Amendment
Bill No. CS/CS/SB 2860

Amendment No. 625745

CHAMBER ACTION
Senate		House
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1	Representatives Ross, Reagan, and Brown offered the following:
2
3	Substitute Amendment for Amendment (439287) to Senate Bill
4	(with title amendment)
5	Remove everything after the enacting clause and insert:
6
7	Section 1.  This act may be cited as the "Homeowner's Bill
8	of Rights Act."
9	Section 2.  Section 215.5595, Florida Statutes, is amended
10	to read:
11	215.5595  Insurance Capital Build-Up Incentive Program.--
12	(1)  Upon entering the 2008 2006 hurricane season, the
13	Legislature finds that:
14	(a)  The losses in this state Florida from eight hurricanes
15	in 2004 and 2005 have seriously strained the resources of both
16	the voluntary insurance market and the public sector mechanisms
17	of Citizens Property Insurance Corporation and the Florida
18	Hurricane Catastrophe Fund.
19	(b)  Private reinsurance is much less available and at a
20	significantly greater cost to residential property insurers as
21	compared to 1 year ago, particularly for amounts below the
22	insurer's retention or retained losses that must be paid before
23	reimbursement is provided by the Florida Hurricane Catastrophe
24	Fund.
25	(c)  The Office of Insurance Regulation has reported that
26	the insolvency of certain insurers may be imminent.
27	(d)  Hurricane forecast experts predict that the 2006
28	hurricane season will be an active hurricane season and that the
29	Atlantic and Gulf Coast regions face an active hurricane cycle
30	of 10 to 20 years or longer.
31	(b)(e)  Citizens Property Insurance Corporation has over
32	1.2 million policies in force, has the largest market share of
33	any insurer writing residential property insurer in the state,
34	and faces the threat of a catastrophic loss that The number of
35	cancellations or nonrenewals of residential property insurance
36	policies is expected to increase and the number of new
37	residential policies written in the voluntary market are likely
38	to decrease, causing increased policy growth and exposure to the
39	state insurer of last resort, Citizens Property Insurance
40	Corporation, and threatening to increase the deficit of the
41	corporation, currently estimated to be over $1.7 billion. This
42	deficit must be funded by assessments against insurers and
43	policyholders, unless otherwise funded by the state. The program
44	has a substantial positive effect on the depopulation efforts of
45	Citizens Property Insurance Corporation since companies
46	participating in the program have removed over 199,000 policies
47	from the corporation. Companies participating in the program
48	have issued a significant number of new policies, thereby
49	keeping an estimated 480,000 new policies out of the
50	corporation.
51	(c)(f)  Policyholders are subject to high increased
52	premiums and assessments that are increasingly making such
53	coverage unaffordable and that may force policyholders to sell
54	their homes and even leave the state.
55	(d)(g)  The increased risk to the public sector and private
56	sector continues to pose poses a serious threat to the economy
57	of this state, particularly the building and financing of
58	residential structures, and existing mortgages may be placed in
59	default.
60	(h)  The losses from 2004 and 2005, combined with the
61	expectation that the increase in hurricane activity will
62	continue for the foreseeable future, have caused both insurers
63	and reinsurers to limit the capital they are willing to commit
64	to covering the hurricane risk in Florida; attracting new
65	capital to the Florida market is a critical priority; and
66	providing a low-cost source of capital would enable insurers to
67	write additional residential property insurance coverage and act
68	to mitigate premium increases.
69	(e)(i)  Appropriating state funds to be exchanged for used
70	as surplus notes issued by for residential property insurers,
71	under conditions requiring the insurer to contribute additional
72	private sector capital and to write a minimum level of premiums
73	for residential hurricane coverage, is a valid and important
74	public purpose.
75	(f)  Extending the Insurance Capital Build-up Incentive
76	Program will provide an incentive for investors to commit
77	additional capital to Florida's residential insurance market.
78	(2)  The purpose of this section is to provide funds in
79	exchange for surplus notes to be issued by to new or existing
80	authorized residential property insurers under the Insurance
81	Capital Build-Up Incentive Program administered by the State
82	Board of Administration, under the following conditions:
83	(a)  The amount of state funds provided in exchange for a
84	the surplus note to for any insurer or insurer group, other than
85	an insurer writing only manufactured housing policies, may not
86	exceed $25 million or 20 percent of the total amount of funds
87	appropriated for available under the program, whichever is
88	greater. The amount of the surplus note for any insurer or
89	insurer group writing residential property insurance covering
90	only manufactured housing may not exceed $7 million.
91	(b)  On or after April 1, 2008, the insurer must contribute
92	an amount of new capital to its surplus which is at least equal
93	to the amount of the surplus note and must apply to the board by
94	September 1, 2008 July 1, 2006. If an insurer applies after
95	September 1, 2008 July 1, 2006, but before June 1, 2009 2007,
96	the amount of the surplus note is limited to one-half of the new
97	capital that the insurer contributes to its surplus, except that
98	an insurer writing only manufactured housing policies is
99	eligible to receive a surplus note of up to $7 million. For
100	purposes of this section, new capital must be in the form of
101	cash or cash equivalents as specified in s. 625.012(1).
102	(c)  The insurer's surplus, new capital, and the surplus
103	note must total at least $50 million, except for insurers
104	writing residential property insurance covering only
105	manufactured housing. The insurer's surplus, new capital, and
106	the surplus note must total at least $14 million for insurers
107	writing only residential property insurance covering
108	manufactured housing policies as provided in paragraph (a).
109	(d)  The insurer must commit to increase its writings of
110	residential property insurance, including the peril of wind, and
111	to meet meeting a minimum writing ratio of net written premium
112	to surplus of at least 1:1 for the first calendar year after
113	receiving the state funds or renegotiation of the surplus note,
114	1.5:1 for the second calendar year, and 2:1 for the remaining
115	term of the surplus note. Alternatively, the insurer must meet a
116	minimum writing ratio of gross written premium to surplus of at
117	least 3:1 for the first calendar year after receiving the state
118	funds or renegotiation of the surplus note, 4.5:1 for the second
119	calendar year, and 6:1 for the remaining term of the surplus
120	note. The writing ratios, which shall be determined by the
121	Office of Insurance Regulation and certified quarterly to the
122	board. For this purpose, the term "premium" "net written
123	premium" means net written premium for residential property
124	insurance in this state Florida, including the peril of wind,
125	and "surplus" means the new capital and surplus note refers to
126	the entire surplus of the insurer. An insurer that makes an
127	initial application after July 1, 2008, must also commit to
128	writing at least 15 percent of its net or gross written premium
129	for new policies, not including renewal premiums, for policies
130	taken out of Citizens Property Insurance Corporation, during
131	each of the first 3 years after receiving the state funds in
132	exchange for the surplus note, which shall be determined by the
133	Office of Insurance Regulation and certified annually to the
134	board. The insurer must also commit to maintaining a level of
135	surplus and reinsurance sufficient to cover in excess of its 1-
136	in-100 year probable maximum loss, as determined by a hurricane
137	loss model accepted by the Florida Commission on Hurricane Loss
138	Projection Methodology, which shall be determined by the Office
139	of Insurance Regulation and certified annually to the board. If
140	the board determines that the insurer has failed to meet any of
141	the requirements of this paragraph required ratio is not
142	maintained during the term of the surplus note, the board may
143	increase the interest rate, accelerate the repayment of interest
144	and principal, or shorten the term of the surplus note, subject
145	to approval by the Commissioner of Insurance of payments by the
146	insurer of principal and interest as provided in paragraph (f).
147	(e)  If the requirements of this section are met, the board
148	may approve an application by an insurer for funds in exchange
149	for issuance of a surplus note, unless the board determines that
150	the financial condition of the insurer and its business plan for
151	writing residential property insurance in Florida places an
152	unreasonably high level of financial risk to the state of
153	nonpayment in full of the interest and principal. The board
154	shall consult with the Office of Insurance Regulation and may
155	contract with independent financial and insurance consultants in
156	making this determination.
157	(f)  The surplus note must be repayable to the state with a
158	term of 20 years. The surplus note shall accrue interest on the
159	unpaid principal balance at a rate equivalent to the 10-year
160	U.S. Treasury Bond rate, require the payment only of interest
161	during the first 3 years, and include such other terms as
162	approved by the board. The board may charge late fees up to 5
163	percent for late payments or other late remittances. Payment of
164	principal, or interest, or late fees by the insurer on the
165	surplus note must be approved by the Commissioner of Insurance,
166	who shall approve such payment unless the commissioner
167	determines that such payment will substantially impair the
168	financial condition of the insurer. If such a determination is
169	made, the commissioner shall approve such payment that will not
170	substantially impair the financial condition of the insurer.
171	(g)  The total amount of funds available for the program is
172	limited to the amount appropriated by the Legislature for this
173	purpose. If the amount of surplus notes requested by insurers
174	exceeds the amount of funds available, the board may prioritize
175	insurers that are eligible and approved, with priority for
176	funding given to insurers writing only manufactured housing
177	policies, regardless of the date of application, based on the
178	financial strength of the insurer, the viability of its proposed
179	business plan for writing additional residential property
180	insurance in the state, and the effect on competition in the
181	residential property insurance market. Between insurers writing
182	residential property insurance covering manufactured housing,
183	priority shall be given to the insurer writing the highest
184	percentage of its policies covering manufactured housing.
185	(h)  The board may allocate portions of the funds available
186	for the program and establish dates for insurers to apply for
187	surplus notes from such allocation which are earlier than the
188	dates established in paragraph (b).
189	(h)(i)  Notwithstanding paragraph (d), a newly formed
190	manufactured housing insurer that is eligible for a surplus note
191	under this section shall meet the premium to surplus ratio
192	provisions of s. 624.4095.
193	(i)(j)  As used in this section, "an insurer writing only
194	manufactured housing policies" includes:
195	1.  A Florida domiciled insurer that begins writing
196	personal lines residential manufactured housing policies in
197	Florida after March 1, 2007, and that removes a minimum of
198	50,000 policies from Citizens Property Insurance Corporation
199	without accepting a bonus, provided at least 25 percent of its
200	policies cover manufactured housing. Such an insurer may count
201	any funds above the minimum capital and surplus requirement that
202	were contributed into the insurer after March 1, 2007, as new
203	capital under this section.
204	2.  A Florida domiciled insurer that writes at least 40
205	percent of its policies covering manufactured housing in
206	Florida.
207	(3)  As used in this section, the term:
208	(a)  "Board" means the State Board of Administration.
209	(b)  "Program" means the Insurance Capital Build-Up
210	Incentive Program established by this section.
211	(4)  The state funds provided to the insurer in exchange
212	for the A surplus note provided to an insurer pursuant to this
213	section are is considered borrowed surplus an asset of the
214	insurer pursuant to s. 628.401 s. 625.012.
215	(5)  If an insurer that receives funds in exchange for
216	issuance of a surplus note pursuant to this section is rendered
217	insolvent, the state is a class 3 creditor pursuant to s.
218	631.271 for the unpaid principal and interest on the surplus
219	note.
220	(6)  The board shall adopt rules prescribing the
221	procedures, administration, and criteria for approving the
222	applications of insurers to receive funds in exchange for
223	issuance of surplus notes pursuant to this section, which may be
224	adopted pursuant to the procedures for emergency rules of
225	chapter 120. Otherwise, actions and determinations by the board
226	pursuant to this section are exempt from chapter 120.
227	(7)  The board shall invest and reinvest the funds
228	appropriated for the program in accordance with s. 215.47 and
229	consistent with board policy.
230	(8)  Costs and fees incurred by the board in administering
231	this program, including fees for investment services, shall be
232	paid from funds appropriated by the Legislature for this
233	program, but are limited to 1 percent of the amount
234	appropriated.
235	(9)  The board shall submit a report to the President of
236	the Senate and the Speaker of the House of Representatives by
237	February 1 of each year as to the results of the program and
238	each insurer's compliance with the terms of its surplus note.
239	(10)  The amendments to this section enacted in 2008 do not
240	affect the terms or conditions of the surplus notes that were
241	approved prior to January 1, 2008. However, the board may
242	renegotiate the terms of any surplus note issued by an insurer
243	prior to January 2008 under this program upon the agreement of
244	the insurer and the board and consistent with the requirements
245	of this section as amended in 2008.
246	(11)  On January 15, 2009, the State Board of
247	Administration shall transfer to Citizens Property Insurance
248	Corporation any funds that have not been committed or reserved
249	for insurers approved to receive such funds under the program,
250	from the funds that were transferred from Citizens Property
251	Insurance Corporation in 2008-2009 for such purposes.
252	Section 3.  Subsection (6) is added to section, 624.3161,
253	Florida Statutes, to read:
254	624.3161  Market conduct examinations.--
255	(6)  Based on the findings of a market conduct examination
256	that an insurer has exhibited a pattern or practice of willful
257	violations of an unfair insurance trade practice related to
258	claims-handling which caused harm to policyholders, as
259	prohibited by s. 626.9541(1)(i), the office may order an insurer
260	pursuant to chapter 120 to file its claims-handling practices
261	and procedures related to that line of insurance with the office
262	for review and inspection, to be held by the office for the
263	following 36-month period. Such claims-handling practices and
264	procedures are public records and are not trade secrets or
265	otherwise exempt from the provisions of s. 119.07(1). As used in
266	this section, "claims-handling practices and procedures" are any
267	policies, guidelines, rules, protocols, standard operating
268	procedures, instructions, or directives that govern or guide how
269	and the manner in which an insured's claims for benefits under
270	any policy will be processed.
271	Section 4.  Subsections (2) and (3) of section 624.4211,
272	Florida Statutes, are amended to read:
273	624.4211  Administrative fine in lieu of suspension or
274	revocation.--
275	(2)  With respect to any nonwillful violation, such fine
276	may shall not exceed $5,000 $2,500 per violation. In no event
277	shall such fine exceed an aggregate amount of $20,000 $10,000
278	for all nonwillful violations arising out of the same action. If
279	When an insurer discovers a nonwillful violation, the insurer
280	shall correct the violation and, if restitution is due, make
281	restitution to all affected persons. Such restitution shall
282	include interest at 12 percent per year from either the date of
283	the violation or the date of inception of the affected person's
284	policy, at the insurer's option. The restitution may be a credit
285	against future premiums due provided that the interest
286	accumulates shall accumulate until the premiums are due. If the
287	amount of restitution due to any person is $50 or more and the
288	insurer wishes to credit it against future premiums, it shall
289	notify such person that she or he may receive a check instead of
290	a credit. If the credit is on a policy that which is not
291	renewed, the insurer shall pay the restitution to the person to
292	whom it is due.
293	(3)  With respect to any knowing and willful violation of a
294	lawful order or rule of the office or commission or a provision
295	of this code, the office may impose a fine upon the insurer in
296	an amount not to exceed $40,000 $20,000 for each such violation.
297	In no event shall such fine exceed an aggregate amount of
298	$200,000 $100,000 for all knowing and willful violations arising
299	out of the same action. In addition to such fines, the such
300	insurer shall make restitution when due in accordance with the
301	provisions of subsection (2).
302	Section 5.  Section 624.4213, Florida Statutes, is created
303	to read:
304	624.4213  Trade secret documents.--
305	(1)  If any person who is required to submit documents or
306	other information to the office or department pursuant to the
307	Insurance Code or by rule or order of the office, department, or
308	commission claims that such submission contains a trade secret,
309	such person may file with the office or department a notice of
310	trade secret as provided in this section. Failure to do so
311	constitutes a waiver of any claim by such person that the
312	document or information is a trade secret.
313	(a)  Each page of such document or specific portion of a
314	document claimed to be a trade secret must be clearly marked as
315	"trade secret."
316	(b)  All material marked as a trade secret must be
317	separated from all non-trade secret material, such as being
318	submitted in a separate envelope clearly marked as "trade
319	secret."
320	(c)  In submitting a notice of trade secret to the office
321	or department, the submitting party must include an affidavit
322	certifying under oath to the truth of the following statements
323	concerning all documents or information that are claimed to be
324	trade secrets:
325	1.  [I consider/My company considers] this information a
326	trade secret that has value and provides an advantage or an
327	opportunity to obtain an advantage over those who do not know or
328	use it.
329	2.  [I have/My company has] taken measures to prevent the
330	disclosure of the information to anyone other that those who
331	have been selected to have access for limited purposes, and [I
332	intend/my company intends] to continue to take such measures.
333	3.  The information is not, and has not been, reasonably
334	obtainable without [my/our] consent by other persons by use of
335	legitimate means.
336	4.  The information is not publicly available elsewhere.
337	(2)  If the office or department receives a public-records
338	request for a document or information that is marked and
339	certified as a trade secret, the office or department shall
340	promptly notify the person that certified the document as a
341	trade secret. The notice shall inform such person that he or she
342	or his or her company has 30 days following receipt of such
343	notice to file an action in circuit court seeking a
344	determination whether the document in question contains trade
345	secrets and an order barring public disclosure of the document.
346	If that person or company files an action within 30 days after
347	receipt of notice of the public-records request, the office or
348	department may not release the documents pending the outcome of
349	the legal action. The failure to file an action within 30 days
350	constitutes a waiver of any claim of confidentiality and the
351	office or department shall release the document as requested.
352	(3)  The office or department may disclose a trade secret,
353	together with the claim that it is a trade secret, to an officer
354	or employee of another governmental agency whose use of the
355	trade secret is within the scope of his or her employment.
356	Section 6. Section 624.4305, Florida Statutes, is created
357	to read:
358	624.4305  Nonrenewal of residential property insurance
359	policies.--Any insurer planning to nonrenew more than 10,000
360	residential property insurance policies in this state within a
361	12-month period shall give notice in writing to the Office of
362	Insurance Regulation for informational purposes 90 days before
363	the issuance of any notices of nonrenewal. The notice provided
364	to the office must set forth the insurer's reasons for such
365	action, the effective dates of nonrenewal, and any arrangements
366	made for other insurers to offer coverage to affected
367	policyholders.
368	Section 7.  Subsection (2) of section 626.9521, Florida
369	Statutes, is amended to read:
370	626.9521  Unfair methods of competition and unfair or
371	deceptive acts or practices prohibited; penalties.--
372	(2)  Any person who violates any provision of this part
373	shall be subject to a fine in an amount not greater than $5,000
374	$2,500 for each nonwillful violation and not greater than
375	$40,000 $20,000 for each willful violation. Fines under this
376	subsection imposed against an insurer may not exceed an
377	aggregate amount of $20,000 $10,000 for all nonwillful
378	violations arising out of the same action or an aggregate amount
379	of $200,000 $100,000 for all willful violations arising out of
380	the same action. The fines authorized by this subsection may be
381	imposed in addition to any other applicable penalty.
382	Section 8.  Paragraph (i) of subsection (1) of section
383	626.9541, Florida Statutes, is amended to read:
384	626.9541  Unfair methods of competition and unfair or
385	deceptive acts or practices defined.--
386	(1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
387	ACTS.--The following are defined as unfair methods of
388	competition and unfair or deceptive acts or practices:
389	(i)  Unfair claim settlement practices.--
390	1.  Attempting to settle claims on the basis of an
391	application, when serving as a binder or intended to become a
392	part of the policy, or any other material document which was
393	altered without notice to, or knowledge or consent of, the
394	insured;
395	2.  A material misrepresentation made to an insured or any
396	other person having an interest in the proceeds payable under
397	such contract or policy, for the purpose and with the intent of
398	effecting settlement of such claims, loss, or damage under such
399	contract or policy on less favorable terms than those provided
400	in, and contemplated by, such contract or policy; or
401	3.  Committing or performing with such frequency as to
402	indicate a general business practice any of the following:
403	a.  Failing to adopt and implement standards for the proper
404	investigation of claims;
405	b.  Misrepresenting pertinent facts or insurance policy
406	provisions relating to coverages at issue;
407	c.  Failing to acknowledge and act promptly upon
408	communications with respect to claims;
409	d.  Denying claims without conducting reasonable
410	investigations based upon available information;
411	e.  Failing to affirm or deny full or partial coverage of
412	claims, and, as to partial coverage, the dollar amount or extent
413	of coverage, or failing to provide a written statement that the
414	claim is being investigated, upon the written request of the
415	insured within 30 days after proof-of-loss statements have been
416	completed;
417	f.  Failing to promptly provide a reasonable explanation in
418	writing to the insured of the basis in the insurance policy, in
419	relation to the facts or applicable law, for denial of a claim
420	or for the offer of a compromise settlement;
421	g.  Failing to promptly notify the insured of any
422	additional information necessary for the processing of a claim;
423	or
424	h.  Failing to clearly explain the nature of the requested
425	information and the reasons why such information is necessary.
426	4.  Failing to pay undisputed amounts of partial or full
427	benefits owed under first-party property insurance policies
428	within 90 days after an insurer receives notice of a residential
429	property insurance claim, determines the amounts of partial or
430	full benefits, and agrees to coverage, unless payment of the
431	undisputed benefits is prevented by an act of God, prevented by
432	the impossibility of performance, or due to actions by the
433	insured or claimant that constitute fraud, lack of cooperation,
434	or intentional misrepresentation regarding the claim for which
435	benefits are owed.
