Bill Text: FL S1630 | 2016 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Operations of the Citizens Property Insurance Corporation
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2016-03-08 - Laid on Table, companion bill(s) passed, see CS/CS/HB 931 (Ch. 2016-229) [S1630 Detail]
Download: Florida-2016-S1630-Comm_Sub.html
Bill Title: Operations of the Citizens Property Insurance Corporation
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2016-03-08 - Laid on Table, companion bill(s) passed, see CS/CS/HB 931 (Ch. 2016-229) [S1630 Detail]
Download: Florida-2016-S1630-Comm_Sub.html
Florida Senate - 2016 CS for SB 1630 By the Committee on Banking and Insurance; and Senator Flores 597-02877-16 20161630c1 1 A bill to be entitled 2 An act relating to operations of the Citizens Property 3 Insurance Corporation; amending s. 627.351, F.S.; 4 specifying that a consumer representative appointed by 5 the Governor to the Citizens Property Insurance 6 Corporation’s board of governors is not prohibited 7 from practicing in a certain profession if required or 8 permitted by law or ordinance; revising the 9 requirements for licensed agents of the corporation; 10 revising provisions related to the corporation’s use 11 of certain public and private hurricane loss 12 projection models in establishing certain rates; 13 revising a provision to permit specified information 14 from certain underwriting and claims files to be made 15 available to certain entities, rather than licensed 16 general lines insurance agents; providing limitations 17 for the use of such information by the entities; 18 requiring the take-out program to be revised for 19 specified purposes by a specified date; requiring the 20 corporation to schedule up to a certain number of 21 cycles annually during which insurers may identify and 22 submit policy take-out requests; specifying 23 information required to be included in such requests; 24 providing conditions that must be agreed to by 25 insurers submitting a request; requiring the 26 corporation to maintain and make available specified 27 lists of insurers to its agents of record; requiring 28 the corporation to provide policyholders and the 29 agents of record with a specified notice regarding 30 their policy renewal options; amending s. 627.3518, 31 F.S.; revising criteria for when an applicant for 32 coverage from the corporation shall be considered a 33 renewal; providing an effective date. 34 35 Be It Enacted by the Legislature of the State of Florida: 36 37 Section 1. Paragraphs (c), (n), and (x) of subsection (6) 38 of section 627.351, Florida Statutes, are amended, and paragraph 39 (ii) is added to that subsection, to read: 40 627.351 Insurance risk apportionment plans.— 41 (6) CITIZENS PROPERTY INSURANCE CORPORATION.— 42 (c) The corporation’s plan of operation: 43 1. Must provide for adoption of residential property and 44 casualty insurance policy forms and commercial residential and 45 nonresidential property insurance forms, which must be approved 46 by the office before use. The corporation shall adopt the 47 following policy forms: 48 a. Standard personal lines policy forms that are 49 comprehensive multiperil policies providing full coverage of a 50 residential property equivalent to the coverage provided in the 51 private insurance market under an HO-3, HO-4, or HO-6 policy. 52 b. Basic personal lines policy forms that are policies 53 similar to an HO-8 policy or a dwelling fire policy that provide 54 coverage meeting the requirements of the secondary mortgage 55 market, but which is more limited than the coverage under a 56 standard policy. 57 c. Commercial lines residential and nonresidential policy 58 forms that are generally similar to the basic perils of full 59 coverage obtainable for commercial residential structures and 60 commercial nonresidential structures in the admitted voluntary 61 market. 62 d. Personal lines and commercial lines residential property 63 insurance forms that cover the peril of wind only. The forms are 64 applicable only to residential properties located in areas 65 eligible for coverage under the coastal account referred to in 66 sub-subparagraph (b)2.a. 67 e. Commercial lines nonresidential property insurance forms 68 that cover the peril of wind only. The forms are applicable only 69 to nonresidential properties located in areas eligible for 70 coverage under the coastal account referred to in sub 71 subparagraph (b)2.a. 72 f. The corporation may adopt variations of the policy forms 73 listed in sub-subparagraphs a.-e. which contain more restrictive 74 coverage. 75 g. Effective January 1, 2013, the corporation shall offer a 76 basic personal lines policy similar to an HO-8 policy with 77 dwelling repair based on common construction materials and 78 methods. 