HB 7077

1	A bill to be entitled
2	An act relating to hurricane preparedness and insurance;
3	amending s. 163.01, F.S.; correcting a cross-reference;
4	amending s. 215.555, F.S.; revising certain reimbursement
5	contract requirements; revising criteria, requirements,
6	and limitations on temporary emergency options for
7	additional coverage under the Florida Hurricane
8	Catastrophe Fund; amending s. 215.5595, F.S.; providing
9	eligibility of certain insurers for a surplus note;
10	providing an aggregate requirement; amending s. 624.407,
11	F.S.; revising an insurer criterion for capital funds
12	requirements for new insurers; amending s. 624.408, F.S.;
13	specifying an additional surplus to policyholder amount
14	requirement for certain insurers; amending s. 627.0613,
15	F.S.; limiting application of certain annual report card
16	preparation powers of the consumer advocate to personal
17	residential property insurers; amending s. 627.062, F.S.;
18	specifying application of certain "file and use"
19	requirements to residential property insurance only;
20	amending s. 627.0629, F.S.; requiring property insurers to
21	periodically reevaluate certain discounts, credits, rate
22	differentials, and deductible reductions and make certain
23	adjustments relating to mitigation measures; requiring
24	insurers to make rate filings for certain purposes;
25	amending s. 627.0655, F.S.; revising criteria for certain
26	inclusion of discounts in certain premiums; amending s.
27	627.351, F.S.; revising a premium payment plan option
28	provision of the operating plan requirements of Citizens
29	Property Insurance Corporation; amending s. 627.3511,
30	F.S.; correcting a cross-reference; amending s. 627.3515,
31	F.S.; revising criteria for an electronic database for a
32	business plan; amending s. 627.3517, F.S.; deleting a
33	provision specifying nonapplication for a certain period;
34	amending s. 627.4035, F.S.; revising a premium payment
35	plan option provision for certain insurers; amending s.
36	627.4133, F.S.; specifying requirements for notices of
37	renewal premium of property insurance policies;
38	authorizing the Financial Services Commission to adopt
39	rules; amending s. 627.701, F.S.; revising requirements
40	for deductibles for certain personal lines residential
41	property insurance policies; amending s. 627.70131, F.S.;
42	revising certain payment or denial of claim requirements;
43	providing for application to residential property
44	insurance claims only; specifying regulatory action as an
45	exclusive remedy for certain violations; amending s.
46	627.712, F.S.; limiting application of certain residential
47	hurricane coverage requirements to personal lines
48	policies; specifying a period of application of certain
49	exclusions; providing for implementation of changes to
50	certain exclusions; amending s. 627.713, F.S.; limiting
51	application of certain reporting requirements to the
52	conclusion of the Atlantic hurricane season; amending s.
53	627.7277, F.S.; deleting certain notice of renewal premium
54	requirements; deleting authority of the commission to
55	adopt rules; amending s. 631.57, F.S.; revising certain
56	emergency assessment provisions relating to insurers
57	rendered insolvent by the effects of hurricanes;
58	preserving certain Florida Building Code internal design
59	options for certain building permits for a certain time;
60	providing for retroactive application; providing
61	severability; limiting application of certain rate filing
62	requirements relating to presumed factor savings to
63	certain catastrophe reinsurance contracts; excusing
64	certain insurers from being required to reflect certain
65	savings in presumed factor rate filings; providing
66	effective dates.
67
68	Be It Enacted by the Legislature of the State of Florida:
69
70	Section 1.  Paragraph (h) of subsection (7) of section
71	163.01, Florida Statutes, as amended by chapter 2007-1, Laws of
72	Florida, is amended to read:
73	163.01  Florida Interlocal Cooperation Act of 1969.--
74	(7)
75	(h)1.  Notwithstanding the provisions of paragraph (c), any
76	separate legal entity consisting of an alliance, as defined in
77	s. 395.106(2)(a), created pursuant to this paragraph and
78	controlled by and whose members consist of eligible entities
79	comprised of special districts created pursuant to a special act
80	and having the authority to own or operate one or more hospitals
81	licensed in this state or hospitals licensed in this state that
82	are owned, operated, or funded by a county or municipality, for
83	the purpose of providing property insurance coverage as defined
84	in s. 395.106(2)(b)(c), for such eligible entities, may exercise
85	all powers under this subsection in connection with borrowing
86	funds for such purposes, including, without limitation, the
87	authorization, issuance, and sale of bonds, notes, or other
88	obligations of indebtedness. Borrowed funds, including, but not
89	limited to, bonds issued by such alliance shall be deemed issued
90	on behalf of such eligible entities that enter into loan
91	agreements with such separate legal entity as provided in this
92	paragraph.
93	2.  Any such separate legal entity shall have all the
94	powers that are provided by the interlocal agreement under which
95	the entity is created or that are necessary to finance, operate,
96	or manage the alliance's property insurance coverage program.
97	Proceeds of bonds, notes, or other obligations issued by such an
98	entity may be loaned to any one or more eligible entities. Such
99	eligible entities are authorized to enter into loan agreements
100	with any separate legal entity created pursuant to this
101	paragraph for the purpose of obtaining moneys with which to
102	finance property insurance coverage or claims. Obligations of
103	any eligible entity pursuant to a loan agreement as described in
104	this paragraph may be validated as provided in chapter 75.
105	3.  Any bonds, notes, or other obligations to be issued or
106	incurred by a separate legal entity created pursuant to this
107	paragraph shall be authorized by resolution of the governing
108	body of such entity and bear the date or dates; mature at the
109	time or times, not exceeding 30 years from their respective
110	dates; bear interest at the rate or rates, which may be fixed or
111	vary at such time or times and in accordance with a specified
112	formula or method of determination; be payable at the time or
113	times; be in the denomination; be in the form; carry the
114	registration privileges; be executed in the manner; be payable
115	from the sources and in the medium of payment and at the place;
116	and be subject to redemption, including redemption prior to
117	maturity, as the resolution may provide. The bonds, notes, or
118	other obligations may be sold at public or private sale for such
119	price as the governing body of the separate legal entity shall
120	determine. The bonds may be secured by such credit enhancement,
121	if any, as the governing body of the separate legal entity deems
122	appropriate. The bonds may be secured by an indenture of trust
123	or trust agreement. In addition, the governing body of the
124	separate legal entity may delegate, to such officer or official
125	of such entity as the governing body may select, the power to
126	determine the time; manner of sale, public or private;
127	maturities; rate or rates of interest, which may be fixed or may
128	vary at such time or times and in accordance with a specified
129	formula or method of determination; and other terms and
130	conditions as may be deemed appropriate by the officer or
131	official so designated by the governing body of such separate
132	legal entity. However, the amounts and maturities of such bonds,
133	the interest rate or rates, and the purchase price of such bonds
134	shall be within the limits prescribed by the governing body of
135	such separate legal entity in its resolution delegating to such
136	officer or official the power to authorize the issuance and sale
137	of such bonds.
138	4.  Bonds issued pursuant to this paragraph may be
139	validated as provided in chapter 75. The complaint in any action
140	to validate such bonds shall be filed only in the Circuit Court
141	for Leon County. The notice required to be published by s. 75.06
142	shall be published in Leon County and in each county in which an
143	eligible entity that is a member of an alliance is located. The
144	complaint and order of the circuit court shall be served only on
145	the State Attorney of the Second Judicial Circuit and on the
146	state attorney of each circuit in each county in which an
147	eligible entity receiving bond proceeds is located.
148	5.  The accomplishment of the authorized purposes of a
149	separate legal entity created under this paragraph is deemed in
150	all respects for the benefit, increase of the commerce and
151	prosperity, and improvement of the health and living conditions
152	of the people of this state. Inasmuch as the separate legal
153	entity performs essential public functions in accomplishing its
154	purposes, the separate legal entity is not required to pay any
155	taxes or assessments of any kind upon any property acquired or
156	used by the entity for such purposes or upon any revenues at any
157	time received by the entity. The bonds, notes, and other
158	obligations of such separate legal entity, the transfer of and
159	income from such bonds, notes, and other obligations, including
160	any profits made on the sale of such bonds, notes, and other
161	obligations, are at all times free from taxation of any kind of
162	the state or by any political subdivision or other agency or
163	instrumentality of the state. The exemption granted in this
164	paragraph does not apply to any tax imposed by chapter 220 on
165	interest, income, or profits on debt obligations owned by
166	corporations.
167	6.  The participation by any eligible entity in an alliance
168	or a separate legal entity created pursuant to this paragraph
169	may not be deemed a waiver of immunity to the extent of
170	liability or any other coverage, and a contract entered
171	regarding such alliance is not required to contain any provision
172	for waiver.
173	Section 2.  Paragraph (b) of subsection (4) and subsection
174	(16) of section 215.555, Florida Statutes, as amended by chapter
175	2007-1, Laws of Florida, are amended to read:
176	215.555  Florida Hurricane Catastrophe Fund.--
177	(4)  REIMBURSEMENT CONTRACTS.--
178	(b)1.  The contract shall contain a promise by the board to
179	reimburse the insurer for 45 percent, 75 percent, or 90 percent
180	of its losses from each covered event in excess of the insurer's
181	retention, plus 5 percent of the reimbursed losses to cover loss
182	adjustment expenses.
183	2.  The insurer must elect one of the percentage coverage
184	levels specified in this paragraph and may, upon renewal of a
185	reimbursement contract, elect a lower percentage coverage level
186	if no revenue bonds issued under subsection (6) after a covered
187	event are outstanding, or elect a higher percentage coverage
188	level, regardless of whether or not revenue bonds are
189	outstanding. All members of an insurer group must elect the same
190	percentage coverage level. Any joint underwriting association,
191	risk apportionment plan, or other entity created under s.
192	627.351 must elect the 90-percent coverage level.
193	3.  The contract shall provide that reimbursement amounts
194	shall not be reduced by reinsurance paid or payable to the
195	insurer from other sources.
196	4.  Notwithstanding any other provision contained in this
197	section, the board shall make available to insurers that
198	purchased coverage provided by this subparagraph participated in
199	2006, insurers qualifying as limited apportionment companies
200	under s. 627.351(6)(c) which began writing property insurance in
201	2007, and insurers that were approved to participate in 2006 or
202	that are approved in 2007 for the Insurance Capital Build-Up
203	Incentive Program pursuant to s. 215.5595, a contract or
204	contract addendum that provides an additional amount of
205	reimbursement coverage of up to $10 million. The premium to be
206	charged for this additional reimbursement coverage shall be 50
207	percent of the additional reimbursement coverage provided, which
208	shall include one prepaid reinstatement. The minimum retention
209	level that an eligible participating insurer must retain
210	associated with this additional coverage layer is 30 percent of
211	the insurer's surplus as of December 31, 2006. This coverage
212	shall be in addition to all other coverage that may be provided
213	under this section. The coverage provided by the fund under this
214	subsection shall be in addition to the claims-paying capacity as
215	defined in subparagraph (c)1., but only with respect to those
216	insurers that select the additional coverage option and meet the
217	requirements of this subsection. The claims-paying capacity with
218	respect to all other participating insurers and limited
219	apportionment companies that do not select the additional
220	coverage option shall be limited to their reimbursement
221	premium's proportionate share of the actual claims-paying
222	capacity otherwise defined in subparagraph (c)1. and as provided
223	for under the terms of the reimbursement contract. Coverage
224	provided in the reimbursement contract will not be affected by
225	the additional premiums paid by participating insurers
226	exercising the additional coverage option allowed in this
227	subparagraph. This subparagraph expires on May 31, 2008.
228	(16)  TEMPORARY EMERGENCY OPTIONS FOR ADDITIONAL
229	COVERAGE.--
230	(a)  Findings and intent.--
231	1.  The Legislature finds that:
232	a.  Because of temporary disruptions in the market for
233	catastrophic reinsurance, many property insurers were unable to
234	procure reinsurance for the 2006 hurricane season with an
235	attachment point below the insurers' respective Florida
236	Hurricane Catastrophe Fund attachment points, were unable to
237	procure sufficient amounts of such reinsurance, or were able to
238	procure such reinsurance only by incurring substantially higher
239	costs than in prior years.
