Florida Senate - 2010                             CS for SB 2044
       
       
       
       By the Committee on Banking and Insurance; and Senator Richter
       
       
       
       
       597-02796-10                                          20102044c1
    1                        A bill to be entitled                      
    2         An act relating to property insurance; amending s.
    3         215.555, F.S.; delaying the repeal of a provision
    4         exempting medical malpractice insurance premiums from
    5         emergency assessments to the Hurricane Catastrophe
    6         Fund; delaying the date on and after which medical
    7         malpractice insurance premiums become subject to
    8         emergency assessments; amending s. 624.408, F.S.;
    9         revising the minimum surplus as to policyholders which
   10         must be maintained by certain insurers; authorizing
   11         the Office of Insurance Regulation to reduce the
   12         surplus requirement under specified circumstances;
   13         amending s. 626.9744, F.S.; requiring insurers to use
   14         retail cost quotations or estimates based on current
   15         market prices in determining repair or replacement
   16         cost estimates; amending s. 627.0613, F.S.; requiring
   17         the office of the consumer advocate to objectively
   18         grade insurers annually based on the number of valid
   19         consumer complaints and other measurable and objective
   20         factors; defining the term “valid consumer complaint”;
   21         amending s. 627.062, F.S.; requiring that the office
   22         issue an approval rather than a notice of intent to
   23         approve following its approval of a file and use
   24         filing; prohibiting the Office of Insurance Regulation
   25         from, directly or indirectly, prohibiting an insurer
   26         from paying acquisition costs based on the full amount
   27         of the premium; prohibiting the Office of Insurance
   28         Regulation from, directly or indirectly, impeding the
   29         right of an insurer to acquire policyholders,
   30         advertise or appoint agents, or regulate agent
   31         commissions; authorizing an insurer to make a rate
   32         filing limited to changes in the cost of reinsurance,
   33         the cost of financing products used as a replacement
   34         for reinsurance, or changes in an inflation trend
   35         factor published annually by the Office of Insurance
   36         Regulation; providing that an insurer may use this
   37         provision only if the increase from such filing and
   38         any other rate filing does not exceed 10 percent for
   39         any policyholder in a policy year; deleting provisions
   40         relating to a rate filing for financing products
   41         relating to the Temporary Increase in Coverage Limits;
   42         revising the information that must be included in a
   43         rate filing relating to certain reinsurance or
   44         financing products; deleting a provision that
   45         prohibited an insurer from making certain rate filings
   46         within a certain period of time after a rate increase;
   47         deleting a provision prohibiting an insurer from
   48         filing for a rate increase within 6 months after it
   49         makes certain rate filings; specifying the information
   50         that an insurer must include in a rate filing based on
   51         the change in an inflation trend factor published by
   52         the Office of Insurance Regulation; requiring that the
   53         office annually publish one or more inflation trend
   54         factors; exempting the inflation trend factors from
   55         rulemaking; providing that an insurer is not required
   56         to adopt an inflation trend factor; requiring the
   57         Office of Insurance Regulation to propose a plan for
   58         developing a website, contingent upon an
   59         appropriation, which provides consumers with
   60         information necessary to make an informed decision
   61         when purchasing homeowners’ insurance; requiring that
   62         the Financial Services Commission review the proposed
   63         plan to implement the website; specifying matters that
   64         the Office of Insurance Regulation must consider in
   65         developing the website; deleting obsolete provisions
   66         relating to legislation enacted during the 2003
   67         Special Session D of the Legislature; amending s.
   68         627.0629, F.S.; providing legislative intent that
   69         insurers provide consumers with accurate pricing
   70         signals for alterations in order to minimize losses,
   71         but that mitigation discounts not result in a loss of
   72         income for the insurer; requiring rate filings for
   73         residential property insurance to include actuarially
   74         reasonable debits that provide proper pricing;
   75         providing for an increase in base rates if mitigation
   76         discounts exceed the aggregate reduction in expected
   77         losses; requiring the Office of Insurance Regulation
   78         to reevaluate discounts, debits, credits, and other
   79         rate differentials by a certain date; requiring the
   80         Office of Insurance Regulation, in consultation with
   81         the Department of Financial Services and the
   82         Department of Community Affairs, to develop a method
   83         for insurers to establish debits for certain hurricane
   84         mitigation measures by a certain date; requiring the
   85         Financial Services Commission to adopt rules relating
   86         to such debits by a certain date; deleting a provision
   87         that prohibits an insurer from including an expense or
   88         profit load in the cost of reinsurance to replace the
   89         Temporary Increase in Coverage Limits; amending s.
   90         627.4133, F.S.; authorizing an insurer to cancel
   91         policies after 45 days’ notice if the Office of
   92         Insurance Regulation determines that the cancellation
   93         of policies is necessary to protect the interests of
   94         the public or policyholders; authorizing the Office of
   95         Insurance Regulation to place an insurer under
   96         administrative supervision or appoint a receiver upon
   97         the consent of the insurer under certain
   98         circumstances; amending s. 627.7011, F.S.; authorizing
   99         an insurer to pay the actual cash value for certain
  100         losses, but requiring the insurer to pay the
  101         reservation or holdback when the insured executes a
  102         contract to replace or repair a dwelling or property
  103         or provides a receipt to replace personal property;
  104         amending s. 627.7015, F.S.; requiring the Department
  105         of Financial Services to prepare a statement or
  106         information by rule which must be included in a notice
  107         by an insurer informing claimants of the right to
  108         participate in a mediation program; specifying
  109         documentation that an insurer and insured must provide
  110         to a mediator in a dispute over an estimate to repair
  111         or replace property; requiring the Department of
  112         Financial Services to adopt rules specifying the type
  113         of documentation that must be submitted during a
  114         mediation; defining the term “claim dispute” as it
  115         relates to disputes between an insurer and insured;
  116         amending s. 631.011, F.S.; redefining the term
  117         “affiliate” to include certain entities that retail,
  118         broker, administer, or underwrite insurance policies
  119         on behalf of an insurer; amending s. 631.021, F.S.;
  120         providing that the Circuit Court of Leon County is the
  121         venue for certain actions collateral to a delinquency
  122         proceeding involving an insurer; providing that the
  123         Circuit Court of Leon County has exclusive
  124         jurisdiction to identify funds, assets, and property
  125         belonging to certain entities placed under
  126         receivership; amending s. 631.025, F.S.; specifying
  127         the persons over which the court in a delinquency
  128         proceeding has exclusive jurisdiction; providing an
  129         effective date.
  130  
  131  Be It Enacted by the Legislature of the State of Florida:
  132  
  133         Section 1. Paragraph (b) of subsection (6) of section
  134  215.555, Florida Statutes, is amended to read:
  135         215.555 Florida Hurricane Catastrophe Fund.—
  136         (6) REVENUE BONDS.—
  137         (b) Emergency assessments.—
  138         1. If the board determines that the amount of revenue
  139  produced under subsection (5) is insufficient to fund the
  140  obligations, costs, and expenses of the fund and the
  141  corporation, including repayment of revenue bonds and that
  142  portion of the debt service coverage not met by reimbursement
  143  premiums, the board shall direct the Office of Insurance
  144  Regulation to levy, by order, an emergency assessment on direct
  145  premiums for all property and casualty lines of business in this
  146  state, including property and casualty business of surplus lines
  147  insurers regulated under part VIII of chapter 626, but not
  148  including any workers’ compensation premiums or medical
  149  malpractice premiums. As used in this subsection, the term
  150  “property and casualty business” includes all lines of business
  151  identified on Form 2, Exhibit of Premiums and Losses, in the
  152  annual statement required of authorized insurers by s. 624.424
  153  and any rule adopted under this section, except for those lines
  154  identified as accident and health insurance and except for
  155  policies written under the National Flood Insurance Program. The
  156  assessment shall be specified as a percentage of direct written
  157  premium and is subject to annual adjustments by the board in
  158  order to meet debt obligations. The same percentage shall apply
  159  to all policies in lines of business subject to the assessment
  160  issued or renewed during the 12-month period beginning on the
  161  effective date of the assessment.
  162         2. A premium is not subject to an annual assessment under
  163  this paragraph in excess of 6 percent of premium with respect to
  164  obligations arising out of losses attributable to any one
  165  contract year, and a premium is not subject to an aggregate
  166  annual assessment under this paragraph in excess of 10 percent
  167  of premium. An annual assessment under this paragraph shall
  168  continue as long as the revenue bonds issued with respect to
  169  which the assessment was imposed are outstanding, including any
  170  bonds the proceeds of which were used to refund the revenue
  171  bonds, unless adequate provision has been made for the payment
  172  of the bonds under the documents authorizing issuance of the
  173  bonds.
  174         3. Emergency assessments shall be collected from
  175  policyholders. Emergency assessments shall be remitted by
  176  insurers as a percentage of direct written premium for the
  177  preceding calendar quarter as specified in the order from the
  178  Office of Insurance Regulation. The office shall verify the
  179  accurate and timely collection and remittance of emergency
  180  assessments and shall report the information to the board in a
  181  form and at a time specified by the board. Each insurer
  182  collecting assessments shall provide the information with
  183  respect to premiums and collections as may be required by the
  184  office to enable the office to monitor and verify compliance
  185  with this paragraph.
  186         4. With respect to assessments of surplus lines premiums,
  187  each surplus lines agent shall collect the assessment at the
  188  same time as the agent collects the surplus lines tax required
  189  by s. 626.932, and the surplus lines agent shall remit the
  190  assessment to the Florida Surplus Lines Service Office created
  191  by s. 626.921 at the same time as the agent remits the surplus
  192  lines tax to the Florida Surplus Lines Service Office. The
  193  emergency assessment on each insured procuring coverage and
  194  filing under s. 626.938 shall be remitted by the insured to the
  195  Florida Surplus Lines Service Office at the time the insured
  196  pays the surplus lines tax to the Florida Surplus Lines Service
  197  Office. The Florida Surplus Lines Service Office shall remit the
  198  collected assessments to the fund or corporation as provided in
  199  the order levied by the Office of Insurance Regulation. The
  200  Florida Surplus Lines Service Office shall verify the proper
  201  application of such emergency assessments and shall assist the
  202  board in ensuring the accurate and timely collection and
  203  remittance of assessments as required by the board. The Florida
  204  Surplus Lines Service Office shall annually calculate the
  205  aggregate written premium on property and casualty business,
  206  other than workers’ compensation and medical malpractice,
  207  procured through surplus lines agents and insureds procuring
  208  coverage and filing under s. 626.938 and shall report the
  209  information to the board in a form and at a time specified by
  210  the board.
