Florida Senate - 2024 COMMITTEE AMENDMENT
Bill No. CS for SB 1716
Ì443848NÎ443848
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
02/28/2024 .
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The Committee on Fiscal Policy (Boyd) recommended the following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 708 - 2925
4 and insert:
5 c. The office may evaluate whether there is a reasonable
6 degree of competition within an individual zip code located in a
7 county that has not been determined by the office to lack a
8 reasonable degree of competition at the county level pursuant to
9 sub-subparagraph b. If the office determines that such zip code
10 lacks a reasonable degree of competition, structures located
11 within that zip code that have a dwelling replacement cost of
12 $700,000 or more but less than $1 million and single condominium
13 units that have a combined dwelling and contents replacement
14 cost of $700,000 or more but less than $1 million are eligible
15 for coverage from the corporation.
16 4. It is the intent of the Legislature that policyholders,
17 applicants, and agents of the corporation receive service and
18 treatment of the highest possible level but never less than that
19 generally provided in the voluntary market. It is also intended
20 that the corporation be held to service standards no less than
21 those applied to insurers in the voluntary market by the office
22 with respect to responsiveness, timeliness, customer courtesy,
23 and overall dealings with policyholders, applicants, or agents
24 of the corporation.
25 5.a. Effective January 1, 2009, a personal lines
26 residential structure that is located in the “wind-borne debris
27 region,” as defined in s. 1609.2, International Building Code
28 (2006), and that has an insured value on the structure of
29 $750,000 or more is not eligible for coverage by the corporation
30 unless the structure has opening protections as required under
31 the Florida Building Code for a newly constructed residential
32 structure in that area. A residential structure is deemed to
33 comply with this sub-subparagraph if it has shutters or opening
34 protections on all openings and if such opening protections
35 complied with the Florida Building Code at the time they were
36 installed.
37 b. Any major structure, as defined in s. 161.54(6)(a), that
38 is newly constructed, or rebuilt, repaired, restored, or
39 remodeled to increase the total square footage of finished area
40 by more than 25 percent, pursuant to a permit applied for after
41 July 1, 2015, is not eligible for coverage by the corporation if
42 the structure is seaward of the coastal construction control
43 line established pursuant to s. 161.053 or is within the Coastal
44 Barrier Resources System as designated by 16 U.S.C. ss. 3501
45 3510.
46 6. With respect to wind-only coverage for commercial lines
47 residential condominiums, effective July 1, 2014, a condominium
48 shall be deemed ineligible for coverage if 50 percent or more of
49 the units are rented more than eight times in a calendar year
50 for a rental agreement period of less than 30 days.
51 (b)1. All insurers authorized to write one or more subject
52 lines of business in this state are subject to assessment by the
53 corporation and, for the purposes of this subsection, are
54 referred to collectively as “assessable insurers.” Insurers
55 writing one or more subject lines of business in this state
56 pursuant to part VIII of chapter 626 are not assessable
57 insurers; however, insureds who procure one or more subject
58 lines of business in this state pursuant to part VIII of chapter
59 626 are subject to assessment by the corporation and are
60 referred to collectively as “assessable insureds.” An insurer’s
61 assessment liability begins on the first day of the calendar
62 year following the year in which the insurer was issued a
63 certificate of authority to transact insurance for subject lines
64 of business in this state and terminates 1 year after the end of
65 the first calendar year during which the insurer no longer holds
66 a certificate of authority to transact insurance for subject
67 lines of business in this state.
68 2.a. All revenues, assets, liabilities, losses, and
69 expenses of the corporation shall be maintained in the Citizens
70 account. The Citizens account may provide divided into three
71 separate accounts as follows:
72 a.(I) A personal lines account for Personal residential
73 policies that provide issued by the corporation which provides
74 comprehensive, multiperil coverage on risks that are not located
75 in areas eligible for coverage by the Florida Windstorm
76 Underwriting Association as those areas were defined on January
77 1, 2002, and for policies that do not provide coverage for the
78 peril of wind on risks that are located in such areas;
79 b.(II) A commercial lines account for Commercial
80 residential and commercial nonresidential policies that provide
81 issued by the corporation which provides coverage for basic
82 property perils on risks that are not located in areas eligible
83 for coverage by the Florida Windstorm Underwriting Association
84 as those areas were defined on January 1, 2002, and for policies
85 that do not provide coverage for the peril of wind on risks that
86 are located in such areas; and
87 c.(III) A coastal account for Personal residential policies
88 and commercial residential and commercial nonresidential
89 property policies that provide issued by the corporation which
90 provides coverage for the peril of wind on risks that are
91 located in areas eligible for coverage by the Florida Windstorm
92 Underwriting Association as those areas were defined on January
93 1, 2002. The corporation may offer policies that provide
94 multiperil coverage and shall offer policies that provide
95 coverage only for the peril of wind for risks located in areas
96 eligible for coverage by the Florida Windstorm Underwriting
97 Association, as those areas were defined on January 1, 2002 in
98 the coastal account. Effective July 1, 2014, The corporation may
99 not offer shall cease offering new commercial residential
100 policies providing multiperil coverage but and shall instead
101 continue to offer commercial residential wind-only policies, and
102 may offer commercial residential policies excluding wind.
103 However, the corporation may, however, continue to renew a
104 commercial residential multiperil policy on a building that was
105 is insured by the corporation on June 30, 2014, under a
106 multiperil policy. In issuing multiperil coverage under this
107 sub-subparagraph, the corporation may use its approved policy
108 forms and rates for risks located in areas not eligible for
109 coverage by the Florida Windstorm Underwriting Association, as
110 those areas were defined on January 1, 2002, and for policies
111 that do not provide coverage for the peril of wind on risks that
112 are located in such areas the personal lines account. An
113 applicant or insured who is eligible to purchase a multiperil
114 policy from the corporation may purchase a multiperil policy
115 from an authorized insurer without prejudice to the applicant’s
116 or insured’s eligibility to prospectively purchase a policy that
117 provides coverage only for the peril of wind from the
118 corporation. An applicant or insured who is eligible for a
119 corporation policy that provides coverage only for the peril of
120 wind may elect to purchase or retain such policy and also
121 purchase or retain coverage excluding wind from an authorized
122 insurer without prejudice to the applicant’s or insured’s
123 eligibility to prospectively purchase a policy that provides
124 multiperil coverage from the corporation. The following
125 policies, which provide coverage only for the peril of wind,
126 must also include quota share primary insurance under
127 subparagraph (c)2.:
128 (I) Personal residential policies and commercial
129 residential and commercial nonresidential property policies that
130 provide coverage for the peril of wind on risks that are located
131 in areas eligible for coverage by the Florida Windstorm
132 Underwriting Association, as those areas were defined on January
133 1, 2002;
134 (II) Policies that provide multiperil coverage, if offered
135 by the corporation, and policies that provide coverage only for
136 the peril of wind for risks located in areas eligible for
137 coverage by the Florida Windstorm Underwriting Association, as
138 those areas were defined on January 1, 2002;
139 (III) Commercial residential wind-only policies;
140 (IV) Commercial residential policies excluding wind, if
141 offered by the corporation; and
142 (V) Commercial residential multiperil policies on a
143 building that was insured by the corporation on June 30, 2014 It
144 is the goal of the Legislature that there be an overall average
145 savings of 10 percent or more for a policyholder who currently
146 has a wind-only policy with the corporation, and an ex-wind
147 policy with a voluntary insurer or the corporation, and who
148 obtains a multiperil policy from the corporation. It is the
149 intent of the Legislature that the offer of multiperil coverage
150 in the coastal account be made and implemented in a manner that
151 does not adversely affect the tax-exempt status of the
152 corporation or creditworthiness of or security for currently
153 outstanding financing obligations or credit facilities of the
154 coastal account, the personal lines account, or the commercial
155 lines account. The coastal account must also include quota share
156 primary insurance under subparagraph (c)2.
157
158 The area eligible for coverage with the corporation under this
159 sub-subparagraph under the coastal account also includes the
160 area within Port Canaveral, which is bordered on the south by
161 the City of Cape Canaveral, bordered on the west by the Banana
162 River, and bordered on the north by Federal Government property.
163 3. With respect to a deficit in the Citizens account:
164 a. Upon a determination by the board of governors that the
165 Citizens account has a projected deficit, the board shall levy a
166 Citizens policyholder surcharge against all policyholders of the
167 corporation.
168 (I) The surcharge shall be levied as a uniform percentage
169 of the premium for the policy of up to 15 percent of such
170 premium, which funds shall be used to offset the deficit.
171 (II) The surcharge is payable upon cancellation or
172 termination of the policy, upon renewal of the policy, or upon
173 issuance of a new policy by the corporation within the first 12
174 months after the date of the levy or the period of time
175 necessary to fully collect the surcharge amount.
176 (III) The surcharge is not considered premium and is not
177 subject to commissions, fees, or premium taxes. However, failure
178 to pay the surcharge shall be treated as failure to pay premium.
179 b. The three separate accounts must be maintained as long
180 as financing obligations entered into by the Florida Windstorm
181 Underwriting Association or Residential Property and Casualty
182 Joint Underwriting Association are outstanding, in accordance
183 with the terms of the corresponding financing documents. If no
184 such financing obligations remain outstanding or if the
185 financing documents allow for combining of accounts, the
186 corporation may consolidate the three separate accounts into a
187 new account, to be known as the Citizens account, for all
188 revenues, assets, liabilities, losses, and expenses of the
189 corporation. The Citizens account, if established by the
190 corporation, is authorized to provide coverage to the same
191 extent as provided under each of the three separate accounts.
192 The authority to provide coverage under the Citizens account is
193 set forth in subparagraph 4. Consistent with this subparagraph
194 and prudent investment policies that minimize the cost of
195 carrying debt, the board shall exercise its best efforts to
196 retire existing debt or obtain the approval of necessary parties
197 to amend the terms of existing debt, so as to structure the most
198 efficient plan for consolidating the three separate accounts
199 into a single account. Once the accounts are combined into one
200 account, this subparagraph and subparagraph 3. shall be replaced
201 in their entirety by subparagraphs 4. and 5.
202 c. Creditors of the Residential Property and Casualty Joint
203 Underwriting Association and the accounts specified in sub-sub
204 subparagraphs a.(I) and (II) may have a claim against, and
205 recourse to, those accounts and no claim against, or recourse
206 to, the account referred to in sub-sub-subparagraph a.(III).
207 Creditors of the Florida Windstorm Underwriting Association have
208 a claim against, and recourse to, the account referred to in
209 sub-sub-subparagraph a.(III) and no claim against, or recourse
210 to, the accounts referred to in sub-sub-subparagraphs a.(I) and
211 (II).
212 d. Revenues, assets, liabilities, losses, and expenses not
213 attributable to particular accounts shall be prorated among the
214 accounts.
215 e. The Legislature finds that the revenues of the
216 corporation are revenues that are necessary to meet the
217 requirements set forth in documents authorizing the issuance of
218 bonds under this subsection.
219 f. The income of the corporation may not inure to the
220 benefit of any private person.
221 3. With respect to a deficit in an account:
222 a. After accounting for the Citizens policyholder surcharge
223 imposed under sub-subparagraph j., if the remaining projected
224 deficit incurred in the coastal account in a particular calendar
225 year:
226 (I) Is not greater than 2 percent of the aggregate
227 statewide direct written premium for the subject lines of
228 business for the prior calendar year, the entire deficit shall
229 be recovered through regular assessments of assessable insurers
230 under paragraph (q) and assessable insureds.
231 (II) Exceeds 2 percent of the aggregate statewide direct
232 written premium for the subject lines of business for the prior
233 calendar year, the corporation shall levy regular assessments on
234 assessable insurers under paragraph (q) and on assessable
235 insureds in an amount equal to the greater of 2 percent of the
236 projected deficit or 2 percent of the aggregate statewide direct
237 written premium for the subject lines of business for the prior
238 calendar year. Any remaining projected deficit shall be
239 recovered through emergency assessments under sub-subparagraph
240 e.
241 b. Each assessable insurer’s share of the amount being
242 assessed under sub-subparagraph a. must be in the proportion
243 that the assessable insurer’s direct written premium for the
244 subject lines of business for the year preceding the assessment
245 bears to the aggregate statewide direct written premium for the
246 subject lines of business for that year. The assessment
247 percentage applicable to each assessable insured is the ratio of
248 the amount being assessed under sub-subparagraph a. to the
249 aggregate statewide direct written premium for the subject lines
250 of business for the prior year. Assessments levied by the
251 corporation on assessable insurers under sub-subparagraph a.
252 must be paid as required by the corporation’s plan of operation
253 and paragraph (q). Assessments levied by the corporation on
254 assessable insureds under sub-subparagraph a. shall be collected
255 by the surplus lines agent at the time the surplus lines agent
256 collects the surplus lines tax required by s. 626.932, and paid
257 to the Florida Surplus Lines Service Office at the time the
258 surplus lines agent pays the surplus lines tax to that office.
259 Upon receipt of regular assessments from surplus lines agents,
260 the Florida Surplus Lines Service Office shall transfer the
261 assessments directly to the corporation as determined by the
262 corporation.
263 c. The corporation may not levy regular assessments under
264 paragraph (q) pursuant to sub-subparagraph a. or sub
265 subparagraph b. if the three separate accounts in sub-sub
266 subparagraphs 2.a.(I)-(III) have been consolidated into the
267 Citizens account pursuant to sub-subparagraph 2.b. However, the
268 outstanding balance of any regular assessment levied by the
269 corporation before establishment of the Citizens account remains
270 payable to the corporation.
271 b.d. After accounting for the Citizens policyholder
272 surcharge imposed under sub-subparagraph a. j., the remaining
273 projected deficits in the Citizens personal lines account and in
274 the commercial lines account in a particular calendar year shall
275 be recovered through emergency assessments under sub
276 subparagraph c. e.
