| 1 | A bill to be entitled |
| 2 | An act relating to insurance; creating s. 624.1275, F.S.; |
| 3 | proscribing state agencies and political subdivisions from |
| 4 | prohibiting or excluding licensed insurance agents from |
| 5 | competing or negotiating for certain insurance products or |
| 6 | plans; providing a definition; amending s. 636.044, F.S.; |
| 7 | authorizing certain persons to engage in the solicitation |
| 8 | and sale of certain insurance relating to air ambulance |
| 9 | transportation costs; providing requirements and |
| 10 | limitations; amending s. 943.135, F.S.; authorizing |
| 11 | certain employing agencies to require law enforcement |
| 12 | officers and correctional officers to pass certain |
| 13 | physical examinations for certain purposes; providing |
| 14 | criteria, requirements, and limitations; authorizing |
| 15 | certain employing agencies to set tobacco use standards |
| 16 | for law enforcement officers and correctional officers |
| 17 | employed by local governments; amending s. 631.181, F.S.; |
| 18 | providing an exception to certain requirements for a |
| 19 | signed statement for certain claims; providing |
| 20 | requirements; creating s. 631.1915, F.S.; providing |
| 21 | requirements for policyholder collateral, deductible |
| 22 | reimbursements, and other policyholder obligations; |
| 23 | specifying that certain collateral held by an insurer or a |
| 24 | receiver to secure policyholder obligations under a |
| 25 | deductible agreement are not an estate asset; requiring |
| 26 | use of such collateral to secure policyholder obligations |
| 27 | under such agreement; requiring a receiver to use such |
| 28 | collateral to pay noncovered claims under certain |
| 29 | circumstances; providing for certain claims to be claims |
| 30 | against an insurer's estate under certain circumstances; |
| 31 | requiring a receiver to allocate collateral among certain |
| 32 | obligations and administer such collateral; authorizing a |
| 33 | receiver to continue and enforce certain alternative |
| 34 | policyholder claim funding contractual agreements; |
| 35 | specifying certain actions as a bar to certain claims and |
| 36 | an extinguishment of certain obligations; requiring a |
| 37 | guaranty association to bill a policyholder for certain |
| 38 | reimbursement amounts for certain claims; specifying |
| 39 | policyholder obligation for certain amounts; prohibiting |
| 40 | certain defenses; requiring a receiver to use certain |
| 41 | collateral for certain purposes; requiring a receiver to |
| 42 | prorate certain funds of an estate under certain |
| 43 | circumstances; authorizing a guaranty association to |
| 44 | deduct certain expenses; requiring a guaranty association |
| 45 | to provide a complete accounting of certain billing and |
| 46 | collection activities; authorizing a guaranty association |
| 47 | to contract for certain collections; providing for claims |
| 48 | against an insolvent insurer's estate for certain |
| 49 | unreimbursed claims payments; requiring a receiver to |
| 50 | periodically adjust collateral held pursuant to a |
| 51 | deductible agreement; specifying jurisdiction of a state |
| 52 | court to resolve disputes; preserving rights of a guaranty |
| 53 | association to reimbursement for certain claims; providing |
| 54 | application to certain orders of liquidation; providing |
| 55 | definitions; providing for nonapplication to certain |
| 56 | claims; amending s. 631.54, F.S.; revising a definition; |
| 57 | amending s. 631.56, F.S.; revising the membership of the |
| 58 | board of directors of the Florida Insurance Guaranty |
| 59 | Association, Inc.; amending s. 631.57, F.S.; revising |
| 60 | requirements and limitations for obligations of the |
| 61 | association for covered claims; authorizing the |
| 62 | association to contract with counties and municipalities |
| 63 | to issue revenue bonds for certain purposes; creating s. |
| 64 | 631.695, F.S.; providing legislative findings and |
| 65 | purposes; providing for issuance of revenue bonds through |
| 66 | counties and municipalities to fund assistance programs |
| 67 | for paying covered claims for hurricane damage; providing |
| 68 | procedures, requirements, and limitations for counties, |
| 69 | municipalities, and the Florida Insurance Guaranty |
| 70 | Association, Inc., relating to issuance and validation of |
| 71 | such bonds; providing for payments on and retirement of |
| 72 | such bonds from certain assessments; prohibiting pledging |
| 73 | the funds, credit, property, and taxing power of the |
| 74 | state, counties, and municipalities for payment of bonds; |
| 75 | specifying authorized uses of bond proceeds; limiting the |
| 76 | term of bonds; specifying a state covenant to protect |
