	comprehensive coverages are not considered to be property
711	coverages.
712	(b)  Upon receiving a rate filing, the office shall review
713	the rate filing to determine if a rate is excessive, inadequate,
714	or unfairly discriminatory. In making that determination, the
715	office shall, in accordance with generally accepted and
716	reasonable actuarial techniques, consider the following factors:
717	1.  Past and prospective loss experience within and without
718	this state.
719	2.  Past and prospective expenses.
720	3.  The degree of competition among insurers for the risk
721	insured.
722	4.  Investment income reasonably expected by the insurer,
723	consistent with the insurer's investment practices, from
724	investable premiums anticipated in the filing, plus any other
725	expected income from currently invested assets representing the
726	amount expected on unearned premium reserves and loss reserves.
727	The commission may adopt rules using reasonable techniques of
728	actuarial science and economics to specify the manner in which
729	insurers shall calculate investment income attributable to such
730	classes of insurance written in this state and the manner in
731	which such investment income is shall be used to calculate
732	insurance rates. Such manner must shall contemplate allowances
733	for an underwriting profit factor and full consideration of
734	investment income which produce a reasonable rate of return;
735	however, investment income from invested surplus may not be
736	considered.
737	5.  The reasonableness of the judgment reflected in the
738	filing.
739	6.  Dividends, savings, or unabsorbed premium deposits
740	allowed or returned to Florida policyholders, members, or
741	subscribers.
742	7.  The adequacy of loss reserves.
743	8.  The cost of reinsurance. The office may shall not
744	disapprove a rate as excessive solely due to the insurer having
745	obtained catastrophic reinsurance to cover the insurer's
746	estimated 250-year probable maximum loss or any lower level of
747	loss.
748	9.  Trend factors, including trends in actual losses per
749	insured unit for the insurer making the filing.
750	10.  Conflagration and catastrophe hazards, if applicable.
751	11.  Projected hurricane losses, if applicable, which must
752	be estimated using a model or method found to be acceptable or
753	reliable by the Florida Commission on Hurricane Loss Projection
754	Methodology, and as further provided in s. 627.0628.
755	12.  A reasonable margin for underwriting profit and
756	contingencies.
757	13.  The cost of medical services, if applicable.
758	14.  Other relevant factors that affect which impact upon
759	the frequency or severity of claims or upon expenses.
760	(c)  In the case of fire insurance rates, consideration
761	must shall be given to the availability of water supplies and
762	the experience of the fire insurance business during a period of
763	not less than the most recent 5-year period for which such
764	experience is available.
765	(d)  If conflagration or catastrophe hazards are considered
766	given consideration by an insurer in its rates or rating plan,
767	including surcharges and discounts, the insurer shall establish
768	a reserve for that portion of the premium allocated to such
769	hazard and shall maintain the premium in a catastrophe reserve.
770	Any Removal of such premiums from the reserve for purposes other
771	than paying claims associated with a catastrophe or purchasing
772	reinsurance for catastrophes must be approved by shall be
773	subject to approval of the office. Any ceding commission
774	received by an insurer purchasing reinsurance for catastrophes
775	must shall be placed in the catastrophe reserve.
776	(e)  After consideration of the rate factors provided in
777	paragraphs (b), (c), and (d), the office may find a rate may be
778	found by the office to be excessive, inadequate, or unfairly
779	discriminatory based upon the following standards:
780	1.  Rates shall be deemed excessive if they are likely to
781	produce a profit from Florida business which that is
782	unreasonably high in relation to the risk involved in the class
783	of business or if expenses are unreasonably high in relation to
784	services rendered.
785	2.  Rates shall be deemed excessive if, among other things,
786	the rate structure established by a stock insurance company
787	provides for replenishment of surpluses from premiums, if when
788	the replenishment is attributable to investment losses.
789	3.  Rates shall be deemed inadequate if they are clearly
790	insufficient, together with the investment income attributable
791	to them, to sustain projected losses and expenses in the class
792	of business to which they apply.
793	4.  A rating plan, including discounts, credits, or
794	surcharges, shall be deemed unfairly discriminatory if it fails
795	to clearly and equitably reflect consideration of the
796	policyholder's participation in a risk management program
797	adopted pursuant to s. 627.0625.
798	5.  A rate shall be deemed inadequate as to the premium
799	charged to a risk or group of risks if discounts or credits are
800	allowed which exceed a reasonable reflection of expense savings
801	and reasonably expected loss experience from the risk or group
802	of risks.
803	6.  A rate shall be deemed unfairly discriminatory as to a
804	risk or group of risks if the application of premium discounts,
805	credits, or surcharges among such risks does not bear a
806	reasonable relationship to the expected loss and expense
807	experience among the various risks.
808	(f)  In reviewing a rate filing, the office may require the
809	insurer to provide, at the insurer's expense, all information
810	necessary to evaluate the condition of the company and the
811	reasonableness of the filing according to the criteria
812	enumerated in this section.
813	(g)  The office may at any time review a rate, rating
814	schedule, rating manual, or rate change; the pertinent records
815	of the insurer; and market conditions. If the office finds on a
816	preliminary basis that a rate may be excessive, inadequate, or
817	unfairly discriminatory, the office shall initiate proceedings
818	to disapprove the rate and shall so notify the insurer. However,
819	the office may not disapprove as excessive any rate for which it
820	has given final approval or which has been deemed approved for a
821	period of 1 year after the effective date of the filing unless
822	the office finds that a material misrepresentation or material
823	error was made by the insurer or was contained in the filing.
824	Upon being so notified, the insurer or rating organization
825	shall, within 60 days, file with the office all information that
826	which, in the belief of the insurer or organization, proves the
827	reasonableness, adequacy, and fairness of the rate or rate
828	change. The office shall issue a notice of intent to approve or
829	a notice of intent to disapprove pursuant to the procedures of
830	paragraph (a) within 90 days after receipt of the insurer's
831	initial response. In such instances and in any administrative
832	proceeding relating to the legality of the rate, the insurer or
833	rating organization shall carry the burden of proof by a
834	preponderance of the evidence to show that the rate is not
835	excessive, inadequate, or unfairly discriminatory. After the
836	office notifies an insurer that a rate may be excessive,
837	inadequate, or unfairly discriminatory, unless the office
838	withdraws the notification, the insurer may shall not alter the
839	rate except to conform to with the office's notice until the
840	earlier of 120 days after the date the notification was provided
841	or 180 days after the date of implementing the implementation of
842	the rate. The office may, subject to chapter 120, may disapprove
843	without the 60-day notification any rate increase filed by an
844	insurer within the prohibited time period or during the time
845	that the legality of the increased rate is being contested.
846	(h)  If In the event the office finds that a rate or rate
847	change is excessive, inadequate, or unfairly discriminatory, the
848	office shall issue an order of disapproval specifying that a new
849	rate or rate schedule, which responds to the findings of the
850	office, be filed by the insurer. The office shall further order,
851	for any "use and file" filing made in accordance with
852	subparagraph (a)2., that premiums charged each policyholder
853	constituting the portion of the rate above that which was
854	actuarially justified be returned to the such policyholder in
855	the form of a credit or refund. If the office finds that an
856	insurer's rate or rate change is inadequate, the new rate or
857	rate schedule filed with the office in response to such a
858	finding is shall be applicable only to new or renewal business
859	of the insurer written on or after the effective date of the
860	responsive filing.
861	(i)  Except as otherwise specifically provided in this
862	chapter, the office may shall not, directly or indirectly:
863	1.  Prohibit any insurer, including any residual market
864	plan or joint underwriting association, from paying acquisition
865	costs based on the full amount of premium, as defined in s.
866	627.403, applicable to any policy, or prohibit any such insurer
867	from including the full amount of acquisition costs in a rate
868	filing; or.
869	2.  Impede, abridge, or otherwise compromise an insurer's
870	right to acquire policyholders, advertise, or appoint agents,
871	including the calculation, manner, or amount of such agent
872	commissions, if any, in property and casualty insurance.
873	(j)  With respect to residential property insurance rate
874	filings, the rate filing must account for mitigation measures
875	undertaken by policyholders to reduce hurricane losses.
876	(k)1.  An insurer may make a separate filing limited solely
877	to an adjustment of its rates for reinsurance or financing costs
878	incurred in the purchase of reinsurance or financing products to
879	replace or finance the payment of the amount covered by the
880	Temporary Increase in Coverage Limits (TICL) portion of the
881	Florida Hurricane Catastrophe Fund including replacement
882	reinsurance for the TICL reductions made pursuant to s.
883	215.555(17)(e); the actual cost paid due to the application of
884	the TICL premium factor pursuant to s. 215.555(17)(f); and the
885	actual cost paid due to the application of the cash build-up
886	factor pursuant to s. 215.555(5)(b) if the insurer:
887	a.  Elects to purchase financing products such as a
888	liquidity instrument or line of credit, in which case the cost
889	included in the filing for the liquidity instrument or line of
890	credit may not result in a premium increase exceeding 3 percent
891	for any individual policyholder. All costs contained in the
892	filing may not result in an overall premium increase of more
893	than 10 percent for any individual policyholder.
894	b.  Includes in the filing a copy of all of its
895	reinsurance, liquidity instrument, or line of credit contracts;
896	proof of the billing or payment for the contracts; and the
897	calculation upon which the proposed rate change is based
898	demonstrates that the costs meet the criteria of this section
899	and are not loaded for expenses or profit for the insurer making
900	the filing.
901	c.  Includes no other changes to its rates in the filing.
902	d.  Has not implemented a rate increase within the 6 months
903	immediately preceding the filing.
904	e.  Does not file for a rate increase under any other
905	paragraph within 6 months after making a filing under this
906	paragraph.
907	f.  That purchases reinsurance or financing products from
908	an affiliated company in compliance with this paragraph does so
909	only if the costs for such reinsurance or financing products are
910	charged at or below charges made for comparable coverage by
911	nonaffiliated reinsurers or financial entities making such
912	coverage or financing products available in this state.
913	2.  An insurer may only make one filing in any 12-month
914	period under this paragraph.
915	3.  An insurer that elects to implement a rate change under
916	this paragraph must file its rate filing with the office at
917	least 45 days before the effective date of the rate change.
