The Florida Senate

Reinsurance, except joint reinsurance as provided in s. 627.311.

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.

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

Commercial inland marine insurance.

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

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;

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

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

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

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

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

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

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;

Whether a factor or factors used in a rate filing or applied by the office are consistent with standard actuarial techniques or practices or are otherwise based on reasonable actuarial judgment.

Whether a factor for underwriting profit and contingencies is reasonable or excessive.

Whether the cost of reinsurance is reasonable or excessive.

The number and nature of consumer complaints, as a market share ratio, received by the department against the insurer.

The disposition of all complaints received by the department.

The average length of time for payment of claims by the insurer.

Any other factors the commission identifies as assisting policyholders in making informed choices about homeowner’s insurance.

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 except as provided in subparagraph 3.:

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:

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.

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.

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:

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.

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.

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.

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.

With respect to residential property insurance rate filings, the rate filing must account for mitigation measures undertaken by policyholders to reduce hurricane losses.

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.

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.

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

If an insurer requests an administrative hearing pursuant to s. 120.57 related to a rate filing under this section, the director of the Division of Administrative Hearings shall expedite the hearing and assign an administrative law judge who shall commence the hearing within 30 days after the receipt of the formal request and shall enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall be allowed 10 days in which to submit written exceptions to the recommended order. The office shall enter a final order within 30 days after the entry of the recommended order. The provisions of this paragraph may be waived upon stipulation of all parties.

Upon entry of a final order, the insurer may request a expedited appellate review pursuant to the Florida Rules of Appellate Procedure. It is the intent of the Legislature that the First District Court of Appeal grant an insurer’s request for an expedited appellate review.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

The chief executive officer or chief financial officer of a property insurer and the chief actuary of a property insurer must certify under oath and subject to the penalty of perjury, on a form approved by the commission, the following information, which must accompany a rate filing:

A signing officer or actuary knowingly making a false certification under this subsection commits a violation of s. 626.9541(1)(e) and is subject to the penalties under s. 626.9521.

Failure to provide such certification by the officer and actuary shall result in the rate filing being disapproved without prejudice to be refiled.

The commission may adopt rules and forms pursuant to ss. 120.536(1) and 120.54 to administer this subsection.

“Rate filing” means any original or amended rate residential property insurance filing.

“Recommendation” means any proposed, preliminary, or final recommendation from an office actuary reviewing a rate filing with respect to the issue of approval or disapproval of the rate filing or with respect to rate indications that the office would consider acceptable.

With respect to any residential property rate filing, the office shall provide the following information on a publicly accessible Internet website:

For any rate filing, whether or not the filing is subject to a public hearing, the office shall provide on its website a means for any policyholder who may be affected by a proposed rate change to send an e-mail regarding the proposed rate change. Such e-mail must be accessible to the actuary assigned to review the rate filing.

“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.

“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.

“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.

Safety measures, including, as applicable, the following areas:

Training to insureds in safety management techniques.

Safety management counseling services.

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.

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.

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)(d), must 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.

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.

The Legislature finds that the authority to take final agency action with respect to insurance ratemaking is vested in the Office of Insurance Regulation and the Financial Services Commission, and that the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology do not constitute final agency action or statements of general applicability that implement, interpret, or prescribe law or policy; accordingly, chapter 120 does not apply to the processes, standards, and guidelines of the Florida Commission on Hurricane Loss Projection Methodology.

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.

The commission shall consist of the following 11 members:

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.

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

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

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.

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.

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.

The commission shall consider any actuarial methods, principles, standards, or models that have the potential for improving the accuracy of or reliability of projecting probable maximum loss levels. The commission shall adopt findings as to the accuracy or reliability of particular methods, principles, standards, or models related to probable maximum loss calculations.

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.

With respect to a rate filing under s. 627.062, an insurer shall employ and may not modify or adjust actuarial methods, principles, standards, models, or output ranges found by the commission to be accurate or reliable in determining hurricane loss factors for use in a rate filing under s. 627.062. An insurer shall employ and may not modify or adjust models found by the commission to be accurate or reliable in determining probable maximum loss levels pursuant to paragraph (b) with respect to a rate filing under s. 627.062 made more than 60 days after the commission has made such findings.

The commission shall adopt revisions to previously adopted actuarial methods, principles, standards, models, or output ranges every odd year.

A residential property insurer may have access to and use the public hurricane loss projection model, including all assumptions and factors and all detailed loss results, for the purpose of calculating rate indications in a rate filing and for analytical purposes, including any analysis or evaluation of the model required under actuarial standards of practice.

By January 1, 2009, the office shall establish by rule a fee schedule for access to and the use of the model. The fee schedule must be reasonably calculated to cover only the actual costs of providing access to and the use of the model.

It is the intent of the Legislature that insurers must provide savings to consumers who install or implement windstorm damage mitigation techniques, alterations, or solutions to their properties to prevent windstorm losses. 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, or appropriate reductions in deductibles, 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 or reductions in deductibles by February 28, 2003. By July 1, 2007, the office shall reevaluate the discounts, credits, other rate differentials, and appropriate reductions in deductibles for fixtures and construction techniques that meet the minimum requirements of the Florida Building Code, based upon actual experience or any other loss relativity studies available to the office. The office shall determine the discounts, credits, other rate differentials, and appropriate reductions in deductibles that reflect the full actuarial value of such revaluation, which may be used by insurers in rate filings.

By February 1, 2011, the Office of Insurance Regulation, in consultation with the Department of Financial Services and the Department of Community Affairs, shall develop and make publicly available a proposed method for insurers to establish discounts, credits, or other rate differentials for hurricane mitigation measures which directly correlate to the numerical rating assigned to a structure pursuant to the uniform home grading scale adopted by the Financial Services Commission pursuant to s. 215.55865, including any proposed changes to the uniform home grading scale. By October 1, 2011, the commission shall adopt rules requiring insurers to make rate filings for residential property insurance which revise insurers’ discounts, credits, or other rate differentials for hurricane mitigation measures so that such rate differentials correlate directly to the uniform home grading scale. The rules may include such changes to the uniform home grading scale as the commission determines are necessary, and may specify the minimum required discounts, credits, or other rate differentials. Such rate differentials must be consistent with generally accepted actuarial principles and wind-loss mitigation studies. The rules shall allow a period of at least 2 years after the effective date of the revised mitigation discounts, credits, or other rate differentials for a property owner to obtain an inspection or otherwise qualify for the revised credit, during which time the insurer shall continue to apply the mitigation credit that was applied immediately prior to the effective date of the revised credit. Discounts, credits, and other rate differentials established for rate filings under this paragraph shall supersede, after adoption, the discounts, credits, and other rate differentials included in rate filings under paragraph (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.

