Florida Senate - 2015 CS for CS for SB 1006 By the Committees on Appropriations; and Banking and Insurance; and Senators Flores and Margolis 576-04269-15 20151006c2 1 A bill to be entitled 2 An act relating to operations of the Citizens Property 3 Insurance Corporation; amending s. 627.351, F.S.; 4 specifying that a consumer representative appointed by 5 the Governor to the Citizens Property Insurance 6 Corporation’s board of governors is not prohibited 7 from practicing in a certain profession if required or 8 permitted by law or ordinance; revising the 9 requirements for licensed agents of the corporation; 10 authorizing the use of specified information by 11 certain entities in analyzing risks and prohibiting 12 the use of such information for the direct 13 solicitation of policyholders; requiring the take-out 14 program to be revised for specified purposes; 15 requiring policyholders after a specified date to 16 receive certain information relating to a 17 demonstration of interest to insure by private 18 insurers; requiring the corporation to develop uniform 19 formats for certain information; allowing a 20 policyholder to elect to limit the frequency of 21 solicitations for take-out offers; providing 22 circumstances under which a policyholder whose policy 23 was taken out to be considered a renewal policyholder 24 for certain rate increase purposes; providing an 25 effective date. 26 27 Be It Enacted by the Legislature of the State of Florida: 28 29 Section 1. Paragraphs (c) and (x) of subsection (6) of 30 section 627.351, Florida Statutes, are amended, and paragraph 31 (ii) is added to that subsection, to read: 32 627.351 Insurance risk apportionment plans.— 33 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 34 (c) The corporation’s plan of operation: 35 1. Must provide for adoption of residential property and 36 casualty insurance policy forms and commercial residential and 37 nonresidential property insurance forms, which must be approved 38 by the office before use. The corporation shall adopt the 39 following policy forms: 40 a. Standard personal lines policy forms that are 41 comprehensive multiperil policies providing full coverage of a 42 residential property equivalent to the coverage provided in the 43 private insurance market under an HO-3, HO-4, or HO-6 policy. 44 b. Basic personal lines policy forms that are policies 45 similar to an HO-8 policy or a dwelling fire policy that provide 46 coverage meeting the requirements of the secondary mortgage 47 market, but which is more limited than the coverage under a 48 standard policy. 49 c. Commercial lines residential and nonresidential policy 50 forms that are generally similar to the basic perils of full 51 coverage obtainable for commercial residential structures and 52 commercial nonresidential structures in the admitted voluntary 53 market. 54 d. Personal lines and commercial lines residential property 55 insurance forms that cover the peril of wind only. The forms are 56 applicable only to residential properties located in areas 57 eligible for coverage under the coastal account referred to in 58 sub-subparagraph (b)2.a. 59 e. Commercial lines nonresidential property insurance forms 60 that cover the peril of wind only. The forms are applicable only 61 to nonresidential properties located in areas eligible for 62 coverage under the coastal account referred to in sub 63 subparagraph (b)2.a. 64 f. The corporation may adopt variations of the policy forms 65 listed in sub-subparagraphs a.-e. which contain more restrictive 66 coverage. 67 g. Effective January 1, 2013, the corporation shall offer a 68 basic personal lines policy similar to an HO-8 policy with 69 dwelling repair based on common construction materials and 70 methods. 71 2. Must provide that the corporation adopt a program in 72 which the corporation and authorized insurers enter into quota 73 share primary insurance agreements for hurricane coverage, as 74 defined in s. 627.4025(2)(a), for eligible risks, and adopt 75 property insurance forms for eligible risks which cover the 76 peril of wind only. 77 a. As used in this subsection, the term: 78 (I) “Quota share primary insurance” means an arrangement in 79 which the primary hurricane coverage of an eligible risk is 80 provided in specified percentages by the corporation and an 81 authorized insurer. The corporation and authorized insurer are 82 each solely responsible for a specified percentage of hurricane 83 coverage of an eligible risk as set forth in a quota share 84 primary insurance agreement between the corporation and an 85 authorized insurer and the insurance contract. The 86 responsibility of the corporation or authorized insurer to pay 87 its specified percentage of hurricane losses of an eligible 88 risk, as set forth in the agreement, may not be altered by the 89 inability of the other party to pay its specified percentage of 90 losses. Eligible risks that are provided hurricane coverage 91 through a quota share primary insurance arrangement must be 92 provided policy forms that set forth the obligations of the 93 corporation and authorized insurer under the arrangement, 94 clearly specify the percentages of quota share primary insurance 95 provided by the corporation and authorized insurer, and 96 conspicuously and clearly state that the authorized insurer and 97 the corporation may not be held responsible beyond their 98 specified percentage of coverage of hurricane losses. 