277 c.e. Upon a determination by the board of governors that a
278 projected deficit in the Citizens an account exceeds the amount
279 that is expected to be recovered through surcharges regular
280 assessments under sub-subparagraph a., plus the amount that is
281 expected to be recovered through surcharges under sub
282 subparagraph j., the board, after verification by the office,
283 shall levy emergency assessments for as many years as necessary
284 to cover the deficits, to be collected by assessable insurers
285 and the corporation and collected from assessable insureds upon
286 issuance or renewal of policies for subject lines of business,
287 excluding National Flood Insurance Program policies. The amount
288 collected in a particular year must be a uniform percentage of
289 that year’s direct written premium for subject lines of business
290 and the Citizens account all accounts of the corporation,
291 excluding National Flood Insurance Program policy premiums, as
292 annually determined by the board and verified by the office. The
293 office shall verify the arithmetic calculations involved in the
294 board’s determination within 30 days after receipt of the
295 information on which the determination was based. The office
296 shall notify assessable insurers and the Florida Surplus Lines
297 Service Office of the date on which assessable insurers shall
298 begin to collect and assessable insureds shall begin to pay such
299 assessment. The date must be at least 90 days after the date the
300 corporation levies emergency assessments pursuant to this sub
301 subparagraph. Notwithstanding any other provision of law, the
302 corporation and each assessable insurer that writes subject
303 lines of business shall collect emergency assessments from its
304 policyholders without such obligation being affected by any
305 credit, limitation, exemption, or deferment. Emergency
306 assessments levied by the corporation on assessable insureds
307 shall be collected by the surplus lines agent at the time the
308 surplus lines agent collects the surplus lines tax required by
309 s. 626.932 and paid to the Florida Surplus Lines Service Office
310 at the time the surplus lines agent pays the surplus lines tax
311 to that office. The emergency assessments collected shall be
312 transferred directly to the corporation on a periodic basis as
313 determined by the corporation and held by the corporation solely
314 in the Citizens applicable account. The aggregate amount of
315 emergency assessments levied for the Citizens an account in any
316 calendar year may be less than but may not exceed the greater of
317 10 percent of the amount needed to cover the deficit, plus
318 interest, fees, commissions, required reserves, and other costs
319 associated with financing the original deficit, or 10 percent of
320 the aggregate statewide direct written premium for subject lines
321 of business and the Citizens account all accounts of the
322 corporation for the prior year, plus interest, fees,
323 commissions, required reserves, and other costs associated with
324 financing the deficit.
325 d.f. The corporation may pledge the proceeds of
326 assessments, projected recoveries from the Florida Hurricane
327 Catastrophe Fund, other insurance and reinsurance recoverables,
328 policyholder surcharges and other surcharges, and other funds
329 available to the corporation as the source of revenue for and to
330 secure bonds issued under paragraph (q), bonds or other
331 indebtedness issued under subparagraph (c)3., or lines of credit
332 or other financing mechanisms issued or created under this
333 subsection, or to retire any other debt incurred as a result of
334 deficits or events giving rise to deficits, or in any other way
335 that the board determines will efficiently recover such
336 deficits. The purpose of the lines of credit or other financing
337 mechanisms is to provide additional resources to assist the
338 corporation in covering claims and expenses attributable to a
339 catastrophe. As used in this subsection, the term “assessments”
340 includes emergency regular assessments under sub-subparagraph c.
341 a. or subparagraph (q)1. and emergency assessments under sub
342 subparagraph e. Emergency assessments collected under sub
343 subparagraph c. e. are not part of an insurer’s rates, are not
344 premium, and are not subject to premium tax, fees, or
345 commissions; however, failure to pay the emergency assessment
346 shall be treated as failure to pay premium. The emergency
347 assessments shall continue as long as any bonds issued or other
348 indebtedness incurred with respect to a deficit for which the
349 assessment was imposed remain outstanding, unless adequate
350 provision has been made for the payment of such bonds or other
351 indebtedness pursuant to the documents governing such bonds or
352 indebtedness.
353 e.g. As used in this subsection and for purposes of any
354 deficit incurred on or after January 25, 2007, the term “subject
355 lines of business” means insurance written by assessable
356 insurers or procured by assessable insureds for all property and
357 casualty lines of business in this state, but not including
358 workers’ compensation or medical malpractice. As used in this
359 sub-subparagraph, the term “property and casualty lines of
360 business” includes all lines of business identified on Form 2,
361 Exhibit of Premiums and Losses, in the annual statement required
362 of authorized insurers under s. 624.424 and any rule adopted
363 under this section, except for those lines identified as
364 accident and health insurance and except for policies written
365 under the National Flood Insurance Program or the Federal Crop
366 Insurance Program. For purposes of this sub-subparagraph, the
367 term “workers’ compensation” includes both workers’ compensation
368 insurance and excess workers’ compensation insurance.
369 f.h. The Florida Surplus Lines Service Office shall
370 annually determine annually the aggregate statewide written
371 premium in subject lines of business procured by assessable
372 insureds and report that information to the corporation in a
373 form and at a time the corporation specifies to ensure that the
374 corporation can meet the requirements of this subsection and the
375 corporation’s financing obligations.
376 g.i. The Florida Surplus Lines Service Office shall verify
377 the proper application by surplus lines agents of assessment
378 percentages for regular assessments and emergency assessments
379 levied under this subparagraph on assessable insureds and assist
380 the corporation in ensuring the accurate, timely collection and
381 payment of assessments by surplus lines agents as required by
382 the corporation.
383 j. Upon determination by the board of governors that an
384 account has a projected deficit, the board shall levy a Citizens
385 policyholder surcharge against all policyholders of the
386 corporation.
387 (I) The surcharge shall be levied as a uniform percentage
388 of the premium for the policy of up to 15 percent of such
389 premium, which funds shall be used to offset the deficit.
390 (II) The surcharge is payable upon cancellation or
391 termination of the policy, upon renewal of the policy, or upon
392 issuance of a new policy by the corporation within the first 12
393 months after the date of the levy or the period of time
394 necessary to fully collect the surcharge amount.
395 (III) The corporation may not levy any regular assessments
396 under paragraph (q) pursuant to sub-subparagraph a. or sub
397 subparagraph b. with respect to a particular year’s deficit
398 until the corporation has first levied the full amount of the
399 surcharge authorized by this sub-subparagraph.
400 (IV) The surcharge is not considered premium and is not
401 subject to commissions, fees, or premium taxes. However, failure
402 to pay the surcharge shall be treated as failure to pay premium.
403 h.k. If the amount of any assessments or surcharges
404 collected from corporation policyholders, assessable insurers or
405 their policyholders, or assessable insureds exceeds the amount
406 of the deficits, such excess amounts shall be remitted to and
407 retained by the corporation in a reserve to be used by the
408 corporation, as determined by the board of governors and
409 approved by the office, to pay claims or reduce any past,
410 present, or future plan-year deficits or to reduce outstanding
411 debt.
412 4. The Citizens account, if established by the corporation
413 pursuant to sub-subparagraph 2.b., is authorized to provide:
414 a. Personal residential policies that provide
415 comprehensive, multiperil coverage on risks that are not located
416 in areas eligible for coverage by the Florida Windstorm
417 Underwriting Association, as those areas were defined on January
418 1, 2002, and for policies that do not provide coverage for the
419 peril of wind on risks that are located in such areas;
420 b. Commercial residential and commercial nonresidential
421 policies that provide coverage for basic property perils on
422 risks that are not located in areas eligible for coverage by the
423 Florida Windstorm Underwriting Association, as those areas were
424 defined on January 1, 2002, and for policies that do not provide
425 coverage for the peril of wind on risks that are located in such
426 areas; and
427 c. Personal residential policies and commercial residential
428 and commercial nonresidential property policies that provide
429 coverage for the peril of wind on risks that are located in
430 areas eligible for coverage by the Florida Windstorm
431 Underwriting Association, as those areas were defined on January
432 1, 2002. The corporation may offer policies that provide
433 multiperil coverage and shall offer policies that provide
434 coverage only for the peril of wind for risks located in areas
435 eligible for coverage by the Florida Windstorm Underwriting
436 Association, as those areas were defined on January 1, 2002. The
437 corporation may not offer new commercial residential policies
438 providing multiperil coverage, but shall continue to offer
439 commercial residential wind-only policies, and may offer
440 commercial residential policies excluding wind. However, the
441 corporation may continue to renew a commercial residential
442 multiperil policy on a building that was insured by the
443 corporation on June 30, 2014, under a multiperil policy. In
444 issuing multiperil coverage under this sub-subparagraph, the
445 corporation may use its approved policy forms and rates for
446 risks located in areas not eligible for coverage by the Florida
447 Windstorm Underwriting Association as those areas were defined
448 on January 1, 2002, and for policies that do not provide
449 coverage for the peril of wind on risks that are located in such
450 areas. An applicant or insured who is eligible to purchase a
451 multiperil policy from the corporation may purchase a multiperil
452 policy from an authorized insurer without prejudice to the
453 applicant’s or insured’s eligibility to prospectively purchase a
454 policy that provides coverage only for the peril of wind from
455 the corporation. An applicant or insured who is eligible for a
456 corporation policy that provides coverage only for the peril of
457 wind may elect to purchase or retain such policy and also
458 purchase or retain coverage excluding wind from an authorized
459 insurer without prejudice to the applicant’s or insured’s
460 eligibility to prospectively purchase a policy that provides
461 multiperil coverage from the corporation. The following
462 policies, which provide coverage only for the peril of wind,
463 must also include quota share primary insurance under
464 subparagraph (c)2.: Personal residential policies and commercial
465 residential and commercial nonresidential property policies that
466 provide coverage for the peril of wind on risks that are located
467 in areas eligible for coverage by the Florida Windstorm
468 Underwriting Association, as those areas were defined on January
469 1, 2002; policies that provide multiperil coverage, if offered
470 by the corporation, and policies that provide coverage only for
471 the peril of wind for risks located in areas eligible for
472 coverage by the Florida Windstorm Underwriting Association, as
473 those areas were defined on January 1, 2002; commercial
474 residential wind-only policies; commercial residential policies
475 excluding wind, if offered by the corporation; and commercial
476 residential multiperil policies on a building that was insured
477 by the corporation on June 30, 2014. The area eligible for
478 coverage with the corporation under this sub-subparagraph
479 includes the area within Port Canaveral, which is bordered on
480 the south by the City of Cape Canaveral, bordered on the west by
481 the Banana River, and bordered on the north by Federal
482 Government property.
483 5. With respect to a deficit in the Citizens account:
484 a. Upon a determination by the board of governors that the
485 Citizens account has a projected deficit, the board shall levy a
486 Citizens policyholder surcharge against all policyholders of the
487 corporation.
488 (I) The surcharge shall be levied as a uniform percentage
489 of the premium for the policy of up to 15 percent of such
490 premium, which funds shall be used to offset the deficit.
491 (II) The surcharge is payable upon cancellation or
492 termination of the policy, upon renewal of the policy, or upon
493 issuance of a new policy by the corporation within the first 12
494 months after the date of the levy or the period of time
495 necessary to fully collect the surcharge amount.
496 (III) The surcharge is not considered premium and is not
497 subject to commissions, fees, or premium taxes. However, failure
498 to pay the surcharge shall be treated as failure to pay premium.
499 b. After accounting for the Citizens policyholder surcharge
500 imposed under sub-subparagraph a., the remaining projected
501 deficit incurred in the Citizens account in a particular
502 calendar year shall be recovered through emergency assessments
503 under sub-subparagraph c.
504 c. Upon a determination by the board of governors that a
505 projected deficit in the Citizens account exceeds the amount
506 that is expected to be recovered through surcharges under sub
507 subparagraph a., the board, after verification by the office,
508 shall levy emergency assessments for as many years as necessary
509 to cover the deficits, to be collected by assessable insurers
510 and the corporation and collected from assessable insureds upon
511 issuance or renewal of policies for subject lines of business,
512 excluding National Flood Insurance Program policies. The amount
513 collected in a particular year must be a uniform percentage of
514 that year’s direct written premium for subject lines of business
515 and the Citizens account, National Flood Insurance Program
516 policy premiums, as annually determined by the board and
517 verified by the office. The office shall verify the arithmetic
518 calculations involved in the board’s determination within 30
519 days after receipt of the information on which the determination
520 was based. The office shall notify assessable insurers and the
521 Florida Surplus Lines Service Office of the date on which
522 assessable insurers shall begin to collect and assessable
523 insureds shall begin to pay such assessment. The date must be at
524 least 90 days after the date the corporation levies emergency
525 assessments pursuant to this sub-subparagraph. Notwithstanding
526 any other law, the corporation and each assessable insurer that
527 writes subject lines of business shall collect emergency
528 assessments from its policyholders without such obligation being
529 affected by any credit, limitation, exemption, or deferment.
530 Emergency assessments levied by the corporation on assessable
531 insureds shall be collected by the surplus lines agent at the
532 time the surplus lines agent collects the surplus lines tax
533 required by s. 626.932 and paid to the Florida Surplus Lines
534 Service Office at the time the surplus lines agent pays the
535 surplus lines tax to that office. The emergency assessments
536 collected shall be transferred directly to the corporation on a
537 periodic basis as determined by the corporation and held by the
538 corporation solely in the Citizens account. The aggregate amount
539 of emergency assessments levied for the Citizens account in any
540 calendar year may be less than, but may not exceed the greater
541 of, 10 percent of the amount needed to cover the deficit, plus
542 interest, fees, commissions, required reserves, and other costs
543 associated with financing the original deficit or 10 percent of
544 the aggregate statewide direct written premium for subject lines
545 of business and the Citizens accounts for the prior year, plus
546 interest, fees, commissions, required reserves, and other costs
547 associated with financing the deficit.
548 d. The corporation may pledge the proceeds of assessments,
549 projected recoveries from the Florida Hurricane Catastrophe
550 Fund, other insurance and reinsurance recoverables, policyholder
551 surcharges and other surcharges, and other funds available to
552 the corporation as the source of revenue for and to secure bonds
553 issued under paragraph (q), bonds or other indebtedness issued
554 under subparagraph (c)3., or lines of credit or other financing
555 mechanisms issued or created under this subsection; or to retire
556 any other debt incurred as a result of deficits or events giving
557 rise to deficits, or in any other way that the board determines
558 will efficiently recover such deficits. The purpose of the lines
559 of credit or other financing mechanisms is to provide additional
560 resources to assist the corporation in covering claims and
561 expenses attributable to a catastrophe. As used in this
562 subsection, the term “assessments” includes emergency
563 assessments under sub-subparagraph c. Emergency assessments
564 collected under sub-subparagraph c. are not part of an insurer’s
565 rates, are not premium, and are not subject to premium tax,
566 fees, or commissions; however, failure to pay the emergency
567 assessment shall be treated as failure to pay premium. The
568 emergency assessments shall continue as long as any bonds issued
569 or other indebtedness incurred with respect to a deficit for
570 which the assessment was imposed remain outstanding, unless
571 adequate provision has been made for the payment of such bonds
572 or other indebtedness pursuant to the documents governing such
573 bonds or indebtedness.