| 77 | bondholders from adverse actions relating to such bonds; |
| 78 | specifying exemptions for bonds, notes, and other |
| 79 | obligations of counties and municipalities from certain |
| 80 | taxes or assessments on property and revenues; authorizing |
| 81 | counties and municipalities to create a legal entity to |
| 82 | exercise certain powers; requiring the association to |
| 83 | issue an annual report on the status of certain uses of |
| 84 | bond proceeds; providing report requirements; requiring |
| 85 | the association to provide a copy of the report to the |
| 86 | Legislature and Chief Financial Officer; prohibiting |
| 87 | repeal of certain provisions relating to certain bonds |
| 88 | under certain circumstances; providing severability; |
| 89 | providing an effective date. |
| 90 |
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| 91 | Be It Enacted by the Legislature of the State of Florida: |
| 92 |
|
| 93 | Section 1. Section 624.1275, Florida Statutes, is created |
| 94 | to read: |
| 95 | 624.1275 Insurance agents; prohibited exclusion from |
| 96 | public bidding and negotiations.--A licensed insurance agent may |
| 97 | not be prohibited or excluded from competing or negotiating for |
| 98 | any insurance product or plan purchased, provided, or endorsed |
| 99 | by a state agency or any political subdivision of this state on |
| 100 | the basis of the compensation or contractual or employment |
| 101 | arrangement granted to the agent by an employer, insurer, or |
| 102 | licensed agency. The term "political subdivision" has the same |
| 103 | meaning set forth in s. 1.01. |
| 104 | Section 2. Subsection (5) is added to section 636.044, |
| 105 | Florida Statutes, to read: |
| 106 | 636.044 Agent licensing.-- |
| 107 | (5) Notwithstanding the provisions of this section, a |
| 108 | person registered in accordance with part XI of chapter 559 as a |
| 109 | seller of travel may engage in the solicitation and sale of |
| 110 | insurance covering the cost of transportation by air ambulance, |
| 111 | as defined in s. 401.23(4), that is provided by an air ambulance |
| 112 | service licensed pursuant to s. 401.251. The insurance policy |
| 113 | providing this coverage is subject to all applicable provisions |
| 114 | of this chapter. A seller of travel may solicit and sell such |
| 115 | insurance only in connection with the sale of transportation |
| 116 | tickets. No such policy shall be in effect for a duration of |
| 117 | more than 48 hours or for the duration of a specified one-way or |
| 118 | round-trip travel event. |
| 119 | Section 3. Subsections (5) and (6) are added to section |
| 120 | 943.135, Florida Statutes, to read: |
| 121 | 943.135 Requirements for continued employment.-- |
| 122 | (5) An employing agency as defined in s. 943.10(4) may |
| 123 | require a law enforcement officer and correctional officer as |
| 124 | defined in s. 943.10(1), (2), or (3) to successfully pass a |
| 125 | physical examination in order to be eligible for the presumption |
| 126 | set forth in s. 112.18. The employing agency shall have the |
| 127 | physical examination performed prior to or immediately upon |
| 128 | employment of the officer. This provision shall not affect the |
| 129 | applicability of the presumption set forth in s. 112.18 for law |
| 130 | enforcement officers or correctional officers who are currently |
| 131 | employed by an employing agency. |
| 132 | (6) An employing agency as defined in s. 943.10(4) may set |
| 133 | tobacco use standards for law enforcement officers and |
| 134 | correctional officers as defined in s. 943.10(1), (2), or (3) |
| 135 | employed by a municipality, county, or political subdivision of |
| 136 | the state or any agent of the political subdivision who has |
| 137 | constitutional authority or statutory authority to employ or |
| 138 | appoint an officer. |
| 139 | Section 4. Paragraph (f) is added to subsection (2) of |
| 140 | section 631.181, Florida Statutes, to read: |
| 141 | 631.181 Filing and proof of claim.-- |
| 142 | (2) |
| 143 | (f) The signed statement required by this section shall |
| 144 | not be required on claims for which adequate claims file |
| 145 | documentation exists within the records of the insolvent |
| 146 | insurer. Claims for payment of unearned premium shall not be |
| 147 | required to use the signed statement required by this section if |
| 148 | the receiver certifies to the guaranty fund that the records of |
| 149 | the insolvent insurer are sufficient to determine the amount of |
| 150 | unearned premium owed to each policyholder of the insurer and |
| 151 | such information is remitted to the guaranty fund by the |
| 152 | receiver in electronic or other mutually agreed upon format. |
| 153 | Section 5. Section 631.1915, Florida Statutes, is created |
