Bill Text: FL H0447 | 2010 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Property Insurance

Spectrum: Strong Partisan Bill (Republican 37-3)

Status: (Introduced - Dead) 2010-04-30 - Died on Calendar, companion bill(s) passed, see CS/CS/CS/CS/HB 663 (Ch. 2010-176), HB 7217 (Ch. 2010-141) [H0447 Detail]

Download: Florida-2010-H0447-Comm_Sub.html
CS/CS/HB 447
1
A bill to be entitled
2An act relating to property insurance; amending s.
3215.555, F.S.; extending a repeal date for an exemption of
4medical malpractice insurance premiums from emergency
5assessments; amending s. 624.407, F.S.; specifying an
6additional surplus requirement for certain domestic
7insurers; amending s. 624.408, F.S.; specifying an
8additional surplus requirement for certain domestic
9insurers; deleting obsolete surplus requirement
10provisions; amending s. 626.7452, F.S.; deleting an
11exception to a provision allowing examination of a
12managing general agent; amending s. 627.0613, F.S.;
13revising annual reporting requirements for the consumer
14advocate; providing a definition; amending s. 627.062,
15F.S.; requiring that the Office of Insurance Regulation
16issue an approval rather than a notice of intent to
17approve following its approval of a file and use filing;
18prohibiting the office from, directly or indirectly,
19prohibiting an insurer from paying acquisition costs based
20on the full amount of the premium; prohibiting the office
21from, directly or indirectly, impeding or compromising the
22right of an insurer to acquire policyholders, advertise or
23appoint agents, or regulate agent commissions; requiring
24the office to publish an annual information memorandum
25establishing certain inflation trend factors for certain
26purposes; specifying factor criteria; authorizing an
27insurer to make a rate filing limited to changes in the
28cost of reinsurance, the costs of financing products used
29as a replacement for reinsurance, or changes in an
30inflation trend factor published annually by the office;
31authorizing certain insurers to use a rate different from
32otherwise applicable filed rates; requiring such rates to
33be filed with the office as a separate filing; providing
34requirements and limitations for such separate filings;
35prohibiting the consideration of certain policies when
36making a specified calculation; preserving the authority
37of the office to disapprove rates as inadequate or
38disapprove a rate filing for using certain rating factors;
39authorizing the office to direct an insurer to make a
40specified type of rate filing under certain circumstances;
41providing construction relating to certifications;
42prohibiting the requirement of a new certification upon an
43insurer providing certain additional information;
44specifying nonapplication to certain filings; amending s.
45627.0621, F.S.; revising provisions relating to
46transparency in rate regulation; amending s. 627.0629,
47F.S.; revising legislative intent relating to residential
48property insurance rate filings; deleting a requirement
49that the office develop and make available a method for
50insurers to establish discounts, credits, or rate
51differentials for certain hurricane mitigation measures;
52revising restrictions relating to including the cost of
53reinsurance for certain purposes; requiring the office to
54contract with a private entity to develop a comprehensive
55consumer information program; specifying program criteria;
56requiring the office to conduct a cost benefit analysis on
57a program implementation plan; requiring review and
58approval by the Financial Services Commission; amending s.
59627.351, F.S.; providing requirements for attachment and
60payment of the Citizens policyholder surcharge;
61prohibiting the corporation from levying certain regular
62assessments until after levying the full amount of a
63Citizens policyholder surcharge; providing that certain
64members of Citizens Property Insurance Corporation's board
65of governors are within the scope of an exemption from
66certain conflict of interest provisions for public
67officers; requiring the corporation's plan of operation to
68require agents to obtain an acknowledgement of potential
69surcharge and assessment liability from applicants and
70policyholders; requiring the corporation to permanently
71retain a copy of such acknowledgments; specifying that the
72acknowledgement creates a conclusive presumption of
73understanding and acceptance by the policyholder;
74prohibiting votes on certain measures by board members;
75specifying vote criteria; providing disclosure
76requirements; deleting an obsolete legislative intent
77provision; amending s. 627.4133, F.S.; authorizing an
78insurer to cancel or nonrenew property insurance policies
79under certain circumstances; specifying duties of the
80office; requiring certain notice; creating s. 627.41341,
81F.S.; specifying requirements for a notice of change in
82policy terms; providing definitions; authorizing policy
83renewals to contain a change in policy terms; specifying
84notice requirements; providing procedural requirements;
85providing intent; amending s. 627.7011, F.S.; revising
86requirements and procedures under homeowners' insurance
87policies for replacement cost coverage of a dwelling and
88personal property; providing criteria for initial and
89subsequent replacement cost payments by an insurer;
90deleting obsolete time references; amending s. 627.70131,
91F.S.; specifying application of certain time periods to
92initial or supplemental property insurance claim notices
93and payments; creating s. 627.7031, F.S.; authorizing
94certain insurers to offer or renew policies at rates
95established under certain circumstances; prohibiting
96certain insurers from purchasing TICL option coverage from
97the Florida Hurricane Catastrophe Fund under certain
98circumstances; requiring that certain policies contain a
99specified rate notice; requiring insurers to offer
100applicants or insureds an estimate of the premium for a
101policy from Citizens Property Insurance Corporation
102reflecting similar coverage, limits, and deductibles;
103requiring applicants or insureds to provide a signed
104premium comparison acknowledgement; specifying criteria
105for insurer compliance with certain requirements;
106specifying acknowledgement contents; requiring insurers
107and agents to retain a copy of the acknowledgement for a
108specified time; specifying a presumption created by a
109signed acknowledgement; specifying types of residential
110property insurance policies that are not eligible for
111certain rates or subject to other requirements; requiring
112written notice of certain nonrenewals; preserving insurer
113authority to cancel policies; specifying a criterion for
114what constitutes an offer to renew a policy; amending s.
115627.707, F.S.; revising standards for investigation of
116sinkhole claims by insurers; specifying requirements for
117contracts for repairs to prevent additional damage to
118buildings or structures; providing application; amending
119s. 627.7072, F.S.; specifying requirements for tests
120performed by professional engineers and professional
121geologists for certain purposes; providing application;
122amending s. 627.7073, F.S.; revising requirements for
123sinkhole reports; providing application; amending s.
124627.7074, F.S.; revising requirements and procedures for
125an alternative procedure for resolution of disputed
126sinkhole insurance claims; providing a definition;
127providing criteria and procedures for disqualification of
128neutral evaluators; providing requirements and procedures
129for neutral evaluators to enlist assistance from other
130professionals under certain circumstances; providing
131application; amending s. 627.711, F.S.; deleting a
132provision for a uniform mitigation verification form to be
133certified by the Department of Financial Services;
134revising persons authorized to sign a uniform mitigation
135verification form; authorizing an insurer to accept a
136mitigation verification form from certain other persons;
137providing personal inspection requirements; prohibiting
138misconduct in performing hurricane mitigation inspections
139or completing mitigation verification forms; specifying
140criteria for misconduct; authorizing certain licensing
141boards to commence disciplinary proceedings and impose
142administrative fines and sanctions for certain violations;
143requiring insurers, persons, or other entities obtaining
144evidence of fraud or making false statements to report to
145the Division of Insurance Fraud; specifying immunity from
146liability for making such a report; providing duties and
147responsibilities of the division; specifying a required
148notice for insurance policies issued or renewed in this
149state; providing notice requirements; repealing s.
150627.7065, F.S., relating to database of information
151relating to sinkholes, the Department of Financial
152Services, and the Department of Environmental Protection;
153providing effective dates.
154
155Be It Enacted by the Legislature of the State of Florida:
156
157 Section 1. Paragraph (b) of subsection (6) of section
158215.555, Florida Statutes, is amended to read:
159 215.555 Florida Hurricane Catastrophe Fund.-
160 (6) REVENUE BONDS.-
161 (b) Emergency assessments.-
162 1. If the board determines that the amount of revenue
163produced under subsection (5) is insufficient to fund the
164obligations, costs, and expenses of the fund and the
165corporation, including repayment of revenue bonds and that
166portion of the debt service coverage not met by reimbursement
167premiums, the board shall direct the Office of Insurance
168Regulation to levy, by order, an emergency assessment on direct
169premiums for all property and casualty lines of business in this
170state, including property and casualty business of surplus lines
171insurers regulated under part VIII of chapter 626, but not
172including any workers' compensation premiums or medical
173malpractice premiums. As used in this subsection, the term
174"property and casualty business" includes all lines of business
175identified on Form 2, Exhibit of Premiums and Losses, in the
176annual statement required of authorized insurers by s. 624.424
177and any rule adopted under this section, except for those lines
178identified as accident and health insurance and except for
179policies written under the National Flood Insurance Program. The
180assessment shall be specified as a percentage of direct written
181premium and is subject to annual adjustments by the board in
182order to meet debt obligations. The same percentage shall apply
183to all policies in lines of business subject to the assessment
184issued or renewed during the 12-month period beginning on the
185effective date of the assessment.
186 2. A premium is not subject to an annual assessment under
187this paragraph in excess of 6 percent of premium with respect to
188obligations arising out of losses attributable to any one
189contract year, and a premium is not subject to an aggregate
190annual assessment under this paragraph in excess of 10 percent
191of premium. An annual assessment under this paragraph shall
192continue as long as the revenue bonds issued with respect to
193which the assessment was imposed are outstanding, including any
194bonds the proceeds of which were used to refund the revenue
195bonds, unless adequate provision has been made for the payment
196of the bonds under the documents authorizing issuance of the
197bonds.
198 3. Emergency assessments shall be collected from
199policyholders. Emergency assessments shall be remitted by
200insurers as a percentage of direct written premium for the
201preceding calendar quarter as specified in the order from the
202Office of Insurance Regulation. The office shall verify the
203accurate and timely collection and remittance of emergency
204assessments and shall report the information to the board in a
205form and at a time specified by the board. Each insurer
206collecting assessments shall provide the information with
207respect to premiums and collections as may be required by the
208office to enable the office to monitor and verify compliance
209with this paragraph.
210 4. With respect to assessments of surplus lines premiums,
211each surplus lines agent shall collect the assessment at the
212same time as the agent collects the surplus lines tax required
213by s. 626.932, and the surplus lines agent shall remit the
214assessment to the Florida Surplus Lines Service Office created
215by s. 626.921 at the same time as the agent remits the surplus
216lines tax to the Florida Surplus Lines Service Office. The
217emergency assessment on each insured procuring coverage and
218filing under s. 626.938 shall be remitted by the insured to the
219Florida Surplus Lines Service Office at the time the insured
220pays the surplus lines tax to the Florida Surplus Lines Service
221Office. The Florida Surplus Lines Service Office shall remit the
222collected assessments to the fund or corporation as provided in
223the order levied by the Office of Insurance Regulation. The
224Florida Surplus Lines Service Office shall verify the proper
225application of such emergency assessments and shall assist the
226board in ensuring the accurate and timely collection and
227remittance of assessments as required by the board. The Florida
228Surplus Lines Service Office shall annually calculate the
229aggregate written premium on property and casualty business,
230other than workers' compensation and medical malpractice,
231procured through surplus lines agents and insureds procuring
232coverage and filing under s. 626.938 and shall report the
233information to the board in a form and at a time specified by
234the board.
235 5. Any assessment authority not used for a particular
236contract year may be used for a subsequent contract year. If,
237for a subsequent contract year, the board determines that the
238amount of revenue produced under subsection (5) is insufficient
239to fund the obligations, costs, and expenses of the fund and the
240corporation, including repayment of revenue bonds and that
241portion of the debt service coverage not met by reimbursement
242premiums, the board shall direct the Office of Insurance
243Regulation to levy an emergency assessment up to an amount not
244exceeding the amount of unused assessment authority from a
245previous contract year or years, plus an additional 4 percent
246provided that the assessments in the aggregate do not exceed the
247limits specified in subparagraph 2.
248 6. The assessments otherwise payable to the corporation
249under this paragraph shall be paid to the fund unless and until
250the Office of Insurance Regulation and the Florida Surplus Lines
251Service Office have received from the corporation and the fund a
252notice, which shall be conclusive and upon which they may rely
253without further inquiry, that the corporation has issued bonds
254and the fund has no agreements in effect with local governments
255under paragraph (c). On or after the date of the notice and
256until the date the corporation has no bonds outstanding, the
257fund shall have no right, title, or interest in or to the
258assessments, except as provided in the fund's agreement with the
259corporation.
260 7. Emergency assessments are not premium and are not
261subject to the premium tax, to the surplus lines tax, to any
262fees, or to any commissions. An insurer is liable for all
263assessments that it collects and must treat the failure of an
264insured to pay an assessment as a failure to pay the premium. An
265insurer is not liable for uncollectible assessments.
266 8. When an insurer is required to return an unearned
267premium, it shall also return any collected assessment
268attributable to the unearned premium. A credit adjustment to the
269collected assessment may be made by the insurer with regard to
270future remittances that are payable to the fund or corporation,
271but the insurer is not entitled to a refund.
272 9. When a surplus lines insured or an insured who has
273procured coverage and filed under s. 626.938 is entitled to the
274return of an unearned premium, the Florida Surplus Lines Service
275Office shall provide a credit or refund to the agent or such
276insured for the collected assessment attributable to the
277unearned premium prior to remitting the emergency assessment
278collected to the fund or corporation.
279 10. The exemption of medical malpractice insurance
280premiums from emergency assessments under this paragraph is
281repealed May 31, 2013 2010, and medical malpractice insurance
282premiums shall be subject to emergency assessments attributable
283to loss events occurring in the contract years commencing on
284June 1, 2013 2010.
285 Section 2. Subsection (1) of section 624.407, Florida
286Statutes, is amended to read:
287 624.407 Capital funds required; new insurers.-
288 (1) To receive authority to transact any one kind or
289combinations of kinds of insurance, as defined in part V of this
290chapter, an insurer applying for its original certificate of
291authority in this state after the effective date of this section
292shall possess surplus as to policyholders not less than the
293greater of:
294 (a) Except as otherwise provided in this subsection, $5
295five million dollars for a property and casualty insurer, or
296$2.5 million for any other insurer;
297 (b) For life insurers, 4 percent of the insurer's total
298liabilities;
299 (c) For life and health insurers, 4 percent of the
300insurer's total liabilities, plus 6 percent of the insurer's
301liabilities relative to health insurance; or
302 (d) For all insurers other than life insurers and life and
303health insurers, 10 percent of the insurer's total liabilities;
304or
305 (e) For a domestic insurer initially licensed on or after
306July 1, 2010, that transacts residential property insurance and
307is not a wholly owned subsidiary of an insurer domiciled in any
308other state, $15 million; however, this paragraph does not apply
309to a domestic insurer that is a subsidiary or affiliate of a
310domestic property insurer that was licensed before July 1, 2010;
311
312however, a domestic insurer that transacts residential property
313insurance and is a wholly owned subsidiary of an insurer
314domiciled in any other state shall possess surplus as to
315policyholders of at least $50 million, but no insurer shall be
316required under this subsection to have surplus as to
317policyholders greater than $100 million.
318 Section 3. Subsection (1) of section 624.408, Florida
319Statutes, is amended to read:
320 624.408 Surplus as to policyholders required; new and
321existing insurers.-
322 (1)(a) To maintain a certificate of authority to transact
323any one kind or combinations of kinds of insurance, as defined
324in part V of this chapter, an insurer in this state shall at all
325times maintain surplus as to policyholders not less than the
326greater of:
327 (a)1. Except as provided in paragraphs (e) and (f)
328subparagraph 5. and paragraph (b), $1.5 million;
329 (b)2. For life insurers, 4 percent of the insurer's total
330liabilities;
331 (c)3. For life and health insurers, 4 percent of the
332insurer's total liabilities plus 6 percent of the insurer's
333liabilities relative to health insurance; or
334 (d)4. For all insurers other than mortgage guaranty
335insurers, life insurers, and life and health insurers, 10
336percent of the insurer's total liabilities;.
337 (e)5. Except as provided in paragraph (f), for property
338and casualty insurers, $4 million; or.
339 (f) For a domestic insurer initially licensed on or after
340July 1, 2010, that transacts residential property insurance and
341is not a wholly owned subsidiary of an insurer domiciled in any
342other state, $12 million; however, this paragraph does not apply
343to a domestic insurer that is a subsidiary or affiliate of a
344domestic property insurer that was licensed before July 1, 2010.