574 e. As used in this subsection and for purposes of any
575 deficit incurred on or after January 25, 2007, the term “subject
576 lines of business” means insurance written by assessable
577 insurers or procured by assessable insureds for all property and
578 casualty lines of business in this state, but not including
579 workers’ compensation or medical malpractice. As used in this
580 sub-subparagraph, the term “property and casualty lines of
581 business” includes all lines of business identified on Form 2,
582 Exhibit of Premiums and Losses, in the annual statement required
583 of authorized insurers under s. 624.424 and any rule adopted
584 under this section, except for those lines identified as
585 accident and health insurance and except for policies written
586 under the National Flood Insurance Program or the Federal Crop
587 Insurance Program. For purposes of this sub-subparagraph, the
588 term “workers’ compensation” includes both workers’ compensation
589 insurance and excess workers’ compensation insurance.
590 f. The Florida Surplus Lines Service Office shall annually
591 determine the aggregate statewide written premium in subject
592 lines of business procured by assessable insureds and report
593 that information to the corporation in a form and at a time the
594 corporation specifies to ensure that the corporation can meet
595 the requirements of this subsection and the corporation’s
596 financing obligations.
597 g. The Florida Surplus Lines Service Office shall verify
598 the proper application by surplus lines agents of assessment
599 percentages for emergency assessments levied under this
600 subparagraph on assessable insureds and assist the corporation
601 in ensuring the accurate, timely collection and payment of
602 assessments by surplus lines agents as required by the
603 corporation.
604 h. If the amount of any assessments or surcharges collected
605 from corporation policyholders, assessable insurers or their
606 policyholders, or assessable insureds exceeds the amount of the
607 deficits, such excess amounts shall be remitted to and retained
608 by the corporation in a reserve to be used by the corporation,
609 as determined by the board of governors and approved by the
610 office, to pay claims or reduce any past, present, or future
611 plan-year deficits or to reduce outstanding debt.
612 (c) The corporation’s plan of operation:
613 1. Must provide for adoption of residential property and
614 casualty insurance policy forms and commercial residential and
615 nonresidential property insurance forms, which must be approved
616 by the office before use. The corporation shall adopt the
617 following policy forms:
618 a. Standard personal lines policy forms that are
619 comprehensive multiperil policies providing full coverage of a
620 residential property equivalent to the coverage provided in the
621 private insurance market under an HO-3, HO-4, or HO-6 policy.
622 b. Basic personal lines policy forms that are policies
623 similar to an HO-8 policy or a dwelling fire policy that provide
624 coverage meeting the requirements of the secondary mortgage
625 market, but which is more limited than the coverage under a
626 standard policy.
627 c. Commercial lines residential and nonresidential policy
628 forms that are generally similar to the basic perils of full
629 coverage obtainable for commercial residential structures and
630 commercial nonresidential structures in the admitted voluntary
631 market.
632 d. Personal lines and commercial lines residential property
633 insurance forms that cover the peril of wind only. The forms are
634 applicable only to residential properties located in areas
635 eligible for coverage by the Florida Windstorm Underwriting
636 Association, as those areas were defined on January 1, 2002.
637 e. Commercial lines nonresidential property insurance forms
638 that cover the peril of wind only. The forms are applicable only
639 to nonresidential properties located in areas eligible for
640 coverage by the Florida Windstorm Underwriting Association, as
641 those areas were defined on January 1, 2002.
642 f. The corporation may adopt variations of the policy forms
643 listed in sub-subparagraphs a.-e. which contain more restrictive
644 coverage.
645 g. The corporation shall offer a basic personal lines
646 policy similar to an HO-8 policy with dwelling repair based on
647 common construction materials and methods.
648 2. Must provide that the corporation adopt a program in
649 which the corporation and authorized insurers enter into quota
650 share primary insurance agreements for hurricane coverage, as
651 defined in s. 627.4025(2)(a), for eligible risks, and adopt
652 property insurance forms for eligible risks which cover the
653 peril of wind only.
654 a. As used in this subsection, the term:
655 (I) “Approved surplus lines insurer” means an eligible
656 surplus lines insurer that:
657 (A) Has a financial strength rating of “A-” or higher from
658 A.M. Best Company;
659 (B) Has a personal lines residential risk program that is
660 managed by a Florida resident surplus lines broker;
661 (C) Applies to the office to participate in the take-out
662 process to offer coverage to applicants for new coverage from
663 the corporation or current policyholders of the corporation
664 through a take-out plan approved by the office;
665 (D) Files rates for review as part of a take-out plan with
666 the office. The office shall review whether the premium is more
667 than 20 percent greater than the premium for comparable coverage
668 from the corporation; and
669 (E) Provides data to the office related to coverage and
670 rates in a format promulgated by the commission.
671 (III) “Primary residence” means the dwelling that is the
672 policyholder’s primary home or is a rental property that is the
673 primary home of the tenant, and which the policyholder or tenant
674 occupies for more than 9 months of each year.
675 (IV)(I) “Quota share primary insurance” means an
676 arrangement in which the primary hurricane coverage of an
677 eligible risk is provided in specified percentages by the
678 corporation and an authorized insurer. The corporation and
679 authorized insurer are each solely responsible for a specified
680 percentage of hurricane coverage of an eligible risk as set
681 forth in a quota share primary insurance agreement between the
682 corporation and an authorized insurer and the insurance
683 contract. The responsibility of the corporation or authorized
684 insurer to pay its specified percentage of hurricane losses of
685 an eligible risk, as set forth in the agreement, may not be
686 altered by the inability of the other party to pay its specified
687 percentage of losses. Eligible risks that are provided hurricane
688 coverage through a quota share primary insurance arrangement
689 must be provided policy forms that set forth the obligations of
690 the corporation and authorized insurer under the arrangement,
691 clearly specify the percentages of quota share primary insurance
692 provided by the corporation and authorized insurer, and
693 conspicuously and clearly state that the authorized insurer and
694 the corporation may not be held responsible beyond their
695 specified percentage of coverage of hurricane losses.
696 (II) “Eligible risks” means personal lines residential and
697 commercial lines residential risks that meet the underwriting
698 criteria of the corporation and are located in areas that were
699 eligible for coverage by the Florida Windstorm Underwriting
700 Association on January 1, 2002.
701 b. The corporation may enter into quota share primary
702 insurance agreements with authorized insurers at corporation
703 coverage levels of 90 percent and 50 percent.
704 c. If the corporation determines that additional coverage
705 levels are necessary to maximize participation in quota share
706 primary insurance agreements by authorized insurers, the
707 corporation may establish additional coverage levels. However,
708 the corporation’s quota share primary insurance coverage level
709 may not exceed 90 percent.
710 d. Any quota share primary insurance agreement entered into
711 between an authorized insurer and the corporation must provide
712 for a uniform specified percentage of coverage of hurricane
713 losses, by county or territory as set forth by the corporation
714 board, for all eligible risks of the authorized insurer covered
715 under the agreement.
716 e. Any quota share primary insurance agreement entered into
717 between an authorized insurer and the corporation is subject to
718 review and approval by the office. However, such agreement shall
719 be authorized only as to insurance contracts entered into
720 between an authorized insurer and an insured who is already
721 insured by the corporation for wind coverage.
722 f. For all eligible risks covered under quota share primary
723 insurance agreements, the exposure and coverage levels for both
724 the corporation and authorized insurers shall be reported by the
725 corporation to the Florida Hurricane Catastrophe Fund. For all
726 policies of eligible risks covered under such agreements, the
727 corporation and the authorized insurer must maintain complete
728 and accurate records for the purpose of exposure and loss
729 reimbursement audits as required by fund rules. The corporation
730 and the authorized insurer shall each maintain duplicate copies
731 of policy declaration pages and supporting claims documents.
732 g. The corporation board shall establish in its plan of
733 operation standards for quota share agreements which ensure that
734 there is no discriminatory application among insurers as to the
735 terms of the agreements, pricing of the agreements, incentive
736 provisions if any, and consideration paid for servicing policies
737 or adjusting claims.
738 h. The quota share primary insurance agreement between the
739 corporation and an authorized insurer must set forth the
740 specific terms under which coverage is provided, including, but
741 not limited to, the sale and servicing of policies issued under
742 the agreement by the insurance agent of the authorized insurer
743 producing the business, the reporting of information concerning
744 eligible risks, the payment of premium to the corporation, and
745 arrangements for the adjustment and payment of hurricane claims
746 incurred on eligible risks by the claims adjuster and personnel
747 of the authorized insurer. Entering into a quota sharing
748 insurance agreement between the corporation and an authorized
749 insurer is voluntary and at the discretion of the authorized
750 insurer.
751 3. May provide that the corporation may employ or otherwise
752 contract with individuals or other entities to provide
753 administrative or professional services that may be appropriate
754 to effectuate the plan. The corporation may borrow funds by
755 issuing bonds or by incurring other indebtedness, and shall have
756 other powers reasonably necessary to effectuate the requirements
757 of this subsection, including, without limitation, the power to
758 issue bonds and incur other indebtedness in order to refinance
759 outstanding bonds or other indebtedness. The corporation may
760 seek judicial validation of its bonds or other indebtedness
761 under chapter 75. The corporation may issue bonds or incur other
762 indebtedness, or have bonds issued on its behalf by a unit of
763 local government pursuant to subparagraph (q)2. in the absence
764 of a hurricane or other weather-related event, upon a
765 determination by the corporation, subject to approval by the
766 office, that such action would enable it to efficiently meet the
767 financial obligations of the corporation and that such
768 financings are reasonably necessary to effectuate the
769 requirements of this subsection. The corporation may take all
770 actions needed to facilitate tax-free status for such bonds or
771 indebtedness, including formation of trusts or other affiliated
772 entities. The corporation may pledge assessments, projected
773 recoveries from the Florida Hurricane Catastrophe Fund, other
774 reinsurance recoverables, policyholder surcharges and other
775 surcharges, and other funds available to the corporation as
776 security for bonds or other indebtedness. In recognition of s.
777 10, Art. I of the State Constitution, prohibiting the impairment
778 of obligations of contracts, it is the intent of the Legislature
779 that no action be taken whose purpose is to impair any bond
780 indenture or financing agreement or any revenue source committed
781 by contract to such bond or other indebtedness.
782 4. Must require that the corporation operate subject to the
783 supervision and approval of a board of governors consisting of
784 nine individuals who are residents of this state and who are
785 from different geographical areas of the state, one of whom is
786 appointed by the Governor and serves solely to advocate on
787 behalf of the consumer. The appointment of a consumer
788 representative by the Governor is deemed to be within the scope
789 of the exemption provided in s. 112.313(7)(b) and is in addition
790 to the appointments authorized under sub-subparagraph a.
791 a. The Governor, the Chief Financial Officer, the President
792 of the Senate, and the Speaker of the House of Representatives
793 shall each appoint two members of the board. At least one of the
794 two members appointed by each appointing officer must have
795 demonstrated expertise in insurance and be deemed to be within
796 the scope of the exemption provided in s. 112.313(7)(b). The
797 Chief Financial Officer shall designate one of the appointees as
798 chair. All board members serve at the pleasure of the appointing
799 officer. All members of the board are subject to removal at will
800 by the officers who appointed them. All board members, including
801 the chair, must be appointed to serve for 3-year terms beginning
802 annually on a date designated by the plan. However, for the
803 first term beginning on or after July 1, 2009, each appointing
804 officer shall appoint one member of the board for a 2-year term
805 and one member for a 3-year term. A board vacancy shall be
806 filled for the unexpired term by the appointing officer. The
807 Chief Financial Officer shall appoint a technical advisory group
808 to provide information and advice to the board in connection
809 with the board’s duties under this subsection. The executive
810 director and senior managers of the corporation shall be engaged
811 by the board and serve at the pleasure of the board. Any
812 executive director appointed on or after July 1, 2006, is
813 subject to confirmation by the Senate. The executive director is
814 responsible for employing other staff as the corporation may
815 require, subject to review and concurrence by the board.
816 b. The board shall create a Market Accountability Advisory
817 Committee to assist the corporation in developing awareness of
818 its rates and its customer and agent service levels in
819 relationship to the voluntary market insurers writing similar
820 coverage.
821 (I) The members of the advisory committee consist of the
822 following 11 persons, one of whom must be elected chair by the
823 members of the committee: four representatives, one appointed by
824 the Florida Association of Insurance Agents, one by the Florida
825 Association of Insurance and Financial Advisors, one by the
826 Professional Insurance Agents of Florida, and one by the Latin
827 American Association of Insurance Agencies; three
828 representatives appointed by the insurers with the three highest
829 voluntary market share of residential property insurance
830 business in the state; one representative from the Office of
831 Insurance Regulation; one consumer appointed by the board who is
832 insured by the corporation at the time of appointment to the
833 committee; one representative appointed by the Florida
834 Association of Realtors; and one representative appointed by the
835 Florida Bankers Association. All members shall be appointed to
836 3-year terms and may serve for consecutive terms.
837 (II) The committee shall report to the corporation at each
838 board meeting on insurance market issues which may include rates
839 and rate competition with the voluntary market; service,
840 including policy issuance, claims processing, and general
841 responsiveness to policyholders, applicants, and agents; and
842 matters relating to depopulation.
843 5. Must provide a procedure for determining the eligibility
844 of a risk for coverage, as follows:
845 a. Subject to s. 627.3517, with respect to personal lines
846 residential risks that are primary residences, if the risk is
847 offered coverage from an authorized insurer at the insurer’s
848 approved rate under a standard policy including wind coverage
849 or, if consistent with the insurer’s underwriting rules as filed
850 with the office, a basic policy including wind coverage, for a
851 new application to the corporation for coverage, the risk is not
852 eligible for any policy issued by the corporation unless the
853 premium for coverage from the authorized insurer is more than 20
854 percent greater than the premium for comparable coverage from
855 the corporation. Whenever an offer of coverage for a personal
856 lines residential risk that is a primary residence is received
857 for a policyholder of the corporation at renewal from an
858 authorized insurer, if the offer is equal to or less than the
859 corporation’s renewal premium for comparable coverage, the risk
860 is not eligible for coverage with the corporation for policies
861 that renew before April 1, 2023; for policies that renew on or
862 after that date, the risk is not eligible for coverage with the
863 corporation unless the premium for coverage from the authorized
864 insurer is more than 20 percent greater than the corporation’s
865 renewal premium for comparable coverage. If the risk is not able
866 to obtain such offer, the risk is eligible for a standard policy
867 including wind coverage or a basic policy including wind
868 coverage issued by the corporation; however, if the risk could
869 not be insured under a standard policy including wind coverage
870 regardless of market conditions, the risk is eligible for a
871 basic policy including wind coverage unless rejected under
872 subparagraph 8. The corporation shall determine the type of
873 policy to be provided on the basis of objective standards
874 specified in the underwriting manual and based on generally
875 accepted underwriting practices. A policyholder removed from the
876 corporation through an assumption agreement does not remain
877 eligible for coverage from the corporation after the end of the
878 policy term. However, any policy removed from the corporation
879 through an assumption agreement remains on the corporation’s
880 policy forms through the end of the policy term. This sub
881 subparagraph applies only to risks that are primary residences.
