CS for SB 1770                 Corrected Copy   Second Engrossed
       
       
       
       
       
       
       
       
       20131770e2
       
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         215.555, F.S.; changing the name of the Florida
    4         Hurricane Catastrophe Fund Finance Corporation to the
    5         State Board of Administration Finance Corporation;
    6         amending s. 624.155, F.S.; providing that Citizens
    7         Property Insurance Corporation is an insurer subject
    8         to civil actions as an agent of the state covered by
    9         sovereign immunity; amending s. 626.752, F.S.,
   10         relating to the exchange of business between an agent
   11         and insurer; providing an exemption from the
   12         requirements of that section to the corporation or
   13         certain private entities under certain circumstances;
   14         amending s. 627.062, F.S.; requiring the Office of
   15         Insurance Regulation to calculate and publish
   16         insurance inflation factors for use in residential
   17         property insurance filings; prohibiting the office
   18         from disapproving a rate as excessive due to the
   19         insurer’s purchase of reinsurance for certain
   20         purposes; deleting obsolete provisions; conforming
   21         cross-references; amending s. 627.0628, F.S.; adding a
   22         member to the Florida Commission on Hurricane Loss
   23         Projection Methodology; amending s. 627.0629, F.S.;
   24         requiring insurers to provide notice of mitigation
   25         discounts in a residential property insurance rate
   26         filing; amending s. 627.351, F.S.; revising
   27         legislative intent with respect to the corporation;
   28         reducing the value of residential structures that can
   29         be covered by the corporation; revising the
   30         corporation’s eligibility criteria for structures
   31         located seaward of the coastal construction control
   32         line; requiring the corporation’s board of governors
   33         to concur with certain decisions by the executive
   34         director; providing for risk-sharing agreements
   35         between the corporation and other insurers and
   36         specifying the requirements and limitations of such
   37         agreements; revising provisions relating to the
   38         appointment of the board of governors and the
   39         executive director; providing that renewal policies
   40         are not eligible for continued coverage by the
   41         corporation unless the premium for comparable coverage
   42         from an authorized insurer exceeds a certain amount;
   43         deleting provisions allowing a policyholder removed
   44         from the corporation to remain eligible for coverage
   45         regardless of an offer of coverage from an authorized
   46         insurer; revising corporation criteria for appointing
   47         agents; requiring the corporation to provide coverage
   48         for mobile homes or manufactured homes and related
   49         structures; requiring disclosure of potential
   50         corporation surcharges and policyholder obligations to
   51         try and obtain private market coverage; revising
   52         provisions relating to the Auditor General’s review of
   53         the corporation; requiring the board to contract with
   54         an independent auditing firm to conduct performance
   55         audits; authorizing the corporation to adopt programs
   56         that encourage insurers to remove policies from the
   57         corporation through a loan secured by a surplus note;
   58         deleting a provision exempting the corporation from
   59         state procurement requirements; requiring the
   60         corporation to have an inspector general; providing
   61         for appointment; providing duties; requiring an annual
   62         report to the Legislature; revising provisions
   63         relating to purchases by the corporation; providing
   64         that the corporation is subject to state agency
   65         purchasing requirements; requiring the corporation to
   66         provide notice of purchasing decisions; providing
   67         procedures for protesting such decisions; providing
   68         applicability; revising the corporation’s rate
   69         standards; requiring that corporation rates be
   70         competitive with approved rates charged in the
   71         admitted market, actuarially sound, and include a
   72         catastrophe risk factor; requiring the corporation to
   73         annually certify its rates; requiring the board of
   74         directors to provide recommendations to the
   75         Legislature on ways of providing rate relief to those
   76         who demonstrate a financial need; deleting obsolete
   77         provisions; creating s. 627.3518, F.S.; establishing a
   78         clearinghouse within the corporation for identifying
   79         and diverting insurance coverage to private insurers;
   80         providing definitions; providing requirements and
   81         duties of the corporation, insurers, and agents;
   82         amending s. 627.3519, F.S.; revising requirements
   83         relating to the preparation of the annual reports
   84         relating to the Florida Hurricane Catastrophe Fund and
   85         Citizens Property Insurance Corporation; establishing
   86         a temporary keepout program that allows authorized
   87         insurers to provide coverage to applicants for
   88         coverage through the corporation through the market
   89         assistance program until the clearinghouse is
   90         operational; providing program components; providing
   91         for expiration; creating s. 627.352, F.S.; creating
   92         the Catastrophe Risk Capital Access Facility to
   93         facilitate insurer access to global risk capital
   94         markets and risk-transfer mechanisms; providing
   95         legislative findings and intent; providing that the
   96         facility may not operate as an insurer, reinsurer, or
   97         other risk-bearing entity, and is not a state agency,
   98         board, or commission; providing for membership;
   99         providing for an initial governing board which must
  100         submit a proposed plan of operation to the Office of
  101         Insurance Regulation and recommendations relating to
  102         public records and open meetings to the Legislature by
  103         a certain date; providing for termination of the
  104         initial board; providing for a permanent board;
  105         specifying provisions that must be addressed by the
  106         plan of operation; providing immunity from liability
  107         for the board; amending s. 627.410, F.S.; conforming
  108         provisions to changes made by the act; amending s.
  109         627.706, F.S.; authorizing an insurer to offer a
  110         reduced amount of sinkhole coverage with an
  111         appropriate reduction in premium; providing effective
  112         dates.
  113  
  114  Be It Enacted by the Legislature of the State of Florida:
  115  
  116         Section 1. Paragraph (n) of subsection (2) and paragraph
  117  (d) of subsection (6) of section 215.555, Florida Statutes, are
  118  amended to read:
  119         215.555 Florida Hurricane Catastrophe Fund.—
  120         (2) DEFINITIONS.—As used in this section:
  121         (n) “Corporation” means the State Board of Administration
  122  Florida Hurricane Catastrophe Fund Finance Corporation created
  123  in paragraph (6)(d).
  124         (6) REVENUE BONDS.—
  125         (d) State Board of Administration Florida Hurricane
  126  Catastrophe Fund Finance Corporation.—
  127         1. In addition to the findings and declarations in
  128  subsection (1), the Legislature also finds and declares that:
  129         a. The public benefits corporation created under this
  130  paragraph will provide a mechanism necessary for the cost
  131  effective and efficient issuance of bonds. This mechanism will
  132  eliminate unnecessary costs in the bond issuance process,
  133  thereby increasing the amounts available for to pay
  134  reimbursement for losses to property sustained as a result of
  135  hurricane damage.
  136         b. The purpose of such bonds is to fund reimbursements
  137  through the Florida Hurricane Catastrophe Fund to pay for the
  138  costs of construction, reconstruction, repair, restoration, and
  139  other costs associated with damage to properties of
  140  policyholders of covered policies due to the occurrence of a
  141  hurricane.
  142         c. The efficacy of the financing mechanism will be enhanced
  143  by the corporation’s ownership of the assessments, by the
  144  insulation of the assessments from possible bankruptcy
  145  proceedings, and by covenants of the state with the
  146  corporation’s bondholders.
  147         2.a.The State Board of Administration Finance Corporation
  148  There is created, which is a public benefits corporation and,
  149  which is an instrumentality of the state, to be known as the
  150  Florida Hurricane Catastrophe Fund Finance Corporation. The
  151  State Board of Administration Finance Corporation is for all
  152  purposes the successor to the Florida Hurricane Catastrophe Fund
  153  Finance Corporation.
  154         a.b. The corporation shall operate under a five-member
  155  board of directors consisting of the Governor or a designee, the
  156  Chief Financial Officer or a designee, the Attorney General or a
  157  designee, the director of the Division of Bond Finance of the
  158  State Board of Administration, and the Chief Operating Officer
  159  senior employee of the State Board of Administration responsible
  160  for operations of the Florida Hurricane Catastrophe Fund.
  161         b.c. The corporation has all of the powers of corporations
  162  under chapter 607 and under chapter 617, subject only to the
  163  provisions of this subsection.
  164         c.d. The corporation may issue bonds and engage in such
  165  other financial transactions as are necessary to provide
  166  sufficient funds to achieve the purposes of this section.
  167         d.e. The corporation may invest in any of the investments
  168  authorized under s. 215.47.
  169         e.f. There is shall be no liability on the part of, and no
  170  cause of action shall arise against, any board members or
  171  employees of the corporation for any actions taken by them in
  172  the performance of their duties under this paragraph.
  173         3.a. In actions under chapter 75 to validate any bonds
  174  issued by the corporation, the notice required by s. 75.06 must
  175  shall be published in two newspapers of general circulation in
  176  the state, and the complaint and order of the court shall be
  177  served only on the State Attorney of the Second Judicial
  178  Circuit.
  179         b. The state hereby covenants with holders of bonds of the
  180  corporation that the state will not repeal or abrogate the power
  181  of the board to direct the Office of Insurance Regulation to
  182  levy the assessments and to collect the proceeds of the revenues
  183  pledged to the payment of such bonds as long as any such bonds
  184  remain outstanding unless adequate provision has been made for
  185  the payment of such bonds pursuant to the documents authorizing
  186  the issuance of the such bonds.
  187         c.4. The bonds of the corporation are not a debt of the
  188  state or of any political subdivision, and neither the state nor
  189  any political subdivision is liable on such bonds. The
  190  corporation may not does not have the power to pledge the
  191  credit, the revenues, or the taxing power of the state or of any
  192  political subdivision. The credit, revenues, or taxing power of
  193  the state or of any political subdivision may shall not be
  194  deemed to be pledged to the payment of any bonds of the
  195  corporation.
  196         d.5.a. The property, revenues, and other assets of the
  197  corporation; the transactions and operations of the corporation
  198  and the income from such transactions and operations; and all
  199  bonds issued under this paragraph and interest on such bonds are
  200  exempt from taxation by the state and any political subdivision,
  201  including the intangibles tax under chapter 199 and the income
  202  tax under chapter 220. This exemption does not apply to any tax
  203  imposed by chapter 220 on interest, income, or profits on debt
  204  obligations owned by corporations other than the State Board of
  205  Administration Florida Hurricane Catastrophe Fund Finance
  206  Corporation.
  207         e.b. All bonds of the corporation are shall be and
  208  constitute legal investments without limitation for all public
  209  bodies of this state; for all banks, trust companies, savings
  210  banks, savings associations, savings and loan associations, and
  211  investment companies; for all administrators, executors,
  212  trustees, and other fiduciaries; for all insurance companies and
  213  associations and other persons carrying on an insurance
  214  business; and for all other persons who are now or may hereafter
  215  be authorized to invest in bonds or other obligations of the
  216  state and are shall be and constitute eligible securities to be
  217  deposited as collateral for the security of any state, county,
  218  municipal, or other public funds. This sub-subparagraph shall be
  219  considered as additional and supplemental authority and may
  220  shall not be limited without specific reference to this sub
  221  subparagraph.
  222         4.6. The corporation and its corporate existence shall
  223  continue until terminated by law; however, no such law shall
  224  take effect as long as the corporation has bonds outstanding
  225  unless adequate provision has been made for the payment of such
  226  bonds pursuant to the documents authorizing the issuance of such
  227  bonds. Upon termination of the existence of the corporation, all
  228  of its rights and properties in excess of its obligations shall
  229  pass to and be vested in the state.
  230         Section 2. Subsection (1) of section 624.155, Florida
  231  Statutes, is amended and subsection (10) is added to that
  232  section, to read:
  233         624.155 Civil remedy.—
  234         (1) Any person may bring a civil action against an insurer,
  235  including Citizens Property Insurance Corporation, if when such
  236  person is damaged:
  237         (a) By a violation of any of the following provisions by
  238  the insurer:
  239         1. Section 626.9541(1)(i), (o), or (x);
  240         2. Section 626.9551;
  241         3. Section 626.9705;
  242         4. Section 626.9706;
  243         5. Section 626.9707; or
  244         6. Section 627.7283.
  245         (b) By the commission of any of the following acts by the
  246  insurer:
  247         1. Not attempting in good faith to settle claims if when,
  248  under all the circumstances, it could and should have done so,
  249  had it acted fairly and honestly toward its insured and with due
  250  regard for her or his interests;
  251         2. Making claims payments to insureds or beneficiaries not
  252  accompanied by a statement setting forth the coverage under
  253  which payments are being made; or
  254         3. Except as to liability coverages, failing to promptly
  255  settle claims, when the obligation to settle a claim has become
  256  reasonably clear, under one portion of the insurance policy
  257  coverage in order to influence settlements under other portions
  258  of the insurance policy coverage.
  259  
  260  Notwithstanding the provisions of this subsection the above to
  261  the contrary, a person pursuing a remedy under this section need
  262  not prove that such act was committed or performed with such
  263  frequency as to indicate a general business practice.
  264         (10) For the purposes of this section, Citizens Property
  265  Insurance Corporation is an agent of the state covered by s.
  266  768.28, and any cause of action brought pursuant to this section
  267  is considered a tort action against the corporation and the
  268  limits of s. 768.28 applicable to tort actions apply.
  269         Section 3. Subsection (4) of section 626.752, Florida
  270  Statutes, is amended to read:
  271         626.752 Exchange of business.—
  272         (4) The foregoing limitations and restrictions do shall not
  273  be construed and shall not apply to the placing of surplus lines
  274  business under the provisions of part VIII, or to the activities
  275  of Citizens Property Insurance Corporation when placing new and
  276  renewal business with authorized insurers in accordance with s.
  277  627.3518.
  278         Section 4. Subsection (2) and paragraph (d) of subsection
  279  (3) of section 627.062, Florida Statutes, are amended to read:
  280         627.062 Rate standards.—
  281         (2) As to all such classes of insurance:
  282         (a) Insurers or rating organizations shall establish and
  283  use rates, rating schedules, or rating manuals that allow the
  284  insurer a reasonable rate of return on the classes of insurance
  285  written in this state. A copy of rates, rating schedules, rating
  286  manuals, premium credits or discount schedules, and surcharge
  287  schedules, and changes thereto, must be filed with the office in
  288  accordance with under one of the following procedures:
  289         1. If the filing is made at least 90 days before the
  290  proposed effective date and is not implemented during the
  291  office’s review of the filing and any proceeding and judicial
  292  review, such filing is considered a “file and use” filing. In
  293  such case, the office shall finalize its review by issuance of a
  294  notice of intent to approve or a notice of intent to disapprove
  295  within 90 days after receipt of the filing. The notice of intent
  296  to approve and the notice of intent to disapprove constitute
  297  agency action for purposes of the Administrative Procedure Act.
  298  Requests for supporting information, requests for mathematical
  299  or mechanical corrections, or notification to the insurer by the
  300  office of its preliminary findings does not toll the 90-day
  301  period during any such proceedings and subsequent judicial
  302  review. The rate shall be deemed approved if the office does not
  303  issue a notice of intent to approve or a notice of intent to
  304  disapprove within 90 days after receipt of the filing.
  305         2. If the filing is not made in accordance with
  306  subparagraph 1., such filing must be made as soon as
  307  practicable, but within 30 days after the effective date, and is
  308  considered a “use and file” filing. An insurer making a “use and
  309  file” filing is potentially subject to an order by the office to
  310  return to policyholders those portions of rates found to be
  311  excessive to policyholders, as provided in paragraph (i) (h).
  312         3. For all property insurance filings made or submitted
  313  after January 25, 2007, but before May 1, 2012, an insurer
  314  seeking a rate that is greater than the rate most recently
  315  approved by the office shall make a “file and use” filing. For
  316  purposes of this subparagraph, motor vehicle collision and
  317  comprehensive coverages are not considered property coverages.
  318         (b) Upon receiving a rate filing, the office shall review
  319  the filing to determine if a rate is excessive, inadequate, or
  320  unfairly discriminatory. In making that determination, the
  321  office shall, in accordance with generally accepted and
  322  reasonable actuarial techniques, consider the following factors:
  323         1. Past and prospective loss experience within and without
  324  this state.
  325         2. Past and prospective expenses.
  326         3. The degree of competition among insurers for the risk
  327  insured.
  328         4. Investment income reasonably expected by the insurer,
  329  consistent with the insurer’s investment practices, from
  330  investable premiums anticipated from in the filing, plus any
  331  other expected income from currently invested assets
  332  representing the amount expected on unearned premium reserves
  333  and loss reserves. The commission may adopt rules that use using
  334  reasonable techniques of actuarial science and economics to
  335  specify the manner in which insurers calculate investment income
  336  attributable to classes of insurance written in this state and
  337  the manner in which investment income is used to calculate
  338  insurance rates. Such rules manner must allow contemplate
  339  allowances for an underwriting profit factor and full
  340  consideration of investment income which produce a reasonable
  341  rate of return; however, investment income from invested surplus
  342  may not be considered.
  343         5. The reasonableness of the judgment reflected in the
  344  filing.
  345         6. Dividends, savings, or unabsorbed premium deposits
  346  allowed or returned to state Florida policyholders, members, or
  347  subscribers.
  348         7. The adequacy of loss reserves.
  349         8. The cost of reinsurance. The office may not disapprove a
  350  rate as excessive solely due solely to the insurer having
  351  obtained catastrophic reinsurance to cover the insurer’s
  352  estimated 250-year probable maximum loss or any lower level of
  353  loss, or due solely to an admitted carrier purchasing private
  354  reinsurance that would insure against potential deficits within
  355  the Florida Hurricane Catastrophe Fund which the most recent
  356  estimate made pursuant to s. 215.555(4)(c)2. predicts would be
  357  funded through revenue bonds issued under s. 215.555(6).
  358         9. Trend factors, including trends in actual losses per
  359  insured unit for the insurer making the filing.
  360         10. Conflagration and catastrophe hazards, if applicable.
  361         11. Projected hurricane losses, if applicable, which must
  362  be estimated using a model or method found to be acceptable or
  363  reliable by the Florida Commission on Hurricane Loss Projection
  364  Methodology, and as further provided in s. 627.0628.
  365         12. A reasonable margin for underwriting profit and
  366  contingencies.
  367         13. The cost of medical services, if applicable.
  368         14. Other relevant factors that affect the frequency or
  369  severity of claims or expenses.
  370         (c) The office shall calculate and publish insurance
  371  inflation factors based on noncatastrophe direct loss costs for
  372  use in residential property insurance filings. The office shall
  373  update the published factors at least annually and make them
  374  available on its website. The calculation of insurance inflation
  375  factors are not subject to rulemaking under chapter 120.
  376         1. An insurer making a residential property insurance rate
  377  filing that proposes a change in noncatastrophe base rates by a
  378  uniform factor equal to or less than the applicable published
  379  insurance inflation factor, may make a rate filing under s.
  380  627.0645 which consists of a rate certification in lieu of a
  381  full rate filing under paragraph (a). The office shall verify
  382  insurer use of the appropriate published inflation factor and,
  383  if the inflation factor is used appropriately, the filed rates
  384  shall be deemed not excessive.
