HB 885

1	A bill to be entitled
2	An act relating to residential property insurance;
3	amending s. 627.062, F.S.; authorizing an insurer to use a
4	rate for residential property insurance that differs from
5	its otherwise filed rate after a specified date under
6	certain circumstances; requiring such rates to be filed
7	with the Office of Insurance Regulation; specifying the
8	maximum difference between rates; limiting the percentage
9	rate increase as to any individual policyholder;
10	preserving the authority of the office to disapprove a
11	rate for inadequacy or discrimination; providing a future
12	revision that requires the inclusion of a statement in
13	certain rate filings relating to the insurer's current or
14	future ability to cover a specified probable maximum loss,
15	requires certification by an insurer relating to the
16	insurer's ability to actually cover a specified probable
17	maximum loss, voids certain rates if an insurer fails to
18	maintain sufficient funds or coverages to cover a
19	specified probable maximum loss, and requires refunds and
20	credits to insureds if an insurer fails to maintain
21	sufficient funds or coverages to cover a specified
22	probable maximum loss; amending s. 627.351, F.S.;
23	requiring insurance agents to obtain a signed
24	acknowledgment from an applicant for coverage and certain
25	policyholders relating to surcharges and assessments
26	potentially being imposed under a Citizens Property
27	Insurance Corporation policy; requiring Citizens Property
28	Insurance Corporation to maintain signed acknowledgments
29	for a specified time; specifying that a signed
30	acknowledgment creates an evidentiary presumption relating
31	to an insured's liability for surcharges and assessments;
32	creating s. 627.7031, F.S.; specifying circumstances under
33	which an insurer may offer or renew residential property
34	insurance policies subject to the amendments to s.
35	627.062, F.S., contained in this act; prohibiting such
36	insurers from procuring coverage under the temporary
37	increase in coverage limits option; requiring specific
38	notices to applicant or insured; requiring Citizens
39	Property Insurance Corporation premium estimates and
40	signed acknowledgments; specifying ineligible types of
41	policies; providing a future revision requiring an insurer
42	to have certain resources to cover a specified probable
43	maximum loss in order to offer or renew policies at
44	certain rates; providing effective dates.
45
46	Be It Enacted by the Legislature of the State of Florida:
47
48	Section 1.  Paragraph (l) is added to subsection (2) of
49	section 627.062, Florida Statutes, to read:
50	627.062  Rate standards.-
51	(2)  As to all such classes of insurance:
52	(l)1.  On or after January 1, 2012, an insurer complying
53	with the requirements of s. 627.7031 may use a rate for
54	residential property insurance when providing residential
55	coverage, as described in s. 627.4025, different from the
56	otherwise applicable filed rate as provided in this paragraph.
57	2.  Policies subject to this paragraph may not be counted
58	in the calculation under s. 627.171(2).
59	3.  Such rates shall be filed with the office as a separate
60	filing. The initial rates used by an insurer under this
61	paragraph may not provide for rates that represent more than a
62	15-percent statewide average rate increase over the most
63	recently filed and approved rate. A rate filing under this
64	paragraph submitted in any year after the implementation of such
65	initial rates may not provide for rates that represent more than
66	a 15-percent statewide average rate increase in a year over the
67	rates in effect under this paragraph at the time of the filing.
68	A rate filing under this paragraph may not provide for a
69	percentage rate increase as to any individual policyholder that
70	exceeds 2 times the statewide average rate increase provided for
71	in the filing.
72	4.  This paragraph does not affect the authority of the
73	office to disapprove a rate as inadequate or to disapprove a
74	rate filing for charging any insured or applicant a higher
75	premium solely because of the insured's or applicant's race,
76	color, creed, marital status, sex, or national origin. Upon
77	finding that an insurer has used any such factor in charging an
78	insured or applicant a higher premium, the office may direct the
79	insurer to make a new filing for a new rate that does not use
80	such factor.
81
82	The provisions of this subsection shall not apply to workers'
83	compensation and employer's liability insurance and to motor
84	vehicle insurance.
85	Section 2.  Effective January 1, 2015, paragraph (l) of
86	subsection (2) of section 627.062, Florida Statutes, as created
87	by this act, is amended to read:
88	627.062  Rate standards.-
89	(2)  As to all such classes of insurance:
90	(l)1.  On or after January 1, 2012, an insurer complying
91	with the requirements of s. 627.7031 may use a rate for
92	residential property insurance when providing residential
93	coverage, as described in s. 627.4025, different from the
94	otherwise applicable filed rate as provided in this paragraph.
95	2.  Policies subject to this paragraph may not be counted
96	in the calculation under s. 627.171(2).
97	3.  Such rates shall be filed with the office as a separate
98	filing. The initial rates used by an insurer under this
99	paragraph may not provide for rates that represent more than a
100	15-percent statewide average rate increase over the most
101	recently filed and approved rate. A rate filing under this
102	paragraph submitted in any year after the implementation of such
103	initial rates may not provide for rates that represent more than
104	a 15-percent statewide average rate increase in a year over the
105	rates in effect under this paragraph at the time of the filing.