882 (I) If the risk accepts an offer of coverage through the
883 market assistance plan or through a mechanism established by the
884 corporation other than a plan established by s. 627.3518, before
885 a policy is issued to the risk by the corporation or during the
886 first 30 days of coverage by the corporation, and the producing
887 agent who submitted the application to the plan or to the
888 corporation is not currently appointed by the insurer, the
889 insurer shall:
890 (A) Pay to the producing agent of record of the policy for
891 the first year, an amount that is the greater of the insurer’s
892 usual and customary commission for the type of policy written or
893 a fee equal to the usual and customary commission of the
894 corporation; or
895 (B) Offer to allow the producing agent of record of the
896 policy to continue servicing the policy for at least 1 year and
897 offer to pay the agent the greater of the insurer’s or the
898 corporation’s usual and customary commission for the type of
899 policy written.
900
901 If the producing agent is unwilling or unable to accept
902 appointment, the new insurer shall pay the agent in accordance
903 with sub-sub-sub-subparagraph (A).
904 (II) If the corporation enters into a contractual agreement
905 for a take-out plan, the producing agent of record of the
906 corporation policy is entitled to retain any unearned commission
907 on the policy, and the insurer shall:
908 (A) Pay to the producing agent of record, for the first
909 year, an amount that is the greater of the insurer’s usual and
910 customary commission for the type of policy written or a fee
911 equal to the usual and customary commission of the corporation;
912 or
913 (B) Offer to allow the producing agent of record to
914 continue servicing the policy for at least 1 year and offer to
915 pay the agent the greater of the insurer’s or the corporation’s
916 usual and customary commission for the type of policy written.
917
918 If the producing agent is unwilling or unable to accept
919 appointment, the new insurer shall pay the agent in accordance
920 with sub-sub-sub-subparagraph (A).
921 b. Subject to s. 627.3517, with respect to personal lines
922 residential risks that are not primary residences, if the risk
923 is offered coverage from an authorized insurer at the insurer’s
924 approved rate or from an approved surplus lines insurer at the
925 rate approved by the office as part of such surplus lines
926 insurer’s take-out plan for a new application to the corporation
927 for coverage, the risk is not eligible for any policy issued by
928 the corporation unless the premium for coverage from the
929 authorized insurer or approved surplus lines insurer is more
930 than 20 percent greater than the premium for comparable coverage
931 from the corporation. Whenever an offer of coverage for a
932 personal lines residential risk that is not a primary residence
933 is received for a policyholder of the corporation at renewal
934 from an authorized insurer at the insurer’s approved rate or an
935 approved surplus lines insurer at the rate approved by the
936 office as part of such insurer’s take-out plan, the risk is not
937 eligible for coverage with the corporation unless the premium
938 for coverage from the authorized insurer or approved surplus
939 lines insurer is more than 20 percent greater than the
940 corporation’s renewal premium for comparable coverage for
941 policies that renew on or after July 1, 2024. If the risk is not
942 able to obtain such offer, the risk is eligible for a standard
943 policy including wind coverage or a basic policy including wind
944 coverage issued by the corporation. If the risk could not be
945 insured under a standard policy including wind coverage
946 regardless of market conditions, the risk is eligible for a
947 basic policy including wind coverage unless rejected under
948 subparagraph 8. The corporation shall determine the type of
949 policy to be provided on the basis of objective standards
950 specified in the underwriting manual and based on generally
951 accepted underwriting practices. A policyholder removed from the
952 corporation through an assumption agreement does not remain
953 eligible for coverage from the corporation after the end of the
954 policy term. However, any policy removed from the corporation
955 through an assumption agreement remains on the corporation’s
956 policy forms through the end of the policy term.
957 (I) If the risk accepts an offer of coverage through the
958 market assistance plan or through a mechanism established by the
959 corporation other than a plan established by s. 627.3518, before
960 a policy is issued to the risk by the corporation or during the
961 first 30 days of coverage by the corporation, and the producing
962 agent who submitted the application to the plan or to the
963 corporation is not currently appointed by the insurer, the
964 insurer must:
965 (A) Pay to the producing agent of record of the policy, for
966 the first year, an amount that is the greater of the insurer’s
967 usual and customary commission for the type of policy written or
968 a fee equal to the usual and customary commission of the
969 corporation; or
970 (B) Offer to allow the producing agent of record of the
971 policy to continue servicing the policy for at least 1 year and
972 offer to pay the agent the greater of the insurer’s or the
973 corporation’s usual and customary commission for the type of
974 policy written.
975
976 If the producing agent is unwilling or unable to accept
977 appointment, the new insurer must pay the agent in accordance
978 with sub-sub-sub-subparagraph (A).
979 (II) If the corporation enters into a contractual agreement
980 for a take-out plan, the producing agent of record of the
981 corporation policy is entitled to retain any unearned commission
982 on the policy, and the insurer must:
983 (A) Pay to the producing agent of record, for the first
984 year, an amount that is the greater of the insurer’s usual and
985 customary commission for the type of policy written or a fee
986 equal to the usual and customary commission of the corporation;
987 or
988 (B) Offer to allow the producing agent of record to
989 continue servicing the policy for at least 1 year and offer to
990 pay the agent the greater of the insurer’s or the corporation’s
991 usual and customary commission for the type of policy written.
992
993 If the producing agent is unwilling or unable to accept
994 appointment, the new insurer shall pay the agent in accordance
995 with sub-sub-sub-subparagraph (A).
996 c.b. With respect to commercial lines residential risks,
997 for a new application to the corporation for coverage, if the
998 risk is offered coverage under a policy including wind coverage
999 from an authorized insurer at its approved rate, the risk is not
1000 eligible for a policy issued by the corporation unless the
1001 premium for coverage from the authorized insurer is more than 20
1002 percent greater than the premium for comparable coverage from
1003 the corporation. Whenever an offer of coverage for a commercial
1004 lines residential risk is received for a policyholder of the
1005 corporation at renewal from an authorized insurer, the risk is
1006 not eligible for coverage with the corporation unless the
1007 premium for coverage from the authorized insurer is more than 20
1008 percent greater than the corporation’s renewal premium for
1009 comparable coverage. If the risk is not able to obtain any such
1010 offer, the risk is eligible for a policy including wind coverage
1011 issued by the corporation. A policyholder removed from the
1012 corporation through an assumption agreement remains eligible for
1013 coverage from the corporation until the end of the policy term.
1014 However, any policy removed from the corporation through an
1015 assumption agreement remains on the corporation’s policy forms
1016 through the end of the policy term.
1017 (I) If the risk accepts an offer of coverage through the
1018 market assistance plan or through a mechanism established by the
1019 corporation other than a plan established by s. 627.3518, before
1020 a policy is issued to the risk by the corporation or during the
1021 first 30 days of coverage by the corporation, and the producing
1022 agent who submitted the application to the plan or the
1023 corporation is not currently appointed by the insurer, the
1024 insurer shall:
1025 (A) Pay to the producing agent of record of the policy, for
1026 the first year, an amount that is the greater of the insurer’s
1027 usual and customary commission for the type of policy written or
1028 a fee equal to the usual and customary commission of the
1029 corporation; or
1030 (B) Offer to allow the producing agent of record of the
1031 policy to continue servicing the policy for at least 1 year and
1032 offer to pay the agent the greater of the insurer’s or the
1033 corporation’s usual and customary commission for the type of
1034 policy written.
1035
1036 If the producing agent is unwilling or unable to accept
1037 appointment, the new insurer shall pay the agent in accordance
1038 with sub-sub-sub-subparagraph (A).
1039 (II) If the corporation enters into a contractual agreement
1040 for a take-out plan, the producing agent of record of the
1041 corporation policy is entitled to retain any unearned commission
1042 on the policy, and the insurer shall:
1043 (A) Pay to the producing agent of record, for the first
1044 year, an amount that is the greater of the insurer’s usual and
1045 customary commission for the type of policy written or a fee
1046 equal to the usual and customary commission of the corporation;
1047 or
1048 (B) Offer to allow the producing agent of record to
1049 continue servicing the policy for at least 1 year and offer to
1050 pay the agent the greater of the insurer’s or the corporation’s
1051 usual and customary commission for the type of policy written.
1052
1053 If the producing agent is unwilling or unable to accept
1054 appointment, the new insurer shall pay the agent in accordance
1055 with sub-sub-sub-subparagraph (A).
1056 d.c. For purposes of determining comparable coverage under
1057 sub-subparagraphs a., and b., and c., the comparison must be
1058 based on those forms and coverages that are reasonably
1059 comparable. The corporation may rely on a determination of
1060 comparable coverage and premium made by the producing agent who
1061 submits the application to the corporation, made in the agent’s
1062 capacity as the corporation’s agent. For purposes of comparing
1063 the premium for comparable coverage under sub-subparagraphs a.,
1064 and b., and c. premium includes any surcharge or assessment that
1065 is actually applied to such policy. A comparison may be made
1066 solely of the premium with respect to the main building or
1067 structure only on the following basis: the same Coverage A or
1068 other building limits; the same percentage hurricane deductible
1069 that applies on an annual basis or that applies to each
1070 hurricane for commercial residential property; the same
1071 percentage of ordinance and law coverage, if the same limit is
1072 offered by both the corporation and the authorized insurer or
1073 the approved surplus line insurer; the same mitigation credits,
1074 to the extent the same types of credits are offered both by the
1075 corporation and the authorized insurer or the approved surplus
1076 lines insurer; the same method for loss payment, such as
1077 replacement cost or actual cash value, if the same method is
1078 offered both by the corporation and the authorized insurer in
1079 accordance with underwriting rules; and any other form or
1080 coverage that is reasonably comparable as determined by the
1081 board. If an application is submitted to the corporation for
1082 wind-only coverage on a risk that is located in an area eligible
1083 for coverage by the Florida Windstorm Underwriting Association,
1084 as that area was defined on January 1, 2002, the premium for the
1085 corporation’s wind-only policy plus the premium for the ex-wind
1086 policy that is offered by an authorized insurer to the applicant
1087 must be compared to the premium for multiperil coverage offered
1088 by an authorized insurer, subject to the standards for
1089 comparison specified in this subparagraph. If the corporation or
1090 the applicant requests from the authorized insurer or the
1091 approved surplus lines insurer a breakdown of the premium of the
1092 offer by types of coverage so that a comparison may be made by
1093 the corporation or its agent and the authorized insurer or the
1094 approved surplus lines insurer refuses or is unable to provide
1095 such information, the corporation may treat the offer as not
1096 being an offer of coverage from an authorized insurer at the
1097 insurer’s approved rate.
1098 6. Must include rules for classifications of risks and
1099 rates.
1100 7. Must provide that if premium and investment income:
1101 a. for the Citizens an account, which are attributable to a
1102 particular calendar year, are in excess of projected losses and
1103 expenses for the Citizens account attributable to that year,
1104 such excess shall be held in surplus in the Citizens account.
1105 Such surplus must be available to defray deficits in the
1106 Citizens that account as to future years and used for that
1107 purpose before assessing assessable insurers and assessable
1108 insureds as to any calendar year; or
1109 b. For the Citizens account, if established by the
1110 corporation, which are attributable to a particular calendar
1111 year are in excess of projected losses and expenses for the
1112 Citizens account attributable to that year, such excess shall be
1113 held in surplus in the Citizens account. Such surplus must be
1114 available to defray deficits in the Citizens account as to
1115 future years and used for that purpose before assessing
1116 assessable insurers and assessable insureds as to any calendar
1117 year.
1118 8. Must provide objective criteria and procedures to be
1119 uniformly applied to all applicants in determining whether an
1120 individual risk is so hazardous as to be uninsurable. In making
1121 this determination and in establishing the criteria and
1122 procedures, the following must be considered:
1123 a. Whether the likelihood of a loss for the individual risk
1124 is substantially higher than for other risks of the same class;
1125 and
1126 b. Whether the uncertainty associated with the individual
1127 risk is such that an appropriate premium cannot be determined.
1128
1129 The acceptance or rejection of a risk by the corporation shall
1130 be construed as the private placement of insurance, and the
1131 provisions of chapter 120 do not apply.
1132 9. Must provide that the corporation make its best efforts
1133 to procure catastrophe reinsurance at reasonable rates, to cover
1134 its projected 100-year probable maximum loss as determined by
1135 the board of governors. If catastrophe reinsurance is not
1136 available at reasonable rates, the corporation need not purchase
1137 it, but the corporation shall include the costs of reinsurance
1138 to cover its projected 100-year probable maximum loss in its
1139 rate calculations even if it does not purchase catastrophe
1140 reinsurance.
1141 10. The policies issued by the corporation must provide
1142 that if the corporation or the market assistance plan obtains an
1143 offer from an authorized insurer to cover the risk at its
1144 approved rates, the risk is no longer eligible for renewal
1145 through the corporation, except as otherwise provided in this
1146 subsection.
1147 11. Corporation policies and applications must include a
1148 notice that the corporation policy could, under this section, be
1149 replaced with a policy issued by an authorized insurer which
1150 does not provide coverage identical to the coverage provided by
1151 the corporation. The notice must also specify that acceptance of
1152 corporation coverage creates a conclusive presumption that the
1153 applicant or policyholder is aware of this potential.
1154 12. May establish, subject to approval by the office,
1155 different eligibility requirements and operational procedures
1156 for any line or type of coverage for any specified county or
1157 area if the board determines that such changes are justified due
1158 to the voluntary market being sufficiently stable and
1159 competitive in such area or for such line or type of coverage
1160 and that consumers who, in good faith, are unable to obtain
1161 insurance through the voluntary market through ordinary methods
1162 continue to have access to coverage from the corporation. If
1163 coverage is sought in connection with a real property transfer,
1164 the requirements and procedures may not provide an effective
1165 date of coverage later than the date of the closing of the
1166 transfer as established by the transferor, the transferee, and,
1167 if applicable, the lender.