  385         2. An insurer filing under this paragraph may make a
  386  separate filing pursuant to paragraph (l) to adjust its rates
  387  for reinsurance rates, reinsurance financing costs and products,
  388  and cash buildup factor costs. The insurance inflation factors
  389  do not apply to these filings.
  390         3. This paragraph does not apply to filings made by
  391  Citizens Property Insurance Corporation.
  392         (d)(c) In the case of fire insurance rates, consideration
  393  must be given to the availability of water supplies and the
  394  experience of the fire insurance business during a period of not
  395  less than the most recent 5-year or longer period for which such
  396  experience is available.
  397         (e)(d) If conflagration or catastrophe hazards are
  398  considered by an insurer in its rates or rating plan, including
  399  surcharges and discounts, the insurer must shall establish a
  400  reserve for that portion of the premium allocated to such hazard
  401  and maintain the premium in a catastrophe reserve. Removal of
  402  such premiums from the reserve for purposes other than paying
  403  claims associated with a catastrophe or purchasing reinsurance
  404  for catastrophes must be approved by the office. Any ceding
  405  commission received by an insurer purchasing reinsurance for
  406  catastrophes must be placed in the catastrophe reserve.
  407         (f)(e) After consideration of the rate factors provided in
  408  paragraphs (b), (c), and (d), and (e) the office may find a rate
  409  to be excessive, inadequate, or unfairly discriminatory based
  410  upon the following standards:
  411         1. Rates shall be deemed excessive if they are likely to
  412  produce a profit from Florida business which is unreasonably
  413  high in relation to the risk involved in the class of business
  414  or if expenses are unreasonably high in relation to services
  415  rendered.
  416         2. Rates shall be deemed excessive if, among other things,
  417  the rate structure established by a stock insurance company
  418  provides for replenishment of surpluses from premiums, if such
  419  the replenishment is attributable to investment losses.
  420         3. Rates shall be deemed inadequate if they are clearly
  421  insufficient, together with the investment income attributable
  422  to them, they are clearly insufficient to sustain projected
  423  losses and expenses in the class of business to which they
  424  apply.
  425         4. A rating plan, including discounts, credits, or
  426  surcharges, shall be deemed unfairly discriminatory if it fails
  427  to clearly and equitably reflect consideration of the
  428  policyholder’s participation in a risk management program
  429  adopted pursuant to s. 627.0625.
  430         5. A rate shall be deemed inadequate as to the premium
  431  charged to a risk or group of risks if discounts or credits are
  432  allowed which exceed a reasonable reflection of expense savings
  433  and reasonably expected loss experience from the risk or group
  434  of risks.
  435         6. A rate shall be deemed unfairly discriminatory as to a
  436  risk or group of risks if the application of premium discounts,
  437  credits, or surcharges among such risks does not bear a
  438  reasonable relationship to the expected loss and expense
  439  experience among the various risks.
  440         (g)(f) In reviewing a rate filing, the office may require
  441  the insurer to provide, at the insurer’s expense, all
  442  information necessary to evaluate the condition of the company
  443  and the reasonableness of the filing according to the criteria
  444  enumerated in this section.
  445         (h)(g) The office may at any time review a rate, rating
  446  schedule, rating manual, or rate change; the pertinent records
  447  of the insurer; and market conditions. If the office finds on a
  448  preliminary basis that a rate may be excessive, inadequate, or
  449  unfairly discriminatory, the office shall initiate proceedings
  450  to disapprove the rate and shall so notify the insurer. However,
  451  the office may not disapprove as excessive any rate for which it
  452  has given final approval or which has been deemed approved for 1
  453  year after the effective date of the filing unless the office
  454  finds that a material misrepresentation or material error was
  455  made by the insurer or was contained in the filing. Upon
  456  notification being notified, the insurer or rating organization
  457  shall, within 60 days, file with the office all information
  458  that, in the belief of the insurer or organization, proves the
  459  reasonableness, adequacy, and fairness of the rate or rate
  460  change. The office shall issue a notice of intent to approve or
  461  a notice of intent to disapprove pursuant to paragraph (a)
  462  within 90 days after receipt of the insurer’s initial response.
  463  In such instances and in any administrative proceeding relating
  464  to the legality of the rate, the insurer or rating organization
  465  shall carry the burden of proof of showing, by a preponderance
  466  of the evidence, to show that the rate is not excessive,
  467  inadequate, or unfairly discriminatory. After the office
  468  notifies an insurer that a rate may be excessive, inadequate, or
  469  unfairly discriminatory, unless the office withdraws the
  470  notification, the insurer may not alter the rate except to
  471  conform to the office’s notice until the earlier of 120 days
  472  after the date the notification was provided or 180 days after
  473  the date of implementing the rate. The office, Subject to
  474  chapter 120, the office may disapprove without the 60-day
  475  notification any rate increase filed by an insurer within the
  476  prohibited time period or during the time that the legality of
  477  the increased rate is being contested.
  478         (i)(h) If the office finds that a rate or rate change is
  479  excessive, inadequate, or unfairly discriminatory, the office
  480  shall issue an order of disapproval requiring specifying that a
  481  new rate or rate schedule, which responds to the findings of the
  482  office, be filed by the insurer. The office shall further order,
  483  for any “use and file” filing made in accordance with
  484  subparagraph (a)2., that the portion of premiums charged which
  485  constitute each policyholder constituting the portion of the
  486  rate above that which was actuarially justified be returned to
  487  the policyholder in the form of a credit or refund. If the
  488  office finds that an insurer’s rate or rate change is
  489  inadequate, the new rate or rate schedule filed with the office
  490  in response to such a finding applies is applicable only to new
  491  or renewal business of the insurer written by the insurer on or
  492  after the effective date of the responsive filing.
  493         (j)(i) Except as otherwise specifically provided in this
  494  chapter, for property and casualty insurance the office may not
  495  directly or indirectly:
  496         1. Prohibit an any insurer, including any residual market
  497  plan or joint underwriting association, from paying acquisition
  498  costs based on the full amount of premium, as defined in s.
  499  627.403, applicable to any policy, or prohibit any such insurer
  500  from including the full amount of acquisition costs in a rate
  501  filing; or
  502         2. Impede, abridge, or otherwise compromise an insurer’s
  503  right to acquire policyholders, advertise, or appoint agents,
  504  including the calculation, manner, or amount of such agent
  505  commissions, if any.
  506         (k)(j) With respect to residential property insurance rate
  507  filings, the rate filing must account for mitigation measures
  508  undertaken by policyholders to reduce hurricane losses.
  509         (l)(k)1. A residential property insurer may make a separate
  510  filing limited solely to an adjustment of its rates for
  511  reinsurance, the cost of financing products used as a
  512  replacement for reinsurance, financing costs incurred in the
  513  purchase of reinsurance, and the actual cost paid due to the
  514  application of the cash build-up factor pursuant to s.
  515  215.555(5)(b) if the insurer:
  516         a. Elects to purchase financing products, such as a
  517  liquidity instrument or line of credit, in which case the cost
  518  included in filing for the liquidity instrument or line of
  519  credit may not result in a premium increase exceeding 3 percent
  520  for any individual policyholder. All costs contained in the
  521  filing may not result in an overall premium increase of more
  522  than 15 percent for any individual policyholder.
  523         b. Includes in the filing a copy of all of its reinsurance,
  524  liquidity instrument, or line of credit contracts; proof of the
  525  billing or payment for the contracts; and the calculation upon
  526  which the proposed rate change is based demonstrating that the
  527  costs meet the criteria of this section.
  528         2. An insurer that purchases reinsurance or financing
  529  products from an affiliated company may make a separate filing
  530  only if the costs for such reinsurance or financing products are
  531  charged at or below charges made for comparable coverage by
  532  nonaffiliated reinsurers or financial entities making such
  533  coverage or financing products available in this state.
  534         3. An insurer may make only one filing per 12-month period
  535  under this paragraph.
  536         4. An insurer that elects to implement a rate change under
  537  this paragraph must file its rate filing with the office at
  538  least 45 days before the effective date of the rate change.
  539  After an insurer submits a complete filing that meets all of the
  540  requirements of this paragraph, the office has 45 days after the
  541  date of the filing to review the rate filing and determine if
  542  the rate is excessive, inadequate, or unfairly discriminatory.
  543  
  544  The provisions of this subsection do not apply to workers’
  545  compensation, employer’s liability insurance, and motor vehicle
  546  insurance.
  547         (3)
  548         (d)1. The following categories or kinds of insurance and
  549  types of commercial lines risks are not subject to paragraph
  550  (2)(a) or paragraph (2)(g) (2)(f):
  551         a. Excess or umbrella.
  552         b. Surety and fidelity.
  553         c. Boiler and machinery and leakage and fire extinguishing
  554  equipment.
  555         d. Errors and omissions.
  556         e. Directors and officers, employment practices, fiduciary
  557  liability, and management liability.
  558         f. Intellectual property and patent infringement liability.
  559         g. Advertising injury and Internet liability insurance.
  560         h. Property risks rated under a highly protected risks
  561  rating plan.
  562         i. General liability.
  563         j. Nonresidential property, except for collateral
  564  protection insurance as defined in s. 624.6085.
  565         k. Nonresidential multiperil.
  566         l. Excess property.
  567         m. Burglary and theft.
  568         n. Any other commercial lines categories or kinds of
  569  insurance or types of commercial lines risks that the office
  570  determines should not be subject to paragraph (2)(a) or
  571  paragraph (2)(g) (2)(f) because of the existence of a
  572  competitive market for such insurance, similarity of such
  573  insurance to other categories or kinds of insurance not subject
  574  to paragraph (2)(a) or paragraph (2)(g) (2)(f), or to improve
  575  the general operational efficiency of the office.
  576         2. Insurers or rating organizations shall establish and use
  577  rates, rating schedules, or rating manuals that to allow the
  578  insurer a reasonable rate of return on insurance and risks
  579  described in subparagraph 1. which are written in this state.
  580         3. An insurer must notify the office of any changes to
  581  rates for insurance and risks described in subparagraph 1.
  582  within 30 days after the effective date of the change. The
  583  notice must include the name of the insurer, the type or kind of
  584  insurance subject to rate change, total premium written during
  585  the immediately preceding year by the insurer for the type or
  586  kind of insurance subject to the rate change, and the average
  587  statewide percentage change in rates. Underwriting files,
  588  premiums, losses, and expense statistics relating with regard to
  589  such insurance and risks written by an insurer must be
  590  maintained by the insurer and subject to examination by the
  591  office. Upon examination, the office, in accordance with
  592  generally accepted and reasonable actuarial techniques, shall
  593  consider the rate factors in paragraphs (2)(b), (d) (c), and (e)
  594  (d) and the standards in paragraph (2)(f) (2)(e) to determine if
  595  the rate is excessive, inadequate, or unfairly discriminatory.
  596         4. A rating organization must notify the office of any
  597  changes to loss cost for insurance and risks described in
  598  subparagraph 1. within 30 days after the effective date of the
  599  change. The notice must include the name of the rating
  600  organization, the type or kind of insurance subject to a loss
  601  cost change, loss costs during the immediately preceding year
  602  for the type or kind of insurance subject to the loss cost
  603  change, and the average statewide percentage change in loss
  604  cost. Actuarial data relating with regard to changes to loss
  605  cost for risks not subject to paragraph (2)(a) or paragraph
  606  (2)(g) (2)(f) must be maintained by the rating organization for
  607  2 years after the effective date of the change and are subject
  608  to examination by the office. The office may require the rating
  609  organization to incur the costs associated with an examination.
  610  Upon examination, the office, in accordance with generally
  611  accepted and reasonable actuarial techniques, shall consider the
  612  rate factors in paragraphs (2)(b), (d), and (e) (2)(b)-(d) and
  613  the standards in paragraph (2)(f) (2)(e) to determine if the
  614  rate is excessive, inadequate, or unfairly discriminatory.
  615         Section 5. Paragraph (b) of subsection (2) of section
  616  627.0628, Florida Statutes, is amended to read:
  617         627.0628 Florida Commission on Hurricane Loss Projection
  618  Methodology; public records exemption; public meetings
  619  exemption.—
  620         (2) COMMISSION CREATED.—
  621         (b) The commission shall consist of the following 12 11
  622  members:
  623         1. The insurance consumer advocate.
  624         2. The senior employee of the State Board of Administration
  625  responsible for operations of the Florida Hurricane Catastrophe
  626  Fund.
  627         3. The Executive Director of the Citizens Property
  628  Insurance Corporation.
  629         4. The Director of the Division of Emergency Management.
  630         5. The actuary member of the Florida Hurricane Catastrophe
  631  Fund Advisory Council.
  632         6. An employee of the office who is an actuary responsible
  633  for property insurance rate filings and who is appointed by the
  634  director of the office.
  635         7. Five members appointed by the Chief Financial Officer,
  636  as follows:
  637         a. An actuary who is employed full time by a property and
  638  casualty insurer that was responsible for at least 1 percent of
  639  the aggregate statewide direct written premium for homeowner’s
  640  insurance in the calendar year preceding the member’s
  641  appointment to the commission.
  642         b. An expert in insurance finance who is a full-time member
  643  of the faculty of the State University System and who has a
  644  background in actuarial science.
  645         c. An expert in statistics who is a full-time member of the
  646  faculty of the State University System and who has a background
  647  in insurance.
  648         d. An expert in computer system design who is a full-time
  649  member of the faculty of the State University System.
  650         e. An expert in meteorology who is a full-time member of
  651  the faculty of the State University System and who specializes
  652  in hurricanes.
  653         8. A licensed professional structural engineer who is a
  654  full-time faculty member in the State University System and who
  655  has expertise in wind mitigation techniques. This appointment
  656  shall be made by the Governor.
  657         Section 6. Subsection (1) of section 627.0629, Florida
  658  Statutes, is amended to read:
  659         627.0629 Residential property insurance; rate filings.—
  660         (1) It is the intent of the Legislature that insurers
  661  provide savings to consumers who install or implement windstorm
  662  damage mitigation techniques, alterations, or solutions to their
  663  properties to prevent windstorm losses. A rate filing for
  664  residential property insurance must include notice of the
  665  mitigation discounts offered by the insurer, which must be
  666  actuarially reasonable discounts, credits, or other rate
  667  differentials, or appropriate reductions in deductibles, for
  668  properties on which fixtures or construction techniques
  669  demonstrated to reduce the amount of loss in a windstorm have
  670  been installed or implemented. The fixtures or construction
  671  techniques must include, but are not limited to, fixtures or
  672  construction techniques that enhance roof strength, roof
  673  covering performance, roof-to-wall strength, wall-to-floor-to
  674  foundation strength, opening protection, and the impact
  675  resistance of window, door, and skylight openings strength.
  676  Credits, discounts, or other rate differentials, or appropriate
  677  reductions in deductibles, for fixtures and construction
  678  techniques that meet the minimum requirements of the Florida
  679  Building Code must be included in the rate filing. The office
  680  shall determine the discounts, credits, other rate
  681  differentials, and appropriate reductions in deductibles that
  682  reflect the full actuarial value of such revaluation, which may
  683  be used by insurers in rate filings.
  684         Section 7. Paragraphs (a), (b), (c), (g), (i), (m), (q),
  685  (t), and (z) of subsection (6) of section 627.351, Florida
  686  Statutes, are amended, and paragraph (gg) is added to that
  687  subsection, to read:
  688         627.351 Insurance risk apportionment plans.—
  689         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
  690         (a) The public purpose of this subsection is to ensure that
  691  there is an orderly market for property insurance for residents
  692  and businesses of this state.
  693         1. The Legislature finds that private insurers are entering
  694  the Florida property insurance market unwilling or unable to
  695  provide affordable property insurance coverage in many regions
  696  of the state. The Legislature further finds that when Citizens
  697  Property Insurance Corporation offers rates that are not
  698  adequate to cover the average costs that are generated from the
  699  claims filed by its policyholders, the deficiency may create a
  700  financial burden on all other state policyholders who must
  701  purchase their own insurance from private insurers at full
  702  actuarial cost and pay an added fee to cover a portion of the
  703  cost for claims filed by policyholders of the corporation. The
  704  Legislature intends that the corporation not act as a barrier or
  705  competitor to the private insurance market but be available to
  706  residents of in this state only if there is no private market
  707  coverage available at rates determined reasonable by the Office
  708  of Insurance Regulation to the extent sought and needed. The
  709  absence of affordable property insurance threatens the public
  710  health, safety, and welfare and likewise threatens the economic
  711  health of the state. As the corporation has continued its rapid
  712  growth and exposure, it increasingly threatens state residents
  713  with having to absorb an even greater financial burden than they
  714  are currently bearing. The state, therefore, has a compelling
  715  public interest and a public purpose to assist in assuring that
  716  property in the state is insured and that it is insured at
  717  affordable, actuarially sound, noncompetitive rates so as to
  718  facilitate the remediation, reconstruction, and replacement of
  719  damaged or destroyed property without overburdening the
  720  policyholders of this state in order to reduce or avoid the
  721  negative effects on otherwise resulting to the public health,
  722  safety, and welfare; on, to the economy of the state; and on,
  723  and to the revenues of the state and local governments which are
  724  needed to provide for the public welfare. It is necessary,
  725  therefore, to make provide affordable, actuarially sound,
  726  noncompetitive property insurance available to applicants who
  727  are, in good faith, entitled to procure insurance through the
  728  voluntary market but are unable to do so. The Legislature
  729  intends, therefore, that affordable, actuarially sound,
  730  noncompetitive property insurance be provided and that it
  731  continue to be provided, as long as necessary, through Citizens
  732  Property Insurance Corporation, a government entity that is an
  733  integral part of the state, and that is not a private insurance
  734  company, or through referrals to private insurers participating
  735  in a clearinghouse established by the corporation. To that end,
  736  the corporation shall strive to promote increase the
  737  availability of affordable and actuarially sound private
  738  property insurance in this state, supplemented by coverage
  739  provided by the corporation if appropriate, while achieving
  740  efficiencies and economies, and while providing service to
  741  policyholders, applicants, and agents which is no less than the
  742  quality generally provided in the voluntary market, for the
  743  achievement of the foregoing public purposes. Because it is
  744  essential for this government entity to have the maximum
  745  financial resources to pay claims following a catastrophic
  746  hurricane, it is further the intent of the Legislature that the
  747  corporation continue to be an integral part of the state and not
  748  a private insurance company, and that the income of the
  749  corporation be exempt from federal income taxation, and that
  750  interest on the debt obligations issued by the corporation be
  751  exempt from federal income taxation.
