HB 1157

1	A bill to be entitled
2	An act relating to property insurance; amending s.
3	215.555, F.S.; providing an additional legislative finding
4	and purpose; limiting application of certain definitions;
5	expanding uses of moneys in the Florida Hurricane
6	Catastrophe Fund to include Florida Hurricane Protection
7	Program costs; providing for expiration of a requirement
8	for certain reimbursement contracts between insurers and
9	the fund's board; revising provisions with respect to
10	issuance and use of revenue bonds; revising emergency
11	assessment provisions; providing for future expiration;
12	preserving effect on certain assessments; providing for
13	additional emergency assessments under certain
14	circumstances; providing requirements; providing for
15	future expiration; preserving application to certain
16	assessments; providing a limitation on certain
17	assessments; providing for future expiration; preserving
18	application to certain assessments; revising powers and
19	duties of the board; revising membership of an advisory
20	council; requiring the Chief Financial Officer to annually
21	designate the council chair; revising coverage levels and
22	periods of effectiveness under the Temporary Increase in
23	Coverage Limits (TICL) option; creating the Florida
24	Hurricane Protection Program within the Florida Hurricane
25	Catastrophe Fund; providing purposes of the program;
26	providing definitions; requiring the State Board of
27	Administration to adopt a plan of operation for the
28	program; providing plan requirements; providing for rules;
29	specifying coverages to be provided; providing standards;
30	requiring insurer contractual participation; providing
31	contract requirements; specifying powers and duties of the
32	program; specifying duties of participating insurers;
33	providing sanctions for noncompliance; providing
34	limitations on liability; providing requirements for
35	adoption of rates and forms; providing criteria and
36	requirements for calculation of reinsurance needs and
37	optional reinsurance; providing legislative intent;
38	providing responsibilities of the board; providing
39	transition requirements; providing legislative intent;
40	requiring a report; providing requirements for the State
41	Board of Administration to implement the program;
42	providing for review and approval of the program's initial
43	rate plan by the Office of Insurance Regulation; providing
44	for transitional rates and form filings by insurers;
45	amending s. 624.509, F.S.; specifying the applicability of
46	the insurance premium tax to policies issued by the
47	Florida Hurricane Protection Program; requiring the
48	program to make certain payments to the Department of
49	Revenue; amending s. 627.351, F.S.; prohibiting Citizens
50	Property Insurance Corporation from issuing or renewing
51	certain types of policies after a specified date;
52	providing an exception to restrictions on acceptance of
53	certain offers of coverage; requiring the corporation to
54	provide access to specified policy information by
55	insurance agents; requiring the corporation to transfer a
56	specified portion of its surplus to the Florida Hurricane
57	Catastrophe Fund; providing for the use of corporation
58	information technology by the Florida Hurricane Protection
59	Program; transferring ownership of such information
60	technology to the program; amending s. 627.706, F.S.;
61	specifying areas in which certain property insurance
62	policies must include coverage for catastrophic ground
63	cover collapse and in which separate sinkhole coverage
64	must be made available; providing an effective date.
65
66	Be It Enacted by the Legislature of the State of Florida:
67
68	Section 1.  Paragraph (h) is added to subsection (1) of
69	section 215.555, Florida Statutes, paragraphs (b), (c), (d),
70	(l), and (m) of subsection (2), subsection (3), paragraph (a) of
71	subsection (4), paragraphs (a) and (b) of subsection (6),
72	paragraph (b) of subsection (7), subsection (8), and paragraphs
73	(c), (d), (e), (g), and (h) of subsection (17) of that section
74	are amended, and subsection (18) is added to that section, to
75	read:
76	215.555  Florida Hurricane Catastrophe Fund.--
77	(1)  FINDINGS AND PURPOSE.--The Legislature finds and
78	declares as follows:
79	(h)  The Legislature further finds that, as of January 1,
80	2009:
81	1.  More than 15 years of efforts to use state regulatory,
82	financial, and insurance mechanisms to ensure availability and
83	affordability of dependable residential property insurance
84	coverage have not succeeded.
85	2.  The continuing lack of available, affordable coverage
86	creates a substantial burden on the state's economy.
87	3.  The potential inability of the Florida Hurricane
88	Catastrophe Fund, as constituted prior to July 1, 2009, to meet
89	its obligations threatens the solvency of all residential
90	property insurers in the state.
91	4.  Notwithstanding depopulation efforts that have removed
92	numerous policies from Citizens Property Insurance Corporation
93	and its predecessors, the property insurance residual market
94	remains unacceptably large, with approximately 1 million
95	policies in force and a total exposure of approximately $400
96	billion.
97	5.  The unsatisfactory performance of a system intended to
98	provide available, affordable, reliable coverage for residential
99	hurricane losses in the state, together with the state's unique
100	exposure to hurricane losses, supports the conclusion that
101	hurricanes may be an uninsurable peril in all or parts of the
102	state as the concept of insurability is commonly understood.
103	6.  Therefore, a restructured system to protect residential
104	property owners from hurricane losses serves a compelling state
105	interest in maintaining a viable and orderly private sector
106	market for property insurance, as described in paragraph (a),
107	and is a necessary measure to abate a significant threat to the
108	economy of the state.
109	(2)  DEFINITIONS.--As used in this section:
110	(b)  "Covered event" means, with respect to reimbursement
111	contracts, any one storm declared to be a hurricane by the
112	National Hurricane Center, which storm causes insured losses in
113	this state.
114	(c)  "Covered policy" means, with respect to reimbursement
115	contracts, any insurance policy covering residential property in
116	this state, including, but not limited to, any homeowner's,
117	mobile home owner's, farm owner's, condominium association,
118	condominium unit owner's, tenant's, or apartment building
119	policy, or any other policy covering a residential structure or
120	its contents issued by any authorized insurer, including a
121	commercial self-insurance fund holding a certificate of
122	authority issued by the Office of Insurance Regulation under s.
123	624.462, the Citizens Property Insurance Corporation, and any
124	joint underwriting association or similar entity created under
125	law. The term "covered policy" includes any collateral
126	protection insurance policy covering personal residences which
127	protects both the borrower's and the lender's financial
128	interests, in an amount at least equal to the coverage for the
129	dwelling in place under the lapsed homeowner's policy, if such
130	policy can be accurately reported as required in subsection (5).
131	Additionally, covered policies include policies covering the
132	peril of wind removed from the Florida Residential Property and
133	Casualty Joint Underwriting Association or from the Citizens
134	Property Insurance Corporation, created under s. 627.351(6), or
135	from the Florida Windstorm Underwriting Association, created
136	under s. 627.351(2), by an authorized insurer under the terms
137	and conditions of an executed assumption agreement between the
138	authorized insurer and such association or Citizens Property
139	Insurance Corporation. Each assumption agreement between the
140	association and such authorized insurer or Citizens Property
141	Insurance Corporation must be approved by the Office of
142	Insurance Regulation before the effective date of the
143	assumption, and the Office of Insurance Regulation must provide
144	written notification to the board within 15 working days after
145	such approval. "Covered policy" does not include any policy that
146	excludes wind coverage or hurricane coverage or any reinsurance
147	agreement and does not include any policy otherwise meeting this
148	definition which is issued by a surplus lines insurer or a
149	reinsurer. All commercial residential excess policies and all
150	deductible buy-back policies that, based on sound actuarial
151	principles, require individual ratemaking shall be excluded by
152	rule if the actuarial soundness of the fund is not jeopardized.
