HB 761

1
A bill to be entitled
2An act relating to property loss appraisals; amending
3s. 627.351, F.S.; requiring Citizens Property
4Insurance Corporation's plan of operation to provide
5for the adoption of policy forms that require
6compliance with certain conditions and procedures
7relating to the participation of umpires and
8appraisers in the loss appraisal process under certain
9circumstances; providing that either party may submit
10a written demand to enter into the process of
11appraisal when the insured and the corporation fail to
12mutually agree to the actual cash value, the amount of
13loss, or the cost of repair or replacement of property
14for which a claim has been filed; providing an
15exception upon which the corporation may refuse to
16accept such demand; providing that the corporation
17waives the right to demand an appraisal under certain
18circumstances; requiring each party to select a
19competent and independent appraiser and to notify the
20opposing party within a specified period; requiring
21the appraisers to select an appraisal umpire;
22authorizing either party to file a petition, in a
23county or circuit court in the jurisdiction in which
24the covered property is located, to designate an
25appraisal umpire if the appraisers cannot agree on the
26selection of an umpire; providing that appraisal
27proceedings are informal unless the corporation and
28the insured agree otherwise; defining and providing
29the scope of the term "informal" for purposes of
30appraisal proceedings; requiring each appraiser to
31submit a written report to the other appraiser;
32requiring that any differences in findings between the
33appraisers that cannot be resolved by the appraisers
34themselves within a specified period be submitted to
35the umpire for review; providing an exception;
36requiring the umpire to submit his or her conclusions
37regarding any unresolved differences in the findings
38of the appraisers within a specified period; providing
39that if either appraiser agrees with the conclusions
40of the umpire, an itemized written appraisal award
41signed by the umpire and appraiser shall be filed with
42the corporation and shall determine the amount of the
43loss; providing that the appraisal award is binding
44upon the corporation and the insured; providing for
45compensation of the appraisers and the umpire;
46providing applicability of the Florida Arbitration
47Code to residential or commercial residential property
48insurance loss appraisal proceedings and specified
49procedural matters; prohibiting the appraisal process
50from addressing issues involving coverage or lack
51thereof under an insurance contract; authorizing the
52umpire and appraisers to consider causation issues
53when necessary to determine the amount of loss;
54providing an effective date.
55
56Be It Enacted by the Legislature of the State of Florida:
57
58     Section 1.  Paragraph (c) of subsection (6) of section
59627.351, Florida Statutes, is amended to read:
60     627.351  Insurance risk apportionment plans.-
61     (6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
62     (c)  The corporation's plan of operation:
63     1.  Must provide for adoption of residential property and
64casualty insurance policy forms and commercial residential and
65nonresidential property insurance forms, which must be approved
66by the office before use. The corporation shall adopt the
67following policy forms:
68     a.  Standard personal lines policy forms that are
69comprehensive multiperil policies providing full coverage of a
70residential property equivalent to the coverage provided in the
71private insurance market under an HO-3, HO-4, or HO-6 policy.
72     b.  Basic personal lines policy forms that are policies
73similar to an HO-8 policy or a dwelling fire policy that provide
74coverage meeting the requirements of the secondary mortgage
75market, but which is more limited than the coverage under a
76standard policy.
77     c.  Commercial lines residential and nonresidential policy
78forms that are generally similar to the basic perils of full
79coverage obtainable for commercial residential structures and
80commercial nonresidential structures in the admitted voluntary
81market.
82     d.  Personal lines and commercial lines residential
83property insurance forms that cover the peril of wind only. The
84forms are applicable only to residential properties located in
85areas eligible for coverage under the coastal account referred
86to in sub-subparagraph (b)2.a.
87     e.  Commercial lines nonresidential property insurance
88forms that cover the peril of wind only. The forms are
89applicable only to nonresidential properties located in areas
90eligible for coverage under the coastal account referred to in
91sub-subparagraph (b)2.a.
92     f.  When the only issue remaining between an insured and
93the corporation on a residential or commercial residential
94property is the actual cash value, the amount of loss, or the
95cost of repair or replacement of property for which a claim has
96been filed, residential and commercial residential property
97insurance forms that apply to the umpires and appraisers who
98participate in the appraisal process and that require compliance
99with the following conditions and procedures:
100     (I)  Either party may submit a written demand to enter into
101the process of appraisal.