345 (b) For any property and casualty insurer holding a
346certificate of authority on December 1, 1993, the following
347amounts apply instead of the $4 million required by subparagraph
348(a)5.:
349 1. On December 31, 2001, and until December 30, 2002, $3
350million.
351 2. On December 31, 2002, and until December 30, 2003,
352$3.25 million.
353 3. On December 31, 2003, and until December 30, 2004, $3.6
354million.
355 4. On December 31, 2004, and thereafter, $4 million.
356 Section 4. Section 626.7452, Florida Statutes, is amended
357to read:
358 626.7452 Managing general agents; examination authority.-
359The acts of the managing general agent are considered to be the
360acts of the insurer on whose behalf it is acting. A managing
361general agent may be examined as if it were the insurer except
362in the case where the managing general agent solely represents a
363single domestic insurer.
364 Section 5. Subsection (4) of section 627.0613, Florida
365Statutes, is amended to read:
366 627.0613 Consumer advocate.-The Chief Financial Officer
367must appoint a consumer advocate who must represent the general
368public of the state before the department and the office. The
369consumer advocate must report directly to the Chief Financial
370Officer, but is not otherwise under the authority of the
371department or of any employee of the department. The consumer
372advocate has such powers as are necessary to carry out the
373duties of the office of consumer advocate, including, but not
374limited to, the powers to:
375 (4)(a) By June 1, 2012, and each June 1 thereafter,
376prepare an annual report card for each authorized personal
377residential property insurer, on a form and using a letter-grade
378scale developed by the commission by rule, which objectively
379grades each insurer based on the following factors:
380 1.(a) The number and nature of valid consumer complaints,
381as a market share ratio, received by the department against the
382insurer.
383 2.(b) The disposition of all valid consumer complaints
384received by the department.
385 3.(c) The average length of time for payment of claims by
386the insurer.
387 4.(d) Any other measurable and objective factors the
388commission identifies as capable of assisting policyholders in
389making informed choices about homeowner's insurance.
390 (b) For purposes of this subsection, the term "valid
391consumer complaint" means a written communication from a
392consumer that expresses dissatisfaction with a specific personal
393residential property insurer whose conduct as described in the
394communication is found to constitute a violation of the
395insurance laws of this state by the Division of Consumer
396Services of the Department of Financial Services.
397 Section 6. Paragraphs (a), (i), and (k) of subsection (2)
398of section 627.062, Florida Statutes, are amended, paragraph (l)
399is added to subsection (2), and paragraph (d) of subsection (9)
400of that section is redesignated as paragraph (g) and new
401paragraphs (d), (e), and (f) are added to that subsection, to
402read:
403 627.062 Rate standards.-
404 (2) As to all such classes of insurance:
405 (a) Insurers or rating organizations shall establish and
406use rates, rating schedules, or rating manuals to allow the
407insurer a reasonable rate of return on such classes of insurance
408written in this state. A copy of rates, rating schedules, rating
409manuals, premium credits or discount schedules, and surcharge
410schedules, and changes thereto, shall be filed with the office
411under one of the following procedures except as provided in
412subparagraph 3.:
413 1. If the filing is made at least 90 days before the
414proposed effective date and the filing is not implemented during
415the office's review of the filing and any proceeding and
416judicial review, then such filing shall be considered a "file
417and use" filing. In such case, the office shall finalize its
418review by issuance of an approval a notice of intent to approve
419or a notice of intent to disapprove within 90 days after receipt
420of the filing. The approval notice of intent to approve and the
421notice of intent to disapprove constitute agency action for
422purposes of the Administrative Procedure Act. Requests for
423supporting information, requests for mathematical or mechanical
424corrections, or notification to the insurer by the office of its
425preliminary findings shall not toll the 90-day period during any
426such proceedings and subsequent judicial review. The rate shall
427be deemed approved if the office does not issue an approval a
428notice of intent to approve or a notice of intent to disapprove
429within 90 days after receipt of the filing.
430 2. If the filing is not made in accordance with the
431provisions of subparagraph 1., such filing shall be made as soon
432as practicable, but no later than 30 days after the effective
433date, and shall be considered a "use and file" filing. An
434insurer making a "use and file" filing is potentially subject to
435an order by the office to return to policyholders portions of
436rates found to be excessive, as provided in paragraph (h).
437 3. For all property insurance filings made or submitted
438after January 25, 2007, but before December 31, 2010, an insurer
439seeking a rate that is greater than the rate most recently
440approved by the office shall make a "file and use" filing. For
441purposes of this subparagraph, motor vehicle collision and
442comprehensive coverages are not considered to be property
443coverages.
444 (i)1. Except as otherwise specifically provided in this
445chapter, the office may shall not, directly or indirectly,
446prohibit any insurer, including any residual market plan or
447joint underwriting association, from paying acquisition costs
448based on the full amount of premium, as defined in s. 627.403,
449applicable to any policy, or prohibit, directly or indirectly,
450any such insurer from including the full amount of acquisition
451costs in a rate filing.
452 2. The office may not, directly or indirectly, impede,
453abridge, or otherwise compromise an insurer's right to acquire
454policyholders or advertise, or appoint agents, including, but
455not limited to, the calculation, manner, or amount of such
456agents' commissions, if any.
457 (k)1.a. An insurer may make a separate filing limited
458solely to an adjustment of its rates for reinsurance, financing
459products to replace insurance, or financing costs incurred in
460the purchase of reinsurance and may include an adjustment of its
461rates based upon an inflation trend factor as set forth in
462subparagraph 4. If an insurer chooses to make a separate filing
463under this paragraph, the insurer shall implement the rate in
464such a manner that all previously approved rate increases
465implemented as a result of a separate filing, together with the
466rate increase under a filing made under this paragraph or
467financing products to replace or finance the payment of the
468amount covered by the Temporary Increase in Coverage Limits
469(TICL) portion of the Florida Hurricane Catastrophe Fund
470including replacement reinsurance for the TICL reductions made
471pursuant to s. 215.555(17)(e); the actual cost paid due to the
472application of the TICL premium factor pursuant to s.
473215.555(17)(f); and the actual cost paid due to the application
474of the cash build-up factor pursuant to s. 215.555(5)(b) if the
475insurer:
476 a. Elects to purchase financing products such as a
477liquidity instrument or line of credit, in which case the cost
478included in the filing for the liquidity instrument or line of
479credit may not result in a premium increase exceeding 3 percent
480for any individual policyholder. All costs contained in the
481filing may not result in an overall rate premium increase of
482more than 10 percent for any individual policyholder, excluding
483coverage changes and surcharges.
484 b. An insurer shall include Includes in the filing a copy
485of all of its reinsurance, liquidity instrument, or line of
486credit contracts; proof of the billing or payment for the
487contracts; and the calculation upon which the proposed rate
488change is based demonstrating demonstrates that the costs meet
489the criteria of this section and are not loaded for expenses or
490profit for the insurer making the filing.
491 c. Any such filing may not include Includes no other
492changes to the insurer's its rates in the filing.
493 d. Has not implemented a rate increase within the 6 months
494immediately preceding the filing.
495 e. Does not file for a rate increase under any other
496paragraph within 6 months after making a filing under this
497paragraph.
498 d.f. An insurer that purchases reinsurance or financing
499products from an affiliate may make a filing under affiliated
500company in compliance with this paragraph does so only if the
501costs for such reinsurance or financing products are charged at
502or below charges made for comparable coverage by nonaffiliated
503reinsurers or financial entities making such coverage or
504financing products available in this state.
505 2. An insurer may only make one filing in any 12-month
506period under this paragraph.
507 3. An insurer that elects to implement a rate change under
508this paragraph must file its rate filing with the office at
509least 45 days before the effective date of the rate change.
510After an insurer submits a complete filing that meets all of the
511requirements of this paragraph, the office has 45 days after the
512date of the filing to review the rate filing and determine if
513the rate is excessive, inadequate, or unfairly discriminatory.
514 4. Beginning January 1, 2011, the office shall publish an
515annual informational memorandum to establish one or more inflation
516trend factors which may be stated separately for personal and
517residential property and for building coverage, contents
518coverage, additional living expense coverage, and liability
519coverage, if applicable. Such factors shall represent an estimate
520of cost increases or decreases based on publicly available relevant
521data and economic indices that are identified in the memorandum
522including, but not limited to, overall claim cost data. Such
523factors are exempt from the rulemaking requirements of chapter 120
524and insurers may not be required to adopt the factors. The office
525may publish factors for any line, but is required to annually
526publish a factor only for residential property insurance by March 1
527of each year.
528 (l)1. On or after January 1, 2011, an insurer complying
529with the requirements of s. 627.7031 may use a rate for
530residential property insurance, as defined in s. 627.4025,
531different from the otherwise applicable filed rate as provided
532in this paragraph.
533 2. Policies subject to this paragraph may not be counted
534in the calculation under s. 627.171(2).
535 3. Such rates shall be filed with the office as a separate
536filing. The filing must be accompanied by an actuary's
537certification stating that the filing was prepared in accordance
538with current actuarial standards of practice adopted by the
539Actuarial Standards Board and that the statewide average rate
540change is within a range consistent with applicable actuarial
541principles or, if the percentage limitations of this paragraph
542do not allow for a rate within a range consistent with
543applicable actuarial principles, is below such range. The
544initial rates used by an insurer under this paragraph may not
545provide for rates that represent more than a 10-percent
546statewide average rate increase over the most recently filed and
547approved rate. A rate filing under this paragraph submitted in
548any year following the implementation of such initial rates may
549not provide for rates that represent more than a 10-percent
550statewide average rate increase in any single year over the
551rates in effect under this paragraph at the time of the filing.
552A rate filing under this paragraph may not provide for a
553percentage rate increase as to any single policyholder that
554exceeds two times the statewide average rate increase provided
555in the filing.
556 4. This paragraph does not affect the authority of the
557office to disapprove a rate as inadequate or to disapprove a
558rate filing for charging any insured or applicant a higher
559premium solely because of the insured's or applicant's race,
560color, creed, marital status, sex, or national origin. Upon
561finding that an insurer has used any such factor in charging an
562insured or applicant a higher premium, the office may direct the
563insurer to make a new filing for a new rate that does not use
564such factor.
565
566The provisions of this subsection shall not apply to workers'
567compensation and employer's liability insurance and to motor
568vehicle insurance.
569 (9)
570 (d) A certification under this subsection is not rendered
571false when, after making the subject rate filing, the insurer
572provides the office with additional or supplementary information
573or clarification pursuant to a formal or informal request from
574the office or for any other reason.
575 (e) If an insurer adds additional information to a pending
576filing that has not yet been disapproved by the office, the
577additional information may not be required to include a new
578certification under this subsection.
579 (f) This subsection does not apply to a filing made
580pursuant to paragraph (2)(k).
581 Section 7. Section 627.0621, Florida Statutes, is amended
582to read:
583 627.0621 Transparency in rate regulation.-
584 (1) DEFINITIONS.-As used in this section, the term:
585 (a) "Rate filing" means any original or amended rate
586residential property insurance filing.
587 (b) "Recommendation" means any proposed, preliminary, or
588final recommendation from an office actuary reviewing a rate
589filing with respect to the issue of approval or disapproval of
590the rate filing or with respect to rate indications that the
591office would consider acceptable.
592 (2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.-
593 (1)(a) With respect to any residential property rate
594filing, the office shall provide the following information on a
595publicly accessible Internet website:
596 (a)1. The overall rate change requested by the insurer.
597 (b)2. The rate change approved by the office along with
598all of the actuary's assumptions and recommendations forming the
599basis of the office's decision.
600 3. Certification by the office's actuary that, based on
601the actuary's knowledge, his or her recommendations are
602consistent with accepted actuarial principles.
603 (2)(b) For any rate filing, whether or not the filing is
604subject to a public hearing, the office shall provide on its
605website a means for any policyholder who may be affected by a
606proposed rate change to send an e-mail regarding the proposed
607rate change. Such e-mail must be accessible to the actuary
608assigned to review the rate filing.
609 Section 8. Subsections (1) and (5) of section 627.0629,
610Florida Statutes, are amended, and subsection (10) is added to
611that section, to read:
612 627.0629 Residential property insurance; rate filings.-
613 (1)(a) It is the intent of the Legislature that insurers
614must provide the most accurate pricing signals available savings
615to encourage consumers who install or implement windstorm damage
616mitigation techniques, alterations, or solutions to their
617properties to prevent windstorm losses. It is also the intent of
618the Legislature that implementation of mitigation discounts not
619result in a loss of income to the insurers granting the
620discounts, so that the aggregate of mitigation discounts should
621not exceed the aggregate of the expected reduction in loss that
622is attributable to the mitigation efforts for which discounts
623are granted. A rate filing for residential property insurance
624must include actuarially reasonable discounts, credits, debits,
625or other rate differentials, or appropriate reductions in
626deductibles, that provide the proper pricing for all properties.
627The rate filing must take into account the presence or absence
628of on which fixtures or construction techniques demonstrated to
629reduce the amount of loss in a windstorm have been installed or
630implemented. The fixtures or construction techniques shall
631include, but not be limited to, fixtures or construction
632techniques that which enhance roof strength, roof covering
633performance, roof-to-wall strength, wall-to-floor-to-foundation
634strength, opening protection, and window, door, and skylight
635strength. Credits, debits, discounts, or other rate
636differentials, or appropriate reductions or increases in
637deductibles, that recognize the presence or absence of for
638fixtures and construction techniques that which meet the minimum
639requirements of the Florida Building Code must be included in
640the rate filing. If an insurer demonstrates that the aggregate
641of its mitigation discounts results in a reduction to revenue
642that exceeds the reduction of the aggregate loss that is
643expected to result from the mitigation, the insurer may recover
644the lost revenue through an increase in its base rates. All
645insurance companies must make a rate filing which includes
646credits, discounts, or other rate differentials or
647deductibles by February 28, 2003. By July 1, 2007,
648shall reevaluate the discounts, credits, other rate
649differentials, and appropriate reductions in deductibles for
650fixtures and construction techniques that meet the minimum
651requirements of the Florida Building Code, based upon actual
652experience or any other loss relativity studies available to the
653office. The office shall determine the discounts, credits,
654debits, other rate differentials, and appropriate reductions or
655increases in deductibles that reflect the full actuarial value
656of such revaluation, which may be used by insurers in rate
657filings.
658 (b) By February 1, 2011, the Office of Insurance
659Regulation, in consultation with the Department of Financial
660Services and the Department of Community Affairs, shall develop
661and make publicly available a proposed method for insurers to
662establish discounts, credits, or other rate differentials for
663hurricane mitigation measures which directly correlate to the
664numerical rating assigned to a structure pursuant to the uniform
665home grading scale adopted by the Financial Services Commission
666pursuant to s. 215.55865, including any proposed changes to the
667uniform home grading scale. By October 1, 2011, the commission
668shall adopt rules requiring insurers to make rate filings for
669residential property insurance which revise insurers' discounts,
670credits, or other rate differentials for hurricane mitigation
671measures so that such rate differentials correlate directly to
672the uniform home grading scale. The rules may include such
673changes to the uniform home grading scale as the commission
674determines are necessary, and may specify the minimum required
675discounts, credits, or other rate differentials. Such rate
676differentials must be consistent with generally accepted
677actuarial principles and wind-loss mitigation studies. The rules
678shall allow a period of at least 2 years after the effective
679date of the revised mitigation discounts, credits, or other rate
680differentials for a property owner to obtain an inspection or
681otherwise qualify for the revised credit, during which time the
682insurer shall continue to apply the mitigation credit that was
683applied immediately prior to the effective date of the revised
684credit. Discounts, credits, and other rate differentials
685established for rate filings under this paragraph shall
686supersede, after adoption, the discounts, credits, and other
687rate differentials included in rate filings under paragraph (a).