153	For this purpose, the term "excess policy" means a policy that
154	provides insurance protection for large commercial property
155	risks and that provides a layer of coverage above a primary
156	layer insured by another insurer.
157	(d)  "Losses" means, with respect to reimbursement
158	contracts, direct incurred losses under covered policies, which
159	shall include losses for additional living expenses not to
160	exceed 40 percent of the insured value of a residential
161	structure or its contents and shall exclude loss adjustment
162	expenses. "Losses" does not include losses for fair rental
163	value, loss of rent or rental income, or business interruption
164	losses.
165	(l)  "Estimated claims-paying capacity" means, with respect
166	to reimbursement contracts, the sum of the projected year-end
167	balance of the fund as of December 31 of a contract year, plus
168	any reinsurance purchased by the fund, plus the board's estimate
169	of the board's borrowing capacity.
170	(m)  "Actual claims-paying capacity" means, with respect to
171	reimbursement contracts, the sum of the balance of the fund as
172	of December 31 of a contract year, plus any reinsurance
173	purchased by the fund, plus the amount the board is able to
174	raise through the issuance of revenue bonds under subsection
175	(6).
176	(3)  FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There is
177	created the Florida Hurricane Catastrophe Fund to be
178	administered by the State Board of Administration. Moneys in the
179	fund may not be expended, loaned, or appropriated except to pay
180	obligations of the fund arising out of reimbursement contracts
181	entered into under subsection (4), payment of debt service on
182	revenue bonds issued under subsection (6), costs of the
183	mitigation program under subsection (7), costs of the Florida
184	Hurricane Protection Program under subsection (18), costs of
185	procuring reinsurance, and costs of administration of the fund.
186	The board shall invest the moneys in the fund pursuant to ss.
187	215.44-215.52. Except as otherwise provided in this section,
188	earnings from all investments shall be retained in the fund. The
189	board may employ or contract with such staff and professionals
190	as the board deems necessary for the administration of the fund.
191	The board may adopt such rules as are reasonable and necessary
192	to implement this section and shall specify interest due on any
193	delinquent remittances, which interest may not exceed the fund's
194	rate of return plus 5 percent. Such rules must conform to the
195	Legislature's specific intent in establishing the fund as
196	expressed in subsection (1), must enhance the fund's potential
197	ability to respond to claims for covered events, must contain
198	general provisions so that the rules can be applied with
199	reasonable flexibility so as to accommodate insurers in
200	situations of an unusual nature or where undue hardship may
201	result, except that such flexibility may not in any way impair,
202	override, supersede, or constrain the public purpose of the
203	fund, and must be consistent with sound insurance practices. The
204	board may, by rule, provide for the exemption from subsections
205	(4) and (5) of insurers writing covered policies with less than
206	$10 million in aggregate exposure for covered policies if the
207	exemption does not affect the actuarial soundness of the fund.
208	(4)  REIMBURSEMENT CONTRACTS.--
209	(a)  The board shall enter into a contract with each
210	insurer writing covered policies in this state to provide to the
211	insurer the reimbursement described in paragraphs (b) and (d),
212	in exchange for the reimbursement premium paid into the fund
213	under subsection (5). As a condition of doing business in this
214	state, each such insurer shall enter into such a contract. The
215	contracting requirements of this paragraph expire May 31, 2011.
216	(6)  REVENUE BONDS.--
217	(a)  General provisions.--
218	1.  Upon the occurrence of a hurricane and a determination
219	that the moneys in the fund are or will be insufficient to pay
220	reimbursement at the levels promised in the reimbursement
221	contracts under subsection (4), or upon a determination that the
222	moneys in the fund are or will be insufficient to meet the
223	obligations of the Florida Hurricane Protection Program under
224	subsection (18), the board may take the necessary steps under
225	paragraph (c) or paragraph (d) for the issuance of revenue bonds
226	for the benefit of the fund. The proceeds of such revenue bonds
227	may be used to make reimbursement payments under reimbursement
228	contracts; to refinance or replace previously existing
229	borrowings or financial arrangements; to pay interest on bonds;
230	to fund reserves for the bonds; to pay expenses incident to the
231	issuance or sale of any bond issued under this section,
232	including costs of validating, printing, and delivering the
233	bonds, costs of printing the official statement, costs of
234	publishing notices of sale of the bonds, and related
235	administrative expenses; or for such other purposes related to
236	the financial obligations of the fund as the board may
237	determine. The term of the bonds may not exceed 30 years. The
238	board may pledge or authorize the corporation to pledge all or a
239	portion of all revenues under subsection (5) and under paragraph
240	(b) to secure such revenue bonds and the board may execute such
241	agreements between the board and the issuer of any revenue bonds
242	and providers of other financing arrangements under paragraph
243	(7)(b) as the board deems necessary to evidence, secure,
244	preserve, and protect such pledge. If reimbursement premiums
245	received under subsection (5) or earnings on such premiums are
246	used to pay debt service on revenue bonds, such premiums and
247	earnings shall be used only after the use of the moneys derived
248	from assessments under paragraph (b). The funds, credit,
249	property, or taxing power of the state or political subdivisions
250	of the state shall not be pledged for the payment of such bonds.
251	The board may also enter into agreements under paragraph (c) or
252	paragraph (d) for the purpose of issuing revenue bonds in the
253	absence of a hurricane upon a determination that such action
254	would maximize the ability of the fund to meet future
255	obligations.
256	2.  The Legislature finds and declares that the issuance of
257	bonds under this subsection is for the public purpose of paying
258	the proceeds of the bonds to insurers as required by
259	reimbursement contracts under subsection (4), thereby enabling
260	insurers to pay the claims of policyholders to ensure assure
261	that policyholders are able to pay the cost of construction,
262	reconstruction, repair, and restoration, and other costs
263	associated with damage to property of policyholders of covered
264	policies after the occurrence of a hurricane, and for the public
265	purpose of paying claims of policyholders under subsection (18)
266	to ensure that policyholders are able to pay the costs of
267	construction, reconstruction, repair, and restoration and other
268	costs associated with damage to property after a hurricane.
269	(b)  Emergency assessments.--
270	1.a.  If the board determines that the amount of revenue
271	produced under subsections subsection (5) and (18) is
272	insufficient to fund the obligations, costs, and expenses of the
273	fund and the corporation, including repayment of revenue bonds
274	and that portion of the debt service coverage not met by
275	reimbursement premiums, the board shall direct the Office of
276	Insurance Regulation to levy, by order, an emergency assessment
277	on direct premiums for all property and casualty lines of
278	business in this state, including property and casualty business
279	of surplus lines insurers regulated under part VIII of chapter
280	626, but not including any workers' compensation premiums or
281	medical malpractice premiums. As used in this subsection, the
282	term "property and casualty business" includes all lines of
283	business identified on Form 2, Exhibit of Premiums and Losses,
284	in the annual statement required of authorized insurers by s.