  211         5. Any assessment authority not used for a particular
  212  contract year may be used for a subsequent contract year. If,
  213  for a subsequent contract year, the board determines that the
  214  amount of revenue produced under subsection (5) is insufficient
  215  to fund the obligations, costs, and expenses of the fund and the
  216  corporation, including repayment of revenue bonds and that
  217  portion of the debt service coverage not met by reimbursement
  218  premiums, the board shall direct the Office of Insurance
  219  Regulation to levy an emergency assessment up to an amount not
  220  exceeding the amount of unused assessment authority from a
  221  previous contract year or years, plus an additional 4 percent
  222  provided that the assessments in the aggregate do not exceed the
  223  limits specified in subparagraph 2.
  224         6. The assessments otherwise payable to the corporation
  225  under this paragraph shall be paid to the fund unless and until
  226  the Office of Insurance Regulation and the Florida Surplus Lines
  227  Service Office have received from the corporation and the fund a
  228  notice, which shall be conclusive and upon which they may rely
  229  without further inquiry, that the corporation has issued bonds
  230  and the fund has no agreements in effect with local governments
  231  under paragraph (c). On or after the date of the notice and
  232  until the date the corporation has no bonds outstanding, the
  233  fund shall have no right, title, or interest in or to the
  234  assessments, except as provided in the fund’s agreement with the
  235  corporation.
  236         7. Emergency assessments are not premium and are not
  237  subject to the premium tax, to the surplus lines tax, to any
  238  fees, or to any commissions. An insurer is liable for all
  239  assessments that it collects and must treat the failure of an
  240  insured to pay an assessment as a failure to pay the premium. An
  241  insurer is not liable for uncollectible assessments.
  242         8. When an insurer is required to return an unearned
  243  premium, it shall also return any collected assessment
  244  attributable to the unearned premium. A credit adjustment to the
  245  collected assessment may be made by the insurer with regard to
  246  future remittances that are payable to the fund or corporation,
  247  but the insurer is not entitled to a refund.
  248         9. When a surplus lines insured or an insured who has
  249  procured coverage and filed under s. 626.938 is entitled to the
  250  return of an unearned premium, the Florida Surplus Lines Service
  251  Office shall provide a credit or refund to the agent or such
  252  insured for the collected assessment attributable to the
  253  unearned premium prior to remitting the emergency assessment
  254  collected to the fund or corporation.
  255         10. The exemption of medical malpractice insurance premiums
  256  from emergency assessments under this paragraph is repealed May
  257  31, 2013 2010, and medical malpractice insurance premiums shall
  258  be subject to emergency assessments attributable to loss events
  259  occurring in the contract years commencing on June 1, 2013 2010.
  260         Section 2. Section 624.408, Florida Statutes, is amended to
  261  read:
  262         624.408 Surplus as to policyholders required; new and
  263  existing insurers.—
  264         (1)(a) To maintain a certificate of authority to transact
  265  any one kind or combinations of kinds of insurance, as defined
  266  in part V of this chapter, an insurer in this state shall at all
  267  times maintain surplus as to policyholders at least not less
  268  than the greater of:
  269         (a)1. Except as provided in paragraphs (e), (f), and (g)
  270  subparagraph 5. and paragraph (b), $1.5 million;
  271         (b)2. For life insurers, 4 percent of the insurer’s total
  272  liabilities;
  273         (c)3. For life and health insurers, 4 percent of the
  274  insurer’s total liabilities plus 6 percent of the insurer’s
  275  liabilities relative to health insurance; or
  276         (d)4. For all insurers other than mortgage guaranty
  277  insurers, life insurers, and life and health insurers, 10
  278  percent of the insurer’s total liabilities.
  279         (e)5. For property and casualty insurers, $4 million,
  280  except property and casualty insurers authorized to underwrite
  281  any line of residential property insurance.
  282         (f)(b) For a residential any property and casualty insurer
  283  not holding a certificate of authority before July 1, 2010 on
  284  December 1, 1993, $15 million. the
  285         (g) For a residential property insurer having a certificate
  286  of authority before July 1, 2010, $5 million until July 1, 2015,
  287  and $15 million after July 1, 2015. The office may reduce this
  288  surplus requirement if the insurer is not writing new business,
  289  has premiums in force of less than $1 million per year in
  290  residential property insurance, or is a mutual insurance
  291  company. following amounts apply instead of the $4 million
  292  required by subparagraph (a)5.:
  293         1.On December 31, 2001, and until December 30, 2002, $3
  294  million.
  295         2.On December 31, 2002, and until December 30, 2003, $3.25
  296  million.
  297         3.On December 31, 2003, and until December 30, 2004, $3.6
  298  million.
  299         4.On December 31, 2004, and thereafter, $4 million.
  300         (2) For purposes of this section, liabilities do shall not
  301  include liabilities required under s. 625.041(4). For purposes
  302  of computing minimum surplus as to policyholders pursuant to s.
  303  625.305(1), liabilities shall include liabilities required under
  304  s. 625.041(4).
  305         (3) This section does not require any No insurer shall be
  306  required under this section to have surplus as to policyholders
  307  greater than $100 million.
  308         (4) A mortgage guaranty insurer shall maintain a minimum
  309  surplus as required by s. 635.042.
  310         Section 3. Section 626.9744, Florida Statutes, is amended
  311  to read:
  312         626.9744 Claim settlement practices relating to property
  313  insurance.—Unless otherwise provided by the policy, if when a
  314  homeowner’s insurance policy provides for the adjustment and
  315  settlement of first-party losses based on repair or replacement
  316  cost, the following requirements apply:
  317         (1) When a loss requires repair or replacement of an item
  318  or part, any physical damage incurred in making such repair or
  319  replacement which is covered and not otherwise excluded by the
  320  policy shall be included in the loss to the extent of any
  321  applicable limits. The insured may not be required to pay for
  322  betterment required by ordinance or code except for the
  323  applicable deductible, unless specifically excluded or limited
  324  by the policy.
  325         (2) When a loss requires replacement of items and the
  326  replaced items do not match in quality, color, or size, the
  327  insurer shall make reasonable repairs or replacement of items in
  328  adjoining areas. In determining the extent of the repairs or
  329  replacement of items in adjoining areas, the insurer may
  330  consider the cost of repairing or replacing the undamaged
  331  portions of the property, the degree of uniformity that can be
  332  achieved without such cost, the remaining useful life of the
  333  undamaged portion, and other relevant factors.
  334         (3) In determining repair or replacement cost estimates,
  335  the insurer shall use only the following:
  336         (a)The retail cost using quotations obtained by the
  337  insurer or insured from licensed contractors or retail
  338  establishments in the local market area; or
  339         (b) Computer software or other databases that produce
  340  estimates based on market prices for products, materials, and
  341  labor in the local geographic region, if the pertinent portions
  342  of the valuation documents generated by a database are provided
  343  by the insurer to the first-party insured upon request.
  344         (4)(3) This section does shall not be construed to make the
  345  insurer a warrantor of the repairs made pursuant to this
  346  section.
  347         (5)(4)Nothing in This section does not shall be construed
  348  to authorize or preclude enforcement of policy provisions
  349  relating to settlement disputes.
  350         Section 4. Section 627.0613, Florida Statutes, is amended
  351  to read:
  352         627.0613 Consumer advocate.—The Chief Financial Officer
  353  must appoint a consumer advocate who must represent the general
  354  public of the state before the department and the office. The
  355  consumer advocate must report directly to the Chief Financial
  356  Officer, but is not otherwise under the authority of the
  357  department or of any employee of the department. The consumer
  358  advocate has such powers as are necessary to carry out the
  359  duties of the office of consumer advocate, including, but not
  360  limited to, the powers to:
  361         (1) Recommend to the department or office, by petition, the
  362  commencement of any proceeding or action; appear in any
  363  proceeding or action before the department or office; or appear
  364  in any proceeding before the Division of Administrative Hearings
  365  relating to subject matter under the jurisdiction of the
  366  department or office.
  367         (2) Have access to and use of all files, records, and data
  368  of the department or office.
  369         (3) Examine rate and form filings submitted to the office,
  370  hire consultants as necessary to aid in the review process, and
  371  recommend to the department or office any position deemed by the
  372  consumer advocate to be in the public interest.
  373         (4) By June 1, 2012, and each June 1 thereafter, prepare an
  374  annual report card for each authorized personal residential
  375  property insurer, on a form and using a letter-grade scale
  376  developed by the commission by rule, which objectively grades
  377  each insurer based on the following factors:
  378         (a) The number and nature of valid consumer complaints, as
  379  a market share ratio, received by the department against the
  380  insurer.
  381         (b) The disposition of all valid consumer complaints
  382  received by the department.
  383         (c) The average length of time for payment of claims by the
  384  insurer.
  385         (d) Any other measurable and objective factors the
  386  commission identifies as capable of assisting policyholders in
  387  making informed choices about homeowner’s insurance.
  388  
  389  For purposes of this subsection, the term “valid consumer
  390  complaint” a means written communication from a consumer which
  391  expresses dissatisfaction with a specific personal residential
  392  property insurer and whose conduct described in the
  393  communication is found to constitute a violation of the
  394  insurance laws of this state by the Division of Consumer
  395  Services of the Department of Financial Services.
  396         (5) Prepare an annual budget for presentation to the
  397  Legislature by the department, which budget must be adequate to
  398  carry out the duties of the office of consumer advocate.
  399         Section 5. Section 627.062, Florida Statutes, is amended to
  400  read:
  401         627.062 Rate standards.—
  402         (1) The rates for all classes of insurance to which the
  403  provisions of this part are applicable shall not be excessive,
  404  inadequate, or unfairly discriminatory.
  405         (2) As to all such classes of insurance:
  406         (a) Insurers or rating organizations shall establish and
  407  use rates, rating schedules, or rating manuals to allow the
  408  insurer a reasonable rate of return on such classes of insurance
  409  written in this state. A copy of rates, rating schedules, rating
  410  manuals, premium credits or discount schedules, and surcharge
  411  schedules, and changes thereto, shall be filed with the office
  412  under one of the following procedures except as provided in
  413  subparagraph 3.:
  414         1. If the filing is made at least 90 days before the
  415  proposed effective date and the filing is not implemented during
  416  the office’s review of the filing and any proceeding and
  417  judicial review, then such filing shall be considered a “file
  418  and use” filing. In such case, the office shall finalize its
  419  review by issuance of an approval a notice of intent to approve
  420  or a notice of intent to disapprove within 90 days after receipt
  421  of the filing. The approval notice of intent to approve and the
  422  notice of intent to disapprove constitute agency action for
  423  purposes of the Administrative Procedure Act. Requests for
  424  supporting information, requests for mathematical or mechanical
  425  corrections, or notification to the insurer by the office of its
  426  preliminary findings shall not toll the 90-day period during any
  427  such proceedings and subsequent judicial review. The rate shall
  428  be deemed approved if the office does not issue an approval a
  429  notice of intent to approve or a notice of intent to disapprove
  430  within 90 days after receipt of the filing.