688 (5) In order to provide an appropriate transition period,
689an insurer may, in its sole discretion, implement an approved
690rate filing for residential property insurance over a period of
691years. An insurer electing to phase in its rate filing must
692provide an informational notice to the office setting out its
693schedule for implementation of the phased-in rate filing. An
694insurer may include in its rate the actual cost of private
695market reinsurance that corresponds to available coverage of the
696Temporary Increase in Coverage Limits, TICL, from the Florida
697Hurricane Catastrophe Fund. The insurer may also include the
698cost of reinsurance to replace the TICL reduction implemented
699pursuant to s. 215.555(17)(d)9. However, this cost for
700reinsurance may not include any expense or profit load or result
701in a total annual base rate increase in excess of 10 percent.
702 (10)(a) Contingent upon specific appropriations made to
703implement this subsection, in order to enhance the ability of
704consumers to compare premiums and to increase the accuracy and
705usefulness of rate and product comparison information for
706homeowners' insurance, the office shall develop or contract with
707a private entity to develop a comprehensive program for
708providing the consumer with all available information necessary
709to make an informed purchase of the insurance product that best
710serves the needs of the individual.
711 (b) In developing the comprehensive program, the office
712shall rely as much as is practical on information that is
713currently available and shall consider:
714 1. The most efficient means for developing, hosting, and
715operating a separate website that consolidates all consumer
716information for price comparisons, filed complaints, financial
717strength, underwriting, and receivership information and other
718data useful to consumers.
719 2. Whether all admitted insurers should be required to
720submit additional information to populate the composite website
721and how often such submissions must be made.
722 3. Whether all admitted insurers should be required to
723provide links from the website into each individual insurer's
724website in order to enable consumers to access product rate
725information and apply for quotations.
726 4. Developing a plan to publicize the existence,
727availability, and value of the website.
728 5. Any other provision that would make relevant
729homeowners' insurance information more readily available so that
730consumers can make informed product comparisons and purchasing
731decisions.
732 (c) Before establishing the program or website, the office
733shall conduct a cost-benefit analysis to determine the most
734effective approach for establishing and operating the program
735and website. Based on the results of the analysis, the office
736shall submit a proposed implementation plan for review and
737approval by the Financial Services Commission. The
738implementation plan shall include an estimated timeline for
739establishing the program and website; a description of the data
740and functionality to be provided by the site; a strategy for
741publicizing the website to consumers; a recommended approach for
742developing, hosting, and operating the website; and an estimate
743of all major nonrecurring and recurring costs required to
744establish and operate the website. Upon approval of the plan,
745the office may initiate the establishment of the program.
746 Section 9. Paragraphs (b), (c), (d), (y), (z), (aa), (bb),
747(cc), (dd), (ee), and (ff) of subsection (6) of section 627.351,
748Florida Statutes, are amended to read:
749 627.351 Insurance risk apportionment plans.-
750 (6) CITIZENS PROPERTY INSURANCE CORPORATION.-
751 (b)1. All insurers authorized to write one or more subject
752lines of business in this state are subject to assessment by the
753corporation and, for the purposes of this subsection, are
754referred to collectively as "assessable insurers." Insurers
755writing one or more subject lines of business in this state
756pursuant to part VIII of chapter 626 are not assessable
757insurers, but insureds who procure one or more subject lines of
758business in this state pursuant to part VIII of chapter 626 are
759subject to assessment by the corporation and are referred to
760collectively as "assessable insureds." An authorized insurer's
761assessment liability shall begin on the first day of the
762calendar year following the year in which the insurer was issued
763a certificate of authority to transact insurance for subject
764lines of business in this state and shall terminate 1 year after
765the end of the first calendar year during which the insurer no
766longer holds a certificate of authority to transact insurance
767for subject lines of business in this state.
768 2.a. All revenues, assets, liabilities, losses, and
769expenses of the corporation shall be divided into three separate
770accounts as follows:
771 (I) A personal lines account for personal residential
772policies issued by the corporation or issued by the Residential
773Property and Casualty Joint Underwriting Association and renewed
774by the corporation that provide comprehensive, multiperil
775coverage on risks that are not located in areas eligible for
776coverage in the Florida Windstorm Underwriting Association as
777those areas were defined on January 1, 2002, and for such
778policies that do not provide coverage for the peril of wind on
779risks that are located in such areas;
780 (II) A commercial lines account for commercial residential
781and commercial nonresidential policies issued by the corporation
782or issued by the Residential Property and Casualty Joint
783Underwriting Association and renewed by the corporation that
784provide coverage for basic property perils on risks that are not
785located in areas eligible for coverage in the Florida Windstorm
786Underwriting Association as those areas were defined on January
7871, 2002, and for such policies that do not provide coverage for
788the peril of wind on risks that are located in such areas; and
789 (III) A high-risk account for personal residential
790policies and commercial residential and commercial
791nonresidential property policies issued by the corporation or
792transferred to the corporation that provide coverage for the
793peril of wind on risks that are located in areas eligible for
794coverage in the Florida Windstorm Underwriting Association as
795those areas were defined on January 1, 2002. The corporation may
796offer policies that provide multiperil coverage and the
797corporation shall continue to offer policies that provide
798coverage only for the peril of wind for risks located in areas
799eligible for coverage in the high-risk account. In issuing
800multiperil coverage, the corporation may use its approved policy
801forms and rates for the personal lines account. An applicant or
802insured who is eligible to purchase a multiperil policy from the
803corporation may purchase a multiperil policy from an authorized
804insurer without prejudice to the applicant's or insured's
805eligibility to prospectively purchase a policy that provides
806coverage only for the peril of wind from the corporation. An
807applicant or insured who is eligible for a corporation policy
808that provides coverage only for the peril of wind may elect to
809purchase or retain such policy and also purchase or retain
810coverage excluding wind from an authorized insurer without
811prejudice to the applicant's or insured's eligibility to
812prospectively purchase a policy that provides multiperil
813coverage from the corporation. It is the goal of the Legislature
814that there would be an overall average savings of 10 percent or
815more for a policyholder who currently has a wind-only policy
816with the corporation, and an ex-wind policy with a voluntary
817insurer or the corporation, and who then obtains a multiperil
818policy from the corporation. It is the intent of the Legislature
819that the offer of multiperil coverage in the high-risk account
820be made and implemented in a manner that does not adversely
821affect the tax-exempt status of the corporation or
822creditworthiness of or security for currently outstanding
823financing obligations or credit facilities of the high-risk
824account, the personal lines account, or the commercial lines
825account. The high-risk account must also include quota share
826primary insurance under subparagraph (c)2. The area eligible for
827coverage under the high-risk account also includes the area
828within Port Canaveral, which is bordered on the south by the
829City of Cape Canaveral, bordered on the west by the Banana
830River, and bordered on the north by Federal Government property.
831 b. The three separate accounts must be maintained as long
832as financing obligations entered into by the Florida Windstorm
833Underwriting Association or Residential Property and Casualty
834Joint Underwriting Association are outstanding, in accordance
835with the terms of the corresponding financing documents. When
836the financing obligations are no longer outstanding, in
837accordance with the terms of the corresponding financing
838documents, the corporation may use a single account for all
839revenues, assets, liabilities, losses, and expenses of the
840corporation. Consistent with the requirement of this
841subparagraph and prudent investment policies that minimize the
842cost of carrying debt, the board shall exercise its best efforts
843to retire existing debt or to obtain approval of necessary
844parties to amend the terms of existing debt, so as to structure
845the most efficient plan to consolidate the three separate
846accounts into a single account. By February 1, 2007, the board
847shall submit a report to the Financial Services Commission, the
848President of the Senate, and the Speaker of the House of
849Representatives which includes an analysis of consolidating the
850accounts, the actions the board has taken to minimize the cost
851of carrying debt, and its recommendations for executing the most
852efficient plan.
853 c. Creditors of the Residential Property and Casualty
854Joint Underwriting Association and of the accounts specified in
855sub-sub-subparagraphs a.(I) and (II) may have a claim against,
856and recourse to, the accounts referred to in sub-sub-
857subparagraphs a.(I) and (II) and shall have no claim against, or
858recourse to, the account referred to in sub-sub-subparagraph
859a.(III). Creditors of the Florida Windstorm Underwriting
860Association shall have a claim against, and recourse to, the
861account referred to in sub-sub-subparagraph a.(III) and shall
862have no claim against, or recourse to, the accounts referred to
863in sub-sub-subparagraphs a.(I) and (II).
864 d. Revenues, assets, liabilities, losses, and expenses not
865attributable to particular accounts shall be prorated among the
866accounts.
867 e. The Legislature finds that the revenues of the
868corporation are revenues that are necessary to meet the
869requirements set forth in documents authorizing the issuance of
870bonds under this subsection.
871 f. No part of the income of the corporation may inure to
872the benefit of any private person.
873 3. With respect to a deficit in an account:
874 a. After accounting for the Citizens policyholder
875surcharge imposed under sub-subparagraph i., when the remaining
876projected deficit incurred in a particular calendar year is not
877greater than 6 percent of the aggregate statewide direct written
878premium for the subject lines of business for the prior calendar
879year, the entire deficit shall be recovered through regular
880assessments of assessable insurers under paragraph (p) and
881assessable insureds.
882 b. After accounting for the Citizens policyholder
883surcharge imposed under sub-subparagraph i., when the remaining
884projected deficit incurred in a particular calendar year exceeds
8856 percent of the aggregate statewide direct written premium for
886the subject lines of business for the prior calendar year, the
887corporation shall levy regular assessments on assessable
888insurers under paragraph (p) and on assessable insureds in an
889amount equal to the greater of 6 percent of the deficit or 6
890percent of the aggregate statewide direct written premium for
891the subject lines of business for the prior calendar year. Any
892remaining deficit shall be recovered through emergency
893assessments under sub-subparagraph d.
894 c. Each assessable insurer's share of the amount being
895assessed under sub-subparagraph a. or sub-subparagraph b. shall
896be in the proportion that the assessable insurer's direct
897written premium for the subject lines of business for the year
898preceding the assessment bears to the aggregate statewide direct
899written premium for the subject lines of business for that year.
900The assessment percentage applicable to each assessable insured
901is the ratio of the amount being assessed under sub-subparagraph
902a. or sub-subparagraph b. to the aggregate statewide direct
903written premium for the subject lines of business for the prior
904year. Assessments levied by the corporation on assessable
905insurers under sub-subparagraphs a. and b. shall be paid as
906required by the corporation's plan of operation and paragraph
907(p). Assessments levied by the corporation on assessable
908insureds under sub-subparagraphs a. and b. shall be collected by
909the surplus lines agent at the time the surplus lines agent
910collects the surplus lines tax required by s. 626.932 and shall
911be paid to the Florida Surplus Lines Service Office at the time
912the surplus lines agent pays the surplus lines tax to the
913Florida Surplus Lines Service Office. Upon receipt of regular
914assessments from surplus lines agents, the Florida Surplus Lines
915Service Office shall transfer the assessments directly to the
916corporation as determined by the corporation.
917 d. Upon a determination by the board of governors that a
918deficit in an account exceeds the amount that will be recovered
919through regular assessments under sub-subparagraph a. or sub-
920subparagraph b., plus the amount that is expected to be
921recovered through surcharges under sub-subparagraph i., as to
922the remaining projected deficit the board shall levy, after
923verification by the office, emergency assessments, for as many
924years as necessary to cover the deficits, to be collected by
925assessable insurers and the corporation and collected from
926assessable insureds upon issuance or renewal of policies for
927subject lines of business, excluding National Flood Insurance
928policies. The amount of the emergency assessment collected in a
929particular year shall be a uniform percentage of that year's
930direct written premium for subject lines of business and all
931accounts of the corporation, excluding National Flood Insurance
932Program policy premiums, as annually determined by the board and
933verified by the office. The office shall verify the arithmetic
934calculations involved in the board's determination within 30
935days after receipt of the information on which the determination
936was based. Notwithstanding any other provision of law, the
937corporation and each assessable insurer that writes subject
938lines of business shall collect emergency assessments from its
939policyholders without such obligation being affected by any
940credit, limitation, exemption, or deferment. Emergency
941assessments levied by the corporation on assessable insureds
942shall be collected by the surplus lines agent at the time the
943surplus lines agent collects the surplus lines tax required by
944s. 626.932 and shall be paid to the Florida Surplus Lines
945Service Office at the time the surplus lines agent pays the
946surplus lines tax to the Florida Surplus Lines Service Office.
947The emergency assessments so collected shall be transferred
948directly to the corporation on a periodic basis as determined by
949the corporation and shall be held by the corporation solely in
950the applicable account. The aggregate amount of emergency
951assessments levied for an account under this sub-subparagraph in
952any calendar year may, at the discretion of the board of
953governors, be less than but may not exceed the greater of 10
954percent of the amount needed to cover the deficit, plus
955interest, fees, commissions, required reserves, and other costs
956associated with financing of the original deficit, or 10 percent
957of the aggregate statewide direct written premium for subject
958lines of business and for all accounts of the corporation for
959the prior year, plus interest, fees, commissions, required
960reserves, and other costs associated with financing the deficit.
961 e. The corporation may pledge the proceeds of assessments,
962projected recoveries from the Florida Hurricane Catastrophe
963Fund, other insurance and reinsurance recoverables, policyholder
964surcharges and other surcharges, and other funds available to
965the corporation as the source of revenue for and to secure bonds
966issued under paragraph (p), bonds or other indebtedness issued
967under subparagraph (c)3., or lines of credit or other financing
968mechanisms issued or created under this subsection, or to retire
969any other debt incurred as a result of deficits or events giving
970rise to deficits, or in any other way that the board determines
971will efficiently recover such deficits. The purpose of the lines
972of credit or other financing mechanisms is to provide additional
973resources to assist the corporation in covering claims and
974expenses attributable to a catastrophe. As used in this
975subsection, the term "assessments" includes regular assessments
976under sub-subparagraph a., sub-subparagraph b., or subparagraph
977(p)1. and emergency assessments under sub-subparagraph d.
978Emergency assessments collected under sub-subparagraph d. are
979not part of an insurer's rates, are not premium, and are not
980subject to premium tax, fees, or commissions; however, failure
981to pay the emergency assessment shall be treated as failure to
982pay premium. The emergency assessments under sub-subparagraph d.
983shall continue as long as any bonds issued or other indebtedness
984incurred with respect to a deficit for which the assessment was
985imposed remain outstanding, unless adequate provision has been
986made for the payment of such bonds or other indebtedness
987pursuant to the documents governing such bonds or other
988indebtedness.
989 f. As used in this subsection for purposes of any deficit
990incurred on or after January 25, 2007, the term "subject lines
991of business" means insurance written by assessable insurers or
992procured by assessable insureds for all property and casualty
993lines of business in this state, but not including workers'
994compensation or medical malpractice. As used in the sub-
995subparagraph, the term "property and casualty lines of business"
996includes all lines of business identified on Form 2, Exhibit of
997Premiums and Losses, in the annual statement required of
998authorized insurers by s. 624.424 and any rule adopted under
999this section, except for those lines identified as accident and
1000health insurance and except for policies written under the
1001National Flood Insurance Program or the Federal Crop Insurance
1002Program. For purposes of this sub-subparagraph, the term
1003"workers' compensation" includes both workers' compensation
1004insurance and excess workers' compensation insurance.
1005 g. The Florida Surplus Lines Service Office shall
1006determine annually the aggregate statewide written premium in
1007subject lines of business procured by assessable insureds and
1008shall report that information to the corporation in a form and
1009at a time the corporation specifies to ensure that the
1010corporation can meet the requirements of this subsection and the
1011corporation's financing obligations.
1012 h. The Florida Surplus Lines Service Office shall verify
1013the proper application by surplus lines agents of assessment
1014percentages for regular assessments and emergency assessments
1015levied under this subparagraph on assessable insureds and shall
1016assist the corporation in ensuring the accurate, timely
1017collection and payment of assessments by surplus lines agents as
1018required by the corporation.
1019 i.(I) If a deficit is incurred in any account in 2008 or
1020thereafter, the board of governors shall levy a Citizens
1021policyholder surcharge against all policyholders of the
1022corporation.
1023 (II) The policyholder's liability for the Citizens
1024policyholder surcharge attaches on the date of the event giving
1025rise to an order levying the surcharge or the date of the order,
1026whichever is earlier. The Citizens policyholder surcharge is
1027payable upon cancellation or termination of the policy, upon
1028renewal of the policy, or upon issuance of a new policy by
1029Citizens within the first 12 months after the date of the levy
1030or the period of time necessary to fully collect the Citizens
1031policyholder surcharge amount.
