HB 1209

1	A bill to be entitled
2	An act relating to the Florida Hurricane Catastrophe Fund;
3	amending s. 215.555, F.S.; revising findings and purposes;
4	revising definitions; changing the name of the fund to the
5	Florida Hurricane Insurance Fund; revising requirements
6	for reimbursement contracts; providing requirements,
7	procedures, and methodologies for policyholders to pay
8	premiums to insurers, insurers to remit premiums to the
9	fund, insurers to reimburse policyholders for hurricane
10	losses, and the state to reimburse insurers from the fund
11	for payments to policyholders; deleting a required annual
12	appropriation from the investment income of the Florida
13	Hurricane Catastrophe Fund for certain purposes; providing
14	coverage limitations; providing exceptions; providing for
15	discounted premiums to certain insurers under certain
16	circumstances; deleting conflicting provisions; revising
17	reimbursement premium provisions to conform; renaming the
18	Florida Hurricane Catastrophe Fund Finance Corporation as
19	the Florida Hurricane Insurance Fund Finance Corporation;
20	making conforming changes; amending ss. 215.556, 215.559,
21	624.424, 624.5091, 627.062, 627.0628, 627.0629, 627.351,
22	627.701, and 627.7077, F.S., to conform; amending s.
23	109(3), ch. 2000-141, Laws of Florida; deleting a
24	limitation subjecting certain portions of coastal counties
25	to certain debris requirements adopted by the Florida
26	Building Commission; providing an effective date.
27
28	Be It Enacted by the Legislature of the State of Florida:
29
30	Section 1.  Section 215.555, Florida Statutes, is amended
31	to read:
32	215.555  Florida Hurricane Insurance Catastrophe Fund.--
33	(1)  FINDINGS AND PURPOSE.--The Legislature finds and
34	declares as follows:
35	(a)  There is a compelling state interest in maintaining a
36	viable and orderly private sector market for property insurance
37	in this state. To the extent that the private sector is unable
38	to maintain a viable and orderly market for property insurance
39	in this state, state actions to maintain such a viable and
40	orderly market are valid and necessary exercises of the police
41	power.
42	(b)  As a result of unprecedented levels of catastrophic
43	insured losses in recent years, and especially as a result of
44	Hurricane Andrew and the 2004 and 2005 hurricane seasons,
45	numerous insurers have determined that in order to protect their
46	solvency, it is necessary for them to reduce their exposure to
47	hurricane losses. Also as a result of these events, world
48	reinsurance capacity has significantly contracted, increasing
49	the pressure on insurers to reduce their catastrophic exposures.
50	(c)  Mortgages require reliable property insurance, and the
51	unavailability of reliable property insurance would therefore
52	make most real estate transactions impossible. In addition, the
53	public health, safety, and welfare demand that structures
54	damaged or destroyed in a catastrophe be repaired or
55	reconstructed as soon as possible. Therefore, the inability of
56	the private sector insurance and reinsurance markets to maintain
57	sufficient capacity to enable residents of this state to obtain
58	property insurance coverage in the private sector endangers the
59	economy of the state and endangers the public health, safety,
60	and welfare. Accordingly, state action to correct for this
61	inability of the private sector constitutes a valid and
62	necessary public and governmental purpose.
63	(d)  The insolvencies and financial impairments resulting
64	from Hurricane Andrew and the 2004 and 2005 hurricane seasons
65	demonstrate that many property insurers are unable or unwilling
66	to maintain reserves, surplus, and reinsurance sufficient to
67	enable the insurers to pay all claims in full in the event of a
68	catastrophe. State action is therefore necessary to protect the
69	public from an insurer's unwillingness or inability to maintain
70	sufficient reserves, surplus, and reinsurance.
71	(e)  A state program to provide a stable and ongoing source
72	of coverage reimbursement to insurers for a substantial portion
73	of their catastrophic hurricane losses for citizens of this
74	state will create additional insurance capacity sufficient to
75	ameliorate the current dangers to the state's economy and to the
76	public health, safety, and welfare.
77	(f)  It is essential to the functioning of a state program
78	to increase insurance capacity that revenues received be exempt
79	from federal taxation. It is therefore the intent of the
80	Legislature that this program be structured as a state trust
81	fund under the direction and control of the State Board of
82	Administration and operate exclusively for the purpose of
83	protecting and advancing the state's interest in maintaining
84	insurance capacity in this state.
85	(g)  Hurricane Andrew, which caused insured and uninsured
86	losses in excess of $20 billion, and the 2004 hurricane season,
87	which caused insured losses in excess of $42 billion, will
88	likely not be the last major windstorm to strike Florida.
89	Recognizing that a future wind catastrophe could cause damages
90	in excess of $60 billion, especially if a major urban area or
91	series of urban areas were hit, it is the intent of the
92	Legislature to balance equitably its concerns about mitigation
93	of hurricane impact, insurance affordability and availability,
94	and the risk of insurer and joint underwriting association
95	insolvency, as well as assessment and bonding limitations.
96	(2)  DEFINITIONS.--As used in this section:
97	(a)(m)  "Actual claims-paying capacity" means the sum of
98	the balance of the fund as of December 31 of a contract year,
99	plus any reinsurance purchased by the fund, plus the amount the
100	board is able to raise through the issuance of revenue bonds
101	under subsection (6).
102	(b)(a)  "Actuarially indicated" means, with respect to
103	premiums paid to by insurers for reimbursement provided by the
104	fund, an amount determined according to principles of actuarial
105	science to be adequate, but not excessive, in the aggregate, to
106	pay current and future obligations and expenses of the fund,
107	including additional amounts if needed to pay debt service on
108	revenue bonds issued under this section and to provide required
109	debt service coverage in excess of the amounts required to pay
110	actual debt service on revenue bonds issued under subsection
111	(6), and determined according to principles of actuarial science
112	to reflect each insurer's relative exposure to hurricane losses.
113	(c)(g)  "Bond" means any bond, debenture, note, or other
114	evidence of financial indebtedness issued under this section.
115	(d)(n)  "Corporation" means the Florida Hurricane Insurance
116	Catastrophe Fund Finance Corporation created in paragraph
117	(6)(d).
118	(e)(b)  "Covered event" means any one storm declared to be
119	a hurricane by the National Hurricane Center, which storm causes
120	insured losses in this state.
121	(f)(c)  "Covered policy" means any hurricane insurance
122	policy covering residential property in this state, including,
123	but not limited to, any homeowner's, mobile home owner's, farm
124	owner's, condominium association, condominium unit owner's,
125	tenant's, or apartment building policy, or any other policy
126	covering a residential structure or its contents issued by any
127	authorized insurer, including the Citizens Property Insurance
128	Corporation and any joint underwriting association or similar
129	entity created pursuant to law. The term "covered policy"
130	includes any collateral protection insurance policy covering
131	personal residences which protects both the borrower's and the
132	lender's financial interests, in an amount at least equal to the
133	coverage for the dwelling in place under the lapsed homeowner's
134	policy, if such policy can be accurately reported as required in
135	subsection (5). Additionally, covered policies include policies
136	covering the peril of wind removed from the Florida Residential
137	Property and Casualty Joint Underwriting Association or from the
138	Citizens Property Insurance Corporation, created pursuant to s.
139	627.351(6), or from the Florida Windstorm Underwriting
140	Association, created pursuant to s. 627.351(2), by an authorized
141	insurer under the terms and conditions of an executed assumption
142	agreement between the authorized insurer and such association or
143	Citizens Property Insurance Corporation. Each assumption
144	agreement between the association and such authorized insurer or
145	Citizens Property Insurance Corporation must be approved by the
146	Office of Insurance Regulation prior to the effective date of
147	the assumption, and the Office of Insurance Regulation must
148	provide written notification to the board within 15 working days
149	after such approval. "Covered policy" does not include any
150	policy that excludes wind coverage or hurricane coverage or any
151	reinsurance agreement and does not include any policy otherwise
152	meeting this definition which is issued by a surplus lines
153	insurer or a reinsurer. All commercial residential excess
154	policies and all deductible buy-back policies that, based on
155	sound actuarial principles, require individual ratemaking shall
156	be excluded by rule if the actuarial soundness of the fund is
157	not jeopardized. For this purpose, the term "excess policy"
158	means a policy that provides insurance protection for large
159	commercial property risks and that provides a layer of coverage
160	above a primary layer insured by another insurer.
161	(g)(h)  "Debt service" means the amount required in any
162	fiscal year to pay the principal of, redemption premium, if any,
163	and interest on revenue bonds and any amounts required by the
164	terms of documents authorizing, securing, or providing liquidity
165	for revenue bonds necessary to maintain in effect any such
166	liquidity or security arrangements.
167	(h)(i)  "Debt service coverage" means the amount, if any,
168	required by the documents under which revenue bonds are issued,
169	which amount is to be received in any fiscal year in excess of
170	the amount required to pay debt service for such fiscal year.
171	(i)(l)  "Estimated claims-paying capacity" means the sum of
172	the projected year-end balance of the fund as of December 31 of
173	a contract year, plus any reinsurance purchased by the fund,
174	plus the board's estimate of the board's borrowing capacity.
175	(j)  "Local government" means a unit of general purpose
176	local government as defined in s. 218.31(2).
177	(k)(d)  "Losses" means direct incurred losses under covered
178	policies, which shall include losses for additional living
179	expenses not to exceed 40 percent of the insured value of a
180	residential structure or its contents and shall exclude loss
181	adjustment expenses. "Losses" does not include losses for fair
182	rental value, loss of use, or business interruption losses.
183	(l)(k)  "Pledged revenues" means all or any portion of
184	revenues to be derived from reimbursement premiums under
185	subsection (5) or from emergency assessments under paragraph
186	(6)(b), as determined by the board.
187	(e)  "Retention" means the amount of losses below which an
188	insurer is not entitled to reimbursement from the fund. An
189	insurer's retention shall be calculated as follows:
190	1.  The board shall calculate and report to each insurer
191	the retention multiples for that year. For the contract year
192	beginning June 1, 2005, the retention multiple shall be equal to
193	$4.5 billion divided by the total estimated reimbursement
194	premium for the contract year; for subsequent years, the
195	retention multiple shall be equal to $4.5 billion, adjusted
196	based upon the reported exposure from the prior contract year to
197	reflect the percentage growth in exposure to the fund for
198	covered policies since 2004, divided by the total estimated
199	reimbursement premium for the contract year. Total reimbursement
200	premium for purposes of the calculation under this subparagraph
201	shall be estimated using the assumption that all insurers have
202	selected the 90-percent coverage level.
203	2.  The retention multiple as determined under subparagraph
204	1. shall be adjusted to reflect the coverage level elected by
205	the insurer. For insurers electing the 90-percent coverage
206	level, the adjusted retention multiple is 100 percent of the
207	amount determined under subparagraph 1. For insurers electing
208	the 75-percent coverage level, the retention multiple is 120
209	percent of the amount determined under subparagraph 1. For
210	insurers electing the 45-percent coverage level, the adjusted
211	retention multiple is 200 percent of the amount determined under
212	subparagraph 1.
213	3.  An insurer shall determine its provisional retention by
214	multiplying its provisional reimbursement premium by the
215	applicable adjusted retention multiple and shall determine its
216	actual retention by multiplying its actual reimbursement premium
217	by the applicable adjusted retention multiple.
218	4.  For insurers who experience multiple covered events
219	causing loss during the contract year, beginning June 1, 2005,
220	each insurer's full retention shall be applied to each of the
221	covered events causing the two largest losses for that insurer.
222	For each other covered event resulting in losses, the insurer's
223	retention shall be reduced to one-third of the full retention.
224	The reimbursement contract shall provide for the reimbursement
225	of losses for each covered event based on the full retention
226	with adjustments made to reflect the reduced retentions after
227	January 1 of the contract year provided the insurer reports its
228	losses as specified in the reimbursement contract.
229	(m)(f)  "Workers' compensation" includes both workers'
230	compensation and excess workers' compensation insurance.
231	(3)  FLORIDA HURRICANE INSURANCE CATASTROPHE FUND
232	CREATED.--There is created the Florida Hurricane Insurance
233	Catastrophe Fund to be administered by the State Board of
234	Administration. Moneys in the fund may not be expended, loaned,
235	or appropriated except to pay obligations of the fund arising
236	out of reimbursement contracts entered into under subsection
237	(4), payment of debt service on revenue bonds issued under
238	subsection (6), costs of the mitigation program under subsection
239	(7), costs of procuring reinsurance, and costs of administration
240	of the fund. The board shall invest the moneys in the fund
241	pursuant to ss. 215.44-215.52. Except as otherwise provided in
242	this section, earnings from all investments shall be retained in
243	the fund. The board may employ or contract with such staff and
244	professionals as the board deems necessary for the
245	administration of the fund. The board may adopt such rules as
246	are reasonable and necessary to implement this section and shall
247	specify interest due on any delinquent remittances, which
248	interest may not exceed the fund's rate of return plus 5
249	percent. Such rules must conform to the Legislature's specific
250	intent in establishing the fund as expressed in subsection (1),
251	must enhance the fund's potential ability to respond to claims
252	for covered events, must contain general provisions so that the
253	rules can be applied with reasonable flexibility so as to
254	accommodate insurers in situations of an unusual nature or where
255	undue hardship may result, except that such flexibility may not
256	in any way impair, override, supersede, or constrain the public
257	purpose of the fund, and must be consistent with sound insurance
258	practices. The board may, by rule, provide for the exemption
259	from subsections (4) and (5) of insurers writing covered
260	policies with less than $10 million in aggregate exposure for
261	covered policies if the exemption does not affect the actuarial
262	soundness of the fund.
263	(4)  REIMBURSEMENT CONTRACTS.--
264	(a)  The board shall enter into a contract with each
265	insurer writing hurricane-covered covered policies in this state
266	to provide to the insurer the reimbursement described in
267	paragraphs (b) and (d), in exchange for the reimbursement
268	premium paid into the fund under subsection (5). As a condition
269	of doing business in this state, each such insurer shall enter
270	into such a contract.
271	(b)1.  The contract shall contain a promise by the board to
272	reimburse the insurer for losses as provided in this paragraph
273	as a result of a covered event 45 percent, 75 percent, or 90
274	percent of its losses from each covered event in excess of the
275	insurer's retention, plus 5 percent of the reimbursed losses to
276	cover loss adjustment expenses.
277	2.  The insurer shall provide hurricane coverage for any
278	policyholder selecting this coverage. The insurer shall collect
279	premiums from policyholders as determined by the state and remit
280	premium collections to the state to be deposited in the Florida
281	Hurricane Insurance Fund must elect one of the percentage
282	coverage levels specified in this paragraph and may, upon
283	renewal of a reimbursement contract, elect a lower percentage
284	coverage level if no revenue bonds issued under subsection (6)
285	after a covered event are outstanding, or elect a higher
286	percentage coverage level, regardless of whether or not revenue
287	bonds are outstanding. All members of an insurer group must
288	elect the same percentage coverage level. Any joint underwriting
289	association, risk apportionment plan, or other entity created
290	under s. 627.351 must elect the 90-percent coverage level.
291	3.  The contract shall provide that reimbursement coverage
292	for any hurricane loss must be paid to the insurer. A
293	policyholder shall submit all claims to the insurer for payment
294	for all related losses.
295	4.  A policyholder shall pay hurricane peril premiums to
296	the insurer, and the insurer shall remit collected premiums to
297	the state.
298	5.  An insurer shall contract with the state to provide
299	hurricane peril coverage to policyholders and provide coverage
300	directly to policyholders for losses as a result of a covered
301	event. The state shall reimburse the insurer from the Florida
302	Hurricane Insurance Fund for all reimbursements made by the
303	insurer to policyholders as a result of a covered event.
304	6.  Premiums paid by a policyholder must provide, through
305	the fund, a maximum coverage of $500,000.