285	624.424 and any rule adopted under this section, except for
286	those lines identified as accident and health insurance and
287	except for policies written under the National Flood Insurance
288	Program. The assessment shall be specified as a percentage of
289	direct written premium and is subject to annual adjustments by
290	the board in order to meet debt obligations. The same percentage
291	shall apply to all policies in lines of business subject to the
292	assessment issued or renewed during the 12-month period
293	beginning on the effective date of the assessment. This sub-
294	subparagraph expires June 1, 2011; however, the expiration of
295	this sub-subparagraph does not affect any assessments levied
296	under this sub-subparagraph prior to that date.
297	b.  Effective June 1, 2011, if the board determines that
298	the amount of revenue produced under subsections (5) and (18),
299	including any appropriated state funds or any federal funding,
300	is insufficient to fund the obligations, costs, and expenses of
301	the fund and the corporation, including repayment of revenue
302	bonds and debt service coverage, the board shall request the
303	Office of Insurance Regulation to levy, and the office shall by
304	order levy, an emergency assessment on direct premiums for all
305	personal lines and commercial lines policies providing property
306	insurance coverage, including policies issued by the Florida
307	Hurricane Protection Program under subsection (18). The
308	assessment shall be specified as a percentage of direct written
309	premium and is subject to annual adjustments by the board in
310	order to meet debt obligations. The same percentage shall apply
311	to all policies issued or renewed during the 12-month period
312	beginning on the effective date of the assessment in all lines
313	of business subject to the assessment.
314	2.a.  A premium is not subject to an annual assessment
315	under this paragraph in excess of 6 percent of premium with
316	respect to obligations arising out of losses attributable to any
317	one contract year, and a premium is not subject to an aggregate
318	annual assessment under this paragraph in excess of 10 percent
319	of premium. This sub-subparagraph expires June 1, 2011; however,
320	the expiration of this sub-subparagraph does not affect any
321	assessments levied under this sub-subparagraph prior to that
322	date.
323	b.  Effective June 1, 2011, the total amount of emergency
324	assessments under this paragraph with respect to a fund deficit
325	incurred in any year may not exceed 10 percent of the statewide
326	total gross written premium for all insurers for personal lines
327	and commercial lines policies providing property insurance
328	coverage, including policies issued by the Florida Hurricane
329	Protection Program under subsection (18), for the prior year.
330	c.  An annual assessment under this paragraph shall
331	continue as long as the revenue bonds issued with respect to
332	which the assessment was imposed are outstanding, including any
333	bonds the proceeds of which were used to refund the revenue
334	bonds, unless adequate provision has been made for the payment
335	of the bonds under the documents authorizing issuance of the
336	bonds.
337	3.  Emergency assessments shall be collected from
338	policyholders. Emergency assessments shall be remitted by
339	insurers as a percentage of direct written premium for the
340	preceding calendar quarter as specified in the order from the
341	Office of Insurance Regulation. The office shall verify the
342	accurate and timely collection and remittance of emergency
343	assessments and shall report the information to the board in a
344	form and at a time specified by the board. Each insurer
345	collecting assessments shall provide the information with
346	respect to premiums and collections as may be required by the
347	office to enable the office to monitor and verify compliance
348	with this paragraph.
349	4.  With respect to assessments of surplus lines premiums,
350	each surplus lines agent shall collect the assessment at the
351	same time as the agent collects the surplus lines tax required
352	by s. 626.932, and the surplus lines agent shall remit the
353	assessment to the Florida Surplus Lines Service Office created
354	by s. 626.921 at the same time as the agent remits the surplus
355	lines tax to the Florida Surplus Lines Service Office. The
356	emergency assessment on each insured procuring coverage and
357	filing under s. 626.938 shall be remitted by the insured to the
358	Florida Surplus Lines Service Office at the time the insured
359	pays the surplus lines tax to the Florida Surplus Lines Service
360	Office. The Florida Surplus Lines Service Office shall remit the
361	collected assessments to the fund or corporation as provided in
362	the order levied by the Office of Insurance Regulation. The
363	Florida Surplus Lines Service Office shall verify the proper
364	application of such emergency assessments and shall assist the
365	board in ensuring the accurate and timely collection and
366	remittance of assessments as required by the board. The Florida
367	Surplus Lines Service Office shall annually calculate the
368	aggregate written premium on property and casualty business,
369	other than workers' compensation and medical malpractice,
370	procured through surplus lines agents and insureds procuring
371	coverage and filing under s. 626.938 and shall report the
372	information to the board in a form and at a time specified by
373	the board.
374	5.  Any assessment authority not used for a particular
375	contract year may be used for a subsequent contract year. If,
376	for a subsequent contract year, the board determines that the
377	amount of revenue produced under subsection (5) is insufficient
378	to fund the obligations, costs, and expenses of the fund and the
379	corporation, including repayment of revenue bonds and that
380	portion of the debt service coverage not met by reimbursement
381	premiums, the board shall direct the Office of Insurance
382	Regulation to levy an emergency assessment up to an amount not
383	exceeding the amount of unused assessment authority from a
384	previous contract year or years, plus an additional 4 percent
385	provided that the assessments in the aggregate do not exceed the
386	limits specified in subparagraph 2. This subparagraph expires
387	June 1, 2011; however, the expiration of this subparagraph does
388	not affect any assessments levied under this subparagraph prior
389	to that date.
390	6.  The assessments otherwise payable to the corporation
391	under this paragraph shall be paid to the fund unless and until
392	the Office of Insurance Regulation and the Florida Surplus Lines
393	Service Office have received from the corporation and the fund a
394	notice, which shall be conclusive and upon which they may rely
395	without further inquiry, that the corporation has issued bonds
396	and the fund has no agreements in effect with local governments
397	under paragraph (c). On or after the date of the notice and
398	until the date the corporation has no bonds outstanding, the
399	fund shall have no right, title, or interest in or to the
400	assessments, except as provided in the fund's agreement with the
401	corporation.
402	7.  Emergency assessments are not premium and are not
403	subject to the premium tax, to the surplus lines tax, to any
404	fees, or to any commissions. An insurer is liable for all
405	assessments that it collects and must treat the failure of an
406	insured to pay an assessment as a failure to pay the premium. An
407	insurer is not liable for uncollectible assessments.
408	8.  When an insurer is required to return an unearned
409	premium, it shall also return any collected assessment
410	attributable to the unearned premium. A credit adjustment to the
411	collected assessment may be made by the insurer with regard to
412	future remittances that are payable to the fund or corporation,
413	but the insurer is not entitled to a refund.
414	9.  When a surplus lines insured or an insured who has
415	procured coverage and filed under s. 626.938 is entitled to the
416	return of an unearned premium, the Florida Surplus Lines Service
417	Office shall provide a credit or refund to the agent or such
418	insured for the collected assessment attributable to the
419	unearned premium prior to remitting the emergency assessment
420	collected to the fund or corporation.
