House Bill hb0551

CODING: Words stricken are deletions; words underlined are additions.




    Florida House of Representatives - 2002                 HB 551

        By Representative Brown






  1                      A bill to be entitled

  2         An act relating to property insurance plans;

  3         providing a short title; amending ss. 627.351

  4         and 627.3511, F.S.; revising certain agent

  5         commission payment and policy servicing

  6         procedures and requirements; creating s.

  7         627.3517, F.S.; preserving a policyholder's

  8         right to select and maintain certain agents;

  9         authorizing the Department of Insurance to

10         adopt rules to preserve such right; providing

11         application; providing an effective date.

12

13  Be It Enacted by the Legislature of the State of Florida:

14

15         Section 1.  This act may be cited as "The Insurance

16  Policyholder Protection Act of 2002."

17         Section 2.  Paragraph (b) of subsection (2) and

18  paragraph (c) of subsection (6) of section 627.351, Florida

19  Statutes, are amended to read:

20         627.351  Insurance risk apportionment plans.--

21         (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--

22         (b)  The department shall require all insurers holding

23  a certificate of authority to transact property insurance on a

24  direct basis in this state, other than joint underwriting

25  associations and other entities formed pursuant to this

26  section, to provide windstorm coverage to applicants from

27  areas determined to be eligible pursuant to paragraph (c) who

28  in good faith are entitled to, but are unable to procure, such

29  coverage through ordinary means; or it shall adopt a

30  reasonable plan or plans for the equitable apportionment or

31  sharing among such insurers of windstorm coverage, which may

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  include formation of an association for this purpose. As used

  2  in this subsection, the term "property insurance" means

  3  insurance on real or personal property, as defined in s.

  4  624.604, including insurance for fire, industrial fire, allied

  5  lines, farmowners multiperil, homeowners' multiperil,

  6  commercial multiperil, and mobile homes, and including

  7  liability coverages on all such insurance, but excluding

  8  inland marine as defined in s. 624.607(3) and excluding

  9  vehicle insurance as defined in s. 624.605(1)(a) other than

10  insurance on mobile homes used as permanent dwellings. The

11  department shall adopt rules that provide a formula for the

12  recovery and repayment of any deferred assessments.

13         1.  For the purpose of this section, properties

14  eligible for such windstorm coverage are defined as dwellings,

15  buildings, and other structures, including mobile homes which

16  are used as dwellings and which are tied down in compliance

17  with mobile home tie-down requirements prescribed by the

18  Department of Highway Safety and Motor Vehicles pursuant to s.

19  320.8325, and the contents of all such properties. An

20  applicant or policyholder is eligible for coverage only if an

21  offer of coverage cannot be obtained by or for the applicant

22  or policyholder from an admitted insurer at approved rates.

23         2.a.(I)  All insurers required to be members of such

24  association shall participate in its writings, expenses, and

25  losses. Surplus of the association shall be retained for the

26  payment of claims and shall not be distributed to the member

27  insurers. Such participation by member insurers shall be in

28  the proportion that the net direct premiums of each member

29  insurer written for property insurance in this state during

30  the preceding calendar year bear to the aggregate net direct

31  premiums for property insurance of all member insurers, as

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  reduced by any credits for voluntary writings, in this state

  2  during the preceding calendar year. For the purposes of this

  3  subsection, the term "net direct premiums" means direct

  4  written premiums for property insurance, reduced by premium

  5  for liability coverage and for the following if included in

  6  allied lines: rain and hail on growing crops; livestock;

  7  association direct premiums booked; National Flood Insurance

  8  Program direct premiums; and similar deductions specifically

  9  authorized by the plan of operation and approved by the

10  department. A member's participation shall begin on the first

11  day of the calendar year following the year in which it is

12  issued a certificate of authority to transact property

13  insurance in the state and shall terminate 1 year after the

14  end of the calendar year during which it no longer holds a

15  certificate of authority to transact property insurance in the

16  state. The commissioner, after review of annual statements,

17  other reports, and any other statistics that the commissioner

18  deems necessary, shall certify to the association the

19  aggregate direct premiums written for property insurance in

20  this state by all member insurers.

21         (II)  The plan of operation shall provide for a board

22  of directors consisting of the Insurance Consumer Advocate

23  appointed under s. 627.0613, 1 consumer representative

24  appointed by the Insurance Commissioner, 1 consumer

25  representative appointed by the Governor, and 12 additional

26  members appointed as specified in the plan of operation. One

27  of the 12 additional members shall be elected by the domestic

28  companies of this state on the basis of cumulative weighted

29  voting based on the net direct premiums of domestic companies

30  in this state. Nothing in the 1997 amendments to this

31

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  paragraph terminates the existing board or the terms of any

  2  members of the board.

  3         (III)  The plan of operation shall provide a formula

  4  whereby a company voluntarily providing windstorm coverage in

  5  affected areas will be relieved wholly or partially from

  6  apportionment of a regular assessment pursuant to

  7  sub-sub-subparagraph d.(I) or sub-sub-subparagraph d.(II).

  8         (IV)  A company which is a member of a group of

  9  companies under common management may elect to have its

10  credits applied on a group basis, and any company or group may

11  elect to have its credits applied to any other company or

12  group.

13         (V)  There shall be no credits or relief from

14  apportionment to a company for emergency assessments collected

15  from its policyholders under sub-sub-subparagraph d.(III).