106	A rate filing under this paragraph may not provide for a
107	percentage rate increase as to any individual policyholder that
108	exceeds 2 times the statewide average rate increase provided for
109	in the filing.
110	4.a.  A filing under this paragraph must include a
111	statement that the insurer has in place, or intends to have in
112	place as of the effective date of the rates, a combination of
113	surplus, Florida Hurricane Catastrophe Fund coverage,
114	reinsurance, and reinsurance equivalents sufficient to cover the
115	insurer's 100-year probable maximum seasonal hurricane loss as
116	described in s. 627.7031.
117	b.  No later than the last day of July of a year in which
118	the rates are in effect, the insurer must provide its
119	certification to the office demonstrating that it in fact has in
120	place a combination of surplus, Florida Hurricane Catastrophe
121	Fund Coverage, reinsurance, and reinsurance equivalents
122	sufficient to cover the insurer's 100-year probable maximum
123	seasonal hurricane loss as described in s. 627.7031.
124	c.  If the insurer fails to maintain the required
125	combination of surplus, Florida Hurricane Catastrophe Fund
126	Coverage, reinsurance, and reinsurance equivalents, the subject
127	rate filing under this paragraph is void and shall be replaced
128	by the insurer's rates in effect under this paragraph at the
129	time of the filing, retroactive to the effective date of the
130	subject rate filing under this paragraph. In such circumstances,
131	the office shall order the insurer to return to each insured the
132	difference between the premium calculated according to the rate
133	filing under this paragraph and the premium under the rates in
134	effect under this paragraph at the time of the subject filing,
135	which may, in the discretion of the insurer, be in the form of
136	either a refund or a credit. Nothing in this sub-subparagraph
137	precludes the insurer from making another filing under this
138	paragraph, but such filing may not take effect before June 1 of
139	the following year.
140	5.4.  This paragraph does not affect the authority of the
141	office to disapprove a rate as inadequate or to disapprove a
142	rate filing for charging any insured or applicant a higher
143	premium solely because of the insured's or applicant's race,
144	color, creed, marital status, sex, or national origin. Upon
145	finding that an insurer has used any such factor in charging an
146	insured or applicant a higher premium, the office may direct the
147	insurer to make a new filing for a new rate that does not use
148	such factor.
149
150	The provisions of this subsection shall not apply to workers'
151	compensation and employer's liability insurance and to motor
152	vehicle insurance.
153	Section 3.  Paragraph (c) of subsection (6) of section
154	627.351, Florida Statutes, is amended to read:
155	627.351  Insurance risk apportionment plans.-
156	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
157	(c)  The plan of operation of the corporation:
158	1.  Must provide for adoption of residential property and
159	casualty insurance policy forms and commercial residential and
160	nonresidential property insurance forms, which forms must be
161	approved by the office prior to use. The corporation shall adopt
162	the following policy forms:
163	a.  Standard personal lines policy forms that are
164	comprehensive multiperil policies providing full coverage of a
165	residential property equivalent to the coverage provided in the
166	private insurance market under an HO-3, HO-4, or HO-6 policy.
167	b.  Basic personal lines policy forms that are policies
168	similar to an HO-8 policy or a dwelling fire policy that provide
169	coverage meeting the requirements of the secondary mortgage
170	market, but which coverage is more limited than the coverage
171	under a standard policy.
172	c.  Commercial lines residential and nonresidential policy
173	forms that are generally similar to the basic perils of full
174	coverage obtainable for commercial residential structures and
175	commercial nonresidential structures in the admitted voluntary
176	market.
177	d.  Personal lines and commercial lines residential
178	property insurance forms that cover the peril of wind only. The
179	forms are applicable only to residential properties located in
180	areas eligible for coverage under the high-risk account referred
181	to in sub-subparagraph (b)2.a.
182	e.  Commercial lines nonresidential property insurance
183	forms that cover the peril of wind only. The forms are
184	applicable only to nonresidential properties located in areas
185	eligible for coverage under the high-risk account referred to in
186	sub-subparagraph (b)2.a.
187	f.  The corporation may adopt variations of the policy
188	forms listed in sub-subparagraphs a.-e. that contain more
189	restrictive coverage.
190	2.a.  Must provide that the corporation adopt a program in
191	which the corporation and authorized insurers enter into quota
192	share primary insurance agreements for hurricane coverage, as
193	defined in s. 627.4025(2)(a), for eligible risks, and adopt
194	property insurance forms for eligible risks which cover the
195	peril of wind only. As used in this subsection, the term:
196	(I)  "Quota share primary insurance" means an arrangement
197	in which the primary hurricane coverage of an eligible risk is
198	provided in specified percentages by the corporation and an
199	authorized insurer. The corporation and authorized insurer are
200	each solely responsible for a specified percentage of hurricane
201	coverage of an eligible risk as set forth in a quota share
202	primary insurance agreement between the corporation and an
203	authorized insurer and the insurance contract. The
204	responsibility of the corporation or authorized insurer to pay
205	its specified percentage of hurricane losses of an eligible
206	risk, as set forth in the quota share primary insurance
207	agreement, may not be altered by the inability of the other
208	party to the agreement to pay its specified percentage of
209	hurricane losses. Eligible risks that are provided hurricane
210	coverage through a quota share primary insurance arrangement
211	must be provided policy forms that set forth the obligations of
212	the corporation and authorized insurer under the arrangement,
213	clearly specify the percentages of quota share primary insurance
214	provided by the corporation and authorized insurer, and
215	conspicuously and clearly state that neither the authorized
216	insurer nor the corporation may be held responsible beyond its
217	specified percentage of coverage of hurricane losses.
