HB 0507

1	A bill to be entitled
2	An act relating to property and casualty insurance;
3	transferring, renumbering, and amending ss. 350.061,
4	350.0611, 350.0612, 350.0613, and 350.0614, F.S.;
5	authorizing the Public Counsel to represent the general
6	public before the Office of Insurance Regulation;
7	including certain proceedings related to rules and rate
8	filings for residential property insurance; authorizing
9	the Public Counsel to have access to files of the office,
10	to seek review of orders of the office, to issue reports,
11	recommendations, and proposed orders to the office;
12	specifying where the Public Counsel shall maintain his or
13	her office; authorizing the Joint Legislative Auditing
14	Committee to authorize the Public Counsel to employ
15	certain types of employees; requiring the Office of
16	Insurance Regulation to provide copies of certain filings
17	to the Public Counsel; amending s. 112.3145, F.S.;
18	conforming a cross-reference; amending s. 215.559, F.S.;
19	revising the distribution of funds in the Hurricane Loss
20	Mitigation Program; providing for a low-interest loan
21	program; amending s. 408.40, F.S.; conforming a cross
22	reference; amending s. 624.319, F.S.; authorizing the
23	Public Counsel to have access to certain confidential
24	information held by the Department of Financial Services
25	or the Office of Insurance Regulation; amending s.
26	627.062, F.S.; deleting provisions that allow an insurer
27	to require arbitration of a rate filing for property and
28	casualty insurance; amending s. 627.0629, F.S.; requiring
29	underwriting rules for homeowners' insurance to be filed
30	with and approved by the Office of Insurance Regulation;
31	providing for filing and approval provisions; amending s.
32	627.0651, F.S.; deleting reference to the filing of
33	specified underwriting rules for homeowners' insurance;
34	amending s. 627.351, F.S.; deleting a cross reference to
35	conform; amending s. 627.4133, F.S.; prohibiting an
36	insurer from canceling or nonrenewing a residential
37	property insurance policy for certain reasons; amending s.
38	627.4145, F.S.; increasing the minimum score on the
39	reading ease test for insurance policies; creating s.
40	627.41494, F.S.; providing for consumer participation in
41	review of insurance rate changes; providing for public
42	inspection of rate filings; providing for adoption of
43	rules by the Financial Services Commission; requiring
44	insurers to pay costs of consumer advocacy groups under
45	certain circumstances; amending s. 627.701, F.S.; revising
46	the hurricane deductibles that insurers must offer for
47	personal lines residential property insurance policies;
48	providing an appropriation; providing effective dates.
49
50	Be It Enacted by the Legislature of the State of Florida:
51
52	Section 1.  Section 350.061, Florida Statutes, is
53	transferred, renumbered as section 11.402, Florida Statutes, and
54	amended to read:
55	11.402 350.061  Public Counsel; appointment; oath;
56	restrictions on Public Counsel and his or her employees.--
57	(1)  The Joint Legislative Auditing Committee shall appoint
58	a Public Counsel by majority vote of the members of the
59	committee to represent the general public of Florida before the
60	Florida Public Service Commission and the Office of Insurance
61	Regulation. The Public Counsel shall be an attorney admitted to
62	practice before the Florida Supreme Court and shall serve at the
63	pleasure of the Joint Legislative Auditing Committee, subject to
64	annual reconfirmation by the committee. Vacancies in the office
65	shall be filled in the same manner as the original appointment.
66	(2)  The Public Counsel shall take and subscribe to the
67	oath of office required of state officers by the State
68	Constitution.
69	(3)  No officer or full-time employee of the Public Counsel
70	shall actively engage in any other business or profession; serve
71	as the representative of any political party or on any executive
72	committee or other governing body thereof; serve as an
73	executive, officer, or employee of any political party,
74	committee, organization, or association; receive remuneration
75	for activities on behalf of any candidate for public office; or
76	engage on behalf of any candidate for public office in the
77	solicitation of votes or other activities in behalf of such
78	candidacy. Neither the Public Counsel nor any employee of the
79	Public Counsel shall become a candidate for election to public
80	office unless he or she shall first resign from his or her
81	office or employment.
82	Section 2.  Section 350.0611, Florida Statutes, is
83	transferred, renumbered as section 11.403, Florida Statutes, and
84	amended to read:
85	11.403 350.0611  Public Counsel; duties and powers.--It
86	shall be the duty of the Public Counsel to provide legal
87	representation for the people of the state in proceedings before
88	the Public Service Commission and the Office of Insurance
89	Regulation and in proceedings before counties pursuant to s.
90	367.171(8). The Public Counsel shall have such powers as are
91	necessary to carry out the duties of his or her office,
92	including, but not limited to, the following specific powers:
93	(1)  To recommend to the Public Service Commission or the
94	counties, by petition, the commencement of any proceeding or
95	action or to appear, in the name of the state or its citizens,
96	in any proceeding or action before the commission or the
97	counties.
98	(2)  To recommend to the Office of Insurance Regulation, by
99	petition, the commencement of, and to appear in the name of the
100	state or its citizens in, any proceeding or action before the
101	office relating to:
102	(a)  Rules governing residential property insurance; or
103	(b)  Rate filings for residential property insurance which,
104	pursuant to standards determined by the office, request an
105	average statewide rate increase of 10 percent or greater as
106	compared to the current rates in effect or the rates in effect
107	12 months prior to the proposed effective date.
108
109	The Public Counsel may not stay any final order of the Office of
110	Insurance Regulation.
111	(3)  To and urge in any proceeding or action to which he or
112	she is a party therein any position that which he or she deems
113	to be in the public interest, whether consistent or inconsistent
114	with positions previously adopted by the commission, or the
115	counties, or the office, and utilize therein all forms of
116	discovery available to attorneys in civil actions generally,
117	subject to protective orders of the commission, or the counties,
118	or the office, which shall be reviewable by summary procedure in
119	the circuit courts of this state.;
120	(4)(2)  To have access to and use of all files, records,
121	and data of the commission, or the counties, or the office
122	available to any other attorney representing parties in a
123	proceeding before the commission, or the counties, or the
124	office.;
125	(5)(3)  In any proceeding in which he or she has
126	participated as a party, to seek review of any determination,
127	finding, or order of the commission, or the counties, or the
128	office, or of any hearing examiner designated by the commission,
129	or the counties, or the office, in the name of the state or its
130	citizens.;
131	(6)(4)  To prepare and issue reports, recommendations, and
132	proposed orders to the commission or office, the Governor, and
133	the Legislature on any matter or subject within the jurisdiction
134	of the commission or office, and to make such recommendations as
135	he or she deems appropriate for legislation relative to
136	commission or office procedures, rules, jurisdiction, personnel,
137	and functions.; and
138	(7)(5)  To appear before other state agencies, federal
139	agencies, and state and federal courts in connection with
140	matters under the jurisdiction of the commission or office, in
141	the name of the state or its citizens.
142	Section 3.  Section 350.0612, Florida Statutes, is
143	transferred, renumbered as section 11.404, Florida Statutes, and
144	amended to read:
145	11.404 350.0612  Public Counsel; location.--The Public
146	Counsel shall maintain his or her office in Leon County on the
147	premises of the commission or, if suitable space there cannot be
148	provided, at such other place convenient to the offices of the
149	Public Services Commission or the Office of Insurance Regulation
150	commissioners as will enable him or her to carry out
151	expeditiously the duties and functions of his or her office.