918	After an insurer submits a complete filing that meets all of the
919	requirements of this paragraph, the office has 45 days after the
920	date of the filing to review the rate filing and determine if
921	the rate is excessive, inadequate, or unfairly discriminatory.
922
923	The provisions of this subsection do shall not apply to workers'
924	compensation, and employer's liability insurance, and to motor
925	vehicle insurance.
926	(3)(a)  For individual risks that are not rated in
927	accordance with the insurer's rates, rating schedules, rating
928	manuals, and underwriting rules filed with the office and that
929	which have been submitted to the insurer for individual rating,
930	the insurer must maintain documentation on each risk subject to
931	individual risk rating. The documentation must identify the
932	named insured and specify the characteristics and classification
933	of the risk supporting the reason for the risk being
934	individually risk rated, including any modifications to existing
935	approved forms to be used on the risk. The insurer must maintain
936	these records for a period of at least 5 years after the
937	effective date of the policy.
938	(b)  Individual risk rates and modifications to existing
939	approved forms are not subject to this part or part II, except
940	for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
941	627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
942	627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
943	627.4265, 627.427, and 627.428, but are subject to all other
944	applicable provisions of this code and rules adopted thereunder.
945	(c)  This subsection does not apply to private passenger
946	motor vehicle insurance.
947	(d)1.  The following categories or kinds of insurance and
948	types of commercial lines risks are not subject to paragraph
949	(2)(a) or paragraph (2)(f):
950	a.  Excess or umbrella.
951	b.  Surety and fidelity.
952	c.  Boiler and machinery and leakage and fire extinguishing
953	equipment.
954	d.  Errors and omissions.
955	e.  Directors and officers, employment practices, and
956	management liability.
957	f.  Intellectual property and patent infringement
958	liability.
959	g.  Advertising injury and Internet liability insurance.
960	h.  Property risks rated under a highly protected risks
961	rating plan.
962	i.  Any other commercial lines categories or kinds of
963	insurance or types of commercial lines risks that the office
964	determines should not be subject to paragraph (2)(a) or
965	paragraph (2)(f) because of the existence of a competitive
966	market for such insurance, similarity of such insurance to other
967	categories or kinds of insurance not subject to paragraph (2)(a)
968	or paragraph (2)(f), or to improve the general operational
969	efficiency of the office.
970	2.  Insurers or rating organizations shall establish and
971	use rates, rating schedules, or rating manuals to allow the
972	insurer a reasonable rate of return on insurance and risks
973	described in subparagraph 1. which are written in this state.
974	3.  An insurer must notify the office of any changes to
975	rates for insurance and risks described in subparagraph 1.
976	within no later than 30 days after the effective date of the
977	change. The notice must include the name of the insurer, the
978	type or kind of insurance subject to rate change, total premium
979	written during the immediately preceding year by the insurer for
980	the type or kind of insurance subject to the rate change, and
981	the average statewide percentage change in rates. Underwriting
982	files, premiums, losses, and expense statistics with regard to
983	such insurance and risks described in subparagraph 1. written by
984	an insurer must shall be maintained by the insurer and subject
985	to examination by the office. Upon examination, the office
986	shall, in accordance with generally accepted and reasonable
987	actuarial techniques, shall consider the rate factors in
988	paragraphs (2)(b), (c), and (d) and the standards in paragraph
989	(2)(e) to determine if the rate is excessive, inadequate, or
990	unfairly discriminatory.
991	4.  A rating organization must notify the office of any
992	changes to loss cost for insurance and risks described in
993	subparagraph 1. within no later than 30 days after the effective
994	date of the change. The notice must include the name of the
995	rating organization, the type or kind of insurance subject to a
996	loss cost change, loss costs during the immediately preceding
997	year for the type or kind of insurance subject to the loss cost
998	change, and the average statewide percentage change in loss
999	cost. Loss and exposure statistics with regard to risks
1000	applicable to loss costs for a rating organization not subject
1001	to paragraph (2)(a) or paragraph (2)(f) must shall be maintained
1002	by the rating organization and are subject to examination by the
1003	office. Upon examination, the office shall, in accordance with
1004	generally accepted and reasonable actuarial techniques, shall
1005	consider the rate factors in paragraphs (2)(b)-(d) and the
1006	standards in paragraph (2)(e) to determine if the rate is
1007	excessive, inadequate, or unfairly discriminatory.
1008	5.  In reviewing a rate, the office may require the insurer
1009	to provide, at the insurer's expense, all information necessary
1010	to evaluate the condition of the company and the reasonableness
1011	of the rate according to the applicable criteria described in
1012	this section.
1013	(4)  The establishment of any rate, rating classification,
1014	rating plan or schedule, or variation thereof in violation of
1015	part IX of chapter 626 is also in violation of this section. In
1016	order to enhance the ability of consumers to compare premiums
1017	and to increase the accuracy and usefulness of rate-comparison
1018	information provided by the office to the public, the office
1019	shall develop a proposed standard rating territory plan to be
1020	used by all authorized property and casualty insurers for
1021	residential property insurance. In adopting the proposed plan,
1022	the office may consider geographical characteristics relevant to
1023	risk, county lines, major roadways, existing rating territories
1024	used by a significant segment of the market, and other relevant
1025	factors. Such plan shall be submitted to the President of the
1026	Senate and the Speaker of the House of Representatives by
1027	January 15, 2006. The plan may not be implemented unless
1028	authorized by further act of the Legislature.
1029	(5)  With respect to a rate filing involving coverage of
1030	the type for which the insurer is required to pay a
1031	reimbursement premium to the Florida Hurricane Catastrophe Fund,
1032	the insurer may fully recoup in its property insurance premiums
1033	any reimbursement premiums paid to the Florida Hurricane
1034	Catastrophe fund, together with reasonable costs of other
1035	reinsurance; however, but except as otherwise provided in this
1036	section, the insurer may not recoup reinsurance costs that
1037	duplicate coverage provided by the Florida Hurricane Catastrophe
1038	fund. An insurer may not recoup more than 1 year of
1039	reimbursement premium at a time. Any under-recoupment from the
1040	prior year may be added to the following year's reimbursement
1041	premium, and any over-recoupment must shall be subtracted from
1042	the following year's reimbursement premium.
1043	(6)(a)  If an insurer requests an administrative hearing
1044	pursuant to s. 120.57 related to a rate filing under this
1045	section, the director of the Division of Administrative Hearings
1046	shall expedite the hearing and assign an administrative law
1047	judge who shall commence the hearing within 30 days after the
1048	receipt of the formal request and shall enter a recommended
1049	order within 30 days after the hearing or within 30 days after
1050	receipt of the hearing transcript by the administrative law
1051	judge, whichever is later. Each party shall have be allowed 10
1052	days in which to submit written exceptions to the recommended
1053	order. The office shall enter a final order within 30 days after
1054	the entry of the recommended order. The provisions of this
1055	paragraph may be waived upon stipulation of all parties.
1056	(b)  Upon entry of a final order, the insurer may request a
1057	expedited appellate review pursuant to the Florida Rules of
1058	Appellate Procedure. It is the intent of the Legislature that
1059	the First District Court of Appeal grant an insurer's request
1060	for an expedited appellate review.
1061	(7)(a)  The provisions of this subsection apply only with
1062	respect to rates for medical malpractice insurance and shall
1063	control to the extent of any conflict with other provisions of
1064	this section.
1065	(a)(b)  Any portion of a judgment entered or settlement
1066	paid as a result of a statutory or common-law bad faith action
1067	and any portion of a judgment entered which awards punitive
1068	damages against an insurer may not be included in the insurer's
1069	rate base, and shall not be used to justify a rate or rate
1070	change. Any common-law bad faith action identified as such, any
1071	portion of a settlement entered as a result of a statutory or
1072	common-law action, or any portion of a settlement wherein an
1073	insurer agrees to pay specific punitive damages may not be used
1074	to justify a rate or rate change. The portion of the taxable
1075	costs and attorney's fees which is identified as being related
1076	to the bad faith and punitive damages in these judgments and
1077	settlements may not be included in the insurer's rate base and
1078	used may not be utilized to justify a rate or rate change.
1079	(b)(c)  Upon reviewing a rate filing and determining
1080	whether the rate is excessive, inadequate, or unfairly
1081	discriminatory, the office shall consider, in accordance with
1082	generally accepted and reasonable actuarial techniques, past and
1083	present prospective loss experience, either using loss
1084	experience solely for this state or giving greater credibility
1085	to this state's loss data after applying actuarially sound
1086	methods of assigning credibility to such data.
1087	(c)(d)  Rates shall be deemed excessive if, among other
1088	standards established by this section, the rate structure
1089	provides for replenishment of reserves or surpluses from
1090	premiums when the replenishment is attributable to investment
1091	losses.
1092	(d)(e)  The insurer must apply a discount or surcharge
1093	based on the health care provider's loss experience or shall
1094	establish an alternative method giving due consideration to the
1095	provider's loss experience. The insurer must include in the
1096	filing a copy of the surcharge or discount schedule or a
1097	description of the alternative method used, and must provide a
1098	copy of such schedule or description, as approved by the office,
1099	to policyholders at the time of renewal and to prospective
1100	policyholders at the time of application for coverage.
1101	(e)(f)  Each medical malpractice insurer must make a rate
1102	filing under this section, sworn to by at least two executive
1103	officers of the insurer, at least once each calendar year.
1104	(8)(a)1.  No later than 60 days after the effective date of
1105	medical malpractice legislation enacted during the 2003 Special
1106	Session D of the Florida Legislature, the office shall calculate
1107	a presumed factor that reflects the impact that the changes
1108	contained in such legislation will have on rates for medical
1109	malpractice insurance and shall issue a notice informing all
1110	insurers writing medical malpractice coverage of such presumed
1111	factor. In determining the presumed factor, the office shall use
1112	generally accepted actuarial techniques and standards provided
1113	in this section in determining the expected impact on losses,
1114	expenses, and investment income of the insurer. To the extent
1115	that the operation of a provision of medical malpractice
1116	legislation enacted during the 2003 Special Session D of the
1117	Florida Legislature is stayed pending a constitutional
1118	challenge, the impact of that provision shall not be included in
1119	the calculation of a presumed factor under this subparagraph.