218	(II)  "Eligible risks" means personal lines residential and
219	commercial lines residential risks that meet the underwriting
220	criteria of the corporation and are located in areas that were
221	eligible for coverage by the Florida Windstorm Underwriting
222	Association on January 1, 2002.
223	b.  The corporation may enter into quota share primary
224	insurance agreements with authorized insurers at corporation
225	coverage levels of 90 percent and 50 percent.
226	c.  If the corporation determines that additional coverage
227	levels are necessary to maximize participation in quota share
228	primary insurance agreements by authorized insurers, the
229	corporation may establish additional coverage levels. However,
230	the corporation's quota share primary insurance coverage level
231	may not exceed 90 percent.
232	d.  Any quota share primary insurance agreement entered
233	into between an authorized insurer and the corporation must
234	provide for a uniform specified percentage of coverage of
235	hurricane losses, by county or territory as set forth by the
236	corporation board, for all eligible risks of the authorized
237	insurer covered under the quota share primary insurance
238	agreement.
239	e.  Any quota share primary insurance agreement entered
240	into between an authorized insurer and the corporation is
241	subject to review and approval by the office. However, such
242	agreement shall be authorized only as to insurance contracts
243	entered into between an authorized insurer and an insured who is
244	already insured by the corporation for wind coverage.
245	f.  For all eligible risks covered under quota share
246	primary insurance agreements, the exposure and coverage levels
247	for both the corporation and authorized insurers shall be
248	reported by the corporation to the Florida Hurricane Catastrophe
249	Fund. For all policies of eligible risks covered under quota
250	share primary insurance agreements, the corporation and the
251	authorized insurer shall maintain complete and accurate records
252	for the purpose of exposure and loss reimbursement audits as
253	required by Florida Hurricane Catastrophe Fund rules. The
254	corporation and the authorized insurer shall each maintain
255	duplicate copies of policy declaration pages and supporting
256	claims documents.
257	g.  The corporation board shall establish in its plan of
258	operation standards for quota share agreements which ensure that
259	there is no discriminatory application among insurers as to the
260	terms of quota share agreements, pricing of quota share
261	agreements, incentive provisions if any, and consideration paid
262	for servicing policies or adjusting claims.
263	h.  The quota share primary insurance agreement between the
264	corporation and an authorized insurer must set forth the
265	specific terms under which coverage is provided, including, but
266	not limited to, the sale and servicing of policies issued under
267	the agreement by the insurance agent of the authorized insurer
268	producing the business, the reporting of information concerning
269	eligible risks, the payment of premium to the corporation, and
270	arrangements for the adjustment and payment of hurricane claims
271	incurred on eligible risks by the claims adjuster and personnel
272	of the authorized insurer. Entering into a quota sharing
273	insurance agreement between the corporation and an authorized
274	insurer shall be voluntary and at the discretion of the
275	authorized insurer.
276	3.  May provide that the corporation may employ or
277	otherwise contract with individuals or other entities to provide
278	administrative or professional services that may be appropriate
279	to effectuate the plan. The corporation shall have the power to
280	borrow funds, by issuing bonds or by incurring other
281	indebtedness, and shall have other powers reasonably necessary
282	to effectuate the requirements of this subsection, including,
283	without limitation, the power to issue bonds and incur other
284	indebtedness in order to refinance outstanding bonds or other
285	indebtedness. The corporation may, but is not required to, seek
286	judicial validation of its bonds or other indebtedness under
287	chapter 75. The corporation may issue bonds or incur other
288	indebtedness, or have bonds issued on its behalf by a unit of
289	local government pursuant to subparagraph (q)2., in the absence
290	of a hurricane or other weather-related event, upon a
291	determination by the corporation, subject to approval by the
292	office, that such action would enable it to efficiently meet the
293	financial obligations of the corporation and that such
294	financings are reasonably necessary to effectuate the
295	requirements of this subsection. The corporation is authorized
296	to take all actions needed to facilitate tax-free status for any
297	such bonds or indebtedness, including formation of trusts or
298	other affiliated entities. The corporation shall have the
299	authority to pledge assessments, projected recoveries from the
300	Florida Hurricane Catastrophe Fund, other reinsurance
301	recoverables, market equalization and other surcharges, and
302	other funds available to the corporation as security for bonds
303	or other indebtedness. In recognition of s. 10, Art. I of the
304	State Constitution, prohibiting the impairment of obligations of
305	contracts, it is the intent of the Legislature that no action be
306	taken whose purpose is to impair any bond indenture or financing
307	agreement or any revenue source committed by contract to such
308	bond or other indebtedness.