  431         2. If the filing is not made in accordance with the
  432  provisions of subparagraph 1., such filing shall be made as soon
  433  as practicable, but no later than 30 days after the effective
  434  date, and shall be considered a “use and file” filing. An
  435  insurer making a “use and file” filing is potentially subject to
  436  an order by the office to return to policyholders portions of
  437  rates found to be excessive, as provided in paragraph (h).
  438         3. For all property insurance filings made or submitted
  439  after January 25, 2007, but before December 31, 2012 2010, an
  440  insurer seeking a rate that is greater than the rate most
  441  recently approved by the office shall make a “file and use”
  442  filing. For purposes of this subparagraph, motor vehicle
  443  collision and comprehensive coverages are not considered to be
  444  property coverages.
  445         (b) Upon receiving a rate filing, the office shall review
  446  the rate filing to determine if a rate is excessive, inadequate,
  447  or unfairly discriminatory. In making that determination, the
  448  office shall, in accordance with generally accepted and
  449  reasonable actuarial techniques, consider the following factors:
  450         1. Past and prospective loss experience within and without
  451  this state.
  452         2. Past and prospective expenses.
  453         3. The degree of competition among insurers for the risk
  454  insured.
  455         4. Investment income reasonably expected by the insurer,
  456  consistent with the insurer’s investment practices, from
  457  investable premiums anticipated in the filing, plus any other
  458  expected income from currently invested assets representing the
  459  amount expected on unearned premium reserves and loss reserves.
  460  The commission may adopt rules using reasonable techniques of
  461  actuarial science and economics to specify the manner in which
  462  insurers shall calculate investment income attributable to such
  463  classes of insurance written in this state and the manner in
  464  which such investment income shall be used to calculate
  465  insurance rates. Such manner shall contemplate allowances for an
  466  underwriting profit factor and full consideration of investment
  467  income which produce a reasonable rate of return; however,
  468  investment income from invested surplus may not be considered.
  469         5. The reasonableness of the judgment reflected in the
  470  filing.
  471         6. Dividends, savings, or unabsorbed premium deposits
  472  allowed or returned to Florida policyholders, members, or
  473  subscribers.
  474         7. The adequacy of loss reserves.
  475         8. The cost of reinsurance. The office shall not disapprove
  476  a rate as excessive solely due to the insurer having obtained
  477  catastrophic reinsurance to cover the insurer’s estimated 250
  478  year probable maximum loss or any lower level of loss.
  479         9. Trend factors, including trends in actual losses per
  480  insured unit for the insurer making the filing.
  481         10. Conflagration and catastrophe hazards, if applicable.
  482         11. Projected hurricane losses, if applicable, which must
  483  be estimated using a model or method found to be acceptable or
  484  reliable by the Florida Commission on Hurricane Loss Projection
  485  Methodology, and as further provided in s. 627.0628.
  486         12. A reasonable margin for underwriting profit and
  487  contingencies.
  488         13. The cost of medical services, if applicable.
  489         14. Other relevant factors which impact upon the frequency
  490  or severity of claims or upon expenses.
  491         (c) In the case of fire insurance rates, consideration
  492  shall be given to the availability of water supplies and the
  493  experience of the fire insurance business during a period of not
  494  less than the most recent 5-year period for which such
  495  experience is available.
  496         (d) If conflagration or catastrophe hazards are given
  497  consideration by an insurer in its rates or rating plan,
  498  including surcharges and discounts, the insurer shall establish
  499  a reserve for that portion of the premium allocated to such
  500  hazard and shall maintain the premium in a catastrophe reserve.
  501  Any removal of such premiums from the reserve for purposes other
  502  than paying claims associated with a catastrophe or purchasing
  503  reinsurance for catastrophes shall be subject to approval of the
  504  office. Any ceding commission received by an insurer purchasing
  505  reinsurance for catastrophes shall be placed in the catastrophe
  506  reserve.
  507         (e) After consideration of the rate factors provided in
  508  paragraphs (b), (c), and (d), a rate may be found by the office
  509  to be excessive, inadequate, or unfairly discriminatory based
  510  upon the following standards:
  511         1. Rates shall be deemed excessive if they are likely to
  512  produce a profit from Florida business that is unreasonably high
  513  in relation to the risk involved in the class of business or if
  514  expenses are unreasonably high in relation to services rendered.
  515         2. Rates shall be deemed excessive if, among other things,
  516  the rate structure established by a stock insurance company
  517  provides for replenishment of surpluses from premiums, when the
  518  replenishment is attributable to investment losses.
  519         3. Rates shall be deemed inadequate if they are clearly
  520  insufficient, together with the investment income attributable
  521  to them, to sustain projected losses and expenses in the class
  522  of business to which they apply.
  523         4. A rating plan, including discounts, credits, or
  524  surcharges, shall be deemed unfairly discriminatory if it fails
  525  to clearly and equitably reflect consideration of the
  526  policyholder’s participation in a risk management program
  527  adopted pursuant to s. 627.0625.
  528         5. A rate shall be deemed inadequate as to the premium
  529  charged to a risk or group of risks if discounts or credits are
  530  allowed which exceed a reasonable reflection of expense savings
  531  and reasonably expected loss experience from the risk or group
  532  of risks.
  533         6. A rate shall be deemed unfairly discriminatory as to a
  534  risk or group of risks if the application of premium discounts,
  535  credits, or surcharges among such risks does not bear a
  536  reasonable relationship to the expected loss and expense
  537  experience among the various risks.
  538         (f) In reviewing a rate filing, the office may require the
  539  insurer to provide at the insurer’s expense all information
  540  necessary to evaluate the condition of the company and the
  541  reasonableness of the filing according to the criteria
  542  enumerated in this section.
  543         (g) The office may at any time review a rate, rating
  544  schedule, rating manual, or rate change; the pertinent records
  545  of the insurer; and market conditions. If the office finds on a
  546  preliminary basis that a rate may be excessive, inadequate, or
  547  unfairly discriminatory, the office shall initiate proceedings
  548  to disapprove the rate and shall so notify the insurer. However,
  549  the office may not disapprove as excessive any rate for which it
  550  has given final approval or which has been deemed approved for a
  551  period of 1 year after the effective date of the filing unless
  552  the office finds that a material misrepresentation or material
  553  error was made by the insurer or was contained in the filing.
  554  Upon being so notified, the insurer or rating organization
  555  shall, within 60 days, file with the office all information
  556  which, in the belief of the insurer or organization, proves the
  557  reasonableness, adequacy, and fairness of the rate or rate
  558  change. The office shall issue a notice of intent to approve or
  559  a notice of intent to disapprove pursuant to the procedures of
  560  paragraph (a) within 90 days after receipt of the insurer’s
  561  initial response. In such instances and in any administrative
  562  proceeding relating to the legality of the rate, the insurer or
  563  rating organization shall carry the burden of proof by a
  564  preponderance of the evidence to show that the rate is not
  565  excessive, inadequate, or unfairly discriminatory. After the
  566  office notifies an insurer that a rate may be excessive,
  567  inadequate, or unfairly discriminatory, unless the office
  568  withdraws the notification, the insurer shall not alter the rate
  569  except to conform with the office’s notice until the earlier of
  570  120 days after the date the notification was provided or 180
  571  days after the date of the implementation of the rate. The
  572  office may, subject to chapter 120, disapprove without the 60
  573  day notification any rate increase filed by an insurer within
  574  the prohibited time period or during the time that the legality
  575  of the increased rate is being contested.
  576         (h) If In the event the office finds that a rate or rate
  577  change is excessive, inadequate, or unfairly discriminatory, the
  578  office shall issue an order of disapproval specifying that a new
  579  rate or rate schedule which responds to the findings of the
  580  office be filed by the insurer. The office shall further order,
  581  for any “use and file” filing made in accordance with
  582  subparagraph (a)2., that premiums charged each policyholder
  583  constituting the portion of the rate above that which was
  584  actuarially justified be returned to such policyholder in the
  585  form of a credit or refund. If the office finds that an
  586  insurer’s rate or rate change is inadequate, the new rate or
  587  rate schedule filed with the office in response to such a
  588  finding shall be applicable only to new or renewal business of
  589  the insurer written on or after the effective date of the
  590  responsive filing.
  591         (i)1. Except as otherwise specifically provided in this
  592  chapter, the office shall not, directly or indirectly, prohibit
  593  any insurer, including any residual market plan or joint
  594  underwriting association, from paying acquisition costs based on
  595  the full amount of premium, as defined in s. 627.403, applicable
  596  to any policy, or directly or indirectly prohibit any such
  597  insurer from including the full amount of acquisition costs in a
  598  rate filing.
  599         2. The office shall not, directly or indirectly, impede,
  600  abridge, or otherwise compromise an insurer’s right to acquire
  601  policyholders, advertise, or appoint agents, including the
  602  calculation, manner, or amount of such agent commissions, if
  603  any.
  604         (j) With respect to residential property insurance rate
  605  filings, the rate filing must account for mitigation measures
  606  undertaken by policyholders to reduce hurricane losses.
  607         (k)1.a. An insurer may make a separate filing limited
  608  solely to an adjustment of its rates for reinsurance, the cost
  609  of financing products used as a replacement for reinsurance, or
  610  financing costs incurred in the purchase of reinsurance, and an
  611  inflation trend factor published by the office pursuant to
  612  subparagraph 4. If an insurer chooses to make a separate filing
  613  under this paragraph, it must implement the rate in such a
  614  manner that all rate increases implemented as a result of the
  615  separate filing, together with rate increases associated with
  616  any other rate filing, do or financing products to replace or
  617  finance the payment of the amount covered by the Temporary
  618  Increase in Coverage Limits (TICL) portion of the Florida
  619  Hurricane Catastrophe Fund including replacement reinsurance for
  620  the TICL reductions made pursuant to s. 215.555(17)(e); the
  621  actual cost paid due to the application of the TICL premium
  622  factor pursuant to s. 215.555(17)(f); and the actual cost paid
  623  due to the application of the cash build-up factor pursuant to
  624  s. 215.555(5)(b) if the insurer:
  625         a.Elects to purchase financing products such as a
  626  liquidity instrument or line of credit, in which case the cost
  627  included in the filing for the liquidity instrument or line of
  628  credit may not result in a premium increase exceeding 3 percent
  629  for any individual policyholder. All costs contained in the
  630  filing may not result in an overall premium increase of more
  631  than 10 percent for any individual policyholder, excluding
  632  coverage changes and surcharges, within the same policy year.
  633         b. An insurer that makes a filing relating to reinsurance
  634  or financing products must include the following Includes in the
  635  filing: a copy of all of its reinsurance, liquidity instrument,
  636  or line of credit contracts; proof of the billing or payment for
  637  the contracts; and the calculation upon which the proposed rate
  638  change is based demonstrating demonstrates that the costs meet
  639  the criteria of this section and are not loaded for expenses or
  640  profit for the insurer making the filing.
  641         c. Any filing made pursuant this paragraph may include only
  642  the Includes no other changes to its rates which are expressly
  643  authorized by this paragraph in the filing.
