The 2005 Florida Statutes

627.011  Short title.

627.021  Scope of this part.

627.031  Purposes of this part; interpretation.

627.041  Definitions.

627.0612  Administrative proceedings in rating determinations.

627.0613  Consumer advocate.

627.062  Rate standards.

627.0625  Commercial property and casualty risk management plans.

627.0628  Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.

627.06281  Public hurricane loss projection model; reporting of data by insurers.

627.0629  Residential property insurance; rate filings.

627.06292  Reports of hurricane loss data and associated exposure data; public records exemption.

627.0645  Annual filings.

627.06501  Insurance discounts for certain persons completing driver improvement course.

627.0651  Making and use of rates for motor vehicle insurance.

627.0652  Insurance discounts for certain persons completing safety course.

627.0653  Insurance discounts for specified motor vehicle equipment.

627.06535  Electric vehicles; restrictions on imposing surcharges.

627.0654  Insurance discounts for buildings with fire sprinklers.

627.066  Excessive profits for motor vehicle insurance prohibited.

627.0665  Automatic bank withdrawal agreements; notification required.

627.072  Making and use of rates.

627.091  Rate filings; workers' compensation and employer's liability insurances.

627.0915  Rate filings; workers' compensation, drug-free workplace, and safe employers.

627.0916  Agricultural horse farms.

627.092  Workers' Compensation Administrator.

627.093  Application of s. 286.011 to workers' compensation and employer's liability insurances.

627.096  Workers' Compensation Rating Bureau.

627.101  When filing becomes effective; workers' compensation and employer's liability insurances.

627.111  Effective date of filing.

627.141  Subsequent disapproval of filing; workers' compensation and employer's liability insurances.

627.151  Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.

627.1615  Workers' compensation applicant discrimination.

627.162  Requirements for premium installments; delinquency, collection, and check return charges; attorney's fees.

627.171  Excess rates.

627.191  Adherence to filings; workers' compensation and employer's liability insurances.

627.192  Workers' compensation insurance; employee leasing arrangements.

627.211  Deviations; workers' compensation and employer's liability insurances.

627.212  Workplace safety program surcharge.

627.215  Excessive profits for workers' compensation, employer's liability, commercial property, and commercial casualty insurance prohibited.

627.221  Rating organizations; licensing; fee.

627.231  Subscribers to rating organizations.

627.241  Notice of changes.

627.251  Bureau rules not to affect dividends.

627.261  Actuarial and technical services.

627.281  Appeal from rating organization; workers' compensation and employer's liability insurance filings.

627.285  Independent actuarial peer review of workers' compensation rating organization.

627.291  Information to be furnished insureds; appeal by insureds; workers' compensation and employer's liability insurances.

627.301  Advisory organizations.

627.311  Joint underwriters and joint reinsurers; public records and public meetings exemptions.

627.312  Transitional provisions.

627.313  Workers' Compensation Joint Underwriting Plan; audit requirements.

627.314  Concerted action by two or more insurers.

627.318  Records.

627.331  Recording and reporting of loss, expense, and claims experience; rating information.

627.351  Insurance risk apportionment plans.

627.3511  Depopulation of Citizens Property Insurance Corporation.

627.3512  Recoupment of residual market deficit assessments.

627.3513  Standards for sale of bonds by Citizens Property Insurance Corporation.

627.3515  Market assistance plan; property and casualty risks.

627.3517  Consumer choice.

627.357  Medical malpractice self-insurance.

627.361  False or misleading information.

627.371  Hearings.

627.381  Penalty for violation.

627.011  Short title.--This part of this chapter may be referred to as the "Rating Law."

History.--s. 412, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.021  Scope of this part.--

(1)  This part of this chapter applies only to property, casualty, and surety insurances on subjects of insurance resident, located, or to be performed in this state.

(2)  This chapter does not apply to:

(a)  Reinsurance, except joint reinsurance as provided in s. 627.311.

(b)  Insurance against loss of or damage to aircraft, their hulls, accessories, or equipment, or against liability, other than workers' compensation and employer's liability, arising out of the ownership, maintenance, or use of aircraft.

(c)  Insurance of vessels or craft, their cargoes, marine builders' risks, marine protection and indemnity, or other risks commonly insured under marine insurance policies.

(d)  Commercial inland marine insurance.

(e)  Surplus lines insurance placed under the provisions of ss. 626.913-626.937.

(3)  For the purposes of this chapter, all motor vehicle insurance shall be deemed to be casualty insurance only.

(4)  This part does not apply to health insurance.

History.--s. 413, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 92, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 337, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 88-166; s. 114, ch. 92-318; s. 1, ch. 98-173.

627.031  Purposes of this part; interpretation.--

(1)  The purposes of this part are:

(a)  To promote the public welfare by regulating insurance rates as herein provided to the end that they shall not be excessive, inadequate, or unfairly discriminatory;

(b)  To encourage independent action by, and reasonable price competition among, insurers;

(c)  To authorize the existence and operation of qualified rating organizations and advisory organizations and to require that specified rating services of such rating organizations be generally available to all authorized insurers; and

(d)  To authorize cooperation between insurers in ratemaking and other related matters.

(2)  It is the purpose of this part to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates, and to authorize the office to regulate such rates. If at any time the office has reason to believe any such rate is excessive, inadequate, or unfairly discriminatory under the law, it is directed to take the necessary action to cause such rate to comply with the laws of this state.

(3)  Nothing in this part shall be construed to repeal or modify the provisions of part IX of chapter 626, relating to unfair trade practices.

History.--s. 411, ch. 59-205; s. 1, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 71-3(B); s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 338, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 28, ch. 87-228; s. 114, ch. 92-318; s. 54, ch. 2001-63; s. 1061, ch. 2003-261.

627.041  Definitions.--As used in this part:

(1)  "Rate" means the unit charge by which the measure of exposure or the amount of insurance specified in a policy of insurance or covered thereunder is multiplied to determine the premium.

(2)  "Premium" means the consideration paid or to be paid to an insurer for the issuance and delivery of any binder or policy of insurance.

(3)  "Rating organization" means every person, other than an authorized insurer, whether located within or outside this state, who has as his or her object or purpose the making of rates, rating plans, or rating systems. Two or more authorized insurers that act in concert for the purpose of making rates, rating plans, or rating systems, and that do not operate within the specific authorizations contained in ss. 627.311, 627.314(2), (4), and 627.351, shall be deemed to be a rating organization. No single insurer shall be deemed to be a rating organization.

(4)  "Advisory organization" means every group, association, or other organization of insurers, whether located within or outside this state, which prepares policy forms or makes underwriting rules incident to but not including the making of rates, rating plans, or rating systems or which collects and furnishes to authorized insurers or rating organizations loss or expense statistics or other statistical information and data and acts in an advisory, as distinguished from a ratemaking, capacity.

(5)  "Member" means an insurer who participates in or is entitled to participate in the management of a rating, advisory, or other organization.

(6)  "Subscriber" means an insurer which is furnished at its request:

(a)  With rates and rating manuals by a rating organization of which it is not a member; or

(b)  With advisory services by an advisory organization of which it is not a member.

(7)  "Willful" or "willfully" in relation to an act or omission which constitutes a violation of this part means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent nevertheless to commit such act or omission.

(8)  "Motor vehicle insurance" means a policy of motor vehicle insurance delivered or issued for delivery in the state by an authorized insurer:

(a)  Insuring a natural person as the named insured or one or more related individuals resident of the same household, or both; and

(b)  Insuring a motor vehicle of the private passenger type or station wagon type, which motor vehicle is not used as public or livery conveyance for passengers or rented to others, or insuring any other four-wheeled motor vehicle having a capacity of 1,500 pounds or less which is not used in the occupation, profession, or business of the insured, other than farming;

other than any policy issued under an automobile insurance risk apportionment plan; or other than any policy insuring more than four automobiles; or other than any policy covering garage, automobile sales agency, repair shop, service station, or public parking place operation hazards.

(9)  "Insurer," for purposes of ss. 627.091, 627.096, 627.101, 627.111, 627.141, 627.171, 627.191, 627.211, and 627.291, includes a commercial self-insurance fund as defined in s. 624.462 and a group self-insurance fund as defined in s. 624.4621.

History.--s. 414, ch. 59-205; s. 2, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 340, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 3, ch. 87-124; s. 114, ch. 92-318; s. 93, ch. 93-415; s. 315, ch. 97-102.

627.0612  Administrative proceedings in rating determinations.--In any proceeding to determine whether rates, rating plans, or other matters governed by this part comply with the law, the appellate court shall set aside a final order of the office if the office has violated s. 120.57(1)(k) by substituting its findings of fact for findings of an administrative law judge which were supported by competent substantial evidence.

History.--s. 7, ch. 86-160; s. 2, ch. 87-50; s. 114, ch. 92-318; s. 272, ch. 96-410; s. 27, ch. 99-3; s. 1062, ch. 2003-261.

627.0613  Consumer advocate.--The Chief Financial Officer must appoint a consumer advocate who must represent the general public of the state before the department and the office. The consumer advocate must report directly to the Chief Financial Officer, but is not otherwise under the authority of the department or of any employee of the department. The consumer advocate has such powers as are necessary to carry out the duties of the office of consumer advocate, including, but not limited to, the powers to:

(1)  Recommend to the department or office, by petition, the commencement of any proceeding or action; appear in any proceeding or action before the department or office; or appear in any proceeding before the Division of Administrative Hearings relating to subject matter under the jurisdiction of the department or office.

(2)  Have access to and use of all files, records, and data of the department or office.

(3)  Examine rate and form filings submitted to the office, hire consultants as necessary to aid in the review process, and recommend to the department or office any position deemed by the consumer advocate to be in the public interest.

(4)  Prepare an annual budget for presentation to the Legislature by the department, which budget must be adequate to carry out the duties of the office of consumer advocate.

History.--s. 18, ch. 92-318; s. 1063, ch. 2003-261.

627.062  Rate standards.--

(1)  The rates for all classes of insurance to which the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory.

(2)  As to all such classes of insurance:

(a)  Insurers or rating organizations shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on such classes of insurance written in this state. A copy of rates, rating schedules, rating manuals, premium credits or discount schedules, and surcharge schedules, and changes thereto, shall be filed with the office under one of the following procedures:

1.  If the filing is made at least 90 days before the proposed effective date and the filing is not implemented during the office's review of the filing and any proceeding and judicial review, then such filing shall be considered a "file and use" filing. In such case, the office shall finalize its review by issuance of a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing. The notice of intent to approve and the notice of intent to disapprove constitute agency action for purposes of the Administrative Procedure Act. Requests for supporting information, requests for mathematical or mechanical corrections, or notification to the insurer by the office of its preliminary findings shall not toll the 90-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue a notice of intent to approve or a notice of intent to disapprove within 90 days after receipt of the filing.

2.  If the filing is not made in accordance with the provisions of subparagraph 1., such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a "use and file" filing. An insurer making a "use and file" filing is potentially subject to an order by the office to return to policyholders portions of rates found to be excessive, as provided in paragraph (h).

(b)  Upon receiving a rate filing, the office shall review the rate filing to determine if a rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the following factors:

1.  Past and prospective loss experience within and without this state.

2.  Past and prospective expenses.

3.  The degree of competition among insurers for the risk insured.

4.  Investment income reasonably expected by the insurer, consistent with the insurer's investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. The commission may adopt rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to such classes of insurance written in this state and the manner in which such investment income shall be used in the calculation of insurance rates. Such manner shall contemplate allowances for an underwriting profit factor and full consideration of investment income which produce a reasonable rate of return; however, investment income from invested surplus shall not be considered.

5.  The reasonableness of the judgment reflected in the filing.

6.  Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.

7.  The adequacy of loss reserves.

8.  The cost of reinsurance.

9.  Trend factors, including trends in actual losses per insured unit for the insurer making the filing.

10.  Conflagration and catastrophe hazards, if applicable.

11.  A reasonable margin for underwriting profit and contingencies.

12.  The cost of medical services, if applicable.

13.  Other relevant factors which impact upon the frequency or severity of claims or upon expenses.

(c)  In the case of fire insurance rates, consideration shall be given to the availability of water supplies and the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available.

(d)  If conflagration or catastrophe hazards are given consideration by an insurer in its rates or rating plan, including surcharges and discounts, the insurer shall establish a reserve for that portion of the premium allocated to such hazard and shall maintain the premium in a catastrophe reserve. Any removal of such premiums from the reserve for purposes other than paying claims associated with a catastrophe or purchasing reinsurance for catastrophes shall be subject to approval of the office. Any ceding commission received by an insurer purchasing reinsurance for catastrophes shall be placed in the catastrophe reserve.

(e)  After consideration of the rate factors provided in paragraphs (b), (c), and (d), a rate may be found by the office to be excessive, inadequate, or unfairly discriminatory based upon the following standards:

1.  Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.

2.  Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when the replenishment is attributable to investment losses.

3.  Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

4.  A rating plan, including discounts, credits, or surcharges, shall be deemed unfairly discriminatory if it fails to clearly and equitably reflect consideration of the policyholder's participation in a risk management program adopted pursuant to s. 627.0625.

5.  A rate shall be deemed inadequate as to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense savings and reasonably expected loss experience from the risk or group of risks.

6.  A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks.

(f)  In reviewing a rate filing, the office may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated in this section.

(g)  The office may at any time review a rate, rating schedule, rating manual, or rate change; the pertinent records of the insurer; and market conditions. If the office finds on a preliminary basis that a rate may be excessive, inadequate, or unfairly discriminatory, the office shall initiate proceedings to disapprove the rate and shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the office all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. The office shall issue a notice of intent to approve or a notice of intent to disapprove pursuant to the procedures of paragraph (a) within 90 days after receipt of the insurer's initial response. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer shall not alter the rate except to conform with the office's notice until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The office may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.

(h)  In the event the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office shall further order, for any "use and file" filing made in accordance with subparagraph (a)2., that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the office finds that an insurer's rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.

(i)  Except as otherwise specifically provided in this chapter, the office shall not prohibit any insurer, including any residual market plan or joint underwriting association, from paying acquisition costs based on the full amount of premium, as defined in s. 627.403, applicable to any policy, or prohibit any such insurer from including the full amount of acquisition costs in a rate filing.

The provisions of this subsection shall not apply to workers' compensation and employer's liability insurance and to motor vehicle insurance.

(3)(a)  For individual risks that are not rated in accordance with the insurer's rates, rating schedules, rating manuals, and underwriting rules filed with the office and which have been submitted to the insurer for individual rating, the insurer must maintain documentation on each risk subject to individual risk rating. The documentation must identify the named insured and specify the characteristics and classification of the risk supporting the reason for the risk being individually risk rated, including any modifications to existing approved forms to be used on the risk. The insurer must maintain these records for a period of at least 5 years after the effective date of the policy.

(b)  Individual risk rates and modifications to existing approved forms are not subject to this part or part II, except for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404, 627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132, 627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426, 627.4265, 627.427, and 627.428, but are subject to all other applicable provisions of this code and rules adopted thereunder.

(c)  This subsection does not apply to private passenger motor vehicle insurance.

(4)  The establishment of any rate, rating classification, rating plan or schedule, or variation thereof in violation of part IX of chapter 626 is also in violation of this section. In order to enhance the ability of consumers to compare premiums and to increase the accuracy and usefulness of rate-comparison information provided by the office to the public, the office shall develop a proposed standard rating territory plan to be used by all authorized property and casualty insurers for residential property insurance. In adopting the proposed plan, the office may consider geographical characteristics relevant to risk, county lines, major roadways, existing rating territories used by a significant segment of the market, and other relevant factors. Such plan shall be submitted to the President of the Senate and the Speaker of the House of Representatives by January 15, 2006. The plan may not be implemented unless authorized by further act of the Legislature.

(5)  With respect to a rate filing involving coverage of the type for which the insurer is required to pay a reimbursement premium to the Florida Hurricane Catastrophe Fund, the insurer may fully recoup in its property insurance premiums any reimbursement premiums paid to the Florida Hurricane Catastrophe Fund, together with reasonable costs of other reinsurance, but may not recoup reinsurance costs that duplicate coverage provided by the Florida Hurricane Catastrophe Fund. An insurer may not recoup more than 1 year of reimbursement premium at a time. Any under-recoupment from the prior year may be added to the following year's reimbursement premium and any over-recoupment shall be subtracted from the following year's reimbursement premium.

(6)(a)  After any action with respect to a rate filing that constitutes agency action for purposes of the Administrative Procedure Act, except for a rate filing for medical malpractice, an insurer may, in lieu of demanding a hearing under s. 120.57, require arbitration of the rate filing. Arbitration shall be conducted by a board of arbitrators consisting of an arbitrator selected by the ¹office, an arbitrator selected by the insurer, and an arbitrator selected jointly by the other two arbitrators. Each arbitrator must be certified by the American Arbitration Association. A decision is valid only upon the affirmative vote of at least two of the arbitrators. No arbitrator may be an employee of any insurance regulator or regulatory body or of any insurer, regardless of whether or not the employing insurer does business in this state. The ¹office and the insurer must treat the decision of the arbitrators as the final approval of a rate filing. Costs of arbitration shall be paid by the insurer.

(b)  Arbitration under this subsection shall be conducted pursuant to the procedures specified in ss. 682.06-682.10. Either party may apply to the circuit court to vacate or modify the decision pursuant to s. 682.13 or s. 682.14. The commission shall adopt rules for arbitration under this subsection, which rules may not be inconsistent with the arbitration rules of the American Arbitration Association as of January 1, 1996.

(c)  Upon initiation of the arbitration process, the insurer waives all rights to challenge the action of the office under the Administrative Procedure Act or any other provision of law; however, such rights are restored to the insurer if the arbitrators fail to render a decision within 90 days after initiation of the arbitration process.

(7)(a)  The provisions of this subsection apply only with respect to rates for medical malpractice insurance and shall control to the extent of any conflict with other provisions of this section.

(b)  Any portion of a judgment entered or settlement paid as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer may not be included in the insurer's rate base, and shall not be used to justify a rate or rate change. Any common-law bad faith action identified as such, any portion of a settlement entered as a result of a statutory or common-law action, or any portion of a settlement wherein an insurer agrees to pay specific punitive damages may not be used to justify a rate or rate change. The portion of the taxable costs and attorney's fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements may not be included in the insurer's rate base and may not be utilized to justify a rate or rate change.

(c)  Upon reviewing a rate filing and determining whether the rate is excessive, inadequate, or unfairly discriminatory, the office shall consider, in accordance with generally accepted and reasonable actuarial techniques, past and present prospective loss experience, either using loss experience solely for this state or giving greater credibility to this state's loss data after applying actuarially sound methods of assigning credibility to such data.

(d)  Rates shall be deemed excessive if, among other standards established by this section, the rate structure provides for replenishment of reserves or surpluses from premiums when the replenishment is attributable to investment losses.

(e)  The insurer must apply a discount or surcharge based on the health care provider's loss experience or shall establish an alternative method giving due consideration to the provider's loss experience. The insurer must include in the filing a copy of the surcharge or discount schedule or a description of the alternative method used, and must provide a copy of such schedule or description, as approved by the office, to policyholders at the time of renewal and to prospective policyholders at the time of application for coverage.

(f)  Each medical malpractice insurer must make a rate filing under this section, sworn to by at least two executive officers of the insurer, at least once each calendar year.

(8)(a)1.  No later than 60 days after the effective date of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature, the office shall calculate a presumed factor that reflects the impact that the changes contained in such legislation will have on rates for medical malpractice insurance and shall issue a notice informing all insurers writing medical malpractice coverage of such presumed factor. In determining the presumed factor, the office shall use generally accepted actuarial techniques and standards provided in this section in determining the expected impact on losses, expenses, and investment income of the insurer. To the extent that the operation of a provision of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature is stayed pending a constitutional challenge, the impact of that provision shall not be included in the calculation of a presumed factor under this subparagraph.

2.  No later than 60 days after the office issues its notice of the presumed rate change factor under subparagraph 1., each insurer writing medical malpractice coverage in this state shall submit to the office a rate filing for medical malpractice insurance, which will take effect no later than January 1, 2004, and apply retroactively to policies issued or renewed on or after the effective date of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature. Except as authorized under paragraph (b), the filing shall reflect an overall rate reduction at least as great as the presumed factor determined under subparagraph 1. With respect to policies issued on or after the effective date of such legislation and prior to the effective date of the rate filing required by this subsection, the office shall order the insurer to make a refund of the amount that was charged in excess of the rate that is approved.

(b)  Any insurer or rating organization that contends that the rate provided for in paragraph (a) is excessive, inadequate, or unfairly discriminatory shall separately state in its filing the rate it contends is appropriate and shall state with specificity the factors or data that it contends should be considered in order to produce such appropriate rate. The insurer or rating organization shall be permitted to use all of the generally accepted actuarial techniques provided in this section in making any filing pursuant to this subsection. The office shall review each such exception and approve or disapprove it prior to use. It shall be the insurer's burden to actuarially justify any deviations from the rates required to be filed under paragraph (a). The insurer making a filing under this paragraph shall include in the filing the expected impact of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature on losses, expenses, and rates.

(c)  If any provision of medical malpractice legislation enacted during the 2003 Special Session D of the Florida Legislature is held invalid by a court of competent jurisdiction, the office shall permit an adjustment of all medical malpractice rates filed under this section to reflect the impact of such holding on such rates so as to ensure that the rates are not excessive, inadequate, or unfairly discriminatory.

(d)  Rates approved on or before July 1, 2003, for medical malpractice insurance shall remain in effect until the effective date of a new rate filing approved under this subsection.

(e)  The calculation and notice by the office of the presumed factor pursuant to paragraph (a) is not an order or rule that is subject to chapter 120. If the office enters into a contract with an independent consultant to assist the office in calculating the presumed factor, such contract shall not be subject to the competitive solicitation requirements of s. 287.057.

History.--s. 3, ch. 67-9; s. 3, ch. 71-3(B); s. 3, ch. 76-168; s. 21, ch. 77-468; s. 1, ch. 77-457; s. 93, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 341, 357, 809(2nd), ch. 82-243; ss. 45, 49, 79, ch. 82-386; s. 93, ch. 83-216; s. 9, ch. 86-160; ss. 19, 114, ch. 92-318; s. 8, ch. 92-328; s. 5, ch. 95-276; s. 4, ch. 96-194; s. 7, ch. 96-377; s. 8, ch. 2000-370; s. 55, ch. 2001-63; s. 1064, ch. 2003-261; ss. 40, 84, ch. 2003-416; s. 3, ch. 2005-111.

¹Note.--

A.  As amended by s. 1064, ch. 2003-261, enacted at the 2003 Regular Session. Section 40, ch. 2003-416, enacted at Special Session D, 2003, failed to incorporate the amendment by s. 1064, ch. 2003-261, which substituted the word "office" for the word "department."

B.  Section 84, ch. 2003-416, provides that "[i]f any law that is amended by this act was also amended by a law enacted at the 2003 Regular Session or a 2003 special session of the Legislature, such laws shall be construed as if they had been enacted during the same session of the Legislature, and full effect should be given to each if that is possible."

627.0625  Commercial property and casualty risk management plans.--

(1)  For the purposes of this section, the term:

(a)  "Commercial property insurance" means insurance as defined in s. 624.604, but limited to coverage of commercial risks, excluding windstorm coverage, flood insurance, federal crop insurance, crop hail insurance, the Pollution Liability Insurance Association, and other federal governmental pools and associations. If separate rates and supporting experience data are not filed and justified for windstorm coverage, the insurer shall, using generally accepted actuarial and economic principles and techniques, identify and justify the premiums, losses, reserves, and associated data for the windstorm coverage excluded from commercial property insurance.

(b)  "Commercial casualty insurance" means insurance as defined in s. 624.605, other than workers' compensation and employer's liability insurance, but limited to coverage of commercial risks.

(c)  "Commercial umbrella liability insurance" means insurance as defined in s. 624.605 but limited to any policy or endorsement which provides coverage in the amount of $300,000 or more in excess of an underlying policy providing $300,000 liability or equivalent limits of insurance, on a specific insured vehicle, location, business operation, or other specific commercial risk.

(2)  This section shall apply only to commercial property insurance and to commercial casualty insurance as those terms are defined in subsection (1), or any combination thereof.

(3)  Each insurer or insurer group offering commercial casualty insurance or commercial property insurance covering risks located in this state shall develop and make available to insureds guidelines for risk management plans. The risk management program shall include the following:

(a)  Safety measures, including, as applicable, the following areas:

1.  Pollution and environmental hazards;

2.  Disease hazards;

3.  Accidental occurrences;

4.  Fire hazards and fire prevention and detection;

5.  Liability for acts from the course of business;

6.  Slip and fall hazards;

7.  Product injury; and

8.  Hazards unique to a particular class or category of insureds.

(b)  Training to insureds in safety management techniques.

(c)  Safety management counseling services.

There shall be no civil cause of action against any insurer or its agents or employees for acts or omissions in any way connected with the requirements of this subsection. This shall not limit the authority for the office to enforce the provisions of this subsection.

History.--s. 10, ch. 86-160; s. 2, ch. 87-50; s. 2, ch. 88-390; s. 18, ch. 89-167; s. 1, ch. 89-225; s. 114, ch. 92-318; s. 1065, ch. 2003-261.

627.0628  Florida Commission on Hurricane Loss Projection Methodology; public records exemption; public meetings exemption.--

(1)  LEGISLATIVE FINDINGS AND INTENT.--

(a)  Reliable projections of hurricane losses are necessary in order to assure that rates for residential property insurance meet the statutory requirement that rates be neither excessive nor inadequate. The ability to accurately project hurricane losses has been enhanced greatly in recent years through the use of computer modeling. It is the public policy of this state to encourage the use of the most sophisticated actuarial methods to assure that consumers are charged lawful rates for residential property insurance coverage.

(b)  The Legislature recognizes the need for expert evaluation of computer models and other recently developed or improved actuarial methodologies for projecting hurricane losses, in order to resolve conflicts among actuarial professionals, and in order to provide both immediate and continuing improvement in the sophistication of actuarial methods used to set rates charged to consumers.

(c)  It is the intent of the Legislature to create the Florida Commission on Hurricane Loss Projection Methodology as a panel of experts to provide the most actuarially sophisticated guidelines and standards for projection of hurricane losses possible, given the current state of actuarial science. It is the further intent of the Legislature that such standards and guidelines must be used by the State Board of Administration in developing reimbursement premium rates for the Florida Hurricane Catastrophe Fund, and, subject to paragraph (3)(c), may be used by insurers in rate filings under s. 627.062 unless the way in which such standards and guidelines were applied by the insurer was erroneous, as shown by a preponderance of the evidence.

(d)  It is the intent of the Legislature that such standards and guidelines be employed as soon as possible, and that they be subject to continuing review thereafter.

(2)  COMMISSION CREATED.--

(a)  There is created the Florida Commission on Hurricane Loss Projection Methodology, which is assigned to the State Board of Administration. For the purposes of this section, the term "commission" means the Florida Commission on Hurricane Loss Projection Methodology. The commission shall be administratively housed within the State Board of Administration, but it shall independently exercise the powers and duties specified in this section.

(b)  The commission shall consist of the following 11 members:

1.  The insurance consumer advocate.

2.  The senior employee of the State Board of Administration responsible for operations of the Florida Hurricane Catastrophe Fund.

3.  The Executive Director of the Citizens Property Insurance Corporation.

4.  The Director of the Division of Emergency Management of the Department of Community Affairs.

5.  The actuary member of the Florida Hurricane Catastrophe Fund Advisory Council.

6.  An employee of the office who is an actuary responsible for property insurance rate filings and who is appointed by the director of the office.

7.  Five members appointed by the Chief Financial Officer, as follows:

a.  An actuary who is employed full time by a property and casualty insurer which was responsible for at least 1 percent of the aggregate statewide direct written premium for homeowner's insurance in the calendar year preceding the member's appointment to the commission.

b.  An expert in insurance finance who is a full-time member of the faculty of the State University System and who has a background in actuarial science.

c.  An expert in statistics who is a full-time member of the faculty of the State University System and who has a background in insurance.

d.  An expert in computer system design who is a full-time member of the faculty of the State University System.

e.  An expert in meteorology who is a full-time member of the faculty of the State University System and who specializes in hurricanes.

(c)  Members designated under subparagraphs (b)1.-5. shall serve on the commission as long as they maintain the respective offices designated in subparagraphs (b)1.-5. The member appointed by the director of the office under subparagraph (b)6. shall serve on the commission until the end of the term of office of the director who appointed him or her, unless removed earlier by the director for cause. Members appointed by the Chief Financial Officer under subparagraph (b)7. shall serve on the commission until the end of the term of office of the Chief Financial Officer who appointed them, unless earlier removed by the Chief Financial Officer for cause. Vacancies on the commission shall be filled in the same manner as the original appointment.

(d)  The State Board of Administration shall annually appoint one of the members of the commission to serve as chair.

(e)  Members of the commission shall serve without compensation, but shall be reimbursed for per diem and travel expenses pursuant to s. 112.061.

(f)  The State Board of Administration shall, as a cost of administration of the Florida Hurricane Catastrophe Fund, provide for travel, expenses, and staff support for the commission.

(g)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member of the commission, any member of the State Board of Administration, or any employee of the State Board of Administration for any action taken in the performance of their duties under this section. In addition, the commission may, in writing, waive any potential cause of action for negligence of a consultant, contractor, or contract employee engaged to assist the commission.

(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--

(a)  The commission shall consider any actuarial methods, principles, standards, models, or output ranges that have the potential for improving the accuracy of or reliability of the hurricane loss projections used in residential property insurance rate filings. The commission shall, from time to time, adopt findings as to the accuracy or reliability of particular methods, principles, standards, models, or output ranges.

(b)  In establishing reimbursement premiums for the Florida Hurricane Catastrophe Fund, the State Board of Administration must, to the extent feasible, employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable.

(c)  With respect to a rate filing under s. 627.062, an insurer may employ actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable to determine hurricane loss factors for use in a rate filing under s. 627.062. Such findings and factors are admissible and relevant in consideration of a rate filing by the office or in any arbitration or administrative or judicial review only if the office and the consumer advocate appointed pursuant to s. 627.0613 have access to all of the assumptions and factors that were used in developing the actuarial methods, principles, standards, models, or output ranges, and are not precluded from disclosing such information in a rate proceeding.

(d)  The commission shall adopt revisions to previously adopted actuarial methods, principles, standards, models, or output ranges at least annually.

(e)1.  A trade secret, as defined in s. 812.081, that is used in designing and constructing a hurricane loss model and that is provided pursuant to this section, by a private company, to the commission, office, or consumer advocate appointed pursuant to s. 627.0613, is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.

2.  That portion of a meeting of the commission or of a rate proceeding on an insurer's rate filing at which a trade secret made confidential and exempt by this paragraph is discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution.

3.  This paragraph is subject to the Open Government Sunset Review Act of 1995 in accordance with s. 119.15, and shall stand repealed on October 2, 2010, unless reviewed and saved from repeal through reenactment by the Legislature.

History.--s. 6, ch. 95-276; s. 6, ch. 96-194; s. 3, ch. 97-55; s. 4, ch. 2000-333; s. 1066, ch. 2003-261; s. 79, ch. 2004-390; s. 4, ch. 2005-111; s. 3, ch. 2005-264.

627.06281  Public hurricane loss projection model; reporting of data by insurers.--Within 30 days after a written request for loss data and associated exposure data by the office or a type I center within the State University System established to study mitigation, residential property insurers and licensed rating and advisory organizations that compile residential property insurance loss data shall provide loss data and associated exposure data for residential property insurance policies to the office or to a type I center within the State University System established to study mitigation, as directed by the office, for the purposes of developing, maintaining, and updating a public model for hurricane loss projections. The loss data and associated exposure data provided shall be in writing.

History.--s. 6, ch. 2005-111.

627.0629  Residential property insurance; rate filings.--

(1)  Effective June 1, 2002, a rate filing for residential property insurance must include actuarially reasonable discounts, credits, or other rate differentials, or appropriate reductions in deductibles, for properties on which fixtures or construction techniques demonstrated to reduce the amount of loss in a windstorm have been installed or implemented. The fixtures or construction techniques shall include, but not be limited to, fixtures or construction techniques which enhance roof strength, roof covering performance, roof-to-wall strength, wall-to-floor-to-foundation strength, opening protection, and window, door, and skylight strength. Credits, discounts, or other rate differentials for fixtures and construction techniques which meet the minimum requirements of the Florida Building Code must be included in the rate filing. All insurance companies must make a rate filing which includes the credits, discounts, or other rate differentials by February 28, 2003.

(2)(a)  A rate filing for residential property insurance made on or before the implementation of paragraph (b) may include rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses the risk of wind damage; however, such a rate filing must also provide for variations from such rate factors on an individual basis based on an inspection of a particular structure by a licensed home inspector, which inspection may be at the cost of the insured.

(b)  A rate filing for residential property insurance made more than 150 days after approval by the office of a building code rating factor plan submitted by a statewide rating organization shall include positive and negative rate factors that reflect the manner in which building code enforcement in a particular jurisdiction addresses risk of wind damage. The rate filing shall include variations from standard rate factors on an individual basis based on inspection of a particular structure by a licensed home inspector. If an inspection is requested by the insured, the insurer may require the insured to pay the reasonable cost of the inspection. This paragraph applies to structures constructed or renovated after the implementation of this paragraph.

(c)  The premium notice shall specify the amount by which the rate has been adjusted as a result of this subsection and shall also specify the maximum possible positive and negative adjustments that are approved for use by the insurer under this subsection.

(3)  A rate filing made on or after July 1, 1995, for mobile home owner's insurance must include appropriate discounts, credits, or other rate differentials for mobile homes constructed to comply with American Society of Civil Engineers Standard ANSI/ASCE 7-88, adopted by the United States Department of Housing and Urban Development on July 13, 1994, and that also comply with all applicable tie-down requirements provided by state law.

(4)  The Legislature finds that separate consideration and notice of hurricane insurance premiums will assist consumers by providing greater assurance that hurricane premiums are lawful and by providing more complete information regarding the components of property insurance premiums. Effective January 1, 1997, a rate filing for residential property insurance shall be separated into two components, rates for hurricane coverage and rates for all other coverages. A premium notice reflecting a rate implemented on the basis of such a filing shall separately indicate the premium for hurricane coverage and the premium for all other coverages.

(5)  In order to provide an appropriate transition period, an insurer may, in its sole discretion, implement an approved rate filing for residential property insurance over a period of years. An insurer electing to phase in its rate filing must provide an informational notice to the office setting out its schedule for implementation of the phased-in rate filing.

(6)  An insurer may not write a residential property insurance policy without providing windstorm coverage or hurricane coverage as defined in s. 627.4025. This subsection does not apply with respect to risks located in an area eligible for coverage under the high-risk account of the Citizens Property Insurance Corporation pursuant to s. 627.351(6).

(7)  Any rate filing that is based in whole or part on data from a computer model may not exceed 15 percent unless there is a public hearing.

(8)  An insurer may implement appropriate discounts or other rate differentials of up to 10 percent of the annual premium to mobile home owners who provide to the insurer evidence of a current inspection of tie-downs for the mobile home, certifying that the tie-downs have been properly installed and are in good condition.

(9)  EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL SOUNDNESS.--

(a)  It is the intent of the Legislature to provide a program whereby homeowners may obtain an evaluation of the wind resistance of their homes with respect to preventing damage from hurricanes, together with a recommendation of reasonable steps that may be taken to upgrade their homes to better withstand hurricane force winds.

(b)  To the extent that funds are provided for this purpose in the General Appropriations Act, the Legislature hereby authorizes the establishment of a program to be administered by the Citizens Property Insurance Corporation for homeowners insured in the high-risk account.

(c)  The program shall provide grants to homeowners, for the purpose of providing homeowner applicants with funds to conduct an evaluation of the integrity of their homes with respect to withstanding hurricane force winds, recommendations to retrofit the homes to better withstand damage from such winds, and the estimated cost to make the recommended retrofits.

(d)  The Department of Community Affairs shall establish by rule standards to govern the quality of the evaluation, the quality of the recommendations for retrofitting, the eligibility of the persons conducting the evaluation, and the selection of applicants under the program. In establishing the rule, the Department of Community Affairs shall consult with the advisory committee to minimize the possibility of fraud or abuse in the evaluation and retrofitting process, and to ensure that funds spent by homeowners acting on the recommendations achieve positive results.

(e)  The Citizens Property Insurance Corporation shall identify areas of this state with the greatest wind risk to residential properties and recommend annually to the Department of Community Affairs priority target areas for such evaluations and inclusion with the associated residential construction mitigation program.

(10)  A property insurance rate filing that includes any adjustments related to premiums paid to the Florida Hurricane Catastrophe Fund must include a complete calculation of the insurer's catastrophe load, and the information in the filing may not be limited solely to recovery of moneys paid to the fund.

History.--s. 13, ch. 93-410; s. 7, ch. 95-276; s. 7, ch. 96-194; s. 4, ch. 97-55; s. 99, ch. 2000-141; ss. 34, 42, ch. 2001-186; ss. 3, 9, ch. 2001-372; s. 20, ch. 2002-293; s. 1067, ch. 2003-261; s. 5, ch. 2005-111.

627.06292  Reports of hurricane loss data and associated exposure data; public records exemption.--

(1)  Reports of hurricane loss data and associated exposure data that are specific to a particular insurance company, as reported by an insurer or a licensed rating organization to the office or to a type I center at a state university pursuant to s. 627.06281, are exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution.

(2)  For the purposes of this section, "loss data and associated exposure data" means the type, age, wind mitigation features, and location of each property insured; the amount and type of coverage written on each of those properties; the amount, date, and type of damage paid for by the insurer on each property; and the amount of any reserves held by an insurer for future payments or expenses on damages associated with the date or dates of occurrence of hurricanes.

(3)  This section is subject to the Open Government Sunset Review Act of 1995 in accordance with s. 119.15, and shall stand repealed on October 2, 2010, unless reviewed and saved from repeal through reenactment by the Legislature.

History.--s. 1, ch. 2005-264.