421	10.  The exemption of medical malpractice insurance
422	premiums from emergency assessments under this paragraph is
423	repealed May 31, 2010, and medical malpractice insurance
424	premiums shall be subject to emergency assessments attributable
425	to loss events occurring in the contract years commencing on
426	June 1, 2010.
427	(7)  ADDITIONAL POWERS AND DUTIES.--
428	(b)  In addition to borrowing under subsection (6), the
429	board may also borrow from, or enter into other financing
430	arrangements or borrow from with, any market sources or federal
431	or multistate funding sources at prevailing interest rates for
432	the purpose of ensuring or enhancing the ability of the fund to
433	meet its obligations.
434	(8)  ADVISORY COUNCIL.--
435	(a)  The State Board of Administration shall appoint an
436	advisory council to provide the board and the staff of the fund
437	with technical, scientific, actuarial, and financial advice;
438	information regarding the impact of potential decisions on
439	insurance consumers and property owners subject to assessment;
440	advice on implementing the Florida Hurricane Protection Program
441	under subsection (18); and such other information and advice as
442	the board or fund staff may request a nine-member advisory
443	council that consists of an actuary, a meteorologist, an
444	engineer, a representative of insurers, a representative of
445	insurance agents, a representative of reinsurers, and three
446	consumers who shall also be representatives of other affected
447	professions and industries, to provide the board with
448	information and advice in connection with its duties under this
449	section.
450	(b)  The advisory council shall consist of the following 14
451	members, who shall be appointed by the board, except that the
452	Chief Financial Officer shall appoint the insurance agent
453	members as provided in subparagraph 7.:
454	1.  Two owners of single-family residences, one of which is
455	located in a higher risk coastal area and one of which is
456	located in a lower risk inland area.
457	2.  Two representatives of owners of commercial residential
458	property, one of which is located in a higher risk coastal area
459	and one of which is located in a lower risk inland area.
460	3.  Two representatives of owners of nonresidential
461	commercial properties.
462	4.  One representative of home builders.
463	5.  One actuary.
464	6.  One meteorologist.
465	7.  Two representatives of residential property insurance
466	agents appointed by the Chief Financial Officer. One of the
467	agent representatives must be an independent agent and the other
468	must be an agent who is appointed under chapter 626 to represent
469	an insurer that writes residential policies in this state on a
470	direct basis through appointed agents who are not employees.
471	8.  One representative of residential property insurers.
472	9.  One person with substantial experience in reinsurance.
473	10.  One person with substantial experience in bond
474	finance.
475	(c)  The Chief Financial Officer shall annually designate a
476	member of the advisory council to serve as chair of the council.
477	Members of the advisory council shall serve at the pleasure of
478	the board and are eligible for per diem and travel expenses
479	under s. 112.061.
480	(17)  TEMPORARY INCREASE IN COVERAGE LIMIT OPTIONS.--
481	(c)  Optional coverage.--For the contract year commencing
482	June 1, 2007, and ending May 31, 2008, the contract year
483	commencing June 1, 2008, and ending May 31, 2009, and the
484	contract year commencing June 1, 2009, and ending May 31, 2010,
485	the board shall offer, for each of such years, the optional
486	coverage as provided in this subsection.
487	(d)  Additional definitions.--As used in this subsection,
488	the term:
489	1.  "FHCF" means Florida Hurricane Catastrophe Fund.
490	2.  "FHCF reimbursement premium" means the premium paid by
491	an insurer for its coverage as a mandatory participant in the
492	FHCF, but does not include additional premiums for optional
493	coverages.
494	3.  "Payout multiple" means the number or multiple created
495	by dividing the statutorily defined claims-paying capacity as
496	determined in subparagraph (4)(c)1. by the aggregate
497	reimbursement premiums paid by all insurers estimated or
498	projected as of calendar year-end.
499	4.  "TICL" means the temporary increase in coverage limit.
500	5.  "TICL options" means the temporary increase in coverage
501	options created under this subsection.
502	6.  "TICL insurer" means an insurer that has opted to
503	obtain coverage under the TICL options addendum in addition to
504	the coverage provided to the insurer under its FHCF
505	reimbursement contract.
506	7.  "TICL reimbursement premium" means the premium charged
507	by the fund for coverage provided under the TICL option.
508	8.  "TICL coverage multiple" means the coverage multiple
509	when multiplied by an insurer's FHCF reimbursement premium that
510	defines the temporary increase in coverage limit.
511	9.  "TICL coverage" means the coverage for an insurer's
512	losses above the insurer's statutorily determined claims-paying
513	capacity based on the claims-paying limit in subparagraph
514	(4)(c)1., which an insurer selects as its temporary increase in
515	coverage from the fund under the TICL options selected. A TICL
516	insurer's increased coverage limit options shall be calculated
517	as follows:
518	a.  The board shall calculate and report to each TICL
519	insurer the TICL coverage multiples based on 9 12 options for
520	increasing the insurer's FHCF coverage limit. Each TICL coverage
521	multiple shall be calculated by dividing $1 billion, $2 billion,
522	$3 billion, $4 billion, $5 billion, $6 billion, $7 billion, $8
523	billion, and $9 billion, $10 billion, $11 billion, or $12
524	billion by the total estimated aggregate FHCF reimbursement
525	premiums for the 2007-2008 contract year, the 2008-2009 contract
526	year, and the 2009-2010 contract year.
527	b.  The TICL insurer's increased coverage shall be the FHCF
528	reimbursement premium multiplied by the TICL coverage multiple
529	for the TICL option selected. In order to determine an insurer's
530	total limit of coverage, an insurer shall add its TICL coverage
531	multiple to its payout multiple. The total shall represent a
532	number that, when multiplied by an insurer's FHCF reimbursement
533	premium for a given reimbursement contract year, defines an
534	insurer's total limit of FHCF reimbursement coverage for that
535	reimbursement contract year.
536	10.  "TICL options addendum" means an addendum to the
537	reimbursement contract reflecting the obligations of the fund
538	and insurers selecting an option to increase an insurer's FHCF
539	coverage limit.
540	(e)  TICL options addendum.--
541	1.  The TICL options addendum shall provide for
542	reimbursement of TICL insurers for covered events occurring
543	between June 1, 2007, and May 31, 2008, and between June 1,
544	2008, and May 31, 2009, or between June 1, 2009, and May 31,
545	2010, in exchange for the TICL reimbursement premium paid into
546	the fund under paragraph (f). Any insurer writing covered
547	policies has the option of selecting an increased limit of
548	coverage under the TICL options addendum and shall select such
549	coverage at the time that it executes the FHCF reimbursement
550	contract.
551	2.  The TICL addendum shall contain a promise by the board
552	to reimburse the TICL insurer for 70 45 percent of the TICL
553	coverage based upon the TICL option selected for the insurer's,
554	75 percent, or 90 percent of its losses from each covered event
555	in excess of the insurer's retention, plus 5 percent of the
556	reimbursed losses to cover loss adjustment expenses. The
557	percentage shall be the same as the coverage level selected by
558	the insurer under paragraph (4)(b).
559	3.  The TICL addendum shall provide that reimbursement
560	amounts shall not be reduced by reinsurance paid or payable to
561	the insurer from other sources.