  752         2. The Residential Property and Casualty Joint Underwriting
  753  Association originally created by this statute shall be known as
  754  the Citizens Property Insurance Corporation. The corporation
  755  shall provide insurance for residential and commercial property
  756  insurance, for applicants who are eligible entitled, but, in
  757  good faith, are unable to procure insurance through the
  758  voluntary market. The corporation shall operate pursuant to a
  759  plan of operation approved by order of the Financial Services
  760  Commission. The plan is subject to continuous review by the
  761  commission, and. the commission may, by order, withdraw approval
  762  of all or part of a plan if the commission determines that
  763  conditions have changed since approval was granted and that the
  764  purposes of the plan require changes in the plan. For the
  765  purposes of this subsection, residential coverage includes both
  766  personal lines residential coverage, which consists of the type
  767  of coverage provided by homeowner’s, mobile home owner’s,
  768  dwelling, tenant’s, condominium unit owner’s, and similar
  769  policies; and commercial lines residential coverage, which
  770  consists of the type of coverage provided by condominium
  771  association, apartment building, and similar policies.
  772         3. With respect to coverage for personal lines residential
  773  structures:
  774         a. Effective January 1, 2014 2009, a personal lines
  775  residential structure that has a dwelling replacement cost of $1
  776  $2 million or more, or a single condominium unit that has a
  777  combined dwelling and contents replacement cost of $1 $2 million
  778  or more is not eligible for coverage by the corporation. Such
  779  dwellings insured by the corporation on December 31, 2013 2008,
  780  may continue to be covered by the corporation until the end of
  781  the policy term. However, such dwellings may reapply and obtain
  782  coverage if the property owner provides the corporation with a
  783  sworn affidavit from one or more insurance agents, on a form
  784  provided by the corporation, stating that the agents have made
  785  their best efforts to obtain coverage and that the property has
  786  been rejected for coverage by at least one authorized insurer
  787  and at least three surplus lines insurers. If such conditions
  788  are met, the dwelling may be insured by the corporation for up
  789  to 3 years, after which time the dwelling is ineligible for
  790  coverage. The office shall approve the method used by the
  791  corporation for valuing the dwelling replacement costs under
  792  cost for the purposes of this subparagraph. If a policyholder is
  793  insured by the corporation before prior to being determined to
  794  be ineligible pursuant to this subparagraph and such
  795  policyholder files a lawsuit challenging the determination, the
  796  policyholder may remain insured by the corporation until the
  797  conclusion of the litigation.
  798         b. Effective January 1, 2015, a structure that has a
  799  dwelling replacement cost of $900,000 or more, or a single
  800  condominium unit that has a combined dwelling and contents
  801  replacement cost of $900,000 or more, is not eligible for
  802  coverage by the corporation. Such dwellings insured by the
  803  corporation on December 31, 2014, may continue to be covered by
  804  the corporation until the end of the policy term.
  805         c. Effective January 1, 2016, a structure that has a
  806  dwelling replacement cost of $800,000 or more, or a single
  807  condominium unit that has a combined dwelling and contents
  808  replacement cost of $800,000 or more, is not eligible for
  809  coverage by the corporation. Such dwellings insured by the
  810  corporation on December 31, 2015, may continue to be covered by
  811  the corporation until the end of the policy term.
  812         d. Effective January 1, 2017, a structure that has a
  813  dwelling replacement cost of $700,000 or more, or a single
  814  condominium unit that has a combined dwelling and contents
  815  replacement cost of $700,000 or more, is not eligible for
  816  coverage by the corporation. Such dwellings insured by the
  817  corporation on December 31, 2016, may continue to be covered by
  818  the corporation until the end of the policy term.
  819         e. Effective January 1, 2018, a structure that has a
  820  dwelling replacement cost of $600,000 or more, or a single
  821  condominium unit that has a combined dwelling and contents
  822  replacement cost of $600,000 or more, is not eligible for
  823  coverage by the corporation. Such dwellings insured by the
  824  corporation on December 31, 2017, may continue to be covered by
  825  the corporation until the end of the policy term.
  826         f. Effective January 1, 2019, a structure that has a
  827  dwelling replacement cost of $500,000 or more, or a single
  828  condominium unit that has a combined dwelling and contents
  829  replacement cost of $500,000 or more, is not eligible for
  830  coverage by the corporation. Such dwellings insured by the
  831  corporation on December 31, 2018, may continue to be covered by
  832  the corporation until the end of the policy term.
  833  
  834  The requirements of sub-subparagraphs b.-f. do not apply in
  835  counties where the corporation provides more than 75 percent of
  836  the personal lines residential policies providing wind coverage.
  837  In such counties the eligibility requirements of sub
  838  subparagraph a. apply.
  839         4. It is the intent of the Legislature that policyholders,
  840  applicants, and agents of the corporation receive service and
  841  treatment of the highest possible level but never less than that
  842  generally provided in the voluntary market. It is also intended
  843  that the corporation be held to service standards no less than
  844  those applied to insurers in the voluntary market by the office
  845  with respect to responsiveness, timeliness, customer courtesy,
  846  and overall dealings with policyholders, applicants, or agents
  847  of the corporation.
  848         5. A new structure for which a notice of commencement has
  849  been issued on or after July 1, 2014, pursuant to s. 713.135,
  850  which is located seaward of the coastal construction control
  851  line created pursuant to s. 161.053, is ineligible for coverage
  852  through the corporation unless the structure meets the coastal
  853  code-plus building code criteria developed and recommended by
  854  the Florida Building Commission. Filing a notice of commencement
  855  for an addition to an existing structure that was built before
  856  July 1, 2014, requires that the addition be built according to
  857  the code-plus building criteria but does not require that the
  858  existing structure meet the code-plus criteria in order to be
  859  eligible for coverage through the corporation. Effective January
  860  1, 2009, a personal lines residential structure that is located
  861  in the “wind-borne debris region,” as defined in s. 1609.2,
  862  International Building Code (2006), and that has an insured
  863  value on the structure of $750,000 or more is not eligible for
  864  coverage by the corporation unless the structure has opening
  865  protections as required under the Florida Building Code for a
  866  newly constructed residential structure in that area. A
  867  residential structure shall be deemed to comply with this
  868  subparagraph if it has shutters or opening protections on all
  869  openings and if such opening protections complied with the
  870  Florida Building Code at the time they were installed.
  871         6. For any claim filed under any policy of the corporation,
  872  a public adjuster may not charge, agree to, or accept any
  873  compensation, payment, commission, fee, or other thing of value
  874  greater than 10 percent of the additional amount actually paid
  875  over the amount that was originally offered by the corporation
  876  for any one claim.
  877         (b)1. All insurers authorized to write one or more subject
  878  lines of business in this state are subject to assessment by the
  879  corporation and, for the purposes of this subsection, are
  880  referred to collectively as “assessable insurers.” Insurers
  881  writing one or more subject lines of business in this state
  882  pursuant to part VIII of chapter 626 are not assessable
  883  insurers; however, but insureds who procure one or more subject
  884  lines of business in this state pursuant to part VIII of chapter
  885  626 are subject to assessment by the corporation and are
  886  referred to collectively as “assessable insureds.” An insurer’s
  887  assessment liability begins on the first day of the calendar
  888  year following the year in which the insurer was issued a
  889  certificate of authority to transact insurance for subject lines
  890  of business in this state and terminates 1 year after the end of
  891  the first calendar year during which the insurer no longer holds
  892  a certificate of authority to transact insurance for subject
  893  lines of business in this state.
  894         2.a. All revenues, assets, liabilities, losses, and
  895  expenses of the corporation shall be divided into three separate
  896  accounts as follows:
  897         (I) A personal lines account for personal residential
  898  policies issued by the corporation, or issued by the Residential
  899  Property and Casualty Joint Underwriting Association and renewed
  900  by the corporation, which provides comprehensive, multiperil
  901  coverage on risks that are not located in areas eligible for
  902  coverage by the Florida Windstorm Underwriting Association as
  903  those areas were defined on January 1, 2002, and for policies
  904  that do not provide coverage for the peril of wind on risks that
  905  are located in such areas;
  906         (II) A commercial lines account for commercial residential
  907  and commercial nonresidential policies issued by the
  908  corporation, or issued by the Residential Property and Casualty
  909  Joint Underwriting Association and renewed by the corporation,
  910  which provides coverage for basic property perils on risks that
  911  are not located in areas eligible for coverage by the Florida
  912  Windstorm Underwriting Association as those areas were defined
  913  on January 1, 2002, and for policies that do not provide
  914  coverage for the peril of wind on risks that are located in such
  915  areas; and
  916         (III) A coastal account for personal residential policies
  917  and commercial residential and commercial nonresidential
  918  property policies issued by the corporation, or transferred to
  919  the corporation, which provides coverage for the peril of wind
  920  on risks that are located in areas eligible for coverage by the
  921  Florida Windstorm Underwriting Association as those areas were
  922  defined on January 1, 2002. The corporation may offer policies
  923  that provide multiperil coverage and the corporation shall
  924  continue to offer policies that provide coverage only for the
  925  peril of wind for risks located in areas eligible for coverage
  926  in the coastal account. In issuing multiperil coverage, the
  927  corporation may use its approved policy forms and rates for the
  928  personal lines account. An applicant or insured who is eligible
  929  to purchase a multiperil policy from the corporation may
  930  purchase a multiperil policy from an authorized insurer without
  931  prejudice to the applicant’s or insured’s eligibility to
  932  prospectively purchase a policy that provides coverage only for
  933  the peril of wind from the corporation. An applicant or insured
  934  who is eligible for a corporation policy that provides coverage
  935  only for the peril of wind may elect to purchase or retain such
  936  policy and also purchase or retain coverage excluding wind from
  937  an authorized insurer without prejudice to the applicant’s or
  938  insured’s eligibility to prospectively purchase a policy that
  939  provides multiperil coverage from the corporation. It is the
  940  goal of the Legislature that there be an overall average savings
  941  of 10 percent or more for a policyholder who currently has a
  942  wind-only policy with the corporation, and an ex-wind policy
  943  with a voluntary insurer or the corporation, and who obtains a
  944  multiperil policy from the corporation. It is the intent of the
  945  Legislature that the offer of multiperil coverage in the coastal
  946  account be made and implemented in a manner that does not
  947  adversely affect the tax-exempt status of the corporation or
  948  creditworthiness of or security for currently outstanding
  949  financing obligations or credit facilities of the coastal
  950  account, the personal lines account, or the commercial lines
  951  account. The coastal account must also include quota share
  952  primary insurance under subparagraph (c)2. The area eligible for
  953  coverage under the coastal account also includes the area within
  954  Port Canaveral, which is bordered on the south by the City of
  955  Cape Canaveral, bordered on the west by the Banana River, and
  956  bordered on the north by Federal Government property.
  957         b. The three separate accounts must be maintained as long
  958  as financing obligations entered into by the Florida Windstorm
  959  Underwriting Association or Residential Property and Casualty
  960  Joint Underwriting Association are outstanding, in accordance
  961  with the terms of the corresponding financing documents. If the
  962  financing obligations are no longer outstanding, the corporation
  963  may use a single account for all revenues, assets, liabilities,
  964  losses, and expenses of the corporation. Consistent with this
  965  subparagraph and prudent investment policies that minimize the
  966  cost of carrying debt, the board shall exercise its best efforts
  967  to retire existing debt or obtain the approval of necessary
  968  parties to amend the terms of existing debt, in order so as to
  969  structure the most efficient plan for consolidating to
  970  consolidate the three separate accounts into a single account.
  971         c. Creditors of the Residential Property and Casualty Joint
  972  Underwriting Association and the accounts specified in sub-sub
  973  subparagraphs a.(I) and (II) may have a claim against, and
  974  recourse to, those accounts and no claim against, or recourse
  975  to, the account referred to in sub-sub-subparagraph a.(III).
  976  Creditors of the Florida Windstorm Underwriting Association have
  977  a claim against, and recourse to, the account referred to in
  978  sub-sub-subparagraph a.(III) and no claim against, or recourse
  979  to, the accounts referred to in sub-sub-subparagraphs a.(I) and
  980  (II).
  981         d. Revenues, assets, liabilities, losses, and expenses not
  982  attributable to particular accounts shall be prorated among the
  983  accounts.
  984         e. The Legislature finds that the revenues of the
  985  corporation are revenues that are necessary to meet the
  986  requirements set forth in documents authorizing the issuance of
  987  bonds under this subsection.
  988         f. The income of the corporation may not inure to the
  989  benefit of any private person.
  990         3. With respect to a deficit in an account:
  991         a. After accounting for the Citizens policyholder surcharge
  992  imposed under sub-subparagraph i., if the remaining projected
  993  deficit incurred in the coastal account in a particular calendar
  994  year:
  995         (I) Is not greater than 2 percent of the aggregate
  996  statewide direct written premium for the subject lines of
  997  business for the prior calendar year, the entire deficit shall
  998  be recovered through regular assessments of assessable insurers
  999  under paragraph (q) and assessable insureds.
 1000         (II) Exceeds 2 percent of the aggregate statewide direct
 1001  written premium for the subject lines of business for the prior
 1002  calendar year, the corporation shall levy regular assessments on
 1003  assessable insurers under paragraph (q) and on assessable
 1004  insureds in an amount equal to the greater of 2 percent of the
 1005  projected deficit or 2 percent of the aggregate statewide direct
 1006  written premium for the subject lines of business for the prior
 1007  calendar year. Any remaining projected deficit shall be
 1008  recovered through emergency assessments under sub-subparagraph
 1009  d.
 1010         b. Each assessable insurer’s share of the amount being
 1011  assessed under sub-subparagraph a. must be in the proportion
 1012  that the assessable insurer’s direct written premium for the
 1013  subject lines of business for the year preceding the assessment
 1014  bears to the aggregate statewide direct written premium for the
 1015  subject lines of business for that year. The assessment
 1016  percentage applicable to each assessable insured is the ratio of
 1017  the amount being assessed under sub-subparagraph a. to the
 1018  aggregate statewide direct written premium for the subject lines
 1019  of business for the prior year. Assessments levied by the
 1020  corporation on assessable insurers under sub-subparagraph a.
 1021  must be paid as required by the corporation’s plan of operation
 1022  and paragraph (q). Assessments levied by the corporation on
 1023  assessable insureds under sub-subparagraph a. shall be collected
 1024  by the surplus lines agent at the time the surplus lines agent
 1025  collects the surplus lines tax required by s. 626.932, and paid
 1026  to the Florida Surplus Lines Service Office at the time the
 1027  surplus lines agent pays the surplus lines tax to that office.
 1028  Upon receipt of regular assessments from surplus lines agents,
 1029  the Florida Surplus Lines Service Office shall transfer the
 1030  assessments directly to the corporation as determined by the
 1031  corporation.
 1032         c. After accounting for the Citizens policyholder surcharge
 1033  imposed under sub-subparagraph i., the remaining projected
 1034  deficits in the personal lines account and in the commercial
 1035  lines account in a particular calendar year shall be recovered
 1036  through emergency assessments under sub-subparagraph d.
 1037         d. Upon a determination by the executive director, with the
 1038  concurrence of the board of governors, that a projected deficit
 1039  in an account exceeds the amount that is expected to be
 1040  recovered through regular assessments under sub-subparagraph a.,
 1041  plus the amount that is expected to be recovered through
 1042  policyholder surcharges under sub-subparagraph i., the executive
 1043  director, with concurrence by the board, after verification by
 1044  the office, shall levy emergency assessments for as many years
 1045  as necessary to cover the deficits, to be collected by
 1046  assessable insurers and the corporation and collected from
 1047  assessable insureds upon issuance or renewal of policies for
 1048  subject lines of business, excluding National Flood Insurance
 1049  policies. The executive director shall notify the Financial
 1050  Services Commission of the emergency assessments within 5 days
 1051  after the board’s concurrence with the executive director’s
 1052  determination that such assessments are necessary. The amount
 1053  collected in a particular year must be a uniform percentage of
 1054  that year’s direct written premium for subject lines of business
 1055  and all accounts of the corporation, excluding National Flood
 1056  Insurance Program policy premiums, as annually determined by the
 1057  executive director, with concurrence by the board, and verified
 1058  by the office. The office shall verify the arithmetic
 1059  calculations involved in the board’s determination within 30
 1060  days after receipt of the information on which the determination
 1061  was based. The office shall notify assessable insurers and the
 1062  Florida Surplus Lines Service Office of the date on which
 1063  assessable insurers shall begin to collect and assessable
 1064  insureds shall begin to pay such assessment. The date must be at
 1065  least may be not less than 90 days after the date the
 1066  corporation levies emergency assessments pursuant to this sub
 1067  subparagraph. Notwithstanding any other provision of law, the
 1068  corporation and each assessable insurer that writes subject
 1069  lines of business shall collect emergency assessments from its
 1070  policyholders without such obligation being affected by any
 1071  credit, limitation, exemption, or deferment. Emergency
 1072  assessments levied by the corporation on assessable insureds
 1073  shall be collected by the surplus lines agent at the time the
 1074  surplus lines agent collects the surplus lines tax required by
 1075  s. 626.932 and paid to the Florida Surplus Lines Service Office
 1076  at the time the surplus lines agent pays the surplus lines tax
 1077  to that office. The emergency assessments collected shall be
 1078  transferred directly to the corporation on a periodic basis as
 1079  determined by the corporation and held by the corporation solely
 1080  in the applicable account. The aggregate amount of emergency
 1081  assessments levied for an account under this sub-subparagraph in
 1082  any calendar year may be less than but not exceed the greater of
 1083  10 percent of the amount needed to cover the deficit, plus
 1084  interest, fees, commissions, required reserves, and other costs
 1085  associated with financing the original deficit, or 10 percent of
 1086  the aggregate statewide direct written premium for subject lines
 1087  of business and all accounts of the corporation for the prior
 1088  year, plus interest, fees, commissions, required reserves, and
 1089  other costs associated with financing the deficit.
 1090         e. The corporation may pledge the proceeds of assessments,
 1091  projected recoveries from the Florida Hurricane Catastrophe
 1092  Fund, other insurance and reinsurance recoverables, policyholder
 1093  surcharges and other surcharges, and other funds available to
 1094  the corporation as the source of revenue for and to secure bonds
 1095  issued under paragraph (q), bonds or other indebtedness issued
 1096  under subparagraph (c)3., or lines of credit or other financing
 1097  mechanisms issued or created under this subsection, or to retire
 1098  any other debt incurred as a result of deficits or events giving
 1099  rise to deficits, or in any other way that the executive
 1100  director, with the concurrence of the board, determines will
 1101  efficiently recover such deficits. The purpose of the lines of
 1102  credit or other financing mechanisms is to provide additional
 1103  resources to assist the corporation in covering claims and
 1104  expenses attributable to a catastrophe. As used in this
 1105  subsection, the term “assessments” includes regular assessments
 1106  under sub-subparagraph a. or subparagraph (q)1. and emergency
 1107  assessments under sub-subparagraph d. Emergency assessments
 1108  collected under sub-subparagraph d. are not part of an insurer’s
 1109  rates, are not premium, and are not subject to premium tax,
 1110  fees, or commissions; however, failure to pay the emergency
 1111  assessment shall be treated as failure to pay premium. The
 1112  emergency assessments under sub-subparagraph d. shall continue
 1113  as long as any bonds issued or other indebtedness incurred with
 1114  respect to a deficit for which the assessment was imposed remain
 1115  outstanding, unless adequate provision has been made for the
 1116  payment of such bonds or other indebtedness pursuant to the
 1117  documents governing such bonds or indebtedness.
