Florida Senate - 2013                                    SB 1262
       
       
       
       By Senator Hays
       
       
       
       
       11-01142A-13                                          20131262__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Hurricane Catastrophe
    3         Fund; amending s. 215.555, F.S.; revising the
    4         definitions for “corporation,” “covered policy,” and
    5         “retention”; providing for calculation of an insurer’s
    6         reimbursement premium and retention under the
    7         reimbursement contract; revising coverage levels
    8         available under the reimbursement contract; revising
    9         aggregate coverage limits; providing for the phase-in
   10         of changes to coverage levels and limits; changing the
   11         name of the Florida Hurricane Catastrophe Fund Finance
   12         Corporation to the State Board of Administration
   13         Finance Corporation; deleting obsolete provisions
   14         related to temporary emergency options for additional
   15         coverage; terminating the temporary increase in
   16         coverage limit options at the end of the 2012-2013
   17         contract year; deleting other obsolete provisions;
   18         amending s. 627.062, F.S.; deleting a provision
   19         prohibiting the recoupment of certain costs; amending
   20         ss. 624.424, 627.0629, 627.351, F.S.; conforming
   21         cross-references; authorizing the State Board of
   22         Administration to adopt emergency rules if necessary
   23         and providing applicability; providing an effective
   24         date.
   25  
   26  Be It Enacted by the Legislature of the State of Florida:
   27  
   28         Section 1. Subsection (2) of section 215.555, Florida
   29  Statutes, is reordered and amended, and paragraphs (b) and (c)
   30  of subsection (4), paragraph (d) of subsection (6), and
   31  subsections (16) through (18) of that section are amended, to
   32  read:
   33         215.555 Florida Hurricane Catastrophe Fund.—
   34         (2) DEFINITIONS.—As used in this section, the term:
   35         (b)(a) “Actuarially indicated” means, with respect to
   36  premiums paid by insurers for reimbursement provided by the
   37  fund, an amount determined according to principles of actuarial
   38  science to be adequate, but not excessive, in the aggregate, to
   39  pay current and future obligations and expenses of the fund,
   40  including additional amounts if needed to pay debt service on
   41  revenue bonds issued under this section and to provide required
   42  debt service coverage in excess of the amounts required to pay
   43  actual debt service on revenue bonds issued under subsection
   44  (6), and determined according to principles of actuarial science
   45  to reflect each insurer’s relative exposure to hurricane losses.
   46         (f)(b) “Covered event” means any one storm declared to be a
   47  hurricane by the National Hurricane Center, which storm causes
   48  insured losses in this state.
   49         (g)(c) “Covered policy” means an any insurance policy
   50  covering residential property in this state, including, but not
   51  limited to, a any homeowner’s, mobile home owner’s, farm
   52  owner’s, condominium association, condominium unit owner’s,
   53  tenant’s, or apartment building policy, or any other policy
   54  covering a residential structure or its contents issued by an
   55  any authorized insurer, including a commercial self-insurance
   56  fund holding a certificate of authority issued by the Office of
   57  Insurance Regulation under s. 624.462, the Citizens Property
   58  Insurance Corporation, and any joint underwriting association or
   59  similar entity created under law. The term “covered policy”
   60  includes a any collateral protection insurance policy covering
   61  personal residences which protects both the borrower’s and the
   62  lender’s financial interests, in an amount at least equal to the
   63  coverage for the dwelling in place under the lapsed homeowner’s
   64  policy, if such policy can be accurately reported as required in
   65  subsection (5). The term also includes Additionally, covered
   66  policies include policies covering the peril of wind removed
   67  from the Florida Residential Property and Casualty Joint
   68  Underwriting Association or from the Citizens Property Insurance
   69  Corporation, created under s. 627.351(6), or from the Florida
   70  Windstorm Underwriting Association, created under s. 627.351(2),
   71  by an authorized insurer under the terms and conditions of an
   72  executed assumption agreement between the authorized insurer and
   73  such association or Citizens Property Insurance Corporation.
   74  Each assumption agreement between the association and such
   75  authorized insurer or Citizens Property Insurance Corporation
   76  must be approved by the Office of Insurance Regulation before
   77  the effective date of the assumption, and the office of
   78  Insurance Regulation must provide written notification to the
   79  board within 15 working days after such approval. The term
   80  “Covered policy” does not include any policy that excludes wind
   81  coverage or hurricane coverage or any reinsurance agreement or
   82  and does not include any policy otherwise meeting this
   83  definition which is issued by a surplus lines insurer or a
   84  reinsurer. All commercial residential excess policies and all
   85  deductible buy-back policies that, based on sound actuarial
   86  principles, require individual ratemaking must shall be excluded
   87  by rule if the actuarial soundness of the fund is not
   88  jeopardized. For this purpose, the term “excess policy” means a
   89  policy that provides insurance protection for large commercial
   90  property risks and that provides a layer of coverage above a
   91  primary layer insured by another insurer.
   92         (l)(d) “Losses” means all incurred losses under covered
   93  policies, including additional living expenses of up to not to
   94  exceed 40 percent of the insured value of a residential
   95  structure or its contents and amounts paid as fees on behalf of
   96  or inuring to the benefit of a policyholder. The term does not
   97  include:
   98         1. Losses for fair rental value, loss of rent or rental
   99  income, or business interruption losses;
  100         2. Losses under liability coverages;
  101         3. Property losses that are proximately caused by any peril
  102  other than a covered event, including, but not limited to, fire,
  103  theft, flood or rising water, or windstorm that does not
  104  constitute a covered event;
  105         4. Amounts paid as the result of a voluntary expansion of
  106  coverage by the insurer, including, but not limited to, a waiver
  107  of an applicable deductible;
  108         5. Amounts paid to reimburse a policyholder for condominium
  109  association or homeowners’ association loss assessments or under
  110  similar coverages for contractual liabilities;
  111         6. Amounts paid as bad faith awards, punitive damage
  112  awards, or other court-imposed fines, sanctions, or penalties;
  113         7. Amounts in excess of the coverage limits under the
  114  covered policy; or
  115         8. Allocated or unallocated loss adjustment expenses.
  116         (n)(e) “Retention” means the amount of losses below which
  117  an insurer is not entitled to reimbursement from the fund. An
  118  insurer’s retention shall be calculated as follows:
  119         1. The board shall calculate and report to each insurer the
  120  retention multiples for that year. For the contract year
  121  beginning June 1, 2005, the retention multiple shall be equal to
  122  $4.5 billion divided by the total estimated reimbursement
  123  premium for the contract year; for subsequent years, the
  124  retention multiple shall be equal to $4.5 billion, adjusted
  125  based upon the reported exposure for the contract year occurring
  126  2 years before the particular contract year to reflect the
  127  percentage growth in exposure to the fund for covered policies
  128  since 2004, divided by the total estimated reimbursement premium
  129  for the contract year. Total reimbursement premium for purposes
  130  of the calculation under this subparagraph shall be estimated
  131  using the assumption that all insurers have selected the 90
  132  percent coverage level.