16         (VI)  The plan of operation may also provide for the

17  award of credits, for a period not to exceed 3 years, from a

18  regular assessment pursuant to sub-sub-subparagraph d.(I) or

19  sub-sub-subparagraph d.(II) as an incentive for taking

20  policies out of the Residential Property and Casualty Joint

21  Underwriting Association.  In order to qualify for the

22  exemption under this sub-sub-subparagraph, the take-out plan

23  must provide that at least 40 percent of the policies removed

24  from the Residential Property and Casualty Joint Underwriting

25  Association cover risks located in Dade, Broward, and Palm

26  Beach Counties or at least 30 percent of the policies so

27  removed cover risks located in Dade, Broward, and Palm Beach

28  Counties and an additional 50 percent of the policies so

29  removed cover risks located in other coastal counties, and

30  must also provide that no more than 15 percent of the policies

31  so removed may exclude windstorm coverage.  With the approval

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  of the department, the association may waive these geographic

  2  criteria for a take-out plan that removes at least the lesser

  3  of 100,000 Residential Property and Casualty Joint

  4  Underwriting Association policies or 15 percent of the total

  5  number of Residential Property and Casualty Joint Underwriting

  6  Association policies, provided the governing board of the

  7  Residential Property and Casualty Joint Underwriting

  8  Association certifies that the take-out plan will materially

  9  reduce the Residential Property and Casualty Joint

10  Underwriting Association's 100-year probable maximum loss from

11  hurricanes.  With the approval of the department, the board

12  may extend such credits for an additional year if the insurer

13  guarantees an additional year of renewability for all policies

14  removed from the Residential Property and Casualty Joint

15  Underwriting Association, or for 2 additional years if the

16  insurer guarantees 2 additional years of renewability for all

17  policies removed from the Residential Property and Casualty

18  Joint Underwriting Association.

19         b.  Assessments to pay deficits in the association

20  under this subparagraph shall be included as an appropriate

21  factor in the making of rates as provided in s. 627.3512.

22         c.  The Legislature finds that the potential for

23  unlimited deficit assessments under this subparagraph may

24  induce insurers to attempt to reduce their writings in the

25  voluntary market, and that such actions would worsen the

26  availability problems that the association was created to

27  remedy. It is the intent of the Legislature that insurers

28  remain fully responsible for paying regular assessments and

29  collecting emergency assessments for any deficits of the

30  association; however, it is also the intent of the Legislature

31

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  to provide a means by which assessment liabilities may be

  2  amortized over a period of years.

  3         d.(I)  When the deficit incurred in a particular

  4  calendar year is 10 percent or less of the aggregate statewide

  5  direct written premium for property insurance for the prior

  6  calendar year for all member insurers, the association shall

  7  levy an assessment on member insurers in an amount equal to

  8  the deficit.

  9         (II)  When the deficit incurred in a particular

10  calendar year exceeds 10 percent of the aggregate statewide

11  direct written premium for property insurance for the prior

12  calendar year for all member insurers, the association shall

13  levy an assessment on member insurers in an amount equal to

14  the greater of 10 percent of the deficit or 10 percent of the

15  aggregate statewide direct written premium for property

16  insurance for the prior calendar year for member insurers. Any

17  remaining deficit shall be recovered through emergency

18  assessments under sub-sub-subparagraph (III).

19         (III)  Upon a determination by the board of directors

20  that a deficit exceeds the amount that will be recovered

21  through regular assessments on member insurers, pursuant to

22  sub-sub-subparagraph (I) or sub-sub-subparagraph (II), the

23  board shall levy, after verification by the department,

24  emergency assessments to be collected by member insurers and

25  by underwriting associations created pursuant to this section

26  which write property insurance, upon issuance or renewal of

27  property insurance policies other than National Flood

28  Insurance policies in the year or years following levy of the

29  regular assessments. The amount of the emergency assessment

30  collected in a particular year shall be a uniform percentage

31  of that year's direct written premium for property insurance

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  for all member insurers and underwriting associations,

  2  excluding National Flood Insurance policy premiums, as

  3  annually determined by the board and verified by the

  4  department. The department shall verify the arithmetic

  5  calculations involved in the board's determination within 30

  6  days after receipt of the information on which the

  7  determination was based. Notwithstanding any other provision

  8  of law, each member insurer and each underwriting association

  9  created pursuant to this section shall collect emergency

10  assessments from its policyholders without such obligation

11  being affected by any credit, limitation, exemption, or

12  deferment.  The emergency assessments so collected shall be

13  transferred directly to the association on a periodic basis as

14  determined by the association. The aggregate amount of

15  emergency assessments levied under this sub-sub-subparagraph

16  in any calendar year may not exceed the greater of 10 percent

17  of the amount needed to cover the original deficit, plus

18  interest, fees, commissions, required reserves, and other

19  costs associated with financing of the original deficit, or 10

20  percent of the aggregate statewide direct written premium for

21  property insurance written by member insurers and underwriting

22  associations for the prior year, plus interest, fees,

23  commissions, required reserves, and other costs associated

24  with financing the original deficit. The board may pledge the

25  proceeds of the emergency assessments under this

26  sub-sub-subparagraph as the source of revenue for bonds, to

27  retire any other debt incurred as a result of the deficit or

28  events giving rise to the deficit, or in any other way that

29  the board determines will efficiently recover the deficit. The

30  emergency assessments under this sub-sub-subparagraph shall

31  continue as long as any bonds issued or other indebtedness

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  incurred with respect to a deficit for which the assessment

  2  was imposed remain outstanding, unless adequate provision has

  3  been made for the payment of such bonds or other indebtedness

  4  pursuant to the document governing such bonds or other

  5  indebtedness. Emergency assessments collected under this

  6  sub-sub-subparagraph are not part of an insurer's rates, are

  7  not premium, and are not subject to premium tax, fees, or

  8  commissions; however, failure to pay the emergency assessment

  9  shall be treated as failure to pay premium.

10         (IV)  Each member insurer's share of the total regular

11  assessments under sub-sub-subparagraph (I) or

12  sub-sub-subparagraph (II) shall be in the proportion that the

13  insurer's net direct premium for property insurance in this

14  state, for the year preceding the assessment bears to the

15  aggregate statewide net direct premium for property insurance

16  of all member insurers, as reduced by any credits for

17  voluntary writings for that year.

18         (V)  If regular deficit assessments are made under

19  sub-sub-subparagraph (I) or sub-sub-subparagraph (II), or by

20  the Residential Property and Casualty Joint Underwriting

21  Association under sub-subparagraph (6)(b)3.a. or

22  sub-subparagraph (6)(b)3.b., the association shall levy upon

23  the association's policyholders, as part of its next rate

24  filing, or by a separate rate filing solely for this purpose,

25  a market equalization surcharge in a percentage equal to the

26  total amount of such regular assessments divided by the

27  aggregate statewide direct written premium for property

28  insurance for member insurers for the prior calendar year.