99 (II) “Eligible risks” means personal lines residential and 100 commercial lines residential risks that meet the underwriting 101 criteria of the corporation and are located in areas that were 102 eligible for coverage by the Florida Windstorm Underwriting 103 Association on January 1, 2002. 104 b. The corporation may enter into quota share primary 105 insurance agreements with authorized insurers at corporation 106 coverage levels of 90 percent and 50 percent. 107 c. If the corporation determines that additional coverage 108 levels are necessary to maximize participation in quota share 109 primary insurance agreements by authorized insurers, the 110 corporation may establish additional coverage levels. However, 111 the corporation’s quota share primary insurance coverage level 112 may not exceed 90 percent. 113 d. Any quota share primary insurance agreement entered into 114 between an authorized insurer and the corporation must provide 115 for a uniform specified percentage of coverage of hurricane 116 losses, by county or territory as set forth by the corporation 117 board, for all eligible risks of the authorized insurer covered 118 under the agreement. 119 e. Any quota share primary insurance agreement entered into 120 between an authorized insurer and the corporation is subject to 121 review and approval by the office. However, such agreement shall 122 be authorized only as to insurance contracts entered into 123 between an authorized insurer and an insured who is already 124 insured by the corporation for wind coverage. 125 f. For all eligible risks covered under quota share primary 126 insurance agreements, the exposure and coverage levels for both 127 the corporation and authorized insurers shall be reported by the 128 corporation to the Florida Hurricane Catastrophe Fund. For all 129 policies of eligible risks covered under such agreements, the 130 corporation and the authorized insurer must maintain complete 131 and accurate records for the purpose of exposure and loss 132 reimbursement audits as required by fund rules. The corporation 133 and the authorized insurer shall each maintain duplicate copies 134 of policy declaration pages and supporting claims documents. 135 g. The corporation board shall establish in its plan of 136 operation standards for quota share agreements which ensure that 137 there is no discriminatory application among insurers as to the 138 terms of the agreements, pricing of the agreements, incentive 139 provisions if any, and consideration paid for servicing policies 140 or adjusting claims. 141 h. The quota share primary insurance agreement between the 142 corporation and an authorized insurer must set forth the 143 specific terms under which coverage is provided, including, but 144 not limited to, the sale and servicing of policies issued under 145 the agreement by the insurance agent of the authorized insurer 146 producing the business, the reporting of information concerning 147 eligible risks, the payment of premium to the corporation, and 148 arrangements for the adjustment and payment of hurricane claims 149 incurred on eligible risks by the claims adjuster and personnel 150 of the authorized insurer. Entering into a quota sharing 151 insurance agreement between the corporation and an authorized 152 insurer is voluntary and at the discretion of the authorized 153 insurer. 154 3. May provide that the corporation may employ or otherwise 155 contract with individuals or other entities to provide 156 administrative or professional services that may be appropriate 157 to effectuate the plan. The corporation may borrow funds by 158 issuing bonds or by incurring other indebtedness, and shall have 159 other powers reasonably necessary to effectuate the requirements 160 of this subsection, including, without limitation, the power to 161 issue bonds and incur other indebtedness in order to refinance 162 outstanding bonds or other indebtedness. The corporation may 163 seek judicial validation of its bonds or other indebtedness 164 under chapter 75. The corporation may issue bonds or incur other 165 indebtedness, or have bonds issued on its behalf by a unit of 166 local government pursuant to subparagraph (q)2. in the absence 167 of a hurricane or other weather-related event, upon a 168 determination by the corporation, subject to approval by the 169 office, that such action would enable it to efficiently meet the 170 financial obligations of the corporation and that such 171 financings are reasonably necessary to effectuate the 172 requirements of this subsection. The corporation may take all 173 actions needed to facilitate tax-free status for such bonds or 174 indebtedness, including formation of trusts or other affiliated 175 entities. The corporation may pledge assessments, projected 176 recoveries from the Florida Hurricane Catastrophe Fund, other 177 reinsurance recoverables, policyholder surcharges and other 178 surcharges, and other funds available to the corporation as 179 security for bonds or other indebtedness. In recognition of s. 180 10, Art. I of the State Constitution, prohibiting the impairment 181 of obligations of contracts, it is the intent of the Legislature 182 that no action be taken whose purpose is to impair any bond 183 indenture or financing agreement or any revenue source committed 184 by contract to such bond or other indebtedness. 