| 154 | to read: |
| 155 | 631.1915 Policyholder collateral; deductible |
| 156 | reimbursements; other policyholder obligations.-- |
| 157 | (1) Any collateral held by or for the benefit of, or |
| 158 | assigned to, the insurer or subsequently the receiver in order |
| 159 | to secure the obligations of a policyholder under a deductible |
| 160 | agreement shall not be considered an asset of the estate and |
| 161 | shall be maintained and administered by the receiver as provided |
| 162 | in this section, notwithstanding any other provision of law or |
| 163 | contract to the contrary. |
| 164 | (2) If the collateral is being held by or for the benefit |
| 165 | of, or assigned to, the insurer or subsequently the receiver to |
| 166 | secure obligations under a deductible agreement with a |
| 167 | policyholder subject to the provisions of this section, the |
| 168 | collateral shall be used to secure the policyholder's obligation |
| 169 | to fund or reimburse claims payments within the agreed |
| 170 | deductible amount. |
| 171 | (3) If a claim is subject to a deductible agreement and |
| 172 | secured by collateral and is not covered by any guaranty |
| 173 | association, the receiver shall adjust and pay the noncovered |
| 174 | claim using the collateral, but only to the extent of the |
| 175 | available collateral. A claim against the collateral by a third- |
| 176 | party claimant is not a claim against the insolvent insurer's |
| 177 | estate for purposes of s. 631.193. If the collateral is |
| 178 | exhausted and the insured is not able to provide funds to pay |
| 179 | the remaining claims within the deductible, the remaining claims |
| 180 | shall be claims against the insurer's estate subject to |
| 181 | complying with other provisions in this part for the filing and |
| 182 | allowance of such claims. |
| 183 | (4) To the extent the receiver is holding collateral |
| 184 | provided by a policyholder that was obtained to secure a |
| 185 | deductible agreement and to secure other obligations of the |
| 186 | policyholder, the receiver shall equitably allocate the |
| 187 | collateral among such obligations and administer the collateral |
| 188 | allocated to the deductible agreement pursuant to this section. |
| 189 | The receiver shall inform the guaranty associations of the |
| 190 | method and details of all the foregoing allocations. |
| 191 | (5) Regardless of whether there is collateral, if the |
| 192 | insurer has contractually agreed to allow the policyholder to |
| 193 | fund its own claims within the deductible amount pursuant to a |
| 194 | deductible agreement, through the policyholder's own |
| 195 | administration of its claims or through the policyholder |
| 196 | providing funds directly to a third-party administrator who |
| 197 | administers the claims, the receiver may allow such funding |
| 198 | arrangement to continue and, where applicable, shall enforce |
| 199 | such arrangements. The funding of such claims by the |
| 200 | policyholder within the deductible amount acts as a bar to any |
| 201 | claim for such amount in the liquidation proceeding, including, |
| 202 | but not limited to, any such claim by the policyholder or the |
| 203 | third-party claimant. The funding extinguishes both the |
| 204 | obligation, if any, of any guaranty association to pay such |
| 205 | claims within the deductible amount and the obligations, if any, |
| 206 | of the policyholder or third-party administrator to reimburse |
| 207 | the guaranty association. No charge of any kind shall be made |
| 208 | against any guaranty association on the basis of the |
| 209 | policyholder's funding of claims payment made pursuant to the |
| 210 | mechanism set forth in this subsection. |
| 211 | (6) If the insurer has not contractually agreed to allow |
| 212 | the policyholder to fund the policyholder's own claims within |
| 213 | the deductible amount, to the extent a guaranty association is |
| 214 | required by applicable state law to pay any claims for which the |
| 215 | insurer would have been entitled to reimbursement from the |
| 216 | policyholder under the terms of the deductible agreement and to |
| 217 | the extent the claims have not been paid by a policyholder or |
| 218 | third party, the guaranty association shall bill the |
| 219 | policyholder for such reimbursement and the policyholder is |
| 220 | obligated to pay such amount to the guaranty association for the |
| 221 | benefit of the guaranty associations who paid such claims. |
| 222 | Neither the insolvency of the insurer nor its inability to |
| 223 | perform any of its obligations under the deductible agreement |
| 224 | shall be a defense to the policyholder's reimbursement |
| 225 | obligation under the deductible agreement. If the policyholder |