436	Section 9.  Section 627.0612, Florida Statutes, is amended
437	to read:
438	627.0612  Administrative proceedings in rating
439	determinations.--
440	(1)  In any proceeding to determine whether rates, rating
441	plans, or other matters governed by this part comply with the
442	law, the appellate court shall set aside a final order of the
443	office if the office has violated s. 120.57(1)(k) by
444	substituting its findings of fact for findings of an
445	administrative law judge which were supported by competent
446	substantial evidence.
447	(2)  In an administrative hearing to determine whether an
448	insurer's rates, rating schedules, rating manuals, premium
449	credits, discount schedules, surcharge schedules, or changes
450	thereto, for property insurance comply with the law, in addition
451	to any other findings of fact, findings on the following matters
452	shall be considered findings of fact:
453	(a)  Whether a factor or factors used in a rate filing or
454	applied by the office is consistent with standard actuarial
455	techniques or practices or are otherwise based on reasonable
456	actuarial judgment.
457	(b)  Whether a factor for underwriting profit and
458	contingencies is reasonable or excessive.
459	(c)  Whether the cost of reinsurance is reasonable or
460	excessive.
461	(3)  In an administrative hearing to determine whether an
462	insurer's rates, rating schedules, rating manuals, premium
463	credits, discount schedules, surcharge schedules, or changes
464	thereto, for property insurance comply with the law, a
465	recommended order may be entered that approves, modifies, or
466	rejects the requested change. A recommended order modifying the
467	requested rate change shall recommend such change as is
468	supported by the record in the case.
469	Section 10.  Paragraphs (a), (b), and (g) of subsection
470	(2), subsection (6), and paragraph (a) of subsection (9) of
471	section 627.062, Florida Statutes, are amended to read:
472	627.062  Rate standards.--
473	(2)  As to all such classes of insurance:
474	(a)  Insurers or rating organizations shall establish and
475	use rates, rating schedules, or rating manuals to allow the
476	insurer a reasonable rate of return on such classes of insurance
477	written in this state. A copy of rates, rating schedules, rating
478	manuals, premium credits or discount schedules, and surcharge
479	schedules, and changes thereto, shall be filed with the office
480	under one of the following procedures except as provided in
481	subparagraph 3.:
482	1.  If the filing is made at least 90 days before the
483	proposed effective date and the filing is not implemented during
484	the office's review of the filing and any proceeding and
485	judicial review, then such filing shall be considered a "file
486	and use" filing. In such case, the office shall finalize its
487	review by issuance of a notice of intent to approve or a notice
488	of intent to disapprove within 90 days after receipt of the
489	filing. The notice of intent to approve and the notice of intent
490	to disapprove constitute agency action for purposes of the
491	Administrative Procedure Act. Requests for supporting
492	information, requests for mathematical or mechanical
493	corrections, or notification to the insurer by the office of its
494	preliminary findings shall not toll the 90-day period during any
495	such proceedings and subsequent judicial review. The rate shall
496	be deemed approved if the office does not issue a notice of
497	intent to approve or a notice of intent to disapprove within 90
498	days after receipt of the filing.
499	2.  If the filing is not made in accordance with the
500	provisions of subparagraph 1., such filing shall be made as soon
501	as practicable, but no later than 30 days after the effective
502	date, and shall be considered a "use and file" filing. An
503	insurer making a "use and file" filing is potentially subject to
504	an order by the office to return to policyholders portions of
505	rates found to be excessive, as provided in paragraph (h).
506	3.  For all property insurance filings made or submitted
507	after January 25, 2007, but before December 31, 2009 2008, an
508	insurer seeking a rate that is greater than the rate most
509	recently approved by the office shall make a "file and use"
510	filing. This subparagraph applies to property insurance only.
511	For purposes of this subparagraph, motor vehicle collision and
512	comprehensive coverages are not considered to be property
513	coverages.
514	(b)  Upon receiving a rate filing, the office shall review
515	the rate filing to determine if a rate is excessive, inadequate,
516	or unfairly discriminatory. In making that determination, the
517	office shall, in accordance with generally accepted and
518	reasonable actuarial techniques, consider the following factors:
519	1.  Past and prospective loss experience within and without
520	this state.
521	2.  Past and prospective expenses.
522	3.  The degree of competition among insurers for the risk
523	insured.
524	4.  Investment income reasonably expected by the insurer,
525	consistent with the insurer's investment practices, from
526	investable premiums anticipated in the filing, plus any other
527	expected income from currently invested assets representing the
528	amount expected on unearned premium reserves and loss reserves.
529	The commission may adopt rules using utilizing reasonable
530	techniques of actuarial science and economics to specify the
531	manner in which insurers shall calculate investment income
532	attributable to such classes of insurance written in this state
533	and the manner in which such investment income shall be used to
534	calculate in the calculation of insurance rates. Such manner
535	shall contemplate allowances for an underwriting profit factor
536	and full consideration of investment income which produce a
537	reasonable rate of return; however, investment income from
538	invested surplus may shall not be considered.
539	5.  The reasonableness of the judgment reflected in the
540	filing.
541	6.  Dividends, savings, or unabsorbed premium deposits
542	allowed or returned to Florida policyholders, members, or
543	subscribers.
544	7.  The adequacy of loss reserves.
545	8.  The cost of reinsurance. The office shall not
546	disapprove a rate as excessive solely due to the insurer having
547	obtained catastrophic reinsurance to cover the insurer's
548	estimated 250-year probable maximum loss or any lower level of
549	loss.
550	9.  Trend factors, including trends in actual losses per
551	insured unit for the insurer making the filing.
552	10.  Conflagration and catastrophe hazards, if applicable.
553	11.  Projected hurricane losses, if applicable, which must
554	be estimated using a model or method found to be acceptable or
555	reliable by the Florida Commission on Hurricane Loss Projection
556	Methodology, and as further provided in s. 627.0628.
557	12.11.  A reasonable margin for underwriting profit and
558	contingencies. For that portion of the rate covering the risk of
559	hurricanes and other catastrophic losses for which the insurer
560	has not purchased reinsurance and has exposed its capital and
561	surplus to such risk, the office must approve a rating factor
562	that provides the insurer a reasonable rate of return that is
563	commensurate with such risk.
564	13.12.  The cost of medical services, if applicable.
565	14.13.  Other relevant factors which impact upon the
566	frequency or severity of claims or upon expenses.
567	(g)  The office may at any time review a rate, rating
568	schedule, rating manual, or rate change; the pertinent records
569	of the insurer; and market conditions. If the office finds on a
570	preliminary basis that a rate may be excessive, inadequate, or
571	unfairly discriminatory, the office shall initiate proceedings
572	to disapprove the rate and shall so notify the insurer. However,
573	the office may not disapprove as excessive any rate for which it
574	has given final approval or which has been deemed approved for a
575	period of 1 year after the effective date of the filing unless
576	the office finds that a material misrepresentation or material
577	error was made by the insurer or was contained in the filing.
578	Upon being so notified, the insurer or rating organization
579	shall, within 60 days, file with the office all information
580	which, in the belief of the insurer or organization, proves the
581	reasonableness, adequacy, and fairness of the rate or rate
582	change. The office shall issue a notice of intent to approve or
583	a notice of intent to disapprove pursuant to the procedures of
584	paragraph (a) within 90 days after receipt of the insurer's
585	initial response. In such instances and in any administrative
586	proceeding relating to the legality of the rate, the insurer or
587	rating organization shall carry the burden of proof by a
588	preponderance of the evidence to show that the rate is not
589	excessive, inadequate, or unfairly discriminatory. After the
590	office notifies an insurer that a rate may be excessive,
591	inadequate, or unfairly discriminatory, unless the office
592	withdraws the notification, the insurer shall not alter the rate
593	except to conform with the office's notice until the earlier of
594	120 days after the date the notification was provided or 180
595	days after the date of the implementation of the rate. The
596	office may, subject to chapter 120, disapprove without the 60-
597	day notification any rate increase filed by an insurer within
598	the prohibited time period or during the time that the legality
599	of the increased rate is being contested.
600
601	The provisions of this subsection shall not apply to workers'
602	compensation and employer's liability insurance and to motor
603	vehicle insurance.
604	(6)(a)  If an insurer requests an administrative hearing
605	pursuant to s. 120.57 related to a rate filing under this
606	section, the director of the Division of Administrative Hearings
607	shall expedite the hearing and assign an administrative law
608	judge who shall commence the hearing within 30 days after the
609	receipt of the formal request and shall enter a recommended
610	order within 30 days after the hearing or within 30 days after
611	receipt of the hearing transcript by the administrative law
612	judge, whichever is later. Each party shall be allowed 10 days
613	in which to submit written exceptions to the recommended order.
614	The office shall enter a final order within 30 days after the
615	entry of the recommended order. The provisions of this paragraph
616	may be waived upon stipulation of all parties.
617	(b)  Upon entry of a final order, the insurer may request a
618	expedited appellate review pursuant to the Florida Rules of
619	Appellate Procedure. It is the intent of the Legislature that
620	the First District Court of Appeal grant an insurer's request
621	for an expedited appellate review.
622	(a)  After any action with respect to a rate filing that
623	constitutes agency action for purposes of the Administrative
624	Procedure Act, except for a rate filing for medical malpractice,
625	an insurer may, in lieu of demanding a hearing under s. 120.57,
626	require arbitration of the rate filing. However, the arbitration
627	option provision in this subsection does not apply to a rate
628	filing that is made on or after the effective date of this act
629	until January 1, 2009. Arbitration shall be conducted by a board
630	of arbitrators consisting of an arbitrator selected by the
631	office, an arbitrator selected by the insurer, and an arbitrator
632	selected jointly by the other two arbitrators. Each arbitrator
633	must be certified by the American Arbitration Association. A
634	decision is valid only upon the affirmative vote of at least two
635	of the arbitrators. No arbitrator may be an employee of any
636	insurance regulator or regulatory body or of any insurer,
637	regardless of whether or not the employing insurer does business
638	in this state. The office and the insurer must treat the
639	decision of the arbitrators as the final approval of a rate
640	filing. Costs of arbitration shall be paid by the insurer.
641	(b)  Arbitration under this subsection shall be conducted
642	pursuant to the procedures specified in ss. 682.06-682.10.
643	Either party may apply to the circuit court to vacate or modify
644	the decision pursuant to s. 682.13 or s. 682.14. The commission
645	shall adopt rules for arbitration under this subsection, which
646	rules may not be inconsistent with the arbitration rules of the
647	American Arbitration Association as of January 1, 1996.
648	(c)  Upon initiation of the arbitration process, the
649	insurer waives all rights to challenge the action of the office
650	under the Administrative Procedure Act or any other provision of
651	law; however, such rights are restored to the insurer if the
652	arbitrators fail to render a decision within 90 days after
653	initiation of the arbitration process.
654	(9)(a)  Effective March 1, 2007, The chief executive
655	officer or chief financial officer of a property insurer and the
656	chief actuary of a property insurer must certify under oath and
657	subject to the penalty of perjury, on a form approved by the
658	commission, the following information, which must accompany a
659	rate filing:
660	1.  The signing officer and actuary have reviewed the rate
661	filing;
662	2.  Based on the signing officer's and actuary's knowledge,
663	the rate filing does not contain any untrue statement of a
664	material fact or omit to state a material fact necessary in
665	order to make the statements made, in light of the circumstances
666	under which such statements were made, not misleading;
667	3.  Based on the signing officer's and actuary's knowledge,
668	the information and other factors described in paragraph (2)(b),
669	including, but not limited to, investment income, fairly present
670	in all material respects the basis of the rate filing for the
671	periods presented in the filing; and
672	4.  Based on the signing officer's and actuary's knowledge,
673	the rate filing reflects all premium savings that are reasonably
674	expected to result from legislative enactments and are in
675	accordance with generally accepted and reasonable actuarial
676	techniques.
677	Section 11.  Paragraph (c) of subsection (1) and subsection
678	(3) of section 627.0628, Florida Statutes, are amended, and
679	paragraph (e) is added to subsection (1) of that section, to
680	read:
681	627.0628  Florida Commission on Hurricane Loss Projection
682	Methodology; public records exemption; public meetings
683	exemption.--
684	(1)  LEGISLATIVE FINDINGS AND INTENT.--
685	(c)  It is the intent of the Legislature to create the
686	Florida Commission on Hurricane Loss Projection Methodology as a
687	panel of experts to provide the most actuarially sophisticated
688	guidelines and standards for projection of hurricane losses
689	possible, given the current state of actuarial science. It is
690	the further intent of the Legislature that such standards and
691	guidelines must be used by the State Board of Administration in
692	developing reimbursement premium rates for the Florida Hurricane
693	Catastrophe Fund, and, subject to paragraph (3)(c), must may be
694	used by insurers in rate filings under s. 627.062 unless the way
695	in which such standards and guidelines were applied by the
696	insurer was erroneous, as shown by a preponderance of the
697	evidence.
698	(e)  The Legislature finds that the authority to take final
699	agency action with respect to insurance ratemaking is vested in
700	the Office of Insurance Regulation and the Financial Services
701	Commission, and that the processes, standards, and guidelines of
702	the Florida Commission on Hurricane Loss Projection Methodology
703	do not constitute final agency action or statements of general
704	applicability that implement, interpret, or prescribe law or
705	policy; accordingly, chapter 120 does not apply to the
706	processes, standards, and guidelines of the Florida Commission
707	on Hurricane Loss Projection Methodology.
708	(3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--
709	(a)  The commission shall consider any actuarial methods,
710	principles, standards, models, or output ranges that have the
711	potential for improving the accuracy of or reliability of the
712	hurricane loss projections used in residential property
713	insurance rate filings. The commission shall, from time to time,
714	adopt findings as to the accuracy or reliability of particular
715	methods, principles, standards, models, or output ranges.
716	(b)  The commission shall consider any actuarial methods,
717	principles, standards, or models that have the potential for
718	improving the accuracy of or reliability of projecting probable
719	maximum loss levels. The commission shall adopt findings as to
720	the accuracy or reliability of particular methods, principles,
721	standards, or models related to probable maximum loss
722	calculations.
723	(c)(b)  In establishing reimbursement premiums for the
724	Florida Hurricane Catastrophe Fund, the State Board of
725	Administration must, to the extent feasible, employ actuarial
726	methods, principles, standards, models, or output ranges found
727	by the commission to be accurate or reliable.
728	(d)(c)  With respect to a rate filing under s. 627.062, an
729	insurer shall may employ and may not modify or adjust actuarial
730	methods, principles, standards, models, or output ranges found
731	by the commission to be accurate or reliable in determining to
732	determine hurricane loss factors for use in a rate filing under
733	s. 627.062. An insurer shall employ and may not modify or adjust
734	models found by the commission to be accurate or reliable in
735	determining probable maximum loss levels pursuant to paragraph
736	(b) with respect to a rate filing under s. 627.062 made more
737	than 60 days after the commission has made such findings. Such
738	findings and factors are admissible and relevant in
739	consideration of a rate filing by the office or in any
740	arbitration or administrative or judicial review only if the
741	office and the consumer advocate appointed pursuant to s.
742	627.0613 have access to all of the assumptions and factors that
743	were used in developing the actuarial methods, principles,
744	standards, models, or output ranges, and are not precluded from
745	disclosing such information in a rate proceeding. In any rate
746	hearing under s. 120.57 or in any arbitration proceeding under
747	s. 627.062(6), the hearing officer, judge, or arbitration panel
748	may determine whether the office and the consumer advocate were
749	provided with access to all of the assumptions and factors that
750	were used in developing the actuarial methods, principles,
751	standards, models, or output ranges and to determine their
752	admissibility.
753	(e)(d)  The commission shall adopt revisions to previously
754	adopted actuarial methods, principles, standards, models, or
755	output ranges at least annually.
756	(f)(e)1.  A trade secret, as defined in s. 812.081, that is
757	used in designing and constructing a hurricane loss model and
758	that is provided pursuant to this section, by a private company,
759	to the commission, office, or consumer advocate appointed
760	pursuant to s. 627.0613, is confidential and exempt from s.
761	119.07(1) and s. 24(a), Art. I of the State Constitution.
762	2.  That portion of a meeting of the commission or of a
763	rate proceeding on an insurer's rate filing at which a trade
764	secret made confidential and exempt by this paragraph is
765	discussed is exempt from s. 286.011 and s. 24(b), Art. I of the
766	State Constitution.
767	3.  This paragraph is subject to the Open Government Sunset
768	Review Act of 1995 in accordance with s. 119.15, and shall stand
769	repealed on October 2, 2010, unless reviewed and saved from
770	repeal through reenactment by the Legislature.
771	Section 12.  Subsection (1) of section 627.0629, Florida
772	Statutes, is amended to read:
773	627.0629  Residential property insurance; rate filings.--
774	(1)(a)  It is the intent of the Legislature that insurers
775	must provide savings to consumers who install or implement
776	windstorm damage mitigation techniques, alterations, or
777	solutions to their properties to prevent windstorm losses. A
778	rate filing for residential property insurance must include
779	actuarially reasonable discounts, credits, or other rate
780	differentials, or appropriate reductions in deductibles, for
781	properties on which fixtures or construction techniques
782	demonstrated to reduce the amount of loss in a windstorm have
783	been installed or implemented. The fixtures or construction
784	techniques shall include, but not be limited to, fixtures or
785	construction techniques which enhance roof strength, roof
786	covering performance, roof-to-wall strength, wall-to-floor-to-
787	foundation strength, opening protection, and window, door, and
788	skylight strength. Credits, discounts, or other rate
789	differentials, or appropriate reductions in deductibles, for
790	fixtures and construction techniques which meet the minimum
791	requirements of the Florida Building Code must be included in
792	the rate filing. All insurance companies must make a rate filing
793	which includes the credits, discounts, or other rate
794	differentials or reductions in deductibles by February 28, 2003.
795	By July 1, 2007, the office shall reevaluate the discounts,
796	credits, other rate differentials, and appropriate reductions in
797	deductibles for fixtures and construction techniques that meet
798	the minimum requirements of the Florida Building Code, based
799	upon actual experience or any other loss relativity studies
800	available to the office. The office shall determine the
801	discounts, credits, other rate differentials, and appropriate
802	reductions in deductibles that reflect the full actuarial value
803	of such revaluation, which may be used by insurers in rate
804	filings.
805	(b)  By February 1, 2011, the Office of Insurance
806	Regulation, in consultation with the Department of Financial
807	Services and the Department of Community Affairs, shall develop
808	and make publicly available a proposed method for insurers to
809	establish discounts, credits, or other rate differentials for
810	hurricane mitigation measures which directly correlate to the
811	numerical rating assigned to a structure pursuant to the uniform
812	home grading scale adopted by the Financial Services Commission
813	pursuant to s. 215.55865, including any proposed changes to the
814	uniform home grading scale. By October 1, 2011, the commission
815	shall adopt rules requiring insurers to make rate filings for
816	residential property insurance which revise insurers' discounts,
817	credits, or other rate differentials for hurricane mitigation
818	measures so that such rate differentials correlate directly to
819	the uniform home grading scale. The rules may include such
820	changes to the uniform home grading scale as the commission
821	determines are necessary, and may specify the minimum required
822	discounts, credits, or other rate differentials. Such rate
823	differentials must be consistent with generally accepted
824	actuarial principles and wind-loss mitigation studies. The rules
825	shall allow a period of at least 2 years after the effective
826	date of the revised mitigation discounts, credits, or other rate
827	differentials for a property owner to obtain an inspection or
828	otherwise qualify for the revised credit, during which time the
829	insurer shall continue to apply the mitigation credit that was
830	applied immediately prior to the effective date of the revised
831	credit.
832	Section 13.  Subsection (2) and paragraphs (a), (b), (c),
833	(m), (p), (w), (dd), (ee), and (ff) of subsection (6) of section
834	627.351, Florida Statutes, are amended to read:
835	627.351  Insurance risk apportionment plans.--
836	(2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--
837	(b)  The department shall require all insurers holding a
838	certificate of authority to transact property insurance on a
839	direct basis in this state, other than joint underwriting
840	associations and other entities formed pursuant to this section,
841	to provide windstorm coverage to applicants from areas
842	determined to be eligible pursuant to paragraph (c) who in good
843	faith are entitled to, but are unable to procure, such coverage
844	through ordinary means; or it shall adopt a reasonable plan or
845	plans for the equitable apportionment or sharing among such
846	insurers of windstorm coverage, which may include formation of
847	an association for this purpose. As used in this subsection, the
848	term "property insurance" means insurance on real or personal
849	property, as defined in s. 624.604, including insurance for
850	fire, industrial fire, allied lines, farmowners multiperil,
851	homeowners' multiperil, commercial multiperil, and mobile homes,
852	and including liability coverages on all such insurance, but
853	excluding inland marine as defined in s. 624.607(3) and
854	excluding vehicle insurance as defined in s. 624.605(1)(a) other
855	than insurance on mobile homes used as permanent dwellings. The
856	department shall adopt rules that provide a formula for the
857	recovery and repayment of any deferred assessments.