240	b.  The reinsurance market problems were responsible, at
241	least in part, for substantial premium increases to many
242	consumers and increases in the number of policies issued by the
243	Citizens Property Insurance Corporation.
244	c.  It is likely that the reinsurance market disruptions
245	will not significantly abate prior to the 2007 hurricane season.
246	2.  It is the intent of the Legislature to create a
247	temporary emergency program, applicable to the 2007, 2008, and
248	2009 hurricane seasons, to address these market disruptions and
249	enable insurers, at their option, to procure additional coverage
250	from the Florida Hurricane Catastrophe Fund.
251	(b)  Applicability of other provisions of this
252	section.--All provisions of this section and the rules adopted
253	under this section apply to the program created by this
254	subsection unless specifically superseded by this subsection.
255	(c)  Optional coverage.--For the contract year commencing
256	June 1, 2007, and ending May 31, 2008, the contract year
257	commencing June 1, 2008, and ending May 31, 2009, and the
258	contract year commencing June 1, 2009, and ending May 31, 2010,
259	the board shall offer for each of such years the optional
260	coverage as provided in this subsection.
261	(d)  Additional definitions.--As used in this subsection,
262	the term:
263	1.  "TEACO options" means the temporary emergency
264	additional coverage options created under this subsection.
265	2.  "TEACO insurer" means an insurer that has opted to
266	obtain coverage under the TEACO options in addition to the
267	coverage provided to the insurer under its reimbursement
268	contract.
269	3.  "TEACO reimbursement premium" means the premium charged
270	by the fund for coverage provided under the TEACO options.
271	4.  "TEACO retention" means the amount of losses below
272	which a TEACO insurer is not entitled to reimbursement from the
273	fund under the TEACO option selected. A TEACO insurer's
274	retention options shall be calculated as follows:
275	a.  The board shall calculate and report to each TEACO
276	insurer the TEACO retention multiples. There shall be three
277	TEACO retention multiples for defining coverage. Each multiple
278	shall be calculated by dividing $3 billion, $4 billion, or $5
279	billion by the total estimated mandatory FHCF TEACO
280	reimbursement premium assuming all insurers selected that
281	option. Total estimated TEACO reimbursement premium for purposes
282	of the calculation under this sub-subparagraph shall be
283	calculated using the assumption that all insurers have selected
284	a specific TEACO retention multiple option and have selected the
285	90-percent coverage level.
286	b.  The TEACO retention multiples as determined under sub-
287	subparagraph a. shall be adjusted to reflect the coverage level
288	elected by the insurer. For insurers electing the 90-percent
289	coverage level, the adjusted retention multiple is 100 percent
290	of the amount determined under sub-subparagraph a. For insurers
291	electing the 75-percent coverage level, the retention multiple
292	is 120 percent of the amount determined under sub-subparagraph
293	a. For insurers electing the 45-percent coverage level, the
294	adjusted retention multiple is 200 percent of the amount
295	determined under sub-subparagraph a.
296	c.  An insurer shall determine its provisional TEACO
297	retention by multiplying its estimated mandatory FHCF
298	provisional TEACO reimbursement premium by the applicable
299	adjusted TEACO retention multiple and shall determine its actual
300	TEACO retention by multiplying its actual mandatory FHCF TEACO
301	reimbursement premium by the applicable adjusted TEACO retention
302	multiple.
303	d.  For TEACO insurers who experience multiple covered
304	events causing loss during the contract year, the insurer's full
305	TEACO retention shall be applied to each of the covered events
306	causing the two largest losses for that insurer. For other
307	covered events resulting in losses, the TEACO option does not
308	apply and the insurer's retention shall be one-third of the full
309	retention as calculated under paragraph (2)(e).
310	5.  "TEACO addendum" means an addendum to the reimbursement
311	contract reflecting the obligations of the fund and TEACO
312	insurers under the program created by this subsection.
313	(e)  TEACO addendum.--
314	1.  The TEACO addendum shall provide for reimbursement of
315	TEACO insurers for covered events occurring during the contract
316	year, in exchange for the TEACO reimbursement premium paid into
317	the fund under paragraph (f). Any insurer writing covered
318	policies has the option of choosing to accept the TEACO addendum
319	for any of the 3 contract years that the coverage is offered.
320	2.  The TEACO addendum shall contain a promise by the board
321	to reimburse the TEACO insurer for 45 percent, 75 percent, or 90
322	percent of its losses from each covered event in excess of the
323	insurer's TEACO retention, plus 5 percent of the reimbursed
324	losses to cover loss adjustment expenses. The percentage shall
325	be the same as the coverage level selected by the insurer under
326	paragraph (4)(b).
327	3.  The TEACO addendum shall provide that reimbursement
328	amounts shall not be reduced by reinsurance paid or payable to
329	the insurer from other sources.
330	4.  The TEACO addendum shall also provide that the
331	obligation of the board with respect to all TEACO addenda shall
332	not exceed an amount equal to two times the difference between
333	the industry retention level calculated under paragraph (2)(e)
334	and the $3 billion, $4 billion, or $5 billion industry TEACO
335	retention level options actually selected, but in no event may
336	the board's obligation exceed the actual claims-paying capacity
337	of the fund plus the additional capacity created in paragraph
338	(g). If the actual claims-paying capacity and the additional
339	capacity created under paragraph (g) fall short of the board's
340	obligations under the reimbursement contract, each insurer's
341	share of the fund's capacity shall be prorated based on the
342	premium an insurer pays for its mandatory normal reimbursement
343	coverage and the premium paid for its optional TEACO coverage as
344	each such premium bears to the total premiums paid to the fund
345	times the available capacity.
346	5.  The priorities, schedule, and method of reimbursements
347	under the TEACO addendum shall be the same as provided under
348	subsection (4).
349	6.  A TEACO insurer's maximum reimbursement for a single
350	event shall be equal to the product of multiplying its mandatory
351	FHCF premium by the difference between its FHCF retention
352	multiple and its TEACO retention multiple under the TEACO option
353	selected and by the coverage selected under paragraph (4)(b),
354	plus an additional 5 percent for loss adjustment expenses. A
355	TEACO insurer's maximum reimbursement under the TEACO option
356	selected for a TEACO insurer's two largest events addendum shall
357	be twice its maximum reimbursement for a single event calculated
358	by multiplying the insurer's share of the estimated total TEACO
359	reimbursement premium as calculated under sub-subparagraph
360	(d)4.a. by an amount equal to two times the difference between
361	the industry retention level calculated under paragraph (2)(e)
362	and the $3 billion, $4 billion, or $5 billion industry TEACO
363	retention level specified in sub-subparagraph (d)4.a. as
364	selected by the TEACO insurer.
365	(f)  TEACO reimbursement premiums.--
366	1.  Each TEACO insurer shall pay to the fund, in the manner
367	and at the time provided in the reimbursement contract for
368	payment of reimbursement premiums, a TEACO reimbursement premium
369	calculated as specified in this paragraph.
370	2.  The TEACO reimbursement premiums shall be calculated
371	based on the assumption that, if all insurers entering into
372	reimbursement contracts under subsection (4) also accepted the
373	TEACO option:
374	a.  The insurer's industry TEACO reimbursement premium
375	associated with the $3 billion retention option shall would be
376	equal to 85 percent of a TEACO insurer's maximum reimbursement
377	for a single event as calculated under subparagraph (e)6. the
378	difference between the industry retention level calculated under
379	paragraph (2)(e) and the $3 billion industry TEACO retention
380	level.
381	b.  The TEACO reimbursement premium associated with the $4
382	billion retention option shall would be equal to 80 percent of a
383	TEACO insurer's maximum reimbursement for a single event as
384	calculated under subparagraph (e)6. the difference between the
385	industry retention level calculated under paragraph (2)(e) and
386	the $4 billion industry TEACO retention level.
387	c.  The TEACO premium associated with the $5 billion
388	retention option shall would be equal to 75 percent of a TEACO
389	insurer's maximum reimbursement for a single event as calculated
390	under subparagraph (e)6. the difference between the industry
391	retention level calculated under paragraph (2)(e) and the $5
392	billion industry TEACO retention level.
393	3.  Each insurer's TEACO premium shall be calculated based
394	on its share of the total TEACO reimbursement premiums based on
395	its coverage selection under the TEACO addendum.
396	(g)  Effect on claims-paying capacity of the fund.--For the
397	contract term commencing June 1, 2007, the contract year
398	commencing June 1, 2008, and the contract term beginning June 1,
399	2009, the program created by this subsection shall increase the
400	claims-paying capacity of the fund as provided in subparagraph
401	(4)(c)1. by an amount equal to two times the difference between
402	the industry retention level calculated under paragraph (2)(e)
403	and the $3 billion industry TEACO retention level specified in
404	sub-subparagraph (d)4.a. The additional capacity shall apply
405	only to the additional coverage provided by the TEACO option and
406	shall not otherwise affect any insurer's reimbursement from the
407	fund.
408	Section 3.  Paragraph (b) of subsection (2) of section
409	215.5595, Florida Statutes, is amended to read:
410	215.5595  Insurance Capital Build-Up Incentive Program.--
411	(2)  The purpose of this section is to provide surplus
412	notes to new or existing authorized residential property
413	insurers under the Insurance Capital Build-Up Incentive Program
414	administered by the State Board of Administration, under the
415	following conditions:
416	(b)  The insurer must contribute an amount of new capital
417	to its surplus which is at least equal to the amount of the
418	surplus note and must apply to the board by July 1, 2006. If an
419	insurer applies after July 1, 2006, but before June 1, 2007, the
420	amount of the surplus note is limited to one-half of the new
421	capital that the insurer contributes to its surplus. For
422	purposes of this section, new capital must be in the form of
423	cash or cash equivalents as specified in s. 625.012(1). An
424	insurer writing only manufactured housing policies that applies
425	for funds under this section after July 1, 2006, but before June
426	1, 2007, is eligible to receive a surplus note in the amount of
427	$7 million. The insurer's surplus, new capital, and the surplus
428	note must total at least $14 million.
429	Section 4.  Subsection (1) of section 624.407, Florida
430	Statutes, as amended by chapter 2007-1, Laws of Florida, is
431	amended to read:
432	624.407  Capital funds required; new insurers.--
433	(1)  To receive authority to transact any one kind or
434	combinations of kinds of insurance, as defined in part V of this
435	chapter, an insurer applying for its original certificate of
436	authority in this state after the effective date of this section
437	shall possess surplus as to policyholders not less than the
438	greater of:
439	(a)  Five million dollars for a property and casualty
440	insurer, or $2.5 million for any other insurer;
441	(b)  For life insurers, 4 percent of the insurer's total
442	liabilities;
443	(c)  For life and health insurers, 4 percent of the
444	insurer's total liabilities, plus 6 percent of the insurer's
445	liabilities relative to health insurance; or
446	(d)  For all insurers other than life insurers and life and
447	health insurers, 10 percent of the insurer's total liabilities;
448
449	however, a domestic insurer that transacts residential property
450	insurance and is a wholly owned subsidiary of an insurer
451	domiciled authorized to do business in any other state shall
452	possess surplus as to policyholders of at least $50 million, but
453	no insurer shall be required under this subsection to have
454	surplus as to policyholders greater than $100 million.
455	Section 5.  Paragraph (a) of subsection (1) of section
456	624.408, Florida Statutes, is amended to read:
457	624.408  Surplus as to policyholders required; new and
458	existing insurers.--
459	(1)(a)  To maintain a certificate of authority to transact
460	any one kind or combinations of kinds of insurance, as defined
461	in part V of this chapter, an insurer in this state shall at all
462	times maintain surplus as to policyholders not less than the
463	greater of:
464	1.  Except as provided in subparagraph 5. and paragraph
465	(b), $1.5 million;
466	2.  For life insurers, 4 percent of the insurer's total
467	liabilities;
468	3.  For life and health insurers, 4 percent of the
469	insurer's total liabilities plus 6 percent of the insurer's
470	liabilities relative to health insurance; or
471	4.  For all insurers other than mortgage guaranty insurers,
472	life insurers, and life and health insurers, 10 percent of the
473	insurer's total liabilities.
