Florida Senate - 2015                      CS for CS for SB 1006
       
       
        
       By the Committees on Appropriations; and Banking and Insurance;
       and Senators Flores and Margolis
       
       
       
       
       576-04269-15                                          20151006c2
    1                        A bill to be entitled                      
    2         An act relating to operations of the Citizens Property
    3         Insurance Corporation; amending s. 627.351, F.S.;
    4         specifying that a consumer representative appointed by
    5         the Governor to the Citizens Property Insurance
    6         Corporation’s board of governors is not prohibited
    7         from practicing in a certain profession if required or
    8         permitted by law or ordinance; revising the
    9         requirements for licensed agents of the corporation;
   10         authorizing the use of specified information by
   11         certain entities in analyzing risks and prohibiting
   12         the use of such information for the direct
   13         solicitation of policyholders; requiring the take-out
   14         program to be revised for specified purposes;
   15         requiring policyholders after a specified date to
   16         receive certain information relating to a
   17         demonstration of interest to insure by private
   18         insurers; requiring the corporation to develop uniform
   19         formats for certain information; allowing a
   20         policyholder to elect to limit the frequency of
   21         solicitations for take-out offers; providing
   22         circumstances under which a policyholder whose policy
   23         was taken out to be considered a renewal policyholder
   24         for certain rate increase purposes; providing an
   25         effective date.
   26          
   27  Be It Enacted by the Legislature of the State of Florida:
   28  
   29         Section 1. Paragraphs (c) and (x) of subsection (6) of
   30  section 627.351, Florida Statutes, are amended, and paragraph
   31  (ii) is added to that subsection, to read:
   32         627.351 Insurance risk apportionment plans.—
   33         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   34         (c) The corporation’s plan of operation:
   35         1. Must provide for adoption of residential property and
   36  casualty insurance policy forms and commercial residential and
   37  nonresidential property insurance forms, which must be approved
   38  by the office before use. The corporation shall adopt the
   39  following policy forms:
   40         a. Standard personal lines policy forms that are
   41  comprehensive multiperil policies providing full coverage of a
   42  residential property equivalent to the coverage provided in the
   43  private insurance market under an HO-3, HO-4, or HO-6 policy.
   44         b. Basic personal lines policy forms that are policies
   45  similar to an HO-8 policy or a dwelling fire policy that provide
   46  coverage meeting the requirements of the secondary mortgage
   47  market, but which is more limited than the coverage under a
   48  standard policy.
   49         c. Commercial lines residential and nonresidential policy
   50  forms that are generally similar to the basic perils of full
   51  coverage obtainable for commercial residential structures and
   52  commercial nonresidential structures in the admitted voluntary
   53  market.
   54         d. Personal lines and commercial lines residential property
   55  insurance forms that cover the peril of wind only. The forms are
   56  applicable only to residential properties located in areas
   57  eligible for coverage under the coastal account referred to in
   58  sub-subparagraph (b)2.a.
   59         e. Commercial lines nonresidential property insurance forms
   60  that cover the peril of wind only. The forms are applicable only
   61  to nonresidential properties located in areas eligible for
   62  coverage under the coastal account referred to in sub
   63  subparagraph (b)2.a.
   64         f. The corporation may adopt variations of the policy forms
   65  listed in sub-subparagraphs a.-e. which contain more restrictive
   66  coverage.
   67         g. Effective January 1, 2013, the corporation shall offer a
   68  basic personal lines policy similar to an HO-8 policy with
   69  dwelling repair based on common construction materials and
   70  methods.
   71         2. Must provide that the corporation adopt a program in
   72  which the corporation and authorized insurers enter into quota
   73  share primary insurance agreements for hurricane coverage, as
   74  defined in s. 627.4025(2)(a), for eligible risks, and adopt
   75  property insurance forms for eligible risks which cover the
   76  peril of wind only.
   77         a. As used in this subsection, the term:
   78         (I) “Quota share primary insurance” means an arrangement in
   79  which the primary hurricane coverage of an eligible risk is
   80  provided in specified percentages by the corporation and an
   81  authorized insurer. The corporation and authorized insurer are
   82  each solely responsible for a specified percentage of hurricane
   83  coverage of an eligible risk as set forth in a quota share
   84  primary insurance agreement between the corporation and an
   85  authorized insurer and the insurance contract. The
   86  responsibility of the corporation or authorized insurer to pay
   87  its specified percentage of hurricane losses of an eligible
   88  risk, as set forth in the agreement, may not be altered by the
   89  inability of the other party to pay its specified percentage of
   90  losses. Eligible risks that are provided hurricane coverage
   91  through a quota share primary insurance arrangement must be
   92  provided policy forms that set forth the obligations of the
   93  corporation and authorized insurer under the arrangement,
   94  clearly specify the percentages of quota share primary insurance
   95  provided by the corporation and authorized insurer, and
   96  conspicuously and clearly state that the authorized insurer and
   97  the corporation may not be held responsible beyond their
   98  specified percentage of coverage of hurricane losses.
