Florida Senate - 2016                      CS for CS for SB 1630
       
       
        
       By the Committees on Ethics and Elections; and Banking and
       Insurance; and Senator Flores
       
       582-03674-16                                          20161630c2
    1                        A bill to be entitled                      
    2         An act relating to operations of the Citizens Property
    3         Insurance Corporation; amending s. 627.351, F.S.;
    4         specifying that a consumer representative appointed by
    5         the Governor to the Citizens Property Insurance
    6         Corporation’s board of governors is not prohibited
    7         from practicing in a certain profession if required or
    8         permitted by law or ordinance; revising the
    9         requirements for licensed agents of the corporation;
   10         revising provisions related to the corporation’s use
   11         of certain public and private hurricane loss
   12         projection models in establishing certain rates;
   13         revising a provision to permit specified information
   14         from certain underwriting and claims files to be made
   15         available to certain entities; providing limitations
   16         for the use of such information by the entities;
   17         requiring the take-out program to be revised for
   18         specified purposes by a specified date; requiring the
   19         corporation to schedule up to a certain number of
   20         cycles annually during which insurers may identify and
   21         submit policy take-out requests; specifying
   22         information required to be included in such requests;
   23         providing conditions that must be agreed to by
   24         insurers submitting a request; requiring the
   25         corporation to maintain and make available specified
   26         lists of insurers to its agents of record; requiring
   27         the corporation to provide policyholders and the
   28         agents of record with a specified notice regarding
   29         their policy renewal options; amending s. 627.3518,
   30         F.S.; revising criteria for when an applicant for
   31         coverage from the corporation shall be considered a
   32         renewal; providing an effective date.
   33          
   34  Be It Enacted by the Legislature of the State of Florida:
   35  
   36         Section 1. Paragraphs (c), (n), and (x) of subsection (6)
   37  of section 627.351, Florida Statutes, are amended, and paragraph
   38  (ii) is added to that subsection, to read:
   39         627.351 Insurance risk apportionment plans.—
   40         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   41         (c) The corporation’s plan of operation:
   42         1. Must provide for adoption of residential property and
   43  casualty insurance policy forms and commercial residential and
   44  nonresidential property insurance forms, which must be approved
   45  by the office before use. The corporation shall adopt the
   46  following policy forms:
   47         a. Standard personal lines policy forms that are
   48  comprehensive multiperil policies providing full coverage of a
   49  residential property equivalent to the coverage provided in the
   50  private insurance market under an HO-3, HO-4, or HO-6 policy.
   51         b. Basic personal lines policy forms that are policies
   52  similar to an HO-8 policy or a dwelling fire policy that provide
   53  coverage meeting the requirements of the secondary mortgage
   54  market, but which is more limited than the coverage under a
   55  standard policy.
   56         c. Commercial lines residential and nonresidential policy
   57  forms that are generally similar to the basic perils of full
   58  coverage obtainable for commercial residential structures and
   59  commercial nonresidential structures in the admitted voluntary
   60  market.
   61         d. Personal lines and commercial lines residential property
   62  insurance forms that cover the peril of wind only. The forms are
   63  applicable only to residential properties located in areas
   64  eligible for coverage under the coastal account referred to in
   65  sub-subparagraph (b)2.a.
   66         e. Commercial lines nonresidential property insurance forms
   67  that cover the peril of wind only. The forms are applicable only
   68  to nonresidential properties located in areas eligible for
   69  coverage under the coastal account referred to in sub
   70  subparagraph (b)2.a.
   71         f. The corporation may adopt variations of the policy forms
   72  listed in sub-subparagraphs a.-e. which contain more restrictive
   73  coverage.
   74         g. Effective January 1, 2013, the corporation shall offer a
   75  basic personal lines policy similar to an HO-8 policy with
   76  dwelling repair based on common construction materials and
   77  methods.
   78         2. Must provide that the corporation adopt a program in
   79  which the corporation and authorized insurers enter into quota
   80  share primary insurance agreements for hurricane coverage, as
   81  defined in s. 627.4025(2)(a), for eligible risks, and adopt
   82  property insurance forms for eligible risks which cover the
   83  peril of wind only.
   84         a. As used in this subsection, the term:
   85         (I) “Quota share primary insurance” means an arrangement in
   86  which the primary hurricane coverage of an eligible risk is
   87  provided in specified percentages by the corporation and an
   88  authorized insurer. The corporation and authorized insurer are
   89  each solely responsible for a specified percentage of hurricane
   90  coverage of an eligible risk as set forth in a quota share
   91  primary insurance agreement between the corporation and an
   92  authorized insurer and the insurance contract. The
   93  responsibility of the corporation or authorized insurer to pay
   94  its specified percentage of hurricane losses of an eligible
   95  risk, as set forth in the agreement, may not be altered by the
   96  inability of the other party to pay its specified percentage of
   97  losses. Eligible risks that are provided hurricane coverage
   98  through a quota share primary insurance arrangement must be
   99  provided policy forms that set forth the obligations of the
  100  corporation and authorized insurer under the arrangement,
  101  clearly specify the percentages of quota share primary insurance
  102  provided by the corporation and authorized insurer, and
  103  conspicuously and clearly state that the authorized insurer and
  104  the corporation may not be held responsible beyond their
  105  specified percentage of coverage of hurricane losses.