474	5.  For property and casualty insurers, $4 million;
475	however, a domestic insurer that transacts residential property
476	insurance and is a wholly owned subsidiary of an insurer
477	domiciled in any other state shall possess surplus as to
478	policyholders of at least $50 million.
479	Section 6.  Subsection (4) of section 627.0613, Florida
480	Statutes, as amended by chapter 2007-1, Laws of Florida, is
481	amended to read:
482	627.0613  Consumer advocate.--The Chief Financial Officer
483	must appoint a consumer advocate who must represent the general
484	public of the state before the department and the office. The
485	consumer advocate must report directly to the Chief Financial
486	Officer, but is not otherwise under the authority of the
487	department or of any employee of the department. The consumer
488	advocate has such powers as are necessary to carry out the
489	duties of the office of consumer advocate, including, but not
490	limited to, the powers to:
491	(4)  Prepare an annual report card for each authorized
492	personal residential property insurer, on a form and using a
493	letter-grade scale developed by the commission by rule, which
494	grades each insurer based on the following factors:
495	(a)  The number and nature of consumer complaints received
496	by the department against the insurer.
497	(b)  The disposition of all complaints received by the
498	department.
499	(c)  The average length of time for payment of claims by
500	the insurer.
501	(d)  Any other factors the commission identifies as
502	assisting policyholders in making informed choices about
503	homeowner's insurance.
504	Section 7.  Paragraph (a) of subsection (2) of section
505	627.062, Florida Statutes, as amended by chapter 2007-1, Laws of
506	Florida, is amended to read:
507	627.062  Rate standards.--
508	(2)  As to all such classes of insurance:
509	(a)  Insurers or rating organizations shall establish and
510	use rates, rating schedules, or rating manuals to allow the
511	insurer a reasonable rate of return on such classes of insurance
512	written in this state. A copy of rates, rating schedules, rating
513	manuals, premium credits or discount schedules, and surcharge
514	schedules, and changes thereto, shall be filed with the office
515	under one of the following procedures except as provided in
516	subparagraph 3.:
517	1.  If the filing is made at least 90 days before the
518	proposed effective date and the filing is not implemented during
519	the office's review of the filing and any proceeding and
520	judicial review, then such filing shall be considered a "file
521	and use" filing. In such case, the office shall finalize its
522	review by issuance of a notice of intent to approve or a notice
523	of intent to disapprove within 90 days after receipt of the
524	filing. The notice of intent to approve and the notice of intent
525	to disapprove constitute agency action for purposes of the
526	Administrative Procedure Act. Requests for supporting
527	information, requests for mathematical or mechanical
528	corrections, or notification to the insurer by the office of its
529	preliminary findings shall not toll the 90-day period during any
530	such proceedings and subsequent judicial review. The rate shall
531	be deemed approved if the office does not issue a notice of
532	intent to approve or a notice of intent to disapprove within 90
533	days after receipt of the filing.
534	2.  If the filing is not made in accordance with the
535	provisions of subparagraph 1., such filing shall be made as soon
536	as practicable, but no later than 30 days after the effective
537	date, and shall be considered a "use and file" filing. An
538	insurer making a "use and file" filing is potentially subject to
539	an order by the office to return to policyholders portions of
540	rates found to be excessive, as provided in paragraph (h).
541	3.  For all filings made or submitted after January 25,
542	2007, but on or before December 31, 2008, an insurer seeking a
543	rate that is greater than the rate most recently approved by the
544	office shall make a "file and use" filing. This subparagraph
545	applies solely to residential property insurance.
546
547	The provisions of this subsection shall not apply to workers'
548	compensation and employer's liability insurance and to motor
549	vehicle insurance.
550	Section 8.  Subsection (1) of section 627.0629, Florida
551	Statutes, is amended to read:
552	627.0629  Residential property insurance; rate filings.--
553	(1)  It is the intent of the Legislature that insurers must
554	provide savings to consumers who install or implement windstorm
555	damage mitigation techniques, alterations, or solutions to their
556	properties to prevent windstorm losses. A rate filing for
557	residential property insurance must include actuarially
558	reasonable discounts, credits, or other rate differentials, or
559	appropriate reductions in deductibles, for properties on which
560	fixtures or construction techniques demonstrated to reduce the
561	amount of loss in a windstorm have been installed or
562	implemented. The fixtures or construction techniques shall
563	include, but not be limited to, fixtures or construction
564	techniques which enhance roof strength, roof covering
565	performance, roof-to-wall strength, wall-to-floor-to-foundation
566	strength, opening protection, and window, door, and skylight
567	strength. Credits, discounts, or other rate differentials, or
568	appropriate reductions in deductibles, for fixtures and
569	construction techniques which meet the minimum requirements of
570	the Florida Building Code must be included in the rate filing.
571	All insurance companies must make a rate filing which includes
572	the credits, discounts, or other rate differentials or
573	reductions in deductibles by February 28, 2003. By July 1, 2007,
574	the office shall reevaluate the discounts, credits, other rate
575	differentials, and appropriate reductions in deductibles for
576	fixtures and construction techniques that meet the minimum
577	requirements of the Florida Building Code, based upon actual
578	experience or any other loss relativity studies available to the
579	office. The office shall determine the discounts, credits, other
580	rate differentials, and appropriate reductions in deductibles
581	that reflect the full actuarial value of such revaluation, which
582	may be used by insurers in rate filings. A property insurer
583	shall reevaluate the discounts, credits, or other rate
584	differentials or appropriate reductions in deductibles provided
585	pursuant to this subsection at least every 5 years and shall
586	submit a rate filing to the office for a reduction in the
587	discount, credit, or rate differential or an increase in the
588	applicable deductible to account for the effectiveness of the
589	mitigation measure installed or implemented.
590	Section 9.  Section 627.0655, Florida Statutes, as created
591	by chapter 2007-1, Laws of Florida, is amended, to read:
592	627.0655  Policyholder loss or expense-related premium
593	discounts.--An insurer or person authorized to engage in the
594	business of insurance in this state may include, in the premium
595	charged an insured for any policy, contract, or certificate of
596	insurance, a discount based on the fact that another policy,
597	contract, or certificate of any type has been purchased by the
598	insured from the same insurer or insurer group.
599	Section 10.  Paragraphs (b), (c), (n), and (v) of
600	subsection (6) of section 627.351, Florida Statutes, as amended
601	by chapter 2007-1, Laws of Florida, are amended to read:
602	627.351  Insurance risk apportionment plans.--
603	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
604	(b)1.  All insurers authorized to write one or more subject
605	lines of business in this state are subject to assessment by the
606	corporation and, for the purposes of this subsection, are
607	referred to collectively as "assessable insurers." Insurers
608	writing one or more subject lines of business in this state
609	pursuant to part VIII of chapter 626 are not assessable
610	insurers, but insureds who procure one or more subject lines of
611	business in this state pursuant to part VIII of chapter 626 are
612	subject to assessment by the corporation and are referred to
613	collectively as "assessable insureds." An authorized insurer's
614	assessment liability shall begin on the first day of the
615	calendar year following the year in which the insurer was issued
616	a certificate of authority to transact insurance for subject
617	lines of business in this state and shall terminate 1 year after
618	the end of the first calendar year during which the insurer no
619	longer holds a certificate of authority to transact insurance
620	for subject lines of business in this state.
621	2.a.  All revenues, assets, liabilities, losses, and
622	expenses of the corporation shall be divided into three separate
623	accounts as follows:
624	(I)  A personal lines account for personal residential
625	policies issued by the corporation or issued by the Residential
626	Property and Casualty Joint Underwriting Association and renewed
627	by the corporation that provide comprehensive, multiperil
628	coverage on risks that are not located in areas eligible for
629	coverage in the Florida Windstorm Underwriting Association as
630	those areas were defined on January 1, 2002, and for such
631	policies that do not provide coverage for the peril of wind on
632	risks that are located in such areas;
633	(II)  A commercial lines account for commercial residential
634	and commercial nonresidential policies issued by the corporation
635	or issued by the Residential Property and Casualty Joint
636	Underwriting Association and renewed by the corporation that
637	provide coverage for basic property perils on risks that are not
638	located in areas eligible for coverage in the Florida Windstorm
639	Underwriting Association as those areas were defined on January
640	1, 2002, and for such policies that do not provide coverage for
641	the peril of wind on risks that are located in such areas; and
642	(III)  A high-risk account for personal residential
643	policies and commercial residential and commercial
644	nonresidential property policies issued by the corporation or
645	transferred to the corporation that provide coverage for the
646	peril of wind on risks that are located in areas eligible for
647	coverage in the Florida Windstorm Underwriting Association as
648	those areas were defined on January 1, 2002. Subject to the
649	approval of a business plan by the Financial Services Commission
650	and Legislative Budget Commission as provided in this sub-sub-
651	subparagraph, but no earlier than March 31, 2007, the
652	corporation may offer policies that provide multiperil coverage
653	and the corporation shall continue to offer policies that
654	provide coverage only for the peril of wind for risks located in
655	areas eligible for coverage in the high-risk account. In issuing
656	multiperil coverage, the corporation may use its approved policy
657	forms and rates for the personal lines account. An applicant or
658	insured who is eligible to purchase a multiperil policy from the
659	corporation may purchase a multiperil policy from an authorized
660	insurer without prejudice to the applicant's or insured's
661	eligibility to prospectively purchase a policy that provides
662	coverage only for the peril of wind from the corporation. An
663	applicant or insured who is eligible for a corporation policy
664	that provides coverage only for the peril of wind may elect to
665	purchase or retain such policy and also purchase or retain
666	coverage excluding wind from an authorized insurer without
667	prejudice to the applicant's or insured's eligibility to
668	prospectively purchase a policy that provides multiperil
669	coverage from the corporation. It is the goal of the Legislature
670	that there would be an overall average savings of 10 percent or
671	more for a policyholder who currently has a wind-only policy
672	with the corporation, and an ex-wind policy with a voluntary
673	insurer or the corporation, and who then obtains a multiperil
674	policy from the corporation. It is the intent of the Legislature
675	that the offer of multiperil coverage in the high-risk account
676	be made and implemented in a manner that does not adversely
677	affect the tax-exempt status of the corporation or
678	creditworthiness of or security for currently outstanding
679	financing obligations or credit facilities of the high-risk
680	account, the personal lines account, or the commercial lines
681	account. By March 1, 2007, the corporation shall prepare and
682	submit for approval by the Financial Services Commission and
683	Legislative Budget Commission a report detailing the
684	corporation's business plan for issuing multiperil coverage in
685	the high-risk account. The business plan shall be approved or
686	disapproved within 30 days after receipt, as submitted or
687	modified and resubmitted by the corporation. The business plan
688	must include: the impact of such multiperil coverage on the
689	corporation's financial resources, the impact of such multiperil
690	coverage on the corporation's tax-exempt status, the manner in
691	which the corporation plans to implement the processing of
692	applications and policy forms for new and existing
693	policyholders, the impact of such multiperil coverage on the
694	corporation's ability to deliver customer service at the high
695	level required by this subsection, the ability of the
696	corporation to process claims, the ability of the corporation to
697	quote and issue policies, the impact of such multiperil coverage
698	on the corporation's agents, the impact of such multiperil
699	coverage on the corporation's existing policyholders, and the
700	impact of such multiperil coverage on rates and premium. The
701	high-risk account must also include quota share primary
702	insurance under subparagraph (c)2. The area eligible for
703	coverage under the high-risk account also includes the area
704	within Port Canaveral, which is bordered on the south by the
705	City of Cape Canaveral, bordered on the west by the Banana
706	River, and bordered on the north by Federal Government property.
707	b.  The three separate accounts must be maintained as long
708	as financing obligations entered into by the Florida Windstorm
709	Underwriting Association or Residential Property and Casualty
710	Joint Underwriting Association are outstanding, in accordance
711	with the terms of the corresponding financing documents. When
712	the financing obligations are no longer outstanding, in
713	accordance with the terms of the corresponding financing
714	documents, the corporation may use a single account for all
715	revenues, assets, liabilities, losses, and expenses of the
716	corporation. Consistent with the requirement of this
717	subparagraph and prudent investment policies that minimize the
718	cost of carrying debt, the board shall exercise its best efforts
719	to retire existing debt or to obtain approval of necessary
720	parties to amend the terms of existing debt, so as to structure
721	the most efficient plan to consolidate the three separate
722	accounts into a single account. By February 1, 2007, the board
723	shall submit a report to the Financial Services Commission, the
724	President of the Senate, and the Speaker of the House of
725	Representatives which includes an analysis of consolidating the
726	accounts, the actions the board has taken to minimize the cost
727	of carrying debt, and its recommendations for executing the most
728	efficient plan.