309	4.a.  Must require that the corporation operate subject to
310	the supervision and approval of a board of governors consisting
311	of eight individuals who are residents of this state, from
312	different geographical areas of this state. The Governor, the
313	Chief Financial Officer, the President of the Senate, and the
314	Speaker of the House of Representatives shall each appoint two
315	members of the board. At least one of the two members appointed
316	by each appointing officer must have demonstrated expertise in
317	insurance. The Chief Financial Officer shall designate one of
318	the appointees as chair. All board members serve at the pleasure
319	of the appointing officer. All members of the board of governors
320	are subject to removal at will by the officers who appointed
321	them. All board members, including the chair, must be appointed
322	to serve for 3-year terms beginning annually on a date
323	designated by the plan. However, for the first term beginning on
324	or after July 1, 2009, each appointing officer shall appoint one
325	member of the board for a 2-year term and one member for a 3-
326	year term. Any board vacancy shall be filled for the unexpired
327	term by the appointing officer. The Chief Financial Officer
328	shall appoint a technical advisory group to provide information
329	and advice to the board of governors in connection with the
330	board's duties under this subsection. The executive director and
331	senior managers of the corporation shall be engaged by the board
332	and serve at the pleasure of the board. Any executive director
333	appointed on or after July 1, 2006, is subject to confirmation
334	by the Senate. The executive director is responsible for
335	employing other staff as the corporation may require, subject to
336	review and concurrence by the board.
337	b.  The board shall create a Market Accountability Advisory
338	Committee to assist the corporation in developing awareness of
339	its rates and its customer and agent service levels in
340	relationship to the voluntary market insurers writing similar
341	coverage. The members of the advisory committee shall consist of
342	the following 11 persons, one of whom must be elected chair by
343	the members of the committee: four representatives, one
344	appointed by the Florida Association of Insurance Agents, one by
345	the Florida Association of Insurance and Financial Advisors, one
346	by the Professional Insurance Agents of Florida, and one by the
347	Latin American Association of Insurance Agencies; three
348	representatives appointed by the insurers with the three highest
349	voluntary market share of residential property insurance
350	business in the state; one representative from the Office of
351	Insurance Regulation; one consumer appointed by the board who is
352	insured by the corporation at the time of appointment to the
353	committee; one representative appointed by the Florida
354	Association of Realtors; and one representative appointed by the
355	Florida Bankers Association. All members must serve for 3-year
356	terms and may serve for consecutive terms. The committee shall
357	report to the corporation at each board meeting on insurance
358	market issues which may include rates and rate competition with
359	the voluntary market; service, including policy issuance, claims
360	processing, and general responsiveness to policyholders,
361	applicants, and agents; and matters relating to depopulation.
362	5.  Must provide a procedure for determining the
363	eligibility of a risk for coverage, as follows:
364	a.  Subject to the provisions of s. 627.3517, with respect
365	to personal lines residential risks, if the risk is offered
366	coverage from an authorized insurer at the insurer's approved
367	rate under either a standard policy including wind coverage or,
368	if consistent with the insurer's underwriting rules as filed
369	with the office, a basic policy including wind coverage, for a
370	new application to the corporation for coverage, the risk is not
371	eligible for any policy issued by the corporation unless the
372	premium for coverage from the authorized insurer is more than 15
373	percent greater than the premium for comparable coverage from
374	the corporation. If the risk is not able to obtain any such
375	offer, the risk is eligible for either a standard policy
376	including wind coverage or a basic policy including wind
377	coverage issued by the corporation; however, if the risk could
378	not be insured under a standard policy including wind coverage
379	regardless of market conditions, the risk shall be eligible for
380	a basic policy including wind coverage unless rejected under
381	subparagraph 8. However, with regard to a policyholder of the
382	corporation or a policyholder removed from the corporation
383	through an assumption agreement until the end of the assumption
384	period, the policyholder remains eligible for coverage from the
385	corporation regardless of any offer of coverage from an
386	authorized insurer or surplus lines insurer. The corporation
387	shall determine the type of policy to be provided on the basis
388	of objective standards specified in the underwriting manual and
389	based on generally accepted underwriting practices.
390	(I)  If the risk accepts an offer of coverage through the
391	market assistance plan or an offer of coverage through a
392	mechanism established by the corporation before a policy is
393	issued to the risk by the corporation or during the first 30
394	days of coverage by the corporation, and the producing agent who
395	submitted the application to the plan or to the corporation is
396	not currently appointed by the insurer, the insurer shall:
397	(A)  Pay to the producing agent of record of the policy,
398	for the first year, an amount that is the greater of the
399	insurer's usual and customary commission for the type of policy
400	written or a fee equal to the usual and customary commission of
401	the corporation; or
402	(B)  Offer to allow the producing agent of record of the
403	policy to continue servicing the policy for a period of not less
404	than 1 year and offer to pay the agent the greater of the
405	insurer's or the corporation's usual and customary commission
406	for the type of policy written.
407
408	If the producing agent is unwilling or unable to accept
409	appointment, the new insurer shall pay the agent in accordance
410	with sub-sub-sub-subparagraph (A).
