Bill Text: FL H1243 | 2011 | Regular Session | Comm Sub

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Bill Title: Citizens Property Insurance Corporation

Spectrum:

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H1243 Detail]

Download: Florida-2011-H1243-Comm_Sub.html

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CS/CS/HB 1243

1	A bill to be entitled
2	An act relating to Citizens Property Insurance
3	Corporation; amending s. 627.351, F.S.; revising
4	legislative intent; providing that certain residential
5	structures are not eligible for coverage by the
6	corporation after a certain date; specifying the
7	percentage amount of emergency assessments; revising
8	provisions relating to policyholder surcharges;
9	prohibiting the corporation from levying certain
10	assessments with respect to a year's deficit until the
11	corporation has first levied a specified surcharge;
12	deleting obsolete provisions relating to the corporation's
13	plan of operation; requiring the corporation to commission
14	a consultant to prepare a report on outsourcing various
15	functions and to submit such report to the Financial
16	Services Commission by a certain date; revising provisions
17	relating to wind coverage; specifying that the
18	corporation's insurance policies must provide that a
19	surplus lines insurer's offer to cover risks at approved
20	rates makes the policy ineligible for renewal through the
21	corporation under certain circumstances; requiring the
22	policyholders to sign a statement acknowledging that they
23	may be assessed surcharges to cover corporate deficits;
24	providing for termination of an agent for violation of
25	provisions relating to unlawful rebates; providing that
26	policies do not include coverage for screen enclosures and
27	limiting coverage for damage from sinkholes after a
28	certain date; requiring members of the board of governors
29	to abstain from voting on issues on which they have a
30	personal interest; requiring such members to disclose the
31	nature of their interest as a public record; providing
32	that the corporation operates as a residual market
33	mechanism; revising provisions relating to corporation
34	rates; providing that surplus lines insurers may
35	participate in depopulation, take-out, or keep-out
36	programs relating to the corporation under certain
37	circumstances; providing requirements that a surplus lines
38	insurer must meet in order to participate in such
39	programs; clarifying that the corporation is immune from
40	certain liabilities; authorizing the release of
41	confidential claims files to an insurer who removes a risk
42	from the corporation under certain circumstances; deleting
43	a requirement for an annual report to the Legislature on
44	losses attributable to wind-only coverages; requiring
45	owners of properties in Special Flood Hazard Areas to
46	maintain a separate flood insurance policy after a certain
47	date; providing exceptions; deleting a provision relating
48	to a pilot program for optional sinkhole coverage;
49	amending s. 627.712, F.S.; conforming cross-references;
50	providing an effective date.
51
52	Be It Enacted by the Legislature of the State of Florida:
53
54	Section 1.  Paragraphs (a), (b), (c), (d), (n), (o), (q),
55	(s), (w), (x), (y), (aa), and (ee) of subsection (6) of section
56	627.351, Florida Statutes, are amended to read:
57	627.351  Insurance risk apportionment plans.-
58	(6)  CITIZENS PROPERTY INSURANCE CORPORATION.-
59	(a)1.  It is The public purpose of this subsection is to
60	ensure that there is the existence of an orderly market for
61	property insurance for residents Floridians and Florida
62	businesses of this state.
63	1.  The Legislature finds that actual and threatened
64	catastrophic losses to property from hurricanes in this state
65	have caused insurers to be unwilling or unable to provide
66	property insurance coverage to the extent sought and needed. The
67	Legislature declares that it is in the public interest and
68	serves a public purpose that property in this state be
69	adequately insured in order to facilitate the remediation,
70	reconstruction, and replacement of damaged or destroyed
71	property. Such efforts are necessary in order to avoid or reduce
72	negative effects to the public health, safety, and welfare; the
73	economy of the state; and the revenues of state and local
74	governments. It is necessary, therefore, to provide property
75	insurance to applicants who are entitled to procure insurance
76	through the voluntary market but who, in good faith, are unable
77	to do so. The Legislature finds that private insurers are
78	unwilling or unable to provide affordable property insurance
79	coverage in this state to the extent sought and needed. The
80	absence of affordable property insurance threatens the public
81	health, safety, and welfare and likewise threatens the economic
82	health of the state. The state therefore has a compelling public
83	interest and a public purpose to assist in assuring that
84	property in the state is insured and that it is insured at
85	affordable rates so as to facilitate the remediation,
86	reconstruction, and replacement of damaged or destroyed property
87	in order to reduce or avoid the negative effects otherwise
88	resulting to the public health, safety, and welfare, to the
89	economy of the state, and to the revenues of the state and local
90	governments which are needed to provide for the public welfare.
91	It is necessary, therefore, to provide affordable property
92	insurance to applicants who are in good faith entitled to
93	procure insurance through the voluntary market but are unable to
94	do so. The Legislature intends, therefore, by this subsection
95	that affordable property insurance be provided and that it
96	continue to be provided, as long as necessary, through Citizens
97	Property Insurance Corporation, a government entity that is an
98	integral part of the state, and that is not a private insurance
99	company. To that end, Citizens Property Insurance Corporation
100	shall strive to increase the availability of affordable property
101	insurance in this state, while achieving efficiencies and
102	economies, and while providing service to policyholders,
103	applicants, and agents which is no less than the quality
104	generally provided in the voluntary market, for the achievement
105	of the foregoing public purposes. Because it is essential for
106	this government entity to have the maximum financial resources
107	to pay claims following a catastrophic hurricane, it is the
108	intent of the Legislature that Citizens Property Insurance
109	Corporation continue to be an integral part of the state and
110	that the income of the corporation be exempt from federal income
111	taxation and that interest on the debt obligations issued by the
112	corporation be exempt from federal income taxation.
113	a.  It is also the intent of the Legislature that
114	policyholders, applicants, and agents of the corporation receive
115	service and treatment of the highest possible level and never
116	less than that generally provided in the voluntary market. The
117	corporation must be held to service standards no less than those
118	applied to insurers in the voluntary market by the office with
119	respect to responsiveness, timeliness, customer courtesy, and
120	overall dealings with policyholders, applicants, or agents of
121	the corporation. It is also the intent of the Legislature that
122	the corporation operate efficiently and economically.
123	b.  Because it is essential that the corporation have the
124	maximum financial resources necessary to pay claims following a
125	catastrophic hurricane, the Legislature also intends that the
126	income of the corporation and interest on the debt obligations
127	issued by the corporation be exempt from federal income
128	taxation.
129	2.  The Residential Property and Casualty Joint
130	Underwriting Association originally created by this statute
131	shall be known, as of July 1, 2002, as the Citizens Property
132	Insurance Corporation. The corporation shall provide insurance
133	for residential and commercial property, for applicants who are
134	in good faith entitled, but, in good faith, are unable, to
135	procure insurance through the voluntary market. The corporation
136	shall operate pursuant to a plan of operation approved by order
137	of the Financial Services Commission. The plan is subject to
138	continuous review by the commission. The commission may, by
139	order, withdraw approval of all or part of a plan if the
140	commission determines that conditions have changed since
141	approval was granted and that the purposes of the plan require
142	changes in the plan. The corporation shall continue to operate
143	pursuant to the plan of operation approved by the Office of
144	Insurance Regulation until October 1, 2006. For the purposes of
145	this subsection, residential coverage includes both personal
146	lines residential coverage, which consists of the type of
147	coverage provided by homeowner's, mobile home owner's, dwelling,
148	tenant's, condominium unit owner's, and similar policies;, and
149	commercial lines residential coverage, which consists of the
150	type of coverage provided by condominium association, apartment
151	building, and similar policies.
152	3.  With respect to coverage for personal lines residential
153	structures:
154	a.  Effective January 1, 2009, a personal lines residential
155	structure that has a dwelling replacement cost of $2 million or
156	more, or a single condominium unit that has a combined dwelling
157	and contents content replacement cost of $2 million or more is
158	not eligible for coverage by the corporation. Such dwellings
159	insured by the corporation on December 31, 2008, may continue to
160	be covered by the corporation until the end of the policy term.
161	However, such dwellings that are insured by the corporation and
162	become ineligible for coverage due to the provisions of this
163	subparagraph may reapply and obtain coverage if the property
164	owner provides the corporation with a sworn affidavit from one
165	or more insurance agents, on a form provided by the corporation,
166	stating that the agents have made their best efforts to obtain
167	coverage and that the property has been rejected for coverage by
168	at least one authorized insurer and at least three surplus lines
169	insurers. If such conditions are met, the dwelling may be
170	insured by the corporation for up to 3 years, after which time
171	the dwelling is ineligible for coverage. The office shall
172	approve the method used by the corporation for valuing the
173	dwelling replacement cost for the purposes of this subparagraph.
174	If a policyholder is insured by the corporation prior to being
175	determined to be ineligible pursuant to this subparagraph and
176	such policyholder files a lawsuit challenging the determination,
177	the policyholder may remain insured by the corporation until the
178	conclusion of the litigation.
179	b.  Effective January 1, 2012, a structure that has a
180	dwelling replacement cost of $1 million or more, or a single
181	condominium unit that has a combined dwelling and contents
182	replacement cost of $1 million or more, is not eligible for
183	coverage by the corporation. Such dwellings insured by the
184	corporation on December 31, 2011, may continue to be covered by
185	the corporation only until the end of the policy term.
186	c.  Effective January 1, 2014, a structure that has a
187	dwelling replacement cost of $750,000 or more, or a single
188	condominium unit that has a combined dwelling and contents
189	replacement cost of $750,000 or more, is not eligible for
190	coverage by the corporation. Such dwellings insured by the
191	corporation on December 31, 2013, may continue to be covered by
192	the corporation until the end of the policy term.
193	d.  Effective January 1, 2016, a structure that has a
194	dwelling replacement cost of $500,000 or more, or a single
195	condominium unit that has a combined dwelling and contents
196	replacement cost of $500,000 or more, is not eligible for
197	coverage by the corporation. Such dwellings insured by the
198	corporation on December 31, 2015, may continue to be covered by
199	the corporation until the end of the policy term.
200	4.  It is the intent of the Legislature that policyholders,
201	applicants, and agents of the corporation receive service and
202	treatment of the highest possible level but never less than that
203	generally provided in the voluntary market. It also is intended
204	that the corporation be held to service standards no less than
205	those applied to insurers in the voluntary market by the office
206	with respect to responsiveness, timeliness, customer courtesy,
207	and overall dealings with policyholders, applicants, or agents
208	of the corporation.
209	4.5.  Effective January 1, 2009, a personal lines
210	residential structure that is located in the "wind-borne debris
211	region," as defined in s. 1609.2, International Building Code
212	(2006), and that has an insured value on the structure of
213	$750,000 or more is not eligible for coverage by the corporation
214	unless the structure has opening protections as required under
215	the Florida Building Code for a newly constructed residential
216	structure in that area. A residential structure shall be deemed
217	to comply with the requirements of this subparagraph if it has
218	shutters or opening protections on all openings and if such
219	opening protections complied with the Florida Building Code at
220	the time they were installed.