562	4.  The priorities, schedule, and method of reimbursements
563	under the TICL addendum shall be the same as provided under
564	subsection (4).
565	(g)  Effect on claims-paying capacity of the fund.--For the
566	contract term terms commencing June 1, 2007, June 1, 2008, and
567	June 1, 2009, the program created by this subsection shall
568	increase the claims-paying capacity of the fund as provided in
569	subparagraph (4)(c)1. by an amount not to exceed $9 $12 billion
570	and shall depend on the TICL coverage options selected and the
571	number of insurers that select the TICL optional coverage. The
572	additional capacity shall apply only to the additional coverage
573	provided under the TICL options and shall not otherwise affect
574	any insurer's reimbursement from the fund if the insurer chooses
575	not to select the temporary option to increase its limit of
576	coverage under the FHCF.
577	(h)  Increasing the claims-paying capacity of the
578	fund.--For the contract year years commencing June 1, 2007, June
579	1, 2008, and June 1, 2009, the board may increase the claims-
580	paying capacity of the fund as provided in paragraph (g) by an
581	amount not to exceed $4 billion in four $1 billion options and
582	shall depend on the TICL coverage options selected and the
583	number of insurers that select the TICL optional coverage. Each
584	insurer's TICL premium shall be calculated based upon the
585	additional limit of increased coverage that the insurer selects.
586	Such limit is determined by multiplying the TICL multiple
587	associated with one of the four options times the insurer's FHCF
588	reimbursement premium. The reimbursement premium associated with
589	the additional coverage provided in this paragraph shall be
590	determined as specified in subsection (5).
591	(18)  FLORIDA HURRICANE PROTECTION PROGRAM.--
592	(a)  Creation; purpose.--The Florida Hurricane Protection
593	Program is created within the Florida Hurricane Catastrophe
594	Fund. The purpose of the program is to provide residential
595	hurricane insurance coverage for properties throughout the
596	state.
597	(b)  Definitions.--The definitions in subsection (2) apply
598	to the program, except as modified by this paragraph. As used in
599	this subsection:
600	1.  "Actuarially indicated" means an amount determined
601	according to principles of actuarial science to be adequate, but
602	not excessive, in the aggregate, to pay current and future
603	obligations and expenses of the program, including additional
604	amounts if needed to pay debt service on revenue bonds issued
605	under this section and to provide required debt service coverage
606	in excess of the amounts required to pay actual debt service on
607	revenue bonds issued under subsection (6) or to meet the
608	conditions of other financial arrangements entered into as
609	provided by paragraph (7)(b), and determined according to
610	principles of actuarial science to reflect each insured's
611	relative exposure to hurricane losses.
612	2.  "Board" means the State Board of Administration.
613	3.  "Hurricane coverage" means coverage for loss or damage
614	caused by the peril of windstorm during a hurricane. The term
615	includes ensuing damage to the interior of a building, or to
616	property inside a building, directly or indirectly caused by
617	rain, snow, sleet, hail, sand, or dust if the direct force of
618	the windstorm first damages the building, causing an opening
619	through which rain, snow, sleet, hail, sand, or dust enters and
620	causes damage, or caused by the loss of power on or off the
621	covered premises when the loss of power is attributable to the
622	windstorm. The term does not include coverage for loss or damage
623	to residential property caused by flood, storm surge, or rising
624	water. For purposes of this definition:
625	a.  "Windstorm" means wind, wind gusts, hail, rain,
626	tornadoes, or cyclones caused by or resulting from a hurricane
627	which results in direct physical loss or damage to property.
628	b.  "Hurricane" means a storm system that has been declared
629	to be a hurricane by the National Hurricane Center of the
630	National Weather Service. The duration of the hurricane includes
631	the time period, in this state:
632	(I)  Beginning at the time a hurricane warning is issued
633	for any part of this state by the National Hurricane Center of
634	the National Weather Service.
635	(II)  Continuing for the time period during which the
636	hurricane conditions exist anywhere in this state.
637	(III)  Ending 72 hours after the termination of the last
638	hurricane warning issued for any part of this state by the
639	National Hurricane Center of the National Weather Service.
640	4.  "Participating insurer" means an insurer that holds a
641	certificate of authority to write residential property insurance
642	coverage and that administers hurricane coverage on behalf of
643	the program.
644	5.  "Program" means the Florida Hurricane Protection
645	Program created under this subsection.
646	6.  "Reinsurance" includes traditional reinsurance and any
647	other arrangement that transfers risk from the program to
648	another entity.
649	7.  "Residential coverage" includes:
650	a.  Personal lines residential coverage, which consists of
651	the type of coverage provided by homeowner's, mobile home
652	owner's, dwelling, tenant's, condominium unit owner's, and
653	cooperative unit owner's policies and similar policies.
654	b.  Commercial lines residential coverage, which consists
655	of the type of coverage provided by condominium association,
656	cooperative association, and apartment building policies and
657	similar policies, including policies covering the common
658	elements of a homeowners' association.
659	8.  "Underlying policy" means the property insurance policy
660	issued by a participating insurer to provide coverage for perils
661	other than hurricane with respect to a residential property the
662	hurricane coverage of which is provided under a policy issued by
663	the program and administered by the insurer.
664	(c)  Plan of operation; coverage provided; standards;
665	policy forms.--
666	1.  By rule, the board shall adopt a plan of operation for
667	the program. The plan of operation shall specify standards for
668	the program, including, but not limited to, standards relating
669	to underwriting, mitigation discounts, deductibles, cancellation
670	and nonrenewal, and recordkeeping.
671	2.  The plan of operation shall provide the form or forms
672	for the contract between the program and a participating insurer
673	specifying the respective rights and duties of the program and
674	the participating insurer and allowing each insurer to conduct
675	sales, promotion, and other functions related to policy
676	acquisition as the program deems appropriate, in compliance with
677	the applicable provisions of the Insurance Code.
678	3.  The plan of operation shall require the program to
679	adopt appropriate policy forms and issue a policy providing
680	hurricane coverage to each residential risk covered by a
681	participating insurer, except that a policy shall not be issued
682	to a risk that does not meet the underwriting standards adopted
683	under the program. Coverage shall include structure, contents,
684	additional living expenses, emergency debris removal, and
685	temporary repairs after loss, subject to the following
686	limitations and requirements:
687	a.  Except as provided in sub-subparagraph b., the policy
688	shall provide structure coverage with a limit equal to the
689	structure limit, also known as the "Coverage A limit," of the
690	underlying policy and shall provide such limits for other
691	coverage as the program deems appropriate.
692	b.  With respect to a personal lines residential risk with
693	a structure value greater than $2 million, the program shall
694	provide coverage with a structure limit, also known as the
695	"Coverage A limit," of $2 million and such limits for other
696	coverage as the program deems consistent with the $2 million
697	Coverage A limit.
698	c.  The policy shall include a deductible equal to 2
699	percent of the insured value of the structure, also known as the
700	"Coverage A limit," and the program shall make available, at the
701	option of the insured, deductibles equal to 5 percent and 10
702	percent of the insured value of the structure.