1032 (III) The Citizens policyholder surcharge for a 12-month
1033period, which shall be levied collected at the time of issuance
1034or renewal of a policy, as a uniform percentage of the premium
1035for the policy of up to 15 percent of such premium, which funds
1036shall be used to offset the deficit.
1037 (IV) The corporation may not levy any regular assessments
1038under sub-subparagraph a. or sub-subparagraph b. with respect to
1039a particular year's deficit until the corporation has first
1040levied a Citizens policyholder surcharge under this sub-
1041subparagraph in the full amount authorized by this sub-
1042subparagraph.
1043 (V) Citizens policyholder surcharges under this sub-
1044subparagraph are not considered premium and are not subject to
1045commissions, fees, or premium taxes. However, failure to pay
1046such surcharges shall be treated as failure to pay premium.
1047 j. If the amount of any assessments or surcharges
1048collected from corporation policyholders, assessable insurers or
1049their policyholders, or assessable insureds exceeds the amount
1050of the deficits, such excess amounts shall be remitted to and
1051retained by the corporation in a reserve to be used by the
1052corporation, as determined by the board of governors and
1053approved by the office, to pay claims or reduce any past,
1054present, or future plan-year deficits or to reduce outstanding
1055debt.
1056 (c) The plan of operation of the corporation:
1057 1. Must provide for adoption of residential property and
1058casualty insurance policy forms and commercial residential and
1059nonresidential property insurance forms, which forms must be
1060approved by the office prior to use. The corporation shall adopt
1061the following policy forms:
1062 a. Standard personal lines policy forms that are
1063comprehensive multiperil policies providing full coverage of a
1064residential property equivalent to the coverage provided in the
1065private insurance market under an HO-3, HO-4, or HO-6 policy.
1066 b. Basic personal lines policy forms that are policies
1067similar to an HO-8 policy or a dwelling fire policy that provide
1068coverage meeting the requirements of the secondary mortgage
1069market, but which coverage is more limited than the coverage
1070under a standard policy.
1071 c. Commercial lines residential and nonresidential policy
1072forms that are generally similar to the basic perils of full
1073coverage obtainable for commercial residential structures and
1074commercial nonresidential structures in the admitted voluntary
1075market.
1076 d. Personal lines and commercial lines residential
1077property insurance forms that cover the peril of wind only. The
1078forms are applicable only to residential properties located in
1079areas eligible for coverage under the high-risk account referred
1080to in sub-subparagraph (b)2.a.
1081 e. Commercial lines nonresidential property insurance
1082forms that cover the peril of wind only. The forms are
1083applicable only to nonresidential properties located in areas
1084eligible for coverage under the high-risk account referred to in
1085sub-subparagraph (b)2.a.
1086 f. The corporation may adopt variations of the policy
1087forms listed in sub-subparagraphs a.-e. that contain more
1088restrictive coverage.
1089 2.a. Must provide that the corporation adopt a program in
1090which the corporation and authorized insurers enter into quota
1091share primary insurance agreements for hurricane coverage, as
1092defined in s. 627.4025(2)(a), for eligible risks, and adopt
1093property insurance forms for eligible risks which cover the
1094peril of wind only. As used in this subsection, the term:
1095 (I) "Quota share primary insurance" means an arrangement
1096in which the primary hurricane coverage of an eligible risk is
1097provided in specified percentages by the corporation and an
1098authorized insurer. The corporation and authorized insurer are
1099each solely responsible for a specified percentage of hurricane
1100coverage of an eligible risk as set forth in a quota share
1101primary insurance agreement between the corporation and an
1102authorized insurer and the insurance contract. The
1103responsibility of the corporation or authorized insurer to pay
1104its specified percentage of hurricane losses of an eligible
1105risk, as set forth in the quota share primary insurance
1106agreement, may not be altered by the inability of the other
1107party to the agreement to pay its specified percentage of
1108hurricane losses. Eligible risks that are provided hurricane
1109coverage through a quota share primary insurance arrangement
1110must be provided policy forms that set forth the obligations of
1111the corporation and authorized insurer under the arrangement,
1112clearly specify the percentages of quota share primary insurance
1113provided by the corporation and authorized insurer, and
1114conspicuously and clearly state that neither the authorized
1115insurer nor the corporation may be held responsible beyond its
1116specified percentage of coverage of hurricane losses.
1117 (II) "Eligible risks" means personal lines residential and
1118commercial lines residential risks that meet the underwriting
1119criteria of the corporation and are located in areas that were
1120eligible for coverage by the Florida Windstorm Underwriting
1121Association on January 1, 2002.
1122 b. The corporation may enter into quota share primary
1123insurance agreements with authorized insurers at corporation
1124coverage levels of 90 percent and 50 percent.
1125 c. If the corporation determines that additional coverage
1126levels are necessary to maximize participation in quota share
1127primary insurance agreements by authorized insurers, the
1128corporation may establish additional coverage levels. However,
1129the corporation's quota share primary insurance coverage level
1130may not exceed 90 percent.
1131 d. Any quota share primary insurance agreement entered
1132into between an authorized insurer and the corporation must
1133provide for a uniform specified percentage of coverage of
1134hurricane losses, by county or territory as set forth by the
1135corporation board, for all eligible risks of the authorized
1136insurer covered under the quota share primary insurance
1137agreement.
1138 e. Any quota share primary insurance agreement entered
1139into between an authorized insurer and the corporation is
1140subject to review and approval by the office. However, such
1141agreement shall be authorized only as to insurance contracts
1142entered into between an authorized insurer and an insured who is
1143already insured by the corporation for wind coverage.
1144 f. For all eligible risks covered under quota share
1145primary insurance agreements, the exposure and coverage levels
1146for both the corporation and authorized insurers shall be
1147reported by the corporation to the Florida Hurricane Catastrophe
1148Fund. For all policies of eligible risks covered under quota
1149share primary insurance agreements, the corporation and the
1150authorized insurer shall maintain complete and accurate records
1151for the purpose of exposure and loss reimbursement audits as
1152required by Florida Hurricane Catastrophe Fund rules. The
1153corporation and the authorized insurer shall each maintain
1154duplicate copies of policy declaration pages and supporting
1155claims documents.
1156 g. The corporation board shall establish in its plan of
1157operation standards for quota share agreements which ensure that
1158there is no discriminatory application among insurers as to the
1159terms of quota share agreements, pricing of quota share
1160agreements, incentive provisions if any, and consideration paid
1161for servicing policies or adjusting claims.
1162 h. The quota share primary insurance agreement between the
1163corporation and an authorized insurer must set forth the
1164specific terms under which coverage is provided, including, but
1165not limited to, the sale and servicing of policies issued under
1166the agreement by the insurance agent of the authorized insurer
1167producing the business, the reporting of information concerning
1168eligible risks, the payment of premium to the corporation, and
1169arrangements for the adjustment and payment of hurricane claims
1170incurred on eligible risks by the claims adjuster and personnel
1171of the authorized insurer. Entering into a quota sharing
1172insurance agreement between the corporation and an authorized
1173insurer shall be voluntary and at the discretion of the
1174authorized insurer.
1175 3. May provide that the corporation may employ or
1176otherwise contract with individuals or other entities to provide
1177administrative or professional services that may be appropriate
1178to effectuate the plan. The corporation shall have the power to
1179borrow funds, by issuing bonds or by incurring other
1180indebtedness, and shall have other powers reasonably necessary
1181to effectuate the requirements of this subsection, including,
1182without limitation, the power to issue bonds and incur other
1183indebtedness in order to refinance outstanding bonds or other
1184indebtedness. The corporation may, but is not required to, seek
1185judicial validation of its bonds or other indebtedness under
1186chapter 75. The corporation may issue bonds or incur other
1187indebtedness, or have bonds issued on its behalf by a unit of
1188local government pursuant to subparagraph (p)2., in the absence
1189of a hurricane or other weather-related event, upon a
1190determination by the corporation, subject to approval by the
1191office, that such action would enable it to efficiently meet the
1192financial obligations of the corporation and that such
1193financings are reasonably necessary to effectuate the
1194requirements of this subsection. The corporation is authorized
1195to take all actions needed to facilitate tax-free status for any
1196such bonds or indebtedness, including formation of trusts or
1197other affiliated entities. The corporation shall have the
1198authority to pledge assessments, projected recoveries from the
1199Florida Hurricane Catastrophe Fund, other reinsurance
1200recoverables, market equalization and other surcharges, and
1201other funds available to the corporation as security for bonds
1202or other indebtedness. In recognition of s. 10, Art. I of the
1203State Constitution, prohibiting the impairment of obligations of
1204contracts, it is the intent of the Legislature that no action be
1205taken whose purpose is to impair any bond indenture or financing
1206agreement or any revenue source committed by contract to such
1207bond or other indebtedness.
1208 4.a. Must require that the corporation operate subject to
1209the supervision and approval of a board of governors consisting
1210of eight individuals who are residents of this state, from
1211different geographical areas of this state. The Governor, the
1212Chief Financial Officer, the President of the Senate, and the
1213Speaker of the House of Representatives shall each appoint two
1214members of the board. At least one of the two members appointed
1215by each appointing officer must have demonstrated expertise in
1216insurance. Members appointed for having a demonstrated expertise
1217in insurance as provided in this subparagraph shall be deemed to
1218be within the scope of the exemption set forth in s.
1219112.313(7)(b). The Chief Financial Officer shall designate one
1220of the appointees as chair. All board members serve at the
1221pleasure of the appointing officer. All members of the board of
1222governors are subject to removal at will by the officers who
1223appointed them. All board members, including the chair, must be
1224appointed to serve for 3-year terms beginning annually on a date
1225designated by the plan. However, for the first term beginning on
1226or after July 1, 2009, each appointing officer shall appoint one
1227member of the board for a 2-year term and one member for a 3-
1228year term. Any board vacancy shall be filled for the unexpired
1229term by the appointing officer. The Chief Financial Officer
1230shall appoint a technical advisory group to provide information
1231and advice to the board of governors in connection with the
1232board's duties under this subsection. The executive director and
1233senior managers of the corporation shall be engaged by the board
1234and serve at the pleasure of the board. Any executive director
1235appointed on or after July 1, 2006, is subject to confirmation
1236by the Senate. The executive director is responsible for
1237employing other staff as the corporation may require, subject to
1238review and concurrence by the board.
1239 b. The board shall create a Market Accountability Advisory
1240Committee to assist the corporation in developing awareness of
1241its rates and its customer and agent service levels in
1242relationship to the voluntary market insurers writing similar
1243coverage. The members of the advisory committee shall consist of
1244the following 11 persons, one of whom must be elected chair by
1245the members of the committee: four representatives, one
1246appointed by the Florida Association of Insurance Agents, one by
1247the Florida Association of Insurance and Financial Advisors, one
1248by the Professional Insurance Agents of Florida, and one by the
1249Latin American Association of Insurance Agencies; three
1250representatives appointed by the insurers with the three highest
1251voluntary market share of residential property insurance
1252business in the state; one representative from the Office of
1253Insurance Regulation; one consumer appointed by the board who is
1254insured by the corporation at the time of appointment to the
1255committee; one representative appointed by the Florida
1256Association of Realtors; and one representative appointed by the
1257Florida Bankers Association. All members must serve for 3-year
1258terms and may serve for consecutive terms. The committee shall
1259report to the corporation at each board meeting on insurance
1260market issues which may include rates and rate competition with
1261the voluntary market; service, including policy issuance, claims
1262processing, and general responsiveness to policyholders,
1263applicants, and agents; and matters relating to depopulation.
1264 5. Must provide a procedure for determining the
1265eligibility of a risk for coverage, as follows:
1266 a. Subject to the provisions of s. 627.3517, with respect
1267to personal lines residential risks, if the risk is offered
1268coverage from an authorized insurer at the insurer's approved
1269rate under either a standard policy including wind coverage or,
1270if consistent with the insurer's underwriting rules as filed
1271with the office, a basic policy including wind coverage, for a
1272new application to the corporation for coverage, the risk is not
1273eligible for any policy issued by the corporation unless the
1274premium for coverage from the authorized insurer is more than 15
1275percent greater than the premium for comparable coverage from
1276the corporation. If the risk is not able to obtain any such
1277offer, the risk is eligible for either a standard policy
1278including wind coverage or a basic policy including wind
1279coverage issued by the corporation; however, if the risk could
1280not be insured under a standard policy including wind coverage
1281regardless of market conditions, the risk shall be eligible for
1282a basic policy including wind coverage unless rejected under
1283subparagraph 8. However, with regard to a policyholder of the
1284corporation or a policyholder removed from the corporation
1285through an assumption agreement until the end of the assumption
1286period, the policyholder remains eligible for coverage from the
1287corporation regardless of any offer of coverage from an
1288authorized insurer or surplus lines insurer. The corporation
1289shall determine the type of policy to be provided on the basis
1290of objective standards specified in the underwriting manual and
1291based on generally accepted underwriting practices.
1292 (I) If the risk accepts an offer of coverage through the
1293market assistance plan or an offer of coverage through a
1294mechanism established by the corporation before a policy is
1295issued to the risk by the corporation or during the first 30
1296days of coverage by the corporation, and the producing agent who
1297submitted the application to the plan or to the corporation is
1298not currently appointed by the insurer, the insurer shall:
1299 (A) Pay to the producing agent of record of the policy,
1300for the first year, an amount that is the greater of the
1301insurer's usual and customary commission for the type of policy
1302written or a fee equal to the usual and customary commission of
1303the corporation; or
1304 (B) Offer to allow the producing agent of record of the
1305policy to continue servicing the policy for a period of not less
1306than 1 year and offer to pay the agent the greater of the
1307insurer's or the corporation's usual and customary commission
1308for the type of policy written.
1309
1310If the producing agent is unwilling or unable to accept
1311appointment, the new insurer shall pay the agent in accordance
1312with sub-sub-sub-subparagraph (A).
1313 (II) When the corporation enters into a contractual
1314agreement for a take-out plan, the producing agent of record of
1315the corporation policy is entitled to retain any unearned
1316commission on the policy, and the insurer shall:
1317 (A) Pay to the producing agent of record of the
1318corporation policy, for the first year, an amount that is the
1319greater of the insurer's usual and customary commission for the
1320type of policy written or a fee equal to the usual and customary
1321commission of the corporation; or
1322 (B) Offer to allow the producing agent of record of the
1323corporation policy to continue servicing the policy for a period
1324of not less than 1 year and offer to pay the agent the greater
1325of the insurer's or the corporation's usual and customary
1326commission for the type of policy written.
1327
1328If the producing agent is unwilling or unable to accept
1329appointment, the new insurer shall pay the agent in accordance
1330with sub-sub-sub-subparagraph (A).
1331 b. With respect to commercial lines residential risks, for
1332a new application to the corporation for coverage, if the risk
1333is offered coverage under a policy including wind coverage from
1334an authorized insurer at its approved rate, the risk is not
1335eligible for any policy issued by the corporation unless the
1336premium for coverage from the authorized insurer is more than 15
1337percent greater than the premium for comparable coverage from
1338the corporation. If the risk is not able to obtain any such
1339offer, the risk is eligible for a policy including wind coverage
1340issued by the corporation. However, with regard to a
1341policyholder of the corporation or a policyholder removed from
1342the corporation through an assumption agreement until the end of
1343the assumption period, the policyholder remains eligible for
1344coverage from the corporation regardless of any offer of
1345coverage from an authorized insurer or surplus lines insurer.
1346 (I) If the risk accepts an offer of coverage through the
1347market assistance plan or an offer of coverage through a
1348mechanism established by the corporation before a policy is
1349issued to the risk by the corporation or during the first 30
1350days of coverage by the corporation, and the producing agent who
1351submitted the application to the plan or the corporation is not
1352currently appointed by the insurer, the insurer shall:
1353 (A) Pay to the producing agent of record of the policy,
1354for the first year, an amount that is the greater of the
1355insurer's usual and customary commission for the type of policy
1356written or a fee equal to the usual and customary commission of
1357the corporation; or
1358 (B) Offer to allow the producing agent of record of the
1359policy to continue servicing the policy for a period of not less
1360than 1 year and offer to pay the agent the greater of the
1361insurer's or the corporation's usual and customary commission
1362for the type of policy written.
