Florida Senate - 2014                      CS for CS for SB 1672
       
       
        
       By the Committees on Rules; Commerce and Tourism; and Banking
       and Insurance
       
       
       
       
       595-04446-14                                          20141672c2
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         626.621, F.S.; providing additional grounds for
    4         refusing, suspending, or revoking a license or
    5         appointment of an insurance agent, adjuster, customer
    6         representative, or managing general agent based on the
    7         acceptance of payment for certain referrals; amending
    8         s. 626.854, F.S.; prohibiting a public adjuster or
    9         public adjuster apprentice from choosing the persons
   10         or entities that will perform repair work; amending s.
   11         627.351, F.S.; postponing the date that new
   12         construction or substantial improvement is not
   13         eligible for coverage by the corporation; deleting
   14         reference to the Residential Property and Casualty
   15         Joint Underwriting Association with respect to issuing
   16         certain residential or commercial policies; requiring
   17         the corporation to cease offering new commercial
   18         residential policies providing multiperil coverage
   19         after a certain date and continue offering commercial
   20         residential wind-only policies; authorizing the
   21         corporation to offer commercial residential policies
   22         excluding wind; providing exceptions; specifying the
   23         amount of the surcharge to be assessed against
   24         personal lines, commercial lines, and coastal accounts
   25         to cover a projected deficit; requiring the
   26         corporation’s board to contract with the Division of
   27         Administrative Hearings to hear protests of the
   28         corporation’s decisions regarding the purchase of
   29         commodities and contractual services and issue a
   30         recommended order; requiring the board to take final
   31         action in a public meeting; revising the date for
   32         submitting the annual loss-ratio report for
   33         residential coverage; amending s. 627.3518, F.S.;
   34         defining the term “surplus lines insurer”; requiring
   35         the corporation to implement procedures for diverting
   36         ineligible applicants and existing policyholders for
   37         commercial residential coverage from the corporation
   38         by a certain date; deleting the requirement that the
   39         corporation report such procedures to the Legislature;
   40         authorizing eligible surplus lines insurers to
   41         participate in the corporation’s clearinghouse program
   42         and providing criteria for such eligibility;
   43         conforming cross-references; providing that certain
   44         applicants who accept an offer from a surplus lines
   45         insurer are considered to be renewing; repealing s.
   46         627.3519, F.S., relating to an annual report
   47         requirement for aggregate net probable maximum losses;
   48         amending s. 627.35191, F.S.; requiring the corporation
   49         to annually provide certain estimates for the next 12
   50         month period to the Legislature and the Financial
   51         Services Commission; amending s. 627.711, F.S.;
   52         prohibiting a mitigation inspector from offering or
   53         delivering compensation, and an insurance agency,
   54         agent, customer representative, or employee from
   55         accepting compensation for referring an owner to the
   56         inspector or inspection company; authorizing an
   57         insurer to exempt a uniform mitigation verification
   58         form from independent verification under certain
   59         circumstances; providing that the form provided to the
   60         corporation is not subject to verification and the
   61         property is not subject to reinspection under certain
   62         circumstances; amending s. 817.234; prohibiting a
   63         contractor from paying, waiving, or rebating a
   64         property insurance deductible; providing penalties;
   65         providing effective dates.
   66          
   67  Be It Enacted by the Legislature of the State of Florida:
   68  
   69         Section 1. Subsection (15) is added to section 626.621,
   70  Florida Statutes, to read:
   71         626.621 Grounds for discretionary refusal, suspension, or
   72  revocation of agent’s, adjuster’s, customer representative’s,
   73  service representative’s, or managing general agent’s license or
   74  appointment.—The department may, in its discretion, deny an
   75  application for, suspend, revoke, or refuse to renew or continue
   76  the license or appointment of any applicant, agent, adjuster,
   77  customer representative, service representative, or managing
   78  general agent, and it may suspend or revoke the eligibility to
   79  hold a license or appointment of any such person, if it finds
   80  that as to the applicant, licensee, or appointee any one or more
   81  of the following applicable grounds exist under circumstances
   82  for which such denial, suspension, revocation, or refusal is not
   83  mandatory under s. 626.611:
   84         (15) Directly or indirectly accepting any compensation,
   85  inducement, or reward from an inspector for the referral of the
   86  owner of the inspected property to the inspector or inspection
   87  company. This prohibition applies to an inspection intended for
   88  submission to a carrier in order to obtain insurance coverage or
   89  establish the applicable insurance premium.
   90         Section 2. Subsection (18) of section 626.854, Florida
   91  Statutes, is redesignated as subsection (19) and amended, and
   92  subsection (18) is added to that section, to read:
   93         626.854 “Public adjuster” defined; prohibitions.—The
   94  Legislature finds that it is necessary for the protection of the
   95  public to regulate public insurance adjusters and to prevent the
   96  unauthorized practice of law.
   97         (18) A public adjuster, a public adjuster apprentice, or a
   98  person acting on behalf of an adjuster or apprentice may not
   99  enter into a contract or accept a power of attorney that vests
  100  in the public adjuster, the public adjuster apprentice, or the
  101  person acting on behalf of the adjuster or apprentice the
  102  effective authority to choose the persons or entities that will
  103  perform repair work.
  104         (19)(18)The provisions of Subsections (5)-(18) (5)-(17)
  105  apply only to residential property insurance policies and
  106  condominium unit owner policies as described defined in s.
  107  718.111(11).
  108         Section 3. Paragraphs (a), (b), (e), and (hh) of subsection
  109  (6) of section 627.351, Florida Statutes, are amended to read:
  110         627.351 Insurance risk apportionment plans.—
  111         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  112         (a) The public purpose of this subsection is to ensure that
  113  there is an orderly market for property insurance for residents
  114  and businesses of this state.