102     (II)  The corporation may refuse to accept the demand only
103if the insured materially fails to comply with the proof-of-loss
104obligations of the insured as set forth in the policy
105conditions.
106     (III)  The corporation is deemed to have waived its right
107to demand an appraisal if it fails to invoke an appraisal within
10830 days after the insured substantially complies with the proof-
109of-loss obligation as set forth in the policy conditions.
110     (IV)  Each party shall select a competent appraiser and
111notify the other party of the appraiser selected within 20 days
112after the date of the demand for an appraisal. The appraisers
113shall select a competent, independent, and impartial umpire. If
114the appraisers are unable to agree on an umpire within 15 days,
115the insured or the corporation may file a petition with a county
116or circuit court in the jurisdiction in which the covered
117property is located to designate a property insurance appraisal
118umpire for the appraisal.
119     (V)  Appraisal proceedings are informal unless the insured
120and the corporation mutually agree otherwise. As used in this
121sub-sub-subparagraph, the term "informal" means that formal
122discovery is not conducted, including depositions,
123interrogatories, requests for admission, or other forms of
124formal civil discovery; formal rules of evidence are not
125applied; and a court reporter is not used for the proceedings.
126However, either appraiser may rely on experts in reaching the
127value of loss.
128     (VI)  Within 60 days after being appointed, each appraiser
129shall appraise the loss and submit a written report to the other
130appraiser that separately states the cost of the loss, the
131actual cash value, or the cost to repair or replace each item.
132Within 30 days after submitting the reports, the appraisers
133shall attempt to resolve any differences in the appraisals and
134reach a mutual agreement on all matters. If the appraisers are
135unable to agree, they shall, within 5 days after the end of the
13630-day period, submit the differences in their findings in
137writing to the umpire. However, the appraisers have an
138additional 60 days after appointment to appraise the loss and
139submit a written report if the loss is covered under a
140commercial property insurance policy and the insured structure
141is 10,000 square feet or more or is covered under a residential
142or commercial residential insurance policy and the claim is
143based on and made subsequent to a hurricane designated by the
144National Hurricane Center or an emergency declared by the
145Governor.
146     (VII)  The umpire shall review any differences in
147appraisals submitted by the appraisers and determine the amount
148of the loss for each item submitted. Within 10 days after
149receipt of any differences in appraisals, the umpire shall
150submit his or her conclusions in writing to each appraiser.
151     (VIII)  If either appraiser agrees with the conclusions of
152the umpire, an itemized written appraisal award signed by the
153umpire and the appraiser shall be filed with the corporation and
154shall determine the amount of the loss.
155     (IX)  The appraisal award is binding on the corporation and
156the insured with regard to the amount of the loss. If the
157insurance policy so provides, the corporation may assert that
158there is no coverage under the policy for the loss as a whole or
159that there has been a violation of the policy conditions with
160respect to fraud, lack of notice, or failure to cooperate.
161     (X)  Each appraiser shall be paid by the party who selects
162the appraiser, and the expenses of the appraisal and fees of the
163umpire shall be paid by the parties equally, except that if the
164final determination of the amount of the loss exceeds the
165corporation's preappraisal estimate of the loss communicated to
166the insured in writing by 50 percent or more, the corporation
167shall pay all expenses, including any fees and expenses charged
168by the insured's appraiser and all fees and expenses of the
169umpire. This sub-sub-subparagraph does not affect an insured's
170claim for attorney fees under s. 627.428.
171     (XI)  The Florida Arbitration Code does not apply to
172residential and commercial residential property insurance loss
173appraisal proceedings, except for those provisions of the code
174regarding proceedings to compel and stay arbitration in s.
175682.03; procedures for correcting, vacating, or modifying an
176award in ss. 682.10, 682.13, and 682.14; procedures for entry of
177judgment on the award in s. 682.15; and procedures regarding
178confirmation of an award in s. 682.12.
179     (XII)  The appraisal process may not address issues
180involving whether the loss or damage is covered under the terms
181of the insurance contract. However, the appraisers and the
182umpire may consider causation issues, if necessary, to determine
183the amount of loss.
184
185f.  The corporation may adopt variations of the policy forms
186listed in sub-subparagraphs a.-e. which contain more restrictive
187coverage.
188     2.  Must provide that the corporation adopt a program in
189which the corporation and authorized insurers enter into quota
190share primary insurance agreements for hurricane coverage, as
191defined in s. 627.4025(2)(a), for eligible risks, and adopt
192property insurance forms for eligible risks which cover the
193peril of wind only.