185 4. Must require that the corporation operate subject to the 186 supervision and approval of a board of governors consisting of 187 nine individuals who are residents of this state and who are 188 from different geographical areas of the state, one of whom is 189 appointed by the Governor and serves solely to advocate on 190 behalf of the consumer. The appointment of a consumer 191 representative by the Governor is deemed to be within the scope 192 of the exemption provided in s. 112.313(7)(b) and is in addition 193 to the appointments authorized under sub-subparagraph a. 194 a. The Governor, the Chief Financial Officer, the President 195 of the Senate, and the Speaker of the House of Representatives 196 shall each appoint two members of the board. At least one of the 197 two members appointed by each appointing officer must have 198 demonstrated expertise in insurance and be deemed to be within 199 the scope of the exemption provided in s. 112.313(7)(b). The 200 Chief Financial Officer shall designate one of the appointees as 201 chair. All board members serve at the pleasure of the appointing 202 officer. All members of the board are subject to removal at will 203 by the officers who appointed them. All board members, including 204 the chair, must be appointed to serve for 3-year terms beginning 205 annually on a date designated by the plan. However, for the 206 first term beginning on or after July 1, 2009, each appointing 207 officer shall appoint one member of the board for a 2-year term 208 and one member for a 3-year term. A board vacancy shall be 209 filled for the unexpired term by the appointing officer. The 210 Chief Financial Officer shall appoint a technical advisory group 211 to provide information and advice to the board in connection 212 with the board’s duties under this subsection. The executive 213 director and senior managers of the corporation shall be engaged 214 by the board and serve at the pleasure of the board. Any 215 executive director appointed on or after July 1, 2006, is 216 subject to confirmation by the Senate. The executive director is 217 responsible for employing other staff as the corporation may 218 require, subject to review and concurrence by the board. 219 b. The board shall create a Market Accountability Advisory 220 Committee to assist the corporation in developing awareness of 221 its rates and its customer and agent service levels in 222 relationship to the voluntary market insurers writing similar 223 coverage. 224 (I) The members of the advisory committee consist of the 225 following 11 persons, one of whom must be elected chair by the 226 members of the committee: four representatives, one appointed by 227 the Florida Association of Insurance Agents, one by the Florida 228 Association of Insurance and Financial Advisors, one by the 229 Professional Insurance Agents of Florida, and one by the Latin 230 American Association of Insurance Agencies; three 231 representatives appointed by the insurers with the three highest 232 voluntary market share of residential property insurance 233 business in the state; one representative from the Office of 234 Insurance Regulation; one consumer appointed by the board who is 235 insured by the corporation at the time of appointment to the 236 committee; one representative appointed by the Florida 237 Association of Realtors; and one representative appointed by the 238 Florida Bankers Association. All members shall be appointed to 239 3-year terms and may serve for consecutive terms. 240 (II) The committee shall report to the corporation at each 241 board meeting on insurance market issues which may include rates 242 and rate competition with the voluntary market; service, 243 including policy issuance, claims processing, and general 244 responsiveness to policyholders, applicants, and agents; and 245 matters relating to depopulation. 246 5. Must provide a procedure for determining the eligibility 247 of a risk for coverage, as follows: 248 a. Subject to s. 627.3517, with respect to personal lines 249 residential risks, if the risk is offered coverage from an 250 authorized insurer at the insurer’s approved rate under a 251 standard policy including wind coverage or, if consistent with 252 the insurer’s underwriting rules as filed with the office, a 253 basic policy including wind coverage, for a new application to 254 the corporation for coverage, the risk is not eligible for any 255 policy issued by the corporation unless the premium for coverage 256 from the authorized insurer is more than 15 percent greater than 257 the premium for comparable coverage from the corporation. 258 Whenever an offer of coverage for a personal lines residential 259 risk is received for a policyholder of the corporation at 260 renewal from an authorized insurer, if the offer is equal to or 261 less than the corporation’s renewal premium for comparable 262 coverage, the risk is not eligible for coverage with the 263 corporation. If the risk is not able to obtain such offer, the 264 risk is eligible for a standard policy including wind coverage 265 or a basic policy including wind coverage issued by the 266 corporation; however, if the risk could not be insured under a 267 standard policy including wind coverage regardless of market 268 conditions, the risk is eligible for a basic policy including 269 wind coverage unless rejected under subparagraph 8. However, a 270 policyholder removed from the corporation through an assumption 271 agreement remains eligible for coverage from the corporation 272 until the end of the assumption period. The corporation shall 273 determine the type of policy to be provided on the basis of 274 objective standards specified in the underwriting manual and 275 based on generally accepted underwriting practices. 