411	(II)  When the corporation enters into a contractual
412	agreement for a take-out plan, the producing agent of record of
413	the corporation policy is entitled to retain any unearned
414	commission on the policy, and the insurer shall:
415	(A)  Pay to the producing agent of record of the
416	corporation policy, for the first year, an amount that is the
417	greater of the insurer's usual and customary commission for the
418	type of policy written or a fee equal to the usual and customary
419	commission of the corporation; or
420	(B)  Offer to allow the producing agent of record of the
421	corporation policy to continue servicing the policy for a period
422	of not less than 1 year and offer to pay the agent the greater
423	of the insurer's or the corporation's usual and customary
424	commission for the type of policy written.
425
426	If the producing agent is unwilling or unable to accept
427	appointment, the new insurer shall pay the agent in accordance
428	with sub-sub-sub-subparagraph (A).
429	b.  With respect to commercial lines residential risks, for
430	a new application to the corporation for coverage, if the risk
431	is offered coverage under a policy including wind coverage from
432	an authorized insurer at its approved rate, the risk is not
433	eligible for any policy issued by the corporation unless the
434	premium for coverage from the authorized insurer is more than 15
435	percent greater than the premium for comparable coverage from
436	the corporation. If the risk is not able to obtain any such
437	offer, the risk is eligible for a policy including wind coverage
438	issued by the corporation. However, with regard to a
439	policyholder of the corporation or a policyholder removed from
440	the corporation through an assumption agreement until the end of
441	the assumption period, the policyholder remains eligible for
442	coverage from the corporation regardless of any offer of
443	coverage from an authorized insurer or surplus lines insurer.
444	(I)  If the risk accepts an offer of coverage through the
445	market assistance plan or an offer of coverage through a
446	mechanism established by the corporation before a policy is
447	issued to the risk by the corporation or during the first 30
448	days of coverage by the corporation, and the producing agent who
449	submitted the application to the plan or the corporation is not
450	currently appointed by the insurer, the insurer shall:
451	(A)  Pay to the producing agent of record of the policy,
452	for the first year, an amount that is the greater of the
453	insurer's usual and customary commission for the type of policy
454	written or a fee equal to the usual and customary commission of
455	the corporation; or
456	(B)  Offer to allow the producing agent of record of the
457	policy to continue servicing the policy for a period of not less
458	than 1 year and offer to pay the agent the greater of the
459	insurer's or the corporation's usual and customary commission
460	for the type of policy written.
461
462	If the producing agent is unwilling or unable to accept
463	appointment, the new insurer shall pay the agent in accordance
464	with sub-sub-sub-subparagraph (A).
465	(II)  When the corporation enters into a contractual
466	agreement for a take-out plan, the producing agent of record of
467	the corporation policy is entitled to retain any unearned
468	commission on the policy, and the insurer shall:
469	(A)  Pay to the producing agent of record of the
470	corporation policy, for the first year, an amount that is the
471	greater of the insurer's usual and customary commission for the
472	type of policy written or a fee equal to the usual and customary
473	commission of the corporation; or
474	(B)  Offer to allow the producing agent of record of the
475	corporation policy to continue servicing the policy for a period
476	of not less than 1 year and offer to pay the agent the greater
477	of the insurer's or the corporation's usual and customary
478	commission for the type of policy written.
479
480	If the producing agent is unwilling or unable to accept
481	appointment, the new insurer shall pay the agent in accordance
482	with sub-sub-sub-subparagraph (A).
483	c.  For purposes of determining comparable coverage under
484	sub-subparagraphs a. and b., the comparison shall be based on
485	those forms and coverages that are reasonably comparable. The
486	corporation may rely on a determination of comparable coverage
487	and premium made by the producing agent who submits the
488	application to the corporation, made in the agent's capacity as
489	the corporation's agent. A comparison may be made solely of the
490	premium with respect to the main building or structure only on
491	the following basis: the same coverage A or other building
492	limits; the same percentage hurricane deductible that applies on
493	an annual basis or that applies to each hurricane for commercial
494	residential property; the same percentage of ordinance and law
495	coverage, if the same limit is offered by both the corporation
496	and the authorized insurer; the same mitigation credits, to the
497	extent the same types of credits are offered both by the
498	corporation and the authorized insurer; the same method for loss
499	payment, such as replacement cost or actual cash value, if the
500	same method is offered both by the corporation and the
501	authorized insurer in accordance with underwriting rules; and
502	any other form or coverage that is reasonably comparable as
503	determined by the board. If an application is submitted to the
504	corporation for wind-only coverage in the high-risk account, the
505	premium for the corporation's wind-only policy plus the premium
506	for the ex-wind policy that is offered by an authorized insurer
507	to the applicant shall be compared to the premium for multiperil
508	coverage offered by an authorized insurer, subject to the
509	standards for comparison specified in this subparagraph. If the
510	corporation or the applicant requests from the authorized
511	insurer a breakdown of the premium of the offer by types of
512	coverage so that a comparison may be made by the corporation or
513	its agent and the authorized insurer refuses or is unable to
514	provide such information, the corporation may treat the offer as
515	not being an offer of coverage from an authorized insurer at the
516	insurer's approved rate.
517	6.  Must include rules for classifications of risks and
518	rates therefor.