1363
1364If the producing agent is unwilling or unable to accept
1365appointment, the new insurer shall pay the agent in accordance
1366with sub-sub-sub-subparagraph (A).
1367 (II) When the corporation enters into a contractual
1368agreement for a take-out plan, the producing agent of record of
1369the corporation policy is entitled to retain any unearned
1370commission on the policy, and the insurer shall:
1371 (A) Pay to the producing agent of record of the
1372corporation policy, for the first year, an amount that is the
1373greater of the insurer's usual and customary commission for the
1374type of policy written or a fee equal to the usual and customary
1375commission of the corporation; or
1376 (B) Offer to allow the producing agent of record of the
1377corporation policy to continue servicing the policy for a period
1378of not less than 1 year and offer to pay the agent the greater
1379of the insurer's or the corporation's usual and customary
1380commission for the type of policy written.
1381
1382If the producing agent is unwilling or unable to accept
1383appointment, the new insurer shall pay the agent in accordance
1384with sub-sub-sub-subparagraph (A).
1385 c. For purposes of determining comparable coverage under
1386sub-subparagraphs a. and b., the comparison shall be based on
1387those forms and coverages that are reasonably comparable. The
1388corporation may rely on a determination of comparable coverage
1389and premium made by the producing agent who submits the
1390application to the corporation, made in the agent's capacity as
1391the corporation's agent. A comparison may be made solely of the
1392premium with respect to the main building or structure only on
1393the following basis: the same coverage A or other building
1394limits; the same percentage hurricane deductible that applies on
1395an annual basis or that applies to each hurricane for commercial
1396residential property; the same percentage of ordinance and law
1397coverage, if the same limit is offered by both the corporation
1398and the authorized insurer; the same mitigation credits, to the
1399extent the same types of credits are offered both by the
1400corporation and the authorized insurer; the same method for loss
1401payment, such as replacement cost or actual cash value, if the
1402same method is offered both by the corporation and the
1403authorized insurer in accordance with underwriting rules; and
1404any other form or coverage that is reasonably comparable as
1405determined by the board. If an application is submitted to the
1406corporation for wind-only coverage in the high-risk account, the
1407premium for the corporation's wind-only policy plus the premium
1408for the ex-wind policy that is offered by an authorized insurer
1409to the applicant shall be compared to the premium for multiperil
1410coverage offered by an authorized insurer, subject to the
1411standards for comparison specified in this subparagraph. If the
1412corporation or the applicant requests from the authorized
1413insurer a breakdown of the premium of the offer by types of
1414coverage so that a comparison may be made by the corporation or
1415its agent and the authorized insurer refuses or is unable to
1416provide such information, the corporation may treat the offer as
1417not being an offer of coverage from an authorized insurer at the
1418insurer's approved rate.
1419 6. Must include rules for classifications of risks and
1420rates therefor.
1421 7. Must provide that if premium and investment income for
1422an account attributable to a particular calendar year are in
1423excess of projected losses and expenses for the account
1424attributable to that year, such excess shall be held in surplus
1425in the account. Such surplus shall be available to defray
1426deficits in that account as to future years and shall be used
1427for that purpose prior to assessing assessable insurers and
1428assessable insureds as to any calendar year.
1429 8. Must provide objective criteria and procedures to be
1430uniformly applied for all applicants in determining whether an
1431individual risk is so hazardous as to be uninsurable. In making
1432this determination and in establishing the criteria and
1433procedures, the following shall be considered:
1434 a. Whether the likelihood of a loss for the individual
1435risk is substantially higher than for other risks of the same
1436class; and
1437 b. Whether the uncertainty associated with the individual
1438risk is such that an appropriate premium cannot be determined.
1439
1440The acceptance or rejection of a risk by the corporation shall
1441be construed as the private placement of insurance, and the
1442provisions of chapter 120 shall not apply.
1443 9. Must provide that the corporation shall make its best
1444efforts to procure catastrophe reinsurance at reasonable rates,
1445to cover its projected 100-year probable maximum loss as
1446determined by the board of governors.
1447 10. The policies issued by the corporation must provide
1448that, if the corporation or the market assistance plan obtains
1449an offer from an authorized insurer to cover the risk at its
1450approved rates, the risk is no longer eligible for renewal
1451through the corporation, except as otherwise provided in this
1452subsection.
1453 11. Corporation policies and applications must include a
1454notice that the corporation policy could, under this section, be
1455replaced with a policy issued by an authorized insurer that does
1456not provide coverage identical to the coverage provided by the
1457corporation. The notice shall also specify that acceptance of
1458corporation coverage creates a conclusive presumption that the
1459applicant or policyholder is aware of this potential.
1460 12. May establish, subject to approval by the office,
1461different eligibility requirements and operational procedures
1462for any line or type of coverage for any specified county or
1463area if the board determines that such changes to the
1464eligibility requirements and operational procedures are
1465justified due to the voluntary market being sufficiently stable
1466and competitive in such area or for such line or type of
1467coverage and that consumers who, in good faith, are unable to
1468obtain insurance through the voluntary market through ordinary
1469methods would continue to have access to coverage from the
1470corporation. When coverage is sought in connection with a real
1471property transfer, such requirements and procedures shall not
1472provide for an effective date of coverage later than the date of
1473the closing of the transfer as established by the transferor,
1474the transferee, and, if applicable, the lender.
1475 13. Must provide that, with respect to the high-risk
1476account, any assessable insurer with a surplus as to
1477policyholders of $25 million or less writing 25 percent or more
1478of its total countrywide property insurance premiums in this
1479state may petition the office, within the first 90 days of each
1480calendar year, to qualify as a limited apportionment company. A
1481regular assessment levied by the corporation on a limited
1482apportionment company for a deficit incurred by the corporation
1483for the high-risk account in 2006 or thereafter may be paid to
1484the corporation on a monthly basis as the assessments are
1485collected by the limited apportionment company from its insureds
1486pursuant to s. 627.3512, but the regular assessment must be paid
1487in full within 12 months after being levied by the corporation.
1488A limited apportionment company shall collect from its
1489policyholders any emergency assessment imposed under sub-
1490subparagraph (b)3.d. The plan shall provide that, if the office
1491determines that any regular assessment will result in an
1492impairment of the surplus of a limited apportionment company,
1493the office may direct that all or part of such assessment be
1494deferred as provided in subparagraph (p)4. However, there shall
1495be no limitation or deferment of an emergency assessment to be
1496collected from policyholders under sub-subparagraph (b)3.d.
1497 14. Must provide that the corporation appoint as its
1498licensed agents only those agents who also hold an appointment
1499as defined in s. 626.015(3) with an insurer who at the time of
1500the agent's initial appointment by the corporation is authorized
1501to write and is actually writing personal lines residential
1502property coverage, commercial residential property coverage, or
1503commercial nonresidential property coverage within the state.
1504 15. Must provide, by July 1, 2007, a premium payment plan
1505option to its policyholders which allows at a minimum for
1506quarterly and semiannual payment of premiums. A monthly payment
1507plan may, but is not required to, be offered.
1508 16. Must limit coverage on mobile homes or manufactured
1509homes built prior to 1994 to actual cash value of the dwelling
1510rather than replacement costs of the dwelling.
1511 17. May provide such limits of coverage as the board
1512determines, consistent with the requirements of this subsection.
1513 18. May require commercial property to meet specified
1514hurricane mitigation construction features as a condition of
1515eligibility for coverage.
1516 19.a. Shall require the agent to obtain from any applicant
1517for coverage the following acknowledgement, signed by the
1518applicant, and shall require the agent of record to obtain the
1519following acknowledgment from each corporation policyholder
1520prior to the policy's first renewal after the effective date of
1521this act:
1522
1523
ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
1524
LIABILITY:
1525 1. I UNDERSTAND, AS A CITIZENS PROPERTY
1526INSURANCE CORPORATION POLICYHOLDER, THAT IF THE
1527CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
1528HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
1529COULD BE SUBJECT TO CITIZENS POLICYHOLDER SURCHARGES,
1530WHICH WOULD BE DUE AND PAYABLE UPON ISSUANCE, RENEWAL,
1531CANCELLATION, OR TERMINATION OF THE POLICY, AND THAT
1532THE SURCHARGES COULD BE AS HIGH AS 15 PERCENT OF MY
1533PREMIUM FOR DEFICITS IN EACH OF THREE CITIZENS
1534ACCOUNTS, OR A DIFFERENT AMOUNT AS ESTABLISHED BY THE
1535FLORIDA LEGISLATURE.
1536 2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
1537EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
1538POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
1539
1540 b. The corporation shall permanently maintain a signed
1541copy of the signed acknowledgement required by this
1542subparagraph, and the agent may also retain a copy.
1543 c. The signed acknowledgement form creates a conclusive
1544presumption that the policyholder understood and accepted his or
1545her potential surcharge and assessment liability as a Citizens
1546policyholder.
1547 (d)1. All prospective employees for senior management
1548positions, as defined by the plan of operation, are subject to
1549background checks as a prerequisite for employment. The office
1550shall conduct background checks on such prospective employees
1551pursuant to ss. 624.34, 624.404(3), and 628.261.
1552 2. On or before July 1 of each year, employees of the
1553corporation are required to sign and submit a statement
1554attesting that they do not have a conflict of interest, as
1555defined in part III of chapter 112. As a condition of
1556employment, all prospective employees are required to sign and
1557submit to the corporation a conflict-of-interest statement.
1558 3. Senior managers and members of the board of governors
1559are subject to the provisions of part III of chapter 112,
1560including, but not limited to, the code of ethics and public
1561disclosure and reporting of financial interests, pursuant to s.
1562112.3145. Notwithstanding s. 112.3143(2), a board member may not
1563vote upon any measure that would inure to his or her special
1564private gain or loss; that he or she knows would inure to the
1565special private gain or loss of any principal by whom he or she
1566is retained or to the parent organization or subsidiary of a
1567corporate principal by which he or she is retained, other than
1568an agency as defined in s. 112.312(2); or that he or she knows
1569would inure to the special private gain or loss of a relative or
1570business associate of the public officer. Such member shall,
1571prior to the vote being taken, publicly state to the assembly
1572the nature of his or her interest in the matter from which he or
1573she is abstaining from voting and, within 15 days after the vote
1574occurs, disclose the nature of his or her interest as a public
1575record in a memorandum filed with the person responsible for
1576recording the minutes of the meeting, who shall incorporate the
1577memorandum in the minutes. Senior managers and board members are
1578also required to file such disclosures with the Commission on
1579Ethics and the Office of Insurance Regulation. The executive
1580director of the corporation or his or her designee shall notify
1581each newly appointed and existing appointed member of the board
1582of governors and senior managers of their duty to comply with
1583the reporting requirements of part III of chapter 112. At least
1584quarterly, the executive director or his or her designee shall
1585submit to the Commission on Ethics a list of names of the senior
1586managers and members of the board of governors who are subject
1587to the public disclosure requirements under s. 112.3145.
1588 4. Notwithstanding s. 112.3148 or s. 112.3149, or any
1589other provision of law, an employee or board member may not
1590knowingly accept, directly or indirectly, any gift or
1591expenditure from a person or entity, or an employee or
1592representative of such person or entity, that has a contractual
1593relationship with the corporation or who is under consideration
1594for a contract. An employee or board member who fails to comply
1595with subparagraph 3. or this subparagraph is subject to
1596penalties provided under ss. 112.317 and 112.3173.
1597 5. Any senior manager of the corporation who is employed
1598on or after January 1, 2007, regardless of the date of hire, who
1599subsequently retires or terminates employment is prohibited from
1600representing another person or entity before the corporation for
16012 years after retirement or termination of employment from the
1602corporation.
1603 6. Any senior manager of the corporation who is employed
1604on or after January 1, 2007, regardless of the date of hire, who
1605subsequently retires or terminates employment is prohibited from
1606having any employment or contractual relationship for 2 years
1607with an insurer that has entered into a take-out bonus agreement
1608with the corporation.
1609 (y) It is the intent of the Legislature that the
1610amendments to this subsection enacted in 2002 should, over time,
1611reduce the probable maximum windstorm losses in the residual
1612markets and should reduce the potential assessments to be levied
1613on property insurers and policyholders statewide. In furtherance
1614of this intent:
1615 1. The board shall, on or before February 1 of each year,
1616provide a report to the President of the Senate and the Speaker
1617of the House of Representatives showing the reduction or
1618increase in the 100-year probable maximum loss attributable to
1619wind-only coverages and the quota share program under this
1620subsection combined, as compared to the benchmark 100-year
1621probable maximum loss of the Florida Windstorm Underwriting
1622Association. For purposes of this paragraph, the benchmark 100-
1623year probable maximum loss of the Florida Windstorm Underwriting
1624Association shall be the calculation dated February 2001 and
1625based on November 30, 2000, exposures. In order to ensure
1626comparability of data, the board shall use the same methods for
1627calculating its probable maximum loss as were used to calculate
1628the benchmark probable maximum loss.
1629 2. Beginning December 1, 2010, if the report under
1630subparagraph 1. for any year indicates that the 100-year
1631probable maximum loss attributable to wind-only coverages and
1632the quota share program combined does not reflect a reduction of
1633at least 25 percent from the benchmark, the board shall reduce
1634the boundaries of the high-risk area eligible for wind-only
1635coverages under this subsection in a manner calculated to reduce
1636such probable maximum loss to an amount at least 25 percent
1637below the benchmark.
1638 3. Beginning February 1, 2015, if the report under
1639subparagraph 1. for any year indicates that the 100-year
1640probable maximum loss attributable to wind-only coverages and
1641the quota share program combined does not reflect a reduction of
1642at least 50 percent from the benchmark, the boundaries of the
1643high-risk area eligible for wind-only coverages under this
1644subsection shall be reduced by the elimination of any area that
1645is not seaward of a line 1,000 feet inland from the Intracoastal
1646Waterway.
1647 (y)(z) In enacting the provisions of this section, the
1648Legislature recognizes that both the Florida Windstorm
1649Underwriting Association and the Residential Property and
1650Casualty Joint Underwriting Association have entered into
1651financing arrangements that obligate each entity to service its
1652debts and maintain the capacity to repay funds secured under
1653these financing arrangements. It is the intent of the
1654Legislature that nothing in this section be construed to
1655compromise, diminish, or interfere with the rights of creditors
1656under such financing arrangements. It is further the intent of
1657the Legislature to preserve the obligations of the Florida
1658Windstorm Underwriting Association and Residential Property and
1659Casualty Joint Underwriting Association with regard to
1660outstanding financing arrangements, with such obligations
1661passing entirely and unchanged to the corporation and,
1662specifically, to the applicable account of the corporation. So
1663long as any bonds, notes, indebtedness, or other financing
1664obligations of the Florida Windstorm Underwriting Association or
1665the Residential Property and Casualty Joint Underwriting
1666Association are outstanding, under the terms of the financing
1667documents pertaining to them, the governing board of the
1668corporation shall have and shall exercise the authority to levy,
1669charge, collect, and receive all premiums, assessments,
1670surcharges, charges, revenues, and receipts that the
1671associations had authority to levy, charge, collect, or receive
1672under the provisions of subsection (2) and this subsection,
1673respectively, as they existed on January 1, 2002, to provide
1674moneys, without exercise of the authority provided by this
1675subsection, in at least the amounts, and by the times, as would
1676be provided under those former provisions of subsection (2) or
1677this subsection, respectively, so that the value, amount, and
1678collectability of any assets, revenues, or revenue source
1679pledged or committed to, or any lien thereon securing such
1680outstanding bonds, notes, indebtedness, or other financing
1681obligations will not be diminished, impaired, or adversely
1682affected by the amendments made by this act and to permit
1683compliance with all provisions of financing documents pertaining
1684to such bonds, notes, indebtedness, or other financing
1685obligations, or the security or credit enhancement for them, and
1686any reference in this subsection to bonds, notes, indebtedness,
1687financing obligations, or similar obligations, of the
1688corporation shall include like instruments or contracts of the
1689Florida Windstorm Underwriting Association and the Residential
1690Property and Casualty Joint Underwriting Association to the
1691extent not inconsistent with the provisions of the financing
1692documents pertaining to them.