306	7.  A policyholder may select hurricane deductibles of 1,
307	2, 5, or 10 percent.
308	8.  An insurer may choose to provide additional coverage
309	beyond the fund's coverage of $500,000 for its policyholders.
310	9.  An insurer shall provide claims adjustment and
311	reimbursement for losses directly to its policyholders. Once
312	reimbursement amounts have been determined for policyholders, an
313	insurer shall submit a request for reimbursement through the
314	fund for payments made to policyholders for hurricane loss.
315	10.  The $500,000 maximum coverage shall be adjusted every
316	5 years based on the home rate index.
317	11.  Discounted premiums shall be provided by the fund for
318	an insurer who encourages its policyholders to engage in loss
319	mitigation following damage to or loss of property amounts shall
320	not be reduced by reinsurance paid or payable to the insurer
321	from other sources.
322	(c)1.  The contract shall also provide that the obligation
323	of the board with respect to all contracts covering a particular
324	contract year shall not exceed the actual claims-paying capacity
325	of the fund up to a limit of $15 billion for that contract year
326	adjusted based upon the reported exposure from the prior
327	contract year to reflect the percentage growth in exposure to
328	the fund for covered policies since 2003, provided the dollar
329	growth in the limit may not increase in any year by an amount
330	greater than the dollar growth of the cash balance which
331	occurred over the prior calendar year.
332	2.  In May before the start of the upcoming contract year
333	and in October during the contract year, the board shall publish
334	in the Florida Administrative Weekly a statement of the fund's
335	estimated borrowing capacity and the projected balance of the
336	fund as of December 31. After the end of each calendar year, the
337	board shall notify insurers of the estimated borrowing capacity
338	and the balance of the fund as of December 31 to provide
339	insurers with data necessary to assist them in determining their
340	actuarially sound premiums retention and projected payout from
341	the fund for loss reimbursement purposes. In conjunction with
342	the development of the premium formula, as provided for in
343	subsection (5), the board shall publish factors or multiples
344	that assist insurers in determining their retention and
345	projected payout for the next contract year. For all regulatory
346	and reinsurance purposes, an insurer may calculate its projected
347	payout from the fund as its share of the total fund premium for
348	the current contract year multiplied by the sum of the projected
349	balance of the fund as of December 31 and the estimated
350	borrowing capacity for that contract year as reported under this
351	subparagraph.
352	(d)1.  For purposes of determining potential liability and
353	to aid in the sound administration of the fund, the contract
354	shall require each insurer to report such insurer's losses from
355	each covered event on an interim basis, as directed by the
356	board. The contract shall require the insurer to report to the
357	board no later than December 31 of each year, and quarterly
358	thereafter, its reimbursable losses from covered events for the
359	year. The contract shall require the board to determine and pay,
360	as soon as practicable after receiving these reports of
361	reimbursable losses, the initial amount of reimbursement due and
362	adjustments to this amount based on later loss information. The
363	adjustments to reimbursement amounts shall require the board to
364	pay, or the insurer to return, amounts reflecting the most
365	recent calculation of losses.
366	2.  In determining reimbursements pursuant to this
367	subsection, the contract shall provide that the board shall:
368	a.  First reimburse insurers within 90 days after reporting
369	policyholder-paid losses as a result of a covered event writing
370	covered policies, which insurers are in full compliance with
371	this section and have petitioned the Office of Insurance
372	Regulation and qualified as limited apportionment companies
373	under s. 627.351(2)(b)3. The amount of such reimbursement shall
374	be the lesser of $10 million or an amount equal to 10 times the
375	insurer's reimbursement premium for the current year. The amount
376	of reimbursement paid under this sub-subparagraph may not exceed
377	the full amount of reimbursement promised in the reimbursement
378	contract. This sub-subparagraph does not apply with respect to
379	any contract year in which the year-end projected cash balance
380	of the fund, exclusive of any bonding capacity of the fund,
381	exceeds $2 billion. Only one member of any insurer group may
382	receive reimbursement under this sub-subparagraph.
383	b.  Next pay to each insurer such insurer's projected
384	payout, which is the amount of reimbursement it is owed, up to
385	an amount equal to the insurer's share of the actual premium
386	paid for that contract year, multiplied by the actual claims-
387	paying capacity available for that contract year; provided,
388	entities created pursuant to s. 627.351 shall be further
389	reimbursed in accordance with sub-subparagraph c.
390	c.  Thereafter, establish the prorated reimbursement level
391	at the highest level for which any remaining fund balance or
392	bond proceeds are sufficient to reimburse entities created
393	pursuant to s. 627.351 based on reimbursable losses exceeding
394	the amounts payable pursuant to sub-subparagraph b. for the
395	current contract year.
396	(e)1.  Except as provided in subparagraphs 2. and 3., the
397	contract shall provide that if an insurer demonstrates to the
398	board that it is likely to qualify for reimbursement under the
399	contract, and demonstrates to the board that the immediate
400	receipt of moneys from the board is likely to prevent the
401	insurer from becoming insolvent, the board shall advance the
402	insurer, at market interest rates, the amounts necessary to
403	maintain the solvency of the insurer, up to 50 percent of the
404	board's estimate of the reimbursement due the insurer. The
405	insurer's reimbursement shall be reduced by an amount equal to
406	the amount of the advance and interest thereon.
407	2.  With respect only to an entity created under s.
408	627.351, the contract shall also provide that the board may,
409	upon application by such entity, advance to such entity, at
410	market interest rates, up to 90 percent of the lesser of:
411	a.  The board's estimate of the amount of reimbursement due
412	to such entity; or
413	b.  The entity's share of the actual reimbursement premium
414	paid for that contract year, multiplied by the currently
415	available liquid assets of the fund. In order for the entity to
416	qualify for an advance under this subparagraph, the entity must
417	demonstrate to the board that the advance is essential to allow
418	the entity to pay claims for a covered event and the board must
419	determine that the fund's assets are sufficient and are
420	sufficiently liquid to allow the board to make an advance to the
421	entity and still fulfill the board's reimbursement obligations
422	to other insurers. The entity's final reimbursement for any
423	contract year in which an advance has been made under this
424	subparagraph must be reduced by an amount equal to the amount of
425	the advance and any interest on such advance. In order to
426	determine what amounts, if any, are due the entity, the board
427	may require the entity to report its exposure and its losses at
428	any time to determine retention levels and reimbursements
429	payable.
430	3.  The contract shall also provide specifically and solely
431	with respect to any limited apportionment company under s.
432	627.351(2)(b)3. that the board may, upon application by such
433	company, advance to such company the amount of the estimated
434	reimbursement payable to such company as calculated pursuant to
435	paragraph (d), at market interest rates, if the board determines
436	that the fund's assets are sufficient and are sufficiently
437	liquid to permit the board to make an advance to such company
438	and at the same time fulfill its reimbursement obligations to
439	the insurers that are participants in the fund. Such company's
440	final reimbursement for any contract year in which an advance
441	pursuant to this subparagraph has been made shall be reduced by
442	an amount equal to the amount of the advance and interest
443	thereon. In order to determine what amounts, if any, are due to
444	such company, the board may require such company to report its
445	exposure and its losses at such times as may be required to
446	determine retention levels and loss reimbursements payable.
447	(e)(f)  In order to ensure that insurers have properly
448	reported the insured values on which the reimbursement premium
449	is based and to ensure that insurers have properly reported the
450	losses for which reimbursements have been made, the board shall
451	inspect, examine, and verify the records of each insurer's
452	covered policies at such times as the board deems appropriate
453	and according to standards established by rule for the specific
454	purpose of validating the accuracy of exposures and losses
455	required to be reported under the terms and conditions of the
456	reimbursement contract. The costs of the examinations shall be
457	borne by the board. However, in order to remove any incentive
458	for an insurer to delay preparations for an examination, the
459	board shall be reimbursed by the insurer for any examination
460	expenses incurred in addition to the usual and customary costs
461	of the examination, which additional expenses were incurred as a
462	result of an insurer's failure, despite proper notice, to be
463	prepared for the examination or as a result of an insurer's
464	failure to provide requested information while the examination
465	is in progress. If the board finds any insurer's records or
466	other necessary information to be inadequate or inadequately
467	posted, recorded, or maintained, the board may employ experts to
468	reconstruct, rewrite, record, post, or maintain such records or
469	information, at the expense of the insurer being examined, if
470	such insurer has failed to maintain, complete, or correct such
471	records or deficiencies after the board has given the insurer
472	notice and a reasonable opportunity to do so. Any information
473	contained in an examination report, which information is
474	described in s. 215.557, is confidential and exempt from the
475	provisions of s. 119.07(1) and s. 24(a), Art. I of the State
476	Constitution, as provided in s. 215.557. Nothing in this
477	paragraph expands the exemption in s. 215.557.
478	(f)(g)  The contract shall provide that in the event of the
479	insolvency of an insurer, the fund shall pay directly to the
480	Florida Insurance Guaranty Association for the benefit of
481	Florida policyholders of the insurer the net amount of all
482	reimbursement moneys owed to the insurer. As used in this
483	paragraph, the term "net amount of all reimbursement moneys"
484	means that amount which remains after reimbursement for:
485	1.  Preliminary or duplicate payments owed to private
486	reinsurers or other inuring reinsurance payments to private
487	reinsurers that satisfy statutory or contractual obligations of
488	the insolvent insurer attributable to covered events to such
489	reinsurers; or
490	2.  Funds owed to a bank or other financial institution to
491	cover obligations of the insolvent insurer under a credit
492	agreement that assists the insolvent insurer in paying claims
493	attributable to covered events.
494
495	The private reinsurers, banks, or other financial institutions
496	shall be reimbursed or otherwise paid prior to payment to the
497	Florida Insurance Guaranty Association, notwithstanding any law
498	to the contrary. The guaranty association shall pay all claims
499	up to the maximum amount permitted by chapter 631; thereafter,
500	any remaining moneys shall be paid pro rata to claims not fully
501	satisfied. This paragraph does not apply to a joint underwriting
502	association, risk apportionment plan, or other entity created
503	under s. 627.351.
504	(5)  REIMBURSEMENT PREMIUMS.--
505	(a)  Each reimbursement contract shall require the insurer
506	to annually pay to the fund an actuarially indicated premium for
507	the reimbursement of hurricane losses.
508	(b)  The State Board of Administration shall select an
509	independent consultant to develop a formula for determining the
510	actuarially indicated premium to be paid to the fund. The
511	formula shall specify, for each zip code or other limited
512	geographical area, the amount of premium to be paid by an
513	insurer for each $1,000 of insured value under covered policies
514	in that zip code or other area. In establishing premiums, the
515	board shall consider the coverage elected under paragraph (4)(b)
516	and any factors that tend to enhance the actuarial
517	sophistication of ratemaking for the fund, including
518	deductibles, type of construction, type of coverage provided,
519	relative concentration of risks, loss mitigation efforts, a
520	factor providing for more rapid cash buildup in the fund until
521	the fund capacity for a single hurricane season is fully funded,
522	and other such factors deemed by the board to be appropriate.
523	The formula may provide for a procedure to determine the
524	premiums to be paid by new insurers that begin writing covered
525	policies after the beginning of a contract year, taking into
526	consideration when the insurer starts writing covered policies,
527	the potential exposure of the insurer, the potential exposure of
528	the fund, the administrative costs to the insurer and to the
529	fund, and any other factors deemed appropriate by the board. The
530	formula must be approved by unanimous vote of the board. The
531	board may, at any time, revise the formula pursuant to the
532	procedure provided in this paragraph.
533	(c)  No later than September 1 of each year, each insurer
534	shall notify the board of its insured values under covered
535	policies by zip code, as of June 30 of that year. On the basis
536	of these reports, the board shall calculate the premium due from
537	the insurer, based on the formula adopted under paragraph (b).
538	The insurer shall pay the required annual premium pursuant to a
539	periodic payment plan specified in the contract. The board shall
540	provide for payment of reimbursement premium in periodic
541	installments and for the adjustment of provisional premium
542	installments collected prior to submission of the exposure
543	report to reflect data in the exposure report. The board shall
544	collect interest on late reimbursement premium payments
545	consistent with the assumptions made in developing the premium
546	formula in accordance with paragraph (b).
547	(d)  All premiums paid to the fund under reimbursement
548	contracts shall be treated as premium for approved reinsurance
549	for all accounting and regulatory purposes.
550	(6)  REVENUE BONDS.--
551	(a)  General provisions.--
552	1.  Upon the occurrence of a hurricane and a determination
553	that the moneys in the fund are or will be insufficient to pay
554	reimbursement at the levels promised in the reimbursement
555	contracts, the board may take the necessary steps under
556	paragraph (c) or paragraph (d) for the issuance of revenue bonds
557	for the benefit of the fund. The proceeds of such revenue bonds
558	may be used to make reimbursement payments under reimbursement
559	contracts; to refinance or replace previously existing
560	borrowings or financial arrangements; to pay interest on bonds;
561	to fund reserves for the bonds; to pay expenses incident to the
562	issuance or sale of any bond issued under this section,
563	including costs of validating, printing, and delivering the
564	bonds, costs of printing the official statement, costs of
565	publishing notices of sale of the bonds, and related
566	administrative expenses; or for such other purposes related to
567	the financial obligations of the fund as the board may
568	determine. The term of the bonds may not exceed 30 years. The
569	board may pledge or authorize the corporation to pledge all or a
570	portion of all revenues under subsection (5) and under paragraph
571	(b) to secure such revenue bonds and the board may execute such
572	agreements between the board and the issuer of any revenue bonds
573	and providers of other financing arrangements under paragraph
574	(7)(b) as the board deems necessary to evidence, secure,
575	preserve, and protect such pledge. If reimbursement premiums
576	received under subsection (5) or earnings on such premiums are
577	used to pay debt service on revenue bonds, such premiums and
578	earnings shall be used only after the use of the moneys derived
579	from assessments under paragraph (b). The funds, credit,
580	property, or taxing power of the state or political subdivisions
581	of the state shall not be pledged for the payment of such bonds.
582	The board may also enter into agreements under paragraph (c) or
583	paragraph (d) for the purpose of issuing revenue bonds in the
584	absence of a hurricane upon a determination that such action
585	would maximize the ability of the fund to meet future
586	obligations.
587	2.  The Legislature finds and declares that the issuance of
588	bonds under this subsection is for the public purpose of paying
589	the proceeds of the bonds to insurers, thereby enabling insurers
590	to pay the claims of policyholders to assure that policyholders
591	are able to pay the cost of construction, reconstruction,
592	repair, restoration, and other costs associated with damage to
593	property of policyholders of covered policies after the
594	occurrence of a hurricane. Revenue bonds may not be issued under
595	this subsection until validated under chapter 75. The validation
596	of at least the first obligations incurred pursuant to this
597	subsection shall be appealed to the Supreme Court, to be handled
598	on an expedited basis.
599	(b)  Emergency assessments.--
600	1.  If the board determines that the amount of revenue
601	produced under subsection (5) is insufficient to fund the
602	obligations, costs, and expenses of the fund and the
603	corporation, including repayment of revenue bonds and that
604	portion of the debt service coverage not met by reimbursement
605	premiums, the board shall direct the Office of Insurance
606	Regulation to levy, by order, an emergency assessment on direct
607	premiums for all property and casualty lines of business in this
608	state, including property and casualty business of surplus lines
609	insurers regulated under part VIII of chapter 626, but not
610	including any workers' compensation premiums or medical
611	malpractice premiums. As used in this subsection, the term
612	"property and casualty business" includes all lines of business
613	identified on Form 2, Exhibit of Premiums and Losses, in the
614	annual statement required of authorized insurers by s. 624.424
615	and any rule adopted under this section, except for those lines
616	identified as accident and health insurance and except for
617	policies written under the National Flood Insurance Program. The
618	assessment shall be specified as a percentage of future premium
619	collections and is subject to annual adjustments by the board to
620	reflect changes in premiums subject to assessments collected
621	under this subparagraph in order to meet debt obligations. The
622	same percentage shall apply to all policies in lines of business
623	subject to the assessment issued or renewed during the 12-month
624	period beginning on the effective date of the assessment.