627.0645  Annual filings.--

(1)  Each rating organization filing rates for, and each insurer writing, any line of property or casualty insurance to which this part applies, except:

(a)  Workers' compensation and employer's liability insurance; or

(b)  Commercial property and casualty insurance as defined in s. 627.0625(1) other than commercial multiple line and commercial motor vehicle,

shall make an annual base rate filing for each such line with the office no later than 12 months after its previous base rate filing, demonstrating that its rates are not inadequate.

(2)(a)  Deviations filed by an insurer to any rating organization's base rate filing are not subject to this section.

(b)  The office, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.

(3)  The filing requirements of this section shall be satisfied by one of the following methods:

(a)  A rate filing prepared by an actuary which contains documentation demonstrating that the proposed rates are not excessive, inadequate, or unfairly discriminatory pursuant to the applicable rating laws and pursuant to rules of the commission.

(b)  If no rate change is proposed, a filing which consists of a certification by an actuary that the existing rate level produces rates which are actuarially sound and which are not inadequate, as defined in s. 627.062.

(4)  An insurer may satisfy the annual filing requirements of this section by being a member or subscriber of a licensed rating organization which complies with the requirements of this section.

(5)  If an insurer does not employ or otherwise retain the services of an actuary, the insurer's rate filing or certification that rates are actuarially sound shall be prepared by insurer personnel or consultants with a minimum of 5 years' experience in insurance ratemaking. A rate filing or certification prepared by a consultant must be reviewed and signed by an employee of the insurer who is authorized to approve rate filings.

(6)  If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the office for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the office no later than the date the filing is due.

(7)  Nothing in this section limits the office's authority to review rates at any time or to find that a rate or rate change is excessive, inadequate, or unfairly discriminatory pursuant to s. 627.062.

(8)  As used in this section, the term "actuary" means an individual who is a member of the Casualty Actuarial Society.

(9)  If an insurer fails to meet the filing requirements of this section and does not submit the filing within 60 days after the date the filing is due, the office may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for the line of insurance for which the required filing was not made until such time as the office determines that the required filing is properly submitted.

History.--s. 2, ch. 89-360; s. 1, ch. 90-192; s. 19, ch. 90-249; s. 11, ch. 90-366; ss. 21, 114, ch. 92-318; s. 1068, ch. 2003-261.

627.06501  Insurance discounts for certain persons completing driver improvement course.--

(1)  Any rate, rating schedule, or rating manual for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office may provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle has successfully completed a driver improvement course approved and certified by the Department of Highway Safety and Motor Vehicles which is effective in reducing crash or violation rates, or both, as determined pursuant to ¹s. 318.1451(5). Any discount, not to exceed 10 percent, used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.

(2)  The premium reduction authorized by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the reduction, that the insured:

(a)  Not be involved in an accident for which the insured is at fault; and

(b)  Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.

(3)  The organization offering the course shall, upon a person's successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount authorized by this section.

(4)  This section does not apply if the driver improvement course is taken in lieu of a court appearance for a traffic infraction as provided for in s. 318.14(9). However, the five-election restriction enumerated in that section is not applicable to taking the course for the purposes of receiving insurance premium reductions.

History.--s. 1, ch. 97-178; s. 1069, ch. 2003-261.

¹Note.--Repealed by s. 14, ch. 99-5.

627.0651  Making and use of rates for motor vehicle insurance.--

(1)  Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on motor vehicle insurance written in this state. A copy of rates, rating schedules, and rating manuals, and changes therein, shall be filed with the office under one of the following procedures:

(a)  If the filing is made at least 60 days before the proposed effective date and the filing is not implemented during the office's review of the filing and any proceeding and judicial review, such filing shall be considered a "file and use" filing. In such case, the office shall initiate proceedings to disapprove the rate and so notify the insurer or shall finalize its review within 60 days after receipt of the filing. Notification to the insurer by the office of its preliminary findings shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue notice to the insurer of its preliminary findings within 60 days after the filing.

(b)  If the filing is not made in accordance with the provisions of paragraph (a), such filing shall be made as soon as practicable, but no later than 30 days after the effective date, and shall be considered a "use and file" filing. An insurer making a "use and file" filing is potentially subject to an order by the office to return to policyholders portions of rates found to be excessive, as provided in subsection (11).

(2)  Upon receiving notice of a rate filing or rate change, the office shall review the rate or rate change to determine if the rate is excessive, inadequate, or unfairly discriminatory. In making that determination, the office shall in accordance with generally accepted and reasonable actuarial techniques consider the following factors:

(a)  Past and prospective loss experience within and outside this state.

(b)  The past and prospective expenses.

(c)  The degree of competition among insurers for the risk insured.

(d)  Investment income reasonably expected by the insurer, consistent with the insurer's investment practices, from investable premiums anticipated in the filing, plus any other expected income from currently invested assets representing the amount expected on unearned premium reserves and loss reserves. Such investment income shall not include income from invested surplus. The commission may adopt rules utilizing reasonable techniques of actuarial science and economics to specify the manner in which insurers shall calculate investment income attributable to motor vehicle insurance policies written in this state and the manner in which such investment income is used in the calculation of insurance rates. Such manner shall contemplate the use of a positive underwriting profit allowance in the rates that will be compatible with a reasonable rate of return plus provisions for contingencies. The total of the profit and contingency factor as specified in the filing shall be utilized in computing excess profits in conjunction with s. 627.066. In adopting such rules, the commission shall in all instances adhere to and implement the provisions of this paragraph.

(e)  The reasonableness of the judgment reflected in the filing.

(f)  Dividends, savings, or unabsorbed premium deposits allowed or returned to Florida policyholders, members, or subscribers.

(g)  The cost of repairs to motor vehicles.

(h)  The cost of medical services, if applicable.

(i)  The adequacy of loss reserves.

(j)  The cost of reinsurance.

(k)  Trend factors, including trends in actual losses per insured unit for the insurer making the filing.

(l)  Other relevant factors which impact upon the frequency or severity of claims or upon expenses.

(3)  Rates shall be deemed excessive if they are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered.

(4)  Rates shall be deemed excessive if, among other things, the rate structure established by a stock insurance company provides for replenishment of surpluses from premiums, when such replenishment is attributable to investment losses.

(5)(a)  Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply.

(b)  The office has the responsibility to ensure that rates for private passenger vehicle insurance are adequate. To that end, the commission shall adopt rules establishing standards defining inadequate rates on private passenger vehicle insurance as defined in s. 627.041(8). In the event that the office finds that a rate or rate change is inadequate, the office shall order that a new rate or rate schedule be thereafter filed by the insurer and shall further provide information as to the manner in which noncompliance of the standards may be corrected. When a violation of this provision occurs, the office shall impose an administrative fine pursuant to s. 624.4211.

(6)  One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses.

(7)  Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy.

(8)  Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory.

(9)  In reviewing the rate or rate change filed, the office may require the insurer to provide at the insurer's expense all information necessary to evaluate the condition of the company and the reasonableness of the filing according to the criteria enumerated herein.

(10)  The office may, at any time, review a rate or rate change, the pertinent records of the insurer, and market conditions; and, if the office finds on a preliminary basis that the rate or rate change may be excessive, inadequate, or unfairly discriminatory, the office shall so notify the insurer. However, the office may not disapprove as excessive any rate for which it has given final approval or which has been deemed approved for a period of 1 year after the effective date of the filing unless the office finds that a material misrepresentation or material error was made by the insurer or was contained in the filing. Upon being so notified, the insurer or rating organization shall, within 60 days, file with the office all information which, in the belief of the insurer or organization, proves the reasonableness, adequacy, and fairness of the rate or rate change. In such instances and in any administrative proceeding relating to the legality of the rate, the insurer or rating organization shall carry the burden of proof by a preponderance of the evidence to show that the rate is not excessive, inadequate, or unfairly discriminatory. After the office notifies an insurer that a rate may be excessive, inadequate, or unfairly discriminatory, unless the office withdraws the notification, the insurer shall not increase the rate until the earlier of 120 days after the date the notification was provided or 180 days after the date of the implementation of the rate. The office may, subject to chapter 120, disapprove without the 60-day notification any rate increase filed by an insurer within the prohibited time period or during the time that the legality of the increased rate is being contested.

(11)  In the event the office finds that a rate or rate change is excessive, inadequate, or unfairly discriminatory, the office shall issue an order of disapproval specifying that a new rate or rate schedule which responds to the findings of the office be filed by the insurer. The office shall further order for any "use and file" filing made in accordance with paragraph (1)(b), that premiums charged each policyholder constituting the portion of the rate above that which was actuarially justified be returned to such policyholder in the form of a credit or refund. If the office finds that an insurer's rate or rate change is inadequate, the new rate or rate schedule filed with the office in response to such a finding shall be applicable only to new or renewal business of the insurer written on or after the effective date of the responsive filing.

(12)  Any portion of a judgment entered as a result of a statutory or common-law bad faith action and any portion of a judgment entered which awards punitive damages against an insurer shall not be included in the insurer's rate base, and shall not be used to justify a rate or rate change. Any portion of a settlement entered as a result of a statutory or common-law bad faith action identified as such and any portion of a settlement wherein an insurer agrees to pay specific punitive damages shall not be used to justify a rate or rate change. The portion of the taxable costs and attorney's fees which is identified as being related to the bad faith and punitive damages in these judgments and settlements shall not be included in the insurer's rate base and shall not be utilized to justify a rate or rate change.

(13)(a)  Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners' insurance.

(b)  The submission of rates, rating schedules, and rating manuals to the office by a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this subsection for any insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating schedules, and rating manuals of such organization. All such information shall be available for public inspection, upon receipt by the office, during usual business hours.

History.--s. 22, ch. 77-468; s. 8, ch. 78-374; s. 2, ch. 81-318; ss. 343, 357, 809(2nd), ch. 82-243; ss. 46, 47, 49, 79, ch. 82-386; s. 94, ch. 83-216; s. 16, ch. 85-245; s. 34, ch. 90-119; s. 114, ch. 92-318; s. 2, ch. 98-173; s. 1070, ch. 2003-261.

627.0652  Insurance discounts for certain persons completing safety course.--

(1)  Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office shall provide for an appropriate reduction in premium charges as to such coverages when the principal operator on the covered vehicle is an insured 55 years of age or older who has successfully completed a motor vehicle accident prevention course approved by the Department of Highway Safety and Motor Vehicles. Any discount used by an insurer is presumed to be appropriate unless credible data demonstrates otherwise.

(2)  The premium reduction required by this section shall be effective for an insured for a 3-year period after successful completion of the approved course, except that the insurer may require, as a condition of maintaining the discount, that the insured:

(a)  Not be involved in an accident for which the insured is at fault; and

(b)  Not be convicted of or plead guilty or nolo contendere to a moving traffic violation.

(3)  The Department of Highway Safety and Motor Vehicles shall approve motor vehicle accident prevention courses for the purposes of this section. The Department of Highway Safety and Motor Vehicles shall consider the competency of the personnel offering the course, the quality of the content and activities of the course with respect to its capability to prevent accidents by persons age 55 or older who complete the course, and the reasonableness of the fee for the course. The Department of Highway Safety and Motor Vehicles shall establish the minimum number of hours necessary for completion of a course. A course approved by the Department of Highway Safety and Motor Vehicles shall require each person completing the course to pass a written test given by the course evaluating the person's knowledge of the content of the course.

(4)  The organization offering the course shall, upon a person's successful completion of the course, issue the person a certificate that the person may use to qualify for the premium discount required by this section.

(5)  This section does not apply if the approved course is taken as punishment specified by a court or other governmental entity resulting from a moving traffic violation.

History.--s. 1, ch. 85-244; s. 1, ch. 86-286; s. 1, ch. 88-250; ss. 22, 114, ch. 92-318; s. 1071, ch. 2003-261.

627.0653  Insurance discounts for specified motor vehicle equipment.--

(1)  Any rates, rating schedules, or rating manuals for the liability, personal injury protection, and collision coverages of a motor vehicle insurance policy filed with the office shall provide a premium discount if the insured vehicle is equipped with factory-installed, four-wheel antilock brakes.

(2)  Each insurer writing motor vehicle comprehensive coverage in this state shall include in its rating manual discount provisions for comprehensive coverage which specifically relate to an antitheft device or vehicle recovery system utilized in the insured vehicle which are factory installed or approved by the office. The commission shall adopt, by rule, procedures under which manufacturers, distributors, or sellers may apply to the office for approval of non-factory-installed devices under this subsection. The rules must include, at a minimum, the test results that must accompany the application and the standards for approval.

(3)  Any rates, rating schedules, or rating manuals for personal injury protection coverage and medical payments coverage, if offered, of a motor vehicle insurance policy filed with the office shall provide a premium discount if the insured vehicle is equipped with one or more air bags which are factory installed.

(4)  The removal of a discount or credit does not constitute the imposition of, or request for, additional premium or a surcharge if the basis for the discount or credit no longer exists or is substantially eliminated.

(5)  Each insurer writing motor vehicle comprehensive coverage in this state may provide a premium discount for this coverage if the insured vehicle has the complete manufacturer's vehicle identification number permanently etched on the windshield and all windows of the vehicle. The etching must be by a tool or process that does not destroy the integrity of the glass or visibility for the operator of the motor vehicle. The identification numbers and letters must be at least ¹/₄ inch in height. A sticker may identify the presence of this identification system. The commission may, by rule, set forth appropriate guidelines to implement this subsection.

History.--ss. 37, 52, ch. 90-119; ss. 23, 109, 114, ch. 92-318; s. 1072, ch. 2003-261.

627.06535  Electric vehicles; restrictions on imposing surcharges.--An insurer may not impose a surcharge on the premium for motor vehicle insurance written on an electric vehicle, as defined in s. 320.01, if the surcharge is based on a factor such as new technology, passenger payload, weight-to-horsepower ratio, or types of materials, including composite materials or aluminum, used to manufacture the vehicle, unless the office determines from actuarial data submitted to it that the surcharge is justified.

History.--s. 13, ch. 95-333; s. 1073, ch. 2003-261.

627.0654  Insurance discounts for buildings with fire sprinklers.--

(1)  Any rates, rating schedules, or rating manuals for a new or renewal fire insurance policy for an existing or newly constructed building, whether used for commercial or residential purposes, must provide for a premium discount if a fire sprinkler system has been installed in the building in accordance with nationally accepted fire sprinkler design standards, as adopted by the department, and if the fire sprinkler system is maintained in accordance with nationally accepted standards.

(2)  The discount required by this section must provide a premium rate that is lower than that for a building in which a fire sprinkler system has not been installed. A discount used by an insurer is presumed appropriate unless credible data demonstrates otherwise.

History.--s. 4, ch. 95-379.

627.066  Excessive profits for motor vehicle insurance prohibited.--

(1)  As used herein:

(a)  "Private passenger automobile business" means that insurance business that is written on a family automobile policy, standard automobile policy, or personal automobile or similar private passenger automobile policy written for personal use, as opposed to commercial automobile insurance business.

(b)  "Cash" means coins, currency, checks, drafts, or money orders.

(2)  Each Florida private passenger automobile insurer group shall file with the office, prior to July 1 of each year on forms prescribed by the commission, the following data for Florida private passenger automobile business. The data filed for the group shall be a consolidation of the data of the individual insurers of the group. The data shall include both voluntary and joint underwriting association business, as follows:

(a)  Calendar-year total limits earned premium.

(b)  Accident-year incurred losses and loss adjustment expenses.

(c)  The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.

(d)  Policyholder dividends incurred during the applicable calendar year.

(3)(a)  Excessive profit has been realized if there has been an underwriting gain for the 3 most recent calendar-accident years combined which is greater than the anticipated underwriting profit plus 5 percent of earned premiums for those calendar-accident years.

(b)  As used herein with respect to any 3-year period, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(4)  Each insurer group shall also file a schedule of Florida private passenger automobile loss and loss adjustment experience for each of the 3 most recent accident years. The incurred losses and loss adjustment expenses shall be valued as of March 31 of the year following the close of the accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1976, so that the reporting of 3 accident years will not take place until accident years 1977 and 1978 have become available.

(5)  Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of March 31 of the following year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, will be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(6)  For the 3 most recent calendar-accident years, the underwriting gain or loss will be compared to the anticipated underwriting profit.

(7)  If the insurer group has realized an excessive profit, the office shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the office that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.

(8)  The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the voluntary private passenger automobile policyholders of record of the insurer group on December 31 of the final compilation year.

(9)  Any excess profit of an insurance company offering motor vehicle insurance shall be returned to policyholders in the form of a cash refund or a credit towards the future purchase of insurance.

(10)(a)  Cash refunds to policyholders may be rounded to the nearest dollar.

(b)  Data in required reports to the office may be rounded to the nearest dollar.

(c)  Rounding, if elected by the insurer group, shall be applied consistently.

(11)(a)  Refunds shall be completed in one of the following ways:

1.  If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2.  If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels his or her policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b)  Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the office that the refunds have been made.

(12)  Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year in which it is incurred, for purposes of reporting under this section for subsequent years.

History.--s. 23, ch. 77-468; ss. 26, 27, ch. 80-236; s. 424, ch. 81-259; s. 2, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 2, ch. 90-366; s. 114, ch. 92-318; s. 316, ch. 97-102; s. 1074, ch. 2003-261.

627.0665  Automatic bank withdrawal agreements; notification required.--Any insurer licensed to issue insurance in the state who has an automatic bank withdrawal agreement with an insured party for the payment of insurance premiums for any type of insurance shall give the named insured at least 15 days advance written notice of any increase in policy premiums prior to any automatic bank withdrawal of an increased premium.

History.--ss. 1, 2, ch. 88-320; s. 114, ch. 92-318.

627.072  Making and use of rates.--

(1)  As to workers' compensation and employer's liability insurance, the following factors shall be used in the determination and fixing of rates:

(a)  The past loss experience and prospective loss experience within and outside this state;

(b)  The conflagration and catastrophe hazards;

(c)  A reasonable margin for underwriting profit and contingencies;

(d)  Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

(e)  Investment income on unearned premium reserves and loss reserves;

(f)  Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and

(g)  All other relevant factors, including judgment factors, within and outside this state.

(2)  As to all rates which are subject to this part, the systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(3)  As to all rates which are subject to this part, risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions.

(4)(a)  In the case of workers' compensation and employer's liability insurance, the office shall consider utilizing the following methodology in rate determinations: Premiums, expenses, and expected claim costs would be discounted to a common point of time, such as the initial point of a policy year, in the determination of rates; the cash-flow pattern of premiums, expenses, and claim costs would be determined initially by using data from 8 to 10 of the largest insurers writing workers' compensation insurance in the state; such insurers may be selected for their statistical ability to report the data on an accident-year basis and in accordance with subparagraphs (b)1., 2., and 3., for at least 2¹/₂ years; such a cash-flow pattern would be modified when necessary in accordance with the data and whenever a radical change in the payout pattern is expected in the policy year under consideration.

(b)  If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:

1.  Each insurer shall include in its statistical reporting to the rating bureau and the office the accident year by calendar quarter data for paid-claim costs;

2.  Each insurer shall submit financial reports to the rating bureau and the office which shall include total incurred claim amounts and paid-claim amounts by policy year and by injury types as of December 31 of each calendar year; and

3.  Each insurer shall submit to the rating bureau and the office paid-premium data on an individual risk basis in which risks are to be subdivided by premium size as follows:


Number of Risks in
  Premium Range

Standard Premium Size

$300--999

1,000--4,999

5,000--49,999

50,000--99,999

100,000 or more

History.--s. 4, ch. 67-9; s. 1, ch. 70-179; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 24, ch. 77-468; s. 94, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 344, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 11, ch. 86-160; s. 114, ch. 92-318; s. 317, ch. 97-102; s. 5, ch. 2000-333; s. 94, ch. 2002-1; s. 1075, ch. 2003-261.

627.091  Rate filings; workers' compensation and employer's liability insurances.--

(1)  As to workers' compensation and employer's liability insurances, every insurer shall file with the office every manual of classifications, rules, and rates, every rating plan, and every modification of any of the foregoing which it proposes to use. Every insurer is authorized to include deductible provisions in its manual of classifications, rules, and rates. Such deductibles shall in all cases be in a form and manner which is consistent with the underlying purpose of chapter 440.

(2)  Every such filing shall state the proposed effective date thereof, and shall indicate the character and extent of the coverage contemplated. When a filing is not accompanied by the information upon which the insurer supports the filing and the office does not have sufficient information to determine whether the filing meets the applicable requirements of this part, it shall within 15 days after the date of filing require the insurer to furnish the information upon which it supports the filing. The information furnished in support of a filing may include:

(a)  The experience or judgment of the insurer or rating organization making the filing;

(b)  Its interpretation of any statistical data it relies upon;

(c)  The experience of other insurers or rating organizations; or

(d)  Any other factors which the insurer or rating organization deems relevant.

(3)  A filing and any supporting information shall be open to public inspection as provided in s. 119.07(1).

(4)  An insurer may satisfy its obligation to make such filings by becoming a member of, or a subscriber to, a licensed rating organization which makes such filings and by authorizing the office to accept such filings in its behalf; but nothing contained in this chapter shall be construed as requiring any insurer to become a member or a subscriber to any rating organization.

(5)  Pursuant to the provisions of s. 624.3161, the office may examine the underlying statistical data used in such filings.

(6)  Whenever the committee of a recognized rating organization with responsibility for workers' compensation and employer's liability insurance rates in this state meets to discuss the necessity for, or a request for, Florida rate increases or decreases, the determination of Florida rates, the rates to be requested, and any other matters pertaining specifically and directly to such Florida rates, such meetings shall be held in this state and shall be subject to s. 286.011. The committee of such a rating organization shall provide at least 3 weeks' prior notice of such meetings to the office and shall provide at least 14 days' prior notice of such meetings to the public by publication in the Florida Administrative Weekly.

History.--s. 419, ch. 59-205; s. 5, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 20, ch. 78-300; s. 95, ch. 79-40; ss. 20, 22, ch. 80-236; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 4, 9, 10, ch. 87-124; s. 63, ch. 91-108; s. 4, ch. 91-429; s. 1, ch. 93-289; s. 1076, ch. 2003-261.

627.0915  Rate filings; workers' compensation, drug-free workplace, and safe employers.--

(1)  The office shall approve rating plans for workers' compensation and employer's liability insurance that give specific identifiable consideration in the setting of rates to employers that either implement a drug-free workplace program pursuant to s. 440.102 and rules adopted under such section or implement a safety program pursuant to provisions of the rating plan or implement both a drug-free workplace program and a safety program. The plans must be actuarially sound and must state the savings anticipated to result from such drug-testing and safety programs.

(2)  An insurer offering a rate plan approved under this section shall notify the employer at the time of the initial quote for the policy and at the time of each renewal of the policy of the availability of the premium discount where a drug-free workplace plan is used by the employer pursuant to s. 440.102 and rules adopted under such section. The Financial Services Commission may adopt rules to implement the provisions of this subsection.

History.--s. 51, ch. 90-201; s. 49, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 94, ch. 93-415; s. 5, ch. 98-126; s. 34, ch. 2001-91; s. 67, ch. 2002-194; s. 1077, ch. 2003-261; s. 26, ch. 2004-374.

627.0916  Agricultural horse farms.--Notwithstanding any other provision of this chapter to the contrary, any rates, rating schedules, or rating manuals for workers' compensation and employer's liability insurance filed with the office shall provide for the rates of an agricultural horse farm engaged in breeding or training to be separated into the following three rate classifications and the premium paid shall be applied proportionately according to payroll: breeding activity involving stallions; breeding activity not involving stallions, including but not limited to boarding and foaling; and training.

History.--s. 96, ch. 93-415; s. 2, ch. 95-219; s. 1078, ch. 2003-261.

627.092  Workers' Compensation Administrator.--There is created within the office the position of Workers' Compensation Administrator to monitor carrier practices in the field of workers' compensation.

History.--s. 21, ch. 78-300; s. 96, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 6, ch. 97-93; s. 1079, ch. 2003-261.

627.093  Application of s. 286.011 to workers' compensation and employer's liability insurances.--Section 286.011 shall be applicable to every rate filing, approval or disapproval of filing, rating deviation from filing, or appeal from any of these regarding workers' compensation and employer's liability insurances.

History.--s. 97, ch. 79-40; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.096  Workers' Compensation Rating Bureau.--

(1)  There is created within the office a Workers' Compensation Rating Bureau, which shall make an investigation and study of all insurers authorized to issue workers' compensation and employer's liability coverage in this state. Such bureau shall study the data, statistics, schedules, or other information as it may deem necessary to assist and advise the office in its review of filings made by or on behalf of workers' compensation and employer's liability insurers. The commission may adopt rules requiring all workers' compensation and employer's liability insurers to submit to the rating bureau any data, statistics, schedules, and other information deemed necessary to the rating bureau's study and advisement.

(2)  The acquisition by the Department of Management Services of data processing software, hardware, and services necessary to carry out the provisions of this act for the department or office shall be exempt from the provisions of part I of chapter 287.

History.--s. 98, ch. 79-40; s. 2, ch. 81-318; ss. 345, 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 5, 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 313, ch. 92-279; s. 55, ch. 92-326; s. 1080, ch. 2003-261.

627.101  When filing becomes effective; workers' compensation and employer's liability insurances.--

(1)  The office shall review filings as to workers' compensation and employer's liability insurances as soon as reasonably possible after they have been made in order to determine whether they meet the applicable requirements of this part. If the office determines that part of a rate filing does not meet the applicable requirements of this part, it may reject so much of the filing as does not meet these requirements, and approve the remainder of the filing.

(2)  The office shall specifically approve the filing before it becomes effective, unless the office has concluded it to be in the public interest to hold a public hearing to determine whether the filing meets the requirements of this chapter and has given notice of such hearing to the insurer or rating organization that made the filing, and in which case the effectiveness of the filing shall be subject to the further order of the office made as provided in s. 627.111. If the office specifically disapproves the filing, the provisions of subsection (4) shall apply.

(3)  An insurer or rating organization may, at the time it makes a filing with the office, request a public hearing thereon. In such event, the office shall give notice of the hearing.

(4)  If the office disapproves a filing, it shall promptly give notice of such disapproval to the insurer or rating organization that made the filing, stating the respects in which it finds that the filing does not meet the requirements of this chapter. If the office approves a filing, it shall give prompt notice thereof to the insurer or rating organization that made the filing, and in which case the filing shall become effective upon such approval or upon such subsequent date as may be satisfactory to the office and the insurer or rating organization that made the filing.

History.--s. 420, ch. 59-205; s. 6, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 22, ch. 78-300; s. 99, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 2, ch. 93-289; s. 1081, ch. 2003-261.

627.111  Effective date of filing.--

(1)  If, pursuant to s. 627.101(2), the office determines to hold a public hearing as to a filing, or it holds such a public hearing pursuant to request therefor under s. 627.101(3), it shall give written notice thereof to the rating organization or insurer that made the filing and shall hold such hearing within 30 days, and not less than 10 days prior to the date of the hearing, it shall give written notice of the hearing to the insurer or rating organization that made the filing. The office may also, in its discretion, give advance public notice of such hearing by publication of notice in one or more daily newspapers of general circulation in this state.

(2)  If the order of the office disapproves the filing, the filing shall not become effective during the effectiveness of such order. If the order of the office approves the filing, the filing shall become effective upon the date of the order or upon such subsequent date as may be satisfactory to the insurer or rating organization that made the filing.

History.--s. 421, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 3, ch. 93-289; s. 1082, ch. 2003-261.

627.141  Subsequent disapproval of filing; workers' compensation and employer's liability insurances.--If at any time after a filing has been approved by it or has otherwise become effective the office finds that the filing no longer meets the requirements of this chapter, it shall issue an order specifying in what respects it finds that such filing fails to meet such requirements and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. The order shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the order.

History.--s. 424, ch. 59-205; s. 7, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 100, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1083, ch. 2003-261.

627.151  Basis of approval or disapproval of workers' compensation or employer's liability insurance filing; scope of disapproval power.--

(1)  In determining at any time whether to approve or disapprove a filing as to workers' compensation or employer's liability insurance, or to permit the filing otherwise to become effective, the office shall give consideration only to the applicable standards and factors referred to in ss. 627.062 and 627.072.

(2)  As to workers' compensation and employer's liability insurances, no manual of classifications, rule, rating plan, rating system, plan of operation, or any modification of any of the foregoing which establishes standards for measuring variations in hazards or expense provisions, or both, shall be disapproved if the rates thereby produced meet the applicable requirements of this part.

History.--s. 425, ch. 59-205; s. 8, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 101, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1084, ch. 2003-261.

627.1615  Workers' compensation applicant discrimination.--Insurers shall not refuse to provide workers' compensation coverage on the basis of the applicant's premium volume.

History.--s. 52, ch. 90-201; s. 50, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429.

627.162  Requirements for premium installments; delinquency, collection, and check return charges; attorney's fees.--

(1)  Insurers providing workers' compensation coverage under chapter 440 shall provide, upon request of the employer, policies providing for the payment of premiums by installment for policies with annual premiums exceeding $1,000.

(2)  Insurers providing workers' compensation coverage under chapter 440 may charge the insured a delinquency and collection fee on each installment in default for a period of not less than 5 days in an amount not to exceed $25 or 5 percent of the delinquent installment, whichever is greater. Only one such delinquency and collection fee may be collected on any such installment regardless of the period during which it remains in default.

(3)  If an installment in default under this section is referred for collection to an attorney, the insured is liable for the payment of attorney's fees not exceeding 25 percent of the sum of the installment and any delinquency and collection fee charged by the insurer.

(4)  Notwithstanding other provisions of this section, an insurer may not take or receive from or charge an insured any collection fee or attorney's fee unless the insurer has mailed a notice of the default to the insured at his or her address as shown on the records of the insurer, giving the insured at least 5 days within which to make the payment in default. A notice of cancellation sent by the insurer to the insured in accordance with s. 440.42 is legally sufficient notice of the default for purposes of this section.

(5)  If a payment is made to an insurer by check or draft and the instrument is returned because of insufficient funds, the insurer may impose a charge of $20 or 5 percent of the check amount, whichever is greater.

(6)  The term "insurer," for purposes of this section, includes a commercial self-insurance fund as defined in s. 624.462, an assessable mutual insurer as defined in s. 628.6011, and a group self-insurer's fund as defined in s. 624.4621.

History.--s. 53, ch. 90-201; s. 51, ch. 91-1; s. 17, ch. 91-201; s. 4, ch. 91-429; s. 24, ch. 92-318; s. 318, ch. 97-102; s. 28, ch. 99-3; s. 33, ch. 2003-412.

627.171  Excess rates.--

(1)  With written consent of the insured signed prior to the policy inception date and filed with the insurer, the insurer may use a rate in excess of the otherwise applicable filed rate on any specific risk. The signed consent form must include the filed rate as well as the excess rate for the risk insured, and a copy of the form must be maintained by the insurer for 3 years and be available for review by the office.

(2)  An insurer may not use excess rates pursuant to this section for more than 10 percent of its commercial insurance policies written or renewed in each calendar year for any line of commercial insurance or for more than 5 percent of its personal lines insurance policies written or renewed in each calendar year for any line of personal insurance. In determining the 10-percent limitation for commercial insurance policies, the insurer shall exclude any workers' compensation policy that was written for an employer who had coverage in the joint underwriting plan created by s. 627.311(5) immediately prior to the writing of the policy by the insurer and any workers' compensation policy that was written for an employer who had been offered coverage in the joint underwriting plan but who was written a policy by the insurer in lieu of accepting the joint underwriting plan policy. These workers' compensation policies shall be excluded from the 10-percent limitation for the first 3 years of coverage.

History.--s. 427, ch. 59-205; s. 9, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 53, ch. 89-360; s. 4, ch. 91-429; s. 1085, ch. 2003-261; s. 2, ch. 2004-82.

627.191  Adherence to filings; workers' compensation and employer's liability insurances.--No insurer or employee thereof, and no agent, shall make or issue a contract or policy of workers' compensation or employer's liability insurance except in accordance with the filings which are in effect for such insurer, as provided in the applicable provisions of this part, or in accordance with s. 627.171.

History.--s. 429, ch. 59-205; s. 11, ch. 67-9; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 102, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429.

627.192  Workers' compensation insurance; employee leasing arrangements.--

(1)  The purpose of this section is to ensure that an employer who leases some or all of its workers properly obtains workers' compensation insurance coverage for all of its employees, including those leased from or coemployed with another entity, and that premium paid by an employee leasing company is commensurate with exposure and anticipated claim experience for all employees.

(2)  For purposes of the Florida Insurance Code:

(a)  "Employee leasing" shall have the same meaning as set forth in s. 468.520(4).

(b)  "Experience rating modification" means a factor applied to a premium to reflect a risk's variation from the average risk. The experience modification is determined by comparing actual losses to expected losses, using the risk's own past experience.

(c)  "Leased employee" means a person performing services for a lessee under an employee leasing arrangement.

(d)  "Lessee" means an entity which obtains all or part of its workforce from another entity through an employee leasing arrangement or which employs the services of an entity through an employee leasing arrangement.

(e)  "Lessor" means an employee leasing company, as set forth in part XI of chapter 468, engaged in the business of or holding itself out as being in the business of employee leasing. A lessor may also be referred to as an employee leasing company.

(f)  "Premium subject to dispute" means that the insured has provided a written notice of dispute to the insurer or service carrier, has initiated any applicable proceeding for resolving such disputes as prescribed by law or rating organization procedures approved by the office, or has initiated litigation regarding the premium dispute. The insured must have detailed the specific areas of dispute and provided an estimate of the premium the insured believes to be correct. The insured must have paid any undisputed portion of the bill.

(3)  A lessor that obtains coverage in the voluntary workers' compensation market may elect, with the voluntary market insurer's knowledge and consent, to secure the coverage on leased employees through a workers' compensation policy issued to the lessor. The insurer of the lessor may, in its discretion, take all reasonable steps to ascertain exposure under the policy and collect the appropriate premium by:

(a)  Requiring the lessor to provide a complete description of lessor's operations.

(b)  Requiring periodic reporting by the lessor of covered lessees' payroll, classifications, claims information, loss data, and jurisdictions with exposure. This reporting may be supplemented by a requirement for lessees to submit to the carrier Internal Revenue Service Form 941 or its equivalent on a quarterly basis.

(c)  Auditing the lessor's operations.

(d)  Using other reasonable measures to determine the appropriate premium.

(4)  A lessor that applies for coverage or is covered through the voluntary market shall also maintain and furnish to the insurer on an annual basis, and as the insurer may otherwise reasonably require, sufficient information to permit the calculation of an experience modification factor for each lessee upon termination of the employee leasing relationship. Information accruing during the term of the leasing arrangement which is used to calculate an experience modification factor for a lessee upon termination of the leasing relationship shall continue to be used in the future experience ratings of the lessor. Such information shall include:

(a)  The lessee's corporate name.

(b)  The lessee's taxpayer or employer identification number.

(c)  Payroll summaries and class codes applicable to each lessee, and, if requested by the insurer, a listing of all leased employees associated with a given lessee.

(d)  Claims information grouped by lessee, and any other information maintained by or readily available to the lessor that is necessary for the calculation of an experience modification factor for each lessee.

(5)  In addition to any other provision of law, any material violation of this section by an employee leasing company is grounds for cancellation or nonrenewal of the lessor's insurance policy provided that the employee leasing company has been provided a reasonable opportunity to cure the violation. If an employee leasing company has received notice that its workers' compensation insurance policy will be canceled or nonrenewed, the leasing company shall notify by certified mail, within 15 days after receipt of the notice, all of the lessees for which there is an employee leasing arrangement covered under the policy to be canceled, except notice is not required if the employee leasing company has obtained another insurance policy with an effective date that is the same as the date of cancellation or nonrenewal.

(6)  If the employee leasing arrangement with a lessee is terminated, the lessee shall be assigned an experience modification factor which reflects its experience during the experience period specified by the approved experience rating plan, including, if applicable, experience incurred for leased employees under the employee leasing arrangements. The employee leasing company shall notify the insurer of its intent to terminate any lessee relationship prior to termination when feasible. When prior notice is not feasible, the employee leasing company shall notify its insurer within 5 working days following actual termination.

(7)  This section shall not have any effect on the statutory obligation, if any, of a lessee to secure workers' compensation coverage for employees that the lessee does not coemploy or lease pursuant to an employee leasing arrangement.

(8)  A lessee shall not enter into an employee leasing relationship or be eligible for workers' compensation coverage in the voluntary market if the lessee owes its current or a prior insurer any premium for workers' compensation insurance, or if the lessee owes its current or prior employee leasing company amounts due under the service agreement, except for premium or amounts due that are subject to dispute. For the purposes of this section and compliance with other laws and regulations, a lessor may rely on a sworn statement by the lessee that the lessee has met any and all prior premium or fee obligations, unless the lessor has actual knowledge to the contrary.

(9)  Insurers shall conduct annual audits of payroll and classifications of employee leasing companies in order to ensure that the appropriate premium is charged for workers' compensation coverage. The audits shall be conducted to ensure that all sources of payment by lessors to employees, subcontractors, and independent contractors have been reviewed and the accuracy of classifications of employees has been verified. Insurers may provide for more frequent audits of lessors based on such factors as amount of premium, type of business, loss ratios, or other relevant factors. Payroll and classification verification audit rules of insurers must include, but need not be limited to, use by the insurer of state and federal reports of employee income, payroll and other accounting records, certificates of insurance maintained by subcontractors, and duties of employees.

(10)  If a lessor or a lessee fails to provide reasonable access to payroll and classification records for a payroll and classification audit, the insured shall pay a premium to the insurer not to exceed three times the most recent estimated annual premium. However, the lessor is not subject to such penalty if the failure to obtain the needed records is the direct result of the acts or omissions of the lessee.

History.--s. 95, ch. 98-199; s. 95, ch. 2002-1; s. 1086, ch. 2003-261.

627.211  Deviations; workers' compensation and employer's liability insurances.--

(1)  Every member or subscriber to a rating organization shall, as to workers' compensation or employer's liability insurance, adhere to the filings made on its behalf by such organization; except that any such insurer may make written application to the office for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance, for a class of insurance which is found by the office to be a proper rating unit for the application of such uniform percentage decrease or increase, or for a subdivision of workers' compensation or employer's liability insurance:

(a)  Comprised of a group of manual classifications which is treated as a separate unit for ratemaking purposes; or

(b)  For which separate expense provisions are included in the filings of the rating organization.