1693 (z)(aa) The corporation shall not require the securing of
1694flood insurance as a condition of coverage if the insured or
1695applicant executes a form approved by the office affirming that
1696flood insurance is not provided by the corporation and that if
1697flood insurance is not secured by the applicant or insured in
1698addition to coverage by the corporation, the risk will not be
1699covered for flood damage. A corporation policyholder electing
1700not to secure flood insurance and executing a form as provided
1701herein making a claim for water damage against the corporation
1702shall have the burden of proving the damage was not caused by
1703flooding. Notwithstanding other provisions of this subsection,
1704the corporation may deny coverage to an applicant or insured who
1705refuses to execute the form described herein.
1706 (aa)(bb) A salaried employee of the corporation who
1707performs policy administration services subsequent to the
1708effectuation of a corporation policy is not required to be
1709licensed as an agent under the provisions of s. 626.112.
1710 (bb)(cc) By February 1, 2007, the corporation shall submit
1711a report to the President of the Senate, the Speaker of the
1712House of Representatives, the minority party leaders of the
1713Senate and the House of Representatives, and the chairs of the
1714standing committees of the Senate and the House of
1715Representatives having jurisdiction over matters relating to
1716property and casualty insurance. In preparing the report, the
1717corporation shall consult with the Office of Insurance
1718Regulation, the Department of Financial Services, and any other
1719party the corporation determines appropriate. The report must
1720include all findings and recommendations on the feasibility of
1721requiring authorized insurers that issue and service personal
1722and commercial residential policies and commercial
1723nonresidential policies that provide coverage for basic property
1724perils except for the peril of wind to issue and service for a
1725fee personal and commercial residential policies and commercial
1726nonresidential policies providing coverage for the peril of wind
1727issued by the corporation. The report must include:
1728 1. The expense savings to the corporation of issuing and
1729servicing such policies as determined by a cost-benefit
1730analysis.
1731 2. The expenses and liability to authorized insurers
1732associated with issuing and servicing such policies.
1733 3. The effect on service to policyholders of the
1734corporation relating to issuing and servicing such policies.
1735 4. The effect on the producing agent of the corporation of
1736issuing and servicing such policies.
1737 5. Recommendations as to the amount of the fee which
1738should be paid to authorized insurers for issuing and servicing
1739such policies.
1740 6. The effect that issuing and servicing such policies
1741will have on the corporation's number of policies, total insured
1742value, and probable maximum loss.
1743 (cc)(dd) There shall be no liability on the part of, and
1744no cause of action of any nature shall arise against, producing
1745agents of record of the corporation or employees of such agents
1746for insolvency of any take-out insurer.
1747 (dd)(ee) The assets of the corporation may be invested and
1748managed by the State Board of Administration.
1749 (ee)(ff) The office may establish a pilot program to offer
1750optional sinkhole coverage in one or more counties or other
1751territories of the corporation for the purpose of implementing
1752s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
1753Florida. Under the pilot program, the corporation is not
1754required to issue a notice of nonrenewal to exclude sinkhole
1755coverage upon the renewal of existing policies, but may exclude
1756such coverage using a notice of coverage change.
1757 Section 10. Paragraph (b) of subsection (2) of section
1758627.4133, Florida Statutes, is amended to read:
1759 627.4133 Notice of cancellation, nonrenewal, or renewal
1760premium.-
1761 (2) With respect to any personal lines or commercial
1762residential property insurance policy, including, but not
1763limited to, any homeowner's, mobile home owner's, farmowner's,
1764condominium association, condominium unit owner's, apartment
1765building, or other policy covering a residential structure or
1766its contents:
1767 (b) The insurer shall give the named insured written
1768notice of nonrenewal, cancellation, or termination at least 100
1769days prior to the effective date of the nonrenewal,
1770cancellation, or termination. However, the insurer shall give at
1771least 100 days' written notice, or written notice by June 1,
1772whichever is earlier, for any nonrenewal, cancellation, or
1773termination that would be effective between June 1 and November
177430. The notice must include the reason or reasons for the
1775nonrenewal, cancellation, or termination, except that:
1776 1. The insurer shall give the named insured written notice
1777of nonrenewal, cancellation, or termination at least 180 days
1778prior to the effective date of the nonrenewal, cancellation, or
1779termination for a named insured whose residential structure has
1780been insured by that insurer or an affiliated insurer for at
1781least a 5-year period immediately prior to the date of the
1782written notice.
1783 2. When cancellation is for nonpayment of premium, at
1784least 10 days' written notice of cancellation accompanied by the
1785reason therefor shall be given. As used in this subparagraph,
1786the term "nonpayment of premium" means failure of the named
1787insured to discharge when due any of her or his obligations in
1788connection with the payment of premiums on a policy or any
1789installment of such premium, whether the premium is payable
1790directly to the insurer or its agent or indirectly under any
1791premium finance plan or extension of credit, or failure to
1792maintain membership in an organization if such membership is a
1793condition precedent to insurance coverage. "Nonpayment of
1794premium" also means the failure of a financial institution to
1795honor an insurance applicant's check after delivery to a
1796licensed agent for payment of a premium, even if the agent has
1797previously delivered or transferred the premium to the insurer.
1798If a dishonored check represents the initial premium payment,
1799the contract and all contractual obligations shall be void ab
1800initio unless the nonpayment is cured within the earlier of 5
1801days after actual notice by certified mail is received by the
1802applicant or 15 days after notice is sent to the applicant by
1803certified mail or registered mail, and if the contract is void,
1804any premium received by the insurer from a third party shall be
1805refunded to that party in full.
1806 3. When such cancellation or termination occurs during the
1807first 90 days during which the insurance is in force and the
1808insurance is canceled or terminated for reasons other than
1809nonpayment of premium, at least 20 days' written notice of
1810cancellation or termination accompanied by the reason therefor
1811shall be given except where there has been a material
1812misstatement or misrepresentation or failure to comply with the
1813underwriting requirements established by the insurer.
1814 4. The requirement for providing written notice of
1815nonrenewal by June 1 of any nonrenewal that would be effective
1816between June 1 and November 30 does not apply to the following
1817situations, but the insurer remains subject to the requirement
1818to provide such notice at least 100 days prior to the effective
1819date of nonrenewal:
1820 a. A policy that is nonrenewed due to a revision in the
1821coverage for sinkhole losses and catastrophic ground cover
1822collapse pursuant to s. 627.706, as amended by s. 30, chapter
18232007-1, Laws of Florida.
1824 b. A policy that is nonrenewed by Citizens Property
1825Insurance Corporation, pursuant to s. 627.351(6), for a policy
1826that has been assumed by an authorized insurer offering
1827replacement or renewal coverage to the policyholder.
1828 5. Notwithstanding any other provision of law, an insurer
1829may cancel or nonrenew a property insurance policy upon a
1830minimum of 45 days' notice if the office finds that the early
1831cancellation of some or all of the insurer's policies is
1832necessary to protect the best interests of the public or
1833policyholders and the office approves the insurer's plan for
1834early cancellation or nonrenewal of some or all of its policies.
1835The office may base such a finding upon the financial condition
1836of the insurer, lack of adequate reinsurance coverage for
1837hurricane risk, or other relevant factors. The office may
1838condition its finding on the consent of the insurer to be placed
1839in administrative supervision pursuant to s. 624.81 or consent
1840to the appointment of a receiver under chapter 631.
1841 6. Citizens Property Insurance Corporation shall give the
1842named insured written notice of nonrenewal, cancellation, or
1843termination at least 45 days before the effective date of the
1844nonrenewal, cancellation, or termination if the policy being
1845nonrenewed, canceled, or terminated has been assumed by an
1846authorized insurer offering coverage to the policyholder.
1847
1848After the policy has been in effect for 90 days, the policy
1849shall not be canceled by the insurer except when there has been
1850a material misstatement, a nonpayment of premium, a failure to
1851comply with underwriting requirements established by the insurer
1852within 90 days of the date of effectuation of coverage, or a
1853substantial change in the risk covered by the policy or when the
1854cancellation is for all insureds under such policies for a given
1855class of insureds. This paragraph does not apply to individually
1856rated risks having a policy term of less than 90 days.
1857 Section 11. Section 627.41341, Florida Statutes, is
1858created to read:
1859 627.41341 Notice of change in policy terms.-
1860 (1) As used in this section, the term:
1861 (a) "Change in policy terms" means the modification,
1862addition, or deletion of any term, coverage, duty, or condition
1863from the prior policy. The correction of typographical or
1864scrivener's errors or the application of mandated legislative
1865changes is not a change in policy terms.
1866 (b) "Policy" means a written contract of personal lines
1867insurance or a written agreement for or effecting insurance, or
1868the certificate of such insurance, by whatever name called, and
1869includes all clauses, riders, endorsements, and papers which are
1870a part of such policy. The term "policy" does not include a
1871binder as defined in s. 627.420 unless the duration of the
1872binder period exceeds 60 days.
1873 (c) "Renewal" means the issuance and delivery by an
1874insurer of a policy superseding at the end of the policy period
1875a policy previously issued and delivered by the same insurer or
1876the issuance and delivery of a certificate or notice extending
1877the term of a policy beyond its policy period or term. Any
1878policy with a policy period or term of less than 6 months or any
1879policy with no fixed expiration date shall for the purpose of
1880this section be considered as if written for successive policy
1881periods or terms of 6 months.
1882 (2) A renewal policy may contain a change in policy terms.
1883If a renewal policy contains a change in policy terms, the
1884insurer shall give the named insured a written notice of change
1885in policy terms that shall be enclosed with the written notice
1886of renewal premium required by ss. 627.4133 and 627.728. The
1887notice shall be entitled "Notice of Change in Policy Terms."
1888 (3) Although not required, United States Postal Service
1889proof of mailing or registered mailing of the notice of change
1890in policy terms to the named insured at the address shown in the
1891policy shall be sufficient proof of notice.
1892 (4) Receipt of payment of the premium for the renewal
1893policy by the insurer shall be deemed to be acceptance of the
1894new policy terms by the named insured.
1895 (5) If an insurer fails to provide the notice of change in
1896policy terms required under subsection (2), the original policy
1897terms shall remain in effect until the next renewal and the
1898proper service of the notice of change in policy terms or until
1899the effective date of replacement coverage obtained by the named
1900insured, whichever occurs first.
1901 (6) The intent of this section is to:
1902 (a) Allow an insurer to make a change in policy terms
1903without nonrenewing policyholders that the insurer wishes to
1904continue insuring.
1905 (b) Alleviate the concern and confusion to the
1906policyholders caused by the required policy nonrenewal for the
1907limited issue when an insurer intends to renew the insurance
1908policy but the new policy contains a change in policy terms.
1909 (c) Encourage policyholders to discuss their coverages
1910with their insurance agent.
1911 Section 12. Subsections (1), (3), (4), and (5) of section
1912627.7011, Florida Statutes, are amended to read:
1913 627.7011 Homeowners' policies; offer of replacement cost
1914coverage and law and ordinance coverage.-
1915 (1) Before Prior to issuing or renewing a homeowner's
1916insurance policy on or after October 1, 2005, or prior to the
1917first renewal of a homeowner's insurance policy on or after
1918October 1, 2005, the insurer must offer each of the following:
1919 (a) A policy or endorsement providing that any loss which
1920is repaired or replaced will be adjusted on the basis of
1921replacement costs not exceeding policy limits as to the
1922dwelling, rather than actual cash value, but not including costs
1923necessary to meet applicable laws and ordinances regulating the
1924construction, use, or repair of any property or requiring the
1925tearing down of any property, including the costs of removing
1926debris.
1927 (b) A policy or endorsement providing that, subject to
1928other policy provisions, any loss which is repaired or replaced
1929at any location will be adjusted on the basis of replacement
1930costs not exceeding policy limits as to the dwelling, rather
1931than actual cash value, and also including costs necessary to
1932meet applicable laws and ordinances regulating the construction,
1933use, or repair of any property or requiring the tearing down of
1934any property, including the costs of removing debris; however,
1935such additional costs necessary to meet applicable laws and
1936ordinances may be limited to either 25 percent or 50 percent of
1937the dwelling limit, as selected by the policyholder, and such
1938coverage shall apply only to repairs of the damaged portion of
1939the structure unless the total damage to the structure exceeds
194050 percent of the replacement cost of the structure.
1941
1942An insurer is not required to make the offers required by this
1943subsection with respect to the issuance or renewal of a
1944homeowner's policy that contains the provisions specified in
1945paragraph (b) for law and ordinance coverage limited to 25
1946percent of the dwelling limit, except that the insurer must
1947offer the law and ordinance coverage limited to 50 percent of
1948the dwelling limit. This subsection does not prohibit the offer
1949of a guaranteed replacement cost policy.
1950 (3)(a) If In the event of a loss occurs for which a
1951dwelling or personal property is insured on the basis of
1952replacement costs, the insurer shall initially pay at least the
1953actual cash value of the loss and shall pay the actual cash
1954value of the insured loss, less any applicable deductible. In
1955order to receive payment from an insurer under this paragraph, a
1956policyholder must enter into a contract for the performance of
1957building and structural repairs. The insurer shall pay any
1958remaining amounts necessary to perform such repairs as work is
1959performed and expenses are incurred. Other than incidental
1960expenses to mitigate further damage, the insurer or any
1961contractor or subcontractor may not require the policyholder to
1962advance payment for such repairs or expenses. The insurer may
1963waive the requirement for a contract under this paragraph
1964replacement cost without reservation or holdback of any
1965depreciation in value, whether or not the insured replaces or
1966repairs the dwelling or property.
1967 (b) If a loss occurs for which personal property is
1968insured on the basis of replacement costs, the insurer may limit
1969an initial payment to 50 percent of the replacement cost value
1970of the personal property to be replaced, less any applicable
1971deductible. An insurer may require an insured to provide the
1972receipts for purchases of property financed by the initial 50-
1973percent payment required by this paragraph, and the insurer
1974shall use such receipts to make any remaining payments requested
1975by the insured for the replacement of remaining insured personal
1976property. If a total loss occurs, the insurer shall pay the
1977replacement cost for content coverage without reservation or
1978holdback of any depreciation in value. The insurer may not
1979require the policyholder to advance payment for the replaced
1980property.
1981 (4) A Any homeowner's insurance policy issued or renewed
1982on or after October 1, 2005, must include in bold type no
1983smaller than 18 points the following statement:
1984
1985"LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
1986THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
1987CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
1988NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
1989COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
1990DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT."
1991
1992The intent of this subsection is to encourage policyholders to
1993purchase sufficient coverage to protect them in case events
1994excluded from the standard homeowners policy, such as law and
1995ordinance enforcement and flood, combine with covered events to
1996produce damage or loss to the insured property. The intent is
1997also to encourage policyholders to discuss these issues with
1998their insurance agent.
1999 (5) Nothing in This section does not shall be construed to
2000apply to policies not considered to be "homeowners' policies,"
2001as that term is commonly understood in the insurance industry.
2002This section specifically does not apply to mobile home
2003policies. Nothing in This section does not limit shall be
2004construed as limiting the ability of any insurer to reject or
2005nonrenew any insured or applicant on the grounds that the
2006structure does not meet underwriting criteria applicable to
2007replacement cost or law and ordinance policies or for other
2008lawful reasons.