276 (I) If the risk accepts an offer of coverage through the 277 market assistance plan or through a mechanism established by the 278 corporation other than a plan established by s. 627.3518, before 279 a policy is issued to the risk by the corporation or during the 280 first 30 days of coverage by the corporation, and the producing 281 agent who submitted the application to the plan or to the 282 corporation is not currently appointed by the insurer, the 283 insurer shall: 284 (A) Pay to the producing agent of record of the policy for 285 the first year, an amount that is the greater of the insurer’s 286 usual and customary commission for the type of policy written or 287 a fee equal to the usual and customary commission of the 288 corporation; or 289 (B) Offer to allow the producing agent of record of the 290 policy to continue servicing the policy for at least 1 year and 291 offer to pay the agent the greater of the insurer’s or the 292 corporation’s usual and customary commission for the type of 293 policy written. 294 295 If the producing agent is unwilling or unable to accept 296 appointment, the new insurer shall pay the agent in accordance 297 with sub-sub-sub-subparagraph (A). 298 (II) If the corporation enters into a contractual agreement 299 for a take-out plan, the producing agent of record of the 300 corporation policy is entitled to retain any unearned commission 301 on the policy, and the insurer shall: 302 (A) Pay to the producing agent of record, for the first 303 year, an amount that is the greater of the insurer’s usual and 304 customary commission for the type of policy written or a fee 305 equal to the usual and customary commission of the corporation; 306 or 307 (B) Offer to allow the producing agent of record to 308 continue servicing the policy for at least 1 year and offer to 309 pay the agent the greater of the insurer’s or the corporation’s 310 usual and customary commission for the type of policy written. 311 312 If the producing agent is unwilling or unable to accept 313 appointment, the new insurer shall pay the agent in accordance 314 with sub-sub-sub-subparagraph (A). 315 b. With respect to commercial lines residential risks, for 316 a new application to the corporation for coverage, if the risk 317 is offered coverage under a policy including wind coverage from 318 an authorized insurer at its approved rate, the risk is not 319 eligible for a policy issued by the corporation unless the 320 premium for coverage from the authorized insurer is more than 15 321 percent greater than the premium for comparable coverage from 322 the corporation. Whenever an offer of coverage for a commercial 323 lines residential risk is received for a policyholder of the 324 corporation at renewal from an authorized insurer, if the offer 325 is equal to or less than the corporation’s renewal premium for 326 comparable coverage, the risk is not eligible for coverage with 327 the corporation. If the risk is not able to obtain any such 328 offer, the risk is eligible for a policy including wind coverage 329 issued by the corporation. However, a policyholder removed from 330 the corporation through an assumption agreement remains eligible 331 for coverage from the corporation until the end of the 332 assumption period. 333 (I) If the risk accepts an offer of coverage through the 334 market assistance plan or through a mechanism established by the 335 corporation other than a plan established by s. 627.3518, before 336 a policy is issued to the risk by the corporation or during the 337 first 30 days of coverage by the corporation, and the producing 338 agent who submitted the application to the plan or the 339 corporation is not currently appointed by the insurer, the 340 insurer shall: 341 (A) Pay to the producing agent of record of the policy, for 342 the first year, an amount that is the greater of the insurer’s 343 usual and customary commission for the type of policy written or 344 a fee equal to the usual and customary commission of the 345 corporation; or 346 (B) Offer to allow the producing agent of record of the 347 policy to continue servicing the policy for at least 1 year and 348 offer to pay the agent the greater of the insurer’s or the 349 corporation’s usual and customary commission for the type of 350 policy written. 351 352 If the producing agent is unwilling or unable to accept 353 appointment, the new insurer shall pay the agent in accordance 354 with sub-sub-sub-subparagraph (A). 