  115         1. The Legislature finds that private insurers are
  116  unwilling or unable to provide affordable property insurance
  117  coverage in this state to the extent sought and needed. The
  118  absence of affordable property insurance threatens the public
  119  health, safety, and welfare and likewise threatens the economic
  120  health of the state. The state, therefore, has a compelling
  121  public interest and a public purpose to assist in assuring that
  122  property in the state is insured and that it is insured at
  123  affordable rates so as to facilitate the remediation,
  124  reconstruction, and replacement of damaged or destroyed property
  125  in order to reduce or avoid the negative effects on otherwise
  126  resulting to the public health, safety, and welfare, to the
  127  economy of the state, and to the revenues of the state and local
  128  governments which are needed to provide for the public welfare.
  129  It is necessary, therefore, to provide affordable property
  130  insurance to applicants who are in good faith entitled to
  131  procure insurance through the voluntary market but are unable to
  132  do so. The Legislature intends, therefore, that affordable
  133  property insurance be provided and that it continue to be
  134  provided, as long as necessary, through Citizens Property
  135  Insurance Corporation, a government entity that is an integral
  136  part of the state, and that is not a private insurance company.
  137  To that end, the corporation shall strive to increase the
  138  availability of affordable property insurance in this state,
  139  while achieving efficiencies and economies, and while providing
  140  service to policyholders, applicants, and agents which is no
  141  less than the quality generally provided in the voluntary
  142  market, for the achievement of the foregoing public purposes.
  143  Because it is essential for this government entity to have the
  144  maximum financial resources to pay claims following a
  145  catastrophic hurricane, it is further the intent of the
  146  Legislature that the corporation continue to be an integral part
  147  of the state, and that the income of the corporation be exempt
  148  from federal income taxation, and that interest on the debt
  149  obligations issued by the corporation be exempt from federal
  150  income taxation.
  151         2. The Residential Property and Casualty Joint Underwriting
  152  Association originally created by this statute shall be known as
  153  the Citizens Property Insurance Corporation. The corporation
  154  shall provide insurance for residential and commercial property,
  155  for applicants who are entitled, but, in good faith, are unable
  156  to procure insurance through the voluntary market. The
  157  corporation shall operate pursuant to a plan of operation
  158  approved by order of the Financial Services Commission. The plan
  159  is subject to continuous review by the commission. The
  160  commission may, by order, withdraw approval of all or part of a
  161  plan if the commission determines that conditions have changed
  162  since approval was granted and that the purposes of the plan
  163  require changes in the plan. For the purposes of this
  164  subsection, residential coverage includes both personal lines
  165  residential coverage, which consists of the type of coverage
  166  provided by homeowner’s, mobile home owner’s, dwelling,
  167  tenant’s, condominium unit owner’s, and similar policies; and
  168  commercial lines residential coverage, which consists of the
  169  type of coverage provided by condominium association, apartment
  170  building, and similar policies.
  171         3. With respect to coverage for personal lines residential
  172  structures:
  173         a. Effective January 1, 2014, a structure that has a
  174  dwelling replacement cost of $1 million or more, or a single
  175  condominium unit that has a combined dwelling and contents
  176  replacement cost of $1 million or more is not eligible for
  177  coverage by the corporation. Such dwellings insured by the
  178  corporation on December 31, 2013, may continue to be covered by
  179  the corporation until the end of the policy term. The office
  180  shall approve the method used by the corporation for valuing the
  181  dwelling replacement costs under cost for the purposes of this
  182  subparagraph. If a policyholder is insured by the corporation
  183  before being determined to be ineligible pursuant to this
  184  subparagraph and such policyholder files a lawsuit challenging
  185  the determination, the policyholder may remain insured by the
  186  corporation until the conclusion of the litigation.
  187         b. Effective January 1, 2015, a structure that has a
  188  dwelling replacement cost of $900,000 or more, or a single
  189  condominium unit that has a combined dwelling and contents
  190  replacement cost of $900,000 or more, is not eligible for
  191  coverage by the corporation. Such dwellings insured by the
  192  corporation on December 31, 2014, may continue to be covered by
  193  the corporation only until the end of the policy term.
  194         c. Effective January 1, 2016, a structure that has a
  195  dwelling replacement cost of $800,000 or more, or a single
  196  condominium unit that has a combined dwelling and contents
  197  replacement cost of $800,000 or more, is not eligible for
  198  coverage by the corporation. Such dwellings insured by the
  199  corporation on December 31, 2015, may continue to be covered by
  200  the corporation until the end of the policy term.
  201         d. Effective January 1, 2017, a structure that has a
  202  dwelling replacement cost of $700,000 or more, or a single
  203  condominium unit that has a combined dwelling and contents
  204  replacement cost of $700,000 or more, is not eligible for
  205  coverage by the corporation. Such dwellings insured by the
  206  corporation on December 31, 2016, may continue to be covered by
  207  the corporation until the end of the policy term.
  208  
  209  The requirements of sub-subparagraphs b.-d. do not apply in
  210  counties where the office determines there is not a reasonable
  211  degree of competition. In such counties a personal lines
  212  residential structure that has a dwelling replacement cost of
  213  less than $1 million, or a single condominium unit that has a
  214  combined dwelling and contents replacement cost of less than $1
  215  million, is eligible for coverage by the corporation.
  216         4. It is the intent of the Legislature that policyholders,
  217  applicants, and agents of the corporation receive service and
  218  treatment of the highest possible level but never less than that
  219  generally provided in the voluntary market. It is also intended
  220  that the corporation be held to service standards no less than
  221  those applied to insurers in the voluntary market by the office
  222  with respect to responsiveness, timeliness, customer courtesy,
  223  and overall dealings with policyholders, applicants, or agents
  224  of the corporation.
  225         5.a. Effective January 1, 2009, a personal lines
  226  residential structure that is located in the “wind-borne debris
  227  region,” as defined in s. 1609.2, International Building Code
  228  (2006), and that has an insured value on the structure of
  229  $750,000 or more is not eligible for coverage by the corporation
  230  unless the structure has opening protections as required under
  231  the Florida Building Code for a newly constructed residential
  232  structure in that area. A residential structure is deemed to
  233  comply with this subparagraph if it has shutters or opening
  234  protections on all openings and if such opening protections
  235  complied with the Florida Building Code at the time they were
  236  installed.