   99         (II) “Eligible risks” means personal lines residential and
  100  commercial lines residential risks that meet the underwriting
  101  criteria of the corporation and are located in areas that were
  102  eligible for coverage by the Florida Windstorm Underwriting
  103  Association on January 1, 2002.
  104         b. The corporation may enter into quota share primary
  105  insurance agreements with authorized insurers at corporation
  106  coverage levels of 90 percent and 50 percent.
  107         c. If the corporation determines that additional coverage
  108  levels are necessary to maximize participation in quota share
  109  primary insurance agreements by authorized insurers, the
  110  corporation may establish additional coverage levels. However,
  111  the corporation’s quota share primary insurance coverage level
  112  may not exceed 90 percent.
  113         d. Any quota share primary insurance agreement entered into
  114  between an authorized insurer and the corporation must provide
  115  for a uniform specified percentage of coverage of hurricane
  116  losses, by county or territory as set forth by the corporation
  117  board, for all eligible risks of the authorized insurer covered
  118  under the agreement.
  119         e. Any quota share primary insurance agreement entered into
  120  between an authorized insurer and the corporation is subject to
  121  review and approval by the office. However, such agreement shall
  122  be authorized only as to insurance contracts entered into
  123  between an authorized insurer and an insured who is already
  124  insured by the corporation for wind coverage.
  125         f. For all eligible risks covered under quota share primary
  126  insurance agreements, the exposure and coverage levels for both
  127  the corporation and authorized insurers shall be reported by the
  128  corporation to the Florida Hurricane Catastrophe Fund. For all
  129  policies of eligible risks covered under such agreements, the
  130  corporation and the authorized insurer must maintain complete
  131  and accurate records for the purpose of exposure and loss
  132  reimbursement audits as required by fund rules. The corporation
  133  and the authorized insurer shall each maintain duplicate copies
  134  of policy declaration pages and supporting claims documents.
  135         g. The corporation board shall establish in its plan of
  136  operation standards for quota share agreements which ensure that
  137  there is no discriminatory application among insurers as to the
  138  terms of the agreements, pricing of the agreements, incentive
  139  provisions if any, and consideration paid for servicing policies
  140  or adjusting claims.
  141         h. The quota share primary insurance agreement between the
  142  corporation and an authorized insurer must set forth the
  143  specific terms under which coverage is provided, including, but
  144  not limited to, the sale and servicing of policies issued under
  145  the agreement by the insurance agent of the authorized insurer
  146  producing the business, the reporting of information concerning
  147  eligible risks, the payment of premium to the corporation, and
  148  arrangements for the adjustment and payment of hurricane claims
  149  incurred on eligible risks by the claims adjuster and personnel
  150  of the authorized insurer. Entering into a quota sharing
  151  insurance agreement between the corporation and an authorized
  152  insurer is voluntary and at the discretion of the authorized
  153  insurer.
  154         3. May provide that the corporation may employ or otherwise
  155  contract with individuals or other entities to provide
  156  administrative or professional services that may be appropriate
  157  to effectuate the plan. The corporation may borrow funds by
  158  issuing bonds or by incurring other indebtedness, and shall have
  159  other powers reasonably necessary to effectuate the requirements
  160  of this subsection, including, without limitation, the power to
  161  issue bonds and incur other indebtedness in order to refinance
  162  outstanding bonds or other indebtedness. The corporation may
  163  seek judicial validation of its bonds or other indebtedness
  164  under chapter 75. The corporation may issue bonds or incur other
  165  indebtedness, or have bonds issued on its behalf by a unit of
  166  local government pursuant to subparagraph (q)2. in the absence
  167  of a hurricane or other weather-related event, upon a
  168  determination by the corporation, subject to approval by the
  169  office, that such action would enable it to efficiently meet the
  170  financial obligations of the corporation and that such
  171  financings are reasonably necessary to effectuate the
  172  requirements of this subsection. The corporation may take all
  173  actions needed to facilitate tax-free status for such bonds or
  174  indebtedness, including formation of trusts or other affiliated
  175  entities. The corporation may pledge assessments, projected
  176  recoveries from the Florida Hurricane Catastrophe Fund, other
  177  reinsurance recoverables, policyholder surcharges and other
  178  surcharges, and other funds available to the corporation as
  179  security for bonds or other indebtedness. In recognition of s.