  106         (II) “Eligible risks” means personal lines residential and
  107  commercial lines residential risks that meet the underwriting
  108  criteria of the corporation and are located in areas that were
  109  eligible for coverage by the Florida Windstorm Underwriting
  110  Association on January 1, 2002.
  111         b. The corporation may enter into quota share primary
  112  insurance agreements with authorized insurers at corporation
  113  coverage levels of 90 percent and 50 percent.
  114         c. If the corporation determines that additional coverage
  115  levels are necessary to maximize participation in quota share
  116  primary insurance agreements by authorized insurers, the
  117  corporation may establish additional coverage levels. However,
  118  the corporation’s quota share primary insurance coverage level
  119  may not exceed 90 percent.
  120         d. Any quota share primary insurance agreement entered into
  121  between an authorized insurer and the corporation must provide
  122  for a uniform specified percentage of coverage of hurricane
  123  losses, by county or territory as set forth by the corporation
  124  board, for all eligible risks of the authorized insurer covered
  125  under the agreement.
  126         e. Any quota share primary insurance agreement entered into
  127  between an authorized insurer and the corporation is subject to
  128  review and approval by the office. However, such agreement shall
  129  be authorized only as to insurance contracts entered into
  130  between an authorized insurer and an insured who is already
  131  insured by the corporation for wind coverage.
  132         f. For all eligible risks covered under quota share primary
  133  insurance agreements, the exposure and coverage levels for both
  134  the corporation and authorized insurers shall be reported by the
  135  corporation to the Florida Hurricane Catastrophe Fund. For all
  136  policies of eligible risks covered under such agreements, the
  137  corporation and the authorized insurer must maintain complete
  138  and accurate records for the purpose of exposure and loss
  139  reimbursement audits as required by fund rules. The corporation
  140  and the authorized insurer shall each maintain duplicate copies
  141  of policy declaration pages and supporting claims documents.
  142         g. The corporation board shall establish in its plan of
  143  operation standards for quota share agreements which ensure that
  144  there is no discriminatory application among insurers as to the
  145  terms of the agreements, pricing of the agreements, incentive
  146  provisions if any, and consideration paid for servicing policies
  147  or adjusting claims.
  148         h. The quota share primary insurance agreement between the
  149  corporation and an authorized insurer must set forth the
  150  specific terms under which coverage is provided, including, but
  151  not limited to, the sale and servicing of policies issued under
  152  the agreement by the insurance agent of the authorized insurer
  153  producing the business, the reporting of information concerning
  154  eligible risks, the payment of premium to the corporation, and
  155  arrangements for the adjustment and payment of hurricane claims
  156  incurred on eligible risks by the claims adjuster and personnel
  157  of the authorized insurer. Entering into a quota sharing
  158  insurance agreement between the corporation and an authorized
  159  insurer is voluntary and at the discretion of the authorized
  160  insurer.
  161         3. May provide that the corporation may employ or otherwise
  162  contract with individuals or other entities to provide
  163  administrative or professional services that may be appropriate
  164  to effectuate the plan. The corporation may borrow funds by
  165  issuing bonds or by incurring other indebtedness, and shall have
  166  other powers reasonably necessary to effectuate the requirements
  167  of this subsection, including, without limitation, the power to
  168  issue bonds and incur other indebtedness in order to refinance
  169  outstanding bonds or other indebtedness. The corporation may
  170  seek judicial validation of its bonds or other indebtedness
  171  under chapter 75. The corporation may issue bonds or incur other
  172  indebtedness, or have bonds issued on its behalf by a unit of
  173  local government pursuant to subparagraph (q)2. in the absence
  174  of a hurricane or other weather-related event, upon a
  175  determination by the corporation, subject to approval by the
  176  office, that such action would enable it to efficiently meet the
  177  financial obligations of the corporation and that such
  178  financings are reasonably necessary to effectuate the
  179  requirements of this subsection. The corporation may take all
  180  actions needed to facilitate tax-free status for such bonds or
  181  indebtedness, including formation of trusts or other affiliated
  182  entities. The corporation may pledge assessments, projected
  183  recoveries from the Florida Hurricane Catastrophe Fund, other
  184  reinsurance recoverables, policyholder surcharges and other
  185  surcharges, and other funds available to the corporation as
  186  security for bonds or other indebtedness. In recognition of s.
  187  10, Art. I of the State Constitution, prohibiting the impairment
  188  of obligations of contracts, it is the intent of the Legislature
  189  that no action be taken whose purpose is to impair any bond
  190  indenture or financing agreement or any revenue source committed
  191  by contract to such bond or other indebtedness.
  192         4. Must require that the corporation operate subject to the
  193  supervision and approval of a board of governors consisting of
  194  nine individuals who are residents of this state and who are
  195  from different geographical areas of the state, one of whom is
  196  appointed by the Governor and serves solely to advocate on
  197  behalf of the consumer. The appointment of a consumer
  198  representative by the Governor is deemed to be within the scope
  199  of the exemption provided in s. 112.313(7)(b) and is in addition
  200  to the appointments authorized under sub-subparagraph a.