355 (II) If the corporation enters into a contractual agreement 356 for a take-out plan, the producing agent of record of the 357 corporation policy is entitled to retain any unearned commission 358 on the policy, and the insurer shall: 359 (A) Pay to the producing agent of record, for the first 360 year, an amount that is the greater of the insurer’s usual and 361 customary commission for the type of policy written or a fee 362 equal to the usual and customary commission of the corporation; 363 or 364 (B) Offer to allow the producing agent of record to 365 continue servicing the policy for at least 1 year and offer to 366 pay the agent the greater of the insurer’s or the corporation’s 367 usual and customary commission for the type of policy written. 368 369 If the producing agent is unwilling or unable to accept 370 appointment, the new insurer shall pay the agent in accordance 371 with sub-sub-sub-subparagraph (A). 372 c. For purposes of determining comparable coverage under 373 sub-subparagraphs a. and b., the comparison must be based on 374 those forms and coverages that are reasonably comparable. The 375 corporation may rely on a determination of comparable coverage 376 and premium made by the producing agent who submits the 377 application to the corporation, made in the agent’s capacity as 378 the corporation’s agent. A comparison may be made solely of the 379 premium with respect to the main building or structure only on 380 the following basis: the same coverage A or other building 381 limits; the same percentage hurricane deductible that applies on 382 an annual basis or that applies to each hurricane for commercial 383 residential property; the same percentage of ordinance and law 384 coverage, if the same limit is offered by both the corporation 385 and the authorized insurer; the same mitigation credits, to the 386 extent the same types of credits are offered both by the 387 corporation and the authorized insurer; the same method for loss 388 payment, such as replacement cost or actual cash value, if the 389 same method is offered both by the corporation and the 390 authorized insurer in accordance with underwriting rules; and 391 any other form or coverage that is reasonably comparable as 392 determined by the board. If an application is submitted to the 393 corporation for wind-only coverage in the coastal account, the 394 premium for the corporation’s wind-only policy plus the premium 395 for the ex-wind policy that is offered by an authorized insurer 396 to the applicant must be compared to the premium for multiperil 397 coverage offered by an authorized insurer, subject to the 398 standards for comparison specified in this subparagraph. If the 399 corporation or the applicant requests from the authorized 400 insurer a breakdown of the premium of the offer by types of 401 coverage so that a comparison may be made by the corporation or 402 its agent and the authorized insurer refuses or is unable to 403 provide such information, the corporation may treat the offer as 404 not being an offer of coverage from an authorized insurer at the 405 insurer’s approved rate. 406 6. Must include rules for classifications of risks and 407 rates. 408 7. Must provide that if premium and investment income for 409 an account attributable to a particular calendar year are in 410 excess of projected losses and expenses for the account 411 attributable to that year, such excess shall be held in surplus 412 in the account. Such surplus must be available to defray 413 deficits in that account as to future years and used for that 414 purpose before assessing assessable insurers and assessable 415 insureds as to any calendar year. 416 8. Must provide objective criteria and procedures to be 417 uniformly applied to all applicants in determining whether an 418 individual risk is so hazardous as to be uninsurable. In making 419 this determination and in establishing the criteria and 420 procedures, the following must be considered: 421 a. Whether the likelihood of a loss for the individual risk 422 is substantially higher than for other risks of the same class; 423 and 424 b. Whether the uncertainty associated with the individual 425 risk is such that an appropriate premium cannot be determined. 426 427 The acceptance or rejection of a risk by the corporation shall 428 be construed as the private placement of insurance, and the 429 provisions of chapter 120 do not apply. 430 9. Must provide that the corporation make its best efforts 431 to procure catastrophe reinsurance at reasonable rates, to cover 432 its projected 100-year probable maximum loss as determined by 433 the board of governors. 434 10. The policies issued by the corporation must provide 435 that if the corporation or the market assistance plan obtains an 436 offer from an authorized insurer to cover the risk at its 437 approved rates, the risk is no longer eligible for renewal 438 through the corporation, except as otherwise provided in this 439 subsection. 440 11. Corporation policies and applications must include a 441 notice that the corporation policy could, under this section, be 442 replaced with a policy issued by an authorized insurer which 443 does not provide coverage identical to the coverage provided by 444 the corporation. The notice must also specify that acceptance of 445 corporation coverage creates a conclusive presumption that the 446 applicant or policyholder is aware of this potential. 