625	2.  A premium is not subject to an annual assessment under
626	this paragraph in excess of 6 percent of premium with respect to
627	obligations arising out of losses attributable to any one
628	contract year, and a premium is not subject to an aggregate
629	annual assessment under this paragraph in excess of 10 percent
630	of premium. An annual assessment under this paragraph shall
631	continue until the revenue bonds issued with respect to which
632	the assessment was imposed are outstanding, including any bonds
633	the proceeds of which were used to refund the revenue bonds,
634	unless adequate provision has been made for the payment of the
635	bonds under the documents authorizing issuance of the bonds.
636	3.  With respect to each insurer collecting premiums that
637	are subject to the assessment, the insurer shall collect the
638	assessment at the same time as it collects the premium payment
639	for each policy and shall remit the assessment collected to the
640	fund or corporation as provided in the order issued by the
641	Office of Insurance Regulation. The office shall verify the
642	accurate and timely collection and remittance of emergency
643	assessments and shall report the information to the board in a
644	form and at a time specified by the board. Each insurer
645	collecting assessments shall provide the information with
646	respect to premiums and collections as may be required by the
647	office to enable the office to monitor and verify compliance
648	with this paragraph.
649	4.  With respect to assessments of surplus lines premiums,
650	each surplus lines agent shall collect the assessment at the
651	same time as the agent collects the surplus lines tax required
652	by s. 626.932, and the surplus lines agent shall remit the
653	assessment to the Florida Surplus Lines Service Office created
654	by s. 626.921 at the same time as the agent remits the surplus
655	lines tax to the Florida Surplus Lines Service Office. The
656	emergency assessment on each insured procuring coverage and
657	filing under s. 626.938 shall be remitted by the insured to the
658	Florida Surplus Lines Service Office at the time the insured
659	pays the surplus lines tax to the Florida Surplus Lines Service
660	Office. The Florida Surplus Lines Service Office shall remit the
661	collected assessments to the fund or corporation as provided in
662	the order levied by the Office of Insurance Regulation. The
663	Florida Surplus Lines Service Office shall verify the proper
664	application of such emergency assessments and shall assist the
665	board in ensuring the accurate and timely collection and
666	remittance of assessments as required by the board. The Florida
667	Surplus Lines Service Office shall annually calculate the
668	aggregate written premium on property and casualty business,
669	other than workers' compensation and medical malpractice,
670	procured through surplus lines agents and insureds procuring
671	coverage and filing under s. 626.938 and shall report the
672	information to the board in a form and at a time specified by
673	the board.
674	5.  Any assessment authority not used for a particular
675	contract year may be used for a subsequent contract year. If,
676	for a subsequent contract year, the board determines that the
677	amount of revenue produced under subsection (5) is insufficient
678	to fund the obligations, costs, and expenses of the fund and the
679	corporation, including repayment of revenue bonds and that
680	portion of the debt service coverage not met by reimbursement
681	premiums, the board shall direct the Office of Insurance
682	Regulation to levy an emergency assessment up to an amount not
683	exceeding the amount of unused assessment authority from a
684	previous contract year or years, plus an additional 4 percent
685	provided that the assessments in the aggregate do not exceed the
686	limits specified in subparagraph 2.
687	6.  The assessments otherwise payable to the corporation
688	under this paragraph shall be paid to the fund unless and until
689	the Office of Insurance Regulation and the Florida Surplus Lines
690	Service Office have received from the corporation and the fund a
691	notice, which shall be conclusive and upon which they may rely
692	without further inquiry, that the corporation has issued bonds
693	and the fund has no agreements in effect with local governments
694	under paragraph (c). On or after the date of the notice and
695	until the date the corporation has no bonds outstanding, the
696	fund shall have no right, title, or interest in or to the
697	assessments, except as provided in the fund's agreement with the
698	corporation.
699	7.  Emergency assessments are not premium and are not
700	subject to the premium tax, to the surplus lines tax, to any
701	fees, or to any commissions. An insurer is liable for all
702	assessments that it collects and must treat the failure of an
703	insured to pay an assessment as a failure to pay the premium. An
704	insurer is not liable for uncollectible assessments.
705	8.  When an insurer is required to return an unearned
706	premium, it shall also return any collected assessment
707	attributable to the unearned premium. A credit adjustment to the
708	collected assessment may be made by the insurer with regard to
709	future remittances that are payable to the fund or corporation,
710	but the insurer is not entitled to a refund.
711	9.  When a surplus lines insured or an insured who has
712	procured coverage and filed under s. 626.938 is entitled to the
713	return of an unearned premium, the Florida Surplus Lines Service
714	Office shall provide a credit or refund to the agent or such
715	insured for the collected assessment attributable to the
716	unearned premium prior to remitting the emergency assessment
717	collected to the fund or corporation.
718	10.  The exemption of medical malpractice insurance
719	premiums from emergency assessments under this paragraph is
720	repealed May 31, 2007, and medical malpractice insurance
721	premiums shall be subject to emergency assessments attributable
722	to loss events occurring in the contract years commencing on
723	June 1, 2007.
724	(c)  Revenue bond issuance through counties or
725	municipalities.--
726	1.  If the board elects to enter into agreements with local
727	governments for the issuance of revenue bonds for the benefit of
728	the fund, the board shall enter into such contracts with one or
729	more local governments, including agreements providing for the
730	pledge of revenues, as are necessary to effect such issuance.
731	The governing body of a county or municipality is authorized to
732	issue bonds as defined in s. 125.013 or s. 166.101 from time to
733	time to fund an assistance program, in conjunction with the
734	Florida Hurricane Insurance Catastrophe Fund, for the purposes
735	set forth in this section or for the purpose of paying the costs
736	of construction, reconstruction, repair, restoration, and other
737	costs associated with damage to properties of policyholders of
738	covered policies due to the occurrence of a hurricane by
739	assuring that policyholders located in this state are able to
740	recover claims under property insurance policies after a covered
741	event.
742	2.  In order to avoid needless and indiscriminate
743	proliferation, duplication, and fragmentation of such assistance
744	programs, any local government may provide for the payment of
745	fund reimbursements, regardless of whether or not the losses for
746	which reimbursement is made occurred within or outside of the
747	territorial jurisdiction of the local government.
748	3.  The state hereby covenants with holders of bonds issued
749	under this paragraph that the state will not repeal or abrogate
750	the power of the board to direct the Office of Insurance
751	Regulation to levy the assessments and to collect the proceeds
752	of the revenues pledged to the payment of such bonds as long as
753	any such bonds remain outstanding unless adequate provision has
754	been made for the payment of such bonds pursuant to the
755	documents authorizing the issuance of such bonds.
756	4.  There shall be no liability on the part of, and no
757	cause of action shall arise against any members or employees of
758	the governing body of a local government for any actions taken
759	by them in the performance of their duties under this paragraph.
760	(d)  Florida Hurricane Insurance Catastrophe Fund Finance
761	Corporation.--
762	1.  In addition to the findings and declarations in
763	subsection (1), the Legislature also finds and declares that:
764	a.  The public benefits corporation created under this
765	paragraph will provide a mechanism necessary for the cost-
766	effective and efficient issuance of bonds. This mechanism will
767	eliminate unnecessary costs in the bond issuance process,
768	thereby increasing the amounts available to pay reimbursement
769	for losses to property sustained as a result of hurricane
770	damage.
771	b.  The purpose of such bonds is to fund reimbursements
772	through the Florida Hurricane Insurance Catastrophe Fund to pay
773	for the costs of construction, reconstruction, repair,
774	restoration, and other costs associated with damage to
775	properties of policyholders of covered policies due to the
776	occurrence of a hurricane.
777	c.  The efficacy of the financing mechanism will be
778	enhanced by the corporation's ownership of the assessments, by
779	the insulation of the assessments from possible bankruptcy
780	proceedings, and by covenants of the state with the
781	corporation's bondholders.
782	2.a.  There is created a public benefits corporation, which
783	is an instrumentality of the state, to be known as the Florida
784	Hurricane Insurance Catastrophe Fund Finance Corporation.
785	b.  The corporation shall operate under a five-member board
786	of directors consisting of the Governor or a designee, the Chief
787	Financial Officer or a designee, the Attorney General or a
788	designee, the director of the Division of Bond Finance of the
789	State Board of Administration, and the senior employee of the
790	State Board of Administration responsible for operations of the
791	Florida Hurricane Insurance Catastrophe Fund.
792	c.  The corporation has all of the powers of corporations
793	under chapter 607 and under chapter 617, subject only to the
794	provisions of this subsection.
795	d.  The corporation may issue bonds and engage in such
796	other financial transactions as are necessary to provide
797	sufficient funds to achieve the purposes of this section.
798	e.  The corporation may invest in any of the investments
799	authorized under s. 215.47.
800	f.  There shall be no liability on the part of, and no
801	cause of action shall arise against, any board members or
802	employees of the corporation for any actions taken by them in
803	the performance of their duties under this paragraph.
804	3.a.  In actions under chapter 75 to validate any bonds
805	issued by the corporation, the notice required by s. 75.06 shall
806	be published only in Leon County and in two newspapers of
807	general circulation in the state, and the complaint and order of
808	the court shall be served only on the State Attorney of the
809	Second Judicial Circuit.
810	b.  The state hereby covenants with holders of bonds of the
811	corporation that the state will not repeal or abrogate the power
812	of the board to direct the Office of Insurance Regulation to
813	levy the assessments and to collect the proceeds of the revenues
814	pledged to the payment of such bonds as long as any such bonds
815	remain outstanding unless adequate provision has been made for
816	the payment of such bonds pursuant to the documents authorizing
817	the issuance of such bonds.
818	4.  The bonds of the corporation are not a debt of the
819	state or of any political subdivision, and neither the state nor
820	any political subdivision is liable on such bonds. The
821	corporation does not have the power to pledge the credit, the
822	revenues, or the taxing power of the state or of any political
823	subdivision. The credit, revenues, or taxing power of the state
824	or of any political subdivision shall not be deemed to be
825	pledged to the payment of any bonds of the corporation.
826	5.a.  The property, revenues, and other assets of the
827	corporation; the transactions and operations of the corporation
828	and the income from such transactions and operations; and all
829	bonds issued under this paragraph and interest on such bonds are
830	exempt from taxation by the state and any political subdivision,
831	including the intangibles tax under chapter 199 and the income
832	tax under chapter 220. This exemption does not apply to any tax
833	imposed by chapter 220 on interest, income, or profits on debt
834	obligations owned by corporations other than the Florida
835	Hurricane Insurance Catastrophe Fund Finance Corporation.
836	b.  All bonds of the corporation shall be and constitute
837	legal investments without limitation for all public bodies of
838	this state; for all banks, trust companies, savings banks,
839	savings associations, savings and loan associations, and
840	investment companies; for all administrators, executors,
841	trustees, and other fiduciaries; for all insurance companies and
842	associations and other persons carrying on an insurance
843	business; and for all other persons who are now or may hereafter
844	be authorized to invest in bonds or other obligations of the
845	state and shall be and constitute eligible securities to be
846	deposited as collateral for the security of any state, county,
847	municipal, or other public funds. This sub-subparagraph shall be
848	considered as additional and supplemental authority and shall
849	not be limited without specific reference to this sub-
850	subparagraph.
851	6.  The corporation and its corporate existence shall
852	continue until terminated by law; however, no such law shall
853	take effect as long as the corporation has bonds outstanding
854	unless adequate provision has been made for the payment of such
855	bonds pursuant to the documents authorizing the issuance of such
856	bonds. Upon termination of the existence of the corporation, all
857	of its rights and properties in excess of its obligations shall
858	pass to and be vested in the state.
859	(e)  Protection of bondholders.--
860	1.  As long as the corporation has any bonds outstanding,
861	neither the fund nor the corporation shall have the authority to
862	file a voluntary petition under chapter 9 of the federal
863	Bankruptcy Code or such corresponding chapter or sections as may
864	be in effect, from time to time, and neither any public officer
865	nor any organization, entity, or other person shall authorize
866	the fund or the corporation to be or become a debtor under
867	chapter 9 of the federal Bankruptcy Code or such corresponding
868	chapter or sections as may be in effect, from time to time,
869	during any such period.
870	2.  The state hereby covenants with holders of bonds of the
871	corporation that the state will not limit or alter the denial of
872	authority under this paragraph or the rights under this section
873	vested in the fund or the corporation to fulfill the terms of
874	any agreements made with such bondholders or in any way impair
875	the rights and remedies of such bondholders as long as any such
876	bonds remain outstanding unless adequate provision has been made
877	for the payment of such bonds pursuant to the documents
878	authorizing the issuance of such bonds.
879	3.  Notwithstanding any other provision of law, any pledge
880	of or other security interest in revenue, money, accounts,
881	contract rights, general intangibles, or other personal property
882	made or created by the fund or the corporation shall be valid,
883	binding, and perfected from the time such pledge is made or
884	other security interest attaches without any physical delivery
885	of the collateral or further act and the lien of any such pledge
886	or other security interest shall be valid, binding, and
887	perfected against all parties having claims of any kind in tort,
888	contract, or otherwise against the fund or the corporation
889	irrespective of whether or not such parties have notice of such
890	claims. No instrument by which such a pledge or security
891	interest is created nor any financing statement need be recorded
892	or filed.
893	(7)  ADDITIONAL POWERS AND DUTIES.--
894	(a)  The board may procure reinsurance from reinsurers
895	acceptable to the Office of Insurance Regulation for the purpose
896	of maximizing the capacity of the fund.
897	(b)  In addition to borrowing under subsection (6), the
898	board may also borrow from, or enter into other financing
899	arrangements with, any market sources at prevailing interest
900	rates.
901	(c)  Each fiscal year, the Legislature shall appropriate
902	from the investment income of the Florida Hurricane Catastrophe
903	Fund an amount no less than $10 million and no more than 35
904	percent of the investment income based upon the most recent
905	fiscal year-end audited financial statements for the purpose of
906	providing funding for local governments, state agencies, public
907	and private educational institutions, and nonprofit
908	organizations to support programs intended to improve hurricane
909	preparedness, reduce potential losses in the event of a
910	hurricane, provide research into means to reduce such losses,
911	educate or inform the public as to means to reduce hurricane
912	losses, assist the public in determining the appropriateness of
913	particular upgrades to structures or in the financing of such
914	upgrades, or protect local infrastructure from potential damage
915	from a hurricane. Moneys shall first be available for
916	appropriation under this paragraph in fiscal year 1997-1998.
917	Moneys in excess of the $10 million specified in this paragraph
918	shall not be available for appropriation under this paragraph if
919	the State Board of Administration finds that an appropriation of
920	investment income from the fund would jeopardize the actuarial
921	soundness of the fund.
922	(c)(d)  The board may allow insurers to comply with
923	reporting requirements and reporting format requirements by
924	using alternative methods of reporting if the proper
925	administration of the fund is not thereby impaired and if the
926	alternative methods produce data which is consistent with the
927	purposes of this section.
928	(d)(e)  In order to assure the equitable operation of the
929	fund, the board may impose a reasonable fee on an insurer to
930	recover costs involved in reprocessing inaccurate, incomplete,
931	or untimely exposure data submitted by the insurer.
932	(8)  ADVISORY COUNCIL.--The State Board of Administration
933	shall appoint a nine-member Florida Hurricane Insurance Fund
934	Advisory Council that consists of an actuary, a meteorologist,
935	an engineer, a representative of insurers, a representative of
936	insurance agents, a representative of reinsurers, and three
937	consumers who shall also be representatives of other affected
938	professions and industries, to provide the board with
939	information and advice in connection with its duties under this
940	section. Members of the advisory council shall serve at the
941	pleasure of the board and are eligible for per diem and travel
942	expenses under s. 112.061.