221	(b)1.  All insurers authorized to write one or more subject
222	lines of business in this state are subject to assessment by the
223	corporation and, for the purposes of this subsection, are
224	referred to collectively as "assessable insurers." Insurers
225	writing one or more subject lines of business in this state
226	pursuant to part VIII of chapter 626 are not assessable
227	insurers, but insureds who procure one or more subject lines of
228	business in this state pursuant to part VIII of chapter 626 are
229	subject to assessment by the corporation and are referred to
230	collectively as "assessable insureds." An authorized insurer's
231	assessment liability begins shall begin on the first day of the
232	calendar year following the year in which the insurer was issued
233	a certificate of authority to transact insurance for subject
234	lines of business in this state and terminates shall terminate 1
235	year after the end of the first calendar year during which the
236	insurer no longer holds a certificate of authority to transact
237	insurance for subject lines of business in this state.
238	2.a.  All revenues, assets, liabilities, losses, and
239	expenses of the corporation shall be divided into three separate
240	accounts as follows:
241	(I)  A personal lines account for personal residential
242	policies issued by the corporation, or issued by the Residential
243	Property and Casualty Joint Underwriting Association and renewed
244	by the corporation, which provides that provide comprehensive,
245	multiperil coverage on risks that are not located in areas
246	eligible for coverage by in the Florida Windstorm Underwriting
247	Association as those areas were defined on January 1, 2002, and
248	for such policies that do not provide coverage for the peril of
249	wind on risks that are located in such areas;
250	(II)  A commercial lines account for commercial residential
251	and commercial nonresidential policies issued by the
252	corporation, or issued by the Residential Property and Casualty
253	Joint Underwriting Association and renewed by the corporation,
254	which provides that provide coverage for basic property perils
255	on risks that are not located in areas eligible for coverage by
256	in the Florida Windstorm Underwriting Association as those areas
257	were defined on January 1, 2002, and for such policies that do
258	not provide coverage for the peril of wind on risks that are
259	located in such areas; and
260	(III)  A high-risk account for personal residential
261	policies and commercial residential and commercial
262	nonresidential property policies issued by the corporation, or
263	transferred to the corporation, which provides that provide
264	coverage for the peril of wind on risks that are located in
265	areas eligible for coverage by in the Florida Windstorm
266	Underwriting Association as those areas were defined on January
267	1, 2002. The corporation may offer policies that provide
268	multiperil coverage and the corporation shall continue to offer
269	policies that provide coverage only for the peril of wind for
270	risks located in areas eligible for coverage in the high-risk
271	account. In issuing multiperil coverage, the corporation may use
272	its approved policy forms and rates for the personal lines
273	account. An applicant or insured who is eligible to purchase a
274	multiperil policy from the corporation may purchase a multiperil
275	policy from an authorized insurer without prejudice to the
276	applicant's or insured's eligibility to prospectively purchase a
277	policy that provides coverage only for the peril of wind from
278	the corporation. An applicant or insured who is eligible for a
279	corporation policy that provides coverage only for the peril of
280	wind may elect to purchase or retain such policy and also
281	purchase or retain coverage excluding wind from an authorized
282	insurer without prejudice to the applicant's or insured's
283	eligibility to prospectively purchase a policy that provides
284	multiperil coverage from the corporation. It is the goal of the
285	Legislature that there would be an overall average savings of 10
286	percent or more for a policyholder who currently has a wind-only
287	policy with the corporation, and an ex-wind policy with a
288	voluntary insurer or the corporation, and who then obtains a
289	multiperil policy from the corporation. It is the intent of the
290	Legislature that the offer of multiperil coverage in the high-
291	risk account be made and implemented in a manner that does not
292	adversely affect the tax-exempt status of the corporation or
293	creditworthiness of or security for currently outstanding
294	financing obligations or credit facilities of the high-risk
295	account, the personal lines account, or the commercial lines
296	account. The high-risk account must also include quota share
297	primary insurance under subparagraph (c)2. The area eligible for
298	coverage under the high-risk account also includes the area
299	within Port Canaveral, which is bordered on the south by the
300	City of Cape Canaveral, bordered on the west by the Banana
301	River, and bordered on the north by Federal Government property.
302	b.  The three separate accounts must be maintained as long
303	as financing obligations entered into by the Florida Windstorm
304	Underwriting Association or Residential Property and Casualty
305	Joint Underwriting Association are outstanding, in accordance
306	with the terms of the corresponding financing documents. If When
307	the financing obligations are no longer outstanding, in
308	accordance with the terms of the corresponding financing
309	documents, the corporation may use a single account for all
310	revenues, assets, liabilities, losses, and expenses of the
311	corporation. Consistent with the requirement of this
312	subparagraph and prudent investment policies that minimize the
313	cost of carrying debt, the board shall exercise its best efforts
314	to retire existing debt or to obtain the approval of necessary
315	parties to amend the terms of existing debt, so as to structure
316	the most efficient plan to consolidate the three separate
317	accounts into a single account.
318	c.  Creditors of the Residential Property and Casualty
319	Joint Underwriting Association and of the accounts specified in
320	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
321	and recourse to, those the accounts referred to in sub-sub-
322	subparagraphs a.(I) and (II) and shall have no claim against, or
323	recourse to, the account referred to in sub-sub-subparagraph
324	a.(III). Creditors of the Florida Windstorm Underwriting
325	Association shall have a claim against, and recourse to, the
326	account referred to in sub-sub-subparagraph a.(III) and shall
327	have no claim against, or recourse to, the accounts referred to
328	in sub-sub-subparagraphs a.(I) and (II).
329	d.  Revenues, assets, liabilities, losses, and expenses not
330	attributable to particular accounts shall be prorated among the
331	accounts.
332	e.  The Legislature finds that the revenues of the
333	corporation are revenues that are necessary to meet the
334	requirements set forth in documents authorizing the issuance of
335	bonds under this subsection.
336	f.  No part of the income of the corporation may inure to
337	the benefit of any private person.
338	3.  With respect to a deficit in an account:
339	a.  After accounting for the Citizens policyholder
340	surcharge imposed under sub-subparagraph i., if when the
341	remaining projected deficit incurred in a particular calendar
342	year is not greater than 6 percent of the aggregate statewide
343	direct written premium for the subject lines of business for the
344	prior calendar year, the entire deficit shall be recovered
345	through regular assessments of assessable insurers under
346	paragraph (q) and assessable insureds.
347	b.  After accounting for the Citizens policyholder
348	surcharge imposed under sub-subparagraph i., when the remaining
349	projected deficit incurred in a particular calendar year exceeds
350	6 percent of the aggregate statewide direct written premium for
351	the subject lines of business for the prior calendar year, the
352	corporation shall levy regular assessments on assessable
353	insurers under paragraph (q) and on assessable insureds in an
354	amount equal to the greater of 6 percent of the deficit or 6
355	percent of the aggregate statewide direct written premium for
356	the subject lines of business for the prior calendar year. Any
357	remaining deficit shall be recovered through emergency
358	assessments under sub-subparagraph d.
359	c.  Each assessable insurer's share of the amount being
360	assessed under sub-subparagraph a. or sub-subparagraph b. must
361	shall be in the proportion that the assessable insurer's direct
362	written premium for the subject lines of business for the year
363	preceding the assessment bears to the aggregate statewide direct
364	written premium for the subject lines of business for that year.
365	The applicable assessment percentage applicable to each
366	assessable insured is the ratio of the amount being assessed
367	under sub-subparagraph a. or sub-subparagraph b. to the
368	aggregate statewide direct written premium for the subject lines
369	of business for the prior year. Assessments levied by the
370	corporation on assessable insurers under sub-subparagraphs a.
371	and b. must shall be paid as required by the corporation's plan
372	of operation and paragraph (q). Assessments levied by the
373	corporation on assessable insureds under sub-subparagraphs a.
374	and b. shall be collected by the surplus lines agent at the time
375	the surplus lines agent collects the surplus lines tax required
376	by s. 626.932 and shall be paid to the Florida Surplus Lines
377	Service Office at the time the surplus lines agent pays the
378	surplus lines tax to that the Florida Surplus Lines Service
379	office. Upon receipt of regular assessments from surplus lines
380	agents, the Florida Surplus Lines Service Office shall transfer
381	the assessments directly to the corporation as determined by the
382	corporation.
383	d.  Upon a determination by the board of governors that a
384	deficit in an account exceeds the amount that will be recovered
385	through regular assessments under sub-subparagraph a. or sub-
386	subparagraph b., plus the amount that is expected to be
387	recovered through surcharges under sub-subparagraph i., as to
388	the remaining projected deficit the board shall levy, after
389	verification by the office, shall levy emergency assessments,
390	for as many years as necessary to cover the deficits, to be
391	collected by assessable insurers and the corporation and
392	collected from assessable insureds upon issuance or renewal of
393	policies for subject lines of business, excluding National Flood
394	Insurance policies. The amount of the emergency assessment
395	collected in a particular year must shall be a uniform
396	percentage of that year's direct written premium for subject
397	lines of business and all accounts of the corporation, excluding
398	National Flood Insurance Program policy premiums, as annually
399	determined by the board and verified by the office. For all
400	accounts of the corporation, the amount of the emergency
401	assessment levied in a particular year must be a uniform
402	percentage equal to 1 1/2 times the uniform percentage emergency
403	assessment levied on subject lines of business. The office shall
404	verify the arithmetic calculations involved in the board's
405	determination within 30 days after receipt of the information on
406	which the determination was based. Notwithstanding any other
407	provision of law, the corporation and each assessable insurer
408	that writes subject lines of business shall collect emergency
409	assessments from its policyholders without such obligation being
410	affected by any credit, limitation, exemption, or deferment.
411	Emergency assessments levied by the corporation on assessable
412	insureds shall be collected by the surplus lines agent at the
413	time the surplus lines agent collects the surplus lines tax
414	required by s. 626.932 and shall be paid to the Florida Surplus
415	Lines Service Office at the time the surplus lines agent pays
416	the surplus lines tax to that the Florida Surplus Lines Service
417	office. The emergency assessments so collected shall be
418	transferred directly to the corporation on a periodic basis as
419	determined by the corporation and shall be held by the
420	corporation solely in the applicable account. The aggregate
421	amount of emergency assessments levied for an account under this
422	sub-subparagraph in any calendar year may, at the discretion of
423	the board of governors, be less than but may not exceed the
424	greater of 10 percent of the amount needed to cover the deficit,
425	plus interest, fees, commissions, required reserves, and other
426	costs associated with financing of the original deficit, or 10
427	percent of the aggregate statewide direct written premium for
428	subject lines of business and 15 percent for all accounts of the
429	corporation for the prior year, plus interest, fees,
430	commissions, required reserves, and other costs associated with
431	financing the deficit.