  180  10, Art. I of the State Constitution, prohibiting the impairment
  181  of obligations of contracts, it is the intent of the Legislature
  182  that no action be taken whose purpose is to impair any bond
  183  indenture or financing agreement or any revenue source committed
  184  by contract to such bond or other indebtedness.
  185         4. Must require that the corporation operate subject to the
  186  supervision and approval of a board of governors consisting of
  187  nine individuals who are residents of this state and who are
  188  from different geographical areas of the state, one of whom is
  189  appointed by the Governor and serves solely to advocate on
  190  behalf of the consumer. The appointment of a consumer
  191  representative by the Governor is deemed to be within the scope
  192  of the exemption provided in s. 112.313(7)(b) and is in addition
  193  to the appointments authorized under sub-subparagraph a.
  194         a. The Governor, the Chief Financial Officer, the President
  195  of the Senate, and the Speaker of the House of Representatives
  196  shall each appoint two members of the board. At least one of the
  197  two members appointed by each appointing officer must have
  198  demonstrated expertise in insurance and be deemed to be within
  199  the scope of the exemption provided in s. 112.313(7)(b). The
  200  Chief Financial Officer shall designate one of the appointees as
  201  chair. All board members serve at the pleasure of the appointing
  202  officer. All members of the board are subject to removal at will
  203  by the officers who appointed them. All board members, including
  204  the chair, must be appointed to serve for 3-year terms beginning
  205  annually on a date designated by the plan. However, for the
  206  first term beginning on or after July 1, 2009, each appointing
  207  officer shall appoint one member of the board for a 2-year term
  208  and one member for a 3-year term. A board vacancy shall be
  209  filled for the unexpired term by the appointing officer. The
  210  Chief Financial Officer shall appoint a technical advisory group
  211  to provide information and advice to the board in connection
  212  with the board’s duties under this subsection. The executive
  213  director and senior managers of the corporation shall be engaged
  214  by the board and serve at the pleasure of the board. Any
  215  executive director appointed on or after July 1, 2006, is
  216  subject to confirmation by the Senate. The executive director is
  217  responsible for employing other staff as the corporation may
  218  require, subject to review and concurrence by the board.
  219         b. The board shall create a Market Accountability Advisory
  220  Committee to assist the corporation in developing awareness of
  221  its rates and its customer and agent service levels in
  222  relationship to the voluntary market insurers writing similar
  223  coverage.
  224         (I) The members of the advisory committee consist of the
  225  following 11 persons, one of whom must be elected chair by the
  226  members of the committee: four representatives, one appointed by
  227  the Florida Association of Insurance Agents, one by the Florida
  228  Association of Insurance and Financial Advisors, one by the
  229  Professional Insurance Agents of Florida, and one by the Latin
  230  American Association of Insurance Agencies; three
  231  representatives appointed by the insurers with the three highest
  232  voluntary market share of residential property insurance
  233  business in the state; one representative from the Office of
  234  Insurance Regulation; one consumer appointed by the board who is
  235  insured by the corporation at the time of appointment to the
  236  committee; one representative appointed by the Florida
  237  Association of Realtors; and one representative appointed by the
  238  Florida Bankers Association. All members shall be appointed to
  239  3-year terms and may serve for consecutive terms.
  240         (II) The committee shall report to the corporation at each
  241  board meeting on insurance market issues which may include rates
  242  and rate competition with the voluntary market; service,
  243  including policy issuance, claims processing, and general
  244  responsiveness to policyholders, applicants, and agents; and
  245  matters relating to depopulation.
  246         5. Must provide a procedure for determining the eligibility
  247  of a risk for coverage, as follows:
  248         a. Subject to s. 627.3517, with respect to personal lines
  249  residential risks, if the risk is offered coverage from an
  250  authorized insurer at the insurer’s approved rate under a
  251  standard policy including wind coverage or, if consistent with
  252  the insurer’s underwriting rules as filed with the office, a
  253  basic policy including wind coverage, for a new application to
  254  the corporation for coverage, the risk is not eligible for any
  255  policy issued by the corporation unless the premium for coverage
  256  from the authorized insurer is more than 15 percent greater than
  257  the premium for comparable coverage from the corporation.