29  Market equalization surcharges under this sub-sub-subparagraph

30  are not considered premium and are not subject to commissions,

31  fees, or premium taxes; however, failure to pay a market

                                  8

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  equalization surcharge shall be treated as failure to pay

  2  premium.

  3         e.  The governing body of any unit of local government,

  4  any residents of which are insured under the plan, may issue

  5  bonds as defined in s. 125.013 or s. 166.101 to fund an

  6  assistance program, in conjunction with the association, for

  7  the purpose of defraying deficits of the association. In order

  8  to avoid needless and indiscriminate proliferation,

  9  duplication, and fragmentation of such assistance programs,

10  any unit of local government, any residents of which are

11  insured by the association, may provide for the payment of

12  losses, regardless of whether or not the losses occurred

13  within or outside of the territorial jurisdiction of the local

14  government. Revenue bonds may not be issued until validated

15  pursuant to chapter 75, unless a state of emergency is

16  declared by executive order or proclamation of the Governor

17  pursuant to s. 252.36 making such findings as are necessary to

18  determine that it is in the best interests of, and necessary

19  for, the protection of the public health, safety, and general

20  welfare of residents of this state and the protection and

21  preservation of the economic stability of insurers operating

22  in this state, and declaring it an essential public purpose to

23  permit certain municipalities or counties to issue bonds as

24  will provide relief to claimants and policyholders of the

25  association and insurers responsible for apportionment of plan

26  losses. Any such unit of local government may enter into such

27  contracts with the association and with any other entity

28  created pursuant to this subsection as are necessary to carry

29  out this paragraph. Any bonds issued under this

30  sub-subparagraph shall be payable from and secured by moneys

31  received by the association from assessments under this

                                  9

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  subparagraph, and assigned and pledged to or on behalf of the

  2  unit of local government for the benefit of the holders of

  3  such bonds. The funds, credit, property, and taxing power of

  4  the state or of the unit of local government shall not be

  5  pledged for the payment of such bonds. If any of the bonds

  6  remain unsold 60 days after issuance, the department shall

  7  require all insurers subject to assessment to purchase the

  8  bonds, which shall be treated as admitted assets; each insurer

  9  shall be required to purchase that percentage of the unsold

10  portion of the bond issue that equals the insurer's relative

11  share of assessment liability under this subsection. An

12  insurer shall not be required to purchase the bonds to the

13  extent that the department determines that the purchase would

14  endanger or impair the solvency of the insurer. The authority

15  granted by this sub-subparagraph is additional to any bonding

16  authority granted by subparagraph 6.

17         3.  The plan shall also provide that any member with a

18  surplus as to policyholders of $20 million or less writing 25

19  percent or more of its total countrywide property insurance

20  premiums in this state may petition the department, within the

21  first 90 days of each calendar year, to qualify as a limited

22  apportionment company. The apportionment of such a member

23  company in any calendar year for which it is qualified shall

24  not exceed its gross participation, which shall not be

25  affected by the formula for voluntary writings. In no event

26  shall a limited apportionment company be required to

27  participate in any apportionment of losses pursuant to

28  sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II)

29  in the aggregate which exceeds $50 million after payment of

30  available plan funds in any calendar year. However, a limited

31  apportionment company shall collect from its policyholders any

                                  10

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  emergency assessment imposed under sub-sub-subparagraph

  2  2.d.(III). The plan shall provide that, if the department

  3  determines that any regular assessment will result in an

  4  impairment of the surplus of a limited apportionment company,

  5  the department may direct that all or part of such assessment

  6  be deferred. However, there shall be no limitation or

  7  deferment of an emergency assessment to be collected from

  8  policyholders under sub-sub-subparagraph 2.d.(III).

  9         4.  The plan shall provide for the deferment, in whole

10  or in part, of a regular assessment of a member insurer under

11  sub-sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II),

12  but not for an emergency assessment collected from

13  policyholders under sub-sub-subparagraph 2.d.(III), if, in the

14  opinion of the commissioner, payment of such regular

15  assessment would endanger or impair the solvency of the member

16  insurer. In the event a regular assessment against a member

17  insurer is deferred in whole or in part, the amount by which

18  such assessment is deferred may be assessed against the other

19  member insurers in a manner consistent with the basis for

20  assessments set forth in sub-sub-subparagraph 2.d.(I) or

21  sub-sub-subparagraph 2.d.(II).

22         5.a.  The plan of operation may include deductibles and

23  rules for classification of risks and rate modifications

24  consistent with the objective of providing and maintaining

25  funds sufficient to pay catastrophe losses.

26         b.  The association may require arbitration of a rate

27  filing under s. 627.062(6). It is the intent of the

28  Legislature that the rates for coverage provided by the

29  association be actuarially sound and not competitive with

30  approved rates charged in the admitted voluntary market such

31  that the association functions as a residual market mechanism

                                  11

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  to provide insurance only when the insurance cannot be

  2  procured in the voluntary market.  The plan of operation shall

  3  provide a mechanism to assure that, beginning no later than

  4  January 1, 1999, the rates charged by the association for each

  5  line of business are reflective of approved rates in the

  6  voluntary market for hurricane coverage for each line of

  7  business in the various areas eligible for association

  8  coverage.

  9         c.  The association shall provide for windstorm

10  coverage on residential properties in limits up to $10 million

11  for commercial lines residential risks and up to $1 million

12  for personal lines residential risks. If coverage with the

13  association is sought for a residential risk valued in excess

14  of these limits, coverage shall be available to the risk up to

15  the replacement cost or actual cash value of the property, at

16  the option of the insured, if coverage for the risk cannot be

17  located in the authorized market. The association must accept

18  a commercial lines residential risk with limits above $10

19  million or a personal lines residential risk with limits above

20  $1 million if coverage is not available in the authorized

21  market.  The association may write coverage above the limits

22  specified in this subparagraph with or without facultative or

23  other reinsurance coverage, as the association determines

24  appropriate.