729	c.  Creditors of the Residential Property and Casualty
730	Joint Underwriting Association shall have a claim against, and
731	recourse to, the accounts referred to in sub-sub-subparagraphs
732	a.(I) and (II) and shall have no claim against, or recourse to,
733	the account referred to in sub-sub-subparagraph a.(III).
734	Creditors of the Florida Windstorm Underwriting Association
735	shall have a claim against, and recourse to, the account
736	referred to in sub-sub-subparagraph a.(III) and shall have no
737	claim against, or recourse to, the accounts referred to in sub-
738	sub-subparagraphs a.(I) and (II).
739	d.  Revenues, assets, liabilities, losses, and expenses not
740	attributable to particular accounts shall be prorated among the
741	accounts.
742	e.  The Legislature finds that the revenues of the
743	corporation are revenues that are necessary to meet the
744	requirements set forth in documents authorizing the issuance of
745	bonds under this subsection.
746	f.  No part of the income of the corporation may inure to
747	the benefit of any private person.
748	3.  With respect to a deficit in an account:
749	a.  When the deficit incurred in a particular calendar year
750	is not greater than 10 percent of the aggregate statewide direct
751	written premium for the subject lines of business for the prior
752	calendar year, the entire deficit shall be recovered through
753	regular assessments of assessable insurers under paragraph (p)
754	and assessable insureds.
755	b.  When the deficit incurred in a particular calendar year
756	exceeds 10 percent of the aggregate statewide direct written
757	premium for the subject lines of business for the prior calendar
758	year, the corporation shall levy regular assessments on
759	assessable insurers under paragraph (p) and on assessable
760	insureds in an amount equal to the greater of 10 percent of the
761	deficit or 10 percent of the aggregate statewide direct written
762	premium for the subject lines of business for the prior calendar
763	year. Any remaining deficit shall be recovered through emergency
764	assessments under sub-subparagraph d.
765	c.  Each assessable insurer's share of the amount being
766	assessed under sub-subparagraph a. or sub-subparagraph b. shall
767	be in the proportion that the assessable insurer's direct
768	written premium for the subject lines of business for the year
769	preceding the assessment bears to the aggregate statewide direct
770	written premium for the subject lines of business for that year.
771	The assessment percentage applicable to each assessable insured
772	is the ratio of the amount being assessed under sub-subparagraph
773	a. or sub-subparagraph b. to the aggregate statewide direct
774	written premium for the subject lines of business for the prior
775	year. Assessments levied by the corporation on assessable
776	insurers under sub-subparagraphs a. and b. shall be paid as
777	required by the corporation's plan of operation and paragraph
778	(p). Notwithstanding any other provision of this subsection, the
779	aggregate amount of a regular assessment for a deficit incurred
780	in a particular calendar year shall be reduced by the estimated
781	amount to be received by the corporation from the Citizens
782	policyholder surcharge under subparagraph (c)10.11. and the
783	amount collected or estimated to be collected from the
784	assessment on Citizens policyholders pursuant to sub-
785	subparagraph i. Assessments levied by the corporation on
786	assessable insureds under sub-subparagraphs a. and b. shall be
787	collected by the surplus lines agent at the time the surplus
788	lines agent collects the surplus lines tax required by s.
789	626.932 and shall be paid to the Florida Surplus Lines Service
790	Office at the time the surplus lines agent pays the surplus
791	lines tax to the Florida Surplus Lines Service Office. Upon
792	receipt of regular assessments from surplus lines agents, the
793	Florida Surplus Lines Service Office shall transfer the
794	assessments directly to the corporation as determined by the
795	corporation.
796	d.  Upon a determination by the board of governors that a
797	deficit in an account exceeds the amount that will be recovered
798	through regular assessments under sub-subparagraph a. or sub-
799	subparagraph b., the board shall levy, after verification by the
800	office, emergency assessments, for as many years as necessary to
801	cover the deficits, to be collected by assessable insurers and
802	the corporation and collected from assessable insureds upon
803	issuance or renewal of policies for subject lines of business,
804	excluding National Flood Insurance policies. The amount of the
805	emergency assessment collected in a particular year shall be a
806	uniform percentage of that year's direct written premium for
807	subject lines of business and all accounts of the corporation,
808	excluding National Flood Insurance Program policy premiums, as
809	annually determined by the board and verified by the office. The
810	office shall verify the arithmetic calculations involved in the
811	board's determination within 30 days after receipt of the
812	information on which the determination was based.
813	Notwithstanding any other provision of law, the corporation and
814	each assessable insurer that writes subject lines of business
815	shall collect emergency assessments from its policyholders
816	without such obligation being affected by any credit,
817	limitation, exemption, or deferment. Emergency assessments
818	levied by the corporation on assessable insureds shall be
819	collected by the surplus lines agent at the time the surplus
820	lines agent collects the surplus lines tax required by s.
821	626.932 and shall be paid to the Florida Surplus Lines Service
822	Office at the time the surplus lines agent pays the surplus
823	lines tax to the Florida Surplus Lines Service Office. The
824	emergency assessments so collected shall be transferred directly
825	to the corporation on a periodic basis as determined by the
826	corporation and shall be held by the corporation solely in the
827	applicable account. The aggregate amount of emergency
828	assessments levied for an account under this sub-subparagraph in
829	any calendar year may not exceed the greater of 10 percent of
830	the amount needed to cover the original deficit, plus interest,
831	fees, commissions, required reserves, and other costs associated
832	with financing of the original deficit, or 10 percent of the
833	aggregate statewide direct written premium for subject lines of
834	business and for all accounts of the corporation for the prior
835	year, plus interest, fees, commissions, required reserves, and
836	other costs associated with financing the original deficit.
837	e.  The corporation may pledge the proceeds of assessments,
838	projected recoveries from the Florida Hurricane Catastrophe
839	Fund, other insurance and reinsurance recoverables, policyholder
840	surcharges and other surcharges, and other funds available to
841	the corporation as the source of revenue for and to secure bonds
842	issued under paragraph (p), bonds or other indebtedness issued
843	under subparagraph (c)3., or lines of credit or other financing
844	mechanisms issued or created under this subsection, or to retire
845	any other debt incurred as a result of deficits or events giving
846	rise to deficits, or in any other way that the board determines
847	will efficiently recover such deficits. The purpose of the lines
848	of credit or other financing mechanisms is to provide additional
849	resources to assist the corporation in covering claims and
850	expenses attributable to a catastrophe. As used in this
851	subsection, the term "assessments" includes regular assessments
852	under sub-subparagraph a., sub-subparagraph b., or subparagraph
853	(p)1. and emergency assessments under sub-subparagraph d.
854	Emergency assessments collected under sub-subparagraph d. are
855	not part of an insurer's rates, are not premium, and are not
856	subject to premium tax, fees, or commissions; however, failure
857	to pay the emergency assessment shall be treated as failure to
858	pay premium. The emergency assessments under sub-subparagraph d.
859	shall continue as long as any bonds issued or other indebtedness
860	incurred with respect to a deficit for which the assessment was
861	imposed remain outstanding, unless adequate provision has been
862	made for the payment of such bonds or other indebtedness
863	pursuant to the documents governing such bonds or other
864	indebtedness.
865	f.  As used in this subsection, the term "subject lines of
866	business" means insurance written by assessable insurers or
867	procured by assessable insureds for all property and casualty
868	lines of business in this state, but not including workers'
869	compensation or medical malpractice. As used in the sub-
870	subparagraph, the term "property and casualty lines of business"
871	includes all lines of business identified on Form 2, Exhibit of
872	Premiums and Losses, in the annual statement required of
873	authorized insurers by s. 624.424 and any rule adopted under
874	this section, except for those lines identified as accident and
875	health insurance and except for policies written under the
876	National Flood Insurance Program or the Federal Crop Insurance
877	Program. For purposes of this sub-subparagraph, the term
878	"workers' compensation" includes both workers' compensation
879	insurance and excess workers' compensation insurance.
880	g.  The Florida Surplus Lines Service Office shall
881	determine annually the aggregate statewide written premium in
882	subject lines of business procured by assessable insureds and
883	shall report that information to the corporation in a form and
884	at a time the corporation specifies to ensure that the
885	corporation can meet the requirements of this subsection and the
886	corporation's financing obligations.
887	h.  The Florida Surplus Lines Service Office shall verify
888	the proper application by surplus lines agents of assessment
889	percentages for regular assessments and emergency assessments
890	levied under this subparagraph on assessable insureds and shall
891	assist the corporation in ensuring the accurate, timely
892	collection and payment of assessments by surplus lines agents as
893	required by the corporation.
894	i.  If a deficit is incurred in any account in 2008 or
895	thereafter, the board of governors shall levy an immediate
896	assessment against the premium of each nonhomestead property
897	policyholder in all accounts of the corporation, as a uniform
898	percentage of the premium of the policy of up to 10 percent of
899	such premium, which funds shall be used to offset the deficit.
900	If this assessment is insufficient to eliminate the deficit, the
901	board of governors shall levy an additional assessment against
902	all policyholders of the corporation, which shall be collected
903	at the time of issuance or renewal of a policy, as a uniform
904	percentage of the premium for the policy of up to 10 percent of
905	such premium, which funds shall be used to further offset the
906	deficit.
907	j.  The board of governors shall maintain separate
908	accounting records that consolidate data for nonhomestead
909	properties, including, but not limited to, number of policies,
910	insured values, premiums written, and losses. The board of
911	governors shall annually report to the office and the
912	Legislature a summary of such data.
913	(c)  The plan of operation of the corporation:
914	1.  Must provide for adoption of residential property and
915	casualty insurance policy forms and commercial residential and
916	nonresidential property insurance forms, which forms must be
917	approved by the office prior to use. The corporation shall adopt
918	the following policy forms:
919	a.  Standard personal lines policy forms that are
920	comprehensive multiperil policies providing full coverage of a
921	residential property equivalent to the coverage provided in the
922	private insurance market under an HO-3, HO-4, or HO-6 policy.
923	b.  Basic personal lines policy forms that are policies
924	similar to an HO-8 policy or a dwelling fire policy that provide
925	coverage meeting the requirements of the secondary mortgage
926	market, but which coverage is more limited than the coverage
927	under a standard policy.
928	c.  Commercial lines residential and nonresidential policy
929	forms that are generally similar to the basic perils of full
930	coverage obtainable for commercial residential structures and
931	commercial nonresidential structures in the admitted voluntary
932	market.
933	d.  Personal lines and commercial lines residential
934	property insurance forms that cover the peril of wind only. The
935	forms are applicable only to residential properties located in
936	areas eligible for coverage under the high-risk account referred
937	to in sub-subparagraph (b)2.a.
938	e.  Commercial lines nonresidential property insurance
939	forms that cover the peril of wind only. The forms are
940	applicable only to nonresidential properties located in areas
941	eligible for coverage under the high-risk account referred to in
942	sub-subparagraph (b)2.a.
943	f.  The corporation may adopt variations of the policy
944	forms listed in sub-subparagraphs a.-e. that contain more
945	restrictive coverage.