1168 13. Must provide that:
1169 a. With respect to the coastal account, any assessable
1170 insurer with a surplus as to policyholders of $25 million or
1171 less writing 25 percent or more of its total countrywide
1172 property insurance premiums in this state may petition the
1173 office, within the first 90 days of each calendar year, to
1174 qualify as a limited apportionment company. A regular assessment
1175 levied by the corporation on a limited apportionment company for
1176 a deficit incurred by the corporation for the coastal account
1177 may be paid to the corporation on a monthly basis as the
1178 assessments are collected by the limited apportionment company
1179 from its insureds, but a limited apportionment company must
1180 begin collecting the regular assessments not later than 90 days
1181 after the regular assessments are levied by the corporation, and
1182 the regular assessments must be paid in full within 15 months
1183 after being levied by the corporation. A limited apportionment
1184 company shall collect from its policyholders any emergency
1185 assessment imposed under sub-subparagraph (b)3.e. The plan must
1186 provide that, if the office determines that any regular
1187 assessment will result in an impairment of the surplus of a
1188 limited apportionment company, the office may direct that all or
1189 part of such assessment be deferred as provided in subparagraph
1190 (q)4. However, an emergency assessment to be collected from
1191 policyholders under sub-subparagraph (b)3.e. may not be limited
1192 or deferred; or
1193 b. With respect to the Citizens account, if established by
1194 the corporation pursuant to sub-subparagraph (b)2.b., any
1195 assessable insurer with a surplus as to policyholders of $25
1196 million or less and writing 25 percent or more of its total
1197 countrywide property insurance premiums in this state may
1198 petition the office, within the first 90 days of each calendar
1199 year, to qualify as a limited apportionment company. A limited
1200 apportionment company shall collect from its policyholders any
1201 emergency assessment imposed under sub-subparagraph (b)5.c. An
1202 emergency assessment to be collected from policyholders under
1203 sub-subparagraph (b)5.c. may not be limited or deferred.
1204 14. Must provide that the corporation appoint as its
1205 licensed agents only those agents who throughout such
1206 appointments also hold an appointment as defined in s. 626.015
1207 by at least three insurers an insurer who are is authorized to
1208 write and are is actually writing or renewing personal lines
1209 residential property coverage, commercial residential property
1210 coverage, or commercial nonresidential property coverage within
1211 the state.
1212 14.15. Must provide a premium payment plan option to its
1213 policyholders which, at a minimum, allows for quarterly and
1214 semiannual payment of premiums. A monthly payment plan may, but
1215 is not required to, be offered.
1216 15.16. Must limit coverage on mobile homes or manufactured
1217 homes built before 1994 to actual cash value of the dwelling
1218 rather than replacement costs of the dwelling.
1219 16.17. Must provide coverage for manufactured or mobile
1220 home dwellings. Such coverage must also include the following
1221 attached structures:
1222 a. Screened enclosures that are aluminum framed or screened
1223 enclosures that are not covered by the same or substantially the
1224 same materials as those of the primary dwelling;
1225 b. Carports that are aluminum or carports that are not
1226 covered by the same or substantially the same materials as those
1227 of the primary dwelling; and
1228 c. Patios that have a roof covering that is constructed of
1229 materials that are not the same or substantially the same
1230 materials as those of the primary dwelling.
1231
1232 The corporation shall make available a policy for mobile homes
1233 or manufactured homes for a minimum insured value of at least
1234 $3,000.
1235 17.18. May provide such limits of coverage as the board
1236 determines, consistent with the requirements of this subsection.
1237 18.19. May require commercial property to meet specified
1238 hurricane mitigation construction features as a condition of
1239 eligibility for coverage.
1240 19.20. Must provide that new or renewal policies issued by
1241 the corporation on or after January 1, 2012, which cover
1242 sinkhole loss do not include coverage for any loss to
1243 appurtenant structures, driveways, sidewalks, decks, or patios
1244 that are directly or indirectly caused by sinkhole activity. The
1245 corporation shall exclude such coverage using a notice of
1246 coverage change, which may be included with the policy renewal,
1247 and not by issuance of a notice of nonrenewal of the excluded
1248 coverage upon renewal of the current policy.
1249 20.a.21.a. As of January 1, 2012, unless the Citizens
1250 account has been established pursuant to sub-subparagraph
1251 (b)2.b., Must require that the agent obtain from an applicant
1252 for coverage from the corporation an acknowledgment signed by
1253 the applicant, which includes, at a minimum, the following
1254 statement:
1255
1256 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
1257 AND ASSESSMENT LIABILITY:
1258
1259 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
1260 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
1261 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
1262 MY POLICY COULD BE SUBJECT TO SURCHARGES AND ASSESSMENTS, WHICH
1263 WILL BE DUE AND PAYABLE UPON RENEWAL, CANCELLATION, OR
1264 TERMINATION OF THE POLICY, AND THAT THE SURCHARGES AND
1265 ASSESSMENTS COULD BE AS HIGH AS 25 45 PERCENT OF MY PREMIUM, OR
1266 A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
1267 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
1268 SURCHARGE, WHICH COULD BE AS HIGH AS 15 45 PERCENT OF MY
1269 PREMIUM, BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND
1270 THAT TO BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY
1271 TO OBTAIN PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR
1272 RENEWING COVERAGE WITH CITIZENS. I UNDERSTAND THAT PRIVATE
1273 MARKET INSURANCE RATES ARE REGULATED AND APPROVED BY THE STATE.
1274 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
1275 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
1276 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
1277 FLORIDA LEGISLATURE.
1278 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
1279 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
1280 STATE OF FLORIDA.
1281
1282 b. The corporation must require, if it has established the
1283 Citizens account pursuant to sub-subparagraph (b)2.b., that the
1284 agent obtain from an applicant for coverage from the corporation
1285 the following acknowledgment signed by the applicant, which
1286 includes, at a minimum, the following statement:
1287
1288 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
1289 AND ASSESSMENT LIABILITY:
1290
1291 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
1292 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
1293 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
1294 MY POLICY COULD BE SUBJECT TO SURCHARGES AND ASSESSMENTS, WHICH
1295 WILL BE DUE AND PAYABLE UPON RENEWAL, CANCELLATION, OR
1296 TERMINATION OF THE POLICY, AND THAT THE SURCHARGES AND
1297 ASSESSMENTS COULD BE AS HIGH AS 25 PERCENT OF MY PREMIUM, OR A
1298 DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
1299 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
1300 SURCHARGE, WHICH COULD BE AS HIGH AS 15 PERCENT OF MY PREMIUM,
1301 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
1302 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
1303 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
1304 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
1305 ARE REGULATED AND APPROVED BY THE STATE.
1306 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
1307 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
1308 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
1309 FLORIDA LEGISLATURE.
1310 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
1311 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
1312 STATE OF FLORIDA.
1313
1314 b.c. The corporation shall maintain, in electronic format
1315 or otherwise, a copy of the applicant’s signed acknowledgment
1316 and provide a copy of the statement to the policyholder as part
1317 of the first renewal after the effective date of sub
1318 subparagraph a. or sub-subparagraph b., as applicable.
1319 c.d. The signed acknowledgment form creates a conclusive
1320 presumption that the policyholder understood and accepted his or
1321 her potential surcharge and assessment liability as a
1322 policyholder of the corporation.
1323 (e) The corporation is subject to s. 287.057 for the
1324 purchase of commodities and contractual services except as
1325 otherwise provided in this paragraph. Services provided by
1326 tradepersons or technical experts to assist a licensed adjuster
1327 in the evaluation of individual claims are not subject to the
1328 procurement requirements of this section. Additionally, the
1329 procurement of financial services providers and underwriters
1330 must be made pursuant to s. 627.3513. Contracts for goods or
1331 services valued at or more than $100,000 are subject to approval
1332 by the board.
1333 1. The corporation is an agency for purposes of s. 287.057,
1334 except that, for purposes of s. 287.057(24), the corporation is
1335 an eligible user.
1336 a. The authority of the Department of Management Services
1337 and the Chief Financial Officer under s. 287.057 extends to the
1338 corporation as if the corporation were an agency.
1339 b. The executive director of the corporation is the agency
1340 head under s. 287.057, except for resolution of bid protests for
1341 which the board would serve as the agency head. The executive
1342 director of the corporation may assign or appoint a designee to
1343 act on his or her behalf.
1344 2. The corporation must provide notice of a decision or
1345 intended decision concerning a solicitation, contract award, or
1346 exceptional purchase by electronic posting. Such notice must
1347 contain the following statement: “Failure to file a protest
1348 within the time prescribed in this section constitutes a waiver
1349 of proceedings.”
1350 a. A person adversely affected by the corporation’s
1351 decision or intended decision to award a contract pursuant to s.
1352 287.057(1) or (3)(c) who elects to challenge the decision must
1353 file a written notice of protest with the executive director of
1354 the corporation within 72 hours after the corporation posts a
1355 notice of its decision or intended decision. For a protest of
1356 the terms, conditions, and specifications contained in a
1357 solicitation, including provisions governing the methods for
1358 ranking bids, proposals, replies, awarding contracts, reserving
1359 rights of further negotiation, or modifying or amending any
1360 contract, the notice of protest must be filed in writing within
1361 72 hours after posting the solicitation. Saturdays, Sundays, and
1362 state holidays are excluded in the computation of the 72-hour
1363 time period.
1364 b. A formal written protest must be filed within 10 days
1365 after the date the notice of protest is filed. The formal
1366 written protest must state with particularity the facts and law
1367 upon which the protest is based. Upon receipt of a formal
1368 written protest that has been timely filed, the corporation must
1369 stop the solicitation or contract award process until the
1370 subject of the protest is resolved by final board action unless
1371 the executive director sets forth in writing particular facts
1372 and circumstances that require the continuance of the
1373 solicitation or contract award process without delay in order to
1374 avoid an immediate and serious danger to the public health,
1375 safety, or welfare.
1376 (I) The corporation must provide an opportunity to resolve
1377 the protest by mutual agreement between the parties within 7
1378 business days after receipt of the formal written protest.
1379 (II) If the subject of a protest is not resolved by mutual
1380 agreement within 7 business days, the corporation’s board must
1381 transmit the protest to the Division of Administrative Hearings
1382 and contract with the division to conduct a hearing to determine
1383 the merits of the protest and to issue a recommended order. The
1384 contract must provide for the corporation to reimburse the
1385 division for any costs incurred by the division for court
1386 reporters, transcript preparation, travel, facility rental, and
1387 other customary hearing costs in the manner set forth in s.
1388 120.65(9). The division has jurisdiction to determine the facts
1389 and law concerning the protest and to issue a recommended order.
1390 The division’s rules and procedures apply to these proceedings;
1391 the division’s applicable bond requirements do not apply. The
1392 protest must be heard by the division at a publicly noticed
1393 meeting in accordance with procedures established by the
1394 division.
1395 c. In a protest of an invitation-to-bid or request-for
1396 proposals procurement, submissions made after the bid or
1397 proposal opening which amend or supplement the bid or proposal
1398 may not be considered. In protesting an invitation-to-negotiate
1399 procurement, submissions made after the corporation announces
1400 its intent to award a contract, reject all replies, or withdraw
1401 the solicitation that amends or supplements the reply may not be
1402 considered. Unless otherwise provided by law, the burden of
1403 proof rests with the party protesting the corporation’s action.
1404 In a competitive-procurement protest, other than a rejection of
1405 all bids, proposals, or replies, the administrative law judge
1406 must conduct a de novo proceeding to determine whether the
1407 corporation’s proposed action is contrary to the corporation’s
1408 governing statutes, the corporation’s rules or policies, or the
1409 solicitation specifications. The standard of proof for the
1410 proceeding is whether the corporation’s action was clearly
1411 erroneous, contrary to competition, arbitrary, or capricious. In
1412 any bid-protest proceeding contesting an intended corporation
1413 action to reject all bids, proposals, or replies, the standard
1414 of review by the board is whether the corporation’s intended
1415 action is illegal, arbitrary, dishonest, or fraudulent.
1416 d. Failure to file a notice of protest or failure to file a
1417 formal written protest constitutes a waiver of proceedings.
1418 3. The board, acting as agency head or his or her designee,
1419 shall consider the recommended order of an administrative law
1420 judge in a public meeting and take final action on the protest.
1421 Any further legal remedy lies with the First District Court of
1422 Appeal.
1423 (n)1. Rates for coverage provided by the corporation must
1424 be actuarially sound pursuant to s. 627.062 and not competitive
1425 with approved rates charged in the admitted voluntary market so
1426 that the corporation functions as a residual market mechanism to
1427 provide insurance only when insurance cannot be procured in the
1428 voluntary market, except as otherwise provided in this
1429 paragraph. The office shall provide the corporation such
1430 information as would be necessary to determine whether rates are
1431 competitive.
1432
1433 The corporation shall file its recommended rates with the office
1434 at least annually. The corporation shall provide any additional
1435 information regarding the rates which the office requires. The
1436 office shall consider the recommendations of the board and issue
1437 a final order establishing the rates for the corporation within
1438 45 days after the recommended rates are filed. The corporation
1439 may not pursue an administrative challenge or judicial review of
1440 the final order of the office.
1441 2. In addition to the rates otherwise determined pursuant
1442 to this paragraph, the corporation shall impose and collect an
1443 amount equal to the premium tax provided in s. 624.509 to
1444 augment the financial resources of the corporation.
1445 3. After the public hurricane loss-projection model under
1446 s. 627.06281 has been found to be accurate and reliable by the
1447 Florida Commission on Hurricane Loss Projection Methodology, the
1448 model shall be considered when establishing the windstorm
1449 portion of the corporation’s rates. The corporation may use the
1450 public model results in combination with the results of private
1451 models to calculate rates for the windstorm portion of the
1452 corporation’s rates. This subparagraph does not require or allow
1453 the corporation to adopt rates lower than the rates otherwise
1454 required or allowed by this paragraph.
1455 4. The corporation must make a recommended actuarially
1456 sound rate filing for each personal and commercial line of
1457 business it writes.
1458 5. Notwithstanding the board’s recommended rates and the
1459 office’s final order regarding the corporation’s filed rates
1460 under subparagraph 1., the corporation shall annually implement
1461 a rate increase which, except for sinkhole coverage, does not
1462 exceed the following for any single policy issued by the
1463 corporation, excluding coverage changes and surcharges:
1464 a. Twelve percent for 2023.
1465 b. Thirteen percent for 2024.
1466 b.c. Fourteen percent for 2025.
1467 c.d. Fifteen percent for 2026 and all subsequent years.
1468 6. The corporation may also implement an increase to
1469 reflect the effect on the corporation of the cash buildup factor
1470 pursuant to s. 215.555(5)(b).
1471 7. The corporation’s implementation of rates as prescribed
1472 in subparagraphs 5. and 8. shall cease for any line of business
1473 written by the corporation upon the corporation’s implementation
1474 of actuarially sound rates. Thereafter, the corporation shall
1475 annually make a recommended actuarially sound rate filing that
1476 is not competitive with approved rates in the admitted voluntary
1477 market for each commercial and personal line of business the
1478 corporation writes.