2009 Section 13. Paragraph (a) of subsection (5) of section
2010627.70131, Florida Statutes, is amended to read:
2011 627.70131 Insurer's duty to acknowledge communications
2012regarding claims; investigation.-
2013 (5)(a) Within 90 days after an insurer receives notice of
2014an initial or supplemental a property insurance claim from a
2015policyholder, the insurer shall pay or deny such claim or a
2016portion of the claim unless the failure to pay such claim or a
2017portion of the claim is caused by factors beyond the control of
2018the insurer which reasonably prevent such payment. Any payment
2019of an initial or supplemental a claim or portion of such a claim
2020made paid 90 days after the insurer receives notice of the
2021claim, or made paid more than 15 days after there are no longer
2022factors beyond the control of the insurer which reasonably
2023prevented such payment, whichever is later, shall bear interest
2024at the rate set forth in s. 55.03. Interest begins to accrue
2025from the date the insurer receives notice of the claim. The
2026provisions of this subsection may not be waived, voided, or
2027nullified by the terms of the insurance policy. If there is a
2028right to prejudgment interest, the insured shall select whether
2029to receive prejudgment interest or interest under this
2030subsection. Interest is payable when the claim or portion of the
2031claim is paid. Failure to comply with this subsection
2032constitutes a violation of this code. However, failure to comply
2033with this subsection shall not form the sole basis for a private
2034cause of action.
2035 Section 14. Effective January 1, 2011, section 627.7031,
2036Florida Statutes, is created to read:
2037 627.7031 Residential property insurance option.-
2038 (1) An insurer holding a certificate of authority to write
2039property insurance in this state may offer or renew policies at
2040rates established in accordance with s. 627.062(2)(l), subject
2041to all of the requirements and prohibitions of this section.
2042 (2) An insurer offering or renewing policies at rates
2043established in accordance with s. 627.062(2)(l) may not purchase
2044coverage from the Florida Hurricane Catastrophe Fund under the
2045temporary increase in coverage limit option under s.
2046215.555(17).
2047 (3)(a) Before the effective date of a newly issued policy
2048at rates established in accordance with s. 627.062(2)(l) or
2049before the effective date of a renewal policy at rates
2050established in accordance with s. 627.062(2)(l), the applicant
2051or insured must be given the following notice, printed in at
2052least 12-point boldfaced type:
2053
2054 THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
2055REGULATION BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY
2056BE HIGHER THAN RATES APPROVED BY THAT OFFICE. A RESIDENTIAL
2057PROPERTY POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY
2058BE AVAILABLE FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
2059PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR POLICY
2060OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE A CITIZENS
2061QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF INSURANCE REGULATION'S
2062WEBSITE AT WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION
2063ABOUT CHOICES AVAILABLE TO YOU.
2064
2065 (b) For policies renewed at a rate established in
2066accordance with s. 627.062(2)(l), the notice described in
2067paragraph (a) must be provided in writing at the same time as
2068the renewal notice on a document separate from the renewal
2069notice, but may be contained within the same mailing as the
2070renewal notice.
2071 (4) Before the effective date of a newly issued policy at
2072rates established in accordance with s. 627.062(2)(l), or before
2073the effective date of the first renewal at rates established in
2074accordance with s. 627.062(2)(l) of a policy originally issued
2075before the effective date of this section, the applicant or
2076insured must:
2077 (a) Be provided or offered, for comparison purposes, an
2078estimate of the premium for a policy from Citizens Property
2079Insurance Corporation reflecting substantially similar
2080coverages, limits, and deductibles to the extent available.
2081 (b) Provide the insurer or agent with a signed copy of the
2082following acknowledgement form, which must be retained by the
2083insurer or agent for at least 3 years. If the acknowledgement
2084form is signed by the insured or if the insured remits payment
2085in the amount of the rate established in accordance with s.
2086627.062(2)(l) after being mailed, otherwise provided, or offered
2087the comparison specified in paragraph (a), an insurer renewing a
2088policy at such rate shall be deemed to comply with this section,
2089and it is presumed that the insured has been informed and
2090understands the information contained in the comparison and
2091acknowledgement forms:
2092
2093
ACKNOWLEDGEMENT
2094 1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
2095REQUIRED PREMIUM COMPARISON.
2096 2. I UNDERSTAND THAT THE RATE FOR THIS RESIDENTIAL
2097PROPERTY INSURANCE POLICY IS NOT SUBJECT TO FULL RATE REGULATION
2098BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY BE HIGHER
2099THAN RATES APPROVED BY THAT OFFICE.
2100 3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY INSURANCE
2101POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY BE
2102AVAILABLE FROM CITIZENS PROPERTY INSURANCE CORPORATION.
2103 4. I UNDERSTAND THAT THE FLORIDA OFFICE OF INSURANCE
2104REGULATION'S WEBSITE WWW.SHOPANDCOMPARERATES.COM CONTAINS
2105RESIDENTIAL PROPERTY INSURANCE RATE COMPARISON INFORMATION.
2106 5. I UNDERSTAND THAT IF CITIZENS PROPERTY INSURANCE
2107CORPORATION INCURS A DEFICIT BECAUSE OF HURRICANE LOSSES OR
2108OTHER LOSSES, I MAY BE REQUIRED TO PAY AN ASSESSMENT BASED UPON
2109THE PREMIUM FOR THIS POLICY AND THAT A POLICYHOLDER OF CITIZENS
2110PROPERTY INSURANCE CORPORATION MAY BE REQUIRED TO PAY A
2111DIFFERENT ASSESSMENT.
2112
2113 (5) The following types of residential property insurance
2114policies are not eligible for rates established in accordance
2115with s. 627.062(2)(l) and are not subject to the other
2116provisions of this section:
2117 (a) Residential property insurance policies that exclude
2118coverage for the perils of windstorm or hurricane.
2119 (b) Residential property insurance policies that are
2120subject to a consent decree, agreement, understanding, or other
2121arrangement between the insurer and the office relating to rates
2122or premiums for policies removed from Citizens Property
2123Insurance Corporation.
2124 (6) Notwithstanding s. 627.4133, an insurer that has
2125issued a policy under this section shall provide the named
2126insured written notice of nonrenewal at least 180 days before
2127the effective date of the nonrenewal as to subsequent
2128nonrenewals. However, this subsection does not prohibit an
2129insurer from canceling a policy as permitted under s. 627.4133.
2130The offer of a policy at rates authorized by this section
2131constitutes an offer to renew the policy at the rates specified
2132in the offer and does not constitute a nonrenewal.
2133 Section 15. Effective June 1, 2010, and applying only to
2134insurance claims made on or after that date, subsection (1),
2135paragraph (b) of subsection (2), and subsections (5), (7), and
2136(8) of section 627.707, Florida Statutes, are amended to read:
2137 627.707 Standards for investigation of sinkhole claims by
2138insurers; nonrenewals.-Upon receipt of a claim for a sinkhole
2139loss, an insurer must meet the following standards in
2140investigating a claim:
2141 (1) The insurer must make an inspection of the insured's
2142premises to determine if there has been physical damage to the
2143structure which is consistent with may be the result of sinkhole
2144loss activity.
2145 (2) Following the insurer's initial inspection, the
2146insurer shall engage a professional engineer or a professional
2147geologist to conduct testing as provided in s. 627.7072 to
2148determine the cause of the loss within a reasonable professional
2149probability and issue a report as provided in s. 627.7073, if:
2150 (b) The policyholder demands testing in accordance with
2151this section or s. 627.7072 and coverage under the policy is
2152available if sinkhole loss is verified.
2153 (5)(a) Subject to paragraph (b), if a sinkhole loss is
2154verified, the insurer shall pay to stabilize the land and
2155building and repair the foundation in accordance with the
2156recommendations of the professional engineer as provided under
2157s. 627.7073, with notice to and in consultation with the
2158policyholder, subject to the coverage and terms of the policy.
2159The insurer shall pay for other repairs to the structure and
2160contents in accordance with the terms of the policy.
2161 (b)1. After a The insurer may limit its payment to the
2162actual cash value of the sinkhole loss, not including
2163underpinning or grouting or any other repair technique performed
2164below the existing foundation of the building, until the
2165policyholder enters into a contract for the performance of
2166building stabilization or foundation repairs, the claim shall be
2167paid up to the full cost of the stabilization or foundation
2168repairs and up to full replacement cost for above-ground repairs
2169as set forth in this paragraph, less the insured's deductible.
2170After the policyholder enters into a contract for the
2171performance of building stabilization or foundation repairs in
2172accordance with the recommendations set forth in s. 627.7073,
2173the insurer may:
2174 a. Limit its initial payment to 10 percent of the
2175estimated costs to implement the building stabilization and
2176foundation repairs.
2177 b. Limit its initial payment to the actual cash value of
2178the sinkhole loss for above-ground repairs to the structure.
2179 2. However, after the policyholder enters into the
2180contract for the performance of building stabilization or
2181foundation repairs, the insurer shall pay the amounts necessary
2182to begin and perform such stabilization and repairs as the work
2183is performed and the expenses are incurred. Final payments for
2184the structural or building stabilization and foundation repair
2185work shall be remitted after such work is complete and finished
2186in accordance with the terms of the policy and the report's
2187recommendations and after final bills or receipts have been
2188submitted to the insurer. The insurer may not require the
2189policyholder to advance payment for such repairs. If repair
2190covered by a personal lines residential property insurance
2191policy has begun and the professional engineer selected or
2192approved by the insurer determines that the repair cannot be
2193completed within the policy limits, the insurer must either
2194complete the professional engineer's recommended repair or
2195tender the policy limits to the policyholder without a reduction
2196for the repair expenses incurred.
2197 (c) The policyholder shall enter into such contract for
2198repairs within 90 days after the insurance company approves
2199coverage for a sinkhole loss to prevent additional damage to the
2200building or structure. The 90-day time period may be extended
2201for an additional reasonable time period if the policyholder is
2202unable to find a qualified person or entity to contract for such
2203repairs within the 90-day time period based upon factors beyond
2204the policyholder's control or the policyholder is actively
2205seeking to retain a professional engineer or geologist as
2206provided in s. 627.7073(1)(c). This time period is tolled if
2207either party invokes neutral evaluation.
2208 (d) The stabilization and all other repairs to the
2209structure and contents must be completed within 12 months after
2210entering into the contract for repairs as described in paragraph
2211(c) unless:
2212 1. There is a mutual agreement between the insurer and the
2213insured;
2214 2. The stabilization and all other repairs cannot be
2215completed due to factors beyond the control of the insured which
2216reasonably prevent completion;
2217 3. The claim is involved with the neutral evaluation
2218process under s. 627.7074;
2219 4. The claim is in litigation; or
2220 5. The claim is under appraisal.
2221 (e)(c) Upon the insurer's obtaining the written approval
2222of the policyholder and any lienholder, the insurer may make
2223payment directly to the persons selected by the policyholder to
2224perform the land and building stabilization and foundation
2225repairs. The decision by the insurer to make payment to such
2226persons does not hold the insurer liable for the work performed.
2227 (7) If the insurer obtains, pursuant to s. 627.7073,
2228written certification that there is no sinkhole loss or that the
2229cause of the damage was not sinkhole activity, and if the
2230policyholder has submitted the sinkhole claim without good faith
2231grounds for submitting such claim, the policyholder shall
2232reimburse the insurer for 50 percent of the actual costs of the
2233analyses and services provided under ss. 627.7072 and 627.7073;
2234however, a policyholder is not required to reimburse an insurer
2235more than $2,500 with respect to any claim. A policyholder is
2236required to pay reimbursement under this subsection only if the
2237insurer, prior to ordering the analysis under s. 627.7072,
2238informs the policyholder in writing of the policyholder's
2239potential liability for reimbursement and gives the policyholder
2240the opportunity to withdraw the claim.
2241 (8) An No insurer may not shall nonrenew any policy of
2242property insurance on the basis of filing of claims for partial
2243loss caused by sinkhole damage or clay shrinkage as long as the
2244total of such payments does not exceed the current policy limits
2245of coverage for property damage for the policy in effect on the
2246date of the loss, or and provided the insured has repaired the
2247structure in accordance with the engineering recommendations
2248upon which any payment or policy proceeds were based.
2249 Section 16. Effective June 1, 2010, and applying only to
2250insurance claims made on or after that date, section 627.7072,
2251Florida Statutes, is amended to read:
2252 627.7072 Testing standards for sinkholes.-
2253 (1) The professional engineer and professional geologist
2254shall perform such tests as sufficient, in their professional
2255opinion, to determine the presence or absence of sinkhole loss
2256or other cause of damage within reasonable professional
2257probability and for the professional engineer to make
2258recommendations regarding necessary building stabilization and
2259foundation repair.
2260 (2) The professional engineer and professional geologist
2261shall perform tests under this section in accordance with
2262Florida Geological Survey Special Publication 57 to determine
2263the presence or absence of sinkhole loss or other cause of
2264damage within a reasonable professional probability.
2265 Section 17. Effective June 1, 2010, and applying only to
2266insurance claims made on or after that date, section 627.7073,
2267Florida Statutes, is amended to read:
2268 627.7073 Sinkhole reports.-
2269 (1) Upon completion of testing as provided in s. 627.7072,
2270the professional engineer or professional geologist shall issue
2271a report and certification to the insurer, with an additional
2272copy and certification for the insurer to forward to and the
2273policyholder as provided in this section.
2274 (a) Sinkhole loss is verified if, based upon tests
2275performed in accordance with s. 627.7072, a professional
2276engineer or a professional geologist issues a written report and
2277certification stating:
2278 1. That the cause of the actual physical and structural
2279damage is sinkhole activity within a reasonable professional
2280probability.
2281 2. That the analyses conducted were of sufficient scope to
2282identify sinkhole activity as the cause of damage within a
2283reasonable professional probability.
2284 3. A description of the tests performed.
2285 4. A recommendation by the professional engineer of
2286methods for stabilizing the land and building and for making
2287repairs to the foundation.
2288 (b) If sinkhole activity is eliminated as the cause of
2289damage to the structure, the professional engineer or
2290professional geologist shall issue a written report and
2291certification to the policyholder and the insurer stating:
2292 1. That the cause of the damage is not sinkhole activity
2293within a reasonable professional probability.
2294 2. That the analyses and tests conducted were of
2295sufficient scope to eliminate sinkhole activity as the cause of
2296damage within a reasonable professional probability.
2297 3. A statement of the cause of the damage within a
2298reasonable professional probability.
2299 4. A description of the tests performed.
2300 (c) If the policyholder disagrees with the findings,
2301opinions, or recommendations of the professional engineer or
2302professional geologist engaged by the insurer, the policyholder
2303may engage a professional engineer or professional geologist, at
2304the policyholder's expense, to conduct testing under s. 627.7072
2305and to render findings, opinions, and recommendations as to the
2306cause of distress to the property and the appropriate method of
2307land and building stabilization and foundation repair and
2308certify such findings, opinions, and recommendations in a report
2309that meets the requirements of this section and forward a copy
2310of the report to the insurer. Unless the policyholder engages a
2311professional engineer or professional geologist as described in
2312this paragraph who disputes the findings of the insurer's
2313engineer or geologist, the respective findings, opinions, and
2314recommendations of the professional engineer or professional
2315geologist as to the cause of distress to the property and the
2316findings, opinions, and recommendations of the insurer's
2317professional engineer as to land and building stabilization and
2318foundation repair as required by s. 627.707(2), shall be
2319presumed correct, which presumption shall shift the burden of
2320proof under s. 90.304.
2321 (2)(a) Any insurer that has paid a claim for a sinkhole
2322loss shall file a copy of the report and certification, prepared
2323pursuant to subsection (1), including the legal description of
2324the real property, and the name of the property owner, and the
2325amount paid by the insurer, with the county clerk of court, who
2326shall record the report and certification. The insurer shall
2327also file a copy of any report prepared on behalf of the insured
2328or the insured's representative that has been provided to the
2329insurer that indicates that sinkhole loss caused the damage
2330claimed. The insurer shall bear the cost of filing and recording
2331of one or more reports the report and certifications
2332certification. There shall be no cause of action or liability
2333against an insurer for compliance with this section. The
2334recording of the report and certification does not:
2335 1. Constitute a lien, encumbrance, or restriction on the
2336title to the real property or constitute a defect in the title
2337to the real property;
2338 2. Create any cause of action or liability against any
2339grantor of the real property for breach of any warranty of good
2340title or warranty against encumbrances; or
2341 3. Create any cause of action or liability against any
2342title insurer that insures the title to the real property.
2343 (b) The seller of real property upon which a sinkhole
2344claim has been made by the seller and paid by the insurer shall
2345disclose to the buyer of such property that a claim has been
2346paid, the amount of the payment, and whether or not the full
2347amount of the proceeds were used to repair the sinkhole damage.