946	2.a.  Must provide that the corporation adopt a program in
947	which the corporation and authorized insurers enter into quota
948	share primary insurance agreements for hurricane coverage, as
949	defined in s. 627.4025(2)(a), for eligible risks, and adopt
950	property insurance forms for eligible risks which cover the
951	peril of wind only. As used in this subsection, the term:
952	(I)  "Quota share primary insurance" means an arrangement
953	in which the primary hurricane coverage of an eligible risk is
954	provided in specified percentages by the corporation and an
955	authorized insurer. The corporation and authorized insurer are
956	each solely responsible for a specified percentage of hurricane
957	coverage of an eligible risk as set forth in a quota share
958	primary insurance agreement between the corporation and an
959	authorized insurer and the insurance contract. The
960	responsibility of the corporation or authorized insurer to pay
961	its specified percentage of hurricane losses of an eligible
962	risk, as set forth in the quota share primary insurance
963	agreement, may not be altered by the inability of the other
964	party to the agreement to pay its specified percentage of
965	hurricane losses. Eligible risks that are provided hurricane
966	coverage through a quota share primary insurance arrangement
967	must be provided policy forms that set forth the obligations of
968	the corporation and authorized insurer under the arrangement,
969	clearly specify the percentages of quota share primary insurance
970	provided by the corporation and authorized insurer, and
971	conspicuously and clearly state that neither the authorized
972	insurer nor the corporation may be held responsible beyond its
973	specified percentage of coverage of hurricane losses.
974	(II)  "Eligible risks" means personal lines residential and
975	commercial lines residential risks that meet the underwriting
976	criteria of the corporation and are located in areas that were
977	eligible for coverage by the Florida Windstorm Underwriting
978	Association on January 1, 2002.
979	b.  The corporation may enter into quota share primary
980	insurance agreements with authorized insurers at corporation
981	coverage levels of 90 percent and 50 percent.
982	c.  If the corporation determines that additional coverage
983	levels are necessary to maximize participation in quota share
984	primary insurance agreements by authorized insurers, the
985	corporation may establish additional coverage levels. However,
986	the corporation's quota share primary insurance coverage level
987	may not exceed 90 percent.
988	d.  Any quota share primary insurance agreement entered
989	into between an authorized insurer and the corporation must
990	provide for a uniform specified percentage of coverage of
991	hurricane losses, by county or territory as set forth by the
992	corporation board, for all eligible risks of the authorized
993	insurer covered under the quota share primary insurance
994	agreement.
995	e.  Any quota share primary insurance agreement entered
996	into between an authorized insurer and the corporation is
997	subject to review and approval by the office. However, such
998	agreement shall be authorized only as to insurance contracts
999	entered into between an authorized insurer and an insured who is
1000	already insured by the corporation for wind coverage.
1001	f.  For all eligible risks covered under quota share
1002	primary insurance agreements, the exposure and coverage levels
1003	for both the corporation and authorized insurers shall be
1004	reported by the corporation to the Florida Hurricane Catastrophe
1005	Fund. For all policies of eligible risks covered under quota
1006	share primary insurance agreements, the corporation and the
1007	authorized insurer shall maintain complete and accurate records
1008	for the purpose of exposure and loss reimbursement audits as
1009	required by Florida Hurricane Catastrophe Fund rules. The
1010	corporation and the authorized insurer shall each maintain
1011	duplicate copies of policy declaration pages and supporting
1012	claims documents.
1013	g.  The corporation board shall establish in its plan of
1014	operation standards for quota share agreements which ensure that
1015	there is no discriminatory application among insurers as to the
1016	terms of quota share agreements, pricing of quota share
1017	agreements, incentive provisions if any, and consideration paid
1018	for servicing policies or adjusting claims.
1019	h.  The quota share primary insurance agreement between the
1020	corporation and an authorized insurer must set forth the
1021	specific terms under which coverage is provided, including, but
1022	not limited to, the sale and servicing of policies issued under
1023	the agreement by the insurance agent of the authorized insurer
1024	producing the business, the reporting of information concerning
1025	eligible risks, the payment of premium to the corporation, and
1026	arrangements for the adjustment and payment of hurricane claims
1027	incurred on eligible risks by the claims adjuster and personnel
1028	of the authorized insurer. Entering into a quota sharing
1029	insurance agreement between the corporation and an authorized
1030	insurer shall be voluntary and at the discretion of the
1031	authorized insurer.
1032	3.  May provide that the corporation may employ or
1033	otherwise contract with individuals or other entities to provide
1034	administrative or professional services that may be appropriate
1035	to effectuate the plan. The corporation shall have the power to
1036	borrow funds, by issuing bonds or by incurring other
1037	indebtedness, and shall have other powers reasonably necessary
1038	to effectuate the requirements of this subsection, including,
1039	without limitation, the power to issue bonds and incur other
1040	indebtedness in order to refinance outstanding bonds or other
1041	indebtedness. The corporation may, but is not required to, seek
1042	judicial validation of its bonds or other indebtedness under
1043	chapter 75. The corporation may issue bonds or incur other
1044	indebtedness, or have bonds issued on its behalf by a unit of
1045	local government pursuant to subparagraph (g)2., in the absence
1046	of a hurricane or other weather-related event, upon a
1047	determination by the corporation, subject to approval by the
1048	office, that such action would enable it to efficiently meet the
1049	financial obligations of the corporation and that such
1050	financings are reasonably necessary to effectuate the
1051	requirements of this subsection. The corporation is authorized
1052	to take all actions needed to facilitate tax-free status for any
1053	such bonds or indebtedness, including formation of trusts or
1054	other affiliated entities. The corporation shall have the
1055	authority to pledge assessments, projected recoveries from the
1056	Florida Hurricane Catastrophe Fund, other reinsurance
1057	recoverables, market equalization and other surcharges, and
1058	other funds available to the corporation as security for bonds
1059	or other indebtedness. In recognition of s. 10, Art. I of the
1060	State Constitution, prohibiting the impairment of obligations of
1061	contracts, it is the intent of the Legislature that no action be
1062	taken whose purpose is to impair any bond indenture or financing
1063	agreement or any revenue source committed by contract to such
1064	bond or other indebtedness.
1065	4.a.  Must require that the corporation operate subject to
1066	the supervision and approval of a board of governors consisting
1067	of eight individuals who are residents of this state, from
1068	different geographical areas of this state. The Governor, the
1069	Chief Financial Officer, the President of the Senate, and the
1070	Speaker of the House of Representatives shall each appoint two
1071	members of the board. At least one of the two members appointed
1072	by each appointing officer must have demonstrated expertise in
1073	insurance. The Chief Financial Officer shall designate one of
1074	the appointees as chair. All board members serve at the pleasure
1075	of the appointing officer. All members of the board of governors
1076	are subject to removal at will by the officers who appointed
1077	them. All board members, including the chair, must be appointed
1078	to serve for 3-year terms beginning annually on a date
1079	designated by the plan. Any board vacancy shall be filled for
1080	the unexpired term by the appointing officer. The Chief
1081	Financial Officer shall appoint a technical advisory group to
1082	provide information and advice to the board of governors in
1083	connection with the board's duties under this subsection. The
1084	executive director and senior managers of the corporation shall
1085	be engaged by the board and serve at the pleasure of the board.
1086	Any executive director appointed on or after July 1, 2006, is
1087	subject to confirmation by the Senate. The executive director is
1088	responsible for employing other staff as the corporation may
1089	require, subject to review and concurrence by the board.
1090	b.  The board shall create a Market Accountability Advisory
1091	Committee to assist the corporation in developing awareness of
1092	its rates and its customer and agent service levels in
1093	relationship to the voluntary market insurers writing similar
1094	coverage. The members of the advisory committee shall consist of
1095	the following 11 persons, one of whom must be elected chair by
1096	the members of the committee: four representatives, one
1097	appointed by the Florida Association of Insurance Agents, one by
1098	the Florida Association of Insurance and Financial Advisors, one
1099	by the Professional Insurance Agents of Florida, and one by the
1100	Latin American Association of Insurance Agencies; three
1101	representatives appointed by the insurers with the three highest
1102	voluntary market share of residential property insurance
1103	business in the state; one representative from the Office of
1104	Insurance Regulation; one consumer appointed by the board who is
1105	insured by the corporation at the time of appointment to the
1106	committee; one representative appointed by the Florida
1107	Association of Realtors; and one representative appointed by the
1108	Florida Bankers Association. All members must serve for 3-year
1109	terms and may serve for consecutive terms. The committee shall
1110	report to the corporation at each board meeting on insurance
1111	market issues which may include rates and rate competition with
1112	the voluntary market; service, including policy issuance, claims
1113	processing, and general responsiveness to policyholders,
1114	applicants, and agents; and matters relating to depopulation.
1115	5.  Must provide a procedure for determining the
1116	eligibility of a risk for coverage, as follows:
1117	a.  Subject to the provisions of s. 627.3517, with respect
1118	to personal lines residential risks, if the risk is offered
1119	coverage from an authorized insurer at the insurer's approved
1120	rate under either a standard policy including wind coverage or,
1121	if consistent with the insurer's underwriting rules as filed
1122	with the office, a basic policy including wind coverage, for a
1123	new application to the corporation for coverage, the risk is not
1124	eligible for any policy issued by the corporation unless the
1125	premium for coverage from the authorized insurer is more than 25
1126	percent greater than the premium for comparable coverage from
1127	the corporation. Coverage is deemed comparable when, with
1128	respect to the main building or structure only, the
1129	corporation's coverage would be provided using the same contract
1130	form and on the same basis, for either all risk or named perils;
1131	loss payment is calculated using the same method, for either
1132	replacement cost or actual cash value; and the percentage
1133	deductible applicable to hurricane losses is identical to the
1134	authorized insurer's offer. If the risk is not able to obtain
1135	any such offer, the risk is eligible for either a standard
1136	policy including wind coverage or a basic policy including wind
1137	coverage issued by the corporation; however, if the risk could
1138	not be insured under a standard policy including wind coverage
1139	regardless of market conditions, the risk shall be eligible for
1140	a basic policy including wind coverage unless rejected under
1141	subparagraph 7. 8. However, with regard to a policyholder of the
1142	corporation, the policyholder remains eligible for coverage from
1143	the corporation regardless of any offer of coverage from an
1144	authorized insurer or surplus lines insurer. The corporation
1145	shall determine the type of policy to be provided on the basis
1146	of objective standards specified in the underwriting manual and
1147	based on generally accepted underwriting practices.
1148	(I)  If the risk accepts an offer of coverage through the
1149	market assistance plan or an offer of coverage through a
1150	mechanism established by the corporation before a policy is
1151	issued to the risk by the corporation or during the first 30
1152	days of coverage by the corporation, and the producing agent who
1153	submitted the application to the plan or to the corporation is
1154	not currently appointed by the insurer, the insurer shall:
1155	(A)  Pay to the producing agent of record of the policy,
1156	for the first year, an amount that is the greater of the
1157	insurer's usual and customary commission for the type of policy
1158	written or a fee equal to the usual and customary commission of
1159	the corporation; or
1160	(B)  Offer to allow the producing agent of record of the
1161	policy to continue servicing the policy for a period of not less
1162	than 1 year and offer to pay the agent the greater of the
1163	insurer's or the corporation's usual and customary commission
1164	for the type of policy written.
1165
1166	If the producing agent is unwilling or unable to accept
1167	appointment, the new insurer shall pay the agent in accordance
1168	with sub-sub-sub-subparagraph (A).
1169	(II)  When the corporation enters into a contractual
1170	agreement for a take-out plan, the producing agent of record of
1171	the corporation policy is entitled to retain any unearned
1172	commission on the policy, and the insurer shall:
1173	(A)  Pay to the producing agent of record of the
1174	corporation policy, for the first year, an amount that is the
1175	greater of the insurer's usual and customary commission for the
1176	type of policy written or a fee equal to the usual and customary
1177	commission of the corporation; or
1178	(B)  Offer to allow the producing agent of record of the
1179	corporation policy to continue servicing the policy for a period
1180	of not less than 1 year and offer to pay the agent the greater
1181	of the insurer's or the corporation's usual and customary
1182	commission for the type of policy written.
1183
1184	If the producing agent is unwilling or unable to accept
1185	appointment, the new insurer shall pay the agent in accordance
1186	with sub-sub-sub-subparagraph (A).