858	1.  For the purpose of this section, properties eligible
859	for such windstorm coverage are defined as dwellings, buildings,
860	and other structures, including mobile homes which are used as
861	dwellings and which are tied down in compliance with mobile home
862	tie-down requirements prescribed by the Department of Highway
863	Safety and Motor Vehicles pursuant to s. 320.8325, and the
864	contents of all such properties. An applicant or policyholder is
865	eligible for coverage only if an offer of coverage cannot be
866	obtained by or for the applicant or policyholder from an
867	admitted insurer at approved rates.
868	2.a.(I)  All insurers required to be members of such
869	association shall participate in its writings, expenses, and
870	losses. Surplus of the association shall be retained for the
871	payment of claims and shall not be distributed to the member
872	insurers. Such participation by member insurers shall be in the
873	proportion that the net direct premiums of each member insurer
874	written for property insurance in this state during the
875	preceding calendar year bear to the aggregate net direct
876	premiums for property insurance of all member insurers, as
877	reduced by any credits for voluntary writings, in this state
878	during the preceding calendar year. For the purposes of this
879	subsection, the term "net direct premiums" means direct written
880	premiums for property insurance, reduced by premium for
881	liability coverage and for the following if included in allied
882	lines: rain and hail on growing crops; livestock; association
883	direct premiums booked; National Flood Insurance Program direct
884	premiums; and similar deductions specifically authorized by the
885	plan of operation and approved by the department. A member's
886	participation shall begin on the first day of the calendar year
887	following the year in which it is issued a certificate of
888	authority to transact property insurance in the state and shall
889	terminate 1 year after the end of the calendar year during which
890	it no longer holds a certificate of authority to transact
891	property insurance in the state. The commissioner, after review
892	of annual statements, other reports, and any other statistics
893	that the commissioner deems necessary, shall certify to the
894	association the aggregate direct premiums written for property
895	insurance in this state by all member insurers.
896	(II)  Effective July 1, 2002, the association shall operate
897	subject to the supervision and approval of a board of governors
898	who are the same individuals that have been appointed by the
899	Treasurer to serve on the board of governors of the Citizens
900	Property Insurance Corporation.
901	(III)  The plan of operation shall provide a formula
902	whereby a company voluntarily providing windstorm coverage in
903	affected areas will be relieved wholly or partially from
904	apportionment of a regular assessment pursuant to sub-sub-
905	subparagraph d.(I) or sub-sub-subparagraph d.(II).
906	(IV)  A company which is a member of a group of companies
907	under common management may elect to have its credits applied on
908	a group basis, and any company or group may elect to have its
909	credits applied to any other company or group.
910	(V)  There shall be no credits or relief from apportionment
911	to a company for emergency assessments collected from its
912	policyholders under sub-sub-subparagraph d.(III).
913	(VI)  The plan of operation may also provide for the award
914	of credits, for a period not to exceed 3 years, from a regular
915	assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
916	subparagraph d.(II) as an incentive for taking policies out of
917	the Residential Property and Casualty Joint Underwriting
918	Association. In order to qualify for the exemption under this
919	sub-sub-subparagraph, the take-out plan must provide that at
920	least 40 percent of the policies removed from the Residential
921	Property and Casualty Joint Underwriting Association cover risks
922	located in Dade, Broward, and Palm Beach Counties or at least 30
923	percent of the policies so removed cover risks located in Dade,
924	Broward, and Palm Beach Counties and an additional 50 percent of
925	the policies so removed cover risks located in other coastal
926	counties, and must also provide that no more than 15 percent of
927	the policies so removed may exclude windstorm coverage. With the
928	approval of the department, the association may waive these
929	geographic criteria for a take-out plan that removes at least
930	the lesser of 100,000 Residential Property and Casualty Joint
931	Underwriting Association policies or 15 percent of the total
932	number of Residential Property and Casualty Joint Underwriting
933	Association policies, provided the governing board of the
934	Residential Property and Casualty Joint Underwriting Association
935	certifies that the take-out plan will materially reduce the
936	Residential Property and Casualty Joint Underwriting
937	Association's 100-year probable maximum loss from hurricanes.
938	With the approval of the department, the board may extend such
939	credits for an additional year if the insurer guarantees an
940	additional year of renewability for all policies removed from
941	the Residential Property and Casualty Joint Underwriting
942	Association, or for 2 additional years if the insurer guarantees
943	2 additional years of renewability for all policies removed from
944	the Residential Property and Casualty Joint Underwriting
945	Association.
946	b.  Assessments to pay deficits in the association under
947	this subparagraph shall be included as an appropriate factor in
948	the making of rates as provided in s. 627.3512.
949	c.  The Legislature finds that the potential for unlimited
950	deficit assessments under this subparagraph may induce insurers
951	to attempt to reduce their writings in the voluntary market, and
952	that such actions would worsen the availability problems that
953	the association was created to remedy. It is the intent of the
954	Legislature that insurers remain fully responsible for paying
955	regular assessments and collecting emergency assessments for any
956	deficits of the association; however, it is also the intent of
957	the Legislature to provide a means by which assessment
958	liabilities may be amortized over a period of years.
959	d.(I)  When the deficit incurred in a particular calendar
960	year is 10 percent or less of the aggregate statewide direct
961	written premium for property insurance for the prior calendar
962	year for all member insurers, the association shall levy an
963	assessment on member insurers in an amount equal to the deficit.
964	(II)  When the deficit incurred in a particular calendar
965	year exceeds 10 percent of the aggregate statewide direct
966	written premium for property insurance for the prior calendar
967	year for all member insurers, the association shall levy an
968	assessment on member insurers in an amount equal to the greater
969	of 10 percent of the deficit or 10 percent of the aggregate
970	statewide direct written premium for property insurance for the
971	prior calendar year for member insurers. Any remaining deficit
972	shall be recovered through emergency assessments under sub-sub-
973	subparagraph (III).
974	(III)  Upon a determination by the board of directors that
975	a deficit exceeds the amount that will be recovered through
976	regular assessments on member insurers, pursuant to sub-sub-
977	subparagraph (I) or sub-sub-subparagraph (II), the board shall
978	levy, after verification by the department, emergency
979	assessments to be collected by member insurers and by
980	underwriting associations created pursuant to this section which
981	write property insurance, upon issuance or renewal of property
982	insurance policies other than National Flood Insurance policies
983	in the year or years following levy of the regular assessments.
984	The amount of the emergency assessment collected in a particular
985	year shall be a uniform percentage of that year's direct written
986	premium for property insurance for all member insurers and
987	underwriting associations, excluding National Flood Insurance
988	policy premiums, as annually determined by the board and
989	verified by the department. The department shall verify the
990	arithmetic calculations involved in the board's determination
991	within 30 days after receipt of the information on which the
992	determination was based. Notwithstanding any other provision of
993	law, each member insurer and each underwriting association
994	created pursuant to this section shall collect emergency
995	assessments from its policyholders without such obligation being
996	affected by any credit, limitation, exemption, or deferment. The
997	emergency assessments so collected shall be transferred directly
998	to the association on a periodic basis as determined by the
999	association. The aggregate amount of emergency assessments
1000	levied under this sub-sub-subparagraph in any calendar year may
1001	not exceed the greater of 10 percent of the amount needed to
1002	cover the original deficit, plus interest, fees, commissions,
1003	required reserves, and other costs associated with financing of
1004	the original deficit, or 10 percent of the aggregate statewide
1005	direct written premium for property insurance written by member
1006	insurers and underwriting associations for the prior year, plus
1007	interest, fees, commissions, required reserves, and other costs
1008	associated with financing the original deficit. The board may
1009	pledge the proceeds of the emergency assessments under this sub-
1010	sub-subparagraph as the source of revenue for bonds, to retire
1011	any other debt incurred as a result of the deficit or events
1012	giving rise to the deficit, or in any other way that the board
1013	determines will efficiently recover the deficit. The emergency
1014	assessments under this sub-sub-subparagraph shall continue as
1015	long as any bonds issued or other indebtedness incurred with
1016	respect to a deficit for which the assessment was imposed remain
1017	outstanding, unless adequate provision has been made for the
1018	payment of such bonds or other indebtedness pursuant to the
1019	document governing such bonds or other indebtedness. Emergency
1020	assessments collected under this sub-sub-subparagraph are not
1021	part of an insurer's rates, are not premium, and are not subject
1022	to premium tax, fees, or commissions; however, failure to pay
1023	the emergency assessment shall be treated as failure to pay
1024	premium.
1025	(IV)  Each member insurer's share of the total regular
1026	assessments under sub-sub-subparagraph (I) or sub-sub-
1027	subparagraph (II) shall be in the proportion that the insurer's
1028	net direct premium for property insurance in this state, for the
1029	year preceding the assessment bears to the aggregate statewide
1030	net direct premium for property insurance of all member
1031	insurers, as reduced by any credits for voluntary writings for
1032	that year.
1033	(V)  If regular deficit assessments are made under sub-sub-
1034	subparagraph (I) or sub-sub-subparagraph (II), or by the
1035	Residential Property and Casualty Joint Underwriting Association
1036	under sub-subparagraph (6)(b)3.a. or sub-subparagraph
1037	(6)(b)3.b., the association shall levy upon the association's
1038	policyholders, as part of its next rate filing, or by a separate
1039	rate filing solely for this purpose, a market equalization
1040	surcharge in a percentage equal to the total amount of such
1041	regular assessments divided by the aggregate statewide direct
1042	written premium for property insurance for member insurers for
1043	the prior calendar year. Market equalization surcharges under
1044	this sub-sub-subparagraph are not considered premium and are not
1045	subject to commissions, fees, or premium taxes; however, failure
1046	to pay a market equalization surcharge shall be treated as
1047	failure to pay premium.
1048	e.  The governing body of any unit of local government, any
1049	residents of which are insured under the plan, may issue bonds
1050	as defined in s. 125.013 or s. 166.101 to fund an assistance
1051	program, in conjunction with the association, for the purpose of
1052	defraying deficits of the association. In order to avoid
1053	needless and indiscriminate proliferation, duplication, and
1054	fragmentation of such assistance programs, any unit of local
1055	government, any residents of which are insured by the
1056	association, may provide for the payment of losses, regardless
1057	of whether or not the losses occurred within or outside of the
1058	territorial jurisdiction of the local government. Revenue bonds
1059	may not be issued until validated pursuant to chapter 75, unless
1060	a state of emergency is declared by executive order or
1061	proclamation of the Governor pursuant to s. 252.36 making such
1062	findings as are necessary to determine that it is in the best
1063	interests of, and necessary for, the protection of the public
1064	health, safety, and general welfare of residents of this state
1065	and the protection and preservation of the economic stability of
1066	insurers operating in this state, and declaring it an essential
1067	public purpose to permit certain municipalities or counties to
1068	issue bonds as will provide relief to claimants and
1069	policyholders of the association and insurers responsible for
1070	apportionment of plan losses. Any such unit of local government
1071	may enter into such contracts with the association and with any
1072	other entity created pursuant to this subsection as are
1073	necessary to carry out this paragraph. Any bonds issued under
1074	this sub-subparagraph shall be payable from and secured by
1075	moneys received by the association from assessments under this
1076	subparagraph, and assigned and pledged to or on behalf of the
1077	unit of local government for the benefit of the holders of such
1078	bonds. The funds, credit, property, and taxing power of the
1079	state or of the unit of local government shall not be pledged
1080	for the payment of such bonds. If any of the bonds remain unsold
1081	60 days after issuance, the department shall require all
1082	insurers subject to assessment to purchase the bonds, which
1083	shall be treated as admitted assets; each insurer shall be
1084	required to purchase that percentage of the unsold portion of
1085	the bond issue that equals the insurer's relative share of
1086	assessment liability under this subsection. An insurer shall not
1087	be required to purchase the bonds to the extent that the
1088	department determines that the purchase would endanger or impair
1089	the solvency of the insurer. The authority granted by this sub-
1090	subparagraph is additional to any bonding authority granted by
1091	subparagraph 6.
1092	3.  The plan shall also provide that any member with a
1093	surplus as to policyholders of $20 million or less writing 25
1094	percent or more of its total countrywide property insurance
1095	premiums in this state may petition the department, within the
1096	first 90 days of each calendar year, to qualify as a limited
1097	apportionment company. The apportionment of such a member
1098	company in any calendar year for which it is qualified shall not
1099	exceed its gross participation, which shall not be affected by
1100	the formula for voluntary writings. In no event shall a limited
1101	apportionment company be required to participate in any
1102	apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
1103	or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
1104	$50 million after payment of available plan funds in any
1105	calendar year. However, a limited apportionment company shall
1106	collect from its policyholders any emergency assessment imposed
1107	under sub-sub-subparagraph 2.d.(III). The plan shall provide
1108	that, if the department determines that any regular assessment
1109	will result in an impairment of the surplus of a limited
1110	apportionment company, the department may direct that all or
1111	part of such assessment be deferred. However, there shall be no
1112	limitation or deferment of an emergency assessment to be
1113	collected from policyholders under sub-sub-subparagraph
1114	2.d.(III).
1115	4.  The plan shall provide for the deferment, in whole or
1116	in part, of a regular assessment of a member insurer under sub-
1117	sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
1118	not for an emergency assessment collected from policyholders
1119	under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
1120	commissioner, payment of such regular assessment would endanger
1121	or impair the solvency of the member insurer. In the event a
1122	regular assessment against a member insurer is deferred in whole
1123	or in part, the amount by which such assessment is deferred may
1124	be assessed against the other member insurers in a manner
1125	consistent with the basis for assessments set forth in sub-sub-
1126	subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
1127	5.a.  The plan of operation may include deductibles and
1128	rules for classification of risks and rate modifications
1129	consistent with the objective of providing and maintaining funds
1130	sufficient to pay catastrophe losses.
1131	b.  The association may require arbitration of a rate
1132	filing under s. 627.062(6). It is the intent of the Legislature
1133	that the rates for coverage provided by the association be
1134	actuarially sound and not competitive with approved rates
1135	charged in the admitted voluntary market such that the
1136	association functions as a residual market mechanism to provide
1137	insurance only when the insurance cannot be procured in the
1138	voluntary market. The plan of operation shall provide a
1139	mechanism to assure that, beginning no later than January 1,
1140	1999, the rates charged by the association for each line of
1141	business are reflective of approved rates in the voluntary
1142	market for hurricane coverage for each line of business in the
1143	various areas eligible for association coverage.
1144	c.  The association shall provide for windstorm coverage on
1145	residential properties in limits up to $10 million for
1146	commercial lines residential risks and up to $1 million for
1147	personal lines residential risks. If coverage with the
1148	association is sought for a residential risk valued in excess of
1149	these limits, coverage shall be available to the risk up to the
1150	replacement cost or actual cash value of the property, at the
1151	option of the insured, if coverage for the risk cannot be
1152	located in the authorized market. The association must accept a
1153	commercial lines residential risk with limits above $10 million
1154	or a personal lines residential risk with limits above $1
1155	million if coverage is not available in the authorized market.
1156	The association may write coverage above the limits specified in
1157	this subparagraph with or without facultative or other
1158	reinsurance coverage, as the association determines appropriate.
1159	d.  The plan of operation must provide objective criteria
1160	and procedures, approved by the department, to be uniformly
1161	applied for all applicants in determining whether an individual
1162	risk is so hazardous as to be uninsurable. In making this
1163	determination and in establishing the criteria and procedures,
1164	the following shall be considered:
1165	(I)  Whether the likelihood of a loss for the individual
1166	risk is substantially higher than for other risks of the same
1167	class; and
1168	(II)  Whether the uncertainty associated with the
1169	individual risk is such that an appropriate premium cannot be
1170	determined.
1171
1172	The acceptance or rejection of a risk by the association
1173	pursuant to such criteria and procedures must be construed as
1174	the private placement of insurance, and the provisions of
1175	chapter 120 do not apply.
1176	e.  If the risk accepts an offer of coverage through the
1177	market assistance program or through a mechanism established by
1178	the association, either before the policy is issued by the
1179	association or during the first 30 days of coverage by the
1180	association, and the producing agent who submitted the
1181	application to the association is not currently appointed by the
1182	insurer, the insurer shall:
1183	(I)  Pay to the producing agent of record of the policy,
1184	for the first year, an amount that is the greater of the
1185	insurer's usual and customary commission for the type of policy
1186	written or a fee equal to the usual and customary commission of
1187	the association; or
1188	(II)  Offer to allow the producing agent of record of the
1189	policy to continue servicing the policy for a period of not less
1190	than 1 year and offer to pay the agent the greater of the
1191	insurer's or the association's usual and customary commission
1192	for the type of policy written.
1193
1194	If the producing agent is unwilling or unable to accept
1195	appointment, the new insurer shall pay the agent in accordance
1196	with sub-sub-subparagraph (I). Subject to the provisions of s.
1197	627.3517, the policies issued by the association must provide
1198	that if the association obtains an offer from an authorized
1199	insurer to cover the risk at its approved rates under either a
1200	standard policy including wind coverage or, if consistent with
1201	the insurer's underwriting rules as filed with the department, a
1202	basic policy including wind coverage, the risk is no longer
1203	eligible for coverage through the association. Upon termination
1204	of eligibility, the association shall provide written notice to
1205	the policyholder and agent of record stating that the
1206	association policy must be canceled as of 60 days after the date
1207	of the notice because of the offer of coverage from an
1208	authorized insurer. Other provisions of the insurance code
1209	relating to cancellation and notice of cancellation do not apply
1210	to actions under this sub-subparagraph.
1211	f.  When the association enters into a contractual
1212	agreement for a take-out plan, the producing agent of record of
1213	the association policy is entitled to retain any unearned
1214	commission on the policy, and the insurer shall:
1215	(I)  Pay to the producing agent of record of the
1216	association policy, for the first year, an amount that is the
1217	greater of the insurer's usual and customary commission for the
1218	type of policy written or a fee equal to the usual and customary
1219	commission of the association; or
1220	(II)  Offer to allow the producing agent of record of the
1221	association policy to continue servicing the policy for a period
1222	of not less than 1 year and offer to pay the agent the greater
1223	of the insurer's or the association's usual and customary
1224	commission 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-subparagraph (I).
1229	6.a.  The plan of operation may authorize the formation of
1230	a private nonprofit corporation, a private nonprofit
1231	unincorporated association, a partnership, a trust, a limited
1232	liability company, or a nonprofit mutual company which may be
1233	empowered, among other things, to borrow money by issuing bonds
1234	or by incurring other indebtedness and to accumulate reserves or
1235	funds to be used for the payment of insured catastrophe losses.
1236	The plan may authorize all actions necessary to facilitate the
1237	issuance of bonds, including the pledging of assessments or
1238	other revenues.
1239	b.  Any entity created under this subsection, or any entity
1240	formed for the purposes of this subsection, may sue and be sued,
1241	may borrow money; issue bonds, notes, or debt instruments;
1242	pledge or sell assessments, market equalization surcharges and
1243	other surcharges, rights, premiums, contractual rights,
1244	projected recoveries from the Florida Hurricane Catastrophe
1245	Fund, other reinsurance recoverables, and other assets as
1246	security for such bonds, notes, or debt instruments; enter into
1247	any contracts or agreements necessary or proper to accomplish
1248	such borrowings; and take other actions necessary to carry out
1249	the purposes of this subsection. The association may issue bonds
1250	or incur other indebtedness, or have bonds issued on its behalf
1251	by a unit of local government pursuant to subparagraph (6)(p)2.,
1252	in the absence of a hurricane or other weather-related event,
1253	upon a determination by the association subject to approval by
1254	the department that such action would enable it to efficiently
1255	meet the financial obligations of the association and that such
1256	financings are reasonably necessary to effectuate the
1257	requirements of this subsection. Any such entity may accumulate
1258	reserves and retain surpluses as of the end of any association
1259	year to provide for the payment of losses incurred by the
1260	association during that year or any future year. The association
1261	shall incorporate and continue the plan of operation and
1262	articles of agreement in effect on the effective date of chapter
1263	76-96, Laws of Florida, to the extent that it is not
1264	inconsistent with chapter 76-96, and as subsequently modified
1265	consistent with chapter 76-96. The board of directors and
1266	officers currently serving shall continue to serve until their
1267	successors are duly qualified as provided under the plan. The
1268	assets and obligations of the plan in effect immediately prior
1269	to the effective date of chapter 76-96 shall be construed to be
1270	the assets and obligations of the successor plan created herein.
1271	c.  In recognition of s. 10, Art. I of the State
1272	Constitution, prohibiting the impairment of obligations of
1273	contracts, it is the intent of the Legislature that no action be
1274	taken whose purpose is to impair any bond indenture or financing
1275	agreement or any revenue source committed by contract to such
1276	bond or other indebtedness issued or incurred by the association
1277	or any other entity created under this subsection.
1278	7.  On such coverage, an agent's remuneration shall be that
1279	amount of money payable to the agent by the terms of his or her
1280	contract with the company with which the business is placed.