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.

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.

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.

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.

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.

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.

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.

Such report must include a summary of the data supplied by residential property insurers and licensed rating and advisory organizations from September 1 of the prior year to August 31 of the current year, and must include the following information:

Separate compilations of the data obtained shall be presented in order to use the public model for calculating rate indications and to update, validate, or calibrate the public model. Additional detail and a description of the operation and maintenance of the public model may be included in the report.

The report may not contain any information that identifies a specific insurer or policyholder.

Workers’ compensation and employer’s liability insurance; or

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

Deviations filed by an insurer to any rating organization’s base rate filing are not subject to this section.

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.

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.

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.

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

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

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.

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).

Past and prospective loss experience within and outside this state.

The past and prospective expenses.

The degree of competition among insurers for the risk insured.

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.

The reasonableness of the judgment reflected in the filing.

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

The cost of repairs to motor vehicles.

The cost of medical services, if applicable.

The adequacy of loss reserves.

The cost of reinsurance.

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

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

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.

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.

Underwriting rules not contained in rating manuals shall be filed for private passenger automobile insurance and homeowners’ insurance.

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.

Commercial motor vehicle insurance covering a fleet of 20 or more self-propelled vehicles is not subject to subsection (1), subsection (2), or subsection (9) or s. 627.0645.

The rates for insurance described in this subsection may not be excessive, inadequate, or unfairly discriminatory.

Insurers shall establish and use rates, rating schedules, or rating manuals to allow the insurer a reasonable rate of return on commercial motor vehicle insurance written in this state covering a fleet of 20 or more self-propelled vehicles.

An insurer must notify the office of any changes to rates for type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the insurer, the type or kind of insurance subject to rate change, total premium written during the immediately preceding year by the insurer for the type or kind of insurance subject to the rate change, and the average statewide percentage change in rates. Underwriting files, premiums, losses, and expense statistics for the type of insurance described in this subsection shall be maintained by the insurer and subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the factors in paragraphs (2)(a)–(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.

A rating organization must notify the office of any changes to loss cost for the type of insurance described in this subsection no later than 30 days after the effective date of the change. The notice shall include the name of the rating organization, the type or kind of insurance subject to a loss cost change, loss costs during the immediately preceding year for the type or kind of insurance subject to the loss cost change, and the average statewide percentage change in loss cost. Loss and exposure statistics with regard to risks applicable to loss costs for a rating organization not subject to subsection (1), subsection (2), or subsection (9) shall be maintained by the rating organization and are subject to examination by the office. Upon examination, the office shall, in accordance with generally accepted and reasonable actuarial techniques, consider the rate factors in paragraphs (2)(a)-(l) and apply subsections (3)-(8) to determine if the rate is excessive, inadequate, or unfairly discriminatory.

In reviewing the rate, 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 rate according to the applicable criteria described herein.

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

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

“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.

“Cash” means coins, currency, checks, drafts, or money orders.

Calendar-year total limits earned premium.

Accident-year incurred losses and loss adjustment expenses.

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

Policyholder dividends incurred during the applicable calendar year.

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.

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.

Cash refunds to policyholders may be rounded to the nearest dollar.

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

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

Refunds shall be completed in one of the following ways:

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

The past loss experience and prospective loss experience within and outside this state;

The conflagration and catastrophe hazards;

A reasonable margin for underwriting profit and contingencies;

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

Investment income on unearned premium reserves and loss reserves;

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

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

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.

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

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

Its interpretation of any statistical data it relies upon;

The experience of other insurers or rating organizations; or

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

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

“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.

“Leased employee” means a person performing services for a lessee under an employee leasing arrangement.

“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.

“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.

“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.

Requiring the lessor to provide a complete description of lessor’s operations.

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.

Auditing the lessor’s operations.

Using other reasonable measures to determine the appropriate premium.

The lessee’s corporate name.

The lessee’s taxpayer or employer identification number.

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.

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.

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

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

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:

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

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.

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.

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.

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.

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.

Cash refunds to policyholders may be rounded to the nearest dollar.

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

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

Refunds shall be completed in one of the following ways:

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

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;

A list of its members and subscribers;

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

A statement of its qualifications as a rating organization.

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;

A list of its members and subscribers; and

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

Its constitution;

Its articles of incorporation, agreement, or association;

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

The list of members and subscribers; and

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.

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

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.

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.

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

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.

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.

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

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.

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

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.

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.

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

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.

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)(d)-(f), 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.

The office shall, after consultation with insurers, approve a joint underwriting plan of insurers which shall operate as the Florida Workers’ Compensation Joint Underwriting Association, Inc., 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.

The operation of the plan is subject to the supervision of a 9-member board of governors. Each member described in subparagraph 1., subparagraph 2., subparagraph 3., or subparagraph 5. shall be appointed by the Financial Services Commission and shall serve at the pleasure of the commission. The board of governors shall be comprised of:

Each board member shall be appointed to a 4-year term and may be appointed to 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. The meetings and records of the board of governors and plan are subject to chapters 119 and 286, unless otherwise exempted by law.

The operation of the plan shall be governed by a plan of operation that is prepared at the direction of the board of governors and 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. The plan of operation shall:

For rates and rating plans effective on or after January 1, 2008, 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 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 shall 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.

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.

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, including policyholder surplus in former subplan C as authorized in subparagraph (d)2., through the use of assessments as provided in subparagraph (d)2., and through assessments on assessable policies as provided in subparagraph (d)3. Any entity that was a policyholder of former subplan C is not subject to any assessments that are attributable to deficits in former subplan C.

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. Any state funds received by the plan in excess of the amount necessary to fund deficits in subplan D or any tier shall be returned to the state.

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

Policies for insureds shall be issued by the plan.

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.

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.

Senior managers and officers, as defined in the plan of operation, and members of the board of governors are subject to the provisions of ss. 112.313, 112.3135, 112.3143, 112.3145, 112.316, and 112.317. Senior managers, officers, and board members are also required to file such disclosures with the Commission on Ethics and the Office of Insurance Regulation. The executive director of the plan or his or her designee shall notify each newly appointed and existing appointed member of the board of governors, senior manager, and officer of his or her duty to comply with the reporting requirements of s. 112.3145. At least quarterly, the executive director of the plan or his or her designee shall submit to the Commission on Ethics a list of names of the senior managers, officers, and members of the board of governors who are subject to the public disclosure requirements under s. 112.3145. Notwithstanding s. 112.313, an employee, officer, owner, or director of an insurance agency, insurance company, or other insurance entity may be a member of the board of governors unless such employee, officer, owner, or director of an insurance agency, insurance company, other insurance entity, or an affiliate provides policy issuance, policy administration, underwriting, claims handling, or payroll audit services. Notwithstanding s. 112.3143, such board member may not participate in or vote on a matter if the insurance agency, insurance company, or other insurance entity would obtain a special or unique benefit that would not apply to other similarly situated insurance entities.