1120	2.  No later than 60 days after the office issues its
1121	notice of the presumed rate change factor under subparagraph 1.,
1122	each insurer writing medical malpractice coverage in this state
1123	shall submit to the office a rate filing for medical malpractice
1124	insurance, which will take effect no later than January 1, 2004,
1125	and apply retroactively to policies issued or renewed on or
1126	after the effective date of medical malpractice legislation
1127	enacted during the 2003 Special Session D of the Florida
1128	Legislature. Except as authorized under paragraph (b), the
1129	filing shall reflect an overall rate reduction at least as great
1130	as the presumed factor determined under subparagraph 1. With
1131	respect to policies issued on or after the effective date of
1132	such legislation and prior to the effective date of the rate
1133	filing required by this subsection, the office shall order the
1134	insurer to make a refund of the amount that was charged in
1135	excess of the rate that is approved.
1136	(b)  Any insurer or rating organization that contends that
1137	the rate provided for in paragraph (a) is excessive, inadequate,
1138	or unfairly discriminatory shall separately state in its filing
1139	the rate it contends is appropriate and shall state with
1140	specificity the factors or data that it contends should be
1141	considered in order to produce such appropriate rate. The
1142	insurer or rating organization shall be permitted to use all of
1143	the generally accepted actuarial techniques provided in this
1144	section in making any filing pursuant to this subsection. The
1145	office shall review each such exception and approve or
1146	disapprove it prior to use. It shall be the insurer's burden to
1147	actuarially justify any deviations from the rates required to be
1148	filed under paragraph (a). The insurer making a filing under
1149	this paragraph shall include in the filing the expected impact
1150	of medical malpractice legislation enacted during the 2003
1151	Special Session D of the Florida Legislature on losses,
1152	expenses, and rates.
1153	(c)  If any provision of medical malpractice legislation
1154	enacted during the 2003 Special Session D of the Florida
1155	Legislature is held invalid by a court of competent
1156	jurisdiction, the office shall permit an adjustment of all
1157	medical malpractice rates filed under this section to reflect
1158	the impact of such holding on such rates so as to ensure that
1159	the rates are not excessive, inadequate, or unfairly
1160	discriminatory.
1161	(d)  Rates approved on or before July 1, 2003, for medical
1162	malpractice insurance shall remain in effect until the effective
1163	date of a new rate filing approved under this subsection.
1164	(e)  The calculation and notice by the office of the
1165	presumed factor pursuant to paragraph (a) is not an order or
1166	rule that is subject to chapter 120. If the office enters into a
1167	contract with an independent consultant to assist the office in
1168	calculating the presumed factor, such contract shall not be
1169	subject to the competitive solicitation requirements of s.
1170	287.057.
1171	(8)(9)(a)  The chief executive officer or chief financial
1172	officer of a property insurer and the chief actuary of a
1173	property insurer must certify under oath and subject to the
1174	penalty of perjury, on a form approved by the commission, the
1175	following information, which must accompany a rate filing:
1176	1.  The signing officer and actuary have reviewed the rate
1177	filing;
1178	2.  Based on the signing officer's and actuary's knowledge,
1179	the rate filing does not contain any untrue statement of a
1180	material fact or omit to state a material fact necessary in
1181	order to make the statements made, in light of the circumstances
1182	under which such statements were made, not misleading;
1183	3.  Based on the signing officer's and actuary's knowledge,
1184	the information and other factors described in paragraph (2)(b),
1185	including, but not limited to, investment income, fairly present
1186	in all material respects the basis of the rate filing for the
1187	periods presented in the filing; and
1188	4.  Based on the signing officer's and actuary's knowledge,
1189	the rate filing reflects all premium savings that are reasonably
1190	expected to result from legislative enactments and are in
1191	accordance with generally accepted and reasonable actuarial
1192	techniques.
1193	(b)  A signing officer or actuary who knowingly makes
1194	making a false certification under this subsection commits a
1195	violation of s. 626.9541(1)(e) and is subject to the penalties
1196	under s. 626.9521.
1197	(c)  Failure to provide such certification by the officer
1198	and actuary shall result in the rate filing being disapproved
1199	without prejudice to be refiled.
1200	(d)  The certification made pursuant to paragraph (a) is
1201	not rendered false if, after making the subject rate filing, the
1202	insurer provides the office with additional or supplementary
1203	information pursuant to a formal or informal request from the
1204	office. However, the actuary primarily responsible for preparing
1205	and submitting the additional or supplementary information shall
1206	certify the information consistent with the certification
1207	required in paragraph (a) and the penalties in paragraph (b),
1208	except that the chief executive officer or chief financial
1209	officer or chief actuary is not required to certify to the
1210	additional or supplementary information.
1211	(e)(d)  The commission may adopt rules and forms pursuant
1212	to ss. 120.536(1) and 120.54 to administer this subsection.
1213	(9)(10)  The burden is on the office to establish that
1214	rates are excessive for personal lines residential coverage with
1215	a dwelling replacement cost of $1 million or more or for a
1216	single condominium unit with a combined dwelling and contents
1217	replacement cost of $1 million or more. Upon request of the
1218	office, the insurer shall provide to the office such loss and
1219	expense information as the office reasonably needs to meet this
1220	burden.
1221	(10)(11)  Any interest paid pursuant to s. 627.70131(5) may
1222	not be included in the insurer's rate base and may not be used
1223	to justify a rate or rate change.
1224	Section 10.  Subsections (1) and (5) and paragraph (b) of
1225	subsection (8) of section 627.0629, Florida Statutes, are
1226	amended to read:
1227	627.0629  Residential property insurance; rate filings.-
1228	(1)(a)  It is the intent of the Legislature that insurers
1229	must provide savings to consumers who install or implement
1230	windstorm damage mitigation techniques, alterations, or
1231	solutions to their properties to prevent windstorm losses. A
1232	rate filing for residential property insurance must include
1233	actuarially reasonable discounts, credits, or other rate
1234	differentials, or appropriate reductions in deductibles, for
1235	properties on which fixtures or construction techniques
1236	demonstrated to reduce the amount of loss in a windstorm have
1237	been installed or implemented. The fixtures or construction
1238	techniques must shall include, but not be limited to, fixtures
1239	or construction techniques that which enhance roof strength,
1240	roof covering performance, roof-to-wall strength, wall-to-floor-
1241	to-foundation strength, opening protection, and window, door,
1242	and skylight strength. Credits, discounts, or other rate
1243	differentials, or appropriate reductions in deductibles, for
1244	fixtures and construction techniques that which meet the minimum
1245	requirements of the Florida Building Code must be included in
1246	the rate filing. All insurance companies must make a rate filing
1247	which includes the credits, discounts, or other rate
1248	differentials or reductions in deductibles by February 28, 2003.
1249	By July 1, 2007, the office shall reevaluate the discounts,
1250	credits, other rate differentials, and appropriate reductions in
1251	deductibles for fixtures and construction techniques that meet
1252	the minimum requirements of the Florida Building Code, based
1253	upon actual experience or any other loss relativity studies
1254	available to the office. The office shall determine the
1255	discounts, credits, other rate differentials, and appropriate
1256	reductions in deductibles that reflect the full actuarial value
1257	of such revaluation, which may be used by insurers in rate
1258	filings.
1259	(b)  By February 1, 2011, the Office of Insurance
1260	Regulation, in consultation with the Department of Financial
1261	Services and the Department of Community Affairs, shall develop
1262	and make publicly available a proposed method for insurers to
1263	establish discounts, credits, or other rate differentials for
1264	hurricane mitigation measures which directly correlate to the
1265	numerical rating assigned to a structure pursuant to the uniform
1266	home grading scale adopted by the Financial Services Commission
1267	pursuant to s. 215.55865, including any proposed changes to the
1268	uniform home grading scale. By October 1, 2011, the commission
1269	shall adopt rules requiring insurers to make rate filings for
1270	residential property insurance which revise insurers' discounts,
1271	credits, or other rate differentials for hurricane mitigation
1272	measures so that such rate differentials correlate directly to
1273	the uniform home grading scale. The rules may include such
1274	changes to the uniform home grading scale as the commission
1275	determines are necessary, and may specify the minimum required
1276	discounts, credits, or other rate differentials. Such rate
1277	differentials must be consistent with generally accepted
1278	actuarial principles and wind-loss mitigation studies. The rules
1279	shall allow a period of at least 2 years after the effective
1280	date of the revised mitigation discounts, credits, or other rate
1281	differentials for a property owner to obtain an inspection or
1282	otherwise qualify for the revised credit, during which time the
1283	insurer shall continue to apply the mitigation credit that was
1284	applied immediately prior to the effective date of the revised
1285	credit. Discounts, credits, and other rate differentials
1286	established for rate filings under this paragraph shall
1287	supersede, after adoption, the discounts, credits, and other
1288	rate differentials included in rate filings under paragraph (a).
1289	(5)  In order to provide an appropriate transition period,
1290	an insurer may, in its sole discretion, implement an approved
1291	rate filing for residential property insurance over a period of
1292	years. Such An insurer electing to phase in its rate filing must
1293	provide an informational notice to the office setting out its
1294	schedule for implementation of the phased-in rate filing. The An
1295	insurer may include in its rate the actual cost of private
1296	market reinsurance that corresponds to available coverage of the
1297	Temporary Increase in Coverage Limits, TICL, from the Florida
1298	Hurricane Catastrophe Fund. The insurer may also include the
1299	cost of reinsurance to replace the TICL reduction implemented
1300	pursuant to s. 215.555(17)(d)9. However, this cost for
1301	reinsurance may not include any expense or profit load or result
1302	in a total annual base rate increase in excess of 10 percent.
1303	(8)  EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
1304	SOUNDNESS.-
1305	(b)  To the extent that funds are provided for this purpose
1306	in the General Appropriations Act, the Legislature hereby
1307	authorizes the establishment of a program to be administered by
1308	the Citizens Property Insurance Corporation for homeowners
1309	insured in the high-risk account is authorized.