  237         b. Any major structure as defined in s. 161.54(6)(a) for
  238  which a permit is applied on or after July 1, 2015 2014, for new
  239  construction or substantial improvement as defined in s.
  240  161.54(12) is not eligible for coverage by the corporation if
  241  the structure is seaward of the coastal construction control
  242  line established pursuant to s. 161.053 or is within the Coastal
  243  Barrier Resources System as designated by 16 U.S.C. ss. 3501
  244  3510.
  245         (b)1. All insurers authorized to write one or more subject
  246  lines of business in this state are subject to assessment by the
  247  corporation and, for the purposes of this subsection, are
  248  referred to collectively as “assessable insurers.” Insurers
  249  writing one or more subject lines of business in this state
  250  pursuant to part VIII of chapter 626 are not assessable
  251  insurers; however, but insureds who procure one or more subject
  252  lines of business in this state pursuant to part VIII of chapter
  253  626 are subject to assessment by the corporation and are
  254  referred to collectively as “assessable insureds.” An insurer’s
  255  assessment liability begins on the first day of the calendar
  256  year following the year in which the insurer was issued a
  257  certificate of authority to transact insurance for subject lines
  258  of business in this state and terminates 1 year after the end of
  259  the first calendar year during which the insurer no longer holds
  260  a certificate of authority to transact insurance for subject
  261  lines of business in this state.
  262         2.a. All revenues, assets, liabilities, losses, and
  263  expenses of the corporation shall be divided into three separate
  264  accounts as follows:
  265         (I) A personal lines account for personal residential
  266  policies issued by the corporation, or issued by the Residential
  267  Property and Casualty Joint Underwriting Association and renewed
  268  by the corporation, which provides comprehensive, multiperil
  269  coverage on risks that are not located in areas eligible for
  270  coverage by the Florida Windstorm Underwriting Association as
  271  those areas were defined on January 1, 2002, and for policies
  272  that do not provide coverage for the peril of wind on risks that
  273  are located in such areas;
  274         (II) A commercial lines account for commercial residential
  275  and commercial nonresidential policies issued by the
  276  corporation, or issued by the Residential Property and Casualty
  277  Joint Underwriting Association and renewed by the corporation,
  278  which provides coverage for basic property perils on risks that
  279  are not located in areas eligible for coverage by the Florida
  280  Windstorm Underwriting Association as those areas were defined
  281  on January 1, 2002, and for policies that do not provide
  282  coverage for the peril of wind on risks that are located in such
  283  areas; and
  284         (III) A coastal account for personal residential policies
  285  and commercial residential and commercial nonresidential
  286  property policies issued by the corporation, or transferred to
  287  the corporation, which provides coverage for the peril of wind
  288  on risks that are located in areas eligible for coverage by the
  289  Florida Windstorm Underwriting Association as those areas were
  290  defined on January 1, 2002. The corporation may offer policies
  291  that provide multiperil coverage and the corporation shall
  292  continue to offer policies that provide coverage only for the
  293  peril of wind for risks located in areas eligible for coverage
  294  in the coastal account. Effective July 1, 2014, the corporation
  295  shall cease offering new commercial residential policies
  296  providing multiperil coverage and shall instead continue to
  297  offer commercial residential wind-only policies, and may offer
  298  commercial residential policies excluding wind. The corporation
  299  may, however, continue to renew a commercial residential
  300  multiperil policy on a building that is insured by the
  301  corporation on June 30, 2014, under a multiperil policy. In
  302  issuing multiperil coverage, the corporation may use its
  303  approved policy forms and rates for the personal lines account.
  304  An applicant or insured who is eligible to purchase a multiperil
  305  policy from the corporation may purchase a multiperil policy
  306  from an authorized insurer without prejudice to the applicant’s
  307  or insured’s eligibility to prospectively purchase a policy that
  308  provides coverage only for the peril of wind from the
  309  corporation. An applicant or insured who is eligible for a
  310  corporation policy that provides coverage only for the peril of
  311  wind may elect to purchase or retain such policy and also
  312  purchase or retain coverage excluding wind from an authorized
  313  insurer without prejudice to the applicant’s or insured’s
  314  eligibility to prospectively purchase a policy that provides
  315  multiperil coverage from the corporation. It is the goal of the
  316  Legislature that there be an overall average savings of 10
  317  percent or more for a policyholder who currently has a wind-only
  318  policy with the corporation, and an ex-wind policy with a
  319  voluntary insurer or the corporation, and who obtains a
  320  multiperil policy from the corporation. It is the intent of the
  321  Legislature that the offer of multiperil coverage in the coastal
  322  account be made and implemented in a manner that does not
  323  adversely affect the tax-exempt status of the corporation or
  324  creditworthiness of or security for currently outstanding
  325  financing obligations or credit facilities of the coastal
  326  account, the personal lines account, or the commercial lines
  327  account. The coastal account must also include quota share
  328  primary insurance under subparagraph (c)2. The area eligible for
  329  coverage under the coastal account also includes the area within
  330  Port Canaveral, which is bordered on the south by the City of
  331  Cape Canaveral, bordered on the west by the Banana River, and
  332  bordered on the north by Federal Government property.
  333         b. The three separate accounts must be maintained as long
  334  as financing obligations entered into by the Florida Windstorm
  335  Underwriting Association or Residential Property and Casualty
  336  Joint Underwriting Association are outstanding, in accordance
  337  with the terms of the corresponding financing documents. If the
  338  financing obligations are no longer outstanding, the corporation
  339  may use a single account for all revenues, assets, liabilities,
  340  losses, and expenses of the corporation. Consistent with this
  341  subparagraph and prudent investment policies that minimize the
  342  cost of carrying debt, the board shall exercise its best efforts
  343  to retire existing debt or obtain the approval of necessary
  344  parties to amend the terms of existing debt, so as to structure
  345  the most efficient plan for consolidating to consolidate the
  346  three separate accounts into a single account.