  201         a. The Governor, the Chief Financial Officer, the President
  202  of the Senate, and the Speaker of the House of Representatives
  203  shall each appoint two members of the board. At least one of the
  204  two members appointed by each appointing officer must have
  205  demonstrated expertise in insurance and be deemed to be within
  206  the scope of the exemption provided in s. 112.313(7)(b). The
  207  Chief Financial Officer shall designate one of the appointees as
  208  chair. All board members serve at the pleasure of the appointing
  209  officer. All members of the board are subject to removal at will
  210  by the officers who appointed them. All board members, including
  211  the chair, must be appointed to serve for 3-year terms beginning
  212  annually on a date designated by the plan. However, for the
  213  first term beginning on or after July 1, 2009, each appointing
  214  officer shall appoint one member of the board for a 2-year term
  215  and one member for a 3-year term. A board vacancy shall be
  216  filled for the unexpired term by the appointing officer. The
  217  Chief Financial Officer shall appoint a technical advisory group
  218  to provide information and advice to the board in connection
  219  with the board’s duties under this subsection. The executive
  220  director and senior managers of the corporation shall be engaged
  221  by the board and serve at the pleasure of the board. Any
  222  executive director appointed on or after July 1, 2006, is
  223  subject to confirmation by the Senate. The executive director is
  224  responsible for employing other staff as the corporation may
  225  require, subject to review and concurrence by the board.
  226         b. The board shall create a Market Accountability Advisory
  227  Committee to assist the corporation in developing awareness of
  228  its rates and its customer and agent service levels in
  229  relationship to the voluntary market insurers writing similar
  230  coverage.
  231         (I) The members of the advisory committee consist of the
  232  following 11 persons, one of whom must be elected chair by the
  233  members of the committee: four representatives, one appointed by
  234  the Florida Association of Insurance Agents, one by the Florida
  235  Association of Insurance and Financial Advisors, one by the
  236  Professional Insurance Agents of Florida, and one by the Latin
  237  American Association of Insurance Agencies; three
  238  representatives appointed by the insurers with the three highest
  239  voluntary market share of residential property insurance
  240  business in the state; one representative from the Office of
  241  Insurance Regulation; one consumer appointed by the board who is
  242  insured by the corporation at the time of appointment to the
  243  committee; one representative appointed by the Florida
  244  Association of Realtors; and one representative appointed by the
  245  Florida Bankers Association. All members shall be appointed to
  246  3-year terms and may serve for consecutive terms.
  247         (II) The committee shall report to the corporation at each
  248  board meeting on insurance market issues which may include rates
  249  and rate competition with the voluntary market; service,
  250  including policy issuance, claims processing, and general
  251  responsiveness to policyholders, applicants, and agents; and
  252  matters relating to depopulation.
  253         5. Must provide a procedure for determining the eligibility
  254  of a risk for coverage, as follows:
  255         a. Subject to s. 627.3517, with respect to personal lines
  256  residential risks, if the risk is offered coverage from an
  257  authorized insurer at the insurer’s approved rate under a
  258  standard policy including wind coverage or, if consistent with
  259  the insurer’s underwriting rules as filed with the office, a
  260  basic policy including wind coverage, for a new application to
  261  the corporation for coverage, the risk is not eligible for any
  262  policy issued by the corporation unless the premium for coverage
  263  from the authorized insurer is more than 15 percent greater than
  264  the premium for comparable coverage from the corporation.
  265  Whenever an offer of coverage for a personal lines residential
  266  risk is received for a policyholder of the corporation at
  267  renewal from an authorized insurer, if the offer is equal to or
  268  less than the corporation’s renewal premium for comparable
  269  coverage, the risk is not eligible for coverage with the
  270  corporation. If the risk is not able to obtain such offer, the
  271  risk is eligible for a standard policy including wind coverage
  272  or a basic policy including wind coverage issued by the
  273  corporation; however, if the risk could not be insured under a
  274  standard policy including wind coverage regardless of market
  275  conditions, the risk is eligible for a basic policy including
  276  wind coverage unless rejected under subparagraph 8. However, a
  277  policyholder removed from the corporation through an assumption
  278  agreement remains eligible for coverage from the corporation
  279  until the end of the assumption period. The corporation shall
  280  determine the type of policy to be provided on the basis of
  281  objective standards specified in the underwriting manual and
  282  based on generally accepted underwriting practices.
  283         (I) If the risk accepts an offer of coverage through the
  284  market assistance plan or through a mechanism established by the
  285  corporation other than a plan established by s. 627.3518, before
  286  a policy is issued to the risk by the corporation or during the
  287  first 30 days of coverage by the corporation, and the producing
  288  agent who submitted the application to the plan or to the
  289  corporation is not currently appointed by the insurer, the
  290  insurer shall:
  291         (A) Pay to the producing agent of record of the policy for
  292  the first year, an amount that is the greater of the insurer’s
  293  usual and customary commission for the type of policy written or
  294  a fee equal to the usual and customary commission of the
  295  corporation; or
  296         (B) Offer to allow the producing agent of record of the
  297  policy to continue servicing the policy for at least 1 year and
  298  offer to pay the agent the greater of the insurer’s or the
  299  corporation’s usual and customary commission for the type of
  300  policy written.
  301  
  302  If the producing agent is unwilling or unable to accept
  303  appointment, the new insurer shall pay the agent in accordance
  304  with sub-sub-sub-subparagraph (A).