703	d.  The plan of operation may specify the maximum coverage
704	limits available to a commercial residential property.
705	e.  Coverage of roofs shall be limited to actual cash
706	value, except the program shall provide insureds with the option
707	of replacement cost coverage for roofs for an appropriate
708	premium that takes into account the design and condition of the
709	roof.
710	f.  No coverage shall be provided for swimming pool
711	enclosures, patio enclosures, patio covers, or awnings.
712	g.  No coverage shall be provided for fences, outbuildings,
713	or other detached structures, except the program shall provide
714	insureds with the option of replacement cost coverage for
715	outbuildings or other permanently affixed detached structures,
716	not including contents, up to an insured value of $100,000, for
717	an appropriate premium.
718	h.  The plan of operation shall specify other optional
719	exclusions that shall be made available to the insured for
720	appropriate premium discounts.
721	i.  Additional living expenses shall be provided only for
722	the period of time in which the structure is uninhabitable, up
723	to a maximum of 12 months.
724	j.  The plan of operation shall specify policy limits for
725	coverage of contents, additional living expenses, emergency
726	debris removal, and temporary repairs after loss.
727	k.  A property is not eligible for coverage under the
728	Florida Hurricane Protection Program unless the property is also
729	covered by a National Flood Insurance Program policy or similar
730	flood insurance coverage if such coverage is available for the
731	property.
732	4.  Except as to matters specifically addressed by this
733	subsection, the program is subject to the provisions of part X
734	of chapter 627.
735	5.  The plan of operation shall require the program to
736	adopt such notices, coverage summaries, and outlines of coverage
737	as are required by law or as the board deems appropriate. The
738	plan of operation shall require the program to provide a notice
739	informing an insured of the duties of the program and the duties
740	of the participating insurer.
741	6.  The plan of operation shall provide standards for
742	applicability of mitigation discounts, credits, and surcharges
743	and shall provide a process for verification of a property's
744	mitigation status.
745	7.  The plan of operation shall provide a reasonable fee
746	schedule for costs and expenses incurred by participating
747	insurers in the sale and administration of coverage under the
748	program, including, but not limited to, policy servicing and
749	loss adjustment expense; shall provide a fee to be paid to
750	insurers for reasonable acquisition costs, but shall not
751	interfere, directly or indirectly, in the setting of agent
752	commissions or other compensation by any participating insurer
753	in compliance with s. 627.062(2)(i); and shall provide for
754	reimbursement of other costs incurred in the administration of
755	coverage under the program.
756	8.  The plan of operation shall authorize the program to
757	enter into agreements with Citizens Property Insurance
758	Corporation under which the corporation provides data processing
759	and other incidental support for the program.
760	(d)  Participating insurers.--
761	1.  As a condition of doing business in this state, each
762	insurer holding a certificate of authority to write residential
763	property insurance shall enter into a contract with the program
764	under which the program agrees to issue a policy providing
765	hurricane coverage to each insured for which the participating
766	insurer provides a policy providing residential property
767	insurance coverage for other perils, except as provided in sub-
768	subparagraph 2.b., and under which the participating insurer
769	agrees to administer the policy as issued by the program,
770	subject to the provisions of this subsection and the plan of
771	operation.
772	2.  The contract shall require the participating insurer
773	to:
774	a.  Collect premiums established pursuant to this
775	subsection for the policy issued by the program using the same
776	billing practices, including payment plans, if any, as the
777	participating insurer uses for the underlying policy, and remit
778	collected premiums to the program on a schedule specified by the
779	program.
780	b.  Apply deductibles, discounts, surcharges, credits, and
781	limits as established by the program.
782	c.  Administer the hurricane coverage under the program
783	policy and provide the program policy to each of its residential
784	property insureds, except to the extent inconsistent with
785	eligibility standards specified in this subsection, program
786	underwriting standards, or the property owner's option to
787	exclude coverage under s. 627.712(2) or (3).
788	d.  Comply with program requirements and standards relating
789	to program policies, including underwriting, cancellation and
790	nonrenewal, and similar matters. The contract shall allow the
791	participating insurer to solicit, sell, promote, or otherwise
792	acquire policyholders and effectuate coverage using its own
793	lawful methodologies, systems, agents, and approach. The
794	contract shall provide that the program, the board, and the
795	office shall not in any way prohibit, restrict, or limit the
796	participating insurer's authority and discretion to appoint,
797	compensate, and contract with agents as the insurer and the
798	agent, in their respective discretion, deem appropriate and
799	feasible, except to the extent that such conduct is specifically
800	prohibited by law.
801	e.  Provide application processing, premium processing,
802	claims processing, and adjusting services in accordance with
803	standards specified in the plan of operation.
804	f.  Provide claims payments to insureds, drawn on an
805	account established and funded by the program for such purpose.
806	3.  A participating insurer has a fiduciary duty to the
807	program to fairly adjust claims and allocate losses between
808	hurricane and nonhurricane perils.
809	4.  The program shall establish an audit process to
810	determine participating insurers' compliance with their
811	fiduciary duties and the requirements of the contract.
812	5.  A participating insurer may make available to its
813	residential property insureds coverage that supplements the
814	hurricane coverage provided by the program, but may not make
815	available to its residential property insureds any coverage that
816	is the same as or similar to the coverage provided by the
817	program.
818	(e)  Noncompliance by participating insurer; liability.--
819	1.  If a participating insurer fails to substantially
820	comply with its obligations under the program contract or
821	breaches its fiduciary duty to the program, the program may
822	require the participating insurer to pay actual damages, require
823	the participating insurer to pay liquidated damages as specified
824	in the program contract, or direct the Office of Insurance
825	Regulation to impose a specified penalty under the Insurance
826	Code.
827	2.  There shall be no liability on the part of, and no
828	cause of action of any nature shall arise against, any
829	participating insurer or its agents or employees, the program or
830	its employees, or members of the board for any action taken by
831	such persons or entities in the performance of their respective
832	duties or responsibilities under this subsection. Such immunity
833	does not apply to:
834	a.  Any persons or entities specified in this subparagraph
835	for any willful tort.
836	b.  The program, a participating insurer, or a
837	participating insurer's producing agents for breach of any
838	written contract or written agreement pertaining to insurance
839	coverage.
840	c.  The program or the fund with respect to issuance or
841	payment of debt.
842	d.  Any participating insurer with respect to any action by
843	the program to enforce a participating insurer's obligations to
844	the program under this subsection.
845	e.  The program in any action for breach of contract or for
846	benefits under a policy issued by the program. In any such
847	action, the program shall be liable to the policyholders and
848	beneficiaries for attorney's fees as provided in s. 627.428.
849	(f)  Ratemaking.--
850	1.  The program shall select an independent consultant to
851	recommend to the board a rate plan for program coverage.
852	2.a.  Program rates must be as close as possible to
853	actuarially indicated rates, taking into account the state's
854	need to restore or maintain affordability of residential
855	property insurance coverage, the program's reinsurance needs as
856	determined under paragraph (g), and the cost of additional
857	reinsurance negotiated under paragraph (g).