1310	Section 11.  Paragraph (b) of subsection (2) of section
1311	627.4133, Florida Statutes, is amended to read:
1312	627.4133  Notice of cancellation, nonrenewal, or renewal
1313	premium.-
1314	(2)  With respect to any personal lines or commercial
1315	residential property insurance policy, including, but not
1316	limited to, any homeowner's, mobile home owner's, farmowner's,
1317	condominium association, condominium unit owner's, apartment
1318	building, or other policy covering a residential structure or
1319	its contents:
1320	(b)  The insurer shall give the named insured written
1321	notice of nonrenewal, cancellation, or termination at least 100
1322	days before prior to the effective date of the nonrenewal,
1323	cancellation, or termination. However, the insurer shall give at
1324	least 100 days' written notice, or written notice by June 1,
1325	whichever is earlier, for any nonrenewal, cancellation, or
1326	termination that would be effective between June 1 and November
1327	30. The notice must include the reason or reasons for the
1328	nonrenewal, cancellation, or termination, except that:
1329	1.  The insurer shall give the named insured written notice
1330	of nonrenewal, cancellation, or termination at least 180 days
1331	prior to the effective date of the nonrenewal, cancellation, or
1332	termination for a named insured whose residential structure has
1333	been insured by that insurer or an affiliated insurer for at
1334	least a 5-year period immediately prior to the date of the
1335	written notice.
1336	2.  If When cancellation is for nonpayment of premium, at
1337	least 10 days' written notice of cancellation accompanied by the
1338	reason therefor must shall be given. As used in this
1339	subparagraph, the term "nonpayment of premium" means failure of
1340	the named insured to discharge when due any of her or his
1341	obligations in connection with the payment of premiums on a
1342	policy or any installment of such premium, whether the premium
1343	is payable directly to the insurer or its agent or indirectly
1344	under any premium finance plan or extension of credit, or
1345	failure to maintain membership in an organization if such
1346	membership is a condition precedent to insurance coverage. The
1347	term "Nonpayment of premium" also means the failure of a
1348	financial institution to honor an insurance applicant's check
1349	after delivery to a licensed agent for payment of a premium,
1350	even if the agent has previously delivered or transferred the
1351	premium to the insurer. If a dishonored check represents the
1352	initial premium payment, the contract and all contractual
1353	obligations are shall be void ab initio unless the nonpayment is
1354	cured within the earlier of 5 days after actual notice by
1355	certified mail is received by the applicant or 15 days after
1356	notice is sent to the applicant by certified mail or registered
1357	mail, and if the contract is void, any premium received by the
1358	insurer from a third party must shall be refunded to that party
1359	in full.
1360	3.  If When such cancellation or termination occurs during
1361	the first 90 days during which the insurance is in force and the
1362	insurance is canceled or terminated for reasons other than
1363	nonpayment of premium, at least 20 days' written notice of
1364	cancellation or termination accompanied by the reason therefor
1365	must shall be given unless except where there has been a
1366	material misstatement or misrepresentation or failure to comply
1367	with the underwriting requirements established by the insurer.
1368	4.  The requirement for providing written notice of
1369	nonrenewal by June 1 of any nonrenewal that would be effective
1370	between June 1 and November 30 does not apply to the following
1371	situations, but the insurer remains subject to the requirement
1372	to provide such notice at least 100 days before prior to the
1373	effective date of nonrenewal:
1374	a.  A policy that is nonrenewed due to a revision in the
1375	coverage for sinkhole losses and catastrophic ground cover
1376	collapse pursuant to s. 627.706, as amended by s. 30, chapter
1377	2007-1, Laws of Florida.
1378	b.  A policy that is nonrenewed by Citizens Property
1379	Insurance Corporation, pursuant to s. 627.351(6), for a policy
1380	that has been assumed by an authorized insurer offering
1381	replacement or renewal coverage to the policyholder.
1382
1383	After the policy has been in effect for 90 days, the policy may
1384	shall not be canceled by the insurer unless except when there
1385	has been a material misstatement, a nonpayment of premium, a
1386	failure to comply with underwriting requirements established by
1387	the insurer within 90 days after of the date of effectuation of
1388	coverage, or a substantial change in the risk covered by the
1389	policy or if when the cancellation is for all insureds under
1390	such policies for a given class of insureds. This paragraph does
1391	not apply to individually rated risks having a policy term of
1392	less than 90 days.
1393	5.  Notwithstanding any other provision of law, an insurer
1394	may cancel or nonrenew a property insurance policy after at
1395	least 45 days' notice if the office finds that the early
1396	cancellation of some or all of the insurer's policies is
1397	necessary to protect the best interests of the public or
1398	policyholders and the office approves the insurer's plan for
1399	early cancellation or nonrenewal of some or all of its policies.
1400	The office may base such finding upon the financial condition of
1401	the insurer, lack of adequate reinsurance coverage for hurricane
1402	risk, or other relevant factors. The office may condition its
1403	finding on the consent of the insurer to be placed under
1404	administrative supervision pursuant to s. 624.81 or to the
1405	appointment of a receiver under chapter 631.
1406	Section 12.  Section 627.43141, Florida Statutes, is
1407	created to read:
1408	627.43141  Notice of change in policy terms.-
1409	(1)  As used in this section, the term:
1410	(a)  "Change in policy terms" means the modification,
1411	addition, or deletion of any term, coverage, duty, or condition
1412	from the previous policy. The correction of typographical or
1413	scrivener's errors or the application of mandated legislative
1414	changes is not a change in policy terms.
1415	(b)  "Policy" means a written contract of personal lines
1416	property and casualty insurance or a written agreement for
1417	insurance, or the certificate of such insurance, by whatever
1418	name called, and includes all clauses, riders, endorsements, and
1419	papers that are a part of such policy. The term does not include
1420	a binder as defined in s. 627.420 unless the duration of the
1421	binder period exceeds 60 days.
1422	(c)  "Renewal" means the issuance and delivery by an
1423	insurer of a policy superseding at the end of the policy period
1424	a policy previously issued and delivered by the same insurer or
1425	the issuance and delivery of a certificate or notice extending
1426	the term of a policy beyond its policy period or term. Any
1427	policy that has a policy period or term of less than 6 months or
1428	that does not have a fixed expiration date shall, for purposes
1429	of this section, be considered as written for successive policy
1430	periods or terms of 6 months.
1431	(2)  A renewal policy may contain a change in policy terms.
1432	If a renewal policy does contains such change, the insurer must
1433	give the named insured written notice of the change, which must
1434	be enclosed along with the written notice of renewal premium
1435	required by ss. 627.4133 and 627.728. Such notice shall be
1436	entitled "Notice of Change in Policy Terms."
1437	(3)  Although not required, proof of mailing or registered
1438	mailing through the United States Postal Service of the Notice
1439	of Change in Policy Terms to the named insured at the address
1440	shown in the policy is sufficient proof of notice.
1441	(4)  Receipt of the premium payment for the renewal policy
1442	by the insurer is deemed to be acceptance of the new policy
1443	terms by the named insured.
1444	(5)  If an insurer fails to provide the notice required in
1445	subsection (2), the original policy terms remain in effect until
1446	the next renewal and the proper service of the notice, or until
1447	the effective date of replacement coverage obtained by the named
1448	insured, whichever occurs first.
1449	(6)  The intent of this section is to:
1450	(a)  Allow an insurer to make a change in policy terms
1451	without nonrenewing those policyholders that the insurer wishes
1452	to continue insuring.
1453	(b)  Alleviate concern and confusion to the policyholder
1454	caused by the required policy nonrenewal for the limited issue
1455	if an insurer intends to renew the insurance policy, but the new
1456	policy contains a change in policy terms.
1457	(c)  Encourage policyholders to discuss their coverages
1458	with their insurance agents.
1459	Section 13.  Section 627.7011, Florida Statutes, is amended
1460	to read:
1461	627.7011  Homeowners' policies; offer of replacement cost
1462	coverage and law and ordinance coverage.-
1463	(1)  Before Prior to issuing or renewing a homeowner's
1464	insurance policy on or after October 1, 2005, or prior to the
1465	first renewal of a homeowner's insurance policy on or after
1466	October 1, 2005, the insurer must offer each of the following:
1467	(a)  A policy or endorsement providing that any loss that
1468	which is repaired or replaced will be adjusted on the basis of
1469	replacement costs to the dwelling not exceeding policy limits as
1470	to the dwelling, rather than actual cash value, but not
1471	including costs necessary to meet applicable laws and ordinances
1472	regulating the construction, use, or repair of any property or
1473	requiring the tearing down of any property, including the costs
1474	of removing debris.
1475	(b)  A policy or endorsement providing that, subject to
1476	other policy provisions, any loss that which is repaired or
1477	replaced at any location will be adjusted on the basis of
1478	replacement costs to the dwelling not exceeding policy limits as
1479	to the dwelling, rather than actual cash value, and also
1480	including costs necessary to meet applicable laws and ordinances
1481	regulating the construction, use, or repair of any property or
1482	requiring the tearing down of any property, including the costs
1483	of removing debris.; However, such additional costs necessary to
1484	meet applicable laws and ordinances may be limited to either 25
1485	percent or 50 percent of the dwelling limit, as selected by the
1486	policyholder, and such coverage applies shall apply only to
1487	repairs of the damaged portion of the structure unless the total
1488	damage to the structure exceeds 50 percent of the replacement
1489	cost of the structure.
1490
1491	An insurer is not required to make the offers required by this
1492	subsection with respect to the issuance or renewal of a
1493	homeowner's policy that contains the provisions specified in
1494	paragraph (b) for law and ordinance coverage limited to 25
1495	percent of the dwelling limit, except that the insurer must
1496	offer the law and ordinance coverage limited to 50 percent of
1497	the dwelling limit. This subsection does not prohibit the offer
1498	of a guaranteed replacement cost policy.