On or before July 1 of each year, employees of the plan shall sign and submit a statement to the plan attesting that they do not have a conflict of interest as defined in part III of chapter 112. As a condition of employment, all prospective employees shall sign and submit a conflict-of-interest statement to the plan.

Any senior manager or officer of the plan who is employed by the plan as of January 1, 2008, regardless of the date of hire, and who subsequently retires or terminates employment may not represent another person or entity before the plan for 2 years after retirement or termination of employment from the plan.

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

Notwithstanding ss. 112.3148 and 112.3149 or other provision of law, an employee or board member may not knowingly accept, directly or indirectly, any expenditure or gift from a person or entity, or an employee or representative of such person or entity, which has a contractual relationship with the plan or is under consideration for a contract. An employee or board member who fails to comply with paragraph (m) or this paragraph is subject to penalties provided under s. 112.317.

This section does not prohibit the plan from providing insurance coverage to any employer with whom a former employee of the plan is affiliated or employing or reemploying any former employee of the plan in a part-time, full-time, temporary, or permanent capacity, so long as such employment does not violate any provision of part III of chapter 112.

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:

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:

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.

The Office of Insurance Regulation shall perform a comprehensive market conduct examination of the plan periodically to determine compliance with its plan of operation and internal operating policies and procedures.

Upon dissolution, the assets of the plan shall be applied first to pay all debts, liabilities, and obligations of the plan, including the establishment of reasonable reserves for any contingent liabilities or obligations, and all remaining assets of the plan shall become property of the state and shall be deposited in the Workers’ Compensation Administration Trust Fund. However, dissolution may not take effect as long as the plan has financial obligations outstanding unless adequate provision has been made for the payment of financial obligations pursuant to the documents authorizing the financial obligations.

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.

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.

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

Claims files until termination of all litigation and the settlement of all claims arising out of the same accident, except that portions of the claims files may remain confidential or exempt if otherwise provided by law.

Records obtained or generated by an 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.

Proprietary information licensed to the association under contract if the contract requires the association to maintain the confidentiality of such information.

Medical records, which include information relating to the medical condition or medical status of an individual.

All records relative to an employee’s participation in an employee assistance program upon the entrance of the employee into the program, except as otherwise provided in s. 440.102(8).

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

Reports provided to or submitted by the association regarding suspected fraud or other criminal activity and producer appeals and related reporting regarding suspected misconduct until such investigation is closed or ceases to be active.

Information received from the Department of Revenue regarding payroll information and client lists of employee leasing companies obtained pursuant to ss. 440.381 and 468.529.

A public record prepared by an attorney retained by the association to protect or represent the interests of the association, or prepared at the attorney’s express direction, that reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the association. This protection is not waived by the release of such public record to another employee or officer of the same association or any person consulted by the association attorney.

The association may release confidential and exempt underwriting files and claims files to:

Prior to the release authorized in paragraph (a), the carrier, producer, or other entity must agree in writing, notarized and under oath, to maintain the confidential and exempt status of such file until that carrier, producer, or other entity agrees to underwrite the risk or provide voluntary market coverage.

That portion of a meeting of the association’s board of governors, or any subcommittee of the association’s board, at which records made confidential and exempt by this section are discussed is exempt from s. 286.011 and s. 24(b), Art. I of the State Constitution.

All exempt portions of meetings shall be recorded and transcribed. The board 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. An exempt portion of any meeting may not be off the record.

Subject to this section and s. 119.021(2), the court reporter’s notes of any exempt portion of a meeting shall be retained by the association for a minimum of 5 years.

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

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.

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.

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.

This subsection does not apply as to workers’ compensation and employer’s liability insurances.

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.

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.

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

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.

As used in this subsection, the term “department” means the former Department of Insurance.

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:

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.

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.

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.

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

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

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.

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.

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:

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.

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.

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).

As used in this subsection:

The manager of the plan or the manager’s assistant is the agent for service of process for the plan.

The plan shall provide:

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.

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

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:

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.

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.

The plan of operation of the corporation:

Purchases that equal or exceed $2,500, but are less than $25,000, shall be made by receipt of written quotes, written record of telephone quotes, or informal bids, whenever practical. The procurement of goods or services valued at or over $25,000 shall be subject to competitive solicitation, except in situations where the goods or services are provided by a sole source or are deemed an emergency purchase; the services are exempted from competitive solicitation requirements under s. 287.057(3)(f); or the procurement of services is subject to s. 627.3513. Justification for the sole-sourcing or emergency procurement must be documented. Contracts for goods or services valued at or over $100,000 are subject to approval by the board.

The corporation is subject to the provisions of chapter 255.

The board shall determine whether it is more cost-effective and in the best interests of the corporation to use legal services provided by in-house attorneys employed by the corporation rather than contracting with outside counsel. In making such determination, the board shall document its findings and shall consider: the expertise needed; whether time commitments exceed in-house staff resources; whether local representation is needed; the travel, lodging and other costs associated with in-house representation; and such other factors that the board determines are relevant.

The corporation may not retain a lobbyist to represent it before the legislative branch or executive branch. However, full-time employees of the corporation may register as lobbyists and represent the corporation before the legislative branch or executive branch.

All records of the corporation, except as otherwise provided by law, are subject to the record retention requirements of s. 119.021.

The office shall conduct a comprehensive market conduct examination of the corporation every 2 years to determine compliance with its plan of operation and internal operations procedures. The first market conduct examination report shall be submitted to the President of the Senate and the Speaker of the House of Representatives no later than February 1, 2009. Subsequent reports shall be submitted on or before February 1 every 2 years thereafter.

The Auditor General shall conduct an operational audit of the corporation every 3 years to evaluate management’s performance in administering laws, policies, and procedures governing the operations of the corporation in an efficient and effective manner. The scope of the review shall include, but is not limited to, evaluating claims handling, customer service, take-out programs and bonuses, financing arrangements, procurement of goods and services, internal controls, and the internal audit function. The initial audit must be completed by February 1, 2009.