432	e.  The corporation may pledge the proceeds of assessments,
433	projected recoveries from the Florida Hurricane Catastrophe
434	Fund, other insurance and reinsurance recoverables, policyholder
435	surcharges and other surcharges, and other funds available to
436	the corporation as the source of revenue for and to secure bonds
437	issued under paragraph (q), bonds or other indebtedness issued
438	under subparagraph (c)2.3., or lines of credit or other
439	financing mechanisms issued or created under this subsection, or
440	to retire any other debt incurred as a result of deficits or
441	events giving rise to deficits, or in any other way that the
442	board determines will efficiently recover such deficits. The
443	purpose of the lines of credit or other financing mechanisms is
444	to provide additional resources to assist the corporation in
445	covering claims and expenses attributable to a catastrophe. As
446	used in this subsection, the term "assessments" includes regular
447	assessments under sub-subparagraph a., sub-subparagraph b., or
448	subparagraph (q)1. and emergency assessments under sub-
449	subparagraph d. Emergency assessments collected under sub-
450	subparagraph d. are not part of an insurer's rates, are not
451	premium, and are not subject to premium tax, fees, or
452	commissions; however, failure to pay the emergency assessment
453	shall be treated as failure to pay premium. The emergency
454	assessments under sub-subparagraph d. shall continue as long as
455	any bonds issued or other indebtedness incurred with respect to
456	a deficit for which the assessment was imposed remain
457	outstanding, unless adequate provision has been made for the
458	payment of such bonds or other indebtedness pursuant to the
459	documents governing such bonds or other indebtedness.
460	f.  As used in this subsection for purposes of any deficit
461	incurred on or after January 25, 2007, the term "subject lines
462	of business" means insurance written by assessable insurers or
463	procured by assessable insureds for all property and casualty
464	lines of business in this state, but not including workers'
465	compensation or medical malpractice. As used in this the sub-
466	subparagraph, the term "property and casualty lines of business"
467	includes all lines of business identified on Form 2, Exhibit of
468	Premiums and Losses, in the annual statement required of
469	authorized insurers under by s. 624.424 and any rule adopted
470	under this section, except for those lines identified as
471	accident and health insurance and except for policies written
472	under the National Flood Insurance Program or the Federal Crop
473	Insurance Program. For purposes of this sub-subparagraph, the
474	term "workers' compensation" includes both workers' compensation
475	insurance and excess workers' compensation insurance.
476	g.  The Florida Surplus Lines Service Office shall
477	determine annually the aggregate statewide written premium in
478	subject lines of business procured by assessable insureds and
479	shall report that information to the corporation in a form and
480	at a time the corporation specifies to ensure that the
481	corporation can meet the requirements of this subsection and the
482	corporation's financing obligations.
483	h.  The Florida Surplus Lines Service Office shall verify
484	the proper application by surplus lines agents of assessment
485	percentages for regular assessments and emergency assessments
486	levied under this subparagraph on assessable insureds and shall
487	assist the corporation in ensuring the accurate, timely
488	collection and payment of assessments by surplus lines agents as
489	required by the corporation.
490	i.  If a deficit is incurred in any account in 2011 2008 or
491	thereafter, the board of governors shall levy a Citizens
492	policyholder surcharge against all policyholders of the
493	corporation.
494	(I)  The surcharge for a 12-month period, which shall be
495	levied collected at the time of issuance or renewal of a policy,
496	as a uniform percentage of the premium for the policy of up to
497	15 percent of such premium, which funds shall be used to offset
498	the deficit.
499	(II)  It is the intent of the Legislature that the
500	policyholder's liability for the surcharge attach on the date of
501	the order levying the surcharge. The surcharge is payable upon
502	cancellation or termination of the policy, upon renewal of the
503	policy, or upon issuance of a new policy by the corporation
504	within the first 12 months after the date of the levy or the
505	period of time necessary to fully collect the surcharge amount.
506	(III)  The corporation may not levy any regular assessments
507	under paragraph (q) pursuant to sub-subparagraph a. or sub-
508	subparagraph b. with respect to a particular year's deficit
509	until the corporation has first levied a surcharge under this
510	sub-subparagraph in the full amount authorized by this sub-
511	subparagraph.
512	(IV)  The Citizens policyholder surcharge is surcharges
513	under this sub-subparagraph are not considered premium and is
514	are not subject to commissions, fees, or premium taxes. However,
515	failure to pay the surcharge such surcharges shall be treated as
516	failure to pay premium.
517	j.  If the amount of any assessments or surcharges
518	collected from corporation policyholders, assessable insurers or
519	their policyholders, or assessable insureds exceeds the amount
520	of the deficits, such excess amounts shall be remitted to and
521	retained by the corporation in a reserve to be used by the
522	corporation, as determined by the board of governors and
523	approved by the office, to pay claims or reduce any past,
524	present, or future plan-year deficits or to reduce outstanding
525	debt.
526	(c)  The plan of operation of the corporation:
527	1.  Must provide for adoption of residential property and
528	casualty insurance policy forms and commercial residential and
529	nonresidential property insurance forms, which forms must be
530	approved by the office before prior to use. The corporation
531	shall adopt the following policy forms:
532	a.  Standard personal lines policy forms that are
533	comprehensive multiperil policies providing full coverage of a
534	residential property equivalent to the coverage provided in the
535	private insurance market under an HO-3, HO-4, or HO-6 policy.
536	b.  Basic personal lines policy forms that are policies
537	similar to an HO-8 policy or a dwelling fire policy that provide
538	coverage meeting the requirements of the secondary mortgage
539	market, but which coverage is more limited than the coverage
540	under a standard policy.
541	c.  Commercial lines residential and nonresidential policy
542	forms that are generally similar to the basic perils of full
543	coverage obtainable for commercial residential structures and
544	commercial nonresidential structures in the admitted voluntary
545	market.
546	d.  Personal lines and commercial lines residential
547	property insurance forms that cover the peril of wind only. The
548	forms are applicable only to residential properties located in
549	areas eligible for coverage under the high-risk account referred
550	to in sub-subparagraph (b)2.a.
551	e.  Commercial lines nonresidential property insurance
552	forms that cover the peril of wind only. The forms are
553	applicable only to nonresidential properties located in areas
554	eligible for coverage under the high-risk account referred to in
555	sub-subparagraph (b)2.a.
556	f.  The corporation may adopt variations of the policy
557	forms listed in sub-subparagraphs a.-e. which that contain more
558	restrictive coverage.
559	2.a.  Must provide that the corporation adopt a program in
560	which the corporation and authorized insurers enter into quota
561	share primary insurance agreements for hurricane coverage, as
562	defined in s. 627.4025(2)(a), for eligible risks, and adopt
563	property insurance forms for eligible risks which cover the
564	peril of wind only. As used in this subsection, the term:
565	(I)  "Quota share primary insurance" means an arrangement
566	in which the primary hurricane coverage of an eligible risk is
567	provided in specified percentages by the corporation and an
568	authorized insurer. The corporation and authorized insurer are
569	each solely responsible for a specified percentage of hurricane
570	coverage of an eligible risk as set forth in a quota share
571	primary insurance agreement between the corporation and an
572	authorized insurer and the insurance contract. The
573	responsibility of the corporation or authorized insurer to pay
574	its specified percentage of hurricane losses of an eligible
575	risk, as set forth in the quota share primary insurance
576	agreement, may not be altered by the inability of the other
577	party to the agreement to pay its specified percentage of
578	hurricane losses. Eligible risks that are provided hurricane
579	coverage through a quota share primary insurance arrangement
580	must be provided policy forms that set forth the obligations of
581	the corporation and authorized insurer under the arrangement,
582	clearly specify the percentages of quota share primary insurance
583	provided by the corporation and authorized insurer, and
584	conspicuously and clearly state that neither the authorized
585	insurer nor the corporation may be held responsible beyond its
586	specified percentage of coverage of hurricane losses.
587	(II)  "Eligible risks" means personal lines residential and
588	commercial lines residential risks that meet the underwriting
589	criteria of the corporation and are located in areas that were
590	eligible for coverage by the Florida Windstorm Underwriting
591	Association on January 1, 2002.
592	b.  The corporation may enter into quota share primary
593	insurance agreements with authorized insurers at corporation
594	coverage levels of 90 percent and 50 percent.
595	c.  If the corporation determines that additional coverage
596	levels are necessary to maximize participation in quota share
597	primary insurance agreements by authorized insurers, the
598	corporation may establish additional coverage levels. However,
599	the corporation's quota share primary insurance coverage level
600	may not exceed 90 percent.
601	d.  Any quota share primary insurance agreement entered
602	into between an authorized insurer and the corporation must
603	provide for a uniform specified percentage of coverage of
604	hurricane losses, by county or territory as set forth by the
605	corporation board, for all eligible risks of the authorized
606	insurer covered under the quota share primary insurance
607	agreement.
608	e.  Any quota share primary insurance agreement entered
609	into between an authorized insurer and the corporation is
610	subject to review and approval by the office. However, such
611	agreement shall be authorized only as to insurance contracts
612	entered into between an authorized insurer and an insured who is
613	already insured by the corporation for wind coverage.
614	f.  For all eligible risks covered under quota share
615	primary insurance agreements, the exposure and coverage levels
616	for both the corporation and authorized insurers shall be
617	reported by the corporation to the Florida Hurricane Catastrophe
618	Fund. For all policies of eligible risks covered under quota
619	share primary insurance agreements, the corporation and the
620	authorized insurer shall maintain complete and accurate records
621	for the purpose of exposure and loss reimbursement audits as
622	required by Florida Hurricane Catastrophe Fund rules. The
623	corporation and the authorized insurer shall each maintain
624	duplicate copies of policy declaration pages and supporting
625	claims documents.
626	g.  The corporation board shall establish in its plan of
627	operation standards for quota share agreements which ensure that
628	there is no discriminatory application among insurers as to the
629	terms of quota share agreements, pricing of quota share
630	agreements, incentive provisions if any, and consideration paid
631	for servicing policies or adjusting claims.
632	h.  The quota share primary insurance agreement between the
633	corporation and an authorized insurer must set forth the
634	specific terms under which coverage is provided, including, but
635	not limited to, the sale and servicing of policies issued under
636	the agreement by the insurance agent of the authorized insurer
637	producing the business, the reporting of information concerning
638	eligible risks, the payment of premium to the corporation, and
639	arrangements for the adjustment and payment of hurricane claims
640	incurred on eligible risks by the claims adjuster and personnel
641	of the authorized insurer. Entering into a quota sharing
642	insurance agreement between the corporation and an authorized
643	insurer shall be voluntary and at the discretion of the
644	authorized insurer.
645	2.3.  May provide that the corporation may employ or
646	otherwise contract with individuals or other entities to provide
647	administrative or professional services that may be appropriate
648	to effectuate the plan.
649	a.  The corporation may shall have the power to borrow
650	funds, by issuing bonds or by incurring other indebtedness, and
651	shall have other powers reasonably necessary to effectuate the
652	requirements of this subsection, including, without limitation,
653	the power to issue bonds and incur other indebtedness in order
654	to refinance outstanding bonds or other indebtedness. The
655	corporation may, but is not required to, seek judicial
656	validation of its bonds or other indebtedness under chapter 75.