| 226 | fails to pay the amounts due within 60 days after the bill for |
| 227 | such reimbursements is due, the receiver shall use the |
| 228 | collateral to the extent necessary to reimburse the guaranty |
| 229 | association and, at the same time, the guaranty association may |
| 230 | pursue other collection efforts against the policyholder. If |
| 231 | more than one guaranty association has a claim against the same |
| 232 | collateral and the available collateral, after allocation under |
| 233 | subsection (4), together with billing and collection efforts, |
| 234 | are together insufficient to pay each guaranty association in |
| 235 | full, the receiver shall prorate payments to each guaranty |
| 236 | association based upon the relationship the amount of claims |
| 237 | each guaranty association has paid bears to the total of all |
| 238 | claims paid by such guaranty associations. |
| 239 | (7)(a) The guaranty association is entitled to deduct from |
| 240 | collateral to be returned to a policyholder reasonable actual |
| 241 | expenses incurred in fulfilling the responsibilities under this |
| 242 | provision. |
| 243 | (b) With respect to claims payments made by any guaranty |
| 244 | association, the guaranty association shall provide any other |
| 245 | guaranty associations and the receiver with a complete |
| 246 | accounting of the guaranty association's deductible billing and |
| 247 | collection activities, including copies of the policyholder |
| 248 | billings when rendered and the reimbursements collected. The |
| 249 | cost of reports required pursuant to this subsection shall be |
| 250 | considered part of the expenses of the guaranty association. |
| 251 | (c) The guaranty association may contract with the |
| 252 | receiver for the direct collection from the policyholders on the |
| 253 | same basis as the guaranty association and with the same rights |
| 254 | and remedies. If so assigned, the receiver shall report any |
| 255 | amounts so collected from each policyholder to the guaranty |
| 256 | association. |
| 257 | (d) To the extent that guaranty associations pay claims |
| 258 | within the deductible amount but are not reimbursed by the |
| 259 | receiver under this section or by policyholder payments from the |
| 260 | guaranty associations' own collection efforts, the guaranty |
| 261 | association shall have a claim on the insolvent insurer's estate |
| 262 | for such unreimbursed claims payments. The priority of such |
| 263 | claim shall depend upon the nature of the payment that should |
| 264 | have been reimbursed. |
| 265 | (e) Periodically, but not more than annually, the receiver |
| 266 | shall adjust the collateral being held pursuant to the |
| 267 | deductible agreement. The receiver shall maintain adequate |
| 268 | collateral to secure 110 percent of the entire estimated |
| 269 | obligation of the policyholder. The receiver shall provide a |
| 270 | copy of its collateral review to any obligated guaranty |
| 271 | association. Once all claims covered by the collateral have been |
| 272 | paid and the receiver is satisfied that no new claims can be |
| 273 | presented, the receiver may release any remaining collateral. |
| 274 | (8) The state court that has jurisdiction over the |
| 275 | liquidation proceedings shall have jurisdiction to resolve |
| 276 | disputes arising under this section. |
| 277 | (9) Nothing in this section limits or adversely affects |
| 278 | any right the guaranty associations may have under applicable |
| 279 | state law to obtain reimbursement from certain classes of |
| 280 | policyholders for claims payments made by such guaranty |
| 281 | associations under policies of the insolvent insurer or for |
| 282 | related expenses the guaranty associations incur. |
| 283 | (10) This section applies to all liquidations for which an |
| 284 | order is entered after July 1, 2005. |
| 285 | (11) For purposes of this section, the term: |
| 286 | (a) "Deductible agreement" means any combination of one or |
| 287 | more policies, endorsements, contracts, or security agreements |
| 288 | that provide for the policyholder to bear the risk of loss |
| 289 | within a specified amount per claim or occurrence covered under |
| 290 | a policy of insurance and that may be subject to aggregate limit |
| 291 | of policyholder reimbursement obligations. |
| 292 | (b) "Noncovered claim" means a claim that is subject to a |
| 293 | deductible agreement, may be secured by collateral, and is not |
| 294 | covered by a guaranty association. |
| 295 | (12) This section does not apply to first-party claims. |
| 296 | Section 6. Subsection (3) of section 631.54, Florida |
| 297 | Statutes, is amended to read: |
| 298 | 631.54 Definitions.--As used in this part: |