79 2. Must provide that the corporation adopt a program in 80 which the corporation and authorized insurers enter into quota 81 share primary insurance agreements for hurricane coverage, as 82 defined in s. 627.4025(2)(a), for eligible risks, and adopt 83 property insurance forms for eligible risks which cover the 84 peril of wind only. 85 a. As used in this subsection, the term: 86 (I) “Quota share primary insurance” means an arrangement in 87 which the primary hurricane coverage of an eligible risk is 88 provided in specified percentages by the corporation and an 89 authorized insurer. The corporation and authorized insurer are 90 each solely responsible for a specified percentage of hurricane 91 coverage of an eligible risk as set forth in a quota share 92 primary insurance agreement between the corporation and an 93 authorized insurer and the insurance contract. The 94 responsibility of the corporation or authorized insurer to pay 95 its specified percentage of hurricane losses of an eligible 96 risk, as set forth in the agreement, may not be altered by the 97 inability of the other party to pay its specified percentage of 98 losses. Eligible risks that are provided hurricane coverage 99 through a quota share primary insurance arrangement must be 100 provided policy forms that set forth the obligations of the 101 corporation and authorized insurer under the arrangement, 102 clearly specify the percentages of quota share primary insurance 103 provided by the corporation and authorized insurer, and 104 conspicuously and clearly state that the authorized insurer and 105 the corporation may not be held responsible beyond their 106 specified percentage of coverage of hurricane losses. 107 (II) “Eligible risks” means personal lines residential and 108 commercial lines residential risks that meet the underwriting 109 criteria of the corporation and are located in areas that were 110 eligible for coverage by the Florida Windstorm Underwriting 111 Association on January 1, 2002. 112 b. The corporation may enter into quota share primary 113 insurance agreements with authorized insurers at corporation 114 coverage levels of 90 percent and 50 percent. 115 c. If the corporation determines that additional coverage 116 levels are necessary to maximize participation in quota share 117 primary insurance agreements by authorized insurers, the 118 corporation may establish additional coverage levels. However, 119 the corporation’s quota share primary insurance coverage level 120 may not exceed 90 percent. 121 d. Any quota share primary insurance agreement entered into 122 between an authorized insurer and the corporation must provide 123 for a uniform specified percentage of coverage of hurricane 124 losses, by county or territory as set forth by the corporation 125 board, for all eligible risks of the authorized insurer covered 126 under the agreement. 127 e. Any quota share primary insurance agreement entered into 128 between an authorized insurer and the corporation is subject to 129 review and approval by the office. However, such agreement shall 130 be authorized only as to insurance contracts entered into 131 between an authorized insurer and an insured who is already 132 insured by the corporation for wind coverage. 133 f. For all eligible risks covered under quota share primary 134 insurance agreements, the exposure and coverage levels for both 135 the corporation and authorized insurers shall be reported by the 136 corporation to the Florida Hurricane Catastrophe Fund. For all 137 policies of eligible risks covered under such agreements, the 138 corporation and the authorized insurer must maintain complete 139 and accurate records for the purpose of exposure and loss 140 reimbursement audits as required by fund rules. The corporation 141 and the authorized insurer shall each maintain duplicate copies 142 of policy declaration pages and supporting claims documents. 143 g. The corporation board shall establish in its plan of 144 operation standards for quota share agreements which ensure that 145 there is no discriminatory application among insurers as to the 146 terms of the agreements, pricing of the agreements, incentive 147 provisions if any, and consideration paid for servicing policies 148 or adjusting claims. 149 h. The quota share primary insurance agreement between the 150 corporation and an authorized insurer must set forth the 151 specific terms under which coverage is provided, including, but 152 not limited to, the sale and servicing of policies issued under 153 the agreement by the insurance agent of the authorized insurer 154 producing the business, the reporting of information concerning 155 eligible risks, the payment of premium to the corporation, and 156 arrangements for the adjustment and payment of hurricane claims 157 incurred on eligible risks by the claims adjuster and personnel 158 of the authorized insurer. Entering into a quota sharing 159 insurance agreement between the corporation and an authorized 160 insurer is voluntary and at the discretion of the authorized 161 insurer. 