If coverage in an account is deactivated pursuant to paragraph (p), coverage through the corporation shall be reactivated by order of the office only under one of the following circumstances:

Nothing in this subsection shall be construed to preclude the issuance of residential property insurance coverage pursuant to part VIII of chapter 626.

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 levied by the Florida Insurance Guaranty Association. 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 debt obligations 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.

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.

Notwithstanding any other provision of law:

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:

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.

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.

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.

There shall be no liability on the part of, and no cause of action of any nature shall arise against, producing agents of record of the corporation or employees of such agents for insolvency of any take-out insurer.

The assets of the corporation may be invested and managed by the State Board of Administration.

The office may establish a pilot program to offer optional sinkhole coverage in one or more counties or other territories of the corporation for the purpose of implementing s. 627.706, as amended by s. 30, chapter 2007-1, Laws of Florida. Under the pilot program, the corporation is not required to issue a notice of nonrenewal to exclude sinkhole coverage upon the renewal of existing policies, but may exclude such coverage using a notice of coverage change.

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.

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.

Whether coverage for risks to be taken out otherwise exists in the admitted voluntary market.

The degree to which the take-out bonus is promoting new capital being allocated by the insurer to Florida residential property coverage.

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:

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 Miami-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.

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:

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.

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.

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

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.

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 four additional 1-year terms, unless canceled or not renewed by the policyholder. 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 four additional 1-year terms, unless canceled or not renewed by the policyholder. For each replacement policy canceled or nonrenewed by the insurer for any reason during the 5-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 5 years; such moneys may be released from escrow only to pay claims. If the policy is canceled or nonrenewed before the end of the 5-year period, the amount of the take-out bonus must be prorated for the time period the policy was insured. 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.

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.

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.

In order for a plan to qualify for approval:

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:

The calculation of an insurer’s regular assessment liability 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., 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:

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:

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.

The purpose of this section is to provide standards for the sale of bonds pursuant to s. 627.351(2) and (6).

The term “corporation,” as used in this section, means the Citizens Property Insurance Corporation.

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.

The names, addresses, and estimated amounts of compensation of any finders connected with the issuance of the bonds.

The amount of underwriting spread expected to be realized and the amount of fees and expenses expected to be paid to the financial adviser.

Any management fee charged by the managing underwriter.

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.

The name and address of each financial adviser or managing underwriter, if any, connected with the bond issue.

Any other disclosure which the corporation may require.

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.

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.

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.

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.

The plan is not required to assist in the placement of any workers’ compensation, employer’s liability, malpractice, or motor vehicle insurance coverage.

The plan and the corporation shall develop a business plan and present it to the Financial Services Commission for approval by September 1, 2007, to provide for the implementation of an electronic database for the purpose of confirming eligibility pursuant to s. 627.351(6). The business plan may provide that authorized insurers or agents of authorized insurers may submit to the plan or the corporation in electronic form, as determined by the plan or the corporation, information determined necessary by the plan or the corporation to deny coverage to risks ineligible for coverage by the corporation. Any authorized insurer submitting such information that results in a risk being denied coverage by the corporation is required to offer coverage to the risk at its approved rates, for the coverage and premium quoted, for at least 1 year.

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any authorized insurer acting within the scope of its authority under this subsection or its agents or employees for any action taken by them in the performance of their duties or responsibilities under this subsection.

“Fund” means a group or association of health care providers authorized to self-insure.

“Health care provider” means any:

“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.

“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.

“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.

“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.

Establishment of a Medical Malpractice Risk Management Trust Fund to provide coverage against professional medical malpractice liability.

Employment of professional consultants for loss prevention and claims management coordination under a risk management program.

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.

Each member has a contingent assessment liability for payment of actual losses and expenses incurred while the member’s policy was in force.

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.

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.

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.

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.

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.

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.

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.

“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.

“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.

“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:

Reinsurance agreements;

Pension plans;

Premium loans, whether or not subject to an automatic provision;

Dividends, whether to purchase additional paid-up insurance or to shorten the dividend payment period;

Salary deduction plans;

Preauthorized check plans;

Waivers of premiums on disability;

Nonforfeiture provisions affording benefits under supplementary contracts; or

Such other methods of paying for life insurance as may be permitted by the commission pursuant to rule or regulation.

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

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. However, the written authorization requirement may be waived by the recipient or the recipient’s representative if the insurer verifies the identity of the insured or the insured’s recipient and does not charge a fee for the transaction. If the funds are misdirected, the insurer remains liable for the payment of the claim.

“Business entity” includes, but is not limited to, a joint venture, partnership, corporation, limited liability company, and business trust.

“Insurable interest” as to life, health, or disability insurance includes only the following interests:

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.

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.

Provide to the applicant specific information regarding the reasons for the refusal to insure.

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.

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.

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.

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).

Every filing made pursuant to this subsection, except disability income policies and accidental death policies, shall be prohibited from applying the following rating practices:

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.

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.

The filing required by this subsection shall be satisfied by one of the following methods:

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.

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.

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.

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.

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:

As used in this subsection:

Is in any respect in violation of, or does not comply with, this code.

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.

Has any title, heading, or other indication of its provisions which is misleading.

Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.

Is for residential property insurance and contains provisions that are unfair or inequitable or encourage misrepresentation.

Is for health insurance, and:

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.

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

Allocation of expenses.

Risk and contingency margins, along with justification of such margins.

Acquisition costs.

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.

Incurred claims are claims occurring within a fixed period, whether or not paid during the same period, under the terms of the policy period.

It finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy; and

The policy is otherwise approved by it.

The names of the parties to the contract.

The subject of the insurance.

The risks insured against.

The time when the insurance thereunder takes effect and the period during which the insurance is to continue.

The premium.

The conditions pertaining to the insurance.

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.

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.

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:

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. This subsection does not apply to individually rated risks having a policy term of less than 90 days.

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.

The insurer shall give the named insured at least 45 days’ advance written notice of the renewal premium.

The insurer shall give the named insured written notice of nonrenewal, cancellation, or termination at least 100 days prior to the effective date of the nonrenewal, cancellation, or termination. However, the insurer shall give at least 100 days’ written notice, or written notice by June 1, whichever is earlier, for any nonrenewal, cancellation, or termination that would be effective between June 1 and November 30. The notice must include the reason or reasons for the nonrenewal, cancellation, or termination, except that:

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.

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.

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.

Effective August 1, 2007, with respect to any residential property insurance policy, every notice of renewal premium must specify:

The Financial Services Commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement this subsection.

The name of the insurer.

The name of each insured.

The limits of the liability coverage.

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.

A copy of the policy.

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.

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.

A summary statement of any renewal or cancellation provisions.