  133         2. The retention multiple as determined under subparagraph
  134  1. shall be adjusted to reflect the coverage level elected by
  135  the insurer. For insurers electing the 90-percent coverage
  136  level, the adjusted retention multiple is 100 percent of the
  137  amount determined under subparagraph 1. For insurers electing
  138  the 75-percent coverage level, the retention multiple is 120
  139  percent of the amount determined under subparagraph 1. For
  140  insurers electing the 45-percent coverage level, the adjusted
  141  retention multiple is 200 percent of the amount determined under
  142  subparagraph 1.
  143         3. An insurer shall determine its provisional retention by
  144  multiplying its provisional reimbursement premium by the
  145  applicable adjusted retention multiple and shall determine its
  146  actual retention by multiplying its actual reimbursement premium
  147  by the applicable adjusted retention multiple.
  148         4. For insurers who experience multiple covered events
  149  causing loss during the contract year, beginning June 1, 2005,
  150  each insurer’s full retention shall be applied to each of the
  151  covered events causing the two largest losses for that insurer.
  152  For each other covered event resulting in losses, the insurer’s
  153  retention shall be reduced to one-third of the full retention.
  154  The reimbursement contract shall provide for the reimbursement
  155  of losses for each covered event based on the full retention
  156  with adjustments made to reflect the reduced retentions on or
  157  after January 1 of the contract year provided the insurer
  158  reports its losses as specified in the reimbursement contract.
  159         (o)(f) “Workers’ compensation” includes both workers’
  160  compensation and excess workers’ compensation insurance.
  161         (c)(g) “Bond” means any bond, debenture, note, or other
  162  evidence of financial indebtedness issued under this section.
  163         (h) “Debt service” means the amount required in any fiscal
  164  year to pay the principal of, redemption premium, if any, and
  165  interest on revenue bonds and any amounts required by the terms
  166  of documents authorizing, securing, or providing liquidity for
  167  revenue bonds necessary to maintain in effect any such liquidity
  168  or security arrangements.
  169         (i) “Debt service coverage” means the amount, if any,
  170  required by the documents under which revenue bonds are issued,
  171  which must amount is to be received in any fiscal year in excess
  172  of the amount required to pay debt service for such fiscal year.
  173         (k)(j) “Local government” means a unit of general purpose
  174  local government as defined in s. 218.31(2).
  175         (m)(k) “Pledged revenues” means all or any portion of
  176  revenues to be derived from reimbursement premiums under
  177  subsection (5) or from emergency assessments under paragraph
  178  (6)(b), as determined by the board.
  179         (j)(l) “Estimated claims-paying capacity” means the sum of
  180  the projected year-end balance of the fund as of December 31 of
  181  a contract year, plus any reinsurance purchased by the fund, and
  182  plus the board’s estimate of the board’s borrowing capacity.
  183         (a)(m) “Actual claims-paying capacity” means the sum of the
  184  balance of the fund as of December 31 of a contract year, plus
  185  any reinsurance purchased by the fund, and plus the amount the
  186  board is able to raise through the issuance of revenue bonds
  187  under subsection (6).
  188         (e)(n) “Corporation” means the State Board of
  189  Administration Florida Hurricane Catastrophe Fund Finance
  190  Corporation created in paragraph (6)(d).
  191         (d)(o) “Contract year” means the period beginning on June 1
  192  of a specified calendar year and ending on May 31 of the
  193  following calendar year.
  194         (4) REIMBURSEMENT CONTRACTS.—
  195         (b)1. An insurer’s retention shall be calculated as
  196  follows:
  197         a. The board shall calculate and report to each insurer the
  198  retention multiples for that year. For the contract year, the
  199  retention multiple is equal to $4.5 billion, adjusted to reflect
  200  the percentage growth in exposure to the fund for covered
  201  policies since 2004 based upon the reported exposure for the
  202  contract year occurring 2 years before the particular contract
  203  year, divided by the total estimated reimbursement premium for
  204  the contract year. Total reimbursement premium for purposes of
  205  this calculation shall be estimated using the assumption that
  206  all insurers have selected the 90-percent coverage level.
  207         b. In order to implement the phase-in of reduced coverage
  208  levels as provided in subparagraph 2., total reimbursement
  209  premium for purposes of the calculation under sub-subparagraph
  210  a. shall be estimated using the following assumptions:
  211         (I) For the 2013-2014 contract year, the assumption is that
  212  all insurers have selected the 85-percent coverage level.
  213         (II) For the 2014-2015 contract year, the assumption is
  214  that all insurers have selected the 80-percent coverage level.
  215         (III) For the 2015-2016 contract year and subsequent
  216  contract years, the assumption is that all insurers have
  217  selected the 75-percent coverage level.
  218         c. The retention multiple shall be adjusted to reflect the
  219  coverage level elected by the insurer.
  220         (I)For an insurer electing the maximum coverage level
  221  under subparagraph 2. for a particular contract year, the
  222  adjusted retention multiple is 100 percent of the amount
  223  determined under sub-subparagraph a.
  224         (II) In order to implement the phase-in of reduced coverage
  225  levels under subparagraph 2., for an insurer electing a coverage
  226  level other than the maximum coverage level:
  227         (A)For the 2013-2014 contract year, for an insurer
  228  electing the 75-percent coverage level, the retention multiple
  229  is 85/75ths of the amount determined under sub-subparagraph a.,
  230  and for an insurer electing the 45-percent coverage level, the
  231  adjusted retention multiple is 85/45ths of the amount determined
  232  under sub-subparagraph a.
  233         (B)For the 2014-2015 contract year, for an insurer
  234  electing the 75-percent coverage level, the retention multiple
  235  is 80/75ths of the amount determined under sub-subparagraph a.,
  236  and for an insurer electing the 45-percent coverage level, the
  237  retention multiple is 80/45ths of the amount determined under
  238  sub-subparagraph a.
  239         (C)For the 2015-2016 contract year and subsequent contract
  240  years, for an insurer electing the 45-percent coverage level,
  241  the retention multiple is 75/45ths of the amount determined
  242  under sub-subparagraph a.
  243         d. An insurer shall determine its provisional retention by
  244  multiplying its provisional reimbursement premium by the
  245  applicable adjusted retention multiple and determine its actual
  246  retention by multiplying its actual reimbursement premium by the
  247  applicable adjusted retention multiple.
  248         e. For insurers who experience multiple covered events
  249  causing loss during the contract year, beginning June 1, 2005,
  250  each insurer’s full retention shall be applied to each of the
  251  covered events causing the two largest losses for that insurer.
  252  For each other covered event resulting in losses, the insurer’s
  253  retention shall be reduced to one-third of the full retention.