519	7.  Must provide that if premium and investment income for
520	an account attributable to a particular calendar year are in
521	excess of projected losses and expenses for the account
522	attributable to that year, such excess shall be held in surplus
523	in the account. Such surplus shall be available to defray
524	deficits in that account as to future years and shall be used
525	for that purpose prior to assessing assessable insurers and
526	assessable insureds as to any calendar year.
527	8.  Must provide objective criteria and procedures to be
528	uniformly applied for all applicants in determining whether an
529	individual risk is so hazardous as to be uninsurable. In making
530	this determination and in establishing the criteria and
531	procedures, the following shall be considered:
532	a.  Whether the likelihood of a loss for the individual
533	risk is substantially higher than for other risks of the same
534	class; and
535	b.  Whether the uncertainty associated with the individual
536	risk is such that an appropriate premium cannot be determined.
537
538	The acceptance or rejection of a risk by the corporation shall
539	be construed as the private placement of insurance, and the
540	provisions of chapter 120 shall not apply.
541	9.  Must provide that the corporation shall make its best
542	efforts to procure catastrophe reinsurance at reasonable rates,
543	to cover its projected 100-year probable maximum loss as
544	determined by the board of governors.
545	10.  The policies issued by the corporation must provide
546	that, if the corporation or the market assistance plan obtains
547	an offer from an authorized insurer to cover the risk at its
548	approved rates, the risk is no longer eligible for renewal
549	through the corporation, except as otherwise provided in this
550	subsection.
551	11.  Corporation policies and applications must include a
552	notice that the corporation policy could, under this section, be
553	replaced with a policy issued by an authorized insurer that does
554	not provide coverage identical to the coverage provided by the
555	corporation. The notice shall also specify that acceptance of
556	corporation coverage creates a conclusive presumption that the
557	applicant or policyholder is aware of this potential.
558	12.  May establish, subject to approval by the office,
559	different eligibility requirements and operational procedures
560	for any line or type of coverage for any specified county or
561	area if the board determines that such changes to the
562	eligibility requirements and operational procedures are
563	justified due to the voluntary market being sufficiently stable
564	and competitive in such area or for such line or type of
565	coverage and that consumers who, in good faith, are unable to
566	obtain insurance through the voluntary market through ordinary
567	methods would continue to have access to coverage from the
568	corporation. When coverage is sought in connection with a real
569	property transfer, such requirements and procedures shall not
570	provide for an effective date of coverage later than the date of
571	the closing of the transfer as established by the transferor,
572	the transferee, and, if applicable, the lender.
573	13.  Must provide that, with respect to the high-risk
574	account, any assessable insurer with a surplus as to
575	policyholders of $25 million or less writing 25 percent or more
576	of its total countrywide property insurance premiums in this
577	state may petition the office, within the first 90 days of each
578	calendar year, to qualify as a limited apportionment company. A
579	regular assessment levied by the corporation on a limited
580	apportionment company for a deficit incurred by the corporation
581	for the high-risk account in 2006 or thereafter may be paid to
582	the corporation on a monthly basis as the assessments are
583	collected by the limited apportionment company from its insureds
584	pursuant to s. 627.3512, but the regular assessment must be paid
585	in full within 12 months after being levied by the corporation.
586	A limited apportionment company shall collect from its
587	policyholders any emergency assessment imposed under sub-
588	subparagraph (b)3.d. The plan shall provide that, if the office
589	determines that any regular assessment will result in an
590	impairment of the surplus of a limited apportionment company,
591	the office may direct that all or part of such assessment be
592	deferred as provided in subparagraph (q)4. However, there shall
593	be no limitation or deferment of an emergency assessment to be
594	collected from policyholders under sub-subparagraph (b)3.d.
595	14.  Must provide that the corporation appoint as its
596	licensed agents only those agents who also hold an appointment
597	as defined in s. 626.015(3) with an insurer who at the time of
598	the agent's initial appointment by the corporation is authorized
599	to write and is actually writing personal lines residential
600	property coverage, commercial residential property coverage, or
601	commercial nonresidential property coverage within the state.
602	15.  Must provide, by July 1, 2007, a premium payment plan
603	option to its policyholders which allows at a minimum for
604	quarterly and semiannual payment of premiums. A monthly payment
605	plan may, but is not required to, be offered.
606	16.  Must limit coverage on mobile homes or manufactured
607	homes built prior to 1994 to actual cash value of the dwelling
608	rather than replacement costs of the dwelling.
609	17.  May provide such limits of coverage as the board
610	determines, consistent with the requirements of this subsection.
611	18.  May require commercial property to meet specified
612	hurricane mitigation construction features as a condition of
613	eligibility for coverage.