  644         d.Has not implemented a rate increase within the 6 months
  645  immediately preceding the filing.
  646         e.Does not file for a rate increase under any other
  647  paragraph within 6 months after making a filing under this
  648  paragraph.
  649         d.f.An insurer that purchases reinsurance or financing
  650  products from an affiliated company may make a filing pursuant
  651  to in compliance with this paragraph does so only if the costs
  652  for such reinsurance or financing products are charged at or
  653  below charges made for comparable coverage by nonaffiliated
  654  reinsurers or financial entities making such coverage or
  655  financing products available in this state.
  656         e. An insurer that makes a filing as the result of a change
  657  in an inflation trend factor published by the office need
  658  support that filing only with rates and rating examples and an
  659  explanation demonstrating the insurer’s eligibility to adopt the
  660  inflation trend factor.
  661         2. An insurer may only make only one filing in any 12-month
  662  period under this paragraph.
  663         3. An insurer that elects to implement a rate change under
  664  this paragraph must file its rate filing with the office at
  665  least 45 days before the effective date of the rate change.
  666  After an insurer submits a complete filing that meets all of the
  667  requirements of this paragraph, the office has 45 days after the
  668  date of the filing to review the rate filing and determine if
  669  the rate is excessive, inadequate, or unfairly discriminatory.
  670         4.Beginning January 1, 2011, the office shall publish an
  671  annual informational memorandum to establish one or more
  672  inflation trend factors that may be stated separately for
  673  personal and residential property and for building coverage,
  674  contents coverage, additional living expense coverage, and
  675  liability coverage, if applicable. These factors shall represent
  676  an estimate of cost increases or decreases based upon publicly
  677  available relevant data and economic indices that are identified
  678  in the memorandum. Such factors are exempt from the rulemaking
  679  requirements of chapter 120, and insurers are not required to
  680  adopt the factors. The office may publish factors for any line
  681  of insurance, but is required to publish a factor only for
  682  residential property insurance.
  683  
  684  The provisions of this subsection do shall not apply to workers’
  685  compensation and employer’s liability insurance and to motor
  686  vehicle insurance.
  687         (3)(a) For individual risks that are not rated in
  688  accordance with the insurer’s rates, rating schedules, rating
  689  manuals, and underwriting rules filed with the office and which
  690  have been submitted to the insurer for individual rating, the
  691  insurer must maintain documentation on each risk subject to
  692  individual risk rating. The documentation must identify the
  693  named insured and specify the characteristics and classification
  694  of the risk supporting the reason for the risk being
  695  individually risk rated, including any modifications to existing
  696  approved forms to be used on the risk. The insurer must maintain
  697  these records for a period of at least 5 years after the
  698  effective date of the policy.
  699         (b) Individual risk rates and modifications to existing
  700  approved forms are not subject to this part or part II, except
  701  for paragraph (a) and ss. 627.402, 627.403, 627.4035, 627.404,
  702  627.405, 627.406, 627.407, 627.4085, 627.409, 627.4132,
  703  627.4133, 627.415, 627.416, 627.417, 627.419, 627.425, 627.426,
  704  627.4265, 627.427, and 627.428, but are subject to all other
  705  applicable provisions of this code and rules adopted thereunder.
  706         (c) This subsection does not apply to private passenger
  707  motor vehicle insurance.
  708         (4)(a)Contingent on specific appropriations made to
  709  implement this subsection, in order to enhance the ability of
  710  consumers to compare premiums and to increase the accuracy and
  711  usefulness of rate and product comparison information for
  712  homeowners insurance, the office shall develop or contract with
  713  a private entity to develop a comprehensive program for
  714  providing the consumer with all available information necessary
  715  to make an informed purchase of the insurance product that best
  716  serves the needs of the individual.
  717         (b)In developing the comprehensive program, the office
  718  shall rely as much as is practical on information that is
  719  currently available and shall consider:
  720         1.The most efficient means for developing, hosting, and
  721  operating a separate website that consolidates all consumer
  722  information for price comparisons, filed complaints, financial
  723  strength, underwriting, and receivership information and other
  724  data useful to consumers;
  725         2.Whether all admitted insurers should be required to
  726  submit additional information to populate the composite website
  727  and how often such submissions must be made;
  728         3.Whether all admitted insurers should be required to
  729  provide links from the website into each individual insurer’s
  730  website in order to enable consumers to access product rate
  731  information and apply for quotations;
  732         4. Developing a plan to publicize the existence,
  733  availability, and value of the website; and
  734         5.Any other provision that would make relevant homeowners
  735  insurance information more readily available so that consumers
  736  can make informed product comparisons and purchasing decisions.
  737         (c)Before establishing the program or website, the office
  738  shall conduct a cost-benefit analysis to determine the most
  739  effective approach for establishing and operating the program
  740  and website. Based on the results of the analysis, the office
  741  shall submit a proposed implementation plan for review and
  742  approval by the Financial Services Commission. The
  743  implementation plan shall include an estimated timeline for
  744  establishing the program and website; a description of the data
  745  and functionality to be provided by the site, a strategy for
  746  publicizing the website to consumers; a recommended approach for
  747  developing, hosting, and operating the website; and an estimate
  748  of all major nonrecurring and recurring costs required to
  749  establish and operate the website. Upon approval of the plan,
  750  the office may initiate the establishment of the program.
  751         (5)(4) The establishment of any rate, rating
  752  classification, rating plan or schedule, or variation thereof in
  753  violation of part IX of chapter 626 is also in violation of this
  754  section. In order to enhance the ability of consumers to compare
  755  premiums and to increase the accuracy and usefulness of rate
  756  comparison information provided by the office to the public, the
  757  office shall develop a proposed standard rating territory plan
  758  to be used by all authorized property and casualty insurers for
  759  residential property insurance. In adopting the proposed plan,
  760  the office may consider geographical characteristics relevant to
  761  risk, county lines, major roadways, existing rating territories
  762  used by a significant segment of the market, and other relevant
  763  factors. Such plan shall be submitted to the President of the
  764  Senate and the Speaker of the House of Representatives by
  765  January 15, 2006. The plan may not be implemented unless
  766  authorized by further act of the Legislature.
  767         (6)(5) With respect to a rate filing involving coverage of
  768  the type for which the insurer is required to pay a
  769  reimbursement premium to the Florida Hurricane Catastrophe Fund,
  770  the insurer may fully recoup in its property insurance premiums
  771  any reimbursement premiums paid to the Florida Hurricane
  772  Catastrophe Fund, together with reasonable costs of other
  773  reinsurance, but except as otherwise provided in this section,
  774  may not recoup reinsurance costs that duplicate coverage
  775  provided by the Florida Hurricane Catastrophe Fund. An insurer
  776  may not recoup more than 1 year of reimbursement premium at a
  777  time. Any under-recoupment from the prior year may be added to
  778  the following year’s reimbursement premium, and any over
  779  recoupment shall be subtracted from the following year’s
  780  reimbursement premium.
  781         (7)(6)(a) If an insurer requests an administrative hearing
  782  pursuant to s. 120.57 related to a rate filing under this
  783  section, the director of the Division of Administrative Hearings
  784  shall expedite the hearing and assign an administrative law
  785  judge who shall commence the hearing within 30 days after the
  786  receipt of the formal request and shall enter a recommended
  787  order within 30 days after the hearing or within 30 days after
  788  receipt of the hearing transcript by the administrative law
  789  judge, whichever is later. Each party shall be allowed 10 days
  790  in which to submit written exceptions to the recommended order.
  791  The office shall enter a final order within 30 days after the
  792  entry of the recommended order. The provisions of this paragraph
  793  may be waived upon stipulation of all parties.
  794         (b) Upon entry of a final order, the insurer may request a
  795  expedited appellate review pursuant to the Florida Rules of
  796  Appellate Procedure. It is the intent of the Legislature that
  797  the First District Court of Appeal grant an insurer’s request
  798  for an expedited appellate review.
  799         (8)(7)(a) The provisions of this subsection apply only with
  800  respect to rates for medical malpractice insurance and shall
  801  control to the extent of any conflict with other provisions of
  802  this section.
  803         (b) Any portion of a judgment entered or settlement paid as
  804  a result of a statutory or common-law bad faith action and any
  805  portion of a judgment entered which awards punitive damages
  806  against an insurer may not be included in the insurer’s rate
  807  base, and shall not be used to justify a rate or rate change.
  808  Any common-law bad faith action identified as such, any portion
  809  of a settlement entered as a result of a statutory or common-law
  810  action, or any portion of a settlement wherein an insurer agrees
  811  to pay specific punitive damages may not be used to justify a
  812  rate or rate change. The portion of the taxable costs and
  813  attorney’s fees which is identified as being related to the bad
  814  faith and punitive damages in these judgments and settlements
  815  may not be included in the insurer’s rate base and may not be
  816  used utilized to justify a rate or rate change.
  817         (c) Upon reviewing a rate filing and determining whether
  818  the rate is excessive, inadequate, or unfairly discriminatory,
  819  the office shall consider, in accordance with generally accepted
  820  and reasonable actuarial techniques, past and present
  821  prospective loss experience, either using loss experience solely
  822  for this state or giving greater credibility to this state’s
  823  loss data after applying actuarially sound methods of assigning
  824  credibility to such data.
  825         (d) Rates shall be deemed excessive if, among other
  826  standards established by this section, the rate structure
  827  provides for replenishment of reserves or surpluses from
  828  premiums when the replenishment is attributable to investment
  829  losses.
  830         (e) The insurer must apply a discount or surcharge based on
  831  the health care provider’s loss experience or shall establish an
  832  alternative method giving due consideration to the provider’s
  833  loss experience. The insurer must include in the filing a copy
  834  of the surcharge or discount schedule or a description of the
  835  alternative method used, and must provide a copy of such
  836  schedule or description, as approved by the office, to
  837  policyholders at the time of renewal and to prospective
  838  policyholders at the time of application for coverage.
  839         (f) Each medical malpractice insurer must make a rate
  840  filing under this section, sworn to by at least two executive
  841  officers of the insurer, at least once each calendar year.
  842         (8)(a)1.No later than 60 days after the effective date of
  843  medical malpractice legislation enacted during the 2003 Special
  844  Session D of the Florida Legislature, the office shall calculate
  845  a presumed factor that reflects the impact that the changes
  846  contained in such legislation will have on rates for medical
  847  malpractice insurance and shall issue a notice informing all
  848  insurers writing medical malpractice coverage of such presumed
  849  factor. In determining the presumed factor, the office shall use
  850  generally accepted actuarial techniques and standards provided
  851  in this section in determining the expected impact on losses,
  852  expenses, and investment income of the insurer. To the extent
  853  that the operation of a provision of medical malpractice
  854  legislation enacted during the 2003 Special Session D of the
  855  Florida Legislature is stayed pending a constitutional
  856  challenge, the impact of that provision shall not be included in
  857  the calculation of a presumed factor under this subparagraph.