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.

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.

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.

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:

The forms shall allow insurers to place other coverages on the checklists which may or may not be included in the insurer’s policies.

The outline of coverage must contain:

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;

It uses layout and spacing which separate the paragraphs from each other and from the border of the paper;

It has section titles that are captioned in boldfaced type or that otherwise stand out significantly from the text;

It avoids the use of unnecessarily long, complicated, or obscure words, sentences, paragraphs, or constructions;

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

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.

For policy forms containing 10,000 words or fewer of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.

The total number of words in the text shall be counted and divided by the total number of sentences, and the figure obtained shall be multiplied by a factor of 1.015.

The total number of syllables shall be counted and divided by the total number of words, and the figure obtained shall be multiplied by a factor of 84.6.

The sum of the figures computed under paragraphs (b) and (c) subtracted from 206.835 equals the Flesch reading ease test score for the policy form.

For purposes of this subsection:

The term “text” as used in this subsection includes all printed matter except:

At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they are to be used.

Any policy which is a security subject to federal jurisdiction;

Any group policy covering a group of 1,000 or more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy; however, this paragraph does not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

Any group annuity contract which serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;

Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this section;

Any policy or form, or partial revision thereof, or renewal thereof, which policy or form is filed prior to October 1, 1983; or

Endorsements filed on or after October 1, 1983, which modify policy forms prior to October 1, 1983.

Mortgage guaranty insurance policies, as defined in s. 635.011.

A clause requiring the insured to cooperate fully in the review process prescribed under s. 766.106 if a notice of intent to file a claim for medical malpractice is made against the insured.

A clause requiring the insurer or self-insurer to notify the insured no less than 90 days prior to the effective date of cancellation of the policy or contract and, in the event of a determination by the insurer or self-insurer not to renew the policy or contract, to notify the insured no less than 90 days prior to the end of the policy or contract period. If cancellation or nonrenewal is due to nonpayment or loss of license, 10 days’ notice is required.

A clause requiring the insurer or self-insurer to notify the insured no less than 60 days prior to the effective date of a rate increase. The provisions of s. 627.4133 shall apply to such notice and to the failure of the insurer to provide such notice to the extent not in conflict with this section.

That the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and

That service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers.

The policy must, at a minimum, provide that for the first 12 months of the disability, a person is totally disabled if the person is unable to perform the material and substantial duties of the person’s regular occupation, or must include a provision at least as favorable to the insured.

The policy may provide that after the first 12 months of disability as described in paragraph (a), the insurer may predicate the continuance of benefits on the person’s ability to perform any work or occupation for which the person is reasonably qualified or trained.

For an employee, the person’s inability to perform any work or occupation for which the person is reasonably qualified or trained; or

For a dependent, the person’s inability to engage in most normal activities of a person of like age and sex in good health.

Except as stated in paragraph (c), if two or more policies or plans cover the same child as a dependent of different parents:

However, if a policy or plan subject to the rule based on the birthdays of the parents coordinates with an out-of-state policy or plan which contains provisions under which the benefits of a policy or plan which covers a person as a dependent of a male are determined before those of a policy or plan which covers the person as a dependent of a female and if, as a result, the policies or plans do not agree on the order of benefits, the provisions of the other policy or plan determine the order of benefits.

If two or more policies or plans cover a dependent child of divorced or separated parents, benefits for the child are determined in this order:

However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child and if the entity obliged to pay or provide the benefits of the policy or plan of that parent has actual knowledge of those terms, the benefits of that policy or plan are determined first, except with respect to any claim determination period or plan or policy year during which any benefits are actually paid or provided before the entity has the actual knowledge.

The benefits of a policy or plan which covers a person as an employee who is neither laid off nor retired, or as that employee’s dependent, are determined before those of a policy or plan which covers the person as a laid-off or retired employee or as the employee’s dependent. If the other policy or plan is not subject to this rule, and if, as a result, the policies or plans do not agree on the order of benefits, this paragraph does not apply.

If none of the rules in paragraph (a), paragraph (b), paragraph (c), or paragraph (d) determine the order of benefits, the benefits of the policy or plan which covered an employee, member, or subscriber for a longer period of time are determined before those of the policy or plan which covered the person for the shorter period of time.

First, the plan covering the person as an employee, or as the employee’s dependent.

Second, the coverage purchased under the plan covering the person as a former employee, or as the former employee’s dependent provided according to the provisions of COBRA.

The Agency for Health Care Administration shall adopt rules specifying the bone marrow transplant procedures that are accepted within the appropriate oncological specialty and are not experimental for purposes of this section. The rules must be based upon recommendations of an advisory panel appointed by the secretary of the agency, composed of:

The director shall also appoint a member of the advisory panel to serve as chairperson.

The agency shall provide, within existing resources, staff support to enable the panel to carry out its responsibilities under this section.

In making recommendations and adopting rules under this section, the advisory panel and the director shall:

The advisory panel shall conduct, at least biennially, a review of scientific evidence to ensure that its recommendations are based on current research findings and that insurance policies offer coverage for the latest medically acceptable bone marrow transplant procedures.

“Medical literature” means scientific studies published in a United States peer-reviewed national professional journal.

“Standard reference compendium” means authoritative compendia identified by the Secretary of the United States Department of Health and Human Services and recognized by the federal Centers for Medicare and Medicaid Services.

An insurer may not exclude coverage in any individual or group insurance policy issued, amended, delivered, or renewed in this state which covers the treatment of cancer for any drug prescribed for the treatment of cancer on the ground that the drug is not approved by the United States Food and Drug Administration for a particular indication, if that drug is recognized for treatment of that indication in a standard reference compendium or recommended in the medical literature.

Coverage for a drug required by this section also includes the medically necessary services associated with the administration of the drug.

Alter any other law with regard to provisions limiting coverage for drugs that are not approved by the United States Food and Drug Administration.

Require coverage for any drug if the United States Food and Drug Administration has determined that the use of the drug is contraindicated.

Require coverage for a drug that is not otherwise approved for any indication by the United States Food and Drug Administration.

Affect the determination as to whether particular levels, dosages, or usage of a medication associated with bone marrow transplant procedures are covered under an individual or group health insurance policy or health maintenance organization contract.

Apply to specified disease or supplemental policies.

Acknowledgment of the receipt of notice of loss or claim under the policy.

Furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted.

Investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.