  254  The reimbursement contract must provide for the reimbursement of
  255  losses for each covered event based on the full retention with
  256  adjustments that reflect the reduced retentions on or after
  257  January 1 of the contract year if the insurer reports its losses
  258  as specified in the reimbursement contract.
  259         2.1. The contract must shall contain a promise by the board
  260  to reimburse the insurer for a specified percentage 45 percent,
  261  75 percent, or 90 percent of its losses from each covered event
  262  in excess of the insurer’s retention, plus 10 5 percent of the
  263  reimbursed losses to cover loss adjustment expenses.
  264         a. The available coverage levels are as follows:
  265         (I)For the 2013-2014 contract year, 85 percent, 75
  266  percent, and 45 percent.
  267         (II) For the 2014-2015 contract year, 80 percent, 75
  268  percent, and 45 percent.
  269         (III) For the 2015-2016 contract year and subsequent
  270  contract years, 75 percent and 45 percent.
  271         3.2. The insurer must elect one of the percentage coverage
  272  levels specified in subparagraph 2. this paragraph and may, upon
  273  renewal of a reimbursement contract, elect a lower percentage
  274  coverage level if no revenue bonds issued under subsection (6)
  275  after a covered event are outstanding, or elect a higher
  276  percentage coverage level, regardless of whether or not revenue
  277  bonds are outstanding. All members of an insurer group must
  278  elect the same percentage coverage level. A Any joint
  279  underwriting association, risk apportionment plan, or other
  280  entity created under s. 627.351 must elect the maximum 90
  281  percent coverage level available under subparagraph 2.
  282         4. In order to implement the phase-in of reduced coverage
  283  levels, and notwithstanding subparagraph 2., if revenue bonds
  284  issued under subsection (6) after a covered event are
  285  outstanding and the insurer has elected the maximum coverage
  286  level available under subparagraph 2., the insurer must, upon
  287  renewal of the reimbursement contract, elect the maximum
  288  coverage level for the renewal contract year.
  289         5.3. The contract must shall provide that reimbursement
  290  amounts are shall not be reduced by reinsurance paid or payable
  291  to the insurer from other sources.
  292         4. Notwithstanding any other provision contained in this
  293  section, the board shall make available to insurers that
  294  purchased coverage provided by this subparagraph in 2008,
  295  insurers qualifying as limited apportionment companies under s.
  296  627.351(6)(c), and insurers that have been approved to
  297  participate in the Insurance Capital Build-Up Incentive Program
  298  pursuant to s. 215.5595 a contract or contract addendum that
  299  provides an additional amount of reimbursement coverage of up to
  300  $10 million. The premium to be charged for this additional
  301  reimbursement coverage shall be 50 percent of the additional
  302  reimbursement coverage provided, which shall include one prepaid
  303  reinstatement. The minimum retention level that an eligible
  304  participating insurer must retain associated with this
  305  additional coverage layer is 30 percent of the insurer’s surplus
  306  as of December 31, 2008, for the 2009-2010 contract year; as of
  307  December 31, 2009, for the 2010-2011 contract year; and as of
  308  December 31, 2010, for the 2011-2012 contract year. This
  309  coverage shall be in addition to all other coverage that may be
  310  provided under this section. The coverage provided by the fund
  311  under this subparagraph shall be in addition to the claims
  312  paying capacity as defined in subparagraph (c)1., but only with
  313  respect to those insurers that select the additional coverage
  314  option and meet the requirements of this subparagraph. The
  315  claims-paying capacity with respect to all other participating
  316  insurers and limited apportionment companies that do not select
  317  the additional coverage option shall be limited to their
  318  reimbursement premium’s proportionate share of the actual
  319  claims-paying capacity otherwise defined in subparagraph (c)1.
  320  and as provided for under the terms of the reimbursement
  321  contract. The optional coverage retention as specified shall be
  322  accessed before the mandatory coverage under the reimbursement
  323  contract, but once the limit of coverage selected under this
  324  option is exhausted, the insurer’s retention under the mandatory
  325  coverage will apply. This coverage will apply and be paid
  326  concurrently with mandatory coverage. This subparagraph expires
  327  on May 31, 2012.
  328         (c)1. The contract must shall also provide that the
  329  obligation of the board with respect to all contracts covering a
  330  particular contract year shall not exceed the actual claims
  331  paying capacity of the fund up to the limit specified in this
  332  paragraph.
  333         1. Fund limits are as follow:
  334         a. For the 2013-2014 contract year, the limit is $16
  335  billion.
  336         b. For the 2014-2015 contract year, the limit is $15
  337  billion.
  338         c. For the 2015-2016 contract year and subsequent contract
  339  years, the limit is $14 billion, except as provided in
  340  subparagraph 2..
  341         2. For contract years after the 2015-2016 contract year, if
  342  a limit of $17 billion for that contract year, unless the board
  343  determines that there is sufficient estimated claims-paying
  344  capacity to provide $14 $17 billion of capacity for the current
  345  contract year and an additional $14 $17 billion of capacity for
  346  subsequent contract years. If the board makes such a
  347  determination, the estimated claims-paying capacity for the
  348  particular contract year shall be determined by adding to the
  349  $14 $17 billion limit one-half of the fund’s estimated claims
  350  paying capacity in excess of $28 $34 billion. However, the
  351  dollar growth in the limit may not increase in any year by an
  352  amount greater than the dollar growth of the balance of the fund
  353  as of December 31, less any premiums or interest attributable to
  354  optional coverage, as defined by rule, which occurred over the
  355  prior calendar year.
  356         3.2. In May and October of the contract year, the board
  357  shall publish in the Florida Administrative Register Weekly a
  358  statement of the fund’s estimated borrowing capacity, the fund’s
  359  estimated claims-paying capacity, and the projected balance of
  360  the fund as of December 31. After the end of each calendar year,
  361  the board shall notify insurers of the estimated borrowing
  362  capacity, estimated claims-paying capacity, and the balance of
  363  the fund as of December 31 to provide insurers with data
  364  necessary to assist them in determining their retention and
  365  projected payout from the fund for loss reimbursement purposes.
  366  In conjunction with the development of the premium formula, as
  367  provided for in subsection (5), the board shall publish factors
  368  or multiples that assist insurers in determining their retention
  369  and projected payout for the next contract year. For all
  370  regulatory and reinsurance purposes, an insurer may calculate
  371  its projected payout from the fund as its share of the total
  372  fund premium for the current contract year multiplied by the sum
  373  of the projected balance of the fund as of December 31 and the
  374  estimated borrowing capacity for that contract year as reported
  375  under this subparagraph.
  376         (6) REVENUE BONDS.—
  377         (d) State Board of Administration Florida Hurricane
  378  Catastrophe Fund Finance Corporation.—
  379         1. In addition to the findings and declarations in
  380  subsection (1), the Legislature also finds and declares that:
  381         a. The public benefits corporation created under this
  382  paragraph will provide a mechanism necessary for the cost
  383  effective and efficient issuance of bonds. This mechanism will
  384  eliminate unnecessary costs in the bond issuance process,
  385  thereby increasing the amounts available for to pay
  386  reimbursement for losses to property sustained as a result of
  387  hurricane damage.