  858         2.No later than 60 days after the office issues its notice
  859  of the presumed rate change factor under subparagraph 1., each
  860  insurer writing medical malpractice coverage in this state shall
  861  submit to the office a rate filing for medical malpractice
  862  insurance, which will take effect no later than January 1, 2004,
  863  and apply retroactively to policies issued or renewed on or
  864  after the effective date of medical malpractice legislation
  865  enacted during the 2003 Special Session D of the Florida
  866  Legislature. Except as authorized under paragraph (b), the
  867  filing shall reflect an overall rate reduction at least as great
  868  as the presumed factor determined under subparagraph 1. With
  869  respect to policies issued on or after the effective date of
  870  such legislation and prior to the effective date of the rate
  871  filing required by this subsection, the office shall order the
  872  insurer to make a refund of the amount that was charged in
  873  excess of the rate that is approved.
  874         (b)Any insurer or rating organization that contends that
  875  the rate provided for in paragraph (a) is excessive, inadequate,
  876  or unfairly discriminatory shall separately state in its filing
  877  the rate it contends is appropriate and shall state with
  878  specificity the factors or data that it contends should be
  879  considered in order to produce such appropriate rate. The
  880  insurer or rating organization shall be permitted to use all of
  881  the generally accepted actuarial techniques provided in this
  882  section in making any filing pursuant to this subsection. The
  883  office shall review each such exception and approve or
  884  disapprove it prior to use. It shall be the insurer’s burden to
  885  actuarially justify any deviations from the rates required to be
  886  filed under paragraph (a). The insurer making a filing under
  887  this paragraph shall include in the filing the expected impact
  888  of medical malpractice legislation enacted during the 2003
  889  Special Session D of the Florida Legislature on losses,
  890  expenses, and rates.
  891         (c)If any provision of medical malpractice legislation
  892  enacted during the 2003 Special Session D of the Florida
  893  Legislature is held invalid by a court of competent
  894  jurisdiction, the office shall permit an adjustment of all
  895  medical malpractice rates filed under this section to reflect
  896  the impact of such holding on such rates so as to ensure that
  897  the rates are not excessive, inadequate, or unfairly
  898  discriminatory.
  899         (d)Rates approved on or before July 1, 2003, for medical
  900  malpractice insurance shall remain in effect until the effective
  901  date of a new rate filing approved under this subsection.
  902         (e)The calculation and notice by the office of the
  903  presumed factor pursuant to paragraph (a) is not an order or
  904  rule that is subject to chapter 120. If the office enters into a
  905  contract with an independent consultant to assist the office in
  906  calculating the presumed factor, such contract shall not be
  907  subject to the competitive solicitation requirements of s.
  908  287.057.
  909         (9)(a) The chief executive officer or chief financial
  910  officer of a property insurer and the chief actuary of a
  911  property insurer must certify under oath and subject to the
  912  penalty of perjury, on a form approved by the commission, the
  913  following information, which must accompany a rate filing:
  914         1. The signing officer and actuary have reviewed the rate
  915  filing;
  916         2. Based on the signing officer’s and actuary’s knowledge,
  917  the rate filing does not contain any untrue statement of a
  918  material fact or omit to state a material fact necessary in
  919  order to make the statements made, in light of the circumstances
  920  under which such statements were made, not misleading;
  921         3. Based on the signing officer’s and actuary’s knowledge,
  922  the information and other factors described in paragraph (2)(b),
  923  including, but not limited to, investment income, fairly present
  924  in all material respects the basis of the rate filing for the
  925  periods presented in the filing; and
  926         4. Based on the signing officer’s and actuary’s knowledge,
  927  the rate filing reflects all premium savings that are reasonably
  928  expected to result from legislative enactments and are in
  929  accordance with generally accepted and reasonable actuarial
  930  techniques.
  931         (b) A signing officer or actuary knowingly making a false
  932  certification under this subsection commits a violation of s.
  933  626.9541(1)(e) and is subject to the penalties under s.
  934  626.9521.
  935         (c) Failure to provide such certification by the officer
  936  and actuary shall result in the rate filing being disapproved
  937  without prejudice to be refiled.
  938         (d) The commission may adopt rules and forms pursuant to
  939  ss. 120.536(1) and 120.54 to administer this subsection.
  940         (10) The burden is on the office to establish that rates
  941  are excessive for personal lines residential coverage with a
  942  dwelling replacement cost of $1 million or more or for a single
  943  condominium unit with a combined dwelling and contents
  944  replacement cost of $1 million or more. Upon request of the
  945  office, the insurer shall provide to the office such loss and
  946  expense information as the office reasonably needs to meet this
  947  burden.
  948         (11) Any interest paid pursuant to s. 627.70131(5) may not
  949  be included in the insurer’s rate base and may not be used to
  950  justify a rate or rate change.
  951         Section 6. Section 627.0629, Florida Statutes, is amended
  952  to read:
  953         627.0629 Residential property insurance; rate filings.—
  954         (1)(a) It is the intent of the Legislature that insurers
  955  must provide the most accurate pricing signals available savings
  956  to encourage consumers to who install or implement windstorm
  957  damage mitigation techniques, alterations, or solutions to their
  958  properties to prevent windstorm losses. It is also the intent of
  959  the Legislature that implementation of mitigation discounts not
  960  result in a loss of income to the insurers granting the
  961  discounts, so that the aggregate of mitigation discounts should
  962  not exceed the aggregate of the expected reduction in loss that
  963  is attributable to the mitigation efforts for which discounts
  964  are granted. A rate filing for residential property insurance
  965  must include actuarially reasonable discounts, credits, debits,
  966  or other rate differentials, or appropriate reductions in
  967  deductibles, which provide the proper pricing for all
  968  properties. The rate filing must take into account the presence
  969  or absence of on which fixtures or construction techniques
  970  demonstrated to reduce the amount of loss in a windstorm have
  971  been installed or implemented. The fixtures or construction
  972  techniques shall include, but not be limited to, fixtures or
  973  construction techniques that which enhance roof strength, roof
  974  covering performance, roof-to-wall strength, wall-to-floor-to
  975  foundation strength, opening protection, and window, door, and
  976  skylight strength. Credits, debits, discounts, or other rate
  977  differentials, or appropriate reductions or increases in
  978  deductibles, which recognize the presence or absence of for
  979  fixtures and construction techniques that which meet the minimum
  980  requirements of the Florida Building Code must be included in
  981  the rate filing. If an insurer demonstrates that the aggregate
  982  of its mitigation discounts results in a reduction to revenue
  983  which exceeds the reduction of the aggregate loss that is
  984  expected to result from the mitigation, that insurer may recover
  985  the lost revenue through an increase in its base rates. All
  986  insurance companies must make a rate filing which includes the
  987  credits, discounts, or other rate differentials or reductions in
  988  deductibles by February 28, 2003. By July 1, 2007, the office
  989  shall reevaluate the discounts, credits, other rate
  990  differentials, and appropriate reductions in deductibles for
  991  fixtures and construction techniques that meet the minimum
  992  requirements of the Florida Building Code, based upon actual
  993  experience or any other loss relativity studies available to the
  994  office. The office shall determine the discounts, credits,
  995  debits, other rate differentials, and appropriate reductions or
  996  increases in deductibles that reflect the full actuarial value
  997  of such revaluation, which may be used by insurers in rate
  998  filings.
  999         (b) By February 1, 2011, the Office of Insurance
 1000  Regulation, in consultation with the Department of Financial
 1001  Services and the Department of Community Affairs, shall develop
 1002  and make publicly available a proposed method for insurers to
 1003  establish discounts, credits, debits, or other rate
 1004  differentials for hurricane mitigation measures which directly
 1005  correlate to the numerical rating assigned to a structure
 1006  pursuant to the uniform home grading scale adopted by the
 1007  Financial Services Commission pursuant to s. 215.55865,
 1008  including any proposed changes to the uniform home grading
 1009  scale. By October 1, 2011, the commission shall adopt rules
 1010  requiring insurers to make rate filings for residential property
 1011  insurance which revise insurers’ discounts, credits, debits, or
 1012  other rate differentials for hurricane mitigation measures so
 1013  that such rate differentials correlate directly to the uniform
 1014  home grading scale. The rules may include such changes to the
 1015  uniform home grading scale as the commission determines are
 1016  necessary, and may specify the minimum required discounts,
 1017  credits, or other rate differentials. Such rate differentials
 1018  must be consistent with generally accepted actuarial principles
 1019  and wind-loss mitigation studies. The rules must shall allow a
 1020  period of at least 2 years after the effective date of the
 1021  revised mitigation discounts, credits, debits, or other rate
 1022  differentials for a property owner to obtain an inspection or
 1023  otherwise qualify for the revised credit or debit, during which
 1024  time the insurer must shall continue to apply the mitigation
 1025  credit or debit that was applied immediately before prior to the
 1026  effective date of the revised credit. Discounts, credits,
 1027  debits, and other rate differentials established for rate
 1028  filings under this paragraph shall supersede, after adoption,
 1029  the discounts, credits, and other rate differentials included in
 1030  rate filings under paragraph (a).
 1031         (2)(a) A rate filing for residential property insurance
 1032  made on or before the implementation of paragraph (b) may
 1033  include rate factors that reflect the manner in which building
 1034  code enforcement in a particular jurisdiction addresses the risk
 1035  of wind damage.; However, such a rate filing must also provide
 1036  for variations from such rate factors on an individual basis
 1037  based on an inspection of a particular structure by a licensed
 1038  home inspector, which inspection may be at the cost of the
 1039  insured.
 1040         (b) A rate filing for residential property insurance made
 1041  more than 150 days after approval by the office of a building
 1042  code rating factor plan submitted by a statewide rating
 1043  organization shall include positive and negative rate factors
 1044  that reflect the manner in which building code enforcement in a
 1045  particular jurisdiction addresses risk of wind damage. The rate
 1046  filing shall include variations from standard rate factors on an
 1047  individual basis based on inspection of a particular structure
 1048  by a licensed home inspector. If an inspection is requested by
 1049  the insured, the insurer may require the insured to pay the
 1050  reasonable cost of the inspection. This paragraph applies to
 1051  structures constructed or renovated after the implementation of
 1052  this paragraph.
 1053         (c) The premium notice shall specify the amount by which
 1054  the rate has been adjusted as a result of this subsection and
 1055  shall also specify the maximum possible positive and negative
 1056  adjustments that are approved for use by the insurer under this
 1057  subsection.
 1058         (3) A rate filing made on or after July 1, 1995, for mobile
 1059  home owner’s insurance must include appropriate discounts,
 1060  credits, or other rate differentials for mobile homes
 1061  constructed to comply with American Society of Civil Engineers
 1062  Standard ANSI/ASCE 7-88, adopted by the United States Department
 1063  of Housing and Urban Development on July 13, 1994, and that also
 1064  comply with all applicable tie-down requirements provided by
 1065  state law.