| 299 | (3) "Covered claim" means an unpaid claim, including one |
| 300 | of unearned premiums, which arises out of, and is within the |
| 301 | coverage, and not in excess of, the applicable limits of an |
| 302 | insurance policy to which this part applies, issued by an |
| 303 | insurer, if such insurer becomes an insolvent insurer and the |
| 304 | claimant or insured is a resident of this state at the time of |
| 305 | the insured event or the property from which the claim arises is |
| 306 | permanently located in this state. For entities other than |
| 307 | individuals, the residence of a claimant, insured, or |
| 308 | policyholder is the state in which the entity's principal place |
| 309 | of business is located at the time of the insured event. |
| 310 | "Covered claim" shall not include: |
| 311 | (a) Any amount due any reinsurer, insurer, insurance pool, |
| 312 | or underwriting association, sought directly or indirectly |
| 313 | through a third party, as subrogation, contribution, |
| 314 | indemnification, or otherwise; or |
| 315 | (b) Any claim that would otherwise be a covered claim |
| 316 | under this part that has been rejected by any other state |
| 317 | guaranty fund on the grounds that an insured's net worth is |
| 318 | greater than that allowed under that state's guaranty law. |
| 319 | Member insurers shall have no right of subrogation, |
| 320 | contribution, indemnification, or otherwise, sought directly or |
| 321 | indirectly through a third party, against the insured of any |
| 322 | insolvent member. |
| 323 | Section 7. Subsection (1) of section 631.56, Florida |
| 324 | Statutes, is amended to read: |
| 325 | 631.56 Board of directors.-- |
| 326 | (1) The board of directors of the association shall |
| 327 | consist of not less than six five or more than ten nine persons |
| 328 | serving terms as established in the plan of operation. The |
| 329 | department shall approve and appoint to the board up to nine |
| 330 | persons recommended by the member insurers. The department shall |
| 331 | select one Florida-licensed insurance agent to serve as a |
| 332 | nonvoting member. In the event the department finds that any |
| 333 | recommended person does not meet the qualifications for service |
| 334 | on the board, the department shall request the member insurers |
| 335 | to recommend another person. Each member shall serve for a 4- |
| 336 | year term and may be reappointed. Vacancies on the board shall |
| 337 | be filled for the remaining period of the term in the same |
| 338 | manner as initial appointments. |
| 339 | Section 8. Paragraph (a) of subsection (1), paragraph (d) |
| 340 | of subsection (2), and paragraph (a) of subsection (3) of |
| 341 | section 631.57, Florida Statutes, are amended to read: |
| 342 | 631.57 Powers and duties of the association.-- |
| 343 | (1) The association shall: |
| 344 | (a)1. Be obligated to the extent of the covered claims |
| 345 | existing: |
| 346 | a. Prior to adjudication of insolvency and arising within |
| 347 | 30 days after the determination of insolvency; |
| 348 | b. Before the policy expiration date if less than 30 days |
| 349 | after the determination; or |
| 350 | c. Before the insured replaces the policy or causes its |
| 351 | cancellation, if she or he does so within 30 days of the |
| 352 | determination. |
| 353 | 2.a. The obligation under subparagraph 1. shall include |
| 354 | only that amount of each covered claim which is in excess of |
| 355 | $100 and is less than $300,000, except with respect to policies |
| 356 | covering condominium associations or homeowners' associations, |
| 357 | which associations have a responsibility to provide insurance |
| 358 | coverage on residential units within the association, the |
| 359 | obligation shall include that amount of each covered property |
| 360 | insurance claim which is less than $100,000 multiplied by the |
| 361 | number of condominium units or other residential units; however, |
| 362 | as to homeowners' associations, this sub-subparagraph |
| 363 | subparagraph applies only to claims for damage or loss to |
| 364 | residential units and structures attached to residential units. |
| 365 | b. Notwithstanding sub-subparagraph a., the association |
| 366 | has no obligation to pay covered claims that are to be paid from |
| 367 | the proceeds of bonds issued under s. 631.695. However, the |
| 368 | association shall assign and pledge the first available moneys |
| 369 | from all or part of the assessments to be made under paragraph |
| 370 | (3)(a) to or on behalf of the issuer of such bonds for the |
| 371 | benefit of the holders of such bonds. The association shall |
| 372 | administer any such covered claims and present valid covered |