  305         (II) If the corporation enters into a contractual agreement
  306  for a take-out plan, the producing agent of record of the
  307  corporation policy is entitled to retain any unearned commission
  308  on the policy, and the insurer shall:
  309         (A) Pay to the producing agent of record, for the first
  310  year, an amount that is the greater of the insurer’s usual and
  311  customary commission for the type of policy written or a fee
  312  equal to the usual and customary commission of the corporation;
  313  or
  314         (B) Offer to allow the producing agent of record to
  315  continue servicing the policy for at least 1 year and offer to
  316  pay the agent the greater of the insurer’s or the corporation’s
  317  usual and customary commission for the type of policy written.
  318  
  319  If the producing agent is unwilling or unable to accept
  320  appointment, the new insurer shall pay the agent in accordance
  321  with sub-sub-sub-subparagraph (A).
  322         b. With respect to commercial lines residential risks, for
  323  a new application to the corporation for coverage, if the risk
  324  is offered coverage under a policy including wind coverage from
  325  an authorized insurer at its approved rate, the risk is not
  326  eligible for a policy issued by the corporation unless the
  327  premium for coverage from the authorized insurer is more than 15
  328  percent greater than the premium for comparable coverage from
  329  the corporation. Whenever an offer of coverage for a commercial
  330  lines residential risk is received for a policyholder of the
  331  corporation at renewal from an authorized insurer, if the offer
  332  is equal to or less than the corporation’s renewal premium for
  333  comparable coverage, the risk is not eligible for coverage with
  334  the corporation. If the risk is not able to obtain any such
  335  offer, the risk is eligible for a policy including wind coverage
  336  issued by the corporation. However, a policyholder removed from
  337  the corporation through an assumption agreement remains eligible
  338  for coverage from the corporation until the end of the
  339  assumption period.
  340         (I) If the risk accepts an offer of coverage through the
  341  market assistance plan or through a mechanism established by the
  342  corporation other than a plan established by s. 627.3518, before
  343  a policy is issued to the risk by the corporation or during the
  344  first 30 days of coverage by the corporation, and the producing
  345  agent who submitted the application to the plan or the
  346  corporation is not currently appointed by the insurer, the
  347  insurer shall:
  348         (A) Pay to the producing agent of record of the policy, for
  349  the first year, an amount that is the greater of the insurer’s
  350  usual and customary commission for the type of policy written or
  351  a fee equal to the usual and customary commission of the
  352  corporation; or
  353         (B) Offer to allow the producing agent of record of the
  354  policy to continue servicing the policy for at least 1 year and
  355  offer to pay the agent the greater of the insurer’s or the
  356  corporation’s usual and customary commission for the type of
  357  policy written.
  358  
  359  If the producing agent is unwilling or unable to accept
  360  appointment, the new insurer shall pay the agent in accordance
  361  with sub-sub-sub-subparagraph (A).
  362         (II) If the corporation enters into a contractual agreement
  363  for a take-out plan, the producing agent of record of the
  364  corporation policy is entitled to retain any unearned commission
  365  on the policy, and the insurer shall:
  366         (A) Pay to the producing agent of record, for the first
  367  year, an amount that is the greater of the insurer’s usual and
  368  customary commission for the type of policy written or a fee
  369  equal to the usual and customary commission of the corporation;
  370  or
  371         (B) Offer to allow the producing agent of record to
  372  continue servicing the policy for at least 1 year and offer to
  373  pay the agent the greater of the insurer’s or the corporation’s
  374  usual and customary commission for the type of policy written.
  375  
  376  If the producing agent is unwilling or unable to accept
  377  appointment, the new insurer shall pay the agent in accordance
  378  with sub-sub-sub-subparagraph (A).
  379         c. For purposes of determining comparable coverage under
  380  sub-subparagraphs a. and b., the comparison must be based on
  381  those forms and coverages that are reasonably comparable. The
  382  corporation may rely on a determination of comparable coverage
  383  and premium made by the producing agent who submits the
  384  application to the corporation, made in the agent’s capacity as
  385  the corporation’s agent. A comparison may be made solely of the
  386  premium with respect to the main building or structure only on
  387  the following basis: the same coverage A or other building
  388  limits; the same percentage hurricane deductible that applies on
  389  an annual basis or that applies to each hurricane for commercial
  390  residential property; the same percentage of ordinance and law
  391  coverage, if the same limit is offered by both the corporation
  392  and the authorized insurer; the same mitigation credits, to the
  393  extent the same types of credits are offered both by the
  394  corporation and the authorized insurer; the same method for loss
  395  payment, such as replacement cost or actual cash value, if the
  396  same method is offered both by the corporation and the
  397  authorized insurer in accordance with underwriting rules; and
  398  any other form or coverage that is reasonably comparable as
  399  determined by the board. If an application is submitted to the
  400  corporation for wind-only coverage in the coastal account, the
  401  premium for the corporation’s wind-only policy plus the premium
  402  for the ex-wind policy that is offered by an authorized insurer
  403  to the applicant must be compared to the premium for multiperil
  404  coverage offered by an authorized insurer, subject to the
  405  standards for comparison specified in this subparagraph. If the
  406  corporation or the applicant requests from the authorized
  407  insurer a breakdown of the premium of the offer by types of
  408  coverage so that a comparison may be made by the corporation or
  409  its agent and the authorized insurer refuses or is unable to
  410  provide such information, the corporation may treat the offer as
  411  not being an offer of coverage from an authorized insurer at the
  412  insurer’s approved rate.