194     a.  As used in this subsection, the term:
195     (I)  "Quota share primary insurance" means an arrangement
196in which the primary hurricane coverage of an eligible risk is
197provided in specified percentages by the corporation and an
198authorized insurer. The corporation and authorized insurer are
199each solely responsible for a specified percentage of hurricane
200coverage of an eligible risk as set forth in a quota share
201primary insurance agreement between the corporation and an
202authorized insurer and the insurance contract. The
203responsibility of the corporation or authorized insurer to pay
204its specified percentage of hurricane losses of an eligible
205risk, as set forth in the agreement, may not be altered by the
206inability of the other party to pay its specified percentage of
207losses. Eligible risks that are provided hurricane coverage
208through a quota share primary insurance arrangement must be
209provided policy forms that set forth the obligations of the
210corporation and authorized insurer under the arrangement,
211clearly specify the percentages of quota share primary insurance
212provided by the corporation and authorized insurer, and
213conspicuously and clearly state that the authorized insurer and
214the corporation may not be held responsible beyond their
215specified percentage of coverage of hurricane losses.
216     (II)  "Eligible risks" means personal lines residential and
217commercial lines residential risks that meet the underwriting
218criteria of the corporation and are located in areas that were
219eligible for coverage by the Florida Windstorm Underwriting
220Association on January 1, 2002.
221     b.  The corporation may enter into quota share primary
222insurance agreements with authorized insurers at corporation
223coverage levels of 90 percent and 50 percent.
224     c.  If the corporation determines that additional coverage
225levels are necessary to maximize participation in quota share
226primary insurance agreements by authorized insurers, the
227corporation may establish additional coverage levels. However,
228the corporation's quota share primary insurance coverage level
229may not exceed 90 percent.
230     d.  Any quota share primary insurance agreement entered
231into between an authorized insurer and the corporation must
232provide for a uniform specified percentage of coverage of
233hurricane losses, by county or territory as set forth by the
234corporation board, for all eligible risks of the authorized
235insurer covered under the agreement.
236     e.  Any quota share primary insurance agreement entered
237into between an authorized insurer and the corporation is
238subject to review and approval by the office. However, such
239agreement shall be authorized only as to insurance contracts
240entered into between an authorized insurer and an insured who is
241already insured by the corporation for wind coverage.
242     f.  For all eligible risks covered under quota share
243primary insurance agreements, the exposure and coverage levels
244for both the corporation and authorized insurers shall be
245reported by the corporation to the Florida Hurricane Catastrophe
246Fund. For all policies of eligible risks covered under such
247agreements, the corporation and the authorized insurer must
248maintain complete and accurate records for the purpose of
249exposure and loss reimbursement audits as required by fund
250rules. The corporation and the authorized insurer shall each
251maintain duplicate copies of policy declaration pages and
252supporting claims documents.
253     g.  The corporation board shall establish in its plan of
254operation standards for quota share agreements which ensure that
255there is no discriminatory application among insurers as to the
256terms of the agreements, pricing of the agreements, incentive
257provisions if any, and consideration paid for servicing policies
258or adjusting claims.
259     h.  The quota share primary insurance agreement between the
260corporation and an authorized insurer must set forth the
261specific terms under which coverage is provided, including, but
262not limited to, the sale and servicing of policies issued under
263the agreement by the insurance agent of the authorized insurer
264producing the business, the reporting of information concerning
265eligible risks, the payment of premium to the corporation, and
266arrangements for the adjustment and payment of hurricane claims
267incurred on eligible risks by the claims adjuster and personnel
268of the authorized insurer. Entering into a quota sharing
269insurance agreement between the corporation and an authorized
270insurer is voluntary and at the discretion of the authorized
271insurer.