  388         b. The purpose of such bonds is to fund reimbursements
  389  through the Florida Hurricane Catastrophe Fund to pay for the
  390  costs of construction, reconstruction, repair, restoration, and
  391  other costs associated with damage to properties of
  392  policyholders of covered policies due to the occurrence of a
  393  hurricane.
  394         c. The efficacy of the financing mechanism will be enhanced
  395  by the corporation’s ownership of the assessments, by the
  396  insulation of the assessments from possible bankruptcy
  397  proceedings, and by covenants of the state with the
  398  corporation’s bondholders.
  399         2.a.The State Board of Administration Finance Corporation
  400  There is created, which is a public benefits corporation and,
  401  which is an instrumentality of the state, to be known as the
  402  Florida Hurricane Catastrophe Fund Finance Corporation. The
  403  State Board of Administration Finance Corporation is for all
  404  purposes the successor to the Florida Hurricane Catastrophe Fund
  405  Finance Corporation.
  406         a.b. The corporation shall operate under a five-member
  407  board of directors consisting of the Governor or a designee, the
  408  Chief Financial Officer or a designee, the Attorney General or a
  409  designee, the director of the Division of Bond Finance of the
  410  State Board of Administration, and the Chief Operating Officer
  411  senior employee of the State Board of Administration responsible
  412  for operations of the Florida Hurricane Catastrophe Fund.
  413         b.c. The corporation has all of the powers of corporations
  414  under chapter 607 and under chapter 617, subject only to the
  415  provisions of this subsection.
  416         c.d. The corporation may issue bonds and engage in such
  417  other financial transactions as are necessary to provide
  418  sufficient funds to achieve the purposes of this section.
  419         d.e. The corporation may invest in any of the investments
  420  authorized under s. 215.47.
  421         e.f. There is shall be no liability on the part of, and no
  422  cause of action shall arise against, any board members or
  423  employees of the corporation for any actions taken by them in
  424  the performance of their duties under this paragraph.
  425         3.a. In actions under chapter 75 to validate any bonds
  426  issued by the corporation, the notice required by s. 75.06 must
  427  shall be published in two newspapers of general circulation in
  428  the state, and the complaint and order of the court shall be
  429  served only on the State Attorney of the Second Judicial
  430  Circuit.
  431         b. The state hereby covenants with holders of bonds of the
  432  corporation that the state will not repeal or abrogate the power
  433  of the board to direct the Office of Insurance Regulation to
  434  levy the assessments and to collect the proceeds of the revenues
  435  pledged to the payment of such bonds as long as any such bonds
  436  remain outstanding unless adequate provision has been made for
  437  the payment of such bonds pursuant to the documents authorizing
  438  the issuance of the such bonds.
  439         c.4. The bonds of the corporation are not a debt of the
  440  state or of any political subdivision, and neither the state nor
  441  any political subdivision is liable on such bonds. The
  442  corporation may not does not have the power to pledge the
  443  credit, the revenues, or the taxing power of the state or of any
  444  political subdivision. The credit, revenues, or taxing power of
  445  the state or of any political subdivision may shall not be
  446  deemed to be pledged to the payment of any bonds of the
  447  corporation.
  448         d.5.a. The property, revenues, and other assets of the
  449  corporation; the transactions and operations of the corporation
  450  and the income from such transactions and operations; and all
  451  bonds issued under this paragraph and interest on such bonds are
  452  exempt from taxation by the state and any political subdivision,
  453  including the intangibles tax under chapter 199 and the income
  454  tax under chapter 220. This exemption does not apply to any tax
  455  imposed by chapter 220 on interest, income, or profits on debt
  456  obligations owned by corporations other than the State Board of
  457  Administration Florida Hurricane Catastrophe Fund Finance
  458  Corporation.
  459         e.b. All bonds of the corporation are shall be and
  460  constitute legal investments without limitation for all public
  461  bodies of this state; for all banks, trust companies, savings
  462  banks, savings associations, savings and loan associations, and
  463  investment companies; for all administrators, executors,
  464  trustees, and other fiduciaries; for all insurance companies and
  465  associations and other persons carrying on an insurance
  466  business; and for all other persons who are now or may hereafter
  467  be authorized to invest in bonds or other obligations of the
  468  state and are shall be and constitute eligible securities to be
  469  deposited as collateral for the security of any state, county,
  470  municipal, or other public funds. This sub-subparagraph shall be
  471  considered as additional and supplemental authority and may
  472  shall not be limited without specific reference to this sub
  473  subparagraph.
  474         4.6. The corporation and its corporate existence shall
  475  continue until terminated by law; however, no such law shall
  476  take effect as long as the corporation has bonds outstanding
  477  unless adequate provision has been made for the payment of such
  478  bonds pursuant to the documents authorizing the issuance of such
  479  bonds. Upon termination of the existence of the corporation, all
  480  of its rights and properties in excess of its obligations shall
  481  pass to and be vested in the state.
  482         (16) TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL COVERAGE.—
  483         (a) Findings and intent.
  484         1. The Legislature finds that:
  485         a. Because of temporary disruptions in the market for
  486  catastrophic reinsurance, many property insurers were unable to
  487  procure reinsurance for the 2006 hurricane season with an
  488  attachment point below the insurers’ respective Florida
  489  Hurricane Catastrophe Fund attachment points, were unable to
  490  procure sufficient amounts of such reinsurance, or were able to
  491  procure such reinsurance only by incurring substantially higher
  492  costs than in prior years.
  493         b. The reinsurance market problems were responsible, at
  494  least in part, for substantial premium increases to many
  495  consumers and increases in the number of policies issued by the
  496  Citizens Property Insurance Corporation.
  497         c. It is likely that the reinsurance market disruptions
  498  will not significantly abate prior to the 2007 hurricane season.
  499         2. It is the intent of the Legislature to create a
  500  temporary emergency program, applicable to the 2007, 2008, and
  501  2009 hurricane seasons, to address these market disruptions and
  502  enable insurers, at their option, to procure additional coverage
  503  from the Florida Hurricane Catastrophe Fund.
  504         (b) Applicability of other provisions of this section.—All
  505  provisions of this section and the rules adopted under this
  506  section apply to the program created by this subsection unless
  507  specifically superseded by this subsection.
  508         (c) Optional coverage.—For the contract year commencing
  509  June 1, 2007, and ending May 31, 2008, the contract year
  510  commencing June 1, 2008, and ending May 31, 2009, and the
  511  contract year commencing June 1, 2009, and ending May 31, 2010,
  512  the board shall offer for each of such years the optional
  513  coverage as provided in this subsection.
  514         (d) Additional definitions.—As used in this subsection, the
  515  term:
  516         1. “TEACO options” means the temporary emergency additional
  517  coverage options created under this subsection.