| 373 | claims for payment in accordance with the provisions of the |
| 374 | assistance program in connection with which such bonds have been |
| 375 | issued. |
| 376 | 3. In no event shall the association be obligated to a |
| 377 | policyholder or claimant in an amount in excess of the |
| 378 | obligation of the insolvent insurer under the policy from which |
| 379 | the claim arises. |
| 380 | (2) The association may: |
| 381 | (d) Negotiate and become a party to such contracts as are |
| 382 | necessary to carry out the purpose of this part. Additionally, |
| 383 | the association may enter into such contracts with a |
| 384 | municipality or county or such legal entity created pursuant to |
| 385 | s. 163.01(7)(g) as are necessary in order for the municipality |
| 386 | or county or such legal entity to issue bonds under s. 631.695. |
| 387 | In connection with the issuance of any such bonds and the |
| 388 | entering into of any such necessary contracts, the association |
| 389 | may agree to such terms and conditions as the association deems |
| 390 | necessary and proper. |
| 391 | (3)(a) To the extent necessary to secure the funds for the |
| 392 | respective accounts for the payment of covered claims, and also |
| 393 | to pay the reasonable costs to administer the same, and to the |
| 394 | extent necessary to secure the funds for the account specified |
| 395 | in s. 631.55(2)(c), or to retire indebtedness, including, |
| 396 | without limitation, the principal, redemption premium, if any, |
| 397 | and interest on, and related costs of issuance of, bonds issued |
| 398 | under s. 631.695, and the funding of any reserves and other |
| 399 | payments required under the bond resolution or trust indenture |
| 400 | pursuant to which such bonds have been issued, the office, upon |
| 401 | certification of the board of directors, shall levy assessments |
| 402 | in the proportion that each insurer's net direct written |
| 403 | premiums in this state in the classes protected by the account |
| 404 | bears to the total of said net direct written premiums received |
| 405 | in this state by all such insurers for the preceding calendar |
| 406 | year for the kinds of insurance included within such account. |
| 407 | Assessments shall be remitted to and administered by the board |
| 408 | of directors in the manner specified by the approved plan. Each |
| 409 | insurer so assessed shall have at least 30 days' written notice |
| 410 | as to the date the assessment is due and payable. Every |
| 411 | assessment shall be made as a uniform percentage applicable to |
| 412 | the net direct written premiums of each insurer in the kinds of |
| 413 | insurance included within the account in which the assessment is |
| 414 | made. The assessments levied against any insurer shall not |
| 415 | exceed in any one year more than 2 percent of that insurer's net |
| 416 | direct written premiums in this state for the kinds of insurance |
| 417 | included within such account during the calendar year next |
| 418 | preceding the date of such assessments. |
| 419 | Section 9. Section 631.695, Florida Statutes, is created |
| 420 | to read: |
| 421 | 631.695 Revenue bond issuance through counties or |
| 422 | municipalities.-- |
| 423 | (1) The Legislature finds: |
| 424 | (a) The potential for widespread and massive damage to |
| 425 | persons and property caused by hurricanes making landfall in |
| 426 | this state can generate insurance claims of such a number as to |
| 427 | render numerous insurers operating within this state insolvent |
| 428 | and therefore unable to satisfy covered claims. |
| 429 | (b) The inability of insureds within this state to receive |
| 430 | payment of covered claims or to timely receive such payment |
| 431 | creates financial and other hardships for such insureds and |
| 432 | places undue burdens on the state, the affected units of local |
| 433 | government, and the community at large. |
| 434 | (c) In addition, the failure of insurers to pay covered |
| 435 | claims or to timely pay such claims due to the insolvency of |
| 436 | such insurers can undermine the public's confidence in insurers |
| 437 | operating within this state, thereby adversely affecting the |
| 438 | stability of the insurance industry in this state. |
| 439 | (d) The state has previously taken action to address these |
| 440 | problems by adopting the Florida Insurance Guaranty Association |
| 441 | Act, which, among other things, provides a mechanism for the |
| 442 | payment of covered claims under certain insurance policies to |
| 443 | avoid excessive delay in payment and to avoid financial loss to |
| 444 | claimants or policyholders because of the insolvency of an |
| 445 | insurer. |
| 446 | (e) In the wake of the unprecedented destruction caused by |