272     3.a.  May provide that the corporation may employ or
273otherwise contract with individuals or other entities to provide
274administrative or professional services that may be appropriate
275to effectuate the plan. The corporation may borrow funds by
276issuing bonds or by incurring other indebtedness, and shall have
277other powers reasonably necessary to effectuate the requirements
278of this subsection, including, without limitation, the power to
279issue bonds and incur other indebtedness in order to refinance
280outstanding bonds or other indebtedness. The corporation may
281seek judicial validation of its bonds or other indebtedness
282under chapter 75. The corporation may issue bonds or incur other
283indebtedness, or have bonds issued on its behalf by a unit of
284local government pursuant to subparagraph (q)2. in the absence
285of a hurricane or other weather-related event, upon a
286determination by the corporation, subject to approval by the
287office, that such action would enable it to efficiently meet the
288financial obligations of the corporation and that such
289financings are reasonably necessary to effectuate the
290requirements of this subsection. The corporation may take all
291actions needed to facilitate tax-free status for such bonds or
292indebtedness, including formation of trusts or other affiliated
293entities. The corporation may pledge assessments, projected
294recoveries from the Florida Hurricane Catastrophe Fund, other
295reinsurance recoverables, market equalization and other
296surcharges, and other funds available to the corporation as
297security for bonds or other indebtedness. In recognition of s.
29810, Art. I of the State Constitution, prohibiting the impairment
299of obligations of contracts, it is the intent of the Legislature
300that no action be taken whose purpose is to impair any bond
301indenture or financing agreement or any revenue source committed
302by contract to such bond or other indebtedness.
303     b.  To ensure that the corporation is operating in an
304efficient and economic manner while providing quality service to
305policyholders, applicants, and agents, the board shall
306commission an independent third-party consultant having
307expertise in insurance company management or insurance company
308management consulting to prepare a report and make
309recommendations on the relative costs and benefits of
310outsourcing various policy issuance and service functions to
311private servicing carriers or entities performing similar
312functions in the private market for a fee, rather than
313performing such functions in-house. In making such
314recommendations, the consultant shall consider how other
315residual markets, both in this state and around the country,
316outsource appropriate functions or use servicing carriers to
317better match expenses with revenues that fluctuate based on a
318widely varying policy count. The report must be completed by
319July 1, 2012. Upon receiving the report, the board shall develop
320a plan to implement the report and submit the plan for review,
321modification, and approval to the Financial Services Commission.
322Upon the commission's approval of the plan, the board shall
323begin implementing the plan by January 1, 2013.
324     4.  Must require that the corporation operate subject to
325the supervision and approval of a board of governors consisting
326of eight individuals who are residents of this state, from
327different geographical areas of this state.
328     a.  The Governor, the Chief Financial Officer, the
329President of the Senate, and the Speaker of the House of
330Representatives shall each appoint two members of the board. At
331least one of the two members appointed by each appointing
332officer must have demonstrated expertise in insurance and is
333deemed to be within the scope of the exemption provided in s.
334112.313(7)(b). The Chief Financial Officer shall designate one
335of the appointees as chair. All board members serve at the
336pleasure of the appointing officer. All members of the board are
337subject to removal at will by the officers who appointed them.
338All board members, including the chair, must be appointed to
339serve for 3-year terms beginning annually on a date designated
340by the plan. However, for the first term beginning on or after
341July 1, 2009, each appointing officer shall appoint one member
342of the board for a 2-year term and one member for a 3-year term.
343A board vacancy shall be filled for the unexpired term by the
344appointing officer. The Chief Financial Officer shall appoint a
345technical advisory group to provide information and advice to
346the board in connection with the board's duties under this
347subsection. The executive director and senior managers of the
348corporation shall be engaged by the board and serve at the
349pleasure of the board. Any executive director appointed on or
350after July 1, 2006, is subject to confirmation by the Senate.
351The executive director is responsible for employing other staff
352as the corporation may require, subject to review and
353concurrence by the board.
354     b.  The board shall create a Market Accountability Advisory
355Committee to assist the corporation in developing awareness of
356its rates and its customer and agent service levels in
357relationship to the voluntary market insurers writing similar
358coverage.
359     (I)  The members of the advisory committee consist of the
360following 11 persons, one of whom must be elected chair by the
361members of the committee: four representatives, one appointed by
362the Florida Association of Insurance Agents, one by the Florida
363Association of Insurance and Financial Advisors, one by the
364Professional Insurance Agents of Florida, and one by the Latin
365American Association of Insurance Agencies; three
366representatives appointed by the insurers with the three highest
367voluntary market share of residential property insurance
368business in the state; one representative from the Office of
369Insurance Regulation; one consumer appointed by the board who is
370insured by the corporation at the time of appointment to the
371committee; one representative appointed by the Florida
372Association of Realtors; and one representative appointed by the
373Florida Bankers Association. All members shall be appointed to
3743-year terms and may serve for consecutive terms.