Such application shall specify the basis for the modification and shall be accompanied by the data upon which the applicant relies. A copy of the application and data shall be sent simultaneously to the rating organization.

(2)  Every member or subscriber to a rating organization may, as to workers' compensation and employer's liability insurance, file a plan or plans to use deviations that vary according to factors present in each insured's individual risk. The insurer that files for the deviations provided in this subsection shall file the qualifications for the plans, schedules of rating factors, and the maximum deviation factors which shall be subject to the approval of the office pursuant to s. 627.091. The actual deviation which shall be used for each insured that qualifies under this subsection may not exceed the maximum filed deviation under that plan and shall be based on the merits of each insured's individual risk as determined by using schedules of rating factors which shall be applied uniformly. Insurers shall maintain statistical data in accordance with the schedule of rating factors. Such data shall be available to support the continued use of such varying deviations.

(3)  In considering an application for the deviation, the office shall give consideration to the applicable principles for ratemaking as set forth in ss. 627.062 and 627.072 and the financial condition of the insurer. In evaluating the financial condition of the insurer, the office may consider: (1) the insurer's audited financial statements and whether the statements provide unqualified opinions or contain significant qualifications or "subject to" provisions; (2) any independent or other actuarial certification of loss reserves; (3) whether workers' compensation and employer's liability reserves are above the midpoint or best estimate of the actuary's reserve range estimate; (4) the adequacy of the proposed rate; (5) historical experience demonstrating the profitability of the insurer; (6) the existence of excess or other reinsurance that contains a sufficiently low attachment point and maximums that provide adequate protection to the insurer; and (7) other factors considered relevant to the financial condition of the insurer by the office. The office shall approve the deviation if it finds it to be justified, it would not endanger the financial condition of the insurer, and it would not constitute predatory pricing. The office shall disapprove the deviation if it finds that the resulting premiums would be excessive, inadequate, or unfairly discriminatory, would endanger the financial condition of the insurer, or would result in predatory pricing. The insurer may not use a deviation unless the deviation is specifically approved by the office. An insurer may apply the premiums approved pursuant to s. 627.091 or its uniform deviation approved pursuant to this section to a particular insured according to underwriting guidelines filed with and approved by the office, such approval to be based on ss. 627.062 and 627.072.

(4)  Each deviation permitted to be filed shall be effective for a period of 1 year unless terminated, extended, or modified with the approval of the office. If at any time after a deviation has been approved the office finds that the deviation no longer meets the requirements of this code, it shall notify the insurer in what respects it finds that the deviation fails to meet such requirements and specify when, within a reasonable period thereafter, the deviation shall be deemed no longer effective. The notice shall not affect any insurance contract or policy made or issued prior to the expiration of the period set forth in the notice.

(5)  For purposes of this section, the office, when considering the experience of any insurer, shall consider the experience of any predecessor insurer when the business and the liabilities of the predecessor insurer were assumed by the insurer pursuant to an order of the office which approves the assumption of the business and the liabilities.

(6)  The office shall submit an annual report to the President of the Senate and the Speaker of the House of Representatives by January 1 of each year which evaluates competition in the workers' compensation insurance market in this state. The report must contain an analysis of the availability and affordability of workers' compensation coverage and whether the current market structure, conduct, and performance are conducive to competition, based upon economic analysis and tests. The purpose of this report is to aid the Legislature in determining whether changes to the workers' compensation rating laws are warranted. The report must also document that the office has complied with the provisions of s. 627.096 which require the office to investigate and study all workers' compensation insurers in the state and to study the data, statistics, schedules, or other information as it finds necessary to assist in its review of workers' compensation rate filings.

History.--s. 431, ch. 59-205; s. 12, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 103, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 6, 9, 10, ch. 87-124; s. 17, ch. 90-249; s. 7, ch. 90-366; s. 4, ch. 91-429; s. 1, ch. 96-405; s. 96, ch. 2002-1; s. 1087, ch. 2003-261; s. 3, ch. 2004-82.

627.212  Workplace safety program surcharge.--The office shall approve a rating plan for workers' compensation coverage insurance that provides for carriers voluntarily to impose a surcharge of no more than 10 percent on the premium of a policyholder or fund member if that policyholder or fund member has been identified by the department as having been required to implement a safety program and having failed to establish or maintain, either in whole or in part, a safety program. The department shall adopt rules prescribing the criteria for the employee safety programs.

History.--s. 97, ch. 93-415; s. 12, ch. 99-240; s. 1088, ch. 2003-261.

627.215  Excessive profits for workers' compensation, employer's liability, commercial property, and commercial casualty insurance prohibited.--

(1)(a)  Each insurer group writing workers' compensation and employer's liability insurance as defined in s. 624.605(1)(c), commercial property insurance as defined in s. 627.0625, commercial umbrella liability insurance as defined in s. 627.0625, or commercial casualty insurance as defined in s. 627.0625 shall file with the office prior to July 1 of each year, on a form prescribed by the commission, the following data for the component types of such insurance as provided in the form:

1.  Calendar-year earned premium.

2.  Accident-year incurred losses and loss adjustment expenses.

3.  The administrative and selling expenses incurred in this state or allocated to this state for the calendar year.

4.  Policyholder dividends applicable to the calendar year.

Nothing herein is intended to prohibit an insurer from filing on a calendar-year basis.

(b)  The data filed for the group shall be a consolidation of the data of the individual insurers of the group. However, an insurer may elect to either consolidate commercial umbrella liability insurance data with commercial casualty insurance data or to separately file data for commercial umbrella liability insurance. Each insurer shall elect its method of filing commercial umbrella liability insurance at the time of filing data for accident year 1987 and shall thereafter continue filing under the same method. In the case of commercial umbrella liability insurance data reported separately, a separate excessive profits test shall be applied and the test period shall be 10 years. In the case of workers' compensation and employer's liability insurance, the final report for the test period including accident years 1984, 1985, and 1986 must be filed prior to July 1, 1988. In the case of commercial property and commercial casualty insurance, the final report for the test period including accident years 1987, 1988, and 1989 must be filed prior to July 1, 1991.

(2)  Each insurer group writing workers' compensation and employer's liability insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year to be reported, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of three evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1984, so that the reporting of 3 accident years under this revised evaluation will not take place until accident years 1985 and 1986 have become available. For reporting purposes unrelated to determining excessive profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.

(3)(a)  Each insurer group writing commercial property insurance or commercial casualty insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 3 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at two 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 3 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before July 1, 1989, and the reporting of 3 accident years will not take place until accident years 1988 and 1989 have become available. For medical malpractice insurance, the first year to be so reported shall be accident year 1990, which shall first be reported on or before July 1, 1992, and the reporting of 3 accident years for full inclusion of medical malpractice experience in commercial casualty insurance will not take place until accident years 1991 and 1992 become available. Accordingly, no medical malpractice insured shall be eligible for refunds or credits until the reporting period ending with calendar-accident year 1992. For reporting purposes unrelated to determining excess profits, the loss and loss adjustment experience of each accident year shall continue to be reported until each accident year has been reported at eight stages of development.

(b)  Each insurer group writing commercial umbrella liability insurance which elects to file separate data for such insurance shall also file a schedule of Florida loss and loss adjustment experience for each of the 10 years previous to the most recent accident year. The incurred losses and loss adjustment expenses shall be valued as of December 31 of the first year following the latest accident year, developed to an ultimate basis, and at nine 12-month intervals thereafter, each developed to an ultimate basis, so that a total of 10 evaluations will be provided for each accident year. The first year to be so reported shall be accident year 1987, which shall first be reported on or before October 1, 1989, and the reporting of 10 accident years will not take place until accident year 1996 data is reported.

(4)  Each insurer group's underwriting gain or loss for each calendar-accident year shall be computed as follows: The sum of the accident-year incurred losses and loss adjustment expenses as of December 31 of the year, developed to an ultimate basis, plus the administrative and selling expenses incurred in the calendar year, plus policyholder dividends applicable to the calendar year, shall be subtracted from the calendar-year earned premium to determine the underwriting gain or loss.

(5)  For the 3 most recent calendar-accident years for which data is to be filed under this section, the underwriting gain or loss shall be compared to the anticipated underwriting profit, except in the case of separately reported commercial umbrella liability insurance for which such comparison shall be made for the 10 most recent calendar-accident years.

(6)  For those insurer groups writing workers' compensation and employer's liability insurance during the years 1984, 1985, 1986, 1987, and 1988, an excessive profit has been realized if underwriting gain is greater than the anticipated underwriting profit plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. Any excess profit of an insurance company offering workers' compensation or employer's liability insurance during this period of time, shall be returned to policyholders in the form of a cash refund or a credit toward future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the workers' compensation policyholders of record of the insurer group on December 31 of the final compilation year.

(7)(a)  Beginning with the July 1, 1991, report for workers' compensation insurance, employer's liability insurance, commercial property insurance, and commercial casualty insurance, an excessive profit has been realized if the net aggregate underwriting gain for all these lines combined is greater than the net aggregate anticipated underwriting profit for these lines plus 5 percent of earned premiums for the 3 most recent calendar years for which data is to be filed under this section. For calculation purposes commercial property insurance and commercial casualty insurance shall be broken down into sublines in order to ascertain the anticipated underwriting profit factor versus the actual underwriting gain for the given subline.

(b)  Beginning with the July 1, 1998, report for commercial umbrella liability insurance, if an insurer has elected to file data separately for such insurance, an excessive profit has been realized if the underwriting gain for such insurance is greater than the anticipated underwriting profit for such insurance plus 5 percent of earned premiums for the 10 most recent calendar years for which data is to be filed under this section.

(8)  As used in this section with respect to any 3-year period, or with respect to any 10-year period in the case of commercial umbrella liability insurance, "anticipated underwriting profit" means the sum of the dollar amounts obtained by multiplying, for each rate filing of the insurer group in effect during such period, the earned premiums applicable to such rate filing during such period by the percentage factor included in such rate filing for profit and contingencies, such percentage factor having been determined with due recognition to investment income from funds generated by Florida business, except that the anticipated underwriting profit for the purposes of this section shall be calculated using a profit and contingencies factor that is not less than zero. Separate calculations need not be made for consecutive rate filings containing the same percentage factor for profits and contingencies.

(9)  If the insurer group has realized an excessive profit, the office shall order a return of the excessive amounts after affording the insurer group an opportunity for hearing and otherwise complying with the requirements of chapter 120. Such excessive amounts shall be refunded in all instances unless the insurer group affirmatively demonstrates to the office that the refund of the excessive amounts will render a member of the insurer group financially impaired or will render it insolvent under the provisions of the Florida Insurance Code.

(10)  Any excess profit of an insurance company as determined on July 1, 1991, and thereafter shall be returned to policyholders in the form of a cash refund or a credit toward the future purchase of insurance. The excessive amount shall be refunded on a pro rata basis in relation to the final compilation year earned premiums to the policyholders of record of the insurer group on December 31 of the final compilation year.

(11)(a)  Cash refunds to policyholders may be rounded to the nearest dollar.

(b)  Data in required reports to the office may be rounded to the nearest dollar.

(c)  Rounding, if elected by the insurer, shall be applied consistently.

(12)(a)  Refunds shall be completed in one of the following ways:

1.  If the insurer group elects to make a cash refund, the refund shall be completed within 60 days of entry of a final order indicating that excessive profits have been realized.

2.  If the insurer group elects to make refunds in the form of a credit to renewal policies, such credits shall be applied to policy renewal premium notices which are forwarded to insureds more than 60 calendar days after entry of a final order indicating that excessive profits have been realized. If an insurer group has made this election but an insured thereafter cancels her or his policy or otherwise allows the policy to terminate, the insurer group shall make a cash refund not later than 60 days after termination of such coverage.

(b)  Upon completion of the renewal credits or refund payments, the insurer group shall immediately certify to the office that the refunds have been made.

(13)  Any refund or renewal credit made pursuant to this section shall be treated as a policyholder dividend applicable to the year immediately succeeding the compilation period giving rise to the refund or credit, for purposes of reporting under this section for subsequent years.

(14)  The application of this law to commercial property and commercial casualty insurance, which includes commercial umbrella liability insurance, ceases on January 1, 1997.

History.--s. 104, ch. 79-40; ss. 21, 22, ch. 80-236; s. 425, ch. 81-259; s. 2, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 7, 9, 10, ch. 87-124; s. 3, ch. 88-390; s. 2, ch. 89-225; s. 8, ch. 90-249; ss. 1, 3, ch. 90-366; s. 4, ch. 91-429; s. 15, ch. 95-276; s. 319, ch. 97-102; ss. 1, 2, ch. 97-292; s. 6, ch. 2000-333; s. 1089, ch. 2003-261.

627.221  Rating organizations; licensing; fee.--

(1)  A person, whether located within or outside this state, may make application to the office for a license as a rating organization. As to property or inland marine insurance, the application shall be for such kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof as are specified in the application. As to casualty and surety insurances, the application shall be for such kinds of insurance or subdivisions thereof as are specified in the application. The applicant shall file with its application:

(a)  A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules, and regulations governing the conduct of its business;

(b)  A list of its members and subscribers;

(c)  The name and address of a resident of this state upon whom notices or orders of the office or process affecting such rating organization may be served; and

(d)  A statement of its qualifications as a rating organization.

If the office finds that the applicant is competent, trustworthy, and otherwise qualified to act as a rating organization and that its constitution, articles of agreement or association or certificate of incorporation, and its bylaws, rules, and regulations governing the conduct of its business conform to the requirements of law, it shall issue a license specifying (in the case of a casualty or surety rating organization) the kinds of insurance or subdivisions thereof, or (in the case of a property insurance rating organization) the kinds of insurance or subdivisions thereof or classes of risk or a part or combination thereof, for which the applicant is authorized to act as a rating organization.

(2)  Licenses issued pursuant to this section shall expire on the September 30 next following date of issuance and shall be subject to annual renewal.

(3)  The fee for the license shall be in the amount specified therefor in s. 624.501. This fee, when collected, shall be deposited to the credit of the Insurance Regulatory Trust Fund.

History.--s. 432, ch. 59-205; s. 17, ch. 65-269; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 346, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1090, ch. 2003-261.

627.231  Subscribers to rating organizations.--

(1)  Subject to rules and regulations which have been approved by the office as reasonable, each rating organization shall permit any insurer, not a member, to subscribe to its rating services. As to property and marine rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance, subdivision thereof, or class of risk or a part or combination thereof for which the rating organization is authorized so to act. As to casualty and surety rating organizations, an insurer shall be so permitted to subscribe to rating services for any kind of insurance or subdivision thereof for which the rating organization is authorized so to act. The rating organization shall give notice to subscribers of proposed changes in such rules and regulations.

(2)  The reasonableness of any rule or regulation in its application to subscribers, or the refusal of any rating organization to admit an insurer as a subscriber, shall, at the request of any subscriber or any such insurer, be reviewed by the office. If the office finds that such rule or regulation is unreasonable in its application to subscribers, it shall order that such rule or regulation shall not be applicable to subscribers. If the rating organization fails to grant or reject an insurer's application for subscribership within 30 days after it was made, the insurer may request a review by the office as if the application had been rejected. If the office finds that the insurer has been refused admittance to the rating organization as a subscriber without justification, it shall order the rating organization to admit the insurer as a subscriber. If it finds that the action of the rating organization was justified, it shall make an order affirming its action.

(3)  Each rating organization shall furnish its rating services without discrimination to its members and subscribers.

History.--s. 433, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1091, ch. 2003-261.

627.241  Notice of changes.--Every rating organization shall notify the office promptly of every change in:

(1)  Its constitution, its articles of agreement or association, or its certificate of incorporation, and its bylaws, rules and regulations governing the conduct of its business;

(2)  Its list of members and subscribers; and

(3)  The name and address of the resident of this state designated by it upon whom notices or orders of the office or process affecting such rating organization may be served.

History.--s. 434, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1092, ch. 2003-261.

627.251  Bureau rules not to affect dividends.--No rating organization shall adopt any rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.

History.--s. 435, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.261  Actuarial and technical services.--Any rating organization may subscribe for or purchase actuarial, technical, or other services; and such services shall be available to all members and subscribers without discrimination.

History.--s. 436, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318.

627.281  Appeal from rating organization; workers' compensation and employer's liability insurance filings.--

(1)  Any member or subscriber to a rating organization may appeal to the office from the action or decision of such rating organization in approving or rejecting any proposed change in or addition to the workers' compensation or employer's liability insurance filings of such rating organization, and the office shall issue an order approving the decision of such rating organization or directing it to give further consideration to such proposal. If such appeal is from the action or decision of the rating organization in rejecting a proposed addition to its filings, the office may, in the event it finds that such action or decision was unreasonable, issue an order directing the rating organization to make an addition to its filings, on behalf of its members and subscribers, in a manner consistent with its findings, within a reasonable time after the issuance of such order.

(2)  If such appeal is based upon the failure of the rating organization to make a filing on behalf of such member or subscriber which is based on a system of expense provisions which differs, in accordance with the right granted in s. 627.072(2), from the system of expense provisions included in a filing made by the rating organization, the office shall, if it grants the appeal, order the rating organization to make the requested filing for use by the appellant. In deciding such appeal, the office shall apply the applicable standards set forth in ss. 627.062 and 627.072.

History.--s. 438, ch. 59-205; s. 13, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 105, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 1093, ch. 2003-261.

627.285  Independent actuarial peer review of workers' compensation rating organization.--The Financial Services Commission shall at least once every other year contract for an independent actuarial peer review and analysis of the ratemaking processes of any licensed rating organization that makes rate filings for workers' compensation insurance, and the rating organization shall fully cooperate in the peer review. The contract shall require submission of a final report to the commission, the President of the Senate, and the Speaker of the House of Representatives by February 1. The first report shall be submitted by February 1, 2004. The costs of the independent actuarial peer review shall be paid from the Workers' Compensation Administration Trust Fund.

History.--s. 34, ch. 2003-412.

627.291  Information to be furnished insureds; appeal by insureds; workers' compensation and employer's liability insurances.--

(1)  As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall, within a reasonable time after receiving written request therefor and upon payment of such reasonable charge as it may make, furnish to any insured affected by a rate made by it, or to the authorized representative of such insured, all pertinent information as to such rate.

(2)  As to workers' compensation and employer's liability insurances, every rating organization and every insurer which makes its own rates shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard, in person or by his or her authorized representative, on his or her written request to review the manner in which such rating system has been applied in connection with the insurance afforded him or her. If the rating organization or insurer fails to grant or rejects such request within 30 days after it is made, the applicant may proceed in the same manner as if his or her application had been rejected. Any party affected by the action of such rating organization or insurer on such request may, within 30 days after written notice of such action, appeal to the office, which may affirm or reverse such action.

History.--s. 439, ch. 59-205; s. 14, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 106, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 806, ch. 82-243; s. 49, ch. 82-386; ss. 9, 10, ch. 87-124; s. 4, ch. 91-429; s. 320, ch. 97-102; s. 1094, ch. 2003-261.

627.301  Advisory organizations.--

(1)  No advisory organization shall conduct its operations in this state unless and until it has filed with the office:

(a)  A copy of its constitution, articles of incorporation, articles of agreement or of association, and bylaws or rules and regulations governing its activities, all duly certified by the custodian of the originals thereof;

(b)  A list of its members and subscribers; and

(c)  The name and address of a resident of this state upon whom notices or orders of the office or process may be served.

(2)  Every such advisory organization shall notify the office promptly of every change in:

(a)  Its constitution;

(b)  Its articles of incorporation, agreement, or association;

(c)  Its bylaws, rules and regulations governing the conduct of its business;

(d)  The list of members and subscribers; and

(e)  The name and address of the resident of this state designated by it upon whom notices or orders of the office or process affecting such organization may be served.

(3)  No such advisory organization shall engage in any unfair or unreasonable practice with respect to such activities.

History.--s. 440, ch. 59-205; s. 15, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1095, ch. 2003-261.

¹627.311  Joint underwriters and joint reinsurers; public records and public meetings exemptions.--

(1)  Every group, association, or other organization of insurers which engages in joint underwritings or joint reinsurance shall be subject to regulation with respect thereto as herein provided, subject, however, with respect to joint underwriting, to all other provisions of this chapter and, with respect to joint reinsurance, to ss. 624.15 and 624.3161.

(2)  If the office finds that any activity or practice of any such group, association, or other organization is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, it may issue a written order specifying in what respects such activity or practice is unfair or unreasonable or otherwise inconsistent with the provisions of this chapter, and requiring the discontinuance of such activity or practice.

(3)  The office may, after consultation with insurers licensed to write automobile insurance in this state, approve a joint underwriting plan for purposes of equitable apportionment or sharing among insurers of automobile liability insurance and other motor vehicle insurance, as an alternate to the plan required in s. 627.351(1). All insurers authorized to write automobile insurance in this state shall subscribe to the plan and participate therein. The plan shall be subject to continuous review by the office which may at any time disapprove the entire plan or any part thereof if it determines that conditions have changed since prior approval and that in view of the purposes of the plan changes are warranted. Any disapproval by the office shall be subject to the provisions of chapter 120. The Florida Automobile Joint Underwriting Association is created under the plan. The plan and the association:

(a)  Must be subject to all provisions of s. 627.351(1), except apportionment of applicants.

(b)  May provide for one or more designated insurers, able and willing to provide policy and claims service, to act on behalf of all other insurers to provide insurance for applicants who are in good faith entitled to, but unable to, procure insurance through the voluntary insurance market at standard rates.

(c)  Must provide that designated insurers will issue policies of insurance and provide policyholder and claims service on behalf of all insurers for the joint underwriting association.

(d)  Must provide for the equitable apportionment among insurers of losses and expenses incurred.

(e)  Must provide that the joint underwriting association will operate subject to the supervision and approval of a board of governors consisting of 11 individuals, including 1 who will be elected as chair. Five members of the board must be appointed by the Chief Financial Officer. Two of the Chief Financial Officer's appointees must be chosen from the insurance industry. Any board member appointed by the Chief Financial Officer may be removed and replaced by her or him at any time without cause. Six members of the board must be appointed by the participating insurers, two of whom must be from the insurance agents' associations. All board members, including the chair, must be appointed to serve for 2-year terms beginning annually on a date designated by the plan.

(f)  Must provide that an agent appointed to a servicing carrier must be a licensed general lines agent of an insurer which is authorized to write automobile liability and physical damage insurance in the state and which is actively writing such coverage in the county in which the agent is located, or the immediately adjoining counties, or an agent who places a volume of other property and casualty insurance in an amount equal to the premium volume placed with the Florida Joint Underwriting Association. The office may, however, determine that an agent may be appointed to a servicing carrier if, after public hearing, the office finds that consumers in the agent's operating area would not have adequate and reasonable access to the purchase of automobile insurance if the agent were not appointed to a servicing carrier.

(g)  Must make available noncancelable coverage as provided in s. 627.7275(2).

(h)  Must provide for the furnishing of a list of insureds and their mailing addresses upon the request of a member of the association or an insurance agent licensed to place business with an association member. The list must indicate whether the insured is currently receiving a good driver discount from the association. The plan may charge a reasonable fee to cover the cost incurred in providing the list.

(i)  Must not provide a renewal credit or discount or any other inducement designed to retain a risk.

(j)  Must not provide any other good driver credit or discount that is not actuarially sound. In addition to other criteria that the plan may specify, to be eligible for a good driver credit, an insured must not have any criminal traffic violations within the most recent 36-month period preceding the date the discount is received.

(k)1.  Shall have no liability, and no cause of action of any nature shall arise against any member insurer or its agents or employees, agents or employees of the association, members of the board of governors of the association, the Chief Financial Officer, or the office or its representatives for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for or arising out of breach of any contract or agreement pertaining to insurance, or any willful tort.

2.  Notwithstanding the requirements of s. 624.155(3)(a), as a condition precedent to bringing an action against the plan under s. 624.155, the department and the plan must have been given 90 days' written notice of the violation. If the department returns a notice for lack of specificity, the 90-day time period shall not begin until a proper notice is filed. This notice must comply with the information requirements of s. 624.155(3)(b). Effective October 1, 2007, this subparagraph shall expire unless reenacted by the Legislature prior to that date.

(l)  May require from the insured proof that he or she has obtained the mandatory types and amounts of insurance from another admitted carrier prior to the cancellation of a policy the insured obtained from the plan and prior to the return of any unearned premium the insured paid for such coverage from the plan. This paragraph does not apply to any person who provides proof of sale or inoperability of the vehicle covered under the policy purchased from the plan or relocation outside the state.

(4)  The Florida Automobile Joint Underwriting Association:

(a)  Shall keep the following records confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution:

1.  Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.

2.  Claims files, until termination of all litigation and settlement of all claims arising out of the same incident. Confidential and exempt claims files may be released to other governmental agencies in the furtherance of their duties and responsibilities. The receiving agency must maintain the confidential and exempt status of the claims files.

3.  Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed or, if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered "active" while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.

4.  Proprietary information licensed to the association under contract when the contract provides for the confidentiality of such information.

5.  All information relating to the medical condition or medical status of an association employee which is not relevant to that employee's capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is confidential and exempt shall include, but is not limited to, information relating to workers' compensation, insurance benefits, and retirement or disability benefits.

6.  All records relating to an employee's participation in an employee assistance program designed to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee's job performance, except as otherwise provided in s. 112.0455(11).

7.  Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.

8.  Minutes of closed meetings regarding confidential and exempt underwriting files or confidential and exempt claims files until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise made confidential or exempt by law must be redacted.

When an authorized insurer is considering underwriting a risk insured by the association, relevant confidential and exempt underwriting files and confidential and exempt claims files may be released to the insurer, provided the insurer agrees in writing, notarized and under oath, to maintain the confidential and exempt status of such files. When a file is transferred to an insurer, that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. The association may make the following information obtained from confidential and exempt underwriting files and confidential and exempt claims files available to licensed general lines insurance agents: name, address, and telephone number of the automobile owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must maintain the confidential and exempt status of the information received.

(b)  Shall keep portions of association meetings during which confidential and exempt underwriting files or confidential and exempt claims files are discussed exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution. All closed portions of association meetings shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions of this paragraph and s. 119.07(1)(b)-(d), the court reporter's notes of any closed meeting shall be retained by the association for a minimum of 5 years. A copy of the transcript, less any confidential and exempt information, of any closed meeting during which confidential and exempt claims files are discussed shall become public as to individual claims files after settlement of that claim.

(5)(a)  The office shall, after consultation with insurers, approve a joint underwriting plan of insurers which shall operate as a nonprofit entity. For the purposes of this subsection, the term "insurer" includes group self-insurance funds authorized by s. 624.4621, commercial self-insurance funds authorized by s. 624.462, assessable mutual insurers authorized under s. 628.6011, and insurers licensed to write workers' compensation and employer's liability insurance in this state. The purpose of the plan is to provide workers' compensation and employer's liability insurance to applicants who are required by law to maintain workers' compensation and employer's liability insurance and who are in good faith entitled to but who are unable to procure such insurance through the voluntary market. Except as provided herein, the plan must have actuarially sound rates that ensure that the plan is self-supporting.

²(b)  The operation of the plan is subject to the supervision of a 9-member board of governors. The board of governors shall be comprised of:

1.  Three members appointed by the Financial Services Commission. Each member appointed by the commission shall serve at the pleasure of the commission;

2.  Two of the 20 domestic insurers, as defined in s. 624.06(1), having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 domestic insurers;

3.  Two of the 20 foreign insurers as defined in s. 624.06(2) having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 foreign insurers;

4.  One person appointed by the largest property and casualty insurance agents' association in this state; and

5.  The consumer advocate appointed under s. 627.0613 or the consumer advocate's designee.

Each board member shall serve a 4-year term and may serve consecutive terms. A vacancy on the board shall be filled in the same manner as the original appointment for the unexpired portion of the term. The Financial Services Commission shall designate a member of the board to serve as chair. No board member shall be an insurer which provides services to the plan or which has an affiliate which provides services to the plan or which is serviced by a service company or third-party administrator which provides services to the plan or which has an affiliate which provides services to the plan. The minutes, audits, and procedures of the board of governors are subject to chapter 119.

(c)  The operation of the plan shall be governed by a plan of operation that is prepared at the direction of the board of governors. The plan of operation may be changed at any time by the board of governors or upon request of the office. The plan of operation and all changes thereto are subject to the approval of the office. The plan of operation shall:

1.  Authorize the board to engage in the activities necessary to implement this subsection, including, but not limited to, borrowing money.

2.  Develop criteria for eligibility for coverage by the plan, including, but not limited to, documented rejection by at least two insurers which reasonably assures that insureds covered under the plan are unable to acquire coverage in the voluntary market.

3.  Require notice from the agent to the insured at the time of the application for coverage that the application is for coverage with the plan and that coverage may be available through an insurer, group self-insurers' fund, commercial self-insurance fund, or assessable mutual insurer through another agent at a lower cost.

4.  Establish programs to encourage insurers to provide coverage to applicants of the plan in the voluntary market and to insureds of the plan, including, but not limited to:

a.  Establishing procedures for an insurer to use in notifying the plan of the insurer's desire to provide coverage to applicants to the plan or existing insureds of the plan and in describing the types of risks in which the insurer is interested. The description of the desired risks must be on a form developed by the plan.

b.  Developing forms and procedures that provide an insurer with the information necessary to determine whether the insurer wants to write particular applicants to the plan or insureds of the plan.

c.  Developing procedures for notice to the plan and the applicant to the plan or insured of the plan that an insurer will insure the applicant or the insured of the plan, and notice of the cost of the coverage offered; and developing procedures for the selection of an insuring entity by the applicant or insured of the plan.

d.  Provide for a market-assistance plan to assist in the placement of employers. All applications for coverage in the plan received 45 days before the effective date for coverage shall be processed through the market-assistance plan. A market-assistance plan specifically designed to serve the needs of small, good policyholders as defined by the board must be finalized by January 1, 1994.

5.  Provide for policy and claims services to the insureds of the plan of the nature and quality provided for insureds in the voluntary market.

6.  Provide for the review of applications for coverage with the plan for reasonableness and accuracy, using any available historic information regarding the insured.

7.  Provide for procedures for auditing insureds of the plan which are based on reasonable business judgment and are designed to maximize the likelihood that the plan will collect the appropriate premiums.

8.  Authorize the plan to terminate the coverage of and refuse future coverage for any insured that submits a fraudulent application to the plan or provides fraudulent or grossly erroneous records to the plan or to any service provider of the plan in conjunction with the activities of the plan.

9.  Establish service standards for agents who submit business to the plan.

10.  Establish criteria and procedures to prohibit any agent who does not adhere to the established service standards from placing business with the plan or receiving, directly or indirectly, any commissions for business placed with the plan.

11.  Provide for the establishment of reasonable safety programs for all insureds in the plan. All insureds of the plan must participate in the safety program.

12.  Authorize the plan to terminate the coverage of and refuse future coverage to any insured who fails to pay premiums or surcharges when due; who, at the time of application, is delinquent in payments of workers' compensation or employer's liability insurance premiums or surcharges owed to an insurer, group self-insurers' fund, commercial self-insurance fund, or assessable mutual insurer licensed to write such coverage in this state; or who refuses to substantially comply with any safety programs recommended by the plan.

13.  Authorize the board of governors to provide the services required by the plan through staff employed by the plan, through reasonably compensated service providers who contract with the plan to provide services as specified by the board of governors, or through a combination of employees and service providers.

14.  Provide for service standards for service providers, methods of determining adherence to those service standards, incentives and disincentives for service, and procedures for terminating contracts for service providers that fail to adhere to service standards.

15.  Provide procedures for selecting service providers and standards for qualification as a service provider that reasonably assure that any service provider selected will continue to operate as an ongoing concern and is capable of providing the specified services in the manner required.

16.  Provide for reasonable accounting and data-reporting practices.

17.  Provide for annual review of costs associated with the administration and servicing of the policies issued by the plan to determine alternatives by which costs can be reduced.

18.  Authorize the acquisition of such excess insurance or reinsurance as is consistent with the purposes of the plan.

19.  Provide for an annual report to the office on a date specified by the office and containing such information as the office reasonably requires.

20.  Establish multiple rating plans for various classifications of risk which reflect risk of loss, hazard grade, actual losses, size of premium, and compliance with loss control. At least one of such plans must be a preferred-rating plan to accommodate small-premium policyholders with good experience as defined in sub-subparagraph 22.a.

21.  Establish agent commission schedules.

22.  For employers otherwise eligible for coverage under the plan, establish three tiers of employers meeting the criteria and subject to the rate limitations specified in this subparagraph.

a.  Tier One.--

(I)  Criteria; rated employers.--An employer that has an experience modification rating shall be included in Tier One if the employer meets all of the following:

(A)  The experience modification is below 1.00.

(B)  The employer had no lost-time claims subsequent to the applicable experience modification rating period.

(C)  The total of the employer's medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.

(II)  Criteria; non-rated employers.--An employer that does not have an experience modification rating shall be included in Tier One if the employer meets all of the following:

(A)  The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan.

(B)  The total of the employer's medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan did not exceed 20 percent of premium.

(C)  The employer has secured workers' compensation coverage for the entire 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan.

(D)  The employer is able to provide the plan with a loss history generated by the employer's prior workers' compensation insurer, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer's agent, a copy of the employer's loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer's insurance agent setting forth the loss history.

(E)  The employer is not a new business.

(III)  Premiums.--The premiums for Tier One insureds shall be set at a premium level 25 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier One, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.

b.  Tier Two.--

(I)  Criteria; rated employers.--An employer that has an experience modification rating shall be included in Tier Two if the employer meets all of the following:

(A)  The experience modification is equal to or greater than 1.00 but not greater than 1.10.

(B)  The employer had no lost-time claims subsequent to the applicable experience modification rating period.

(C)  The total of the employer's medical-only claims subsequent to the applicable experience modification rating period did not exceed 20 percent of premium.

(II)  Criteria; non-rated employers.--An employer that does not have any experience modification rating shall be included in Tier Two if the employer is a new business. An employer shall be included in Tier Two if the employer has less than 3 years of loss experience in the 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan and the employer meets all of the following:

(A)  The employer had no lost-time claims for the 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan.

(B)  The total of the employer's medical-only claims for the 3-year period immediately preceding the inception date or renewal date of the employer's coverage under the plan did not exceed 20 percent of premium.

(C)  The employer is able to provide the plan with a loss history generated by the workers' compensation insurer that provided coverage for the portion or portions of such period during which the employer had secured workers' compensation coverage, except if the employer is not able to produce a loss history due to the insolvency of an insurer, the receiver shall provide to the plan, upon the request of the employer or the employer's agent, a copy of the employer's loss history from the records of the insolvent insurer if the loss history is contained in records of the insurer which are in the possession of the receiver. If the receiver is unable to produce the loss history, the employer may, in lieu of the loss history, submit an affidavit from the employer and the employer's insurance agent setting forth the loss history.

(III)  Premiums.--The premiums for Tier Two insureds shall be set at a rate level 50 percent above the comparable voluntary market premiums until the plan has sufficient experience as determined by the board to establish an actuarially sound rate for Tier Two, at which point the board shall, subject to paragraph (e), adjust the rates, if necessary, to produce actuarially sound rates, provided such rate adjustment shall not take effect prior to January 1, 2007.

c.  Tier Three.--

(I)  Eligibility.--An employer shall be included in Tier Three if the employer does not meet the criteria for Tier One or Tier Two.

(II)  Rates.--The board shall establish, subject to paragraph (e), and the plan shall charge, actuarially sound rates for Tier Three insureds.

23.  For Tier One or Tier Two employers which employ no nonexempt employees or which report payroll which is less than the minimum wage hourly rate for one full-time employee for 1 year at 40 hours per week, the plan shall establish actuarially sound premiums, provided, however, that the premiums may not exceed $2,500. These premiums shall be in addition to the fee specified in subparagraph 26. When the plan establishes actuarially sound rates for all employers in Tier One and Tier Two, the premiums for employers referred to in this paragraph are no longer subject to the $2,500 cap.

24.  Provide for a depopulation program to reduce the number of insureds in the plan. If an employer insured through the plan is offered coverage from a voluntary market carrier:

a.  During the first 30 days of coverage under the plan;

b.  Before a policy is issued under the plan;

c.  By issuance of a policy upon expiration or cancellation of the policy under the plan; or

d.  By assumption of the plan's obligation with respect to an in-force policy,

that employer is no longer eligible for coverage through the plan. The premium for risks assumed by the voluntary market carrier must be no greater than the premium the insured would have paid under the plan, and shall be adjusted upon renewal to reflect changes in the plan rates and the tier for which the insured would qualify as of the time of renewal. The insured may be charged such premiums only for the first 3 years of coverage in the voluntary market. A premium under this subparagraph is deemed approved and is not an excess premium for purposes of s. 627.171.

25.  Require that policies issued and applications must include a notice that the policy could be replaced by a policy issued from a voluntary market carrier and that, if an offer of coverage is obtained from a voluntary market carrier, the policyholder is no longer eligible for coverage through the plan. The notice must also specify that acceptance of coverage under the plan creates a conclusive presumption that the applicant or policyholder is aware of this potential.

26.  Require that each application for coverage and each renewal premium be accompanied by a nonrefundable fee of $475 to cover costs of administration and fraud prevention. The board may, with the approval of the office, increase the amount of the fee pursuant to a rate filing to reflect increased costs of administration and fraud prevention. The fee is not subject to commission and is fully earned upon commencement of coverage.

(d)1.  The funding of the plan shall include premiums as provided in subparagraph (c)22. and assessments as provided in this paragraph.