152	Section 4.  Section 350.0613, Florida Statutes, is
153	transferred, renumbered as section 11.405, Florida Statutes, and
154	amended to read:
155	11.405 350.0613  Public Counsel; employees; receipt of
156	pleadings.--The Joint Legislative Auditing Committee may
157	authorize the Public Counsel to employ clerical and technical
158	assistants whose qualifications, duties, and responsibilities
159	the committee shall from time to time prescribe. The committee
160	may from time to time authorize retention of the services of
161	additional attorneys, actuaries, economists, or experts to the
162	extent that the best interests of the people of the state will
163	be better served thereby, including the retention of expert
164	witnesses and other technical personnel for participation in
165	contested proceedings before the Public Service Commission or
166	Office of Insurance Regulation. The commission shall furnish the
167	Public Counsel with copies of the initial pleadings in all
168	proceedings before the commission. The office shall furnish the
169	Public Counsel with copies of all filings that relate to the
170	jurisdiction of the Public Counsel pursuant to s. 11.403(2).,
171	and If the Public Counsel intervenes as a party in any
172	proceeding he or she shall be served with copies of all
173	subsequent pleadings, exhibits, and prepared testimony, if used.
174	Upon filing notice of intervention, the Public Counsel shall
175	serve all interested parties with copies of such notice and all
176	of his or her subsequent pleadings and exhibits.
177	Section 5.  Section 350.0614, Florida Statutes, is
178	transferred, renumbered as section 11.406, Florida Statutes, and
179	amended to read:
180	11.406 350.0614  Public Counsel; compensation and
181	expenses.--
182	(1)  The salaries and expenses of the Public Counsel and
183	his or her employees shall be allocated by the committee only
184	from moneys appropriated to the Public Counsel by the
185	Legislature.
186	(2)  The Legislature hereby declares and determines that
187	the Public Counsel is under the legislative branch of government
188	within the intention of the legislation as expressed in chapter
189	216, and no power shall be in the Executive Office of the
190	Governor or its successor to release or withhold funds
191	appropriated to it, but the same shall be available for
192	expenditure as provided by law and the rules or decisions of the
193	Joint Auditing Committee.
194	(3)  Neither the Executive Office of the Governor nor the
195	Department of Management Services or its successor shall have
196	power to determine the number, or fix the compensation, of the
197	employees of the Public Counsel or to exercise any manner of
198	control over them.
199	Section 6.  Paragraph (b) of subsection (1) of section
200	112.3145, Florida Statutes, is amended to read:
201	112.3145  Disclosure of financial interests and clients
202	represented before agencies.--
203	(1)  For purposes of this section, unless the context
204	otherwise requires, the term:
205	(b)  "Specified state employee" means:
206	1.  Public counsel created by chapter 11 350, an assistant
207	state attorney, an assistant public defender, a full-time state
208	employee who serves as counsel or assistant counsel to any state
209	agency, the Deputy Chief Judge of Compensation Claims, a judge
210	of compensation claims, an administrative law judge, or a
211	hearing officer.
212	2.  Any person employed in the office of the Governor or in
213	the office of any member of the Cabinet if that person is exempt
214	from the Career Service System, except persons employed in
215	clerical, secretarial, or similar positions.
216	3.  Each appointed secretary, assistant secretary, deputy
217	secretary, executive director, assistant executive director, or
218	deputy executive director of each state department, commission,
219	board, or council; unless otherwise provided, the division
220	director, assistant division director, deputy director, bureau
221	chief, and assistant bureau chief of any state department or
222	division; or any person having the power normally conferred upon
223	such persons, by whatever title.
224	4.  The superintendent or institute director of a state
225	mental health institute established for training and research in
226	the mental health field or the warden or director of any major
227	state institution or facility established for corrections,
228	training, treatment, or rehabilitation.
229	5.  Business managers, purchasing agents having the power
230	to make any purchase exceeding the threshold amount provided for
231	in s. 287.017 for CATEGORY ONE, finance and accounting
232	directors, personnel officers, or grants coordinators for any
233	state agency.
234	6.  Any person, other than a legislative assistant exempted
235	by the presiding officer of the house by which the legislative
236	assistant is employed, who is employed in the legislative branch
237	of government, except persons employed in maintenance, clerical,
238	secretarial, or similar positions.
239	7.  Each employee of the Commission on Ethics.
240	Section 7.  Section 215.559, Florida Statutes, is amended
241	to read:
242	215.559  Hurricane Loss Mitigation Program.--
243	(1)  There is created a Hurricane Loss Mitigation Program.
244	The Legislature shall annually appropriate $10 million of the
245	moneys authorized for appropriation under s. 215.555(7)(c) from
246	the Florida Hurricane Catastrophe Fund to the Department of
247	Community Affairs for the purposes set forth in this section.
248	(2)(a)  One Seven million dollars in funds provided in
249	subsection (1) shall be used for programs to improve the wind
250	resistance of residences and mobile homes, including loans,
251	subsidies, grants, demonstration projects, and direct
252	assistance; cooperative programs with local governments and the
253	Federal Government; and other efforts to prevent or reduce
254	losses or reduce the cost of rebuilding after a disaster.
255	(b)  Six million dollars in funds provided in subsection
256	(1) shall be used for programs to improve the wind resistance of
257	residences to prevent or reduce losses or reduce the cost of
258	rebuilding after a disaster.
259	(c)  The department shall, with the funds authorized in
260	paragraphs (a) and (b), establish a program of low-interest
261	loans to qualified owners of residences and qualified owners of
262	mobile homes. For the purpose of this section, the term "low-
263	interest loan" means any direct loan or loan guarantee issued or
264	backed by such authorized funds to a qualified owner to finance
265	efforts to prevent or reduce losses or reduce the cost of
266	rebuilding after a disaster with a requirement for repayment by
267	the owner. Loans provided under this section shall be made at a
268	rate of up to 2 percent below the qualified loan rate as
269	determined by the department. The terms and conditions of the
270	low-interest loan program, including loan incentive provisions,
271	and the qualifications required of owners of residences and
272	owners of mobile homes shall be determined by the department.
273	(d)(b)  Three million dollars in funds provided in
274	subsection (1) shall be used to retrofit existing facilities
275	used as public hurricane shelters. The department must
276	prioritize the use of these funds for projects included in the
277	September 1, 2000, version of the Shelter Retrofit Report
278	prepared in accordance with s. 252.385(3), and each annual
279	report thereafter. The department must give funding priority to
280	projects in regional planning council regions that have shelter
281	deficits and to projects that maximize use of state funds.
282	(3)  Forty percent of the total appropriation in paragraph
283	(2)(a) shall be used to inspect and improve tie-downs for mobile
284	homes. Within 30 days after the effective date of that
285	appropriation, the department shall contract with a public
286	higher educational institution in this state which has previous
287	experience in administering the programs set forth in this
288	subsection to serve as the administrative entity and fiscal
289	agent pursuant to s. 216.346 for the purpose of administering
290	the programs set forth in this subsection in accordance with
291	established policy and procedures. The administrative entity
292	working with the advisory council set up under subsection (5)
293	shall develop a list of mobile home parks and counties that may
294	be eligible to participate in the tie-down program.