  258  Whenever an offer of coverage for a personal lines residential
  259  risk is received for a policyholder of the corporation at
  260  renewal from an authorized insurer, if the offer is equal to or
  261  less than the corporation’s renewal premium for comparable
  262  coverage, the risk is not eligible for coverage with the
  263  corporation. If the risk is not able to obtain such offer, the
  264  risk is eligible for a standard policy including wind coverage
  265  or a basic policy including wind coverage issued by the
  266  corporation; however, if the risk could not be insured under a
  267  standard policy including wind coverage regardless of market
  268  conditions, the risk is eligible for a basic policy including
  269  wind coverage unless rejected under subparagraph 8. However, a
  270  policyholder removed from the corporation through an assumption
  271  agreement remains eligible for coverage from the corporation
  272  until the end of the assumption period. The corporation shall
  273  determine the type of policy to be provided on the basis of
  274  objective standards specified in the underwriting manual and
  275  based on generally accepted underwriting practices.
  276         (I) If the risk accepts an offer of coverage through the
  277  market assistance plan or through a mechanism established by the
  278  corporation other than a plan established by s. 627.3518, before
  279  a policy is issued to the risk by the corporation or during the
  280  first 30 days of coverage by the corporation, and the producing
  281  agent who submitted the application to the plan or to the
  282  corporation is not currently appointed by the insurer, the
  283  insurer shall:
  284         (A) Pay to the producing agent of record of the policy for
  285  the first year, an amount that is the greater of the insurer’s
  286  usual and customary commission for the type of policy written or
  287  a fee equal to the usual and customary commission of the
  288  corporation; or
  289         (B) Offer to allow the producing agent of record of the
  290  policy to continue servicing the policy for at least 1 year and
  291  offer to pay the agent the greater of the insurer’s or the
  292  corporation’s usual and customary commission for the type of
  293  policy written.
  294  
  295  If the producing agent is unwilling or unable to accept
  296  appointment, the new insurer shall pay the agent in accordance
  297  with sub-sub-sub-subparagraph (A).
  298         (II) If the corporation enters into a contractual agreement
  299  for a take-out plan, the producing agent of record of the
  300  corporation policy is entitled to retain any unearned commission
  301  on the policy, and the insurer shall:
  302         (A) Pay to the producing agent of record, for the first
  303  year, an amount that is the greater of the insurer’s usual and
  304  customary commission for the type of policy written or a fee
  305  equal to the usual and customary commission of the corporation;
  306  or
  307         (B) Offer to allow the producing agent of record to
  308  continue servicing the policy for at least 1 year and offer to
  309  pay the agent the greater of the insurer’s or the corporation’s
  310  usual and customary commission for the type of policy written.
  311  
  312  If the producing agent is unwilling or unable to accept
  313  appointment, the new insurer shall pay the agent in accordance
  314  with sub-sub-sub-subparagraph (A).
  315         b. With respect to commercial lines residential risks, for
  316  a new application to the corporation for coverage, if the risk
  317  is offered coverage under a policy including wind coverage from
  318  an authorized insurer at its approved rate, the risk is not
  319  eligible for a policy issued by the corporation unless the
  320  premium for coverage from the authorized insurer is more than 15
  321  percent greater than the premium for comparable coverage from
  322  the corporation. Whenever an offer of coverage for a commercial
  323  lines residential risk is received for a policyholder of the
  324  corporation at renewal from an authorized insurer, if the offer
  325  is equal to or less than the corporation’s renewal premium for
  326  comparable coverage, the risk is not eligible for coverage with
  327  the corporation. If the risk is not able to obtain any such
  328  offer, the risk is eligible for a policy including wind coverage
  329  issued by the corporation. However, a policyholder removed from
  330  the corporation through an assumption agreement remains eligible
  331  for coverage from the corporation until the end of the
  332  assumption period.
  333         (I) If the risk accepts an offer of coverage through the
  334  market assistance plan or through a mechanism established by the
  335  corporation other than a plan established by s. 627.3518, before
  336  a policy is issued to the risk by the corporation or during the
  337  first 30 days of coverage by the corporation, and the producing
  338  agent who submitted the application to the plan or the
  339  corporation is not currently appointed by the insurer, the
  340  insurer shall:
  341         (A) Pay to the producing agent of record of the policy, for
  342  the first year, an amount that is the greater of the insurer’s
  343  usual and customary commission for the type of policy written or
  344  a fee equal to the usual and customary commission of the
  345  corporation; or
  346         (B) Offer to allow the producing agent of record of the
  347  policy to continue servicing the policy for at least 1 year and
  348  offer to pay the agent the greater of the insurer’s or the
  349  corporation’s usual and customary commission for the type of
  350  policy written.