  347         c. Creditors of the Residential Property and Casualty Joint
  348  Underwriting Association and the accounts specified in sub-sub
  349  subparagraphs a.(I) and (II) may have a claim against, and
  350  recourse to, those accounts and no claim against, or recourse
  351  to, the account referred to in sub-sub-subparagraph a.(III).
  352  Creditors of the Florida Windstorm Underwriting Association have
  353  a claim against, and recourse to, the account referred to in
  354  sub-sub-subparagraph a.(III) and no claim against, or recourse
  355  to, the accounts referred to in sub-sub-subparagraphs a.(I) and
  356  (II).
  357         d. Revenues, assets, liabilities, losses, and expenses not
  358  attributable to particular accounts shall be prorated among the
  359  accounts.
  360         e. The Legislature finds that the revenues of the
  361  corporation are revenues that are necessary to meet the
  362  requirements set forth in documents authorizing the issuance of
  363  bonds under this subsection.
  364         f. The income of the corporation may not inure to the
  365  benefit of any private person.
  366         3. With respect to a deficit in an account:
  367         a. After accounting for the Citizens policyholder surcharge
  368  imposed under sub-subparagraph i., if the remaining projected
  369  deficit incurred in the coastal account in a particular calendar
  370  year:
  371         (I) Is not greater than 2 percent of the aggregate
  372  statewide direct written premium for the subject lines of
  373  business for the prior calendar year, the entire deficit shall
  374  be recovered through regular assessments of assessable insurers
  375  under paragraph (q) and assessable insureds.
  376         (II) Exceeds 2 percent of the aggregate statewide direct
  377  written premium for the subject lines of business for the prior
  378  calendar year, the corporation shall levy regular assessments on
  379  assessable insurers under paragraph (q) and on assessable
  380  insureds in an amount equal to the greater of 2 percent of the
  381  projected deficit or 2 percent of the aggregate statewide direct
  382  written premium for the subject lines of business for the prior
  383  calendar year. Any remaining projected deficit shall be
  384  recovered through emergency assessments under sub-subparagraph
  385  d.
  386         b. Each assessable insurer’s share of the amount being
  387  assessed under sub-subparagraph a. must be in the proportion
  388  that the assessable insurer’s direct written premium for the
  389  subject lines of business for the year preceding the assessment
  390  bears to the aggregate statewide direct written premium for the
  391  subject lines of business for that year. The assessment
  392  percentage applicable to each assessable insured is the ratio of
  393  the amount being assessed under sub-subparagraph a. to the
  394  aggregate statewide direct written premium for the subject lines
  395  of business for the prior year. Assessments levied by the
  396  corporation on assessable insurers under sub-subparagraph a.
  397  must be paid as required by the corporation’s plan of operation
  398  and paragraph (q). Assessments levied by the corporation on
  399  assessable insureds under sub-subparagraph a. shall be collected
  400  by the surplus lines agent at the time the surplus lines agent
  401  collects the surplus lines tax required by s. 626.932, and paid
  402  to the Florida Surplus Lines Service Office at the time the
  403  surplus lines agent pays the surplus lines tax to that office.
  404  Upon receipt of regular assessments from surplus lines agents,
  405  the Florida Surplus Lines Service Office shall transfer the
  406  assessments directly to the corporation as determined by the
  407  corporation.
  408         c. After accounting for the Citizens policyholder surcharge
  409  imposed under sub-subparagraph i., the remaining projected
  410  deficits in the personal lines account and in the commercial
  411  lines account in a particular calendar year shall be recovered
  412  through emergency assessments under sub-subparagraph d.
  413         d. Upon a determination by the board of governors that a
  414  projected deficit in an account exceeds the amount that is
  415  expected to be recovered through regular assessments under sub
  416  subparagraph a., plus the amount that is expected to be
  417  recovered through surcharges under sub-subparagraph i., the
  418  board, after verification by the office, shall levy emergency
  419  assessments for as many years as necessary to cover the
  420  deficits, to be collected by assessable insurers and the
  421  corporation and collected from assessable insureds upon issuance
  422  or renewal of policies for subject lines of business, excluding
  423  National Flood Insurance policies. The amount collected in a
  424  particular year must be a uniform percentage of that year’s
  425  direct written premium for subject lines of business and all
  426  accounts of the corporation, excluding National Flood Insurance
  427  Program policy premiums, as annually determined by the board and
  428  verified by the office. The office shall verify the arithmetic
  429  calculations involved in the board’s determination within 30
  430  days after receipt of the information on which the determination
  431  was based. The office shall notify assessable insurers and the
  432  Florida Surplus Lines Service Office of the date on which
  433  assessable insurers shall begin to collect and assessable
  434  insureds shall begin to pay such assessment. The date must be at
  435  least may be not less than 90 days after the date the
  436  corporation levies emergency assessments pursuant to this sub
  437  subparagraph. Notwithstanding any other provision of law, the
  438  corporation and each assessable insurer that writes subject
  439  lines of business shall collect emergency assessments from its
  440  policyholders without such obligation being affected by any
  441  credit, limitation, exemption, or deferment. Emergency
  442  assessments levied by the corporation on assessable insureds
  443  shall be collected by the surplus lines agent at the time the
  444  surplus lines agent collects the surplus lines tax required by
  445  s. 626.932 and paid to the Florida Surplus Lines Service Office
  446  at the time the surplus lines agent pays the surplus lines tax
  447  to that office. The emergency assessments collected shall be
  448  transferred directly to the corporation on a periodic basis as
  449  determined by the corporation and held by the corporation solely
  450  in the applicable account. The aggregate amount of emergency
  451  assessments levied for an account under this sub-subparagraph in
  452  any calendar year may be less than but may not exceed the
  453  greater of 10 percent of the amount needed to cover the deficit,
  454  plus interest, fees, commissions, required reserves, and other
  455  costs associated with financing the original deficit, or 10
  456  percent of the aggregate statewide direct written premium for
  457  subject lines of business and all accounts of the corporation
  458  for the prior year, plus interest, fees, commissions, required
  459  reserves, and other costs associated with financing the deficit.