375     (II)  The committee shall report to the corporation at each
376board meeting on insurance market issues which may include rates
377and rate competition with the voluntary market; service,
378including policy issuance, claims processing, and general
379responsiveness to policyholders, applicants, and agents; and
380matters relating to depopulation.
381     5.  Must provide a procedure for determining the
382eligibility of a risk for coverage, as follows:
383     a.  Subject to s. 627.3517, with respect to personal lines
384residential risks, if the risk is offered coverage from an
385authorized insurer at the insurer's approved rate under a
386standard policy including wind coverage or, if consistent with
387the insurer's underwriting rules as filed with the office, a
388basic policy including wind coverage, for a new application to
389the corporation for coverage, the risk is not eligible for any
390policy issued by the corporation unless the premium for coverage
391from the authorized insurer is more than 15 percent greater than
392the premium for comparable coverage from the corporation. If the
393risk is not able to obtain such offer, the risk is eligible for
394a standard policy including wind coverage or a basic policy
395including wind coverage issued by the corporation; however, if
396the risk could not be insured under a standard policy including
397wind coverage regardless of market conditions, the risk is
398eligible for a basic policy including wind coverage unless
399rejected under subparagraph 8. However, a policyholder of the
400corporation or a policyholder removed from the corporation
401through an assumption agreement until the end of the assumption
402period remains eligible for coverage from the corporation
403regardless of any offer of coverage from an authorized insurer
404or surplus lines insurer. The corporation shall determine the
405type of policy to be provided on the basis of objective
406standards specified in the underwriting manual and based on
407generally accepted underwriting practices.
408     (I)  If the risk accepts an offer of coverage through the
409market assistance plan or through a mechanism established by the
410corporation before a policy is issued to the risk by the
411corporation or during the first 30 days of coverage by the
412corporation, and the producing agent who submitted the
413application to the plan or to the corporation is not currently
414appointed by the insurer, the insurer shall:
415     (A)  Pay to the producing agent of record of the policy for
416the first year, an amount that is the greater of the insurer's
417usual and customary commission for the type of policy written or
418a fee equal to the usual and customary commission of the
419corporation; or
420     (B)  Offer to allow the producing agent of record of the
421policy to continue servicing the policy for at least 1 year and
422offer to pay the agent the greater of the insurer's or the
423corporation's usual and customary commission for the type of
424policy written.
425
426If the producing agent is unwilling or unable to accept
427appointment, the new insurer shall pay the agent in accordance
428with sub-sub-sub-subparagraph (A).
429     (II)  If the corporation enters into a contractual
430agreement for a take-out plan, the producing agent of record of
431the corporation policy is entitled to retain any unearned
432commission on the policy, and the insurer shall:
433     (A)  Pay to the producing agent of record, for the first
434year, an amount that is the greater of the insurer's usual and
435customary commission for the type of policy written or a fee
436equal to the usual and customary commission of the corporation;
437or
438     (B)  Offer to allow the producing agent of record to
439continue servicing the policy for at least 1 year and offer to
440pay the agent the greater of the insurer's or the corporation's
441usual and customary commission for the type of policy written.
442
443If the producing agent is unwilling or unable to accept
444appointment, the new insurer shall pay the agent in accordance
445with sub-sub-sub-subparagraph (A).
446     b.  With respect to commercial lines residential risks, for
447a new application to the corporation for coverage, if the risk
448is offered coverage under a policy including wind coverage from
449an authorized insurer at its approved rate, the risk is not
450eligible for a policy issued by the corporation unless the
451premium for coverage from the authorized insurer is more than 15
452percent greater than the premium for comparable coverage from
453the corporation. If the risk is not able to obtain any such
454offer, the risk is eligible for a policy including wind coverage
455issued by the corporation. However, a policyholder of the
456corporation or a policyholder removed from the corporation
457through an assumption agreement until the end of the assumption
458period remains eligible for coverage from the corporation
459regardless of an offer of coverage from an authorized insurer or
460surplus lines insurer.
461     (I)  If the risk accepts an offer of coverage through the
462market assistance plan or through a mechanism established by the
463corporation before a policy is issued to the risk by the
464corporation or during the first 30 days of coverage by the
465corporation, and the producing agent who submitted the
466application to the plan or the corporation is not currently
467appointed by the insurer, the insurer shall:
468     (A)  Pay to the producing agent of record of the policy,
469for the first year, an amount that is the greater of the
470insurer's usual and customary commission for the type of policy
471written or a fee equal to the usual and customary commission of
472the corporation; or
473     (B)  Offer to allow the producing agent of record of the
474policy to continue servicing the policy for at least 1 year and
475offer to pay the agent the greater of the insurer's or the
476corporation's usual and customary commission for the type of
477policy written.