 1118         f. As used in this subsection for purposes of any deficit
 1119  incurred on or after January 25, 2007, the term “subject lines
 1120  of business” means insurance written by assessable insurers or
 1121  procured by assessable insureds for all property and casualty
 1122  lines of business in this state, but not including workers’
 1123  compensation or medical malpractice. As used in this sub
 1124  subparagraph, the term “property and casualty lines of business”
 1125  includes all lines of business identified on Form 2, Exhibit of
 1126  Premiums and Losses, in the annual statement required of
 1127  authorized insurers under s. 624.424 and any rule adopted under
 1128  this section, except for those lines identified as accident and
 1129  health insurance and except for policies written under the
 1130  National Flood Insurance Program or the Federal Crop Insurance
 1131  Program. For purposes of this sub-subparagraph, the term
 1132  “workers’ compensation” includes both workers’ compensation
 1133  insurance and excess workers’ compensation insurance.
 1134         g. The Florida Surplus Lines Service Office shall annually
 1135  determine annually the aggregate statewide written premium in
 1136  subject lines of business procured by assessable insureds and
 1137  report that information to the corporation in a form and at a
 1138  time the corporation specifies to ensure that the corporation
 1139  can meet the requirements of this subsection and the
 1140  corporation’s financing obligations.
 1141         h. The Florida Surplus Lines Service Office shall verify
 1142  the proper application by surplus lines agents of assessment
 1143  percentages for regular assessments and emergency assessments
 1144  levied under this subparagraph on assessable insureds and assist
 1145  the corporation in ensuring the accurate, timely collection and
 1146  payment of assessments by surplus lines agents as required by
 1147  the corporation.
 1148         i. In 2008 or thereafter, Upon a determination by the board
 1149  of governors that an account has a projected deficit, the board
 1150  shall levy a Citizens policyholder surcharge against all
 1151  policyholders of the corporation.
 1152         (I) The surcharge shall be levied as a uniform percentage
 1153  of the premium for the policy of up to 15 percent of the policy
 1154  such premium, which funds shall be used to offset the deficit.
 1155         (II) The surcharge is payable upon cancellation or
 1156  termination of the policy, upon renewal of the policy, or upon
 1157  issuance of a new policy by the corporation within the first 12
 1158  months after the date of the levy or the period of time
 1159  necessary to fully collect the surcharge amount.
 1160         (III) The corporation may not levy any regular assessments
 1161  under paragraph (q) pursuant to sub-subparagraph a. or sub
 1162  subparagraph b. with respect to a particular year’s deficit
 1163  until the corporation has first levied the full amount of the
 1164  surcharge authorized by this sub-subparagraph.
 1165         (IV) The surcharge is not considered premium and is not
 1166  subject to commissions, fees, or premium taxes. However, failure
 1167  to pay the surcharge shall be treated as failure to pay premium.
 1168         j. If the amount of any assessments or surcharges collected
 1169  from corporation policyholders, assessable insurers or their
 1170  policyholders, or assessable insureds exceeds the amount of the
 1171  deficits, such excess amounts shall be remitted to and retained
 1172  by the corporation in a reserve to be used by the corporation,
 1173  as determined by the executive director, with the concurrence of
 1174  the board of governors, and approved by the office, to pay
 1175  claims or reduce any past, present, or future plan-year deficits
 1176  or to reduce outstanding debt.
 1177         (c) The corporation’s plan of operation:
 1178         1. Must provide for adoption of residential property and
 1179  casualty insurance policy forms and commercial residential and
 1180  nonresidential property insurance forms, which must be approved
 1181  by the office before use. The corporation shall adopt the
 1182  following policy forms:
 1183         a. Standard personal lines policy forms that are
 1184  comprehensive multiperil policies providing full coverage of a
 1185  residential property equivalent to the coverage provided in the
 1186  private insurance market under an HO-3, HO-4, or HO-6 policy.
 1187         b. Basic personal lines policy forms that are policies
 1188  similar to an HO-8 policy or a dwelling fire policy that provide
 1189  coverage meeting the requirements of the secondary mortgage
 1190  market, but which is more limited than the coverage under a
 1191  standard policy.
 1192         c. Commercial lines residential and nonresidential policy
 1193  forms that are generally similar to the basic perils of full
 1194  coverage obtainable for commercial residential structures and
 1195  commercial nonresidential structures in the admitted voluntary
 1196  market.
 1197         d. Personal lines and commercial lines residential property
 1198  insurance forms that cover the peril of wind only. Such The
 1199  forms are applicable only to residential properties located in
 1200  areas eligible for coverage under the coastal account referred
 1201  to in sub-subparagraph (b)2.a.
 1202         e. Commercial lines nonresidential property insurance forms
 1203  that cover the peril of wind only. Such The forms are applicable
 1204  only to nonresidential properties located in areas eligible for
 1205  coverage under the coastal account referred to in sub
 1206  subparagraph (b)2.a.
 1207         f. The corporation may adopt variations of the policy forms
 1208  listed in sub-subparagraphs a.-e. which contain more restrictive
 1209  coverage.
 1210         g. Effective January 1, 2013, the corporation shall offer a
 1211  basic personal lines policy similar to an HO-8 policy with
 1212  dwelling repair based on common construction materials and
 1213  methods.
 1214         2. Must provide that the corporation and an authorized
 1215  insurer may enter into a risk-sharing agreement for the purpose
 1216  of reducing the corporation’s exposure. As used in this
 1217  subparagraph, the term “risk-sharing agreement” means an
 1218  agreement between the corporation and an authorized insurer for
 1219  the corporation to retain part, but not all, of the risk for a
 1220  specified group of policies or specified perils within a group
 1221  of policies, as part of the terms for removal of policies from
 1222  the corporation.
 1223         a. Entering into a risk-sharing agreement is voluntary and
 1224  at the discretion of the corporation and the authorized insurer.
 1225  To avoid unnecessary expense, the executive director, with
 1226  concurrence of the board of governors, may limit the
 1227  corporation’s participation in risk-sharing agreements to those
 1228  participants capable and willing to assume a minimum of 25
 1229  percent of the exposure on at least 100,000 policies and may
 1230  specify other limitations. A risk-sharing agreement in which the
 1231  corporation retains part of the risk may not exceed 5 years.
 1232         b. The risk-sharing agreement may cover policies in any
 1233  account and may cover any perils. The corporation may act as a
 1234  reinsurer or a cedent under a risk sharing agreement or an
 1235  excess of loss agreement. If the corporation is the reinsurer,
 1236  the insurance policy forms and endorsements must be approved by
 1237  the office, cover all perils that are the subject of the risk
 1238  sharing agreement, and cover at least the same limits as the
 1239  corporation policies being replaced.
 1240         c. The terms of each risk-sharing agreement must ensure
 1241  that the consideration received by the corporation is
 1242  commensurate with the risk retained by the corporation and the
 1243  risk assumed by the authorized insurer. The corporation may not
 1244  share risk for bad faith.
 1245         d. The risk-sharing agreement must specify the proportion
 1246  of exposure that the authorized insurer reports to the Florida
 1247  Hurricane Catastrophe Fund and the exposure retained by the
 1248  corporation. Each shall pay premium and receive reimbursements
 1249  from the fund for the exposure that they retain or assume as
 1250  provided in the risk-sharing agreement. The risk retained or
 1251  assumed is eligible for coverage by the fund and is not
 1252  considered reinsurance for purposes of coverage by the fund.
 1253  However, the authorized insurer and the corporation may report
 1254  participation in the risk sharing agreement on their financial
 1255  statements as reinsurance if appropriate according to the
 1256  characteristics of the agreement based on statutory accounting
 1257  rules and instructions.
 1258         e. Notwithstanding any other provision of law:
 1259         (I) Policies offered coverage by the corporation or an
 1260  authorized insurer through a risk-sharing agreement are not
 1261  eligible for coverage by the corporation outside of the
 1262  agreement; and
 1263         (II) A risk-sharing agreement between the corporation and
 1264  an authorized insurer is not subject to the requirements of a
 1265  take-out or keep-out program under ss. 627.3517 and this
 1266  subsection, except that the agreement must be filed by the
 1267  authorized insurer with the office for review and approval
 1268  before the execution of the agreement by the insurer.
 1269         f. To ensure that exposures are accurately reported to the
 1270  Florida Hurricane Catastrophe Fund, the corporation and each
 1271  insurer participating in a risk-sharing agreement under this
 1272  subparagraph must report its exposure under covered policies to
 1273  the fund as required under s. 215.555(5)(c), including the
 1274  requirement that, by September 1 of each year, each insurer
 1275  notify the board of its insured values under covered policies as
 1276  of June 30 of that year. Each report must also specify the
 1277  percentage of liability applicable to the corporation and the
 1278  percentage applicable to the insurer. Pursuant to its authority
 1279  under s. 215.555, the State Board of Administration shall adopt
 1280  rules to administer this sub-subparagraph.
 1281         2. Must provide that the corporation adopt a program in
 1282  which the corporation and authorized insurers enter into quota
 1283  share primary insurance agreements for hurricane coverage, as
 1284  defined in s. 627.4025(2)(a), for eligible risks, and adopt
 1285  property insurance forms for eligible risks which cover the
 1286  peril of wind only.
 1287         a. As used in this subsection, the term:
 1288         (I) “Quota share primary insurance” means an arrangement in
 1289  which the primary hurricane coverage of an eligible risk is
 1290  provided in specified percentages by the corporation and an
 1291  authorized insurer. The corporation and authorized insurer are
 1292  each solely responsible for a specified percentage of hurricane
 1293  coverage of an eligible risk as set forth in a quota share
 1294  primary insurance agreement between the corporation and an
 1295  authorized insurer and the insurance contract. The
 1296  responsibility of the corporation or authorized insurer to pay
 1297  its specified percentage of hurricane losses of an eligible
 1298  risk, as set forth in the agreement, may not be altered by the
 1299  inability of the other party to pay its specified percentage of
 1300  losses. Eligible risks that are provided hurricane coverage
 1301  through a quota share primary insurance arrangement must be
 1302  provided policy forms that set forth the obligations of the
 1303  corporation and authorized insurer under the arrangement,
 1304  clearly specify the percentages of quota share primary insurance
 1305  provided by the corporation and authorized insurer, and
 1306  conspicuously and clearly state that the authorized insurer and
 1307  the corporation may not be held responsible beyond their
 1308  specified percentage of coverage of hurricane losses.
 1309         (II) “Eligible risks” means personal lines residential and
 1310  commercial lines residential risks that meet the underwriting
 1311  criteria of the corporation and are located in areas that were
 1312  eligible for coverage by the Florida Windstorm Underwriting
 1313  Association on January 1, 2002.
 1314         b. The corporation may enter into quota share primary
 1315  insurance agreements with authorized insurers at corporation
 1316  coverage levels of 90 percent and 50 percent.
 1317         c. If the corporation determines that additional coverage
 1318  levels are necessary to maximize participation in quota share
 1319  primary insurance agreements by authorized insurers, the
 1320  corporation may establish additional coverage levels. However,
 1321  the corporation’s quota share primary insurance coverage level
 1322  may not exceed 90 percent.
 1323         d. Any quota share primary insurance agreement entered into
 1324  between an authorized insurer and the corporation must provide
 1325  for a uniform specified percentage of coverage of hurricane
 1326  losses, by county or territory as set forth by the corporation
 1327  board, for all eligible risks of the authorized insurer covered
 1328  under the agreement.
 1329         e. Any quota share primary insurance agreement entered into
 1330  between an authorized insurer and the corporation is subject to
 1331  review and approval by the office. However, such agreement shall
 1332  be authorized only as to insurance contracts entered into
 1333  between an authorized insurer and an insured who is already
 1334  insured by the corporation for wind coverage.
 1335         f. For all eligible risks covered under quota share primary
 1336  insurance agreements, the exposure and coverage levels for both
 1337  the corporation and authorized insurers shall be reported by the
 1338  corporation to the Florida Hurricane Catastrophe Fund. For all
 1339  policies of eligible risks covered under such agreements, the
 1340  corporation and the authorized insurer must maintain complete
 1341  and accurate records for the purpose of exposure and loss
 1342  reimbursement audits as required by fund rules. The corporation
 1343  and the authorized insurer shall each maintain duplicate copies
 1344  of policy declaration pages and supporting claims documents.
 1345         g. The corporation board shall establish in its plan of
 1346  operation standards for quota share agreements which ensure that
 1347  there is no discriminatory application among insurers as to the
 1348  terms of the agreements, pricing of the agreements, incentive
 1349  provisions if any, and consideration paid for servicing policies
 1350  or adjusting claims.
 1351         h. The quota share primary insurance agreement between the
 1352  corporation and an authorized insurer must set forth the
 1353  specific terms under which coverage is provided, including, but
 1354  not limited to, the sale and servicing of policies issued under
 1355  the agreement by the insurance agent of the authorized insurer
 1356  producing the business, the reporting of information concerning
 1357  eligible risks, the payment of premium to the corporation, and
 1358  arrangements for the adjustment and payment of hurricane claims
 1359  incurred on eligible risks by the claims adjuster and personnel
 1360  of the authorized insurer. Entering into a quota sharing
 1361  insurance agreement between the corporation and an authorized
 1362  insurer is voluntary and at the discretion of the authorized
 1363  insurer.
 1364         3.a. May provide that the corporation may employ or
 1365  otherwise contract with individuals or other entities to provide
 1366  administrative or professional services that may be appropriate
 1367  to effectuate the plan. The corporation may borrow funds by
 1368  issuing bonds or by incurring other indebtedness, and shall have
 1369  other powers reasonably necessary to effectuate the requirements
 1370  of this subsection, including, without limitation, the power to
 1371  issue bonds and incur other indebtedness in order to refinance
 1372  outstanding bonds or other indebtedness. The corporation may
 1373  seek judicial validation of its bonds or other indebtedness
 1374  under chapter 75. The corporation may issue bonds or incur other
 1375  indebtedness, or have bonds issued on its behalf by a unit of
 1376  local government pursuant to subparagraph (q)2. in the absence
 1377  of a hurricane or other weather-related event, upon a
 1378  determination by the corporation, subject to approval by the
 1379  office, that such action would enable it to efficiently meet the
 1380  financial obligations of the corporation and that such
 1381  financings are reasonably necessary to effectuate the
 1382  requirements of this subsection. The corporation may take all
 1383  actions needed to facilitate tax-free status for such bonds or
 1384  indebtedness, including formation of trusts or other affiliated
 1385  entities. The corporation may pledge assessments, projected
 1386  recoveries from the Florida Hurricane Catastrophe Fund, other
 1387  reinsurance recoverables, Citizens policyholder surcharges and
 1388  other surcharges, and other funds available to the corporation
 1389  as security for bonds or other indebtedness. In recognition of
 1390  s. 10, Art. I of the State Constitution, prohibiting the
 1391  impairment of obligations of contracts, it is the intent of the
 1392  Legislature that no action not be taken whose purpose is to
 1393  impair any bond indenture or financing agreement or any revenue
 1394  source committed by contract to such bond or other indebtedness.
 1395         b. May provide that the corporation employ or otherwise
 1396  contract with individuals or other entities to provide
 1397  administrative or professional services that may be appropriate
 1398  to effectuate the plan. To ensure that the corporation is
 1399  operating in an efficient and economic manner while providing
 1400  quality service to policyholders, applicants, and agents, the
 1401  board shall commission an independent third-party consultant
 1402  having expertise in insurance company management or insurance
 1403  company management consulting to prepare a report and make
 1404  recommendations on the relative costs and benefits of
 1405  outsourcing various policy issuance and service functions to
 1406  private servicing carriers or entities performing similar
 1407  functions in the private market for a fee, rather than
 1408  performing such functions in-house. In making such
 1409  recommendations, the consultant shall consider how other
 1410  residual markets, both in this state and around the country,
 1411  outsource appropriate functions or use servicing carriers to
 1412  better match expenses with revenues that fluctuate based on a
 1413  widely varying policy count. The report must be completed by
 1414  July 1, 2012. Upon receiving the report, the executive director,
 1415  with the concurrence of the board, shall develop a plan to
 1416  implement the report and submit the plan for review,
 1417  modification, and approval to the Financial Services Commission.
 1418  Upon the commission’s approval of the plan, the board shall
 1419  begin implementing the plan by January 1, 2013.
 1420         4. Must require that the corporation operate subject to the
 1421  supervision and approval of a board of governors consisting of
 1422  nine eight individuals who are residents of this state and who
 1423  are, from different geographical areas of the this state, one of
 1424  whom is appointed by the Governor and serves solely to advocate
 1425  on behalf of the consumer. The appointment of a consumer
 1426  representative by the Governor is in addition to the
 1427  appointments authorized under sub-subparagraph a.
 1428         a. The Governor, the Chief Financial Officer, the President
 1429  of the Senate, and the Speaker of the House of Representatives
 1430  shall each appoint two members of the board. All board members,
 1431  except those appointed by the speaker, must be confirmed by the
 1432  Senate during the legislative session following their
 1433  appointment. At least one of the two members appointed by each
 1434  appointing officer must have demonstrated expertise in insurance
 1435  and must be is deemed to be within the scope of the exemption
 1436  provided under in s. 112.313(7)(b). The Chief Financial Officer
 1437  shall designate one of the appointees as chair for the purpose
 1438  of presiding over the orderly conduct of meetings. An appointee
 1439  serves as chair for no more than one term. All board members
 1440  serve at the pleasure of the appointing officer. All members of
 1441  the board are subject to removal at will by the officers who
 1442  appointed them. All board members, including the chair, shall
 1443  must be appointed to serve for 3-year terms beginning annually
 1444  on a date designated by the plan. However, for the first term
 1445  beginning on or after July 1, 2009, each appointing officer
 1446  shall appoint one member of the board for a 2-year term and one
 1447  member for a 3-year term. A board vacancy shall be filled for
 1448  the unexpired term by the appointing officer. The Chief
 1449  Financial Officer shall appoint a technical advisory group to
 1450  provide information and advice to the executive director and the
 1451  board in connection with the corporation’s board’s duties under
 1452  this subsection. The executive director shall be appointed by
 1453  and serve at the pleasure of the Governor and the Chief
 1454  Financial Officer. and Senior managers of the corporation shall
 1455  be appointed by the executive director, with the concurrence of
 1456  engaged by the board, and serve at the pleasure of the executive
 1457  director board. Appointment of the Any executive director
 1458  appointed on or after July 1, 2006, is subject to confirmation
 1459  by the Senate upon original appointment and upon the election or
 1460  reelection of the Governor and Chief Financial Officer if
 1461  retained. The executive director is responsible for employing
 1462  other staff as the corporation may require, subject to review
 1463  and concurrence by the board.