447 12. May establish, subject to approval by the office, 448 different eligibility requirements and operational procedures 449 for any line or type of coverage for any specified county or 450 area if the board determines that such changes are justified due 451 to the voluntary market being sufficiently stable and 452 competitive in such area or for such line or type of coverage 453 and that consumers who, in good faith, are unable to obtain 454 insurance through the voluntary market through ordinary methods 455 continue to have access to coverage from the corporation. If 456 coverage is sought in connection with a real property transfer, 457 the requirements and procedures may not provide an effective 458 date of coverage later than the date of the closing of the 459 transfer as established by the transferor, the transferee, and, 460 if applicable, the lender. 461 13. Must provide that, with respect to the coastal account, 462 any assessable insurer with a surplus as to policyholders of $25 463 million or less writing 25 percent or more of its total 464 countrywide property insurance premiums in this state may 465 petition the office, within the first 90 days of each calendar 466 year, to qualify as a limited apportionment company. A regular 467 assessment levied by the corporation on a limited apportionment 468 company for a deficit incurred by the corporation for the 469 coastal account may be paid to the corporation on a monthly 470 basis as the assessments are collected by the limited 471 apportionment company from its insureds, but a limited 472 apportionment company must begin collecting the regular 473 assessments not later than 90 days after the regular assessments 474 are levied by the corporation, and the regular assessments must 475 be paid in full within 15 months after being levied by the 476 corporation. A limited apportionment company shall collect from 477 its policyholders any emergency assessment imposed under sub 478 subparagraph (b)3.d. The plan must provide that, if the office 479 determines that any regular assessment will result in an 480 impairment of the surplus of a limited apportionment company, 481 the office may direct that all or part of such assessment be 482 deferred as provided in subparagraph (q)4. However, an emergency 483 assessment to be collected from policyholders under sub 484 subparagraph (b)3.d. may not be limited or deferred. 485 14. Must provide that the corporation appoint as its 486 licensed agents only those agents who throughout such 487 appointments also hold an appointment as defined in s. 488 626.015(3) by
withan insurer who at the time of the agent’s489 initial appointment by the corporationis authorized to write 490 and is actually writing or renewing personal lines residential 491 property coverage, commercial residential property coverage, or 492 commercial nonresidential property coverage within the state. 493 15. Must provide a premium payment plan option to its 494 policyholders which, at a minimum, allows for quarterly and 495 semiannual payment of premiums. A monthly payment plan may, but 496 is not required to, be offered. 497 16. Must limit coverage on mobile homes or manufactured 498 homes built before 1994 to actual cash value of the dwelling 499 rather than replacement costs of the dwelling. 500 17. Must provide coverage for manufactured or mobile home 501 dwellings. Such coverage must also include the following 502 attached structures: 503 a. Screened enclosures that are aluminum framed or screened 504 enclosures that are not covered by the same or substantially the 505 same materials as those of the primary dwelling; 506 b. Carports that are aluminum or carports that are not 507 covered by the same or substantially the same materials as those 508 of the primary dwelling; and 509 c. Patios that have a roof covering that is constructed of 510 materials that are not the same or substantially the same 511 materials as those of the primary dwelling. 512 513 The corporation shall make available a policy for mobile homes 514 or manufactured homes for a minimum insured value of at least 515 $3,000. 516 18. May provide such limits of coverage as the board 517 determines, consistent with the requirements of this subsection. 518 19. May require commercial property to meet specified 519 hurricane mitigation construction features as a condition of 520 eligibility for coverage. 521 20. Must provide that new or renewal policies issued by the 522 corporation on or after January 1, 2012, which cover sinkhole 523 loss do not include coverage for any loss to appurtenant 524 structures, driveways, sidewalks, decks, or patios that are 525 directly or indirectly caused by sinkhole activity. The 526 corporation shall exclude such coverage using a notice of 527 coverage change, which may be included with the policy renewal, 528 and not by issuance of a notice of nonrenewal of the excluded 529 coverage upon renewal of the current policy. 530 21. As of January 1, 2012, must require that the agent 531 obtain from an applicant for coverage from the corporation an 532 acknowledgment signed by the applicant, which includes, at a 533 minimum, the following statement: 534 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE 535 AND ASSESSMENT LIABILITY: 536 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE 537 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A 538 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, 539 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND 540 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE 541 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT 542 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA 543 LEGISLATURE. 