  518         2. “TEACO insurer” means an insurer that has opted to
  519  obtain coverage under the TEACO options in addition to the
  520  coverage provided to the insurer under its reimbursement
  521  contract.
  522         3. “TEACO reimbursement premium” means the premium charged
  523  by the fund for coverage provided under the TEACO options.
  524         4. “TEACO retention” means the amount of losses below which
  525  a TEACO insurer is not entitled to reimbursement from the fund
  526  under the TEACO option selected. A TEACO insurer’s retention
  527  options shall be calculated as follows:
  528         a. The board shall calculate and report to each TEACO
  529  insurer the TEACO retention multiples. There shall be three
  530  TEACO retention multiples for defining coverage. Each multiple
  531  shall be calculated by dividing $3 billion, $4 billion, or $5
  532  billion by the total estimated mandatory FHCF reimbursement
  533  premium assuming all insurers selected the 90-percent coverage
  534  level.
  535         b. The TEACO retention multiples as determined under sub
  536  subparagraph a. shall be adjusted to reflect the coverage level
  537  elected by the insurer. For insurers electing the 90-percent
  538  coverage level, the adjusted retention multiple is 100 percent
  539  of the amount determined under sub-subparagraph a. For insurers
  540  electing the 75-percent coverage level, the retention multiple
  541  is 120 percent of the amount determined under sub-subparagraph
  542  a. For insurers electing the 45-percent coverage level, the
  543  adjusted retention multiple is 200 percent of the amount
  544  determined under sub-subparagraph a.
  545         c. An insurer shall determine its provisional TEACO
  546  retention by multiplying its estimated mandatory FHCF
  547  reimbursement premium by the applicable adjusted TEACO retention
  548  multiple and shall determine its actual TEACO retention by
  549  multiplying its actual mandatory FHCF reimbursement premium by
  550  the applicable adjusted TEACO retention multiple.
  551         d. For TEACO insurers who experience multiple covered
  552  events causing loss during the contract year, the insurer’s full
  553  TEACO retention shall be applied to each of the covered events
  554  causing the two largest losses for that insurer. For other
  555  covered events resulting in losses, the TEACO option does not
  556  apply and the insurer’s retention shall be one-third of the full
  557  retention as calculated under paragraph (2)(e).
  558         5. “TEACO addendum” means an addendum to the reimbursement
  559  contract reflecting the obligations of the fund and TEACO
  560  insurers under the program created by this subsection.
  561         6. “FHCF” means the Florida Hurricane Catastrophe Fund.
  562         (e) TEACO addendum.
  563         1. The TEACO addendum shall provide for reimbursement of
  564  TEACO insurers for covered events occurring during the contract
  565  year, in exchange for the TEACO reimbursement premium paid into
  566  the fund under paragraph (f). Any insurer writing covered
  567  policies has the option of choosing to accept the TEACO addendum
  568  for any of the 3 contract years that the coverage is offered.
  569         2. The TEACO addendum shall contain a promise by the board
  570  to reimburse the TEACO insurer for 45 percent, 75 percent, or 90
  571  percent of its losses from each covered event in excess of the
  572  insurer’s TEACO retention, plus 5 percent of the reimbursed
  573  losses to cover loss adjustment expenses. The percentage shall
  574  be the same as the coverage level selected by the insurer under
  575  paragraph (4)(b).
  576         3. The TEACO addendum shall provide that reimbursement
  577  amounts shall not be reduced by reinsurance paid or payable to
  578  the insurer from other sources.
  579         4. The TEACO addendum shall also provide that the
  580  obligation of the board with respect to all TEACO addenda shall
  581  not exceed an amount equal to two times the difference between
  582  the industry retention level calculated under paragraph (2)(e)
  583  and the $3 billion, $4 billion, or $5 billion industry TEACO
  584  retention level options actually selected, but in no event may
  585  the board’s obligation exceed the actual claims-paying capacity
  586  of the fund plus the additional capacity created in paragraph
  587  (g). If the actual claims-paying capacity and the additional
  588  capacity created under paragraph (g) fall short of the board’s
  589  obligations under the reimbursement contract, each insurer’s
  590  share of the fund’s capacity shall be prorated based on the
  591  premium an insurer pays for its mandatory reimbursement coverage
  592  and the premium paid for its optional TEACO coverage as each
  593  such premium bears to the total premiums paid to the fund times
  594  the available capacity.
  595         5. The priorities, schedule, and method of reimbursements
  596  under the TEACO addendum shall be the same as provided under
  597  subsection (4).
  598         6. A TEACO insurer’s maximum reimbursement for a single
  599  event shall be equal to the product of multiplying its mandatory
  600  FHCF premium by the difference between its FHCF retention
  601  multiple and its TEACO retention multiple under the TEACO option
  602  selected and by the coverage selected under paragraph (4)(b),
  603  plus an additional 5 percent for loss adjustment expenses. A
  604  TEACO insurer’s maximum reimbursement under the TEACO option
  605  selected for a TEACO insurer’s two largest events shall be twice
  606  its maximum reimbursement for a single event.
  607         (f) TEACO reimbursement premiums.
  608         1. Each TEACO insurer shall pay to the fund, in the manner
  609  and at the time provided in the reimbursement contract for
  610  payment of reimbursement premiums, a TEACO reimbursement premium
  611  calculated as specified in this paragraph.
  612         2. The insurer’s TEACO reimbursement premium associated
  613  with the $3 billion retention option shall be equal to 85
  614  percent of a TEACO insurer’s maximum reimbursement for a single
  615  event as calculated under subparagraph (e)6. The TEACO
  616  reimbursement premium associated with the $4 billion retention
  617  option shall be equal to 80 percent of a TEACO insurer’s maximum
  618  reimbursement for a single event as calculated under
  619  subparagraph (e)6. The TEACO premium associated with the $5
  620  billion retention option shall be equal to 75 percent of a TEACO
  621  insurer’s maximum reimbursement for a single event as calculated
  622  under subparagraph (e)6.
  623         (g) Effect on claims-paying capacity of the fund.—For the
  624  contract term commencing June 1, 2007, the contract year
  625  commencing June 1, 2008, and the contract term beginning June 1,
  626  2009, the program created by this subsection shall increase the
  627  claims-paying capacity of the fund as provided in subparagraph
  628  (4)(c)1. by an amount equal to two times the difference between
  629  the industry retention level calculated under paragraph (2)(e)
  630  and the $3 billion industry TEACO retention level specified in
  631  sub-subparagraph (d)4.a. The additional capacity shall apply
  632  only to the additional coverage provided by the TEACO option and
  633  shall not otherwise affect any insurer’s reimbursement from the
  634  fund.
  635         (17) TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.—
  636         (a) Findings and intent.