162 3. May provide that the corporation may employ or otherwise 163 contract with individuals or other entities to provide 164 administrative or professional services that may be appropriate 165 to effectuate the plan. The corporation may borrow funds by 166 issuing bonds or by incurring other indebtedness, and shall have 167 other powers reasonably necessary to effectuate the requirements 168 of this subsection, including, without limitation, the power to 169 issue bonds and incur other indebtedness in order to refinance 170 outstanding bonds or other indebtedness. The corporation may 171 seek judicial validation of its bonds or other indebtedness 172 under chapter 75. The corporation may issue bonds or incur other 173 indebtedness, or have bonds issued on its behalf by a unit of 174 local government pursuant to subparagraph (q)2. in the absence 175 of a hurricane or other weather-related event, upon a 176 determination by the corporation, subject to approval by the 177 office, that such action would enable it to efficiently meet the 178 financial obligations of the corporation and that such 179 financings are reasonably necessary to effectuate the 180 requirements of this subsection. The corporation may take all 181 actions needed to facilitate tax-free status for such bonds or 182 indebtedness, including formation of trusts or other affiliated 183 entities. The corporation may pledge assessments, projected 184 recoveries from the Florida Hurricane Catastrophe Fund, other 185 reinsurance recoverables, policyholder surcharges and other 186 surcharges, and other funds available to the corporation as 187 security for bonds or other indebtedness. In recognition of s. 188 10, Art. I of the State Constitution, prohibiting the impairment 189 of obligations of contracts, it is the intent of the Legislature 190 that no action be taken whose purpose is to impair any bond 191 indenture or financing agreement or any revenue source committed 192 by contract to such bond or other indebtedness. 193 4. Must require that the corporation operate subject to the 194 supervision and approval of a board of governors consisting of 195 nine individuals who are residents of this state and who are 196 from different geographical areas of the state, one of whom is 197 appointed by the Governor and serves solely to advocate on 198 behalf of the consumer. The appointment of a consumer 199 representative by the Governor is deemed to be within the scope 200 of the exemption provided in s. 112.313(7)(b) and is in addition 201 to the appointments authorized under sub-subparagraph a. 202 a. The Governor, the Chief Financial Officer, the President 203 of the Senate, and the Speaker of the House of Representatives 204 shall each appoint two members of the board. At least one of the 205 two members appointed by each appointing officer must have 206 demonstrated expertise in insurance and be deemed to be within 207 the scope of the exemption provided in s. 112.313(7)(b). The 208 Chief Financial Officer shall designate one of the appointees as 209 chair. All board members serve at the pleasure of the appointing 210 officer. All members of the board are subject to removal at will 211 by the officers who appointed them. All board members, including 212 the chair, must be appointed to serve for 3-year terms beginning 213 annually on a date designated by the plan. However, for the 214 first term beginning on or after July 1, 2009, each appointing 215 officer shall appoint one member of the board for a 2-year term 216 and one member for a 3-year term. A board vacancy shall be 217 filled for the unexpired term by the appointing officer. The 218 Chief Financial Officer shall appoint a technical advisory group 219 to provide information and advice to the board in connection 220 with the board’s duties under this subsection. The executive 221 director and senior managers of the corporation shall be engaged 222 by the board and serve at the pleasure of the board. Any 223 executive director appointed on or after July 1, 2006, is 224 subject to confirmation by the Senate. The executive director is 225 responsible for employing other staff as the corporation may 226 require, subject to review and concurrence by the board. 227 b. The board shall create a Market Accountability Advisory 228 Committee to assist the corporation in developing awareness of 229 its rates and its customer and agent service levels in 230 relationship to the voluntary market insurers writing similar 231 coverage. 232 (I) The members of the advisory committee consist of the 233 following 11 persons, one of whom must be elected chair by the 234 members of the committee: four representatives, one appointed by 235 the Florida Association of Insurance Agents, one by the Florida 236 Association of Insurance and Financial Advisors, one by the 237 Professional Insurance Agents of Florida, and one by the Latin 238 American Association of Insurance Agencies; three 239 representatives appointed by the insurers with the three highest 240 voluntary market share of residential property insurance 241 business in the state; one representative from the Office of 242 Insurance Regulation; one consumer appointed by the board who is 243 insured by the corporation at the time of appointment to the 244 committee; one representative appointed by the Florida 245 Association of Realtors; and one representative appointed by the 246 Florida Bankers Association. All members shall be appointed to 247 3-year terms and may serve for consecutive terms. 