Within 30 days after the liability insurer knew or should have known of the coverage defense, written notice of reservation of rights to assert a coverage defense is given to the named insured by registered or certified mail sent to the last known address of the insured or by hand delivery; and

Within 60 days of compliance with paragraph (a) or receipt of a summons and complaint naming the insured as a defendant, whichever is later, but in no case later than 30 days before trial, the insurer:

This section applies to all insurance policies, and the underwriting thereof, which are issued in this state or are issued outside this state pursuant to s. 627.5515 or s. 627.6515 covering residents of this state; to prepaid limited health organizations; and to multiple-employer welfare arrangements defined in s. 624.437. For the purposes of this section, “insurer” includes authorized multiple-employer welfare arrangements.

This section does not prohibit an insurer from contesting a policy or claim to the extent allowed by law.

“AIDS” means acquired immune deficiency syndrome.

“ARC” means AIDS-related complex.

“HIV” means the human immunodeficiency virus identified as the causative agent of AIDS.

With respect to the issuance of or the underwriting of a policy regarding exposure to the HIV infection and sickness or medical conditions derived from HIV infection, the insurer may use only medical tests that are reliable predictors of risk. A test which is recommended by the Centers for Disease Control and Prevention or by the federal Food and Drug Administration is reliable for the purposes of this section. A test which is rejected or not recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration is not reliable for the purposes of this section. If a specific test recommended by the Centers for Disease Control and Prevention or the federal Food and Drug Administration indicates the existence or potential existence of exposure to the HIV infection or a sickness or medical condition related to the HIV infection, the insurer shall, before relying on a single test result to deny or limit coverage or to rate the coverage, follow the applicable Centers for Disease Control and Prevention or federal Food and Drug Administration recommended test protocol and shall use any applicable followup tests or series of tests recommended by the Centers for Disease Control and Prevention or federal Food and Drug Administration to confirm the indication.

Prior to testing, the insurer shall disclose its intent to test the person for the HIV infection or for a specific sickness or medical condition derived therefrom and shall obtain the person’s written informed consent to administer the test. The written informed consent required by this paragraph shall include a fair explanation of the test, including its purpose, potential uses, and limitations, and the meaning of its results and the right to confidential treatment of information. Use of a form approved by the office raises a conclusive presumption of informed consent.

An applicant shall be notified of a positive test result by a physician designated by the applicant or, in the absence of such designation, by the Department of Health. Notification must include all of the following:

A medical test for exposure to the HIV infection or for a sickness or medical condition derived from such infection may be required of or given to a person only if the test is based on the person’s current medical condition or medical history or if the test is triggered by threshold coverage amounts which apply to all persons within the risk class. Sexual orientation may not be used in the underwriting process or in the determination of which applicants shall be tested for exposure to the HIV infection. The marital status, living arrangements, occupation, gender, beneficiary designation, or zip code or other territorial classification of an applicant may not be used to establish the applicant’s sexual orientation.

An insurer may inquire whether a person has been tested positive for exposure to the HIV infection or been diagnosed as having ARC or AIDS caused by the HIV infection or other sickness or condition derived from such infection. An insurer may not inquire whether the person has been tested for or has received a negative result from a specific test for exposure to the HIV infection or for a sickness or a medical condition derived from such infection.

Insurers shall maintain strict confidentiality regarding medical test results with respect to exposure to the HIV infection or a specific sickness or medical condition derived from such exposure. The insurer may not disclose information regarding specific test results outside of the insurance company or its employees, insurance affiliates, agents, or reinsurers, except to the person tested and to persons designated in writing by the person tested. The insurer may not furnish specific test results for exposure to the HIV infection to an insurer industry data bank if a review of the information would identify the individual and the specific test results.

A laboratory may be used by an insurer or insurance support organization for the processing of HIV-related tests only if it is certified by the United States Department of Health and Human Services under the Clinical Laboratories Improvement Act of 1967, permitting testing of specimens obtained in interstate commerce, and only if the laboratory subjects itself to ongoing proficiency testing by the College of American Pathologists, the American Association of Bio Analysts, or an equivalent program approved by the Centers for Disease Control and Prevention of the United States Department of Health and Human Services.

An insurer of a group policy may not exclude coverage of an eligible individual because of a positive test result for exposure to the HIV infection or a specific sickness or medical condition derived from such exposure, either as a condition for or subsequent to the issuance of the policy. This paragraph does not apply to individuals applying for coverage where individual underwriting is otherwise allowed by law.

Subject to the total benefits limits in a health insurance policy, no health insurance policy shall contain an exclusion or limitation with respect to coverage for exposure to the HIV infection or a specific sickness or medical condition derived from such infection, except as provided in a preexisting condition clause. This paragraph does not prohibit the issuance of accident-only or specified disease health policies.

Except for preexisting conditions specifically applying to a sickness or medical condition of the insured, benefits under a life insurance policy shall not be denied or limited based on the fact that the insured’s death was caused, directly or indirectly, by exposure to the HIV infection or a specific sickness or medical condition derived from such infection. This paragraph does not prohibit the issuance of accidental death only or specified disease policies.

Any major medical or comprehensive accident and health policy for which individual underwriting is authorized by law may contain a provision excluding coverage for expenses related to AIDS or ARC if, in the opinion of a legally qualified physician, the insured, prior to the first anniversary of the insured’s coverage under the policy, first exhibited objective manifestations of AIDS or ARC, as defined by the Centers for Disease Control and Prevention, which objective manifestations are attributable to no other cause or was diagnosed as having AIDS or ARC if all of the following apply:

“Genetic information” means information derived from genetic testing to determine the presence or absence of variations or mutations, including carrier status, in an individual’s genetic material or genes that are scientifically or medically believed to cause a disease, disorder, or syndrome, or are associated with a statistically increased risk of developing a disease, disorder, or syndrome, which is asymptomatic at the time of testing. Such testing does not include routine physical examinations or chemical, blood, or urine analysis, unless conducted purposefully to obtain genetic information, or questions regarding family history.

“Health insurer” means an authorized insurer offering health insurance as defined in s. 624.603, a self-insured plan as defined in s. 624.031, a multiple-employer welfare arrangement as defined in s. 624.437, a prepaid limited health service organization as defined in s. 636.003, a health maintenance organization as defined in s. 641.19, a prepaid health clinic as defined in s. 641.402, a fraternal benefit society as defined in s. 632.601, or any health care arrangement whereby risk is assumed.

In the absence of a diagnosis of a condition related to genetic information, no health insurer authorized to transact insurance in this state may cancel, limit, or deny coverage, or establish differentials in premium rates, based on such information.

Health insurers may not require or solicit genetic information, use genetic test results, or consider a person’s decisions or actions relating to genetic testing in any manner for any insurance purpose.