1499	(2)  Unless the insurer obtains the policyholder's written
1500	refusal of the policies or endorsements specified in subsection
1501	(1), any policy covering the dwelling is deemed to include the
1502	law and ordinance coverage limited to 25 percent of the dwelling
1503	limit. The rejection or selection of alternative coverage shall
1504	be made on a form approved by the office. The form must shall
1505	fully advise the applicant of the nature of the coverage being
1506	rejected. If this form is signed by a named insured, it is will
1507	be conclusively presumed that there was an informed, knowing
1508	rejection of the coverage or election of the alternative
1509	coverage on behalf of all insureds. Unless the policyholder
1510	requests in writing the coverage specified in this section, it
1511	need not be provided in or supplemental to any other policy that
1512	renews, insures, extends, changes, supersedes, or replaces an
1513	existing policy if when the policyholder has rejected the
1514	coverage specified in this section or has selected alternative
1515	coverage. The insurer must provide the such policyholder with
1516	notice of the availability of such coverage in a form approved
1517	by the office at least once every 3 years. The failure to
1518	provide such notice constitutes a violation of this code, but
1519	does not affect the coverage provided under the policy.
1520	(3)(a)  In the event of a loss for which a dwelling is
1521	insured on the basis of replacement costs, the insurer initially
1522	must pay at least the actual cash value of the insured loss,
1523	less any applicable deductible. An insured shall subsequently
1524	enter into a contract for the performance of building and
1525	structural repairs. The insurer shall pay any remaining amounts
1526	incurred to perform such repairs as the work is performed. With
1527	the exception of incidental expenses to mitigate further damage,
1528	the insurer or any contractor or subcontractor may not require
1529	the policyholder to advance payment for such repairs or
1530	expenses. The insurer may waive the requirement for a contract
1531	as provided in this paragraph. An insured shall have a period of
1532	1 year after the date the insurer pays actual cash value to make
1533	a claim for replacement cost. If a total loss of a dwelling
1534	occurs, the insurer shall pay the replacement cost coverage
1535	without reservation or holdback of any depreciation in value,
1536	pursuant to s. 627.702.
1537	(b)  In the event of a loss for which a dwelling or
1538	personal property is insured on the basis of replacement costs,
1539	the insurer shall pay the replacement cost without reservation
1540	or holdback of any depreciation in value, whether or not the
1541	insured replaces or repairs the dwelling or property.
1542	(4)  A Any homeowner's insurance policy issued or renewed
1543	on or after October 1, 2005, must include in bold type no
1544	smaller than 18 points the following statement:
1545
1546	"LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
1547	THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
1548	CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
1549	NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
1550	COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
1551	DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT."
1552
1553	The intent of this subsection is to encourage policyholders to
1554	purchase sufficient coverage to protect them in case events
1555	excluded from the standard homeowners policy, such as law and
1556	ordinance enforcement and flood, combine with covered events to
1557	produce damage or loss to the insured property. The intent is
1558	also to encourage policyholders to discuss these issues with
1559	their insurance agent.
1560	(5)  Nothing in This section does not: shall be construed
1561	to
1562	(a)  Apply to policies not considered to be "homeowners'
1563	policies," as that term is commonly understood in the insurance
1564	industry. This section specifically does not
1565	(b)  Apply to mobile home policies. Nothing in this section
1566	(c)  Limit shall be construed as limiting the ability of an
1567	any insurer to reject or nonrenew any insured or applicant on
1568	the grounds that the structure does not meet underwriting
1569	criteria applicable to replacement cost or law and ordinance
1570	policies or for other lawful reasons.
1571	(d)(6)  This section does not Prohibit an insurer from
1572	limiting its liability under a policy or endorsement providing
1573	that loss will be adjusted on the basis of replacement costs to
1574	the lesser of:
1575	1.(a)  The limit of liability shown on the policy
1576	declarations page;
1577	2.(b)  The reasonable and necessary cost to repair the
1578	damaged, destroyed, or stolen covered property; or
1579	3.(c)  The reasonable and necessary cost to replace the
1580	damaged, destroyed, or stolen covered property.
1581	(e)(7)  This section does not Prohibit an insurer from
1582	exercising its right to repair damaged property in compliance
1583	with its policy and s. 627.702(7).
1584	Section 14.  Paragraph (a) of subsection (5) of section
1585	627.70131, Florida Statutes, is amended to read:
1586	627.70131  Insurer's duty to acknowledge communications
1587	regarding claims; investigation.-
1588	(5)(a)  Within 90 days after an insurer receives notice of
1589	an initial, reopened, or supplemental a property insurance claim
1590	from a policyholder, the insurer shall pay or deny such claim or
1591	a portion of the claim unless the failure to pay such claim or a
1592	portion of the claim is caused by factors beyond the control of
1593	the insurer which reasonably prevent such payment. Any payment
1594	of an initial or supplemental a claim or portion of such a claim
1595	made paid 90 days after the insurer receives notice of the
1596	claim, or made paid more than 15 days after there are no longer
1597	factors beyond the control of the insurer which reasonably
1598	prevented such payment, whichever is later, bears shall bear
1599	interest at the rate set forth in s. 55.03. Interest begins to
1600	accrue from the date the insurer receives notice of the claim.
1601	The provisions of this subsection may not be waived, voided, or
1602	nullified by the terms of the insurance policy. If there is a
1603	right to prejudgment interest, the insured shall select whether
1604	to receive prejudgment interest or interest under this
1605	subsection. Interest is payable when the claim or portion of the
1606	claim is paid. Failure to comply with this subsection
1607	constitutes a violation of this code. However, failure to comply
1608	with this subsection does shall not form the sole basis for a
1609	private cause of action.
1610	Section 15.  The Legislature finds and declares:
1611	(1)  There is a compelling state interest in maintaining a
1612	viable and orderly private-sector market for property insurance
1613	in this state. The lack of a viable and orderly property market
1614	reduces the availability of property insurance coverage to state
1615	residents, increases the cost of property insurance, and
1616	increases the state's reliance on a residual property insurance
1617	market and its potential for imposing assessments on
1618	policyholders throughout the state.
1619	(2)  In 2005, the Legislature revised ss. 627.706-627.7074,
1620	Florida Statutes, to adopt certain geological or technical
1621	terms; to increase reliance on objective, scientific testing
1622	requirements; and generally to reduce the number of sinkhole
1623	claims and related disputes arising under prior law. The
1624	Legislature determined that since the enactment of these
1625	statutory revisions, both private-sector insurers and Citizens
1626	Property Insurance Corporation have, nevertheless, continued to
1627	experience high claims frequency and severity for sinkhole
1628	insurance claims. In addition, many properties remain unrepaired
1629	even after loss payments, which reduces the local property tax
1630	base and adversely affects the real estate market. Therefore,
1631	the Legislature finds that losses associated with sinkhole
1632	claims adversely affect the public health, safety, and welfare
1633	of this state and its citizens.
1634	(3)  Pursuant to sections 16 through 20 of this act,
1635	technical or scientific definitions adopted in the 2005
1636	legislation are clarified to implement and advance the
1637	Legislature's intended reduction of sinkhole claims and
1638	disputes. Certain other revisions to ss. 627.706-627.7074,
1639	Florida Statutes, are enacted to advance legislative intent to
1640	rely on scientific or technical determinations relating to
1641	sinkholes and sinkhole claims, reduce the number and cost of
1642	disputes relating to sinkhole claims, and ensure that repairs
1643	are made commensurate with the scientific and technical
1644	determinations and insurance claims payments.
1645	Section 16.  Section 627.706, Florida Statutes, is
1646	reordered and amended to read:
1647	627.706  Sinkhole insurance; catastrophic ground cover
1648	collapse; definitions.-
1649	(1)(a)  Every insurer authorized to transact property
1650	insurance in this state must shall provide coverage for a
1651	catastrophic ground cover collapse.
1652	(b)  The insurer and shall make available, for an
1653	appropriate additional premium, coverage for sinkhole losses on
1654	any structure, including the contents of personal property
1655	contained therein, to the extent provided in the form to which
1656	the coverage attaches. The insurer may require an inspection of
1657	the property before issuance of sinkhole loss coverage. A policy
1658	for residential property insurance may include a deductible
1659	amount applicable to sinkhole losses equal to 1 percent, 2
1660	percent, 5 percent, or 10 percent of the policy dwelling limits,
1661	with appropriate premium discounts offered with each deductible
1662	amount.
1663	(c)  The insurer may restrict catastrophic ground cover
1664	collapse and sinkhole loss coverage to the principal building,
1665	as defined in the applicable policy.
1666	(2)  As used in ss. 627.706-627.7074, and as used in
1667	connection with any policy providing coverage for a catastrophic
1668	ground cover collapse or for sinkhole losses, the term:
1669	(a)  "Catastrophic ground cover collapse" means geological
1670	activity that results in all the following:
1671	1.  The abrupt collapse of the ground cover;
1672	2.  A depression in the ground cover clearly visible to the
1673	naked eye;
1674	3.  Structural damage to the covered building, including
1675	the foundation; and
1676	4.  The insured structure being condemned and ordered to be
1677	vacated by the governmental agency authorized by law to issue
1678	such an order for that structure.
1679
1680	Contents coverage applies if there is a loss resulting from a
1681	catastrophic ground cover collapse. Structural Damage consisting
1682	merely of the settling or cracking of a foundation, structure,
1683	or building does not constitute a loss resulting from a
1684	catastrophic ground cover collapse.
1685	(b)  "Neutral evaluation" means the alternative dispute
1686	resolution provided in s. 627.7074.
1687	(c)  "Neutral evaluator" means a professional engineer or a
1688	professional geologist who has completed a course of study in
1689	alternative dispute resolution designed or approved by the
1690	department for use in the neutral evaluation process and who is
1691	determined to be fair and impartial.
1692	(d)(b)  "Sinkhole" means a landform created by subsidence
1693	of soil, sediment, or rock as underlying strata are dissolved by
1694	groundwater. A sinkhole forms may form by collapse into
1695	subterranean voids created by dissolution of limestone or
1696	dolostone or by subsidence as these strata are dissolved.
1697	(e)(c)  "Sinkhole loss" means structural damage to the
1698	covered building, including the foundation, caused by sinkhole
1699	activity. Contents coverage and additional living expenses shall
1700	apply only if there is structural damage to the covered building
1701	caused by sinkhole activity.