 1464         b. The board shall create a Market Accountability Advisory
 1465  Committee to assist the corporation in developing awareness of
 1466  its rates and its customer and agent service levels in
 1467  relationship to the voluntary market insurers writing similar
 1468  coverage.
 1469         (I) The members of the advisory committee consist of the
 1470  following 11 persons, one of whom must be elected chair by the
 1471  members of the committee: four representatives, one appointed by
 1472  the Florida Association of Insurance Agents, one by the Florida
 1473  Association of Insurance and Financial Advisors, one by the
 1474  Professional Insurance Agents of Florida, and one by the Latin
 1475  American Association of Insurance Agencies; three
 1476  representatives appointed by the insurers with the three highest
 1477  voluntary market share of residential property insurance
 1478  business in the state; one representative from the Office of
 1479  Insurance Regulation; one consumer appointed by the board who is
 1480  insured by the corporation at the time of appointment to the
 1481  committee; one representative appointed by the Florida
 1482  Association of Realtors; and one representative appointed by the
 1483  Florida Bankers Association. All members shall be appointed to
 1484  3-year terms, serve at the pleasure of the board of governors,
 1485  and may serve for consecutive terms.
 1486         (II) The committee shall report to the corporation at each
 1487  board meeting on insurance market issues that which may include
 1488  rates and rate competition within with the voluntary market;
 1489  service, including policy issuance, claims processing, and
 1490  general responsiveness to policyholders, applicants, and agents;
 1491  and matters relating to depopulation.
 1492         5. Must provide a procedure for determining the eligibility
 1493  of a risk for coverage by the corporation which applies to both
 1494  new and renewal policies, as follows:
 1495         a. Subject to s. 627.3517, with respect to personal lines
 1496  residential risks, if the risk is offered coverage from an
 1497  authorized insurer at the insurer’s approved rate under a
 1498  standard policy including wind coverage or, if consistent with
 1499  the insurer’s underwriting rules as filed with the office, a
 1500  basic policy including wind coverage, for a new application to
 1501  the corporation for coverage, the risk is not eligible for any
 1502  policy issued by the corporation unless the premium for coverage
 1503  from the authorized insurer is more than 15 percent greater than
 1504  the premium for comparable coverage from the corporation. For
 1505  renewal policies, the risk is not eligible for a policy issued
 1506  by the corporation if the premium for coverage from an
 1507  authorized insurer is equal to or less than the premium for
 1508  comparable coverage from the corporation. If the risk is not
 1509  able to obtain such offer, the risk is eligible for a standard
 1510  policy including wind coverage or a basic policy including wind
 1511  coverage issued by the corporation; however, if the risk could
 1512  not be insured under a standard policy including wind coverage
 1513  regardless of market conditions, the risk is eligible for a
 1514  basic policy including wind coverage unless rejected under
 1515  subparagraph 8. However, a policyholder of the corporation or a
 1516  policyholder removed from the corporation through an assumption
 1517  agreement until the end of the assumption period remains
 1518  eligible for coverage from the corporation regardless of any
 1519  offer of coverage from an authorized insurer or surplus lines
 1520  insurer. The corporation shall determine the type of policy to
 1521  be provided on the basis of objective standards specified in the
 1522  underwriting manual and based on generally accepted underwriting
 1523  practices.
 1524         (I) If the risk accepts an offer of coverage through the
 1525  market assistance plan or through a mechanism established by the
 1526  corporation before a policy is issued to the risk by the
 1527  corporation or during the first 30 days of coverage by the
 1528  corporation, and the producing agent who submitted the
 1529  application to the plan or to the corporation is not currently
 1530  appointed by the insurer, the insurer shall:
 1531         (A) Pay to the producing agent of record of the policy for
 1532  the first year, an amount that is the greater of the insurer’s
 1533  usual and customary commission for the type of policy written or
 1534  a fee equal to the usual and customary commission of the
 1535  corporation; or
 1536         (B) Offer to allow the producing agent of record of the
 1537  policy to continue servicing the policy for at least 1 year and
 1538  offer to pay the agent the greater of the insurer’s or the
 1539  corporation’s usual and customary commission for the type of
 1540  policy written.
 1541  
 1542  If the producing agent is unwilling or unable to accept
 1543  appointment, the new insurer shall pay the agent in accordance
 1544  with sub-sub-sub-subparagraph (A).
 1545         (II) If the corporation enters into a contractual agreement
 1546  for a take-out plan, the producing agent of record of the
 1547  corporation policy is entitled to retain any unearned commission
 1548  on the policy, and the insurer shall:
 1549         (A) Pay to the producing agent of record, for the first
 1550  year, an amount that is the greater of the insurer’s usual and
 1551  customary commission for the type of policy written or a fee
 1552  equal to the usual and customary commission of the corporation;
 1553  or
 1554         (B) Offer to allow the producing agent of record to
 1555  continue servicing the policy for at least 1 year and offer to
 1556  pay the agent the greater of the insurer’s or the corporation’s
 1557  usual and customary commission for the type of policy written.
 1558  
 1559  If the producing agent is unwilling or unable to accept
 1560  appointment, the new insurer shall pay the agent in accordance
 1561  with sub-sub-sub-subparagraph (A).
 1562         b. With respect to commercial lines residential risks, for
 1563  a new application to the corporation for coverage, if the risk
 1564  is offered coverage under a policy including wind coverage from
 1565  an authorized insurer at its approved rate, the risk is not
 1566  eligible for a policy issued by the corporation unless the
 1567  premium for coverage from the authorized insurer is more than 15
 1568  percent greater than the premium for comparable coverage from
 1569  the corporation. If the risk is not able to obtain any such
 1570  offer, the risk is eligible for a policy including wind coverage
 1571  issued by the corporation. However, a policyholder of the
 1572  corporation or a policyholder removed from the corporation
 1573  through an assumption agreement until the end of the assumption
 1574  period remains eligible for coverage from the corporation
 1575  regardless of an offer of coverage from an authorized insurer or
 1576  surplus lines insurer.
 1577         (I) If the risk accepts an offer of coverage through the
 1578  market assistance plan or through a mechanism established by the
 1579  corporation before a policy is issued to the risk by the
 1580  corporation or during the first 30 days of coverage by the
 1581  corporation, and the producing agent who submitted the
 1582  application to the plan or the corporation is not currently
 1583  appointed by the insurer, the insurer shall:
 1584         (A) Pay to the producing agent of record of the policy, for
 1585  the first year, an amount that is the greater of the insurer’s
 1586  usual and customary commission for the type of policy written or
 1587  a fee equal to the usual and customary commission of the
 1588  corporation; or
 1589         (B) Offer to allow the producing agent of record of the
 1590  policy to continue servicing the policy for at least 1 year and
 1591  offer to pay the agent the greater of the insurer’s or the
 1592  corporation’s usual and customary commission for the type of
 1593  policy written.
 1594  
 1595  If the producing agent is unwilling or unable to accept
 1596  appointment, the new insurer shall pay the agent in accordance
 1597  with sub-sub-sub-subparagraph (A).
 1598         (II) If the corporation enters into a contractual agreement
 1599  for a take-out plan, the producing agent of record of the
 1600  corporation policy is entitled to retain any unearned commission
 1601  on the policy, and the insurer shall:
 1602         (A) Pay to the producing agent of record, for the first
 1603  year, an amount that is the greater of the insurer’s usual and
 1604  customary commission for the type of policy written or a fee
 1605  equal to the usual and customary commission of the corporation;
 1606  or
 1607         (B) Offer to allow the producing agent of record to
 1608  continue servicing the policy for at least 1 year and offer to
 1609  pay the agent the greater of the insurer’s or the corporation’s
 1610  usual and customary commission for the type of policy written.
 1611  
 1612  If the producing agent is unwilling or unable to accept
 1613  appointment, the new insurer shall pay the agent in accordance
 1614  with sub-sub-sub-subparagraph (A).
 1615         c. For purposes of determining comparable coverage under
 1616  sub-subparagraphs a. and b., the comparison must be based on
 1617  those forms and coverages that are reasonably comparable. The
 1618  corporation may rely on a determination of comparable coverage
 1619  and premium made by the producing agent who submits the
 1620  application to the corporation, made in the agent’s capacity as
 1621  the corporation’s agent. A comparison may be made solely of the
 1622  premium with respect to the main building or structure only on
 1623  the following basis: the same coverage A or other building
 1624  limits; the same percentage hurricane deductible that applies on
 1625  an annual basis or that applies to each hurricane for commercial
 1626  residential property; the same percentage of ordinance and law
 1627  coverage, if the same limit is offered by both the corporation
 1628  and the authorized insurer; the same mitigation credits, to the
 1629  extent the same types of credits are offered both by the
 1630  corporation and the authorized insurer; the same method for loss
 1631  payment, such as replacement cost or actual cash value, if the
 1632  same method is offered both by the corporation and the
 1633  authorized insurer in accordance with underwriting rules; and
 1634  any other form or coverage that is reasonably comparable as
 1635  determined by the board. If an application is submitted to the
 1636  corporation for wind-only coverage in the coastal account, the
 1637  premium for the corporation’s wind-only policy plus the premium
 1638  for the ex-wind policy that is offered by an authorized insurer
 1639  to the applicant must be compared to the premium for multiperil
 1640  coverage offered by an authorized insurer, subject to the
 1641  standards for comparison specified in this subparagraph. If the
 1642  corporation or the applicant requests from the authorized
 1643  insurer a breakdown of the premium of the offer by types of
 1644  coverage so that a comparison may be made by the corporation or
 1645  its agent and the authorized insurer refuses or is unable to
 1646  provide such information, the corporation may treat the offer as
 1647  not being an offer of coverage from an authorized insurer at the
 1648  insurer’s approved rate.
 1649         6. Must include rules for classifications of risks and
 1650  rates.
 1651         7. Must provide that if premium and investment income for
 1652  an account attributable to a particular calendar year are in
 1653  excess of projected losses and expenses for the account
 1654  attributable to that year, such excess must shall be held in
 1655  surplus in the account. Such surplus must be available to defray
 1656  deficits in that account as to future years and used for that
 1657  purpose before assessing assessable insurers and assessable
 1658  insureds as to any calendar year.
 1659         8. Must provide objective criteria and procedures that are
 1660  to be uniformly applied to all applicants in determining whether
 1661  an individual risk is so hazardous as to be uninsurable. In
 1662  making this determination and in establishing the criteria and
 1663  procedures, the following must be considered:
 1664         a. Whether the likelihood of a loss for the individual risk
 1665  is substantially higher than for other risks of the same class;
 1666  and
 1667         b. Whether the uncertainty associated with the individual
 1668  risk is such that an appropriate premium cannot be determined.
 1669  
 1670  The acceptance or rejection of a risk by the corporation shall
 1671  be construed as the private placement of insurance, and the
 1672  provisions of chapter 120 do not apply.
 1673         9. Must provide that the corporation make its best efforts
 1674  to procure catastrophe reinsurance at reasonable rates, to cover
 1675  its projected 100-year probable maximum loss as determined by
 1676  the board of governors.
 1677         10. Must provide that the policies issued by the
 1678  corporation must provide that if the corporation or the market
 1679  assistance plan obtains an offer from an authorized insurer to
 1680  cover the risk at its approved rates, the risk is no longer
 1681  eligible for renewal through the corporation, except as
 1682  otherwise provided in this subsection.
 1683         11. Must provide that corporation policies and applications
 1684  must include a notice that the corporation policy could, under
 1685  this section, be replaced with a policy issued by an authorized
 1686  insurer which does not provide coverage identical to the
 1687  coverage provided by the corporation. The notice must also
 1688  specify that acceptance of corporation coverage creates a
 1689  conclusive presumption that the applicant or policyholder is
 1690  aware of this potential.
 1691         12. May establish, subject to approval by the office,
 1692  different eligibility requirements and operational procedures
 1693  for any line or type of coverage for any specified county or
 1694  area if the board determines that such changes are justified due
 1695  to the voluntary market being sufficiently stable and
 1696  competitive in such area or for such line or type of coverage
 1697  and that consumers who, in good faith, are unable to obtain
 1698  insurance through the voluntary market through ordinary methods
 1699  continue to have access to coverage from the corporation. If
 1700  coverage is sought in connection with a real property transfer,
 1701  the requirements and procedures may not provide an effective
 1702  date of coverage later than the date of the closing of the
 1703  transfer as established by the transferor, the transferee, and,
 1704  if applicable, the lender.
 1705         13. Must provide that, with respect to the coastal account,
 1706  any assessable insurer that has with a surplus as to
 1707  policyholders of $25 million or less writing 25 percent or more
 1708  of its total countrywide property insurance premiums in this
 1709  state may petition the office, within the first 90 days of each
 1710  calendar year, petition the office to qualify as a limited
 1711  apportionment company. A regular assessment levied by the
 1712  corporation on a limited apportionment company for a deficit
 1713  incurred by the corporation for the coastal account may be paid
 1714  to the corporation on a monthly basis as the assessments are
 1715  collected by the limited apportionment company from its
 1716  insureds. The, but a limited apportionment company must begin
 1717  collecting the regular assessments within not later than 90 days
 1718  after the regular assessments are levied by the corporation, and
 1719  the regular assessments must be paid in full within 15 months
 1720  after being levied by the corporation. A limited apportionment
 1721  company shall collect from its policyholders any emergency
 1722  assessment imposed under sub-subparagraph (b)3.d. The plan must
 1723  provide that, if the office determines that any regular
 1724  assessment will result in an impairment of the surplus of a
 1725  limited apportionment company, the office may direct that all or
 1726  part of such assessment be deferred as provided in subparagraph
 1727  (q)4. However, an emergency assessment to be collected from
 1728  policyholders under sub-subparagraph (b)3.d. may not be limited
 1729  or deferred.
 1730         14. Must provide that the corporation appoint as its
 1731  licensed agents only those agents who at the time of initial
 1732  appointment also hold an appointment as defined in s. 626.015(3)
 1733  with an insurer who at the time of the agent’s initial
 1734  appointment by the corporation is authorized to write and is
 1735  actually writing personal lines residential property coverage,
 1736  commercial residential property coverage, or commercial
 1737  nonresidential property coverage within the state. As a
 1738  condition of continued appointment, agents of the corporation
 1739  must maintain appropriate documentation specified by the
 1740  corporation which warrants and certifies that alternative
 1741  coverage was annually sought for each risk placed by that agent
 1742  with the corporation in accordance with s. 627.3518. After
 1743  January 1, 2014, if an agent places a policy with the
 1744  corporation which was ineligible for coverage based on
 1745  eligibility standards at the time of placement, agent
 1746  commissions may not be paid on that policy.
 1747         15. Must provide a premium payment plan option to its
 1748  policyholders which, at a minimum, allows for quarterly and
 1749  semiannual payment of premiums. A monthly payment plan may, but
 1750  is not required to, be offered.
 1751         16. Must make available a policy for mobile homes or
 1752  manufactured homes with a minimum insured value of at least
 1753  $3,000. Must limit Coverage on mobile homes or manufactured
 1754  homes built before 1994 is limited to actual cash value of the
 1755  dwelling rather than replacement costs of the dwelling. Such
 1756  coverage must also include the following attached structures:
 1757         a. Screened enclosures that are aluminum framed or that are
 1758  not covered by the same or substantially the same materials as
 1759  those of the primary dwelling;
 1760         b. Carports that are aluminum or that are not covered by
 1761  the same or substantially the same materials as those of the
 1762  primary dwelling; and
 1763         c. Patios that have a roof covering constructed of
 1764  materials that are not the same or substantially the same
 1765  materials as those of the primary dwelling.
 1766         17. May provide such limits of coverage as the board
 1767  determines, consistent with the requirements of this subsection.
 1768         18. May require commercial property to meet specified
 1769  hurricane mitigation construction features as a condition of
 1770  eligibility for coverage.
 1771         19. Must provide that new or renewal policies issued by the
 1772  corporation on or after January 1, 2012, which cover sinkhole
 1773  loss do not include coverage for any loss to appurtenant
 1774  structures, driveways, sidewalks, decks, or patios that are
 1775  directly or indirectly caused by sinkhole activity. The
 1776  corporation shall exclude such coverage using a notice of
 1777  coverage change, which may be included with the policy renewal,
 1778  and not by issuance of a notice of nonrenewal of the excluded
 1779  coverage upon renewal of the current policy.
 1780         20. Must, as of July January 1, 2014 2012, must require
 1781  that the agent obtain from an applicant for coverage from the
 1782  corporation an acknowledgment signed by the applicant, which
 1783  includes, at a minimum, the following statement:
 1784  
 1785                ACKNOWLEDGMENT OF POTENTIAL SURCHARGE              
 1786                      AND ASSESSMENT LIABILITY:                    
 1787  
 1788         1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
 1789  CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
 1790  DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
 1791  MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
 1792  PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
 1793  POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
 1794  OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
 1795  LEGISLATURE.
 1796         2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
 1797  SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
 1798  BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
 1799  BE ELIGIBLE FOR COVERAGE BY CITIZENS I MUST FIRST TRY TO OBTAIN
 1800  PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
 1801  WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
 1802  ARE REGULATED AND APPROVED BY THE STATE.
 1803         3.2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
 1804  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
 1805  INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
 1806  FLORIDA LEGISLATURE.
 1807         4.3. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
 1808  CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
 1809  STATE OF FLORIDA.
 1810         a. The corporation shall maintain, in electronic format or
 1811  otherwise, a copy of the applicant’s signed acknowledgment and
 1812  provide a copy of the statement to the policyholder as part of
 1813  his or her the first renewal after the effective date of this
 1814  subparagraph.
 1815         b. The signed acknowledgment form creates a conclusive
 1816  presumption that the policyholder understood and accepted his or
 1817  her potential surcharge and assessment liability as a
 1818  policyholder of the corporation.
 1819         (g) The executive director, with the concurrence of the
 1820  board, shall determine whether it is more cost-effective and in
 1821  the best interests of the corporation to use legal services
 1822  provided by in-house attorneys employed by the corporation
 1823  rather than contracting with outside counsel. In making such
 1824  determination, the board shall document its findings and shall
 1825  consider: the expertise needed; whether time commitments exceed
 1826  in-house staff resources; whether local representation is
 1827  needed; the travel, lodging and other costs associated with in
 1828  house representation; and such other factors that the board
 1829  determines are relevant.