1281	However, no commission will be paid on that portion of the
1282	premium which is in excess of the standard premium of that
1283	company.
1284	8.  Subject to approval by the department, the association
1285	may establish different eligibility requirements and operational
1286	procedures for any line or type of coverage for any specified
1287	eligible area or portion of an eligible area if the board
1288	determines that such changes to the eligibility requirements and
1289	operational procedures are justified due to the voluntary market
1290	being sufficiently stable and competitive in such area or for
1291	such line or type of coverage and that consumers who, in good
1292	faith, are unable to obtain insurance through the voluntary
1293	market through ordinary methods would continue to have access to
1294	coverage from the association. When coverage is sought in
1295	connection with a real property transfer, such requirements and
1296	procedures shall not provide for an effective date of coverage
1297	later than the date of the closing of the transfer as
1298	established by the transferor, the transferee, and, if
1299	applicable, the lender.
1300	9.  Notwithstanding any other provision of law:
1301	a.  The pledge or sale of, the lien upon, and the security
1302	interest in any rights, revenues, or other assets of the
1303	association created or purported to be created pursuant to any
1304	financing documents to secure any bonds or other indebtedness of
1305	the association shall be and remain valid and enforceable,
1306	notwithstanding the commencement of and during the continuation
1307	of, and after, any rehabilitation, insolvency, liquidation,
1308	bankruptcy, receivership, conservatorship, reorganization, or
1309	similar proceeding against the association under the laws of
1310	this state or any other applicable laws.
1311	b.  No such proceeding shall relieve the association of its
1312	obligation, or otherwise affect its ability to perform its
1313	obligation, to continue to collect, or levy and collect,
1314	assessments, market equalization or other surcharges, projected
1315	recoveries from the Florida Hurricane Catastrophe Fund,
1316	reinsurance recoverables, or any other rights, revenues, or
1317	other assets of the association pledged.
1318	c.  Each such pledge or sale of, lien upon, and security
1319	interest in, including the priority of such pledge, lien, or
1320	security interest, any such assessments, emergency assessments,
1321	market equalization or renewal surcharges, projected recoveries
1322	from the Florida Hurricane Catastrophe Fund, reinsurance
1323	recoverables, or other rights, revenues, or other assets which
1324	are collected, or levied and collected, after the commencement
1325	of and during the pendency of or after any such proceeding shall
1326	continue unaffected by such proceeding.
1327	d.  As used in this subsection, the term "financing
1328	documents" means any agreement, instrument, or other document
1329	now existing or hereafter created evidencing any bonds or other
1330	indebtedness of the association or pursuant to which any such
1331	bonds or other indebtedness has been or may be issued and
1332	pursuant to which any rights, revenues, or other assets of the
1333	association are pledged or sold to secure the repayment of such
1334	bonds or indebtedness, together with the payment of interest on
1335	such bonds or such indebtedness, or the payment of any other
1336	obligation of the association related to such bonds or
1337	indebtedness.
1338	e.  Any such pledge or sale of assessments, revenues,
1339	contract rights or other rights or assets of the association
1340	shall constitute a lien and security interest, or sale, as the
1341	case may be, that is immediately effective and attaches to such
1342	assessments, revenues, contract, or other rights or assets,
1343	whether or not imposed or collected at the time the pledge or
1344	sale is made. Any such pledge or sale is effective, valid,
1345	binding, and enforceable against the association or other entity
1346	making such pledge or sale, and valid and binding against and
1347	superior to any competing claims or obligations owed to any
1348	other person or entity, including policyholders in this state,
1349	asserting rights in any such assessments, revenues, contract, or
1350	other rights or assets to the extent set forth in and in
1351	accordance with the terms of the pledge or sale contained in the
1352	applicable financing documents, whether or not any such person
1353	or entity has notice of such pledge or sale and without the need
1354	for any physical delivery, recordation, filing, or other action.
1355	f.  There shall be no liability on the part of, and no
1356	cause of action of any nature shall arise against, any member
1357	insurer or its agents or employees, agents or employees of the
1358	association, members of the board of directors of the
1359	association, or the department or its representatives, for any
1360	action taken by them in the performance of their duties or
1361	responsibilities under this subsection. Such immunity does not
1362	apply to actions for breach of any contract or agreement
1363	pertaining to insurance, or any willful tort.
1364	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1365	(a)1.  It is the public purpose of this subsection to
1366	ensure the existence of an orderly market for property insurance
1367	for Floridians and Florida businesses. The Legislature finds
1368	that private insurers are unwilling or unable to provide
1369	affordable property insurance coverage in this state to the
1370	extent sought and needed. The absence of affordable property
1371	insurance threatens the public health, safety, and welfare and
1372	likewise threatens the economic health of the state. The state
1373	therefore has a compelling public interest and a public purpose
1374	to assist in assuring that property in the state is insured and
1375	that it is insured at affordable rates so as to facilitate the
1376	remediation, reconstruction, and replacement of damaged or
1377	destroyed property in order to reduce or avoid the negative
1378	effects otherwise resulting to the public health, safety, and
1379	welfare, to the economy of the state, and to the revenues of the
1380	state and local governments which are needed to provide for the
1381	public welfare. It is necessary, therefore, to provide
1382	affordable property insurance to applicants who are in good
1383	faith entitled to procure insurance through the voluntary market
1384	but are unable to do so. The Legislature intends by this
1385	subsection that affordable property insurance be provided and
1386	that it continue to be provided, as long as necessary, through
1387	Citizens Property Insurance Corporation, a government entity
1388	that is an integral part of the state, and that is not a private
1389	insurance company. To that end, Citizens Property Insurance
1390	Corporation shall strive to increase the availability of
1391	affordable property insurance in this state, while achieving
1392	efficiencies and economies, and while providing service to
1393	policyholders, applicants, and agents which is no less than the
1394	quality generally provided in the voluntary market, for the
1395	achievement of the foregoing public purposes. Because it is
1396	essential for this government entity to have the maximum
1397	financial resources to pay claims following a catastrophic
1398	hurricane, it is the intent of the Legislature that Citizens
1399	Property Insurance Corporation continue to be an integral part
1400	of the state and that the income of the corporation be exempt
1401	from federal income taxation and that interest on the debt
1402	obligations issued by the corporation be exempt from federal
1403	income taxation.
1404	2.  The Residential Property and Casualty Joint
1405	Underwriting Association originally created by this statute
1406	shall be known, as of July 1, 2002, as the Citizens Property
1407	Insurance Corporation. The corporation shall provide insurance
1408	for residential and commercial property, for applicants who are
1409	in good faith entitled, but are unable, to procure insurance
1410	through the voluntary market. The corporation shall operate
1411	pursuant to a plan of operation approved by order of the
1412	Financial Services Commission. The plan is subject to continuous
1413	review by the commission. The commission may, by order, withdraw
1414	approval of all or part of a plan if the commission determines
1415	that conditions have changed since approval was granted and that
1416	the purposes of the plan require changes in the plan. The
1417	corporation shall continue to operate pursuant to the plan of
1418	operation approved by the Office of Insurance Regulation until
1419	October 1, 2006. For the purposes of this subsection,
1420	residential coverage includes both personal lines residential
1421	coverage, which consists of the type of coverage provided by
1422	homeowner's, mobile home owner's, dwelling, tenant's,
1423	condominium unit owner's, and similar policies, and commercial
1424	lines residential coverage, which consists of the type of
1425	coverage provided by condominium association, apartment
1426	building, and similar policies.
1427	3.  For the purposes of this subsection, the term
1428	"homestead property" means:
1429	a.  Property that has been granted a homestead exemption
1430	under chapter 196;
1431	b.  Property for which the owner has a current, written
1432	lease with a renter for a term of at least 7 months and for
1433	which the dwelling is insured by the corporation for $200,000 or
1434	less;
1435	c.  An owner-occupied mobile home or manufactured home, as
1436	defined in s. 320.01, which is permanently affixed to real
1437	property, is owned by a Florida resident, and has been granted a
1438	homestead exemption under chapter 196 or, if the owner does not
1439	own the real property, the owner certifies that the mobile home
1440	or manufactured home is his or her principal place of residence;
1441	d.  Tenant's coverage;
1442	e.  Commercial lines residential property; or
1443	f.  Any county, district, or municipal hospital; a hospital
1444	licensed by any not-for-profit corporation qualified under s.
1445	501(c)(3) of the United States Internal Revenue Code; or a
1446	continuing care retirement community that is certified under
1447	chapter 651 and that receives an exemption from ad valorem taxes
1448	under chapter 196.
1449	4.  For the purposes of this subsection, the term
1450	"nonhomestead property" means property that is not homestead
1451	property.
1452	3.5.  Effective January 1, 2009, a personal lines
1453	residential structure that has a dwelling replacement cost of $2
1454	$1 million or more, or a single condominium unit that has a
1455	combined dwelling and content replacement cost of $2 $1 million
1456	or more is not eligible for coverage by the corporation. Such
1457	dwellings insured by the corporation on December 31, 2008, may
1458	continue to be covered by the corporation until the end of the
1459	policy term. However, such dwellings that are insured by the
1460	corporation and become ineligible for coverage due to the
1461	provisions of this subparagraph may reapply and obtain coverage
1462	in the high-risk account and be considered "nonhomestead
1463	property" if the property owner provides the corporation with a
1464	sworn affidavit from one or more insurance agents, on a form
1465	provided by the corporation, stating that the agents have made
1466	their best efforts to obtain coverage and that the property has
1467	been rejected for coverage by at least one authorized insurer
1468	and at least three surplus lines insurers. If such conditions
1469	are met, the dwelling may be insured by the corporation for up
1470	to 3 years, after which time the dwelling is ineligible for
1471	coverage. The office shall approve the method used by the
1472	corporation for valuing the dwelling replacement cost for the
1473	purposes of this subparagraph. If a policyholder is insured by
1474	the corporation prior to being determined to be ineligible
1475	pursuant to this subparagraph and such policyholder files a
1476	lawsuit challenging the determination, the policyholder may
1477	remain insured by the corporation until the conclusion of the
1478	litigation.
1479	6.  For properties constructed on or after January 1, 2009,
1480	the corporation may not insure any property located within 2,500
1481	feet landward of the coastal construction control line created
1482	pursuant to s. 161.053 unless the property meets the
1483	requirements of the code-plus building standards developed by
1484	the Florida Building Commission.
1485	4.7.  It is the intent of the Legislature that
1486	policyholders, applicants, and agents of the corporation receive
1487	service and treatment of the highest possible level but never
1488	less than that generally provided in the voluntary market. It
1489	also is intended that the corporation be held to service
1490	standards no less than those applied to insurers in the
1491	voluntary market by the office with respect to responsiveness,
1492	timeliness, customer courtesy, and overall dealings with
1493	policyholders, applicants, or agents of the corporation.
1494	5.8.  Effective January 1, 2009, a personal lines
1495	residential structure that is located in the "wind-borne debris
1496	region," as defined in s. 1609.2, International Building Code
1497	(2006), and that has an insured value on the structure of
1498	$750,000 or more is not eligible for coverage by the corporation
1499	unless the structure has opening protections as required under
1500	the Florida Building Code for a newly constructed residential
1501	structure in that area. A residential structure shall be deemed
1502	to comply with the requirements of this subparagraph if it has
1503	shutters or opening protections on all openings and if such
1504	opening protections complied with the Florida Building Code at
1505	the time they were installed. Effective January 1, 2010, for
1506	personal lines residential property insured by the corporation
1507	that is located in the wind-borne debris region and has an
1508	insured value on the structure of $500,000 or more, a
1509	prospective purchaser of any such residential property must be
1510	provided by the seller a written disclosure that contains the
1511	structure's windstorm mitigation rating based on the uniform
1512	home grading scale adopted under s. 215.55865. Such rating shall
1513	be provided to the purchaser at or before the time the purchaser
1514	executes a contract for sale and purchase.
1515	(b)1.  All insurers authorized to write one or more subject
1516	lines of business in this state are subject to assessment by the
1517	corporation and, for the purposes of this subsection, are
1518	referred to collectively as "assessable insurers." Insurers
1519	writing one or more subject lines of business in this state
1520	pursuant to part VIII of chapter 626 are not assessable
1521	insurers, but insureds who procure one or more subject lines of
1522	business in this state pursuant to part VIII of chapter 626 are
1523	subject to assessment by the corporation and are referred to
1524	collectively as "assessable insureds." An authorized insurer's
1525	assessment liability shall begin on the first day of the
1526	calendar year following the year in which the insurer was issued
1527	a certificate of authority to transact insurance for subject
1528	lines of business in this state and shall terminate 1 year after
1529	the end of the first calendar year during which the insurer no
1530	longer holds a certificate of authority to transact insurance
1531	for subject lines of business in this state.
1532	2.a.  All revenues, assets, liabilities, losses, and
1533	expenses of the corporation shall be divided into three separate
1534	accounts as follows:
1535	(I)  A personal lines account for personal residential
1536	policies issued by the corporation or issued by the Residential
1537	Property and Casualty Joint Underwriting Association and renewed
1538	by the corporation that provide comprehensive, multiperil
1539	coverage on risks that are not located in areas eligible for
1540	coverage in the Florida Windstorm Underwriting Association as
1541	those areas were defined on January 1, 2002, and for such
1542	policies that do not provide coverage for the peril of wind on
1543	risks that are located in such areas;
1544	(II)  A commercial lines account for commercial residential
1545	and commercial nonresidential policies issued by the corporation
1546	or issued by the Residential Property and Casualty Joint
1547	Underwriting Association and renewed by the corporation that
1548	provide coverage for basic property perils on risks that are not
1549	located in areas eligible for coverage in the Florida Windstorm
1550	Underwriting Association as those areas were defined on January
1551	1, 2002, and for such policies that do not provide coverage for
1552	the peril of wind on risks that are located in such areas; and
1553	(III)  A high-risk account for personal residential
1554	policies and commercial residential and commercial
1555	nonresidential property policies issued by the corporation or
1556	transferred to the corporation that provide coverage for the
1557	peril of wind on risks that are located in areas eligible for
1558	coverage in the Florida Windstorm Underwriting Association as
1559	those areas were defined on January 1, 2002. Subject to the
1560	approval of a business plan by the Financial Services Commission
1561	and Legislative Budget Commission as provided in this sub-sub-
1562	subparagraph, but no earlier than March 31, 2007, The
1563	corporation may offer policies that provide multiperil coverage
1564	and the corporation shall continue to offer policies that
1565	provide coverage only for the peril of wind for risks located in
1566	areas eligible for coverage in the high-risk account. In issuing
1567	multiperil coverage, the corporation may use its approved policy
1568	forms and rates for the personal lines account. An applicant or
1569	insured who is eligible to purchase a multiperil policy from the
1570	corporation may purchase a multiperil policy from an authorized
1571	insurer without prejudice to the applicant's or insured's
1572	eligibility to prospectively purchase a policy that provides
1573	coverage only for the peril of wind from the corporation. An
1574	applicant or insured who is eligible for a corporation policy
1575	that provides coverage only for the peril of wind may elect to
1576	purchase or retain such policy and also purchase or retain
1577	coverage excluding wind from an authorized insurer without
1578	prejudice to the applicant's or insured's eligibility to
1579	prospectively purchase a policy that provides multiperil
1580	coverage from the corporation. It is the goal of the Legislature
1581	that there would be an overall average savings of 10 percent or
1582	more for a policyholder who currently has a wind-only policy
1583	with the corporation, and an ex-wind policy with a voluntary
1584	insurer or the corporation, and who then obtains a multiperil
1585	policy from the corporation. It is the intent of the Legislature
1586	that the offer of multiperil coverage in the high-risk account
1587	be made and implemented in a manner that does not adversely
1588	affect the tax-exempt status of the corporation or
1589	creditworthiness of or security for currently outstanding
1590	financing obligations or credit facilities of the high-risk
1591	account, the personal lines account, or the commercial lines
1592	account. By March 1, 2007, the corporation shall prepare and
1593	submit for approval by the Financial Services Commission and
1594	Legislative Budget Commission a report detailing the
1595	corporation's business plan for issuing multiperil coverage in
1596	the high-risk account. The business plan shall be approved or
1597	disapproved within 30 days after receipt, as submitted or
1598	modified and resubmitted by the corporation. The business plan
1599	must include: the impact of such multiperil coverage on the
1600	corporation's financial resources, the impact of such multiperil
1601	coverage on the corporation's tax-exempt status, the manner in
1602	which the corporation plans to implement the processing of
1603	applications and policy forms for new and existing
1604	policyholders, the impact of such multiperil coverage on the
1605	corporation's ability to deliver customer service at the high
1606	level required by this subsection, the ability of the
1607	corporation to process claims, the ability of the corporation to
1608	quote and issue policies, the impact of such multiperil coverage
1609	on the corporation's agents, the impact of such multiperil
1610	coverage on the corporation's existing policyholders, and the
1611	impact of such multiperil coverage on rates and premium. The
1612	high-risk account must also include quota share primary
1613	insurance under subparagraph (c)2. The area eligible for
1614	coverage under the high-risk account also includes the area
1615	within Port Canaveral, which is bordered on the south by the
1616	City of Cape Canaveral, bordered on the west by the Banana
1617	River, and bordered on the north by Federal Government property.
1618	b.  The three separate accounts must be maintained as long
1619	as financing obligations entered into by the Florida Windstorm
1620	Underwriting Association or Residential Property and Casualty
1621	Joint Underwriting Association are outstanding, in accordance
1622	with the terms of the corresponding financing documents. When
1623	the financing obligations are no longer outstanding, in
1624	accordance with the terms of the corresponding financing
1625	documents, the corporation may use a single account for all
1626	revenues, assets, liabilities, losses, and expenses of the
1627	corporation. Consistent with the requirement of this
1628	subparagraph and prudent investment policies that minimize the
1629	cost of carrying debt, the board shall exercise its best efforts
1630	to retire existing debt or to obtain approval of necessary
1631	parties to amend the terms of existing debt, so as to structure
1632	the most efficient plan to consolidate the three separate
1633	accounts into a single account. By February 1, 2007, the board
1634	shall submit a report to the Financial Services Commission, the
1635	President of the Senate, and the Speaker of the House of
1636	Representatives which includes an analysis of consolidating the
1637	accounts, the actions the board has taken to minimize the cost
1638	of carrying debt, and its recommendations for executing the most
1639	efficient plan.
1640	c.  Creditors of the Residential Property and Casualty
1641	Joint Underwriting Association and of the accounts specified in
1642	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
1643	and recourse to, the accounts referred to in sub-sub-
1644	subparagraphs a.(I) and (II) and shall have no claim against, or
1645	recourse to, the account referred to in sub-sub-subparagraph
1646	a.(III). Creditors of the Florida Windstorm Underwriting
1647	Association shall have a claim against, and recourse to, the
1648	account referred to in sub-sub-subparagraph a.(III) and shall
1649	have no claim against, or recourse to, the accounts referred to
1650	in sub-sub-subparagraphs a.(I) and (II).
1651	d.  Revenues, assets, liabilities, losses, and expenses not
1652	attributable to particular accounts shall be prorated among the
1653	accounts.
1654	e.  The Legislature finds that the revenues of the
1655	corporation are revenues that are necessary to meet the
1656	requirements set forth in documents authorizing the issuance of
1657	bonds under this subsection.
1658	f.  No part of the income of the corporation may inure to
1659	the benefit of any private person.
1660	3.  With respect to a deficit in an account:
1661	a.  After accounting for the Citizens policyholder
1662	surcharge imposed under sub-subparagraph i., when the remaining
1663	projected deficit incurred in a particular calendar year is not
1664	greater than 6 10 percent of the aggregate statewide direct
1665	written premium for the subject lines of business for the prior
1666	calendar year, the entire deficit shall be recovered through
1667	regular assessments of assessable insurers under paragraph (p)
1668	and assessable insureds.
1669	b.  After accounting for the Citizens policyholder
1670	surcharge imposed under sub-subparagraph i., when the remaining
1671	projected deficit incurred in a particular calendar year exceeds
1672	6 10 percent of the aggregate statewide direct written premium
1673	for the subject lines of business for the prior calendar year,
1674	the corporation shall levy regular assessments on assessable
1675	insurers under paragraph (p) and on assessable insureds in an
1676	amount equal to the greater of 6 10 percent of the deficit or 6
1677	10 percent of the aggregate statewide direct written premium for
1678	the subject lines of business for the prior calendar year. Any
1679	remaining deficit shall be recovered through emergency
1680	assessments under sub-subparagraph d.
1681	c.  Each assessable insurer's share of the amount being
1682	assessed under sub-subparagraph a. or sub-subparagraph b. shall
1683	be in the proportion that the assessable insurer's direct
1684	written premium for the subject lines of business for the year
1685	preceding the assessment bears to the aggregate statewide direct
1686	written premium for the subject lines of business for that year.