943	(9)  APPLICABILITY OF S. 19, ART. III OF THE STATE
944	CONSTITUTION.--The Legislature finds that the Florida Hurricane
945	Insurance Catastrophe Fund created by this section is a trust
946	fund established for bond covenants, indentures, or resolutions
947	within the meaning of s. 19(f)(3), Art. III of the State
948	Constitution.
949	(10)  VIOLATIONS.--Any violation of this section or of
950	rules adopted under this section constitutes a violation of the
951	insurance code.
952	(11)  LEGAL PROCEEDINGS.--The board is authorized to take
953	any action necessary to enforce the rules, and the provisions
954	and requirements of the reimbursement contract, required by and
955	adopted pursuant to this section.
956	(12)  FEDERAL OR MULTISTATE CATASTROPHIC FUNDS.--Upon the
957	creation of a federal or multistate catastrophic insurance or
958	reinsurance program intended to serve purposes similar to the
959	purposes of the fund created by this section, the State Board of
960	Administration shall promptly make recommendations to the
961	Legislature for coordination with the federal or multistate
962	program, for termination of the fund, or for such other actions
963	as the board finds appropriate in the circumstances.
964	(13)  REVERSION OF FUND ASSETS UPON TERMINATION.--The fund
965	and the duties of the board under this section may be terminated
966	only by law. Upon termination of the fund, all assets of the
967	fund shall revert to the General Revenue Fund.
968	(14)  SEVERABILITY.--If any provision of this section or
969	its application to any person or circumstance is held invalid,
970	the invalidity does not affect other provisions or applications
971	of the section which can be given effect without the invalid
972	provision or application, and to this end the provisions of this
973	section are declared severable.
974	(15)  COLLATERAL PROTECTION INSURANCE.--As used in this
975	section and ss. 627.311 and 627.351, the term "collateral
976	protection insurance" means commercial property insurance of
977	which a creditor is the primary beneficiary and policyholder and
978	which protects or covers an interest of the creditor arising out
979	of a credit transaction secured by real or personal property.
980	Initiation of such coverage is triggered by the mortgagor's
981	failure to maintain insurance coverage as required by the
982	mortgage or other lending document. Collateral protection
983	insurance is not residential coverage.
984	Section 2.  Section 215.556, Florida Statutes, is amended
985	to read:
986	215.556  Exemption.--The Florida Hurricane Insurance
987	Catastrophe Fund created by s. 215.555 is exempt from the
988	deduction required by s. 215.20(1).
989	Section 3.  Subsection (1) of section 215.559, Florida
990	Statutes, is amended to read:
991	215.559  Hurricane Loss Mitigation Program.--
992	(1)  There is created a Hurricane Loss Mitigation Program.
993	The Legislature shall annually appropriate $10 million of the
994	moneys authorized for appropriation under s. 215.555(7)(c) from
995	the Florida Hurricane Insurance Catastrophe Fund to the
996	Department of Community Affairs for the purposes set forth in
997	this section.
998	Section 4.  Subsection (10) of section 624.424, Florida
999	Statutes, is amended to read:
1000	624.424  Annual statement and other information.--
1001	(10)  Each insurer or insurer group doing business in this
1002	state shall file on a quarterly basis in conjunction with
1003	financial reports required by paragraph (1)(a) a supplemental
1004	report on an individual and group basis on a form prescribed by
1005	the commission with information on personal lines and commercial
1006	lines residential property insurance policies in this state. The
1007	supplemental report shall include separate information for
1008	personal lines property policies and for commercial lines
1009	property policies and totals for each item specified, including
1010	premiums written for each of the property lines of business as
1011	described in ss. 215.555(2)(f)(c) and 627.351(6)(a). The report
1012	shall include the following information for each county on a
1013	monthly basis:
1014	(a)  Total number of policies in force at the end of each
1015	month.
1016	(b)  Total number of policies canceled.
1017	(c)  Total number of policies nonrenewed.
1018	(d)  Number of policies canceled due to hurricane risk.
1019	(e)  Number of policies nonrenewed due to hurricane risk.
1020	(f)  Number of new policies written.
1021	(g)  Total dollar value of structure exposure under
1022	policies that include wind coverage.
1023	(h)  Number of policies that exclude wind coverage.
1024	Section 5.  Subsection (3) of section 624.5091, Florida
1025	Statutes, is amended to read:
1026	624.5091  Retaliatory provision, insurers.--
1027	(3)  This section does not apply as to personal income
1028	taxes, nor as to sales or use taxes, nor as to ad valorem taxes
1029	on real or personal property, nor as to reimbursement premiums
1030	paid to the Florida Hurricane Insurance Catastrophe Fund, nor as
1031	to emergency assessments paid to the Florida Hurricane Insurance
1032	Catastrophe Fund, nor as to special purpose obligations or
1033	assessments imposed in connection with particular kinds of
1034	insurance other than property insurance, except that deductions,
1035	from premium taxes or other taxes otherwise payable, allowed on
1036	account of real estate or personal property taxes paid shall be
1037	taken into consideration by the department in determining the
1038	propriety and extent of retaliatory action under this section.
1039	Section 6.  Subsection (5) of section 627.062, Florida
1040	Statutes, is amended to read:
1041	627.062  Rate standards.--
1042	(5)  With respect to a rate filing involving coverage of
1043	the type for which the insurer is required to pay a
1044	reimbursement premium to the Florida Hurricane Insurance
1045	Catastrophe Fund, the insurer may fully recoup in its property
1046	insurance premiums any reimbursement premiums paid to the
1047	Florida Hurricane Insurance Catastrophe Fund, together with
1048	reasonable costs of other reinsurance, but may not recoup
1049	reinsurance costs that duplicate coverage provided by the
1050	Florida Hurricane Insurance Catastrophe Fund. An insurer may not
1051	recoup more than 1 year of reimbursement premium at a time. Any
1052	under-recoupment from the prior year may be added to the
1053	following year's reimbursement premium and any over-recoupment
1054	shall be subtracted from the following year's reimbursement
1055	premium.
1056	Section 7.  Paragraph (c) of subsection (1), paragraphs (b)
1057	and (f) of subsection (2), and paragraph (b) of subsection (3)
1058	of section 627.0628, Florida Statutes, are amended to read:
1059	627.0628  Florida Commission on Hurricane Loss Projection
1060	Methodology; public records exemption; public meetings
1061	exemption.--
1062	(1)  LEGISLATIVE FINDINGS AND INTENT.--
1063	(c)  It is the intent of the Legislature to create the
1064	Florida Commission on Hurricane Loss Projection Methodology as a
1065	panel of experts to provide the most actuarially sophisticated
1066	guidelines and standards for projection of hurricane losses
1067	possible, given the current state of actuarial science. It is
1068	the further intent of the Legislature that such standards and
1069	guidelines must be used by the State Board of Administration in
1070	developing reimbursement premium rates for the Florida Hurricane
1071	Insurance Catastrophe Fund, and, subject to paragraph (3)(c),
1072	may be used by insurers in rate filings under s. 627.062 unless
1073	the way in which such standards and guidelines were applied by
1074	the insurer was erroneous, as shown by a preponderance of the
1075	evidence.
1076	(2)  COMMISSION CREATED.--
1077	(b)  The commission shall consist of the following 11
1078	members:
1079	1.  The insurance consumer advocate.
1080	2.  The senior employee of the State Board of
1081	Administration responsible for operations of the Florida
1082	Hurricane Insurance Catastrophe Fund.
1083	3.  The Executive Director of the Citizens Property
1084	Insurance Corporation.
1085	4.  The Director of the Division of Emergency Management of
1086	the Department of Community Affairs.
1087	5.  The actuary member of the Florida Hurricane Insurance
1088	Catastrophe Fund Advisory Council.
1089	6.  An employee of the office who is an actuary responsible
1090	for property insurance rate filings and who is appointed by the
1091	director of the office.
1092	7.  Five members appointed by the Chief Financial Officer,
1093	as follows:
1094	a.  An actuary who is employed full time by a property and
1095	casualty insurer which was responsible for at least 1 percent of
1096	the aggregate statewide direct written premium for homeowner's
1097	insurance in the calendar year preceding the member's
1098	appointment to the commission.
1099	b.  An expert in insurance finance who is a full-time
1100	member of the faculty of the State University System and who has
1101	a background in actuarial science.
1102	c.  An expert in statistics who is a full-time member of
1103	the faculty of the State University System and who has a
1104	background in insurance.
1105	d.  An expert in computer system design who is a full-time
1106	member of the faculty of the State University System.
1107	e.  An expert in meteorology who is a full-time member of
1108	the faculty of the State University System and who specializes
1109	in hurricanes.
1110	(f)  The State Board of Administration shall, as a cost of
1111	administration of the Florida Hurricane Insurance Catastrophe
1112	Fund, provide for travel, expenses, and staff support for the
1113	commission.
1114	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
1115	(b)  In establishing reimbursement premiums for the Florida
1116	Hurricane Insurance Catastrophe Fund, the State Board of
1117	Administration must, to the extent feasible, employ actuarial
1118	methods, principles, standards, models, or output ranges found
1119	by the commission to be accurate or reliable.
1120	Section 8.  Subsection (10) of section 627.0629, Florida
1121	Statutes, is amended to read:
1122	627.0629  Residential property insurance; rate filings.--
1123	(10)  A property insurance rate filing that includes any
1124	adjustments related to premiums paid to the Florida Hurricane
1125	Insurance Catastrophe Fund must include a complete calculation
1126	of the insurer's catastrophe load, and the information in the
1127	filing may not be limited solely to recovery of moneys paid to
1128	the fund.
1129	Section 9.  Paragraph (b) of subsection (2) and paragraphs
1130	(b), (c), (k), and (l) of subsection (6) of section 627.351,
1131	Florida Statutes, are amended to read:
1132	627.351  Insurance risk apportionment plans.--
1133	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
1134	(b)  The department shall require all insurers holding a
1135	certificate of authority to transact property insurance on a
1136	direct basis in this state, other than joint underwriting
1137	associations and other entities formed pursuant to this section,
1138	to provide windstorm coverage to applicants from areas
1139	determined to be eligible pursuant to paragraph (c) who in good
1140	faith are entitled to, but are unable to procure, such coverage
1141	through ordinary means; or it shall adopt a reasonable plan or
1142	plans for the equitable apportionment or sharing among such
1143	insurers of windstorm coverage, which may include formation of
1144	an association for this purpose. As used in this subsection, the
1145	term "property insurance" means insurance on real or personal
1146	property, as defined in s. 624.604, including insurance for
1147	fire, industrial fire, allied lines, farmowners multiperil,
1148	homeowners' multiperil, commercial multiperil, and mobile homes,
1149	and including liability coverages on all such insurance, but
1150	excluding inland marine as defined in s. 624.607(3) and
1151	excluding vehicle insurance as defined in s. 624.605(1)(a) other
1152	than insurance on mobile homes used as permanent dwellings. The
1153	department shall adopt rules that provide a formula for the
1154	recovery and repayment of any deferred assessments.
1155	1.  For the purpose of this section, properties eligible
1156	for such windstorm coverage are defined as dwellings, buildings,
1157	and other structures, including mobile homes which are used as
1158	dwellings and which are tied down in compliance with mobile home
1159	tie-down requirements prescribed by the Department of Highway
1160	Safety and Motor Vehicles pursuant to s. 320.8325, and the
1161	contents of all such properties. An applicant or policyholder is
1162	eligible for coverage only if an offer of coverage cannot be
1163	obtained by or for the applicant or policyholder from an
1164	admitted insurer at approved rates.
1165	2.a.(I)  All insurers required to be members of such
1166	association shall participate in its writings, expenses, and
1167	losses. Surplus of the association shall be retained for the
1168	payment of claims and shall not be distributed to the member
1169	insurers. Such participation by member insurers shall be in the
1170	proportion that the net direct premiums of each member insurer
1171	written for property insurance in this state during the
1172	preceding calendar year bear to the aggregate net direct
1173	premiums for property insurance of all member insurers, as
1174	reduced by any credits for voluntary writings, in this state
1175	during the preceding calendar year. For the purposes of this
1176	subsection, the term "net direct premiums" means direct written
1177	premiums for property insurance, reduced by premium for
1178	liability coverage and for the following if included in allied
1179	lines: rain and hail on growing crops; livestock; association
1180	direct premiums booked; National Flood Insurance Program direct
1181	premiums; and similar deductions specifically authorized by the
1182	plan of operation and approved by the department. A member's
1183	participation shall begin on the first day of the calendar year
1184	following the year in which it is issued a certificate of
1185	authority to transact property insurance in the state and shall
1186	terminate 1 year after the end of the calendar year during which
1187	it no longer holds a certificate of authority to transact
1188	property insurance in the state. The commissioner, after review
1189	of annual statements, other reports, and any other statistics
1190	that the commissioner deems necessary, shall certify to the
1191	association the aggregate direct premiums written for property
1192	insurance in this state by all member insurers.
1193	(II)  Effective July 1, 2002, the association shall operate
1194	subject to the supervision and approval of a board of governors
1195	who are the same individuals that have been appointed by the
1196	Treasurer to serve on the board of governors of the Citizens
1197	Property Insurance Corporation.
1198	(III)  The plan of operation shall provide a formula
1199	whereby a company voluntarily providing windstorm coverage in
1200	affected areas will be relieved wholly or partially from
1201	apportionment of a regular assessment pursuant to sub-sub-
1202	subparagraph d.(I) or sub-sub-subparagraph d.(II).
1203	(IV)  A company which is a member of a group of companies
1204	under common management may elect to have its credits applied on
1205	a group basis, and any company or group may elect to have its
1206	credits applied to any other company or group.
1207	(V)  There shall be no credits or relief from apportionment
1208	to a company for emergency assessments collected from its
1209	policyholders under sub-sub-subparagraph d.(III).
1210	(VI)  The plan of operation may also provide for the award
1211	of credits, for a period not to exceed 3 years, from a regular
1212	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
1213	subparagraph d.(II) as an incentive for taking policies out of
1214	the Residential Property and Casualty Joint Underwriting
1215	Association. In order to qualify for the exemption under this
1216	sub-sub-subparagraph, the take-out plan must provide that at
1217	least 40 percent of the policies removed from the Residential
1218	Property and Casualty Joint Underwriting Association cover risks
1219	located in Dade, Broward, and Palm Beach Counties or at least 30
1220	percent of the policies so removed cover risks located in Dade,
1221	Broward, and Palm Beach Counties and an additional 50 percent of
1222	the policies so removed cover risks located in other coastal
1223	counties, and must also provide that no more than 15 percent of
1224	the policies so removed may exclude windstorm coverage. With the
1225	approval of the department, the association may waive these
1226	geographic criteria for a take-out plan that removes at least
1227	the lesser of 100,000 Residential Property and Casualty Joint
1228	Underwriting Association policies or 15 percent of the total
1229	number of Residential Property and Casualty Joint Underwriting
1230	Association policies, provided the governing board of the
1231	Residential Property and Casualty Joint Underwriting Association
1232	certifies that the take-out plan will materially reduce the
1233	Residential Property and Casualty Joint Underwriting
1234	Association's 100-year probable maximum loss from hurricanes.
1235	With the approval of the department, the board may extend such
1236	credits for an additional year if the insurer guarantees an
1237	additional year of renewability for all policies removed from
1238	the Residential Property and Casualty Joint Underwriting
1239	Association, or for 2 additional years if the insurer guarantees
1240	2 additional years of renewability for all policies removed from
1241	the Residential Property and Casualty Joint Underwriting
1242	Association.
1243	b.  Assessments to pay deficits in the association under
1244	this subparagraph shall be included as an appropriate factor in
1245	the making of rates as provided in s. 627.3512.