657	The corporation may issue bonds or incur other indebtedness, or
658	have bonds issued on its behalf by a unit of local government
659	pursuant to subparagraph (q)2., in the absence of a hurricane or
660	other weather-related event, upon a determination by the
661	corporation, subject to approval by the office, that such action
662	would enable it to efficiently meet the financial obligations of
663	the corporation and that such financings are reasonably
664	necessary to effectuate the requirements of this subsection. The
665	corporation may is authorized to take all actions needed to
666	facilitate tax-free status for any such bonds or indebtedness,
667	including formation of trusts or other affiliated entities. The
668	corporation may shall have the authority to pledge assessments,
669	projected recoveries from the Florida Hurricane Catastrophe
670	Fund, other reinsurance recoverables, market equalization and
671	other surcharges, and other funds available to the corporation
672	as security for bonds or other indebtedness. In recognition of
673	s. 10, Art. I of the State Constitution, prohibiting the
674	impairment of obligations of contracts, it is the intent of the
675	Legislature that no action be taken whose purpose is to impair
676	any bond indenture or financing agreement or any revenue source
677	committed by contract to such bond or other indebtedness.
678	b.  To ensure that the corporation is operating in an
679	efficient and economic manner while providing quality service to
680	policyholders, applicants, and agents, the board shall
681	commission an independent third-party consultant having
682	expertise in insurance company management or insurance company
683	management consulting to prepare a report and make
684	recommendations on the relative costs and benefits of
685	outsourcing various policy issuance and service functions to
686	private servicing carriers or entities performing similar
687	functions in the private market for a fee, rather than
688	performing such functions in house. In making such
689	recommendations, the consultant shall consider how other
690	residual markets, both in this state and around the country,
691	outsource appropriate functions or use servicing carriers to
692	better match expenses with revenues that fluctuate based on a
693	widely varying policy count. The report must be completed by
694	July 1, 2012. Upon receiving the report, the board shall develop
695	a plan to implement the report and submit the plan for review,
696	modification, and approval to the Financial Services Commission.
697	Upon the commission's approval of the plan, the board shall
698	begin implementing the plan by January 1, 2013.
699	3.4.a.  Must require that the corporation operate subject
700	to the supervision and approval of a board of governors
701	consisting of eight individuals who are residents of this state,
702	from different geographical areas of this state.
703	a.  The Governor, the Chief Financial Officer, the
704	President of the Senate, and the Speaker of the House of
705	Representatives shall each appoint two members of the board. At
706	least one of the two members appointed by each appointing
707	officer must have demonstrated expertise in insurance and be
708	within the scope of the exemption provided in s. 112.313(7)(b).
709	The Chief Financial Officer shall designate one of the
710	appointees as chair. All board members serve at the pleasure of
711	the appointing officer. All members of the board of governors
712	are subject to removal at will by the officers who appointed
713	them. All board members, including the chair, must be appointed
714	to serve for 3-year terms beginning annually on a date
715	designated by the plan. However, for the first term beginning on
716	or after July 1, 2009, each appointing officer shall appoint one
717	member of the board for a 2-year term and one member for a 3-
718	year term. A Any board vacancy shall be filled for the unexpired
719	term by the appointing officer. The Chief Financial Officer
720	shall appoint a technical advisory group to provide information
721	and advice to the board of governors in connection with the
722	board's duties under this subsection. The executive director and
723	senior managers of the corporation shall be engaged by the board
724	and serve at the pleasure of the board. Any executive director
725	appointed on or after July 1, 2006, is subject to confirmation
726	by the Senate. The executive director is responsible for
727	employing other staff as the corporation may require, subject to
728	review and concurrence by the board.
729	b.  The board shall create a Market Accountability Advisory
730	Committee to assist the corporation in developing awareness of
731	its rates and its customer and agent service levels in
732	relationship to the voluntary market insurers writing similar
733	coverage and to provide advice on issues regarding agent
734	appointments and compensation.
735	(I)  The members of the advisory committee shall consist of
736	the following 11 persons, one of whom must be elected chair by
737	the members of the committee: four representatives, one
738	appointed by the Florida Association of Insurance Agents, one by
739	the National Florida Association of Insurance and Financial
740	Advisors-Florida Advisors, one by the Professional Insurance
741	Agents of Florida, and one by the Latin American Association of
742	Insurance Agencies; three representatives appointed by the
743	insurers with the three highest voluntary market share of
744	residential property insurance business in the state; one
745	representative from the Office of Insurance Regulation; one
746	consumer appointed by the board who is insured by the
747	corporation at the time of appointment to the committee; one
748	representative appointed by the Florida Association of Realtors;
749	and one representative appointed by the Florida Bankers
750	Association. All members shall be appointed to must serve for 3-
751	year terms and may serve for consecutive terms.
752	(II)  The committee shall report to the corporation at each
753	board meeting on insurance market issues which may include rates
754	and rate competition with the voluntary market; service,
755	including policy issuance, claims processing, and general
756	responsiveness to policyholders, applicants, and agents; and
757	matters relating to depopulation, producer compensation, or
758	agency agreements.
759	4.5.  Must provide a procedure for determining the
760	eligibility of a risk for coverage, as follows:
761	a.  Subject to the provisions of s. 627.3517, with respect
762	to personal lines residential risks, if the risk is offered
763	coverage from an authorized insurer at the insurer's approved
764	rate under either a standard policy including wind coverage or,
765	if consistent with the insurer's underwriting rules as filed
766	with the office, a basic policy including wind coverage, for a
767	new application to the corporation for coverage, the risk is not
768	eligible for any policy issued by the corporation unless the
769	premium for coverage from the authorized insurer is more than 15
770	percent greater than the premium for comparable coverage from
771	the corporation. If the risk is not able to obtain any such
772	offer, the risk is eligible for either a standard policy
773	including wind coverage or a basic policy including wind
774	coverage issued by the corporation; however, if the risk could
775	not be insured under a standard policy including wind coverage
776	regardless of market conditions, the risk is shall be eligible
777	for a basic policy including wind coverage unless rejected under
778	subparagraph 7. 8. Notwithstanding these limitations, an
779	application for coverage having an effective date before January
780	1, 2015, is eligible for coverage by the corporation if the
781	premium for coverage from an authorized insurer exceeds the
782	premium for comparable coverage from the corporation by more
783	than 25 percent. However, with regard to a policyholder of the
784	corporation or a policyholder removed from the corporation
785	through an assumption agreement until the end of the assumption
786	period, the policyholder remains eligible for coverage from the
787	corporation regardless of any offer of coverage from an
788	authorized insurer or surplus lines insurer. The corporation
789	shall determine the type of policy to be provided on the basis
790	of objective standards specified in the underwriting manual and
791	based on generally accepted underwriting practices.
792	(I)  If the risk accepts an offer of coverage through the
793	market assistance plan or an offer of coverage through a
794	mechanism established by the corporation before a policy is
795	issued to the risk by the corporation or during the first 30
796	days of coverage by the corporation, and the producing agent who
797	submitted the application to the plan or to the corporation is
798	not currently appointed by the insurer, the insurer shall:
799	(A)  Pay to the producing agent of record of the policy,
800	for the first year, an amount that is the greater of the
801	insurer's usual and customary commission for the type of policy
802	written or a fee equal to the usual and customary commission of
803	the corporation; or
804	(B)  Offer to allow the producing agent of record of the
805	policy to continue servicing the policy for at least a period of
806	not less than 1 year and offer to pay the agent the greater of
807	the insurer's or the corporation's usual and customary
808	commission for the type of policy written.
809
810	If the producing agent is unwilling or unable to accept
811	appointment, the new insurer shall pay the agent in accordance
812	with sub-sub-sub-subparagraph (A).
813	(II)  If When the corporation enters into a contractual
814	agreement for a take-out plan, the producing agent of record of
815	the corporation policy is entitled to retain any unearned
816	commission on the policy, and the insurer shall:
817	(A)  Pay to the producing agent of record of the
818	corporation policy, for the first year, an amount that is the
819	greater of the insurer's usual and customary commission for the
820	type of policy written or a fee equal to the usual and customary
821	commission of the corporation; or
822	(B)  Offer to allow the producing agent of record of the
823	corporation policy to continue servicing the policy for at least
824	a period of not less than 1 year and offer to pay the agent the
825	greater of the insurer's or the corporation's usual and
826	customary commission for the type of policy written.
827
828	If the producing agent is unwilling or unable to accept
829	appointment, the new insurer shall pay the agent in accordance
830	with sub-sub-sub-subparagraph (A).
831	b.  Subject to s. 627.3517, with respect to commercial
832	lines residential risks, for a new application to the
833	corporation for coverage, if the risk is offered coverage under
834	a policy including wind coverage from an authorized insurer at
835	its approved rate, the risk is not eligible for a any policy
836	issued by the corporation unless the premium for coverage from
837	the authorized insurer is more than 15 percent greater than the
838	premium for comparable coverage from the corporation. If the
839	risk is not able to obtain any such offer, the risk is eligible
840	for a policy including wind coverage issued by the corporation.
841	Notwithstanding these limitations, an application for coverage
842	having an effective date before January 1, 2015, is eligible for
843	coverage by the corporation if the premium for coverage from an
844	authorized insurer exceeds the premium for comparable coverage
845	from the corporation by more than 25 percent. However, with
846	regard to a policyholder of the corporation or a policyholder
847	removed from the corporation through an assumption agreement
848	until the end of the assumption period, the policyholder remains
849	eligible for coverage from the corporation regardless of any
850	offer of coverage from an authorized insurer or surplus lines
851	insurer.
852	(I)  If the risk accepts an offer of coverage through the
853	market assistance plan or an offer of coverage through a
854	mechanism established by the corporation before a policy is
855	issued to the risk by the corporation or during the first 30
856	days of coverage by the corporation, and the producing agent who
857	submitted the application to the plan or the corporation is not
858	currently appointed by the insurer, the insurer shall:
859	(A)  Pay to the producing agent of record of the policy,
860	for the first year, an amount that is the greater of the
861	insurer's usual and customary commission for the type of policy
862	written or a fee equal to the usual and customary commission of
863	the corporation; or
864	(B)  Offer to allow the producing agent of record of the
865	policy to continue servicing the policy for at least a period of
866	not less than 1 year and offer to pay the agent the greater of
867	the insurer's or the corporation's usual and customary
868	commission for the type of policy written.
869
870	If the producing agent is unwilling or unable to accept
871	appointment, the new insurer shall pay the agent in accordance
872	with sub-sub-sub-subparagraph (A).