2348The seller shall also provide to the buyer a copy of the report
2349prepared pursuant to subsection (1) and any report prepared on
2350behalf of the insured.
2351 Section 18. Effective June 1, 2010, and applying only to
2352insurance claims made on or after that date, section 627.7074,
2353Florida Statutes, is amended to read:
2354 627.7074 Alternative procedure for resolution of disputed
2355sinkhole insurance claims.-
2356 (1) As used in this section, the term:
2357 (a) "Neutral evaluation" means the alternative dispute
2358resolution provided for in this section.
2359 (b) "Neutral evaluator" means a professional engineer or a
2360professional geologist who has completed a course of study in
2361alternative dispute resolution designed or approved by the
2362department for use in the neutral evaluation process, who is
2363determined to be fair and impartial.
2364 (2)(a) The department shall certify and maintain a list of
2365persons who are neutral evaluators.
2366 (b) The department shall prepare a consumer information
2367pamphlet for distribution by insurers to policyholders which
2368clearly describes the neutral evaluation process and includes
2369information and forms necessary for the policyholder to request
2370a neutral evaluation.
2371 (3) Neutral evaluation is available to either party if a
2372sinkhole report has been issued pursuant to s. 627.7073.
2373Following the receipt of the report provided under s. 627.7073
2374or the denial of a claim for a sinkhole loss, the insurer shall
2375notify the policyholder of his or her right to participate in
2376the neutral evaluation program under this section. Neutral
2377evaluation supersedes the alternative dispute resolution process
2378under s. 627.7015 but does not supersede the appraisal clause if
2379an appraisal clause is provided by the insurance policy. The
2380insurer shall provide to the policyholder the consumer
2381information pamphlet prepared by the department pursuant to
2382paragraph (2)(b).
2383 (4) Neutral evaluation is nonbinding, but mandatory if
2384requested by either party. A request for neutral evaluation may
2385be filed with the department by the policyholder or the insurer
2386on a form approved by the department. The request for neutral
2387evaluation must state the reason for the request and must
2388include an explanation of all the issues in dispute at the time
2389of the request. Filing a request for neutral evaluation tolls
2390the applicable time requirements for filing suit for a period of
239160 days following the conclusion of the neutral evaluation
2392process or the time prescribed in s. 95.11, whichever is later.
2393 (5) Neutral evaluation shall be conducted as an informal
2394process in which formal rules of evidence and procedure need not
2395be observed. A party to neutral evaluation is not required to
2396attend neutral evaluation if a representative of the party
2397attends and has the authority to make a binding decision on
2398behalf of the party. All parties shall participate in the
2399evaluation in good faith.
2400 (6) The insurer shall pay the costs associated with the
2401neutral evaluation.
2402 (7)(a) Upon receipt of a request for neutral evaluation,
2403the department shall provide the parties a list of certified
2404neutral evaluators. The parties shall mutually select a neutral
2405evaluator from the list and promptly inform the department. If
2406the parties cannot agree to a neutral evaluator within 10
2407business days, the department allow the parties to submit
2408requests to disqualify neutral evaluators on the list for cause.
2409For purposes of this subsection, a ground for cause is required
2410to be found by the department only if:
2411 1. A familial relationship exists between the neutral
2412evaluator and either party or a representative of either party
2413within the third degree;
2414 2. The proposed neutral evaluator has, in a professional
2415capacity, previously represented either party or a
2416representative of either party in the same or a substantially
2417related matter;
2418 3. The proposed neutral evaluator has, in a professional
2419capacity, represented another person in the same or a
2420substantially related matter and that person's interests are
2421materially adverse to the interests of the parties;
2422 4. The proposed neutral evaluator works in the same firm
2423or corporation as a person who has, in a professional capacity,
2424previously represented either party or a representative of
2425either party in the same or a substantially related matter; or
2426 5. The proposed neutral evaluator has, within the
2427preceding 5 years, worked as an employee of any party to the
2428case.
2429 (b) The parties shall mutually appoint a neutral evaluator
2430from the department list and promptly inform the department. If
2431the parties cannot agree to a neutral evaluator within 10
2432business days, the department shall appoint a neutral evaluator
2433from the department's list of certified neutral evaluators. The
2434department shall allow each party to disqualify one neutral
2435evaluator without cause. Upon selection or appointment, the
2436department shall promptly refer the request to the neutral
2437evaluator.
2438 (c) Within 5 business days after the referral, the neutral
2439evaluator shall notify the policyholder and the insurer of the
2440date, time, and place of the neutral evaluation conference. The
2441conference may be held by telephone, if feasible and desirable.
2442The neutral evaluation conference shall be held within 90 45
2443days after the receipt of the request by the department. If the
2444neutral evaluator fails to hold a neutral evaluation conference
2445in accordance with this paragraph, the neutral evaluator's fee
2446shall be reduced by 10 percent unless the failure was due to
2447factors beyond the control of the neutral evaluator.
2448 (d) As used in this subsection, the term "substantially
2449related matter" means participation by the neutral evaluator on
2450the same claim, property, or any adjacent property.
2451 (8) The department shall adopt rules of procedure for the
2452neutral evaluation process.
2453 (9) For policyholders not represented by an attorney, a
2454consumer affairs specialist of the department or an employee
2455designated as the primary contact for consumers on issues
2456relating to sinkholes under s. 20.121 shall be available for
2457consultation to the extent that he or she may lawfully do so.
2458 (10) Evidence of an offer to settle a claim during the
2459neutral evaluation process, as well as any relevant conduct or
2460statements made in negotiations concerning the offer to settle a
2461claim, is inadmissible to prove liability or absence of
2462liability for the claim or its value, except as provided in
2463subsection (14) (13).
2464 (11) Regardless of when invoked, any court proceeding
2465related to the subject matter of the neutral evaluation shall be
2466stayed pending completion of the neutral evaluation and for 5
2467days after the filing of the neutral evaluator's report with the
2468court.
2469 (12) If the neutral evaluator, based upon his or her
2470professional training and credentials, is qualified only to
2471determine the causation issue or the method of repair issue, the
2472department shall allow the neutral evaluator to enlist the
2473assistance of another professional from the qualified neutral
2474evaluators list, not previously struck by parties with respect
2475to the subject evaluation, who, based upon his or her
2476professional training and credentials, is able to provide an
2477opinion as to the other disputed issue. Any professional who, if
2478appointed as the neutral evaluator, would be disqualified for
2479any reason listed in subsection (7) must be disqualified. In
2480addition, the neutral evaluator may use the service of other
2481experts or professionals as necessary to ensure that all items
2482in dispute are addressed in order to complete the neutral
2483evaluation. The neutral evaluator may request that the entity
2484that performed testing pursuant to s. 627.7072 perform such
2485additional reasonable testing deemed necessary in the
2486professional opinion of the neutral evaluator to complete the
2487neutral evaluation.
2488 (13)(12) For all matters that are not resolved by the
2489parties at the conclusion of the neutral evaluation, the neutral
2490evaluator shall prepare a report stating that in his or her
2491opinion the sinkhole loss has been verified or eliminated within
2492a reasonable degree of professional probability and, if
2493verified, whether the sinkhole loss has caused structural or
2494cosmetic damage to the building and, if so, the need for and
2495estimated costs of stabilizing the land and any covered
2496structures or buildings and other appropriate remediation or
2497structural repairs that are necessary due to the sinkhole loss.
2498The evaluator's report shall be sent to all parties in
2499attendance at the neutral evaluation and to the department.
2500 (14)(13) The recommendation of the neutral evaluator is
2501not binding on any party, and the parties retain access to
2502court. The neutral evaluator's written recommendation is
2503admissible in any subsequent action or proceeding relating to
2504the claim or to the cause of action giving rise to the claim.
2505 (15)(14) If the neutral evaluator first verifies the
2506existence of a sinkhole and, second, recommends the need for and
2507estimates costs of stabilizing the land and any covered
2508structures or buildings and other appropriate remediation or
2509structural repairs, which costs exceed the amount that the
2510insurer has offered to pay the policyholder, the insurer is
2511liable to the policyholder for up to $2,500 in attorney's fees
2512for the attorney's participation in the neutral evaluation
2513process. For purposes of this subsection, the term "offer to
2514pay" means a written offer signed by the insurer or its legal
2515representative and delivered to the policyholder within 10 days
2516after the insurer receives notice that a request for neutral
2517evaluation has been made under this section.
2518 (16)(15) If the insurer timely agrees in writing to comply
2519and timely complies with the recommendation of the neutral
2520evaluator, but the policyholder declines to resolve the matter
2521in accordance with the recommendation of the neutral evaluator
2522pursuant to this section:
2523 (a) The insurer is not liable for extracontractual damages
2524related to a claim for a sinkhole loss but only as related to
2525the issues determined by the neutral evaluation process. This
2526section does not affect or impair claims for extracontractual
2527damages unrelated to the issues determined by the neutral
2528evaluation process contained in this section; and
2529 (b) The actions of the insurer are not a confession of
2530judgment or an admission of liability, and the insurer may is
2531not be liable for attorney's fees under s. 627.428 or other
2532provisions of the insurance code unless the policyholder obtains
2533a judgment that is more favorable than the recommendation of the
2534neutral evaluator.
2535 (17) If the insurer agrees to comply with the neutral
2536evaluator's report, payment for stabilizing the land and
2537building and repairing the foundation shall be made in
2538accordance with the terms and conditions of the applicable
2539insurance policy.
2540 Section 19. Section 627.711, Florida Statutes, is amended
2541to read:
2542 627.711 Notice of premium discounts for hurricane loss
2543mitigation; uniform mitigation verification inspection form.-
2544 (1) Using a form prescribed by the Office of Insurance
2545Regulation, the insurer shall clearly notify the applicant or
2546policyholder of any personal lines residential property
2547insurance policy, at the time of the issuance of the policy and
2548at each renewal, of the availability and the range of each
2549premium discount, credit, other rate differential, or reduction
2550in deductibles, and combinations of discounts, credits, rate
2551differentials, or reductions in deductibles, for properties on
2552which fixtures or construction techniques demonstrated to reduce
2553the amount of loss in a windstorm can be or have been installed
2554or implemented. The prescribed form shall describe generally
2555what actions the policyholders may be able to take to reduce
2556their windstorm premium. The prescribed form and a list of such
2557ranges approved by the office for each insurer licensed in the
2558state and providing such discounts, credits, other rate
2559differentials, or reductions in deductibles for properties
2560described in this subsection shall be available for electronic
2561viewing and download from the Department of Financial Services'
2562or the Office of Insurance Regulation's Internet website. The
2563Financial Services Commission may adopt rules to implement this
2564subsection.
2565 (2)(a) By July 1, 2007, The Financial Services Commission
2566shall develop by rule a uniform mitigation verification
2567inspection form that shall be used by all insurers when
2568submitted by policyholders for the purpose of factoring
2569discounts for wind insurance. In developing the form, the
2570commission shall seek input from insurance, construction, and
2571building code representatives. Further, the commission shall
2572provide guidance as to the length of time the inspection results
2573are valid. An insurer shall accept as valid a uniform mitigation
2574verification form certified by the Department of Financial
2575Services or signed by:
2576 (a) A hurricane mitigation inspector certified by the My
2577Safe Florida Home program;
2578 1.(b) A building code inspector certified under s.
2579468.607;
2580 2.(c) A general, building, or residential contractor
2581licensed under s. 489.111;
2582 3.(d) A professional engineer licensed under s. 471.015
2583who has passed the appropriate equivalency test of the building
2584code training program as required by s. 553.841; or
2585 4.(e) A professional architect licensed under s. 481.213;
2586or
2587 (f) Any other individual or entity recognized by the
2588insurer as possessing the necessary qualifications to properly
2589complete a uniform mitigation verification form.
2590 (b) An insurer may, but is not required to, accept a
2591mitigation verification form from any other person possessing
2592qualifications and experience acceptable to the insurer.
2593 (3) A person who is authorized to sign a mitigation
2594verification form must inspect the structures referenced by the
2595form personally, not through employees or other persons, and
2596must certify or attest to that person's personal inspection of
2597the structures referenced by the form.
2598 (4) An individual or entity that signs a uniform
2599mitigation form may not commit misconduct in performing
2600hurricane mitigation inspections or in completing a uniform
2601mitigation form that causes financial harm to a customer or the
2602customer's insurer or that jeopardizes a customer's health and
2603safety. Misconduct occurs when an authorized mitigation
2604inspector signs a uniform mitigation verification form that:
2605 (a) Falsely indicates that he or she personally inspected
2606the structures referenced by the form;
2607 (b) Falsely indicates the existence of a feature which
2608entitles an insured to a mitigation discount that the inspector
2609knows does not exist or did not personally inspect;
2610 (c) Contains erroneous information due to the gross
2611negligence of the inspector; or
2612 (d) Contains demonstrably false information relating to
2613the existence of mitigation features that may give an insured a
2614false evaluation of the ability of the structure to withstand
2615major damage from a hurricane endangering the safety of the
2616insured's life and property.
2617 (5) The licensing board of an authorized mitigation
2618inspector who violates subsection (4) may commence disciplinary
2619proceedings and impose administrative fines and other sanctions
2620authorized under the inspector's licensing act.
2621 (6) An insurer, person, or other entity that obtains
2622evidence of fraud or evidence that an inspector has made false
2623statements in the completion of a mitigation inspection form
2624shall file a report with the Division of Insurance Fraud,
2625together with all of the evidence in its possession that
2626supports the allegation of fraud or falsity. An insurer, person,
2627or other entity making the report is immune from liability in
2628accordance with s. 626.989(4) for any statements made in the
2629report, during the investigation, or in connection with the
2630report. The Division of Insurance Fraud shall issue an
2631investigative report if the division finds that probable cause
2632exists to believe that the inspector made intentionally false or
2633fraudulent statements in the inspection form. Upon conclusion of
2634the investigation and a finding of probable cause that a
2635violation has occurred, the Division of Insurance Fraud shall
2636send a copy of the investigative report to the office and a copy
2637to the agency responsible for the professional licensure of the
2638inspector, whether or not a prosecutor takes action based upon
2639the report.
2640 (7) The insurer may require the mitigation inspector or
2641inspection company to provide evidence of the inspector's or
2642inspection company's quality assurance program. At the insurer's
2643expense, the insurer may require that any uniform mitigation
2644verification form provided by a mitigation inspector or
2645inspection company that does not possess or has not provided
2646evidence to the insurer of a quality assurance program be
2647independently verified by an inspector, inspection company, or
2648independent third-party quality assurance provider that
2649possesses a quality assurance program prior to accepting it as
2650valid.
2651 (8)(3) An individual or entity who knowingly provides or
2652utters a false or fraudulent mitigation verification form with
2653the intent to obtain or receive a discount on an insurance
2654premium to which the individual or entity is not entitled
2655commits a misdemeanor of the first degree, punishable as
2656provided in s. 775.082 or s. 775.083.
2657 Section 20. In the interest of full disclosure and
2658transparency to insurance policy owners, and because most
2659insurance policies sold in this state are subject to assessments
2660to make up for the funding deficiencies of the Citizens Property
2661Insurance Corporation, the Florida Insurance Guaranty
2662Association, or the Florida Hurricane Catastrophe Fund, the
2663following warning shall be printed in bold type of not less than
266416 points and shall be displayed on the declarations page or on
2665the renewal notice of every insurance policy sold or issued in
2666this state that is or may be subject to assessment by the
2667Citizens Property Insurance Corporation, the Florida Insurance
2668Guaranty Association, or the Florida Hurricane Catastrophe Fund:
2669
2670
WARNING
2671The premium you are about to pay may NOT be the full cost
2672of this insurance policy. If a hurricane strikes Florida,
2673you may be forced to pay additional moneys to offset the
2674inability of the state-owned Citizens Property Insurance
2675Corporation, the Florida Insurance Guaranty Association,
2676or the Florida Hurricane Catastrophe Fund to pay claims
2677resulting from the losses due to the hurricane.
2678 Section 21. Section 627.7065, Florida Statutes, is
2679repealed.
2680 Section 22. Except as otherwise expressly provided in this
2681act, this act shall take effect July 1, 2010.
CODING: Words stricken are deletions; words underlined are additions.
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