1479 8. The following new or renewal personal lines policies
1480 written on or after November 1, 2023, are not subject to the
1481 rate increase limitations in subparagraph 5., but may not be
1482 charged more than 50 percent above, and may not be charged nor
1483 less than, the prior year’s established rate for the
1484 corporation:
1485 a. Policies that do not cover a primary residence;
1486 b. New policies under which the coverage for the insured
1487 risk, before the date of application with the corporation, was
1488 last provided by an insurer determined by the office to be
1489 unsound or an insurer placed in receivership under chapter 631;
1490 c. Policies made eligible for coverage from the corporation
1491 pursuant to sub-subparagraph (a)3.c.; or
1492 d.c. Subsequent renewals of those policies, including the
1493 new policies in sub-subparagraph b., under which the coverage
1494 for the insured risk, before the date of application with the
1495 corporation, was last provided by an insurer determined by the
1496 office to be unsound or an insurer placed in receivership under
1497 chapter 631.
1498 9. As used in this paragraph, the term “primary residence”
1499 means the dwelling that is the policyholder’s primary home or is
1500 a rental property that is the primary home of the tenant, and
1501 which the policyholder or tenant occupies for more than 9 months
1502 of each year.
1503 (o) If coverage in an account, or the Citizens account if
1504 established by the corporation, is deactivated pursuant to
1505 paragraph (p), coverage through the corporation shall be
1506 reactivated by order of the office only under one of the
1507 following circumstances:
1508 1. If the market assistance plan receives a minimum of 100
1509 applications for coverage within a 3-month period, or 200
1510 applications for coverage within a 1-year period or less for
1511 residential coverage, unless the market assistance plan provides
1512 a quotation from authorized admitted carriers at their approved
1513 filed rates for at least 90 percent of such applicants. Any
1514 market assistance plan application that is rejected because an
1515 individual risk is so hazardous as to be uninsurable using the
1516 criteria specified in subparagraph (c)8. may shall not be
1517 included in the minimum percentage calculation provided herein.
1518 In the event that there is a legal or administrative challenge
1519 to a determination by the office that the conditions of this
1520 subparagraph have been met for eligibility for coverage in the
1521 corporation, any eligible risk may obtain coverage during the
1522 pendency of such challenge.
1523 2. In response to a state of emergency declared by the
1524 Governor under s. 252.36, the office may activate coverage by
1525 order for the period of the emergency upon a finding by the
1526 office that the emergency significantly affects the availability
1527 of residential property insurance.
1528 (p)1. The corporation shall file with the office quarterly
1529 statements of financial condition, an annual statement of
1530 financial condition, and audited financial statements in the
1531 manner prescribed by law. In addition, the corporation shall
1532 report to the office monthly on the types, premium, exposure,
1533 and distribution by county of its policies in force, and shall
1534 submit other reports as the office requires to carry out its
1535 oversight of the corporation.
1536 2. The activities of the corporation shall be reviewed at
1537 least annually by the office to determine whether coverage shall
1538 be deactivated in an account, or in the Citizens account if
1539 established by the corporation, on the basis that the conditions
1540 giving rise to its activation no longer exist.
1541 (q)1. The corporation shall certify to the office its needs
1542 for annual assessments as to a particular calendar year, and for
1543 any interim assessments that it deems to be necessary to sustain
1544 operations as to a particular year pending the receipt of annual
1545 assessments. Upon verification, the office shall approve such
1546 certification, and the corporation shall levy such annual or
1547 interim assessments. Such assessments shall be prorated, if
1548 authority to levy exists, as provided in paragraph (b). The
1549 corporation shall take all reasonable and prudent steps
1550 necessary to collect the amount of assessments due from each
1551 assessable insurer, including, if prudent, filing suit to
1552 collect the assessments, and the office may provide such
1553 assistance to the corporation it deems appropriate. If the
1554 corporation is unable to collect an assessment from any
1555 assessable insurer, the uncollected assessments shall be levied
1556 as an additional assessment against the assessable insurers and
1557 any assessable insurer required to pay an additional assessment
1558 as a result of such failure to pay shall have a cause of action
1559 against such nonpaying assessable insurer. Assessments shall be
1560 included as an appropriate factor in the making of rates. The
1561 failure of a surplus lines agent to collect and remit any
1562 regular or emergency assessment levied by the corporation is
1563 considered to be a violation of s. 626.936 and subjects the
1564 surplus lines agent to the penalties provided in that section.
1565 2. The governing body of any unit of local government, any
1566 residents of which are insured by the corporation, may issue
1567 bonds as defined in s. 125.013 or s. 166.101 from time to time
1568 to fund an assistance program, in conjunction with the
1569 corporation, for the purpose of defraying deficits of the
1570 corporation. In order to avoid needless and indiscriminate
1571 proliferation, duplication, and fragmentation of such assistance
1572 programs, any unit of local government, any residents of which
1573 are insured by the corporation, may provide for the payment of
1574 losses, regardless of whether or not the losses occurred within
1575 or outside of the territorial jurisdiction of the local
1576 government. Revenue bonds under this subparagraph may not be
1577 issued until validated pursuant to chapter 75, unless a state of
1578 emergency is declared by executive order or proclamation of the
1579 Governor pursuant to s. 252.36 making such findings as are
1580 necessary to determine that it is in the best interests of, and
1581 necessary for, the protection of the public health, safety, and
1582 general welfare of residents of this state and declaring it an
1583 essential public purpose to permit certain municipalities or
1584 counties to issue such bonds as will permit relief to claimants
1585 and policyholders of the corporation. Any such unit of local
1586 government may enter into such contracts with the corporation
1587 and with any other entity created pursuant to this subsection as
1588 are necessary to carry out this paragraph. Any bonds issued
1589 under this subparagraph shall be payable from and secured by
1590 moneys received by the corporation from emergency assessments
1591 under sub-subparagraph (b)3.c. (b)3.e., and assigned and pledged
1592 to or on behalf of the unit of local government for the benefit
1593 of the holders of such bonds. The funds, credit, property, and
1594 taxing power of the state or of the unit of local government may
1595 shall not be pledged for the payment of such bonds.
1596 3.a. The corporation shall adopt one or more programs
1597 subject to approval by the office for the reduction of both new
1598 and renewal writings in the corporation. Beginning January 1,
1599 2008, any program the corporation adopts for the payment of
1600 bonuses to an insurer for each risk the insurer removes from the
1601 corporation shall comply with s. 627.3511(2) and may not exceed
1602 the amount referenced in s. 627.3511(2) for each risk removed.
1603 The corporation may consider any prudent and not unfairly
1604 discriminatory approach to reducing corporation writings, and
1605 may adopt a credit against assessment liability or other
1606 liability that provides an incentive for insurers to take risks
1607 out of the corporation and to keep risks out of the corporation
1608 by maintaining or increasing voluntary writings in counties or
1609 areas in which corporation risks are highly concentrated and a
1610 program to provide a formula under which an insurer voluntarily
1611 taking risks out of the corporation by maintaining or increasing
1612 voluntary writings will be relieved wholly or partially from
1613 assessments under sub-subparagraph (b)3.a. However, any “take
1614 out bonus” or payment to an insurer must be conditioned on the
1615 property being insured for at least 5 years by the insurer,
1616 unless canceled or nonrenewed by the policyholder. If the policy
1617 is canceled or nonrenewed by the policyholder before the end of
1618 the 5-year period, the amount of the take-out bonus must be
1619 prorated for the time period the policy was insured. When the
1620 corporation enters into a contractual agreement for a take-out
1621 plan, the producing agent of record of the corporation policy is
1622 entitled to retain any unearned commission on such policy, and
1623 the insurer shall either:
1624 (I) Pay to the producing agent of record of the policy, for
1625 the first year, an amount which is the greater of the insurer’s
1626 usual and customary commission for the type of policy written or
1627 a policy fee equal to the usual and customary commission of the
1628 corporation; or
1629 (II) Offer to allow the producing agent of record of the
1630 policy to continue servicing the policy for a period of not less
1631 than 1 year and offer to pay the agent the insurer’s usual and
1632 customary commission for the type of policy written. If the
1633 producing agent is unwilling or unable to accept appointment by
1634 the new insurer, the new insurer shall pay the agent in
1635 accordance with sub-sub-subparagraph (I).
1636 b. Any credit or exemption from regular assessments adopted
1637 under this subparagraph shall last no longer than the 3 years
1638 following the cancellation or expiration of the policy by the
1639 corporation. With the approval of the office, the board may
1640 extend such credits for an additional year if the insurer
1641 guarantees an additional year of renewability for all policies
1642 removed from the corporation, or for 2 additional years if the
1643 insurer guarantees 2 additional years of renewability for all
1644 policies so removed.
1645 c. There shall be no credit, limitation, exemption, or
1646 deferment from emergency assessments to be collected from
1647 policyholders pursuant to sub-subparagraph (b)3.c. sub
1648 subparagraph (b)3.e. or sub-subparagraph (b)5.c.
1649 4. The plan shall provide for the deferment, in whole or in
1650 part, of the assessment of an assessable insurer, other than an
1651 emergency assessment collected from policyholders pursuant to
1652 sub-subparagraph (b)3.e. or sub-subparagraph (b)5.c., if the
1653 office finds that payment of the assessment would endanger or
1654 impair the solvency of the insurer. In the event an assessment
1655 against an assessable insurer is deferred in whole or in part,
1656 the amount by which such assessment is deferred may be assessed
1657 against the other assessable insurers in a manner consistent
1658 with the basis for assessments set forth in paragraph (b).
1659 5. Effective July 1, 2007, in order to evaluate the costs
1660 and benefits of approved take-out plans, if the corporation pays
1661 a bonus or other payment to an insurer for an approved take-out
1662 plan, it shall maintain a record of the address or such other
1663 identifying information on the property or risk removed in order
1664 to track if and when the property or risk is later insured by
1665 the corporation.
1666 5.6. Any policy taken out, assumed, or removed from the
1667 corporation is, as of the effective date of the take-out,
1668 assumption, or removal, direct insurance issued by the insurer
1669 and not by the corporation, even if the corporation continues to
1670 service the policies. This subparagraph applies to policies of
1671 the corporation and not policies taken out, assumed, or removed
1672 from any other entity.
1673 6.7. For a policy taken out, assumed, or removed from the
1674 corporation, the insurer may, for a period of no more than 3
1675 years, continue to use any of the corporation’s policy forms or
1676 endorsements that apply to the policy taken out, removed, or
1677 assumed without obtaining approval from the office for use of
1678 such policy form or endorsement.
1679 (v)1. Effective July 1, 2002, policies of the Residential
1680 Property and Casualty Joint Underwriting Association become
1681 policies of the corporation. All obligations, rights, assets and
1682 liabilities of the association, including bonds, note and debt
1683 obligations, and the financing documents pertaining to them
1684 become those of the corporation as of July 1, 2002. The
1685 corporation is not required to issue endorsements or
1686 certificates of assumption to insureds during the remaining term
1687 of in-force transferred policies.
1688 2. Effective July 1, 2002, policies of the Florida
1689 Windstorm Underwriting Association are transferred to the
1690 corporation and become policies of the corporation. All
1691 obligations, rights, assets, and liabilities of the association,
1692 including bonds, note and debt obligations, and the financing
1693 documents pertaining to them are transferred to and assumed by
1694 the corporation on July 1, 2002. The corporation is not required
1695 to issue endorsements or certificates of assumption to insureds
1696 during the remaining term of in-force transferred policies.
1697 3. The Florida Windstorm Underwriting Association and the
1698 Residential Property and Casualty Joint Underwriting Association
1699 shall take all actions necessary to further evidence the
1700 transfers and provide the documents and instruments of further
1701 assurance as may reasonably be requested by the corporation for
1702 that purpose. The corporation shall execute assumptions and
1703 instruments as the trustees or other parties to the financing
1704 documents of the Florida Windstorm Underwriting Association or
1705 the Residential Property and Casualty Joint Underwriting
1706 Association may reasonably request to further evidence the
1707 transfers and assumptions, which transfers and assumptions,
1708 however, are effective on the date provided under this paragraph
1709 whether or not, and regardless of the date on which, the
1710 assumptions or instruments are executed by the corporation.
1711 Subject to the relevant financing documents pertaining to their
1712 outstanding bonds, notes, indebtedness, or other financing
1713 obligations, the moneys, investments, receivables, choses in
1714 action, and other intangibles of the Florida Windstorm
1715 Underwriting Association shall be credited to the coastal
1716 account of the corporation, and those of the personal lines
1717 residential coverage account and the commercial lines
1718 residential coverage account of the Residential Property and
1719 Casualty Joint Underwriting Association shall be credited to the
1720 personal lines account and the commercial lines account,
1721 respectively, of the corporation.
1722 4. Effective July 1, 2002, a new applicant for property
1723 insurance coverage who would otherwise have been eligible for
1724 coverage in the Florida Windstorm Underwriting Association is
1725 eligible for coverage from the corporation as provided in this
1726 subsection.
1727 5. The transfer of all policies, obligations, rights,
1728 assets, and liabilities from the Florida Windstorm Underwriting
1729 Association to the corporation and the renaming of the
1730 Residential Property and Casualty Joint Underwriting Association
1731 as the corporation does not affect the coverage with respect to
1732 covered policies as defined in s. 215.555(2)(c) provided to
1733 these entities by the Florida Hurricane Catastrophe Fund. The
1734 coverage provided by the fund to the Florida Windstorm
1735 Underwriting Association based on its exposures as of June 30,
1736 2002, and each June 30 thereafter, unless the corporation has
1737 established the Citizens account, shall be redesignated as
1738 coverage for the coastal account of the corporation.