  460         e. The corporation may pledge the proceeds of assessments,
  461  projected recoveries from the Florida Hurricane Catastrophe
  462  Fund, other insurance and reinsurance recoverables, policyholder
  463  surcharges and other surcharges, and other funds available to
  464  the corporation as the source of revenue for and to secure bonds
  465  issued under paragraph (q), bonds or other indebtedness issued
  466  under subparagraph (c)3., or lines of credit or other financing
  467  mechanisms issued or created under this subsection, or to retire
  468  any other debt incurred as a result of deficits or events giving
  469  rise to deficits, or in any other way that the board determines
  470  will efficiently recover such deficits. The purpose of the lines
  471  of credit or other financing mechanisms is to provide additional
  472  resources to assist the corporation in covering claims and
  473  expenses attributable to a catastrophe. As used in this
  474  subsection, the term “assessments” includes regular assessments
  475  under sub-subparagraph a. or subparagraph (q)1. and emergency
  476  assessments under sub-subparagraph d. Emergency assessments
  477  collected under sub-subparagraph d. are not part of an insurer’s
  478  rates, are not premium, and are not subject to premium tax,
  479  fees, or commissions; however, failure to pay the emergency
  480  assessment shall be treated as failure to pay premium. The
  481  emergency assessments under sub-subparagraph d. shall continue
  482  as long as any bonds issued or other indebtedness incurred with
  483  respect to a deficit for which the assessment was imposed remain
  484  outstanding, unless adequate provision has been made for the
  485  payment of such bonds or other indebtedness pursuant to the
  486  documents governing such bonds or indebtedness.
  487         f. As used in this subsection for purposes of any deficit
  488  incurred on or after January 25, 2007, the term “subject lines
  489  of business” means insurance written by assessable insurers or
  490  procured by assessable insureds for all property and casualty
  491  lines of business in this state, but not including workers’
  492  compensation or medical malpractice. As used in this sub
  493  subparagraph, the term “property and casualty lines of business”
  494  includes all lines of business identified on Form 2, Exhibit of
  495  Premiums and Losses, in the annual statement required of
  496  authorized insurers under s. 624.424 and any rule adopted under
  497  this section, except for those lines identified as accident and
  498  health insurance and except for policies written under the
  499  National Flood Insurance Program or the Federal Crop Insurance
  500  Program. For purposes of this sub-subparagraph, the term
  501  “workers’ compensation” includes both workers’ compensation
  502  insurance and excess workers’ compensation insurance.
  503         g. The Florida Surplus Lines Service Office shall determine
  504  annually the aggregate statewide written premium in subject
  505  lines of business procured by assessable insureds and report
  506  that information to the corporation in a form and at a time the
  507  corporation specifies to ensure that the corporation can meet
  508  the requirements of this subsection and the corporation’s
  509  financing obligations.
  510         h. The Florida Surplus Lines Service Office shall verify
  511  the proper application by surplus lines agents of assessment
  512  percentages for regular assessments and emergency assessments
  513  levied under this subparagraph on assessable insureds and assist
  514  the corporation in ensuring the accurate, timely collection and
  515  payment of assessments by surplus lines agents as required by
  516  the corporation.
  517         i. In 2008 or thereafter, Upon a determination by the board
  518  of governors that an account has a projected deficit, the board
  519  shall levy a Citizens policyholder surcharge against all
  520  policyholders of the corporation.
  521         (I) The surcharge shall be levied as a uniform percentage
  522  of the premium for all corporation policyholders for the policy
  523  of up to 10 percent of the policy premium for deficits in the
  524  personal lines account, up to 15 percent of the policy such
  525  premium for deficits in the commercial lines account, and up to
  526  20 percent of the policy premium for deficits in the coastal
  527  account, which funds shall be used to offset the deficit.
  528         (II) The surcharge is payable upon cancellation or
  529  termination of the policy, upon renewal of the policy, or upon
  530  issuance of a new policy by the corporation within the first 12
  531  months after the date of the levy or the period of time
  532  necessary to fully collect the surcharge amount.
  533         (III) The corporation may not levy any regular assessments
  534  under paragraph (q) pursuant to sub-subparagraph a. or sub
  535  subparagraph b. with respect to a particular year’s deficit
  536  until the corporation has first levied the full amount of the
  537  surcharge authorized by this sub-subparagraph.
  538         (IV) The surcharge is not considered premium and is not
  539  subject to commissions, fees, or premium taxes. However, failure
  540  to pay the surcharge shall be treated as failure to pay premium.
  541         j. If the amount of any assessments or surcharges collected
  542  from corporation policyholders, assessable insurers or their
  543  policyholders, or assessable insureds exceeds the amount of the
  544  deficits, such excess amounts shall be remitted to and retained
  545  by the corporation in a reserve to be used by the corporation,
  546  as determined by the board of governors and approved by the
  547  office, to pay claims or reduce any past, present, or future
  548  plan-year deficits or to reduce outstanding debt.
  549         (e) The corporation is subject to s. 287.057 for the
  550  purchase of commodities and contractual services except as
  551  otherwise provided in this paragraph. Services provided by
  552  tradepersons or technical experts to assist a licensed adjuster
  553  in the evaluation of individual claims are not subject to the
  554  procurement requirements of this section. Additionally, the
  555  procurement of financial services providers and underwriters
  556  must be made pursuant to s. 627.3513. Contracts for goods or
  557  services valued at or more than $100,000 are subject to approval
  558  by the board.
  559         1. The corporation is an agency for purposes of s. 287.057,
  560  except that, for purposes of s. 287.057(22), the corporation is
  561  an eligible user.
  562         a. The authority of the Department of Management Services
  563  and the Chief Financial Officer under s. 287.057 extends to the
  564  corporation as if the corporation were an agency.
  565         b. The executive director of the corporation is the agency
  566  head under s. 287.057, except for resolution of bid protests for
  567  which the board would serve as the agency head.
  568         2. The corporation must provide notice of a decision or
  569  intended decision concerning a solicitation, contract award, or
  570  exceptional purchase by electronic posting. Such notice must
  571  contain the following statement: “Failure to file a protest
  572  within the time prescribed in this section constitutes a waiver
  573  of proceedings.”