2.a.  If the board determines that a deficit exists in Tier One or Tier Two or that there is any deficit remaining attributable to any of the plan's former subplans and that the deficit cannot be funded without the use of deficit assessments, the board shall request the office to levy, by order, a deficit assessment against premiums charged to insureds for workers' compensation insurance by insurers as defined in s. 631.904(5). The office shall issue the order after verifying the amount of the deficit. The assessment shall be specified as a percentage of future premium collections, as recommended by the board and approved by the office. The same percentage shall apply to premiums on all workers' compensation policies issued or renewed during the 12-month period beginning on the effective date of the assessment, as specified in the order.

b.  With respect to each insurer collecting premiums that are subject to the assessment, the insurer shall collect the assessment at the same time as the insurer collects the premium payment for each policy and shall remit the assessments collected to the plan as provided in the order issued by the office. The office shall verify the accurate and timely collection and remittance of deficit assessments and shall report such information to the board. Each insurer collecting assessments shall provide such information with respect to premiums and collections as may be required by the office to enable the office to monitor and audit compliance with this paragraph.

c.  Deficit assessments are not considered part of an insurer's rate, are not premium, and are not subject to the premium tax, to the assessments under ss. 440.49 and 440.51, to the surplus lines tax, to any fees, or to any commissions. The deficit assessment imposed shall become plan funds at the moment of collection and shall not constitute income to the insurer for any purpose, including financial reporting on the insurer's income statement. An insurer is liable for all assessments that the insurer collects and must treat the failure of an insured to pay an assessment as a failure to pay premium. An insurer is not liable for uncollectible assessments.

d.  When an insurer is required to return unearned premium, the insurer shall also return any collected assessments attributable to the unearned premium.

e.  Deficit assessments as described in this subparagraph shall not be levied after July 1, 2007.

3.a.  All policies issued to Tier Three insureds shall be assessable. All Tier Three assessable policies must be clearly identified as assessable by containing, in contrasting color and in not less than 10-point type, the following statement:

"This is an assessable policy. If the plan is unable to pay its obligations, policyholders will be required to contribute on a pro rata earned premium basis the money necessary to meet any assessment levied."

b.  The board may from time to time assess Tier Three insureds to whom the plan has issued assessable policies for the purpose of funding plan deficits. Any such assessment shall be based upon a reasonable actuarial estimate of the amount of the deficit, taking into account the amount needed to fund medical and indemnity reserves and reserves for incurred but not reported claims, and allowing for general administrative expenses, the cost of levying and collecting the assessment, a reasonable allowance for estimated uncollectible assessments, and allocated and unallocated loss adjustment expenses.

c.  Each Tier Three insured's share of a deficit shall be computed by applying to the premium earned on the insured's policy or policies during the period to be covered by the assessment the ratio of the total deficit to the total premiums earned during such period upon all policies subject to the assessment. If one or more Tier Three insureds fail to pay an assessment, the other Tier Three insureds shall be liable on a proportionate basis for additional assessments to fund the deficit. The plan may compromise and settle individual assessment claims without affecting the validity of or amounts due on assessments levied against other insureds. The plan may offer and accept discounted payments for assessments which are promptly paid. The plan may offset the amount of any unpaid assessment against unearned premiums which may otherwise be due to an insured. The plan shall institute legal action when necessary and appropriate to collect the assessment from any insured who fails to pay an assessment when due.

d.  The venue of a proceeding to enforce or collect an assessment or to contest the validity or amount of an assessment shall be in the Circuit Court of Leon County.

e.  If the board finds that a deficit in Tier Three exists for any period and that an assessment is necessary, the board shall certify to the office the need for an assessment. No sooner than 30 days after the date of such certification, the board shall notify in writing each insured who is to be assessed that an assessment is being levied against the insured, and informing the insured of the amount of the assessment, the period for which the assessment is being levied, and the date by which payment of the assessment is due. The board shall establish a date by which payment of the assessment is due, which shall be no sooner than 30 days nor later than 120 days after the date on which notice of the assessment is mailed to the insured.

f.  Whenever the board makes a determination that the plan does not have a sufficient cash basis to meet 3 months of projected cash needs due to a deficit in Tier Three, the board may request the department to transfer funds from the Workers' Compensation Administration Trust Fund to the plan in an amount sufficient to fund the difference between the amount available and the amount needed to meet a 3-month projected cash need as determined by the board and verified by the office, subject to the approval of the Legislative Budget Commission. If the Legislative Budget Commission approves a transfer of funds under this sub-subparagraph, the plan shall report to the Legislature the transfer of funds and the Legislature shall review the plan during the next legislative session or the current legislative session, if the transfer occurs during a legislative session. This sub-subparagraph shall not apply until the plan determines and the office verifies that assessments collected by the plan pursuant to sub-subparagraph b. are insufficient to fund the deficit in Tier Three and to meet 3 months of projected cash needs.

4.  The plan may offer rating, dividend plans, and other plans to encourage loss prevention programs.

(e)  The plan shall establish and use its rates and rating plans, and the plan may establish and use changes in rating plans at any time, but no more frequently than two times per any rating class for any calendar year. By December 1, 1993, and December 1 of each year thereafter, except as provided in subparagraph (c)22., the board shall establish and use actuarially sound rates for use by the plan to assure that the plan is self-funding while those rates are in effect. Such rates and rating plans must be filed with the office within 30 calendar days after their effective dates, and shall be considered a "use and file" filing. Any disapproval by the office must have an effective date that is at least 60 days from the date of disapproval of the rates and rating plan and must have prospective effect only. The plan may not be subject to any order by the office to return to policyholders any portion of the rates disapproved by the office. The office may not disapprove any rates or rating plans unless it demonstrates that such rates and rating plans are excessive, inadequate, or unfairly discriminatory.

(f)  No later than June 1 of each year, the plan shall obtain an independent actuarial certification of the results of the operations of the plan for prior years, and shall furnish a copy of the certification to the office. If, after the effective date of the plan, the projected ultimate incurred losses and expenses and dividends for prior years exceed collected premiums, accrued net investment income, and prior assessments for prior years, the certification is subject to review and approval by the office before it becomes final.

(g)  Whenever a deficit exists, the plan shall, within 90 days, provide the office with a program to eliminate the deficit within a reasonable time. The deficit may be funded through increased premiums charged to insureds of the plan for subsequent years, through the use of policyholder surplus attributable to any year, through the use of assessments as provided in subparagraph (d)2., and through assessments on assessable policies as provided in subparagraph (d)3.

(h)  Any premium or assessments collected by the plan in excess of the amount necessary to fund projected ultimate incurred losses and expenses of the plan and not paid to insureds of the plan in conjunction with loss prevention or dividend programs shall be retained by the plan for future use.

(i)  The decisions of the board of governors do not constitute final agency action and are not subject to chapter 120.

(j)  Policies for insureds shall be issued by the plan.

(k)  The plan created under this subsection is liable only for payment for losses arising under policies issued by the plan with dates of accidents occurring on or after January 1, 1994.

(l)  Plan losses are the sole and exclusive responsibility of the plan, and payment for such losses must be funded in accordance with this subsection and must not come, directly or indirectly, from insurers or any guaranty association for such insurers.

(m)  Each joint underwriting plan or association created under this section is not a state agency, board, or commission. However, for the purposes of s. 199.183(1) only, the joint underwriting plan is a political subdivision of the state and is exempt from the corporate income tax.

(n)  Each joint underwriting plan or association may elect to pay premium taxes on the premiums received on its behalf or may elect to have the member insurers to whom the premiums are allocated pay the premium taxes if the member insurer had written the policy. The joint underwriting plan or association shall notify the member insurers and the Department of Revenue by January 15 of each year of its election for the same year. As used in this paragraph, the term "premiums received" means the consideration for insurance, by whatever name called, but does not include any policy assessment or surcharge received by the joint underwriting association as a result of apportioning losses or deficits of the association pursuant to this section.

(o)  Neither the plan nor any member of the board of governors is liable for monetary damages to any person for any statement, vote, decision, or failure to act, regarding the management or policies of the plan, unless:

1.  The member breached or failed to perform her or his duties as a member; and

2.  The member's breach of, or failure to perform, duties constitutes:

a.  A violation of the criminal law, unless the member had reasonable cause to believe her or his conduct was not unlawful. A judgment or other final adjudication against a member in any criminal proceeding for violation of the criminal law estops that member from contesting the fact that her or his breach, or failure to perform, constitutes a violation of the criminal law; but does not estop the member from establishing that she or he had reasonable cause to believe that her or his conduct was lawful or had no reasonable cause to believe that her or his conduct was unlawful;

b.  A transaction from which the member derived an improper personal benefit, either directly or indirectly; or

c.  Recklessness or any act or omission that was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property. For purposes of this sub-subparagraph, the term "recklessness" means the acting, or omission to act, in conscious disregard of a risk:

(I)  Known, or so obvious that it should have been known, to the member; and

(II)  Known to the member, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such act or omission.

(p)  No insurer shall provide workers' compensation and employer's liability insurance to any person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan or to any person who is an affiliated person of a person who is delinquent in the payment of premiums, assessments, penalties, or surcharges owed to the plan. For purposes of this paragraph, the term "affiliated person" of another person means:

1.  The spouse of such other natural person;

2.  Any person who directly or indirectly owns or controls, or holds with the power to vote, 5 percent or more of the outstanding voting securities of such other person;

3.  Any person who directly or indirectly owns 5 percent or more of the outstanding voting securities that are directly or indirectly owned or controlled, or held with the power to vote, by such other person;

4.  Any person or group of persons who directly or indirectly control, are controlled by, or are under common control with such other person;

5.  Any officer, director, trustee, partner, owner, manager, joint venturer, or employee, or other person performing duties similar to persons in those positions, of such other persons; or

6.  Any person who has an officer, director, trustee, partner, or joint venturer in common with such other person.

(q)  Effective July 1, 2004, the plan is exempt from the premium tax under s. 624.509 and any assessments under ss. 440.49 and 440.51.

(6)  As used in this section and ss. 215.555 and 627.351, the term "collateral protection insurance" means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor's failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.

(7)(a)  The Florida Automobile Joint Underwriting Association created under this section shall be deemed to have appointed its general manager as its agent to receive service of all legal process issued against the association in any civil action or proceeding in this state. Process so served shall be valid and binding upon the insurer.

(b)  Service of process upon the association's general manager as the association's agent pursuant to such an appointment shall be the sole method of service of process upon the association.

History.--s. 441, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 74-51; s. 3, ch. 76-168; s. 16, ch. 77-290; s. 1, ch. 77-457; s. 21, ch. 78-95; s. 107, ch. 79-40; ss. 1, 2, 4, ch. 79-394; s. 238, ch. 79-400; ss. 1, 2, ch. 80-360; ss. 1, 2, ch. 80-362; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 34, ch. 89-289; s. 4, ch. 91-106; s. 64, ch. 91-108; ss. 25, 114, ch. 92-318; s. 98, ch. 93-415; s. 7, ch. 97-93; s. 321, ch. 97-102; s. 4, ch. 97-214; s. 3, ch. 98-173; s. 1, ch. 98-315; s. 66, ch. 99-5; s. 1, ch. 99-237; s. 13, ch. 99-240; s. 8, ch. 2000-150; s. 35, ch. 2001-91; s. 97, ch. 2002-1; s. 1, ch. 2003-108; s. 1, ch. 2003-169; s. 1096, ch. 2003-261; s. 35, ch. 2003-412; s. 1, ch. 2004-266; s. 46, ch. 2004-335; s. 11, ch. 2004-370; s. 156, ch. 2004-390.

¹Note.--Section 2, ch. 2004-266, provides that:

"Notwithstanding the provisions of ss. 440.50 and 440.51, Florida Statutes, subject to the following procedures and approval, the Department of Financial Services may request transfer funds from the Workers' Compensation Administration Trust Fund within the Department of Financial Services to the workers' compensation joint underwriting plan provided in s. 627.311(5), Florida Statutes.

"(1)  The department shall establish a contingency reserve within the Workers' Compensation Administration Trust Fund, from which the department is authorized to expend funds as provided in the subsection, in an amount not to exceed $15 million to be released only upon the approval of a budget amendment presented to the Legislative Budget Commission. For actuarial deficits projected for policyholders, based on actuarial best estimates, covered in subplan "D" prior to July 1, 2004, and upon verification by the Office of Insurance Regulation, the plan is authorized to request and the department is authorized to submit a budget amendment in an amount not to exceed $15 million for the purpose of funding deficits in subplan "D".

"(2)  After the contingency reserve is established, whenever the board determines subplan "D" does not have a sufficient cash basis to meet 3 months of projected cash needs due to any deficit in subplan "D," the board is authorized to request the department to transfer funds from the contingency reserve fund within the Workers' Compensation Administration Trust Fund to the plan in an amount sufficient to fund the difference between the amount available and the amount needed to meet subplan "D"'s projected cash need for the subsequent 3-month period. The board and the office must first certify to the Department of Financial Services that there is not sufficient cash within subplan "D" to meet the projected cash needs in subplan "D" within the subsequent 3 months. The amount requested for transfer to subplan "D" may not exceed the difference between the amount available within subplan "D" and the amount needed to meet subplan "D"'s projected cash need for the subsequent 3-month period, as jointly certified by the board and the Office of Insurance Regulation to the Department of Financial Services, attributable to the former subplan "D" policyholders. The Department of Financial Services may submit a budget amendment to request release of funds from the Workers' Compensation Administration Trust Fund, subject to the approval of the Legislative Budget Commission. The board will provide, for review of the Legislative Budget Commission, information on the reasonableness of the plan's administration, including, but not limited to, the plan of operations and costs, claims costs, claims administration costs, overhead costs, claims reserves, and the latest report submitted on administration cost reduction alternatives as required in s. 627.311(5)(c)17., Florida Statutes.

"(3)  This section expires July 1, 2007."

²Note.--

A.  As amended by s. 35, ch. 2003-412, passed in 2003 Special Session A. Paragraph (4)(b), redesignated as paragraph (5)(b) by s. 1, ch. 2003-108, was also amended by s. 1096, ch. 2003-261, passed in the 2003 Regular Session, and that version reads:

(b)  The operation of the plan is subject to the supervision of a 13-member board of governors. The board of governors shall be comprised of:

1.  Five of the 20 domestic insurers, as defined in s. 624.06(1), having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 domestic insurers;

2.  Five of the 20 foreign insurers as defined in s. 624.06(2) having the largest voluntary direct premiums written in this state for workers' compensation and employer's liability insurance, which shall be elected by those 20 foreign insurers;

3.  One person, who shall serve as the chair, appointed by the Chief Financial Officer;

4.  One person appointed by the largest property and casualty insurance agents' association in this state; and

5.  The consumer advocate appointed under s. 627.0613 or the consumer advocate's designee.


Each board member shall serve a 4-year term and may serve consecutive terms. No board member shall be an insurer which provides service to the plan or which has an affiliate which provides services to the plan or which is serviced by a service company or third-party administrator which provides services to the plan or which has an affiliate which provides services to the plan. The minutes, audits, and procedures of the board of governors are subject to chapter 119.

B.  Section 49, ch. 2003-412, provides that "[i]f any law amended by this act was also amended by a law enacted at the 2003 Regular Session of the Legislature, such laws shall be construed as if they had been enacted at the same session of the Legislature, and full effect shall be given to each if possible."

627.312  Transitional provisions.--Effective upon this act becoming a law:

(1)  Notwithstanding s. 627.311(5), no policy in subplan "D" of the Florida Workers' Compensation Joint Underwriting Association is subject to an assessment for the purpose of funding a deficit.

(2)  Any policy issued by the Florida Workers' Compensation Joint Underwriting Association with an effective date between the date on which this act becomes a law and June 30, 2004, shall be rerated and placed in the appropriate tier provided in s. 627.311(5), as amended, effective July 1, 2004, and shall be subject to the premiums and charges provided for in that section as amended.

History.--s. 6, ch. 2004-266.

627.313  Workers' Compensation Joint Underwriting Plan; audit requirements.--The Workers' Compensation Joint Underwriting Association is subject to the Florida Single Audit Act, as provided in s. 215.97, if the association expends a total amount of state financial assistance equal to or in excess of $300,000 in any fiscal year. Such audit reports shall be submitted to the President of the Senate, the Speaker of the House of Representatives, and the Governor pursuant to s. 215.97.

History.--s. 4, ch. 2004-266.

627.314  Concerted action by two or more insurers.--

(1)  Subject to and in compliance with the provisions of this part authorizing insurers to be members or subscribers of rating or advisory organizations or to engage in joint underwriting or joint reinsurance, two or more insurers may act in concert with each other and with others with respect to any matters pertaining to:

(a)  The making of rates or rating systems except for private passenger automobile insurance rates;

(b)  The preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations;

(c)  The furnishing of loss or expense statistics or other information and data; or

(d)  The carrying on of research.

(2)  With respect to any matters pertaining to the making of rates or rating systems; the preparation or making of insurance policy or bond forms, underwriting rules, surveys, inspections, and investigations; the furnishing of loss or expense statistics or other information and data; or the carrying on of research, two or more authorized insurers having a common ownership or operating in the state under common management or control are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer. To the extent that such matters relate to cosurety bonds, two or more authorized insurers executing such bonds are hereby authorized to act in concert between or among themselves the same as if they constituted a single insurer.

(3)(a)  Members and subscribers of rating or advisory organizations may use the rates, rating systems, underwriting rules, or policy or bond forms of such organizations, either consistently or intermittently; but, except as provided in subsection (2) and ss. 627.311 and 627.351, they shall not agree with each other or rating organizations or others to adhere thereto.

(b)  The fact that two or more authorized insurers, whether or not members or subscribers of a rating or advisory organization, use, either consistently or intermittently, the rates or rating systems made or adopted by a rating organization or the underwriting rules or policy or bond forms prepared by a rating or advisory organization shall not be sufficient in itself to support a finding that an agreement to so adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.

(c)  This subsection does not apply as to workers' compensation and employer's liability insurances.

(4)  Licensed rating organizations and authorized insurers are authorized to exchange information and experience data with rating organizations and insurers in this and other states and may consult with them with respect to ratemaking and the application of rating systems.

(5)  Upon compliance with the provisions of this part applicable thereto, any rating organization or advisory organization, and any group, association, or other organization of authorized insurers which engages in joint underwriting or joint reinsurance through such organization or by standing agreement among the members thereof, may conduct operations in this state. As respects insurance risks or operations in this state, no insurer shall be a member or subscriber of any such organization, group, or association that has not complied with the provisions of this part applicable to it.

(6)  Notwithstanding any other provisions of this part, insurers shall not participate directly or indirectly in the deliberations or decisions of rating organizations on private passenger automobile insurance. However, such rating organizations shall, upon request of individual insurers, be required to furnish at reasonable cost the rate indications resulting from the loss and expense statistics gathered by them. Individual insurers may modify the indications to reflect their individual experience in determining their own rates. Such rates shall be filed with the office for public inspection whenever requested and shall be available for public announcement only by the press, office, or insurer.

History.--s. 16, ch. 67-9; s. 1, ch. 70-320; s. 1, ch. 71-6(B); s. 3, ch. 76-168; s. 1, ch. 77-457; s. 108, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1098, ch. 2003-261.

627.318  Records.--Every insurer, rating organization, and advisory organization and every group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance shall maintain reasonable records, of the type and kind reasonably adapted to its method of operation, of its experience or the experience of its members and of the data, statistics, or information collected or used by it in connection with the rates, rating plans, rating systems, underwriting rules, policy or bond forms, surveys, or inspections made or used by it, so that such records will be available at all reasonable times to enable the office to determine whether such organization, insurer, group, or association, and, in the case of an insurer or rating organization, every rate, rating plan, and rating system made or used by it, complies with the provisions of this part applicable to it. The maintenance of such records in the office of a licensed rating organization of which an insurer is a member or subscriber will be sufficient compliance with this section for any such insurer maintaining membership or subscribership in such organization, to the extent that the insurer uses the rates, rating plans, rating systems, or underwriting rules of such organization. Such records shall be maintained in an office within this state or shall be made available for examination or inspection within this state by the department at any time upon reasonable notice.

History.--s. 17, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 348, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1099, ch. 2003-261.

627.331  Recording and reporting of loss, expense, and claims experience; rating information.--

(1)  The commission may promulgate rules and statistical plans which shall thereafter be used by each insurer in the recording and reporting of its loss, expense, and claims experience, in order that the experience of all insurers may be made available at least annually in such form and detail as may be necessary to aid the office in determining whether the insurer's activities comply with the applicable standards of this code.

(2)  In promulgating such rules and plans, the commission shall give due consideration to the rating systems in use in this state and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states. No insurer shall be required to record or report its loss experience on a classification basis that is inconsistent with the rating system used by it, except for motor vehicle insurance as otherwise provided by law.

(3)  The office may designate one or more rating organizations or other agencies to assist it in gathering such experience and making compilations thereof; and such compilations shall be made available, subject to reasonable rules adopted by the commission, to insurers and rating organizations.

History.--s. 443, ch. 59-205; s. 19, ch. 67-9; ss. 13, 35, ch. 69-106; s. 1, ch. 70-75; s. 1, ch. 70-321; s. 1, ch. 70-439; s. 1, ch. 73-153; s. 1, ch. 74-320; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 27, ch. 77-468; ss. 2, 3, ch. 81-318; ss. 350, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 10, ch. 83-288; s. 1, ch. 84-352; s. 12, ch. 86-160; s. 22, ch. 89-360; s. 1, ch. 89-528; ss. 11, 35, ch. 90-119; s. 114, ch. 92-318; s. 1100, ch. 2003-261.

627.351  Insurance risk apportionment plans.--

(1)  MOTOR VEHICLE INSURANCE RISK APPORTIONMENT.--Agreements may be made among casualty and surety insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the approval of the office. The office shall, after consultation with the insurers licensed to write automobile liability insurance in this state, adopt a reasonable plan or plans for the equitable apportionment among such insurers of applicants for such insurance who are in good faith entitled to, but are unable to, procure such insurance through ordinary methods, and, when such plan has been adopted, all such insurers shall subscribe thereto and shall participate therein. Such plan or plans shall include rules for classification of risks and rates therefor. The plan or plans shall make available noncancelable coverage as provided in s. 627.7275(2). Any insured placed with the plan shall be notified of the fact that insurance coverage is being afforded through the plan and not through the private market, and such notification shall be given in writing within 10 days of such placement. To assure that plan rates are made adequate to pay claims and expenses, insurers shall develop a means of obtaining loss and expense experience at least annually, and the plan shall file such experience, when available, with the office in sufficient detail to make a determination of rate adequacy. Prior to the filing of such experience with the office, the plan shall poll each member insurer as to the need for an actuary who is a member of the Casualty Actuarial Society and who is not affiliated with the plan's statistical agent to certify the plan's rate adequacy. If a majority of those insurers responding indicate a need for such certification, the plan shall include the certification as part of its experience filing. Such experience shall be filed with the office not more than 9 months following the end of the annual statistical period under review, together with a rate filing based on said experience. The office shall initiate proceedings to disapprove the rate and so notify the plan or shall finalize its review within 60 days of receipt of the filing. Notification to the plan by the office of its preliminary findings, which include a point of entry to the plan pursuant to chapter 120, shall toll the 60-day period during any such proceedings and subsequent judicial review. The rate shall be deemed approved if the office does not issue notice to the plan of its preliminary findings within 60 days of the filing. In addition to provisions for claims and expenses, the ratemaking formula shall include a factor for projected claims trending and 5 percent for contingencies. In no instance shall the formula include a renewal discount for plan insureds. However, the plan shall reunderwrite each insured on an annual basis, based upon all applicable rating factors approved by the office. Trend factors shall not be found to be inappropriate if not in excess of trend factors normally used in the development of residual market rates by the appropriate licensed rating organization. Each application for coverage in the plan shall include, in boldfaced 12-point type immediately preceding the applicant's signature, the following statement:

"THIS INSURANCE IS BEING AFFORDED THROUGH THE FLORIDA JOINT UNDERWRITING ASSOCIATION AND NOT THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED THAT COVERAGE WITH A PRIVATE INSURER MAY BE AVAILABLE FROM ANOTHER AGENT AT A LOWER COST. AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE LOCAL YELLOW PAGES."

(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--

(a)  Agreements may be made among property insurers with respect to the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to, but are unable to procure, such insurance through ordinary methods; and such insurers may agree among themselves on the use of reasonable rate modifications for such insurance. Such agreements and rate modifications shall be subject to the applicable provisions of this chapter.

(b)  The department shall require all insurers holding a certificate of authority to transact property insurance on a direct basis in this state, other than joint underwriting associations and other entities formed pursuant to this section, to provide windstorm coverage to applicants from areas determined to be eligible pursuant to paragraph (c) who in good faith are entitled to, but are unable to procure, such coverage through ordinary means; or it shall adopt a reasonable plan or plans for the equitable apportionment or sharing among such insurers of windstorm coverage, which may include formation of an association for this purpose. As used in this subsection, the term "property insurance" means insurance on real or personal property, as defined in s. 624.604, including insurance for fire, industrial fire, allied lines, farmowners multiperil, homeowners' multiperil, commercial multiperil, and mobile homes, and including liability coverages on all such insurance, but excluding inland marine as defined in s. 624.607(3) and excluding vehicle insurance as defined in s. 624.605(1)(a) other than insurance on mobile homes used as permanent dwellings. The department shall adopt rules that provide a formula for the recovery and repayment of any deferred assessments.

1.  For the purpose of this section, properties eligible for such windstorm coverage are defined as dwellings, buildings, and other structures, including mobile homes which are used as dwellings and which are tied down in compliance with mobile home tie-down requirements prescribed by the Department of Highway Safety and Motor Vehicles pursuant to s. 320.8325, and the contents of all such properties. An applicant or policyholder is eligible for coverage only if an offer of coverage cannot be obtained by or for the applicant or policyholder from an admitted insurer at approved rates.

2.a.(I)  All insurers required to be members of such association shall participate in its writings, expenses, and losses. Surplus of the association shall be retained for the payment of claims and shall not be distributed to the member insurers. Such participation by member insurers shall be in the proportion that the net direct premiums of each member insurer written for property insurance in this state during the preceding calendar year bear to the aggregate net direct premiums for property insurance of all member insurers, as reduced by any credits for voluntary writings, in this state during the preceding calendar year. For the purposes of this subsection, the term "net direct premiums" means direct written premiums for property insurance, reduced by premium for liability coverage and for the following if included in allied lines: rain and hail on growing crops; livestock; association direct premiums booked; National Flood Insurance Program direct premiums; and similar deductions specifically authorized by the plan of operation and approved by the department. A member's participation shall begin on the first day of the calendar year following the year in which it is issued a certificate of authority to transact property insurance in the state and shall terminate 1 year after the end of the calendar year during which it no longer holds a certificate of authority to transact property insurance in the state. The commissioner, after review of annual statements, other reports, and any other statistics that the commissioner deems necessary, shall certify to the association the aggregate direct premiums written for property insurance in this state by all member insurers.

(II)  Effective July 1, 2002, the association shall operate subject to the supervision and approval of a board of governors who are the same individuals that have been appointed by the Treasurer to serve on the board of governors of the Citizens Property Insurance Corporation.

(III)  The plan of operation shall provide a formula whereby a company voluntarily providing windstorm coverage in affected areas will be relieved wholly or partially from apportionment of a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

(IV)  A company which is a member of a group of companies under common management may elect to have its credits applied on a group basis, and any company or group may elect to have its credits applied to any other company or group.

(V)  There shall be no credits or relief from apportionment to a company for emergency assessments collected from its policyholders under sub-sub-subparagraph d.(III).

(VI)  The plan of operation may also provide for the award of credits, for a period not to exceed 3 years, from a regular assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II) as an incentive for taking policies out of the Residential Property and Casualty Joint Underwriting Association. In order to qualify for the exemption under this sub-sub-subparagraph, the take-out plan must provide that at least 40 percent of the policies removed from the Residential Property and Casualty Joint Underwriting Association cover risks located in Dade, Broward, and Palm Beach Counties or at least 30 percent of the policies so removed cover risks located in Dade, Broward, and Palm Beach Counties and an additional 50 percent of the policies so removed cover risks located in other coastal counties, and must also provide that no more than 15 percent of the policies so removed may exclude windstorm coverage. With the approval of the department, the association may waive these geographic criteria for a take-out plan that removes at least the lesser of 100,000 Residential Property and Casualty Joint Underwriting Association policies or 15 percent of the total number of Residential Property and Casualty Joint Underwriting Association policies, provided the governing board of the Residential Property and Casualty Joint Underwriting Association certifies that the take-out plan will materially reduce the Residential Property and Casualty Joint Underwriting Association's 100-year probable maximum loss from hurricanes. With the approval of the department, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies removed from the Residential Property and Casualty Joint Underwriting Association.

b.  Assessments to pay deficits in the association under this subparagraph shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.

c.  The Legislature finds that the potential for unlimited deficit assessments under this subparagraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for paying regular assessments and collecting emergency assessments for any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.

d.(I)  When the deficit incurred in a particular calendar year is 10 percent or less of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the deficit.

(II)  When the deficit incurred in a particular calendar year exceeds 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for all member insurers, the association shall levy an assessment on member insurers in an amount equal to the greater of 10 percent of the deficit or 10 percent of the aggregate statewide direct written premium for property insurance for the prior calendar year for member insurers. Any remaining deficit shall be recovered through emergency assessments under sub-sub-subparagraph (III).

(III)  Upon a determination by the board of directors that a deficit exceeds the amount that will be recovered through regular assessments on member insurers, pursuant to sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the board shall levy, after verification by the department, emergency assessments to be collected by member insurers and by underwriting associations created pursuant to this section which write property insurance, upon issuance or renewal of property insurance policies other than National Flood Insurance policies in the year or years following levy of the regular assessments. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year's direct written premium for property insurance for all member insurers and underwriting associations, excluding National Flood Insurance policy premiums, as annually determined by the board and verified by the department. The department shall verify the arithmetic calculations involved in the board's determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, each member insurer and each underwriting association created pursuant to this section shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. The emergency assessments so collected shall be transferred directly to the association on a periodic basis as determined by the association. The aggregate amount of emergency assessments levied under this sub-sub-subparagraph in any calendar year may not exceed the greater of 10 percent of the amount needed to cover the original deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for property insurance written by member insurers and underwriting associations for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit. The board may pledge the proceeds of the emergency assessments under this sub-sub-subparagraph as the source of revenue for bonds, to retire any other debt incurred as a result of the deficit or events giving rise to the deficit, or in any other way that the board determines will efficiently recover the deficit. The emergency assessments under this sub-sub-subparagraph shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the document governing such bonds or other indebtedness. Emergency assessments collected under this sub-sub-subparagraph are not part of an insurer's rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium.

(IV)  Each member insurer's share of the total regular assessments under sub-sub-subparagraph (I) or sub-sub-subparagraph (II) shall be in the proportion that the insurer's net direct premium for property insurance in this state, for the year preceding the assessment bears to the aggregate statewide net direct premium for property insurance of all member insurers, as reduced by any credits for voluntary writings for that year.

(V)  If regular deficit assessments are made under sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by the Residential Property and Casualty Joint Underwriting Association under sub-subparagraph (6)(b)3.a. or sub-subparagraph (6)(b)3.b., the association shall levy upon the association's policyholders, as part of its next rate filing, or by a separate rate filing solely for this purpose, a market equalization surcharge in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for property insurance for member insurers for the prior calendar year. Market equalization surcharges under this sub-sub-subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes; however, failure to pay a market equalization surcharge shall be treated as failure to pay premium.

e.  The governing body of any unit of local government, any residents of which are insured under the plan, may issue bonds as defined in s. 125.013 or s. 166.101 to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the association, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue bonds as will provide relief to claimants and policyholders of the association and insurers responsible for apportionment of plan losses. Any such unit of local government may enter into such contracts with the association and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this subparagraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the department shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the department determines that the purchase would endanger or impair the solvency of the insurer. The authority granted by this sub-subparagraph is additional to any bonding authority granted by subparagraph 6.

3.  The plan shall also provide that any member with a surplus as to policyholders of $20 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the department, within the first 90 days of each calendar year, to qualify as a limited apportionment company. The apportionment of such a member company in any calendar year for which it is qualified shall not exceed its gross participation, which shall not be affected by the formula for voluntary writings. In no event shall a limited apportionment company be required to participate in any apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds $50 million after payment of available plan funds in any calendar year. However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-sub-subparagraph 2.d.(III). The plan shall provide that, if the department determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the department may direct that all or part of such assessment be deferred. However, there shall be no limitation or deferment of an emergency assessment to be collected from policyholders under sub-sub-subparagraph 2.d.(III).

4.  The plan shall provide for the deferment, in whole or in part, of a regular assessment of a member insurer under sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but not for an emergency assessment collected from policyholders under sub-sub-subparagraph 2.d.(III), if, in the opinion of the commissioner, payment of such regular assessment would endanger or impair the solvency of the member insurer. In the event a regular assessment against a member insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).

5.a.  The plan of operation may include deductibles and rules for classification of risks and rate modifications consistent with the objective of providing and maintaining funds sufficient to pay catastrophe losses.

b.  The association may require arbitration of a rate filing under s. 627.062(6). It is the intent of the Legislature that the rates for coverage provided by the association be actuarially sound and not competitive with approved rates charged in the admitted voluntary market such that the association functions as a residual market mechanism to provide insurance only when the insurance cannot be procured in the voluntary market. The plan of operation shall provide a mechanism to assure that, beginning no later than January 1, 1999, the rates charged by the association for each line of business are reflective of approved rates in the voluntary market for hurricane coverage for each line of business in the various areas eligible for association coverage.

c.  The association shall provide for windstorm coverage on residential properties in limits up to $10 million for commercial lines residential risks and up to $1 million for personal lines residential risks. If coverage with the association is sought for a residential risk valued in excess of these limits, coverage shall be available to the risk up to the replacement cost or actual cash value of the property, at the option of the insured, if coverage for the risk cannot be located in the authorized market. The association must accept a commercial lines residential risk with limits above $10 million or a personal lines residential risk with limits above $1 million if coverage is not available in the authorized market. The association may write coverage above the limits specified in this subparagraph with or without facultative or other reinsurance coverage, as the association determines appropriate.

d.  The plan of operation must provide objective criteria and procedures, approved by the department, to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

(I)  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

(II)  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the association pursuant to such criteria and procedures must be construed as the private placement of insurance, and the provisions of chapter 120 do not apply.

e.  If the risk accepts an offer of coverage through the market assistance program or through a mechanism established by the association, either before the policy is issued by the association or during the first 30 days of coverage by the association, and the producing agent who submitted the application to the association is not currently appointed by the insurer, the insurer shall:

(I)  Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or

(II)  Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the association's usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I). Subject to the provisions of s. 627.3517, the policies issued by the association must provide that if the association obtains an offer from an authorized insurer to cover the risk at its approved rates under either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the department, a basic policy including wind coverage, the risk is no longer eligible for coverage through the association. Upon termination of eligibility, the association shall provide written notice to the policyholder and agent of record stating that the association policy must be canceled as of 60 days after the date of the notice because of the offer of coverage from an authorized insurer. Other provisions of the insurance code relating to cancellation and notice of cancellation do not apply to actions under this sub-subparagraph.

f.  When the association enters into a contractual agreement for a take-out plan, the producing agent of record of the association policy is entitled to retain any unearned commission on the policy, and the insurer shall:

(I)  Pay to the producing agent of record of the association policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the association; or

(II)  Offer to allow the producing agent of record of the association policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the association's usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).

6.a.  The plan of operation may authorize the formation of a private nonprofit corporation, a private nonprofit unincorporated association, a partnership, a trust, a limited liability company, or a nonprofit mutual company which may be empowered, among other things, to borrow money by issuing bonds or by incurring other indebtedness and to accumulate reserves or funds to be used for the payment of insured catastrophe losses. The plan may authorize all actions necessary to facilitate the issuance of bonds, including the pledging of assessments or other revenues.

b.  Any entity created under this subsection, or any entity formed for the purposes of this subsection, may sue and be sued, may borrow money; issue bonds, notes, or debt instruments; pledge or sell assessments, market equalization surcharges and other surcharges, rights, premiums, contractual rights, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, and other assets as security for such bonds, notes, or debt instruments; enter into any contracts or agreements necessary or proper to accomplish such borrowings; and take other actions necessary to carry out the purposes of this subsection. The association may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (6)(g)2., in the absence of a hurricane or other weather-related event, upon a determination by the association subject to approval by the department that such action would enable it to efficiently meet the financial obligations of the association and that such financings are reasonably necessary to effectuate the requirements of this subsection. Any such entity may accumulate reserves and retain surpluses as of the end of any association year to provide for the payment of losses incurred by the association during that year or any future year. The association shall incorporate and continue the plan of operation and articles of agreement in effect on the effective date of chapter 76-96, Laws of Florida, to the extent that it is not inconsistent with chapter 76-96, and as subsequently modified consistent with chapter 76-96. The board of directors and officers currently serving shall continue to serve until their successors are duly qualified as provided under the plan. The assets and obligations of the plan in effect immediately prior to the effective date of chapter 76-96 shall be construed to be the assets and obligations of the successor plan created herein.

c.  In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness issued or incurred by the association or any other entity created under this subsection.

7.  On such coverage, an agent's remuneration shall be that amount of money payable to the agent by the terms of his or her contract with the company with which the business is placed. However, no commission will be paid on that portion of the premium which is in excess of the standard premium of that company.

8.  Subject to approval by the department, the association may establish different eligibility requirements and operational procedures for any line or type of coverage for any specified eligible area or portion of an eligible area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the association. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.

9.  Notwithstanding any other provision of law:

a.  The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the association created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the association shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the association under the laws of this state or any other applicable laws.

b.  No such proceeding shall relieve the association of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or any other rights, revenues, or other assets of the association pledged.

c.  Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, emergency assessments, market equalization or renewal surcharges, projected recoveries from the Florida Hurricane Catastrophe Fund, reinsurance recoverables, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of or after any such proceeding shall continue unaffected by such proceeding.

d.  As used in this subsection, the term "financing documents" means any agreement, instrument, or other document now existing or hereafter created evidencing any bonds or other indebtedness of the association or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the association are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation of the association related to such bonds or indebtedness.

e.  Any such pledge or sale of assessments, revenues, contract rights or other rights or assets of the association shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, contract, or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the association or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, contract, or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.

f.  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, agents or employees of the association, members of the board of directors of the association, or the department or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any willful tort.