295	(4)  Of moneys provided to the Department of Community
296	Affairs in paragraphs paragraph (2)(a) and (b), 10 percent shall
297	be allocated to a Type I Center within the State University
298	System dedicated to hurricane research. The Type I Center shall
299	develop a preliminary work plan approved by the advisory council
300	set forth in subsection (5) to eliminate the state and local
301	barriers to upgrading existing residences, mobile homes, and
302	communities;, research and develop a program for the recycling
303	of existing older mobile homes;, and support programs of
304	research and development relating to hurricane loss reduction
305	devices and techniques for site-built residences. The State
306	University System also shall consult with the Department of
307	Community Affairs and assist the department with the report
308	required under subsection (7).
309	(5)  Except for the program set forth in subsection (3),
310	the Department of Community Affairs shall develop the programs
311	set forth in this section in consultation with an advisory
312	council consisting of a representative designated by the Chief
313	Financial Officer, a representative designated by the Florida
314	Home Builders Association, a representative designated by the
315	Florida Insurance Council, a representative designated by the
316	Federation of Manufactured Home Owners, a representative
317	designated by the Florida Association of Counties, and a
318	representative designated by the Florida Manufactured Housing
319	Association.
320	(6)  Moneys provided to the Department of Community Affairs
321	under this section are intended to supplement other funding
322	sources of the Department of Community Affairs and may not
323	supplant other funding sources of the Department of Community
324	Affairs.
325	(7)  On January 1st of each year, the Department of
326	Community Affairs shall provide a full report and accounting of
327	activities under this section and an evaluation of such
328	activities to the Speaker of the House of Representatives, the
329	President of the Senate, and the Majority and Minority Leaders
330	of the House of Representatives and the Senate.
331	(8)  This section is repealed June 30, 2011.
332	Section 8.  Subsection (1) of section 408.40, Florida
333	Statutes, is amended to read:
334	408.40  Public Counsel.--
335	(1)  Notwithstanding any other provisions of this chapter,
336	the Public Counsel shall represent the public in any proceeding
337	before the agency or its advisory panels in any administrative
338	hearing conducted pursuant to chapter 120 or before any other
339	state and federal agencies and courts in any issue before the
340	agency, any court, or any agency. With respect to any such
341	proceeding, the Public Counsel is subject to the provisions of
342	and may use the powers granted to him or her by ss. 11.402-
343	11.406 ss. 350.061-350.0614.
344	Section 9.  Paragraph (b) of subsection (3) of section
345	624.319, Florida Statutes, is amended to read:
346	624.319  Examination and investigation reports.--
347	(3)
348	(b)  Workpapers and other information held by the
349	department or office, and workpapers and other information
350	received from another governmental entity or the National
351	Association of Insurance Commissioners, for the department's or
352	office's use in the performance of its examination or
353	investigation duties pursuant to this section and ss. 624.316,
354	624.3161, 624.317, and 624.318 are confidential and exempt from
355	the provisions of s. 119.07(1) and s. 24(a), Art. I of the State
356	Constitution. This exemption applies to workpapers and other
357	information held by the department or office before, on, or
358	after the effective date of this exemption. Such confidential
359	and exempt information may be disclosed to another governmental
360	entity, if disclosure is necessary for the receiving entity to
361	perform its duties and responsibilities, and may be disclosed to
362	the National Association of Insurance Commissioners. The Public
363	Counsel shall have access to such confidential and exempt
364	information pertaining to residential property insurance at any
365	time. The receiving governmental entity or the association must
366	maintain the confidential and exempt status of the information.
367	The information made confidential and exempt by this paragraph
368	may be used in a criminal, civil, or administrative proceeding
369	so long as the confidential and exempt status of such
370	information is maintained. This paragraph is subject to the Open
371	Government Sunset Review Act of 1995 in accordance with s.
372	119.15 and shall stand repealed on October 2, 2007, unless
373	reviewed and saved from repeal through reenactment by the
374	Legislature.
375	Section 10.  Effective upon this act becoming a law,
376	subsection (6) of section 627.062, Florida Statutes, is amended,
377	and subsections (7) and (8) of said section are renumbered as
378	subsections (6) and (7), respectively, to read:
379	627.062  Rate standards.--
380	(6)(a)  After any action with respect to a rate filing that
381	constitutes agency action for purposes of the Administrative
382	Procedure Act, except for a rate filing for medical malpractice,
383	an insurer may, in lieu of demanding a hearing under s. 120.57,
384	require arbitration of the rate filing. Arbitration shall be
385	conducted by a board of arbitrators consisting of an arbitrator
386	selected by the office, an arbitrator selected by the insurer,
387	and an arbitrator selected jointly by the other two arbitrators.
388	Each arbitrator must be certified by the American Arbitration
389	Association. A decision is valid only upon the affirmative vote
390	of at least two of the arbitrators. No arbitrator may be an
391	employee of any insurance regulator or regulatory body or of any
392	insurer, regardless of whether or not the employing insurer does
393	business in this state. The office and the insurer must treat
394	the decision of the arbitrators as the final approval of a rate
395	filing. Costs of arbitration shall be paid by the insurer.
396	(b)  Arbitration under this subsection shall be conducted
397	pursuant to the procedures specified in ss. 682.06-682.10.
398	Either party may apply to the circuit court to vacate or modify
399	the decision pursuant to s. 682.13 or s. 682.14. The commission
400	shall adopt rules for arbitration under this subsection, which
401	rules may not be inconsistent with the arbitration rules of the
402	American Arbitration Association as of January 1, 1996.
403	(c)  Upon initiation of the arbitration process, the
404	insurer waives all rights to challenge the action of the office
405	under the Administrative Procedure Act or any other provision of
406	law; however, such rights are restored to the insurer if the
407	arbitrators fail to render a decision within 90 days after
408	initiation of the arbitration process.
409	Section 11.  Subsection (11) is added to section 627.0629,
410	Florida Statutes, to read:
411	627.0629  Residential property insurance; rate filings;
412	underwriting rules.--
413	(11)  The underwriting rules for homeowners' insurance not
414	contained in rating manuals shall be filed with the office. All
415	underwriting rules for homeowners' insurance must be approved by
416	the office and be reasonable and comply with applicable
417	provisions of law. The filing and form-approval provisions under
418	s. 627.410 apply to the filing and approval of underwriting
419	rules for homeowners' insurance.
420	Section 12.  Subsection (13) of section 627.0651, Florida
421	Statutes, is amended to read:
422	627.0651  Making and use of rates for motor vehicle
423	insurance.--
424	(13)(a)  Underwriting rules not contained in rating manuals
425	shall be filed for private passenger automobile insurance and
426	homeowners' insurance.
427	(b)  The submission of rates, rating schedules, and rating
428	manuals to the office by a licensed rating organization of which
429	an insurer is a member or subscriber will be sufficient
430	compliance with this subsection for any insurer maintaining
431	membership or subscribership in such organization, to the extent
432	that the insurer uses the rates, rating schedules, and rating
433	manuals of such organization. All such information shall be
434	available for public inspection, upon receipt by the office,
435	during usual business hours.