25         d.  The plan of operation must provide objective

26  criteria and procedures, approved by the department, to be

27  uniformly applied for all applicants in determining whether an

28  individual risk is so hazardous as to be uninsurable. In

29  making this determination and in establishing the criteria and

30  procedures, the following shall be considered:

31

                                  12

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         (I)  Whether the likelihood of a loss for the

  2  individual risk is substantially higher than for other risks

  3  of the same class; and

  4         (II)  Whether the uncertainty associated with the

  5  individual risk is such that an appropriate premium cannot be

  6  determined.

  7

  8  The acceptance or rejection of a risk by the association

  9  pursuant to such criteria and procedures must be construed as

10  the private placement of insurance, and the provisions of

11  chapter 120 do not apply.

12         e.  If the risk accepts an offer of coverage through

13  the market assistance program or through a mechanism

14  established by the association, either before the policy is

15  issued by the association or during the first 30 days of

16  coverage by the association, and the producing agent who

17  submitted the application to the association is not currently

18  appointed by the insurer, the insurer shall:

19         (I)  Pay to the producing agent of record of the

20  policy, for the first year, an amount that is the greater of

21  the insurer's usual and customary commission for the type of

22  policy written or a fee equal to the usual and customary

23  commission of the association; or

24         (II)  Offer to allow the producing agent of record of

25  the policy to continue servicing the policy for a period of

26  not less than 1 year and offer to pay the agent the greater of

27  the insurer's or the association's usual and customary

28  commission for the type of policy written.

29

30  If the new or producing agent is unwilling or unable to accept

31  appointment, the new insurer shall pay the agent in accordance

                                  13

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  with sub-sub-subparagraph (I). The policies issued by the

  2  association must provide that if the association obtains an

  3  offer from an authorized insurer to cover the risk at its

  4  approved rates under either a standard policy including wind

  5  coverage or, if consistent with the insurer's underwriting

  6  rules as filed with the department, a basic policy including

  7  wind coverage, the risk is no longer eligible for coverage

  8  through the association. Upon termination of eligibility, the

  9  association shall provide written notice to the policyholder

10  and agent of record stating that the association policy must

11  be canceled as of 60 days after the date of the notice because

12  of the offer of coverage from an authorized insurer. Other

13  provisions of the insurance code relating to cancellation and

14  notice of cancellation do not apply to actions under this

15  sub-subparagraph.

16         f.  When the association enters into a contractual

17  agreement for a take-out plan, the producing agent of record

18  of the association policy is entitled to retain any unearned

19  commission on the policy, and the insurer shall:

20         (I)  Pay to the producing agent of record of the

21  association policy, for the first year, an amount that is the

22  greater of the insurer's usual and customary commission for

23  the type of policy written or a fee equal to the usual and

24  customary commission of the association; or

25         (II)  Offer to allow the producing agent of record of

26  the association policy to continue servicing the policy for a

27  period of not less than 1 year and offer to pay the agent the

28  greater of the insurer's or the association's usual and

29  customary commission for the type of policy written.

30

31

                                  14

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  If the new or producing agent is unwilling or unable to accept

  2  appointment, the new insurer shall pay the agent in accordance

  3  with sub-sub-subparagraph (I). Association policies and

  4  applications must include a notice that the association policy

  5  could, under this section, be replaced with a policy issued by

  6  an authorized insurer that does not provide coverage identical

  7  to the coverage provided by the association. The notice shall

  8  also specify that acceptance of association coverage creates a

  9  conclusive presumption that the applicant or policyholder is

10  aware of this potential.

11         6.a.  The plan of operation may authorize the formation

12  of a private nonprofit corporation, a private nonprofit

13  unincorporated association, a partnership, a trust, a limited

14  liability company, or a nonprofit mutual company which may be

15  empowered, among other things, to borrow money by issuing

16  bonds or by incurring other indebtedness and to accumulate

17  reserves or funds to be used for the payment of insured

18  catastrophe losses. The plan may authorize all actions

19  necessary to facilitate the issuance of bonds, including the

20  pledging of assessments or other revenues.

21         b.  Any entity created under this subsection, or any

22  entity formed for the purposes of this subsection, may sue and

23  be sued, may borrow money; issue bonds, notes, or debt

24  instruments; pledge or sell assessments, market equalization

25  surcharges and other surcharges, rights, premiums, contractual

26  rights, projected recoveries from the Florida Hurricane

27  Catastrophe Fund, other reinsurance recoverables, and other

28  assets as security for such bonds, notes, or debt instruments;

29  enter into any contracts or agreements necessary or proper to

30  accomplish such borrowings; and take other actions necessary

31  to carry out the purposes of this subsection. The association

                                  15

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  may issue bonds or incur other indebtedness, or have bonds

  2  issued on its behalf by a unit of local government pursuant to

  3  subparagraph (6)(g)2., in the absence of a hurricane or other

  4  weather-related event, upon a determination by the association

  5  subject to approval by the department that such action would

  6  enable it to efficiently meet the financial obligations of the

  7  association and that such financings are reasonably necessary

  8  to effectuate the requirements of this subsection. Any such

  9  entity may accumulate reserves and retain surpluses as of the

10  end of any association year to provide for the payment of

11  losses incurred by the association during that year or any

12  future year. The association shall incorporate and continue

13  the plan of operation and articles of agreement in effect on

14  the effective date of chapter 76-96, Laws of Florida, to the

15  extent that it is not inconsistent with chapter 76-96, and as

16  subsequently modified consistent with chapter 76-96. The board

17  of directors and officers currently serving shall continue to

18  serve until their successors are duly qualified as provided

19  under the plan. The assets and obligations of the plan in

20  effect immediately prior to the effective date of chapter

21  76-96 shall be construed to be the assets and obligations of

22  the successor plan created herein.