1187	b.  With respect to commercial lines residential risks, for
1188	a new application to the corporation for coverage, if the risk
1189	is offered coverage under a policy including wind coverage from
1190	an authorized insurer at its approved rate, the risk is not
1191	eligible for any policy issued by the corporation unless the
1192	premium for coverage from the authorized insurer is more than 25
1193	percent greater than the premium for comparable coverage from
1194	the corporation. Coverage is deemed comparable when, with
1195	respect to the main building or structure only, the
1196	corporation's coverage would be provided using the same contract
1197	form and on the same basis, for either all risk or named perils;
1198	loss payment is calculated using the same method, for either
1199	replacement cost or actual cash value; and the percentage
1200	deductible applicable to hurricane losses is identical to the
1201	authorized insurer's offer. If the risk is not able to obtain
1202	any such offer, the risk is eligible for a policy including wind
1203	coverage issued by the corporation. However, with regard to a
1204	policyholder of the corporation, the policyholder remains
1205	eligible for coverage from the corporation regardless of any
1206	offer of coverage from an authorized insurer or surplus lines
1207	insurer.
1208	(I)  If the risk accepts an offer of coverage through the
1209	market assistance plan or an offer of coverage through a
1210	mechanism established by the corporation before a policy is
1211	issued to the risk by the corporation or during the first 30
1212	days of coverage by the corporation, and the producing agent who
1213	submitted the application to the plan or the corporation is not
1214	currently appointed by the insurer, the insurer shall:
1215	(A)  Pay to the producing agent of record of the policy,
1216	for the first year, an amount that is the greater of the
1217	insurer's usual and customary commission for the type of policy
1218	written or a fee equal to the usual and customary commission of
1219	the corporation; or
1220	(B)  Offer to allow the producing agent of record of the
1221	policy to continue servicing the policy for a period of not less
1222	than 1 year and offer to pay the agent the greater of the
1223	insurer's or the corporation's usual and customary commission
1224	for the type of policy written.
1225
1226	If the producing agent is unwilling or unable to accept
1227	appointment, the new insurer shall pay the agent in accordance
1228	with sub-sub-sub-subparagraph (A).
1229	(II)  When the corporation enters into a contractual
1230	agreement for a take-out plan, the producing agent of record of
1231	the corporation policy is entitled to retain any unearned
1232	commission on the policy, and the insurer shall:
1233	(A)  Pay to the producing agent of record of the
1234	corporation policy, for the first year, an amount that is the
1235	greater of the insurer's usual and customary commission for the
1236	type of policy written or a fee equal to the usual and customary
1237	commission of the corporation; or
1238	(B)  Offer to allow the producing agent of record of the
1239	corporation policy to continue servicing the policy for a period
1240	of not less than 1 year and offer to pay the agent the greater
1241	of the insurer's or the corporation's usual and customary
1242	commission for the type of policy written.
1243
1244	If the producing agent is unwilling or unable to accept
1245	appointment, the new insurer shall pay the agent in accordance
1246	with sub-sub-sub-subparagraph (A).
1247	6.  Must provide by July 1, 2007, that an application for
1248	coverage for a new policy is subject to a waiting period of 10
1249	days before coverage is effective, during which time the
1250	corporation shall make such application available for review by
1251	general lines agents and authorized property and casualty
1252	insurers. The board shall approve an exception that allows for
1253	coverage to be effective before the end of the 10-day waiting
1254	period, for coverage issued in conjunction with a real estate
1255	closing. The board may approve such other exceptions as the
1256	board determines are necessary to prevent lapses in coverage.
1257	6.7.  Must include rules for classifications of risks and
1258	rates therefor.
1259	7.8.  Must provide that if premium and investment income
1260	for an account attributable to a particular calendar year are in
1261	excess of projected losses and expenses for the account
1262	attributable to that year, such excess shall be held in surplus
1263	in the account. Such surplus shall be available to defray
1264	deficits in that account as to future years and shall be used
1265	for that purpose prior to assessing assessable insurers and
1266	assessable insureds as to any calendar year.
1267	8.9.  Must provide objective criteria and procedures to be
1268	uniformly applied for all applicants in determining whether an
1269	individual risk is so hazardous as to be uninsurable. In making
1270	this determination and in establishing the criteria and
1271	procedures, the following shall be considered:
1272	a.  Whether the likelihood of a loss for the individual
1273	risk is substantially higher than for other risks of the same
1274	class; and
1275	b.  Whether the uncertainty associated with the individual
1276	risk is such that an appropriate premium cannot be determined.
1277
1278	The acceptance or rejection of a risk by the corporation shall
1279	be construed as the private placement of insurance, and the
1280	provisions of chapter 120 shall not apply.
1281	9.10.  Must provide that the corporation shall make its
1282	best efforts to procure catastrophe reinsurance at reasonable
1283	rates, to cover its projected 100-year probable maximum loss as
1284	determined by the board of governors.
1285	10.11.  Must provide that in the event of regular deficit
1286	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
1287	(b)3.b., in the personal lines account, the commercial lines
1288	residential account, or the high-risk account, the corporation
1289	shall levy upon corporation policyholders in its next rate
1290	filing, or by a separate rate filing solely for this purpose, a
1291	Citizens policyholder surcharge arising from a regular
1292	assessment in such account in a percentage equal to the total
1293	amount of such regular assessments divided by the aggregate
1294	statewide direct written premium for subject lines of business
1295	for the prior calendar year. For purposes of calculating the
1296	Citizens policyholder surcharge to be levied under this
1297	subparagraph, the total amount of the regular assessment to
1298	which this surcharge is related shall be determined as set forth
1299	in subparagraph (b)3., without deducting the estimated Citizens
1300	policyholder surcharge. Citizens policyholder surcharges under
1301	this subparagraph are not considered premium and are not subject
1302	to commissions, fees, or premium taxes; however, failure to pay
1303	a market equalization surcharge shall be treated as failure to
1304	pay premium.
1305	11.12.  The policies issued by the corporation must provide
1306	that, if the corporation or the market assistance plan obtains
1307	an offer from an authorized insurer to cover the risk at its
1308	approved rates, the risk is no longer eligible for renewal
1309	through the corporation, except as otherwise provided in this
1310	subsection.
1311	12.13.  Corporation policies and applications must include
1312	a notice that the corporation policy could, under this section,
1313	be replaced with a policy issued by an authorized insurer that
1314	does not provide coverage identical to the coverage provided by
1315	the corporation. The notice shall also specify that acceptance
1316	of corporation coverage creates a conclusive presumption that
1317	the applicant or policyholder is aware of this potential.
1318	13.14.  May establish, subject to approval by the office,
1319	different eligibility requirements and operational procedures
1320	for any line or type of coverage for any specified county or
1321	area if the board determines that such changes to the
1322	eligibility requirements and operational procedures are
1323	justified due to the voluntary market being sufficiently stable
1324	and competitive in such area or for such line or type of
1325	coverage and that consumers who, in good faith, are unable to
1326	obtain insurance through the voluntary market through ordinary
1327	methods would continue to have access to coverage from the
1328	corporation. When coverage is sought in connection with a real
1329	property transfer, such requirements and procedures shall not
1330	provide for an effective date of coverage later than the date of
1331	the closing of the transfer as established by the transferor,
1332	the transferee, and, if applicable, the lender.
1333	14.15.  Must provide that, with respect to the high-risk
1334	account, any assessable insurer with a surplus as to
1335	policyholders of $25 million or less writing 25 percent or more
1336	of its total countrywide property insurance premiums in this
1337	state may petition the office, within the first 90 days of each
1338	calendar year, to qualify as a limited apportionment company. A
1339	regular assessment levied by the corporation on a limited
1340	apportionment company for a deficit incurred by the corporation
1341	for the high-risk account in 2006 or thereafter may be paid to
1342	the corporation on a monthly basis as the assessments are
1343	collected by the limited apportionment company from its insureds
1344	pursuant to s. 627.3512, but the regular assessment must be paid
1345	in full within 12 months after being levied by the corporation.
1346	A limited apportionment company shall collect from its
1347	policyholders any emergency assessment imposed under sub-
1348	subparagraph (b)3.d. The plan shall provide that, if the office
1349	determines that any regular assessment will result in an
1350	impairment of the surplus of a limited apportionment company,
1351	the office may direct that all or part of such assessment be
1352	deferred as provided in subparagraph (g)4. However, there shall
1353	be no limitation or deferment of an emergency assessment to be
1354	collected from policyholders under sub-subparagraph (b)3.d.
1355	15.16.  Must provide that the corporation appoint as its
1356	licensed agents only those agents who also hold an appointment
1357	as defined in s. 626.015(3) with an insurer who at the time of
1358	the agent's initial appointment by the corporation is authorized
1359	to write and is actually writing personal lines residential
1360	property coverage, commercial residential property coverage, or
1361	commercial nonresidential property coverage within the state.
1362	16.17.  Must provide, by July 1, 2007, a premium payment
1363	plan option to its policyholders which allows at a minimum for
1364	quarterly and semiannual payment of premiums. A monthly payment
1365	plan may, but is not required to, be offered.
1366	17.18.  Must provide, effective June 1, 2007, that the
1367	corporation contract with each insurer providing the non-wind
1368	coverage for risks insured by the corporation in the high-risk
1369	account, requiring that the insurer provide claims adjusting
1370	services for the wind coverage provided by the corporation for
1371	such risks. An insurer is required to enter into this contract
1372	as a condition of providing non-wind coverage for a risk that is
1373	insured by the corporation in the high-risk account unless the
1374	board finds, after a hearing, that the insurer is not capable of
1375	providing adjusting services at an acceptable level of quality
1376	to corporation policyholders. The terms and conditions of such
1377	contracts must be substantially the same as the contracts that
1378	the corporation executed with insurers under the "adjust-your-
1379	own" program in 2006, except as may be mutually agreed to by the
1380	parties and except for such changes that the board determines
1381	are necessary to ensure that claims are adjusted appropriately.
1382	The corporation shall provide a process for neutral arbitration
1383	of any dispute between the corporation and the insurer regarding
1384	the terms of the contract. The corporation shall review and
1385	monitor the performance of insurers under these contracts.
1386	18.19.  Must limit coverage on mobile homes or manufactured
1387	homes built prior to 1994 to actual cash value of the dwelling
1388	rather than replacement costs of the dwelling.
1389	19.20.  May provide such limits of coverage as the board
1390	determines, consistent with the requirements of this subsection.
1391	20.21.  May require commercial property to meet specified
1392	hurricane mitigation construction features as a condition of
1393	eligibility for coverage.
1394	(n)  If coverage in an account is deactivated pursuant to
1395	paragraph (f), coverage through the corporation shall be
1396	reactivated by order of the office only under one of the
1397	following circumstances:
1398	1.  If the market assistance plan receives a minimum of 100
1399	applications for coverage within a 3-month period, or 200
1400	applications for coverage within a 1-year period or less for
1401	residential coverage, unless the market assistance plan provides
1402	a quotation from admitted carriers at their filed rates for at
1403	least 90 percent of such applicants. Any market assistance plan
1404	application that is rejected because an individual risk is so
1405	hazardous as to be uninsurable using the criteria specified in
1406	subparagraph (c)7.8. shall not be included in the minimum
1407	percentage calculation provided herein. In the event that there
1408	is a legal or administrative challenge to a determination by the
1409	office that the conditions of this subparagraph have been met
1410	for eligibility for coverage in the corporation, any eligible
1411	risk may obtain coverage during the pendency of such challenge.
1412	2.  In response to a state of emergency declared by the
1413	Governor under s. 252.36, the office may activate coverage by
1414	order for the period of the emergency upon a finding by the
1415	office that the emergency significantly affects the availability
1416	of residential property insurance.
1417	(v)  Notwithstanding any other provision of law:
1418	1.  The pledge or sale of, the lien upon, and the security
1419	interest in any rights, revenues, or other assets of the
1420	corporation created or purported to be created pursuant to any
1421	financing documents to secure any bonds or other indebtedness of
1422	the corporation shall be and remain valid and enforceable,
1423	notwithstanding the commencement of and during the continuation
1424	of, and after, any rehabilitation, insolvency, liquidation,
1425	bankruptcy, receivership, conservatorship, reorganization, or
1426	similar proceeding against the corporation under the laws of
1427	this state.