 1066         (4) The Legislature finds that separate consideration and
 1067  notice of hurricane insurance premiums will assist consumers by
 1068  providing greater assurance that hurricane premiums are lawful
 1069  and by providing more complete information regarding the
 1070  components of property insurance premiums. Effective January 1,
 1071  1997, A rate filing for residential property insurance shall be
 1072  separated into two components, rates for hurricane coverage and
 1073  rates for all other coverages. A premium notice reflecting a
 1074  rate implemented on the basis of such a filing shall separately
 1075  indicate the premium for hurricane coverage and the premium for
 1076  all other coverages.
 1077         (5) In order to provide an appropriate transition period,
 1078  an insurer may, in its sole discretion, implement an approved
 1079  rate filing for residential property insurance over a period of
 1080  years. An insurer electing to phase in its rate filing must
 1081  provide an informational notice to the office setting out its
 1082  schedule for implementation of the phased-in rate filing. An
 1083  insurer may include in its rate the actual cost of private
 1084  market reinsurance that corresponds to available coverage of the
 1085  Temporary Increase in Coverage Limits, TICL, from the Florida
 1086  Hurricane Catastrophe Fund. The insurer may also include the
 1087  cost of reinsurance to replace the TICL reduction implemented
 1088  pursuant to s. 215.555(17)(d)9. However, this cost for
 1089  reinsurance may not include any expense or profit load or result
 1090  in a total annual base rate increase in excess of 10 percent.
 1091         (6) Any rate filing that is based in whole or part on data
 1092  from a computer model may not exceed 15 percent unless there is
 1093  a public hearing.
 1094         (7) An insurer may implement appropriate discounts or other
 1095  rate differentials of up to 10 percent of the annual premium to
 1096  mobile home owners who provide to the insurer evidence of a
 1097  current inspection of tie-downs for the mobile home, certifying
 1098  that the tie-downs have been properly installed and are in good
 1099  condition.
 1100         (8) EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL
 1101  SOUNDNESS.—
 1102         (a) It is the intent of the Legislature to provide a
 1103  program whereby homeowners may obtain an evaluation of the wind
 1104  resistance of their homes with respect to preventing damage from
 1105  hurricanes, together with a recommendation of reasonable steps
 1106  that may be taken to upgrade their homes to better withstand
 1107  hurricane force winds.
 1108         (b) To the extent that funds are provided for this purpose
 1109  in the General Appropriations Act, the Legislature hereby
 1110  authorizes the establishment of a program to be administered by
 1111  the Citizens Property Insurance Corporation for homeowners
 1112  insured in the high-risk account.
 1113         (c) The program shall provide grants to homeowners, for the
 1114  purpose of providing homeowner applicants with funds to conduct
 1115  an evaluation of the integrity of their homes with respect to
 1116  withstanding hurricane force winds, recommendations to retrofit
 1117  the homes to better withstand damage from such winds, and the
 1118  estimated cost to make the recommended retrofits.
 1119         (d) The Department of Community Affairs shall establish by
 1120  rule standards to govern the quality of the evaluation, the
 1121  quality of the recommendations for retrofitting, the eligibility
 1122  of the persons conducting the evaluation, and the selection of
 1123  applicants under the program. In establishing the rule, the
 1124  Department of Community Affairs shall consult with the advisory
 1125  committee to minimize the possibility of fraud or abuse in the
 1126  evaluation and retrofitting process, and to ensure that funds
 1127  spent by homeowners acting on the recommendations achieve
 1128  positive results.
 1129         (e) The Citizens Property Insurance Corporation shall
 1130  identify areas of this state with the greatest wind risk to
 1131  residential properties and recommend annually to the Department
 1132  of Community Affairs priority target areas for such evaluations
 1133  and inclusion with the associated residential construction
 1134  mitigation program.
 1135         (9) A property insurance rate filing that includes any
 1136  adjustments related to premiums paid to the Florida Hurricane
 1137  Catastrophe Fund must include a complete calculation of the
 1138  insurer’s catastrophe load, and the information in the filing
 1139  may not be limited solely to recovery of moneys paid to the
 1140  fund.
 1141         Section 7. Subsection (2) of section 627.4133, Florida
 1142  Statutes, is amended to read:
 1143         627.4133 Notice of cancellation, nonrenewal, or renewal
 1144  premium.—
 1145         (2) With respect to any personal lines or commercial
 1146  residential property insurance policy, including, but not
 1147  limited to, any homeowner’s, mobile home owner’s, farmowner’s,
 1148  condominium association, condominium unit owner’s, apartment
 1149  building, or other policy covering a residential structure or
 1150  its contents:
 1151         (a) The insurer shall give the named insured at least 45
 1152  days’ advance written notice of the renewal premium.
 1153         (b) The insurer shall give the named insured written notice
 1154  of nonrenewal, cancellation, or termination at least 100 days
 1155  before prior to the effective date of the nonrenewal,
 1156  cancellation, or termination. However, the insurer shall give at
 1157  least 100 days’ written notice, or written notice by June 1,
 1158  whichever is earlier, for any nonrenewal, cancellation, or
 1159  termination that would be effective between June 1 and November
 1160  30. The notice must include the reason or reasons for the
 1161  nonrenewal, cancellation, or termination, except that:
 1162         1. The insurer must shall give the named insured written
 1163  notice of nonrenewal, cancellation, or termination at least 180
 1164  days before prior to the effective date of the nonrenewal,
 1165  cancellation, or termination for a named insured whose
 1166  residential structure has been insured by that insurer or an
 1167  affiliated insurer for at least a 5-year period immediately
 1168  prior to the date of the written notice.
 1169         2. When cancellation is for nonpayment of premium, at least
 1170  10 days’ written notice of cancellation accompanied by the
 1171  reason therefor must shall be given. As used in this
 1172  subparagraph, the term “nonpayment of premium” means failure of
 1173  the named insured to discharge when due any of her or his
 1174  obligations in connection with the payment of premiums on a
 1175  policy or any installment of such premium, whether the premium
 1176  is payable directly to the insurer or its agent or indirectly
 1177  under any premium finance plan or extension of credit, or
 1178  failure to maintain membership in an organization if such
 1179  membership is a condition precedent to insurance coverage.
 1180  “Nonpayment of premium” also means the failure of a financial
 1181  institution to honor an insurance applicant’s check after
 1182  delivery to a licensed agent for payment of a premium, even if
 1183  the agent has previously delivered or transferred the premium to
 1184  the insurer. If a dishonored check represents the initial
 1185  premium payment, the contract and all contractual obligations
 1186  are shall be void ab initio unless the nonpayment is cured
 1187  within the earlier of 5 days after actual notice by certified
 1188  mail is received by the applicant or 15 days after notice is
 1189  sent to the applicant by certified mail or registered mail, and
 1190  if the contract is void, any premium received by the insurer
 1191  from a third party must shall be refunded to that party in full.
 1192         3. When such cancellation or termination occurs during the
 1193  first 90 days during which the insurance is in force and the
 1194  insurance is canceled or terminated for reasons other than
 1195  nonpayment of premium, at least 20 days’ written notice of
 1196  cancellation or termination accompanied by the reason therefor
 1197  must shall be given except if where there has been a material
 1198  misstatement or misrepresentation or failure to comply with the
 1199  underwriting requirements established by the insurer.
 1200         4. The requirement for providing written notice of
 1201  nonrenewal by June 1 of any nonrenewal that would be effective
 1202  between June 1 and November 30 does not apply to the following
 1203  situations, but the insurer remains subject to the requirement
 1204  to provide such notice at least 100 days before prior to the
 1205  effective date of nonrenewal:
 1206         a. A policy that is nonrenewed due to a revision in the
 1207  coverage for sinkhole losses and catastrophic ground cover
 1208  collapse pursuant to s. 627.706, as amended by s. 30, chapter
 1209  2007-1, Laws of Florida.
 1210         b. A policy that is nonrenewed by Citizens Property
 1211  Insurance Corporation, pursuant to s. 627.351(6), for a policy
 1212  that has been assumed by an authorized insurer offering
 1213  replacement or renewal coverage to the policyholder.
 1214  
 1215  After the policy has been in effect for 90 days, the policy may
 1216  shall not be canceled by the insurer except if when there has
 1217  been a material misstatement, a nonpayment of premium, a failure
 1218  to comply with underwriting requirements established by the
 1219  insurer within 90 days of the date of effectuation of coverage,
 1220  or a substantial change in the risk covered by the policy or if
 1221  when the cancellation is for all insureds under such policies
 1222  for a given class of insureds. This paragraph does not apply to
 1223  individually rated risks having a policy term of less than 90
 1224  days.
 1225         5.Notwithstanding any other provision of law, an insurer
 1226  may cancel or nonrenew a property insurance policy upon a
 1227  minimum of 45 days notice if the office finds that the early
 1228  cancellation of some or all of the insurer’s policies is
 1229  necessary to protect the best interests of the public or
 1230  policyholders and the office approves the insurer’s plan for
 1231  early cancellation or nonrenewal of some or all of its policies.
 1232  The office may base such a finding upon the financial condition
 1233  of the insurer, lack of adequate reinsurance coverage for
 1234  hurricane risk, or other relevant factors. The office may
 1235  condition its finding on the consent of the insurer to be placed
 1236  in administrative supervision pursuant to s. 624.81 or consent
 1237  to the appointment of a receiver under chapter 631.
 1238         (c) If the insurer fails to provide the notice required by
 1239  this subsection, other than the 10-day notice, the coverage
 1240  provided to the named insured shall remain in effect until the
 1241  effective date of replacement coverage or until the expiration
 1242  of a period of days after the notice is given equal to the
 1243  required notice period, whichever occurs first. The premium for
 1244  the coverage shall remain the same during any such extension
 1245  period except that, in the event of failure to provide notice of
 1246  nonrenewal, if the rate filing then in effect would have
 1247  resulted in a premium reduction, the premium during such
 1248  extension must shall be calculated based on the later rate
 1249  filing.
 1250         (d)1. Upon a declaration of an emergency pursuant to s.
 1251  252.36 and the filing of an order by the Commissioner of
 1252  Insurance Regulation, an insurer may not cancel or nonrenew a
 1253  personal residential or commercial residential property
 1254  insurance policy covering a dwelling or residential property
 1255  located in this state which has been damaged as a result of a
 1256  hurricane or wind loss that is the subject of the declaration of
 1257  emergency for a period of 90 days after the dwelling or
 1258  residential property has been repaired. A structure is deemed to
 1259  be repaired when substantially completed and restored to the
 1260  extent that it is insurable by another authorized insurer that
 1261  is writing policies in this state.