This section does not apply to the underwriting or issuance of a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy or any other actions of an insurer directly related to a life insurance policy, disability income policy, long-term care policy, accident-only policy, hospital indemnity or fixed indemnity policy, dental policy, or vision policy.

The name of the claim processor.

The electronic-claims payor identification number or the issuer identification number, also referred to as the Banking Identification Number or “BIN,” assigned by the American National Standards Institute.

The insured’s prescription group number.

The insured’s identification number.

The insured’s name.

The claims submission name and address.

The help desk telephone number.

Any other information that the entity finds will assist in the processing of the claim.

“Contractor” means a contractor or subcontractor performing work on a public construction project under contract with a public agency, as described in s. 255.0517(2).

“Liability insurer” means an insurer issuing a commercial general liability insurance policy in this state to a contractor that provides coverage for liability arising out of completed operations performed by the contractor or on the contractor’s behalf.

The purpose of this section is to set forth standards and procedures for making recommendations to senior consumers which result in a transaction involving annuity products to appropriately address the insurance needs and financial objectives of senior consumers at the time of the transaction.

A violation of this section does not create or imply a private cause of action.

Nothing in this section shall subject an insurer to criminal or civil liability for the acts of independent individuals not affiliated with that insurer for selling its products, when such sales are made in a way not authorized by the insurer.

“Annuity contract” means a fixed annuity, equity indexed annuity, fixed equity indexed annuity, or variable annuity that is individually solicited, whether the product is classified as an individual annuity or a group annuity.

“Accredited investor” means any person who comes within any of the following categories, or who the issuer reasonably believes comes within any of the following categories, at the time of the sale of an annuity to that person:

“Recommendation” means advice provided by an insurance agent, or an insurer if no insurance agent is involved, to an individual senior consumer which results in a purchase or exchange of an annuity in accordance with that advice.

“Senior consumer” means a person 65 years of age or older. In the event of a joint purchase by more than one party, a purchaser is considered to be a senior consumer if any of the parties is age 65 or older.

In recommending to a senior consumer the purchase or exchange of an annuity that results in another insurance transaction or series of insurance transactions, an insurance agent, or an insurer if no insurance agent is involved, must have an objectively reasonable basis for believing that the recommendation is suitable for the senior consumer based on the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs.

Before executing a purchase or exchange of an annuity resulting from a recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is involved, shall make reasonable efforts to obtain information concerning the suitability of the recommendation. The information shall include, at a minimum:

This information shall be collected on a form adopted by rule by the department and completed and signed by the applicant and agent. Questions requesting this information must be presented in at least 12-point type and be sufficiently clear so as to be readily understandable by both the agent and the consumer. A true and correct executed copy of the form shall be provided by the agent to the insurer, or the third party that has contracted with such insurer pursuant to subparagraph (f)3., within 10 days after execution of the form, and shall be provided to the consumer no later than the date of delivery of the contract or contracts.

In addition to the information required by paragraph (b), before the execution of a replacement or exchange of an annuity contract resulting from a recommendation, the insurance agent shall also provide, on a form adopted by rule by the department, information concerning differences between each existing annuity contract and the annuity contract being recommended in order to determine the suitability of the recommendation and its benefit to the consumer. A true and correct executed copy of this form shall be provided by the agent to the insurer, or the third party that has contracted with such insurer pursuant to subparagraph (f)3., within 10 days after execution of the form, and shall be provided to the consumer no later than the date of delivery of the contract or contracts. The information shall include, at a minimum:

Prior to the execution of a purchase or exchange of an annuity contract resulting from a recommendation, an agent shall also disclose to the consumer that such purchase or exchange may have tax consequences and that the applicant should contact his or her tax advisor for more information.

The office may order an insurer to take reasonably appropriate corrective action, including rescission of the policy or contract and a full refund of the premiums paid or the accumulation value, whichever is greater, for any senior consumer harmed by a violation of this section by the insurer or the insurer’s insurance agent.

The department may order:

The department shall, in addition to any other penalty authorized under chapter 626, order an insurance agent to pay restitution to any senior consumer who has been deprived of money by the agent’s misappropriation, conversion, or unlawful withholding of monies belonging to the senior consumer in the course of a transaction involving annuities. The amount of restitution required to be paid pursuant to this paragraph may not exceed the amount misappropriated, converted, or unlawfully withheld. This paragraph does not limit or restrict a person’s right to seek other remedies as provided by law.

Any applicable penalty under the Florida Insurance Code for a violation of paragraph (4)(a), paragraph (4)(b), or subparagraph (4)(c)2. may be reduced or eliminated, according to a schedule adopted by the office or the department, as appropriate, if corrective action for the senior consumer was taken promptly after a violation was discovered.

Insurers, managing general agents, insurance agencies, and insurance agents shall maintain or make available from the entity or entities responsible for maintaining the records pursuant to paragraph (4)(f), to the department or office, as appropriate, records of the information collected from the senior consumer and other information used in making the recommendations that were the basis for insurance transactions for 5 years after the insurance transaction is completed by the insurer. An insurer is permitted, but shall not be required, to maintain documentation on behalf of an insurance agent.

Records required to be maintained by this subsection may be maintained in paper, photographic, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces the actual document.

Direct-response solicitations where there is no recommendation based on information collected from the senior consumer pursuant to this section.

Contracts used to fund:

A provision permitting a maximum interest rate of not more than 10 percent a year; or

A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.

The published monthly average for the calendar month ending 2 months before the date on which the rate is determined; or

The rate used to compute the cash surrender values under the policy during the applicable period plus 1 percent a year.

The rate being charged may be increased whenever such increase as determined under subsection (3) would increase that rate by 50 basis points or more a year.

The rate being charged must be reduced whenever such reduction as determined under subsection (3) would decrease that rate by 50 basis points or more a year.

Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan.

Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practicable to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in paragraph (c).

Send to policyholders with loans reasonable advance notice of any increase or decrease in the rate.

Include in the notices required in this section the substance of the pertinent provisions of subsections (2) and (4).

The rate of interest on policy loans permitted under this section includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy.

The term “policy loan” includes any premium loan made under a policy to pay one or more premiums that were not paid to the life insurer as they fell due.

The term “policyholder” includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer.

The term “policy” includes certificates issued by a fraternal benefit society and annuity contracts which provide for policy loans.

Those provisions specified in ss. 627.465-627.469, except that under s. 627.465 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for deduction of such payments from an amount payable upon settlement under the contract; and

A provision that the contract may be reinstated at any time within 3 years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract are paid (or, within the limits permitted by the then cash value of the contract, reinstated) with interest as to both payments and indebtedness at a rate to be specified in the contract but not exceeding 8 percent per year compounded annually.