1687	The assessment percentage applicable to each assessable insured
1688	is the ratio of the amount being assessed under sub-subparagraph
1689	a. or sub-subparagraph b. to the aggregate statewide direct
1690	written premium for the subject lines of business for the prior
1691	year. Assessments levied by the corporation on assessable
1692	insurers under sub-subparagraphs a. and b. shall be paid as
1693	required by the corporation's plan of operation and paragraph
1694	(p). notwithstanding any other provision of this subsection, the
1695	aggregate amount of a regular assessment for a deficit incurred
1696	in a particular calendar year shall be reduced by the estimated
1697	amount to be received by the corporation from the Citizens
1698	policyholder surcharge under subparagraph (c)10. and the amount
1699	collected or estimated to be collected from the assessment on
1700	Citizens policyholders pursuant to sub-subparagraph i.
1701	Assessments levied by the corporation on assessable insureds
1702	under sub-subparagraphs a. and b. shall be collected by the
1703	surplus lines agent at the time the surplus lines agent collects
1704	the surplus lines tax required by s. 626.932 and shall be paid
1705	to the Florida Surplus Lines Service Office at the time the
1706	surplus lines agent pays the surplus lines tax to the Florida
1707	Surplus Lines Service Office. Upon receipt of regular
1708	assessments from surplus lines agents, the Florida Surplus Lines
1709	Service Office shall transfer the assessments directly to the
1710	corporation as determined by the corporation.
1711	d.  Upon a determination by the board of governors that a
1712	deficit in an account exceeds the amount that will be recovered
1713	through regular assessments under sub-subparagraph a. or sub-
1714	subparagraph b., plus the amount that is expected to be
1715	recovered through surcharges under sub-subparagraph i., as to
1716	the remaining projected deficit the board shall levy, after
1717	verification by the office, emergency assessments, for as many
1718	years as necessary to cover the deficits, to be collected by
1719	assessable insurers and the corporation and collected from
1720	assessable insureds upon issuance or renewal of policies for
1721	subject lines of business, excluding National Flood Insurance
1722	policies. The amount of the emergency assessment collected in a
1723	particular year shall be a uniform percentage of that year's
1724	direct written premium for subject lines of business and all
1725	accounts of the corporation, excluding National Flood Insurance
1726	Program policy premiums, as annually determined by the board and
1727	verified by the office. The office shall verify the arithmetic
1728	calculations involved in the board's determination within 30
1729	days after receipt of the information on which the determination
1730	was based. Notwithstanding any other provision of law, the
1731	corporation and each assessable insurer that writes subject
1732	lines of business shall collect emergency assessments from its
1733	policyholders without such obligation being affected by any
1734	credit, limitation, exemption, or deferment. Emergency
1735	assessments levied by the corporation on assessable insureds
1736	shall be collected by the surplus lines agent at the time the
1737	surplus lines agent collects the surplus lines tax required by
1738	s. 626.932 and shall be paid to the Florida Surplus Lines
1739	Service Office at the time the surplus lines agent pays the
1740	surplus lines tax to the Florida Surplus Lines Service Office.
1741	The emergency assessments so collected shall be transferred
1742	directly to the corporation on a periodic basis as determined by
1743	the corporation and shall be held by the corporation solely in
1744	the applicable account. The aggregate amount of emergency
1745	assessments levied for an account under this sub-subparagraph in
1746	any calendar year may, at the discretion of the board of
1747	governors, be less than but may not exceed the greater of 10
1748	percent of the amount needed to cover the original deficit, plus
1749	interest, fees, commissions, required reserves, and other costs
1750	associated with financing of the original deficit, or 10 percent
1751	of the aggregate statewide direct written premium for subject
1752	lines of business and for all accounts of the corporation for
1753	the prior year, plus interest, fees, commissions, required
1754	reserves, and other costs associated with financing the original
1755	deficit.
1756	e.  The corporation may pledge the proceeds of assessments,
1757	projected recoveries from the Florida Hurricane Catastrophe
1758	Fund, other insurance and reinsurance recoverables, policyholder
1759	surcharges and other surcharges, and other funds available to
1760	the corporation as the source of revenue for and to secure bonds
1761	issued under paragraph (p), bonds or other indebtedness issued
1762	under subparagraph (c)3., or lines of credit or other financing
1763	mechanisms issued or created under this subsection, or to retire
1764	any other debt incurred as a result of deficits or events giving
1765	rise to deficits, or in any other way that the board determines
1766	will efficiently recover such deficits. The purpose of the lines
1767	of credit or other financing mechanisms is to provide additional
1768	resources to assist the corporation in covering claims and
1769	expenses attributable to a catastrophe. As used in this
1770	subsection, the term "assessments" includes regular assessments
1771	under sub-subparagraph a., sub-subparagraph b., or subparagraph
1772	(p)1. and emergency assessments under sub-subparagraph d.
1773	Emergency assessments collected under sub-subparagraph d. are
1774	not part of an insurer's rates, are not premium, and are not
1775	subject to premium tax, fees, or commissions; however, failure
1776	to pay the emergency assessment shall be treated as failure to
1777	pay premium. The emergency assessments under sub-subparagraph d.
1778	shall continue as long as any bonds issued or other indebtedness
1779	incurred with respect to a deficit for which the assessment was
1780	imposed remain outstanding, unless adequate provision has been
1781	made for the payment of such bonds or other indebtedness
1782	pursuant to the documents governing such bonds or other
1783	indebtedness.
1784	f.  As used in this subsection for purposes of any deficit
1785	incurred on or after January 25, 2007, the term "subject lines
1786	of business" means insurance written by assessable insurers or
1787	procured by assessable insureds for all property and casualty
1788	lines of business in this state, but not including workers'
1789	compensation or medical malpractice. As used in the sub-
1790	subparagraph, the term "property and casualty lines of business"
1791	includes all lines of business identified on Form 2, Exhibit of
1792	Premiums and Losses, in the annual statement required of
1793	authorized insurers by s. 624.424 and any rule adopted under
1794	this section, except for those lines identified as accident and
1795	health insurance and except for policies written under the
1796	National Flood Insurance Program or the Federal Crop Insurance
1797	Program. For purposes of this sub-subparagraph, the term
1798	"workers' compensation" includes both workers' compensation
1799	insurance and excess workers' compensation insurance.
1800	g.  The Florida Surplus Lines Service Office shall
1801	determine annually the aggregate statewide written premium in
1802	subject lines of business procured by assessable insureds and
1803	shall report that information to the corporation in a form and
1804	at a time the corporation specifies to ensure that the
1805	corporation can meet the requirements of this subsection and the
1806	corporation's financing obligations.
1807	h.  The Florida Surplus Lines Service Office shall verify
1808	the proper application by surplus lines agents of assessment
1809	percentages for regular assessments and emergency assessments
1810	levied under this subparagraph on assessable insureds and shall
1811	assist the corporation in ensuring the accurate, timely
1812	collection and payment of assessments by surplus lines agents as
1813	required by the corporation.
1814	i.  If a deficit is incurred in any account in 2008 or
1815	thereafter, the board of governors shall levy a Citizens
1816	policyholder surcharge an immediate assessment against the
1817	premium of each nonhomestead property policyholder in all
1818	accounts of the corporation, as a uniform percentage of the
1819	premium of the policy of up to 10 percent of such premium, which
1820	funds shall be used to offset the deficit. If this assessment is
1821	insufficient to eliminate the deficit, the board of governors
1822	shall levy an additional assessment against all policyholders of
1823	the corporation for a 12-month period, which shall be collected
1824	at the time of issuance or renewal of a policy, as a uniform
1825	percentage of the premium for the policy of up to 15 10 percent
1826	of such premium, which funds shall be used to further offset the
1827	deficit. Citizens policyholder surcharges under this sub-
1828	subparagraph are not considered premium and are not subject to
1829	commissions, fees, or premium taxes. However, failure to pay
1830	such surcharges shall be treated as failure to pay premium.
1831	j.  If the amount of any assessments or surcharges
1832	collected from corporation policyholders, assessable insurers or
1833	their policyholders, or assessable insureds exceeds the amount
1834	of the deficits, such excess amounts shall be remitted to and
1835	retained by the corporation in a reserve to be used by the
1836	corporation, as determined by the board of governors and
1837	approved by the office, to pay claims or reduce any past,
1838	present, or future plan-year deficits or to reduce outstanding
1839	debt. The board of governors shall maintain separate accounting
1840	records that consolidate data for nonhomestead properties,
1841	including, but not limited to, number of policies, insured
1842	values, premiums written, and losses. The board of governors
1843	shall annually report to the office and the Legislature a
1844	summary of such data.
1845	(c)  The plan of operation of the corporation:
1846	1.  Must provide for adoption of residential property and
1847	casualty insurance policy forms and commercial residential and
1848	nonresidential property insurance forms, which forms must be
1849	approved by the office prior to use. The corporation shall adopt
1850	the following policy forms:
1851	a.  Standard personal lines policy forms that are
1852	comprehensive multiperil policies providing full coverage of a
1853	residential property equivalent to the coverage provided in the
1854	private insurance market under an HO-3, HO-4, or HO-6 policy.
1855	b.  Basic personal lines policy forms that are policies
1856	similar to an HO-8 policy or a dwelling fire policy that provide
1857	coverage meeting the requirements of the secondary mortgage
1858	market, but which coverage is more limited than the coverage
1859	under a standard policy.
1860	c.  Commercial lines residential and nonresidential policy
1861	forms that are generally similar to the basic perils of full
1862	coverage obtainable for commercial residential structures and
1863	commercial nonresidential structures in the admitted voluntary
1864	market.
1865	d.  Personal lines and commercial lines residential
1866	property insurance forms that cover the peril of wind only. The
1867	forms are applicable only to residential properties located in
1868	areas eligible for coverage under the high-risk account referred
1869	to in sub-subparagraph (b)2.a.
1870	e.  Commercial lines nonresidential property insurance
1871	forms that cover the peril of wind only. The forms are
1872	applicable only to nonresidential properties located in areas
1873	eligible for coverage under the high-risk account referred to in
1874	sub-subparagraph (b)2.a.
1875	f.  The corporation may adopt variations of the policy
1876	forms listed in sub-subparagraphs a.-e. that contain more
1877	restrictive coverage.
1878	2.a.  Must provide that the corporation adopt a program in
1879	which the corporation and authorized insurers enter into quota
1880	share primary insurance agreements for hurricane coverage, as
1881	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1882	property insurance forms for eligible risks which cover the
1883	peril of wind only. As used in this subsection, the term:
1884	(I)  "Quota share primary insurance" means an arrangement
1885	in which the primary hurricane coverage of an eligible risk is
1886	provided in specified percentages by the corporation and an
1887	authorized insurer. The corporation and authorized insurer are
1888	each solely responsible for a specified percentage of hurricane
1889	coverage of an eligible risk as set forth in a quota share
1890	primary insurance agreement between the corporation and an
1891	authorized insurer and the insurance contract. The
1892	responsibility of the corporation or authorized insurer to pay
1893	its specified percentage of hurricane losses of an eligible
1894	risk, as set forth in the quota share primary insurance
1895	agreement, may not be altered by the inability of the other
1896	party to the agreement to pay its specified percentage of
1897	hurricane losses. Eligible risks that are provided hurricane
1898	coverage through a quota share primary insurance arrangement
1899	must be provided policy forms that set forth the obligations of
1900	the corporation and authorized insurer under the arrangement,
1901	clearly specify the percentages of quota share primary insurance
1902	provided by the corporation and authorized insurer, and
1903	conspicuously and clearly state that neither the authorized
1904	insurer nor the corporation may be held responsible beyond its
1905	specified percentage of coverage of hurricane losses.
1906	(II)  "Eligible risks" means personal lines residential and
1907	commercial lines residential risks that meet the underwriting
1908	criteria of the corporation and are located in areas that were
1909	eligible for coverage by the Florida Windstorm Underwriting
1910	Association on January 1, 2002.
1911	b.  The corporation may enter into quota share primary
1912	insurance agreements with authorized insurers at corporation
1913	coverage levels of 90 percent and 50 percent.
1914	c.  If the corporation determines that additional coverage
1915	levels are necessary to maximize participation in quota share
1916	primary insurance agreements by authorized insurers, the
1917	corporation may establish additional coverage levels. However,
1918	the corporation's quota share primary insurance coverage level
1919	may not exceed 90 percent.
1920	d.  Any quota share primary insurance agreement entered
1921	into between an authorized insurer and the corporation must
1922	provide for a uniform specified percentage of coverage of
1923	hurricane losses, by county or territory as set forth by the
1924	corporation board, for all eligible risks of the authorized
1925	insurer covered under the quota share primary insurance
1926	agreement.
1927	e.  Any quota share primary insurance agreement entered
1928	into between an authorized insurer and the corporation is
1929	subject to review and approval by the office. However, such
1930	agreement shall be authorized only as to insurance contracts
1931	entered into between an authorized insurer and an insured who is
1932	already insured by the corporation for wind coverage.
1933	f.  For all eligible risks covered under quota share
1934	primary insurance agreements, the exposure and coverage levels
1935	for both the corporation and authorized insurers shall be
1936	reported by the corporation to the Florida Hurricane Catastrophe
1937	Fund. For all policies of eligible risks covered under quota
1938	share primary insurance agreements, the corporation and the
1939	authorized insurer shall maintain complete and accurate records
1940	for the purpose of exposure and loss reimbursement audits as
1941	required by Florida Hurricane Catastrophe Fund rules. The
1942	corporation and the authorized insurer shall each maintain
1943	duplicate copies of policy declaration pages and supporting
1944	claims documents.
1945	g.  The corporation board shall establish in its plan of
1946	operation standards for quota share agreements which ensure that
1947	there is no discriminatory application among insurers as to the
1948	terms of quota share agreements, pricing of quota share
1949	agreements, incentive provisions if any, and consideration paid
1950	for servicing policies or adjusting claims.
1951	h.  The quota share primary insurance agreement between the
1952	corporation and an authorized insurer must set forth the
1953	specific terms under which coverage is provided, including, but
1954	not limited to, the sale and servicing of policies issued under
1955	the agreement by the insurance agent of the authorized insurer
1956	producing the business, the reporting of information concerning
1957	eligible risks, the payment of premium to the corporation, and
1958	arrangements for the adjustment and payment of hurricane claims
1959	incurred on eligible risks by the claims adjuster and personnel
1960	of the authorized insurer. Entering into a quota sharing
1961	insurance agreement between the corporation and an authorized
1962	insurer shall be voluntary and at the discretion of the
1963	authorized insurer.
1964	3.  May provide that the corporation may employ or
1965	otherwise contract with individuals or other entities to provide
1966	administrative or professional services that may be appropriate
1967	to effectuate the plan. The corporation shall have the power to
1968	borrow funds, by issuing bonds or by incurring other
1969	indebtedness, and shall have other powers reasonably necessary
1970	to effectuate the requirements of this subsection, including,
1971	without limitation, the power to issue bonds and incur other
1972	indebtedness in order to refinance outstanding bonds or other
1973	indebtedness. The corporation may, but is not required to, seek
1974	judicial validation of its bonds or other indebtedness under
1975	chapter 75. The corporation may issue bonds or incur other
1976	indebtedness, or have bonds issued on its behalf by a unit of
1977	local government pursuant to subparagraph (p)2., in the absence
1978	of a hurricane or other weather-related event, upon a
1979	determination by the corporation, subject to approval by the
1980	office, that such action would enable it to efficiently meet the
1981	financial obligations of the corporation and that such
1982	financings are reasonably necessary to effectuate the
1983	requirements of this subsection. The corporation is authorized
1984	to take all actions needed to facilitate tax-free status for any
1985	such bonds or indebtedness, including formation of trusts or
1986	other affiliated entities. The corporation shall have the
1987	authority to pledge assessments, projected recoveries from the
1988	Florida Hurricane Catastrophe Fund, other reinsurance
1989	recoverables, market equalization and other surcharges, and
1990	other funds available to the corporation as security for bonds
1991	or other indebtedness. In recognition of s. 10, Art. I of the
1992	State Constitution, prohibiting the impairment of obligations of
1993	contracts, it is the intent of the Legislature that no action be
1994	taken whose purpose is to impair any bond indenture or financing
1995	agreement or any revenue source committed by contract to such
1996	bond or other indebtedness.
1997	4.a.  Must require that the corporation operate subject to
1998	the supervision and approval of a board of governors consisting
1999	of eight individuals who are residents of this state, from
2000	different geographical areas of this state. The Governor, the
2001	Chief Financial Officer, the President of the Senate, and the
2002	Speaker of the House of Representatives shall each appoint two
2003	members of the board. At least one of the two members appointed
2004	by each appointing officer must have demonstrated expertise in
2005	insurance. The Chief Financial Officer shall designate one of
2006	the appointees as chair. All board members serve at the pleasure
2007	of the appointing officer. All members of the board of governors
2008	are subject to removal at will by the officers who appointed
2009	them. All board members, including the chair, must be appointed
2010	to serve for 3-year terms beginning annually on a date
2011	designated by the plan. Any board vacancy shall be filled for
2012	the unexpired term by the appointing officer. The Chief
2013	Financial Officer shall appoint a technical advisory group to
2014	provide information and advice to the board of governors in
2015	connection with the board's duties under this subsection. The
2016	executive director and senior managers of the corporation shall
2017	be engaged by the board and serve at the pleasure of the board.
2018	Any executive director appointed on or after July 1, 2006, is
2019	subject to confirmation by the Senate. The executive director is
2020	responsible for employing other staff as the corporation may
2021	require, subject to review and concurrence by the board.
2022	b.  The board shall create a Market Accountability Advisory
2023	Committee to assist the corporation in developing awareness of
2024	its rates and its customer and agent service levels in
2025	relationship to the voluntary market insurers writing similar
2026	coverage. The members of the advisory committee shall consist of
2027	the following 11 persons, one of whom must be elected chair by
2028	the members of the committee: four representatives, one
2029	appointed by the Florida Association of Insurance Agents, one by
2030	the Florida Association of Insurance and Financial Advisors, one
2031	by the Professional Insurance Agents of Florida, and one by the
2032	Latin American Association of Insurance Agencies; three
2033	representatives appointed by the insurers with the three highest
2034	voluntary market share of residential property insurance
2035	business in the state; one representative from the Office of
2036	Insurance Regulation; one consumer appointed by the board who is
2037	insured by the corporation at the time of appointment to the
2038	committee; one representative appointed by the Florida
2039	Association of Realtors; and one representative appointed by the
2040	Florida Bankers Association. All members must serve for 3-year
2041	terms and may serve for consecutive terms. The committee shall
2042	report to the corporation at each board meeting on insurance
2043	market issues which may include rates and rate competition with
2044	the voluntary market; service, including policy issuance, claims
2045	processing, and general responsiveness to policyholders,
2046	applicants, and agents; and matters relating to depopulation.
2047	5.  Must provide a procedure for determining the
2048	eligibility of a risk for coverage, as follows:
2049	a.  Subject to the provisions of s. 627.3517, with respect
2050	to personal lines residential risks, if the risk is offered
2051	coverage from an authorized insurer at the insurer's approved
2052	rate under either a standard policy including wind coverage or,
2053	if consistent with the insurer's underwriting rules as filed
2054	with the office, a basic policy including wind coverage, for a
2055	new application to the corporation for coverage, the risk is not
2056	eligible for any policy issued by the corporation unless the
2057	premium for coverage from the authorized insurer is more than 15
2058	percent greater than the premium for comparable coverage from
2059	the corporation. If the risk is not able to obtain any such
2060	offer, the risk is eligible for either a standard policy
2061	including wind coverage or a basic policy including wind
2062	coverage issued by the corporation; however, if the risk could
2063	not be insured under a standard policy including wind coverage
2064	regardless of market conditions, the risk shall be eligible for
2065	a basic policy including wind coverage unless rejected under
2066	subparagraph 9. However, with regard to a policyholder of the
2067	corporation or a policyholder removed from the corporation
2068	through an assumption agreement until the end of the assumption
2069	period, the policyholder remains eligible for coverage from the
2070	corporation regardless of any offer of coverage from an
2071	authorized insurer or surplus lines insurer. The corporation
2072	shall determine the type of policy to be provided on the basis
2073	of objective standards specified in the underwriting manual and
2074	based on generally accepted underwriting practices.
2075	(I)  If the risk accepts an offer of coverage through the
2076	market assistance plan or an offer of coverage through a
2077	mechanism established by the corporation before a policy is
2078	issued to the risk by the corporation or during the first 30
2079	days of coverage by the corporation, and the producing agent who
2080	submitted the application to the plan or to the corporation is
2081	not currently appointed by the insurer, the insurer shall:
2082	(A)  Pay to the producing agent of record of the policy,
2083	for the first year, an amount that is the greater of the
2084	insurer's usual and customary commission for the type of policy
2085	written or a fee equal to the usual and customary commission of
2086	the corporation; or
2087	(B)  Offer to allow the producing agent of record of the
2088	policy to continue servicing the policy for a period of not less
2089	than 1 year and offer to pay the agent the greater of the
2090	insurer's or the corporation's usual and customary commission
2091	for the type of policy written.
2092
2093	If the producing agent is unwilling or unable to accept
2094	appointment, the new insurer shall pay the agent in accordance
2095	with sub-sub-sub-subparagraph (A).