478
479If the producing agent is unwilling or unable to accept
480appointment, the new insurer shall pay the agent in accordance
481with sub-sub-sub-subparagraph (A).
482     (II)  If the corporation enters into a contractual
483agreement for a take-out plan, the producing agent of record of
484the corporation policy is entitled to retain any unearned
485commission on the policy, and the insurer shall:
486     (A)  Pay to the producing agent of record, for the first
487year, an amount that is the greater of the insurer's usual and
488customary commission for the type of policy written or a fee
489equal to the usual and customary commission of the corporation;
490or
491     (B)  Offer to allow the producing agent of record to
492continue servicing the policy for at least 1 year and offer to
493pay the agent the greater of the insurer's or the corporation's
494usual and customary commission for the type of policy written.
495
496If the producing agent is unwilling or unable to accept
497appointment, the new insurer shall pay the agent in accordance
498with sub-sub-sub-subparagraph (A).
499     c.  For purposes of determining comparable coverage under
500sub-subparagraphs a. and b., the comparison must be based on
501those forms and coverages that are reasonably comparable. The
502corporation may rely on a determination of comparable coverage
503and premium made by the producing agent who submits the
504application to the corporation, made in the agent's capacity as
505the corporation's agent. A comparison may be made solely of the
506premium with respect to the main building or structure only on
507the following basis: the same coverage A or other building
508limits; the same percentage hurricane deductible that applies on
509an annual basis or that applies to each hurricane for commercial
510residential property; the same percentage of ordinance and law
511coverage, if the same limit is offered by both the corporation
512and the authorized insurer; the same mitigation credits, to the
513extent the same types of credits are offered both by the
514corporation and the authorized insurer; the same method for loss
515payment, such as replacement cost or actual cash value, if the
516same method is offered both by the corporation and the
517authorized insurer in accordance with underwriting rules; and
518any other form or coverage that is reasonably comparable as
519determined by the board. If an application is submitted to the
520corporation for wind-only coverage in the coastal account, the
521premium for the corporation's wind-only policy plus the premium
522for the ex-wind policy that is offered by an authorized insurer
523to the applicant must be compared to the premium for multiperil
524coverage offered by an authorized insurer, subject to the
525standards for comparison specified in this subparagraph. If the
526corporation or the applicant requests from the authorized
527insurer a breakdown of the premium of the offer by types of
528coverage so that a comparison may be made by the corporation or
529its agent and the authorized insurer refuses or is unable to
530provide such information, the corporation may treat the offer as
531not being an offer of coverage from an authorized insurer at the
532insurer's approved rate.
533     6.  Must include rules for classifications of risks and
534rates.
535     7.  Must provide that if premium and investment income for
536an account attributable to a particular calendar year are in
537excess of projected losses and expenses for the account
538attributable to that year, such excess shall be held in surplus
539in the account. Such surplus must be available to defray
540deficits in that account as to future years and used for that
541purpose before assessing assessable insurers and assessable
542insureds as to any calendar year.
543     8.  Must provide objective criteria and procedures to be
544uniformly applied to all applicants in determining whether an
545individual risk is so hazardous as to be uninsurable. In making
546this determination and in establishing the criteria and
547procedures, the following must be considered:
548     a.  Whether the likelihood of a loss for the individual
549risk is substantially higher than for other risks of the same
550class; and
551     b.  Whether the uncertainty associated with the individual
552risk is such that an appropriate premium cannot be determined.
553
554The acceptance or rejection of a risk by the corporation shall
555be construed as the private placement of insurance, and the
556provisions of chapter 120 do not apply.
557     9.  Must provide that the corporation make its best efforts
558to procure catastrophe reinsurance at reasonable rates, to cover
559its projected 100-year probable maximum loss as determined by
560the board of governors.
561     10.  The policies issued by the corporation must provide
562that if the corporation or the market assistance plan obtains an
563offer from an authorized insurer to cover the risk at its
564approved rates, the risk is no longer eligible for renewal
565through the corporation, except as otherwise provided in this
566subsection.