(c)  The provisions of paragraph (b) are applicable only with respect to:

1.  Those areas that were eligible for coverage under this subsection on April 9, 1993; or

2.  Any county or area as to which the department, after public hearing, finds that the following criteria exist:

a.  Due to the lack of windstorm insurance coverage in the county or area so affected, economic growth and development is being deterred or otherwise stifled in such county or area, mortgages are in default, and financial institutions are unable to make loans;

b.  The county or area so affected is enforcing the structural requirements of the Florida Building Code, as defined in s. 553.73, for new construction and has included adequate minimum floor elevation requirements for structures in areas subject to inundation; and

c.  Extending windstorm insurance coverage to such county or area is consistent with and will implement and further the policies and objectives set forth in applicable state laws, rules, and regulations governing coastal management, coastal construction, comprehensive planning, beach and shore preservation, barrier island preservation, coastal zone protection, and the Coastal Zone Protection Act of 1985.

The department shall consider reports of the Florida Building Commission when evaluating building code enforcement. Any time after the department has determined that the criteria referred to in this subparagraph do not exist with respect to any county or area of the state, it may, after a subsequent public hearing, declare that such county or area is no longer eligible for windstorm coverage through the plan.

(d)  For the purpose of evaluating whether the criteria of paragraph (c) are met, such criteria shall be applied as the situation would exist if policies had not been written by the Florida Residential Property and Casualty Joint Underwriting Association and property insurance for such policyholders was not available.

(e)1.  Notwithstanding the provisions of subparagraph (c)2. or paragraph (d), eligibility shall not be extended to any area that was not eligible on March 1, 1997, except that the department may act with respect to any petition on which a hearing was held prior to May 9, 1997.

2.  Notwithstanding the provisions of subparagraph 1., the following area is eligible for coverage under this subsection effective July 1, 2002: the area within Port Canaveral which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by United States Government property.

(f)  As used in this subsection, the term "department" means the former Department of Insurance.

(3)  POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK APPORTIONMENT.--

(a)  The office shall, after consultation with the casualty insurers licensed in this state, adopt a plan or plans for the equitable apportionment among them of casualty insurance coverage which may be afforded political subdivisions which are in good faith entitled to, but are unable to, procure such coverage through the voluntary market at standard rates or through a statutorily approved plan authorized by the office. The office may adopt a joint underwriting plan which shall provide for one or more designated insurers able and willing to provide policyholder and claims service, including the issuance of insurance policies, to act on behalf of all other insurers required to participate in the joint underwriting plan. Any joint underwriting plan adopted shall provide for the equitable apportionment of any profits realized, or of losses and expenses incurred, among participating insurers. The plan shall include, but shall not be limited to:

1.  Rules for the classification of risks and rates which reflect the past loss experience and prospective loss experience in different geographic areas.

2.  A rating plan which reasonably reflects the prior claims experience of the insureds.

3.  Excess coverage by insurers if the office, in its discretion, requires such coverage by insurers participating in the joint underwriting plan.

(b)  In the event an underwriting deficit exists at the end of any year the plan is in effect, each policyholder shall pay to the joint underwriting plan a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder for that year. The joint underwriting plan shall pay no further claims on any policy for which the policyholder fails to pay the premium contingency assessment.

(c)  Any deficit sustained under the plan shall first be recovered through a premium contingency assessment. Concurrently, the rates for insureds shall be adjusted for the next year so as to be actuarially sound in conformance with rules adopted by the commission.

(d)  If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the preceding calendar year bear to the aggregate net direct premiums written in this state by all members of the joint underwriting plan.

(e)  Upon adoption of a plan, all casualty insurers licensed in the state shall subscribe thereto and participate therein.

(4)  MEDICAL MALPRACTICE RISK APPORTIONMENT.--

(a)  The office shall, after consultation with insurers as set forth in paragraph (b), adopt a joint underwriting plan as set forth in paragraph (d).

(b)  Entities licensed to issue casualty insurance as defined in s. 624.605(1)(b), (k), and (q) and self-insurers authorized to issue medical malpractice insurance under s. 627.357 shall participate in the plan and shall be members of the Joint Underwriting Association.

(c)  The Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of representatives of five of the insurers participating in the Joint Underwriting Association, an attorney to be named by The Florida Bar, a physician to be named by the Florida Medical Association, a dentist to be named by the Florida Dental Association, and a hospital representative to be named by the Florida Hospital Association. The Chief Financial Officer shall select the representatives of the five insurers. One insurer representative shall be selected from recommendations of the American Insurance Association. One insurer representative shall be selected from recommendations of the Alliance of American Insurers. One insurer representative shall be selected from recommendations of the National Association of Independent Insurers. Two insurer representatives shall be selected to represent insurers that are not affiliated with these associations. The board of governors shall choose, during the first meeting of the board after June 30 of each year, one of its members to serve as chair of the board and another member to serve as vice chair of the board. There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, self-insurer, or its agents or employees, the Joint Underwriting Association or its agents or employees, members of the board of governors, or the office or its representatives for any action taken by them in the performance of their powers and duties under this subsection.

(d)  The plan shall provide coverage for claims arising out of the rendering of, or failure to render, medical care or services and, in the case of health care facilities, coverage for bodily injury or property damage to the person or property of any patient arising out of the insured's activities, in appropriate policy forms for all health care providers as defined in paragraph (h). The plan shall include, but shall not be limited to:

1.  Classifications of risks and rates which reflect past and prospective loss and expense experience in different areas of practice and in different geographical areas. To assure that plan rates are adequate to pay claims and expenses, the Joint Underwriting Association shall develop a means of obtaining loss and expense experience; and the plan shall file such experience, when available, with the office in sufficient detail to make a determination of rate adequacy. Within 60 days after a rate filing, the office shall approve such rates or rate revisions as are fully supported by the filing. In addition to provisions for claims and expenses, the ratemaking formula may include a factor for projected claims trending and a margin for contingencies. The use of trend factors shall not be found to be inappropriate.

2.  A rating plan which reasonably recognizes the prior claims experience of insureds.

3.  Provisions as to rates for:

a.  Insureds who are retired or semiretired.

b.  The estates of deceased insureds.

c.  Part-time professionals.

4.  Protection in an amount not to exceed $250,000 per claim, $750,000 annual aggregate for health care providers other than hospitals and in an amount not to exceed $1.5 million per claim, $5 million annual aggregate for hospitals. Such coverage for health care providers other than hospitals shall be available as primary coverage and as excess coverage for the layer of coverage between the primary coverage and the total limits of $250,000 per claim, $750,000 annual aggregate. The plan shall also provide tail coverage in these amounts to insureds whose claims-made coverage with another insurer or trust has or will be terminated. Such tail coverage shall provide coverage for incidents that occurred during the claims-made policy period for which a claim is made after the policy period.

5.  A risk management program for insureds of the association. This program shall include, but not be limited to: investigation and analysis of frequency, severity, and causes of adverse or untoward medical injuries; development of measures to control these injuries; systematic reporting of medical incidents; investigation and analysis of patient complaints; and auditing of association members to assure implementation of this program. The plan may refuse to insure any insured who refuses or fails to comply with the risk management program implemented by the association. Prior to cancellation or refusal to renew an insured, the association shall provide the insured 60 days' notice of intent to cancel or nonrenew and shall further notify the insured of any action which must be taken to be in compliance with the risk management program.

(e)  In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment of claims in the year the surplus arose shall be used to offset the deficit to the extent available.

1.  As to remaining deficit, except those relating to deficit assessment coverage, each policyholder shall pay to the association a premium contingency assessment not to exceed one-third of the premium payment paid by such policyholder to the association for that policy year. The association shall pay no further claims on any policy for the policyholder who fails to pay the premium contingency assessment.

2.  If there is any remaining deficit under the plan after maximum collection of the premium contingency assessment, such deficit shall be recovered from the companies participating in the plan in the proportion that the net direct premiums of each such member written during the calendar year immediately preceding the end of the policy year for which there is a deficit assessment bear to the aggregate net direct premiums written in this state by all members of the association. The term "premiums" as used herein means premiums for the lines of insurance defined in s. 624.605(1)(b), (k), and (q), including premiums for such coverage issued under package policies.

(f)  The plan shall provide for one or more insurers able and willing to provide policy service through licensed resident agents and claims service on behalf of all other insurers participating in the plan. In the event no insurer is able and willing to provide such services, the Joint Underwriting Association is authorized to perform any and all such services.

(g)  All books, records, documents, or audits relating to the Joint Underwriting Association or its operation shall be open to public inspection, except that a claim file in the possession of the Joint Underwriting Association is confidential and exempt from the provisions of s. 119.07(1) during the processing of that claim. Any information contained in these files that identifies an injured person is confidential and exempt from the provisions of s. 119.07(1).

(h)  As used in this subsection:

1.  "Health care provider" means hospitals licensed under chapter 395; physicians licensed under chapter 458; osteopathic physicians licensed under chapter 459; podiatric physicians licensed under chapter 461; dentists licensed under chapter 466; chiropractic physicians licensed under chapter 460; naturopaths licensed under chapter 462; nurses licensed under part I of chapter 464; midwives licensed under chapter 467; clinical laboratories registered under chapter 483; physician assistants licensed under chapter 458 or chapter 459; physical therapists and physical therapist assistants licensed under chapter 486; health maintenance organizations certificated under part I of chapter 641; ambulatory surgical centers licensed under chapter 395; other medical facilities as defined in subparagraph 2.; blood banks, plasma centers, industrial clinics, and renal dialysis facilities; or professional associations, partnerships, corporations, joint ventures, or other associations for professional activity by health care providers.

2.  "Other medical facility" means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment, to which facility the patient is admitted and from which facility the patient is discharged within the same working day, and which facility is not part of a hospital. However, a facility existing for the primary purpose of performing terminations of pregnancy or an office maintained by a physician or dentist for the practice of medicine shall not be construed to be an "other medical facility."

3.  "Health care facility" means any hospital licensed under chapter 395, health maintenance organization certificated under part I of chapter 641, ambulatory surgical center licensed under chapter 395, or other medical facility as defined in subparagraph 2.

(i)  The manager of the plan or the manager's assistant is the agent for service of process for the plan.

(5)  PROPERTY AND CASUALTY INSURANCE RISK APPORTIONMENT.--The commission shall adopt by rule a joint underwriting plan to equitably apportion among insurers authorized in this state to write property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605, the underwriting of one or more classes of property insurance or casualty insurance, except for the types of insurance that are included within property insurance or casualty insurance for which an equitable apportionment plan, assigned risk plan, or joint underwriting plan is authorized under s. 627.311 or subsection (1), subsection (2), subsection (3), subsection (4), or subsection (5) and except for risks eligible for flood insurance written through the federal flood insurance program to persons with risks eligible under subparagraph (a)1. and who are in good faith entitled to, but are unable to, obtain such property or casualty insurance coverage, including excess coverage, through the voluntary market. For purposes of this subsection, an adequate level of coverage means that coverage which is required by state law or by responsible or prudent business practices. The Joint Underwriting Association shall not be required to provide coverage for any type of risk for which there are no insurers providing similar coverage in this state. The office may designate one or more participating insurers who agree to provide policyholder and claims service, including the issuance of policies, on behalf of the participating insurers.

(a)  The plan shall provide:

1.  A means of establishing eligibility of a risk for obtaining insurance through the plan, which provides that:

a.  A risk shall be eligible for such property insurance or casualty insurance as is required by Florida law if the insurance is unavailable in the voluntary market, including the market assistance program and the surplus lines market.

b.  A commercial risk not eligible under sub-subparagraph a. shall be eligible for property or casualty insurance if:

(I)  The insurance is unavailable in the voluntary market, including the market assistance plan and the surplus lines market;

(II)  Failure to secure the insurance would substantially impair the ability of the entity to conduct its affairs; and

(III)  The risk is not determined by the Risk Underwriting Committee to be uninsurable.

c.  In the event the Federal Government terminates the Federal Crime Insurance Program established under 44 C.F.R. ss. 80-83, Florida commercial and residential risks previously insured under the federal program shall be eligible under the plan.

d.(I)  In the event a risk is eligible under this paragraph and in the event the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less, for a given class of risk contained in the classification system defined in the plan of operation of the Joint Underwriting Association, and unless the market assistance plan provides a quotation for at least 80 percent of such applicants, such classification shall immediately be eligible for coverage in the Joint Underwriting Association.

(II)  Any market assistance plan application which is rejected because an individual risk is so hazardous as to be practically uninsurable, considering whether the likelihood of a loss for such a risk is substantially higher than for other risks of the same class due to individual risk characteristics, prior loss experience, unwillingness to cooperate with a prior insurer, physical characteristics and physical location shall not be included in the minimum percentage calculation provided above. In the event that there is any legal or administrative challenge to a determination by the office that the conditions of this subparagraph have been met for eligibility for coverage in the Joint Underwriting Association for a given classification, any eligible risk may obtain coverage during the pendency of any such challenge.

e.  In order to qualify as a quotation for the purpose of meeting the minimum percentage calculation in this subparagraph, the quoted premium must meet the following criteria:

(I)  In the case of an admitted carrier, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association or the premium developed by using the rates and rating plans on file with the office by the quoting insurer, whichever is greater.

(II)  In the case of an authorized surplus lines insurer, the quoted premium must not exceed the premium available for a given classification currently in use by the Joint Underwriting Association by more than 25 percent, after consideration of any individual risk surcharge or credit.

f.  Any agent who falsely certifies the unavailability of coverage as provided by sub-subparagraphs a. and b., is subject to the penalties provided in s. 626.611.

2.  A means for the equitable apportionment of profits or losses and expenses among participating insurers.

3.  Rules for the classification of risks and rates which reflect the past and prospective loss experience.

4.  A rating plan which reasonably reflects the prior claims experience of the insureds. Such rating plan shall include at least two levels of rates for risks that have favorable loss experience and risks that have unfavorable loss experience, as established by the plan.

5.  Reasonable limits to available amounts of insurance. Such limits may not be less than the amounts of insurance required of eligible risks by Florida law.

6.  Risk management requirements for insurance where such requirements are reasonable and are expected to reduce losses.

7.  Deductibles as may be necessary to meet the needs of insureds.

8.  Policy forms which are consistent with the forms in use by the majority of the insurers providing coverage in the voluntary market for the coverage requested by the applicant.

9.  A means to remove risks from the plan once such risks no longer meet the eligibility requirements of this paragraph. For this purpose, the plan shall include the following requirements: At each 6-month interval after the activation of any class of insureds, the board of governors or its designated committee shall review the number of applications to the market assistance plan for that class. If, based on these latest numbers, at least 90 percent of such applications have been provided a quotation, the Joint Underwriting Association shall cease underwriting new applications for such class within 30 days, and notification of this decision shall be sent to the office, the major agents' associations, and the board of directors of the market assistance plan. A quotation for the purpose of this subparagraph shall meet the same criteria for a quotation as provided in sub-subparagraph 1.e. All policies which were previously written for that class shall continue in force until their normal expiration date, at which time, subject to the required timely notification of nonrenewal by the Joint Underwriting Association, the insured may then elect to reapply to the Joint Underwriting Association according to the requirements of eligibility. If, upon reapplication, those previously insured Joint Underwriting Association risks meet the eligibility requirements, the Joint Underwriting Association shall provide the coverage requested.

10.  A means for providing credits to insurers against any deficit assessment levied pursuant to paragraph (c), for risks voluntarily written through the market assistance plan by such insurers.

11.  That the Joint Underwriting Association shall operate subject to the supervision and approval of a board of governors consisting of 13 individuals appointed by the Chief Financial Officer, and shall have an executive or underwriting committee. At least four of the members shall be representatives of insurance trade associations as follows: one member from the American Insurance Association, one member from the Alliance of American Insurers, one member from the National Association of Independent Insurers, and one member from an unaffiliated insurer writing coverage on a national basis. Two representatives shall be from two of the statewide agents' associations. Each board member shall be appointed to serve for 2-year terms beginning on a date designated by the plan and shall serve at the pleasure of the Chief Financial Officer. Members may be reappointed for subsequent terms.

(b)  Rates used by the Joint Underwriting Association shall be actuarially sound. To the extent applicable, the rate standards set forth in s. 627.062 shall be considered by the office in establishing rates to be used by the joint underwriting plan. The initial rate level shall be determined using the rates, rules, rating plans, and classifications contained in the most current Insurance Services Office (ISO) filing with the office or the filing of other licensed rating organizations with an additional increment of 25 percent of premium. For any type of coverage or classification which lends itself to manual rating for which the Insurance Services Office or another licensed rating organization does not file or publish a rate, the Joint Underwriting Association shall file and use an initial rate based on the average current market rate. The initial rate level for the rate plan shall also be subject to an experience and schedule rating plan which may produce a maximum of 25 percent debits or credits. For any risk which does not lend itself to manual rating and for which no rate has been promulgated under the rate plan, the board shall develop and file with the office, subject to its approval, appropriate criteria and factors for rating the individual risk. Such criteria and factors shall include, but not be limited to, loss rating plans, composite rating plans, and unique and unusual risk rating plans. The initial rates required under this paragraph shall be adjusted in conformity with future filings by the Insurance Services Office with the office and shall remain in effect until such time as the Joint Underwriting Association has sufficient data as to independently justify an actuarially sound change in such rates.

(c)1.  In the event an underwriting deficit exists for any policy year the plan is in effect, any surplus which has accrued from previous years and is not projected within reasonable actuarial certainty to be needed for payment for claims in the year the surplus arose shall be used to offset the deficit to the extent available.

2.  As to any remaining deficit, the board of governors of the Joint Underwriting Association shall levy and collect an assessment in an amount sufficient to offset such deficit. Such assessment shall be levied against the insurers participating in the plan during the year giving rise to the assessment. Any assessments against insurers for the lines of property and casualty insurance issued to commercial risks shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for commercial risks written during the preceding calendar year bears to the aggregate net direct premium written for commercial risks by all members of the plan for the lines of insurance included in the plan. Any assessments against insurers for the lines of property and casualty insurance issued to personal risks eligible under sub-subparagraph (a)1.a. or sub-subparagraph (a)1.c. shall be recovered from the participating insurers in the proportion that the net direct premium of each insurer for personal risks written during the preceding calendar year bears to the aggregate net direct premium written for personal risks by all members of the plan for the lines of insurance included in the plan.

3.  The board shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each participating insurer and policyholder, including, if prudent, filing suit to collect such assessment. If the board is unable to collect an assessment from any insurer, the uncollected assessments shall be levied as an additional assessment against the participating insurers and any participating insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying insurer.

4.  Any funds or entitlements that the state may be eligible to receive by virtue of the Federal Government's termination of the Federal Crime Insurance Program referenced in sub-subparagraph (a)1.c. may be used under the plan to offset any subsequent underwriting deficits that may occur from risks previously insured with the Federal Crime Insurance Program.

5.  Assessments shall be included as an appropriate factor in the making of rates as provided in s. 627.3512.

6.a.  The Legislature finds that the potential for unlimited assessments under this paragraph may induce insurers to attempt to reduce their writings in the voluntary market, and that such actions would worsen the availability problems that the association was created to remedy. It is the intent of the Legislature that insurers remain fully responsible for covering any deficits of the association; however, it is also the intent of the Legislature to provide a means by which assessment liabilities may be amortized over a period of years.

b.  The total amount of deficit assessments under this paragraph with respect to any year may not exceed 10 percent of the statewide total gross written premium for all insurers for the coverages referred to in the introductory language of this subsection for the prior year, except that if the deficit with respect to any plan year exceeds such amount and bonds are issued under sub-subparagraph c. to defray the deficit, the total amount of assessments with respect to such deficit may not in any year exceed 10 percent of the deficit, or such lesser percentage as is sufficient to retire the bonds as determined by the board, and shall continue annually until the bonds are retired.

c.  The governing body of any unit of local government, any residents or businesses of which are insured by the association, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the association, for the purpose of defraying deficits of the association. Revenue bonds may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and the protection and preservation of the economic stability of insurers operating in this state, and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will provide relief to claimants and policyholders of the joint underwriting association and insurers responsible for apportionment of association losses. The unit of local government shall enter into such contracts with the association as are necessary to carry out this paragraph. Any bonds issued under this sub-subparagraph shall be payable from and secured by moneys received by the association from assessments under this paragraph, and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the office shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the office determines that the purchase would endanger or impair the solvency of the insurer.

7.  The plan shall provide for the deferment, in whole or in part, of the assessment of an insurer if the office finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in subparagraph 2.

(d)  Upon adoption of the plan, all insurers authorized in this state to underwrite property or casualty insurance shall participate in the plan.

(e)  A Risk Underwriting Committee of the Joint Underwriting Association composed of three members experienced in evaluating insurance risks is created to review risks rejected by the voluntary market for which application is made for insurance through the joint underwriting plan. The committee shall consist of a representative of the market assistance plan created under s. 627.3515, a member selected by the insurers participating in the Joint Underwriting Association, and a member named by the Chief Financial Officer. The Risk Underwriting Committee shall appoint such advisory committees as are provided for in the plan and are necessary to conduct its functions. The salaries and expenses of the members of the Risk Underwriting Committee and its advisory committees shall be paid by the joint underwriting plan. The plan approved by the office shall establish criteria and procedures for use by the Risk Underwriting Committee for determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

1.  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

2.  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the underwriting committee shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

(f)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the Florida Property and Casualty Joint Underwriting Association or its agents or employees, members of the board of governors, the Chief Financial Officer, or the office or its representatives for any action taken by them in the performance of their duties under this subsection. Such immunity does not apply to actions for breach of any contract or agreement pertaining to insurance, or any other willful tort.

(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--

(a)1.  The Legislature finds that actual and threatened catastrophic losses to property in this state from hurricanes have caused insurers to be unwilling or unable to provide property insurance coverage to the extent sought and needed. It is in the public interest and a public purpose to assist in assuring that property in the state is insured so as to facilitate the remediation, reconstruction, and replacement of damaged or destroyed property in order to reduce or avoid the negative effects otherwise resulting to the public health, safety, and welfare; to the economy of the state; and to the revenues of the state and local governments needed to provide for the public welfare. It is necessary, therefore, to provide property insurance to applicants who are in good faith entitled to procure insurance through the voluntary market but are unable to do so. The Legislature intends by this subsection that property insurance be provided and that it continues, as long as necessary, through an entity organized to achieve efficiencies and economies, while providing service to policyholders, applicants, and agents that is no less than the quality generally provided in the voluntary market, all toward the achievement of the foregoing public purposes. Because it is essential for the corporation to have the maximum financial resources to pay claims following a catastrophic hurricane, it is the intent of the Legislature that the income of the corporation be exempt from federal income taxation and that interest on the debt obligations issued by the corporation be exempt from federal income taxation.

2.  The Residential Property and Casualty Joint Underwriting Association originally created by this statute shall be known, as of July 1, 2002, as the Citizens Property Insurance Corporation. The corporation shall provide insurance for residential and commercial property, for applicants who are in good faith entitled, but are unable, to procure insurance through the voluntary market. The corporation shall operate pursuant to a plan of operation approved by order of the office. The plan is subject to continuous review by the office. The office may, by order, withdraw approval of all or part of a plan if the office determines that conditions have changed since approval was granted and that the purposes of the plan require changes in the plan. For the purposes of this subsection, residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner's, mobile home owner's, dwelling, tenant's, condominium unit owner's, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, apartment building, and similar policies.

3.  It is the intent of the Legislature that policyholders, applicants, and agents of the corporation receive service and treatment of the highest possible level but never less than that generally provided in the voluntary market. It also is intended that the corporation be held to service standards no less than those applied to insurers in the voluntary market by the office with respect to responsiveness, timeliness, customer courtesy, and overall dealings with policyholders, applicants, or agents of the corporation.

(b)1.  All insurers authorized to write one or more subject lines of business in this state are subject to assessment by the corporation and, for the purposes of this subsection, are referred to collectively as "assessable insurers." Insurers writing one or more subject lines of business in this state pursuant to part VIII of chapter 626 are not assessable insurers, but insureds who procure one or more subject lines of business in this state pursuant to part VIII of chapter 626 are subject to assessment by the corporation and are referred to collectively as "assessable insureds." An authorized insurer's assessment liability shall begin on the first day of the calendar year following the year in which the insurer was issued a certificate of authority to transact insurance for subject lines of business in this state and shall terminate 1 year after the end of the first calendar year during which the insurer no longer holds a certificate of authority to transact insurance for subject lines of business in this state.

2.a.  All revenues, assets, liabilities, losses, and expenses of the corporation shall be divided into three separate accounts as follows:

(I)  A personal lines account for personal residential policies issued by the corporation or issued by the Residential Property and Casualty Joint Underwriting Association and renewed by the corporation that provide comprehensive, multiperil coverage on risks that are not located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for such policies that do not provide coverage for the peril of wind on risks that are located in such areas;

(II)  A commercial lines account for commercial residential policies issued by the corporation or issued by the Residential Property and Casualty Joint Underwriting Association and renewed by the corporation that provide coverage for basic property perils on risks that are not located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002, and for such policies that do not provide coverage for the peril of wind on risks that are located in such areas; and

(III)  A high-risk account for personal residential policies and commercial residential and commercial nonresidential property policies issued by the corporation or transferred to the corporation that provide coverage for the peril of wind on risks that are located in areas eligible for coverage in the Florida Windstorm Underwriting Association as those areas were defined on January 1, 2002. The high-risk account must also include quota share primary insurance under subparagraph (c)2. The area eligible for coverage under the high-risk account also includes the area within Port Canaveral, which is bordered on the south by the City of Cape Canaveral, bordered on the west by the Banana River, and bordered on the north by Federal Government property. The office may remove territory from the area eligible for wind-only and quota share coverage if, after a public hearing, the office finds that authorized insurers in the voluntary market are willing and able to write sufficient amounts of personal and commercial residential coverage for all perils in the territory, including coverage for the peril of wind, such that risks covered by wind-only policies in the removed territory could be issued a policy by the corporation in either the personal lines or commercial lines account without a significant increase in the corporation's probable maximum loss in such account. Removal of territory from the area eligible for wind-only or quota share coverage does not alter the assignment of wind coverage written in such areas to the high-risk account.

b.  The three separate accounts must be maintained as long as financing obligations entered into by the Florida Windstorm Underwriting Association or Residential Property and Casualty Joint Underwriting Association are outstanding, in accordance with the terms of the corresponding financing documents. When the financing obligations are no longer outstanding, in accordance with the terms of the corresponding financing documents, the corporation may use a single account for all revenues, assets, liabilities, losses, and expenses of the corporation.

c.  Creditors of the Residential Property and Casualty Joint Underwriting Association shall have a claim against, and recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II) and shall have no claim against, or recourse to, the account referred to in sub-sub-subparagraph a.(III). Creditors of the Florida Windstorm Underwriting Association shall have a claim against, and recourse to, the account referred to in sub-sub-subparagraph a.(III) and shall have no claim against, or recourse to, the accounts referred to in sub-sub-subparagraphs a.(I) and (II).

d.  Revenues, assets, liabilities, losses, and expenses not attributable to particular accounts shall be prorated among the accounts.

e.  The Legislature finds that the revenues of the corporation are revenues that are necessary to meet the requirements set forth in documents authorizing the issuance of bonds under this subsection.

f.  No part of the income of the corporation may inure to the benefit of any private person.

3.  With respect to a deficit in an account:

a.  When the deficit incurred in a particular calendar year is not greater than 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the entire deficit shall be recovered through regular assessments of assessable insurers under paragraph (g) and assessable insureds.

b.  When the deficit incurred in a particular calendar year exceeds 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year, the corporation shall levy regular assessments on assessable insurers under paragraph (g) and on assessable insureds in an amount equal to the greater of 10 percent of the deficit or 10 percent of the aggregate statewide direct written premium for the subject lines of business for the prior calendar year. Any remaining deficit shall be recovered through emergency assessments under sub-subparagraph d.

c.  Each assessable insurer's share of the amount being assessed under sub-subparagraph a. or sub-subparagraph b. shall be in the proportion that the assessable insurer's direct written premium for the subject lines of business for the year preceding the assessment bears to the aggregate statewide direct written premium for the subject lines of business for that year. The assessment percentage applicable to each assessable insured is the ratio of the amount being assessed under sub-subparagraph a. or sub-subparagraph b. to the aggregate statewide direct written premium for the subject lines of business for the prior year. Assessments levied by the corporation on assessable insurers under sub-subparagraphs a. and b. shall be paid as required by the corporation's plan of operation and paragraph (g). Assessments levied by the corporation on assessable insureds under sub-subparagraphs a. and b. shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932 and shall be paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to the Florida Surplus Lines Service Office. Upon receipt of regular assessments from surplus lines agents, the Florida Surplus Lines Service Office shall transfer the assessments directly to the corporation as determined by the corporation.

d.  Upon a determination by the board of governors that a deficit in an account exceeds the amount that will be recovered through regular assessments under sub-subparagraph a. or sub-subparagraph b., the board shall levy, after verification by the office, emergency assessments, for as many years as necessary to cover the deficits, to be collected by assessable insurers and the corporation and collected from assessable insureds upon issuance or renewal of policies for subject lines of business, excluding National Flood Insurance policies. The amount of the emergency assessment collected in a particular year shall be a uniform percentage of that year's direct written premium for subject lines of business and all accounts of the corporation, excluding National Flood Insurance Program policy premiums, as annually determined by the board and verified by the office. The office shall verify the arithmetic calculations involved in the board's determination within 30 days after receipt of the information on which the determination was based. Notwithstanding any other provision of law, the corporation and each assessable insurer that writes subject lines of business shall collect emergency assessments from its policyholders without such obligation being affected by any credit, limitation, exemption, or deferment. Emergency assessments levied by the corporation on assessable insureds shall be collected by the surplus lines agent at the time the surplus lines agent collects the surplus lines tax required by s. 626.932 and shall be paid to the Florida Surplus Lines Service Office at the time the surplus lines agent pays the surplus lines tax to the Florida Surplus Lines Service Office. The emergency assessments so collected shall be transferred directly to the corporation on a periodic basis as determined by the corporation and shall be held by the corporation solely in the applicable account. The aggregate amount of emergency assessments levied for an account under this sub-subparagraph in any calendar year may not exceed the greater of 10 percent of the amount needed to cover the original deficit, plus interest, fees, commissions, required reserves, and other costs associated with financing of the original deficit, or 10 percent of the aggregate statewide direct written premium for subject lines of business and for all accounts of the corporation for the prior year, plus interest, fees, commissions, required reserves, and other costs associated with financing the original deficit.

e.  The corporation may pledge the proceeds of assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other insurance and reinsurance recoverables, market equalization surcharges and other surcharges, and other funds available to the corporation as the source of revenue for and to secure bonds issued under paragraph (g), bonds or other indebtedness issued under subparagraph (c)3., or lines of credit or other financing mechanisms issued or created under this subsection, or to retire any other debt incurred as a result of deficits or events giving rise to deficits, or in any other way that the board determines will efficiently recover such deficits. The purpose of the lines of credit or other financing mechanisms is to provide additional resources to assist the corporation in covering claims and expenses attributable to a catastrophe. As used in this subsection, the term "assessments" includes regular assessments under sub-subparagraph a., sub-subparagraph b., or subparagraph (g)1. and emergency assessments under sub-subparagraph d. Emergency assessments collected under sub-subparagraph d. are not part of an insurer's rates, are not premium, and are not subject to premium tax, fees, or commissions; however, failure to pay the emergency assessment shall be treated as failure to pay premium. The emergency assessments under sub-subparagraph d. shall continue as long as any bonds issued or other indebtedness incurred with respect to a deficit for which the assessment was imposed remain outstanding, unless adequate provision has been made for the payment of such bonds or other indebtedness pursuant to the documents governing such bonds or other indebtedness.

f.  As used in this subsection, the term "subject lines of business" means insurance written by assessable insurers or procured by assessable insureds on real or personal property, as defined in s. 624.604, including insurance for fire, industrial fire, allied lines, farmowners multiperil, homeowners multiperil, commercial multiperil, and mobile homes, and including liability coverage on all such insurance, but excluding inland marine as defined in s. 624.607(3) and excluding vehicle insurance as defined in s. 624.605(1) other than insurance on mobile homes used as permanent dwellings.

g.  The Florida Surplus Lines Service Office shall determine annually the aggregate statewide written premium in subject lines of business procured by assessable insureds and shall report that information to the corporation in a form and at a time the corporation specifies to ensure that the corporation can meet the requirements of this subsection and the corporation's financing obligations.

h.  The Florida Surplus Lines Service Office shall verify the proper application by surplus lines agents of assessment percentages for regular assessments and emergency assessments levied under this subparagraph on assessable insureds and shall assist the corporation in ensuring the accurate, timely collection and payment of assessments by surplus lines agents as required by the corporation.

(c)  The plan of operation of the corporation:

1.  Must provide for adoption of residential property and casualty insurance policy forms and commercial residential and nonresidential property insurance forms, which forms must be approved by the office prior to use. The corporation shall adopt the following policy forms:

a.  Standard personal lines policy forms that are comprehensive multiperil policies providing full coverage of a residential property equivalent to the coverage provided in the private insurance market under an HO-3, HO-4, or HO-6 policy.

b.  Basic personal lines policy forms that are policies similar to an HO-8 policy or a dwelling fire policy that provide coverage meeting the requirements of the secondary mortgage market, but which coverage is more limited than the coverage under a standard policy.

c.  Commercial lines residential policy forms that are generally similar to the basic perils of full coverage obtainable for commercial residential structures in the admitted voluntary market.

d.  Personal lines and commercial lines residential property insurance forms that cover the peril of wind only. The forms are applicable only to residential properties located in areas eligible for coverage under the high-risk account referred to in sub-subparagraph (b)2.a.

e.  Commercial lines nonresidential property insurance forms that cover the peril of wind only. The forms are applicable only to nonresidential properties located in areas eligible for coverage under the high-risk account referred to in sub-subparagraph (b)2.a.

2.a.  Must provide that the corporation adopt a program in which the corporation and authorized insurers enter into quota share primary insurance agreements for hurricane coverage, as defined in s. 627.4025(2)(a), for eligible risks, and adopt property insurance forms for eligible risks which cover the peril of wind only. As used in this subsection, the term:

(I)  "Quota share primary insurance" means an arrangement in which the primary hurricane coverage of an eligible risk is provided in specified percentages by the corporation and an authorized insurer. The corporation and authorized insurer are each solely responsible for a specified percentage of hurricane coverage of an eligible risk as set forth in a quota share primary insurance agreement between the corporation and an authorized insurer and the insurance contract. The responsibility of the corporation or authorized insurer to pay its specified percentage of hurricane losses of an eligible risk, as set forth in the quota share primary insurance agreement, may not be altered by the inability of the other party to the agreement to pay its specified percentage of hurricane losses. Eligible risks that are provided hurricane coverage through a quota share primary insurance arrangement must be provided policy forms that set forth the obligations of the corporation and authorized insurer under the arrangement, clearly specify the percentages of quota share primary insurance provided by the corporation and authorized insurer, and conspicuously and clearly state that neither the authorized insurer nor the corporation may be held responsible beyond its specified percentage of coverage of hurricane losses.

(II)  "Eligible risks" means personal lines residential and commercial lines residential risks that meet the underwriting criteria of the corporation and are located in areas that were eligible for coverage by the Florida Windstorm Underwriting Association on January 1, 2002.

b.  The corporation may enter into quota share primary insurance agreements with authorized insurers at corporation coverage levels of 90 percent and 50 percent.

c.  If the corporation determines that additional coverage levels are necessary to maximize participation in quota share primary insurance agreements by authorized insurers, the corporation may establish additional coverage levels. However, the corporation's quota share primary insurance coverage level may not exceed 90 percent.

d.  Any quota share primary insurance agreement entered into between an authorized insurer and the corporation must provide for a uniform specified percentage of coverage of hurricane losses, by county or territory as set forth by the corporation board, for all eligible risks of the authorized insurer covered under the quota share primary insurance agreement.

e.  Any quota share primary insurance agreement entered into between an authorized insurer and the corporation is subject to review and approval by the office. However, such agreement shall be authorized only as to insurance contracts entered into between an authorized insurer and an insured who is already insured by the corporation for wind coverage.

f.  For all eligible risks covered under quota share primary insurance agreements, the exposure and coverage levels for both the corporation and authorized insurers shall be reported by the corporation to the Florida Hurricane Catastrophe Fund. For all policies of eligible risks covered under quota share primary insurance agreements, the corporation and the authorized insurer shall maintain complete and accurate records for the purpose of exposure and loss reimbursement audits as required by Florida Hurricane Catastrophe Fund rules. The corporation and the authorized insurer shall each maintain duplicate copies of policy declaration pages and supporting claims documents.

g.  The corporation board shall establish in its plan of operation standards for quota share agreements which ensure that there is no discriminatory application among insurers as to the terms of quota share agreements, pricing of quota share agreements, incentive provisions if any, and consideration paid for servicing policies or adjusting claims.

h.  The quota share primary insurance agreement between the corporation and an authorized insurer must set forth the specific terms under which coverage is provided, including, but not limited to, the sale and servicing of policies issued under the agreement by the insurance agent of the authorized insurer producing the business, the reporting of information concerning eligible risks, the payment of premium to the corporation, and arrangements for the adjustment and payment of hurricane claims incurred on eligible risks by the claims adjuster and personnel of the authorized insurer. Entering into a quota sharing insurance agreement between the corporation and an authorized insurer shall be voluntary and at the discretion of the authorized insurer.

3.  May provide that the corporation may employ or otherwise contract with individuals or other entities to provide administrative or professional services that may be appropriate to effectuate the plan. The corporation shall have the power to borrow funds, by issuing bonds or by incurring other indebtedness, and shall have other powers reasonably necessary to effectuate the requirements of this subsection, including, without limitation, the power to issue bonds and incur other indebtedness in order to refinance outstanding bonds or other indebtedness. The corporation may, but is not required to, seek judicial validation of its bonds or other indebtedness under chapter 75. The corporation may issue bonds or incur other indebtedness, or have bonds issued on its behalf by a unit of local government pursuant to subparagraph (g)2., in the absence of a hurricane or other weather-related event, upon a determination by the corporation, subject to approval by the office, that such action would enable it to efficiently meet the financial obligations of the corporation and that such financings are reasonably necessary to effectuate the requirements of this subsection. The corporation is authorized to take all actions needed to facilitate tax-free status for any such bonds or indebtedness, including formation of trusts or other affiliated entities. The corporation shall have the authority to pledge assessments, projected recoveries from the Florida Hurricane Catastrophe Fund, other reinsurance recoverables, market equalization and other surcharges, and other funds available to the corporation as security for bonds or other indebtedness. In recognition of s. 10, Art. I of the State Constitution, prohibiting the impairment of obligations of contracts, it is the intent of the Legislature that no action be taken whose purpose is to impair any bond indenture or financing agreement or any revenue source committed by contract to such bond or other indebtedness.