2096	(II)  When the corporation enters into a contractual
2097	agreement for a take-out plan, the producing agent of record of
2098	the corporation policy is entitled to retain any unearned
2099	commission on the policy, and the insurer shall:
2100	(A)  Pay to the producing agent of record of the
2101	corporation policy, for the first year, an amount that is the
2102	greater of the insurer's usual and customary commission for the
2103	type of policy written or a fee equal to the usual and customary
2104	commission of the corporation; or
2105	(B)  Offer to allow the producing agent of record of the
2106	corporation policy to continue servicing the policy for a period
2107	of not less than 1 year and offer to pay the agent the greater
2108	of the insurer's or the corporation's usual and customary
2109	commission for the type of policy written.
2110
2111	If the producing agent is unwilling or unable to accept
2112	appointment, the new insurer shall pay the agent in accordance
2113	with sub-sub-sub-subparagraph (A).
2114	b.  With respect to commercial lines residential risks, for
2115	a new application to the corporation for coverage, if the risk
2116	is offered coverage under a policy including wind coverage from
2117	an authorized insurer at its approved rate, the risk is not
2118	eligible for any policy issued by the corporation unless the
2119	premium for coverage from the authorized insurer is more than 15
2120	percent greater than the premium for comparable coverage from
2121	the corporation. If the risk is not able to obtain any such
2122	offer, the risk is eligible for a policy including wind coverage
2123	issued by the corporation. However, with regard to a
2124	policyholder of the corporation or a policyholder removed from
2125	the corporation through an assumption agreement until the end of
2126	the assumption period, the policyholder remains eligible for
2127	coverage from the corporation regardless of any offer of
2128	coverage from an authorized insurer or surplus lines insurer.
2129	(I)  If the risk accepts an offer of coverage through the
2130	market assistance plan or an offer of coverage through a
2131	mechanism established by the corporation before a policy is
2132	issued to the risk by the corporation or during the first 30
2133	days of coverage by the corporation, and the producing agent who
2134	submitted the application to the plan or the corporation is not
2135	currently appointed by the insurer, the insurer shall:
2136	(A)  Pay to the producing agent of record of the policy,
2137	for the first year, an amount that is the greater of the
2138	insurer's usual and customary commission for the type of policy
2139	written or a fee equal to the usual and customary commission of
2140	the corporation; or
2141	(B)  Offer to allow the producing agent of record of the
2142	policy to continue servicing the policy for a period of not less
2143	than 1 year and offer to pay the agent the greater of the
2144	insurer's or the corporation's usual and customary commission
2145	for the type of policy written.
2146
2147	If the producing agent is unwilling or unable to accept
2148	appointment, the new insurer shall pay the agent in accordance
2149	with sub-sub-sub-subparagraph (A).
2150	(II)  When the corporation enters into a contractual
2151	agreement for a take-out plan, the producing agent of record of
2152	the corporation policy is entitled to retain any unearned
2153	commission on the policy, and the insurer shall:
2154	(A)  Pay to the producing agent of record of the
2155	corporation policy, for the first year, an amount that is the
2156	greater of the insurer's usual and customary commission for the
2157	type of policy written or a fee equal to the usual and customary
2158	commission of the corporation; or
2159	(B)  Offer to allow the producing agent of record of the
2160	corporation policy to continue servicing the policy for a period
2161	of not less than 1 year and offer to pay the agent the greater
2162	of the insurer's or the corporation's usual and customary
2163	commission for the type of policy written.
2164
2165	If the producing agent is unwilling or unable to accept
2166	appointment, the new insurer shall pay the agent in accordance
2167	with sub-sub-sub-subparagraph (A).
2168	c.  For purposes of determining comparable coverage under
2169	sub-subparagraphs a. and b., the comparison shall be based on
2170	those forms and coverages that are reasonably comparable. The
2171	corporation may rely on a determination of comparable coverage
2172	and premium made by the producing agent who submits the
2173	application to the corporation, made in the agent's capacity as
2174	the corporation's agent. A comparison may be made solely of the
2175	premium with respect to the main building or structure only on
2176	the following basis: the same coverage A or other building
2177	limits; the same percentage hurricane deductible that applies on
2178	an annual basis or that applies to each hurricane for commercial
2179	residential property; the same percentage of ordinance and law
2180	coverage, if the same limit is offered by both the corporation
2181	and the authorized insurer; the same mitigation credits, to the
2182	extent the same types of credits are offered both by the
2183	corporation and the authorized insurer; the same method for loss
2184	payment, such as replacement cost or actual cash value, if the
2185	same method is offered both by the corporation and the
2186	authorized insurer in accordance with underwriting rules; and
2187	any other form or coverage that is reasonably comparable as
2188	determined by the board. If an application is submitted to the
2189	corporation for wind-only coverage in the high-risk account, the
2190	premium for the corporation's wind-only policy plus the premium
2191	for the ex-wind policy that is offered by an authorized insurer
2192	to the applicant shall be compared to the premium for multiperil
2193	coverage offered by an authorized insurer, subject to the
2194	standards for comparison specified in this subparagraph. If the
2195	corporation or the applicant requests from the authorized
2196	insurer a breakdown of the premium of the offer by types of
2197	coverage so that a comparison may be made by the corporation or
2198	its agent and the authorized insurer refuses or is unable to
2199	provide such information, the corporation may treat the offer as
2200	not being an offer of coverage from an authorized insurer at the
2201	insurer's approved rate.
2202	6.  Must include rules for classifications of risks and
2203	rates therefor.
2204	7.  Must provide that if premium and investment income for
2205	an account attributable to a particular calendar year are in
2206	excess of projected losses and expenses for the account
2207	attributable to that year, such excess shall be held in surplus
2208	in the account. Such surplus shall be available to defray
2209	deficits in that account as to future years and shall be used
2210	for that purpose prior to assessing assessable insurers and
2211	assessable insureds as to any calendar year.
2212	8.  Must provide objective criteria and procedures to be
2213	uniformly applied for all applicants in determining whether an
2214	individual risk is so hazardous as to be uninsurable. In making
2215	this determination and in establishing the criteria and
2216	procedures, the following shall be considered:
2217	a.  Whether the likelihood of a loss for the individual
2218	risk is substantially higher than for other risks of the same
2219	class; and
2220	b.  Whether the uncertainty associated with the individual
2221	risk is such that an appropriate premium cannot be determined.
2222
2223	The acceptance or rejection of a risk by the corporation shall
2224	be construed as the private placement of insurance, and the
2225	provisions of chapter 120 shall not apply.
2226	9.  Must provide that the corporation shall make its best
2227	efforts to procure catastrophe reinsurance at reasonable rates,
2228	to cover its projected 100-year probable maximum loss as
2229	determined by the board of governors.
2230	10.  Must provide that in the event of regular deficit
2231	assessments under sub-subparagraph (b)3.a. or sub-subparagraph
2232	(b)3.b., in the personal lines account, the commercial lines
2233	residential account, or the high-risk account, the corporation
2234	shall levy upon corporation policyholders in its next rate
2235	filing, or by a separate rate filing solely for this purpose, a
2236	Citizens policyholder surcharge arising from a regular
2237	assessment in such account in a percentage equal to the total
2238	amount of such regular assessments divided by the aggregate
2239	statewide direct written premium for subject lines of business
2240	for the prior calendar year. For purposes of calculating the
2241	Citizens policyholder surcharge to be levied under this
2242	subparagraph, the total amount of the regular assessment to
2243	which this surcharge is related shall be determined as set forth
2244	in subparagraph (b)3., without deducting the estimated Citizens
2245	policyholder surcharge. Citizens policyholder surcharges under
2246	this subparagraph are not considered premium and are not subject
2247	to commissions, fees, or premium taxes; however, failure to pay
2248	a market equalization surcharge shall be treated as failure to
2249	pay premium.
2250	10.11.  The policies issued by the corporation must provide
2251	that, if the corporation or the market assistance plan obtains
2252	an offer from an authorized insurer to cover the risk at its
2253	approved rates, the risk is no longer eligible for renewal
2254	through the corporation, except as otherwise provided in this
2255	subsection.
2256	11.12.  Corporation policies and applications must include
2257	a notice that the corporation policy could, under this section,
2258	be replaced with a policy issued by an authorized insurer that
2259	does not provide coverage identical to the coverage provided by
2260	the corporation. The notice shall also specify that acceptance
2261	of corporation coverage creates a conclusive presumption that
2262	the applicant or policyholder is aware of this potential.
2263	12.13.  May establish, subject to approval by the office,
2264	different eligibility requirements and operational procedures
2265	for any line or type of coverage for any specified county or
2266	area if the board determines that such changes to the
2267	eligibility requirements and operational procedures are
2268	justified due to the voluntary market being sufficiently stable
2269	and competitive in such area or for such line or type of
2270	coverage and that consumers who, in good faith, are unable to
2271	obtain insurance through the voluntary market through ordinary
2272	methods would continue to have access to coverage from the
2273	corporation. When coverage is sought in connection with a real
2274	property transfer, such requirements and procedures shall not
2275	provide for an effective date of coverage later than the date of
2276	the closing of the transfer as established by the transferor,
2277	the transferee, and, if applicable, the lender.
2278	13.14.  Must provide that, with respect to the high-risk
2279	account, any assessable insurer with a surplus as to
2280	policyholders of $25 million or less writing 25 percent or more
2281	of its total countrywide property insurance premiums in this
2282	state may petition the office, within the first 90 days of each
2283	calendar year, to qualify as a limited apportionment company. A
2284	regular assessment levied by the corporation on a limited
2285	apportionment company for a deficit incurred by the corporation
2286	for the high-risk account in 2006 or thereafter may be paid to
2287	the corporation on a monthly basis as the assessments are
2288	collected by the limited apportionment company from its insureds
2289	pursuant to s. 627.3512, but the regular assessment must be paid
2290	in full within 12 months after being levied by the corporation.
2291	A limited apportionment company shall collect from its
2292	policyholders any emergency assessment imposed under sub-
2293	subparagraph (b)3.d. The plan shall provide that, if the office
2294	determines that any regular assessment will result in an
2295	impairment of the surplus of a limited apportionment company,
2296	the office may direct that all or part of such assessment be
2297	deferred as provided in subparagraph (p)4. However, there shall
2298	be no limitation or deferment of an emergency assessment to be
2299	collected from policyholders under sub-subparagraph (b)3.d.
2300	14.15.  Must provide that the corporation appoint as its
2301	licensed agents only those agents who also hold an appointment
2302	as defined in s. 626.015(3) with an insurer who at the time of
2303	the agent's initial appointment by the corporation is authorized
2304	to write and is actually writing personal lines residential
2305	property coverage, commercial residential property coverage, or
2306	commercial nonresidential property coverage within the state.
2307	15.16.  Must provide, by July 1, 2007, a premium payment
2308	plan option to its policyholders which allows at a minimum for
2309	quarterly and semiannual payment of premiums. A monthly payment
2310	plan may, but is not required to, be offered.
2311	16.17.  Must limit coverage on mobile homes or manufactured
2312	homes built prior to 1994 to actual cash value of the dwelling
2313	rather than replacement costs of the dwelling.
2314	17.18.  May provide such limits of coverage as the board
2315	determines, consistent with the requirements of this subsection.
2316	18.19.  May require commercial property to meet specified
2317	hurricane mitigation construction features as a condition of
2318	eligibility for coverage.
2319	(m)1.  Rates for coverage provided by the corporation shall
2320	be actuarially sound and subject to the requirements of s.
2321	627.062, except as otherwise provided in this paragraph. The
2322	corporation shall file its recommended rates with the office at
2323	least annually. The corporation shall provide any additional
2324	information regarding the rates which the office requires. The
2325	office shall consider the recommendations of the board and issue
2326	a final order establishing the rates for the corporation within
2327	45 days after the recommended rates are filed. The corporation
2328	may not pursue an administrative challenge or judicial review of
2329	the final order of the office.
2330	2.  In addition to the rates otherwise determined pursuant
2331	to this paragraph, the corporation shall impose and collect an
2332	amount equal to the premium tax provided for in s. 624.509 to
2333	augment the financial resources of the corporation.
2334	3.  After the public hurricane loss-projection model under
2335	s. 627.06281 has been found to be accurate and reliable by the
2336	Florida Commission on Hurricane Loss Projection Methodology,
2337	that model shall serve as the minimum benchmark for determining
2338	the windstorm portion of the corporation's rates. This
2339	subparagraph does not require or allow the corporation to adopt
2340	rates lower than the rates otherwise required or allowed by this
2341	paragraph.
2342	4.  The rate filings for the corporation which were
2343	approved by the office and which took effect January 1, 2007,
2344	are rescinded, except for those rates that were lowered. As soon
2345	as possible, the corporation shall begin using the lower rates
2346	that were in effect on December 31, 2006, and shall provide
2347	refunds to policyholders who have paid higher rates as a result
2348	of that rate filing. The rates in effect on December 31, 2006,
2349	shall remain in effect for the 2007 and 2008 calendar years
2350	except for any rate change that results in a lower rate. The
2351	next rate change that may increase rates shall take effect
2352	January 1, 2009, pursuant to a new rate filing recommended by
2353	the corporation and established by the office, subject to the
2354	requirements of this paragraph.
2355	5.  Beginning on July 15, 2009, and each year thereafter,
2356	the corporation must make a recommended actuarially sound rate
2357	filing for each personal and commercial line of business it
2358	writes, to be effective no earlier than January 1, 2010.
2359	(p)1.  The corporation shall certify to the office its
2360	needs for annual assessments as to a particular calendar year,
2361	and for any interim assessments that it deems to be necessary to
2362	sustain operations as to a particular year pending the receipt
2363	of annual assessments. Upon verification, the office shall
2364	approve such certification, and the corporation shall levy such
2365	annual or interim assessments. Such assessments shall be
2366	prorated as provided in paragraph (b). The corporation shall
2367	take all reasonable and prudent steps necessary to collect the
2368	amount of assessment due from each assessable insurer,
2369	including, if prudent, filing suit to collect such assessment.
2370	If the corporation is unable to collect an assessment from any
2371	assessable insurer, the uncollected assessments shall be levied
2372	as an additional assessment against the assessable insurers and
2373	any assessable insurer required to pay an additional assessment
2374	as a result of such failure to pay shall have a cause of action
2375	against such nonpaying assessable insurer. Assessments shall be
2376	included as an appropriate factor in the making of rates. The
2377	failure of a surplus lines agent to collect and remit any
2378	regular or emergency assessment levied by the corporation is
2379	considered to be a violation of s. 626.936 and subjects the
2380	surplus lines agent to the penalties provided in that section.
2381	2.  The governing body of any unit of local government, any
2382	residents of which are insured by the corporation, may issue
2383	bonds as defined in s. 125.013 or s. 166.101 from time to time
2384	to fund an assistance program, in conjunction with the
2385	corporation, for the purpose of defraying deficits of the
2386	corporation. In order to avoid needless and indiscriminate
2387	proliferation, duplication, and fragmentation of such assistance
2388	programs, any unit of local government, any residents of which
2389	are insured by the corporation, may provide for the payment of
2390	losses, regardless of whether or not the losses occurred within
2391	or outside of the territorial jurisdiction of the local
2392	government. Revenue bonds under this subparagraph may not be
2393	issued until validated pursuant to chapter 75, unless a state of
2394	emergency is declared by executive order or proclamation of the
2395	Governor pursuant to s. 252.36 making such findings as are
2396	necessary to determine that it is in the best interests of, and
2397	necessary for, the protection of the public health, safety, and
2398	general welfare of residents of this state and declaring it an
2399	essential public purpose to permit certain municipalities or
2400	counties to issue such bonds as will permit relief to claimants
2401	and policyholders of the corporation. Any such unit of local
2402	government may enter into such contracts with the corporation
2403	and with any other entity created pursuant to this subsection as
2404	are necessary to carry out this paragraph. Any bonds issued
2405	under this subparagraph shall be payable from and secured by
2406	moneys received by the corporation from emergency assessments
2407	under sub-subparagraph (b)3.d., and assigned and pledged to or
2408	on behalf of the unit of local government for the benefit of the
2409	holders of such bonds. The funds, credit, property, and taxing
2410	power of the state or of the unit of local government shall not
2411	be pledged for the payment of such bonds. If any of the bonds
2412	remain unsold 60 days after issuance, the office shall require
2413	all insurers subject to assessment to purchase the bonds, which
2414	shall be treated as admitted assets; each insurer shall be
2415	required to purchase that percentage of the unsold portion of
2416	the bond issue that equals the insurer's relative share of
2417	assessment liability under this subsection. An insurer shall not
2418	be required to purchase the bonds to the extent that the office
2419	determines that the purchase would endanger or impair the
2420	solvency of the insurer.
2421	3.a.  The corporation shall adopt one or more programs
2422	subject to approval by the office for the reduction of both new
2423	and renewal writings in the corporation. Beginning January 1,
2424	2008, any program the corporation adopts for the payment of
2425	bonuses to an insurer for each risk the insurer removes from the
2426	corporation shall comply with s. 627.3511(2) and may not exceed
2427	the amount referenced in s. 627.3511(2) for each risk removed.
2428	The corporation may consider any prudent and not unfairly
2429	discriminatory approach to reducing corporation writings, and
2430	may adopt a credit against assessment liability or other
2431	liability that provides an incentive for insurers to take risks
2432	out of the corporation and to keep risks out of the corporation
2433	by maintaining or increasing voluntary writings in counties or
2434	areas in which corporation risks are highly concentrated and a
2435	program to provide a formula under which an insurer voluntarily
2436	taking risks out of the corporation by maintaining or increasing
2437	voluntary writings will be relieved wholly or partially from
2438	assessments under sub-subparagraphs (b)3.a. and b. However, any
2439	"take-out bonus" or payment to an insurer must be conditioned on
2440	the property being insured for at least 5 years by the insurer,
2441	unless canceled or nonrenewed by the policyholder. If the policy
2442	is canceled or nonrenewed by the policyholder before the end of
2443	the 5-year period, the amount of the take-out bonus must be
2444	prorated for the time period the policy was insured. When the
2445	corporation enters into a contractual agreement for a take-out
2446	plan, the producing agent of record of the corporation policy is
2447	entitled to retain any unearned commission on such policy, and
2448	the insurer shall either:
2449	(I)  Pay to the producing agent of record of the policy,
2450	for the first year, an amount which is the greater of the
2451	insurer's usual and customary commission for the type of policy
2452	written or a policy fee equal to the usual and customary
2453	commission of the corporation; or
2454	(II)  Offer to allow the producing agent of record of the
2455	policy to continue servicing the policy for a period of not less
2456	than 1 year and offer to pay the agent the insurer's usual and
2457	customary commission for the type of policy written. If the
2458	producing agent is unwilling or unable to accept appointment by
2459	the new insurer, the new insurer shall pay the agent in
2460	accordance with sub-sub-subparagraph (I).
2461	b.  Any credit or exemption from regular assessments
2462	adopted under this subparagraph shall last no longer than the 3
2463	years following the cancellation or expiration of the policy by
2464	the corporation. With the approval of the office, the board may
2465	extend such credits for an additional year if the insurer
2466	guarantees an additional year of renewability for all policies
2467	removed from the corporation, or for 2 additional years if the
2468	insurer guarantees 2 additional years of renewability for all
2469	policies so removed.
2470	c.  There shall be no credit, limitation, exemption, or
2471	deferment from emergency assessments to be collected from
2472	policyholders pursuant to sub-subparagraph (b)3.d.
2473	4.  The plan shall provide for the deferment, in whole or
2474	in part, of the assessment of an assessable insurer, other than
2475	an emergency assessment collected from policyholders pursuant to
2476	sub-subparagraph (b)3.d., if the office finds that payment of
2477	the assessment would endanger or impair the solvency of the
2478	insurer. In the event an assessment against an assessable
2479	insurer is deferred in whole or in part, the amount by which
2480	such assessment is deferred may be assessed against the other
2481	assessable insurers in a manner consistent with the basis for
2482	assessments set forth in paragraph (b).
2483	5.  Effective July 1, 2007, in order to evaluate the costs
2484	and benefits of approved take-out plans, if the corporation pays
2485	a bonus or other payment to an insurer for an approved take-out
2486	plan, it shall maintain a record of the address or such other
2487	identifying information on the property or risk removed in order
2488	to track if and when the property or risk is later insured by
2489	the corporation.
2490	6.  Any policy taken out, assumed, or removed from the
2491	corporation is, as of the effective date of the take-out,
2492	assumption, or removal, direct insurance issued by the insurer
2493	and not by the corporation, even if the corporation continues to
2494	service the policies. This subparagraph applies to policies of
2495	the corporation and not policies taken out, assumed, or removed
2496	from any other entity.
2497	(w)1.  The following records of the corporation are
2498	confidential and exempt from the provisions of s. 119.07(1) and
2499	s. 24(a), Art. I of the State Constitution:
2500	a.  Underwriting files, except that a policyholder or an
2501	applicant shall have access to his or her own underwriting
2502	files. Confidential and exempt underwriting file records may
2503	also be released to other governmental agencies upon written
2504	request and demonstration of need; such records held by the
2505	receiving agency remain confidential and exempt as provided
2506	herein.