873	(II)  If When the corporation enters into a contractual
874	agreement for a take-out plan, the producing agent of record of
875	the corporation policy is entitled to retain any unearned
876	commission on the policy, and the insurer shall:
877	(A)  Pay to the producing agent of record of the
878	corporation policy, for the first year, an amount that is the
879	greater of the insurer's usual and customary commission for the
880	type of policy written or a fee equal to the usual and customary
881	commission of the corporation; or
882	(B)  Offer to allow the producing agent of record of the
883	corporation policy to continue servicing the policy for at least
884	a period of not less than 1 year and offer to pay the agent the
885	greater of the insurer's or the corporation's usual and
886	customary commission for the type of policy written.
887
888	If the producing agent is unwilling or unable to accept
889	appointment, the new insurer shall pay the agent in accordance
890	with sub-sub-sub-subparagraph (A).
891	c.  For purposes of determining comparable coverage under
892	sub-subparagraphs a. and b., the comparison shall be based on
893	those forms and coverages that are reasonably comparable. The
894	corporation may rely on a determination of comparable coverage
895	and premium made by the producing agent who submits the
896	application to the corporation, made in the agent's capacity as
897	the corporation's agent. A comparison may be made solely of the
898	premium with respect to the main building or structure only on
899	the following basis: the same coverage A or other building
900	limits; the same percentage hurricane deductible that applies on
901	an annual basis or that applies to each hurricane for commercial
902	residential property; the same percentage of ordinance and law
903	coverage, if the same limit is offered by both the corporation
904	and the authorized insurer; the same mitigation credits, to the
905	extent the same types of credits are offered both by the
906	corporation and the authorized insurer; the same method for loss
907	payment, such as replacement cost or actual cash value, if the
908	same method is offered both by the corporation and the
909	authorized insurer in accordance with underwriting rules; and
910	any other form or coverage that is reasonably comparable as
911	determined by the board. If an application is submitted to the
912	corporation for wind-only coverage in the high-risk account, the
913	premium for the corporation's wind-only policy plus the premium
914	for the ex-wind policy that is offered by an authorized insurer
915	to the applicant shall be compared to the premium for multiperil
916	coverage offered by an authorized insurer, subject to the
917	standards for comparison specified in this subparagraph. If the
918	corporation or the applicant requests from the authorized
919	insurer a breakdown of the premium of the offer by types of
920	coverage so that a comparison may be made by the corporation or
921	its agent and the authorized insurer refuses or is unable to
922	provide such information, the corporation may treat the offer as
923	not being an offer of coverage from an authorized insurer at the
924	insurer's approved rate.
925	5.6.  Must include rules for classifications of risks and
926	rates therefor.
927	6.7.  Must provide that if premium and investment income
928	for an account attributable to a particular calendar year are in
929	excess of projected losses and expenses for the account
930	attributable to that year, such excess shall be held in surplus
931	in the account. Such surplus must shall be available to defray
932	deficits in that account as to future years and shall be used
933	for that purpose before prior to assessing assessable insurers
934	and assessable insureds as to any calendar year.
935	7.8.  Must provide objective criteria and procedures to be
936	uniformly applied to for all applicants in determining whether
937	an individual risk is so hazardous as to be uninsurable. In
938	making this determination and in establishing the criteria and
939	procedures, the following must shall be considered:
940	a.  Whether the likelihood of a loss for the individual
941	risk is substantially higher than for other risks of the same
942	class; and
943	b.  Whether the uncertainty associated with the individual
944	risk is such that an appropriate premium cannot be determined.
945
946	The acceptance or rejection of a risk by the corporation shall
947	be construed as the private placement of insurance, and the
948	provisions of chapter 120 do shall not apply.
949	8.9.  Must provide that the corporation Shall make its best
950	efforts to procure catastrophe reinsurance at reasonable rates,
951	to cover its projected 100-year probable maximum loss as
952	determined by the board of governors.
953	9.10.  Must issue The policies that issued by the
954	corporation must provide that, if the corporation or the market
955	assistance plan obtains an offer from an authorized insurer to
956	cover the risk at its approved rates or from a surplus lines
957	insurer, the risk is no longer eligible for renewal through the
958	corporation, except as otherwise provided in this subsection.
959	10.11.  Must Corporation Policies and applications must
960	include a notice in the corporation policies and applications
961	that the corporation policy could, under this section, be
962	replaced with a policy issued by an authorized insurer which
963	that does not provide coverage identical to the coverage
964	provided by the corporation. The notice must shall also specify
965	that acceptance of corporation coverage creates a conclusive
966	presumption that the applicant or policyholder is aware of this
967	potential.
968	11.12.  May establish, subject to approval by the office,
969	different eligibility requirements and operational procedures
970	for any line or type of coverage for any specified county or
971	area if the board determines that such changes to the
972	eligibility requirements and operational procedures are
973	justified due to the voluntary market being sufficiently stable
974	and competitive in such area or for such line or type of
975	coverage and that consumers who, in good faith, are unable to
976	obtain insurance through the voluntary market through ordinary
977	methods would continue to have access to coverage from the
978	corporation. If When coverage is sought in connection with a
979	real property transfer, the such requirements and procedures may
980	shall not provide for an effective date of coverage later than
981	the date of the closing of the transfer as established by the
982	transferor, the transferee, and, if applicable, the lender.
983	12.13.  Must provide that, with respect to the high-risk
984	account, any assessable insurer with a surplus as to
985	policyholders of $25 million or less writing 25 percent or more
986	of its total countrywide property insurance premiums in this
987	state may petition the office, within the first 90 days of each
988	calendar year, to qualify as a limited apportionment company. A
989	regular assessment levied by the corporation on a limited
990	apportionment company for a deficit incurred by the corporation
991	for the high-risk account in 2006 or thereafter may be paid to
992	the corporation on a monthly basis as the assessments are
993	collected by the limited apportionment company from its insureds
994	pursuant to s. 627.3512, but the regular assessment must be paid
995	in full within 12 months after being levied by the corporation.
996	A limited apportionment company shall collect from its
997	policyholders any emergency assessment imposed under sub-
998	subparagraph (b)3.d. The plan shall provide that, If the office
999	determines that any regular assessment will result in an
1000	impairment of the surplus of a limited apportionment company,
1001	the office may direct that all or part of such assessment be
1002	deferred as provided in subparagraph (q)4. However, there shall
1003	be no limitation or deferment of an emergency assessment to be
1004	collected from policyholders under sub-subparagraph (b)3.d. may
1005	not be limited or deferred.
1006	13.14.  Effective January 1, 2012, must provide that the
1007	corporation appoint as its licensed agents only those agents who
1008	also hold an appointment as defined in s. 626.015(3) with an
1009	insurer who at the time of the agent's initial appointment by
1010	the corporation is authorized to write and is actually writing
1011	personal lines residential property coverage, commercial
1012	residential property coverage, or commercial nonresidential
1013	property coverage within the state.
1014	14.15.  Must provide, by July 1, 2007, a premium payment
1015	plan option to its policyholders which, allows at a minimum,
1016	allows for quarterly and semiannual payment of premiums. A
1017	monthly payment plan may, but is not required to, be offered.
1018	15.16.  Must limit coverage on mobile homes or manufactured
1019	homes built before prior to 1994 to actual cash value of the
1020	dwelling rather than replacement costs of the dwelling.
1021	16.17.  May provide such limits of coverage as the board
1022	determines, consistent with the requirements of this subsection.
1023	17.18.  May require commercial property to meet specified
1024	hurricane mitigation construction features as a condition of
1025	eligibility for coverage.
1026	18.  As of January 1, 2012, must require that the agent
1027	obtain from an applicant for coverage from the corporation an
1028	acknowledgement signed by the applicant, which includes, at a
1029	minimum, the following statement:
1030
1031	ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT LIABILITY:
1032
1033	1.  AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
1034	CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
1035	DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
1036	MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
1037	PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE
1038	POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT
1039	OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
1040	LEGISLATURE.
1041	2.  I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
1042	ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
1043	INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
1044	FLORIDA LEGISLATURE.
1045	3.  I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
1046	CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
1047	STATE OF FLORIDA.
1048
1049	a.  The corporation shall maintain, in electronic format or
1050	otherwise, a copy of the applicant's signed acknowledgement and
1051	provide a copy of the statement to the policyholder as part of
1052	the first renewal after the effective date of this subparagraph.
1053	b.  The signed acknowledgement form creates a conclusive
1054	presumption that the policyholder understood and accepted his or
1055	her potential surcharge and assessment liability as a
1056	policyholder of the corporation.
1057	19.  Upon notice and determination by the department that
1058	an agent appointed by the corporation has violated s.
1059	626.9541(1)(h), must immediately terminate the agent's
1060	appointment to represent the corporation.
1061	20.  Must provide that new or renewal policies issued by
1062	the corporation on or after January 1, 2012, do not include
1063	coverage for attached or detached screen enclosures. The
1064	corporation is not required to issue a notice of nonrenewal to
1065	exclude this coverage upon the renewal of current policies, but
1066	shall exclude such coverage using a notice of coverage change.
1067	21.  Must provide that new or renewal policies issued by
1068	the corporation on or after January 1, 2012, which cover
1069	sinkhole loss do not include coverage for any loss to
1070	appurtenant structures, driveways, sidewalks, decks, or patios
1071	which is caused directly or indirectly by sinkhole activity. The
1072	corporation is not required to issue a notice of nonrenewal to
1073	exclude this coverage upon the renewal of current policies, but
1074	shall exclude such coverage using a notice of coverage change
1075	which may be included with the policy renewal.
1076	(d)1.  All prospective employees for senior management
1077	positions, as defined by the plan of operation, are subject to
1078	background checks as a prerequisite for employment. The office
1079	shall conduct the background checks on such prospective
1080	employees pursuant to ss. 624.34, 624.404(3), and 628.261.
1081	2.  On or before July 1 of each year, employees of the
1082	corporation must are required to sign and submit a statement
1083	attesting that they do not have a conflict of interest, as
1084	defined in part III of chapter 112. As a condition of
1085	employment, all prospective employees must are required to sign
1086	and submit to the corporation a conflict-of-interest statement.
1087	3.  Senior managers and members of the board of governors
1088	are subject to the provisions of part III of chapter 112,
1089	including, but not limited to, the code of ethics and public
1090	disclosure and reporting of financial interests, pursuant to s.
1091	112.3145.
1092	a.  Senior managers and board members are also required to
1093	file such disclosures with the Commission on Ethics and the
1094	Office of Insurance Regulation. The executive director of the
1095	corporation or his or her designee shall notify each existing
1096	and newly appointed and existing appointed member of the board
1097	of governors and senior managers of their duty to comply with
1098	the reporting requirements of part III of chapter 112. At least
1099	quarterly, the executive director or his or her designee shall
1100	submit to the Commission on Ethics a list of names of the senior
1101	managers and members of the board of governors who are subject
1102	to the public disclosure requirements under s. 112.3145.