248 (II) The committee shall report to the corporation at each 249 board meeting on insurance market issues which may include rates 250 and rate competition with the voluntary market; service, 251 including policy issuance, claims processing, and general 252 responsiveness to policyholders, applicants, and agents; and 253 matters relating to depopulation. 254 5. Must provide a procedure for determining the eligibility 255 of a risk for coverage, as follows: 256 a. Subject to s. 627.3517, with respect to personal lines 257 residential risks, if the risk is offered coverage from an 258 authorized insurer at the insurer’s approved rate under a 259 standard policy including wind coverage or, if consistent with 260 the insurer’s underwriting rules as filed with the office, a 261 basic policy including wind coverage, for a new application to 262 the corporation for coverage, the risk is not eligible for any 263 policy issued by the corporation unless the premium for coverage 264 from the authorized insurer is more than 15 percent greater than 265 the premium for comparable coverage from the corporation. 266 Whenever an offer of coverage for a personal lines residential 267 risk is received for a policyholder of the corporation at 268 renewal from an authorized insurer, if the offer is equal to or 269 less than the corporation’s renewal premium for comparable 270 coverage, the risk is not eligible for coverage with the 271 corporation. If the risk is not able to obtain such offer, the 272 risk is eligible for a standard policy including wind coverage 273 or a basic policy including wind coverage issued by the 274 corporation; however, if the risk could not be insured under a 275 standard policy including wind coverage regardless of market 276 conditions, the risk is eligible for a basic policy including 277 wind coverage unless rejected under subparagraph 8. However, a 278 policyholder removed from the corporation through an assumption 279 agreement remains eligible for coverage from the corporation 280 until the end of the assumption period. The corporation shall 281 determine the type of policy to be provided on the basis of 282 objective standards specified in the underwriting manual and 283 based on generally accepted underwriting practices. 284 (I) If the risk accepts an offer of coverage through the 285 market assistance plan or through a mechanism established by the 286 corporation other than a plan established by s. 627.3518, before 287 a policy is issued to the risk by the corporation or during the 288 first 30 days of coverage by the corporation, and the producing 289 agent who submitted the application to the plan or to the 290 corporation is not currently appointed by the insurer, the 291 insurer shall: 292 (A) Pay to the producing agent of record of the policy for 293 the first year, an amount that is the greater of the insurer’s 294 usual and customary commission for the type of policy written or 295 a fee equal to the usual and customary commission of the 296 corporation; or 297 (B) Offer to allow the producing agent of record of the 298 policy to continue servicing the policy for at least 1 year and 299 offer to pay the agent the greater of the insurer’s or the 300 corporation’s usual and customary commission for the type of 301 policy written. 302 303 If the producing agent is unwilling or unable to accept 304 appointment, the new insurer shall pay the agent in accordance 305 with sub-sub-sub-subparagraph (A). 306 (II) If the corporation enters into a contractual agreement 307 for a take-out plan, the producing agent of record of the 308 corporation policy is entitled to retain any unearned commission 309 on the policy, and the insurer shall: 310 (A) Pay to the producing agent of record, for the first 311 year, an amount that is the greater of the insurer’s usual and 312 customary commission for the type of policy written or a fee 313 equal to the usual and customary commission of the corporation; 314 or 315 (B) Offer to allow the producing agent of record to 316 continue servicing the policy for at least 1 year and offer to 317 pay the agent the greater of the insurer’s or the corporation’s 318 usual and customary commission for the type of policy written. 319 320 If the producing agent is unwilling or unable to accept 321 appointment, the new insurer shall pay the agent in accordance 322 with sub-sub-sub-subparagraph (A). 