 1830         (i)1. The Office of the Internal Auditor is established
 1831  within the corporation to provide a central point for
 1832  coordination of and responsibility for activities that promote
 1833  accountability, integrity, and efficiency to the policyholders
 1834  and to the taxpayers of this state. The internal auditor shall
 1835  be appointed by the board of governors, shall report to and be
 1836  under the general supervision of the board of governors, and is
 1837  not subject to supervision by an any employee of the
 1838  corporation. Administrative staff and support shall be provided
 1839  by the corporation. The internal auditor shall be appointed
 1840  without regard to political affiliation. It is the duty and
 1841  responsibility of the internal auditor to:
 1842         a. Provide direction for, supervise, conduct, and
 1843  coordinate audits, investigations, and management reviews
 1844  relating to the programs and operations of the corporation.
 1845         b. Conduct, supervise, or coordinate other activities
 1846  carried out or financed by the corporation for the purpose of
 1847  promoting efficiency in the administration of, or preventing and
 1848  detecting fraud, abuse, and mismanagement in, its programs and
 1849  operations.
 1850         c. Submit final audit reports, reviews, or investigative
 1851  reports to the board of governors, the executive director, the
 1852  members of the Financial Services Commission, and the President
 1853  of the Senate and the Speaker of the House of Representatives.
 1854         d. Keep the executive director and the board of governors
 1855  informed concerning fraud, abuses, and internal control
 1856  deficiencies relating to programs and operations administered or
 1857  financed by the corporation, recommend corrective action, and
 1858  report on the progress made in implementing corrective action.
 1859         e. Cooperate and coordinate activities with the
 1860  corporation’s inspector general.
 1861         e. Report expeditiously to the Department of Law
 1862  Enforcement or other law enforcement agencies, as appropriate,
 1863  whenever the internal auditor has reasonable grounds to believe
 1864  there has been a violation of criminal law.
 1865         2. On or before February 15, the internal auditor shall
 1866  prepare an annual report evaluating the effectiveness of the
 1867  internal controls of the corporation and providing
 1868  recommendations for corrective action, if necessary, and
 1869  summarizing the audits, reviews, and investigations conducted by
 1870  the office during the preceding fiscal year. The final report
 1871  shall be furnished to the board of governors and the executive
 1872  director, the President of the Senate, the Speaker of the House
 1873  of Representatives, and the Financial Services Commission.
 1874         (m)1. The Auditor General shall conduct an operational
 1875  audit of the corporation annually every 3 years to evaluate
 1876  management’s performance in administering laws, policies, and
 1877  procedures governing the operations of the corporation in an
 1878  efficient and effective manner. The scope of the review must
 1879  shall include, but is not limited to, evaluating claims
 1880  handling, customer service, take-out programs and bonuses;,
 1881  financing arrangements made to address a 100-year probable
 1882  maximum loss; personnel costs and administration; underwriting,
 1883  including processes designed to ensure compliance with policy
 1884  eligibility requirements of law;, procurement of goods and
 1885  services;, internal controls;, and the internal audit function;
 1886  and related internal controls. A copy of the report shall be
 1887  provided to the corporation’s board, the President of the
 1888  Senate, the Speaker of the House of Representatives, each member
 1889  of the Financial Services Commission, and the Office of
 1890  Insurance Regulation. The initial audit must be completed by
 1891  February 1, 2009.
 1892         2. The executive director, with the concurrence of the
 1893  board, shall contract with an independent auditing firm to
 1894  conduct a performance audit of the corporation every 2 years.
 1895  The objectives of the audit include, but are not limited to, an
 1896  evaluation, within the context of insurance industry best
 1897  practices, of the corporation’s strategic planning processes,
 1898  the functionality of the corporation’s organizational structure,
 1899  the compensation levels of senior management, and the overall
 1900  management and operations of the corporation. A copy of the
 1901  audit report shall be provided to the corporation’s board, the
 1902  President of the Senate, the Speaker of the House of
 1903  Representatives, each member of the Financial Services
 1904  Commission, the Office of Insurance Regulation, and the Auditor
 1905  General. The initial audit must be completed by June 1, 2014.
 1906         (q)1. The corporation shall certify to the office its needs
 1907  for annual assessments as to a particular calendar year, and for
 1908  any interim assessments that it deems to be necessary to sustain
 1909  operations as to a particular year pending the receipt of annual
 1910  assessments. Upon verification, the office shall approve such
 1911  certification, and the corporation shall levy such annual or
 1912  interim assessments. Such assessments shall be prorated as
 1913  provided in paragraph (b). The corporation shall take all
 1914  reasonable and prudent steps necessary to collect the amount of
 1915  assessments due from each assessable insurer, including, if
 1916  prudent, filing suit to collect the assessments, and the office
 1917  may provide such assistance to the corporation it deems
 1918  appropriate. If the corporation is unable to collect an
 1919  assessment from any assessable insurer, the uncollected
 1920  assessments shall be levied as an additional assessment against
 1921  the assessable insurers and any assessable insurer required to
 1922  pay an additional assessment as a result of such failure to pay
 1923  shall have a cause of action against the such nonpaying
 1924  assessable insurer. Assessments must shall be included as an
 1925  appropriate factor in the making of rates. The failure of a
 1926  surplus lines agent to collect and remit any regular or
 1927  emergency assessment levied by the corporation is considered to
 1928  be a violation of s. 626.936 and subjects the surplus lines
 1929  agent to the penalties provided in that section.
 1930         2. The governing body of any unit of local government, any
 1931  residents of which are insured by the corporation, may issue
 1932  bonds as defined in s. 125.013 or s. 166.101 from time to time
 1933  to fund an assistance program, in conjunction with the
 1934  corporation, for the purpose of defraying deficits of the
 1935  corporation. In order to avoid needless and indiscriminate
 1936  proliferation, duplication, and fragmentation of such assistance
 1937  programs, the any unit of local government, any residents of
 1938  which are insured by the corporation, may provide for the
 1939  payment of losses, regardless of whether or not the losses
 1940  occurred within or outside of the territorial jurisdiction of
 1941  the local government. Revenue bonds under this subparagraph may
 1942  not be issued until validated pursuant to chapter 75, unless a
 1943  state of emergency is declared by executive order or
 1944  proclamation of the Governor pursuant to s. 252.36 which makes
 1945  making such findings as are necessary to determine that it is in
 1946  the best interests of, and necessary for, the protection of the
 1947  public health, safety, and general welfare of residents of this
 1948  state and declaring it an essential public purpose to permit
 1949  certain municipalities or counties to issue such bonds as will
 1950  permit relief to claimants and policyholders of the corporation.
 1951  Any such unit of local government may enter into such contracts
 1952  with the corporation and with any other entity created pursuant
 1953  to this subsection as are necessary to carry out this paragraph.
 1954  Any bonds issued are under this subparagraph shall be payable
 1955  from and secured by moneys received by the corporation from
 1956  emergency assessments under sub-subparagraph (b)3.d., and
 1957  assigned and pledged to or on behalf of the unit of local
 1958  government for the benefit of the holders of such bonds. The
 1959  funds, credit, property, and taxing power of the state or of the
 1960  unit of local government may shall not be pledged for the
 1961  payment of such bonds.
 1962         3.a. The corporation shall adopt one or more programs
 1963  subject to approval by the office for the reduction of both new
 1964  and renewal writings by in the corporation. The corporation may
 1965  consider any prudent and not unfairly discriminatory approach to
 1966  reducing corporation writings.
 1967         a. The corporation may adopt a credit against assessment
 1968  liability or other liability which provides an incentive for
 1969  insurers to take and keep risks out of the corporation by
 1970  maintaining or increasing voluntary writings in counties or
 1971  areas in which corporation risks are highly concentrated, and a
 1972  program to provide a formula under which an insurer voluntarily
 1973  taking risks out of the corporation by maintaining or increasing
 1974  voluntary writings is relieved, wholly or partially, from
 1975  assessments under sub-subparagraph (b)3.a.
 1976         b.Beginning January 1, 2008, Any program the corporation
 1977  adopts for the payment of bonuses to an insurer for each risk
 1978  the insurer removes from the corporation must shall comply with
 1979  s. 627.3511(2) and may not exceed the amount referenced in s.
 1980  627.3511(2) for each risk removed. The corporation may consider
 1981  any prudent and not unfairly discriminatory approach to reducing
 1982  corporation writings, and may adopt a credit against assessment
 1983  liability or other liability that provides an incentive for
 1984  insurers to take risks out of the corporation and to keep risks
 1985  out of the corporation by maintaining or increasing voluntary
 1986  writings in counties or areas in which corporation risks are
 1987  highly concentrated and a program to provide a formula under
 1988  which an insurer voluntarily taking risks out of the corporation
 1989  by maintaining or increasing voluntary writings will be relieved
 1990  wholly or partially from assessments under sub-subparagraph
 1991  (b)3.a. However, Any “take-out bonus” or payment to an insurer
 1992  must be conditioned on the property being insured for at least 5
 1993  years by the insurer, unless canceled or nonrenewed by the
 1994  policyholder. If the policy is canceled or nonrenewed by the
 1995  policyholder before the end of the 5-year period, the amount of
 1996  the take-out bonus must be prorated for the time period the
 1997  policy was insured. If When the corporation enters into a
 1998  contractual agreement for a take-out plan, the producing agent
 1999  of record of the corporation policy is entitled to retain any
 2000  unearned commission on such policy, and the insurer shall
 2001  either:
 2002         (I) Pay to the producing agent of record of the policy, for
 2003  the first year, an amount which is the greater of the insurer’s
 2004  usual and customary commission for the type of policy written or
 2005  a policy fee equal to the usual and customary commission of the
 2006  corporation; or
 2007         (II) Offer to allow the producing agent of record of the
 2008  policy to continue servicing the policy for at least a period of
 2009  not less than 1 year and offer to pay the agent the insurer’s
 2010  usual and customary commission for the type of policy written.
 2011  If the producing agent is unwilling or unable to accept
 2012  appointment by the new insurer, the new insurer shall pay the
 2013  agent in accordance with sub-sub-subparagraph (I).
 2014         c.b. Any credit or exemption from regular assessments
 2015  adopted under this subparagraph shall last up to no longer than
 2016  the 3 years after following the cancellation or expiration of
 2017  the policy by the corporation. With the approval of the office,
 2018  the board may extend such credits for an additional year if the
 2019  insurer guarantees an additional year of renewability for all
 2020  policies removed from the corporation, or for 2 additional years
 2021  if the insurer guarantees 2 additional years of renewability for
 2022  all policies so removed.
 2023         d.c.A There shall be no credit, limitation, exemption, or
 2024  deferment from emergency assessments to be collected from
 2025  policyholders pursuant to sub-subparagraph (b)3.d. is
 2026  prohibited.
 2027         4. The corporation plan shall provide for the deferment, in
 2028  whole or in part, of the assessment of an assessable insurer,
 2029  other than an emergency assessment collected from policyholders
 2030  pursuant to sub-subparagraph (b)3.d., if the office finds that
 2031  payment of the assessment would endanger or impair the solvency
 2032  of the insurer. If In the event an assessment against an
 2033  assessable insurer is deferred in whole or in part, the amount
 2034  by which such assessment is deferred may be assessed against the
 2035  other assessable insurers in a manner consistent with the basis
 2036  for assessments set forth in paragraph (b).
 2037         5. Effective July 1, 2007, In order to evaluate the costs
 2038  and benefits of approved take-out plans, if the corporation pays
 2039  a bonus or other payment to an insurer for an approved take-out
 2040  plan, it shall maintain a record of the address or such other
 2041  identifying information on the property or risk removed in order
 2042  to track if and when the property or risk is later insured by
 2043  the corporation.
 2044         6. Any policy taken out, assumed, or removed from the
 2045  corporation is, as of the effective date of the take-out,
 2046  assumption, or removal, direct insurance issued by the insurer
 2047  and not by the corporation, even if the corporation continues to
 2048  service the policies. This subparagraph applies to policies of
 2049  the corporation and not policies taken out, assumed, or removed
 2050  from any other entity.
 2051         6. The corporation may adopt one or more programs to
 2052  encourage authorized insurers to remove policies from the
 2053  corporation through a loan from the corporation to an insurer
 2054  secured by a surplus note that contains such necessary and
 2055  reasonable provisions as the corporation requires. Such surplus
 2056  note is subject to the review and approval of the office
 2057  pursuant to s. 628.401. The corporation may include, but is not
 2058  limited to, provisions regarding the maximum size of a loan to
 2059  an insurer, capital matching requirements, the relationship
 2060  between the aggregate number of policies or amount of loss
 2061  exposure removed from the association and the amount of a loan,
 2062  retention requirements related to policies removed from the
 2063  corporation, and limitations on the number of insurers receiving
 2064  loans from the corporation under any one management group in
 2065  whatever form or arrangement. If a loan secured by a surplus
 2066  note is provided to a new mutual insurance company, the
 2067  corporation may require the board of the new mutual insurer to
 2068  have a majority of independent board members, may restrict the
 2069  ability of the new mutual insurer to convert to a stock insurer
 2070  while the mutual insurer owes any principal or interest under
 2071  the surplus note to the corporation, establish a capital match
 2072  requirement of up to $1 of private capital for each $4 of the
 2073  corporation’s loan to a new mutual insurer, and limit the
 2074  eligibility of a new mutual insurer for a waiver of the ceding
 2075  commission traditionally associated with take-out programs from
 2076  the corporation to those new mutual insurers that agree
 2077  contractually to maintain an expense ratio below 20 per cent of
 2078  written premium. For this purpose, the term “expense ratio”
 2079  means the sum of agent commissions and other acquisition
 2080  expenses; general and administrative expenses; and premium
 2081  taxes, licenses, and fees, divided by the gross written premium.
 2082         (t) For the purposes of s. 199.183(1), the corporation is
 2083  shall be considered a political subdivision of the state and is
 2084  shall be exempt from the corporate income tax. The premiums,
 2085  assessments, investment income, and other revenue of the
 2086  corporation are funds received for providing property insurance
 2087  coverage as required by this subsection, paying claims for state
 2088  residents Florida citizens insured by the corporation, securing
 2089  and repaying debt obligations issued by the corporation, and
 2090  conducting all other activities of the corporation, and are
 2091  shall not be considered taxes, fees, licenses, or charges for
 2092  services imposed by the Legislature on individuals, businesses,
 2093  or agencies outside state government. Bonds and other debt
 2094  obligations issued by or on behalf of the corporation are not to
 2095  be considered “state bonds” within the meaning of s. 215.58(8).
 2096  The corporation is not subject to the procurement provisions of
 2097  chapter 287, and Policies and decisions of the corporation
 2098  relating to incurring debt, levying of assessments and the sale,
 2099  issuance, continuation, terms and claims under corporation
 2100  policies, and all services relating thereto, are not subject to
 2101  the provisions of chapter 120. The corporation is not required
 2102  to obtain or to hold a certificate of authority issued by the
 2103  office, nor is it required to participate as a member insurer of
 2104  the Florida Insurance Guaranty Association. However, the
 2105  corporation is required to pay, in the same manner as an
 2106  authorized insurer, assessments levied by the Florida Insurance
 2107  Guaranty Association. It is the intent of the Legislature that
 2108  the tax exemptions provided in this paragraph will augment the
 2109  financial resources of the corporation to better enable the
 2110  corporation to fulfill its public purposes. Any debt obligations
 2111  issued by the corporation, their transfer, and the income
 2112  therefrom, including any profit made on the sale thereof, is
 2113  shall at all times be free from taxation of every kind by the
 2114  state and any political subdivision or local unit or other
 2115  instrumentality thereof; however, this exemption does not apply
 2116  to any tax imposed by chapter 220 on interest, income, or
 2117  profits on debt obligations owned by corporations other than the
 2118  corporation.
 2119         (z) In enacting the provisions of this section, the
 2120  Legislature recognizes that both the Florida Windstorm
 2121  Underwriting Association and the Residential Property and
 2122  Casualty Joint Underwriting Association have entered into
 2123  financing arrangements that obligate each entity to service its
 2124  debts and maintain the capacity to repay funds secured under
 2125  these financing arrangements. It is the intent of the
 2126  Legislature that nothing in this section not be construed to
 2127  compromise, diminish, or interfere with the rights of creditors
 2128  under such financing arrangements. It is further the intent of
 2129  the Legislature to preserve the obligations of the Florida
 2130  Windstorm Underwriting Association and Residential Property and
 2131  Casualty Joint Underwriting Association with regard to
 2132  outstanding financing arrangements, with such obligations
 2133  passing entirely and unchanged to the corporation and,
 2134  specifically, to the applicable account of the corporation. So
 2135  long as any bonds, notes, indebtedness, or other financing
 2136  obligations of the Florida Windstorm Underwriting Association or
 2137  the Residential Property and Casualty Joint Underwriting
 2138  Association are outstanding, under the terms of the financing
 2139  documents pertaining to them, the executive director of the
 2140  corporation, with the concurrence of the governing board, of the
 2141  corporation shall have and shall exercise the authority to levy,
 2142  charge, collect, and receive all premiums, assessments,
 2143  surcharges, charges, revenues, and receipts that the
 2144  associations had authority to levy, charge, collect, or receive
 2145  under the provisions of subsection (2) and this subsection,
 2146  respectively, as they existed on January 1, 2002, to provide
 2147  moneys, without exercise of the authority provided by this
 2148  subsection, in at least the amounts, and by the times, as would
 2149  be provided under those former provisions of subsection (2) or
 2150  this subsection, respectively, so that the value, amount, and
 2151  collectability of any assets, revenues, or revenue source
 2152  pledged or committed to, or any lien thereon securing such
 2153  outstanding bonds, notes, indebtedness, or other financing
 2154  obligations is will not be diminished, impaired, or adversely
 2155  affected by the amendments made by this section act and to
 2156  permit compliance with all provisions of financing documents
 2157  pertaining to such bonds, notes, indebtedness, or other
 2158  financing obligations, or the security or credit enhancement for
 2159  them, and any reference in this subsection to bonds, notes,
 2160  indebtedness, financing obligations, or similar obligations, of
 2161  the corporation must shall include like instruments or contracts
 2162  of the Florida Windstorm Underwriting Association and the
 2163  Residential Property and Casualty Joint Underwriting Association
 2164  to the extent not inconsistent with the provisions of the
 2165  financing documents pertaining to them.
 2166         (gg) The Office of Inspector General is established within
 2167  the corporation to provide a central point for coordination of
 2168  and responsibility for activities that promote accountability,
 2169  integrity, and efficiency. The office shall be headed by an
 2170  inspector general, which is a senior management position that
 2171  involves planning, coordinating, and performing activities
 2172  assigned to and assumed by the inspector general for the
 2173  corporation.
 2174         1. The inspector general shall be appointed by the
 2175  Financial Services Commission and may be removed from office
 2176  only by the commission. The inspector general shall be appointed
 2177  without regard to political affiliation.
 2178         a. At a minimum, the inspector general must possess a
 2179  bachelor’s degree from an accredited college or university and 8
 2180  years of professional experience related to the duties of an
 2181  inspector general as described in this paragraph, of which 5
 2182  years must have been at a supervisory level.