1103	b.  Notwithstanding s. 112.3143(2), a board member may not
1104	vote on any measure that would inure to his or her special
1105	private gain or loss; that he or she knows would inure to the
1106	special private gain or loss of any principal by whom he or she
1107	is retained or to the parent organization or subsidiary of a
1108	corporate principal by which he or she is retained, other than
1109	an agency as defined in s. 112.312; or that he or she knows
1110	would inure to the special private gain or loss of a relative or
1111	business associate of the public officer. Before the vote is
1112	taken, such member must publicly state to the assembly the
1113	nature of his or her interest in the matter from which he or she
1114	is abstaining and, within 15 days after the vote occurs,
1115	disclose the nature of his or her interest as a public record in
1116	a memorandum filed with the person responsible for recording the
1117	minutes of the meeting, who shall incorporate the memorandum in
1118	the minutes.
1119	4.  Notwithstanding s. 112.3148 or s. 112.3149, or any
1120	other provision of law, an employee or board member may not
1121	knowingly accept, directly or indirectly, any gift or
1122	expenditure from a person or entity, or an employee or
1123	representative of such person or entity, which that has a
1124	contractual relationship with the corporation or who is under
1125	consideration for a contract. An employee or board member who
1126	fails to comply with subparagraph 3. or this subparagraph is
1127	subject to penalties provided under ss. 112.317 and 112.3173.
1128	5.  Any senior manager of the corporation who is employed
1129	on or after January 1, 2007, regardless of the date of hire, who
1130	subsequently retires or terminates employment is prohibited from
1131	representing another person or entity before the corporation for
1132	2 years after retirement or termination of employment from the
1133	corporation.
1134	6.  Any senior manager of the corporation who is employed
1135	on or after January 1, 2007, regardless of the date of hire, who
1136	subsequently retires or terminates employment is prohibited from
1137	having any employment or contractual relationship for 2 years
1138	with an insurer that has entered into a take-out bonus agreement
1139	with the corporation.
1140	(n)1.  It is the intent of the Legislature that the rates
1141	for coverage provided by the corporation be actuarially
1142	determined and not be competitive with rates charged in the
1143	admitted voluntary market such that the corporation functions as
1144	a residual market mechanism that provides insurance only if such
1145	insurance cannot be procured in the voluntary market. To achieve
1146	this goal, for any rate filing made by the corporation on or
1147	after July 1, 2011:
1148	1.  Rates for coverage provided by the corporation shall be
1149	actuarially sound and subject to the requirements of s. 627.062,
1150	except as otherwise provided in this paragraph. The corporation
1151	shall file its recommended rates with the office at least
1152	annually. The office shall consider the recommended rates and
1153	issue a final order establishing the rates within 45 days after
1154	the recommended rates are filed. The corporation shall provide
1155	any additional information regarding the rates which the office
1156	requires. The office shall consider the recommendations of the
1157	board and issue a final order establishing the rates for the
1158	corporation within 45 days after the recommended rates are
1159	filed. The corporation may not pursue an administrative
1160	challenge or judicial review of the final order of the office.
1161	2.  In developing its rates, the corporation shall use an
1162	appropriate industry expense equalization factor to ensure that
1163	its rates include standard industry ratemaking expense
1164	provisions. The industry expense equalization factor must
1165	include a catastrophe risk load, a provision for taxes, a market
1166	provision for reinsurance costs, and an industry expense
1167	provision for general expenses, acquisition expenses, and
1168	commissions.
1169	3.  The corporation shall implement a rate increase each
1170	year, which may not exceed 15 percent for any single policy,
1171	excluding coverage changes and surcharges. This subparagraph
1172	expires January 1, 2015, and does not apply to rates for
1173	sinkhole coverage or costs for the purchase of private
1174	reinsurance, if any.
1175	4.2.  In addition to the rates otherwise determined
1176	pursuant to this paragraph, the corporation shall impose and
1177	collect an amount equal to the premium tax provided for in s.
1178	624.509 to augment the financial resources of the corporation.
1179	3.  After the public hurricane loss-projection model under
1180	s. 627.06281 has been found to be accurate and reliable by the
1181	Florida Commission on Hurricane Loss Projection Methodology,
1182	that model shall serve as the minimum benchmark for determining
1183	the windstorm portion of the corporation's rates. This
1184	subparagraph does not require or allow the corporation to adopt
1185	rates lower than the rates otherwise required or allowed by this
1186	paragraph.
1187	4.  The rate filings for the corporation which were
1188	approved by the office and which took effect January 1, 2007,
1189	are rescinded, except for those rates that were lowered. As soon
1190	as possible, the corporation shall begin using the lower rates
1191	that were in effect on December 31, 2006, and shall provide
1192	refunds to policyholders who have paid higher rates as a result
1193	of that rate filing. The rates in effect on December 31, 2006,
1194	shall remain in effect for the 2007 and 2008 calendar years
1195	except for any rate change that results in a lower rate. The
1196	next rate change that may increase rates shall take effect
1197	pursuant to a new rate filing recommended by the corporation and
1198	established by the office, subject to the requirements of this
1199	paragraph.
1200	5.  Beginning on July 15, 2009, and each year thereafter,
1201	the corporation must make a recommended actuarially sound rate
1202	filing for each personal and commercial line of business it
1203	writes, to be effective no earlier than January 1, 2010.
1204	6.  Beginning on or after January 1, 2010, and
1205	notwithstanding the board's recommended rates and the office's
1206	final order regarding the corporation's filed rates under
1207	subparagraph 1., the corporation shall implement a rate increase
1208	each year which does not exceed 10 percent for any single policy
1209	issued by the corporation, excluding coverage changes and
1210	surcharges.
1211	5.7.  The corporation may also implement an increase to
1212	reflect the effect on the corporation of the cash buildup factor
1213	pursuant to s. 215.555(5)(b).
1214	8.  The corporation's implementation of rates as prescribed
1215	in subparagraph 6. shall cease for any line of business written
1216	by the corporation upon the corporation's implementation of
1217	actuarially sound rates. Thereafter, the corporation shall
1218	annually make a recommended actuarially sound rate filing for
1219	each commercial and personal line of business the corporation
1220	writes.
1221	(o)  If coverage in an account is deactivated pursuant to
1222	paragraph (p), coverage through the corporation shall be
1223	reactivated by order of the office only under one of the
1224	following circumstances:
1225	1.  If the market assistance plan receives a minimum of 100
1226	applications for coverage within a 3-month period, or 200
1227	applications for coverage within a 1-year period or less for
1228	residential coverage, unless the market assistance plan provides
1229	a quotation from admitted carriers at their filed rates for at
1230	least 90 percent of such applicants. A Any market assistance
1231	plan application that is rejected because an individual risk is
1232	so hazardous as to be uninsurable using the criteria specified
1233	in subparagraph (c)7. may (c)8. shall not be included in the
1234	minimum percentage calculation provided herein. If In the event
1235	that there is a legal or administrative challenge to a
1236	determination by the office that the conditions of this
1237	subparagraph have been met for eligibility for coverage by in
1238	the corporation, an any eligible risk may obtain coverage during
1239	the pendency of such challenge.
1240	2.  In response to a state of emergency declared by the
1241	Governor under s. 252.36, the office may activate coverage by
1242	order during for the period of the emergency upon a finding by
1243	the office that the emergency significantly affects the
1244	availability of residential property insurance.
1245	(q)1.  The corporation shall certify to the office its
1246	needs for annual assessments as to a particular calendar year,
1247	and for any interim assessments that it deems to be necessary to
1248	sustain operations as to a particular year pending the receipt
1249	of annual assessments. Upon verification, the office shall
1250	approve such certification, and the corporation shall levy such
1251	annual or interim assessments. Such assessments shall be
1252	prorated as provided in paragraph (b). The corporation shall
1253	take all reasonable and prudent steps necessary to collect the
1254	amount of assessment due from each assessable insurer,
1255	including, if prudent, filing suit to collect such assessment.
1256	If the corporation is unable to collect an assessment from any
1257	assessable insurer, the uncollected assessments shall be levied
1258	as an additional assessment against the assessable insurers and
1259	any assessable insurer required to pay an additional assessment
1260	as a result of such failure to pay shall have a cause of action
1261	against such nonpaying assessable insurer. Assessments shall be
1262	included as an appropriate factor in the making of rates. The
1263	failure of a surplus lines agent to collect and remit any
1264	regular or emergency assessment levied by the corporation is
1265	considered to be a violation of s. 626.936 and subjects the
1266	surplus lines agent to the penalties provided in that section.
1267	2.  The governing body of any unit of local government, any
1268	residents of which are insured by the corporation, may issue
1269	bonds as defined in s. 125.013 or s. 166.101 from time to time
1270	to fund an assistance program, in conjunction with the
1271	corporation, for the purpose of defraying deficits of the
1272	corporation. In order to avoid needless and indiscriminate
1273	proliferation, duplication, and fragmentation of such assistance
1274	programs, any unit of local government, any residents of which
1275	are insured by the corporation, may provide for the payment of
1276	losses, regardless of whether or not the losses occurred within
1277	or outside of the territorial jurisdiction of the local
1278	government. Revenue bonds under this subparagraph may not be
1279	issued until validated pursuant to chapter 75, unless a state of
1280	emergency is declared by executive order or proclamation of the
1281	Governor pursuant to s. 252.36 making such findings as are
1282	necessary to determine that it is in the best interests of, and
1283	necessary for, the protection of the public health, safety, and
1284	general welfare of residents of this state and declaring it an
1285	essential public purpose to permit certain municipalities or
1286	counties to issue such bonds as will permit relief to claimants
1287	and policyholders of the corporation. Any such unit of local
1288	government may enter into such contracts with the corporation
1289	and with any other entity created pursuant to this subsection as
1290	are necessary to carry out this paragraph. Any bonds issued
1291	under this subparagraph shall be payable from and secured by
1292	moneys received by the corporation from emergency assessments
1293	under sub-subparagraph (b)3.d., and assigned and pledged to or
1294	on behalf of the unit of local government for the benefit of the
1295	holders of such bonds. The funds, credit, property, and taxing
1296	power of the state or of the unit of local government shall not
1297	be pledged for the payment of such bonds.
1298	3.a.  The corporation shall adopt one or more programs
1299	subject to approval by the office for the reduction of both new
1300	and renewal writings in the corporation. Beginning January 1,
1301	2008, any program the corporation adopts for the payment of
1302	bonuses to an insurer for each risk the insurer removes from the
1303	corporation shall comply with s. 627.3511(2) and may not exceed
1304	the amount referenced in s. 627.3511(2) for each risk removed.