 1262         2. However, an insurer or agent may cancel or nonrenew such
 1263  a policy before prior to the repair of the dwelling or
 1264  residential property:
 1265         a. Upon 10 days’ notice for nonpayment of premium; or
 1266         b. Upon 45 days’ notice:
 1267         (I) For a material misstatement or fraud related to the
 1268  claim;
 1269         (II) If the insurer determines that the insured has
 1270  unreasonably caused a delay in the repair of the dwelling; or
 1271         (III) If the insurer has paid policy limits.
 1272         3. If the insurer elects to nonrenew a policy covering a
 1273  property that has been damaged, the insurer shall provide at
 1274  least 90 days’ notice to the insured that the insurer intends to
 1275  nonrenew the policy 90 days after the dwelling or residential
 1276  property has been repaired. Nothing in this paragraph shall
 1277  prevent the insurer from canceling or nonrenewing the policy 90
 1278  days after the repairs are complete for the same reasons the
 1279  insurer would otherwise have canceled or nonrenewed the policy
 1280  but for the limitations of subparagraph 1. The Financial
 1281  Services Commission may adopt rules, and the Commissioner of
 1282  Insurance Regulation may issue orders, necessary to implement
 1283  this paragraph.
 1284         4. This paragraph shall also applies apply to personal
 1285  residential and commercial residential policies covering
 1286  property that was damaged as the result of Tropical Storm
 1287  Bonnie, Hurricane Charley, Hurricane Frances, Hurricane Ivan, or
 1288  Hurricane Jeanne.
 1289         (e) If any cancellation or nonrenewal of a policy subject
 1290  to this subsection is to take effect during the duration of a
 1291  hurricane as defined in s. 627.4025(2)(c), the effective date of
 1292  such cancellation or nonrenewal is extended until the end of the
 1293  duration of such hurricane. The insurer may collect premium at
 1294  the prior rates or the rates then in effect for the period of
 1295  time for which coverage is extended. This paragraph does not
 1296  apply to any property with respect to which replacement coverage
 1297  has been obtained and which is in effect for a claim occurring
 1298  during the duration of the hurricane.
 1299         Section 8. Section 627.7011, Florida Statutes, is amended
 1300  to read:
 1301         627.7011 Homeowners’ policies; offer of replacement cost
 1302  coverage and law and ordinance coverage.—
 1303         (1) Before Prior to issuing or renewing a homeowner’s
 1304  insurance policy on or after October 1, 2005, or prior to the
 1305  first renewal of a homeowner’s insurance policy on or after
 1306  October 1, 2005, the insurer must offer each of the following:
 1307         (a) A policy or endorsement providing that any loss which
 1308  is repaired or replaced will be adjusted on the basis of
 1309  replacement costs not exceeding policy limits as to the
 1310  dwelling, rather than actual cash value, but not including costs
 1311  necessary to meet applicable laws and ordinances regulating the
 1312  construction, use, or repair of any property or requiring the
 1313  tearing down of any property, including the costs of removing
 1314  debris.
 1315         (b) A policy or endorsement providing that, subject to
 1316  other policy provisions, any loss which is repaired or replaced
 1317  at any location will be adjusted on the basis of replacement
 1318  costs not exceeding policy limits as to the dwelling, rather
 1319  than actual cash value, and also including costs necessary to
 1320  meet applicable laws and ordinances regulating the construction,
 1321  use, or repair of any property or requiring the tearing down of
 1322  any property, including the costs of removing debris.; However,
 1323  such additional costs necessary to meet applicable laws and
 1324  ordinances may be limited to either 25 percent or 50 percent of
 1325  the dwelling limit, as selected by the policyholder, and such
 1326  coverage shall apply only to repairs of the damaged portion of
 1327  the structure unless the total damage to the structure exceeds
 1328  50 percent of the replacement cost of the structure.
 1329  
 1330  An insurer is not required to make the offers required by this
 1331  subsection with respect to the issuance or renewal of a
 1332  homeowner’s policy that contains the provisions specified in
 1333  paragraph (b) for law and ordinance coverage limited to 25
 1334  percent of the dwelling limit, except that the insurer must
 1335  offer the law and ordinance coverage limited to 50 percent of
 1336  the dwelling limit. This subsection does not prohibit the offer
 1337  of a guaranteed replacement cost policy.
 1338         (2) Unless the insurer obtains the policyholder’s written
 1339  refusal of the policies or endorsements specified in subsection
 1340  (1), any policy covering the dwelling is deemed to include the
 1341  law and ordinance coverage limited to 25 percent of the dwelling
 1342  limit. The rejection or selection of alternative coverage shall
 1343  be made on a form approved by the office. The form shall fully
 1344  advise the applicant of the nature of the coverage being
 1345  rejected. If this form is signed by a named insured, it will be
 1346  conclusively presumed that there was an informed, knowing
 1347  rejection of the coverage or election of the alternative
 1348  coverage on behalf of all insureds. Unless the policyholder
 1349  requests in writing the coverage specified in this section, it
 1350  need not be provided in or supplemental to any other policy that
 1351  renews, insures, extends, changes, supersedes, or replaces an
 1352  existing policy when the policyholder has rejected the coverage
 1353  specified in this section or has selected alternative coverage.
 1354  The insurer must provide such policyholder with notice of the
 1355  availability of such coverage in a form approved by the office
 1356  at least once every 3 years. The failure to provide such notice
 1357  constitutes a violation of this code, but does not affect the
 1358  coverage provided under the policy.
 1359         (3)(a)If In the event of a loss occurs for which a
 1360  dwelling or personal property is insured on the basis of
 1361  replacement costs, the insurer initially must shall pay at least
 1362  the actual cash value of the loss, and must pay the replacement
 1363  cost without reservation or holdback of any depreciation in
 1364  value if the insured executes a contract to replace or repair,
 1365  whether or not the insured replaces or repairs the dwelling or
 1366  property. The insurer must explain this process clearly in its
 1367  contract.
 1368         (b) If a loss occurs for which personal property is insured
 1369  on the basis of replacement costs, the insurer may limit its
 1370  initial payment to the greater of the actual cash value or 50
 1371  percent of the replacement cost value and must pay the
 1372  reservation or holdback upon the insured providing a receipt for
 1373  the replaced property. The insurer must explain this process
 1374  clearly in its contract.
 1375         (4) A Any homeowner’s insurance policy issued or renewed on
 1376  or after October 1, 2005, must include in bold type no smaller
 1377  than 18 points the following statement:
 1378  
 1379         “LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
 1380         THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
 1381         CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
 1382         NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
 1383         COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
 1384         DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT.”
 1385  The intent of this subsection is to encourage policyholders to
 1386  purchase sufficient coverage to protect them in case events
 1387  excluded from the standard homeowners policy, such as law and
 1388  ordinance enforcement and flood, combine with covered events to
 1389  produce damage or loss to the insured property. The intent is
 1390  also to encourage policyholders to discuss these issues with
 1391  their insurance agent.
 1392         (5) Nothing in This section does not shall be construed to
 1393  apply to policies not considered to be “homeowners’ policies,”
 1394  as that term is commonly understood in the insurance industry.
 1395  This section specifically does not apply to mobile home
 1396  policies. Nothing in This section does not limit shall be
 1397  construed as limiting the ability of any insurer to reject or
 1398  nonrenew any insured or applicant on the grounds that the
 1399  structure does not meet underwriting criteria applicable to
 1400  replacement cost or law and ordinance policies or for other
 1401  lawful reasons.
 1402         (6) This section does not prohibit an insurer from limiting
 1403  its liability under a policy or endorsement providing that loss
 1404  will be adjusted on the basis of replacement costs to the lesser
 1405  of:
 1406         (a) The limit of liability shown on the policy declarations
 1407  page;
 1408         (b) The reasonable and necessary cost to repair the
 1409  damaged, destroyed, or stolen covered property; or
 1410         (c) The reasonable and necessary cost to replace the
 1411  damaged, destroyed, or stolen covered property.
 1412         (7) This section does not prohibit an insurer from
 1413  exercising its right to repair damaged property in compliance
 1414  with its policy and s. 627.702(7).
 1415         Section 9. Section 627.7015, Florida Statutes, is amended
 1416  to read:
 1417         627.7015 Alternative procedure for resolution of disputed
 1418  property insurance claims.—
 1419         (1) PURPOSE AND SCOPE.—This section sets forth a
 1420  nonadversarial alternative dispute resolution procedure for a
 1421  mediated claim resolution conference prompted by the need for
 1422  effective, fair, and timely handling of property insurance
 1423  claims. There is a particular need for an informal,
 1424  nonthreatening forum for helping parties who elect this
 1425  procedure to resolve their claims disputes because most
 1426  homeowner’s and commercial residential insurance policies
 1427  obligate insureds to participate in a potentially expensive and
 1428  time-consuming adversarial appraisal process before prior to
 1429  litigation. The procedure set forth in this section is designed
 1430  to bring the parties together for a mediated claims settlement
 1431  conference without any of the trappings or drawbacks of an
 1432  adversarial process. Before resorting to these procedures,
 1433  insureds and insurers are encouraged to resolve claims as
 1434  quickly and fairly as possible. This section is available with
 1435  respect to claims under personal lines and commercial
 1436  residential policies for all claimants and insurers prior to
 1437  commencing the appraisal process, or commencing litigation. If
 1438  requested by the insured, participation by legal counsel shall
 1439  be permitted. Mediation under this section is also available to
 1440  litigants referred to the department by a county court or
 1441  circuit court. This section does not apply to commercial
 1442  coverages, to private passenger motor vehicle insurance
 1443  coverages, or to disputes relating to liability coverages in
 1444  policies of property insurance.
 1445         (2) At the time a first-party claim dispute within the
 1446  scope of this section is filed, the insurer shall notify all
 1447  first-party claimants of their right to participate in the
 1448  mediation program under this section. The department shall
 1449  prepare a statement or information relating to the mediation
 1450  program which an insurer must include in the notice. The content
 1451  of the statement or information must be adopted by rule of the
 1452  department consumer information pamphlet for distribution to
 1453  persons participating in mediation under this section.
 1454         (3) The costs of mediation shall be reasonable, and the
 1455  insurer shall bear all of the cost of conducting mediation
 1456  conferences, except as otherwise provided in this section. If an
 1457  insured fails to appear at the conference, the conference shall
 1458  be rescheduled upon the insured’s payment of the costs of a
 1459  rescheduled conference. If the insurer fails to appear at the
 1460  conference, the insurer shall pay the insured’s actual cash
 1461  expenses incurred in attending the conference if the insurer’s
 1462  failure to attend was not due to a good cause acceptable to the
 1463  department. An insurer will be deemed to have failed to appear
 1464  if the insurer’s representative lacks authority to settle the
 1465  full value of the claim. The insurer shall incur an additional
 1466  fee for a rescheduled conference necessitated by the insurer’s
 1467  failure to appear at a scheduled conference. The fees assessed
 1468  by the administrator shall include a charge necessary to defray
 1469  the expenses of the department related to its duties under this
 1470  section and shall be deposited in the Insurance Regulatory Trust
 1471  Fund.
 1472         (4) In a dispute over the cost to replace or repair insured
 1473  property, the insurer and insured shall each provide
 1474  documentation to the mediator which supports his or her estimate
 1475  to repair or replace the property. The documentation must be
 1476  provided before the beginning of the mediation conference. The
 1477  insurer’s documentation must include its reports or other
 1478  evidence relating to the loss and show that the insurer’s
 1479  estimates were created in compliance with s. 626.9744(3). The
 1480  insured must submit quotes obtained from licensed contractors in
 1481  the local market area, retail price quotes for products and
 1482  materials, or other documentation specific to the loss which
 1483  clearly documents the actual cost to repair or replace the
 1484  property.