  637         1. The Legislature finds that:
  638         a. Because of temporary disruptions in the market for
  639  catastrophic reinsurance, many property insurers were unable to
  640  procure sufficient amounts of reinsurance for the 2006 hurricane
  641  season or were able to procure such reinsurance only by
  642  incurring substantially higher costs than in prior years.
  643         b. The reinsurance market problems were responsible, at
  644  least in part, for substantial premium increases to many
  645  consumers and increases in the number of policies issued by
  646  Citizens Property Insurance Corporation.
  647         c. It is likely that the reinsurance market disruptions
  648  will not significantly abate prior to the 2007 hurricane season.
  649         2. It is the intent of the Legislature to create options
  650  for insurers to purchase a temporary increased coverage limit
  651  above the statutorily determined limit in subparagraph (4)(c)1.,
  652  applicable for the 2007, 2008, 2009, 2010, 2011, 2012, and 2013
  653  hurricane seasons, to address market disruptions and enable
  654  insurers, at their option, to procure additional coverage from
  655  the Florida Hurricane Catastrophe Fund.
  656         (b) Applicability of other provisions of this section.—All
  657  provisions of this section and the rules adopted under this
  658  section apply to the coverage created by this subsection unless
  659  specifically superseded by provisions in this subsection.
  660         (c) Optional coverage.—For the 2009-2010, 2010-2011, 2011
  661  2012, 2012-2013, and 2013-2014 contract years, the board shall
  662  offer, for each of such years, the optional coverage as provided
  663  in this subsection.
  664         (d) Additional definitions.—As used in this subsection, the
  665  term:
  666         1. “FHCF” means Florida Hurricane Catastrophe Fund.
  667         2. “FHCF reimbursement premium” means the premium paid by
  668  an insurer for its coverage as a mandatory participant in the
  669  FHCF, but does not include additional premiums for optional
  670  coverages.
  671         3. “Payout multiple” means the number or multiple created
  672  by dividing the statutorily defined claims-paying capacity as
  673  determined in subparagraph (4)(c)1. by the aggregate
  674  reimbursement premiums paid by all insurers estimated or
  675  projected as of calendar year-end.
  676         4. “TICL” means the temporary increase in coverage limit.
  677         5. “TICL options” means the temporary increase in coverage
  678  options created under this subsection.
  679         6. “TICL insurer” means an insurer that has opted to obtain
  680  coverage under the TICL options addendum in addition to the
  681  coverage provided to the insurer under its FHCF reimbursement
  682  contract.
  683         7. “TICL reimbursement premium” means the premium charged
  684  by the fund for coverage provided under the TICL option.
  685         8. “TICL coverage multiple” means the coverage multiple
  686  when multiplied by an insurer’s reimbursement premium that
  687  defines the temporary increase in coverage limit.
  688         9. “TICL coverage” means the coverage for an insurer’s
  689  losses above the insurer’s statutorily determined claims-paying
  690  capacity based on the claims-paying limit in subparagraph
  691  (4)(c)1., which an insurer selects as its temporary increase in
  692  coverage from the fund under the TICL options selected. A TICL
  693  insurer’s increased coverage limit options shall be calculated
  694  as follows:
  695         a. The board shall calculate and report to each TICL
  696  insurer the TICL coverage multiples based on 12 options for
  697  increasing the insurer’s FHCF coverage limit. Each TICL coverage
  698  multiple shall be calculated by dividing $1 billion, $2 billion,
  699  $3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8
  700  billion, $9 billion, $10 billion, $11 billion, or $12 billion by
  701  the total estimated aggregate FHCF reimbursement premiums for
  702  the 2007-2008 contract year, and the 2008-2009 contract year.
  703         b. For the 2009-2010 contract year, the board shall
  704  calculate and report to each TICL insurer the TICL coverage
  705  multiples based on 10 options for increasing the insurer’s FHCF
  706  coverage limit. Each TICL coverage multiple shall be calculated
  707  by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  708  billion, $6 billion, $7 billion, $8 billion, $9 billion, and $10
  709  billion by the total estimated aggregate FHCF reimbursement
  710  premiums for the 2009-2010 contract year.
  711         c. For the 2010-2011 contract year, the board shall
  712  calculate and report to each TICL insurer the TICL coverage
  713  multiples based on eight options for increasing the insurer’s
  714  FHCF coverage limit. Each TICL coverage multiple shall be
  715  calculated by dividing $1 billion, $2 billion, $3 billion, $4
  716  billion, $5 billion, $6 billion, $7 billion, and $8 billion by
  717  the total estimated aggregate FHCF reimbursement premiums for
  718  the contract year.
  719         d. For the 2011-2012 contract year, the board shall
  720  calculate and report to each TICL insurer the TICL coverage
  721  multiples based on six options for increasing the insurer’s FHCF
  722  coverage limit. Each TICL coverage multiple shall be calculated
  723  by dividing $1 billion, $2 billion, $3 billion, $4 billion, $5
  724  billion, and $6 billion by the total estimated aggregate FHCF
  725  reimbursement premiums for the 2011-2012 contract year.
  726         e. For the 2012-2013 contract year, the board shall
  727  calculate and report to each TICL insurer the TICL coverage
  728  multiples based on four options for increasing the insurer’s
  729  FHCF coverage limit. Each TICL coverage multiple shall be
  730  calculated by dividing $1 billion, $2 billion, $3 billion, and
  731  $4 billion by the total estimated aggregate FHCF reimbursement
  732  premiums for the 2012-2013 contract year.
  733         f. For the 2013-2014 contract year, the board shall
  734  calculate and report to each TICL insurer the TICL coverage
  735  multiples based on two options for increasing the insurer’s FHCF
  736  coverage limit. Each TICL coverage multiple shall be calculated
  737  by dividing $1 billion and $2 billion by the total estimated
  738  aggregate FHCF reimbursement premiums for the 2013-2014 contract
  739  year.
  740         g. The TICL insurer’s increased coverage shall be the FHCF
  741  reimbursement premium multiplied by the TICL coverage multiple.
  742  In order to determine an insurer’s total limit of coverage, an
  743  insurer shall add its TICL coverage multiple to its payout
  744  multiple. The total shall represent a number that, when
  745  multiplied by an insurer’s FHCF reimbursement premium for a
  746  given reimbursement contract year, defines an insurer’s total
  747  limit of FHCF reimbursement coverage for that reimbursement
  748  contract year.
  749         10. “TICL options addendum” means an addendum to the
  750  reimbursement contract reflecting the obligations of the fund
  751  and insurers selecting an option to increase an insurer’s FHCF
  752  coverage limit.
  753         (e) TICL options addendum.
  754         1. The TICL options addendum shall provide for
  755  reimbursement of TICL insurers for covered events occurring
  756  during the 2009-2010, 2010-2011, 2011-2012, 2012-2013, and 2013
  757  2014 contract years in exchange for the TICL reimbursement
  758  premium paid into the fund under paragraph (f) based on the TICL
  759  coverage available and selected for each respective contract
  760  year. Any insurer writing covered policies has the option of
  761  selecting an increased limit of coverage under the TICL options
  762  addendum and shall select such coverage at the time that it
  763  executes the FHCF reimbursement contract.