323 b. With respect to commercial lines residential risks, for 324 a new application to the corporation for coverage, if the risk 325 is offered coverage under a policy including wind coverage from 326 an authorized insurer at its approved rate, the risk is not 327 eligible for a policy issued by the corporation unless the 328 premium for coverage from the authorized insurer is more than 15 329 percent greater than the premium for comparable coverage from 330 the corporation. Whenever an offer of coverage for a commercial 331 lines residential risk is received for a policyholder of the 332 corporation at renewal from an authorized insurer, if the offer 333 is equal to or less than the corporation’s renewal premium for 334 comparable coverage, the risk is not eligible for coverage with 335 the corporation. If the risk is not able to obtain any such 336 offer, the risk is eligible for a policy including wind coverage 337 issued by the corporation. However, a policyholder removed from 338 the corporation through an assumption agreement remains eligible 339 for coverage from the corporation until the end of the 340 assumption period. 341 (I) If the risk accepts an offer of coverage through the 342 market assistance plan or through a mechanism established by the 343 corporation other than a plan established by s. 627.3518, before 344 a policy is issued to the risk by the corporation or during the 345 first 30 days of coverage by the corporation, and the producing 346 agent who submitted the application to the plan or the 347 corporation is not currently appointed by the insurer, the 348 insurer shall: 349 (A) Pay to the producing agent of record of the policy, for 350 the first year, an amount that is the greater of the insurer’s 351 usual and customary commission for the type of policy written or 352 a fee equal to the usual and customary commission of the 353 corporation; or 354 (B) Offer to allow the producing agent of record of the 355 policy to continue servicing the policy for at least 1 year and 356 offer to pay the agent the greater of the insurer’s or the 357 corporation’s usual and customary commission for the type of 358 policy written. 359 360 If the producing agent is unwilling or unable to accept 361 appointment, the new insurer shall pay the agent in accordance 362 with sub-sub-sub-subparagraph (A). 363 (II) If the corporation enters into a contractual agreement 364 for a take-out plan, the producing agent of record of the 365 corporation policy is entitled to retain any unearned commission 366 on the policy, and the insurer shall: 367 (A) Pay to the producing agent of record, for the first 368 year, an amount that is the greater of the insurer’s usual and 369 customary commission for the type of policy written or a fee 370 equal to the usual and customary commission of the corporation; 371 or 372 (B) Offer to allow the producing agent of record to 373 continue servicing the policy for at least 1 year and offer to 374 pay the agent the greater of the insurer’s or the corporation’s 375 usual and customary commission for the type of policy written. 376 377 If the producing agent is unwilling or unable to accept 378 appointment, the new insurer shall pay the agent in accordance 379 with sub-sub-sub-subparagraph (A). 380 c. For purposes of determining comparable coverage under 381 sub-subparagraphs a. and b., the comparison must be based on 382 those forms and coverages that are reasonably comparable. The 383 corporation may rely on a determination of comparable coverage 384 and premium made by the producing agent who submits the 385 application to the corporation, made in the agent’s capacity as 386 the corporation’s agent. A comparison may be made solely of the 387 premium with respect to the main building or structure only on 388 the following basis: the same coverage A or other building 389 limits; the same percentage hurricane deductible that applies on 390 an annual basis or that applies to each hurricane for commercial 391 residential property; the same percentage of ordinance and law 392 coverage, if the same limit is offered by both the corporation 393 and the authorized insurer; the same mitigation credits, to the 394 extent the same types of credits are offered both by the 395 corporation and the authorized insurer; the same method for loss 396 payment, such as replacement cost or actual cash value, if the 397 same method is offered both by the corporation and the 398 authorized insurer in accordance with underwriting rules; and 399 any other form or coverage that is reasonably comparable as 400 determined by the board. If an application is submitted to the 401 corporation for wind-only coverage in the coastal account, the 402 premium for the corporation’s wind-only policy plus the premium 403 for the ex-wind policy that is offered by an authorized insurer 404 to the applicant must be compared to the premium for multiperil 405 coverage offered by an authorized insurer, subject to the 406 standards for comparison specified in this subparagraph. If the 407 corporation or the applicant requests from the authorized 408 insurer a breakdown of the premium of the offer by types of 409 coverage so that a comparison may be made by the corporation or 410 its agent and the authorized insurer refuses or is unable to 411 provide such information, the corporation may treat the offer as 412 not being an offer of coverage from an authorized insurer at the 413 insurer’s approved rate. 414 6. Must include rules for classifications of risks and 415 rates. 