2507	b.  Claims files, until termination of all litigation and
2508	settlement of all claims arising out of the same incident,
2509	although portions of the claims files may remain exempt, as
2510	otherwise provided by law. Confidential and exempt claims file
2511	records may be released to other governmental agencies upon
2512	written request and demonstration of need; such records held by
2513	the receiving agency remain confidential and exempt as provided
2514	for herein.
2515	c.  Records obtained or generated by an internal auditor
2516	pursuant to a routine audit, until the audit is completed, or if
2517	the audit is conducted as part of an investigation, until the
2518	investigation is closed or ceases to be active. An investigation
2519	is considered "active" while the investigation is being
2520	conducted with a reasonable, good faith belief that it could
2521	lead to the filing of administrative, civil, or criminal
2522	proceedings.
2523	d.  Matters reasonably encompassed in privileged attorney-
2524	client communications.
2525	e.  Proprietary information licensed to the corporation
2526	under contract and the contract provides for the confidentiality
2527	of such proprietary information.
2528	f.  All information relating to the medical condition or
2529	medical status of a corporation employee which is not relevant
2530	to the employee's capacity to perform his or her duties, except
2531	as otherwise provided in this paragraph. Information that which
2532	is exempt shall include, but is not limited to, information
2533	relating to workers' compensation, insurance benefits, and
2534	retirement or disability benefits.
2535	g.  Upon an employee's entrance into the employee
2536	assistance program, a program to assist any employee who has a
2537	behavioral or medical disorder, substance abuse problem, or
2538	emotional difficulty which affects the employee's job
2539	performance, all records relative to that participation shall be
2540	confidential and exempt from the provisions of s. 119.07(1) and
2541	s. 24(a), Art. I of the State Constitution, except as otherwise
2542	provided in s. 112.0455(11).
2543	h.  Information relating to negotiations for financing,
2544	reinsurance, depopulation, or contractual services, until the
2545	conclusion of the negotiations.
2546	i.  Minutes of closed meetings regarding underwriting
2547	files, and minutes of closed meetings regarding an open claims
2548	file until termination of all litigation and settlement of all
2549	claims with regard to that claim, except that information
2550	otherwise confidential or exempt by law shall will be redacted.
2551	2.  If When an authorized insurer is considering
2552	underwriting a risk insured by the corporation, relevant
2553	underwriting files and confidential claims files may be released
2554	to the insurer provided the insurer agrees in writing, notarized
2555	and under oath, to maintain the confidentiality of such files.
2556	If When a file is transferred to an insurer that file is no
2557	longer a public record because it is not held by an agency
2558	subject to the provisions of the public records law.
2559	Underwriting files and confidential claims files may also be
2560	released to staff of and the board of governors of the market
2561	assistance plan established pursuant to s. 627.3515, who must
2562	retain the confidentiality of such files, except such files may
2563	be released to authorized insurers that are considering assuming
2564	the risks to which the files apply, provided the insurer agrees
2565	in writing, notarized and under oath, to maintain the
2566	confidentiality of such files. Finally, the corporation or the
2567	board or staff of the market assistance plan may make the
2568	following information obtained from underwriting files and
2569	confidential claims files available to licensed general lines
2570	insurance agents: name, address, and telephone number of the
2571	residential property owner or insured; location of the risk;
2572	rating information; loss history; and policy type. The receiving
2573	licensed general lines insurance agent must retain the
2574	confidentiality of the information received.
2575	3.  A policyholder who has filed suit against the
2576	corporation has the right to discover the contents of his or her
2577	own claims file to the same extent that discovery of such
2578	contents would be available from a private insurer in litigation
2579	as provided by the Florida Rules of Civil Procedure, the Florida
2580	Evidence Code, and other applicable law. Pursuant to subpoena, a
2581	third party has the right to discover the contents of an
2582	insured's or applicant's underwriting or claims file to the same
2583	extent that discovery of such contents would be available from a
2584	private insurer by subpoena as provided by the Florida Rules of
2585	Civil Procedure, the Florida Evidence Code, and other applicable
2586	law, and subject to any confidentiality protections requested by
2587	the corporation and agreed to by the seeking party or ordered by
2588	the court. The corporation may release confidential underwriting
2589	and claims file contents and information as it deems necessary
2590	and appropriate to underwrite or service insurance policies and
2591	claims, subject to any confidentiality protections deemed
2592	necessary and appropriate by the corporation.
2593	4.2.  Portions of meetings of the corporation are exempt
2594	from the provisions of s. 286.011 and s. 24(b), Art. I of the
2595	State Constitution wherein confidential underwriting files or
2596	confidential open claims files are discussed. All portions of
2597	corporation meetings which are closed to the public shall be
2598	recorded by a court reporter. The court reporter shall record
2599	the times of commencement and termination of the meeting, all
2600	discussion and proceedings, the names of all persons present at
2601	any time, and the names of all persons speaking. No portion of
2602	any closed meeting shall be off the record. Subject to the
2603	provisions hereof and s. 119.07(1)(e)-(g), the court reporter's
2604	notes of any closed meeting shall be retained by the corporation
2605	for a minimum of 5 years. A copy of the transcript, less any
2606	exempt matters, of any closed meeting wherein claims are
2607	discussed shall become public as to individual claims after
2608	settlement of the claim.
2609	(dd)1.  For policies subject to nonrenewal as a result of
2610	the risk being no longer eligible for coverage due to being
2611	valued at $1 million or more, the corporation shall, directly or
2612	through the market assistance plan, make information from
2613	confidential underwriting and claims files of policyholders
2614	available only to licensed general lines agents who register
2615	with the corporation to receive such information according to
2616	the following procedures:
2617	2.  By August 1, 2006, the corporation shall provide such
2618	policyholders who are not eligible for renewal the opportunity
2619	to request in writing, within 30 days after the notification is
2620	sent, that information from their confidential underwriting and
2621	claims files not be released to licensed general lines agents
2622	registered pursuant to this paragraph.
2623	3.  By August 1, 2006, the corporation shall make available
2624	to licensed general lines agents the registration procedures to
2625	be used to obtain confidential information from underwriting and
2626	claims files for such policies not eligible for renewal. As a
2627	condition of registration, the corporation shall require the
2628	licensed general lines agent to attest that the agent has the
2629	experience and relationships with authorized or surplus lines
2630	carriers to attempt to offer replacement coverage for such
2631	policies.
2632	4.  By September 1, 2006, the corporation shall make
2633	available through a secured website to licensed general lines
2634	agents registered pursuant to this paragraph application,
2635	rating, loss history, mitigation, and policy type information
2636	relating to such policies not eligible for renewal and for which
2637	the policyholder has not requested the corporation withhold such
2638	information. The registered licensed general lines agent may use
2639	such information to contact and assist the policyholder in
2640	securing replacement policies, and the agent may disclose to the
2641	policyholder that such information was obtained from the
2642	corporation.
2643	(dd)(ee)  The assets of the corporation may be invested and
2644	managed by the State Board of Administration.
2645	(ee)(ff)  The office may establish a pilot program to offer
2646	optional sinkhole coverage in one or more counties or other
2647	territories of the corporation for the purpose of implementing
2648	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2649	Florida. Under the pilot program, the corporation is not
2650	required to issue a notice of nonrenewal to exclude sinkhole
2651	coverage upon the renewal of existing policies, but may exclude
2652	such coverage using a notice of coverage change.
2653	Section 14.  Paragraph (b) of subsection (2) of section
2654	627.4133, Florida Statutes, is amended to read:
2655	627.4133  Notice of cancellation, nonrenewal, or renewal
2656	premium.--
2657	(2)  With respect to any personal lines or commercial
2658	residential property insurance policy, including, but not
2659	limited to, any homeowner's, mobile home owner's, farmowner's,
2660	condominium association, condominium unit owner's, apartment
2661	building, or other policy covering a residential structure or
2662	its contents:
2663	(b)  The insurer shall give the named insured written
2664	notice of nonrenewal, cancellation, or termination at least 100
2665	days prior to the effective date of the nonrenewal,
2666	cancellation, or termination. However, the insurer shall give at
2667	least 100 days' written notice, or written notice by June 1,
2668	whichever is earlier, for any nonrenewal, cancellation, or
2669	termination that would be effective between June 1 and November
2670	30. The notice must include the reason or reasons for the
2671	nonrenewal, cancellation, or termination, except that:
2672	1.  The insurer shall give the named insured written notice
2673	of nonrenewal, cancellation, or termination at least 180 days
2674	prior to the effective date of the nonrenewal, cancellation, or
2675	termination for a named insured whose residential structure has
2676	been insured by that insurer or an affiliated insurer for at
2677	least a 5-year period immediately prior to date of the written
2678	notice.
2679	2.1.  When cancellation is for nonpayment of premium, at
2680	least 10 days' written notice of cancellation accompanied by the
2681	reason therefor shall be given. As used in this subparagraph,
2682	the term "nonpayment of premium" means failure of the named
2683	insured to discharge when due any of her or his obligations in
2684	connection with the payment of premiums on a policy or any
2685	installment of such premium, whether the premium is payable
2686	directly to the insurer or its agent or indirectly under any
2687	premium finance plan or extension of credit, or failure to
2688	maintain membership in an organization if such membership is a
2689	condition precedent to insurance coverage. "Nonpayment of
2690	premium" also means the failure of a financial institution to
2691	honor an insurance applicant's check after delivery to a
2692	licensed agent for payment of a premium, even if the agent has
2693	previously delivered or transferred the premium to the insurer.
2694	If a dishonored check represents the initial premium payment,
2695	the contract and all contractual obligations shall be void ab
2696	initio unless the nonpayment is cured within the earlier of 5
2697	days after actual notice by certified mail is received by the
2698	applicant or 15 days after notice is sent to the applicant by
2699	certified mail or registered mail, and if the contract is void,
2700	any premium received by the insurer from a third party shall be
2701	refunded to that party in full.
2702	3.2.  When such cancellation or termination occurs during
2703	the first 90 days during which the insurance is in force and the
2704	insurance is canceled or terminated for reasons other than
2705	nonpayment of premium, at least 20 days' written notice of
2706	cancellation or termination accompanied by the reason therefor
2707	shall be given except where there has been a material
2708	misstatement or misrepresentation or failure to comply with the
2709	underwriting requirements established by the insurer.
2710	4.3.  The requirement for providing written notice of
2711	nonrenewal by June 1 of any nonrenewal that would be effective
2712	between June 1 and November 30 does not apply to the following
2713	situations, but the insurer remains subject to the requirement
2714	to provide such notice at least 100 days prior to the effective
2715	date of nonrenewal:
2716	a.  A policy that is nonrenewed due to a revision in the
2717	coverage for sinkhole losses and catastrophic ground cover
2718	collapse pursuant to s. 627.730, as amended by s. 30, chapter
2719	2007-1, Laws of Florida.
2720	b.  A policy that is nonrenewed by Citizens Property
2721	Insurance Corporation, pursuant to s. 627.351(6), for a policy
2722	that has been assumed by an authorized insurer offering
2723	replacement or renewal coverage to the policyholder.
2724
2725	After the policy has been in effect for 90 days, the policy
2726	shall not be canceled by the insurer except when there has been
2727	a material misstatement, a nonpayment of premium, a failure to
2728	comply with underwriting requirements established by the insurer
2729	within 90 days of the date of effectuation of coverage, or a
2730	substantial change in the risk covered by the policy or when the
2731	cancellation is for all insureds under such policies for a given
2732	class of insureds. This paragraph does not apply to individually
2733	rated risks having a policy term of less than 90 days.
2734	Section 15.  Effective January 1, 2011, section 689.262,
2735	Florida Statutes, is created to read:
2736	689.262  Sale of residential property; disclosure of
2737	windstorm mitigation rating.--A purchaser of residential
2738	property that is located in the wind-borne debris region, as
2739	defined in s. 1609.2 of the International Building Code(2006),
2740	must be informed of the windstorm mitigation rating of the
2741	structure, based on the uniform home grading scale adopted
2742	pursuant to s. 215.55865. The rating must be included in the
2743	contract for sale or as a separate document attached to the
2744	contract for sale. The Financial Services Commission may adopt
2745	rules, consistent with other state laws, to administer this
2746	section, including the form of the disclosure and the
2747	requirements for the windstorm mitigation inspection or report
2748	that is required for purposes of determining the rating.
2749	Section 16.  (1)  By December 15, 2008, Citizens Property
2750	Insurance Corporation shall transfer $250 million to the General
2751	Revenue Fund, from the personal lines account and the commercial
2752	lines account only, if the combined surplus of the personal
2753	lines account and commercial lines account as defined in s.
2754	627.351(6), Florida Statutes, exceeds $1 billion. The board of
2755	governors of Citizens Property Insurance Corporation must make a
2756	reasonable estimate of such surplus on or after December 1,
2757	2008, and no later than December 14, 2008, using generally
2758	accepted actuarial and accounting practices, recognizing that
2759	audited financial statements will not yet be available.
2760	(2)  Beginning July 1, 2009, the board shall make quarterly
2761	transfers of any interest earned prior to the issuance of any
2762	surplus notes, interest paid, and principal repaid to the state
2763	for any surplus notes issued by the program after December 1,
2764	2008, to Citizens Property Insurance Corporation, provided such
2765	surplus notes were funded exclusively by an appropriation to the
2766	program by the Legislature for the 2008-2009 fiscal year. The
2767	corporation shall credit each account as defined in s.
2768	627.351(6) in a pro rata manner for the funds removed from each
2769	account to make the transfer required by subsection (1).
2770	(3)  On July 1, 2009, the State Board of Administration
2771	shall transfer to Citizens Property Insurance Corporation any
2772	funds that have not been committed or reserved for insurers
2773	approved to receive such funds under the program from the funds
2774	that were appropriated from the corporation in 2008-2009 for
2775	such purposes.
2776	Section 17.  Citizens Property Insurance Corporation may
2777	not use any amendments made to s. 215.5595, Florida Statutes, by
2778	this act or any transfer of funds authorized by this act as
2779	justification or cause in seeking any rate or assessment
2780	increase.
2781	Section 18.  Subsection (3) is added to section 627.06281,
2782	Florida Statutes, to read:
2783	627.06281  Public hurricane loss projection model;
2784	reporting of data by insurers.--
2785	(3)(a)  A residential property insurer may have access to
2786	and use the public hurricane loss projection model, including
2787	all assumptions and factors and all detailed loss results, for
2788	the purpose of calculating rate indications in a rate filing and
2789	for analytical purposes, including any analysis or evaluation of
2790	the model required under actuarial standards of practice.
2791	(b)  By January 1, 2009, the office shall establish by rule
2792	a fee schedule for access to and the use of the model. The fee
2793	schedule must be reasonably calculated to cover only the actual
2794	costs of providing access to and the use of the model.
2795	Section 19.  Section 627.0655, Florida Statutes, is amended
2796	to read:
2797	627.0655  Policyholder loss or expense-related premium
2798	discounts.--An insurer or person authorized to engage in the
2799	business of insurance in this state may include, in the premium
2800	charged an insured for any policy, contract, or certificate of
2801	insurance, a discount based on the fact that another policy,
2802	contract, or certificate of any type has been purchased by the
2803	insured from the same insurer or insurer group, the Citizens
2804	Property Insurance Corporation created under s. 627.351(6) if
2805	the same insurance agent is servicing both policies, or an
2806	insurer that has removed the policy from the Citizens Property
2807	Insurance Corporation if the same insurance agent is servicing
2808	both policies.
2809	Section 20.  (1)  The Citizens Property Insurance
2810	Corporation Mission Review Task Force is created to analyze and
2811	compile available data and to develop a report setting forth the
2812	statutory and operational changes needed to return Citizens
2813	Property Insurance Corporation to its former role as a state-
2814	created, noncompetitive residual market mechanism that provides
2815	property insurance coverage to risks that are otherwise entitled
2816	but unable to obtain such coverage in the private insurance
2817	market. The task force shall submit a report to the Governor,
2818	the President of the Senate, and the Speaker of the House of
2819	Representatives by January 31, 2009. At a minimum, the task
2820	force shall analyze and evaluate relevant and applicable
2821	information and data and develop recommendations concerning:
2822	(a)  The nature of Citizens Property Insurance
2823	Corporation's role in providing property insurance coverage only
2824	if such coverage is not available from private insurers.
2825	(b)  The ability of the admitted market to offer policies
2826	to those consumers formerly insured through Citizens Property
2827	Insurance Corporation. This consideration shall include, but not
2828	be limited to, the availability of private market reinsurance
2829	and coverage through the Florida Hurricane Catastrophe Fund and
2830	the capacity of the industry to offer policies to former
2831	Citizens Property Insurance Corporation policyholders within
2832	existing writing ratio limitations.
2833	(c)  The relationship of rates charged by Citizens Property
2834	Insurance Corporation to rates charged by private insurers, with
2835	due consideration for the corporation's role as a noncompetitive
2836	residual market mechanism.
2837	(d)  The relationships between the exposure of Citizens
2838	Property Insurance Corporation to catastrophic hurricane losses,
2839	the corporation's history of purchasing any reinsurance
2840	coverage, and the corporation's capital capacity to meet its
2841	potential claim obligations without incurring large deficits.
2842	(e)  The projected assessments on all policies required to
2843	offset the lack of capitol to pay claims.
2844	(f)  The projections under paragraph (e) shall be specific
2845	to losses of $3 billion, $12 billion, and $23 billion caused by
2846	a storm or a group of storms in any given year.
2847	(g)  The operational implications of the variation in the
2848	number of policies in force over time in Citizens Property
2849	Insurance Corporation and the merits of outsourcing some or all
2850	of its operational responsibilities.
2851	(h)  Changes in the mission and operations of Citizens
2852	Property Insurance Corporation to reduce or eliminate any
2853	adverse effect such mission and operations may be having on the
2854	promotion of sound and economic growth and development of the
2855	coastal areas of this state.
2856	(i)  Appropriate and consistent geographic boundaries of
2857	the high-risk account.
2858	(j)  The rankings, by county, of the average approved rates
2859	in Citizens Property Insurance Corporation and any savings
2860	associated with policyholder choice in selecting Citizens.
2861	(2)  The task force shall be composed of 11 members as
2862	follows:
2863	(a)  Two members appointed by the Speaker of the House of
2864	Representatives.
2865	1.  One member representing a property and casualty
2866	residential insurer that provides at least 150,000 homeowner's
2867	insurance policies in this state at the time of the creation of
2868	the task force.
2869	2.  One member representing a surplus lines insurance
2870	company.
2871	(b)  Two members appointed by the President of the
2872	Senate.
2873	1.  One member representing a property and casualty
2874	commercial non-residential insurer.
2875	2.  One member representing a property and casualty
2876	residential insurer with fewer than 150,000 homeowner's policies
2877	in this state at the time of the creation of the task force.
2878	(c)  Three members appointed by the Governor who are not
2879	employed by or professionally affiliated with an insurance
2880	company or a subsidiary of an insurance company, at least one of
2881	whom must be consumer advocates or members of a consumer
2882	advocacy organization or agency.
2883	(d)  Two members appointed by the Chief Financial Officer
2884	representing insurance agents in this state.
2885	(e)  One member representing Citizens Property Insurance
2886	Corporation selected by Citizens Chairman of the Board.
2887	(f)  The Commissioner of Insurance Regulation or his or her
2888	designee.
2889	(3)  The task force shall conduct research, hold public
2890	meetings, receive testimony, employ consultants and
2891	administrative staff, and undertake other activities determined
2892	by its members to be necessary to complete its responsibilities.
2893	Citizens Property Insurance Corporation shall have appropriate
2894	senior staff attend task force meetings, shall respond to
2895	requests for testimony and data by the task force, shall
2896	otherwise cooperate with the task force, and shall provide
2897	funding for the necessary costs of implementing the provisions
2898	of this section.
2899	(4)  A member of the task force may not delegate his or her
2900	attendance or voting power to a designee.
2901	(5)  Members of the task force shall serve without
2902	compensation but are entitled to receive reimbursement for
2903	travel and per diem as provided in s. 112.061, Florida Statutes.
2904	(6)  The appointments to the task force must be completed
2905	within 30 calendar days after the effective date of this act,
2906	and the task force must hold its initial meeting within 1 month
2907	after appointment of all members. The task force shall expire no
2908	later than 60 calendar days after submission of the report
2909	required in subsection (1).
2910	Section 21.  The Chief Financial Officer shall provide a
2911	report on the economic impact on the state of a 1-in-100-year
2912	hurricane to the Governor, the President of the Senate, and the
2913	Speaker of the House of Representatives by March 1 of each year.
2914	The report shall include an estimate of the short-term and long-
2915	term fiscal impacts of such a storm on Citizens Property
2916	Insurance Corporation, the Florida Hurricane Catastrophe Fund,
2917	the private insurance and reinsurance markets, the state
2918	economy, and the state debt. The report shall also include an
2919	analysis of the average premium increase to fund a 1-in-100-year
2920	hurricane event and list the average cost, in both a percentage
2921	and dollar amount, impact to consumers on a county-level basis.