544 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER 545 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, 546 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO 547 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN 548 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE 549 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES 550 ARE REGULATED AND APPROVED BY THE STATE. 551 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY 552 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER 553 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE 554 FLORIDA LEGISLATURE. 555 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE 556 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE 557 STATE OF FLORIDA. 558 a. The corporation shall maintain, in electronic format or 559 otherwise, a copy of the applicant’s signed acknowledgment and 560 provide a copy of the statement to the policyholder as part of 561 the first renewal after the effective date of this subparagraph. 562 b. The signed acknowledgment form creates a conclusive 563 presumption that the policyholder understood and accepted his or 564 her potential surcharge and assessment liability as a 565 policyholder of the corporation. 566 (x)1. The following records of the corporation are 567 confidential and exempt from the provisions of s. 119.07(1) and 568 s. 24(a), Art. I of the State Constitution: 569 a. Underwriting files, except that a policyholder or an 570 applicant shall have access to his or her own underwriting 571 files. Confidential and exempt underwriting file records may 572 also be released to other governmental agencies upon written 573 request and demonstration of need; such records held by the 574 receiving agency remain confidential and exempt as provided 575 herein. 576 b. Claims files, until termination of all litigation and 577 settlement of all claims arising out of the same incident, 578 although portions of the claims files may remain exempt, as 579 otherwise provided by law. Confidential and exempt claims file 580 records may be released to other governmental agencies upon 581 written request and demonstration of need; such records held by 582 the receiving agency remain confidential and exempt as provided 583 herein. 584 c. Records obtained or generated by an internal auditor 585 pursuant to a routine audit, until the audit is completed, or if 586 the audit is conducted as part of an investigation, until the 587 investigation is closed or ceases to be active. An investigation 588 is considered “active” while the investigation is being 589 conducted with a reasonable, good faith belief that it could 590 lead to the filing of administrative, civil, or criminal 591 proceedings. 592 d. Matters reasonably encompassed in privileged attorney 593 client communications. 594 e. Proprietary information licensed to the corporation 595 under contract and the contract provides for the confidentiality 596 of such proprietary information. 597 f. All information relating to the medical condition or 598 medical status of a corporation employee which is not relevant 599 to the employee’s capacity to perform his or her duties, except 600 as otherwise provided in this paragraph. Information that is 601 exempt shall include, but is not limited to, information 602 relating to workers’ compensation, insurance benefits, and 603 retirement or disability benefits. 604 g. Upon an employee’s entrance into the employee assistance 605 program, a program to assist any employee who has a behavioral 606 or medical disorder, substance abuse problem, or emotional 607 difficulty which affects the employee’s job performance, all 608 records relative to that participation shall be confidential and 609 exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I 610 of the State Constitution, except as otherwise provided in s. 611 112.0455(11). 612 h. Information relating to negotiations for financing, 613 reinsurance, depopulation, or contractual services, until the 614 conclusion of the negotiations. 615 i. Minutes of closed meetings regarding underwriting files, 616 and minutes of closed meetings regarding an open claims file 617 until termination of all litigation and settlement of all claims 618 with regard to that claim, except that information otherwise 619 confidential or exempt by law shall be redacted. 620 2. If an authorized insurer is considering underwriting a 621 risk insured by the corporation, relevant underwriting files and 622 confidential claims files may be released to the insurer 623 provided the insurer agrees in writing, notarized and under 624 oath, to maintain the confidentiality of such files. If a file 625 is transferred to an insurer, that file is no longer a public 626 record because it is not held by an agency subject to the 627 provisions of the public records law. Underwriting files and 628 confidential claims files may also be released to staff and the 629 board of governors of the market assistance plan established 630 pursuant to s. 627.3515, who must retain the confidentiality of 631 such files, except such files may be released to authorized 632 insurers that are considering assuming the risks to which the 633 files apply, provided the insurer agrees in writing, notarized 634 and under oath, to maintain the confidentiality of such files. 