| 447 | various hurricanes that have made landfall in this state, the |
| 448 | resultant covered claims, and the number of insurers rendered |
| 449 | insolvent thereby, it is evident that alternative programs must |
| 450 | be developed to allow the Florida Insurance Guaranty |
| 451 | Association, Inc., to more expeditiously and effectively provide |
| 452 | for the payment of covered claims. |
| 453 | (f) It is therefore determined to be in the best interests |
| 454 | of, and necessary for, the protection of the public health, |
| 455 | safety, and general welfare of the residents of this state, and |
| 456 | for the protection and preservation of the economic stability of |
| 457 | insurers operating in this state, and it is declared to be an |
| 458 | essential public purpose, to permit certain municipalities and |
| 459 | counties to take such actions as will provide relief to |
| 460 | claimants and policyholders having covered claims against |
| 461 | insolvent insurers operating in this state by expediting the |
| 462 | handling and payment of covered claims. |
| 463 | (g) To achieve the foregoing purposes, it is proper to |
| 464 | authorize municipalities and counties of this state |
| 465 | substantially affected by the landfall of a category 1 or |
| 466 | greater hurricane to issue bonds to assist the Florida Insurance |
| 467 | Guaranty Association, Inc., in expediting the handling and |
| 468 | payment of covered claims of insolvent insurers. |
| 469 | (h) In order to avoid the needless and indiscriminate |
| 470 | proliferation, duplication, and fragmentation of such assistance |
| 471 | programs, it is in the best interests of the residents of this |
| 472 | state to authorize municipalities and counties severely affected |
| 473 | by a category 1 or greater hurricane to provide for the payment |
| 474 | of covered claims beyond their territorial limits in the |
| 475 | implementation of such programs. |
| 476 | (i) It is a paramount public purpose for municipalities |
| 477 | and counties substantially affected by the landfall of a |
| 478 | category 1 or greater hurricane to be able to issue bonds for |
| 479 | the purposes described in this section. Such issuance shall |
| 480 | provide assistance to residents of those municipalities and |
| 481 | counties as well as to other residents of this state. |
| 482 | (2) The governing body of any municipality or county the |
| 483 | residents of which have been substantially affected by a |
| 484 | category 1 or greater hurricane may issue bonds to fund an |
| 485 | assistance program in conjunction with, and with the consent of, |
| 486 | the Florida Insurance Guaranty Association, Inc., for the |
| 487 | purpose of paying claimants' or policyholders' covered claims as |
| 488 | defined in s. 631.54 arising through the insolvency of an |
| 489 | insurer, which insolvency is determined by the Florida Insurance |
| 490 | Guaranty Association, Inc., to have been a result of a category |
| 491 | 1 or greater hurricane, regardless of whether such claimants or |
| 492 | policyholders are residents of such municipality or county or |
| 493 | the property to which such claim relates is located within or |
| 494 | outside the territorial jurisdiction of such municipality or |
| 495 | county. The power of a municipality or county to issue bonds as |
| 496 | described in this section is in addition to any powers granted |
| 497 | by law and may not be abrogated or restricted by any provisions |
| 498 | in such municipality's or county's charter. A municipality or |
| 499 | county issuing bonds for this purpose shall enter into such |
| 500 | contracts with the Florida Insurance Guaranty Association, Inc., |
| 501 | or any entity acting on behalf of the Florida Insurance Guaranty |
| 502 | Association, Inc., as are necessary to implement the assistance |
| 503 | program. Any bonds issued by a municipality or county or |
| 504 | combination thereof under this subsection shall be payable from |
| 505 | and secured by moneys received by or on behalf of the |
| 506 | municipality or county from assessments levied under s. |
| 507 | 631.57(3)(a) and assigned and pledged to or on behalf of the |
| 508 | municipality or county for the benefit of the holders of such |
| 509 | bonds in connection with such assistance program. The funds, |
| 510 | credit, property, and taxing power of the state or any |
| 511 | municipality or county shall not be pledged for the payment of |
| 512 | such bonds. |
| 513 | (3) Bonds may be validated by such municipality or county |
| 514 | pursuant to chapter 75. The proceeds of such bonds may be used |
| 515 | to pay covered claims of insolvent insurers; to refinance or |
| 516 | replace previously existing borrowings or financial |