  351  
  352  If the producing agent is unwilling or unable to accept
  353  appointment, the new insurer shall pay the agent in accordance
  354  with sub-sub-sub-subparagraph (A).
  355         (II) If the corporation enters into a contractual agreement
  356  for a take-out plan, the producing agent of record of the
  357  corporation policy is entitled to retain any unearned commission
  358  on the policy, and the insurer shall:
  359         (A) Pay to the producing agent of record, for the first
  360  year, an amount that is the greater of the insurer’s usual and
  361  customary commission for the type of policy written or a fee
  362  equal to the usual and customary commission of the corporation;
  363  or
  364         (B) Offer to allow the producing agent of record to
  365  continue servicing the policy for at least 1 year and offer to
  366  pay the agent the greater of the insurer’s or the corporation’s
  367  usual and customary commission for the type of policy written.
  368  
  369  If the producing agent is unwilling or unable to accept
  370  appointment, the new insurer shall pay the agent in accordance
  371  with sub-sub-sub-subparagraph (A).
  372         c. For purposes of determining comparable coverage under
  373  sub-subparagraphs a. and b., the comparison must be based on
  374  those forms and coverages that are reasonably comparable. The
  375  corporation may rely on a determination of comparable coverage
  376  and premium made by the producing agent who submits the
  377  application to the corporation, made in the agent’s capacity as
  378  the corporation’s agent. A comparison may be made solely of the
  379  premium with respect to the main building or structure only on
  380  the following basis: the same coverage A or other building
  381  limits; the same percentage hurricane deductible that applies on
  382  an annual basis or that applies to each hurricane for commercial
  383  residential property; the same percentage of ordinance and law
  384  coverage, if the same limit is offered by both the corporation
  385  and the authorized insurer; the same mitigation credits, to the
  386  extent the same types of credits are offered both by the
  387  corporation and the authorized insurer; the same method for loss
  388  payment, such as replacement cost or actual cash value, if the
  389  same method is offered both by the corporation and the
  390  authorized insurer in accordance with underwriting rules; and
  391  any other form or coverage that is reasonably comparable as
  392  determined by the board. If an application is submitted to the
  393  corporation for wind-only coverage in the coastal account, the
  394  premium for the corporation’s wind-only policy plus the premium
  395  for the ex-wind policy that is offered by an authorized insurer
  396  to the applicant must be compared to the premium for multiperil
  397  coverage offered by an authorized insurer, subject to the
  398  standards for comparison specified in this subparagraph. If the
  399  corporation or the applicant requests from the authorized
  400  insurer a breakdown of the premium of the offer by types of
  401  coverage so that a comparison may be made by the corporation or
  402  its agent and the authorized insurer refuses or is unable to
  403  provide such information, the corporation may treat the offer as
  404  not being an offer of coverage from an authorized insurer at the
  405  insurer’s approved rate.
  406         6. Must include rules for classifications of risks and
  407  rates.
  408         7. Must provide that if premium and investment income for
  409  an account attributable to a particular calendar year are in
  410  excess of projected losses and expenses for the account
  411  attributable to that year, such excess shall be held in surplus
  412  in the account. Such surplus must be available to defray
  413  deficits in that account as to future years and used for that
  414  purpose before assessing assessable insurers and assessable
  415  insureds as to any calendar year.
  416         8. Must provide objective criteria and procedures to be
  417  uniformly applied to all applicants in determining whether an
  418  individual risk is so hazardous as to be uninsurable. In making
  419  this determination and in establishing the criteria and
  420  procedures, the following must be considered:
  421         a. Whether the likelihood of a loss for the individual risk
  422  is substantially higher than for other risks of the same class;
  423  and
  424         b. Whether the uncertainty associated with the individual
  425  risk is such that an appropriate premium cannot be determined.
  426  
  427  The acceptance or rejection of a risk by the corporation shall
  428  be construed as the private placement of insurance, and the
  429  provisions of chapter 120 do not apply.
  430         9. Must provide that the corporation make its best efforts
  431  to procure catastrophe reinsurance at reasonable rates, to cover
  432  its projected 100-year probable maximum loss as determined by
  433  the board of governors.
  434         10. The policies issued by the corporation must provide
  435  that if the corporation or the market assistance plan obtains an
  436  offer from an authorized insurer to cover the risk at its
  437  approved rates, the risk is no longer eligible for renewal
  438  through the corporation, except as otherwise provided in this
  439  subsection.