436	Section 13.  Paragraph (b) of subsection (2) of section
437	627.351, Florida Statutes, is amended to read:
438	627.351  Insurance risk apportionment plans.--
439	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
440	(b)  The department shall require all insurers holding a
441	certificate of authority to transact property insurance on a
442	direct basis in this state, other than joint underwriting
443	associations and other entities formed pursuant to this section,
444	to provide windstorm coverage to applicants from areas
445	determined to be eligible pursuant to paragraph (c) who in good
446	faith are entitled to, but are unable to procure, such coverage
447	through ordinary means; or it shall adopt a reasonable plan or
448	plans for the equitable apportionment or sharing among such
449	insurers of windstorm coverage, which may include formation of
450	an association for this purpose. As used in this subsection, the
451	term "property insurance" means insurance on real or personal
452	property, as defined in s. 624.604, including insurance for
453	fire, industrial fire, allied lines, farmowners multiperil,
454	homeowners' multiperil, commercial multiperil, and mobile homes,
455	and including liability coverages on all such insurance, but
456	excluding inland marine as defined in s. 624.607(3) and
457	excluding vehicle insurance as defined in s. 624.605(1)(a) other
458	than insurance on mobile homes used as permanent dwellings. The
459	department shall adopt rules that provide a formula for the
460	recovery and repayment of any deferred assessments.
461	1.  For the purpose of this section, properties eligible
462	for such windstorm coverage are defined as dwellings, buildings,
463	and other structures, including mobile homes which are used as
464	dwellings and which are tied down in compliance with mobile home
465	tie-down requirements prescribed by the Department of Highway
466	Safety and Motor Vehicles pursuant to s. 320.8325, and the
467	contents of all such properties. An applicant or policyholder is
468	eligible for coverage only if an offer of coverage cannot be
469	obtained by or for the applicant or policyholder from an
470	admitted insurer at approved rates.
471	2.a.(I)  All insurers required to be members of such
472	association shall participate in its writings, expenses, and
473	losses. Surplus of the association shall be retained for the
474	payment of claims and shall not be distributed to the member
475	insurers. Such participation by member insurers shall be in the
476	proportion that the net direct premiums of each member insurer
477	written for property insurance in this state during the
478	preceding calendar year bear to the aggregate net direct
479	premiums for property insurance of all member insurers, as
480	reduced by any credits for voluntary writings, in this state
481	during the preceding calendar year. For the purposes of this
482	subsection, the term "net direct premiums" means direct written
483	premiums for property insurance, reduced by premium for
484	liability coverage and for the following if included in allied
485	lines: rain and hail on growing crops; livestock; association
486	direct premiums booked; National Flood Insurance Program direct
487	premiums; and similar deductions specifically authorized by the
488	plan of operation and approved by the department. A member's
489	participation shall begin on the first day of the calendar year
490	following the year in which it is issued a certificate of
491	authority to transact property insurance in the state and shall
492	terminate 1 year after the end of the calendar year during which
493	it no longer holds a certificate of authority to transact
494	property insurance in the state. The commissioner, after review
495	of annual statements, other reports, and any other statistics
496	that the commissioner deems necessary, shall certify to the
497	association the aggregate direct premiums written for property
498	insurance in this state by all member insurers.
499	(II)  Effective July 1, 2002, the association shall operate
500	subject to the supervision and approval of a board of governors
501	who are the same individuals that have been appointed by the
502	Treasurer to serve on the board of governors of the Citizens
503	Property Insurance Corporation.
504	(III)  The plan of operation shall provide a formula
505	whereby a company voluntarily providing windstorm coverage in
506	affected areas will be relieved wholly or partially from
507	apportionment of a regular assessment pursuant to sub-sub-
508	subparagraph d.(I) or sub-sub-subparagraph d.(II).
509	(IV)  A company which is a member of a group of companies
510	under common management may elect to have its credits applied on
511	a group basis, and any company or group may elect to have its
512	credits applied to any other company or group.
513	(V)  There shall be no credits or relief from apportionment
514	to a company for emergency assessments collected from its
515	policyholders under sub-sub-subparagraph d.(III).
516	(VI)  The plan of operation may also provide for the award
517	of credits, for a period not to exceed 3 years, from a regular
518	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
519	subparagraph d.(II) as an incentive for taking policies out of
520	the Residential Property and Casualty Joint Underwriting
521	Association. In order to qualify for the exemption under this
522	sub-sub-subparagraph, the take-out plan must provide that at
523	least 40 percent of the policies removed from the Residential
524	Property and Casualty Joint Underwriting Association cover risks
525	located in Dade, Broward, and Palm Beach Counties or at least 30
526	percent of the policies so removed cover risks located in Dade,
527	Broward, and Palm Beach Counties and an additional 50 percent of
528	the policies so removed cover risks located in other coastal
529	counties, and must also provide that no more than 15 percent of
530	the policies so removed may exclude windstorm coverage. With the
531	approval of the department, the association may waive these
532	geographic criteria for a take-out plan that removes at least
533	the lesser of 100,000 Residential Property and Casualty Joint
534	Underwriting Association policies or 15 percent of the total
535	number of Residential Property and Casualty Joint Underwriting
536	Association policies, provided the governing board of the
537	Residential Property and Casualty Joint Underwriting Association
538	certifies that the take-out plan will materially reduce the
539	Residential Property and Casualty Joint Underwriting
540	Association's 100-year probable maximum loss from hurricanes.
541	With the approval of the department, the board may extend such
542	credits for an additional year if the insurer guarantees an
543	additional year of renewability for all policies removed from
544	the Residential Property and Casualty Joint Underwriting
545	Association, or for 2 additional years if the insurer guarantees
546	2 additional years of renewability for all policies removed from
547	the Residential Property and Casualty Joint Underwriting
548	Association.
549	b.  Assessments to pay deficits in the association under
550	this subparagraph shall be included as an appropriate factor in
551	the making of rates as provided in s. 627.3512.
552	c.  The Legislature finds that the potential for unlimited
553	deficit assessments under this subparagraph may induce insurers
554	to attempt to reduce their writings in the voluntary market, and
555	that such actions would worsen the availability problems that
556	the association was created to remedy. It is the intent of the
557	Legislature that insurers remain fully responsible for paying
558	regular assessments and collecting emergency assessments for any
559	deficits of the association; however, it is also the intent of
560	the Legislature to provide a means by which assessment
561	liabilities may be amortized over a period of years.
562	d.(I)  When the deficit incurred in a particular calendar
563	year is 10 percent or less of the aggregate statewide direct
564	written premium for property insurance for the prior calendar
565	year for all member insurers, the association shall levy an
566	assessment on member insurers in an amount equal to the deficit.
567	(II)  When the deficit incurred in a particular calendar
568	year exceeds 10 percent of the aggregate statewide direct
569	written premium for property insurance for the prior calendar
570	year for all member insurers, the association shall levy an
571	assessment on member insurers in an amount equal to the greater
572	of 10 percent of the deficit or 10 percent of the aggregate
573	statewide direct written premium for property insurance for the
574	prior calendar year for member insurers. Any remaining deficit
575	shall be recovered through emergency assessments under sub-sub-
576	subparagraph (III).