1702	(f)(d)  "Sinkhole activity" means settlement or systematic
1703	weakening of the earth supporting such property only if the when
1704	such settlement or systematic weakening results from
1705	contemporaneous movement or raveling of soils, sediments, or
1706	rock materials into subterranean voids created by the effect of
1707	water on a limestone or similar rock formation.
1708	(g)(e)  "Professional engineer" means a person, as defined
1709	in s. 471.005, who has a bachelor's degree or higher in
1710	engineering and has successfully completed at least five courses
1711	in any combination of the following: geotechnical engineering,
1712	structural engineering, soil mechanics, foundations, or geology
1713	with a specialty in the geotechnical engineering field. A
1714	professional engineer must also have geotechnical experience and
1715	expertise in the identification of sinkhole activity as well as
1716	other potential causes of structural damage to the structure.
1717	(h)(f)  "Professional geologist" means a person, as defined
1718	in by s. 492.102, who has a bachelor's degree or higher in
1719	geology or related earth science and with expertise in the
1720	geology of Florida. A professional geologist must have
1721	geological experience and expertise in the identification of
1722	sinkhole activity as well as other potential geologic causes of
1723	structural damage to the structure.
1724	(i)  "Structural damage" means a covered building has
1725	experienced:
1726	1.  Foundation displacement in excess of acceptable
1727	variances or deflections as defined in ACI 117-90 or the Florida
1728	Building Code and damage in the primary structural members or
1729	primary structural systems that prevents them from supporting
1730	the loads and forces they were designed to support as defined in
1731	the Florida Building Code;
1732	2.  Damage that results in stresses in a primary structural
1733	member greater than one and one-third the nominal strength
1734	allowed under the Florida Building Code for new buildings of
1735	similar structure, purpose, or location;
1736	3.  Listing, leaning, or buckling of the exterior load
1737	bearing walls or other vertical primary structural members to
1738	such an extent that a plumb line passing through the center of
1739	gravity does not fall inside the middle one-third of the base as
1740	defined within the Florida Building Code;
1741	4.  Damage that results in the building, or any portion
1742	thereof, being likely to imminently collapse partially or
1743	completely because of the movement or instability of the ground
1744	within the influence zone of the supporting ground within the
1745	sheer plane necessary for the purpose of supporting such
1746	building as defined within the Florida Building Code; or
1747	5.  Damage that qualifies as "substantial structural
1748	damage" as defined in the Florida Building Code.
1749	(3)  On or before June 1, 2007, Every insurer authorized to
1750	transact property insurance in this state shall make a proper
1751	filing with the office for the purpose of extending the
1752	appropriate forms of property insurance to include coverage for
1753	catastrophic ground cover collapse or for sinkhole losses.
1754	coverage for catastrophic ground cover collapse may not go into
1755	effect until the effective date provided for in the filing
1756	approved by the office.
1757	(3)(4)  Insurers offering policies that exclude coverage
1758	for sinkhole losses must shall inform policyholders in bold type
1759	of not less than 14 points as follows: "YOUR POLICY PROVIDES
1760	COVERAGE FOR A CATASTROPHIC GROUND COVER COLLAPSE THAT RESULTS
1761	IN THE PROPERTY BEING CONDEMNED AND UNINHABITABLE. OTHERWISE,
1762	YOUR POLICY DOES NOT PROVIDE COVERAGE FOR SINKHOLE LOSSES. YOU
1763	MAY PURCHASE ADDITIONAL COVERAGE FOR SINKHOLE LOSSES FOR AN
1764	ADDITIONAL PREMIUM."
1765	(4)(5)  An insurer offering sinkhole coverage to
1766	policyholders before or after the adoption of s. 30, chapter
1767	2007-1, Laws of Florida, may nonrenew the policies of
1768	policyholders maintaining sinkhole coverage in Pasco County or
1769	Hernando County, at the option of the insurer, and provide an
1770	offer of coverage that to such policyholders which includes
1771	catastrophic ground cover collapse and excludes sinkhole
1772	coverage. Insurers acting in accordance with this subsection are
1773	subject to the following requirements:
1774	(a)  Policyholders must be notified that a nonrenewal is
1775	for purposes of removing sinkhole coverage, and that the
1776	policyholder is still being offered a policy that provides
1777	coverage for catastrophic ground cover collapse.
1778	(b)  Policyholders must be provided an actuarially
1779	reasonable premium credit or discount for the removal of
1780	sinkhole coverage and provision of only catastrophic ground
1781	cover collapse.
1782	(c)  Subject to the provisions of this subsection and the
1783	insurer's approved underwriting or insurability guidelines, the
1784	insurer shall provide each policyholder with the opportunity to
1785	purchase an endorsement to his or her policy providing sinkhole
1786	coverage and may require an inspection of the property before
1787	issuance of a sinkhole coverage endorsement.
1788	(d)  Section 624.4305 does not apply to nonrenewal notices
1789	issued pursuant to this subsection.
1790	(5)  Any claim, including, but not limited to, initial,
1791	supplemental, and reopened claims under an insurance policy that
1792	provides sinkhole coverage is barred unless notice of the claim
1793	was given to the insurer in accordance with the terms of the
1794	policy within 3 years after the policyholder knew or reasonably
1795	should have known about the sinkhole loss.
1796	Section 17.  Section 627.7065, Florida Statutes, is
1797	repealed.
1798	Section 18.  Section 627.707, Florida Statutes, is amended
1799	to read:
1800	627.707  Standards for Investigation of sinkhole claims by
1801	insurers; insurer payment; nonrenewals.-Upon receipt of a claim
1802	for a sinkhole loss to a covered building, an insurer must meet
1803	the following standards in investigating a claim:
1804	(1)  The insurer must inspect make an inspection of the
1805	policyholder's insured's premises to determine if there is
1806	structural has been physical damage that to the structure which
1807	may be the result of sinkhole activity.
1808	(2)  If the insurer confirms that structural damage exists
1809	but is unable to identify a valid cause of such damage or
1810	discovers that such damage is consistent with sinkhole loss
1811	Following the insurer's initial inspection, the insurer shall
1812	engage a professional engineer or a professional geologist to
1813	conduct testing as provided in s. 627.7072 to determine the
1814	cause of the loss within a reasonable professional probability
1815	and issue a report as provided in s. 627.7073, only if sinkhole
1816	loss is covered under the policy. Except as provided in
1817	subsections (4) and (6), the fees and costs of the professional
1818	engineer or professional geologist shall be paid by the
1819	insurer.:
1820	(a)  The insurer is unable to identify a valid cause of the
1821	damage or discovers damage to the structure which is consistent
1822	with sinkhole loss; or
1823	(b)  The policyholder demands testing in accordance with
1824	this section or s. 627.7072.
1825	(3)  Following the initial inspection of the policyholder's
1826	insured premises, the insurer shall provide written notice to
1827	the policyholder disclosing the following information:
1828	(a)  What the insurer has determined to be the cause of
1829	damage, if the insurer has made such a determination.
1830	(b)  A statement of the circumstances under which the
1831	insurer is required to engage a professional engineer or a
1832	professional geologist to verify or eliminate sinkhole loss and
1833	to engage a professional engineer to make recommendations
1834	regarding land and building stabilization and foundation repair.
1835	(c)  A statement regarding the right of the policyholder to
1836	request testing by a professional engineer or a professional
1837	geologist, and the circumstances under which the policyholder
1838	may demand certain testing, and the circumstances under which
1839	the policyholder may incur costs associated with testing.
1840	(4)(a)  If the insurer determines that there is no sinkhole
1841	loss, the insurer may deny the claim.
1842	(b)  If coverage for sinkhole loss is available and If the
1843	insurer denies the claim, without performing testing under s.
1844	627.7072, the policyholder may demand testing by the insurer
1845	under s. 627.7072.
1846	1.  The policyholder's demand for testing must be
1847	communicated to the insurer in writing within 60 days after the
1848	policyholder's receipt of the insurer's denial of the claim.
1849	2.  The policyholder shall pay 50 percent of the actual
1850	costs of the analyses and services provided under ss. 627.7072
1851	and 627.7073 or $2,500, whichever is less.
1852	3.  The insurer shall reimburse the policyholder for the
1853	costs if the insurer obtains pursuant to s. 627.7073 written
1854	certification that there is sinkhole loss.
1855	(5)(a)  Subject to paragraph (b), If a sinkhole loss is
1856	verified, the insurer shall pay to stabilize the land and
1857	building and repair the foundation in accordance with the
1858	recommendations of the professional engineer retained pursuant
1859	to subsection (2), as provided under s. 627.7073, and in
1860	consultation with notice to the policyholder, subject to the
1861	coverage and terms of the policy. The insurer shall pay for
1862	other repairs to the structure and contents in accordance with
1863	the terms of the policy.
1864	(a)(b)  The insurer may limit its total claims payment to
1865	the actual cash value of the sinkhole loss, which does not
1866	include including underpinning or grouting or any other repair
1867	technique performed below the existing foundation of the
1868	building, until the policyholder enters into a contract for the
1869	performance of building stabilization or foundation repairs in
1870	accordance with the recommendations set forth in the insurer's
1871	report issued pursuant to s. 627.7073.
1872	(b)  In order to prevent additional damage to the building
1873	or structure, the policyholder must enter into a contract for
1874	the performance of building stabilization or foundation repairs
1875	within 90 days after the insurance company confirms coverage for
1876	the sinkhole loss and notifies the policyholder of such
1877	confirmation. This time period is tolled if either party invokes
1878	the neutral evaluation process and begins again 10 days after
1879	the conclusion of the neutral evaluation process.
1880	(c)  After the policyholder enters into the contract for
1881	the performance of building stabilization or foundation repairs,
1882	the insurer shall pay the amounts necessary to begin and perform
1883	such repairs as the work is performed and the expenses are
1884	incurred. The insurer may not require the policyholder to
1885	advance payment for such repairs. If repair covered by a
1886	personal lines residential property insurance policy has begun
1887	and the professional engineer selected or approved by the
1888	insurer determines that the repair cannot be completed within
1889	the policy limits, the insurer must either complete the
1890	professional engineer's recommended repair or tender the policy
1891	limits to the policyholder without a reduction for the repair
1892	expenses incurred.