1305	The corporation may consider any prudent and not unfairly
1306	discriminatory approach to reducing corporation writings, and
1307	may adopt a credit against assessment liability or other
1308	liability that provides an incentive for insurers to take risks
1309	out of the corporation and to keep risks out of the corporation
1310	by maintaining or increasing voluntary writings in counties or
1311	areas in which corporation risks are highly concentrated and a
1312	program to provide a formula under which an insurer voluntarily
1313	taking risks out of the corporation by maintaining or increasing
1314	voluntary writings will be relieved wholly or partially from
1315	assessments under sub-subparagraphs (b)3.a. and b. However, any
1316	"take-out bonus" or payment to an insurer must be conditioned on
1317	the property being insured for at least 5 years by the insurer,
1318	unless canceled or nonrenewed by the policyholder. If the policy
1319	is canceled or nonrenewed by the policyholder before the end of
1320	the 5-year period, the amount of the take-out bonus must be
1321	prorated for the time period the policy was insured. When the
1322	corporation enters into a contractual agreement for a take-out
1323	plan, the producing agent of record of the corporation policy is
1324	entitled to retain any unearned commission on such policy, and
1325	the insurer shall either:
1326	(I)  Pay to the producing agent of record of the policy,
1327	for the first year, an amount which is the greater of the
1328	insurer's usual and customary commission for the type of policy
1329	written or a policy fee equal to the usual and customary
1330	commission of the corporation; or
1331	(II)  Offer to allow the producing agent of record of the
1332	policy to continue servicing the policy for a period of not less
1333	than 1 year and offer to pay the agent the insurer's usual and
1334	customary commission for the type of policy written. If the
1335	producing agent is unwilling or unable to accept appointment by
1336	the new insurer, the new insurer shall pay the agent in
1337	accordance with sub-sub-subparagraph (I).
1338	b.  Any credit or exemption from regular assessments
1339	adopted under this subparagraph shall last no longer than the 3
1340	years following the cancellation or expiration of the policy by
1341	the corporation. With the approval of the office, the board may
1342	extend such credits for an additional year if the insurer
1343	guarantees an additional year of renewability for all policies
1344	removed from the corporation, or for 2 additional years if the
1345	insurer guarantees 2 additional years of renewability for all
1346	policies so removed.
1347	c.  There shall be no credit, limitation, exemption, or
1348	deferment from emergency assessments to be collected from
1349	policyholders pursuant to sub-subparagraph (b)3.d.
1350	d.  Notwithstanding any other provision of law, for
1351	purposes of a depopulation, take-out, or keep-out program
1352	adopted by the corporation, including an initial or renewal
1353	offer of coverage made to a policyholder removed from the
1354	corporation pursuant to a depopulation, take-out, or keep-out
1355	program, an eligible surplus lines insurer may participate in a
1356	depopulation, take-out, or keep-out program in the same manner
1357	and on the same terms as an authorized insurer, except as
1358	provided under this sub-subparagraph. To qualify to participate
1359	in a depopulation, take-out, or keep-out program, an eligible
1360	surplus lines insurer must first obtain approval from the office
1361	for a depopulation, take-out, or keep-out plan and must then
1362	comply with all of the corporation's requirements for the
1363	depopulation, take-out, or keep-out plan applicable to admitted
1364	insurers and with all statutory provisions applicable to the
1365	removal of policies from the corporation. With regard to a
1366	policyholder removed from the corporation through an assumption
1367	agreement, until the end of the assumption period, the
1368	policyholder remains eligible for coverage from the corporation
1369	regardless of any offer of coverage from a surplus lines
1370	insurer. In considering a surplus lines insurer's request for
1371	approval for a depopulation, take-out, or keep-out plan, the
1372	office must determine that the surplus lines insurer meets the
1373	following requirements:
1374	(I)  The surplus lines insurer maintains a surplus to
1375	policyholders of at least $50 million on a company or pooled
1376	basis;
1377	(II)  The surplus lines insurer maintains an A.M. Best
1378	Financial Strength Rating of A minus or better;
1379	(III)  The surplus lines insurer maintains reserves,
1380	surplus, reinsurance, and reinsurance equivalents sufficient to
1381	cover the insurer's 100-year probable maximum hurricane loss at
1382	least twice in a single hurricane season. In addition, the
1383	surplus lines insurer must submit such reinsurance to the office
1384	to review for purposes of the takeout;
1385	(IV)  The surplus lines insurer provides prominent notice
1386	to the policyholder before the assumption of the policy that
1387	surplus lines policies are not provided coverage by the Florida
1388	Insurance Guaranty Association and an outline of any substantial
1389	differences in coverage between the existing policy and the
1390	policy being offered to the insured; and
1391	(V)  The surplus lines insurer provides similar policy
1392	coverage.
1393
1394	This sub-subparagraph does not subject any surplus lines insurer
1395	to requirements in addition to the requirements contained in
1396	part VIII of chapter 626. A surplus lines broker who makes an
1397	offer of coverage under this sub-subparagraph is not required to
1398	comply with s. 626.916(1)(a), (b), (c), and (e).
1399	4.  The plan shall provide for the deferment, in whole or
1400	in part, of the assessment of an assessable insurer, other than
1401	an emergency assessment collected from policyholders pursuant to
1402	sub-subparagraph (b)3.d., if the office finds that payment of
1403	the assessment would endanger or impair the solvency of the
1404	insurer. In the event an assessment against an assessable
1405	insurer is deferred in whole or in part, the amount by which
1406	such assessment is deferred may be assessed against the other
1407	assessable insurers in a manner consistent with the basis for
1408	assessments set forth in paragraph (b).
1409	5.  Effective July 1, 2007, in order to evaluate the costs
1410	and benefits of approved take-out plans, if the corporation pays
1411	a bonus or other payment to an insurer for an approved take-out
1412	plan, it shall maintain a record of the address or such other
1413	identifying information on the property or risk removed in order
1414	to track if and when the property or risk is later insured by
1415	the corporation.
1416	6.  Any policy taken out, assumed, or removed from the
1417	corporation is, as of the effective date of the take-out,
1418	assumption, or removal, direct insurance issued by the insurer
1419	and not by the corporation, even if the corporation continues to
1420	service the policies. This subparagraph applies to policies of
1421	the corporation and not policies taken out, assumed, or removed
1422	from any other entity.
1423	(s)1.  There is shall be no liability on the part of, and
1424	no cause of action of any nature shall arise against, any
1425	assessable insurer or its agents or employees, the corporation
1426	or its agents or employees, members of the board of governors or
1427	their respective designees at a board meeting, corporation
1428	committee members, or the office or its representatives, for any
1429	action taken by them in the performance of their duties or
1430	responsibilities under this subsection.
1431	a.  As part of the immunity, the corporation, as a
1432	governmental entity serving a public purpose, is not liable for
1433	any claim for bad faith whether or not brought pursuant to s.
1434	624.155, and this subsection or any other provision of law does
1435	not create liability or a cause of action for bad faith or a
1436	claim for extracontractual damages.
1437	b.  Such immunity does not apply to:
1438	(I)a.  Any of the foregoing persons or entities for any
1439	willful tort;
1440	(II)b.  The corporation or its producing agents for breach
1441	of any contract or agreement pertaining to insurance coverage;
1442	(III)c.  The corporation with respect to issuance or
1443	payment of debt;
1444	(IV)d.  An Any assessable insurer with respect to any
1445	action to enforce an assessable insurer's obligations to the
1446	corporation under this subsection; or
1447	(V)e.  The corporation in any pending or future action for
1448	breach of contract or for benefits under a policy issued by the
1449	corporation.; In any such action, the corporation is shall be
1450	liable to the policyholders and beneficiaries for attorney's
1451	fees under s. 627.428.
1452	2.  The corporation shall manage its claim employees,
1453	independent adjusters, and others who handle claims to ensure
1454	they carry out the corporation's duty to its policyholders to
1455	handle claims carefully, timely, diligently, and in good faith,
1456	balanced against the corporation's duty to the state to manage
1457	its assets responsibly in order to minimize its assessment
1458	potential.
1459	(w)  Notwithstanding any other provision of law:
1460	1.  The pledge or sale of, the lien upon, and the security
1461	interest in any rights, revenues, or other assets of the
1462	corporation created or purported to be created pursuant to any
1463	financing documents to secure any bonds or other indebtedness of
1464	the corporation shall be and remain valid and enforceable,
1465	notwithstanding the commencement of and during the continuation
1466	of, and after, any rehabilitation, insolvency, liquidation,
1467	bankruptcy, receivership, conservatorship, reorganization, or
1468	similar proceeding against the corporation under the laws of
1469	this state.
1470	2.  No Such proceeding does not shall relieve the
1471	corporation of its obligation, or otherwise affect its ability
1472	to perform its obligation, to continue to collect, or levy and
1473	collect, assessments, market equalization or other surcharges
1474	under subparagraph (c)10., or any other rights, revenues, or
1475	other assets of the corporation pledged pursuant to any
1476	financing documents.
1477	3.  Each such pledge or sale of, lien upon, and security
1478	interest in, including the priority of such pledge, lien, or
1479	security interest, any such assessments, market equalization or
1480	other surcharges, or other rights, revenues, or other assets
1481	which are collected, or levied and collected, after the
1482	commencement of and during the pendency of, or after, any such
1483	proceeding continues shall continue unaffected by such
1484	proceeding. As used in this subsection, the term "financing
1485	documents" means any agreement or agreements, instrument or
1486	instruments, or other document or documents now existing or
1487	hereafter created evidencing any bonds or other indebtedness of
1488	the corporation or pursuant to which any such bonds or other
1489	indebtedness has been or may be issued and pursuant to which any
1490	rights, revenues, or other assets of the corporation are pledged
1491	or sold to secure the repayment of such bonds or indebtedness,
1492	together with the payment of interest on such bonds or such
1493	indebtedness, or the payment of any other obligation or
1494	financial product, as defined in the plan of operation of the
1495	corporation related to such bonds or indebtedness.
1496	4.  Any such pledge or sale of assessments, revenues,
1497	contract rights, or other rights or assets of the corporation
1498	constitutes shall constitute a lien and security interest, or
1499	sale, as the case may be, that is immediately effective and
1500	attaches to such assessments, revenues, or contract rights or
1501	other rights or assets, whether or not imposed or collected at
1502	the time the pledge or sale is made. Any Such pledge or sale is
1503	effective, valid, binding, and enforceable against the
1504	corporation or other entity making such pledge or sale, and
1505	valid and binding against and superior to any competing claims
1506	or obligations owed to any other person or entity, including
1507	policyholders in this state, asserting rights in any such
1508	assessments, revenues, or contract rights or other rights or
1509	assets to the extent set forth in and in accordance with the
1510	terms of the pledge or sale contained in the applicable
1511	financing documents, whether or not any such person or entity
1512	has notice of such pledge or sale and without the need for any
1513	physical delivery, recordation, filing, or other action.
1514	5.  If As long as the corporation has any bonds
1515	outstanding, the corporation may not file a voluntary petition
1516	under chapter 9 of the federal Bankruptcy Code or such
1517	corresponding chapter or sections as may be in effect, from time
1518	to time, and a public officer or any organization, entity, or
1519	other person may not authorize the corporation to be or become a
1520	debtor under chapter 9 of the federal Bankruptcy Code or such
1521	corresponding chapter or sections as may be in effect, from time
1522	to time, during any such period.