635 Finally, the corporation or the board or staff of the market 636 assistance plan may make the following information obtained from 637 underwriting files and confidential claims files available to 638 licensed general lines insurance agents: name, address, and 639 telephone number of the residential property owner or insured; 640 location of the risk; rating information; loss history; and 641 policy type. The receiving licensed general lines insurance 642 agent must retain the confidentiality of the information 643 received and may use the information only for the purposes of 644 developing a take-out plan to be submitted to the office for 645 approval or otherwise analyzing the underwriting of a risk or 646 risks insured by the corporation on behalf of the private 647 insurance market. The licensed general lines agent and an 648 insurer receiving information under this subparagraph may not 649 use the information for the direct solicitation of 650 policyholders. An entity that has obtained a permit to become an 651 authorized insurer, a reinsurer, a reinsurance broker, or a 652 modeling company may receive the information available to a 653 licensed general lines agent for the sole purpose of analyzing 654 risks for underwriting in the private insurance market and must 655 retain the confidentiality of the information received. Such 656 entities may not use the information for the direct solicitation 657 of policyholders. 658 3. A policyholder who has filed suit against the 659 corporation has the right to discover the contents of his or her 660 own claims file to the same extent that discovery of such 661 contents would be available from a private insurer in litigation 662 as provided by the Florida Rules of Civil Procedure, the Florida 663 Evidence Code, and other applicable law. Pursuant to subpoena, a 664 third party has the right to discover the contents of an 665 insured’s or applicant’s underwriting or claims file to the same 666 extent that discovery of such contents would be available from a 667 private insurer by subpoena as provided by the Florida Rules of 668 Civil Procedure, the Florida Evidence Code, and other applicable 669 law, and subject to any confidentiality protections requested by 670 the corporation and agreed to by the seeking party or ordered by 671 the court. The corporation may release confidential underwriting 672 and claims file contents and information as it deems necessary 673 and appropriate to underwrite or service insurance policies and 674 claims, subject to any confidentiality protections deemed 675 necessary and appropriate by the corporation. 676 4. Portions of meetings of the corporation are exempt from 677 the provisions of s. 286.011 and s. 24(b), Art. I of the State 678 Constitution wherein confidential underwriting files or 679 confidential open claims files are discussed. All portions of 680 corporation meetings which are closed to the public shall be 681 recorded by a court reporter. The court reporter shall record 682 the times of commencement and termination of the meeting, all 683 discussion and proceedings, the names of all persons present at 684 any time, and the names of all persons speaking. No portion of 685 any closed meeting shall be off the record. Subject to the 686 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s 687 notes of any closed meeting shall be retained by the corporation 688 for a minimum of 5 years. A copy of the transcript, less any 689 exempt matters, of any closed meeting wherein claims are 690 discussed shall become public as to individual claims after 691 settlement of the claim. 692 (ii) The corporation shall revise the programs adopted 693 pursuant to sub-subparagraph (6)(q)3.a. to maximize policyholder 694 options and encourage increased participation by insurers and 695 agents. 696 1. After January 1, 2016, such revisions must include a 697 process by which policyholders are informed if one or more 698 insurers demonstrate an interest in taking out that policy from 699 the corporation. This demonstration of interest must include the 700 amount of the estimated premium, a description of the coverage, 701 including an explanation of differences, and a comparison of the 702 estimated premium and coverage offered by the insurer to the 703 estimated premium and coverage provided by the corporation. The 704 corporation shall develop a uniform format for the estimated 705 premium and coverage information required by this subparagraph. 706 After January 1, 2016, a policy may not be taken out from the 707 corporation unless the provisions of this subparagraph are met. 708 2. A policyholder may elect not to be solicited for take 709 out offers more than once in a 6-month period. 710 3. A policyholder whose policy was taken out by an insurer 711 in the previous 36 months is considered a renewal policyholder 712 under s. 627.3518 if the corporation determines that the insurer 713 continues to insure the policyholder and that the initial 714 premium of the insurer exceeded its estimated premium by more 715 than 10 percent or the insurer increased the rate on the policy 716 in excess of the increase allowed for the corporation under 717 subparagraph (6)(n)6. 718 Section 2. This act shall take effect July 1, 2015.