416 7. Must provide that if premium and investment income for 417 an account attributable to a particular calendar year are in 418 excess of projected losses and expenses for the account 419 attributable to that year, such excess shall be held in surplus 420 in the account. Such surplus must be available to defray 421 deficits in that account as to future years and used for that 422 purpose before assessing assessable insurers and assessable 423 insureds as to any calendar year. 424 8. Must provide objective criteria and procedures to be 425 uniformly applied to all applicants in determining whether an 426 individual risk is so hazardous as to be uninsurable. In making 427 this determination and in establishing the criteria and 428 procedures, the following must be considered: 429 a. Whether the likelihood of a loss for the individual risk 430 is substantially higher than for other risks of the same class; 431 and 432 b. Whether the uncertainty associated with the individual 433 risk is such that an appropriate premium cannot be determined. 434 435 The acceptance or rejection of a risk by the corporation shall 436 be construed as the private placement of insurance, and the 437 provisions of chapter 120 do not apply. 438 9. Must provide that the corporation make its best efforts 439 to procure catastrophe reinsurance at reasonable rates, to cover 440 its projected 100-year probable maximum loss as determined by 441 the board of governors. 442 10. The policies issued by the corporation must provide 443 that if the corporation or the market assistance plan obtains an 444 offer from an authorized insurer to cover the risk at its 445 approved rates, the risk is no longer eligible for renewal 446 through the corporation, except as otherwise provided in this 447 subsection. 448 11. Corporation policies and applications must include a 449 notice that the corporation policy could, under this section, be 450 replaced with a policy issued by an authorized insurer which 451 does not provide coverage identical to the coverage provided by 452 the corporation. The notice must also specify that acceptance of 453 corporation coverage creates a conclusive presumption that the 454 applicant or policyholder is aware of this potential. 455 12. May establish, subject to approval by the office, 456 different eligibility requirements and operational procedures 457 for any line or type of coverage for any specified county or 458 area if the board determines that such changes are justified due 459 to the voluntary market being sufficiently stable and 460 competitive in such area or for such line or type of coverage 461 and that consumers who, in good faith, are unable to obtain 462 insurance through the voluntary market through ordinary methods 463 continue to have access to coverage from the corporation. If 464 coverage is sought in connection with a real property transfer, 465 the requirements and procedures may not provide an effective 466 date of coverage later than the date of the closing of the 467 transfer as established by the transferor, the transferee, and, 468 if applicable, the lender. 469 13. Must provide that, with respect to the coastal account, 470 any assessable insurer with a surplus as to policyholders of $25 471 million or less writing 25 percent or more of its total 472 countrywide property insurance premiums in this state may 473 petition the office, within the first 90 days of each calendar 474 year, to qualify as a limited apportionment company. A regular 475 assessment levied by the corporation on a limited apportionment 476 company for a deficit incurred by the corporation for the 477 coastal account may be paid to the corporation on a monthly 478 basis as the assessments are collected by the limited 479 apportionment company from its insureds, but a limited 480 apportionment company must begin collecting the regular 481 assessments not later than 90 days after the regular assessments 482 are levied by the corporation, and the regular assessments must 483 be paid in full within 15 months after being levied by the 484 corporation. A limited apportionment company shall collect from 485 its policyholders any emergency assessment imposed under sub 486 subparagraph (b)3.d. The plan must provide that, if the office 487 determines that any regular assessment will result in an 488 impairment of the surplus of a limited apportionment company, 489 the office may direct that all or part of such assessment be 490 deferred as provided in subparagraph (q)4. However, an emergency 491 assessment to be collected from policyholders under sub 492 subparagraph (b)3.d. may not be limited or deferred. 493 14. Must provide that the corporation appoint as its 494 licensed agents only those agents who throughout such 495 appointments also hold an appointment as defined in s. 496 626.015(3) bywithan insurer whoat the time of the agent’s497initial appointment by the corporationis authorized to write 498 and is actually writing or renewing personal lines residential 499 property coverage, commercial residential property coverage, or 500 commercial nonresidential property coverage within the state. 