577	(III)  Upon a determination by the board of directors that
578	a deficit exceeds the amount that will be recovered through
579	regular assessments on member insurers, pursuant to sub-sub-
580	subparagraph (I) or sub-sub-subparagraph (II), the board shall
581	levy, after verification by the department, emergency
582	assessments to be collected by member insurers and by
583	underwriting associations created pursuant to this section which
584	write property insurance, upon issuance or renewal of property
585	insurance policies other than National Flood Insurance policies
586	in the year or years following levy of the regular assessments.
587	The amount of the emergency assessment collected in a particular
588	year shall be a uniform percentage of that year's direct written
589	premium for property insurance for all member insurers and
590	underwriting associations, excluding National Flood Insurance
591	policy premiums, as annually determined by the board and
592	verified by the department. The department shall verify the
593	arithmetic calculations involved in the board's determination
594	within 30 days after receipt of the information on which the
595	determination was based. Notwithstanding any other provision of
596	law, each member insurer and each underwriting association
597	created pursuant to this section shall collect emergency
598	assessments from its policyholders without such obligation being
599	affected by any credit, limitation, exemption, or deferment. The
600	emergency assessments so collected shall be transferred directly
601	to the association on a periodic basis as determined by the
602	association. The aggregate amount of emergency assessments
603	levied under this sub-sub-subparagraph in any calendar year may
604	not exceed the greater of 10 percent of the amount needed to
605	cover the original deficit, plus interest, fees, commissions,
606	required reserves, and other costs associated with financing of
607	the original deficit, or 10 percent of the aggregate statewide
608	direct written premium for property insurance written by member
609	insurers and underwriting associations for the prior year, plus
610	interest, fees, commissions, required reserves, and other costs
611	associated with financing the original deficit. The board may
612	pledge the proceeds of the emergency assessments under this sub-
613	sub-subparagraph as the source of revenue for bonds, to retire
614	any other debt incurred as a result of the deficit or events
615	giving rise to the deficit, or in any other way that the board
616	determines will efficiently recover the deficit. The emergency
617	assessments under this sub-sub-subparagraph shall continue as
618	long as any bonds issued or other indebtedness incurred with
619	respect to a deficit for which the assessment was imposed remain
620	outstanding, unless adequate provision has been made for the
621	payment of such bonds or other indebtedness pursuant to the
622	document governing such bonds or other indebtedness. Emergency
623	assessments collected under this sub-sub-subparagraph are not
624	part of an insurer's rates, are not premium, and are not subject
625	to premium tax, fees, or commissions; however, failure to pay
626	the emergency assessment shall be treated as failure to pay
627	premium.
628	(IV)  Each member insurer's share of the total regular
629	assessments under sub-sub-subparagraph (I) or sub-sub-
630	subparagraph (II) shall be in the proportion that the insurer's
631	net direct premium for property insurance in this state, for the
632	year preceding the assessment bears to the aggregate statewide
633	net direct premium for property insurance of all member
634	insurers, as reduced by any credits for voluntary writings for
635	that year.
636	(V)  If regular deficit assessments are made under sub-sub-
637	subparagraph (I) or sub-sub-subparagraph (II), or by the
638	Residential Property and Casualty Joint Underwriting Association
639	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
640	(6)(b)3.b., the association shall levy upon the association's
641	policyholders, as part of its next rate filing, or by a separate
642	rate filing solely for this purpose, a market equalization
643	surcharge in a percentage equal to the total amount of such
644	regular assessments divided by the aggregate statewide direct
645	written premium for property insurance for member insurers for
646	the prior calendar year. Market equalization surcharges under
647	this sub-sub-subparagraph are not considered premium and are not
648	subject to commissions, fees, or premium taxes; however, failure
649	to pay a market equalization surcharge shall be treated as
650	failure to pay premium.
651	e.  The governing body of any unit of local government, any
652	residents of which are insured under the plan, may issue bonds
653	as defined in s. 125.013 or s. 166.101 to fund an assistance
654	program, in conjunction with the association, for the purpose of
655	defraying deficits of the association. In order to avoid
656	needless and indiscriminate proliferation, duplication, and
657	fragmentation of such assistance programs, any unit of local
658	government, any residents of which are insured by the
659	association, may provide for the payment of losses, regardless
660	of whether or not the losses occurred within or outside of the
661	territorial jurisdiction of the local government. Revenue bonds
662	may not be issued until validated pursuant to chapter 75, unless
663	a state of emergency is declared by executive order or
664	proclamation of the Governor pursuant to s. 252.36 making such
665	findings as are necessary to determine that it is in the best
666	interests of, and necessary for, the protection of the public
667	health, safety, and general welfare of residents of this state
668	and the protection and preservation of the economic stability of
669	insurers operating in this state, and declaring it an essential
670	public purpose to permit certain municipalities or counties to
671	issue bonds as will provide relief to claimants and
672	policyholders of the association and insurers responsible for
673	apportionment of plan losses. Any such unit of local government
674	may enter into such contracts with the association and with any
675	other entity created pursuant to this subsection as are
676	necessary to carry out this paragraph. Any bonds issued under
677	this sub-subparagraph shall be payable from and secured by
678	moneys received by the association from assessments under this
679	subparagraph, and assigned and pledged to or on behalf of the
680	unit of local government for the benefit of the holders of such
681	bonds. The funds, credit, property, and taxing power of the
682	state or of the unit of local government shall not be pledged
683	for the payment of such bonds. If any of the bonds remain unsold
684	60 days after issuance, the department shall require all
685	insurers subject to assessment to purchase the bonds, which
686	shall be treated as admitted assets; each insurer shall be
687	required to purchase that percentage of the unsold portion of
688	the bond issue that equals the insurer's relative share of
689	assessment liability under this subsection. An insurer shall not
690	be required to purchase the bonds to the extent that the
691	department determines that the purchase would endanger or impair
692	the solvency of the insurer. The authority granted by this sub-
693	subparagraph is additional to any bonding authority granted by
694	subparagraph 6.
695	3.  The plan shall also provide that any member with a
696	surplus as to policyholders of $20 million or less writing 25
697	percent or more of its total countrywide property insurance
698	premiums in this state may petition the department, within the
699	first 90 days of each calendar year, to qualify as a limited
700	apportionment company. The apportionment of such a member
701	company in any calendar year for which it is qualified shall not
702	exceed its gross participation, which shall not be affected by
703	the formula for voluntary writings. In no event shall a limited
704	apportionment company be required to participate in any
705	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
706	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
707	$50 million after payment of available plan funds in any
708	calendar year. However, a limited apportionment company shall
709	collect from its policyholders any emergency assessment imposed
710	under sub-sub-subparagraph 2.d.(III). The plan shall provide
711	that, if the department determines that any regular assessment
712	will result in an impairment of the surplus of a limited
713	apportionment company, the department may direct that all or
714	part of such assessment be deferred. However, there shall be no
715	limitation or deferment of an emergency assessment to be
716	collected from policyholders under sub-sub-subparagraph
717	2.d.(III).