  413         6. Must include rules for classifications of risks and
  414  rates.
  415         7. Must provide that if premium and investment income for
  416  an account attributable to a particular calendar year are in
  417  excess of projected losses and expenses for the account
  418  attributable to that year, such excess shall be held in surplus
  419  in the account. Such surplus must be available to defray
  420  deficits in that account as to future years and used for that
  421  purpose before assessing assessable insurers and assessable
  422  insureds as to any calendar year.
  423         8. Must provide objective criteria and procedures to be
  424  uniformly applied to all applicants in determining whether an
  425  individual risk is so hazardous as to be uninsurable. In making
  426  this determination and in establishing the criteria and
  427  procedures, the following must be considered:
  428         a. Whether the likelihood of a loss for the individual risk
  429  is substantially higher than for other risks of the same class;
  430  and
  431         b. Whether the uncertainty associated with the individual
  432  risk is such that an appropriate premium cannot be determined.
  433  
  434  The acceptance or rejection of a risk by the corporation shall
  435  be construed as the private placement of insurance, and the
  436  provisions of chapter 120 do not apply.
  437         9. Must provide that the corporation make its best efforts
  438  to procure catastrophe reinsurance at reasonable rates, to cover
  439  its projected 100-year probable maximum loss as determined by
  440  the board of governors.
  441         10. The policies issued by the corporation must provide
  442  that if the corporation or the market assistance plan obtains an
  443  offer from an authorized insurer to cover the risk at its
  444  approved rates, the risk is no longer eligible for renewal
  445  through the corporation, except as otherwise provided in this
  446  subsection.
  447         11. Corporation policies and applications must include a
  448  notice that the corporation policy could, under this section, be
  449  replaced with a policy issued by an authorized insurer which
  450  does not provide coverage identical to the coverage provided by
  451  the corporation. The notice must also specify that acceptance of
  452  corporation coverage creates a conclusive presumption that the
  453  applicant or policyholder is aware of this potential.
  454         12. May establish, subject to approval by the office,
  455  different eligibility requirements and operational procedures
  456  for any line or type of coverage for any specified county or
  457  area if the board determines that such changes are justified due
  458  to the voluntary market being sufficiently stable and
  459  competitive in such area or for such line or type of coverage
  460  and that consumers who, in good faith, are unable to obtain
  461  insurance through the voluntary market through ordinary methods
  462  continue to have access to coverage from the corporation. If
  463  coverage is sought in connection with a real property transfer,
  464  the requirements and procedures may not provide an effective
  465  date of coverage later than the date of the closing of the
  466  transfer as established by the transferor, the transferee, and,
  467  if applicable, the lender.
  468         13. Must provide that, with respect to the coastal account,
  469  any assessable insurer with a surplus as to policyholders of $25
  470  million or less writing 25 percent or more of its total
  471  countrywide property insurance premiums in this state may
  472  petition the office, within the first 90 days of each calendar
  473  year, to qualify as a limited apportionment company. A regular
  474  assessment levied by the corporation on a limited apportionment
  475  company for a deficit incurred by the corporation for the
  476  coastal account may be paid to the corporation on a monthly
  477  basis as the assessments are collected by the limited
  478  apportionment company from its insureds, but a limited
  479  apportionment company must begin collecting the regular
  480  assessments not later than 90 days after the regular assessments
  481  are levied by the corporation, and the regular assessments must
  482  be paid in full within 15 months after being levied by the
  483  corporation. A limited apportionment company shall collect from
  484  its policyholders any emergency assessment imposed under sub
  485  subparagraph (b)3.d. The plan must provide that, if the office
  486  determines that any regular assessment will result in an
  487  impairment of the surplus of a limited apportionment company,
  488  the office may direct that all or part of such assessment be
  489  deferred as provided in subparagraph (q)4. However, an emergency
  490  assessment to be collected from policyholders under sub
  491  subparagraph (b)3.d. may not be limited or deferred.
  492         14. Must provide that the corporation appoint as its
  493  licensed agents only those agents who throughout such
  494  appointments also hold an appointment as defined in s.
  495  626.015(3) by with an insurer who at the time of the agent’s
  496  initial appointment by the corporation is authorized to write
  497  and is actually writing or renewing personal lines residential
  498  property coverage, commercial residential property coverage, or
  499  commercial nonresidential property coverage within the state.
  500         15. Must provide a premium payment plan option to its
  501  policyholders which, at a minimum, allows for quarterly and
  502  semiannual payment of premiums. A monthly payment plan may, but
  503  is not required to, be offered.
  504         16. Must limit coverage on mobile homes or manufactured
  505  homes built before 1994 to actual cash value of the dwelling
  506  rather than replacement costs of the dwelling.