1246	c.  The Legislature finds that the potential for unlimited
1247	deficit assessments under this subparagraph may induce insurers
1248	to attempt to reduce their writings in the voluntary market, and
1249	that such actions would worsen the availability problems that
1250	the association was created to remedy. It is the intent of the
1251	Legislature that insurers remain fully responsible for paying
1252	regular assessments and collecting emergency assessments for any
1253	deficits of the association; however, it is also the intent of
1254	the Legislature to provide a means by which assessment
1255	liabilities may be amortized over a period of years.
1256	d.(I)  When the deficit incurred in a particular calendar
1257	year is 10 percent or less of the aggregate statewide direct
1258	written premium for property insurance for the prior calendar
1259	year for all member insurers, the association shall levy an
1260	assessment on member insurers in an amount equal to the deficit.
1261	(II)  When the deficit incurred in a particular calendar
1262	year exceeds 10 percent of the aggregate statewide direct
1263	written premium for property insurance for the prior calendar
1264	year for all member insurers, the association shall levy an
1265	assessment on member insurers in an amount equal to the greater
1266	of 10 percent of the deficit or 10 percent of the aggregate
1267	statewide direct written premium for property insurance for the
1268	prior calendar year for member insurers. Any remaining deficit
1269	shall be recovered through emergency assessments under sub-sub-
1270	subparagraph (III).
1271	(III)  Upon a determination by the board of directors that
1272	a deficit exceeds the amount that will be recovered through
1273	regular assessments on member insurers, pursuant to sub-sub-
1274	subparagraph (I) or sub-sub-subparagraph (II), the board shall
1275	levy, after verification by the department, emergency
1276	assessments to be collected by member insurers and by
1277	underwriting associations created pursuant to this section which
1278	write property insurance, upon issuance or renewal of property
1279	insurance policies other than National Flood Insurance policies
1280	in the year or years following levy of the regular assessments.
1281	The amount of the emergency assessment collected in a particular
1282	year shall be a uniform percentage of that year's direct written
1283	premium for property insurance for all member insurers and
1284	underwriting associations, excluding National Flood Insurance
1285	policy premiums, as annually determined by the board and
1286	verified by the department. The department shall verify the
1287	arithmetic calculations involved in the board's determination
1288	within 30 days after receipt of the information on which the
1289	determination was based. Notwithstanding any other provision of
1290	law, each member insurer and each underwriting association
1291	created pursuant to this section shall collect emergency
1292	assessments from its policyholders without such obligation being
1293	affected by any credit, limitation, exemption, or deferment. The
1294	emergency assessments so collected shall be transferred directly
1295	to the association on a periodic basis as determined by the
1296	association. The aggregate amount of emergency assessments
1297	levied under this sub-sub-subparagraph in any calendar year may
1298	not exceed the greater of 10 percent of the amount needed to
1299	cover the original deficit, plus interest, fees, commissions,
1300	required reserves, and other costs associated with financing of
1301	the original deficit, or 10 percent of the aggregate statewide
1302	direct written premium for property insurance written by member
1303	insurers and underwriting associations for the prior year, plus
1304	interest, fees, commissions, required reserves, and other costs
1305	associated with financing the original deficit. The board may
1306	pledge the proceeds of the emergency assessments under this sub-
1307	sub-subparagraph as the source of revenue for bonds, to retire
1308	any other debt incurred as a result of the deficit or events
1309	giving rise to the deficit, or in any other way that the board
1310	determines will efficiently recover the deficit. The emergency
1311	assessments under this sub-sub-subparagraph shall continue as
1312	long as any bonds issued or other indebtedness incurred with
1313	respect to a deficit for which the assessment was imposed remain
1314	outstanding, unless adequate provision has been made for the
1315	payment of such bonds or other indebtedness pursuant to the
1316	document governing such bonds or other indebtedness. Emergency
1317	assessments collected under this sub-sub-subparagraph are not
1318	part of an insurer's rates, are not premium, and are not subject
1319	to premium tax, fees, or commissions; however, failure to pay
1320	the emergency assessment shall be treated as failure to pay
1321	premium.
1322	(IV)  Each member insurer's share of the total regular
1323	assessments under sub-sub-subparagraph (I) or sub-sub-
1324	subparagraph (II) shall be in the proportion that the insurer's
1325	net direct premium for property insurance in this state, for the
1326	year preceding the assessment bears to the aggregate statewide
1327	net direct premium for property insurance of all member
1328	insurers, as reduced by any credits for voluntary writings for
1329	that year.
1330	(V)  If regular deficit assessments are made under sub-sub-
1331	subparagraph (I) or sub-sub-subparagraph (II), or by the
1332	Residential Property and Casualty Joint Underwriting Association
1333	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
1334	(6)(b)3.b., the association shall levy upon the association's
1335	policyholders, as part of its next rate filing, or by a separate
1336	rate filing solely for this purpose, a market equalization
1337	surcharge in a percentage equal to the total amount of such
1338	regular assessments divided by the aggregate statewide direct
1339	written premium for property insurance for member insurers for
1340	the prior calendar year. Market equalization surcharges under
1341	this sub-sub-subparagraph are not considered premium and are not
1342	subject to commissions, fees, or premium taxes; however, failure
1343	to pay a market equalization surcharge shall be treated as
1344	failure to pay premium.
1345	e.  The governing body of any unit of local government, any
1346	residents of which are insured under the plan, may issue bonds
1347	as defined in s. 125.013 or s. 166.101 to fund an assistance
1348	program, in conjunction with the association, for the purpose of
1349	defraying deficits of the association. In order to avoid
1350	needless and indiscriminate proliferation, duplication, and
1351	fragmentation of such assistance programs, any unit of local
1352	government, any residents of which are insured by the
1353	association, may provide for the payment of losses, regardless
1354	of whether or not the losses occurred within or outside of the
1355	territorial jurisdiction of the local government. Revenue bonds
1356	may not be issued until validated pursuant to chapter 75, unless
1357	a state of emergency is declared by executive order or
1358	proclamation of the Governor pursuant to s. 252.36 making such
1359	findings as are necessary to determine that it is in the best
1360	interests of, and necessary for, the protection of the public
1361	health, safety, and general welfare of residents of this state
1362	and the protection and preservation of the economic stability of
1363	insurers operating in this state, and declaring it an essential
1364	public purpose to permit certain municipalities or counties to
1365	issue bonds as will provide relief to claimants and
1366	policyholders of the association and insurers responsible for
1367	apportionment of plan losses. Any such unit of local government
1368	may enter into such contracts with the association and with any
1369	other entity created pursuant to this subsection as are
1370	necessary to carry out this paragraph. Any bonds issued under
1371	this sub-subparagraph shall be payable from and secured by
1372	moneys received by the association from assessments under this
1373	subparagraph, and assigned and pledged to or on behalf of the
1374	unit of local government for the benefit of the holders of such
1375	bonds. The funds, credit, property, and taxing power of the
1376	state or of the unit of local government shall not be pledged
1377	for the payment of such bonds. If any of the bonds remain unsold
1378	60 days after issuance, the department shall require all
1379	insurers subject to assessment to purchase the bonds, which
1380	shall be treated as admitted assets; each insurer shall be
1381	required to purchase that percentage of the unsold portion of
1382	the bond issue that equals the insurer's relative share of
1383	assessment liability under this subsection. An insurer shall not
1384	be required to purchase the bonds to the extent that the
1385	department determines that the purchase would endanger or impair
1386	the solvency of the insurer. The authority granted by this sub-
1387	subparagraph is additional to any bonding authority granted by
1388	subparagraph 6.
1389	3.  The plan shall also provide that any member with a
1390	surplus as to policyholders of $20 million or less writing 25
1391	percent or more of its total countrywide property insurance
1392	premiums in this state may petition the department, within the
1393	first 90 days of each calendar year, to qualify as a limited
1394	apportionment company. The apportionment of such a member
1395	company in any calendar year for which it is qualified shall not
1396	exceed its gross participation, which shall not be affected by
1397	the formula for voluntary writings. In no event shall a limited
1398	apportionment company be required to participate in any
1399	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1400	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1401	$50 million after payment of available plan funds in any
1402	calendar year. However, a limited apportionment company shall
1403	collect from its policyholders any emergency assessment imposed
1404	under sub-sub-subparagraph 2.d.(III). The plan shall provide
1405	that, if the department determines that any regular assessment
1406	will result in an impairment of the surplus of a limited
1407	apportionment company, the department may direct that all or
1408	part of such assessment be deferred. However, there shall be no
1409	limitation or deferment of an emergency assessment to be
1410	collected from policyholders under sub-sub-subparagraph
1411	2.d.(III).
1412	4.  The plan shall provide for the deferment, in whole or
1413	in part, of a regular assessment of a member insurer under sub-
1414	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1415	not for an emergency assessment collected from policyholders
1416	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1417	commissioner, payment of such regular assessment would endanger
1418	or impair the solvency of the member insurer. In the event a
1419	regular assessment against a member insurer is deferred in whole
1420	or in part, the amount by which such assessment is deferred may
1421	be assessed against the other member insurers in a manner
1422	consistent with the basis for assessments set forth in sub-sub-
1423	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1424	5.a.  The plan of operation may include deductibles and
1425	rules for classification of risks and rate modifications
1426	consistent with the objective of providing and maintaining funds
1427	sufficient to pay catastrophe losses.
1428	b.  The association may require arbitration of a rate
1429	filing under s. 627.062(6). It is the intent of the Legislature
1430	that the rates for coverage provided by the association be
1431	actuarially sound and not competitive with approved rates
1432	charged in the admitted voluntary market such that the
1433	association functions as a residual market mechanism to provide
1434	insurance only when the insurance cannot be procured in the
1435	voluntary market. The plan of operation shall provide a
1436	mechanism to assure that, beginning no later than January 1,
1437	1999, the rates charged by the association for each line of
1438	business are reflective of approved rates in the voluntary
1439	market for hurricane coverage for each line of business in the
1440	various areas eligible for association coverage.
1441	c.  The association shall provide for windstorm coverage on
1442	residential properties in limits up to $10 million for
1443	commercial lines residential risks and up to $1 million for
1444	personal lines residential risks. If coverage with the
1445	association is sought for a residential risk valued in excess of
1446	these limits, coverage shall be available to the risk up to the
1447	replacement cost or actual cash value of the property, at the
1448	option of the insured, if coverage for the risk cannot be
1449	located in the authorized market. The association must accept a
1450	commercial lines residential risk with limits above $10 million
1451	or a personal lines residential risk with limits above $1
1452	million if coverage is not available in the authorized market.
1453	The association may write coverage above the limits specified in
1454	this subparagraph with or without facultative or other
1455	reinsurance coverage, as the association determines appropriate.
1456	d.  The plan of operation must provide objective criteria
1457	and procedures, approved by the department, to be uniformly
1458	applied for all applicants in determining whether an individual
1459	risk is so hazardous as to be uninsurable. In making this
1460	determination and in establishing the criteria and procedures,
1461	the following shall be considered:
1462	(I)  Whether the likelihood of a loss for the individual
1463	risk is substantially higher than for other risks of the same
1464	class; and
1465	(II)  Whether the uncertainty associated with the
1466	individual risk is such that an appropriate premium cannot be
1467	determined.
1468
1469	The acceptance or rejection of a risk by the association
1470	pursuant to such criteria and procedures must be construed as
1471	the private placement of insurance, and the provisions of
1472	chapter 120 do not apply.
1473	e.  If the risk accepts an offer of coverage through the
1474	market assistance program or through a mechanism established by
1475	the association, either before the policy is issued by the
1476	association or during the first 30 days of coverage by the
1477	association, and the producing agent who submitted the
1478	application to the association is not currently appointed by the
1479	insurer, the insurer shall:
1480	(I)  Pay to the producing agent of record of the policy,
1481	for the first year, an amount that is the greater of the
1482	insurer's usual and customary commission for the type of policy
1483	written or a fee equal to the usual and customary commission of
1484	the association; or
1485	(II)  Offer to allow the producing agent of record of the
1486	policy to continue servicing the policy for a period of not less
1487	than 1 year and offer to pay the agent the greater of the
1488	insurer's or the association's usual and customary commission
1489	for the type of policy written.
1490
1491	If the producing agent is unwilling or unable to accept
1492	appointment, the new insurer shall pay the agent in accordance
1493	with sub-sub-subparagraph (I). Subject to the provisions of s.
1494	627.3517, the policies issued by the association must provide
1495	that if the association obtains an offer from an authorized
1496	insurer to cover the risk at its approved rates under either a
1497	standard policy including wind coverage or, if consistent with
1498	the insurer's underwriting rules as filed with the department, a
1499	basic policy including wind coverage, the risk is no longer
1500	eligible for coverage through the association. Upon termination
1501	of eligibility, the association shall provide written notice to
1502	the policyholder and agent of record stating that the
1503	association policy must be canceled as of 60 days after the date
1504	of the notice because of the offer of coverage from an
1505	authorized insurer. Other provisions of the insurance code
1506	relating to cancellation and notice of cancellation do not apply
1507	to actions under this sub-subparagraph.
1508	f.  When the association enters into a contractual
1509	agreement for a take-out plan, the producing agent of record of
1510	the association policy is entitled to retain any unearned
1511	commission on the policy, and the insurer shall:
1512	(I)  Pay to the producing agent of record of the
1513	association policy, for the first year, an amount that is the
1514	greater of the insurer's usual and customary commission for the
1515	type of policy written or a fee equal to the usual and customary
1516	commission of the association; or
1517	(II)  Offer to allow the producing agent of record of the
1518	association policy to continue servicing the policy for a period
1519	of not less than 1 year and offer to pay the agent the greater
1520	of the insurer's or the association's usual and customary
1521	commission for the type of policy written.
1522
1523	If the producing agent is unwilling or unable to accept
1524	appointment, the new insurer shall pay the agent in accordance
1525	with sub-sub-subparagraph (I).
1526	6.a.  The plan of operation may authorize the formation of
1527	a private nonprofit corporation, a private nonprofit
1528	unincorporated association, a partnership, a trust, a limited
1529	liability company, or a nonprofit mutual company which may be
1530	empowered, among other things, to borrow money by issuing bonds
1531	or by incurring other indebtedness and to accumulate reserves or
1532	funds to be used for the payment of insured catastrophe losses.
1533	The plan may authorize all actions necessary to facilitate the
1534	issuance of bonds, including the pledging of assessments or
1535	other revenues.
1536	b.  Any entity created under this subsection, or any entity
1537	formed for the purposes of this subsection, may sue and be sued,
1538	may borrow money; issue bonds, notes, or debt instruments;
1539	pledge or sell assessments, market equalization surcharges and
1540	other surcharges, rights, premiums, contractual rights,
1541	projected recoveries from the Florida Hurricane Insurance
1542	Catastrophe Fund, other reinsurance recoverables, and other
1543	assets as security for such bonds, notes, or debt instruments;
1544	enter into any contracts or agreements necessary or proper to
1545	accomplish such borrowings; and take other actions necessary to
1546	carry out the purposes of this subsection. The association may
1547	issue bonds or incur other indebtedness, or have bonds issued on
1548	its behalf by a unit of local government pursuant to
1549	subparagraph (6)(g)2., in the absence of a hurricane or other
1550	weather-related event, upon a determination by the association
1551	subject to approval by the department that such action would
1552	enable it to efficiently meet the financial obligations of the
1553	association and that such financings are reasonably necessary to
1554	effectuate the requirements of this subsection. Any such entity
1555	may accumulate reserves and retain surpluses as of the end of
1556	any association year to provide for the payment of losses
1557	incurred by the association during that year or any future year.
1558	The association shall incorporate and continue the plan of
1559	operation and articles of agreement in effect on the effective
1560	date of chapter 76-96, Laws of Florida, to the extent that it is
1561	not inconsistent with chapter 76-96, and as subsequently
1562	modified consistent with chapter 76-96. The board of directors
1563	and officers currently serving shall continue to serve until
1564	their successors are duly qualified as provided under the plan.