718	4.  The plan shall provide for the deferment, in whole or
719	in part, of a regular assessment of a member insurer under sub-
720	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
721	not for an emergency assessment collected from policyholders
722	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
723	commissioner, payment of such regular assessment would endanger
724	or impair the solvency of the member insurer. In the event a
725	regular assessment against a member insurer is deferred in whole
726	or in part, the amount by which such assessment is deferred may
727	be assessed against the other member insurers in a manner
728	consistent with the basis for assessments set forth in sub-sub-
729	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
730	5.a.  The plan of operation may include deductibles and
731	rules for classification of risks and rate modifications
732	consistent with the objective of providing and maintaining funds
733	sufficient to pay catastrophe losses.
734	b.  The association may require arbitration of a rate
735	filing under s. 627.062(6). It is the intent of the Legislature
736	that the rates for coverage provided by the association be
737	actuarially sound and not competitive with approved rates
738	charged in the admitted voluntary market such that the
739	association functions as a residual market mechanism to provide
740	insurance only when the insurance cannot be procured in the
741	voluntary market. The plan of operation shall provide a
742	mechanism to assure that, beginning no later than January 1,
743	1999, the rates charged by the association for each line of
744	business are reflective of approved rates in the voluntary
745	market for hurricane coverage for each line of business in the
746	various areas eligible for association coverage.
747	c.  The association shall provide for windstorm coverage on
748	residential properties in limits up to $10 million for
749	commercial lines residential risks and up to $1 million for
750	personal lines residential risks. If coverage with the
751	association is sought for a residential risk valued in excess of
752	these limits, coverage shall be available to the risk up to the
753	replacement cost or actual cash value of the property, at the
754	option of the insured, if coverage for the risk cannot be
755	located in the authorized market. The association must accept a
756	commercial lines residential risk with limits above $10 million
757	or a personal lines residential risk with limits above $1
758	million if coverage is not available in the authorized market.
759	The association may write coverage above the limits specified in
760	this subparagraph with or without facultative or other
761	reinsurance coverage, as the association determines appropriate.
762	d.  The plan of operation must provide objective criteria
763	and procedures, approved by the department, to be uniformly
764	applied for all applicants in determining whether an individual
765	risk is so hazardous as to be uninsurable. In making this
766	determination and in establishing the criteria and procedures,
767	the following shall be considered:
768	(I)  Whether the likelihood of a loss for the individual
769	risk is substantially higher than for other risks of the same
770	class; and
771	(II)  Whether the uncertainty associated with the
772	individual risk is such that an appropriate premium cannot be
773	determined.
774
775	The acceptance or rejection of a risk by the association
776	pursuant to such criteria and procedures must be construed as
777	the private placement of insurance, and the provisions of
778	chapter 120 do not apply.
779	e.  If the risk accepts an offer of coverage through the
780	market assistance program or through a mechanism established by
781	the association, either before the policy is issued by the
782	association or during the first 30 days of coverage by the
783	association, and the producing agent who submitted the
784	application to the association is not currently appointed by the
785	insurer, the insurer shall:
786	(I)  Pay to the producing agent of record of the policy,
787	for the first year, an amount that is the greater of the
788	insurer's usual and customary commission for the type of policy
789	written or a fee equal to the usual and customary commission of
790	the association; or
791	(II)  Offer to allow the producing agent of record of the
792	policy to continue servicing the policy for a period of not less
793	than 1 year and offer to pay the agent the greater of the
794	insurer's or the association's usual and customary commission
795	for the type of policy written.
796
797	If the producing agent is unwilling or unable to accept
798	appointment, the new insurer shall pay the agent in accordance
799	with sub-sub-subparagraph (I). Subject to the provisions of s.
800	627.3517, the policies issued by the association must provide
801	that if the association obtains an offer from an authorized
802	insurer to cover the risk at its approved rates under either a
803	standard policy including wind coverage or, if consistent with
804	the insurer's underwriting rules as filed with the department, a
805	basic policy including wind coverage, the risk is no longer
806	eligible for coverage through the association. Upon termination
807	of eligibility, the association shall provide written notice to
808	the policyholder and agent of record stating that the
809	association policy must be canceled as of 60 days after the date
810	of the notice because of the offer of coverage from an
811	authorized insurer. Other provisions of the insurance code
812	relating to cancellation and notice of cancellation do not apply
813	to actions under this sub-subparagraph.
814	f.  When the association enters into a contractual
815	agreement for a take-out plan, the producing agent of record of
816	the association policy is entitled to retain any unearned
817	commission on the policy, and the insurer shall:
818	(I)  Pay to the producing agent of record of the
819	association policy, for the first year, an amount that is the
820	greater of the insurer's usual and customary commission for the
821	type of policy written or a fee equal to the usual and customary
822	commission of the association; or
823	(II)  Offer to allow the producing agent of record of the
824	association policy to continue servicing the policy for a period
825	of not less than 1 year and offer to pay the agent the greater
826	of the insurer's or the association's usual and customary
827	commission for the type of policy written.
828
829	If the producing agent is unwilling or unable to accept
830	appointment, the new insurer shall pay the agent in accordance
831	with sub-sub-subparagraph (I).
832	6.a.  The plan of operation may authorize the formation of
833	a private nonprofit corporation, a private nonprofit
834	unincorporated association, a partnership, a trust, a limited
835	liability company, or a nonprofit mutual company which may be
836	empowered, among other things, to borrow money by issuing bonds
837	or by incurring other indebtedness and to accumulate reserves or
838	funds to be used for the payment of insured catastrophe losses.
839	The plan may authorize all actions necessary to facilitate the
840	issuance of bonds, including the pledging of assessments or
841	other revenues.
842	b.  Any entity created under this subsection, or any entity
843	formed for the purposes of this subsection, may sue and be sued,
844	may borrow money; issue bonds, notes, or debt instruments;
845	pledge or sell assessments, market equalization surcharges and
846	other surcharges, rights, premiums, contractual rights,
847	projected recoveries from the Florida Hurricane Catastrophe
848	Fund, other reinsurance recoverables, and other assets as
849	security for such bonds, notes, or debt instruments; enter into
850	any contracts or agreements necessary or proper to accomplish
851	such borrowings; and take other actions necessary to carry out
852	the purposes of this subsection. The association may issue bonds
853	or incur other indebtedness, or have bonds issued on its behalf
854	by a unit of local government pursuant to subparagraph (6)(g)2.,
855	in the absence of a hurricane or other weather-related event,
856	upon a determination by the association subject to approval by
857	the department that such action would enable it to efficiently
858	meet the financial obligations of the association and that such
859	financings are reasonably necessary to effectuate the
860	requirements of this subsection. Any such entity may accumulate
861	reserves and retain surpluses as of the end of any association
862	year to provide for the payment of losses incurred by the
863	association during that year or any future year. The association
864	shall incorporate and continue the plan of operation and
865	articles of agreement in effect on the effective date of chapter
866	76-96, Laws of Florida, to the extent that it is not
867	inconsistent with chapter 76-96, and as subsequently modified
868	consistent with chapter 76-96. The board of directors and
869	officers currently serving shall continue to serve until their
870	successors are duly qualified as provided under the plan. The
871	assets and obligations of the plan in effect immediately prior
872	to the effective date of chapter 76-96 shall be construed to be
873	the assets and obligations of the successor plan created herein.