614	19.a.  Must require an agent to obtain from any applicant
615	for coverage the following acknowledgment, signed by the
616	applicant, and must require the agent of record to obtain the
617	following acknowledgment from each policyholder of the
618	corporation, signed by the policyholder, before the policy's
619	first renewal after the effective date of this subparagraph:
620
621	ACKNOWLEDGMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
622	LIABILITY:
623	1.  I UNDERSTAND, AS A CITIZENS PROPERTY
624	INSURANCE CORPORATION POLICYHOLDER, THAT IF THE
625	CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
626	HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
627	COULD BE SUBJECT TO CITIZENS POLICYHOLDER SURCHARGES,
628	WHICH WOULD BE DUE AND PAYABLE UPON RENEWAL,
629	CANCELLATION, OR TERMINATION OF THE POLICY.
630	2.  I UNDERSTAND THAT THE SURCHARGES COULD BE AS
631	HIGH AS 15 PERCENT OF MY PREMIUM FOR DEFICITS IN EACH
632	OF THREE CITIZENS ACCOUNTS, OR A DIFFERENT AMOUNT AS
633	ESTABLISHED BY THE FLORIDA LEGISLATURE.
634	3.  I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
635	EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
636	POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
637
638	b.  The corporation must permanently maintain a signed copy
639	of the signed acknowledgment required by this subparagraph, and
640	the agent may also retain a copy.
641	c.  The signed acknowledgment form creates a conclusive
642	presumption that the policyholder understood and accepted his or
643	her potential surcharge and assessment liability as a Citizens
644	Property Insurance Corporation policyholder.
645	Section 4.  Section 627.7031, Florida Statutes, is created
646	to read:
647	627.7031  Residential property insurance option.-
648	(1)  An insurer holding a certificate of authority to write
649	property insurance in this state may offer or renew residential
650	property insurance policies at rates established in accordance
651	with s. 627.062(2)(l), subject to all of the requirements and
652	prohibitions of this section.
653	(2)  An insurer offering or renewing policies at rates
654	established in accordance with s. 627.062(2)(l) may not purchase
655	coverage from the Florida Hurricane Catastrophe Fund under the
656	temporary increase in coverage limit option under s.
657	215.555(17).
658	(3)(a)  Before the effective date of a newly issued policy
659	at rates established in accordance with s. 627.062(2)(l) or
660	before the effective date of a renewal policy at rates
661	established in accordance with s. 627.062(2)(l), the applicant
662	or insured must be given the following notice, printed in at
663	least 12-point boldfaced type:
664
665	THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
666	REGULATION BY THE FLORIDA OFFICE OF INSURANCE
667	REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
668	THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
669	FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
670	FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
671	PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
672	POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
673	A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
674	INSURANCE REGULATION'S WEBSITE AT
675	WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
676	CHOICES AVAILABLE TO YOU.
677
678	(b)  For policies renewed at a rate established in
679	accordance with s. 627.062(2)(l), the notice described in
680	paragraph (a) must be furnished in writing at the same time as
681	the renewal notice on a document separate from the renewal
682	notice, but may be contained within the same mailing as the
683	renewal notice.
684	(4)  Before the effective date of a newly issued policy at
685	rates established in accordance with s. 627.062(2)(l) or before
686	the effective date of the first renewal at rates established in
687	accordance with s. 627.062(2)(l) of a policy originally issued
688	before the effective date of this section, the applicant or
689	insured must:
690	(a)  Be provided or offered, for comparison purposes, an
691	estimate of the premium for a policy from Citizens Property
692	Insurance Corporation reflecting substantially similar
693	coverages, limits, and deductibles to the extent available.
694	(b)  Provide the insurer or agent with a signed copy of the
695	following acknowledgment form, which must be retained by the
696	insurer or agent for at least 3 years. If the acknowledgment
697	form is signed by the insured or if the insured remits payment
698	in the amount of the rate established in accordance with s.
699	627.062(2)(l) after being mailed, otherwise provided, or offered
700	the comparison specified in paragraph (a), an insurer renewing a
701	policy at such rate shall be deemed to comply with this section,
702	and it is presumed that the insured has been informed and
703	understands the information contained in the comparison and
704	acknowledgment forms:
705
706	ACKNOWLEDGMENT:
707	1.  I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
708	THE REQUIRED PREMIUM COMPARISON.
709	2.  I UNDERSTAND THAT THE RATE FOR THIS
710	RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
711	TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
712	INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
713	APPROVED BY THAT OFFICE.
714	3.  I UNDERSTAND THAT A RESIDENTIAL PROPERTY
715	INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
716	REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
717	INSURANCE CORPORATION.
718	4.  I UNDERSTAND THAT THE FLORIDA OFFICE OF
719	INSURANCE REGULATION'S WEBSITE
720	WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
721	PROPERTY INSURANCE RATE COMPARISON INFORMATION.
722
723	(5)  The following types of residential property insurance
724	policies are not eligible for rates established in accordance
725	with s. 627.062(2)(l) and are not subject to the other
726	provisions of this section:
727	(a)  Residential property insurance policies that exclude
728	coverage for the perils of windstorm or hurricane.
729	(b)  Residential property insurance policies subject to a
730	consent decree, agreement, understanding, or other arrangement
731	between the insurer and the office relating to rates or premiums
732	for policies removed from Citizens Property Insurance Corp.
733	Section 5.  Effective January 1, 2015, section 627.7031,
734	Florida Statutes, as created by this act, is amended to read:
735	627.7031  Residential property insurance option.-
736	(1)  An insurer holding a certificate of authority to write
737	property insurance in this state may offer or renew residential
738	property insurance policies at rates established in accordance
739	with s. 627.062(2)(l), subject to all of the requirements and
740	prohibitions of this section.