4.a.  Must require that the corporation operate subject to the supervision and approval of a board of governors consisting of 8 individuals who are residents of this state, from different geographical areas of this state. The Governor, the Chief Financial Officer, the President of the Senate, and the Speaker of the House of Representatives shall each appoint two members of the board, effective August 1, 2005. At least one of the two members appointed by each appointing officer must have demonstrated expertise in insurance. The Chief Financial Officer shall designate one of the appointees as chair. All board members serve at the pleasure of the appointing officer. All board members, including the chair, must be appointed to serve for 3-year terms beginning annually on a date designated by the plan. Any board vacancy shall be filled for the unexpired term by the appointing officer. The Chief Financial Officer shall appoint a technical advisory group to provide information and advice to the board of governors in connection with the board's duties under this subsection. The executive director and senior managers of the corporation shall be engaged by the board, as recommended by the Chief Financial Officer, and serve at the pleasure of the board. The executive director is responsible for employing other staff as the corporation may require, subject to review and concurrence by the board and the Chief Financial Officer.

b.  The board shall create a Market Accountability Advisory Committee to assist the corporation in developing awareness of its rates and its customer and agent service levels in relationship to the voluntary market insurers writing similar coverage. The members of the advisory committee shall consist of the following 11 persons, one of whom must be elected chair by the members of the committee: four representatives, one appointed by the Florida Association of Insurance Agents, one by the Florida Association of Insurance and Financial Advisors, one by the Professional Insurance Agents of Florida, and one by the Latin American Association of Insurance Agencies; three representatives appointed by the insurers with the three highest voluntary market share of residential property insurance business in the state; one representative from the Office of Insurance Regulation; one consumer appointed by the board who is insured by the corporation at the time of appointment to the committee; one representative appointed by the Florida Association of Realtors; and one representative appointed by the Florida Bankers Association. All members must serve for 3-year terms and may serve for consecutive terms. The committee shall report to the corporation at each board meeting on insurance market issues which may include rates and rate competition with the voluntary market; service, including policy issuance, claims processing, and general responsiveness to policyholders, applicants, and agents; and matters relating to depopulation.

5.  Must provide a procedure for determining the eligibility of a risk for coverage, as follows:

a.  Subject to the provisions of s. 627.3517, with respect to personal lines residential risks, if the risk is offered coverage from an authorized insurer at the insurer's approved rate under either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the office, a basic policy including wind coverage, the risk is not eligible for any policy issued by the corporation. If the risk is not able to obtain any such offer, the risk is eligible for either a standard policy including wind coverage or a basic policy including wind coverage issued by the corporation; however, if the risk could not be insured under a standard policy including wind coverage regardless of market conditions, the risk shall be eligible for a basic policy including wind coverage unless rejected under subparagraph 8. The corporation shall determine the type of policy to be provided on the basis of objective standards specified in the underwriting manual and based on generally accepted underwriting practices.

(I)  If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the corporation before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or to the corporation is not currently appointed by the insurer, the insurer shall:

(A)  Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or

(B)  Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the corporation's usual and customary commission for the type of policy written.


If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II)  When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:

(A)  Pay to the producing agent of record of the corporation policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or

(B)  Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the corporation's usual and customary commission for the type of policy written.


If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

b.  With respect to commercial lines residential risks, if the risk is offered coverage under a policy including wind coverage from an authorized insurer at its approved rate, the risk is not eligible for any policy issued by the corporation. If the risk is not able to obtain any such offer, the risk is eligible for a policy including wind coverage issued by the corporation.

(I)  If the risk accepts an offer of coverage through the market assistance plan or an offer of coverage through a mechanism established by the corporation before a policy is issued to the risk by the corporation or during the first 30 days of coverage by the corporation, and the producing agent who submitted the application to the plan or the corporation is not currently appointed by the insurer, the insurer shall:

(A)  Pay to the producing agent of record of the policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or

(B)  Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the corporation's usual and customary commission for the type of policy written.


If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

(II)  When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on the policy, and the insurer shall:

(A)  Pay to the producing agent of record of the corporation policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or

(B)  Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the corporation's usual and customary commission for the type of policy written.


If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with sub-sub-sub-subparagraph (A).

6.  Must include rules for classifications of risks and rates therefor.

7.  Must provide that if premium and investment income for an account attributable to a particular calendar year are in excess of projected losses and expenses for the account attributable to that year, such excess shall be held in surplus in the account. Such surplus shall be available to defray deficits in that account as to future years and shall be used for that purpose prior to assessing assessable insurers and assessable insureds as to any calendar year.

8.  Must provide objective criteria and procedures to be uniformly applied for all applicants in determining whether an individual risk is so hazardous as to be uninsurable. In making this determination and in establishing the criteria and procedures, the following shall be considered:

a.  Whether the likelihood of a loss for the individual risk is substantially higher than for other risks of the same class; and

b.  Whether the uncertainty associated with the individual risk is such that an appropriate premium cannot be determined.

The acceptance or rejection of a risk by the corporation shall be construed as the private placement of insurance, and the provisions of chapter 120 shall not apply.

9.  Must provide that the corporation shall make its best efforts to procure catastrophe reinsurance at reasonable rates, to cover its projected 100-year probable maximum loss as determined by the board of governors.

10.  Must provide that in the event of regular deficit assessments under sub-subparagraph (b)3.a. or sub-subparagraph (b)3.b., in the personal lines account, the commercial lines residential account, or the high-risk account, the corporation shall levy upon corporation policyholders in its next rate filing, or by a separate rate filing solely for this purpose, a market equalization surcharge arising from a regular assessment in such account in a percentage equal to the total amount of such regular assessments divided by the aggregate statewide direct written premium for subject lines of business for the prior calendar year. Market equalization surcharges under this subparagraph are not considered premium and are not subject to commissions, fees, or premium taxes; however, failure to pay a market equalization surcharge shall be treated as failure to pay premium.

11.  The policies issued by the corporation must provide that, if the corporation or the market assistance plan obtains an offer from an authorized insurer to cover the risk at its approved rates, the risk is no longer eligible for renewal through the corporation.

12.  Corporation policies and applications must include a notice that the corporation policy could, under this section, be replaced with a policy issued by an authorized insurer that does not provide coverage identical to the coverage provided by the corporation. The notice shall also specify that acceptance of corporation coverage creates a conclusive presumption that the applicant or policyholder is aware of this potential.

13.  May establish, subject to approval by the office, different eligibility requirements and operational procedures for any line or type of coverage for any specified county or area if the board determines that such changes to the eligibility requirements and operational procedures are justified due to the voluntary market being sufficiently stable and competitive in such area or for such line or type of coverage and that consumers who, in good faith, are unable to obtain insurance through the voluntary market through ordinary methods would continue to have access to coverage from the corporation. When coverage is sought in connection with a real property transfer, such requirements and procedures shall not provide for an effective date of coverage later than the date of the closing of the transfer as established by the transferor, the transferee, and, if applicable, the lender.

14.  Must provide that, with respect to the high-risk account, any assessable insurer with a surplus as to policyholders of $25 million or less writing 25 percent or more of its total countrywide property insurance premiums in this state may petition the office, within the first 90 days of each calendar year, to qualify as a limited apportionment company. In no event shall a limited apportionment company be required to participate in the portion of any assessment, within the high-risk account, pursuant to sub-subparagraph (b)3.a. or sub-subparagraph (b)3.b. in the aggregate which exceeds $50 million after payment of available high-risk account funds in any calendar year. However, a limited apportionment company shall collect from its policyholders any emergency assessment imposed under sub-subparagraph (b)3.d. The plan shall provide that, if the office determines that any regular assessment will result in an impairment of the surplus of a limited apportionment company, the office may direct that all or part of such assessment be deferred as provided in subparagraph (g)4. However, there shall be no limitation or deferment of an emergency assessment to be collected from policyholders under sub-subparagraph (b)3.d.

15.  Must provide that the corporation appoint as its licensed agents only those agents who also hold an appointment as defined in s. 626.015(3) with an insurer who at the time of the agent's initial appointment by the corporation is authorized to write and is actually writing personal lines residential property coverage, commercial residential property coverage, or commercial nonresidential property coverage within the state.

(d)1.  It is the intent of the Legislature that the rates for coverage provided by the corporation be actuarially sound and not competitive with approved rates charged in the admitted voluntary market, so that the corporation functions as a residual market mechanism to provide insurance only when the insurance cannot be procured in the voluntary market. Rates shall include an appropriate catastrophe loading factor that reflects the actual catastrophic exposure of the corporation.

2.  For each county, the average rates of the corporation for each line of business for personal lines residential policies excluding rates for wind-only policies shall be no lower than the average rates charged by the insurer that had the highest average rate in that county among the 20 insurers with the greatest total direct written premium in the state for that line of business in the preceding year, except that with respect to mobile home coverages, the average rates of the corporation shall be no lower than the average rates charged by the insurer that had the highest average rate in that county among the 5 insurers with the greatest total written premium for mobile home owner's policies in the state in the preceding year.

3.  Rates for personal lines residential wind-only policies must be actuarially sound and not competitive with approved rates charged by authorized insurers. Corporation rate manuals shall include a rate surcharge for seasonal occupancy. To ensure that personal lines residential wind-only rates are not competitive with approved rates charged by authorized insurers, the corporation, in conjunction with the office, shall develop a wind-only ratemaking methodology, which methodology shall be contained in each rate filing made by the corporation with the office. If the office determines that the wind-only rates or rating factors filed by the corporation fail to comply with the wind-only ratemaking methodology provided for in this subsection, it shall so notify the corporation and require the corporation to amend its rates or rating factors to come into compliance within 90 days of notice from the office.

4.  For the purposes of establishing a pilot program to evaluate issues relating to the availability and affordability of insurance in an area where historically there has been little market competition, the provisions of subparagraph 2. do not apply to coverage provided by the corporation in Monroe County if the office determines that a reasonable degree of competition does not exist for personal lines residential policies. The provisions of subparagraph 3. do not apply to coverage provided by the corporation in Monroe County if the office determines that a reasonable degree of competition does not exist for personal lines residential policies in the area of that county which is eligible for wind-only coverage. In this county, the rates for personal lines residential coverage shall be actuarially sound and not excessive, inadequate, or unfairly discriminatory and are subject to the other provisions of the paragraph and s. 627.062. The commission shall adopt rules establishing the criteria for determining whether a reasonable degree of competition exists for personal lines residential policies in Monroe County. By March 1, 2006, the office shall submit a report to the Legislature providing an evaluation of the implementation of the pilot program affecting Monroe County.

5.  Rates for commercial lines coverage shall not be subject to the requirements of subparagraph 2., but shall be subject to all other requirements of this paragraph and s. 627.062.

6.  Nothing in this paragraph shall require or allow the corporation to adopt a rate that is inadequate under s. 627.062.

7.  The corporation shall certify to the office at least twice annually that its personal lines rates comply with the requirements of subparagraphs 1. and 2. If any adjustment in the rates or rating factors of the corporation is necessary to ensure such compliance, the corporation shall make and implement such adjustments and file its revised rates and rating factors with the office. If the office thereafter determines that the revised rates and rating factors fail to comply with the provisions of subparagraphs 1. and 2., it shall notify the corporation and require the corporation to amend its rates or rating factors in conjunction with its next rate filing. The office must notify the corporation by electronic means of any rate filing it approves for any insurer among the insurers referred to in subparagraph 2.

8.  In addition to the rates otherwise determined pursuant to this paragraph, the corporation shall impose and collect an amount equal to the premium tax provided for in s. 624.509 to augment the financial resources of the corporation.

9.a.  To assist the corporation in developing additional ratemaking methods to assure compliance with subparagraphs 1. and ¹4., the corporation shall appoint a rate methodology panel consisting of one person recommended by the Florida Association of Insurance Agents, one person recommended by the Professional Insurance Agents of Florida, one person recommended by the Florida Association of Insurance and Financial Advisors, one person recommended by the insurer with the highest voluntary market share of residential property insurance business in the state, one person recommended by the insurer with the second-highest voluntary market share of residential property insurance business in the state, one person recommended by an insurer writing commercial residential property insurance in this state, one person recommended by the Office of Insurance Regulation, and one board member designated by the board chairman, who shall serve as chairman of the panel.

b.  By January 1, 2004, the rate methodology panel shall provide a report to the corporation of its findings and recommendations for the use of additional ratemaking methods and procedures, including the use of a rate equalization surcharge in an amount sufficient to assure that the total cost of coverage for policyholders or applicants to the corporation is sufficient to comply with subparagraph 1.

c.  Within 30 days after such report, the corporation shall present to the President of the Senate, the Speaker of the House of Representatives, the minority party leaders of each house of the Legislature, and the chairs of the standing committees of each house of the Legislature having jurisdiction of insurance issues, a plan for implementing the additional ratemaking methods and an outline of any legislation needed to facilitate use of the new methods.

d.  The plan must include a provision that producer commissions paid by the corporation shall not be calculated in such a manner as to include any rate equalization surcharge. However, without regard to the plan to be developed or its implementation, producer commissions paid by the corporation for each account, other than the quota share primary program, shall remain fixed as to percentage, effective rate, calculation, and payment method until January 1, 2004.

10.  By January 1, 2004, the corporation shall develop a notice to policyholders or applicants that the rates of Citizens Property Insurance Corporation are intended to be higher than the rates of any admitted carrier and providing other information the corporation deems necessary to assist consumers in finding other voluntary admitted insurers willing to insure their property.

(e)  If coverage in an account is deactivated pursuant to paragraph (f), coverage through the corporation shall be reactivated by order of the office only under one of the following circumstances:

1.  If the market assistance plan receives a minimum of 100 applications for coverage within a 3-month period, or 200 applications for coverage within a 1-year period or less for residential coverage, unless the market assistance plan provides a quotation from admitted carriers at their filed rates for at least 90 percent of such applicants. Any market assistance plan application that is rejected because an individual risk is so hazardous as to be uninsurable using the criteria specified in subparagraph (c)8. shall not be included in the minimum percentage calculation provided herein. In the event that there is a legal or administrative challenge to a determination by the office that the conditions of this subparagraph have been met for eligibility for coverage in the corporation, any eligible risk may obtain coverage during the pendency of such challenge.

2.  In response to a state of emergency declared by the Governor under s. 252.36, the office may activate coverage by order for the period of the emergency upon a finding by the office that the emergency significantly affects the availability of residential property insurance.

(f)1.  The corporation shall file with the office quarterly statements of financial condition, an annual statement of financial condition, and audited financial statements in the manner prescribed by law. In addition, the corporation shall report to the office monthly on the types, premium, exposure, and distribution by county of its policies in force, and shall submit other reports as the office requires to carry out its oversight of the corporation.

2.  The activities of the corporation shall be reviewed at least annually by the office to determine whether coverage shall be deactivated in an account on the basis that the conditions giving rise to its activation no longer exist.

(g)1.  The corporation shall certify to the office its needs for annual assessments as to a particular calendar year, and for any interim assessments that it deems to be necessary to sustain operations as to a particular year pending the receipt of annual assessments. Upon verification, the office shall approve such certification, and the corporation shall levy such annual or interim assessments. Such assessments shall be prorated as provided in paragraph (b). The corporation shall take all reasonable and prudent steps necessary to collect the amount of assessment due from each assessable insurer, including, if prudent, filing suit to collect such assessment. If the corporation is unable to collect an assessment from any assessable insurer, the uncollected assessments shall be levied as an additional assessment against the assessable insurers and any assessable insurer required to pay an additional assessment as a result of such failure to pay shall have a cause of action against such nonpaying assessable insurer. Assessments shall be included as an appropriate factor in the making of rates. The failure of a surplus lines agent to collect and remit any regular or emergency assessment levied by the corporation is considered to be a violation of s. 626.936 and subjects the surplus lines agent to the penalties provided in that section.

2.  The governing body of any unit of local government, any residents of which are insured by the corporation, may issue bonds as defined in s. 125.013 or s. 166.101 from time to time to fund an assistance program, in conjunction with the corporation, for the purpose of defraying deficits of the corporation. In order to avoid needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, any unit of local government, any residents of which are insured by the corporation, may provide for the payment of losses, regardless of whether or not the losses occurred within or outside of the territorial jurisdiction of the local government. Revenue bonds under this subparagraph may not be issued until validated pursuant to chapter 75, unless a state of emergency is declared by executive order or proclamation of the Governor pursuant to s. 252.36 making such findings as are necessary to determine that it is in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of residents of this state and declaring it an essential public purpose to permit certain municipalities or counties to issue such bonds as will permit relief to claimants and policyholders of the corporation. Any such unit of local government may enter into such contracts with the corporation and with any other entity created pursuant to this subsection as are necessary to carry out this paragraph. Any bonds issued under this subparagraph shall be payable from and secured by moneys received by the corporation from emergency assessments under sub-subparagraph (b)3.d., and assigned and pledged to or on behalf of the unit of local government for the benefit of the holders of such bonds. The funds, credit, property, and taxing power of the state or of the unit of local government shall not be pledged for the payment of such bonds. If any of the bonds remain unsold 60 days after issuance, the office shall require all insurers subject to assessment to purchase the bonds, which shall be treated as admitted assets; each insurer shall be required to purchase that percentage of the unsold portion of the bond issue that equals the insurer's relative share of assessment liability under this subsection. An insurer shall not be required to purchase the bonds to the extent that the office determines that the purchase would endanger or impair the solvency of the insurer.

3.a.  The corporation shall adopt one or more programs subject to approval by the office for the reduction of both new and renewal writings in the corporation. The corporation may consider any prudent and not unfairly discriminatory approach to reducing corporation writings, and may adopt a credit against assessment liability or other liability that provides an incentive for insurers to take risks out of the corporation and to keep risks out of the corporation by maintaining or increasing voluntary writings in counties or areas in which corporation risks are highly concentrated and a program to provide a formula under which an insurer voluntarily taking risks out of the corporation by maintaining or increasing voluntary writings will be relieved wholly or partially from assessments under sub-subparagraphs (b)3.a. and b. When the corporation enters into a contractual agreement for a take-out plan, the producing agent of record of the corporation policy is entitled to retain any unearned commission on such policy, and the insurer shall either:

(I)  Pay to the producing agent of record of the policy, for the first year, an amount which is the greater of the insurer's usual and customary commission for the type of policy written or a policy fee equal to the usual and customary commission of the corporation; or

(II)  Offer to allow the producing agent of record of the policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the insurer's usual and customary commission for the type of policy written. If the producing agent is unwilling or unable to accept appointment by the new insurer, the new insurer shall pay the agent in accordance with sub-sub-subparagraph (I).

b.  Any credit or exemption from regular assessments adopted under this subparagraph shall last no longer than the 3 years following the cancellation or expiration of the policy by the corporation. With the approval of the office, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the corporation, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.

c.  There shall be no credit, limitation, exemption, or deferment from emergency assessments to be collected from policyholders pursuant to sub-subparagraph (b)3.d.

4.  The plan shall provide for the deferment, in whole or in part, of the assessment of an assessable insurer, other than an emergency assessment collected from policyholders pursuant to sub-subparagraph (b)3.d., if the office finds that payment of the assessment would endanger or impair the solvency of the insurer. In the event an assessment against an assessable insurer is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other assessable insurers in a manner consistent with the basis for assessments set forth in paragraph (b).

(h)  Nothing in this subsection shall be construed to preclude the issuance of residential property insurance coverage pursuant to part VIII of chapter 626.

(i)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any assessable insurer or its agents or employees, the corporation or its agents or employees, members of the board of governors or their respective designees at a board meeting, corporation committee members, or the office or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to:

1.  Any of the foregoing persons or entities for any willful tort;

2.  The corporation or its producing agents for breach of any contract or agreement pertaining to insurance coverage;

3.  The corporation with respect to issuance or payment of debt; or

4.  Any assessable insurer with respect to any action to enforce an assessable insurer's obligations to the corporation under this subsection.

(j)  For the purposes of s. 199.183(1), the corporation shall be considered a political subdivision of the state and shall be exempt from the corporate income tax. The premiums, assessments, investment income, and other revenue of the corporation are funds received for providing property insurance coverage as required by this subsection, paying claims for Florida citizens insured by the corporation, securing and repaying debt obligations issued by the corporation, and conducting all other activities of the corporation, and shall not be considered taxes, fees, licenses, or charges for services imposed by the Legislature on individuals, businesses, or agencies outside state government. Bonds and other debt obligations issued by or on behalf of the corporation are not to be considered "state bonds" within the meaning of s. 215.58(8). The corporation is not subject to the procurement provisions of chapter 287, and policies and decisions of the corporation relating to incurring debt, levying of assessments and the sale, issuance, continuation, terms and claims under corporation policies, and all services relating thereto, are not subject to the provisions of chapter 120. The corporation is not required to obtain or to hold a certificate of authority issued by the office, nor is it required to participate as a member insurer of the Florida Insurance Guaranty Association. However, the corporation is required to pay, in the same manner as an authorized insurer, assessments pledged by the Florida Insurance Guaranty Association to secure bonds issued or other indebtedness incurred to pay covered claims arising from insurer insolvencies caused by, or proximately related to, hurricane losses. It is the intent of the Legislature that the tax exemptions provided in this paragraph will augment the financial resources of the corporation to better enable the corporation to fulfill its public purposes. Any bonds issued by the corporation, their transfer, and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation of every kind by the state and any political subdivision or local unit or other instrumentality thereof; however, this exemption does not apply to any tax imposed by chapter 220 on interest, income, or profits on debt obligations owned by corporations other than the corporation.

(k)  Upon a determination by the office that the conditions giving rise to the establishment and activation of the corporation no longer exist, the corporation is dissolved. Upon dissolution, the assets of the corporation shall be applied first to pay all debts, liabilities, and obligations of the corporation, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the corporation shall become property of the state and shall be deposited in the Florida Hurricane Catastrophe Fund. However, no dissolution shall take effect as long as the corporation has bonds or other financial obligations outstanding unless adequate provision has been made for the payment of the bonds or other financial obligations pursuant to the documents authorizing the issuance of the bonds or other financial obligations.

(l)1.  Effective July 1, 2002, policies of the Residential Property and Casualty Joint Underwriting Association shall become policies of the corporation. All obligations, rights, assets and liabilities of the Residential Property and Casualty Joint Underwriting Association, including bonds, note and debt obligations, and the financing documents pertaining to them become those of the corporation as of July 1, 2002. The corporation is not required to issue endorsements or certificates of assumption to insureds during the remaining term of in-force transferred policies.

2.  Effective July 1, 2002, policies of the Florida Windstorm Underwriting Association are transferred to the corporation and shall become policies of the corporation. All obligations, rights, assets, and liabilities of the Florida Windstorm Underwriting Association, including bonds, note and debt obligations, and the financing documents pertaining to them are transferred to and assumed by the corporation on July 1, 2002. The corporation is not required to issue endorsement or certificates of assumption to insureds during the remaining term of in-force transferred policies.

3.  The Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association shall take all actions as may be proper to further evidence the transfers and shall provide the documents and instruments of further assurance as may reasonably be requested by the corporation for that purpose. The corporation shall execute assumptions and instruments as the trustees or other parties to the financing documents of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association may reasonably request to further evidence the transfers and assumptions, which transfers and assumptions, however, are effective on the date provided under this paragraph whether or not, and regardless of the date on which, the assumptions or instruments are executed by the corporation. Subject to the relevant financing documents pertaining to their outstanding bonds, notes, indebtedness, or other financing obligations, the moneys, investments, receivables, choses in action, and other intangibles of the Florida Windstorm Underwriting Association shall be credited to the high-risk account of the corporation, and those of the personal lines residential coverage account and the commercial lines residential coverage account of the Residential Property and Casualty Joint Underwriting Association shall be credited to the personal lines account and the commercial lines account, respectively, of the corporation.

4.  Effective July 1, 2002, a new applicant for property insurance coverage who would otherwise have been eligible for coverage in the Florida Windstorm Underwriting Association is eligible for coverage from the corporation as provided in this subsection.

5.  The transfer of all policies, obligations, rights, assets, and liabilities from the Florida Windstorm Underwriting Association to the corporation and the renaming of the Residential Property and Casualty Joint Underwriting Association as the corporation shall in no way affect the coverage with respect to covered policies as defined in s. 215.555(2)(c) provided to these entities by the Florida Hurricane Catastrophe Fund. The coverage provided by the Florida Hurricane Catastrophe Fund to the Florida Windstorm Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be redesignated as coverage for the high-risk account of the corporation. Notwithstanding any other provision of law, the coverage provided by the Florida Hurricane Catastrophe Fund to the Residential Property and Casualty Joint Underwriting Association based on its exposures as of June 30, 2002, and each June 30 thereafter shall be transferred to the personal lines account and the commercial lines account of the corporation. Notwithstanding any other provision of law, the high-risk account shall be treated, for all Florida Hurricane Catastrophe Fund purposes, as if it were a separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. Likewise, the personal lines and commercial lines accounts shall be viewed together, for all Florida Hurricane Catastrophe Fund purposes, as if the two accounts were one and represent a single, separate participating insurer with its own exposures, reimbursement premium, and loss reimbursement. The coverage provided by the Florida Hurricane Catastrophe Fund to the corporation shall constitute and operate as a full transfer of coverage from the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting to the corporation.

(m)  Notwithstanding any other provision of law:

1.  The pledge or sale of, the lien upon, and the security interest in any rights, revenues, or other assets of the corporation created or purported to be created pursuant to any financing documents to secure any bonds or other indebtedness of the corporation shall be and remain valid and enforceable, notwithstanding the commencement of and during the continuation of, and after, any rehabilitation, insolvency, liquidation, bankruptcy, receivership, conservatorship, reorganization, or similar proceeding against the corporation under the laws of this state.

2.  No such proceeding shall relieve the corporation of its obligation, or otherwise affect its ability to perform its obligation, to continue to collect, or levy and collect, assessments, market equalization or other surcharges under subparagraph (c)10., or any other rights, revenues, or other assets of the corporation pledged pursuant to any financing documents.

3.  Each such pledge or sale of, lien upon, and security interest in, including the priority of such pledge, lien, or security interest, any such assessments, market equalization or other surcharges, or other rights, revenues, or other assets which are collected, or levied and collected, after the commencement of and during the pendency of, or after, any such proceeding shall continue unaffected by such proceeding. As used in this subsection, the term "financing documents" means any agreement or agreements, instrument or instruments, or other document or documents now existing or hereafter created evidencing any bonds or other indebtedness of the corporation or pursuant to which any such bonds or other indebtedness has been or may be issued and pursuant to which any rights, revenues, or other assets of the corporation are pledged or sold to secure the repayment of such bonds or indebtedness, together with the payment of interest on such bonds or such indebtedness, or the payment of any other obligation or financial product, as defined in the plan of operation of the corporation related to such bonds or indebtedness.

4.  Any such pledge or sale of assessments, revenues, contract rights, or other rights or assets of the corporation shall constitute a lien and security interest, or sale, as the case may be, that is immediately effective and attaches to such assessments, revenues, or contract rights or other rights or assets, whether or not imposed or collected at the time the pledge or sale is made. Any such pledge or sale is effective, valid, binding, and enforceable against the corporation or other entity making such pledge or sale, and valid and binding against and superior to any competing claims or obligations owed to any other person or entity, including policyholders in this state, asserting rights in any such assessments, revenues, or contract rights or other rights or assets to the extent set forth in and in accordance with the terms of the pledge or sale contained in the applicable financing documents, whether or not any such person or entity has notice of such pledge or sale and without the need for any physical delivery, recordation, filing, or other action.

(n)1.  The following records of the corporation are confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution:

a.  Underwriting files, except that a policyholder or an applicant shall have access to his or her own underwriting files.

b.  Claims files, until termination of all litigation and settlement of all claims arising out of the same incident, although portions of the claims files may remain exempt, as otherwise provided by law. Confidential and exempt claims file records may be released to other governmental agencies upon written request and demonstration of need; such records held by the receiving agency remain confidential and exempt as provided for herein.

c.  Records obtained or generated by an internal auditor pursuant to a routine audit, until the audit is completed, or if the audit is conducted as part of an investigation, until the investigation is closed or ceases to be active. An investigation is considered "active" while the investigation is being conducted with a reasonable, good faith belief that it could lead to the filing of administrative, civil, or criminal proceedings.

d.  Matters reasonably encompassed in privileged attorney-client communications.

e.  Proprietary information licensed to the corporation under contract and the contract provides for the confidentiality of such proprietary information.

f.  All information relating to the medical condition or medical status of a corporation employee which is not relevant to the employee's capacity to perform his or her duties, except as otherwise provided in this paragraph. Information which is exempt shall include, but is not limited to, information relating to workers' compensation, insurance benefits, and retirement or disability benefits.

g.  Upon an employee's entrance into the employee assistance program, a program to assist any employee who has a behavioral or medical disorder, substance abuse problem, or emotional difficulty which affects the employee's job performance, all records relative to that participation shall be confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution, except as otherwise provided in s. 112.0455(11).

h.  Information relating to negotiations for financing, reinsurance, depopulation, or contractual services, until the conclusion of the negotiations.

i.  Minutes of closed meetings regarding underwriting files, and minutes of closed meetings regarding an open claims file until termination of all litigation and settlement of all claims with regard to that claim, except that information otherwise confidential or exempt by law will be redacted.

When an authorized insurer is considering underwriting a risk insured by the corporation, relevant underwriting files and confidential claims files may be released to the insurer provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. When a file is transferred to an insurer that file is no longer a public record because it is not held by an agency subject to the provisions of the public records law. Underwriting files and confidential claims files may also be released to staff of and the board of governors of the market assistance plan established pursuant to s. 627.3515, who must retain the confidentiality of such files, except such files may be released to authorized insurers that are considering assuming the risks to which the files apply, provided the insurer agrees in writing, notarized and under oath, to maintain the confidentiality of such files. Finally, the corporation or the board or staff of the market assistance plan may make the following information obtained from underwriting files and confidential claims files available to licensed general lines insurance agents: name, address, and telephone number of the residential property owner or insured; location of the risk; rating information; loss history; and policy type. The receiving licensed general lines insurance agent must retain the confidentiality of the information received.

2.  Portions of meetings of the corporation are exempt from the provisions of s. 286.011 and s. 24(b), Art. I of the State Constitution wherein confidential underwriting files or confidential open claims files are discussed. All portions of corporation meetings which are closed to the public shall be recorded by a court reporter. The court reporter shall record the times of commencement and termination of the meeting, all discussion and proceedings, the names of all persons present at any time, and the names of all persons speaking. No portion of any closed meeting shall be off the record. Subject to the provisions hereof and s. 119.07(1)(b)-(d), the court reporter's notes of any closed meeting shall be retained by the corporation for a minimum of 5 years. A copy of the transcript, less any exempt matters, of any closed meeting wherein claims are discussed shall become public as to individual claims after settlement of the claim.

(o)  It is the intent of the Legislature that the amendments to this subsection enacted in 2002 should, over time, reduce the probable maximum windstorm losses in the residual markets and should reduce the potential assessments to be levied on property insurers and policyholders statewide. In furtherance of this intent:

1.  The board shall, on or before February 1 of each year, provide a report to the President of the Senate and the Speaker of the House of Representatives showing the reduction or increase in the 100-year probable maximum loss attributable to wind-only coverages and the quota share program under this subsection combined, as compared to the benchmark 100-year probable maximum loss of the Florida Windstorm Underwriting Association. For purposes of this paragraph, the benchmark 100-year probable maximum loss of the Florida Windstorm Underwriting Association shall be the calculation dated February 2001 and based on November 30, 2000, exposures. In order to ensure comparability of data, the board shall use the same methods for calculating its probable maximum loss as were used to calculate the benchmark probable maximum loss.

2.  Beginning February 1, 2007, if the report under subparagraph 1. for any year indicates that the 100-year probable maximum loss attributable to wind-only coverages and the quota share program combined does not reflect a reduction of at least 25 percent from the benchmark, the board shall reduce the boundaries of the high-risk area eligible for wind-only coverages under this subsection in a manner calculated to reduce such probable maximum loss to an amount at least 25 percent below the benchmark.

3.  Beginning February 1, 2012, if the report under subparagraph 1. for any year indicates that the 100-year probable maximum loss attributable to wind-only coverages and the quota share program combined does not reflect a reduction of at least 50 percent from the benchmark, the boundaries of the high-risk area eligible for wind-only coverages under this subsection shall be reduced by the elimination of any area that is not seaward of a line 1,000 feet inland from the Intracoastal Waterway.

(p)  In enacting the provisions of this section, the Legislature recognizes that both the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association have entered into financing arrangements that obligate each entity to service its debts and maintain the capacity to repay funds secured under these financing arrangements. It is the intent of the Legislature that nothing in this section be construed to compromise, diminish, or interfere with the rights of creditors under such financing arrangements. It is further the intent of the Legislature to preserve the obligations of the Florida Windstorm Underwriting Association and Residential Property and Casualty Joint Underwriting Association with regard to outstanding financing arrangements, with such obligations passing entirely and unchanged to the corporation and, specifically, to the applicable account of the corporation. So long as any bonds, notes, indebtedness, or other financing obligations of the Florida Windstorm Underwriting Association or the Residential Property and Casualty Joint Underwriting Association are outstanding, under the terms of the financing documents pertaining to them, the governing board of the corporation shall have and shall exercise the authority to levy, charge, collect, and receive all premiums, assessments, surcharges, charges, revenues, and receipts that the associations had authority to levy, charge, collect, or receive under the provisions of subsection (2) and this subsection, respectively, as they existed on January 1, 2002, to provide moneys, without exercise of the authority provided by this subsection, in at least the amounts, and by the times, as would be provided under those former provisions of subsection (2) or this subsection, respectively, so that the value, amount, and collectability of any assets, revenues, or revenue source pledged or committed to, or any lien thereon securing such outstanding bonds, notes, indebtedness, or other financing obligations will not be diminished, impaired, or adversely affected by the amendments made by this act and to permit compliance with all provisions of financing documents pertaining to such bonds, notes, indebtedness, or other financing obligations, or the security or credit enhancement for them, and any reference in this subsection to bonds, notes, indebtedness, financing obligations, or similar obligations, of the corporation shall include like instruments or contracts of the Florida Windstorm Underwriting Association and the Residential Property and Casualty Joint Underwriting Association to the extent not inconsistent with the provisions of the financing documents pertaining to them.

(q)  The corporation shall not require the securing of flood insurance as a condition of coverage if the insured or applicant executes a form approved by the office affirming that flood insurance is not provided by the corporation and that if flood insurance is not secured by the applicant or insured in addition to coverage by the corporation, the risk will not be covered for flood damage. A corporation policyholder electing not to secure flood insurance and executing a form as provided herein making a claim for water damage against the corporation shall have the burden of proving the damage was not caused by flooding. Notwithstanding other provisions of this subsection, the corporation may deny coverage to an applicant or insured who refuses to execute the form described herein.

(r)  A salaried employee of the corporation who performs policy administration services subsequent to the effectuation of a corporation policy is not required to be licensed as an agent under the provisions of s. 626.112.

²(7)  COLLATERAL PROTECTION INSURANCE.--As used in this section and ss. 215.555 and 627.311, the term "collateral protection insurance" means commercial property insurance of which a creditor is the primary beneficiary and policyholder and which protects or covers an interest of the creditor arising out of a credit transaction secured by real or personal property. Initiation of such coverage is triggered by the mortgagor's failure to maintain insurance coverage as required by the mortgage or other lending document. Collateral protection insurance is not residential coverage.

History.--s. 445, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 69-199; ss. 1, 2, ch. 70-234; s. 1, ch. 72-22; s. 1, ch. 73-259; s. 1, ch. 74-216; s. 14, ch. 75-9; s. 3, ch. 75-279; s. 1, ch. 76-96; s. 3, ch. 76-168; s. 5, ch. 76-260; s. 3, ch. 77-64; s. 1, ch. 77-93; s. 1, ch. 77-174; s. 1, ch. 77-380; s. 1, ch. 77-457; s. 28, ch. 77-468; s. 1, ch. 78-47; s. 164, ch. 79-164; ss. 1, 2, ch. 79-185; ss. 1, 2, ch. 80-94; ss. 1, 2, ch. 81-4; ss. 2, 3, ch. 81-318; ss. 351, 357, 809(2nd), 810, ch. 82-243; ss. 48, 49, 79, ch. 82-386; ss. 1, 5, ch. 82-391; s. 1, ch. 83-124; s. 1, ch. 83-206; s. 95, ch. 83-216; s. 15, ch. 85-62; s. 24, ch. 85-175; s. 1, ch. 85-274; ss. 13, 44, ch. 86-160; s. 35, ch. 86-191; s. 14, ch. 86-287; s. 1, ch. 88-368; s. 5, ch. 88-390; s. 1, ch. 89-236; s. 1, ch. 90-108; s. 6, ch. 91-106; s. 59, ch. 91-110; s. 18, ch. 92-179; s. 114, ch. 92-318; s. 3, ch. 92-345; s. 21, ch. 93-260; s. 4, ch. 93-289; s. 3, ch. 93-401; s. 14, ch. 93-410; s. 1, ch. 95-233; s. 9, ch. 95-276; s. 8, ch. 96-194; s. 2, ch. 96-377; s. 379, ch. 96-406; s. 5, ch. 97-55; s. 28, ch. 97-94; ss. 1731, 1732, ch. 97-102; s. 57, ch. 97-264; s. 8, ch. 98-49; ss. 221, 290, ch. 98-166; s. 8, ch. 98-173; s. 56, ch. 98-287; s. 1, ch. 99-237; s. 132, ch. 2000-141; s. 139, ch. 2000-318; s. 35, ch. 2001-186; s. 4, ch. 2001-372; s. 2, ch. 2002-221; s. 2, ch. 2002-240; s. 11, ch. 2002-282; s. 90, ch. 2003-1; s. 1101, ch. 2003-261; s. 73, ch. 2003-281; s. 122, ch. 2004-5; s. 47, ch. 2004-335; s. 24, ch. 2004-374; s. 7, ch. 2005-111.