  507         17. Must provide coverage for manufactured or mobile home
  508  dwellings. Such coverage must also include the following
  509  attached structures:
  510         a. Screened enclosures that are aluminum framed or screened
  511  enclosures that are not covered by the same or substantially the
  512  same materials as those of the primary dwelling;
  513         b. Carports that are aluminum or carports that are not
  514  covered by the same or substantially the same materials as those
  515  of the primary dwelling; and
  516         c. Patios that have a roof covering that is constructed of
  517  materials that are not the same or substantially the same
  518  materials as those of the primary dwelling.
  519  
  520  The corporation shall make available a policy for mobile homes
  521  or manufactured homes for a minimum insured value of at least
  522  $3,000.
  523         18. May provide such limits of coverage as the board
  524  determines, consistent with the requirements of this subsection.
  525         19. May require commercial property to meet specified
  526  hurricane mitigation construction features as a condition of
  527  eligibility for coverage.
  528         20. Must provide that new or renewal policies issued by the
  529  corporation on or after January 1, 2012, which cover sinkhole
  530  loss do not include coverage for any loss to appurtenant
  531  structures, driveways, sidewalks, decks, or patios that are
  532  directly or indirectly caused by sinkhole activity. The
  533  corporation shall exclude such coverage using a notice of
  534  coverage change, which may be included with the policy renewal,
  535  and not by issuance of a notice of nonrenewal of the excluded
  536  coverage upon renewal of the current policy.
  537         21. As of January 1, 2012, must require that the agent
  538  obtain from an applicant for coverage from the corporation an
  539  acknowledgment signed by the applicant, which includes, at a
  540  minimum, the following statement:
  541                ACKNOWLEDGMENT OF POTENTIAL SURCHARGE              
  542                      AND ASSESSMENT LIABILITY:                    
  543         1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
  544  CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
  545  DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
  546  MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
  547  PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
  548  POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
  549  OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
  550  LEGISLATURE.
  551         2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
  552  SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM,
  553  BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
  554  BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
  555  PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
  556  WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
  557  ARE REGULATED AND APPROVED BY THE STATE.
  558         3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
  559  ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
  560  INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
  561  FLORIDA LEGISLATURE.
  562         4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
  563  CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
  564  STATE OF FLORIDA.
  565         a. The corporation shall maintain, in electronic format or
  566  otherwise, a copy of the applicant’s signed acknowledgment and
  567  provide a copy of the statement to the policyholder as part of
  568  the first renewal after the effective date of this subparagraph.
  569         b. The signed acknowledgment form creates a conclusive
  570  presumption that the policyholder understood and accepted his or
  571  her potential surcharge and assessment liability as a
  572  policyholder of the corporation.
  573         (n)1. Rates for coverage provided by the corporation must
  574  be actuarially sound and subject to s. 627.062, except as
  575  otherwise provided in this paragraph. The corporation shall file
  576  its recommended rates with the office at least annually. The
  577  corporation shall provide any additional information regarding
  578  the rates which the office requires. The office shall consider
  579  the recommendations of the board and issue a final order
  580  establishing the rates for the corporation within 45 days after
  581  the recommended rates are filed. The corporation may not pursue
  582  an administrative challenge or judicial review of the final
  583  order of the office.
  584         2. In addition to the rates otherwise determined pursuant
  585  to this paragraph, the corporation shall impose and collect an
  586  amount equal to the premium tax provided in s. 624.509 to
  587  augment the financial resources of the corporation.
  588         3. After the public hurricane loss-projection model under
  589  s. 627.06281 has been found to be accurate and reliable by the
  590  Florida Commission on Hurricane Loss Projection Methodology, the
  591  model shall be considered when establishing serve as the minimum
  592  benchmark for determining the windstorm portion of the
  593  corporation’s rates. The corporation may use the public model
  594  results in combination with the results of private models to
  595  calculate rates for the windstorm portion of the corporation’s
  596  rates. This subparagraph does not require or allow the
  597  corporation to adopt rates lower than the rates otherwise
  598  required or allowed by this paragraph.
  599         4. The rate filings for the corporation which were approved
  600  by the office and took effect January 1, 2007, are rescinded,
  601  except for those rates that were lowered. As soon as possible,
  602  the corporation shall begin using the lower rates that were in
  603  effect on December 31, 2006, and provide refunds to
  604  policyholders who paid higher rates as a result of that rate
  605  filing. The rates in effect on December 31, 2006, remain in
  606  effect for the 2007 and 2008 calendar years except for any rate
  607  change that results in a lower rate. The next rate change that
  608  may increase rates shall take effect pursuant to a new rate
  609  filing recommended by the corporation and established by the
  610  office, subject to this paragraph.
  611         5. Beginning on July 15, 2009, and annually thereafter, the
  612  corporation must make a recommended actuarially sound rate
  613  filing for each personal and commercial line of business it
  614  writes, to be effective no earlier than January 1, 2010.
  615         6. Beginning on or after January 1, 2010, and
  616  notwithstanding the board’s recommended rates and the office’s
  617  final order regarding the corporation’s filed rates under
  618  subparagraph 1., the corporation shall annually implement a rate
  619  increase which, except for sinkhole coverage, does not exceed 10
  620  percent for any single policy issued by the corporation,
  621  excluding coverage changes and surcharges.
  622         7. The corporation may also implement an increase to
  623  reflect the effect on the corporation of the cash buildup factor
  624  pursuant to s. 215.555(5)(b).