23         c.  In recognition of s. 10, Art. I of the State

24  Constitution, prohibiting the impairment of obligations of

25  contracts, it is the intent of the Legislature that no action

26  be taken whose purpose is to impair any bond indenture or

27  financing agreement or any revenue source committed by

28  contract to such bond or other indebtedness issued or incurred

29  by the association or any other entity created under this

30  subsection.

31

                                  16

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         7.  On such coverage, an agent's remuneration shall be

  2  that amount of money payable to the agent by the terms of his

  3  or her contract with the company with which the business is

  4  placed. However, no commission will be paid on that portion of

  5  the premium which is in excess of the standard premium of that

  6  company.

  7         8.  Subject to approval by the department, the

  8  association may establish different eligibility requirements

  9  and operational procedures for any line or type of coverage

10  for any specified eligible area or portion of an eligible area

11  if the board determines that such changes to the eligibility

12  requirements and operational procedures are justified due to

13  the voluntary market being sufficiently stable and competitive

14  in such area or for such line or type of coverage and that

15  consumers who, in good faith, are unable to obtain insurance

16  through the voluntary market through ordinary methods would

17  continue to have access to coverage from the association. When

18  coverage is sought in connection with a real property

19  transfer, such requirements and procedures shall not provide

20  for an effective date of coverage later than the date of the

21  closing of the transfer as established by the transferor, the

22  transferee, and, if applicable, the lender.

23         9.  Notwithstanding any other provision of law:

24         a.  The pledge or sale of, the lien upon, and the

25  security interest in any rights, revenues, or other assets of

26  the association created or purported to be created pursuant to

27  any financing documents to secure any bonds or other

28  indebtedness of the association shall be and remain valid and

29  enforceable, notwithstanding the commencement of and during

30  the continuation of, and after, any rehabilitation,

31  insolvency, liquidation, bankruptcy, receivership,

                                  17

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  conservatorship, reorganization, or similar proceeding against

  2  the association under the laws of this state or any other

  3  applicable laws.

  4         b.  No such proceeding shall relieve the association of

  5  its obligation, or otherwise affect its ability to perform its

  6  obligation, to continue to collect, or levy and collect,

  7  assessments, market equalization or other surcharges,

  8  projected recoveries from the Florida Hurricane Catastrophe

  9  Fund, reinsurance recoverables, or any other rights, revenues,

10  or other assets of the association pledged.

11         c.  Each such pledge or sale of, lien upon, and

12  security interest in, including the priority of such pledge,

13  lien, or security interest, any such assessments, emergency

14  assessments, market equalization or renewal surcharges,

15  projected recoveries from the Florida Hurricane Catastrophe

16  Fund, reinsurance recoverables, or other rights, revenues, or

17  other assets which are collected, or levied and collected,

18  after the commencement of and during the pendency of or after

19  any such proceeding shall continue unaffected by such

20  proceeding.

21         d.  As used in this subsection, the term "financing

22  documents" means any agreement, instrument, or other document

23  now existing or hereafter created evidencing any bonds or

24  other indebtedness of the association or pursuant to which any

25  such bonds or other indebtedness has been or may be issued and

26  pursuant to which any rights, revenues, or other assets of the

27  association are pledged or sold to secure the repayment of

28  such bonds or indebtedness, together with the payment of

29  interest on such bonds or such indebtedness, or the payment of

30  any other obligation of the association related to such bonds

31  or indebtedness.

                                  18

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         e.  Any such pledge or sale of assessments, revenues,

  2  contract rights or other rights or assets of the association

  3  shall constitute a lien and security interest, or sale, as the

  4  case may be, that is immediately effective and attaches to

  5  such assessments, revenues, contract, or other rights or

  6  assets, whether or not imposed or collected at the time the

  7  pledge or sale is made. Any such pledge or sale is effective,

  8  valid, binding, and enforceable against the association or

  9  other entity making such pledge or sale, and valid and binding

10  against and superior to any competing claims or obligations

11  owed to any other person or entity, including policyholders in

12  this state, asserting rights in any such assessments,

13  revenues, contract, or other rights or assets to the extent

14  set forth in and in accordance with the terms of the pledge or

15  sale contained in the applicable financing documents, whether

16  or not any such person or entity has notice of such pledge or

17  sale and without the need for any physical delivery,

18  recordation, filing, or other action.

19         f.  There shall be no liability on the part of, and no

20  cause of action of any nature shall arise against, any member

21  insurer or its agents or employees, agents or employees of the

22  association, members of the board of directors of the

23  association, or the department or its representatives, for any

24  action taken by them in the performance of their duties or

25  responsibilities under this subsection. Such immunity does not

26  apply to actions for breach of any contract or agreement

27  pertaining to insurance, or any willful tort.

28         (6)  RESIDENTIAL PROPERTY AND CASUALTY JOINT

29  UNDERWRITING ASSOCIATION.--

30         (c)  The plan of operation of the association:

31

                                  19

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         1.  May provide for one or more designated insurers,

  2  able and willing to provide policy and claims service, to act

  3  on behalf of the association to provide such service.  Each

  4  licensed agent shall be entitled to indicate the order of

  5  preference regarding who will service the business placed by

  6  the agent.  The association shall adhere to each agent's

  7  preferences unless after consideration of other factors in

  8  assigning agents, including, but not limited to, servicing

  9  capacity and fee arrangements, the association has reason to

10  believe it is in the best interest of the association to make

11  a different assignment.

12         2.  Must provide for adoption of residential property

13  and casualty insurance policy forms, which forms must be

14  approved by the department prior to use.  The association

15  shall adopt the following policy forms:

16         a.  Standard personal lines policy forms including wind

17  coverage, which are multiperil policies providing what is

18  generally considered to be full coverage of a residential

19  property similar to the coverage provided under an HO-2, HO-3,

20  HO-4, or HO-6 policy.

21         b.  Standard personal lines policy forms without wind

22  coverage, which are the same as the policies described in

23  sub-subparagraph a. except that they do not include wind

24  coverage.