  440         11. Corporation policies and applications must include a
  441  notice that the corporation policy could, under this section, be
  442  replaced with a policy issued by an authorized insurer which
  443  does not provide coverage identical to the coverage provided by
  444  the corporation. The notice must also specify that acceptance of
  445  corporation coverage creates a conclusive presumption that the
  446  applicant or policyholder is aware of this potential.
  447         12. May establish, subject to approval by the office,
  448  different eligibility requirements and operational procedures
  449  for any line or type of coverage for any specified county or
  450  area if the board determines that such changes are justified due
  451  to the voluntary market being sufficiently stable and
  452  competitive in such area or for such line or type of coverage
  453  and that consumers who, in good faith, are unable to obtain
  454  insurance through the voluntary market through ordinary methods
  455  continue to have access to coverage from the corporation. If
  456  coverage is sought in connection with a real property transfer,
  457  the requirements and procedures may not provide an effective
  458  date of coverage later than the date of the closing of the
  459  transfer as established by the transferor, the transferee, and,
  460  if applicable, the lender.
  461         13. Must provide that, with respect to the coastal account,
  462  any assessable insurer with a surplus as to policyholders of $25
  463  million or less writing 25 percent or more of its total
  464  countrywide property insurance premiums in this state may
  465  petition the office, within the first 90 days of each calendar
  466  year, to qualify as a limited apportionment company. A regular
  467  assessment levied by the corporation on a limited apportionment
  468  company for a deficit incurred by the corporation for the
  469  coastal account may be paid to the corporation on a monthly
  470  basis as the assessments are collected by the limited
  471  apportionment company from its insureds, but a limited
  472  apportionment company must begin collecting the regular
  473  assessments not later than 90 days after the regular assessments
  474  are levied by the corporation, and the regular assessments must
  475  be paid in full within 15 months after being levied by the
  476  corporation. A limited apportionment company shall collect from
  477  its policyholders any emergency assessment imposed under sub
  478  subparagraph (b)3.d. The plan must provide that, if the office
  479  determines that any regular assessment will result in an
  480  impairment of the surplus of a limited apportionment company,
  481  the office may direct that all or part of such assessment be
  482  deferred as provided in subparagraph (q)4. However, an emergency
  483  assessment to be collected from policyholders under sub
  484  subparagraph (b)3.d. may not be limited or deferred.
  485         14. Must provide that the corporation appoint as its
  486  licensed agents only those agents who throughout such
  487  appointments also hold an appointment as defined in s.
  488  626.015(3) by with an insurer who at the time of the agent’s
  489  initial appointment by the corporation is authorized to write
  490  and is actually writing or renewing personal lines residential
  491  property coverage, commercial residential property coverage, or
  492  commercial nonresidential property coverage within the state.
  493         15. Must provide a premium payment plan option to its
  494  policyholders which, at a minimum, allows for quarterly and
  495  semiannual payment of premiums. A monthly payment plan may, but
  496  is not required to, be offered.
  497         16. Must limit coverage on mobile homes or manufactured
  498  homes built before 1994 to actual cash value of the dwelling
  499  rather than replacement costs of the dwelling.
  500         17. Must provide coverage for manufactured or mobile home
  501  dwellings. Such coverage must also include the following
  502  attached structures:
  503         a. Screened enclosures that are aluminum framed or screened
  504  enclosures that are not covered by the same or substantially the
  505  same materials as those of the primary dwelling;
  506         b. Carports that are aluminum or carports that are not
  507  covered by the same or substantially the same materials as those
  508  of the primary dwelling; and
  509         c. Patios that have a roof covering that is constructed of
  510  materials that are not the same or substantially the same
  511  materials as those of the primary dwelling.
  512  
  513  The corporation shall make available a policy for mobile homes
  514  or manufactured homes for a minimum insured value of at least
  515  $3,000.
  516         18. May provide such limits of coverage as the board
  517  determines, consistent with the requirements of this subsection.
  518         19. May require commercial property to meet specified
  519  hurricane mitigation construction features as a condition of
  520  eligibility for coverage.
  521         20. Must provide that new or renewal policies issued by the
  522  corporation on or after January 1, 2012, which cover sinkhole
  523  loss do not include coverage for any loss to appurtenant
  524  structures, driveways, sidewalks, decks, or patios that are
  525  directly or indirectly caused by sinkhole activity. The
  526  corporation shall exclude such coverage using a notice of
  527  coverage change, which may be included with the policy renewal,
  528  and not by issuance of a notice of nonrenewal of the excluded
  529  coverage upon renewal of the current policy.