858	b.  Except as otherwise specifically provided in this
859	paragraph, rates may not be excessive, inadequate, or unfairly
860	discriminatory within the meaning of s. 627.062, and the rate
861	plan must provide mitigation discounts consistent with the
862	intent of s. 627.0629.
863	c.  In the aggregate, the rates must generate premium
864	revenue equal to or greater than the statewide average annual
865	insured hurricane loss, based on an average of all models
866	currently determined to meet the standards and guidelines of the
867	Florida Commission on Hurricane Loss Projection Methodology,
868	plus expenses.
869	3.  The program shall annually adopt a rate plan pursuant
870	to this paragraph and shall submit the rate plan to the Office
871	of Insurance Regulation for review under s. 627.062. The office
872	shall approve the plan unless the office determines that the
873	plan fails to meet the criteria specified in subparagraph 2. In
874	complying with s. 627.062(2)(i), the office shall not directly
875	or indirectly prohibit, impede, or restrict any participating
876	insurer from compensating duly appointed agents as the
877	participating insurer, in its sole discretion, deems
878	appropriate. A rate plan takes effect on the date specified in
879	the rate plan and remains in effect until the effective date of
880	a subsequently adopted rate plan.
881	(g)  Calculation of reinsurance needs; optional
882	reinsurance.--
883	1.  It is the intent of the Legislature that the program
884	must have for any hurricane season resources sufficient to cover
885	all losses and expenses attributable to a 1-in-100 year seasonal
886	probable maximum loss, relying on a combination of cash, debt,
887	appropriated state funds or federal funding, if any, and
888	reinsurance. Prior to receiving the rate recommendations of the
889	independent consultant under subparagraph (f)1., the board shall
890	adopt an estimate of the program's reinsurance needs. The
891	estimate shall be calculated as follows:
892	a.  The board shall determine a projected cash balance for
893	the upcoming year.
894	b.  The board shall obtain an opinion from a financial
895	advisor regarding the maximum amount of funding the board could
896	reasonably be expected to obtain for hurricane losses in the
897	upcoming year through bonds and other debt instruments and
898	through any available federal funding sources, taking into
899	account both the actual capacity of credit markets to absorb the
900	program's debt offerings and the assessment revenues and other
901	revenues available for debt service.
902	c.  The board shall determine the minimum amount of
903	reinsurance necessary to ensure that, taken together with the
904	amounts calculated under sub-subparagraphs a. and b., the
905	program will be able, for the upcoming hurricane season, to
906	cover all losses and expenses attributable to a 1-in-100 year
907	seasonal probable maximum loss.
908	2.  The program shall annually procure such amounts of
909	reinsurance as are determined to be necessary under the
910	calculation specified in subparagraph 1.
911	3.  In addition to the mandatory procurement of reinsurance
912	under subparagraph 2., the board may also procure reinsurance
913	for the purpose of reducing potential assessments or for the
914	purpose of transferring some or all of the risk of loss in
915	excess of the 1-in-100 year seasonal probable maximum loss.
916	4.  The board may structure its reinsurance arrangements in
917	such layer or layers, in such groupings of risks, and with such
918	percentages of retained liability in a particular layer, as the
919	board deems appropriate.
920	(h)  Transition.--
921	1.  It is the intent of the Legislature that participating
922	insurers continue to provide hurricane coverage to their
923	existing policyholders under policies providing residential
924	property insurance coverage until the first renewal date on or
925	after March 1, 2010, at which time the hurricane coverage shall
926	be provided under a program policy.
927	2.  A participating insurer remains eligible for coverage
928	under subsection (4) during the contract year beginning June 1,
929	2010, to the extent the participating insurer has in force
930	policies defined as covered policies under subsection (2). The
931	premium for such coverage shall be based on the participating
932	insurer's exposure as of June 30, 2010.
933	3.  The replacement of hurricane coverage under a
934	participating insurer's policy providing residential property
935	insurance coverage with hurricane coverage under a program
936	policy does not constitute a cancellation or nonrenewal for
937	purposes of s. 627.4133 or any other purposes under the
938	Insurance Code. With respect to residential property insurance
939	policy renewals taking effect on or after March 1, 2010, and
940	before March 1, 2011, the notice of renewal premium shall
941	include a notice, in a form specified by the board, stating
942	that, as of the policy renewal date, hurricane coverage will be
943	provided under a program policy administered by the insurer and
944	coverage for other perils will be provided under a residential
945	property insurance policy issued by the insurer.
946	(i)  It is the intent of the Legislature that, after the
947	program has sufficient experience providing residential
948	hurricane coverage, coverage under the program be expanded to
949	include commercial nonresidential properties with a structure
950	insured value not exceeding $2 million, contingent upon clear
951	evidence of the feasibility of and need for such expansion.
952	Therefore, no later than December 31, 2012, the State Board of
953	Administration shall provide a report to the President of the
954	Senate and the Speaker of the House of Representatives that
955	analyzes the feasibility of and need for an expansion of the
956	program as described in this paragraph.
957	Section 2.  State Board of Administration; implementation
958	of the Florida Hurricane Protection Program.--
959	(1)  No later than October 1, 2009, the State Board of
960	Administration shall adopt the plan of operation and all forms
961	and rates required to implement the Florida Hurricane Protection
962	Program created by s. 215.555(18), Florida Statutes.
963	(2)  No later than October 1, 2009, the State Board of
964	Administration shall submit the initial rate plan required to
965	implement the Florida Hurricane Protection Program created by s.
966	215.555, Florida Statutes, as amended by this act, to the Office
967	of Insurance Regulation for review and approval. The office
968	shall review the initial rate plan on an expedited basis. The
969	office shall approve the initial rate plan, as originally filed
970	or as subsequently revised by the office, no later than December
971	1, 2009. Annual rate filings subsequent to the initial rate plan
972	shall take effect only after approval by the office.
973	(3)  In order to meet the deadline specified in this
974	section, the board may adopt the plan of operation and forms as
975	emergency rules under s. 120.54(4), Florida Statutes.
976	Notwithstanding the provisions of s. 120.54(4), Florida
977	Statutes, such rules shall remain in effect until they are
978	replaced by permanent rules adopted under s. 120.54(3), Florida
979	Statutes, provided that the board initiates rulemaking under s.
980	120.54(3), Florida Statutes, no later than 30 days after the
981	adoption of the emergency rules.
982	Section 3.  Transitional rate and form filings.--Each
983	insurer holding a certificate of authority to write residential
984	property insurance in this state, including Citizens Property
985	Insurance Corporation, shall, no later than October 1, 2009,
986	file with the Office of Insurance Regulation policy forms or
987	endorsements to reflect the fact that, with respect to policies
988	issued or renewed on or after March 1, 2010, residential
989	hurricane coverage will be provided in a separate policy issued
990	by the Florida Hurricane Protection Program under s.
991	215.555(18), Florida Statutes, and shall make appropriate rate
992	adjustments on a use and file basis under s. 627.062(2)(a)2.,
993	Florida Statutes. Any form or endorsement filed under this
994	section is deemed approved on December 1, 2009, unless
995	specifically disapproved by the office.