1893	(d)  The stabilization and all other repairs to the
1894	structure and contents must be completed within 12 months after
1895	entering into the contract for repairs described in paragraph
1896	(b) unless:
1897	1.  There is a mutual agreement between the insurer and the
1898	policyholder;
1899	2.  The claim is involved with the neutral evaluation
1900	process;
1901	3.  The claim is in litigation; or
1902	4.  The claim is under appraisal or mediation.
1903	(e)(c)  Upon the insurer's obtaining the written approval
1904	of the policyholder and any lienholder, the insurer may make
1905	payment directly to the persons selected by the policyholder to
1906	perform the land and building stabilization and foundation
1907	repairs. The decision by the insurer to make payment to such
1908	persons does not hold the insurer liable for the work performed.
1909	The policyholder may not accept a rebate from any person
1910	performing the repairs specified in this section. If a
1911	policyholder does receive a rebate, coverage is void and the
1912	policyholder must refund the amount of the rebate to the
1913	insurer. Any person making the repairs specified in this section
1914	who offers a rebate, or any policyholder who accepts a rebate
1915	for such repairs, commits insurance fraud, a felony of the third
1916	degree punishable as provided in s. 775.082, s. 775.083, or s.
1917	775.084.
1918	(6)  Except as provided in subsection (7), the fees and
1919	costs of the professional engineer or the professional geologist
1920	shall be paid by the insurer.
1921	(6)(7)  If the insurer obtains, pursuant to s. 627.7073,
1922	written certification that there is no sinkhole loss or that the
1923	cause of the damage was not sinkhole activity, and if the
1924	policyholder has submitted the sinkhole claim without good faith
1925	grounds for submitting such claim, the policyholder shall
1926	reimburse the insurer for 50 percent of the actual costs of the
1927	analyses and services provided under ss. 627.7072 and 627.7073;
1928	however, a policyholder is not required to reimburse an insurer
1929	more than $2,500 with respect to any claim. A policyholder is
1930	required to pay reimbursement under this subsection only if the
1931	policyholder requested the analysis and services provided under
1932	ss. 627.7072 and 627.7073 and the insurer, before prior to
1933	ordering the analysis under s. 627.7072, informs the
1934	policyholder in writing of the policyholder's potential
1935	liability for reimbursement and gives the policyholder the
1936	opportunity to withdraw the claim.
1937	(7)(8)  An No insurer may not shall nonrenew any policy of
1938	property insurance on the basis of filing of claims for sinkhole
1939	partial loss if caused by sinkhole damage or clay shrinkage as
1940	long as the total of such payments does not exceed the current
1941	policy limits of coverage for the policy in effect on the date
1942	of loss, for property damage to the covered building, as set
1943	forth on the declarations page, and provided the insured has
1944	repaired the structure in accordance with the engineering
1945	recommendations made pursuant to subsection (2) upon which any
1946	payment or policy proceeds were based.
1947	(8)(9)  The insurer may engage a professional structural
1948	engineer to make recommendations as to the repair of the
1949	structure.
1950	Section 19.  Section 627.7073, Florida Statutes, is amended
1951	to read:
1952	627.7073  Sinkhole reports.-
1953	(1)  Upon completion of testing as provided in s. 627.7072,
1954	the professional engineer or professional geologist shall issue
1955	a report and certification to the insurer and the policyholder
1956	as provided in this section.
1957	(a)  Sinkhole loss is verified if, based upon tests
1958	performed in accordance with s. 627.7072, a professional
1959	engineer or a professional geologist issues a written report and
1960	certification stating:
1961	1.  That structural damage to the covered building has been
1962	identified within a reasonable professional probability.
1963	2.1.  That the cause of the actual physical and structural
1964	damage is sinkhole activity within a reasonable professional
1965	probability.
1966	3.2.  That the analyses conducted were of sufficient scope
1967	to identify sinkhole activity as the cause of damage within a
1968	reasonable professional probability.
1969	4.3.  A description of the tests performed.
1970	5.4.  A recommendation by the professional engineer of
1971	methods for stabilizing the land and building and for making
1972	repairs to the foundation.
1973	(b)  If there is no structural damage or if sinkhole
1974	activity is eliminated as the cause of such damage to the
1975	covered building structure, the professional engineer or
1976	professional geologist shall issue a written report and
1977	certification to the policyholder and the insurer stating:
1978	1.  That there is no structural damage or the cause of such
1979	the damage is not sinkhole activity within a reasonable
1980	professional probability.
1981	2.  That the analyses and tests conducted were of
1982	sufficient scope to eliminate sinkhole activity as the cause of
1983	the structural damage within a reasonable professional
1984	probability.
1985	3.  A statement of the cause of the structural damage
1986	within a reasonable professional probability.
1987	4.  A description of the tests performed.
1988	(c)  The respective findings, opinions, and recommendations
1989	of the professional engineer or professional geologist as to the
1990	cause of distress to the property and the findings, opinions,
1991	and recommendations of the professional engineer as to land and
1992	building stabilization and foundation repair shall be presumed
1993	correct.
1994	(2)(a)  Any insurer that has paid a claim for a sinkhole
1995	loss shall file a copy of the report and certification, prepared
1996	pursuant to subsection (1), including the legal description of
1997	the real property and the name of the property owner, the
1998	neutral evaluator's report, if any, that indicates that sinkhole
1999	activity caused the damage claimed, a copy of the certification
2000	indicating that stabilization has been completed, if applicable,
2001	and the amount of the payment, with the county clerk of court,
2002	who shall record the report and certification. The insurer shall
2003	bear the cost of filing and recording one or more reports and
2004	certifications the report and certification. There shall be no
2005	cause of action or liability against an insurer for compliance
2006	with this section.
2007	(a)  The recording of the report and certification does
2008	not:
2009	1.  Constitute a lien, encumbrance, or restriction on the
2010	title to the real property or constitute a defect in the title
2011	to the real property;
2012	2.  Create any cause of action or liability against any
2013	grantor of the real property for breach of any warranty of good
2014	title or warranty against encumbrances; or
2015	3.  Create any cause of action or liability against any
2016	title insurer that insures the title to the real property.
2017	(b)  As a precondition to accepting payment for a sinkhole
2018	loss, the policyholder must file a copy of any report prepared
2019	on behalf or at the request of the policyholder regarding the
2020	insured property. The policyholder shall bear the cost of filing
2021	and recording such sinkhole report. The recording of the report
2022	does not:
2023	1.  Constitute a lien, encumbrance, or restriction on the
2024	title to the real property or constitute a defect in the title
2025	to the real property;
2026	2.  Create any cause of action or liability against any
2027	grantor of the real property for breach of any warranty of good
2028	title or warranty against encumbrances; or
2029	3.  Create any cause of action or liability against any
2030	title insurer that insures the title to the real property.
2031	(c)(b)  The seller of real property upon which a sinkhole
2032	claim has been made by the seller and paid by the insurer must
2033	shall disclose to the buyer of such property that a claim has
2034	been paid and whether or not the full amount of the proceeds
2035	were used to repair the sinkhole damage.
2036	Section 20.  Section 627.7074, Florida Statutes, is amended
2037	to read:
2038	627.7074  Alternative procedure for resolution of disputed
2039	sinkhole insurance claims.-
2040	(1)  As used in this section, the term:
2041	(a)  "Neutral evaluation" means the alternative dispute
2042	resolution provided for in this section.
2043	(b)  "Neutral evaluator" means a professional engineer or a
2044	professional geologist who has completed a course of study in
2045	alternative dispute resolution designed or approved by the
2046	department for use in the neutral evaluation process, who is
2047	determined to be fair and impartial.
2048	(1)(2)(a)  The department shall:
2049	(a)  Certify and maintain a list of persons who are neutral
2050	evaluators.
2051	(b)  The department shall Prepare a consumer information
2052	pamphlet for distribution by insurers to policyholders which
2053	clearly describes the neutral evaluation process and includes
2054	information and forms necessary for the policyholder to request
2055	a neutral evaluation.
2056	(2)  Neutral evaluation is available to either party if a
2057	sinkhole report has been issued pursuant to s. 627.7073. At a
2058	minimum, neutral evaluation must determine:
2059	(a)  Causation;
2060	(b)  All methods of stabilization and repair both above and
2061	below ground;
2062	(c)  The costs for stabilization and all repairs; and
2063	(d)  Information necessary to carry out subsection (12).
2064	(3)  Following the receipt of the report provided under s.
2065	627.7073 or the denial of a claim for a sinkhole loss, the
2066	insurer shall notify the policyholder of his or her right to
2067	participate in the neutral evaluation program under this
2068	section. Neutral evaluation supersedes the alternative dispute
2069	resolution process under s. 627.7015, but does not invalidate
2070	the appraisal clause of the insurance policy. The insurer shall
2071	provide to the policyholder the consumer information pamphlet
2072	prepared by the department pursuant to subsection (1)
2073	electronically or by United States mail paragraph (2)(b).
2074	(4)  Neutral evaluation is nonbinding, but mandatory if
2075	requested by either party. A request for neutral evaluation may
2076	be filed with the department by the policyholder or the insurer
2077	on a form approved by the department. The request for neutral
2078	evaluation must state the reason for the request and must
2079	include an explanation of all the issues in dispute at the time
2080	of the request. Filing a request for neutral evaluation tolls
2081	the applicable time requirements for filing suit for a period of
2082	60 days following the conclusion of the neutral evaluation
2083	process or the time prescribed in s. 95.11, whichever is later.
2084	(5)  Neutral evaluation shall be conducted as an informal
2085	process in which formal rules of evidence and procedure need not
2086	be observed. A party to neutral evaluation is not required to
2087	attend neutral evaluation if a representative of the party
2088	attends and has the authority to make a binding decision on
2089	behalf of the party. All parties shall participate in the
2090	evaluation in good faith. The neutral evaluator must be allowed
2091	reasonable access to the interior and exterior of insured
2092	structures to be evaluated or for which a claim has been made.
2093	Any reports initiated by the policyholder, or an agent of the
2094	policyholder, confirming a sinkhole loss or disputing another
2095	sinkhole report regarding insured structures must be provided to
2096	the neutral evaluator before the evaluator's physical inspection
2097	of the insured property.