  530         21. As of January 1, 2012, must require that the agent
  531  obtain from an applicant for coverage from the corporation an
  532  acknowledgment signed by the applicant, which includes, at a
  533  minimum, the following statement:
  534                ACKNOWLEDGMENT OF POTENTIAL SURCHARGE              
  535                      AND ASSESSMENT LIABILITY:                    
  536         1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
  537  CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
  538  DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
  539  MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
  540  PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
  541  POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
  542  OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
  543  LEGISLATURE.
  544         2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
  545  SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
  546  BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
  547  BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
  548  PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
  549  WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
  550  ARE REGULATED AND APPROVED BY THE STATE.
  551         3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
  552  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
  553  INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
  554  FLORIDA LEGISLATURE.
  555         4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
  556  CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
  557  STATE OF FLORIDA.
  558         a. The corporation shall maintain, in electronic format or
  559  otherwise, a copy of the applicant’s signed acknowledgment and
  560  provide a copy of the statement to the policyholder as part of
  561  the first renewal after the effective date of this subparagraph.
  562         b. The signed acknowledgment form creates a conclusive
  563  presumption that the policyholder understood and accepted his or
  564  her potential surcharge and assessment liability as a
  565  policyholder of the corporation.
  566         (x)1. The following records of the corporation are
  567  confidential and exempt from the provisions of s. 119.07(1) and
  568  s. 24(a), Art. I of the State Constitution:
  569         a. Underwriting files, except that a policyholder or an
  570  applicant shall have access to his or her own underwriting
  571  files. Confidential and exempt underwriting file records may
  572  also be released to other governmental agencies upon written
  573  request and demonstration of need; such records held by the
  574  receiving agency remain confidential and exempt as provided
  575  herein.
  576         b. Claims files, until termination of all litigation and
  577  settlement of all claims arising out of the same incident,
  578  although portions of the claims files may remain exempt, as
  579  otherwise provided by law. Confidential and exempt claims file
  580  records may be released to other governmental agencies upon
  581  written request and demonstration of need; such records held by
  582  the receiving agency remain confidential and exempt as provided
  583  herein.
  584         c. Records obtained or generated by an internal auditor
  585  pursuant to a routine audit, until the audit is completed, or if
  586  the audit is conducted as part of an investigation, until the
  587  investigation is closed or ceases to be active. An investigation
  588  is considered “active” while the investigation is being
  589  conducted with a reasonable, good faith belief that it could
  590  lead to the filing of administrative, civil, or criminal
  591  proceedings.
  592         d. Matters reasonably encompassed in privileged attorney
  593  client communications.
  594         e. Proprietary information licensed to the corporation
  595  under contract and the contract provides for the confidentiality
  596  of such proprietary information.
  597         f. All information relating to the medical condition or
  598  medical status of a corporation employee which is not relevant
  599  to the employee’s capacity to perform his or her duties, except
  600  as otherwise provided in this paragraph. Information that is
  601  exempt shall include, but is not limited to, information
  602  relating to workers’ compensation, insurance benefits, and
  603  retirement or disability benefits.
  604         g. Upon an employee’s entrance into the employee assistance
  605  program, a program to assist any employee who has a behavioral
  606  or medical disorder, substance abuse problem, or emotional
  607  difficulty which affects the employee’s job performance, all
  608  records relative to that participation shall be confidential and
  609  exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
  610  of the State Constitution, except as otherwise provided in s.
  611  112.0455(11).
  612         h. Information relating to negotiations for financing,
  613  reinsurance, depopulation, or contractual services, until the
  614  conclusion of the negotiations.
  615         i. Minutes of closed meetings regarding underwriting files,
  616  and minutes of closed meetings regarding an open claims file
  617  until termination of all litigation and settlement of all claims
  618  with regard to that claim, except that information otherwise
  619  confidential or exempt by law shall be redacted.
  620         2. If an authorized insurer is considering underwriting a
  621  risk insured by the corporation, relevant underwriting files and
  622  confidential claims files may be released to the insurer
  623  provided the insurer agrees in writing, notarized and under
  624  oath, to maintain the confidentiality of such files. If a file
  625  is transferred to an insurer, that file is no longer a public
  626  record because it is not held by an agency subject to the
  627  provisions of the public records law. Underwriting files and
  628  confidential claims files may also be released to staff and the
  629  board of governors of the market assistance plan established
  630  pursuant to s. 627.3515, who must retain the confidentiality of
  631  such files, except such files may be released to authorized
  632  insurers that are considering assuming the risks to which the
  633  files apply, provided the insurer agrees in writing, notarized
  634  and under oath, to maintain the confidentiality of such files.