567     11.  Corporation policies and applications must include a
568notice that the corporation policy could, under this section, be
569replaced with a policy issued by an authorized insurer which
570does not provide coverage identical to the coverage provided by
571the corporation. The notice must also specify that acceptance of
572corporation coverage creates a conclusive presumption that the
573applicant or policyholder is aware of this potential.
574     12.  May establish, subject to approval by the office,
575different eligibility requirements and operational procedures
576for any line or type of coverage for any specified county or
577area if the board determines that such changes are justified due
578to the voluntary market being sufficiently stable and
579competitive in such area or for such line or type of coverage
580and that consumers who, in good faith, are unable to obtain
581insurance through the voluntary market through ordinary methods
582continue to have access to coverage from the corporation. If
583coverage is sought in connection with a real property transfer,
584the requirements and procedures may not provide an effective
585date of coverage later than the date of the closing of the
586transfer as established by the transferor, the transferee, and,
587if applicable, the lender.
588     13.  Must provide that, with respect to the coastal
589account, any assessable insurer with a surplus as to
590policyholders of $25 million or less writing 25 percent or more
591of its total countrywide property insurance premiums in this
592state may petition the office, within the first 90 days of each
593calendar year, to qualify as a limited apportionment company. A
594regular assessment levied by the corporation on a limited
595apportionment company for a deficit incurred by the corporation
596for the coastal account may be paid to the corporation on a
597monthly basis as the assessments are collected by the limited
598apportionment company from its insureds pursuant to s. 627.3512,
599but the regular assessment must be paid in full within 12 months
600after being levied by the corporation. A limited apportionment
601company shall collect from its policyholders any emergency
602assessment imposed under sub-subparagraph (b)3.d. The plan must
603provide that, if the office determines that any regular
604assessment will result in an impairment of the surplus of a
605limited apportionment company, the office may direct that all or
606part of such assessment be deferred as provided in subparagraph
607(q)4. However, an emergency assessment to be collected from
608policyholders under sub-subparagraph (b)3.d. may not be limited
609or deferred.
610     14.  Must provide that the corporation appoint as its
611licensed agents only those agents who also hold an appointment
612as defined in s. 626.015(3) with an insurer who at the time of
613the agent's initial appointment by the corporation is authorized
614to write and is actually writing personal lines residential
615property coverage, commercial residential property coverage, or
616commercial nonresidential property coverage within the state.
617     15.  Must provide a premium payment plan option to its
618policyholders which, at a minimum, allows for quarterly and
619semiannual payment of premiums. A monthly payment plan may, but
620is not required to, be offered.
621     16.  Must limit coverage on mobile homes or manufactured
622homes built before 1994 to actual cash value of the dwelling
623rather than replacement costs of the dwelling.
624     17.  May provide such limits of coverage as the board
625determines, consistent with the requirements of this subsection.
626     18.  May require commercial property to meet specified
627hurricane mitigation construction features as a condition of
628eligibility for coverage.
629     19.  Must provide that new or renewal policies issued by
630the corporation on or after January 1, 2012, which cover
631sinkhole loss do not include coverage for any loss to
632appurtenant structures, driveways, sidewalks, decks, or patios
633that are directly or indirectly caused by sinkhole activity. The
634corporation shall exclude such coverage using a notice of
635coverage change, which may be included with the policy renewal,
636and not by issuance of a notice of nonrenewal of the excluded
637coverage upon renewal of the current policy.
638     20.  As of January 1, 2012, must require that the agent
639obtain from an applicant for coverage from the corporation an
640acknowledgement signed by the applicant, which includes, at a
641minimum, the following statement:
642
ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE
643
AND ASSESSMENT LIABILITY:
644     1.  AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
645CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
646DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
647MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
648PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
649POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
650OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
651LEGISLATURE.
652     2.  I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
653ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
654INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
655FLORIDA LEGISLATURE.
656     3.  I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
657CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
658STATE OF FLORIDA.
659     a.  The corporation shall maintain, in electronic format or
660otherwise, a copy of the applicant's signed acknowledgement and
661provide a copy of the statement to the policyholder as part of
662the first renewal after the effective date of this subparagraph.
663     b.  The signed acknowledgement form creates a conclusive
664presumption that the policyholder understood and accepted his or
665her potential surcharge and assessment liability as a
666policyholder of the corporation.
667     Section 2.  This act shall take effect July 1, 2012.


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