1565	The assets and obligations of the plan in effect immediately
1566	prior to the effective date of chapter 76-96 shall be construed
1567	to be the assets and obligations of the successor plan created
1568	herein.
1569	c.  In recognition of s. 10, Art. I of the State
1570	Constitution, prohibiting the impairment of obligations of
1571	contracts, it is the intent of the Legislature that no action be
1572	taken whose purpose is to impair any bond indenture or financing
1573	agreement or any revenue source committed by contract to such
1574	bond or other indebtedness issued or incurred by the association
1575	or any other entity created under this subsection.
1576	7.  On such coverage, an agent's remuneration shall be that
1577	amount of money payable to the agent by the terms of his or her
1578	contract with the company with which the business is placed.
1579	However, no commission will be paid on that portion of the
1580	premium which is in excess of the standard premium of that
1581	company.
1582	8.  Subject to approval by the department, the association
1583	may establish different eligibility requirements and operational
1584	procedures for any line or type of coverage for any specified
1585	eligible area or portion of an eligible area if the board
1586	determines that such changes to the eligibility requirements and
1587	operational procedures are justified due to the voluntary market
1588	being sufficiently stable and competitive in such area or for
1589	such line or type of coverage and that consumers who, in good
1590	faith, are unable to obtain insurance through the voluntary
1591	market through ordinary methods would continue to have access to
1592	coverage from the association. When coverage is sought in
1593	connection with a real property transfer, such requirements and
1594	procedures shall not provide for an effective date of coverage
1595	later than the date of the closing of the transfer as
1596	established by the transferor, the transferee, and, if
1597	applicable, the lender.
1598	9.  Notwithstanding any other provision of law:
1599	a.  The pledge or sale of, the lien upon, and the security
1600	interest in any rights, revenues, or other assets of the
1601	association created or purported to be created pursuant to any
1602	financing documents to secure any bonds or other indebtedness of
1603	the association shall be and remain valid and enforceable,
1604	notwithstanding the commencement of and during the continuation
1605	of, and after, any rehabilitation, insolvency, liquidation,
1606	bankruptcy, receivership, conservatorship, reorganization, or
1607	similar proceeding against the association under the laws of
1608	this state or any other applicable laws.
1609	b.  No such proceeding shall relieve the association of its
1610	obligation, or otherwise affect its ability to perform its
1611	obligation, to continue to collect, or levy and collect,
1612	assessments, market equalization or other surcharges, projected
1613	recoveries from the Florida Hurricane Insurance Catastrophe
1614	Fund, reinsurance recoverables, or any other rights, revenues,
1615	or other assets of the association pledged.
1616	c.  Each such pledge or sale of, lien upon, and security
1617	interest in, including the priority of such pledge, lien, or
1618	security interest, any such assessments, emergency assessments,
1619	market equalization or renewal surcharges, projected recoveries
1620	from the Florida Hurricane Insurance Catastrophe Fund,
1621	reinsurance recoverables, or other rights, revenues, or other
1622	assets which are collected, or levied and collected, after the
1623	commencement of and during the pendency of or after any such
1624	proceeding shall continue unaffected by such proceeding.
1625	d.  As used in this subsection, the term "financing
1626	documents" means any agreement, instrument, or other document
1627	now existing or hereafter created evidencing any bonds or other
1628	indebtedness of the association or pursuant to which any such
1629	bonds or other indebtedness has been or may be issued and
1630	pursuant to which any rights, revenues, or other assets of the
1631	association are pledged or sold to secure the repayment of such
1632	bonds or indebtedness, together with the payment of interest on
1633	such bonds or such indebtedness, or the payment of any other
1634	obligation of the association related to such bonds or
1635	indebtedness.
1636	e.  Any such pledge or sale of assessments, revenues,
1637	contract rights or other rights or assets of the association
1638	shall constitute a lien and security interest, or sale, as the
1639	case may be, that is immediately effective and attaches to such
1640	assessments, revenues, contract, or other rights or assets,
1641	whether or not imposed or collected at the time the pledge or
1642	sale is made. Any such pledge or sale is effective, valid,
1643	binding, and enforceable against the association or other entity
1644	making such pledge or sale, and valid and binding against and
1645	superior to any competing claims or obligations owed to any
1646	other person or entity, including policyholders in this state,
1647	asserting rights in any such assessments, revenues, contract, or
1648	other rights or assets to the extent set forth in and in
1649	accordance with the terms of the pledge or sale contained in the
1650	applicable financing documents, whether or not any such person
1651	or entity has notice of such pledge or sale and without the need
1652	for any physical delivery, recordation, filing, or other action.
1653	f.  There shall be no liability on the part of, and no
1654	cause of action of any nature shall arise against, any member
1655	insurer or its agents or employees, agents or employees of the
1656	association, members of the board of directors of the
1657	association, or the department or its representatives, for any
1658	action taken by them in the performance of their duties or
1659	responsibilities under this subsection. Such immunity does not
1660	apply to actions for breach of any contract or agreement
1661	pertaining to insurance, or any willful tort.
1662	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1663	(b)1.  All insurers authorized to write one or more subject
1664	lines of business in this state are subject to assessment by the
1665	corporation and, for the purposes of this subsection, are
1666	referred to collectively as "assessable insurers." Insurers
1667	writing one or more subject lines of business in this state
1668	pursuant to part VIII of chapter 626 are not assessable
1669	insurers, but insureds who procure one or more subject lines of
1670	business in this state pursuant to part VIII of chapter 626 are
1671	subject to assessment by the corporation and are referred to
1672	collectively as "assessable insureds." An authorized insurer's
1673	assessment liability shall begin on the first day of the
1674	calendar year following the year in which the insurer was issued
1675	a certificate of authority to transact insurance for subject
1676	lines of business in this state and shall terminate 1 year after
1677	the end of the first calendar year during which the insurer no
1678	longer holds a certificate of authority to transact insurance
1679	for subject lines of business in this state.
1680	2.a.  All revenues, assets, liabilities, losses, and
1681	expenses of the corporation shall be divided into three separate
1682	accounts as follows:
1683	(I)  A personal lines account for personal residential
1684	policies issued by the corporation or issued by the Residential
1685	Property and Casualty Joint Underwriting Association and renewed
1686	by the corporation that provide comprehensive, multiperil
1687	coverage on risks that are not located in areas eligible for
1688	coverage in the Florida Windstorm Underwriting Association as
1689	those areas were defined on January 1, 2002, and for such
1690	policies that do not provide coverage for the peril of wind on
1691	risks that are located in such areas;
1692	(II)  A commercial lines account for commercial residential
1693	policies issued by the corporation or issued by the Residential
1694	Property and Casualty Joint Underwriting Association and renewed
1695	by the corporation that provide coverage for basic property
1696	perils on risks that are not located in areas eligible for
1697	coverage in the Florida Windstorm Underwriting Association as
1698	those areas were defined on January 1, 2002, and for such
1699	policies that do not provide coverage for the peril of wind on
1700	risks that are located in such areas; and
1701	(III)  A high-risk account for personal residential
1702	policies and commercial residential and commercial
1703	nonresidential property policies issued by the corporation or
1704	transferred to the corporation that provide coverage for the
1705	peril of wind on risks that are located in areas eligible for
1706	coverage in the Florida Windstorm Underwriting Association as
1707	those areas were defined on January 1, 2002. The high-risk
1708	account must also include quota share primary insurance under
1709	subparagraph (c)2. The area eligible for coverage under the
1710	high-risk account also includes the area within Port Canaveral,
1711	which is bordered on the south by the City of Cape Canaveral,
1712	bordered on the west by the Banana River, and bordered on the
1713	north by Federal Government property. The office may remove
1714	territory from the area eligible for wind-only and quota share
1715	coverage if, after a public hearing, the office finds that
1716	authorized insurers in the voluntary market are willing and able
1717	to write sufficient amounts of personal and commercial
1718	residential coverage for all perils in the territory, including
1719	coverage for the peril of wind, such that risks covered by wind-
1720	only policies in the removed territory could be issued a policy
1721	by the corporation in either the personal lines or commercial
1722	lines account without a significant increase in the
1723	corporation's probable maximum loss in such account. Removal of
1724	territory from the area eligible for wind-only or quota share
1725	coverage does not alter the assignment of wind coverage written
1726	in such areas to the high-risk account.
1727	b.  The three separate accounts must be maintained as long
1728	as financing obligations entered into by the Florida Windstorm
1729	Underwriting Association or Residential Property and Casualty
1730	Joint Underwriting Association are outstanding, in accordance
1731	with the terms of the corresponding financing documents. When
1732	the financing obligations are no longer outstanding, in
1733	accordance with the terms of the corresponding financing
1734	documents, the corporation may use a single account for all
1735	revenues, assets, liabilities, losses, and expenses of the
1736	corporation.
1737	c.  Creditors of the Residential Property and Casualty
1738	Joint Underwriting Association shall have a claim against, and
1739	recourse to, the accounts referred to in sub-sub-subparagraphs
1740	a.(I) and (II) and shall have no claim against, or recourse to,
1741	the account referred to in sub-sub-subparagraph a.(III).
1742	Creditors of the Florida Windstorm Underwriting Association
1743	shall have a claim against, and recourse to, the account
1744	referred to in sub-sub-subparagraph a.(III) and shall have no
1745	claim against, or recourse to, the accounts referred to in sub-
1746	sub-subparagraphs a.(I) and (II).
1747	d.  Revenues, assets, liabilities, losses, and expenses not
1748	attributable to particular accounts shall be prorated among the
1749	accounts.
1750	e.  The Legislature finds that the revenues of the
1751	corporation are revenues that are necessary to meet the
1752	requirements set forth in documents authorizing the issuance of
1753	bonds under this subsection.
1754	f.  No part of the income of the corporation may inure to
1755	the benefit of any private person.
1756	3.  With respect to a deficit in an account:
1757	a.  When the deficit incurred in a particular calendar year
1758	is not greater than 10 percent of the aggregate statewide direct
1759	written premium for the subject lines of business for the prior
1760	calendar year, the entire deficit shall be recovered through
1761	regular assessments of assessable insurers under paragraph (g)
1762	and assessable insureds.
1763	b.  When the deficit incurred in a particular calendar year
1764	exceeds 10 percent of the aggregate statewide direct written
1765	premium for the subject lines of business for the prior calendar
1766	year, the corporation shall levy regular assessments on
1767	assessable insurers under paragraph (g) and on assessable
1768	insureds in an amount equal to the greater of 10 percent of the
1769	deficit or 10 percent of the aggregate statewide direct written
1770	premium for the subject lines of business for the prior calendar
1771	year. Any remaining deficit shall be recovered through emergency
1772	assessments under sub-subparagraph d.
1773	c.  Each assessable insurer's share of the amount being
1774	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1775	be in the proportion that the assessable insurer's direct
1776	written premium for the subject lines of business for the year
1777	preceding the assessment bears to the aggregate statewide direct
1778	written premium for the subject lines of business for that year.
1779	The assessment percentage applicable to each assessable insured
1780	is the ratio of the amount being assessed under sub-subparagraph
1781	a. or sub-subparagraph b. to the aggregate statewide direct
1782	written premium for the subject lines of business for the prior
1783	year. Assessments levied by the corporation on assessable
1784	insurers under sub-subparagraphs a. and b. shall be paid as
1785	required by the corporation's plan of operation and paragraph
1786	(g). Assessments levied by the corporation on assessable
1787	insureds under sub-subparagraphs a. and b. shall be collected by
1788	the surplus lines agent at the time the surplus lines agent
1789	collects the surplus lines tax required by s. 626.932 and shall
1790	be paid to the Florida Surplus Lines Service Office at the time
1791	the surplus lines agent pays the surplus lines tax to the
1792	Florida Surplus Lines Service Office. Upon receipt of regular
1793	assessments from surplus lines agents, the Florida Surplus Lines
1794	Service Office shall transfer the assessments directly to the
1795	corporation as determined by the corporation.
1796	d.  Upon a determination by the board of governors that a
1797	deficit in an account exceeds the amount that will be recovered
1798	through regular assessments under sub-subparagraph a. or sub-
1799	subparagraph b., the board shall levy, after verification by the
1800	office, emergency assessments, for as many years as necessary to
1801	cover the deficits, to be collected by assessable insurers and
1802	the corporation and collected from assessable insureds upon
1803	issuance or renewal of policies for subject lines of business,
1804	excluding National Flood Insurance policies. The amount of the
1805	emergency assessment collected in a particular year shall be a
1806	uniform percentage of that year's direct written premium for
1807	subject lines of business and all accounts of the corporation,
1808	excluding National Flood Insurance Program policy premiums, as
1809	annually determined by the board and verified by the office. The
1810	office shall verify the arithmetic calculations involved in the
1811	board's determination within 30 days after receipt of the
1812	information on which the determination was based.
1813	Notwithstanding any other provision of law, the corporation and
1814	each assessable insurer that writes subject lines of business
1815	shall collect emergency assessments from its policyholders
1816	without such obligation being affected by any credit,
1817	limitation, exemption, or deferment. Emergency assessments
1818	levied by the corporation on assessable insureds shall be
1819	collected by the surplus lines agent at the time the surplus
1820	lines agent collects the surplus lines tax required by s.
1821	626.932 and shall be paid to the Florida Surplus Lines Service
1822	Office at the time the surplus lines agent pays the surplus
1823	lines tax to the Florida Surplus Lines Service Office. The
1824	emergency assessments so collected shall be transferred directly
1825	to the corporation on a periodic basis as determined by the
1826	corporation and shall be held by the corporation solely in the
1827	applicable account. The aggregate amount of emergency
1828	assessments levied for an account under this sub-subparagraph in
1829	any calendar year may not exceed the greater of 10 percent of
1830	the amount needed to cover the original deficit, plus interest,
1831	fees, commissions, required reserves, and other costs associated
1832	with financing of the original deficit, or 10 percent of the
1833	aggregate statewide direct written premium for subject lines of
1834	business and for all accounts of the corporation for the prior
1835	year, plus interest, fees, commissions, required reserves, and
1836	other costs associated with financing the original deficit.
1837	e.  The corporation may pledge the proceeds of assessments,
1838	projected recoveries from the Florida Hurricane Insurance
1839	Catastrophe Fund, other insurance and reinsurance recoverables,
1840	market equalization surcharges and other surcharges, and other
1841	funds available to the corporation as the source of revenue for
1842	and to secure bonds issued under paragraph (g), bonds or other
1843	indebtedness issued under subparagraph (c)3., or lines of credit
1844	or other financing mechanisms issued or created under this
1845	subsection, or to retire any other debt incurred as a result of
1846	deficits or events giving rise to deficits, or in any other way
1847	that the board determines will efficiently recover such
1848	deficits. The purpose of the lines of credit or other financing
1849	mechanisms is to provide additional resources to assist the
1850	corporation in covering claims and expenses attributable to a
1851	catastrophe. As used in this subsection, the term "assessments"
1852	includes regular assessments under sub-subparagraph a., sub-
1853	subparagraph b., or subparagraph (g)1. and emergency assessments
1854	under sub-subparagraph d. Emergency assessments collected under
1855	sub-subparagraph d. are not part of an insurer's rates, are not
1856	premium, and are not subject to premium tax, fees, or
1857	commissions; however, failure to pay the emergency assessment
1858	shall be treated as failure to pay premium. The emergency
1859	assessments under sub-subparagraph d. shall continue as long as
1860	any bonds issued or other indebtedness incurred with respect to
1861	a deficit for which the assessment was imposed remain
1862	outstanding, unless adequate provision has been made for the
1863	payment of such bonds or other indebtedness pursuant to the
1864	documents governing such bonds or other indebtedness.