  625         8. The corporation’s implementation of rates as prescribed
  626  in subparagraph 6. shall cease for any line of business written
  627  by the corporation upon the corporation’s implementation of
  628  actuarially sound rates. Thereafter, the corporation shall
  629  annually make a recommended actuarially sound rate filing for
  630  each commercial and personal line of business the corporation
  631  writes.
  632         (x)1. The following records of the corporation are
  633  confidential and exempt from the provisions of s. 119.07(1) and
  634  s. 24(a), Art. I of the State Constitution:
  635         a. Underwriting files, except that a policyholder or an
  636  applicant shall have access to his or her own underwriting
  637  files. Confidential and exempt underwriting file records may
  638  also be released to other governmental agencies upon written
  639  request and demonstration of need; such records held by the
  640  receiving agency remain confidential and exempt as provided
  641  herein.
  642         b. Claims files, until termination of all litigation and
  643  settlement of all claims arising out of the same incident,
  644  although portions of the claims files may remain exempt, as
  645  otherwise provided by law. Confidential and exempt claims file
  646  records may be released to other governmental agencies upon
  647  written request and demonstration of need; such records held by
  648  the receiving agency remain confidential and exempt as provided
  649  herein.
  650         c. Records obtained or generated by an internal auditor
  651  pursuant to a routine audit, until the audit is completed, or if
  652  the audit is conducted as part of an investigation, until the
  653  investigation is closed or ceases to be active. An investigation
  654  is considered “active” while the investigation is being
  655  conducted with a reasonable, good faith belief that it could
  656  lead to the filing of administrative, civil, or criminal
  657  proceedings.
  658         d. Matters reasonably encompassed in privileged attorney
  659  client communications.
  660         e. Proprietary information licensed to the corporation
  661  under contract and the contract provides for the confidentiality
  662  of such proprietary information.
  663         f. All information relating to the medical condition or
  664  medical status of a corporation employee which is not relevant
  665  to the employee’s capacity to perform his or her duties, except
  666  as otherwise provided in this paragraph. Information that is
  667  exempt shall include, but is not limited to, information
  668  relating to workers’ compensation, insurance benefits, and
  669  retirement or disability benefits.
  670         g. Upon an employee’s entrance into the employee assistance
  671  program, a program to assist any employee who has a behavioral
  672  or medical disorder, substance abuse problem, or emotional
  673  difficulty that which affects the employee’s job performance,
  674  all records relative to that participation shall be confidential
  675  and exempt from the provisions of s. 119.07(1) and s. 24(a),
  676  Art. I of the State Constitution, except as otherwise provided
  677  in s. 112.0455(11).
  678         h. Information relating to negotiations for financing,
  679  reinsurance, depopulation, or contractual services, until the
  680  conclusion of the negotiations.
  681         i. Minutes of closed meetings regarding underwriting files,
  682  and minutes of closed meetings regarding an open claims file
  683  until termination of all litigation and settlement of all claims
  684  with regard to that claim, except that information otherwise
  685  confidential or exempt by law shall be redacted.
  686         2. If an authorized insurer is considering underwriting a
  687  risk insured by the corporation, relevant underwriting files and
  688  confidential claims files may be released to the insurer
  689  provided the insurer agrees in writing, notarized and under
  690  oath, to maintain the confidentiality of such files. If a file
  691  is transferred to an insurer, that file is no longer a public
  692  record because it is not held by an agency subject to the
  693  provisions of the public records law. Underwriting files and
  694  confidential claims files may also be released to staff and the
  695  board of governors of the market assistance plan established
  696  pursuant to s. 627.3515, who must retain the confidentiality of
  697  such files, except such files may be released to authorized
  698  insurers that are considering assuming the risks to which the
  699  files apply, provided the insurer agrees in writing, notarized
  700  and under oath, to maintain the confidentiality of such files.
  701  Finally, the corporation or the board or staff of the market
  702  assistance plan may make the following information obtained from
  703  underwriting files and confidential claims files available to an
  704  entity that has obtained a permit to become an authorized
  705  insurer, a reinsurer that may provide reinsurance under s.
  706  624.610, a licensed reinsurance broker, a licensed rating
  707  organization, a modeling company, or a licensed general lines
  708  insurance agent agents: name, address, and telephone number of
  709  the residential property owner or insured; location of the risk;
  710  rating information; loss history; and policy type. The receiving
  711  person licensed general lines insurance agent must retain the
  712  confidentiality of the information received and may use the
  713  information only for the purposes of developing a take-out plan
  714  or a rating plan to be submitted to the office for approval or
  715  otherwise analyzing the underwriting of a risk or risks insured
  716  by the corporation on behalf of the private insurance market. A
  717  licensed general lines insurance agent may not use such
  718  information for the direct solicitation of policyholders.
  719         3. A policyholder who has filed suit against the
  720  corporation has the right to discover the contents of his or her
  721  own claims file to the same extent that discovery of such
  722  contents would be available from a private insurer in litigation
  723  as provided by the Florida Rules of Civil Procedure, the Florida
  724  Evidence Code, and other applicable law. Pursuant to subpoena, a
  725  third party has the right to discover the contents of an
  726  insured’s or applicant’s underwriting or claims file to the same
  727  extent that discovery of such contents would be available from a
  728  private insurer by subpoena as provided by the Florida Rules of
  729  Civil Procedure, the Florida Evidence Code, and other applicable
  730  law, and subject to any confidentiality protections requested by
  731  the corporation and agreed to by the seeking party or ordered by
  732  the court. The corporation may release confidential underwriting
  733  and claims file contents and information as it deems necessary
  734  and appropriate to underwrite or service insurance policies and
  735  claims, subject to any confidentiality protections deemed
  736  necessary and appropriate by the corporation.