  574         a. A person adversely affected by the corporation’s
  575  decision or intended decision to award a contract pursuant to s.
  576  287.057(1) or (3)(c) who elects to challenge the decision must
  577  file a written notice of protest with the executive director of
  578  the corporation within 72 hours after the corporation posts a
  579  notice of its decision or intended decision. For a protest of
  580  the terms, conditions, and specifications contained in a
  581  solicitation, including any provisions governing the methods for
  582  ranking bids, proposals, replies, awarding contracts, reserving
  583  rights of further negotiation, or modifying or amending any
  584  contract, the notice of protest must be filed in writing within
  585  72 hours after the posting of the solicitation. Saturdays,
  586  Sundays, and state holidays are excluded in the computation of
  587  the 72-hour time period.
  588         b. A formal written protest must be filed within 10 days
  589  after the date the notice of protest is filed. The formal
  590  written protest must state with particularity the facts and law
  591  upon which the protest is based. Upon receipt of a formal
  592  written protest that has been timely filed, the corporation must
  593  stop the solicitation or contract award process until the
  594  subject of the protest is resolved by final board action unless
  595  the executive director sets forth in writing particular facts
  596  and circumstances that require the continuance of the
  597  solicitation or contract award process without delay in order to
  598  avoid an immediate and serious danger to the public health,
  599  safety, or welfare.
  600         (I) The corporation must provide an opportunity to resolve
  601  the protest by mutual agreement between the parties within 7
  602  business days after receipt of the formal written protest.
  603         (II) If the subject of a protest is not resolved by mutual
  604  agreement within 7 business days, the corporation’s board must
  605  transmit the protest to the Division of Administrative Hearings
  606  and contract with the division to conduct a hearing to determine
  607  the merits of the protest and to issue a recommended order place
  608  the protest on the agenda and resolve it at its next regularly
  609  scheduled meeting. The contract must provide for the corporation
  610  to reimburse the division for any costs incurred by the division
  611  for court reporters, transcript preparation, travel, facility
  612  rental, and other customary hearing costs in the manner set
  613  forth in s. 120.65(9). The division has jurisdiction to
  614  determine the facts and law concerning the protest and to issue
  615  a recommended order. The division’s rules and procedures apply
  616  to these proceedings; the division’s applicable bond
  617  requirements do not apply. The protest must be heard by the
  618  division board at a publicly noticed meeting in accordance with
  619  procedures established by the division board.
  620         c. In a protest of an invitation-to-bid or request-for
  621  proposals procurement, submissions made after the bid or
  622  proposal opening which amend or supplement the bid or proposal
  623  may not be considered. In protesting an invitation-to-negotiate
  624  procurement, submissions made after the corporation announces
  625  its intent to award a contract, reject all replies, or withdraw
  626  the solicitation that amends or supplements the reply may not be
  627  considered. Unless otherwise provided by law, the burden of
  628  proof rests with the party protesting the corporation’s action.
  629  In a competitive-procurement protest, other than a rejection of
  630  all bids, proposals, or replies, the administrative law judge
  631  corporation’s board must conduct a de novo proceeding to
  632  determine whether the corporation’s proposed action is contrary
  633  to the corporation’s governing statutes, the corporation’s rules
  634  or policies, or the solicitation specifications. The standard of
  635  proof for the proceeding is whether the corporation’s action was
  636  clearly erroneous, contrary to competition, arbitrary, or
  637  capricious. In any bid-protest proceeding contesting an intended
  638  corporation action to reject all bids, proposals, or replies,
  639  the standard of review by the board is whether the corporation’s
  640  intended action is illegal, arbitrary, dishonest, or fraudulent.
  641         d. Failure to file a notice of protest or failure to file a
  642  formal written protest constitutes a waiver of proceedings.
  643         3. The board, acting as agency head, shall consider the
  644  recommended order of an administrative law judge in a public
  645  meeting and take final action on the protest. Contract actions
  646  and decisions by the board under this paragraph are final. Any
  647  further legal remedy lies with the First District Court of
  648  Appeal must be made in the Circuit Court of Leon County.
  649         (hh) The corporation shall must prepare a report for each
  650  calendar year outlining both the statewide average and county
  651  specific details of the loss ratio attributable to losses that
  652  are not catastrophic losses for residential coverage provided by
  653  the corporation, which information must be presented to the
  654  office and available for public inspection on the Internet
  655  website of the corporation by March 1 January 15th of the
  656  following calendar year.
  657         Section 4. Paragraph (e) is added to subsection (1) of
  658  section 627.3518, Florida Statutes, subsection (2) and paragraph
  659  (e) of subsection (4) of that section are amended, present
  660  subsections (5) through (10) of that section are redesignated as
  661  subsections (6) through (11), respectively, present subsection
  662  (11) is redesignated as subsection (13), new subsections (5) and
  663  (12) are added to that section, and present subsections (5)
  664  through (7) of that section are amended, to read:
  665         627.3518 Citizens Property Insurance Corporation
  666  policyholder eligibility clearinghouse program.—The purpose of
  667  this section is to provide a framework for the corporation to
  668  implement a clearinghouse program by January 1, 2014.
  669         (1) As used in this section, the term:
  670         (e) “Surplus lines insurer” means an unauthorized insurer
  671  that has been made eligible by the office to issue coverage
  672  under the Surplus Lines Law.
  673         (2) In order to confirm eligibility with the corporation
  674  and to enhance the access of new applicants for coverage and
  675  existing policyholders of the corporation to offers of coverage
  676  from authorized insurers and surplus lines insurers, the
  677  corporation shall establish a program for personal residential
  678  risks in order to facilitate the diversion of ineligible
  679  applicants and existing policyholders from the corporation into
  680  the voluntary insurance market. The corporation shall also
  681  develop appropriate procedures for facilitating the diversion of
  682  ineligible applicants and existing policyholders for commercial
  683  residential coverage into the private insurance market and
  684  implement these procedures by October 1, 2015 shall report such
  685  procedures to the President of the Senate and the Speaker of the
  686  House of Representatives by January 1, 2014.
  687         (4) Any authorized insurer may participate in the program;
  688  however, participation is not mandatory for any insurer.