1739 Notwithstanding any other provision of law, the coverage
1740 provided by the fund to the Residential Property and Casualty
1741 Joint Underwriting Association based on its exposures as of June
1742 30, 2002, and each June 30 thereafter, unless the corporation
1743 has established the Citizens account, shall be transferred to
1744 the personal lines account and the commercial lines account of
1745 the corporation. Notwithstanding any other provision of law, the
1746 coastal account, unless the corporation has established the
1747 Citizens account, shall be treated, for all Florida Hurricane
1748 Catastrophe Fund purposes, as if it were a separate
1749 participating insurer with its own exposures, reimbursement
1750 premium, and loss reimbursement. Likewise, the personal lines
1751 and commercial lines accounts, unless the corporation has
1752 established the Citizens account, shall be viewed together, for
1753 all fund purposes, as if the two accounts were one and represent
1754 a single, separate participating insurer with its own exposures,
1755 reimbursement premium, and loss reimbursement. The coverage
1756 provided by the fund to the corporation shall constitute and
1757 operate as a full transfer of coverage from the Florida
1758 Windstorm Underwriting Association and Residential Property and
1759 Casualty Joint Underwriting Association to the corporation.
1760 (w) Notwithstanding any other provision of law:
1761 1. The pledge or sale of, the lien upon, and the security
1762 interest in any rights, revenues, or other assets of the
1763 corporation created or purported to be created pursuant to any
1764 financing documents to secure any bonds or other indebtedness of
1765 the corporation shall be and remain valid and enforceable,
1766 notwithstanding the commencement of and during the continuation
1767 of, and after, any rehabilitation, insolvency, liquidation,
1768 bankruptcy, receivership, conservatorship, reorganization, or
1769 similar proceeding against the corporation under the laws of
1770 this state.
1771 2. The proceeding does not relieve the corporation of its
1772 obligation, or otherwise affect its ability to perform its
1773 obligation, to continue to collect, or levy and collect,
1774 assessments, policyholder surcharges or other surcharges under
1775 sub-subparagraph (b)3.j., or any other rights, revenues, or
1776 other assets of the corporation pledged pursuant to any
1777 financing documents.
1778 3. Each such pledge or sale of, lien upon, and security
1779 interest in, including the priority of such pledge, lien, or
1780 security interest, any such assessments, policyholder surcharges
1781 or other surcharges, or other rights, revenues, or other assets
1782 which are collected, or levied and collected, after the
1783 commencement of and during the pendency of, or after, any such
1784 proceeding shall continue unaffected by such proceeding. As used
1785 in this subsection, the term “financing documents” means any
1786 agreement or agreements, instrument or instruments, or other
1787 document or documents now existing or hereafter created
1788 evidencing any bonds or other indebtedness of the corporation or
1789 pursuant to which any such bonds or other indebtedness has been
1790 or may be issued and pursuant to which any rights, revenues, or
1791 other assets of the corporation are pledged or sold to secure
1792 the repayment of such bonds or indebtedness, together with the
1793 payment of interest on such bonds or such indebtedness, or the
1794 payment of any other obligation or financial product, as defined
1795 in the plan of operation of the corporation related to such
1796 bonds or indebtedness.
1797 4. Any such pledge or sale of assessments, revenues,
1798 contract rights, or other rights or assets of the corporation
1799 shall constitute a lien and security interest, or sale, as the
1800 case may be, that is immediately effective and attaches to such
1801 assessments, revenues, or contract rights or other rights or
1802 assets, whether or not imposed or collected at the time the
1803 pledge or sale is made. Any such pledge or sale is effective,
1804 valid, binding, and enforceable against the corporation or other
1805 entity making such pledge or sale, and valid and binding against
1806 and superior to any competing claims or obligations owed to any
1807 other person or entity, including policyholders in this state,
1808 asserting rights in any such assessments, revenues, or contract
1809 rights or other rights or assets to the extent set forth in and
1810 in accordance with the terms of the pledge or sale contained in
1811 the applicable financing documents, whether or not any such
1812 person or entity has notice of such pledge or sale and without
1813 the need for any physical delivery, recordation, filing, or
1814 other action.
1815 5. As long as the corporation has any bonds outstanding,
1816 the corporation may not file a voluntary petition under chapter
1817 9 of the federal Bankruptcy Code or such corresponding chapter
1818 or sections as may be in effect, from time to time, and a public
1819 officer or any organization, entity, or other person may not
1820 authorize the corporation to be or become a debtor under chapter
1821 9 of the federal Bankruptcy Code or such corresponding chapter
1822 or sections as may be in effect, from time to time, during any
1823 such period.
1824 6. If ordered by a court of competent jurisdiction, the
1825 corporation may assume policies or otherwise provide coverage
1826 for policyholders of an insurer placed in liquidation under
1827 chapter 631, under such forms, rates, terms, and conditions as
1828 the corporation deems appropriate, subject to approval by the
1829 office.
1830 (x)1. The following records of the corporation are
1831 confidential and exempt from the provisions of s. 119.07(1) and
1832 s. 24(a), Art. I of the State Constitution:
1833 a. Underwriting files, except that a policyholder or an
1834 applicant shall have access to his or her own underwriting
1835 files. Confidential and exempt underwriting file records may
1836 also be released to other governmental agencies upon written
1837 request and demonstration of need; such records held by the
1838 receiving agency remain confidential and exempt as provided
1839 herein.
1840 b. Claims files, until termination of all litigation and
1841 settlement of all claims arising out of the same incident,
1842 although portions of the claims files may remain exempt, as
1843 otherwise provided by law. Confidential and exempt claims file
1844 records may be released to other governmental agencies upon
1845 written request and demonstration of need; such records held by
1846 the receiving agency remain confidential and exempt as provided
1847 herein.
1848 c. Records obtained or generated by an internal auditor
1849 pursuant to a routine audit, until the audit is completed, or if
1850 the audit is conducted as part of an investigation, until the
1851 investigation is closed or ceases to be active. An investigation
1852 is considered “active” while the investigation is being
1853 conducted with a reasonable, good faith belief that it could
1854 lead to the filing of administrative, civil, or criminal
1855 proceedings.
1856 d. Matters reasonably encompassed in privileged attorney
1857 client communications.
1858 e. Proprietary information licensed to the corporation
1859 under contract and the contract provides for the confidentiality
1860 of such proprietary information.
1861 f. All information relating to the medical condition or
1862 medical status of a corporation employee which is not relevant
1863 to the employee’s capacity to perform his or her duties, except
1864 as otherwise provided in this paragraph. Information that is
1865 exempt shall include, but is not limited to, information
1866 relating to workers’ compensation, insurance benefits, and
1867 retirement or disability benefits.
1868 g. Upon an employee’s entrance into the employee assistance
1869 program, a program to assist any employee who has a behavioral
1870 or medical disorder, substance abuse problem, or emotional
1871 difficulty that affects the employee’s job performance, all
1872 records relative to that participation shall be confidential and
1873 exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
1874 of the State Constitution, except as otherwise provided in s.
1875 112.0455(11).
1876 h. Information relating to negotiations for financing,
1877 reinsurance, depopulation, or contractual services, until the
1878 conclusion of the negotiations.
1879 i. Minutes of closed meetings regarding underwriting files,
1880 and minutes of closed meetings regarding an open claims file
1881 until termination of all litigation and settlement of all claims
1882 with regard to that claim, except that information otherwise
1883 confidential or exempt by law shall be redacted.
1884 2. If an authorized insurer is considering underwriting a
1885 risk insured by the corporation, relevant underwriting files and
1886 confidential claims files may be released to the insurer
1887 provided the insurer agrees in writing, notarized and under
1888 oath, to maintain the confidentiality of such files. If a file
1889 is transferred to an insurer, that file is no longer a public
1890 record because it is not held by an agency subject to the
1891 provisions of the public records law. Underwriting files and
1892 confidential claims files may also be released to staff and the
1893 board of governors of the market assistance plan established
1894 pursuant to s. 627.3515, who must retain the confidentiality of
1895 such files, except such files may be released to authorized
1896 insurers that are considering assuming the risks to which the
1897 files apply, provided the insurer agrees in writing, notarized
1898 and under oath, to maintain the confidentiality of such files.
1899 Finally, the corporation or the board or staff of the market
1900 assistance plan may make the following information obtained from
1901 underwriting files and confidential claims files available to an
1902 entity that has obtained a permit to become an authorized
1903 insurer, a reinsurer that may provide reinsurance under s.
1904 624.610, a licensed reinsurance broker, a licensed rating
1905 organization, a modeling company, a licensed surplus lines
1906 agent, or a licensed general lines insurance agent: name,
1907 address, and telephone number of the residential property owner
1908 or insured; location of the risk; rating information; loss
1909 history; and policy type. The receiving person must retain the
1910 confidentiality of the information received and may use the
1911 information only for the purposes of developing a take-out plan
1912 or a rating plan to be submitted to the office for approval or
1913 otherwise analyzing the underwriting of a risk or risks insured
1914 by the corporation on behalf of the private insurance market. A
1915 licensed surplus lines agent or licensed general lines insurance
1916 agent may not use such information for the direct solicitation
1917 of policyholders.
1918 3. A policyholder who has filed suit against the
1919 corporation has the right to discover the contents of his or her
1920 own claims file to the same extent that discovery of such
1921 contents would be available from a private insurer in litigation
1922 as provided by the Florida Rules of Civil Procedure, the Florida
1923 Evidence Code, and other applicable law. Pursuant to subpoena, a
1924 third party has the right to discover the contents of an
1925 insured’s or applicant’s underwriting or claims file to the same
1926 extent that discovery of such contents would be available from a
1927 private insurer by subpoena as provided by the Florida Rules of
1928 Civil Procedure, the Florida Evidence Code, and other applicable
1929 law, and subject to any confidentiality protections requested by
1930 the corporation and agreed to by the seeking party or ordered by
1931 the court. The corporation may release confidential underwriting
1932 and claims file contents and information as it deems necessary
1933 and appropriate to underwrite or service insurance policies and
1934 claims, subject to any confidentiality protections deemed
1935 necessary and appropriate by the corporation.
1936 4. Portions of meetings of the corporation are exempt from
1937 the provisions of s. 286.011 and s. 24(b), Art. I of the State
1938 Constitution wherein confidential underwriting files or
1939 confidential open claims files are discussed. All portions of
1940 corporation meetings which are closed to the public shall be
1941 recorded by a court reporter. The court reporter shall record
1942 the times of commencement and termination of the meeting, all
1943 discussion and proceedings, the names of all persons present at
1944 any time, and the names of all persons speaking. No portion of
1945 any closed meeting shall be off the record. Subject to the
1946 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s
1947 notes of any closed meeting shall be retained by the corporation
1948 for a minimum of 5 years. A copy of the transcript, less any
1949 exempt matters, of any closed meeting wherein claims are
1950 discussed shall become public as to individual claims after
1951 settlement of the claim.
1952 (z) In enacting the provisions of this section, the
1953 Legislature recognizes that both the Florida Windstorm
1954 Underwriting Association and the Residential Property and
1955 Casualty Joint Underwriting Association have entered into
1956 financing arrangements that obligate each entity to service its
1957 debts and maintain the capacity to repay funds secured under
1958 these financing arrangements. It is the intent of the
1959 Legislature that nothing in this section be construed to
1960 compromise, diminish, or interfere with the rights of creditors
1961 under such financing arrangements. It is further the intent of
1962 the Legislature to preserve the obligations of the Florida
1963 Windstorm Underwriting Association and Residential Property and
1964 Casualty Joint Underwriting Association with regard to
1965 outstanding financing arrangements, with such obligations
1966 passing entirely and unchanged to the corporation and,
1967 specifically, to the Citizens applicable account of the
1968 corporation. So long as any bonds, notes, indebtedness, or other
1969 financing obligations of the Florida Windstorm Underwriting
1970 Association or the Residential Property and Casualty Joint
1971 Underwriting Association are outstanding, under the terms of the
1972 financing documents pertaining to them, the governing board of
1973 the corporation shall have and shall exercise the authority to
1974 levy, charge, collect, and receive all premiums, assessments,
1975 surcharges, charges, revenues, and receipts that the
1976 associations had authority to levy, charge, collect, or receive
1977 under the provisions of subsection (2) and this subsection,
1978 respectively, as they existed on January 1, 2002, to provide
1979 moneys, without exercise of the authority provided by this
1980 subsection, in at least the amounts, and by the times, as would
1981 be provided under those former provisions of subsection (2) or
1982 this subsection, respectively, so that the value, amount, and
1983 collectability of any assets, revenues, or revenue source
1984 pledged or committed to, or any lien thereon securing such
1985 outstanding bonds, notes, indebtedness, or other financing
1986 obligations will not be diminished, impaired, or adversely
1987 affected by the amendments made by this act and to permit
1988 compliance with all provisions of financing documents pertaining
1989 to such bonds, notes, indebtedness, or other financing
1990 obligations, or the security or credit enhancement for them, and
1991 any reference in this subsection to bonds, notes, indebtedness,
1992 financing obligations, or similar obligations, of the
1993 corporation shall include like instruments or contracts of the
1994 Florida Windstorm Underwriting Association and the Residential
1995 Property and Casualty Joint Underwriting Association to the
1996 extent not inconsistent with the provisions of the financing
1997 documents pertaining to them.
1998 (ii) The corporation shall revise the programs adopted
1999 pursuant to sub-subparagraph (q)3.a. for personal lines
2000 residential policies to maximize policyholder options and
2001 encourage increased participation by insurers and agents. After
2002 January 1, 2017, a policy may not be taken out of the
2003 corporation unless the provisions of this paragraph are met.
2004 1. The corporation must publish a periodic schedule of
2005 cycles during which an insurer may identify, and notify the
2006 corporation of, policies that the insurer is requesting to take
2007 out. A request must include a description of the coverage
2008 offered and an estimated premium and must be submitted to the
2009 corporation in a form and manner prescribed by the corporation.
2010 2. The corporation must maintain and make available to the
2011 agent of record a consolidated list of all insurers requesting
2012 to take out a policy. The list must include a description of the
2013 coverage offered and the estimated premium for each take-out
2014 request.
2015 3. If a policyholder receives a take-out offer from an
2016 authorized insurer, the risk is no longer eligible for coverage
2017 with the corporation unless the premium for coverage from the
2018 authorized insurer is more than 20 percent greater than the
2019 renewal premium for comparable coverage from the corporation
2020 pursuant to sub-subparagraph (c)5.d. (c)5.c. This subparagraph
2021 applies to take-out offers that are part of an application to
2022 participate in depopulation submitted to the office on or after
2023 January 1, 2023. This subparagraph only applies to a policy that
2024 covers a primary residence.
2025 4. The corporation must provide written notice to the
2026 policyholder and the agent of record regarding all insurers
2027 requesting to take out the policy. The notice must be in a
2028 format prescribed by the corporation and include, for each take
2029 out offer:
2030 a. The amount of the estimated premium;
2031 b. A description of the coverage; and
2032 c. A comparison of the estimated premium and coverage
2033 offered by the insurer to the estimated premium and coverage
2034 provided by the corporation.
2035 (nn) The corporation may share its claims data with the
2036 National Insurance Crime Bureau, provided that the National
2037 Insurance Crime Bureau agrees to maintain the confidentiality of
2038 such documents as otherwise provided for in paragraph (x).