 1485         (5)(4) The department shall adopt by rule a property
 1486  insurance mediation program to be administered by the department
 1487  or its designee. The department may also adopt special rules
 1488  that which are applicable in cases of an emergency within the
 1489  state. The rules shall be modeled after practices and procedures
 1490  set forth in mediation rules of procedure adopted by the Supreme
 1491  Court. The rules shall provide for:
 1492         (a) Reasonable requirement for processing and scheduling of
 1493  requests for mediation.
 1494         (b) Qualifications of mediators as provided in s. 627.745
 1495  and in the Florida Rules of Certified and Court Appointed
 1496  Mediators, and for such other individuals as are qualified by
 1497  education, training, or experience as the department determines
 1498  to be appropriate.
 1499         (c) Provisions governing who may attend mediation
 1500  conferences.
 1501         (d) Selection of mediators.
 1502         (e) Criteria for the conduct of mediation conferences.
 1503         (f) Right to legal counsel.
 1504         (g) The types of documentation required to be submitted
 1505  during the mediation process.
 1506         (6)(5) All statements made and documents produced at a
 1507  mediation conference shall be deemed to be settlement
 1508  negotiations in anticipation of litigation within the scope of
 1509  s. 90.408. All parties to the mediation must negotiate in good
 1510  faith and must have the authority to immediately settle the
 1511  claim. Mediators are deemed to be agents of the department and
 1512  shall have the immunity from suit provided in s. 44.107.
 1513         (7)(6) Mediation is nonbinding.; However, if a written
 1514  settlement is reached, the insured has 3 business days within
 1515  which the insured may rescind the settlement unless the insured
 1516  has cashed or deposited any check or draft disbursed to the
 1517  insured for the disputed matters as a result of the conference.
 1518  If a settlement agreement is reached and is not rescinded, it
 1519  shall be binding and act as a release of all specific claims
 1520  that were presented in that mediation conference.
 1521         (8)(7) If the insurer fails to comply with subsection (2)
 1522  by failing to notify a first-party claimant of its right to
 1523  participate in the mediation program under this section or if
 1524  the insurer requests the mediation, and the mediation results
 1525  are rejected by either party, the insured may shall not be
 1526  required to submit to or participate in any contractual loss
 1527  appraisal process of the property loss damage as a precondition
 1528  to legal action for breach of contract against the insurer for
 1529  its failure to pay the policyholder’s claims covered by the
 1530  policy.
 1531         (9)(8) The department may designate an entity or person to
 1532  serve as administrator to carry out any of the provisions of
 1533  this section and may take this action by means of a written
 1534  contract or agreement.
 1535         (10)(9)As used in For purposes of this section, the term
 1536  “claim dispute” refers to any dispute between an insurer and an
 1537  insured relating to a material issue of fact other than a
 1538  dispute:
 1539         (a) With respect to which the insurer has a reasonable
 1540  basis to suspect fraud;
 1541         (b) Where, based on agreed-upon facts as to the cause of
 1542  loss, there is no coverage under the policy;
 1543         (c) With respect to which the insurer has a reasonable
 1544  basis to believe that the claimant has intentionally made a
 1545  material misrepresentation of fact which is relevant to the
 1546  claim, and the entire request for payment of a loss has been
 1547  denied on the basis of the material misrepresentation; or
 1548         (d) With respect to which the amount in controversy is less
 1549  than $500, unless the parties agree to mediate a dispute
 1550  involving a lesser amount; or.
 1551         (e)With respect to which the date of loss occurred more
 1552  than 5 years before the request for mediation, unless the
 1553  parties agree to mediate a dispute involving a longer period.
 1554         Section 10. Subsection (1) of section 631.011, Florida
 1555  Statutes, is amended to read:
 1556         631.011 Definitions.—For the purpose of this part, the
 1557  term:
 1558         (1) “Affiliate” means any entity that which exercises
 1559  control over or is controlled by the insurer, directly or
 1560  indirectly through:
 1561         (a) Equity ownership of voting securities;
 1562         (b) Common managerial control; or
 1563         (c) Collusive participation by the management of the
 1564  insurer and affiliate in the management of the insurer or the
 1565  affiliate; or.
 1566         (d)Retailing, brokering, administering, or underwriting
 1567  insurance policies on behalf of the insurer, including, without
 1568  limitation, managing general agents, claims administrators,
 1569  third-party administrators, retail agents, premium finance
 1570  managers, billing services agents, or any other entity of
 1571  similar function and participation in the collection, retention,
 1572  or disbursement of insurance premiums.
 1573         Section 11. Section 631.021, Florida Statutes, is amended
 1574  to read:
 1575         631.021 Jurisdiction of delinquency proceeding; venue;
 1576  change of venue; exclusiveness of remedy; appeal.—
 1577         (1) The circuit court has shall have original jurisdiction
 1578  of any delinquency proceeding under this chapter, and any court
 1579  with jurisdiction is authorized to make all necessary or proper
 1580  orders to carry out the purposes of this chapter. Any
 1581  delinquency proceeding in this chapter is in equity.
 1582         (2) The venue of a delinquency proceeding or summary
 1583  proceeding against a domestic, foreign, or alien insurer is
 1584  shall be in the Circuit Court of Leon County. The Circuit Court
 1585  of Leon County is also the venue for any collateral actions
 1586  against an insurer’s affiliate, including, but not limited to,
 1587  voidable or fraudulent transfers made by an insurer or
 1588  affiliate; actions that constitute a breach of fiduciary duty by
 1589  an officer, director, or agent; or misreporting or
 1590  misrepresenting what is property, funds, or assets of the
 1591  insurer, including premium and unearned commissions.
 1592         (3) A delinquency proceeding pursuant to this chapter
 1593  constitutes the sole and exclusive method of liquidating,
 1594  rehabilitating, reorganizing, or conserving an insurer. A No
 1595  court may not shall entertain a petition for the commencement of
 1596  such a proceeding unless the petition has been filed in the name
 1597  of the state on the relation of the department. The Florida
 1598  Insurance Guaranty Association, Incorporated, the Florida
 1599  Workers’ Compensation Insurance Guaranty Association,
 1600  Incorporated, and the Florida Life and Health Guaranty
 1601  Association, Incorporated, shall be given reasonable written
 1602  notice by the department of all hearings which pertain to an
 1603  adjudication of insolvency of a member insurer.
 1604         (4) An appeal shall lie to the District Court of Appeal,
 1605  First District, from an order granting or refusing
 1606  rehabilitation, liquidation, or conservation and from every
 1607  order in a delinquency proceeding having the character of a
 1608  final order as to the particular portion of the proceeding
 1609  embraced therein.
 1610         (5) A No service of process against the department in its
 1611  capacity as receiver is not shall be effective unless served
 1612  upon a person designated by the receiver and filed with the
 1613  circuit court having jurisdiction over the delinquency
 1614  proceeding. The designated person shall refuse to accept service
 1615  if acceptance would violate a stay against legal proceedings
 1616  involving an insurer that is the subject of delinquency
 1617  proceedings or would violate any orders of the circuit court
 1618  governing a delinquency proceeding. The person denied service
 1619  may petition the circuit court having jurisdiction over the
 1620  delinquency proceeding for relief from the receiver’s refusal to
 1621  accept service. This subsection shall be strictly construed, and
 1622  any purported service on the receiver or the department which
 1623  that is not in accordance with this subsection is shall be null
 1624  and void.
 1625         (6) The domiciliary court acquiring jurisdiction over
 1626  persons subject to this chapter may exercise exclusive
 1627  jurisdiction to the exclusion of all other courts, except as
 1628  limited by the provisions of this chapter. Upon the issuance of
 1629  an order of conservation, rehabilitation, or liquidation, the
 1630  Circuit Court of Leon County shall have exclusive jurisdiction
 1631  with respect to assets or property of any insurer subject to
 1632  such proceedings and claims against said insurer’s assets or
 1633  property. Further, the Circuit Court of Leon County has
 1634  exclusive jurisdiction to determine and identify the funds,
 1635  assets, and property belonging to an entity placed in
 1636  receivership under this chapter. Funds, assets, and property
 1637  under this section include, but are not limited to, premiums,
 1638  unearned commissions or other unearned agent compensation, and
 1639  transfers deemed to be fraudulent or voidable made by an insurer
 1640  or affiliate. This exclusive jurisdiction preempts the
 1641  jurisdiction of federal courts, including bankruptcy courts, if
 1642  the funds, assets, or property of the entity placed in
 1643  receivership under this chapter is disputed or is at issue.
 1644         Section 12. Section 631.025, Florida Statutes, is amended
 1645  to read:
 1646         631.025 Persons subject to this part.—Delinquency
 1647  proceedings authorized by this part may be initiated against any
 1648  insurer, as defined in s. 631.011(15), if the statutory grounds
 1649  are present as to that insurer, and the court may exercise
 1650  exclusive jurisdiction over any affiliate, as defined in s.
 1651  631.011, or any person required to cooperate with the department
 1652  and office pursuant to s. 631.391 and over all persons made
 1653  subject to the court’s jurisdiction by other provisions of law.
 1654  In addition to insurers and affiliates, the court also retains
 1655  exclusive jurisdiction over the following categories of Such
 1656  persons include, but are not limited to:
 1657         (1) A person transacting, or that has transacted, insurance
 1658  business in or from this state and against whom claims arising
 1659  from that business may exist now or in the future.
 1660         (2) A person purporting to transact an insurance business
 1661  in this state and any person who acts as an insurer, transacts
 1662  insurance, or otherwise engages in insurance activities in or
 1663  from this state, with or without a certificate of authority or
 1664  proper authority from the department or office, against whom
 1665  claims arising from that business may exist now or in the
 1666  future.
 1667         (3) An insurer with policyholders resident in this state.
 1668         (4) An affiliate of an insurer that files for bankruptcy
 1669  relief during the 6 months immediately preceding the
 1670  commencement of the affiliated insurer’s delinquency proceedings
 1671  or any time after the affiliated insurer’s delinquency
 1672  proceedings.
 1673         (5)(4) All other persons organized or in the process of
 1674  organizing with the intent to transact an insurance business in
 1675  this state.
 1676         Section 13. This act shall take effect July 1, 2010.