741	(2)  An insurer may offer or renew policies at rates
742	established in accordance with s. 627.062(2)(l) only if the
743	insurer has in place a combination of surplus, Florida Hurricane
744	Catastrophe Fund coverage, reinsurance, and reinsurance
745	equivalents sufficient to cover the insurer's 100-year probable
746	maximum hurricane loss for residential property as determined on
747	a seasonal, rather than a single-event, basis. The insurer shall
748	determine its probable maximum loss using one or more models
749	that meet the standards of the Florida Commission on Hurricane
750	Loss Projection Methodology.
751	(3)(2)  An insurer offering or renewing policies at rates
752	established in accordance with s. 627.062(2)(l) may not purchase
753	coverage from the Florida Hurricane Catastrophe Fund under the
754	temporary increase in coverage limit option under s.
755	215.555(17).
756	(4)(3)(a)  Before the effective date of a newly issued
757	policy at rates established in accordance with s. 627.062(2)(l)
758	or before the effective date of a renewal policy at rates
759	established in accordance with s. 627.062(2)(l), the applicant
760	or insured must be given the following notice, printed in at
761	least 12-point boldfaced type:
762
763	THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
764	REGULATION BY THE FLORIDA OFFICE OF INSURANCE
765	REGULATION AND MAY BE HIGHER THAN RATES APPROVED BY
766	THAT OFFICE. A RESIDENTIAL PROPERTY POLICY SUBJECT TO
767	FULL RATE REGULATION REQUIREMENTS MAY BE AVAILABLE
768	FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
769	PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR
770	POLICY OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE
771	A CITIZENS QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF
772	INSURANCE REGULATION'S WEBSITE AT
773	WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION ABOUT
774	CHOICES AVAILABLE TO YOU.
775
776	(b)  For policies renewed at a rate established in
777	accordance with s. 627.062(2)(l), the notice described in
778	paragraph (a) must be furnished in writing at the same time as
779	the renewal notice on a document separate from the renewal
780	notice, but may be contained within the same mailing as the
781	renewal notice.
782	(5)(4)  Before the effective date of a newly issued policy
783	at rates established in accordance with s. 627.062(2)(l) or
784	before the effective date of the first renewal at rates
785	established in accordance with s. 627.062(2)(l) of a policy
786	originally issued before the effective date of this section, the
787	applicant or insured must:
788	(a)  Be provided or offered, for comparison purposes, an
789	estimate of the premium for a policy from Citizens Property
790	Insurance Corporation reflecting substantially similar
791	coverages, limits, and deductibles to the extent available.
792	(b)  Provide the insurer or agent with a signed copy of the
793	following acknowledgment form, which must be retained by the
794	insurer or agent for at least 3 years. If the acknowledgment
795	form is signed by the insured or if the insured remits payment
796	in the amount of the rate established in accordance with s.
797	627.062(2)(l) after being mailed, otherwise provided, or offered
798	the comparison specified in paragraph (a), an insurer renewing a
799	policy at such rate shall be deemed to comply with this section,
800	and it is presumed that the insured has been informed and
801	understands the information contained in the comparison and
802	acknowledgment forms:
803
804	ACKNOWLEDGMENT:
805	1.  I HAVE REVIEWED THE REQUIRED DISCLOSURES AND
806	THE REQUIRED PREMIUM COMPARISON.
807	2.  I UNDERSTAND THAT THE RATE FOR THIS
808	RESIDENTIAL PROPERTY INSURANCE POLICY IS NOT SUBJECT
809	TO FULL RATE REGULATION BY THE FLORIDA OFFICE OF
810	INSURANCE REGULATION AND MAY BE HIGHER THAN RATES
811	APPROVED BY THAT OFFICE.
812	3.  I UNDERSTAND THAT A RESIDENTIAL PROPERTY
813	INSURANCE POLICY SUBJECT TO FULL RATE REGULATION
814	REQUIREMENTS MAY BE AVAILABLE FROM CITIZENS PROPERTY
815	INSURANCE CORPORATION.
816	4.  I UNDERSTAND THAT THE FLORIDA OFFICE OF
817	INSURANCE REGULATION'S WEBSITE
818	WWW.SHOPANDCOMPARERATES.COM CONTAINS RESIDENTIAL
819	PROPERTY INSURANCE RATE COMPARISON INFORMATION.
820
821	(6)(5)  The following types of residential property
822	insurance policies are not eligible for rates established in
823	accordance with s. 627.062(2)(l) and are not subject to the
824	other provisions of this section:
825	(a)  Residential property insurance policies that exclude
826	coverage for the perils of windstorm or hurricane.
827	(b)  Residential property insurance policies subject to a
828	consent decree, agreement, understanding, or other arrangement
829	between the insurer and the office relating to rates or premiums
830	for policies removed from Citizens Property Insurance Corp.
831	Section 6.  Except as otherwise expressly provided in this
832	act, this act shall take effect upon becoming a law.

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