996	Section 4.  Subsection (1) of section 624.509, Florida
997	Statutes, is amended to read:
998	624.509  Premium tax; rate and computation.--
999	(1)  In addition to the license taxes provided for in this
1000	chapter, each insurer shall also annually, and on or before
1001	March 1 in each year, except as to wet marine and transportation
1002	insurance taxed under s. 624.510, pay to the Department of
1003	Revenue a tax on insurance premiums, premiums for title
1004	insurance, or assessments, including membership fees and policy
1005	fees and gross deposits received from subscribers to reciprocal
1006	or interinsurance agreements, and on annuity premiums or
1007	considerations, received during the preceding calendar year, the
1008	amounts thereof to be determined as set forth in this section,
1009	to wit:
1010	(a)  An amount equal to 1.75 percent of the gross amount of
1011	such receipts on account of life and health insurance policies
1012	covering persons resident in this state and on account of all
1013	other types of policies and contracts (except annuity policies
1014	or contracts taxable under paragraph (b) and except policies
1015	issued by the Florida Hurricane Protection Program under s.
1016	215.555(18)) covering property, subjects, or risks located,
1017	resident, or to be performed in this state, omitting premiums on
1018	reinsurance accepted, and less return premiums or assessments,
1019	but without deductions:
1020	1.  For reinsurance ceded to other insurers;
1021	2.  For moneys paid upon surrender of policies or
1022	certificates for cash surrender value;
1023	3.  For discounts or refunds for direct or prompt payment
1024	of premiums or assessments; and
1025	4.  On account of dividends of any nature or amount paid
1026	and credited or allowed to holders of insurance policies;
1027	certificates; or surety, indemnity, reciprocal, or
1028	interinsurance contracts or agreements; and
1029	(b)  An amount equal to 1 percent of the gross receipts on
1030	annuity policies or contracts paid by holders thereof in this
1031	state.
1032	(c)  With respect to policies issued by the Florida
1033	Hurricane Protection Program under s. 215.555(18), the program
1034	shall annually pay to the Department of Revenue on or before
1035	March 1 of each year a tax on insurance premiums received during
1036	the preceding calendar year in an amount equal to 1 percent of
1037	the gross amount of receipts on account of such policies,
1038	subject to the deductions and exclusions specified in paragraph
1039	(a).
1040	Section 5.  Paragraphs (ff), (gg), and (hh) are added to
1041	subsection (6) of section 627.351, Florida Statutes, to read:
1042	627.351  Insurance risk apportionment plans.--
1043	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.--
1044	(ff)  Notwithstanding any provision of this subsection or
1045	s. 627.3517:
1046	1.  On or after March 1, 2010, the corporation may not
1047	issue or renew any residential property insurance policy
1048	providing hurricane coverage as defined in s. 215.555(18). This
1049	prohibition does not preclude the corporation from issuing or
1050	renewing policies that provide other residential property
1051	insurance coverages.
1052	2.  The corporation, directly or through the market
1053	assistance plan, shall make information from confidential
1054	underwriting and claims files of policyholders available only to
1055	licensed general lines agents who register with the corporation
1056	to receive such information according to the following
1057	procedures:
1058	a.  No later than August 1, 2009, the corporation shall
1059	make available to licensed general lines agents the registration
1060	procedures to be used to obtain confidential information from
1061	underwriting and claims files for all policies issued by the
1062	corporation providing residential coverage, other than
1063	windstorm-only policies.
1064	b.  No later than September 1, 2009, the corporation shall
1065	establish a secure website to provide licensed general lines
1066	agents registered pursuant to this paragraph with application,
1067	rating information, loss history, mitigation, and policy type
1068	for all policies issued by the corporation providing residential
1069	coverage, other than windstorm-only policies. The registered
1070	licensed general lines agent may use such information to contact
1071	and assist the policyholder in securing residential property
1072	coverage in the voluntary market.
1073	3.  Effective March 1, 2010, the corporation may not issue
1074	or renew a policy providing residential property insurance
1075	coverage if the owner of the property has received an offer of
1076	coverage from a participating insurer as defined in s.
1077	215.555(18), provided the participating insurer has given the
1078	corporation notice of the offer of coverage at least 30 days
1079	prior to the expected renewal date or expected issuance date of
1080	the corporation's policy. Nothing in this subparagraph precludes
1081	a participating insurer from making an offer of coverage to a
1082	property owner who has received an offer of coverage from
1083	another participating insurer.
1084	(gg)  No later than December 31, 2011, the corporation
1085	shall transfer to the Florida Hurricane Catastrophe Fund an
1086	additional capital contribution for the benefit of the Florida
1087	Hurricane Protection Program. The contribution shall consist of
1088	the corporation's surplus as to policyholders, multiplied by a
1089	ratio:
1090	1.  The numerator of which is the total structural insured
1091	value as of March 1, 2011, for risks covered by all policies
1092	issued by the corporation; and
1093	2.  The denominator of which is the total structural
1094	insured value as of March 1, 2010, for risks covered by all
1095	policies issued by the corporation.
1096	(hh)  No later than October 1, 2009, the corporation shall
1097	enter into an agreement with the Florida Hurricane Protection
1098	Program under which the program has the right to use all of the
1099	corporation's information technology related to the high-risk
1100	account, including computer systems, hardware, and software and
1101	other intellectual property, and including licenses to any such
1102	information technology used by the corporation under license. On
1103	March 1, 2011, all such information technology and the licenses
1104	thereto become the property of the program.
1105	Section 6.  Subsection (1) of section 627.706, Florida
1106	Statutes, is amended to read:
1107	627.706  Sinkhole insurance; catastrophic ground cover
1108	collapse; definitions.--
1109	(1)(a)  Every insurer authorized to transact property
1110	insurance in this state shall provide coverage for a
1111	catastrophic ground cover collapse and shall make available, for
1112	an appropriate additional premium, coverage for sinkhole losses
1113	on any structure, including contents of personal property
1114	contained therein, to the extent provided in the form to which
1115	the coverage attaches. A policy for residential property
1116	insurance may include a deductible amount applicable to sinkhole
1117	losses equal to 1 percent, 2 percent, 5 percent, or 10 percent
1118	of the policy dwelling limits, with appropriate premium
1119	discounts offered with each deductible amount.
1120	(b)1.  Effective January 1, 2010, the provisions of this
1121	paragraph apply to residential property insurance coverage of
1122	properties located in counties with a high risk of sinkhole
1123	hazards issued by an admitted insurer or by Citizens Property
1124	Insurance Corporation. High sinkhole hazard counties include
1125	Hernando County, Pasco County, and any other county determined
1126	by the office to have a similarly high likelihood of sinkhole
1127	losses, as compared with the state as a whole, based upon
1128	available scientific, historical, and actuarial evidence.
1129	2.  A homeowner's multiperil insurance policy or dwelling
1130	fire insurance policy subject to this paragraph shall include
1131	coverage for a catastrophic ground cover collapse but shall not
1132	include coverage for sinkhole losses. The insurer shall make
1133	available to the policyholder an endorsement or separate policy
1134	providing sinkhole coverage.
1135	Section 7.  This act shall take effect July 1, 2009.

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