25         c.  Basic personal lines policy forms including wind

26  coverage, which are policies similar to an HO-8 policy or a

27  dwelling fire policy that provide coverage meeting the

28  requirements of the secondary mortgage market, but which

29  coverage is more limited than the coverage under a standard

30  policy.

31

                                  20

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         d.  Basic personal lines policy forms without wind

  2  coverage, which are the same as the policies described in

  3  sub-subparagraph c. except that they do not include wind

  4  coverage.

  5         e.  Commercial lines residential policy forms including

  6  wind coverage that are generally similar to the basic perils

  7  of full coverage obtainable for commercial residential

  8  structures in the admitted voluntary market.

  9         f.  Commercial lines residential policy forms without

10  wind coverage, which are the same as the policies described in

11  sub-subparagraph e. except that they do not include wind

12  coverage.

13         3.  May provide that the association may employ or

14  otherwise contract with individuals or other entities to

15  provide administrative or professional services that may be

16  appropriate to effectuate the plan.  The association shall

17  have the power to borrow funds, by issuing bonds or by

18  incurring other indebtedness, and shall have other powers

19  reasonably necessary to effectuate the requirements of this

20  subsection. The association may issue bonds or incur other

21  indebtedness, or have bonds issued on its behalf by a unit of

22  local government pursuant to subparagraph (g)2., in the

23  absence of a hurricane or other weather-related event, upon a

24  determination by the association, subject to approval by the

25  department, that such action would enable it to efficiently

26  meet the financial obligations of the association and that

27  such financings are reasonably necessary to effectuate the

28  requirements of this subsection.  The association is

29  authorized to take all actions needed to facilitate tax-free

30  status for any such bonds or indebtedness, including formation

31  of trusts or other affiliated entities.  The association shall

                                  21

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  have the authority to pledge assessments, projected recoveries

  2  from the Florida Hurricane Catastrophe Fund, other reinsurance

  3  recoverables, market equalization and other surcharges, and

  4  other funds available to the association as security for bonds

  5  or other indebtedness.  In recognition of s. 10, Art. I of the

  6  State Constitution, prohibiting the impairment of obligations

  7  of contracts, it is the intent of the Legislature that no

  8  action be taken whose purpose is to impair any bond indenture

  9  or financing agreement or any revenue source committed by

10  contract to such bond or other indebtedness.

11         4.  Must require that the association operate subject

12  to the supervision and approval of a board of governors

13  consisting of 13 individuals, including 1 who is elected as

14  chair. The board shall consist of:

15         a.  The insurance consumer advocate appointed under s.

16  627.0613.

17         b.  Five members designated by the insurance industry.

18         c.  Five consumer representatives appointed by the

19  Insurance Commissioner. Two of the consumer representatives

20  must, at the time of appointment, be holders of policies

21  issued by the association, who are selected with consideration

22  given to reflecting the geographic balance of association

23  policyholders. Two of the consumer members must be individuals

24  who are minority persons as defined in s. 288.703(3). One of

25  the consumer members shall have expertise in the field of

26  mortgage lending.

27         d.  Two representatives of the insurance industry

28  appointed by the Insurance Commissioner. Of the two insurance

29  industry representatives appointed by the Insurance

30  Commissioner, at least one must be an individual who is a

31  minority person as defined in s. 288.703(3).

                                  22

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1

  2  Any board member may be disapproved or removed and replaced by

  3  the commissioner at any time for cause. All board members,

  4  including the chair, must be appointed to serve for 3-year

  5  terms beginning annually on a date designated by the plan.

  6         5.  Must provide a procedure for determining the

  7  eligibility of a risk for coverage, as follows:

  8         a.  With respect to personal lines residential risks,

  9  if the risk is offered coverage from an authorized insurer at

10  the insurer's approved rate under either a standard policy

11  including wind coverage or, if consistent with the insurer's

12  underwriting rules as filed with the department, a basic

13  policy including wind coverage, the risk is not eligible for

14  any policy issued by the association. If the risk is not able

15  to obtain any such offer, the risk is eligible for either a

16  standard policy including wind coverage or a basic policy

17  including wind coverage issued by the association; however, if

18  the risk could not be insured under a standard policy

19  including wind coverage regardless of market conditions, the

20  risk shall be eligible for a basic policy including wind

21  coverage unless rejected under subparagraph 8. The association

22  shall determine the type of policy to be provided on the basis

23  of objective standards specified in the underwriting manual

24  and based on generally accepted underwriting practices.

25         (I)  If the risk accepts an offer of coverage through

26  the market assistance plan or an offer of coverage through a

27  mechanism established by the association before a policy is

28  issued to the risk by the association or during the first 30

29  days of coverage by the association, and the producing agent

30  who submitted the application to the plan or to the

31

                                  23

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  association is not currently appointed by the insurer, the

  2  insurer shall:

  3         (A)  Pay to the producing agent of record of the

  4  policy, for the first year, an amount that is the greater of

  5  the insurer's usual and customary commission for the type of

  6  policy written or a fee equal to the usual and customary

  7  commission of the association; or

  8         (B)  Offer to allow the producing agent of record of

  9  the policy to continue servicing the policy for a period of

10  not less than 1 year and offer to pay the agent the greater of

11  the insurer's or the association's usual and customary

12  commission for the type of policy written.

13

14  If the new or producing agent is unwilling or unable to accept

15  appointment, the new insurer shall pay the agent in accordance

16  with sub-sub-sub-subparagraph (A).

17         (II)  When the association enters into a contractual

18  agreement for a take-out plan, the producing agent of record

19  of the association policy is entitled to retain any unearned

20  commission on the policy, and the insurer shall:

21         (A)  Pay to the producing agent of record of the

22  association policy, for the first year, an amount that is the

23  greater of the insurer's usual and customary commission for

24  the type of policy written or a fee equal to the usual and

25  customary commission of the association; or

26         (B)  Offer to allow the producing agent of record of

27  the association policy to continue servicing the policy for a

28  period of not less than 1 year and offer to pay the agent the

29  greater of the insurer's or the association's usual and

30  customary commission for the type of policy written.