874	c.  In recognition of s. 10, Art. I of the State
875	Constitution, prohibiting the impairment of obligations of
876	contracts, it is the intent of the Legislature that no action be
877	taken whose purpose is to impair any bond indenture or financing
878	agreement or any revenue source committed by contract to such
879	bond or other indebtedness issued or incurred by the association
880	or any other entity created under this subsection.
881	7.  On such coverage, an agent's remuneration shall be that
882	amount of money payable to the agent by the terms of his or her
883	contract with the company with which the business is placed.
884	However, no commission will be paid on that portion of the
885	premium which is in excess of the standard premium of that
886	company.
887	8.  Subject to approval by the department, the association
888	may establish different eligibility requirements and operational
889	procedures for any line or type of coverage for any specified
890	eligible area or portion of an eligible area if the board
891	determines that such changes to the eligibility requirements and
892	operational procedures are justified due to the voluntary market
893	being sufficiently stable and competitive in such area or for
894	such line or type of coverage and that consumers who, in good
895	faith, are unable to obtain insurance through the voluntary
896	market through ordinary methods would continue to have access to
897	coverage from the association. When coverage is sought in
898	connection with a real property transfer, such requirements and
899	procedures shall not provide for an effective date of coverage
900	later than the date of the closing of the transfer as
901	established by the transferor, the transferee, and, if
902	applicable, the lender.
903	9.  Notwithstanding any other provision of law:
904	a.  The pledge or sale of, the lien upon, and the security
905	interest in any rights, revenues, or other assets of the
906	association created or purported to be created pursuant to any
907	financing documents to secure any bonds or other indebtedness of
908	the association shall be and remain valid and enforceable,
909	notwithstanding the commencement of and during the continuation
910	of, and after, any rehabilitation, insolvency, liquidation,
911	bankruptcy, receivership, conservatorship, reorganization, or
912	similar proceeding against the association under the laws of
913	this state or any other applicable laws.
914	b.  No such proceeding shall relieve the association of its
915	obligation, or otherwise affect its ability to perform its
916	obligation, to continue to collect, or levy and collect,
917	assessments, market equalization or other surcharges, projected
918	recoveries from the Florida Hurricane Catastrophe Fund,
919	reinsurance recoverables, or any other rights, revenues, or
920	other assets of the association pledged.
921	c.  Each such pledge or sale of, lien upon, and security
922	interest in, including the priority of such pledge, lien, or
923	security interest, any such assessments, emergency assessments,
924	market equalization or renewal surcharges, projected recoveries
925	from the Florida Hurricane Catastrophe Fund, reinsurance
926	recoverables, or other rights, revenues, or other assets which
927	are collected, or levied and collected, after the commencement
928	of and during the pendency of or after any such proceeding shall
929	continue unaffected by such proceeding.
930	d.  As used in this subsection, the term "financing
931	documents" means any agreement, instrument, or other document
932	now existing or hereafter created evidencing any bonds or other
933	indebtedness of the association or pursuant to which any such
934	bonds or other indebtedness has been or may be issued and
935	pursuant to which any rights, revenues, or other assets of the
936	association are pledged or sold to secure the repayment of such
937	bonds or indebtedness, together with the payment of interest on
938	such bonds or such indebtedness, or the payment of any other
939	obligation of the association related to such bonds or
940	indebtedness.
941	e.  Any such pledge or sale of assessments, revenues,
942	contract rights or other rights or assets of the association
943	shall constitute a lien and security interest, or sale, as the
944	case may be, that is immediately effective and attaches to such
945	assessments, revenues, contract, or other rights or assets,
946	whether or not imposed or collected at the time the pledge or
947	sale is made. Any such pledge or sale is effective, valid,
948	binding, and enforceable against the association or other entity
949	making such pledge or sale, and valid and binding against and
950	superior to any competing claims or obligations owed to any
951	other person or entity, including policyholders in this state,
952	asserting rights in any such assessments, revenues, contract, or
953	other rights or assets to the extent set forth in and in
954	accordance with the terms of the pledge or sale contained in the
955	applicable financing documents, whether or not any such person
956	or entity has notice of such pledge or sale and without the need
957	for any physical delivery, recordation, filing, or other action.
958	f.  There shall be no liability on the part of, and no
959	cause of action of any nature shall arise against, any member
960	insurer or its agents or employees, agents or employees of the
961	association, members of the board of directors of the
962	association, or the department or its representatives, for any
963	action taken by them in the performance of their duties or
964	responsibilities under this subsection. Such immunity does not
965	apply to actions for breach of any contract or agreement
966	pertaining to insurance, or any willful tort.
967	Section 14.  Effective upon this act becoming a law,
968	subsection (7) is added to section 627.4133, Florida Statutes,
969	to read:
970	627.4133  Notice of cancellation, nonrenewal, or renewal
971	premium.--
972	(7)  An insurer may not cancel or nonrenew a residential
973	property insurance policy, based on only one claim under the
974	policy, or for any other reason other than a lawful underwriting
975	reason as filed with the office, for a policyholder who has been
976	continuously insured with that insurer or with an insurer within
977	the same insurance group for 10 years or longer.
978	Section 15.  Subsection (1) of section 627.4145, Florida
979	Statutes, is amended to read:
980	627.4145  Readable language in insurance policies.--
981	(1)  Every policy shall be readable as required by this
982	section. For the purposes of this section, the term "policy"
983	means a policy form or endorsement. A policy is deemed readable
984	if:
985	(a)  The text achieves a minimum score of 50 45 on the
986	Flesch reading ease test as computed in subsection (5) or an
987	equivalent score on any other test comparable in result and
988	approved by the office.;
989	(b)  It uses layout and spacing which separate the
990	paragraphs from each other and from the border of the paper.;
991	(c)  It has section titles that are captioned in boldfaced
992	type or that otherwise stand out significantly from the text.;
993	(d)  It avoids the use of unnecessarily long, complicated,
994	or obscure words, sentences, paragraphs, or constructions.;
995	(e)  The style, arrangement, and overall appearance of the
996	policy give no undue prominence to any portion of the text of
997	the policy or to any endorsements or riders.; and
998	(f)  It contains a table of contents or an index of the
999	principal sections of the policy, if the policy has more than
1000	3,000 words or more than three pages.
1001	Section 16.  Section 627.41494, Florida Statutes, is
1002	created to read:
1003	627.41494  Consumer participation in rate review.--
1004	(1)  Upon the filing of a proposed rate change for
1005	residential property insurance by an insurer under s. 627.062,
1006	which filing would, pursuant to standards determined by the
1007	office, result in an average statewide increase of 10 percent or
1008	more as compared to the rates in effect at that time or the
1009	rates in effect 12 months prior to the proposed effective date,
1010	the insurer shall mail notice of such filing to each of its
1011	policyholders or members.