2922	The report may also include recommendations by the Chief
2923	Financial Officer for preparing for such a hurricane and
2924	reducing the economic impact of such a hurricane on the state.
2925	In preparing the analysis, the Chief Financial Officer shall
2926	coordinate with and obtain data from the Office of Insurance
2927	Regulation, Citizens Property Insurance Corporation, the Florida
2928	Hurricane Catastrophe Fund, the Florida Commission on Hurricane
2929	Loss Projection Methodology, the State Board of Administration,
2930	the Office of Economic and Demographic Research, and other state
2931	agencies.
2932	Section 22.  Section 627.0621, Florida Statutes, is created
2933	to read:
2934	627.0621  Transparency in rate regulation.--
2935	(1)  DEFINITIONS.--As used in this section, the term:
2936	(a)  "Rate filing" means any original or amended rate
2937	residential property insurance filing.
2938	(b)  "Recommendation" means any proposed, preliminary, or
2939	final recommendation from an office actuary reviewing a rate
2940	filing with respect to the issue of approval or disapproval of
2941	the rate filing or with respect to rate indications that the
2942	office would consider acceptable.
2943	(2)  WEBSITE FOR PUBLIC ACCESS TO RATE FILING
2944	INFORMATION.--With respect to any rate filing made on after July
2945	1, 2008, the office shall provide the following information on a
2946	publicly accessible Internet website:
2947	(a)  The overall rate change requested by the insurer.
2948	(b)  All assumptions made by the office's actuaries.
2949	(c)  A statement describing any assumptions or methods that
2950	deviate from the actuarial standards of practice of the Casualty
2951	Actuarial Society or the American Academy of Actuaries,
2952	including an explanation of the nature, rationale, and effect of
2953	the deviation.
2954	(d)  All recommendations made by any office actuary who
2955	reviewed the rate filing.
2956	(e)  Certification by the office's actuary that, based on
2957	the actuary's knowledge, his or her recommendations are
2958	consistent with accepted actuarial principles.
2959	(f)  The overall rate change approved by the office.
2960	(3)  ATTORNEY-CLIENT PRIVILEGE; WORK PRODUCT.--It is the
2961	intent of the Legislature that the principles of the public
2962	records and open meetings laws apply to the assertion of
2963	attorney-client privilege and work product confidentiality by
2964	the office in connection with a challenge to its actions on a
2965	rate filing. Therefore, in any administrative or judicial
2966	proceeding relating to a rate filing, attorney-client privilege
2967	and work product exemptions from disclosure do not apply to
2968	communications with office attorneys or records prepared by or
2969	at the direction of an office attorney, except when the
2970	conditions of paragraphs (a) and (b) have been met:
2971	(a)  The communication or record reflects a mental
2972	impression, conclusion, litigation strategy, or legal theory of
2973	the attorney or office that was prepared exclusively for civil
2974	or criminal litigation or adversarial administrative
2975	proceedings.
2976	(b)  The communication occurred or the record was prepared
2977	after the initiation of an action in a court of competent
2978	jurisdiction, after the issuance of a notice of intent to deny a
2979	rate filing, or after the filing of a request for a proceeding
2980	under ss. 120.569 and 120.57.
2981	Section 23.  Paragraph (b) of subsection (4) of section
2982	215.555, Florida Statutes, is amended to read:
2983	215.555  Florida Hurricane Catastrophe Fund.--
2984	(4)  REIMBURSEMENT CONTRACTS.--
2985	(b)1.  The contract shall contain a promise by the board to
2986	reimburse the insurer for 45 percent, 75 percent, or 90 percent
2987	of its losses from each covered event in excess of the insurer's
2988	retention, plus 5 percent of the reimbursed losses to cover loss
2989	adjustment expenses.
2990	2.  The insurer must elect one of the percentage coverage
2991	levels specified in this paragraph and may, upon renewal of a
2992	reimbursement contract, elect a lower percentage coverage level
2993	if no revenue bonds issued under subsection (6) after a covered
2994	event are outstanding, or elect a higher percentage coverage
2995	level, regardless of whether or not revenue bonds are
2996	outstanding. All members of an insurer group must elect the same
2997	percentage coverage level. Any joint underwriting association,
2998	risk apportionment plan, or other entity created under s.
2999	627.351 must elect the 90-percent coverage level.
3000	3.  The contract shall provide that reimbursement amounts
3001	shall not be reduced by reinsurance paid or payable to the
3002	insurer from other sources.
3003	4.  Notwithstanding any other provision contained in this
3004	section, the board shall make available to insurers that
3005	purchased coverage provided by this subparagraph in 2007 2006,
3006	insurers qualifying as limited apportionment companies under s.
3007	627.351(6)(c), and insurers that have been were approved to
3008	participate in 2006 or that are approved in 2007 for the
3009	Insurance Capital Build-Up Incentive Program pursuant to s.
3010	215.5595, a contract or contract addendum that provides an
3011	additional amount of reimbursement coverage of up to $10
3012	million. The premium to be charged for this additional
3013	reimbursement coverage shall be 50 percent of the additional
3014	reimbursement coverage provided, which shall include one prepaid
3015	reinstatement. The minimum retention level that an eligible
3016	participating insurer must retain associated with this
3017	additional coverage layer is 30 percent of the insurer's surplus
3018	as of December 31, 2007 2006. This coverage shall be in addition
3019	to all other coverage that may be provided under this section.
3020	The coverage provided by the fund under this subparagraph shall
3021	be in addition to the claims-paying capacity as defined in
3022	subparagraph (c)1., but only with respect to those insurers that
3023	select the additional coverage option and meet the requirements
3024	of this subparagraph. The claims-paying capacity with respect to
3025	all other participating insurers and limited apportionment
3026	companies that do not select the additional coverage option
3027	shall be limited to their reimbursement premium's proportionate
3028	share of the actual claims-paying capacity otherwise defined in
3029	subparagraph (c)1. and as provided for under the terms of the
3030	reimbursement contract. Coverage provided in the reimbursement
3031	contract shall will not be affected by the additional premiums
3032	paid by participating insurers exercising the additional
3033	coverage option allowed in this subparagraph. This subparagraph
3034	expires on May 31, 2009 2008.
3035	Section 24.  Subsection (1) of section 627.0613, Florida
3036	Statutes, is amended to read:
3037	627.0613  Consumer advocate.--The Chief Financial Officer
3038	must appoint a consumer advocate who must represent the general
3039	public of the state before the department and the office. The
3040	consumer advocate must report directly to the Chief Financial
3041	Officer, but is not otherwise under the authority of the
3042	department or of any employee of the department. The consumer
3043	advocate has such powers as are necessary to carry out the
3044	duties of the office of consumer advocate, including, but not
3045	limited to, the powers to:
3046	(1)  Recommend to the department or office, by petition,
3047	the commencement of any proceeding or action; appear in any
3048	proceeding or action before the department or office; or appear
3049	in any proceeding before the Division of Administrative Hearings
3050	or arbitration panel specified in s. 627.062(6) relating to
3051	subject matter under the jurisdiction of the department or
3052	office.
3053	Section 25.  Subsections (1) and (2) of section 627.712,
3054	Florida Statutes, are amended to read:
3055	627.712  Residential windstorm coverage required;
3056	availability of exclusions for windstorm or contents.--
3057	(1)  An insurer issuing a residential property insurance
3058	policy must provide windstorm coverage. Except as provided in
3059	paragraph (2)(c), this section subsection does not apply with
3060	respect to risks that are eligible for wind-only coverage from
3061	Citizens Property Insurance Corporation under s. 627.351(6).
3062	(2)  A property insurer must make available, at the option
3063	of the policyholder, an exclusion of windstorm coverage.
3064	(a)  The coverage may be excluded only if:
3065	(a)1.  When the policyholder is a natural person, the
3066	policyholder personally writes and provides to the insurer the
3067	following statement in his or her own handwriting and signs his
3068	or her name, which must also be signed by every other named
3069	insured on the policy, and dated: "I do not want the insurance
3070	on my (home/mobile home/condominium unit) to pay for damage from
3071	windstorms. I will pay those costs. My insurance will not."
3072	2.  When the policyholder is other than a natural person,
3073	the policyholder provides to the insurer on the policyholder's
3074	letterhead the following statement that must be signed by the
3075	policyholder's authorized representative and dated: "  (Name of
3076	entity)   does not want the insurance on its   (type of
3077	structure)   to pay for damage from windstorms.   (Name of
3078	entity)   will be responsible for these costs.   (Name of
3079	entity's)   insurance will not."
3080	(b)  If the structure insured by the policy is subject to a
3081	mortgage or lien, the policyholder must provide the insurer with
3082	a written statement from the mortgageholder or lienholder
3083	indicating that the mortgageholder or lienholder approves the
3084	policyholder electing to exclude windstorm coverage or hurricane
3085	coverage from his or her or its property insurance policy.
3086	(c)  If the residential structure is eligible for wind-only
3087	coverage from Citizens Property Insurance Corporation, an
3088	insurer nonrenewing a policy and issuing a replacement policy,
3089	or issuing a new policy, that does not provide wind coverage
3090	shall provide a notice to the mortgageholder or lienholder
3091	indicating the policyholder has elected coverage that does not
3092	cover wind.
3093	Section 26.  The provisions of this act shall supersede and
3094	control over any conflicting provisions adopted in House Bill
3095	5057, 2008 Regular Session, to the extent of such conflict, if
3096	that bill becomes a law.
3097	Section 27.  Except as otherwise expressly provided in this
3098	act, this act shall take effect July 1, 2008.
3099
3100
3101
3102
3103
3104	-----------------------------------------------------
3105	T I T L E  A M E N D M E N T
3106	Remove the entire title and insert:
3107	A bill to be entitled
3108	An act relating to insurance; providing a short title; amending
3109	s. 215.5595, F.S.; revising legislative findings; providing for
3110	an appropriation of state funds in exchange for surplus notes
3111	issued by residential property insurers under the program;
3112	revising the conditions and requirements for providing funds to
3113	insurers under the program; requiring a commitment by the
3114	insurer to meet minimum premium-to-surplus writing ratios for
3115	residential property insurance and for taking policies out of
3116	Citizens Property Insurance Corporation; requiring insurers to
3117	commit to maintaining certain levels of surplus and reinsurance;
3118	authorizing the State Board of Administration to charge a fee
3119	for late payments; providing for payment of costs and fees
3120	incurred by the board in administering the program from funds
3121	appropriated to the program, subject to a specified limit;
3122	requiring the board to submit an annual report to the
3123	Legislature on the program and insurer compliance with certain
3124	requirements; providing that amendments made by the act do not
3125	affect the terms of surplus notes approved prior to a specified
3126	date; authorizing the State Board of Administration and an
3127	insurer to renegotiate such terms consistent with such
3128	amendments; requiring the State Board of Administration to
3129	transfer to Citizens Property Insurance Corporation certain
3130	uncommitted or unreserved funds; amending s. 624.3161, F.S.;
3131	authorizing the Office of Insurance Regulation to require an
3132	insurer to file its claims handling practices and procedures as
3133	a public record based on findings of a market conduct
3134	examination; amending s. 624.4211, F.S.; increasing the maximum
3135	amounts of administrative fines that may be imposed upon an
3136	insurer by the Office of Insurance Regulation for nonwillful and
3137	willful violations of an order or rule of the office or any
3138	provision of the Florida Insurance Code; creating s. 624.4213,
3139	F.S.; specifying requirements for submission of a document or
3140	information to the Office of Insurance Regulation or the
3141	Department of Financial Services in order for a person to claim
3142	that the document is a trade secret; requiring each page or
3143	portion to be labeled as a trade secret and be separated from
3144	non-trade secret material; requiring the submitting party to
3145	include an affidavit certifying certain information about the
3146	documents claimed to be trade secrets; requiring the office or
3147	department to notify persons who submit trade secret documents
3148	of any public-records request and the opportunity to file a
3149	court action to bar disclosure; specifying conditions for the
3150	office to retain or release such documents; creating s.
3151	624.4305, F.S.; requiring that an insurer planning to nonrenew
3152	more than a specified number of residential property insurance
3153	policies notify the Office of Insurance Regulation and obtain
3154	approval for such nonrenewals; specifying procedures for
3155	issuance of such notice; amending s. 626.9521, F.S.; increasing
3156	the maximum fines that may be imposed by the office or
3157	department for nonwillful and willful violations of state law
3158	regarding unfair methods of competition and unfair or deceptive
3159	acts or practices related to insurance; amending s. 626.9541,
3160	F.S.; specifying an additional unfair claims settlement
3161	practice; amending s. 627.0612, F.S.; providing criteria for
3162	administrative hearings to determine whether an insurer's
3163	property insurance rates, rating manuals, premium credits,
3164	discount schedules, and surcharge schedules comply with the law;
3165	providing for entry of certain  orders; amending s. 627.062,
3166	F.S.; requiring that an insurer seeking a rate for property
3167	insurance that is greater than the rate most recently approved
3168	by the Office of Insurance Regulation make a "file and use"
3169	filing for all such rate filings made after a specified date;
3170	revising the factors the office must consider in reviewing a
3171	rate filing; prohibiting the Office of Insurance Regulation from
3172	disapproving as excessive a rate solely because the insurer
3173	obtained reinsurance covering a specified probably maximum loss;
3174	allowing the office to disapprove a rate as excessive within 1
3175	year after the rate has been approved under certain conditions
3176	related to nonrenewal of policies by the insurer; requiring the
3177	Division of Administrative Hearings to expedite a hearing
3178	request by an insurer and for the administrative law judge to
3179	commence the hearing within a specified time; authorizing an
3180	insurer to request an expedited appellate review pursuant to the
3181	Florida Rules of Appellate Procedure; expressing legislative
3182	intent for an expedited appellate review; revising provisions
3183	relating to the submission of a disputed rate filing, other than
3184	a rate filing for medical malpractice insurance, to an
3185	arbitration panel in lieu of an administrative hearing if the
3186	rate is filed before a specified date; deleting provisions
3187	relating to mandatory arbitration in lieu of certain hearings;
3188	amending s. 627.0628, F.S.; providing legislative findings
3189	relating to final agency action for insurance ratemaking;
3190	requiring the Financial Services Commission to consider and
3191	adopt findings relating to certain actuarial models, principles,
3192	standards, or models for certain maximum loss level
3193	calculations; requiring that with respect to rate filings,
3194	insurers must use actuarial methods or models found to be
3195	accurate or reliable by the Florida Commission on Hurricane Loss
3196	Projection Methodology; deleting the requirement for the Office
3197	of Insurance Regulation and the Consumer Advocate to have access
3198	to all assumptions of a hurricane loss model in order for a
3199	model that has been found to be accurate and reliable by the
3200	Florida Commission on Hurricane Loss Projection Methodology to
3201	be admissible in a rate proceeding; deleting cross-references to
3202	conform to changes made by the act; amending s. 627.0629, F.S.;
3203	requiring that the Office of Insurance Regulation develop and
3204	make publicly available before a specified deadline a proposed
3205	method for insurers to establish windstorm mitigation premium
3206	discounts that correlate to the uniform home rating scale;
3207	requiring that the Financial Services Commission adopt rules
3208	before a specified deadline; requiring insurers to make rate
3209	filings pursuant to such method; authorizing the commission to
3210	make changes by rule to the uniform home grading scale and
3211	specify by rule the minimum required discounts, credits, or
3212	other rate differentials; requiring that such rate differentials
3213	be consistent with generally accepted actuarial principles and
3214	wind loss mitigation studies; amending s. 627.351, F.S.,
3215	relating to Citizens Property Insurance Corporation; deleting a
3216	provision to conform to changes made in the act; deleting
3217	provisions defining the terms "homestead property" and
3218	"nonhomestead property"; increasing threshold replacement costs
3219	of certain structures for eligibility for coverage by the
3220	corporation; deleting requirements for certain properties to
3221	meeting building code plus requirements as a condition of
3222	eligibility for coverage by the corporation; decreasing the
3223	value at which certain structures are eligible for coverage;
3224	requiring written disclosure of windstorm mitigation ratings for
3225	certain structures; deleting outdated provisions requiring the
3226	corporation to submit a report for approval of offering
3227	multiperil coverage; revising threshold amounts of deficits
3228	incurred in a calendar year on which the decision to levy
3229	assessments and the types of such assessments are based;
3230	revising the formula used to calculate shares of assessments
3231	owed by certain assessable insureds; requiring that the board of
3232	governors make certain determinations before levying emergency
3233	assessments; providing the board of governors with discretion to
3234	set the amount of an emergency assessment within specified
3235	limits; requiring the board of governors to levy a Citizens
3236	policyholder surcharge under certain conditions; increasing the
3237	amount of the surcharge; deleting a provision requiring the levy
3238	of an immediate assessment against certain policyholders under
3239	such conditions; requiring that funds collected from the levy of
3240	such surcharges be used for certain purposes; providing that
3241	such surcharges are not considered premium and are not subject
3242	to commissions, fees, or premium taxes; requiring that the
3243	failure to pay such surcharges be treated as failure to pay
3244	premium; requiring that the amount of any assessment or
3245	surcharge which exceeds the amount of deficits be remitted to
3246	and used by the corporation for specified purposes; deleting
3247	provisions requiring that the plan of operation of the
3248	corporation provide for the levy of a Citizens policyholder
3249	surcharge if regular deficit assessments are levied as a result
3250	of deficits in certain accounts; deleting provisions related to
3251	the calculation, classification, and nonpayment of such
3252	surcharge; requiring that the corporation make an annual filing
3253	for each personal or commercial line of business it writes,
3254	beginning on a specified date; deleting a provision requiring an
3255	insurer to purchase bonds that remain unsold; deleting
3256	provisions requiring the corporation to make certain
3257	confidential underwriting and claims files available to agents
3258	to conform to changes made by the act relating to ineligibility
3259	of certain dwellings; clarifying the right of certain parties to
3260	discover underwriting and claims file records; authorizing the
3261	corporation to release such records as it deems necessary;
3262	amending s. 627.4133, F.S.; requiring insurers to provide
3263	written notice of certain cancellations, nonrenewals, or
3264	terminations; creating s. 689.262, F.S.; requiring a purchaser
3265	of residential property in wind-borne debris regions to be
3266	presented with the windstorm mitigation rating of the structure;
3267	authorizing the Financial Services Commission to adopt rules;
3268	requiring Citizens Property Insurance Corporation to transfer
3269	funds to the General Revenue Fund if the losses due to a
3270	hurricane do not exceed a specified amount; requiring the board
3271	of governors of Citizens Property Insurance Corporation to make
3272	a reasonable estimate of such losses by a certain date;
3273	requiring the board to make quarterly transfers of funds to the
3274	corporation under certain circumstances; requiring the
3275	corporation to credit certain accounts for funds removed to make
3276	certain transfers; requiring the State Board of Administration
3277	to transfer to Citizens Property Insurance Corporation certain
3278	uncommitted or unreserved funds under certain circumstances;
3279	prohibiting Citizens Property Insurance Corporation from using
3280	certain statutory changes or authorized transfers of funds as
3281	justification or cause to seek any rate or assessment increase;
3282	amending s. 627.06281, F.S.; providing for residential property
3283	insurers to have access to and use a public hurricane loss
3284	projection model; requiring the office to establish a fee
3285	schedule for such model access and use; amending s. 627.0655,
3286	F.S.; expanding application of policyholder loss or expense-
3287	related premium discounts; creating the Citizens Property
3288	Insurance Corporation Mission Review Task Force; providing
3289	purposes; requiring a report; providing report requirements;
3290	providing for appointment of members; providing
3291	responsibilities; specifying service without compensation;
3292	providing for reimbursement of per diem and travel expenses;
3293	providing meeting requirements; requiring the corporation to
3294	assist the task force; providing for the expiration of the task
3295	force; requiring the Chief Financial Officer to provide a report
3296	on the economic impact on the state of certain hurricanes;
3297	providing report requirements; creating s. 627.0621, F.S.;
3298	providing requirements for transparency in rate regulation;
3299	providing definitions; providing for a website for public access
3300	to rate filing information; providing requirements; providing
3301	for application of public meeting requirements; specifying
3302	nonapplication of attorney-client or work-product privileges to
3303	certain communications in certain administrative or judicial
3304	proceedings under certain circumstances; specifying criteria;
3305	amending s. 215.555, F.S.; extending for an additional year the
3306	offer of reimbursement coverage for specified insurers; revising
3307	the qualifying criteria for such insurers; revising provisions
3308	to conform; amending s. 627.0613, F.S.; deleting cross-
3309	references to conform to changes made by the act; amending s.
3310	627.712, F.S.; requiring insurers to provide notice to
3311	mortgageholders or lienholders of certain policies not providing
3312	wind coverage for certain structures; providing for provisions
3313	of the act to supersede and control over conflicting provisions
3314	of House Bill 5057; providing effective dates.

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