1865	f.  As used in this subsection, the term "subject lines of
1866	business" means insurance written by assessable insurers or
1867	procured by assessable insureds on real or personal property, as
1868	defined in s. 624.604, including insurance for fire, industrial
1869	fire, allied lines, farmowners multiperil, homeowners
1870	multiperil, commercial multiperil, and mobile homes, and
1871	including liability coverage on all such insurance, but
1872	excluding inland marine as defined in s. 624.607(3) and
1873	excluding vehicle insurance as defined in s. 624.605(1) other
1874	than insurance on mobile homes used as permanent dwellings.
1875	g.  The Florida Surplus Lines Service Office shall
1876	determine annually the aggregate statewide written premium in
1877	subject lines of business procured by assessable insureds and
1878	shall report that information to the corporation in a form and
1879	at a time the corporation specifies to ensure that the
1880	corporation can meet the requirements of this subsection and the
1881	corporation's financing obligations.
1882	h.  The Florida Surplus Lines Service Office shall verify
1883	the proper application by surplus lines agents of assessment
1884	percentages for regular assessments and emergency assessments
1885	levied under this subparagraph on assessable insureds and shall
1886	assist the corporation in ensuring the accurate, timely
1887	collection and payment of assessments by surplus lines agents as
1888	required by the corporation.
1889	(c)  The plan of operation of the corporation:
1890	1.  Must provide for adoption of residential property and
1891	casualty insurance policy forms and commercial residential and
1892	nonresidential property insurance forms, which forms must be
1893	approved by the office prior to use. The corporation shall adopt
1894	the following policy forms:
1895	a.  Standard personal lines policy forms that are
1896	comprehensive multiperil policies providing full coverage of a
1897	residential property equivalent to the coverage provided in the
1898	private insurance market under an HO-3, HO-4, or HO-6 policy.
1899	b.  Basic personal lines policy forms that are policies
1900	similar to an HO-8 policy or a dwelling fire policy that provide
1901	coverage meeting the requirements of the secondary mortgage
1902	market, but which coverage is more limited than the coverage
1903	under a standard policy.
1904	c.  Commercial lines residential policy forms that are
1905	generally similar to the basic perils of full coverage
1906	obtainable for commercial residential structures in the admitted
1907	voluntary market.
1908	d.  Personal lines and commercial lines residential
1909	property insurance forms that cover the peril of wind only. The
1910	forms are applicable only to residential properties located in
1911	areas eligible for coverage under the high-risk account referred
1912	to in sub-subparagraph (b)2.a.
1913	e.  Commercial lines nonresidential property insurance
1914	forms that cover the peril of wind only. The forms are
1915	applicable only to nonresidential properties located in areas
1916	eligible for coverage under the high-risk account referred to in
1917	sub-subparagraph (b)2.a.
1918	2.a.  Must provide that the corporation adopt a program in
1919	which the corporation and authorized insurers enter into quota
1920	share primary insurance agreements for hurricane coverage, as
1921	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1922	property insurance forms for eligible risks which cover the
1923	peril of wind only. As used in this subsection, the term:
1924	(I)  "Quota share primary insurance" means an arrangement
1925	in which the primary hurricane coverage of an eligible risk is
1926	provided in specified percentages by the corporation and an
1927	authorized insurer. The corporation and authorized insurer are
1928	each solely responsible for a specified percentage of hurricane
1929	coverage of an eligible risk as set forth in a quota share
1930	primary insurance agreement between the corporation and an
1931	authorized insurer and the insurance contract. The
1932	responsibility of the corporation or authorized insurer to pay
1933	its specified percentage of hurricane losses of an eligible
1934	risk, as set forth in the quota share primary insurance
1935	agreement, may not be altered by the inability of the other
1936	party to the agreement to pay its specified percentage of
1937	hurricane losses. Eligible risks that are provided hurricane
1938	coverage through a quota share primary insurance arrangement
1939	must be provided policy forms that set forth the obligations of
1940	the corporation and authorized insurer under the arrangement,
1941	clearly specify the percentages of quota share primary insurance
1942	provided by the corporation and authorized insurer, and
1943	conspicuously and clearly state that neither the authorized
1944	insurer nor the corporation may be held responsible beyond its
1945	specified percentage of coverage of hurricane losses.
1946	(II)  "Eligible risks" means personal lines residential and
1947	commercial lines residential risks that meet the underwriting
1948	criteria of the corporation and are located in areas that were
1949	eligible for coverage by the Florida Windstorm Underwriting
1950	Association on January 1, 2002.
1951	b.  The corporation may enter into quota share primary
1952	insurance agreements with authorized insurers at corporation
1953	coverage levels of 90 percent and 50 percent.
1954	c.  If the corporation determines that additional coverage
1955	levels are necessary to maximize participation in quota share
1956	primary insurance agreements by authorized insurers, the
1957	corporation may establish additional coverage levels. However,
1958	the corporation's quota share primary insurance coverage level
1959	may not exceed 90 percent.
1960	d.  Any quota share primary insurance agreement entered
1961	into between an authorized insurer and the corporation must
1962	provide for a uniform specified percentage of coverage of
1963	hurricane losses, by county or territory as set forth by the
1964	corporation board, for all eligible risks of the authorized
1965	insurer covered under the quota share primary insurance
1966	agreement.
1967	e.  Any quota share primary insurance agreement entered
1968	into between an authorized insurer and the corporation is
1969	subject to review and approval by the office. However, such
1970	agreement shall be authorized only as to insurance contracts
1971	entered into between an authorized insurer and an insured who is
1972	already insured by the corporation for wind coverage.
1973	f.  For all eligible risks covered under quota share
1974	primary insurance agreements, the exposure and coverage levels
1975	for both the corporation and authorized insurers shall be
1976	reported by the corporation to the Florida Hurricane Insurance
1977	Catastrophe Fund. For all policies of eligible risks covered
1978	under quota share primary insurance agreements, the corporation
1979	and the authorized insurer shall maintain complete and accurate
1980	records for the purpose of exposure and loss reimbursement
1981	audits as required by Florida Hurricane Insurance Catastrophe
1982	Fund rules. The corporation and the authorized insurer shall
1983	each maintain duplicate copies of policy declaration pages and
1984	supporting claims documents.
1985	g.  The corporation board shall establish in its plan of
1986	operation standards for quota share agreements which ensure that
1987	there is no discriminatory application among insurers as to the
1988	terms of quota share agreements, pricing of quota share
1989	agreements, incentive provisions if any, and consideration paid
1990	for servicing policies or adjusting claims.
1991	h.  The quota share primary insurance agreement between the
1992	corporation and an authorized insurer must set forth the
1993	specific terms under which coverage is provided, including, but
1994	not limited to, the sale and servicing of policies issued under
1995	the agreement by the insurance agent of the authorized insurer
1996	producing the business, the reporting of information concerning
1997	eligible risks, the payment of premium to the corporation, and
1998	arrangements for the adjustment and payment of hurricane claims
1999	incurred on eligible risks by the claims adjuster and personnel
2000	of the authorized insurer. Entering into a quota sharing
2001	insurance agreement between the corporation and an authorized
2002	insurer shall be voluntary and at the discretion of the
2003	authorized insurer.
2004	3.  May provide that the corporation may employ or
2005	otherwise contract with individuals or other entities to provide
2006	administrative or professional services that may be appropriate
2007	to effectuate the plan. The corporation shall have the power to
2008	borrow funds, by issuing bonds or by incurring other
2009	indebtedness, and shall have other powers reasonably necessary
2010	to effectuate the requirements of this subsection, including,
2011	without limitation, the power to issue bonds and incur other
2012	indebtedness in order to refinance outstanding bonds or other
2013	indebtedness. The corporation may, but is not required to, seek
2014	judicial validation of its bonds or other indebtedness under
2015	chapter 75. The corporation may issue bonds or incur other
2016	indebtedness, or have bonds issued on its behalf by a unit of
2017	local government pursuant to subparagraph (g)2., in the absence
2018	of a hurricane or other weather-related event, upon a
2019	determination by the corporation, subject to approval by the
2020	office, that such action would enable it to efficiently meet the
2021	financial obligations of the corporation and that such
2022	financings are reasonably necessary to effectuate the
2023	requirements of this subsection. The corporation is authorized
2024	to take all actions needed to facilitate tax-free status for any
2025	such bonds or indebtedness, including formation of trusts or
2026	other affiliated entities. The corporation shall have the
2027	authority to pledge assessments, projected recoveries from the
2028	Florida Hurricane Insurance Catastrophe Fund, other reinsurance
2029	recoverables, market equalization and other surcharges, and
2030	other funds available to the corporation as security for bonds
2031	or other indebtedness. In recognition of s. 10, Art. I of the
2032	State Constitution, prohibiting the impairment of obligations of
2033	contracts, it is the intent of the Legislature that no action be
2034	taken whose purpose is to impair any bond indenture or financing
2035	agreement or any revenue source committed by contract to such
2036	bond or other indebtedness.
2037	4.a.  Must require that the corporation operate subject to
2038	the supervision and approval of a board of governors consisting
2039	of 8 individuals who are residents of this state, from different
2040	geographical areas of this state. The Governor, the Chief
2041	Financial Officer, the President of the Senate, and the Speaker
2042	of the House of Representatives shall each appoint two members
2043	of the board, effective August 1, 2005. At least one of the two
2044	members appointed by each appointing officer must have
2045	demonstrated expertise in insurance. The Chief Financial Officer
2046	shall designate one of the appointees as chair. All board
2047	members serve at the pleasure of the appointing officer. All
2048	board members, including the chair, must be appointed to serve
2049	for 3-year terms beginning annually on a date designated by the
2050	plan. Any board vacancy shall be filled for the unexpired term
2051	by the appointing officer. The Chief Financial Officer shall
2052	appoint a technical advisory group to provide information and
2053	advice to the board of governors in connection with the board's
2054	duties under this subsection. The executive director and senior
2055	managers of the corporation shall be engaged by the board, as
2056	recommended by the Chief Financial Officer, and serve at the
2057	pleasure of the board. The executive director is responsible for
2058	employing other staff as the corporation may require, subject to
2059	review and concurrence by the board and the Chief Financial
2060	Officer.
2061	b.  The board shall create a Market Accountability Advisory
2062	Committee to assist the corporation in developing awareness of
2063	its rates and its customer and agent service levels in
2064	relationship to the voluntary market insurers writing similar
2065	coverage. The members of the advisory committee shall consist of
2066	the following 11 persons, one of whom must be elected chair by
2067	the members of the committee: four representatives, one
2068	appointed by the Florida Association of Insurance Agents, one by
2069	the Florida Association of Insurance and Financial Advisors, one
2070	by the Professional Insurance Agents of Florida, and one by the
2071	Latin American Association of Insurance Agencies; three
2072	representatives appointed by the insurers with the three highest
2073	voluntary market share of residential property insurance
2074	business in the state; one representative from the Office of
2075	Insurance Regulation; one consumer appointed by the board who is
2076	insured by the corporation at the time of appointment to the
2077	committee; one representative appointed by the Florida
2078	Association of Realtors; and one representative appointed by the
2079	Florida Bankers Association. All members must serve for 3-year
2080	terms and may serve for consecutive terms. The committee shall
2081	report to the corporation at each board meeting on insurance
2082	market issues which may include rates and rate competition with
2083	the voluntary market; service, including policy issuance, claims
2084	processing, and general responsiveness to policyholders,
2085	applicants, and agents; and matters relating to depopulation.
2086	5.  Must provide a procedure for determining the
2087	eligibility of a risk for coverage, as follows:
2088	a.  Subject to the provisions of s. 627.3517, with respect
2089	to personal lines residential risks, if the risk is offered
2090	coverage from an authorized insurer at the insurer's approved
2091	rate under either a standard policy including wind coverage or,
2092	if consistent with the insurer's underwriting rules as filed
2093	with the office, a basic policy including wind coverage, the
2094	risk is not eligible for any policy issued by the corporation.
2095	If the risk is not able to obtain any such offer, the risk is
2096	eligible for either a standard policy including wind coverage or
2097	a basic policy including wind coverage issued by the
2098	corporation; however, if the risk could not be insured under a
2099	standard policy including wind coverage regardless of market
2100	conditions, the risk shall be eligible for a basic policy
2101	including wind coverage unless rejected under subparagraph 8.
2102	The corporation shall determine the type of policy to be
2103	provided on the basis of objective standards specified in the
2104	underwriting manual and based on generally accepted underwriting
2105	practices.
2106	(I)  If the risk accepts an offer of coverage through the
2107	market assistance plan or an offer of coverage through a
2108	mechanism established by the corporation before a policy is
2109	issued to the risk by the corporation or during the first 30
2110	days of coverage by the corporation, and the producing agent who
2111	submitted the application to the plan or to the corporation is
2112	not currently appointed by the insurer, the insurer shall:
2113	(A)  Pay to the producing agent of record of the policy,
2114	for the first year, an amount that is the greater of the
2115	insurer's usual and customary commission for the type of policy
2116	written or a fee equal to the usual and customary commission of
2117	the corporation; or
2118	(B)  Offer to allow the producing agent of record of the
2119	policy to continue servicing the policy for a period of not less
2120	than 1 year and offer to pay the agent the greater of the
2121	insurer's or the corporation's usual and customary commission
2122	for the type of policy written.
2123
2124	If the producing agent is unwilling or unable to accept
2125	appointment, the new insurer shall pay the agent in accordance
2126	with sub-sub-sub-subparagraph (A).
2127	(II)  When the corporation enters into a contractual
2128	agreement for a take-out plan, the producing agent of record of
2129	the corporation policy is entitled to retain any unearned
2130	commission on the policy, and the insurer shall:
2131	(A)  Pay to the producing agent of record of the
2132	corporation policy, for the first year, an amount that is the
2133	greater of the insurer's usual and customary commission for the
2134	type of policy written or a fee equal to the usual and customary
2135	commission of the corporation; or
2136	(B)  Offer to allow the producing agent of record of the
2137	corporation policy to continue servicing the policy for a period
2138	of not less than 1 year and offer to pay the agent the greater
2139	of the insurer's or the corporation's usual and customary
2140	commission for the type of policy written.
2141
2142	If the producing agent is unwilling or unable to accept
2143	appointment, the new insurer shall pay the agent in accordance
2144	with sub-sub-sub-subparagraph (A).
2145	b.  With respect to commercial lines residential risks, if
2146	the risk is offered coverage under a policy including wind
2147	coverage from an authorized insurer at its approved rate, the
2148	risk is not eligible for any policy issued by the corporation.
2149	If the risk is not able to obtain any such offer, the risk is
2150	eligible for a policy including wind coverage issued by the
2151	corporation.
2152	(I)  If the risk accepts an offer of coverage through the
2153	market assistance plan or an offer of coverage through a
2154	mechanism established by the corporation before a policy is
2155	issued to the risk by the corporation or during the first 30
2156	days of coverage by the corporation, and the producing agent who
2157	submitted the application to the plan or the corporation is not
2158	currently appointed by the insurer, the insurer shall:
2159	(A)  Pay to the producing agent of record of the policy,
2160	for the first year, an amount that is the greater of the
2161	insurer's usual and customary commission for the type of policy
2162	written or a fee equal to the usual and customary commission of
2163	the corporation; or
2164	(B)  Offer to allow the producing agent of record of the
2165	policy to continue servicing the policy for a period of not less
2166	than 1 year and offer to pay the agent the greater of the
2167	insurer's or the corporation's usual and customary commission
2168	for the type of policy written.
2169
2170	If the producing agent is unwilling or unable to accept
2171	appointment, the new insurer shall pay the agent in accordance
2172	with sub-sub-sub-subparagraph (A).