  689  Insurers making offers of coverage to new applicants or renewal
  690  policyholders through the program:
  691         (e) May participate through their single-designated
  692  managing general agent or broker; however, the provisions of
  693  paragraph (7)(a) (6)(a) regarding ownership, control, and use of
  694  the expirations continue to apply.
  695         (5) Effective January 1, 2015, an eligible surplus lines
  696  insurer may make an offer of similar coverage on a risk
  697  submitted though the clearinghouse program if no offers of
  698  coverage were submitted by authorized insurers participating in
  699  the program and the office determines that the eligible surplus
  700  lines insurer:
  701         (a) Maintains a surplus of $50 million on a company or
  702  pooled basis;
  703         (b) Is rated as having a superior, excellent, exceptional,
  704  or equally comparable financial strength by a rating agency
  705  acceptable to the office;
  706         (c) Maintains reserves, surplus, reinsurance, and
  707  reinsurance equivalents to cover the eligible surplus lines
  708  insurer’s 100-year probable maximum hurricane loss at least
  709  twice in a single hurricane season, and submits such reinsurance
  710  to the office for review for purposes of participation in the
  711  program; and
  712         (d) Provides prominent notice to the policyholder:
  713         1. That the policyholder does not have to accept an offer
  714  of coverage from a surplus lines insurer;
  715         2. That an offer of coverage from a surplus lines insurer
  716  does not affect whether the policyholder is eligible for
  717  coverage from the corporation;
  718         3. That a policyholder who accepts an offer of coverage
  719  from a surplus lines insurer may, at any time, submit a new
  720  application for coverage to the corporation;
  721         4. That surplus lines policies are not covered by the
  722  Florida Insurance Guaranty Association;
  723         5. That rates for surplus lines insurance are not subject
  724  to review by the office; and
  725         6. Of any additional information required by the office.
  726  
  727  Such notice must be signed by the policyholder and kept on file
  728  with the surplus lines insurer for as long as the policyholder
  729  remains insured by the surplus lines insurer.
  730         (6)(5) Notwithstanding s. 627.3517, an any applicant for
  731  new coverage from the corporation is not eligible for coverage
  732  from the corporation if provided an offer of coverage from an
  733  authorized insurer through the program at a premium that is at
  734  or below the eligibility threshold established in s.
  735  627.351(6)(c)5.a. or b. Whenever an offer of coverage for a
  736  personal lines or commercial lines residential risk is received
  737  for a policyholder of the corporation at renewal from an
  738  authorized insurer through the program, if the offer is equal to
  739  or less than the corporation’s renewal premium for comparable
  740  coverage, the risk is not eligible for coverage with the
  741  corporation. If In the event an offer of coverage for a new
  742  applicant is received from an authorized insurer through the
  743  program, and the premium offered exceeds the eligibility
  744  threshold contained in s. 627.351(6)(c)5.a. or b., the applicant
  745  or insured may elect to accept such coverage, or may elect to
  746  accept or continue coverage with the corporation. If In the
  747  event an offer of coverage for a personal lines or commercial
  748  lines residential risk is received from an authorized insurer at
  749  renewal through the program, and if the premium offered is more
  750  than the corporation’s renewal premium for comparable coverage,
  751  the insured may elect to accept such coverage, or may elect to
  752  accept or continue coverage with the corporation. Section
  753  627.351(6)(c)5.a.(I) or b.(I) does not apply to an offer of
  754  coverage from an authorized insurer obtained through the
  755  program. An applicant for personal lines residential coverage
  756  from the corporation who was declared ineligible for coverage at
  757  renewal by the corporation in the previous 36 months due to an
  758  offer of coverage pursuant to this subsection is shall be
  759  considered a renewal under this section if the corporation
  760  determines that the authorized insurer making the offer of
  761  coverage pursuant to this subsection continues to insure the
  762  applicant and increased the rate on the policy in excess of the
  763  increase allowed for the corporation under s. 627.351(6)(n)6.
  764         (7)(6) Independent insurance agents submitting new
  765  applications for coverage or that are the agent of record on a
  766  renewal policy submitted to the program:
  767         (a) Are granted and must maintain ownership and the
  768  exclusive use of expirations, records, or other written or
  769  electronic information directly related to such applications or
  770  renewals written through the corporation or through an insurer
  771  participating in the program, notwithstanding s.
  772  627.351(6)(c)5.a.(I)(B) and (II)(B) and b.(I)(B) and (II)(B).
  773  Such ownership is granted for as long as the insured remains
  774  with the agency or until sold or surrendered in writing by the
  775  agent. Contracts with the corporation or required by the
  776  corporation must not amend, modify, interfere with, or limit
  777  such rights of ownership. Such expirations, records, or other
  778  written or electronic information may be used to review an
  779  application, issue a policy, or for any other purpose necessary
  780  for placing such business through the program.
  781         (b) May not be required to be appointed by any insurer
  782  participating in the program for policies written solely through
  783  the program, notwithstanding the provisions of s. 626.112.
  784         (c) May accept an appointment from an any insurer
  785  participating in the program.
  786         (d) May enter into either a standard or limited agency
  787  agreement with the insurer, at the insurer’s option.
  788  
  789  Applicants ineligible for coverage in accordance with subsection
  790  (6) (5) remain ineligible if their independent agent is
  791  unwilling or unable to enter into a standard or limited agency
  792  agreement with an insurer participating in the program.
  793         (8)(7) Exclusive agents submitting new applications for
  794  coverage or that are the agent of record on a renewal policy
  795  submitted to the program:
  796         (a) Must maintain ownership and the exclusive use of
  797  expirations, records, or other written or electronic information
  798  directly related to such applications or renewals written
  799  through the corporation or through an insurer participating in
  800  the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
  801  (II)(B) and b.(I)(B) and (II)(B). Contracts with the corporation
  802  or required by the corporation must not amend, modify, interfere
  803  with, or limit such rights of ownership. Such expirations,
  804  records, or other written or electronic information may be used
  805  to review an application, issue a policy, or for any other
  806  purpose necessary for placing such business through the program.