1428	2.  No such proceeding shall relieve the corporation of its
1429	obligation, or otherwise affect its ability to perform its
1430	obligation, to continue to collect, or levy and collect,
1431	assessments, market equalization or other surcharges under
1432	subparagraph (c)9.10., or any other rights, revenues, or other
1433	assets of the corporation pledged pursuant to any financing
1434	documents.
1435	3.  Each such pledge or sale of, lien upon, and security
1436	interest in, including the priority of such pledge, lien, or
1437	security interest, any such assessments, market equalization or
1438	other surcharges, or other rights, revenues, or other assets
1439	which are collected, or levied and collected, after the
1440	commencement of and during the pendency of, or after, any such
1441	proceeding shall continue unaffected by such proceeding. As used
1442	in this subsection, the term "financing documents" means any
1443	agreement or agreements, instrument or instruments, or other
1444	document or documents now existing or hereafter created
1445	evidencing any bonds or other indebtedness of the corporation or
1446	pursuant to which any such bonds or other indebtedness has been
1447	or may be issued and pursuant to which any rights, revenues, or
1448	other assets of the corporation are pledged or sold to secure
1449	the repayment of such bonds or indebtedness, together with the
1450	payment of interest on such bonds or such indebtedness, or the
1451	payment of any other obligation or financial product, as defined
1452	in the plan of operation of the corporation related to such
1453	bonds or indebtedness.
1454	4.  Any such pledge or sale of assessments, revenues,
1455	contract rights, or other rights or assets of the corporation
1456	shall constitute a lien and security interest, or sale, as the
1457	case may be, that is immediately effective and attaches to such
1458	assessments, revenues, or contract rights or other rights or
1459	assets, whether or not imposed or collected at the time the
1460	pledge or sale is made. Any such pledge or sale is effective,
1461	valid, binding, and enforceable against the corporation or other
1462	entity making such pledge or sale, and valid and binding against
1463	and superior to any competing claims or obligations owed to any
1464	other person or entity, including policyholders in this state,
1465	asserting rights in any such assessments, revenues, or contract
1466	rights or other rights or assets to the extent set forth in and
1467	in accordance with the terms of the pledge or sale contained in
1468	the applicable financing documents, whether or not any such
1469	person or entity has notice of such pledge or sale and without
1470	the need for any physical delivery, recordation, filing, or
1471	other action.
1472	5.  As long as the corporation has any bonds outstanding,
1473	the corporation may not file a voluntary petition under chapter
1474	9 of the federal Bankruptcy Code or such corresponding chapter
1475	or sections as may be in effect, from time to time, and a public
1476	officer or any organization, entity, or other person may not
1477	authorize the corporation to be or become a debtor under chapter
1478	9 of the federal Bankruptcy Code or such corresponding chapter
1479	or sections as may be in effect, from time to time, during any
1480	such period.
1481	6.  If ordered by a court of competent jurisdiction, the
1482	corporation may assume policies or otherwise provide coverage
1483	for policyholders of an insurer placed in liquidation under
1484	chapter 631, under such forms, rates, terms, and conditions as
1485	the corporation deems appropriate, subject to approval by the
1486	office.
1487	Section 11.  Subsection (4) of section 627.3511, Florida
1488	Statutes, is amended to read:
1489	627.3511  Depopulation of Citizens Property Insurance
1490	Corporation.--
1491	(4)  AGENT BONUS.--When the corporation enters into a
1492	contractual agreement for a take-out plan that provides a bonus
1493	to the insurer, the producing agent of record of the corporation
1494	policy is entitled to retain any unearned commission on such
1495	policy, and the insurer shall either:
1496	(a)  Pay to the producing agent of record of the
1497	association policy, for the first year, an amount that is the
1498	greater of the insurer's usual and customary commission for the
1499	type of policy written or a fee equal to the usual and customary
1500	commission of the corporation; or
1501	(b)  Offer to allow the producing agent of record of the
1502	corporation policy to continue servicing the policy for a period
1503	of not less than 1 year and offer to pay the agent the greater
1504	of the insurer's or the corporation's usual and customary
1505	commission for the type of policy written.
1506
1507	If the producing agent is unwilling or unable to accept
1508	appointment, the new insurer shall pay the agent in accordance
1509	with paragraph (a). The requirement of this subsection that the
1510	producing agent of record is entitled to retain the unearned
1511	commission on an association policy does not apply to a policy
1512	for which coverage has been provided in the association for 30
1513	days or less or for which a cancellation notice has been issued
1514	pursuant to s. 627.351(6)(c)10.11. during the first 30 days of
1515	coverage.
1516	Section 12.  Paragraph (a) of subsection (3) of section
1517	627.3515, Florida Statutes, as amended by chapter 2007-1, Laws
1518	of Florida, is amended to read:
1519	627.3515  Market assistance plan; property and casualty
1520	risks.--
1521	(3)(a)  The plan and the corporation shall develop a
1522	business plan and present it to the Financial Services
1523	Commission for approval by September 1, 2007, to provide for the
1524	implementation of an electronic database for the purpose of
1525	confirming eligibility pursuant to s. 627.351(6). The business
1526	plan may provide that authorized insurers or agents of
1527	authorized insurers may submit to the plan or the corporation in
1528	electronic form, as determined by the plan or the corporation,
1529	information determined necessary by the plan or the corporation
1530	to deny coverage to risks ineligible for coverage by the
1531	corporation. Any authorized insurer submitting such information
1532	that results in a risk being denied coverage by the corporation
1533	is required to provide coverage to the risk at its approved
1534	rates, for the coverage and premium quoted, for at least 1 year.
1535	Section 13.  Section 627.3517, Florida Statutes, is amended
1536	to read:
1537	627.3517  Consumer choice.--
1538	(1)  Except as provided in subsection (2), No provision of
1539	s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to
1540	impair the right of any insurance risk apportionment plan
1541	policyholder, upon receipt of any keepout or take-out offer, to
1542	retain his or her current agent, so long as that agent is duly
1543	licensed and appointed by the insurance risk apportionment plan
1544	or otherwise authorized to place business with the insurance
1545	risk apportionment plan. This right shall not be canceled,
1546	suspended, impeded, abridged, or otherwise compromised by any
1547	rule, plan of operation, or depopulation plan, whether through
1548	keepout, take-out, midterm assumption, or any other means, of
1549	any insurance risk apportionment plan or depopulation plan,
1550	including, but not limited to, those described in s. 627.351, s.
1551	627.3511, or s. 627.3515. The commission shall adopt any rules
1552	necessary to cause any insurance risk apportionment plan or
1553	market assistance plan under such sections to demonstrate that
1554	the operations of the plan do not interfere with, promote, or
1555	allow interference with the rights created under this section.
1556	If the policyholder's current agent is unable or unwilling to be
1557	appointed with the insurer making the take-out or keepout offer,
1558	the policyholder shall not be disqualified from participation in
1559	the appropriate insurance risk apportionment plan because of an
1560	offer of coverage in the voluntary market. An offer of full
1561	property insurance coverage by the insurer currently insuring
1562	either the ex-wind or wind-only coverage on the policy to which
1563	the offer applies shall not be considered a take-out or keepout
1564	offer. Any rule, plan of operation, or plan of depopulation,
1565	through keepout, take-out, midterm assumption, or any other
1566	means, of any property insurance risk apportionment plan under
1567	s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c)
1568	and 627.3511(4).
1569	(2)  This section does not apply during the first 10 days
1570	after a new application for coverage has been submitted to
1571	Citizens Property Insurance Corporation under s. 627.351(6),
1572	whether or not coverage is bound during this period.
1573	Section 14.  Subsection (1) of section 627.4035, Florida
1574	Statutes, as amended by chapter 2007-1, Laws of Florida, is
1575	amended to read:
1576	627.4035  Cash payment of premiums; claims.--
1577	(1)  The premiums for insurance contracts issued in this
1578	state or covering risk located in this state shall be paid in
1579	cash consisting of coins, currency, checks, or money orders or
1580	by using a debit card, credit card, automatic electronic funds
1581	transfer, or payroll deduction plan. By July 1, 2007, insurers
1582	issuing personal lines residential and commercial property
1583	policies shall provide a premium payment plan option to their
1584	policyholders which allows for a minimum of quarterly and
1585	semiannual payment of premiums. Insurers may, but are not
1586	required to, offer monthly payment plans. Insurers issuing such
1587	policies must submit their premium payment plan option to the
1588	office for approval before use.
1589	Section 15.  Subsection (7) is added to section 627.4133,
1590	Florida Statutes, to read:
1591	627.4133  Notice of cancellation, nonrenewal, or renewal
1592	premium.--
1593	(7)(a)  With respect to any residential property insurance
1594	policy, every notice of renewal premium must specify:
1595	1.  The dollar amounts recouped for assessments by the
1596	Florida Hurricane Catastrophe Fund, the Citizens Property
1597	Insurance Corporation, and the Florida Insurance Guaranty
1598	Association. The actual names of the entities must appear next
1599	to the dollar amounts.
1600	2.  The dollar amount of any premium increase that is due
1601	to an approved rate increase and the dollar amounts that are due
1602	to coverage changes.
1603	(b)  The Financial Services Commission may adopt rules
1604	pursuant to ss. 120.536(1) and 120.54 to implement this
1605	subsection.
1606	Section 16.  Paragraphs (a) and (c) of subsection (3) and
1607	paragraph (d) of subsection (4) of section 627.701, Florida
1608	Statutes, as amended by chapter 2007-1, Laws of Florida, are
1609	amended, to read:
1610	627.701  Liability of insureds; coinsurance; deductibles.--
1611	(3)(a)  Except as otherwise provided in this subsection,
1612	prior to issuing a personal lines residential property insurance
1613	policy, the insurer must offer alternative deductible amounts
1614	applicable to hurricane losses equal to $500, 2 percent, 5
1615	percent, and 10 percent of the policy dwelling limits, unless
1616	the specific percentage deductible is less than $500. The
1617	written notice of the offer shall specify the hurricane or wind
1618	deductible to be applied in the event that the applicant or
1619	policyholder fails to affirmatively choose a hurricane
1620	deductible. The insurer must provide such policyholder with
1621	notice of the availability of the deductible amounts specified
1622	in this paragraph in a form approved by the office in
1623	conjunction with each renewal of the policy. The failure to
1624	provide such notice constitutes a violation of this code but
1625	does not affect the coverage provided under the policy.
1626	(c)  With respect to a policy covering a risk with dwelling
1627	limits of at least $100,000, but less than $250,000, the insurer
1628	may, in lieu of offering a policy with a $500 hurricane or wind
1629	deductible as required by paragraph (a), offer a policy that the
1630	insurer guarantees it will not nonrenew for reasons of reducing
1631	hurricane loss for one renewal period and that contains up to a
1632	2 percent hurricane or wind deductible as required by paragraph
1633	(a).
1634	(4)
1635	(d)1.  A personal lines residential property insurance
1636	policy covering a risk valued at less than $500,000 may not have
1637	a hurricane deductible in excess of 10 percent of the policy
1638	dwelling limits, unless the following conditions are met:
1639	a.  The policyholder must personally write and provide to
1640	the insurer the following statement in his or her own
1641	handwriting and sign his or her name, which must also be signed
1642	by every other named insured on the policy, and dated: "I do not
1643	want the insurance on my home to pay for the first (specify
1644	dollar value) of damage from hurricanes. I will pay those costs.
1645	My insurance will not."
1646	b.  If the structure insured by the policy is subject to a
1647	mortgage or lien, the policyholder must provide the insurer with
1648	a written statement from the mortgageholder or lienholder
1649	indicating that the mortgageholder or lienholder approves the
1650	policyholder electing to have the specified deductible.
1651	2.  A deductible subject to the requirements of this
1652	paragraph applies for the term of the policy and for each
1653	renewal thereafter unless the policyholder elects otherwise.