¹Note.--Redesignated as subparagraph 5. by s. 7, ch. 2005-111.

²Note.--Also published at s. 215.555(15).

627.3511  Depopulation of Citizens Property Insurance Corporation.--

(1)  LEGISLATIVE INTENT.--The Legislature finds that the public policy of this state requires the maintenance of a residual market for residential property insurance. It is the intent of the Legislature to provide a variety of financial incentives to encourage the replacement of the highest possible number of Citizens Property Insurance Corporation policies with policies written by admitted insurers at approved rates.

(2)  TAKE-OUT BONUS.--The Citizens Property Insurance Corporation shall pay the sum of up to $100 to an insurer for each risk that the insurer removes from the corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation's obligations with respect to an in-force policy. Such payment is subject to approval of the corporation board. In order to qualify for the bonus under this subsection, the take-out plan must include a minimum of 25,000 policies. Within 30 days after approval by the board, the office may reject the insurer's take-out plan and disqualify the insurer from the bonus, based on the following criteria:

(a)  The capacity of the insurer to absorb the policies proposed to be taken out of the corporation and the concentration of risks of those policies.

(b)  Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the corporation sufficiently to justify the bonus.

(c)  Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.

(d)  The degree to which the take-out bonus is promoting new capital being allocated by the insurer to Florida residential property coverage.

(3)  EXEMPTION FROM DEFICIT ASSESSMENTS.--

(a)  The calculation of an insurer's assessment liability under s. 627.351(6)(b)3.a. or b. shall, for an insurer that in any calendar year removes 50,000 or more risks from the Citizens Property Insurance Corporation, either by issuance of a policy upon expiration or cancellation of the corporation policy or by assumption of the corporation's obligations with respect to in-force policies, exclude such removed policies for the succeeding 3 years, as follows:

1.  In the first year following removal of the risks, the risks are excluded from the calculation to the extent of 100 percent.

2.  In the second year following removal of the risks, the risks are excluded from the calculation to the extent of 75 percent.

3.  In the third year following removal of the risks, the risks are excluded from the calculation to the extent of 50 percent.

If the removal of risks is accomplished through assumption of obligations with respect to in-force policies, the corporation shall pay to the assuming insurer all unearned premium with respect to such policies less any policy acquisition costs agreed to by the corporation and assuming insurer. The term "policy acquisition costs" is defined as costs of issuance of the policy by the corporation which includes agent commissions, servicing company fees, and premium tax. This paragraph does not apply to an insurer that, at any time within 5 years before removing the risks, had a market share in excess of 0.1 percent of the statewide aggregate gross direct written premium for any line of property insurance, or to an affiliate of such an insurer. This paragraph does not apply unless either at least 40 percent of the risks removed from the corporation are located in Dade, Broward, and Palm Beach Counties, or at least 30 percent of the risks removed from the corporation are located in such counties and an additional 50 percent of the risks removed from the corporation are located in other coastal counties.

(b)  An insurer that first wrote personal lines residential property coverage in this state on or after July 1, 1994, is exempt from regular deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation until the earlier of the following:

1.  The end of the calendar year in which it first wrote 0.5 percent or more of the statewide aggregate direct written premium for any line of residential property coverage; or

2.  December 31, 1997, or December 31 of the third year in which it wrote such coverage in this state, whichever is later.

(c)  Other than an insurer that is exempt under paragraph (b), an insurer that in any calendar year increases its total structure exposure subject to wind coverage by 25 percent or more over its exposure for the preceding calendar year is, with respect to that year, exempt from deficit assessments imposed pursuant to s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., of the Citizens Property Insurance Corporation attributable to such increase in exposure.

(d)  Any exemption or credit from regular assessments authorized by this section shall last no longer than 3 years following the cancellation or expiration of the policy by the corporation. With the approval of the office, the board may extend such credits for an additional year if the insurer guarantees an additional year of renewability for all policies removed from the corporation, or for 2 additional years if the insurer guarantees 2 additional years of renewability for all policies so removed.

(4)  AGENT BONUS.--When the corporation enters into a contractual agreement for a take-out plan that provides a bonus to the insurer, the producing agent of record of the corporation policy is entitled to retain any unearned commission on such policy, and the insurer shall either:

(a)  Pay to the producing agent of record of the association policy, for the first year, an amount that is the greater of the insurer's usual and customary commission for the type of policy written or a fee equal to the usual and customary commission of the corporation; or

(b)  Offer to allow the producing agent of record of the corporation policy to continue servicing the policy for a period of not less than 1 year and offer to pay the agent the greater of the insurer's or the corporation's usual and customary commission for the type of policy written.

If the producing agent is unwilling or unable to accept appointment, the new insurer shall pay the agent in accordance with paragraph (a). The requirement of this subsection that the producing agent of record is entitled to retain the unearned commission on an association policy does not apply to a policy for which coverage has been provided in the association for 30 days or less or for which a cancellation notice has been issued pursuant to s. 627.351(6)(c)11. during the first 30 days of coverage.

(5)  APPLICABILITY.--

(a)  The take-out bonus provided by subsection (2) and the exemption from assessment provided by paragraph (3)(a) apply only if the corporation policy is replaced by either a standard policy including wind coverage or, if consistent with the insurer's underwriting rules as filed with the office, a basic policy including wind coverage; however, with respect to risks located in areas where coverage through the high-risk account of the corporation is available, the replacement policy need not provide wind coverage. The insurer must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. If an insurer assumes the corporation's obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation policy and must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 3-year coverage period required by this paragraph, the insurer must remove from the corporation one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy. In addition to these requirements, the corporation must place the bonus moneys in escrow for a period of 3 years; such moneys may be released from escrow only to pay claims. A take-out bonus provided by subsection (2) or subsection (6) shall not be considered premium income for purposes of taxes and assessments under the Florida Insurance Code and shall remain the property of the corporation, subject to the prior security interest of the insurer under the escrow agreement until it is released from escrow, and after it is released from escrow it shall be considered an asset of the insurer and credited to the insurer's capital and surplus.

(b)  It is the intent of the Legislature that an insurer eligible for the exemption under paragraph (3)(a) establish a preference in appointment of agents for those agents who lose a substantial amount of business as a result of risks being removed from the corporation.

(6)  COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--

(a)  The corporation shall pay a bonus to an insurer for each commercial residential policy that the insurer removes from the corporation pursuant to an approved take-out plan, either by issuance of a new policy upon expiration of the corporation policy or by assumption of the corporation's obligations with respect to an in-force policy. The corporation board shall determine the amount of the bonus based on such factors as the coverage provided, relative hurricane risk, the length of time that the property has been covered by the corporation, and the criteria specified in paragraphs (b) and (c). The amount of the bonus with respect to a particular policy may not exceed 25 percent of the corporation's 1-year premium for the policy. Such payment is subject to approval of the corporation board. In order to qualify for the bonus under this subsection, the take-out plan must include policies reflecting at least $100 million in structure exposure.

(b)  In order for a plan to qualify for approval:

1.  At least 40 percent of the policies removed from the corporation under the plan must be located in Dade, Broward, and Palm Beach Counties, or at least 30 percent of the policies removed from the corporation under the plan must be located in such counties and an additional 50 percent of the policies removed from the corporation must be located in other coastal counties.

2.  The insurer must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled or nonrenewed by the insurer for a lawful reason other than reduction of hurricane exposure. If an insurer assumes the corporation's obligations for a policy, it must issue a replacement policy for a 1-year term upon expiration of the corporation policy and must renew the replacement policy at approved rates on substantially similar terms for two additional 1-year terms, unless canceled by the insurer for a lawful reason other than reduction of hurricane exposure. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 3-year coverage period required by this subparagraph, the insurer must remove from the corporation one additional policy covering a risk similar to the risk covered by the canceled or nonrenewed policy.

(c)  A take-out plan is deemed approved unless the office, within 120 days after the board votes to recommend the plan, disapproves the plan based on:

1.  The capacity of the insurer to absorb the policies proposed to be taken out of the corporation and the concentration of risks of those policies.

2.  Whether the geographic and risk characteristics of policies in the proposed take-out plan serve to reduce the exposure of the corporation sufficiently to justify the bonus.

3.  Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.

4.  The degree to which the take-out bonus is promoting new capital being allocated by the insurer to residential property coverage in this state.

(d)  The calculation of an insurer's regular assessment liability under s. 627.351(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., shall, with respect to commercial residential policies removed from the corporation under an approved take-out plan, exclude such removed policies for the succeeding 3 years, as follows:

1.  In the first year following removal of the policies, the policies are excluded from the calculation to the extent of 100 percent.

2.  In the second year following removal of the policies, the policies are excluded from the calculation to the extent of 75 percent.

3.  In the third year following removal of the policies, the policies are excluded from the calculation to the extent of 50 percent.

(e)  An insurer that first wrote commercial residential property coverage in this state on or after June 1, 1996, is exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., with respect to commercial residential policies until the earlier of:

1.  The end of the calendar year in which such insurer first wrote 0.5 percent or more of the statewide aggregate direct written premium for commercial residential property coverage; or

2.  December 31 of the third year in which such insurer wrote commercial residential property coverage in this state.

(f)  An insurer that is not otherwise exempt from regular assessments under s. 627.351(6)(b)3.a. and b. with respect to commercial residential policies is, for any calendar year in which such insurer increased its total commercial residential hurricane exposure by 25 percent or more over its exposure for the preceding calendar year, exempt from regular assessments under s. 627.351(6)(b)3.a. and b., but not emergency assessments collected from policyholders pursuant to s. 627.351(6)(b)3.d., attributable to such increased exposure.

(7)  A minority business, which is at least 51 percent owned by minority persons as described in s. 288.703(3), desiring to operate or become licensed as a property and casualty insurer may exempt up to $50 of the escrow requirements of the take-out bonus, as described in this section. Such minority business, which has applied for a certificate of authority to engage in business as a property and casualty insurer, may simultaneously file the business' proposed take-out plan, as described in this section, with the corporation.

History.--s. 10, ch. 95-276; s. 10, ch. 96-194; s. 6, ch. 97-55; s. 24, ch. 97-93; s. 1, ch. 99-142; s. 7, ch. 2000-333; s. 3, ch. 2002-221; s. 3, ch. 2002-240; s. 1102, ch. 2003-261.

627.3512  Recoupment of residual market deficit assessments.--

(1)  An insurer or insurer group may recoup any assessments that have been paid during or after 1995 by the insurer or insurer group to defray deficits of an insurance risk apportionment plan or assigned risk plan under ss. 627.311 and 627.351, net of any earnings returned to the insurer or insurer group by the association or plan for any year after 1993. The recoupment shall be made by applying a separate assessment factor on policies of the same line or type as were considered by the residual markets in determining the assessment liability of the insurer or insurer group. An insurer or insurer group shall calculate a separate assessment factor for personal lines and commercial lines. The separate assessment factor shall provide for full recoupment of the assessments over a period of 1 year, unless the insurer or insurer group, at its option, elects to recoup the assessments over a longer period. The assessment factor expires upon collection of the full amount allowed to be recouped. Amounts recouped under this section are not subject to premium taxes, fees, or commissions.

(2)  The assessment factor must not be more than 3 percentage points above the ratio of the deficit assessment to the Florida direct written premium for policies for the lines or types of business as to which the assessment was calculated, as written in the year the deficit assessment was paid. If an insurer or insurer group fails to collect the full amount of the deficit assessment, the insurer or insurer group must carry forward the amount of the deficit and adjust the deficit assessment to be recouped in a subsequent year by that amount.

(3)  The insurer or insurer group shall file with the office a statement setting forth the amount of the assessment factor and an explanation of how the factor will be applied, at least 15 days prior to the factor being applied to any policies. The statement shall include documentation of the assessment paid by the insurer or insurer group and the arithmetic calculations supporting the assessment factor. The office shall complete its review within 15 days after receipt of the filing and shall limit its review to verification of the arithmetic calculations. The insurer or insurer group may use the assessment factor at any time after the expiration of the 15-day period unless the office has notified the insurer or insurer group in writing that the arithmetic calculations are incorrect.

(4)  The commission may adopt rules to implement this section.

History.--s. 11, ch. 95-276; s. 7, ch. 97-55; s. 1103, ch. 2003-261.

627.3513  Standards for sale of bonds by Citizens Property Insurance Corporation.--

(1)(a)  The purpose of this section is to provide standards for the sale of bonds pursuant to s. 627.351(2) and (6).

(b)  The term "corporation," as used in this section, means the Citizens Property Insurance Corporation.

(2)  The plan of operation of the corporation shall provide for the selection of financial services providers and underwriters. Such provisions shall include the method for publicizing or otherwise providing reasonable notice to potential financial services providers, underwriters, and other interested parties, which may include expedited procedures and methods for emergency situations. The corporation shall not engage the services of any person or firm as a securities broker or bond underwriter that is not eligible to be engaged by the state under the provisions of s. 215.684. The corporation shall make all selections of financial service providers and managing underwriters at a noticed public meeting.

(3)  The plan of operation of the corporation shall provide for any managing underwriter or financial adviser to provide to the corporation a disclosure statement containing at least the following information:

(a)  An itemized list setting forth the nature and estimated amounts of expenses to be incurred by the managing underwriter in connection with the issuance of such bonds. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided such item includes only minor items of expense which cannot be easily categorized elsewhere in the statement.

(b)  The names, addresses, and estimated amounts of compensation of any finders connected with the issuance of the bonds.

(c)  The amount of underwriting spread expected to be realized and the amount of fees and expenses expected to be paid to the financial adviser.

(d)  Any management fee charged by the managing underwriter.

(e)  Any other fee, bonus, or compensation estimated to be paid by the managing underwriter in connection with the bond issue to any person not regularly employed or retained by it.

(f)  The name and address of each financial adviser or managing underwriter, if any, connected with the bond issue.

(g)  Any other disclosure which the corporation may require.

(4)(a)  No underwriter, commercial bank, investment banker, or financial consultant or adviser shall pay any finder any bonus, fee, or gratuity in connection with the sale of bonds issued by the corporation unless full disclosure is made in writing to the corporation prior to or concurrently with the submission of a purchase proposal for bonds by the underwriter, commercial bank, investment banker, or financial consultant or adviser, providing the name and address of any finder and the amount of bonus, fee, or gratuity paid to such finder. A violation of this subsection shall not affect the validity of the bond issue.

(b)  As used in this subsection, the term "finder" means a person who is neither regularly employed by, nor a partner or officer of, an underwriter, bank, banker, or financial consultant or adviser and who enters into an understanding with either the issuer or the managing underwriter, or both, for any paid or promised compensation or valuable consideration, directly or indirectly, expressed or implied, to act solely as an intermediary between such issuer and managing underwriter for the purpose of influencing any transaction in the purpose of such bonds.

(5)  This section is not intended to restrict or prohibit the employment of professional services relating to bonds issued under s. 627.351(6) or the issuance of bonds by the corporation.

(6)  The failure of the corporation to comply with one or more provisions of this section shall not affect the validity of the bond issue; however, the failure of the corporation to comply in good faith both with this section and with the plan as amended shall be a violation of its plan of operation and a violation of the insurance code.

History.--s. 8, ch. 97-55; s. 1104, ch. 2003-261.

627.3515  Market assistance plan; property and casualty risks.--

(1)  The office shall adopt a market assistance plan to assist in the placement of risks of applicants who are unable to procure property insurance as defined in s. 624.604 or casualty insurance as defined in s. 624.605(1)(b), (e), (f), (g), or (h) from authorized insurers when such insurance is otherwise generally available from insurers authorized to transact and actually writing that kind and class of insurance in this state. Through such measures as are found appropriate by the board of governors, the market assistance plan shall take affirmative steps to assist in the removal from the Citizens Property Insurance Corporation any risk that can be placed in the voluntary market. All property and casualty insurers licensed in this state shall participate in the plan.

(2)(a)  Each person serving as a member of the board of governors of the Citizens Property Insurance Corporation shall also serve as a member of the board of governors of the market assistance plan.

(b)  The plan shall be funded through payments from the Citizens Property Insurance Corporation and annual assessments of residential property insurers in the amount of $450.

(c)  The plan is not required to assist in the placement of any workers' compensation, employer's liability, malpractice, or motor vehicle insurance coverage.

History.--s. 1, ch. 85-92; s. 43, ch. 86-160; s. 1, ch. 86-286; s. 6, ch. 88-390; ss. 26, 114, ch. 92-318; s. 12, ch. 95-276; s. 3, ch. 96-377; s. 1105, ch. 2003-261.

627.3517  Consumer choice.--No provision of s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to impair the right of any insurance risk apportionment plan policyholder, upon receipt of any keepout or take-out offer, to retain his or her current agent, so long as that agent is duly licensed and appointed by the insurance risk apportionment plan or otherwise authorized to place business with the insurance risk apportionment plan. This right shall not be canceled, suspended, impeded, abridged, or otherwise compromised by any rule, plan of operation, or depopulation plan, whether through keepout, take-out, midterm assumption, or any other means, of any insurance risk apportionment plan or depopulation plan, including, but not limited to, those described in s. 627.351, s. 627.3511, or s. 627.3515. The commission shall adopt any rules necessary to cause any insurance risk apportionment plan or market assistance plan under such sections to demonstrate that the operations of the plan do not interfere with, promote, or allow interference with the rights created under this section. If the policyholder's current agent is unable or unwilling to be appointed with the insurer making the take-out or keepout offer, the policyholder shall not be disqualified from participation in the appropriate insurance risk apportionment plan because of an offer of coverage in the voluntary market. An offer of full property insurance coverage by the insurer currently insuring either the ex-wind or wind-only coverage on the policy to which the offer applies shall not be considered a take-out or keepout offer. Any rule, plan of operation, or plan of depopulation, through keepout, take-out, midterm assumption, or any other means, of any property insurance risk apportionment plan under s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c) and 627.3511(4).

History.--s. 4, ch. 2002-221; s. 4, ch. 2002-240; s. 1106, ch. 2003-261.

627.357  Medical malpractice self-insurance.--

(1)  DEFINITIONS.--As used in this section, the term:

(a)  "Fund" means a group or association of health care providers authorized to self-insure.

(b)  "Health care provider" means any:

1.  Hospital licensed under chapter 395.

2.  Physician licensed, or physician assistant licensed, under chapter 458.

3.  Osteopathic physician or physician assistant licensed under chapter 459.

4.  Podiatric physician licensed under chapter 461.

5.  Health maintenance organization certificated under part I of chapter 641.

6.  Ambulatory surgical center licensed under chapter 395.

7.  Chiropractic physician licensed under chapter 460.

8.  Psychologist licensed under chapter 490.

9.  Optometrist licensed under chapter 463.

10.  Dentist licensed under chapter 466.

11.  Pharmacist licensed under chapter 465.

12.  Registered nurse, licensed practical nurse, or advanced registered nurse practitioner licensed or registered under part I of chapter 464.

13.  Other medical facility.

14.  Professional association, partnership, corporation, joint venture, or other association established by the individuals set forth in subparagraphs 2., 3., 4., 7., 8., 9., 10., 11., and 12. for professional activity.

(c)  "Other medical facility" means a facility the primary purpose of which is to provide human medical diagnostic services or a facility providing nonsurgical human medical treatment and in which the patient is admitted to and discharged from such facility within the same working day, and which is not part of a hospital. The term does not include a facility existing for the primary purpose of performing terminations of pregnancies or an office maintained by a physician or dentist for the practice of medicine.

(d)  "Hospital subsidiary corporation" means any corporation over which a hospital or the hospital's parent corporation exercises financial or operational control and which provides health care services to the hospital or the hospital parent corporation or another hospital subsidiary corporation.

(e)  "Hospital parent corporation" means any corporation which has financial or operational control over a hospital and which provides health care services to the hospital or another hospital subsidiary corporation.

(f)  "Committee" means a committee or board of trustees of a health care provider or group of health care providers established to make recommendations, policies, or decisions regarding patient institutional utilization, patient treatment, or institutional staff privileges or to perform other administrative or professional purposes or functions.

(2)  A group or association of health care providers composed of any number of members, is authorized to self-insure against claims arising out of the rendering of, or failure to render, medical care or services, or against claims for injury or death to the insured's patients arising out of the insured's activities, upon obtaining approval from the office and upon complying with the following conditions:

(a)  Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.

(b)  Employment of professional consultants for loss prevention and claims management coordination under a risk management program.

(3)  The fund may insure hospital parent corporations, hospital subsidiary corporations, and committees against claims arising out of the rendering of, or failure to render, medical care or services.

(4)  The fund is subject to regulation and investigation by the office. The fund is subject to rules of the commission and to part IX of chapter 626, relating to trade practices and frauds.

(5)  The trust fund may purchase medical malpractice insurance, specific excess insurance, and aggregate excess insurance, up to determined limits, as necessary to provide the insurance coverages authorized by this section, consistent with market availability. The trust fund may purchase such risk management services as may be required, pay claims as may arise under any deductible provisions, and engage in prudent investment of trust funds and other activities reasonably relating to the payment of claims and to providing medical malpractice self-insurance, to the extent otherwise consistent with this section and law generally applicable to medical malpractice insurers.

(6)  The commission shall adopt rules to implement this section, including rules that ensure that a trust fund remains solvent and maintains a sufficient reserve to cover contingent liabilities under subsection (7) in the event of its dissolution.

(7)(a)  The liability of each member for the obligations of the trust fund is individual, several, and proportionate, but not joint, except as provided in this subsection.

(b)  Each member has a contingent assessment liability for payment of actual losses and expenses incurred while the member's policy was in force.

(c)  The trust fund may from time to time assess members of the fund liable therefor under the terms of their policies and pursuant to this section. The office may assess the members in the event of liquidation of the fund.

(d)  A member's share of a deficiency for which an assessment is made is computed by applying to the premium earned on the member's policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. If one or more members fail to pay an assessment, the other members are liable on a proportionate basis for an additional assessment. The fund, acting on behalf of all members who paid the additional assessment, shall institute legal action, when necessary and appropriate, to recover the assessment from members who failed to pay it.

(e)  In computing the earned premiums for the purposes of this section, the gross premium received by the fund for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.

(f)  No member has an offset against any assessment for which the member is liable, on account of any claim for unearned premium of losses payable.

(g)  If the assets of a trust fund are at any time insufficient to comply with the requirements of law, discharge the fund's liabilities, or meet the required conditions of financial soundness, or if a judgment against the fund has remained unsatisfied for 30 days, the trust fund must immediately make up the deficiency or levy an assessment upon the members for the amount needed to make up the deficiency, subject to the limitations set forth in this subsection.

(h)  If the trust fund fails to make an assessment as required by paragraph (g), the office shall order the fund to do so. If the deficiency is not sufficiently made up within 60 days after the date of the order, the fund is deemed insolvent and grounds exist to proceed against the fund as provided for in part I of chapter 631.

(i)  Subject to this section, any rehabilitation, liquidation, conservation, or dissolution of a trust fund shall be conducted under the supervision of the department, which has all power with respect thereto granted to it under part I of chapter 631 governing the rehabilitation, liquidation, conservation, or dissolution of insurers.

(8)  The expense factors associated with rates used by a fund shall be filed with the office at least 30 days prior to use and may not be used until approved by the office. The office shall disapprove the rates unless the filed expense factors associated therewith are justified and reasonable for the benefits and services provided.

(9)  Premiums, contributions, and assessments received by a fund are subject to ss. 624.509(1) and (2) and 624.5092, except that the tax rate is 1.6 percent of the gross amount of such premiums, contributions, or assessments.

History.--ss. 1, 2, 3, ch. 72-265; s. 162, ch. 73-333; s. 4, ch. 75-9; s. 3, ch. 76-168; s. 8, ch. 76-260; s. 5, ch. 77-64; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 353, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 15, ch. 86-160; s. 30, ch. 87-226; s. 6, ch. 88-206; s. 17, ch. 89-167; s. 13, ch. 90-249; s. 60, ch. 91-110; ss. 27, 114, ch. 92-318; s. 58, ch. 97-264; s. 9, ch. 98-49; ss. 222, 291, ch. 98-166; s. 140, ch. 2000-318; s. 57, ch. 2001-63; s. 1107, ch. 2003-261; s. 42, ch. 2003-416.

Note.--Former s. 627.355; s. 768.52, 1976 Supplement.

627.361  False or misleading information.--No person shall willfully withhold information from or knowingly give false or misleading information to the office, any statistical agency designated by the office, any rating organization, or any insurer, which will affect the rates or premiums chargeable under this part.

History.--s. 446, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 354, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1108, ch. 2003-261.

627.371  Hearings.--

(1)  Any person aggrieved by any rate charged, rating plan, rating system, or underwriting rule followed or adopted by an insurer, and any person aggrieved by any rating plan, rating system, or underwriting rule followed or adopted by a rating organization, may herself or himself or by her or his authorized representative make written request of the insurer or rating organization to review the manner in which the rate, plan, system, or rule has been applied with respect to insurance afforded her or him. If the request is not granted within 30 days after it is made, the requester may treat it as rejected. Any person aggrieved by the refusal of an insurer or rating organization to grant the review requested, or by the failure or refusal to grant all or part of the relief requested, may file a written complaint with the office, specifying the grounds relied upon. If the office has already disposed of the issue as raised by a similar complaint or believes that probable cause for the complaint does not exist or that the complaint is not made in good faith, it shall so notify the complainant. Otherwise, and if it also finds that the complaint charges a violation of this chapter and that the complainant would be aggrieved if the violation is proven, it shall proceed as provided in subsection (2).

(2)  If after examination of an insurer, rating organization, advisory organization, or group, association, or other organization of insurers which engages in joint underwriting or joint reinsurance, upon the basis of other information, or upon sufficient complaint as provided in subsection (1), the office has good cause to believe that such insurer, organization, group, or association, or any rate, rating plan, or rating system made or used by any such insurer or rating organization, does not comply with the requirements and standards of this part applicable to it, it shall, unless it has good cause to believe such noncompliance is willful, give notice in writing to such insurer, organization, group, or association stating therein in what manner and to what extent noncompliance is alleged to exist and specifying therein a reasonable time, not less than 10 days thereafter, in which the noncompliance may be corrected, including any premium adjustment.

(3)  If the office has good cause to believe that such noncompliance is willful or if, within the period prescribed by the office in the notice required by subsection (2), the insurer, organization, group, or association does not make such changes as may be necessary to correct the noncompliance specified by the office or establish to the satisfaction of the office that such specified noncompliance does not exist, then the office is required to proceed to further determine the matter. If no notice has been given as provided in subsection (2), the notice shall state in what manner and to what extent noncompliance is alleged to exist. The proceedings shall not consider any subject not specified in the notice required by subsections (2) and (3).

History.--s. 447, ch. 59-205; s. 20, ch. 67-9; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 355, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 5, ch. 93-289; s. 322, ch. 97-102; s. 1109, ch. 2003-261.

627.381  Penalty for violation.--

(1)  The office may, if it finds that any person or organization has violated any provision of this part, impose an administrative fine pursuant to s. 624.4211.

(2)  The office may suspend the license or authority of any rating organization or insurer which fails to comply with an order of the office within the time limited by such order, or any extension thereof which the office may grant. The office shall not suspend the license or authority of any rating organization or insurer for failure to comply with an order until the time prescribed for an appeal therefrom has expired or, if an appeal has been taken, until such order has been affirmed. The office may determine when a suspension of license or authority shall become effective and it shall remain in effect for the period fixed by it, unless it modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded, or reversed.

History.--s. 448, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 356, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 114, ch. 92-318; s. 1110, ch. 2003-261.

627.401  Scope of this part.

627.402  Definitions; specified certificates not included.

627.4025  Residential coverage and hurricane coverage defined.

627.403  "Premium" defined.

627.4035  Cash payment of premiums; claims.

627.404  Insurable interest; personal insurance.

627.405  Insurable interest; property.

627.406  Power to contract; purchase of insurance by or for minor.

627.407  Alteration of application.

627.408  Application as evidence.

627.4085  Insurer name, agent name, and license identification number required on application.

627.409  Representations in applications; warranties.

627.4091  Specific reasons for denial, cancellation, or nonrenewal.

627.40951  Standard personal lines residential insurance policy.

627.410  Filing, approval of forms.

627.4101  Credit insurance enrollment forms.

627.4105  Life and health insurance; reduced premiums upon rigorous physical examination.

627.411  Grounds for disapproval.

627.412  Standard provisions, in general.

627.413  Contents of policies, in general; identification.

627.4131  Telephone number required.

627.4132  Stacking of coverages prohibited.

627.4133  Notice of cancellation, nonrenewal, or renewal premium.

627.4135  Casualty insurance contracts subject to general provisions for insurance contracts.

627.4136  Nonjoinder of insurers.

627.4137  Disclosure of certain information required.

627.414  Additional policy contents.

627.4143  Outline of coverage.

627.4145  Readable language in insurance policies.

627.4147  Medical malpractice insurance contracts.

627.4148  Medical malpractice insurers; required offer of coverage limits.

627.41495  Public notice of medical malpractice rate filings.

627.415  Charter, bylaw provisions.

627.416  Execution of policies.

627.417  Underwriters' and combination policies.

627.418  Validity of noncomplying contracts.

627.419  Construction of policies.

627.4195  Health insurance; claims for payment of psychotherapeutic services; confidentiality.

627.420  Binders.

627.4205  Coverage identification number required.

627.421  Delivery of policy.

627.422  Assignment of policies.

627.423  Payment discharges insurer.

627.4232  Health insurance out-of-hospital benefits.

627.4233  Total disability defined.

627.4234  Health insurance cost containment provisions required.

627.4235  Coordination of benefits.

627.4236  Coverage for bone marrow transplant procedures.

627.4237  Sickness disability or disability due to sickness.

627.4238  Health insurer examinations.

627.4239  Coverage for use of drugs in treatment of cancer.

627.42395  Coverage for certain prescription and nonprescription enteral formulas.

627.424  Minor may give acquittance.

627.425  Forms for proof of loss to be furnished.

627.426  Claims administration.

627.4261  Insurer's duty to acknowledge communications regarding claims; investigation.

627.4265  Payment of settlement.

627.427  Payment of judgment by insurer; penalty for failure.

627.428  Attorney's fee.

627.429  Medical tests for HIV infection and AIDS for insurance purposes.

627.4295  Dental procedures; anesthesia and hospitalization coverage.

627.4301  Genetic information for insurance purposes.

627.4302  Identification cards for processing prescription drug claims.

627.441  Commercial general liability policies; coverage to contractors for completed operations.

627.401  Scope of this part.--No provision of this part of this chapter applies to:

(1)  Reinsurance.

(2)  Policies or contracts not issued for delivery in this state nor delivered in this state, except as otherwise provided in this code.

(3)  Wet marine and transportation insurance, except ss. 627.409, 627.420, and 627.428.

(4)  Title insurance, except ss. 627.406, 627.415, 627.416, 627.419, 627.427, and 627.428.

(5)  Credit life or credit disability insurance, except ss. 627.419(5) and 627.428.

History.--s. 450, ch. 59-205; s. 1, ch. 70-322; s. 1, ch. 70-371; s. 1, ch. 71-45; s. 163, ch. 73-333; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 358, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.402  Definitions; specified certificates not included.--As used in this part, the term:

(1)  "Policy" means a written contract of insurance or written agreement for or effecting insurance, or the certificate thereof, by whatever name called, and includes all clauses, riders, endorsements, and papers which are a part thereof.

(2)  The word "certificate" as used in this section does not include certificates as to group life or health insurance or as to group annuities issued to individual insureds.

History.--s. 451, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 359, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 28, 114, ch. 92-318.

627.4025  Residential coverage and hurricane coverage defined.--

(1)  Residential coverage includes both personal lines residential coverage, which consists of the type of coverage provided by homeowner's, mobile home owner's, dwelling, tenant's, condominium unit owner's, cooperative unit owner's, and similar policies, and commercial lines residential coverage, which consists of the type of coverage provided by condominium association, cooperative association, apartment building, and similar policies, including policies covering the common elements of a homeowners' association. Residential coverage for personal lines and commercial lines as set forth in this section includes policies that provide coverage for particular perils such as windstorm and hurricane or coverage for insurer insolvency or deductibles.

(2)  As used in policies providing residential coverage:

(a)  "Hurricane coverage" is coverage for loss or damage caused by the peril of windstorm during a hurricane. The term includes ensuing damage to the interior of a building, or to property inside a building, caused by rain, snow, sleet, hail, sand, or dust if the direct force of the windstorm first damages the building, causing an opening through which rain, snow, sleet, hail, sand, or dust enters and causes damage.

(b)  "Windstorm" for purposes of paragraph (a) means wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane which results in direct physical loss or damage to property.

(c)  "Hurricane" for purposes of paragraphs (a) and (b) means a storm system that has been declared to be a hurricane by the National Hurricane Center of the National Weather Service. The duration of the hurricane includes the time period, in Florida:

1.  Beginning at the time a hurricane watch or hurricane warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service;

2.  Continuing for the time period during which the hurricane conditions exist anywhere in Florida; and

3.  Ending 72 hours following the termination of the last hurricane watch or hurricane warning issued for any part of Florida by the National Hurricane Center of the National Weather Service.

History.--s. 8, ch. 95-276; s. 11, ch. 96-194; s. 10, ch. 97-55.

627.403  "Premium" defined.--"Premium" is the consideration for insurance, by whatever name called. Any "assessment," or any "membership," "policy," "survey," "inspection," "service" or similar fee or charge in consideration for an insurance contract is deemed part of the premium.

History.--s. 452, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4035  Cash payment of premiums; claims.--

(1)  The premiums for insurance contracts issued in this state or covering risk located in this state shall be paid in cash consisting of coins, currency, checks, or money orders or by using a debit card, credit card, automatic electronic funds transfer, or payroll deduction plan.

(2)  Subsection (1) is not applicable to:

(a)  Reinsurance agreements;

(b)  Pension plans;

(c)  Premium loans, whether or not subject to an automatic provision;

(d)  Dividends, whether to purchase additional paid-up insurance or to shorten the dividend payment period;

(e)  Salary deduction plans;

(f)  Preauthorized check plans;

(g)  Waivers of premiums on disability;

(h)  Nonforfeiture provisions affording benefits under supplementary contracts; or

(i)  Such other methods of paying for life insurance as may be permitted by the commission pursuant to rule or regulation.

(3)  All payments of claims made in this state under any contract of insurance shall be paid:

(a)  In cash consisting of coins, currency, checks, drafts, or money orders and, if by check or draft, shall be in such form as will comply with the standards for cash items adopted by the Federal Reserve System to facilitate the sorting, routing, and mechanized processing of such items; or

(b)  If authorized in writing by the recipient or the recipient's representative, by debit card or any other form of electronic transfer. Any fees or costs to be charged against the recipient must be disclosed in writing to the recipient or the recipient's representative at the time of written authorization.

History.--s. 1, ch. 70-69; s. 1, ch. 70-439; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 11, ch. 83-288; s. 114, ch. 92-318; s. 1, ch. 2000-113; s. 1111, ch. 2003-261; s. 1, ch. 2003-267; s. 1, ch. 2003-281.

627.404  Insurable interest; personal insurance.--

(1)  An insurer shall be entitled to rely upon all statements, declarations, and representations made by an applicant for insurance relative to the insurable interest which such applicant has in the insured; and no insurer shall incur any legal liability except as set forth in the policy, by virtue of any untrue statements, declarations, or representations so relied upon in good faith by the insurer.

(2)  A charitable organization that meets the requirements of s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, may own or purchase life insurance on an insured who consents to the ownership or purchase of that insurance.

History.--s. 453, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 13, ch. 91-296; s. 114, ch. 92-318.

627.405  Insurable interest; property.--

(1)  No contract of insurance of property or of any interest in property or arising from property shall be enforceable as to the insurance except for the benefit of persons having an insurable interest in the things insured as at the time of the loss.

(2)  "Insurable interest" as used in this section means any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.

(3)  The measure of an insurable interest in property is the extent to which the insured might be damnified by loss, injury, or impairment thereof.

History.--s. 454, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.406  Power to contract; purchase of insurance by or for minor.--

(1)  Any person of competent legal capacity may contract for insurance.

(2)  Any minor of the age of 15 years or more, as determined by the nearest birthday, may, notwithstanding his or her minority, contract for annuities or for insurance on his or her own life, body, health, property, liabilities, or other interests or on the person of another in whom the minor has an insurable interest. Such a minor shall, notwithstanding such minority, be deemed competent to exercise all rights and powers with respect to or under any contract for annuity or for insurance upon his or her own life, body, or health or any contract such minor effected on his or her own property, liabilities, or other interests or on the person of another, as might be exercised by a person of full legal age. Such minor may at any time surrender his or her interest in any such contracts and give a valid discharge for any benefits accruing or money payable thereunder. Such a minor shall not, by reason of his or her minority, be entitled to rescind, avoid, or repudiate the contract, nor to rescind, avoid, or repudiate any exercise of a right or privilege thereunder, except that such a minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such annuity or insurance contract.

(3)  If any minor mentioned in subsection (2) is possessed of an estate that is being administered by a guardian or curator, no such contract shall be binding upon such estate as to payment of premiums, except as and when consented to by the guardian or curator and approved by the probate court of the county in which the administration of the estate is pending; and such consent and approval shall be required as to each premium payment.

(4)  Any annuity contract or policy of life or health insurance procured by or for a minor under subsection (2) shall be made payable either to the minor or his or her estate or to a person having an insurable interest in the life of such minor.

History.--s. 455, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 360, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 323, ch. 97-102.

627.407  Alteration of application.--No alteration of any written application for any life or health insurance policy shall be made by any person other than the applicant without his or her written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant.

History.--s. 456, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 361, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 324, ch. 97-102.

627.408  Application as evidence.--

(1)  An application for the issuance of any life or health insurance policy or annuity contract is not admissible in evidence in an action relative to the policy or contract unless a true copy of the application was attached to or otherwise made a part of the policy or contract when issued.