2098	(6)  The insurer shall pay the costs associated with the
2099	neutral evaluation. However, if a party chooses to hire a court
2100	reporter or stenographer to contemporaneously record and
2101	document the neutral evaluation, that party must bear such
2102	costs.
2103	(7)  Upon receipt of a request for neutral evaluation, the
2104	department shall provide the parties a list of certified neutral
2105	evaluators. The parties shall mutually select a neutral
2106	evaluator from the list and promptly inform the department. If
2107	the parties cannot agree to a neutral evaluator within 10
2108	business days, The department shall allow the parties to submit
2109	requests to disqualify evaluators on the list for cause.
2110	(a)  The department shall disqualify neutral evaluators for
2111	cause based only on any of the following grounds:
2112	1.  A familial relationship exists between the neutral
2113	evaluator and either party or a representative of either party
2114	within the third degree.
2115	2.  The proposed neutral evaluator has, in a professional
2116	capacity, previously represented either party or a
2117	representative of either party, in the same or a substantially
2118	related matter.
2119	3.  The proposed neutral evaluator has, in a professional
2120	capacity, represented another person in the same or a
2121	substantially related matter and that person's interests are
2122	materially adverse to the interests of the parties. The term
2123	"substantially related matter" means participation by the
2124	neutral evaluator on the same claim, property, or adjacent
2125	property.
2126	4.  The proposed neutral evaluator has, within the
2127	preceding 5 years, worked as an employer or employee of any
2128	party to the case.
2129	(b)  The parties shall appoint a neutral evaluator from the
2130	department list and promptly inform the department. If the
2131	parties cannot agree to a neutral evaluator within 14 days, the
2132	department shall appoint a neutral evaluator from the list of
2133	certified neutral evaluators. The department shall allow each
2134	party to disqualify two neutral evaluators without cause. Upon
2135	selection or appointment, the department shall promptly refer
2136	the request to the neutral evaluator.
2137	(c)  Within 7 5 business days after the referral, the
2138	neutral evaluator shall notify the policyholder and the insurer
2139	of the date, time, and place of the neutral evaluation
2140	conference. The conference may be held by telephone, if feasible
2141	and desirable. The neutral evaluator shall hold the neutral
2142	evaluation conference shall be held within 90 45 days after the
2143	receipt of the request by the department. Failure of the neutral
2144	evaluator to hold the conference within 90 days does not
2145	invalidate either party's right to neutral evaluation or to a
2146	neutral evaluation conference held outside this timeframe.
2147	(8)  The department shall adopt rules of procedure for the
2148	neutral evaluation process.
2149	(8)(9)  For policyholders not represented by an attorney, a
2150	consumer affairs specialist of the department or an employee
2151	designated as the primary contact for consumers on issues
2152	relating to sinkholes under s. 20.121 shall be available for
2153	consultation to the extent that he or she may lawfully do so.
2154	(9)(10)  Evidence of an offer to settle a claim during the
2155	neutral evaluation process, as well as any relevant conduct or
2156	statements made in negotiations concerning the offer to settle a
2157	claim, is inadmissible to prove liability or absence of
2158	liability for the claim or its value, except as provided in
2159	subsection (14) (13).
2160	(10)(11)  Regardless of when noticed, any court proceeding
2161	related to the subject matter of the neutral evaluation shall be
2162	stayed pending completion of the neutral evaluation and for 5
2163	days after the filing of the neutral evaluator's report with the
2164	court.
2165	(11)  If, based upon his or her professional training and
2166	credentials, a neutral evaluator is qualified to determine only
2167	disputes relating to causation or method of repair, the
2168	department shall allow the neutral evaluator to enlist the
2169	assistance of another professional from the list of neutral
2170	evaluators not previously stricken, who, based upon his or her
2171	professional training and credentials, is able to provide an
2172	opinion as to other disputed issues. A professional who would be
2173	disqualified for any reason listed in subsection (7) must be
2174	disqualified. The neutral evaluator may also use the services of
2175	professional engineers and professional geologists who are not
2176	certified as neutral evaluators, as well as licensed building
2177	contractors, in order to ensure that all items in dispute are
2178	addressed and the neutral evaluation can be completed. Any
2179	professional engineer, professional geologist, or licensed
2180	building contractor retained may be disqualified for any of the
2181	reasons listed in subsection (7).
2182	(12)  At For matters that are not resolved by the parties
2183	at the conclusion of the neutral evaluation, the neutral
2184	evaluator shall prepare a report describing all matters that are
2185	the subject of the neutral evaluation, including whether,
2186	stating that in his or her opinion the sinkhole loss has been
2187	verified or eliminated within a reasonable degree of
2188	professional probability and, if verified, whether the sinkhole
2189	activity caused structural damage to the covered building, and
2190	if so, the need for and estimated costs of stabilizing the land
2191	and any covered structures or buildings and other appropriate
2192	remediation or necessary building structural repairs due to the
2193	sinkhole loss. The evaluator's report shall be sent to all
2194	parties in attendance at the neutral evaluation and to the
2195	department, within 14 days after completing the neutral
2196	evaluation conference.
2197	(13)  The recommendation of the neutral evaluator is not
2198	binding on any party, and the parties retain access to the
2199	court. The neutral evaluator's written recommendation is
2200	admissible in any subsequent action or proceeding relating to
2201	the claim or to the cause of action giving rise to the claim.
2202	(14)  If the neutral evaluator first verifies the existence
2203	of a sinkhole that caused structural damage and, second,
2204	recommends the need for and estimates costs of stabilizing the
2205	land and any covered structures or buildings and other
2206	appropriate remediation or building structural repairs, which
2207	costs exceed the amount that the insurer has offered to pay the
2208	policyholder, the insurer is liable to the policyholder for up
2209	to $2,500 in attorney's fees for the attorney's participation in
2210	the neutral evaluation process. For purposes of this subsection,
2211	the term "offer to pay" means a written offer signed by the
2212	insurer or its legal representative and delivered to the
2213	policyholder within 10 days after the insurer receives notice
2214	that a request for neutral evaluation has been made under this
2215	section.
2216	(15)  If the insurer timely agrees in writing to comply and
2217	timely complies with the recommendation of the neutral
2218	evaluator, but the policyholder declines to resolve the matter
2219	in accordance with the recommendation of the neutral evaluator
2220	pursuant to this section:
2221	(a)  The insurer is not liable for extracontractual damages
2222	related to a claim for a sinkhole loss but only as related to
2223	the issues determined by the neutral evaluation process. This
2224	section does not affect or impair claims for extracontractual
2225	damages unrelated to the issues determined by the neutral
2226	evaluation process contained in this section; and
2227	(b)  The insurer is not liable for attorney's fees under s.
2228	627.428 or other provisions of the insurance code unless the
2229	policyholder obtains a judgment that is more favorable than the
2230	recommendation of the neutral evaluator.
2231	(16)  Neutral evaluators are deemed to be agents of the
2232	department and have immunity from suit as provided in s. 44.107.
2233	(17)  The department shall adopt rules of procedure for the
2234	neutral evaluation process.
2235	Section 21.  Subsection (8) of section 627.711, Florida
2236	Statutes, is amended to read:
2237	627.711  Notice of premium discounts for hurricane loss
2238	mitigation; uniform mitigation verification inspection form.-
2239	(8)  At its expense, the insurer may require that any
2240	uniform mitigation verification form provided by a policyholder,
2241	policyholder's agent, an authorized mitigation inspector, or
2242	inspection company be independently verified by an inspector, an
2243	inspection company, or an independent third-party quality
2244	assurance provider which does possess a quality assurance
2245	program before prior to accepting the uniform mitigation
2246	verification form as valid.
2247	Section 22.  Subsection (3) of section 631.54, Florida
2248	Statutes, is amended to read:
2249	631.54  Definitions.-As used in this part:
2250	(3)  "Covered claim" means an unpaid claim, including one
2251	of unearned premiums, which arises out of, and is within the
2252	coverage, and not in excess of, the applicable limits of an
2253	insurance policy to which this part applies, issued by an
2254	insurer, if such insurer becomes an insolvent insurer and the
2255	claimant or insured is a resident of this state at the time of
2256	the insured event or the property from which the claim arises is
2257	permanently located in this state. For entities other than
2258	individuals, the residence of a claimant, insured, or
2259	policyholder is the state in which the entity's principal place
2260	of business is located at the time of the insured event. The
2261	term does "Covered claim" shall not include:
2262	(a)  Any amount due any reinsurer, insurer, insurance pool,
2263	or underwriting association, sought directly or indirectly
2264	through a third party, as subrogation, contribution,
2265	indemnification, or otherwise; or
2266	(b)  Any claim that would otherwise be a covered claim
2267	under this part that has been rejected by any other state
2268	guaranty fund on the grounds that an insured's net worth is
2269	greater than that allowed under that state's guaranty law.
2270	Member insurers shall have no right of subrogation,
2271	contribution, indemnification, or otherwise, sought directly or
2272	indirectly through a third party, against the insured of any
2273	insolvent member; or
2274	(c)  Any amount payable for a sinkhole loss other than
2275	testing deemed appropriate by the association or payable for the
2276	actual repair of the loss, except that the association may not
2277	pay for attorney's fees or public adjuster's fees in connection
2278	with a sinkhole loss or pay the policyholder. The association
2279	may pay for actual repairs to the property, but is not liable
2280	for amounts in excess of policy limits.
2281	Section 23.  If any provision of this act, or the
2282	application thereof to any person or circumstance is held
2283	invalid, such invalidity shall not affect other provisions or
2284	applications of this act which can be given effect without the
2285	invalid provision or application. It is the express intent of
2286	the Legislature to enact multiple important, but independent,
2287	reforms to Florida law relating to sinkhole insurance coverage
2288	and related claims. The Legislature further intends that the
2289	multiple reforms in the act could and should be enforced if one
2290	or more provisions are held invalid. To this end, the provisions
2291	of this act are declared to be severable.
2292	Section 24.  Except as otherwise expressly provided in this
2293	act, this act shall take effect upon becoming a law.

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