2039 (7) TRADEMARKS, COPYRIGHTS, OR PATENTS.—Notwithstanding any
2040 other law, the corporation is authorized, in its own name, to:
2041 (a) Perform all things necessary to secure letters of
2042 patent, copyrights, or trademarks on any work products and
2043 enforce its rights therein.
2044 (b) License, lease, assign, or otherwise give written
2045 consent to any person, firm, or corporation for the manufacture
2046 or use thereof, on a royalty basis or for such other
2047 consideration as the corporation deems proper.
2048 (c) Take any action necessary, including legal action, to
2049 protect trademarks, copyrights, or patents against improper or
2050 unlawful use or infringement.
2051 (d) Enforce the collection of any sums due the corporation
2052 for the manufacture or use thereof by any other party.
2053 (e) Sell any of its trademarks, copyrights, or patents and
2054 execute all instruments necessary to consummate any such sale.
2055 (f) Do all other acts necessary and proper for the
2056 execution of powers and duties herein conferred upon the
2057 corporation in order to administer this subsection.
2058 Section 2. Paragraphs (a), (b), and (c) of subsection (3)
2059 and paragraphs (d), (e), and (f) of subsection (6) of section
2060 627.3511, Florida Statutes, are amended to read:
2061 627.3511 Depopulation of Citizens Property Insurance
2062 Corporation.—
2063 (3) EXEMPTION FROM DEFICIT ASSESSMENTS.—
2064 (a) The calculation of an insurer’s assessment liability
2065 under s. 627.351(6)(b)3.a. shall, for an insurer that in any
2066 calendar year removes 50,000 or more risks from the Citizens
2067 Property Insurance Corporation, either by issuance of a policy
2068 upon expiration or cancellation of the corporation policy or by
2069 assumption of the corporation’s obligations with respect to in
2070 force policies, exclude such removed policies for the succeeding
2071 3 years, as follows:
2072 1. In the first year following removal of the risks, the
2073 risks are excluded from the calculation to the extent of 100
2074 percent.
2075 2. In the second year following removal of the risks, the
2076 risks are excluded from the calculation to the extent of 75
2077 percent.
2078 3. In the third year following removal of the risks, the
2079 risks are excluded from the calculation to the extent of 50
2080 percent.
2081
2082 If the removal of risks is accomplished through assumption of
2083 obligations with respect to in-force policies, the corporation
2084 shall pay to the assuming insurer all unearned premium with
2085 respect to such policies less any policy acquisition costs
2086 agreed to by the corporation and assuming insurer. The term
2087 “policy acquisition costs” is defined as costs of issuance of
2088 the policy by the corporation which includes agent commissions,
2089 servicing company fees, and premium tax. This paragraph does not
2090 apply to an insurer that, at any time within 5 years before
2091 removing the risks, had a market share in excess of 0.1 percent
2092 of the statewide aggregate gross direct written premium for any
2093 line of property insurance, or to an affiliate of such an
2094 insurer. This paragraph does not apply unless either at least 40
2095 percent of the risks removed from the corporation are located in
2096 Miami-Dade, Broward, and Palm Beach Counties, or at least 30
2097 percent of the risks removed from the corporation are located in
2098 such counties and an additional 50 percent of the risks removed
2099 from the corporation are located in other coastal counties.
2100 (b) An insurer that first wrote personal lines residential
2101 property coverage in this state on or after July 1, 1994, is
2102 exempt from liability regular deficit assessments imposed
2103 pursuant to s. 627.351(6)(b)3.a., but not emergency assessments
2104 collected from policyholders pursuant to s. 627.351(6)(b)3.c. s.
2105 627.351(6)(b)3.e., of the Citizens Property Insurance
2106 Corporation until the earlier of the following:
2107 1. The end of the calendar year in which it first wrote 0.5
2108 percent or more of the statewide aggregate direct written
2109 premium for any line of residential property coverage; or
2110 2. December 31, 1997, or December 31 of the third year in
2111 which it wrote such coverage in this state, whichever is later.
2112 (c) Other than an insurer that is exempt under paragraph
2113 (b), an insurer that in any calendar year increases its total
2114 structure exposure subject to wind coverage by 25 percent or
2115 more over its exposure for the preceding calendar year is, with
2116 respect to that year, exempt from liability deficit assessments
2117 imposed pursuant to s. 627.351(6)(b)3.a., but not from emergency
2118 assessments collected from policyholders pursuant to s.
2119 627.351(6)(b)3.c. s. 627.351(6)(b)3.e., of the Citizens Property
2120 Insurance Corporation attributable to such increase in exposure.
2121 (6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.—
2122 (d) The calculation of an insurer’s regular assessment
2123 liability under s. 627.351(6)(b)3.a., but not emergency
2124 assessments collected from policyholders pursuant to s.
2125 627.351(6)(b)3.c. s. 627.351(6)(b)3.e., shall, with respect to
2126 commercial residential policies removed from the corporation
2127 under an approved take-out plan, exclude such removed policies
2128 for the succeeding 3 years, as follows:
2129 1. In the first year following removal of the policies, the
2130 policies are excluded from the calculation to the extent of 100
2131 percent.
2132 2. In the second year following removal of the policies,
2133 the policies are excluded from the calculation to the extent of
2134 75 percent.
2135 3. In the third year following removal of the policies, the
2136 policies are excluded from the calculation to the extent of 50
2137 percent.
2138 (e) An insurer that first wrote commercial residential
2139 property coverage in this state on or after June 1, 1996, is
2140 exempt from liability regular assessments under s.
2141 627.351(6)(b)3.a., but not from emergency assessments collected
2142 from policyholders pursuant to s. 627.351(6)(b)3.c. s.
2143 627.351(6)(b)3.e., with respect to commercial residential
2144 policies until the earlier of:
2145 1. The end of the calendar year in which such insurer first
2146 wrote 0.5 percent or more of the statewide aggregate direct
2147 written premium for commercial residential property coverage; or
2148 2. December 31 of the third year in which such insurer
2149 wrote commercial residential property coverage in this state.
2150 (f) An insurer that is not otherwise exempt from liability
2151 regular assessments under s. 627.351(6)(b)3.a. with respect to
2152 commercial residential policies is, for any calendar year in
2153 which such insurer increased its total commercial residential
2154 hurricane exposure by 25 percent or more over its exposure for
2155 the preceding calendar year, exempt from liability regular
2156 assessments under s. 627.351(6)(b)3.a., but not emergency
2157 assessments collected from policyholders pursuant to s.
2158 627.351(6)(b)3.c. s. 627.351(6)(b)3.e., attributable to such
2159 increased exposure.
2160 Section 3. Subsections (5), (6), and (7) of section
2161 627.3518, Florida Statutes, are amended to read:
2162 627.3518 Citizens Property Insurance Corporation
2163 policyholder eligibility clearinghouse program.—The purpose of
2164 this section is to provide a framework for the corporation to
2165 implement a clearinghouse program by January 1, 2014.
2166 (5) Notwithstanding s. 627.3517, any applicant for new
2167 coverage from the corporation is not eligible for coverage from
2168 the corporation if provided an offer of coverage from an
2169 authorized insurer through the program at a premium that is at
2170 or below the eligibility threshold for applicants for new
2171 coverage of a primary residence established in s.
2172 627.351(6)(c)5.a., or for applicants for new coverage of a risk
2173 that is not a primary residence established in s.
2174 627.351(6)(c)5.b. Whenever an offer of coverage for a personal
2175 lines risk is received for a policyholder of the corporation at
2176 renewal from an authorized insurer through the program which is
2177 at or below the eligibility threshold for primary residences of
2178 policyholders of the corporation established in s.
2179 627.351(6)(c)5.a., or the eligibility threshold for risks that
2180 are not primary residences of policyholders of the corporation
2181 established in s. 627.351(6)(c)5.b., the risk is not eligible
2182 for coverage with the corporation. In the event an offer of
2183 coverage for a new applicant is received from an authorized
2184 insurer through the program, and the premium offered exceeds the
2185 eligibility threshold for applicants for new coverage of a
2186 primary residence established in s. 627.351(6)(c)5.a., or the
2187 eligibility threshold for applicants for new coverage on a risk
2188 that is not a primary residence established in s.
2189 627.351(6)(c)5.b., the applicant or insured may elect to accept
2190 such coverage, or may elect to accept or continue coverage with
2191 the corporation. In the event an offer of coverage for a
2192 personal lines risk is received from an authorized insurer at
2193 renewal through the program, and the premium offered exceeds the
2194 eligibility threshold for primary residences of policyholders of
2195 the corporation established in s. 627.351(6)(c)5.a., or exceeds
2196 the eligibility threshold for risks that are not primary
2197 residences of policyholders of the corporation established in s.
2198 627.351(6)(c)5.b., the insured may elect to accept such
2199 coverage, or may elect to accept or continue coverage with the
2200 corporation. Section 627.351(6)(c)5.a.(I) and b.(I) does not
2201 apply to an offer of coverage from an authorized insurer
2202 obtained through the program. As used in this subsection, the
2203 term “primary residence” has the same meaning as in s.
2204 627.351(6)(c)2.a.
2205 (6) Independent insurance agents submitting new
2206 applications for coverage or that are the agent of record on a
2207 renewal policy submitted to the program:
2208 (a) Are granted and must maintain ownership and the
2209 exclusive use of expirations, records, or other written or
2210 electronic information directly related to such applications or
2211 renewals written through the corporation or through an insurer
2212 participating in the program, notwithstanding s.
2213 627.351(6)(c)5.a.(I)(B) and (II)(B) or s.
2214 627.351(6)(c)5.b.(I)(B) and (II)(B). Such ownership is granted
2215 for as long as the insured remains with the agency or until sold
2216 or surrendered in writing by the agent. Contracts with the
2217 corporation or required by the corporation must not amend,
2218 modify, interfere with, or limit such rights of ownership. Such
2219 expirations, records, or other written or electronic information
2220 may be used to review an application, issue a policy, or for any
2221 other purpose necessary for placing such business through the
2222 program.
2223 (b) May not be required to be appointed by any insurer
2224 participating in the program for policies written solely through
2225 the program, notwithstanding the provisions of s. 626.112.
2226 (c) May accept an appointment from any insurer
2227 participating in the program.
2228 (d) May enter into either a standard or limited agency
2229 agreement with the insurer, at the insurer’s option.
2230
2231 Applicants ineligible for coverage in accordance with subsection
2232 (5) remain ineligible if their independent agent is unwilling or
2233 unable to enter into a standard or limited agency agreement with
2234 an insurer participating in the program.
2235 (7) Exclusive agents submitting new applications for
2236 coverage or that are the agent of record on a renewal policy
2237 submitted to the program:
2238 (a) Must maintain ownership and the exclusive use of
2239 expirations, records, or other written or electronic information
2240 directly related to such applications or renewals written
2241 through the corporation or through an insurer participating in
2242 the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
2243 (II)(B) or s. 627.351(6)(c)5.b.(I)(B) and (II)(B). Contracts
2244
2245 ================= T I T L E A M E N D M E N T ================
2246 And the title is amended as follows:
2247 Delete lines 3 - 65
2248 and insert:
2249 Corporation; amending s. 627.351, F.S.; revising
2250 circumstances under which certain insurers’
2251 associations must levy market equalization surcharges
2252 on policyholders; deleting obsolete language;
2253 authorizing the Office of Insurance Regulation to
2254 evaluate whether there is a reasonable degree of
2255 competition within certain zip codes; providing that
2256 certain structures located within certain zip codes
2257 are eligible for coverage from the corporation;
2258 providing that certain accounts for Citizens Property
2259 Insurance Corporation revenues, assets, liabilities,
2260 losses, and expenses are now maintained as the
2261 Citizens account; revising the requirements for
2262 certain coverages by the corporation; requiring the
2263 inclusion of quota share primary insurance in certain
2264 policies; deleting provisions relating to legislative
2265 goals; conforming provisions to changes made by the
2266 act; revising provisions relating to deficits in
2267 certain accounts; revising the definition of the term
2268 “assessments”; deleting provisions relating to
2269 surcharges and regular assessments upon determination
2270 of projected deficits; deleting provisions relating to
2271 funds available to the corporation as sources of
2272 revenue and bonds; deleting definitions; deleting
2273 provisions relating to the duties of the Florida
2274 Surplus Lines Service Office; deleting provisions
2275 relating to disposition of excess amounts of
2276 assessments and surcharges; defining the terms
2277 “approved surplus lines insurer” and “primary
2278 residence”; providing applicability of certain
2279 provisions relating to personal lines residential
2280 risks coverage by the corporation; providing that
2281 certain personal lines residential risks are not
2282 eligible for any policy issued by the corporation;
2283 providing an exception; providing that certain
2284 personal lines residential risks are not eligible for
2285 coverage with the corporation under certain
2286 circumstances; providing an exception; providing that
2287 certain risks are eligible for certain standard
2288 policies; providing that certain risks are eligible
2289 for certain basic polices; requiring the department to
2290 determine the type of policy to be provided on the
2291 basis of certain standards and practices; providing
2292 that certain policyholders do not remain eligible for
2293 coverage from the corporation; requiring the insurer
2294 to pay the producing agent of record a certain amount
2295 or make certain offers under certain circumstances;
2296 providing that the producing agent of record is
2297 entitled to retain certain commission on the policy;
2298 requiring the insurer to pay the producing agent of
2299 record a certain amount or make certain offers under
2300 certain circumstances; revising the corporation’s plan
2301 of operation; revising the required statements from
2302 applicants for coverage; revising the duties of the
2303 executive director of the corporation; authorizing the
2304 executive director to assign and appoint designees;
2305 deleting an applicability provision relating to bond
2306 requirements; revising the personal lines polices that
2307 are not subject to certain rate limitations; deleting
2308 provisions relating to certain insurer assessment
2309 deferments; deleting provisions relating to the
2310 intangibles of and coverage by the Florida Windstorm
2311 Underwriting Association and the corporation coastal
2312 account; authorizing the corporation and certain
2313 persons to make specified information obtained from
2314 underwriting files and confidential claims files
2315 available to licensed surplus lines agents;
2316 prohibiting such agents from using such information
2317 for specified purposes; providing applicability of
2318 provisions relating to take-out offers that are part
2319 of applications to participate in depopulation;
2320 authorizing the corporation to share its claims data
2321 with a specified entity; authorizing the corporation
2322 to take certain actions relating to trademarks,
2323 copyrights, or patents; amending s. 627.3511, F.S.;
2324 conforming provisions to changes made by the act;
2325 conforming cross-references; amending s. 627.3518,
2326 F.S.; revising eligibility requirements for
2327 policyholders at renewal and for applicants for new