The reserve on the date of default of the premium less a sum of not more than 2.5 percent of the face amount; or

An amount as defined in s. 627.476 but on the basis of the Commissioners’ 1941 Standard Ordinary Mortality Table in lieu of the Commissioners’ 1958 Standard Ordinary Mortality Table therein specified. The policy shall reserve to the insurer the right to defer the granting of any cash surrender value for 6 months after demand therefor with surrender of the policy.

That in the event of default in any premium payment, after premiums have been paid for at least 1 full year in the case of ordinary insurance or 3 full years in the case of industrial insurance, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such amount as may be hereinafter specified. In lieu of such stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. With respect to all policy forms filed on or after October 1, 1990, the policy forms shall include, but not be limited to, a reduced paid-up nonforfeiture benefit. For the purposes of this subsection, the term “reduced paid-up nonforfeiture benefit” means a benefit whereby the policy may be continued at the option of the insured as reduced paid-up life insurance, the amount of which shall be as much as the surrender value of the policy will provide on the date of default, calculated using the surrender value of the policy as a net single premium on the due date of the first unpaid premium at the then-current age of the insured.

That upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least 3 full years in the case of ordinary insurance or 5 full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified.

That a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default.

That if the policy becomes paid up by completion of all premium payments, or if it is continued under any paid-up nonforfeiture benefit which became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified.

In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of any other policy, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary, either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy.

A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of this state; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein, a statement that such method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy.

Any cash surrender value available under the policy in the event of default in the premium payment due on any policy anniversary, whether or not required by subsection (2), shall be an amount not less than the excess, if any, of the present value on such anniversary of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:

For any policy issued on or after the operative date of subsection (9), as defined therein, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such rider or supplemental policy provision and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. For any family policy issued on or after the operative date of subsection (9), as defined therein, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse reaches age 71, the cash surrender value referred to in paragraph (a) shall be an amount not less than the sum of the cash surrender value as defined in such paragraph for an otherwise similar policy issued at the same age without such term insurance on the life of the spouse and the cash surrender value as defined in such paragraph for a policy which provides only the benefits otherwise provided by such term insurance on the life of the spouse.

Any cash surrender value available within 30 days after any policy anniversary under any policy paid up by completion of all premium payments, or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection (2), shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy.

The then-present value of the future guaranteed benefits provided for by the policy;

Two percent of the amount of the insurance if the insurance is uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with the duration of the policy;

Forty percent of the adjusted premium for the first policy year; and

Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

For policies issued on and after the operative date of this section but before January 1, 1968, the 1941 Standard Industrial Mortality Table, unless the Commissioners’ 1961 Standard Industrial Mortality Table is applicable according to subsection (14);

For policies issued on and after January 1, 1968, the Commissioners’ 1961 Standard Industrial Mortality Table.

All calculations shall be made on the basis of the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; however, such rate of interest shall not exceed 3.5 percent per year, except that a rate of interest not exceeding 4 percent per year may be used for policies issued on or after July 1, 1973, and prior to October 1, 1979, and a rate of interest not exceeding 4.5 percent per year may be used for policies issued on or after October 1, 1979, and a rate of interest not exceeding 5.5 percent per year may be used for policies issued on or after October 1, 1980. In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners’ 1958 Extended Term Insurance Table, for ordinary policies. In the case of industrial policies:

For policies issued on and after the operative date of this section but before January 1, 1968, not more than 130 percent of the rates of mortality according to the 1941 Standard Industrial Mortality Table, unless the Commissioners’ 1961 Industrial Extended Term Insurance Table is applicable according to subsection (14), in which case not more than those of the latter table;

For policies issued on and after January 1, 1968, not more than those of the Commissioners’ 1961 Industrial Extended Term Insurance Table.

This subsection shall apply to all policies issued on or after the operative date of this subsection, as defined herein. Except as provided in paragraph (g), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:

However, in applying the percentage specified in subparagraph 3., no nonforfeiture net-level premium shall be deemed to exceed 4 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this subsection shall be the date as of which the rated age of the insured is determined.

The nonforfeiture net-level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of such policy on which a premium falls due.

In the case of a policy which causes on a basis guaranteed in the policy unscheduled changes in benefits or premiums, or which provides an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any such change in the benefits or premiums, the future adjusted premiums, nonforfeiture net-level premiums, and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.

Except as otherwise provided in paragraph (g), the recalculated future adjusted premiums for any such policy shall be such uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums shall be equal to the excess of the sum of the then-present value of the then future guaranteed benefits provided for by the policy and the additional expense allowance, if any, over the then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.

The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of 1 percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and 125 percent of the increase, if positive, in the nonforfeiture net-level premium.

The recalculated nonforfeiture net-level premium shall be equal to the result obtained by dividing (A) and (B) where:

Notwithstanding any other provisions of this subsection to the contrary, in the case of a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, such policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amounts of insurance, adjusted premiums and present values for such substandard policy may be calculated as if it were issued to provide such higher uniform amounts of insurance on the standard basis.

All adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners’ 1980 Standard Ordinary Mortality Table or, at the election of the insurer for any one or more specified plans of life insurance, the Commissioners’ 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; shall for all policies of industrial insurance be calculated on the basis of the Commissioners’ 1961 Standard Industrial Mortality Table; and shall for all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection for policies issued in that calendar year. However:

The nonforfeiture interest rate per year for any policy issued in a particular calendar year shall be equal to 125 percent of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearest one-fourth of 1 percent.

Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.

After October 1, 1981, any insurer may file with the office a written notice of its election to comply with the provisions of this subsection after a specified date before January 1, 1989, which shall be the operative date of this subsection for that insurer. If an insurer makes no such election, the operative date of this subsection for the insurer shall be January 1, 1989.

The office must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (2)-(9);

The office must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and

The cash surrender values and paid-up nonforfeiture benefits provided by such plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by rules promulgated by the commission.

In the event of death or dismemberment by accident or accidental means,

In the event of total and permanent disability,

As reversionary annuity or deferred reversionary annuity benefits,

As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply,

As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child’s age is 26, is uniform in amount after the child’s age is 1, and has not become paid up by reason of the death of a parent of the child, and

As other policy benefits additional to life insurance by endowment benefits,

Must be the same percentage for each policy year between the second policy anniversary and the later of the fifth policy anniversary and the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least 0.2 percent of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and

Must be such that no percentage after the later of the two policy anniversaries specified in paragraph (a) may apply to fewer than 5 consecutive policy years.