31

                                  24

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  If the new or producing agent is unwilling or unable to accept

  2  appointment, the new insurer shall pay the agent in accordance

  3  with sub-sub-sub-subparagraph (A). either appoint the agent to

  4  service the risk or, if the insurer places the coverage

  5  through a new agent, require the new agent who then writes the

  6  policy to pay not less than 50 percent of the first year's

  7  commission to the producing agent who submitted the

  8  application to the plan or the association, except that if the

  9  new agent is an employee or exclusive agent of the insurer,

10  the new agent shall pay a policy fee of $50 to the producing

11  agent in lieu of splitting the commission.

12

13  If the risk is not able to obtain any such offer, the risk is

14  eligible for either a standard policy including wind coverage

15  or a basic policy including wind coverage issued by the

16  association; however, if the risk could not be insured under a

17  standard policy including wind coverage regardless of market

18  conditions, the risk shall be eligible for a basic policy

19  including wind coverage unless rejected under subparagraph 8.

20  The association shall determine the type of policy to be

21  provided on the basis of objective standards specified in the

22  underwriting manual and based on generally accepted

23  underwriting practices.

24         b.  With respect to commercial lines residential risks,

25  if the risk is offered coverage under a policy including wind

26  coverage from an authorized insurer at its approved rate, the

27  risk is not eligible for any policy issued by the association.

28  If the risk is not able to obtain any such offer, the risk is

29  eligible for a policy including wind coverage issued by the

30  association.

31

                                  25

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         (I)  If the risk accepts an offer of coverage through

  2  the market assistance plan or an offer of coverage through a

  3  mechanism established by the association before a policy is

  4  issued to the risk by the association or during the first 30

  5  days of coverage by the association, and the producing agent

  6  who submitted the application to the plan or the association

  7  is not currently appointed by the insurer, the insurer shall:

  8         (A)  Pay to the producing agent of record of the

  9  policy, for the first year, an amount that is the greater of

10  the insurer's usual and customary commission for the type of

11  policy written or a fee equal to the usual and customary

12  commission of the association; or

13         (B)  Offer to allow the producing agent of record of

14  the policy to continue servicing the policy for a period of

15  not less than 1 year and offer to pay the agent the greater of

16  the insurer's or the association's usual and customary

17  commission for the type of policy written.

18

19  If the new or producing agent is unwilling or unable to accept

20  appointment, the new insurer shall pay the agent in accordance

21  with sub-sub-sub-subparagraph (A).

22         (II)  When the association enters into a contractual

23  agreement for a take-out plan, the producing agent of record

24  of the association policy is entitled to retain any unearned

25  commission on the policy, and the insurer shall:

26         (A)  Pay to the producing agent of record of the

27  association policy, for the first year, an amount that is the

28  greater of the insurer's usual and customary commission for

29  the type of policy written or a fee equal to the usual and

30  customary commission of the association; or

31

                                  26

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1         (B)  Offer to allow the producing agent of record of

  2  the association policy to continue servicing the policy for a

  3  period of not less than 1 year and offer to pay the agent the

  4  greater of the insurer's or the association's usual and

  5  customary commission for the type of policy written.

  6

  7  If the new or producing agent is unwilling or unable to accept

  8  appointment, the new insurer shall pay the agent in accordance

  9  with sub-sub-sub-subparagraph (A). either appoint the agent to

10  service the risk or, if the insurer places the coverage

11  through a new agent, require the new agent who then writes the

12  policy to pay not less than 50 percent of the first year's

13  commission to the producing agent who submitted the

14  application to the plan, except that if the new agent is an

15  employee or exclusive agent of the insurer, the new agent

16  shall pay a policy fee of $50 to the producing agent in lieu

17  of splitting the commission.

18

19  If the risk is not able to obtain any such offer, the risk is

20  eligible for a policy including wind coverage issued by the

21  association.

22         c.  This subparagraph does not require the association

23  to provide wind coverage or hurricane coverage in any area in

24  which such coverage is available through the Florida Windstorm

25  Underwriting Association.

26         6.  Must include rules for classifications of risks and

27  rates therefor.

28         7.  Must provide that if premium and investment income

29  attributable to a particular plan year are in excess of

30  projected losses and expenses of the plan attributable to that

31  year, such excess shall be held in surplus. Such surplus shall

                                  27

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  be available to defray deficits as to future years and shall

  2  be used for that purpose prior to assessing member insurers as

  3  to any plan year.

  4         8.  Must provide objective criteria and procedures to

  5  be uniformly applied for all applicants in determining whether

  6  an individual risk is so hazardous as to be uninsurable. In

  7  making this determination and in establishing the criteria and

  8  procedures, the following shall be considered:

  9         a.  Whether the likelihood of a loss for the individual

10  risk is substantially higher than for other risks of the same

11  class; and

12         b.  Whether the uncertainty associated with the

13  individual risk is such that an appropriate premium cannot be

14  determined.

15

16  The acceptance or rejection of a risk by the association shall

17  be construed as the private placement of insurance, and the

18  provisions of chapter 120 shall not apply.

19         9.  Must provide that the association shall make its

20  best efforts to procure catastrophe reinsurance at reasonable

21  rates, as determined by the board of governors.

22         10.  Must provide that in the event of regular deficit

23  assessments under sub-subparagraph (b)3.a. or sub-subparagraph

24  (b)3.b., or by the Florida Windstorm Underwriting Association

25  under sub-sub-subparagraph (2)(b)2.d.(I) or

26  sub-sub-subparagraph (2)(b)2.d.(II), the association shall

27  levy upon association policyholders in its next rate filing,

28  or by a separate rate filing solely for this purpose, a market

29  equalization surcharge in a percentage equal to the total

30  amount of such regular assessments divided by the aggregate

31  statewide direct written premium for subject lines of business

                                  28

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  for member insurers for the prior calendar year. Market

  2  equalization surcharges under this subparagraph are not

  3  considered premium and are not subject to commissions, fees,

  4  or premium taxes; however, failure to pay a market

  5  equalization surcharge shall be treated as failure to pay

  6  premium.