1012	(2)  The rate filing shall be available for public
1013	inspection. If any policyholder or member requests the office
1014	within 30 days after the mailing of such notification pursuant
1015	to subsection (1) to hold a hearing, the office shall hold a
1016	hearing within 30 days after such request. Any consumer advocacy
1017	group or the Public Counsel under chapter 11 may participate in
1018	such hearing, and the commission may adopt rules governing such
1019	participation.
1020	(3)  For purposes of this section, the term "consumer
1021	advocacy group" means an organization with a membership of at
1022	least 1,000 individuals, the purpose of which is to represent
1023	the best interests of the public in matters relating, but not
1024	limited, to insurance rate filings before the office. The
1025	consumer advocacy group may:
1026	(a)  Appear in any proceeding or action before the
1027	department or office or appear in any proceeding before the
1028	Division of Administrative Hearings relating to rate filings
1029	subject to subsection (1).
1030	(b)  Have access to and use of all files, records, and data
1031	of the office relating to such rate filings.
1032	(c)  Examine such rate and form filings submitted to the
1033	office.
1034	(d)  Recommend to the office any position deemed by the
1035	group to be in the best interest of the public in matters
1036	relating to such rate filings.
1037
1038	This subsection does not limit the rights of a consumer advocacy
1039	group to have access to records of the office as otherwise
1040	available pursuant to law.
1041	(4)  The office shall order the insurer to pay the
1042	reasonable costs of the consumer advocacy group if the office
1043	determines that the consumer advocacy group made a relevant and
1044	substantial contribution to the final order on the rate filing.
1045	In determining the reasonable costs the insurer shall pay the
1046	consumer advocacy group, the office shall consider, among other
1047	things, the time, labor, fees, and expenses incurred by the
1048	advocacy group.
1049	Section 17.  Effective upon this act becoming a law,
1050	subsection (3) and paragraph (b) of subsection (7) of section
1051	627.701, Florida Statutes, are amended to read:
1052	627.701  Liability of insureds; coinsurance; deductibles.--
1053	(3)(a)  A policy of residential property insurance shall
1054	include a deductible amount applicable to hurricane or wind
1055	losses no lower than $500 and no higher than 5 2 percent of the
1056	policy dwelling limits with respect to personal lines
1057	residential risks, and no higher than 3 percent of the policy
1058	limits with respect to commercial lines residential risks;
1059	however, if a risk was covered on August 24, 1992, under a
1060	policy having a higher deductible than the deductibles allowed
1061	by this paragraph, a policy covering such risk may include a
1062	deductible no higher than the deductible in effect on August 24,
1063	1992. Notwithstanding the other provisions of this paragraph, a
1064	personal lines residential policy covering a risk valued at
1065	$50,000 or less may include a deductible amount attributable to
1066	hurricane or wind losses no lower than $250, and a personal
1067	lines residential policy covering a risk valued at $100,000 or
1068	more may include a deductible amount attributable to hurricane
1069	or wind losses no higher than 5 percent of the policy limits
1070	unless subject to a higher deductible on August 24, 1992;
1071	however, no maximum deductible is required with respect to a
1072	personal lines residential policy covering a risk valued at more
1073	than $500,000. An insurer may require a higher deductible,
1074	provided such deductible is the same as or similar to a
1075	deductible program lawfully in effect on June 14, 1995. In
1076	addition to the deductible amounts authorized by this paragraph,
1077	an insurer may also offer policies with a copayment provision
1078	under which, after exhaustion of the deductible, the
1079	policyholder is responsible for 10 percent of the next $10,000
1080	of insured hurricane or wind losses.
1081	(b)1.  Except as otherwise provided in this paragraph,
1082	prior to issuing a personal lines residential property insurance
1083	policy on or after March 1, 2005 April 1, 1996, or prior to the
1084	first renewal of a residential property insurance policy on or
1085	after March 1, 2005 April 1, 1996, the insurer must offer
1086	alternative deductible amounts applicable to hurricane or wind
1087	losses equal to $500, 1 percent, and 2 percent, and 5 percent of
1088	the policy dwelling limits, but it need not offer a deductible
1089	expressed as a percentage when that percentage unless the 2
1090	percent deductible is less than $500. The written notice of the
1091	offer shall specify the hurricane or wind deductible to be
1092	applied in the event that the applicant or policyholder fails to
1093	affirmatively choose a hurricane deductible. The insurer must
1094	provide such policyholder with notice of the availability of the
1095	deductible amounts specified in this paragraph in a form
1096	approved by the office in conjunction with each renewal of the
1097	policy. The failure to provide such notice constitutes a
1098	violation of this code but does not affect the coverage provided
1099	under the policy.
1100	2.  This paragraph does not apply with respect to a
1101	deductible program lawfully in effect on June 14, 1995, or to
1102	any similar deductible program, if the deductible program
1103	requires a minimum deductible amount of no less than 1 2 percent
1104	of the policy limits.
1105	3.  With respect to a policy covering a risk with dwelling
1106	limits of at least $100,000, but less than $250,000, the insurer
1107	may, in lieu of offering a policy with a $500 hurricane or wind
1108	deductible as required by subparagraph 1., offer a policy that
1109	the insurer guarantees it will not nonrenew for reasons of
1110	reducing hurricane loss for one renewal period and that contains
1111	up to a 2 percent hurricane or wind deductible as required by
1112	subparagraph 1.
1113	3.4.  With respect to a policy covering a risk with
1114	dwelling limits of $250,000 or more, the insurer need not offer
1115	the $500 hurricane or wind deductible as required by
1116	subparagraph 1., but must, except as otherwise provided in this
1117	subsection, offer the 1 percent, 2 percent, and 5 percent
1118	hurricane deductibles or wind deductible as required by
1119	subparagraph 1.
1120	(c)  In order to provide for the transition from wind
1121	deductibles to hurricane deductibles as required by this
1122	subsection, an insurer is required to provide wind deductibles
1123	meeting the requirements of this subsection until the effective
1124	date of the insurer's first rate filing made after January 1,
1125	1997, and is thereafter required to provide hurricane
1126	deductibles meeting the requirements of this subsection.
1127	(7)
1128	(b)  Notwithstanding the provisions of subsection (3), with
1129	respect to mobile home policies,:
1130	1.  the deductible for hurricane coverage may not exceed 10
1131	percent of the property value if the property is not subject to
1132	any liens and may not exceed 5 percent of the property value if
1133	the property is subject to any liens.
1134	2.  The insurer need not make the offers required by
1135	paragraph (3)(b).
1136	Section 18.  The sum of $50 million is appropriated for
1137	fiscal year 2005-2006 on a nonrecurring basis from the General
1138	Revenue Fund to the Department of Community Affairs in the
1139	special appropriation category "Residential Hurricane Mitigation
1140	Low-Interest Loan Program" for low-interest loans to qualified
1141	owners of residences and qualified owners of mobile homes to
1142	finance efforts to improve the wind resistance of residences to
1143	prevent or reduce losses or reduce the cost of rebuilding after
1144	a disaster with a requirement of repayment by the owner, as
1145	provided in section 7. These funds shall be subject to the
1146	release provisions of chapter 216, Florida Statutes. Up to 0.5
1147	percent of this appropriation may be used by the department for
1148	administration of the loan program.
1149	Section 19.  Except as otherwise expressly provided in this
1150	act, this act shall take effect July 1, 2005.

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