(2)  After reinstatement or renewal of a policy of insurance delivered or issued for delivery in this state, the insured may, in writing, request from the insurer a copy of the original application, or the application for renewal or reinstatement, if any. The insured or the beneficiary or assignee of a life or health insurance policy may request the application. Within 30 days after receiving the request, the insurer must deliver or mail a legible copy of the application to the person requesting it. If the request is made by a beneficiary, the 30-day period does not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's vested interest in the policy or contract.

History.--s. 457, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 362, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 29, 114, ch. 92-318.

627.4085  Insurer name, agent name, and license identification number required on application.--

(1)  All applications for an insurance policy or annuity contract shall prominently display the name of the insuring entity on the first page of the application form at the time the coverage is bound or premium is quoted. Such applications shall also disclose the name and license identification number of the agent as shown on the agent's license issued by the department, which information may be typed, printed, stamped, or handwritten if legible.

(2)  This section does not apply to surplus lines business under the provisions of ss. 626.913-626.937.

History.--ss. 34, 65, ch. 88-166; s. 39, ch. 92-146; s. 114, ch. 92-318.

627.409  Representations in applications; warranties.--

(1)  Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a representation and is not a warranty. A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:

(a)  The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b)  If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

(2)  A breach or violation by the insured of any warranty, condition, or provision of any wet marine or transportation insurance policy, contract of insurance, endorsement, or application therefor does not void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured.

History.--s. 458, ch. 59-205; s. 2, ch. 71-45; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 363, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 30, 114, ch. 92-318.

627.4091  Specific reasons for denial, cancellation, or nonrenewal.--

(1)  The denial of an application for an insurance policy must be accompanied by the specific reasons for denial, including the specific underwriting reasons, if applicable.

(2)  Each notice of nonrenewal or cancellation must be accompanied by the specific reasons for nonrenewal or cancellation, including the specific underwriting reasons, if applicable.

(3)  No cause of action in the nature of defamation, invasion of privacy, or negligence shall arise against any person for disclosing personal or privileged information in accordance with this section, nor shall such a cause of action arise against any person for furnishing personal or privileged information to an insurance institution, agent, or insurance-support organization; however, this section shall provide no immunity for disclosing or furnishing false information through gross negligence or with malice or willful intent to injure any person.

(4)  The provisions of any other statute respecting disclosure of personal information control to the extent of any conflict with this section.

(5)  When an insurer refuses to provide private passenger automobile insurance or personal lines residential property insurance, including, but not limited to, homeowner's, mobile home owner's, condominium unit owner's, or other insurance covering a personal residential structure, to an applicant due to adverse underwriting information, the insurer shall:

(a)  Provide to the applicant specific information regarding the reasons for the refusal to insure.

(b)  If the reason for the refusal to insure is based on a loss underwriting history or report from a consumer reporting agency, to the extent applicable identify the loss underwriting history and notify the applicant of his or her right under the federal Fair and Accurate Credit Transactions Act to obtain a copy of the report from the consumer reporting agency.

History.--s. 31, ch. 92-318; s. 12, ch. 2004-370; s. 157, ch. 2004-390.

627.40951  Standard personal lines residential insurance policy.--

(1)  The Legislature finds that many consumers who filed property loss claims as a result of the hurricanes that struck this state in 2004 were inadequately insured due to the difficulty consumers encounter in trying to understand the complex nature of property insurance policies. The purpose and intent of this section is to have property and casualty insurers offer standard personal lines residential property insurance policies and standard checklists of policy contents, in accordance with s. 627.4143, to consumers and to ensure that these policies and checklists are written in a simple format with easily readable language that will enable most consumers to understand the principal benefits and coverage provided in the policy; the principal exclusions and limitations or reductions contained in the policy, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions; and any additional coverage provided through any rider or endorsement that accompanies the policy and renewal or cancellation provisions.

(2)  The Chief Financial Officer shall appoint an advisory committee composed of two representatives of insurers currently selling personal lines residential property insurance coverage, two representatives of property and casualty agents, two representatives of consumers, two representatives of the Commissioner of Insurance Regulation, and the Insurance Consumer Advocate or her or his designee. The Chief Financial Officer or her or his designee shall serve as chair of the committee. The committee shall develop policy language for coverage that represents general industry standards in the market for comprehensive coverage under personal lines residential insurance policies and shall develop a checklist to be used with each type of personal lines residential property insurance policy. The committee shall review policies and related forms written by Insurance Services Office, Inc. The committee shall file a report containing its recommendations to the President of the Senate and the Speaker of the House of Representatives by January 15, 2006. No insurer shall be required to offer the standard policy unless required by further act of the Legislature.

History.--s. 8, ch. 2005-111.

627.410  Filing, approval of forms.--

(1)  No basic insurance policy or annuity contract form, or application form where written application is required and is to be made a part of the policy or contract, or group certificates issued under a master contract delivered in this state, or printed rider or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with the office by or in behalf of the insurer which proposes to use such form and has been approved by the office. This provision does not apply to surety bonds or to policies, riders, endorsements, or forms of unique character which are designed for and used with relation to insurance upon a particular subject (other than as to health insurance), or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or health insurance policies and are used at the request of the individual policyholder, contract holder, or certificateholder. As to group insurance policies effectuated and delivered outside this state but covering persons resident in this state, the group certificates to be delivered or issued for delivery in this state shall be filed with the office for information purposes only.

(2)  Every such filing must be made not less than 30 days in advance of any such use or delivery. At the expiration of such 30 days, the form so filed will be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the office. The approval of any such form by the office constitutes a waiver of any unexpired portion of such waiting period. The office may extend by not more than an additional 15 days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved.

(3)  The office may, for cause, withdraw a previous approval. No insurer shall issue or use any form disapproved by the office, or as to which the office has withdrawn approval, after the effective date of the order of the office.

(4)  The office may, by order, exempt from the requirements of this section for so long as it deems proper any insurance document or form or type thereof as specified in such order, to which, in its opinion, this section may not practicably be applied, or the filing and approval of which are, in its opinion, not desirable or necessary for the protection of the public.

(5)  This section also applies to any such form used by domestic insurers for delivery in a jurisdiction outside this state if the insurance supervisory official of such jurisdiction informs the office that such form is not subject to approval or disapproval by such official, and upon the order of the office requiring the form to be submitted to it for the purpose. The applicable same standards apply to such forms as apply to forms for domestic use.

(6)(a)  An insurer shall not deliver or issue for delivery or renew in this state any health insurance policy form until it has filed with the office a copy of every applicable rating manual, rating schedule, change in rating manual, and change in rating schedule; if rating manuals and rating schedules are not applicable, the insurer must file with the office applicable premium rates and any change in applicable premium rates. This paragraph does not apply to group health insurance policies, effectuated and delivered in this state, insuring groups of 51 or more persons, except for Medicare supplement insurance, long-term care insurance, and any coverage under which the increase in claim costs over the lifetime of the contract due to advancing age or duration is prefunded in the premium.

(b)  The commission may establish by rule, for each type of health insurance form, procedures to be used in ascertaining the reasonableness of benefits in relation to premium rates and may, by rule, exempt from any requirement of paragraph (a) any health insurance policy form or type thereof (as specified in such rule) to which form or type such requirements may not be practically applied or to which form or type the application of such requirements is not desirable or necessary for the protection of the public. With respect to any health insurance policy form or type thereof which is exempted by rule from any requirement of paragraph (a), premium rates filed pursuant to ss. 627.640 and 627.662 shall be for informational purposes.

(c)  Every filing made pursuant to this subsection shall be made within the same time period provided in, and shall be deemed to be approved under the same conditions as those provided in, subsection (2).

(d)  Every filing made pursuant to this subsection, except disability income policies and accidental death policies, shall be prohibited from applying the following rating practices:

1.  Select and ultimate premium schedules.

2.  Premium class definitions which classify insured based on year of issue or duration since issue.

3.  Attained age premium structures on policy forms under which more than 50 percent of the policies are issued to persons age 65 or over.

(e)  Except as provided in subparagraph 1., an insurer shall continue to make available for purchase any individual policy form issued on or after October 1, 1993. A policy form shall not be considered to be available for purchase unless the insurer has actively offered it for sale in the previous 12 months.

1.  An insurer may discontinue the availability of a policy form if the insurer provides to the office in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the office, the insurer shall no longer offer for sale the policy form or certificate form in this state.

2.  An insurer that discontinues the availability of a policy form pursuant to subparagraph 1. shall not file for approval a new policy form providing similar benefits as the discontinued form for a period of 5 years after the insurer provides notice to the office of the discontinuance. The period of discontinuance may be reduced if the office determines that a shorter period is appropriate.

3.  The experience of all policy forms providing similar benefits shall be combined for all rating purposes.

(7)(a)  Each insurer subject to the requirements of subsection (6) shall make an annual filing with the office no later than 12 months after its previous filing, demonstrating the reasonableness of benefits in relation to premium rates. The office, after receiving a request to be exempted from the provisions of this section, may, for good cause due to insignificant numbers of policies in force or insignificant premium volume, exempt a company, by line of coverage, from filing rates or rate certification as required by this section.

(b)  The filing required by this subsection shall be satisfied by one of the following methods:

1.  A rate filing prepared by an actuary which contains documentation demonstrating the reasonableness of benefits in relation to premiums charged in accordance with the applicable rating laws and rules promulgated by the commission.

2.  If no rate change is proposed, a filing which consists of a certification by an actuary that benefits are reasonable in relation to premiums currently charged in accordance with applicable laws and rules promulgated by the commission.

(c)  As used in this section, "actuary" means an individual who is a member of the Society of Actuaries or the American Academy of Actuaries. If an insurer does not employ or otherwise retain the services of an actuary, the insurer's certification shall be prepared by insurer personnel or consultants with a minimum of 5 years' experience in insurance ratemaking. The chief executive officer of the insurer shall review and sign the certification indicating his or her agreement with its conclusions.

(d)  If at the time a filing is required under this section an insurer is in the process of completing a rate review, the insurer may apply to the office for an extension of up to an additional 30 days in which to make the filing. The request for extension must be received by the office no later than the date the filing is due.

(e)  If an insurer fails to meet the filing requirements of this subsection and does not submit the filing within 60 days following the date the filing is due, the office may, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for which the required filing was not made, until such time as the office determines that the required filing is properly submitted.

(8)(a)  For the purposes of subsections (6) and (7), benefits of an individual accident and health insurance policy form, including Medicare supplement policies as defined in s. 627.672, when authorized by rules adopted by the commission, and excluding long-term care insurance policies as defined in s. 627.9404, and other policy forms under which more than 50 percent of the policies are issued to individuals age 65 and over, are deemed to be reasonable in relation to premium rates if the rates are filed pursuant to a loss ratio guarantee and both the initial rates and the durational and lifetime loss ratios have been approved by the office, and such benefits shall continue to be deemed reasonable for renewal rates while the insurer complies with such guarantee, provided the currently expected lifetime loss ratio is not more than 5 percent less than the filed lifetime loss ratio as certified to by an actuary. The office shall have the right to bring an administrative action should it deem that the lifetime loss ratio will not be met. For Medicare supplement filings, the office may withdraw a previously approved filing which was made pursuant to a loss ratio guarantee if it determines that the filing is not in compliance with ss. 627.671-627.675 or the currently expected lifetime loss ratio is less than the filed lifetime loss ratio as certified by an actuary in the initial guaranteed loss ratio filing. If this section conflicts with ss. 627.671-627.675, ss. 627.671-627.675 shall control.

(b)  The renewal premium rates shall be deemed to be approved upon filing with the office if the filing is accompanied by the most current approved loss ratio guarantee. The loss ratio guarantee shall be in writing, shall be signed by an officer of the insurer, and shall contain at least:

1.  A recitation of the anticipated lifetime and durational target loss ratios contained in the actuarial memorandum filed with the policy form when it was originally approved. The durational target loss ratios shall be calculated for 1-year experience periods. If statutory changes have rendered any portion of such actuarial memorandum obsolete, the loss ratio guarantee shall also include an amendment to the actuarial memorandum reflecting current law and containing new lifetime and durational loss ratio targets.

2.  A guarantee that the applicable loss ratios for the experience period in which the new rates will take effect, and for each experience period thereafter until new rates are filed, will meet the loss ratios referred to in subparagraph 1.

3.  A guarantee that the applicable loss ratio results for the experience period will be independently audited at the insurer's expense. The audit shall be performed in the second calendar quarter of the year following the end of the experience period, and the audited results shall be reported to the office no later than the end of such quarter. The commission shall establish by rule the minimum information reasonably necessary to be included in the report. The audit shall be done in accordance with accepted accounting and actuarial principles.

4.  A guarantee that affected policyholders in this state shall be issued a proportional refund, based on the premium earned, of the amount necessary to bring the applicable experience period loss ratio up to the durational target loss ratio referred to in subparagraph 1. The refund shall be made to all policyholders in this state who are insured under the applicable policy form as of the last day of the experience period, except that no refund need be made to a policyholder in an amount less than $10. Refunds less than $10 shall be aggregated and paid pro rata to the policyholders receiving refunds. The refund shall include interest at the then-current variable loan interest rate for life insurance policies established by the National Association of Insurance Commissioners, from the end of the experience period until the date of payment. Payments shall be made during the third calendar quarter of the year following the experience period for which a refund is determined to be due. However, no refunds shall be made until 60 days after the filing of the audit report in order that the office has adequate time to review the report.

5.  A guarantee that if the applicable loss ratio exceeds the durational target loss ratio for that experience period by more than 20 percent, provided there are at least 2,000 policyholders on the form nationwide or, if not, then accumulated each calendar year until 2,000 policyholder years is reached, the insurer, if directed by the office, shall withdraw the policy form for the purposes of issuing new policies.

(c)  As used in this subsection:

1.  "Loss ratio" means the ratio of incurred claims to earned premium.

2.  "Applicable loss ratio" means the loss ratio attributable solely to this state if there are 2,000 or more policyholders in the state. If there are 500 or more policyholders in this state but less than 2,000, it is the linear interpolation of the nationwide loss ratio and the loss ratio for this state. If there are less than 500 policyholders in this state, it is the nationwide loss ratio.

3.  "Experience period" means the period, ordinarily a calendar year, for which a loss ratio guarantee is calculated.

History.--s. 459, ch. 59-205; ss. 13, 35, ch. 69-106; s. 1, ch. 71-17; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 21, ch. 78-95; ss. 2, 3, ch. 81-318; ss. 364, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 2, ch. 84-235; s. 3, ch. 89-360; s. 20, ch. 90-249; s. 12, ch. 90-366; s. 1, ch. 91-73; ss. 32, 114, ch. 92-318; s. 62, ch. 93-129; s. 22, ch. 93-260; s. 325, ch. 97-102; s. 3, ch. 98-159; s. 4, ch. 98-173; s. 5, ch. 2002-282; s. 1112, ch. 2003-261; s. 20, ch. 2004-297.

627.4101  Credit insurance enrollment forms.--All credit insurance enrollment forms must be approved by the office pursuant to the provisions of s. 627.410 or s. 627.682.

History.--s. 11, ch. 2002-57; s. 1113, ch. 2003-261.

627.4105  Life and health insurance; reduced premiums upon rigorous physical examination.--Upon request, the office may approve special life and health insurance policy forms providing for reduced premiums for each applicant passing a rigorous physical examination.

History.--s. 1, ch. 78-248; s. 2, ch. 81-318; ss. 365, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1114, ch. 2003-261.

627.411  Grounds for disapproval.--

(1)  The office shall disapprove any form filed under s. 627.410, or withdraw any previous approval thereof, only if the form:

(a)  Is in any respect in violation of, or does not comply with, this code.

(b)  Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.

(c)  Has any title, heading, or other indication of its provisions which is misleading.

(d)  Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.

(e)  Is for residential property insurance and contains provisions that are unfair or inequitable or encourage misrepresentation.

(f)  Is for health insurance, and:

1.  Provides benefits that are unreasonable in relation to the premium charged.

2.  Contains provisions that are unfair or inequitable or contrary to the public policy of this state or that encourage misrepresentation.

3.  Contains provisions that apply rating practices that result in unfair discrimination pursuant to s. 626.9541(1)(g)2.

(g)  Excludes coverage for human immunodeficiency virus infection or acquired immune deficiency syndrome or contains limitations in the benefits payable, or in the terms or conditions of such contract, for human immunodeficiency virus infection or acquired immune deficiency syndrome which are different than those which apply to any other sickness or medical condition.

(2)  In determining whether the benefits are reasonable in relation to the premium charged, the office, in accordance with reasonable actuarial techniques, shall consider:

(a)  Past loss experience and prospective loss experience within and without this state.

(b)  Allocation of expenses.

(c)  Risk and contingency margins, along with justification of such margins.

(d)  Acquisition costs.

(3)(a)  For health insurance coverage as described in s. 627.6561(5)(a)2., the minimum loss ratio standard of incurred claims to earned premium for the form shall be 65 percent.

(b)  Incurred claims are claims occurring within a fixed period, whether or not paid during the same period, under the terms of the policy period.

1.  Claims include scheduled benefit payments or services provided by a provider or through a provider network for dental, vision, disability, and similar health benefits.

2.  Claims do not include state assessments, taxes, company expenses, or any expense incurred by the company for the cost of adjusting and settling a claim, including the review, qualification, oversight, management, or monitoring of a claim or incentives or compensation to providers for other than the provisions of health care services.

3.  A company may at its discretion include costs that are demonstrated to reduce claims, such as fraud intervention programs or case management costs, which are identified in each filing, are demonstrated to reduce claims costs, and do not result in increasing the experience period loss ratio by more than 5 percent.

4.  For scheduled claim payments, such as disability income or long-term care, the incurred claims shall be the present value of the benefit payments discounted for continuance and interest.

History.--s. 460, ch. 59-205; ss. 13, 35, 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 366, 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 48, ch. 88-380; s. 114, ch. 92-318; s. 63, ch. 93-129; s. 1, ch. 2003-139; s. 1115, ch. 2003-261; s. 9, ch. 2005-111.

627.412  Standard provisions, in general.--

(1)  Insurance contracts shall contain such standard or uniform provisions as are required by the applicable provisions of this code pertaining to contracts of particular kinds of insurance. The office may waive the required use of a particular provision in a particular insurance policy form if:

(a)  It finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and

(b)  The policy is otherwise approved by it.

(2)  No policy shall contain any provision inconsistent with or contradictory to any standard or uniform provision used or required to be used, but the office may approve any substitute provision which is, in its opinion, not less favorable in any particular to the insured or beneficiary than the provisions otherwise required.

(3)  In lieu of the provisions required by this code for contracts for particular kinds of insurance, substantially similar provisions required by the law of the domicile of a foreign or alien insurer may be used when approved by the office.

History.--s. 461, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318; s. 1116, ch. 2003-261.

627.413  Contents of policies, in general; identification.--

(1)  Every policy shall specify:

(a)  The names of the parties to the contract.

(b)  The subject of the insurance.

(c)  The risks insured against.

(d)  The time when the insurance thereunder takes effect and the period during which the insurance is to continue.

(e)  The premium.

(f)  The conditions pertaining to the insurance.

(g)  The form numbers and edition dates or numeric code indicating edition dates, when such code has been supplied to the office, of all endorsements attached to a policy. This requirement applies to life insurance policies and health insurance policies only at the time of original issue.

(2)  If under the policy the exact amount of premium is determinable only at stated intervals or termination of the contract, a statement of the basis and rates upon which the premium is to be determined and paid shall be included.

(3)  Subsections (1) and (2) do not apply to surety contracts or to group insurance policies.

(4)  All policies and annuity contracts issued by insurers, and the forms thereof filed with the office, shall have printed thereon an appropriate designating letter or figure, or combination of letters or figures or terms identifying the respective forms of policies or contracts. Whenever any change is made in any such form, the designating letters, figures, or terms thereon shall be correspondingly changed.

(5)  Any policy that is a minimum premium policy issued by an insurer pursuant to the minimum premium provisions of rules adopted by rating organizations licensed by the office, shall have typed, printed, stamped, or legibly handwritten on the certificate the words "minimum premium policy" or equivalent language. The office may impose an administrative fine pursuant to s. 624.4211 if the office finds any violation of this subsection.

¹(6)  Notwithstanding any other provision of the Florida Insurance Code that is in conflict with federal requirements for a health savings account qualified high-deductible health plan, an insurer, or a health maintenance organization subject to part I of chapter 641, which is authorized to issue health insurance in this state may offer for sale an individual or group policy or contract that provides for a high-deductible plan that meets the federal requirements of a health savings account plan and which is offered in conjunction with a health savings account.

History.--s. 462, ch. 59-205; ss. 13, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 367, 377, 809(2nd), ch. 82-243; ss. 50, 79, ch. 82-386; s. 114, ch. 92-318; s. 16, ch. 98-174; s. 1117, ch. 2003-261; s. 3, ch. 2005-231.

¹Note.--Section 11, ch. 2005-231, provides that "[e]xcept as otherwise expressly provided in this act and except for this section, which shall take effect [June 14, 2005], this act shall take effect July 1, 2005, and shall apply to all policies or contracts issued or renewed on or after July 1, 2005."

627.4131  Telephone number required.--Each insurer issuing a policy subject to this part, or issuing a policy of title insurance, credit life insurance, or credit disability insurance in this state, must make a telephone number available for policyholders and certificateholders to present inquiries or obtain information about coverage and to provide assistance in resolving complaints. The policy or certificate must provide notice of the telephone number and its purposes.

History.--s. 34, ch. 92-318.

627.4132  Stacking of coverages prohibited.--If an insured or named insured is protected by any type of motor vehicle insurance policy for liability, personal injury protection, or other coverage, the policy shall provide that the insured or named insured is protected only to the extent of the coverage she or he has on the vehicle involved in the accident. However, if none of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with applicable coverage. Coverage on any other vehicles shall not be added to or stacked upon that coverage. This section does not apply:

(1)  To uninsured motorist coverage which is separately governed by s. 627.727.

(2)  To reduce the coverage available by reason of insurance policies insuring different named insureds.

History.--s. 10, ch. 76-266; s. 1, ch. 80-364; s. 2, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 14, ch. 88-370; s. 114, ch. 92-318; s. 326, ch. 97-102.

627.4133  Notice of cancellation, nonrenewal, or renewal premium.--

(1)  Except as provided in subsection (2):

(a)  An insurer issuing a policy providing coverage for workers' compensation and employer's liability insurance, property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728, shall give the named insured at least 45 days' advance written notice of nonrenewal or of the renewal premium. If the policy is not to be renewed, the written notice shall state the reason or reasons as to why the policy is not to be renewed. This requirement applies only if the insured has furnished all of the necessary information so as to enable the insurer to develop the renewal premium prior to the expiration date of the policy to be renewed.

(b)  An insurer issuing a policy providing coverage for property, casualty, except mortgage guaranty, surety, or marine insurance, other than motor vehicle insurance subject to s. 627.728 or s. 627.7281, shall give the named insured written notice of cancellation or termination other than nonrenewal at least 45 days prior to the effective date of the cancellation or termination, including in the written notice the reason or reasons for the cancellation or termination, except that:

1.  When cancellation is for nonpayment of premium, at least 10 days' written notice of cancellation accompanied by the reason therefor shall be given; and

2.  When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days' written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.

After the policy has been in effect for 90 days, no such policy shall be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. The provisions of this subsection shall not apply to individually rated risks having a policy term of less than 90 days.

(c)  If an insurer fails to provide the 45-day or 20-day written notice required under this section, the coverage provided to the named insured shall remain in effect until 45 days after the notice is given or until the effective date of replacement coverage obtained by the named insured, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension of coverage shall be calculated based upon the later rate filing.

(2)  With respect to any personal lines or commercial residential property insurance policy, including, but not limited to, any homeowner's, mobile home owner's, farmowner's, condominium association, condominium unit owner's, apartment building, or other policy covering a residential structure or its contents:

(a)  The insurer shall give the named insured at least 45 days' advance written notice of the renewal premium.

(b)  The insurer shall give the named insured written notice of nonrenewal, cancellation, or termination at least 90 days prior to the effective date of the nonrenewal, cancellation, or termination. The notice must include the reason or reasons for the nonrenewal, cancellation, or termination, except that:

1.  When cancellation is for nonpayment of premium, at least 10 days' written notice of cancellation accompanied by the reason therefor shall be given.

2.  When such cancellation or termination occurs during the first 90 days during which the insurance is in force and the insurance is canceled or terminated for reasons other than nonpayment of premium, at least 20 days' written notice of cancellation or termination accompanied by the reason therefor shall be given except where there has been a material misstatement or misrepresentation or failure to comply with the underwriting requirements established by the insurer.

After the policy has been in effect for 90 days, the policy shall not be canceled by the insurer except when there has been a material misstatement, a nonpayment of premium, a failure to comply with underwriting requirements established by the insurer within 90 days of the date of effectuation of coverage, or a substantial change in the risk covered by the policy or when the cancellation is for all insureds under such policies for a given class of insureds. This paragraph does not apply to individually rated risks having a policy term of less than 90 days.

(c)  If the insurer fails to provide the notice required by this subsection, other than the 10-day notice, the coverage provided to the named insured shall remain in effect until the effective date of replacement coverage or until the expiration of a period of days after the notice is given equal to the required notice period, whichever occurs first. The premium for the coverage shall remain the same during any such extension period except that, in the event of failure to provide notice of nonrenewal, if the rate filing then in effect would have resulted in a premium reduction, the premium during such extension shall be calculated based on the later rate filing.

(d)1.  Upon a declaration of an emergency pursuant to s. 252.36 and the filing of an order by the Commissioner of Insurance Regulation, an insurer may not cancel or nonrenew a personal residential or commercial residential property insurance policy covering a dwelling or residential property located in this state which has been damaged as a result of a hurricane or wind loss that is the subject of the declaration of emergency for a period of 90 days after the dwelling or residential property has been repaired. A structure is deemed to be repaired when substantially completed and restored to the extent that it is insurable by another authorized insurer that is writing policies in this state.

2.  However, an insurer or agent may cancel or nonrenew such a policy prior to the repair of the dwelling or residential property:

a.  Upon 10 days' notice for nonpayment of premium; or

b.  Upon 45 days' notice:

(I)  For a material misstatement or fraud related to the claim;

(II)  If the insurer determines that the insured has unreasonably caused a delay in the repair of the dwelling; or

(III)  If the insurer has paid policy limits.

3.  If the insurer elects to nonrenew a policy covering a property that has been damaged, the insurer shall provide at least 90 days' notice to the insured that the insurer intends to nonrenew the policy 90 days after the dwelling or residential property has been repaired. Nothing in this paragraph shall prevent the insurer from canceling or nonrenewing the policy 90 days after the repairs are complete for the same reasons the insurer would otherwise have canceled or nonrenewed the policy but for the limitations of subparagraph 1. The Financial Services Commission may adopt rules, and the Commissioner of Insurance Regulation may issue orders, necessary to implement this paragraph.

4.  This paragraph shall also apply to personal residential and commercial residential policies covering property that was damaged as the result of Tropical Storm Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or Hurricane Jeanne.

(e)  If any cancellation or nonrenewal of a policy subject to this subsection is to take effect during the duration of a hurricane as defined in s. 627.4025(2)(c), the effective date of such cancellation or nonrenewal is extended until the end of the duration of such hurricane. The insurer may collect premium at the prior rates or the rates then in effect for the period of time for which coverage is extended. This paragraph does not apply to any property with respect to which replacement coverage has been obtained and which is in effect for a claim occurring during the duration of the hurricane.

(3)  Claims on property insurance policies that are the result of an act of God may not be used as a cause for cancellation or nonrenewal, unless the insurer can demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer to prevent recurrence of damage to the insured property.

(4)  Notwithstanding the provisions of s. 440.42(3), if cancellation of a policy providing coverage for workers' compensation and employer's liability insurance is requested by the insured, such cancellation shall be effective on the date the carrier sends the notice of cancellation to the insured.

(5)  An insurer that cancels a property insurance policy on property secured by a mortgage due to the failure of the lender to timely pay the premium when due shall reinstate the policy as required by s. 501.137.

(6)  A single claim on a property insurance policy which is the result of water damage may not be used as the sole cause for cancellation or nonrenewal unless the insurer can demonstrate that the insured has failed to take action reasonably requested by the insurer to prevent a future similar occurrence of damage to the insured property.

History.--s. 16, ch. 86-160; s. 2, ch. 87-50; s. 8, ch. 87-124; s. 12, ch. 90-119; ss. 35, 114, ch. 92-318; s. 15, ch. 93-410; s. 99, ch. 93-415; s. 13, ch. 2004-370; s. 43, ch. 2004-374; ss. 109, 158, ch. 2004-390; s. 10, ch. 2005-111.

627.4135  Casualty insurance contracts subject to general provisions for insurance contracts.--All contracts of casualty insurance covering subjects resident, located, or to be performed in this state shall be subject to the applicable provisions of this part and to the other applicable provisions of this code.

History.--s. 610, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; ss. 36, 114, ch. 92-318.

Note.--Former s. 627.726.

627.4136  Nonjoinder of insurers.--

(1)  It shall be a condition precedent to the accrual or maintenance of a cause of action against a liability insurer by a person not an insured under the terms of the liability insurance contract that such person shall first obtain a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(2)  Notwithstanding subsection (1), any insurer who pays any taxable costs or attorney's fees which would be recoverable by the insured but for the fact that such costs or fees were paid by the insurer shall be considered a party for the purpose of recovering such fees or costs. No person who is not an insured under the terms of a liability insurance policy shall have any interest in such policy, either as a third-party beneficiary or otherwise, prior to first obtaining a settlement or verdict against a person who is an insured under the terms of such policy for a cause of action which is covered by such policy.

(3)  Insurers are affirmatively granted the substantive right to insert in liability insurance policies contractual provisions that preclude persons who are not designated as insureds in such policies from joining a liability insurer as a party defendant with its insured prior to the rendition of a verdict. The contractual provisions authorized in this subsection shall be fully enforceable.

(4)  At the time a judgment is entered or a settlement is reached during the pendency of litigation, a liability insurer may be joined as a party defendant for the purposes of entering final judgment or enforcing the settlement by the motion of any party, unless the insurer denied coverage under the provisions of s. 627.426(2) or defended under a reservation of rights pursuant to s. 627.426(2). A copy of the motion to join the insurer shall be served on the insurer by certified mail. If a judgment is reversed or remanded on appeal, the insurer's presence shall not be disclosed to the jury in a subsequent trial.

History.--s. 12, ch. 76-266; s. 2, ch. 81-318; ss. 542, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 38, ch. 90-119; ss. 37, 114, ch. 92-318.

Note.--Former s. 627.7262.

627.4137  Disclosure of certain information required.--

(1)  Each insurer which does or may provide liability insurance coverage to pay all or a portion of any claim which might be made shall provide, within 30 days of the written request of the claimant, a statement, under oath, of a corporate officer or the insurer's claims manager or superintendent setting forth the following information with regard to each known policy of insurance, including excess or umbrella insurance:

(a)  The name of the insurer.

(b)  The name of each insured.

(c)  The limits of the liability coverage.

(d)  A statement of any policy or coverage defense which such insurer reasonably believes is available to such insurer at the time of filing such statement.

(e)  A copy of the policy.

In addition, the insured, or her or his insurance agent, upon written request of the claimant or the claimant's attorney, shall disclose the name and coverage of each known insurer to the claimant and shall forward such request for information as required by this subsection to all affected insurers. The insurer shall then supply the information required in this subsection to the claimant within 30 days of receipt of such request.

(2)  The statement required by subsection (1) shall be amended immediately upon discovery of facts calling for an amendment to such statement.

History.--ss. 543, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 22, ch. 83-288; ss. 38, 114, ch. 92-318; s. 327, ch. 97-102.

Note.--Former s. 627.7264.

627.414  Additional policy contents.--A policy may contain additional provisions not inconsistent with this code and which are:

(1)  Required to be inserted by the laws of the insurer's domicile;

(2)  Necessary, on account of the manner in which the insurer is constituted or operated, in order to state the rights and obligations of the parties to the contract; or

(3)  Desired by the insurer and neither prohibited by law nor in conflict with any provisions required to be included therein.

History.--s. 463, ch. 59-205; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 3, ch. 81-318; ss. 377, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 114, ch. 92-318.

627.4143  Outline of coverage.--

(1)  No private passenger automobile or basic homeowner's policy shall be delivered or issued for delivery in this state unless an appropriate outline of coverage has been delivered prior to issuance of the policy or accompanies the policy when issued.

(2)  The outline of coverage for a private passenger motor vehicle insurance policy shall contain all of the following:

(a)  A brief description of the principal benefits and coverage provided in the policy, broken down by each class or type of coverage provided under the policy for which a premium is charged, and itemization of the applicable premium.

(b)  A summary statement of the principal exclusions and limitations or reductions contained in the policy by class or type, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions.

(c)  A summary statement of any renewal or cancellation provisions.

(d)  A description of the credit or surcharge plan that is being applied. The description may display numerical or alphabetical codes on the declarations page or premium notice to enable the insured to determine the reason or reasons why her or his policy is being surcharged or is receiving a credit.

(e)  A list of any additional coverage provided through any rider or endorsement which accompanies the policy. The list shall contain a descriptive reference to each additional coverage, rather than solely a reference to a form or code number.

(f)  The extent of coverage provided to the insured in the event of collision damage to a rental vehicle rented by the insured. The proof-of-insurance card required by s. 316.646 must also specify whether rental car coverage is provided, and may refer to the outline of coverage as to the details or extent of coverage.

(3)  A basic homeowner's, mobile home owner's, dwelling, or condominium unit owner's policy may not be delivered or issued for delivery in this state unless a comprehensive checklist of coverage on a form adopted by the commission and an appropriate outline of coverage have been delivered prior to issuance of the policy or accompanies the policy when issued. The commission shall, by rule, adopt a form for the checklist for each type of policy to which this subsection applies. Each form shall indicate that it was adopted by the commission.

(a)  The checklist must contain a list of the standard provisions and elements that may typically be included in these policies, whether or not they are included in the particular policy being issued, in a format that allows the insurer to place a check mark next to the provisions elements that are included so that the consumer can see both what is included and what is not included in the policy. As an alternative to checking the boxes on the checklist, an insurer may delete the check boxes from the form and replace them with text indicating whether the provision's elements are included or not. Limits of liability shall be listed for each item. The checklist must include, but is not limited to, the following:

1.  Property coverage for the principal premises shown in the declarations.

2.  Property coverage for other structures on the residence premises.

3.  Whether the principal premises and other structures are insured against the following perils:

a.  Fire.

b.  Lightning.

c.  Explosion.

d.  Hurricane loss.

e.  Nonhurricane wind loss.

f.  Collapse.

g.  Mold.

h.  Sinkhole loss.

i.  Vandalism.

4.  Personal property coverage.

5.  Whether personal property is insured against the following perils:

a.  Fire.

b.  Lightning.

c.  Hurricane loss.

d.  Nonhurricane wind loss.

e.  Collapse.

f.  Mold.

g.  Sinkhole loss.

h.  Theft.

6.  The following additional coverages:

a.  Debris removal.

b.  Loss assessment.

c.  Additional living expenses.

7.  Personal liability coverage.

8.  Medical payments coverage.

9.  Discounts applied to the premium.

10.  Deductibles for loss due to hurricane and loss to other perils.

11.  Building ordinance or law coverage.

12.  Replacement cost coverage.

13.  Actual cash value coverage.

(b)  The forms shall allow insurers to place other coverages on the checklists which may or may not be included in the insurer's policies.

(c)  The outline of coverage must contain:

1.  A brief description of the principal benefits and coverage provided in the policy, broken down by each class or type of coverage provided under the policy for which a premium is charged, and itemization of the applicable premium.

2.  A summary statement of the principal exclusions and limitations or reductions contained in the policy by class or type, including, but not limited to, deductibles, coinsurance, and any other limitations or reductions.

3.  A summary statement of any renewal or cancellation provisions.

4.  A description of the credit or surcharge plan that is being applied. The description may display numerical or alphabetical codes on the declarations page or premium notice to enable the insured to determine the reason or reasons why her or his policy is being surcharged or is receiving a credit.

5.  A summary of any additional coverage provided through any rider or endorsement that accompanies the policy.

(4)  The outline of coverage for a private passenger motor vehicle policy is required only on the initial policy issued by an insurer. The outline of coverage and the checklist for a basic homeowner's, mobile home owner's, dwelling, or condominium unit owner's policy is required on the initial policy and each renewal thereof issued by an insurer.

(5)  An insurer must insert the following language on the outline of coverage:


"The following outline of coverage or checklist is for informational purposes only. Florida law prohibits this outline or checklist from changing any of the provisions of the insurance contract which is the subject of this outline. Any endorsement regarding changes in types of coverage, exclusions, limitations, reductions, deductibles, coinsurance, renewal provisions, cancellation provisions, surcharges, or credits will be sent separately."

(6)  Neither this section nor the outline of coverage or checklist mandated by this section alters or modifies the terms of the insurance contract, creates a cause of action, or is admissible in any civil action.

History.--s. 23, ch. 89-360; s. 1, ch. 90-192; ss. 39, 114, ch. 92-318; s. 328, ch. 97-102; s. 11, ch. 2005-111.

627.4145  Readable language in insurance policies.--

(1)  Every policy shall be readable as required by this section. For the purposes of this section, the term "policy" means a policy form or endorsement. A policy is deemed readable if:

(a)  The text achieves a minimum score of 45 on the Flesch reading ease test as computed in subsection (5) or an equivalent score on any other test comparable in result and approved by the office;

(b)  It uses layout and spacing which separate the paragraphs from each other and from the border of the paper;

(c)  It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;

(d)  It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;

(e)  The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and

(f)  It contains a table of contents or an index of the principal sections of the policy, if the policy has more than 3,000 words or more than three pages.

(2)  The office may authorize a lower score than the Flesch reading ease test score required in subsection (1) whenever it finds that a lower score will provide a more accurate reflection of the readability of a policy form, is warranted by the nature of a particular policy form or type or class of policy forms, or is the result of language which is used to conform to the requirements of any law.

(3)  A filing subject to this section shall be accompanied by a certification signed by an officer of the insurer stating that the policy meets the requirements of subsection (1). Such