  7         11.  The policies issued by the association must

  8  provide that, if the association or the market assistance plan

  9  obtains an offer from an authorized insurer to cover the risk

10  at its approved rates under either a standard policy including

11  wind coverage or a basic policy including wind coverage, the

12  risk is no longer eligible for coverage through the

13  association. However, if the risk is located in an area in

14  which Florida Windstorm Underwriting Association coverage is

15  available, such an offer of a standard or basic policy

16  terminates eligibility regardless of whether or not the offer

17  includes wind coverage. Upon termination of eligibility, the

18  association shall provide written notice to the policyholder

19  and agent of record stating that the association policy shall

20  be canceled as of 60 days after the date of the notice because

21  of the offer of coverage from an authorized insurer. Other

22  provisions of the insurance code relating to cancellation and

23  notice of cancellation do not apply to actions under this

24  subparagraph.

25         12.  Association policies and applications must include

26  a notice that the association policy could, under this section

27  or s. 627.3511, be replaced with a policy issued by an

28  admitted insurer that does not provide coverage identical to

29  the coverage provided by the association. The notice shall

30  also specify that acceptance of association coverage creates a

31

                                  29

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  conclusive presumption that the applicant or policyholder is

  2  aware of this potential.

  3         13.  May establish, subject to approval by the

  4  department, different eligibility requirements and operational

  5  procedures for any line or type of coverage for any specified

  6  county or area if the board determines that such changes to

  7  the eligibility requirements and operational procedures are

  8  justified due to the voluntary market being sufficiently

  9  stable and competitive in such area or for such line or type

10  of coverage and that consumers who, in good faith, are unable

11  to obtain insurance through the voluntary market through

12  ordinary methods would continue to have access to coverage

13  from the association. When coverage is sought in connection

14  with a real property transfer, such requirements and

15  procedures shall not provide for an effective date of coverage

16  later than the date of the closing of the transfer as

17  established by the transferor, the transferee, and, if

18  applicable, the lender.

19         Section 3.  Subsection (4) of section 627.3511, Florida

20  Statutes, is amended to read:

21         627.3511  Depopulation of Residential Property and

22  Casualty Joint Underwriting Association.--

23         (4)  AGENT BONUS.--When the Residential Property and

24  Casualty Joint Underwriting Association enters into a

25  contractual agreement for a take-out plan that provides a

26  bonus to the insurer, the producing agent of record of the

27  association policy is entitled to retain any unearned

28  commission on such policy, and the insurer shall either:

29         (a)  Pay to the producing agent of record of the

30  association policy, for the first year, an amount that is the

31  greater of equal to the insurer's usual and customary

                                  30

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  commission for the type of policy written or a fee equal to

  2  the if the term of the association policy was in excess of 6

  3  months, or one-half of such usual and customary commission if

  4  the term of the association policy was 6 months or less; or

  5         (b)  Offer to allow the producing agent of record of

  6  the association policy to continue servicing the policy for a

  7  period of not less than 1 year and offer to pay the agent the

  8  greater of the insurer's or the association's usual and

  9  customary commission for the type of policy written.

10

11  If the new or producing agent is unwilling or unable to accept

12  appointment, the new insurer shall pay the agent in accordance

13  with paragraph (a). The insurer need not take any further

14  action if the offer is rejected. This subsection does not

15  apply to any reciprocal interinsurance exchange, nonprofit

16  federation, or any subsidiary or affiliate of such

17  organization. This subsection does not apply if the agent is

18  also the agent of record on the new coverage. The requirement

19  of this subsection that the producing agent of record is

20  entitled to retain the unearned commission on an association

21  policy does not apply to a policy for which coverage has been

22  provided in the association for 30 days or less or for which a

23  cancellation notice has been issued pursuant to s.

24  627.351(6)(c)11. during the first 30 days of coverage.

25         Section 4.  Section 627.3517, Florida Statutes, is

26  created to read:

27         627.3517  Consumer choice.--No provision of this part

28  shall be construed to impair the right of any residual market

29  policyholder to select and maintain an agent of his or her own

30  choosing.  This right shall not be canceled, suspended,

31  impeded, abridged, or otherwise compromised by any rule, plan

                                  31

CODING: Words stricken are deletions; words underlined are additions.






    Florida House of Representatives - 2002                 HB 551

    754-113A-02






  1  of operation, or depopulation plan, whether through keepout,

  2  takeout, midterm assumption, or any other means, of any

  3  insurance risk apportionment plan or depopulation plan,

  4  including, but not limited to, those described in s. 627.351,

  5  s. 627.3511, or s. 627.3515.  The department shall adopt any

  6  rules necessary to cause any insurance risk apportionment plan

  7  or market assistance plan under this part to demonstrate that

  8  the operations of the plan do not interfere with, promote, or

  9  allow interference with the rights created under this section.

10  If the policyholder chooses an agent who is unable or

11  unwilling to be appointed with a particular carrier, the

12  policyholder shall not be disqualified from participation in

13  the appropriate residual market because of an offer of

14  coverage in the voluntary market.  Any rule, plan of

15  operation, or plan of depopulation, through keepout, takeout,

16  midterm assumption, or any other means, of any insurance risk

17  apportionment plan is subject to ss. 627.351(2)(b) and

18  627.3511(4).

19         Section 5.  This act shall take effect upon becoming a

20  law.

21

22            *****************************************

23                          HOUSE SUMMARY

24
      Creates "The Insurance Policyholder Protection Act of
25    2002." Revises agent commission payment and policy
      servicing procedures and requirements for agents securing
26    coverage for risks under a market assistance program or
      plan of the Florida Windstorm Underwriting Association or
27    the Residential Property and Casualty Joint Underwriting
      Association. Preserves a policyholder's right to select
28    and maintain an agent. See bill for details.

29

30

31

                                  32

CODING: Words stricken are deletions; words underlined are additions.