| 517 | arrangements; to pay interest on bonds; to fund reserves for the |
| 518 | bonds; to pay expenses incident to the issuance or sale of any |
| 519 | bond issued under this section, including costs of validating, |
| 520 | printing, and delivering the bonds, costs of printing the |
| 521 | official statement, costs of publishing notices of sale of the |
| 522 | bonds, costs of obtaining credit enhancement or liquidity |
| 523 | support, and related administrative expenses; or for such other |
| 524 | purposes related to the financial obligations of the fund as the |
| 525 | association may determine. The term of the bonds may not exceed |
| 526 | 30 years. |
| 527 | (4) The state covenants with holders of bonds of the |
| 528 | assistance program that the state will not take any action which |
| 529 | will have a material adverse affect on such holders and will not |
| 530 | repeal or abrogate the power of the board of directors of the |
| 531 | association to direct the Office of Insurance Regulation to levy |
| 532 | the assessments and to collect the proceeds of the revenues |
| 533 | pledged to the payment of such bonds as long as any such bonds |
| 534 | remain outstanding unless adequate provision has been made for |
| 535 | the payment of such bonds pursuant to the documents authorizing |
| 536 | the issuance of such bonds. |
| 537 | (5) The accomplishment of the authorized purposes of such |
| 538 | municipality or county under this section is in all respects for |
| 539 | the benefit of the people of the state, for the increase of |
| 540 | their commerce and prosperity, and for the improvement of their |
| 541 | health and living conditions. Such municipality or county, in |
| 542 | performing essential governmental functions in accomplishing its |
| 543 | purposes, is not required to pay any taxes or assessments of any |
| 544 | kind whatsoever upon any property acquired or used by the county |
| 545 | or municipality for such purposes or upon any revenues at any |
| 546 | time received by the county or municipality. The bonds, notes, |
| 547 | and other obligations of such municipality or county, and the |
| 548 | transfer of and income from such bonds, notes, and other |
| 549 | obligations, including any profits made on the sale of such |
| 550 | bonds, notes, and other obligations, are exempt from taxation of |
| 551 | any kind by the state or by any political subdivision or other |
| 552 | agency or instrumentality of the state. The exemption granted in |
| 553 | this subsection is not applicable to any tax imposed by chapter |
| 554 | 220 on interest, income, or profits on debt obligations owned by |
| 555 | corporations. |
| 556 | (6) Two or more municipalities or counties the residents |
| 557 | of which have been substantially affected by a category 1 or |
| 558 | greater hurricane may create a legal entity pursuant to s. |
| 559 | 163.01(7)(g) to exercise the powers described in this section as |
| 560 | well as those powers granted in s. 163.01(7)(g). Reference in |
| 561 | this section to a municipality or county includes such legal |
| 562 | entity. |
| 563 | (7) The association shall issue an annual report on the |
| 564 | status of the use of bond proceeds as related to insolvencies |
| 565 | caused by hurricanes. The report must contain the number and |
| 566 | amount of claims paid. The association shall also include an |
| 567 | analysis of the revenue generated from the assessment levied |
| 568 | under s. 631.57(3)(a) to pay such bonds. The association shall |
| 569 | submit a copy of the report to the President of the Senate, the |
| 570 | Speaker of the House of Representatives, and the Chief Financial |
| 571 | Officer within 90 days after the end of each calendar year in |
| 572 | which bonds were outstanding. |
| 573 | Section 10. No provision of s. 631.57 or s. 631.695, |
| 574 | Florida Statutes, shall be repealed until such time as the |
| 575 | principal, redemption premium, if any, and interest on all bonds |
| 576 | issued under s. 631.695, Florida Statutes, payable and secured |
| 577 | from assessments levied under s. 631.57(3)(a), Florida Statutes, |
| 578 | have been paid in full or adequate provision for such payment |
| 579 | has been made in accordance with the bond resolution or trust |
| 580 | indenture pursuant to which such bonds were issued. |
| 581 | Section 11. If any provision of this act or the |
| 582 | application thereof to any person or circumstance is held |
| 583 | invalid, the invalidity shall not affect other provisions or |
| 584 | applications of the act which can be given effect without the |
| 585 | invalid provision or application, and to this end the provisions |
| 586 | of this act are declared severable. |
| 587 | Section 12. This act shall take effect upon becoming a |
| 588 | law. |