 2183         b. Until June 30, 2014, the inspector general shall be
 2184  under the general supervision of the Financial Services
 2185  Commission and not subject to the supervision of any employee of
 2186  the corporation. Beginning July 1, 2014, the inspector general
 2187  shall report to, and be under the supervision of, the chair of
 2188  the board of governors. The executive director or corporation
 2189  staff may not prevent or prohibit the inspector general from
 2190  initiating, carrying out, or completing any review, evaluation,
 2191  or investigation.
 2192         2. The inspector general shall initiate, direct,
 2193  coordinate, participate in, and perform studies, reviews,
 2194  evaluations, and investigations designed to assess management
 2195  practices; compliance with laws, rules, and policies; and
 2196  program effectiveness and efficiency. This includes:
 2197         a. Conducting internal examinations; investigating
 2198  allegations of fraud, waste, abuse, malfeasance, mismanagement,
 2199  employee misconduct, or violations of corporation policies; and
 2200  conducting any other investigations as directed by the Financial
 2201  Services Commission or as independently determined.
 2202         b. Evaluating and recommending actions regarding security,
 2203  the ethical behavior of personnel and vendors, and compliance
 2204  with rules, laws, policies, and personnel matters; and rendering
 2205  ethics opinions.
 2206         c. Overseeing or participating in personnel and
 2207  administrative policy compliance and management, operational
 2208  reviews, and conducting and selecting human resources-related
 2209  advice and consultation.
 2210         d. In conjunction with the ethics and compliance officer,
 2211  evaluating the application of a corporation code of ethics,
 2212  providing input on the design and content of ethics-related
 2213  policy training courses, educating employees on the code and on
 2214  appropriate conduct, and checking for compliance.
 2215         e. Participating in policy development and review. This
 2216  includes working collaboratively with the ethics and compliance
 2217  officer in the creation, modification, and maintenance of
 2218  personnel and administrative services policies and in the
 2219  identification of policy enhancements; and researching policy
 2220  related issues.
 2221         f. Participating in the activities of the senior management
 2222  team and evaluating the management’s compliance with recommended
 2223  solutions.
 2224         g. Cooperating and coordinating activities with the chief
 2225  of internal audit, but not conducting internal audits.
 2226         h. Maintaining records of investigations and discipline in
 2227  accordance with established policies.
 2228         i. Supervising and directing the tasks and assignments of
 2229  the staff assigned to assist with the inspector general’s
 2230  projects. This includes regular review and feedback regarding
 2231  work in progress and upon completion and providing input
 2232  regarding relevant training and staff development activities as
 2233  warranted.
 2234         j. Directing, planning, preparing, and presenting interim
 2235  and final reports and oral briefings to the Financial Services
 2236  Commission and the executive director which communicate the
 2237  results of studies, reviews, and investigations.
 2238         k. Reporting expeditiously to the Department of Law
 2239  Enforcement or other law enforcement agencies, as appropriate,
 2240  whenever the inspector general has reasonable grounds to believe
 2241  there has been a violation of criminal law.
 2242         l. Providing the executive director and board chairman with
 2243  independent and objective assessments of programs and
 2244  activities.
 2245         m. Complying with the General Principles and Standards for
 2246  Offices of Inspector General as published and revised by the
 2247  Association of Inspectors General.
 2248         3. At least annually, the inspector general shall provide a
 2249  report to the President of the Senate and the Speaker of the
 2250  House of Representatives regarding the corporation’s
 2251  clearinghouse and the extent to which policies are being
 2252  returned to the voluntary market. This report must include an
 2253  analysis regarding the effectiveness of the clearinghouse in
 2254  encouraging voluntary market participation in depopulation.
 2255         Section 8. Effective October 1, 2013, paragraph (e) of
 2256  subsection (6) of section 627.351, Florida Statutes, is amended
 2257  to read:
 2258         627.351 Insurance risk apportionment plans.—
 2259         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 2260         (e) The corporation is subject to s. 287.057 for the
 2261  purchase of commodities and contractual services except as
 2262  otherwise provided in this paragraph. Services provided by
 2263  tradepersons or technical experts to assist a licensed adjuster
 2264  in the evaluation of individual claims are not subject to the
 2265  procurement requirements of this section. Additionally, the
 2266  procurement of financial services providers and underwriters
 2267  must be made pursuant to s. 627.3513 Purchases that equal or
 2268  exceed $2,500, but are less than $25,000, shall be made by
 2269  receipt of written quotes, written record of telephone quotes,
 2270  or informal bids, whenever practical. The procurement of goods
 2271  or services valued at or over $25,000 shall be subject to
 2272  competitive solicitation, except in situations where the goods
 2273  or services are provided by a sole source or are deemed an
 2274  emergency purchase; the services are exempted from competitive
 2275  solicitation requirements under s. 287.057(3)(f); or the
 2276  procurement of services is subject to s. 627.3513. Justification
 2277  for the sole-sourcing or emergency procurement must be
 2278  documented. Contracts for goods or services valued at or more
 2279  than over $100,000 are subject to approval by the board.
 2280         1. The corporation is an agency for the purposes of s.
 2281  287.057, except for subsection (22) of that section for which
 2282  the corporation is an eligible user.
 2283         a. The authority of the Department of Management Services
 2284  and the Chief Financial Officer under s. 287.057 extends to the
 2285  corporation as if the corporation were an agency.
 2286         b. The executive director of the corporation is the agency
 2287  head under s. 287.057, except for resolution of bid protests for
 2288  which the board would serve as the agency head.
 2289         2. The corporation must provide notice of a decision or
 2290  intended decision concerning a solicitation, contract award, or
 2291  exceptional purchase by electronic posting. Such notice must
 2292  contain the following statement: “Failure to file a protest
 2293  within the time prescribed in this section constitutes a waiver
 2294  of proceedings.”
 2295         a. A person adversely affected by the corporation’s
 2296  decision or intended decision to award a contract pursuant to s.
 2297  287.057(1) or s. 287.057(3)(c) who elects to challenge the
 2298  decision must file a written notice of protest with the
 2299  executive director of the corporation within 72 hours after the
 2300  corporation posts a notice of its decision or intended decision.
 2301  For a protest of the terms, conditions, and specifications
 2302  contained in a solicitation, including any provisions governing
 2303  the methods for ranking bids, proposals, replies, awarding
 2304  contracts, reserving rights of further negotiation, or modifying
 2305  or amending any contract, the notice of protest must be filed in
 2306  writing within 72 hours after the posting of the solicitation.
 2307  Saturdays, Sundays, and state holidays are excluded in the
 2308  computation of the 72-hour time period.
 2309         b. A formal written protest must be filed within 10 days
 2310  after the date the notice of protest is filed. The formal
 2311  written protest must state with particularity the facts and law
 2312  upon which the protest is based. Upon receipt of a formal
 2313  written protest that has been timely filed, the corporation must
 2314  stop the solicitation or contract award process until the
 2315  subject of the protest is resolved by final board action unless
 2316  the executive director sets forth in writing particular facts
 2317  and circumstances that require the continuance of the
 2318  solicitation or contract award process without delay in order to
 2319  avoid an immediate and serious danger to the public health,
 2320  safety, or welfare. The corporation must provide an opportunity
 2321  to resolve the protest by mutual agreement between the parties
 2322  within 7 business days after receipt of the formal written
 2323  protest. If the subject of a protest is not resolved by mutual
 2324  agreement within 7 business days, the corporation’s board must
 2325  place the protest on the agenda and resolve it at its next
 2326  regularly scheduled meeting. The protest must be heard by the
 2327  board at a publicly noticed meeting in accordance with
 2328  procedures established by the board.
 2329         c. In a protest of an invitation-to-bid or request-for
 2330  proposals procurement, submissions made after the bid or
 2331  proposal opening which amend or supplement the bid or proposal
 2332  may not be considered. In protesting an invitation-to-negotiate
 2333  procurement, submissions made after the corporation announces
 2334  its intent to award a contract, reject all replies, or withdraw
 2335  the solicitation that amends or supplements the reply may not be
 2336  considered. Unless otherwise provided by law, the burden of
 2337  proof rests with the party protesting the corporation’s action.
 2338  In a competitive-procurement protest, other than a rejection of
 2339  all bids, proposals, or replies, the corporation’s board must
 2340  conduct a de novo proceeding to determine whether the
 2341  corporation’s proposed action is contrary to the corporation’s
 2342  governing statutes, the corporation’s rules or policies, or the
 2343  solicitation specifications. The standard of proof for the
 2344  proceeding is whether the corporation’s action was clearly
 2345  erroneous, contrary to competition, arbitrary, or capricious. In
 2346  any bid-protest proceeding contesting an intended corporation
 2347  action to reject all bids, proposals, or replies, the standard
 2348  of review by the board is whether the corporation’s intended
 2349  action is illegal, arbitrary, dishonest, or fraudulent.
 2350         d. Failure to file a notice of protest or failure to file a
 2351  formal written protest constitutes a waiver of proceedings.
 2352         3. Contract actions and decisions by the board under this
 2353  paragraph are final. Any further legal remedy must be made in
 2354  the Circuit Court of Leon County.
 2355         Section 9. The purchase of commodities and contractual
 2356  services by Citizens Property Insurance Corporation commenced
 2357  before October 1, 2013, is governed by the law in effect on
 2358  September 30, 2013.
 2359         Section 10. Effective January 1, 2014, paragraph (n) of
 2360  subsection (6) of section 627.351, Florida Statutes, is amended
 2361  to read:
 2362         627.351 Insurance risk apportionment plans.—
 2363         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
 2364         (n)1. Rates for coverage provided by the corporation must
 2365  be actuarially sound and subject to s. 627.062, Except as
 2366  otherwise provided in this paragraph, rates for coverage
 2367  provided by the corporation must be actuarially sound and not
 2368  competitive with approved rates charged in the admitted
 2369  voluntary market in order for the corporation to function as a
 2370  residual market mechanism that provides insurance only if
 2371  insurance cannot be procured in the voluntary market.
 2372         a. In establishing actuarially sound rates the corporation
 2373  shall include an appropriate catastrophe risk load factor that
 2374  reflects the actual catastrophic risk exposure retained by the
 2375  corporation.
 2376         b. The corporation shall file its recommended rates with
 2377  the office at least annually. The corporation shall provide any
 2378  additional information regarding the rates which the office
 2379  requires. The office shall consider the recommendations of the
 2380  board and issue a final order establishing the rates for the
 2381  corporation within 45 days after the recommended rates are
 2382  filed. The corporation may not pursue an administrative
 2383  challenge or judicial review of the final order of the office.
 2384         c. In territories located in a county where the corporation
 2385  provides more than 75 percent of personal lines residential
 2386  policies providing wind coverage, subparagraph 3. applies to all
 2387  new personal lines residential policies written by the
 2388  corporation in such territories.
 2389         2. In addition to the rates otherwise determined pursuant
 2390  to this paragraph, the corporation shall impose and collect an
 2391  amount equal to the premium tax provided in s. 624.509 to
 2392  augment the financial resources of the corporation.
 2393         3. After the public hurricane loss-projection model under
 2394  s. 627.06281 has been found to be accurate and reliable by the
 2395  Florida Commission on Hurricane Loss Projection Methodology, the
 2396  model shall serve as the minimum benchmark for determining the
 2397  windstorm portion of the corporation’s rates. This subparagraph
 2398  does not require or allow the corporation to adopt rates lower
 2399  than the rates otherwise required or allowed by this paragraph.
 2400         4. The rate filings for the corporation which were approved
 2401  by the office and took effect January 1, 2007, are rescinded,
 2402  except for those rates that were lowered. As soon as possible,
 2403  the corporation shall begin using the lower rates that were in
 2404  effect on December 31, 2006, and provide refunds to
 2405  policyholders who paid higher rates as a result of that rate
 2406  filing. The rates in effect on December 31, 2006, remain in
 2407  effect for the 2007 and 2008 calendar years except for any rate
 2408  change that results in a lower rate. The next rate change that
 2409  may increase rates shall take effect pursuant to a new rate
 2410  filing recommended by the corporation and established by the
 2411  office, subject to this paragraph.
 2412         5. Beginning on July 15, 2009, and annually thereafter, the
 2413  corporation must make a recommended actuarially sound rate
 2414  filing for each personal and commercial line of business it
 2415  writes, to be effective no earlier than January 1, 2010.
 2416         3.6.Beginning on or after January 1, 2010, and
 2417  notwithstanding the board’s recommended rates and the office’s
 2418  final order regarding the corporation’s filed rates under
 2419  subparagraph 1., The corporation shall annually implement a rate
 2420  increase that which, except for sinkhole coverage, does not
 2421  exceed 10 percent for any single policy issued by the
 2422  corporation, excluding coverage changes and surcharges, for
 2423  residential policyholders who:
 2424         a. Were initially insured by the corporation before January
 2425  1, 2014, and who have been continuously insured by the
 2426  corporation since that date; or
 2427         b. Were previously insured with the corporation on or
 2428  before December 31, 2013, were continuously insured with the
 2429  corporation until being depopulated by a private insurer on or
 2430  after January 1, 2014, and who, through no fault of their own,
 2431  were nonrenewed by the private insurer within 18 months after
 2432  being removed from the corporation and, after submitting an
 2433  application to the clearinghouse pursuant to the rating
 2434  requirements of s. 627.3518(5)(a), are eligible for coverage
 2435  with the corporation.
 2436         4.7. The corporation may also implement an increase to
 2437  reflect the effect on the corporation of the cash buildup factor
 2438  pursuant to s. 215.555(5)(b).
 2439         5.8. The corporation’s implementation of rates as
 2440  prescribed in subparagraph 3. 6. shall cease for any line of
 2441  business written by the corporation upon the corporation’s
 2442  implementation of actuarially sound rates. Thereafter, the
 2443  corporation shall annually make a recommended actuarially sound
 2444  rate filing implementing such rates for each commercial and
 2445  personal line of business the corporation writes.
 2446         6. The corporation shall annually certify to the office
 2447  that its rates comply with the requirements of this paragraph.
 2448  If any adjustment in the rates or rating factors of the
 2449  corporation is necessary to ensure such compliance, the
 2450  corporation shall make and implement such adjustments and file
 2451  its revised rates and rating factors with the office. If the
 2452  office thereafter determines that the revised rates and rating
 2453  factors fail to comply with this paragraph, it shall notify the
 2454  corporation and require the corporation to amend its rates or
 2455  rating factors in conjunction with its next rate filing. The
 2456  office must notify the corporation by electronic means of any
 2457  rate filing it approves for any insurer among the insurers
 2458  referred to in this paragraph.
 2459         7. By January 1, 2014, the board shall provide
 2460  recommendations to the Legislature on how to provide relief to a
 2461  policyholder whose premium reflects the full rate required under
 2462  subparagraph 1. and who demonstrates a financial need at the
 2463  time of application or renewal, including the impact of any
 2464  phase-in pursuant to s. 627.0629 of required rates under
 2465  subparagraph 1.
 2466         Section 11. Section 627.3518, Florida Statutes, is created
 2467  to read:
 2468         627.3518 Citizens Property Insurance Corporation
 2469  clearinghouse.—The Legislature recognizes that Citizens Property
 2470  Insurance Corporation has authority to establish a clearinghouse
 2471  as a separate organizational unit within the corporation for the
 2472  purpose of determining the eligibility of new and renewal risks,
 2473  excluding commercial residential, seeking coverage through the
 2474  corporation and facilitating the identification and diversion of
 2475  ineligible applicants and current policyholders from the
 2476  corporation into the voluntary insurance market. The purpose of
 2477  this section is to augment that authority by providing a
 2478  framework for the corporation to implement such program by
 2479  January 1, 2014.
 2480         (1) As used in this section, the term:
 2481         (a) “Clearinghouse” means the clearinghouse diversion
 2482  program created under this section.
 2483         (b) “Corporation” means Citizens Property Insurance
 2484  Corporation.
 2485         (c) “Exclusive agent” means a licensed insurance agent who
 2486  has agreed, by contract, to act exclusively for one company or
 2487  group of affiliated insurance companies and is disallowed by the
 2488  provisions of that contract to directly write for any other
 2489  unaffiliated insurer absent express consent from the company or
 2490  group of affiliated insurance companies.
 2491         (d) “Independent agent” means a licensed insurance agent
 2492  not described in paragraph (c).
 2493         (2) In order to confirm eligibility with the corporation
 2494  and to enhance the access of new applicants for coverage and
 2495  existing policyholders of the corporation to offers of coverage
 2496  from authorized and eligible insurers, the corporation shall
 2497  establish a clearinghouse for personal residential risks in
 2498  order to facilitate the diversion of ineligible applicants and
 2499  existing policyholders from the corporation into the voluntary
 2500  insurance market. The corporation shall also develop appropriate
 2501  procedures for facilitating the diversion of ineligible
 2502  applicants and existing policyholders for commercial residential
 2503  coverage into the private insurance market, and shall report
 2504  such procedures to the President of the Senate and the Speaker
 2505  of the House of Representatives by July 1, 2015.
 2506         (3) The clearinghouse has the same rights and
 2507  responsibilities in carrying out its duties as a licensed
 2508  general lines agent, but is not required to employ or engage a
 2509  licensed general lines agent or to maintain an insurance agency
 2510  license in order to solicit and place insurance coverage. In
 2511  establishing the clearinghouse, the corporation may:
 2512         (a) Require all new applications and all policies due for
 2513  renewal to be submitted to the clearinghouse in order to
 2514  facilitate obtaining an offer of coverage from an authorized
 2515  insurer before binding or renewing coverage by the corporation.
 2516         (b) Employ or otherwise contract with individuals or other
 2517  entities to provide administrative or professional services in
 2518  order to carry out the plan within the corporation in accordance
 2519  with the applicable purchasing requirements under s. 627.351.
 2520         (c) Enter into a contract with an authorized or eligible
 2521  insurer participating in the clearinghouse and accept an
 2522  appointment by such insurer.
 2523         (d) Provide funds to operate the clearinghouse. Insurers
 2524  and agents participating in the clearinghouse are not required
 2525  to pay a fee to offset or partially offset the cost of the
 2526  clearinghouse, or use the clearinghouse for the renewal of
 2527  policies initially written through the clearinghouse.
 2528         (e) Develop an enhanced application for obtaining
 2529  information that will assist private insurers in determining
 2530  whether to make an offer of coverage through the clearinghouse.
 2531         (f) Before approving new applications for coverage by the
 2532  corporation, require that every application be subject to a
 2533  period of 2 business days during which an insurer participating
 2534  in the program may select the application for coverage. The
 2535  insurer may issue a binder on any policy selected for coverage
 2536  for at least 30 days but not more than 60 days.