  764         2. The TICL addendum shall contain a promise by the board
  765  to reimburse the TICL insurer for 45 percent, 75 percent, or 90
  766  percent of its losses from each covered event in excess of the
  767  insurer’s retention, plus 5 percent of the reimbursed losses to
  768  cover loss adjustment expenses. The percentage shall be the same
  769  as the coverage level selected by the insurer under paragraph
  770  (4)(b).
  771         3. The TICL addendum shall provide that reimbursement
  772  amounts shall not be reduced by reinsurance paid or payable to
  773  the insurer from other sources.
  774         4. The priorities, schedule, and method of reimbursements
  775  under the TICL addendum shall be the same as provided under
  776  subsection (4).
  777         (f) TICL reimbursement premiums.—Each TICL insurer shall
  778  pay to the fund, in the manner and at the time provided in the
  779  reimbursement contract for payment of reimbursement premiums, a
  780  TICL reimbursement premium determined as specified in subsection
  781  (5), except that a cash build-up factor does not apply to the
  782  TICL reimbursement premiums. However, the TICL reimbursement
  783  premium shall be increased in the 2009-2010 contract year by a
  784  factor of two, in the 2010-2011 contract year by a factor of
  785  three, in the 2011-2012 contract year by a factor of four, in
  786  the 2012-2013 contract year by a factor of five, and in the
  787  2013-2014 contract year by a factor of six.
  788         (g) Effect on claims-paying capacity of the fund.—For the
  789  2009-2010, 2010-2011, 2011-2012, 2012-2013, and 2013-2014
  790  contract years, the program created by this subsection shall
  791  increase the claims-paying capacity of the fund as provided in
  792  subparagraph (4)(c)1. by an amount not to exceed $12 billion and
  793  shall depend on the TICL coverage options available and selected
  794  for the specified contract year and the number of insurers that
  795  select the TICL optional coverage. The additional capacity shall
  796  apply only to the additional coverage provided under the TICL
  797  options and shall not otherwise affect any insurer’s
  798  reimbursement from the fund if the insurer chooses not to select
  799  the temporary option to increase its limit of coverage under the
  800  FHCF.
  801         (16)(18) FACILITATION OF INSURERS’ PRIVATE CONTRACT
  802  NEGOTIATIONS BEFORE THE START OF THE HURRICANE SEASON.—
  803         (a) In addition to the legislative findings and intent
  804  provided elsewhere in this section:,
  805         1. The Legislature finds that:
  806         1.a. Because a regular session of the Legislature begins
  807  approximately 3 months before the start of a contract year and
  808  ends approximately 1 month before the start of a contract year,
  809  participants in the fund always face the possibility that
  810  legislative actions will change the coverage provided or offered
  811  by the fund with only a few days or weeks of advance notice.
  812         b. The timing issues described in sub-subparagraph a. can
  813  create uncertainties and disadvantages for the residential
  814  property insurers that are required to participate in the fund
  815  when such insurers negotiate for the procurement of private
  816  reinsurance or other sources of capital.
  817         c. Providing participating insurers with a greater degree
  818  of certainty regarding the coverage provided or offered by the
  819  fund and more time to negotiate for the procurement of private
  820  reinsurance or other sources of capital will enable the
  821  residential property insurance market to operate with greater
  822  stability.
  823         d. Increased stability in the residential property
  824  insurance market serves a primary purpose of the fund and
  825  benefits state Florida consumers by enabling insurers to operate
  826  more economically. In years when reinsurance and capital markets
  827  are experiencing a capital shortage, the last-minute rush by
  828  insurers only weeks before the start of the hurricane season to
  829  procure adequate coverage in order to meet their capital
  830  requirements can result in higher costs that are passed on to
  831  Florida consumers. However, if more time is available,
  832  residential property insurers should experience greater
  833  competition for their business with a corresponding beneficial
  834  effect for Florida consumers.
  835         2. It is the intent of the Legislature:
  836         a. To provide insurers with the terms and conditions of the
  837  reimbursement contract well in advance of the insurers’ need to
  838  finalize their procurement of private reinsurance or other
  839  sources of capital, and thereby improve insurers’ negotiating
  840  position with reinsurers and other sources of capital.
  841         b.3.It is also the intent of the Legislature That the
  842  board publish the fund’s maximum statutory limit of coverage and
  843  the fund’s total retention early enough for that residential
  844  property insurers to can have the opportunity to better estimate
  845  their coverage from the fund.
  846         (b) The board shall adopt the reimbursement contract for a
  847  particular contract year by February 1 of the immediately
  848  preceding contract year. However, the reimbursement contract
  849  shall be adopted as soon as possible in advance of the 2010-2011
  850  contract year.
  851         (c) Insurers writing covered policies shall execute the
  852  reimbursement contract by March 1 of the immediately preceding
  853  contract year, and the contract shall have an effective date as
  854  of the beginning of the contract year defined in paragraph
  855  (2)(o).
  856         (d) The board shall publish in the Florida Administrative
  857  Register Weekly the maximum statutory adjusted capacity for the
  858  mandatory coverage for a particular contract year, the maximum
  859  statutory coverage for any optional coverage for the particular
  860  contract year, and the aggregate fund retention used to
  861  calculate individual insurer’s retention multiples for the
  862  particular contract year by no later than January 1 of the
  863  immediately preceding contract year.
  864         Section 2. Subsection (5) of section 627.062, Florida
  865  Statutes, is amended to read:
  866         627.062 Rate standards.—
  867         (5) With respect to a rate filing involving coverage of the
  868  type for which the insurer is required to pay a reimbursement
  869  premium to the Florida Hurricane Catastrophe Fund, the insurer
  870  may fully recoup in its property insurance premiums any
  871  reimbursement premiums paid to the fund, together with
  872  reasonable costs of other reinsurance; however, except as
  873  otherwise provided in this section, the insurer may not recoup
  874  reinsurance costs that duplicate coverage provided by the fund.
  875  An insurer may not recoup more than 1 year of reimbursement
  876  premium at a time. Any under-recoupment from the prior year may
  877  be added to the following year’s reimbursement premium, and any
  878  over-recoupment must be subtracted from the following year’s
  879  reimbursement premium.
  880         Section 3. Subsection (10) of section 624.424, Florida
  881  Statutes, is amended to read:
  882         624.424 Annual statement and other information.—
  883         (10) Each insurer or insurer group doing business in this
  884  state shall file, on a quarterly basis, in conjunction with
  885  financial reports required by paragraph (1)(a), a supplemental
  886  report on an individual and group basis on a form prescribed by
  887  the commission with information on personal lines and commercial
  888  lines residential property insurance policies in this state. The
  889  supplemental report must shall include separate information for
  890  personal lines property policies and for commercial lines
  891  property policies and totals for each item specified, including
  892  premiums written for each of the property lines of business as
  893  described in ss. 215.555(2)(g) 215.555(2)(c) and 627.351(6)(a).