1523	6.  If ordered by a court of competent jurisdiction, the
1524	corporation may assume policies or otherwise provide coverage
1525	for policyholders of an insurer placed in liquidation under
1526	chapter 631, under such forms, rates, terms, and conditions as
1527	the corporation deems appropriate, subject to approval by the
1528	office.
1529	(x)1.  The following records of the corporation are
1530	confidential and exempt from the provisions of s. 119.07(1) and
1531	s. 24(a), Art. I of the State Constitution:
1532	a.  Underwriting files, except that a policyholder or an
1533	applicant shall have access to his or her own underwriting
1534	files. Confidential and exempt underwriting file records may
1535	also be released to other governmental agencies upon written
1536	request and demonstration of need; such records held by the
1537	receiving agency remain confidential and exempt as provided
1538	herein.
1539	b.  Claims files, until termination of all litigation and
1540	settlement of all claims arising out of the same incident,
1541	although portions of the claims files may remain exempt, as
1542	otherwise provided by law. Confidential and exempt claims file
1543	records may be released to other governmental agencies upon
1544	written request and demonstration of need; such records held by
1545	the receiving agency remain confidential and exempt as provided
1546	herein.
1547	c.  Records obtained or generated by an internal auditor
1548	pursuant to a routine audit, until the audit is completed, or if
1549	the audit is conducted as part of an investigation, until the
1550	investigation is closed or ceases to be active. An investigation
1551	is considered "active" while the investigation is being
1552	conducted with a reasonable, good faith belief that it could
1553	lead to the filing of administrative, civil, or criminal
1554	proceedings.
1555	d.  Matters reasonably encompassed in privileged attorney-
1556	client communications.
1557	e.  Proprietary information licensed to the corporation
1558	under contract and the contract provides for the confidentiality
1559	of such proprietary information.
1560	f.  All information relating to the medical condition or
1561	medical status of a corporation employee which is not relevant
1562	to the employee's capacity to perform his or her duties, except
1563	as otherwise provided in this paragraph. Information that is
1564	exempt shall include, but is not limited to, information
1565	relating to workers' compensation, insurance benefits, and
1566	retirement or disability benefits.
1567	g.  Upon an employee's entrance into the employee
1568	assistance program, a program to assist any employee who has a
1569	behavioral or medical disorder, substance abuse problem, or
1570	emotional difficulty which affects the employee's job
1571	performance, all records relative to that participation shall be
1572	confidential and exempt from the provisions of s. 119.07(1) and
1573	s. 24(a), Art. I of the State Constitution, except as otherwise
1574	provided in s. 112.0455(11).
1575	h.  Information relating to negotiations for financing,
1576	reinsurance, depopulation, or contractual services, until the
1577	conclusion of the negotiations.
1578	i.  Minutes of closed meetings regarding underwriting
1579	files, and minutes of closed meetings regarding an open claims
1580	file until termination of all litigation and settlement of all
1581	claims with regard to that claim, except that information
1582	otherwise confidential or exempt by law shall be redacted.
1583	2.  If an authorized insurer is considering underwriting a
1584	risk insured by the corporation or has removed a risk from the
1585	corporation, relevant underwriting files and confidential claims
1586	files may be released to the insurer provided the insurer agrees
1587	in writing, notarized and under oath, to maintain the
1588	confidentiality of such files. If a file is transferred to an
1589	insurer, that file is no longer a public record because it is
1590	not held by an agency subject to the provisions of the public
1591	records law. Underwriting files and confidential claims files
1592	may also be released to staff and the board of governors of the
1593	market assistance plan established pursuant to s. 627.3515, who
1594	must retain the confidentiality of such files, except such files
1595	may be released to authorized insurers that are considering
1596	assuming the risks to which the files apply, provided the
1597	insurer agrees in writing, notarized and under oath, to maintain
1598	the confidentiality of such files. Finally, the corporation or
1599	the board or staff of the market assistance plan may make the
1600	following information obtained from underwriting files and
1601	confidential claims files available to licensed general lines
1602	insurance agents: name, address, and telephone number of the
1603	residential property owner or insured; location of the risk;
1604	rating information; loss history; and policy type. The receiving
1605	licensed general lines insurance agent must retain the
1606	confidentiality of the information received.
1607	3.  A policyholder who has filed suit against the
1608	corporation has the right to discover the contents of his or her
1609	own claims file to the same extent that discovery of such
1610	contents would be available from a private insurer in litigation
1611	as provided by the Florida Rules of Civil Procedure, the Florida
1612	Evidence Code, and other applicable law. Pursuant to subpoena, a
1613	third party has the right to discover the contents of an
1614	insured's or applicant's underwriting or claims file to the same
1615	extent that discovery of such contents would be available from a
1616	private insurer by subpoena as provided by the Florida Rules of
1617	Civil Procedure, the Florida Evidence Code, and other applicable
1618	law, and subject to any confidentiality protections requested by
1619	the corporation and agreed to by the seeking party or ordered by
1620	the court. The corporation may release confidential underwriting
1621	and claims file contents and information as it deems necessary
1622	and appropriate to underwrite or service insurance policies and
1623	claims, subject to any confidentiality protections deemed
1624	necessary and appropriate by the corporation.
1625	4.  Portions of meetings of the corporation are exempt from
1626	the provisions of s. 286.011 and s. 24(b), Art. I of the State
1627	Constitution wherein confidential underwriting files or
1628	confidential open claims files are discussed. All portions of
1629	corporation meetings which are closed to the public shall be
1630	recorded by a court reporter. The court reporter shall record
1631	the times of commencement and termination of the meeting, all
1632	discussion and proceedings, the names of all persons present at
1633	any time, and the names of all persons speaking. No portion of
1634	any closed meeting shall be off the record. Subject to the
1635	provisions hereof and s. 119.07(1)(d)-(f), the court reporter's
1636	notes of any closed meeting shall be retained by the corporation
1637	for a minimum of 5 years. A copy of the transcript, less any
1638	exempt matters, of any closed meeting wherein claims are
1639	discussed shall become public as to individual claims after
1640	settlement of the claim.
1641	(y)  It is the intent of the Legislature that the
1642	amendments to this subsection enacted in 2002 should, over time,
1643	reduce the probable maximum windstorm losses in the residual
1644	markets and should reduce the potential assessments to be levied
1645	on property insurers and policyholders statewide. In furtherance
1646	of this intent:
1647	1.  The board shall, on or before February 1 of each year,
1648	provide a report to the President of the Senate and the Speaker
1649	of the House of Representatives showing the reduction or
1650	increase in the 100-year probable maximum loss attributable to
1651	wind-only coverages and the quota share program under this
1652	subsection combined, as compared to the benchmark 100-year
1653	probable maximum loss of the Florida Windstorm Underwriting
1654	Association. For purposes of this paragraph, the benchmark 100-
1655	year probable maximum loss of the Florida Windstorm Underwriting
1656	Association shall be the calculation dated February 2001 and
1657	based on November 30, 2000, exposures. In order to ensure
1658	comparability of data, the board shall use the same methods for
1659	calculating its probable maximum loss as were used to calculate
1660	the benchmark probable maximum loss.
1661	2.  Beginning December 1, 2010, if the report under
1662	subparagraph 1. for any year indicates that the 100-year
1663	probable maximum loss attributable to wind-only coverages and
1664	the quota share program combined does not reflect a reduction of
1665	at least 25 percent from the benchmark, the board shall reduce
1666	the boundaries of the high-risk area eligible for wind-only
1667	coverages under this subsection in a manner calculated to reduce
1668	such probable maximum loss to an amount at least 25 percent
1669	below the benchmark.
1670	3.  Beginning February 1, 2015, if the report under
1671	subparagraph 1. for any year indicates that the 100-year
1672	probable maximum loss attributable to wind-only coverages and
1673	the quota share program combined does not reflect a reduction of
1674	at least 50 percent from the benchmark, the boundaries of the
1675	high-risk area eligible for wind-only coverages under this
1676	subsection shall be reduced by the elimination of any area that
1677	is not seaward of a line 1,000 feet inland from the Intracoastal
1678	Waterway.
1679	(aa)  As a condition of eligibility for coverage by the
1680	corporation, an applicant or insured of a property located in a
1681	Special Flood Hazard Area, as defined by the National Flood
1682	Insurance Program, must maintain in effect a separate flood
1683	insurance policy having coverage limits for building and
1684	contents at least equal to those provided under the
1685	corporation's policy, subject to the maximum limits available
1686	under the National Flood Insurance Program policy. This
1687	requirement does not apply to an insured who is a tenant or a
1688	condominium unit owner above the ground floor; a policy issued
1689	by the corporation which excludes wind and hail coverage; a risk
1690	that is not eligible for flood coverage under the National Flood
1691	Insurance Program; or a mobile home that is located more than 2
1692	miles from open water, including the ocean, the gulf, a bay, a
1693	river, or the intracoastal waterway. This paragraph applies to
1694	new policies issued by the corporation on or after January 1,
1695	2012, and to policies renewed by the corporation on or after
1696	January 1, 2013. The corporation shall not require the securing
1697	of flood insurance as a condition of coverage if the insured or
1698	applicant executes a form approved by the office affirming that
1699	flood insurance is not provided by the corporation and that if
1700	flood insurance is not secured by the applicant or insured in
1701	addition to coverage by the corporation, the risk will not be
1702	covered for flood damage. A corporation policyholder electing
1703	not to secure flood insurance and executing a form as provided
1704	herein making a claim for water damage against the corporation
1705	shall have the burden of proving the damage was not caused by
1706	flooding. Notwithstanding other provisions of this subsection,
1707	the corporation may deny coverage to an applicant or insured who
1708	refuses to execute the form described herein.
1709	(ee)  The office may establish a pilot program to offer
1710	optional sinkhole coverage in one or more counties or other
1711	territories of the corporation for the purpose of implementing
1712	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
1713	Florida. Under the pilot program, the corporation is not
1714	required to issue a notice of nonrenewal to exclude sinkhole
1715	coverage upon the renewal of existing policies, but may exclude
1716	such coverage using a notice of coverage change.
1717	Section 2.  Subsection (1) of section 627.712, Florida
1718	Statutes, is amended to read:
1719	627.712  Residential windstorm coverage required;
1720	availability of exclusions for windstorm or contents.-
1721	(1)  An insurer issuing a residential property insurance
1722	policy must provide windstorm coverage. Except as provided in
1723	paragraph (2)(c), this section does not apply with respect to
1724	risks that are eligible for wind-only coverage from Citizens
1725	Property Insurance Corporation under s. 627.351(6), and with
1726	respect to risks that are not eligible for coverage from
1727	Citizens Property Insurance Corporation under s. 627.351(6)(a)3.
1728	or 4. 5. A risk ineligible for Citizens coverage under s.
1729	627.351(6)(a)3. or 4. 5. is exempt from the requirements of this
1730	section only if the risk is located within the boundaries of the
1731	high-risk account of the corporation.
1732	Section 3.  This act shall take effect upon becoming a law.

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