  807         (b) May not be required to be appointed by any insurer
  808  participating in the program for policies written solely through
  809  the program, notwithstanding the provisions of s. 626.112.
  810         (c) Must only facilitate the placement of an offer of
  811  coverage from an insurer whose limited servicing agreement is
  812  approved by that exclusive agent’s exclusive insurer.
  813         (d) May enter into a limited servicing agreement with the
  814  insurer making an offer of coverage, and only after the
  815  exclusive agent’s insurer has approved the limited servicing
  816  agreement terms. The exclusive agent’s insurer must approve a
  817  limited service agreement for the program for an any insurer for
  818  which it has approved a service agreement for other purposes.
  819  
  820  Applicants ineligible for coverage in accordance with subsection
  821  (6) (5) remain ineligible if their exclusive agent is unwilling
  822  or unable to enter into a standard or limited agency agreement
  823  with an insurer making an offer of coverage to that applicant.
  824         (12) An applicant for coverage from the corporation who was
  825  a policyholder of the corporation within the previous 36 months
  826  and who subsequently accepted an offer of coverage from a
  827  surplus lines insurer is considered a renewal under this
  828  section.
  829         Section 5. Section 627.3519, Florida Statutes, is repealed.
  830         Section 6. Section 627.35191, Florida Statutes, is amended
  831  to read:
  832         627.35191 Required reports Annual report of aggregate net
  833  probable maximum losses, financing options, and potential
  834  assessments.—
  835         (1) By No later than February 1 of each year, the Florida
  836  Hurricane Catastrophe Fund and Citizens Property Insurance
  837  Corporation shall each submit a report to the Legislature and
  838  the Financial Services Commission identifying their respective
  839  aggregate net probable maximum losses, financing options, and
  840  potential assessments. The report issued by the fund and the
  841  corporation must include their respective 50-year, 100-year, and
  842  250-year probable maximum losses; analysis of all reasonable
  843  financing strategies for each such probable maximum loss,
  844  including the amount and term of debt instruments; specification
  845  of the percentage assessments that would be needed to support
  846  each of the financing strategies; and calculations of the
  847  aggregate assessment burden on Florida property and casualty
  848  policyholders for each of the probable maximum losses.
  849         (2) In May of each year, Citizens Property Insurance
  850  Corporation shall also provide to the Legislature and the
  851  Financial Services Commission a statement of the estimated
  852  borrowing capacity of the corporation for the next 12-month
  853  period, the estimated claims-paying capacity of the corporation,
  854  and the corporation’s estimated balance as of December 31 of the
  855  current calendar year. Such estimates must take into account
  856  that the corporation, the Florida Hurricane Catastrophe Fund,
  857  and the Florida Insurance Guaranty Association may all be
  858  concurrently issuing debt instruments following a catastrophic
  859  event.
  860         Section 7. Present subsections (6) through (8) of section
  861  627.711, Florida Statues, are redesignated as subsections (7)
  862  through (9), respectively, a new subsection (6) is added to that
  863  section, and present subsection (8) of that section is amended,
  864  to read:
  865         627.711 Notice of premium discounts for hurricane loss
  866  mitigation; uniform mitigation verification inspection form.—
  867         (6)(a) An authorized mitigation inspector may not directly
  868  or indirectly offer or deliver any compensation, inducement, or
  869  reward to an insurance agency, insurance agent, customer
  870  representative, or an employee of an insurance agency for the
  871  referral of the owner of the inspected property to the inspector
  872  or the inspection company. Section 455.227(1)(k) applies to
  873  applicable licensees in violation of this paragraph.
  874         (b) An insurance agency, insurance agent, customer
  875  representative, or an employee of an insurance agency may not
  876  directly or indirectly receive or accept any compensation,
  877  inducement, or reward from an authorized mitigation inspector
  878  for the referral of the owner of the inspected property to the
  879  inspector or the inspection company. Sections 626.621(2) and
  880  626.6215(5)(d) apply to a violation of this paragraph.
  881         (9)(8) At its expense, the insurer may require that a
  882  uniform mitigation verification form provided by a policyholder,
  883  a policyholder’s agent, or an authorized mitigation inspector or
  884  inspection company be independently verified by an inspector, an
  885  inspection company, or an independent third-party quality
  886  assurance provider that which possesses a quality assurance
  887  program before accepting the uniform mitigation verification
  888  form as valid. At its option, the insurer may exempt from
  889  independent verification a uniform mitigation verification form
  890  completed by an authorized mitigation inspector or inspection
  891  company that possesses a quality assurance program approved by
  892  the insurer. A uniform mitigation verification form provided by
  893  a policyholder, a policyholder’s agent, or an authorized
  894  mitigation inspector or inspection company to Citizens Property
  895  Insurance Corporation is not subject to independent verification
  896  and the property is not subject to reinspection by the
  897  corporation, absent material changes to the structure during the
  898  term stated on the form, if the form was signed by an authorized
  899  mitigation inspector and submitted to, reviewed by, and verified
  900  by a quality assurance program approved by the corporation
  901  before submission of the form to the corporation.
  902         Section 8. Paragraph (d) is added to subsection (7) of
  903  section 817.234, Florida Statutes, to read:
  904         817.234 False and fraudulent insurance claims.—
  905         (7)
  906         (d) A contractor or a person acting on behalf of a
  907  contractor may not pay, waive, or rebate all or part of an
  908  insurance deductible applicable to covered property for which
  909  the payment for repairs will be made from the proceeds of a
  910  property insurance policy. A person who violates this paragraph
  911  commits a third degree felony, punishable as provided in s.
  912  775.082, s. 775.083, or s. 775.084.
  913         Section 9. Except as otherwise expressly provided in this
  914  act, this act shall take effect July 1, 2014.