  737         4. Portions of meetings of the corporation are exempt from
  738  the provisions of s. 286.011 and s. 24(b), Art. I of the State
  739  Constitution wherein confidential underwriting files or
  740  confidential open claims files are discussed. All portions of
  741  corporation meetings which are closed to the public shall be
  742  recorded by a court reporter. The court reporter shall record
  743  the times of commencement and termination of the meeting, all
  744  discussion and proceedings, the names of all persons present at
  745  any time, and the names of all persons speaking. No portion of
  746  any closed meeting shall be off the record. Subject to the
  747  provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s
  748  notes of any closed meeting shall be retained by the corporation
  749  for a minimum of 5 years. A copy of the transcript, less any
  750  exempt matters, of any closed meeting wherein claims are
  751  discussed shall become public as to individual claims after
  752  settlement of the claim.
  753         (ii) The corporation shall revise the programs adopted
  754  pursuant to sub-subparagraph (q)3.a. for personal lines
  755  residential policies to maximize policyholder options and
  756  encourage increased participation by insurers and agents. Such
  757  revisions must comply with this paragraph no later than January
  758  1, 2017.
  759         1. The corporation must schedule no more than 6 cycles per
  760  year during which insurers may identify policies they wish to
  761  take out and may submit requests to take out such policies to
  762  the corporation in a form and manner prescribed by the
  763  corporation. An insurer’s take-out request must include a
  764  description of the coverages offered and an estimated premium.
  765  In submitting any take-out request, an insurer must agree to
  766  offer comparable coverage to that offered by the corporation and
  767  that the initial premium of the insurer after assumption will
  768  not exceed its estimated premium by more than 10 percent,
  769  excluding coverage changes, surcharges, and assessments.
  770         2. For each policy of the corporation identified under
  771  subparagraph 1., the corporation shall maintain and make
  772  available to the agent of record a consolidated list of all
  773  insurers requesting the policy. The list must contain the
  774  information described in subparagraph 1.
  775         3. The corporation shall provide written notice to its
  776  policyholders and the agents of record informing them of their
  777  option to accept one of the take-out offers presented or to
  778  remain with the corporation. The notice must be in a format
  779  prescribed by the corporation and include the amount of the
  780  estimated premium for the coverage of each offering insurer, the
  781  amount of the premium for the coverage provided by the
  782  corporation, and a description of the coverage offered by each
  783  insurer and the coverage provided by the corporation, which
  784  includes an explanation of any differences among the coverage
  785  offered by each insurer and the coverage provided by the
  786  corporation.
  787         Section 2. Subsection (5) of section 627.3518, Florida
  788  Statutes, is amended to read:
  789         627.3518 Citizens Property Insurance Corporation
  790  policyholder eligibility clearinghouse program.—The purpose of
  791  this section is to provide a framework for the corporation to
  792  implement a clearinghouse program by January 1, 2014.
  793         (5) Notwithstanding s. 627.3517, any applicant for new
  794  coverage from the corporation is not eligible for coverage from
  795  the corporation if provided an offer of coverage from an
  796  authorized insurer through the program at a premium that is at
  797  or below the eligibility threshold established in s.
  798  627.351(6)(c)5.a. Whenever an offer of coverage for a personal
  799  lines risk is received for a policyholder of the corporation at
  800  renewal from an authorized insurer through the program, if the
  801  offer is equal to or less than the corporation’s renewal premium
  802  for comparable coverage, the risk is not eligible for coverage
  803  with the corporation. In the event an offer of coverage for a
  804  new applicant is received from an authorized insurer through the
  805  program, and the premium offered exceeds the eligibility
  806  threshold contained in s. 627.351(6)(c)5.a., the applicant or
  807  insured may elect to accept such coverage, or may elect to
  808  accept or continue coverage with the corporation. In the event
  809  an offer of coverage for a personal lines risk is received from
  810  an authorized insurer at renewal through the program, and the
  811  premium offered is more than the corporation’s renewal premium
  812  for comparable coverage, the insured may elect to accept such
  813  coverage, or may elect to accept or continue coverage with the
  814  corporation. Section 627.351(6)(c)5.a.(I) does not apply to an
  815  offer of coverage from an authorized insurer obtained through
  816  the program. An applicant for coverage from the corporation who
  817  in the previous 36 months has been assumed through a take-out
  818  offer from an insurer or who was declared ineligible for
  819  coverage at renewal by the corporation in the previous 36 months
  820  due to an offer of coverage pursuant to this subsection shall be
  821  considered a renewal under this section if the corporation
  822  determines that the same authorized insurer making the offer of
  823  coverage pursuant to this subsection continues to insure the
  824  applicant and increased the rate on the policy in excess of the
  825  increase allowed for the corporation under s. 627.351(6)(n)6.
  826         Section 3. This act shall take effect July 1, 2016.