 2537         (4) An authorized or eligible insurer may participate in
 2538  the clearinghouse; however, participation is not mandatory. An
 2539  insurer that makes an offer of coverage to a new applicant or
 2540  renews a policy for a policyholder through the clearinghouse:
 2541         (a) Is not required to individually appoint an agent whose
 2542  customer is underwritten and bound through the clearinghouse.
 2543  Notwithstanding s. 626.112, an insurer is not required to
 2544  appoint an agent on a policy underwritten through the
 2545  clearinghouse if that policy remains with the insurer. An
 2546  insurer may appoint an agent whose customer is initially
 2547  underwritten and bound through the clearinghouse. If an insurer
 2548  accepts a policy from an agent who is not appointed pursuant to
 2549  this paragraph and thereafter accepts a policy from such agent,
 2550  the provisions of s. 626.112 requiring appointment apply to the
 2551  agent.
 2552         (b) Must enter into a limited agency agreement with each
 2553  agent who is not appointed in accordance with paragraph (a) and
 2554  whose customer is underwritten and bound through the
 2555  clearinghouse.
 2556         (c) Must enter into its standard agency agreement with each
 2557  agent whose customer is underwritten and bound through the
 2558  clearinghouse if that agent has been appointed by the insurer
 2559  pursuant to s. 626.112.
 2560         (d) Must comply with s. 627.4133(2).
 2561         (e) Must allow authorized or eligible insurers
 2562  participating in the clearinghouse to participate through their
 2563  single, designated managing general agent or broker; however,
 2564  the provisions of paragraph (6)(a) regarding ownership, control,
 2565  and use of the expirations apply.
 2566         (f) Must pay the producing agent a commission equal to that
 2567  paid by the corporation or the usual and customary commission
 2568  paid by the insurer for that line of business, whichever is
 2569  greater.
 2570         (5)(a) Notwithstanding s. 627.3517, an applicant for new
 2571  coverage is not eligible for coverage from the corporation if
 2572  the applicant is offered coverage from an authorized insurer
 2573  through the clearinghouse at a premium that is at or below the
 2574  eligibility threshold established under s. 627.351(6)(c)5.a.
 2575         (b) Notwithstanding any other provisions of law, if a
 2576  renewing policyholder of the corporation is offered coverage
 2577  from an authorized insurer for a personal lines risk at a
 2578  premium that is equal to or less than the corporation’s renewal
 2579  premium for comparable coverage, the risk is not eligible for
 2580  coverage with the corporation.
 2581         (c) Notwithstanding s. 626.916(1), if an applicant for new
 2582  or renewal coverage from the corporation does not receive an
 2583  offer of coverage from an authorized insurer, the applicant may
 2584  choose to accept an offer of coverage from an eligible insurer
 2585  or its broker under ss. 626.913-626.937. Such offer of coverage
 2586  from an eligible insurer does not make the risk ineligible for
 2587  coverage with the corporation.
 2588         (d) An applicant for new or renewal coverage from the
 2589  corporation may choose to accept any offer of coverage received
 2590  through the clearinghouse from an authorized insurer.
 2591         (e) Section 627.351(6)(c)5.a.(I) and b.(I) does not apply
 2592  to an offer of coverage from an authorized insurer obtained
 2593  through the clearinghouse.
 2594         (f) The 45-day notice of nonrenewal required under s.
 2595  627.4133(2)(b)4.b. applies when a policy is nonrenewed by the
 2596  corporation because the risk has received an offer of coverage
 2597  pursuant to this section which renders the risk ineligible for
 2598  coverage by the corporation.
 2599         (6) An independent agent who submits a new application for
 2600  coverage or who is the agent of record on a renewal policy
 2601  submitted to the clearinghouse:
 2602         (a) Is granted and must maintain ownership and the
 2603  exclusive use of expirations, records, or other written or
 2604  electronic information directly related to such application or
 2605  renewal written through the corporation or through an insurer
 2606  participating in the clearinghouse, notwithstanding s.
 2607  627.351(6)(c)5.a.(I)(B) and (II)(B). Such ownership is granted
 2608  for as long as the insured remains with the agency or until sold
 2609  or surrendered in writing by the agent. A contract with the
 2610  corporation or required by the corporation may not amend,
 2611  modify, interfere with, or limit such rights of ownership. Such
 2612  expirations, records, or other written or electronic information
 2613  may be used to review an application or issue a policy or for
 2614  any other purpose necessary for placing business through the
 2615  clearinghouse.
 2616         (b) Is not required to be appointed by an insurer
 2617  participating in the clearinghouse for policies written solely
 2618  through the clearinghouse, notwithstanding s. 626.112.
 2619         (c) May accept an appointment from an insurer participating
 2620  in the clearinghouse.
 2621         (d) May enter into a standard or limited agency agreement
 2622  with the insurer, at the insurer’s option.
 2623  
 2624  An applicant ineligible for coverage under subsection (5)
 2625  remains ineligible if the applicant’s independent agent is
 2626  unwilling or unable to enter into a standard or limited agency
 2627  agreement with an insurer participating in the clearinghouse.
 2628         (7) An exclusive agent who submits a new application for
 2629  coverage or who is the agent of record on a renewal policy
 2630  submitted to the clearinghouse:
 2631         (a) Must maintain ownership and the exclusive use of
 2632  expirations, records, or other written or electronic information
 2633  directly related to such application or renewal written through
 2634  the corporation or through an insurer participating in the
 2635  clearinghouse, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
 2636  (II)(B). A contract with the corporation or required by the
 2637  corporation may not amend, modify, interfere with, or limit such
 2638  rights of ownership. Such expirations, records, or other written
 2639  or electronic information may be used to review an application
 2640  or issue a policy or for any other purpose necessary for placing
 2641  business through the clearinghouse.
 2642         (b) Is not required to be appointed by an insurer
 2643  participating in the clearinghouse for policies written solely
 2644  through the clearinghouse, notwithstanding s. 626.112.
 2645         (c) Must only facilitate the placement of an offer of
 2646  coverage from an insurer whose limited servicing agreement is
 2647  approved by that exclusive agent’s exclusive insurer.
 2648         (d) May enter into a limited servicing agreement with the
 2649  insurer making an offer of coverage, and may do so only after
 2650  the exclusive agent’s insurer has approved the terms of the
 2651  agreement. The exclusive agent’s insurer must approve a limited
 2652  service agreement for the clearinghouse if the insurer has
 2653  approved a service agreement with the agent for other purposes.
 2654  
 2655  An applicant is ineligible for coverage under subsection (5) if
 2656  the applicant’s exclusive agent is unwilling or unable to enter
 2657  into a standard or limited agency agreement with a participating
 2658  insurer making an offer of coverage to that applicant.
 2659         (8) Submission of an application to the clearinghouse for
 2660  coverage by the corporation does not constitute the binding of
 2661  coverage, and the failure of the clearinghouse to obtain an
 2662  offer of coverage by an insurer is not considered acceptance of
 2663  coverage of the risk by the corporation.
 2664         (9) The clearinghouse may not include commercial
 2665  nonresidential policies.
 2666         Section 12. Section 627.3519, Florida Statutes, is amended
 2667  to read:
 2668         627.3519 Annual report of aggregate net probable maximum
 2669  losses, financing options, and potential assessments.—By No
 2670  later than February 1 of each year, the Florida Hurricane
 2671  Catastrophe Fund and Citizens Property Insurance Corporation
 2672  Financial Services Commission shall each provide to the
 2673  Legislature a report of their the aggregate net probable maximum
 2674  losses, financing options, and potential assessments to the
 2675  Legislature and the Financial Services Commission of the Florida
 2676  Hurricane Catastrophe Fund and Citizens Property Insurance
 2677  Corporation. Each The report must include the respective 50
 2678  year, 100-year, and 250-year probable maximum losses of the fund
 2679  and the corporation; analysis of all reasonable financing
 2680  strategies for each such probable maximum loss, including the
 2681  amount and term of debt instruments and risk transfer products;
 2682  specification of the percentage assessments that would be needed
 2683  to support each of the financing strategies; and calculations of
 2684  the aggregate assessment burden on Florida property and casualty
 2685  policyholders for each of the probable maximum losses. The
 2686  commission shall require the fund and the corporation to provide
 2687  the commission with such data and analysis as the commission
 2688  considers necessary to prepare the report.
 2689         Section 13. Temporary keepout program.—Citizens Property
 2690  Insurance Corporation shall implement a temporary keepout
 2691  program beginning July 1, 2013, and ending on the date the
 2692  clearinghouse program established under s. 627.3518, Florida
 2693  Statutes, is operational.
 2694         (1) Subject to procedures adopted by the corporation, the
 2695  program shall provide an opportunity for new applicants for
 2696  personal residential multiperil coverage with the corporation to
 2697  be offered coverage with authorized insurers through the market
 2698  assistance plan established under s. 627.3515, Florida Statutes.
 2699         (2) The program is subject to all of the following:
 2700         (a) The corporation may not accept a new personal
 2701  residential multiperil application for coverage within 72 hours
 2702  after submission of the risk to the market assistance plan under
 2703  subsection (1).
 2704         (b) Section 627.3517, Florida Statutes, relating to
 2705  consumer choice of agent does not apply to applications for
 2706  coverage accepted by authorized insurers under the program.
 2707         (c) Insurers issuing policies under this section are
 2708  subject to s. 627.3518(3), Florida Statutes, relating to agent
 2709  appointment, and are not subject to s. 627.351(6)(c)5.a.(I),
 2710  Florida Statutes, relating to agent payment.
 2711         (d) Notwithstanding s. 626.916(1), Florida Statutes, if an
 2712  applicant for new or renewal coverage from the corporation does
 2713  not receive an offer of coverage from an eligible insurer, the
 2714  applicant may accept an offer from a designated broker of an
 2715  insurer eligible under ss. 626.913-626.937, Florida Statutes.
 2716         (e) An exclusive agent must only facilitate the placement
 2717  of an offer of coverage from an insurer whose limited servicing
 2718  agreement is approved by that exclusive agent’s exclusive
 2719  insurer.
 2720  
 2721  An applicant is ineligible for coverage if the applicant’s agent
 2722  is unwilling or unable to enter into a standard or limited
 2723  agency agreement with a participating insurer making an offer of
 2724  coverage to that applicant.
 2725         (3) This section expires on January 1, 2014, or when the
 2726  clearinghouse program established under s. 627.3518, Florida
 2727  Statutes, becomes operational, whichever occurs first.
 2728         Section 14. Section 627.352, Florida Statutes, is created
 2729  to read:
 2730         627.352 Catastrophe Risk Capital Access Facility.—
 2731         (1) LEGISLATIVE FINDINGS AND INTENT.—The Legislature finds
 2732  and declares that:
 2733         (a) A growing and competitive private sector market for
 2734  residential property insurance is in the public interest.
 2735         (b) The global market for catastrophe risk has expanded
 2736  dramatically, resulting in the availability of billions of
 2737  dollars in additional risk capital for insurers and new and
 2738  innovative alternative risk-transfer mechanisms.
 2739         (c) Having access to additional risk capital and risk
 2740  transfer mechanisms provides an opportunity for property
 2741  insurers in this state to expand their capacity to write
 2742  additional business and diversify their catastrophe risk, which
 2743  will serve the public interest of fostering private sector
 2744  market growth.
 2745         (d) Despite an expansion in the amount of available global
 2746  risk capital, state property insurers in general, and smaller
 2747  state property insurers in particular, face challenges accessing
 2748  global markets if the relatively small amount of risk finance
 2749  required by any one company is not economically viable in the
 2750  larger global market.
 2751         (e) It is the intent of the Legislature to establish a
 2752  self-regulating mechanism to facilitate the access of property
 2753  insurers generally, and smaller property insurers in particular,
 2754  to global risk capital markets and risk-transfer mechanisms for
 2755  property risks in this state.
 2756         (2) FACILITY CREATED.—A nonprofit association, to be known
 2757  as the Catastrophe Risk Capital Access Facility, is hereby
 2758  created.
 2759         (a) The facility must operate pursuant to a plan of
 2760  operation adopted by the governing board, except that the
 2761  initial plan of operation shall be recommended by the initial
 2762  governing board and adopted by the office after consultation
 2763  with potential participating insurers and other interested
 2764  parties.
 2765         (b) The facility is not intended to be, and may not
 2766  function as, an insurer, reinsurer, or other risk-bearing
 2767  entity, and is not a state agency, board, or commission.
 2768         (3) MEMBERSHIP.—An insurer holding a certificate of
 2769  authority to transact property insurance in this state is
 2770  eligible to become a member of the facility. To become a member,
 2771  an insurer must file a declaration of intent with the office by
 2772  September 30, 2013.
 2773         (4) INITIAL GOVERNING BOARD.—
 2774         (a) Each insurer that timely files a declaration under
 2775  subsection (3) is a member of the initial governing board of the
 2776  facility and has a vote proportional to its share of direct
 2777  premium for property insurance written in this state as of
 2778  December 31, 2012. At a minimum, three insurers must file a
 2779  declaration of intent to constitute an initial governing board
 2780  and activate the facility.
 2781         (b) The initial governing board must hold its first meeting
 2782  at a time and place specified by the office. At the first
 2783  meeting, the initial governing board must elect one of its
 2784  members to serve as chair.
 2785         (c) The initial governing board must submit a recommended
 2786  plan of operation to the office by December 1, 2013. The initial
 2787  governing board may retain staff or professionals to assist in
 2788  the preparation of the proposed plan of operation.
 2789         (d) The initial governing board must provide the presiding
 2790  officers and minority party leaders of the Legislature with
 2791  recommendations and draft legislation addressing the facility’s
 2792  need, if any, for exemptions from public records and open
 2793  meetings laws by December 31, 2013.
 2794         (e) The functions of the initial governing board terminate
 2795  upon the election of a governing board as provided in the plan
 2796  of operation.
 2797         (5) GOVERNING BOARD.—Beginning on the effective date of the
 2798  plan of operation, the facility shall operate under a seven
 2799  member governing board composed of representatives of member
 2800  insurers, appointed as specified in the plan of operation.
 2801         (6) PLAN OF OPERATION.—The plan of operation:
 2802         (a) Must specify the following functions of the facility:
 2803         1. Aggregating the demand of members for risk finance for
 2804  state property risks from global capital markets.
 2805         2. Designing and executing risk-transfer tools such as
 2806  insurance-linked securities and other appropriate instruments
 2807  for state property risks for members; using special purpose
 2808  vehicles or onshore or offshore protected cells, as appropriate,
 2809  to increase members’ access to risk capital for state property
 2810  risks; and making use of any other financial instruments or
 2811  reinsurance or pooling arrangements that may develop in the
 2812  market.
 2813         3. Identifying and coordinating appropriate risk-transfer
 2814  products and opportunities for state property risks, initially
 2815  targeting layers of coverage below, alongside, and above the
 2816  coverage provided by the Florida Hurricane Catastrophe Fund.
 2817         4. Establishing and maintaining regular and ongoing contact
 2818  with global risk capital market participants, institutions, and
 2819  investors in order to identify opportunities that satisfy and
 2820  coordinate with insurer demand for additional risk capital for
 2821  state property risks.
 2822         (b) Must provide that in conducting its affairs, the
 2823  facility may not:
 2824         1. Take a position in, or provide financial support for,
 2825  any risk-transfer transaction.
 2826         2. Be a guarantor of premium or make any other financial
 2827  guarantees to a member.
 2828         3. Enter into any contract on the part of the state or
 2829  create any state contractual obligations.
 2830         4. Impose or levy any taxes, assessments, or similar
 2831  charges.
 2832         (c) Must provide for funding the expenses of the facility,
 2833  including an initial charge that applies to all members and
 2834  subsequent charges to members on a pro rata basis.
 2835         (d) Must provide additional annual enrollment periods for
 2836  eligible insurers to become members of the facility.
 2837         (e) Must provide for the election and terms of the
 2838  governing board.
 2839         (f) May provide for the appointment or retention of staff
 2840  and professionals as the governing board deems appropriate.
 2841         (g) Must require the facility to submit a biennial report
 2842  and annual independent audits to the members of the Financial
 2843  Services Commission and the presiding officers of the
 2844  Legislature by December 31 of each even-numbered year beginning
 2845  in 2014.
 2846         (7) IMMUNITY FROM LIABILITY.—No liability on the part of,
 2847  and no cause of action of any nature, may arise against the
 2848  facility or its agents or employees, the governing board, or the
 2849  department or office or their representatives for any action
 2850  taken by them in the performance of their powers and duties
 2851  under this section.
 2852         Section 15. Subsection (1) of section 627.410, Florida
 2853  Statutes, is amended to read:
 2854         627.410 Filing, approval of forms.—
 2855         (1) A No basic insurance policy or annuity contract form,
 2856  or application form where written application is required and is
 2857  to be made a part of the policy or contract, or group
 2858  certificates issued under a master contract delivered in this
 2859  state, or printed rider or endorsement form or form of renewal
 2860  certificate, may not shall be delivered or issued for delivery
 2861  in this state, unless the form has been filed with the office by
 2862  or on in behalf of the insurer that which proposes to use such
 2863  form and has been approved by the office. This provision does
 2864  not apply to surety bonds or to policies, riders, endorsements,
 2865  or forms of unique character that which are designed for and
 2866  used with relation to insurance on upon a particular subject,
 2867  (other than as to health insurance), or that which relate to the
 2868  manner of distributing distribution of benefits or to the
 2869  reservation of rights and benefits under life or health
 2870  insurance policies and are used at the request of the individual
 2871  policyholder, contract holder, or certificateholder. For As to
 2872  group insurance policies effectuated and delivered outside this
 2873  state but covering persons resident in this state, the group
 2874  certificates to be delivered or issued for delivery in this
 2875  state shall be filed with the office for information purposes
 2876  only.
 2877         Section 16. Paragraph (b) of subsection (1) of section
 2878  627.706, Florida Statutes, is amended to read:
 2879         627.706 Sinkhole insurance; catastrophic ground cover
 2880  collapse; definitions.—
 2881         (1)
 2882         (b) The insurer shall make available, for an appropriate
 2883  additional premium, coverage for sinkhole losses on any
 2884  structure, including the contents of personal property contained
 2885  therein, in an amount equal to the full amount of coverage on
 2886  the structure. The insurer may also offer less coverage equal to
 2887  25 or 50 percent of the amount of coverage on the structure,
 2888  with an appropriate reduction in the additional premium to the
 2889  extent provided in the form to which the coverage attaches. The
 2890  insurer may require an inspection of the property before
 2891  issuance of sinkhole loss coverage. A policy for residential
 2892  property insurance may include a deductible amount applicable to
 2893  sinkhole losses equal to 1 percent, 2 percent, 5 percent, or 10
 2894  percent of the policy dwelling limits, with appropriate premium
 2895  discounts offered with each deductible amount.
 2896         Section 17. Except as otherwise expressly provided in the
 2897  act, this act shall take effect July 1, 2013.