  635  Finally, the corporation or the board or staff of the market
  636  assistance plan may make the following information obtained from
  637  underwriting files and confidential claims files available to
  638  licensed general lines insurance agents: name, address, and
  639  telephone number of the residential property owner or insured;
  640  location of the risk; rating information; loss history; and
  641  policy type. The receiving licensed general lines insurance
  642  agent must retain the confidentiality of the information
  643  received and may use the information only for the purposes of
  644  developing a take-out plan to be submitted to the office for
  645  approval or otherwise analyzing the underwriting of a risk or
  646  risks insured by the corporation on behalf of the private
  647  insurance market. The licensed general lines agent and an
  648  insurer receiving information under this subparagraph may not
  649  use the information for the direct solicitation of
  650  policyholders. An entity that has obtained a permit to become an
  651  authorized insurer, a reinsurer, a reinsurance broker, or a
  652  modeling company may receive the information available to a
  653  licensed general lines agent for the sole purpose of analyzing
  654  risks for underwriting in the private insurance market and must
  655  retain the confidentiality of the information received. Such
  656  entities may not use the information for the direct solicitation
  657  of policyholders.
  658         3. A policyholder who has filed suit against the
  659  corporation has the right to discover the contents of his or her
  660  own claims file to the same extent that discovery of such
  661  contents would be available from a private insurer in litigation
  662  as provided by the Florida Rules of Civil Procedure, the Florida
  663  Evidence Code, and other applicable law. Pursuant to subpoena, a
  664  third party has the right to discover the contents of an
  665  insured’s or applicant’s underwriting or claims file to the same
  666  extent that discovery of such contents would be available from a
  667  private insurer by subpoena as provided by the Florida Rules of
  668  Civil Procedure, the Florida Evidence Code, and other applicable
  669  law, and subject to any confidentiality protections requested by
  670  the corporation and agreed to by the seeking party or ordered by
  671  the court. The corporation may release confidential underwriting
  672  and claims file contents and information as it deems necessary
  673  and appropriate to underwrite or service insurance policies and
  674  claims, subject to any confidentiality protections deemed
  675  necessary and appropriate by the corporation.
  676         4. Portions of meetings of the corporation are exempt from
  677  the provisions of s. 286.011 and s. 24(b), Art. I of the State
  678  Constitution wherein confidential underwriting files or
  679  confidential open claims files are discussed. All portions of
  680  corporation meetings which are closed to the public shall be
  681  recorded by a court reporter. The court reporter shall record
  682  the times of commencement and termination of the meeting, all
  683  discussion and proceedings, the names of all persons present at
  684  any time, and the names of all persons speaking. No portion of
  685  any closed meeting shall be off the record. Subject to the
  686  provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s
  687  notes of any closed meeting shall be retained by the corporation
  688  for a minimum of 5 years. A copy of the transcript, less any
  689  exempt matters, of any closed meeting wherein claims are
  690  discussed shall become public as to individual claims after
  691  settlement of the claim.
  692         (ii) The corporation shall revise the programs adopted
  693  pursuant to sub-subparagraph (6)(q)3.a. to maximize policyholder
  694  options and encourage increased participation by insurers and
  695  agents.
  696         1. After January 1, 2016, such revisions must include a
  697  process by which policyholders are informed if one or more
  698  insurers demonstrate an interest in taking out that policy from
  699  the corporation. This demonstration of interest must include the
  700  amount of the estimated premium, a description of the coverage,
  701  including an explanation of differences, and a comparison of the
  702  estimated premium and coverage offered by the insurer to the
  703  estimated premium and coverage provided by the corporation. The
  704  corporation shall develop a uniform format for the estimated
  705  premium and coverage information required by this subparagraph.
  706  After January 1, 2016, a policy may not be taken out from the
  707  corporation unless the provisions of this subparagraph are met.
  708         2. A policyholder may elect not to be solicited for take
  709  out offers more than once in a 6-month period.
  710         3. A policyholder whose policy was taken out by an insurer
  711  in the previous 36 months is considered a renewal policyholder
  712  under s. 627.3518 if the corporation determines that the insurer
  713  continues to insure the policyholder and that the initial
  714  premium of the insurer exceeded its estimated premium by more
  715  than 10 percent or the insurer increased the rate on the policy
  716  in excess of the increase allowed for the corporation under
  717  subparagraph (6)(n)6.
  718         Section 2. This act shall take effect July 1, 2015.