  894  The report must shall include the following information for each
  895  county on a monthly basis:
  896         (a) Total number of policies in force at the end of each
  897  month.
  898         (b) Total number of policies canceled.
  899         (c) Total number of policies nonrenewed.
  900         (d) Number of policies canceled due to hurricane risk.
  901         (e) Number of policies nonrenewed due to hurricane risk.
  902         (f) Number of new policies written.
  903         (g) Total dollar value of structure exposure under policies
  904  that include wind coverage.
  905         (h) Number of policies that exclude wind coverage.
  906         Section 4. Subsection (5) of section 627.0629, Florida
  907  Statutes, is amended to read:
  908         627.0629 Residential property insurance; rate filings.—
  909         (5) In order to provide an appropriate transition period,
  910  an insurer may implement an approved rate filing for residential
  911  property insurance over a period of years. Such insurer must
  912  provide an informational notice to the office setting out its
  913  schedule for implementation of the phased-in rate filing. The
  914  insurer may include in its rate the actual cost of private
  915  market reinsurance that corresponds to available coverage of the
  916  Temporary Increase in Coverage Limits, TICL, from the Florida
  917  Hurricane Catastrophe Fund. The insurer may also include the
  918  cost of reinsurance to replace the TICL reduction implemented
  919  pursuant to s. 215.555(17)(d)9. However, this cost for
  920  reinsurance may not include any expense or profit load or result
  921  in a total annual base rate increase in excess of 10 percent.
  922         Section 5. Paragraph (v) of subsection (6) of section
  923  627.351, Florida Statutes, is amended to read:
  924         627.351 Insurance risk apportionment plans.—
  925         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  926         (v)1. Effective July 1, 2002, policies of the Residential
  927  Property and Casualty Joint Underwriting Association become
  928  policies of the corporation. All obligations, rights, assets and
  929  liabilities of the association, including bonds, note and debt
  930  obligations, and the financing documents pertaining to them
  931  become those of the corporation as of July 1, 2002. The
  932  corporation is not required to issue endorsements or
  933  certificates of assumption to insureds during the remaining term
  934  of in-force transferred policies.
  935         2. Effective July 1, 2002, policies of the Florida
  936  Windstorm Underwriting Association are transferred to the
  937  corporation and become policies of the corporation. All
  938  obligations, rights, assets, and liabilities of the association,
  939  including bonds, note and debt obligations, and the financing
  940  documents pertaining to them are transferred to and assumed by
  941  the corporation on July 1, 2002. The corporation is not required
  942  to issue endorsements or certificates of assumption to insureds
  943  during the remaining term of in-force transferred policies.
  944         3. The Florida Windstorm Underwriting Association and the
  945  Residential Property and Casualty Joint Underwriting Association
  946  shall take all actions necessary to further evidence the
  947  transfers and provide the documents and instruments of further
  948  assurance as may reasonably be requested by the corporation for
  949  that purpose. The corporation shall execute assumptions and
  950  instruments as the trustees or other parties to the financing
  951  documents of the associations Florida Windstorm Underwriting
  952  Association or the Residential Property and Casualty Joint
  953  Underwriting Association may reasonably request to further
  954  evidence the transfers and assumptions, which transfers and
  955  assumptions, however, are effective on the date provided under
  956  this paragraph whether or not, and regardless of the date on
  957  which, the assumptions or instruments are executed by the
  958  corporation. Subject to the relevant financing documents
  959  pertaining to their outstanding bonds, notes, indebtedness, or
  960  other financing obligations, the moneys, investments,
  961  receivables, choses in action, and other intangibles of the
  962  Florida Windstorm Underwriting Association shall be credited to
  963  the coastal account of the corporation, and those of the
  964  personal lines residential coverage account and the commercial
  965  lines residential coverage account of the Residential Property
  966  and Casualty Joint Underwriting Association shall be credited to
  967  the personal lines account and the commercial lines account,
  968  respectively, of the corporation.
  969         4. Effective July 1, 2002, a new applicant for property
  970  insurance coverage who would otherwise have been eligible for
  971  coverage in the Florida Windstorm Underwriting Association is
  972  eligible for coverage from the corporation as provided in this
  973  subsection.
  974         5. The transfer of all policies, obligations, rights,
  975  assets, and liabilities from the Florida Windstorm Underwriting
  976  Association to the corporation and the renaming of the
  977  Residential Property and Casualty Joint Underwriting Association
  978  as the corporation does not affect the coverage with respect to
  979  a covered policy policies as defined in s. 215.555(2)(c)
  980  provided to these entities by the Florida Hurricane Catastrophe
  981  Fund. The coverage provided by the fund to the Florida Windstorm
  982  Underwriting Association based on its exposures as of June 30,
  983  2002, and each June 30 thereafter shall be redesignated as
  984  coverage for the coastal account of the corporation.
  985  Notwithstanding any other provision of law, the coverage
  986  provided by the fund to the Residential Property and Casualty
  987  Joint Underwriting Association based on its exposures as of June
  988  30, 2002, and each June 30 thereafter shall be transferred to
  989  the personal lines account and the commercial lines account of
  990  the corporation. Notwithstanding any other provision of law, the
  991  coastal account shall be treated, for all Florida Hurricane
  992  Catastrophe Fund purposes, as if it were a separate
  993  participating insurer with its own exposures, reimbursement
  994  premium, and loss reimbursement. Likewise, the personal lines
  995  and commercial lines accounts shall be viewed together, for all
  996  fund purposes, be viewed together as if the two accounts were
  997  one and represent a single, separate participating insurer with
  998  its own exposures, reimbursement premium, and loss
  999  reimbursement. The coverage provided by the fund to the
 1000  corporation shall constitute and operate as a full transfer of
 1001  coverage from the Florida Windstorm Underwriting Association and
 1002  Residential Property and Casualty Joint Underwriting Association
 1003  to the corporation.
 1004         Section 6. Transitional provisions.—In order to implement
 1005  the revisions to section 215.555, Florida Statutes, as provided
 1006  in section 1 of this act, the State Board of Administration
 1007  shall adopt such revised or amended rules and forms, or addenda
 1008  thereto, as necessary to ensure that these statutory changes
 1009  apply to each participating insurer’s Florida Hurricane
 1010  Catastrophe Fund reimbursement contract for the contract year
 1011  commencing on June 1, 2013. The board may use the emergency
 1012  rulemaking process as needed to assure timely adoption of these
 1013  rules, forms, and addenda. Such rules, forms, and addenda
 1014  adopted under the authority of this section supersede previously
 1015  adopted rules, forms, and addenda applicable to the 2013-2014
 1016  contract year to the extent of any conflict therewith.
 1017         Section 7. This act shall take effect July 1, 2013.