1654	Changes to the deductible percentage may be implemented only as
1655	of the date of renewal.
1656	3.  An insurer shall keep the original copy of the signed
1657	statement required by this paragraph, electronically or
1658	otherwise, and provide a copy to the policyholder providing the
1659	signed statement. A signed statement meeting the requirements of
1660	this paragraph creates a presumption that there was an informed,
1661	knowing election of coverage.
1662	4.  The commission shall adopt rules providing appropriate
1663	alternative methods for providing the statements required by
1664	this section for policyholders who have a handicapping or
1665	disabling condition that prevents them from providing a
1666	handwritten statement.
1667	Section 17.  Subsection (5) of section 627.70131, Florida
1668	Statutes, as amended by chapter 2007-1, Laws of Florida, is
1669	amended to read:
1670	627.70131  Insurer's duty to acknowledge communications
1671	regarding claims; investigation.--
1672	(5)  Within 90 days after an insurer receives notice of
1673	loss of a residential property insurance claim from a
1674	policyholder, the insurer shall pay or deny such claim unless
1675	the failure to pay such claim is caused by factors beyond the
1676	control of the insurer which reasonably prevent such payment.
1677	The exclusive remedy for a violation of this subsection is a
1678	regulatory action under this code. Failure to comply with this
1679	subsection constitutes a violation of this code.
1680	Section 18.  Subsections (2), (4), and (5) of section
1681	627.712, Florida Statutes, as created by chapter 2007-1, Laws of
1682	Florida, are amended to read:
1683	627.712  Residential hurricane coverage required;
1684	availability of exclusions for windstorm or contents.--
1685	(1)  An insurer issuing a residential property insurance
1686	policy must provide hurricane or windstorm coverage as defined
1687	in s. 627.4025. This subsection does not apply with respect to
1688	risks that are eligible for wind-only coverage from Citizens
1689	Property Insurance Corporation under s. 627.351(6).
1690	(2)  A personal lines residential property An insurer that
1691	is subject to subsection (1) must make available, at the option
1692	of the policyholder, an exclusion of hurricane coverage or
1693	windstorm coverage as provided within the applicable policy. The
1694	coverage may be excluded only if:
1695	(a)  The policyholder personally writes and provides to the
1696	insurer the following statement in his or her own handwriting
1697	and signs his or her name, which must also be signed by every
1698	other named insured on the policy, and dated: "I do not want the
1699	insurance on my (home/mobile home/condominium unit) to pay for
1700	damage from windstorms or hurricanes. I will pay those costs. My
1701	insurance will not."
1702	(b)  If the structure insured by the policy is subject to a
1703	mortgage or lien, the policyholder must provide the insurer with
1704	a written statement from the mortgageholder or lienholder
1705	indicating that the mortgageholder or lienholder approves the
1706	policyholder electing to exclude windstorm coverage or hurricane
1707	coverage from his or her residential property insurance policy.
1708	(4)  An insurer shall keep the original copy of a signed
1709	statement required by this section, electronically or otherwise,
1710	and provide a copy to the policyholder providing the signed
1711	statement. A signed statement meeting the requirements of this
1712	section creates a presumption that there was an informed,
1713	knowing rejection of coverage.
1714	(5)  The exclusions authorized by this section apply for
1715	the term of the policy and for each renewal thereafter. Changes
1716	to the exclusions authorized by this section may be implemented
1717	only as of the date of renewal. The exclusions authorized by
1718	this section are valid for the term of the contract and for each
1719	renewal unless the policyholder elects otherwise.
1720	Section 19.  Section 627.713, Florida Statutes, as created
1721	by chapter 2007-1, Laws of Florida, is amended to read:
1722	627.713  Report of hurricane loss data.--After the
1723	conclusion of the Atlantic hurricane season each year, the
1724	office may require property insurers to report data regarding
1725	hurricane claims and underwriting costs, including, but not
1726	limited to:
1727	(1)  Number of claims.
1728	(2)  Amount of claim payments made.
1729	(3)  Number and amount of total-loss claims.
1730	(4)  Amount and percentage of losses covered by reinsurance
1731	or other loss-transfer agreements.
1732	(5)  Amount of losses covered under specified deductibles.
1733	(6)  Claims and payments for specified insured values.
1734	(7)  Claims and payments for specified dollar values.
1735	(8)  Claims and payments for specified types of
1736	construction or mitigation features.
1737	(9)  Claims and payments for policies under specified
1738	underwriting criteria.
1739	(10)  Claims and payments for contents, additional living
1740	expense, and other specified coverages.
1741	(11)  Claims and payments by county for the information
1742	specified in this section.
1743	(12)  Any other data that the office requires.
1744	Section 20.  Subsections (4) and (5) of section 627.7277,
1745	Florida Statutes, as amended by chapter 2007-1, Laws of Florida,
1746	are amended to read:
1747	627.7277  Notice of renewal premium.--
1748	(4)  Every notice of renewal premium must specify:
1749	(a)  The dollar amounts recouped for assessments by the
1750	Florida Hurricane Catastrophe Fund, the Citizens Property
1751	Insurance Corporation, and the Florida Insurance Guaranty
1752	Association. The actual names of the entities must appear next
1753	to the dollar amounts.
1754	(b)  The dollar amount of any premium increase that is due
1755	to a rate increase and the dollar amounts that are due to
1756	coverage changes.
1757	(5)  The Financial Services Commission may adopt rules
1758	pursuant to ss. 120.536(1) and 120.54 to implement this section.
1759	Section 21.  Paragraph (e) of subsection (3) of section
1760	631.57, Florida Statutes, as amended by chapter 2007-1, Laws of
1761	Florida, is amended to read:
1762	631.57  Powers and duties of the association.--
1763	(3)
1764	(e)1.a.  In addition to assessments otherwise authorized in
1765	paragraph (a) and to the extent necessary to secure the funds
1766	for the account specified in s. 631.55(2)(c) for the direct
1767	payment of covered claims of insurers rendered insolvent by the
1768	effects of a hurricane homeowners' insurers and to pay the
1769	reasonable costs to administer such claims, or to retire
1770	indebtedness, including, without limitation, the principal,
1771	redemption premium, if any, and interest on, and related costs
1772	of issuance of, bonds issued under s. 631.695 and the funding of
1773	any reserves and other payments required under the bond
1774	resolution or trust indenture pursuant to which such bonds have
1775	been issued, the office, upon certification of the board of
1776	directors, shall levy emergency assessments upon insurers
1777	holding a certificate of authority. The emergency assessments
1778	payable under this paragraph by any insurer shall not exceed in
1779	any single year more than 2 percent of that insurer's direct
1780	written premiums, net of refunds, in this state during the
1781	preceding calendar year for the kinds of insurance within the
1782	account specified in s. 631.55(2)(c).
1783	b.  Any emergency assessments authorized under this
1784	paragraph shall be levied by the office upon insurers referred
1785	to in sub-subparagraph a., upon certification as to the need for
1786	such assessments by the board of directors. In the event the
1787	board of directors participates in the issuance of bonds in
1788	accordance with s. 631.695, emergency assessments shall be
1789	levied in each year that bonds issued under s. 631.695 and
1790	secured by such emergency assessments are outstanding, in such
1791	amounts up to such 2-percent limit as required in order to
1792	provide for the full and timely payment of the principal of,
1793	redemption premium, if any, and interest on, and related costs
1794	of issuance of, such bonds. The emergency assessments provided
1795	for in this paragraph are assigned and pledged to the
1796	municipality, county, or legal entity issuing bonds under s.
1797	631.695 for the benefit of the holders of such bonds, in order
1798	to enable such municipality, county, or legal entity to provide
1799	for the payment of the principal of, redemption premium, if any,
1800	and interest on such bonds, the cost of issuance of such bonds,
1801	and the funding of any reserves and other payments required
1802	under the bond resolution or trust indenture pursuant to which
1803	such bonds have been issued, without the necessity of any
1804	further action by the association, the office, or any other
1805	party. To the extent bonds are issued under s. 631.695 and the
1806	association determines to secure such bonds by a pledge of
1807	revenues received from the emergency assessments, such bonds,
1808	upon such pledge of revenues, shall be secured by and payable
1809	from the proceeds of such emergency assessments, and the
1810	proceeds of emergency assessments levied under this paragraph
1811	shall be remitted directly to and administered by the trustee or
1812	custodian appointed for such bonds.
1813	c.  Emergency assessments under this paragraph may be
1814	payable in a single payment or, at the option of the
1815	association, may be payable in 12 monthly installments with the
1816	first installment being due and payable at the end of the month
1817	after an emergency assessment is levied and subsequent
1818	installments being due not later than the end of each succeeding
1819	month.
1820	d.  If emergency assessments are imposed, the report
1821	required by s. 631.695(7) shall include an analysis of the
1822	revenues generated from the emergency assessments imposed under
1823	this paragraph.
1824	e.  If emergency assessments are imposed, the references in
1825	sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to
1826	assessments levied under paragraph (a) shall include emergency
1827	assessments imposed under this paragraph.
1828	2.  In order to ensure that insurers paying emergency
1829	assessments levied under this paragraph continue to charge rates
1830	that are neither inadequate nor excessive, within 90 days after
1831	being notified of such assessments, each insurer that is to be
1832	assessed pursuant to this paragraph shall submit a rate filing
1833	for coverage included within the account specified in s.
1834	631.55(2)(c) and for which rates are required to be filed under
1835	s. 627.062. If the filing reflects a rate change that, as a
1836	percentage, is equal to the difference between the rate of such
1837	assessment and the rate of the previous year's assessment under
1838	this paragraph, the filing shall consist of a certification so
1839	stating and shall be deemed approved when made. Any rate change
1840	of a different percentage shall be subject to the standards and
1841	procedures of s. 627.062.
1842	3.  In the event the board of directors participates in the
1843	issuance of bonds in accordance with s. 631.695, an annual
1844	assessment under this paragraph shall continue while the bonds
1845	issued with respect to which the assessment was imposed are
1846	outstanding, including any bonds the proceeds of which were used
1847	to refund bonds issued pursuant to s. 631.695, unless adequate
1848	provision has been made for the payment of the bonds in the
1849	documents authorizing the issuance of such bonds.
1850	4.  Emergency assessments under this paragraph are not
1851	premium and are not subject to the premium tax, to any fees, or
1852	to any commissions. An insurer is liable for all emergency
1853	assessments that the insurer collects and shall treat the
1854	failure of an insured to pay an emergency assessment as a
1855	failure to pay the premium. An insurer is not liable for
1856	uncollectible emergency assessments.
1857	Section 22.  (1)  Notwithstanding section 9 of chapter
1858	2007-1, Laws of Florida, the internal design option provided in
1859	s. 1609.1.4.1. of the Florida Building Code shall remain in
1860	effect until June 1, 2007, for a building permit application
1861	made prior to that date.
1862	(2)  This section shall take effect upon this act becoming
1863	a law and shall apply retroactively to January 25, 2007. This
1864	section shall apply to any actions taken on any building permit
1865	affected by section 9 of chapter 2007-1, Laws of Florida,
1866	including any actions, legal or ministerial, pertaining to the
1867	issuance, revocation, or modifications of any building permit
1868	initiated or issued prior to, on, after, or pending as of
1869	January 25, 2007. If the retroactive application of any
1870	provision of this section is held invalid, the invalidity shall
1871	not affect the retroactive application of other provisions of
1872	this section.
1873	Section 23.  The rate filing requirement in section 3 of
1874	chapter 2007-1, Laws of Florida, relating to savings to be
1875	reflected due to the presumed factor set by the Office of
1876	Insurance Regulation on March 15, 2007, shall apply solely to
1877	catastrophe reinsurance contracts covering the 2007 hurricane
1878	season entered into after January 25, 2007. If an insurer had
1879	any catastrophe reinsurance contract covering the 2007 hurricane
1880	season in place prior to January 25, 2007, such insurer shall
1881	not be required to reflect a savings in its presumed factor rate
1882	filing for that affected contract.
1883	Section 24.  Except as otherwise expressly provided in this
1884	act, this act shall take effect July 1, 2007.

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