2173	(II)  When the corporation enters into a contractual
2174	agreement for a take-out plan, the producing agent of record of
2175	the corporation policy is entitled to retain any unearned
2176	commission on the policy, and the insurer shall:
2177	(A)  Pay to the producing agent of record of the
2178	corporation policy, for the first year, an amount that is the
2179	greater of the insurer's usual and customary commission for the
2180	type of policy written or a fee equal to the usual and customary
2181	commission of the corporation; or
2182	(B)  Offer to allow the producing agent of record of the
2183	corporation policy to continue servicing the policy for a period
2184	of not less than 1 year and offer to pay the agent the greater
2185	of the insurer's or the corporation's usual and customary
2186	commission for the type of policy written.
2187
2188	If the producing agent is unwilling or unable to accept
2189	appointment, the new insurer shall pay the agent in accordance
2190	with sub-sub-sub-subparagraph (A).
2191	6.  Must include rules for classifications of risks and
2192	rates therefor.
2193	7.  Must provide that if premium and investment income for
2194	an account attributable to a particular calendar year are in
2195	excess of projected losses and expenses for the account
2196	attributable to that year, such excess shall be held in surplus
2197	in the account. Such surplus shall be available to defray
2198	deficits in that account as to future years and shall be used
2199	for that purpose prior to assessing assessable insurers and
2200	assessable insureds as to any calendar year.
2201	8.  Must provide objective criteria and procedures to be
2202	uniformly applied for all applicants in determining whether an
2203	individual risk is so hazardous as to be uninsurable. In making
2204	this determination and in establishing the criteria and
2205	procedures, the following shall be considered:
2206	a.  Whether the likelihood of a loss for the individual
2207	risk is substantially higher than for other risks of the same
2208	class; and
2209	b.  Whether the uncertainty associated with the individual
2210	risk is such that an appropriate premium cannot be determined.
2211
2212	The acceptance or rejection of a risk by the corporation shall
2213	be construed as the private placement of insurance, and the
2214	provisions of chapter 120 shall not apply.
2215	9.  Must provide that the corporation shall make its best
2216	efforts to procure catastrophe reinsurance at reasonable rates,
2217	to cover its projected 100-year probable maximum loss as
2218	determined by the board of governors.
2219	10.  Must provide that in the event of regular deficit
2220	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2221	(b)3.b., in the personal lines account, the commercial lines
2222	residential account, or the high-risk account, the corporation
2223	shall levy upon corporation policyholders in its next rate
2224	filing, or by a separate rate filing solely for this purpose, a
2225	market equalization surcharge arising from a regular assessment
2226	in such account in a percentage equal to the total amount of
2227	such regular assessments divided by the aggregate statewide
2228	direct written premium for subject lines of business for the
2229	prior calendar year. Market equalization surcharges under this
2230	subparagraph are not considered premium and are not subject to
2231	commissions, fees, or premium taxes; however, failure to pay a
2232	market equalization surcharge shall be treated as failure to pay
2233	premium.
2234	11.  The policies issued by the corporation must provide
2235	that, if the corporation or the market assistance plan obtains
2236	an offer from an authorized insurer to cover the risk at its
2237	approved rates, the risk is no longer eligible for renewal
2238	through the corporation.
2239	12.  Corporation policies and applications must include a
2240	notice that the corporation policy could, under this section, be
2241	replaced with a policy issued by an authorized insurer that does
2242	not provide coverage identical to the coverage provided by the
2243	corporation. The notice shall also specify that acceptance of
2244	corporation coverage creates a conclusive presumption that the
2245	applicant or policyholder is aware of this potential.
2246	13.  May establish, subject to approval by the office,
2247	different eligibility requirements and operational procedures
2248	for any line or type of coverage for any specified county or
2249	area if the board determines that such changes to the
2250	eligibility requirements and operational procedures are
2251	justified due to the voluntary market being sufficiently stable
2252	and competitive in such area or for such line or type of
2253	coverage and that consumers who, in good faith, are unable to
2254	obtain insurance through the voluntary market through ordinary
2255	methods would continue to have access to coverage from the
2256	corporation. When coverage is sought in connection with a real
2257	property transfer, such requirements and procedures shall not
2258	provide for an effective date of coverage later than the date of
2259	the closing of the transfer as established by the transferor,
2260	the transferee, and, if applicable, the lender.
2261	14.  Must provide that, with respect to the high-risk
2262	account, any assessable insurer with a surplus as to
2263	policyholders of $25 million or less writing 25 percent or more
2264	of its total countrywide property insurance premiums in this
2265	state may petition the office, within the first 90 days of each
2266	calendar year, to qualify as a limited apportionment company. In
2267	no event shall a limited apportionment company be required to
2268	participate in the portion of any assessment, within the high-
2269	risk account, pursuant to sub-subparagraph (b)3.a. or sub-
2270	subparagraph (b)3.b. in the aggregate which exceeds $50 million
2271	after payment of available high-risk account funds in any
2272	calendar year. However, a limited apportionment company shall
2273	collect from its policyholders any emergency assessment imposed
2274	under sub-subparagraph (b)3.d. The plan shall provide that, if
2275	the office determines that any regular assessment will result in
2276	an impairment of the surplus of a limited apportionment company,
2277	the office may direct that all or part of such assessment be
2278	deferred as provided in subparagraph (g)4. However, there shall
2279	be no limitation or deferment of an emergency assessment to be
2280	collected from policyholders under sub-subparagraph (b)3.d.
2281	15.  Must provide that the corporation appoint as its
2282	licensed agents only those agents who also hold an appointment
2283	as defined in s. 626.015(3) with an insurer who at the time of
2284	the agent's initial appointment by the corporation is authorized
2285	to write and is actually writing personal lines residential
2286	property coverage, commercial residential property coverage, or
2287	commercial nonresidential property coverage within the state.
2288	(k)  Upon a determination by the office that the conditions
2289	giving rise to the establishment and activation of the
2290	corporation no longer exist, the corporation is dissolved. Upon
2291	dissolution, the assets of the corporation shall be applied
2292	first to pay all debts, liabilities, and obligations of the
2293	corporation, including the establishment of reasonable reserves
2294	for any contingent liabilities or obligations, and all remaining
2295	assets of the corporation shall become property of the state and
2296	shall be deposited in the Florida Hurricane Insurance
2297	Catastrophe Fund. However, no dissolution shall take effect as
2298	long as the corporation has bonds or other financial obligations
2299	outstanding unless adequate provision has been made for the
2300	payment of the bonds or other financial obligations pursuant to
2301	the documents authorizing the issuance of the bonds or other
2302	financial obligations.
2303	(l)1.  Effective July 1, 2002, policies of the Residential
2304	Property and Casualty Joint Underwriting Association shall
2305	become policies of the corporation. All obligations, rights,
2306	assets and liabilities of the Residential Property and Casualty
2307	Joint Underwriting Association, including bonds, note and debt
2308	obligations, and the financing documents pertaining to them
2309	become those of the corporation as of July 1, 2002. The
2310	corporation is not required to issue endorsements or
2311	certificates of assumption to insureds during the remaining term
2312	of in-force transferred policies.
2313	2.  Effective July 1, 2002, policies of the Florida
2314	Windstorm Underwriting Association are transferred to the
2315	corporation and shall become policies of the corporation. All
2316	obligations, rights, assets, and liabilities of the Florida
2317	Windstorm Underwriting Association, including bonds, note and
2318	debt obligations, and the financing documents pertaining to them
2319	are transferred to and assumed by the corporation on July 1,
2320	2002. The corporation is not required to issue endorsement or
2321	certificates of assumption to insureds during the remaining term
2322	of in-force transferred policies.
2323	3.  The Florida Windstorm Underwriting Association and the
2324	Residential Property and Casualty Joint Underwriting Association
2325	shall take all actions as may be proper to further evidence the
2326	transfers and shall provide the documents and instruments of
2327	further assurance as may reasonably be requested by the
2328	corporation for that purpose. The corporation shall execute
2329	assumptions and instruments as the trustees or other parties to
2330	the financing documents of the Florida Windstorm Underwriting
2331	Association or the Residential Property and Casualty Joint
2332	Underwriting Association may reasonably request to further
2333	evidence the transfers and assumptions, which transfers and
2334	assumptions, however, are effective on the date provided under
2335	this paragraph whether or not, and regardless of the date on
2336	which, the assumptions or instruments are executed by the
2337	corporation. Subject to the relevant financing documents
2338	pertaining to their outstanding bonds, notes, indebtedness, or
2339	other financing obligations, the moneys, investments,
2340	receivables, choses in action, and other intangibles of the
2341	Florida Windstorm Underwriting Association shall be credited to
2342	the high-risk account of the corporation, and those of the
2343	personal lines residential coverage account and the commercial
2344	lines residential coverage account of the Residential Property
2345	and Casualty Joint Underwriting Association shall be credited to
2346	the personal lines account and the commercial lines account,
2347	respectively, of the corporation.
2348	4.  Effective July 1, 2002, a new applicant for property
2349	insurance coverage who would otherwise have been eligible for
2350	coverage in the Florida Windstorm Underwriting Association is
2351	eligible for coverage from the corporation as provided in this
2352	subsection.
2353	5.  The transfer of all policies, obligations, rights,
2354	assets, and liabilities from the Florida Windstorm Underwriting
2355	Association to the corporation and the renaming of the
2356	Residential Property and Casualty Joint Underwriting Association
2357	as the corporation shall in no way affect the coverage with
2358	respect to covered policies as defined in s. 215.555(2)(c)
2359	provided to these entities by the Florida Hurricane Insurance
2360	Catastrophe Fund. The coverage provided by the Florida Hurricane
2361	Insurance Catastrophe Fund to the Florida Windstorm Underwriting
2362	Association based on its exposures as of June 30, 2002, and each
2363	June 30 thereafter shall be redesignated as coverage for the
2364	high-risk account of the corporation. Notwithstanding any other
2365	provision of law, the coverage provided by the Florida Hurricane
2366	Insurance Catastrophe Fund to the Residential Property and
2367	Casualty Joint Underwriting Association based on its exposures
2368	as of June 30, 2002, and each June 30 thereafter shall be
2369	transferred to the personal lines account and the commercial
2370	lines account of the corporation. Notwithstanding any other
2371	provision of law, the high-risk account shall be treated, for
2372	all Florida Hurricane Insurance Catastrophe Fund purposes, as if
2373	it were a separate participating insurer with its own exposures,
2374	reimbursement premium, and loss reimbursement. Likewise, the
2375	personal lines and commercial lines accounts shall be viewed
2376	together, for all Florida Hurricane Insurance Catastrophe Fund
2377	purposes, as if the two accounts were one and represent a
2378	single, separate participating insurer with its own exposures,
2379	reimbursement premium, and loss reimbursement. The coverage
2380	provided by the Florida Hurricane Insurance Catastrophe Fund to
2381	the corporation shall constitute and operate as a full transfer
2382	of coverage from the Florida Windstorm Underwriting Association
2383	and Residential Property and Casualty Joint Underwriting to the
2384	corporation.
2385	Section 10.  Paragraph (d) of subsection (6) of section
2386	627.701, Florida Statutes, is amended to read:
2387	627.701  Liability of insureds; coinsurance; deductibles.--
2388	(6)
2389	(d)  The office shall draft and formally propose as a rule
2390	the form for the certificate of security. The certificate of
2391	security may be issued in any of the following circumstances:
2392	1.  A mortgage lender or other financial institution may
2393	issue a certificate of security after granting the applicant a
2394	line of credit, secured by equity in real property or other
2395	reasonable security, which line of credit may be drawn on only
2396	to pay for the deductible portion of insured construction or
2397	reconstruction after a hurricane loss. In the sole discretion of
2398	the mortgage lender or other financial institution, the line of
2399	credit may be issued to an applicant on an unsecured basis.
2400	2.  A licensed insurance agent may issue a certificate of
2401	security after obtaining for an applicant a line of credit,
2402	secured by equity in real property or other reasonable security,
2403	which line of credit may be drawn on only to pay for the
2404	deductible portion of insured construction or reconstruction
2405	after a hurricane loss. The Florida Hurricane Insurance
2406	Catastrophe Fund shall negotiate agreements creating a financing
2407	consortium to serve as an additional source of lines of credit
2408	to secure deductibles. Any licensed insurance agent may act as
2409	the agent of such consortium.
2410	3.  Any person qualified to act as a trustee for any
2411	purpose may issue a certificate of security secured by a pledge
2412	of assets, with the restriction that the assets may be drawn on
2413	only to pay for the deductible portion of insured construction
2414	or reconstruction after a hurricane loss.
2415	4.  Any insurer, including any admitted insurer or any
2416	surplus lines insurer, may issue a certificate of security after
2417	issuing the applicant a policy of supplemental insurance that
2418	will pay for 100 percent of the deductible portion of insured
2419	construction or reconstruction after a hurricane loss.
2420	5.  Any other method approved by the office upon finding
2421	that such other method provides a similar level of security as
2422	the methods specified in this paragraph and that such other
2423	method has no negative impact on residential property insurance
2424	catastrophic capacity. The legislative intent of this
2425	subparagraph is to provide the flexibility needed to achieve the
2426	public policy of expanding property insurance capacity while
2427	improving the affordability of property insurance.
2428	Section 11.  Paragraph (a) of subsection (3) of section
2429	627.7077, Florida Statutes, is amended to read:
2430	627.7077  Florida Sinkhole Insurance Facility and other
2431	matters related to affordability and availability of sinkhole
2432	insurance; feasibility study.--
2433	(3)  The feasibility study shall, at a minimum, address the
2434	following issues:
2435	(a)  Where the facility should be housed, including, but
2436	not limited to, the options of creating a separate facility or
2437	using the Citizens Property Insurance Corporation or the Florida
2438	Hurricane Insurance Catastrophe Fund.
2439	Section 12.  Subsection (3) of section 109 of chapter 2000-
2440	141, Laws of Florida, is amended to read:
2441	Section 109.  The Legislature has reviewed the Florida
2442	Building Code that was adopted by action of the Florida Building
2443	Commission on February 15, 2000, and that was noticed for rule
2444	adoption by reference in Rule 9B-3.047, F.A.C., on February 18,
2445	2000, in the Florida Administrative Weekly on page 731. The
2446	Florida Building Commission is directed to continue the process
2447	to adopt the code, pursuant to section 120.54(3), Florida
2448	Statutes, and to incorporate the following provisions or
2449	standards for the State of Florida:
2450	(3)  For areas of the state not within the high velocity
2451	hurricane zone, the commission shall adopt, pursuant to s.
2452	553.73, Florida Statutes, the wind protection requirements of
2453	the American Society of Civil Engineers, Standard 7, 1998
2454	edition as implemented by the International Building Code, 2000
2455	edition, and as modified by the commission in its February 15,
2456	2000, adoption of the Florida Building Code for rule adoption by
2457	reference in Rule 9B-3.047, Florida Administrative Code.
2458	However, from the eastern border of Franklin County to the
2459	Florida-Alabama line, only land within 1 mile of the coast shall
2460	be subject to the windborne-debris requirements adopted by the
2461	commission. The exact location of wind speed lines shall be
2462	established by local ordinance, using recognized physical
2463	landmarks such as major roads, canals, rivers, and lake shores,
2464	wherever possible. Buildings constructed in the windborne debris
2465	region must be either designed for internal pressures that may
2466	result inside a building when a window or door is broken or a
2467	hole is created in its walls or roof by large debris, or be
2468	designed with protected openings. Except in the high velocity
2469	hurricane zone, local governments may not prohibit the option of
2470	designing buildings to resist internal pressures.
2471
2472	The Legislature declares that changes made to the proposed Rule
2473	9B-3.047, Florida Administrative Code, to implement the
2474	requirements of this act prior to October 1, 2000, are not
2475	subject to rule challenges under section 120.56, Florida
2476	Statutes. However, the entire rule, adopted pursuant to s.
2477	120.54(3), Florida Statutes, as amended after October 1, 2000,
2478	is subject to rule challenges under s. 120.56, Florida Statutes.
2479	Section 13.  This act shall take effect July 1, 2006.

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