501 15. Must provide a premium payment plan option to its 502 policyholders which, at a minimum, allows for quarterly and 503 semiannual payment of premiums. A monthly payment plan may, but 504 is not required to, be offered. 505 16. Must limit coverage on mobile homes or manufactured 506 homes built before 1994 to actual cash value of the dwelling 507 rather than replacement costs of the dwelling. 508 17. Must provide coverage for manufactured or mobile home 509 dwellings. Such coverage must also include the following 510 attached structures: 511 a. Screened enclosures that are aluminum framed or screened 512 enclosures that are not covered by the same or substantially the 513 same materials as those of the primary dwelling; 514 b. Carports that are aluminum or carports that are not 515 covered by the same or substantially the same materials as those 516 of the primary dwelling; and 517 c. Patios that have a roof covering that is constructed of 518 materials that are not the same or substantially the same 519 materials as those of the primary dwelling. 520 521 The corporation shall make available a policy for mobile homes 522 or manufactured homes for a minimum insured value of at least 523 $3,000. 524 18. May provide such limits of coverage as the board 525 determines, consistent with the requirements of this subsection. 526 19. May require commercial property to meet specified 527 hurricane mitigation construction features as a condition of 528 eligibility for coverage. 529 20. Must provide that new or renewal policies issued by the 530 corporation on or after January 1, 2012, which cover sinkhole 531 loss do not include coverage for any loss to appurtenant 532 structures, driveways, sidewalks, decks, or patios that are 533 directly or indirectly caused by sinkhole activity. The 534 corporation shall exclude such coverage using a notice of 535 coverage change, which may be included with the policy renewal, 536 and not by issuance of a notice of nonrenewal of the excluded 537 coverage upon renewal of the current policy. 538 21. As of January 1, 2012, must require that the agent 539 obtain from an applicant for coverage from the corporation an 540 acknowledgment signed by the applicant, which includes, at a 541 minimum, the following statement: 542 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE 543 AND ASSESSMENT LIABILITY: 544 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE 545 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A 546 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON, 547 MY POLICY COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND 548 PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF THE 549 POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH AS 45 PERCENT 550 OF MY PREMIUM, OR A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA 551 LEGISLATURE. 552 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER 553 SURCHARGE, WHICH COULD BE AS HIGH AS 45 PERCENT OF MY PREMIUM, 554 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO 555 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN 556 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE 557 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES 558 ARE REGULATED AND APPROVED BY THE STATE. 559 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY 560 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER 561 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE 562 FLORIDA LEGISLATURE. 563 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE 564 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE 565 STATE OF FLORIDA. 566 a. The corporation shall maintain, in electronic format or 567 otherwise, a copy of the applicant’s signed acknowledgment and 568 provide a copy of the statement to the policyholder as part of 569 the first renewal after the effective date of this subparagraph. 570 b. The signed acknowledgment form creates a conclusive 571 presumption that the policyholder understood and accepted his or 572 her potential surcharge and assessment liability as a 573 policyholder of the corporation. 574 (n)1. Rates for coverage provided by the corporation must 575 be actuarially sound and subject to s. 627.062, except as 576 otherwise provided in this paragraph. The corporation shall file 577 its recommended rates with the office at least annually. The 578 corporation shall provide any additional information regarding 579 the rates which the office requires. The office shall consider 580 the recommendations of the board and issue a final order 581 establishing the rates for the corporation within 45 days after 582 the recommended rates are filed. The corporation may not pursue 583 an administrative challenge or judicial review of the final 584 order of the office. 585 2. In addition to the rates otherwise determined pursuant 586 to this paragraph, the corporation shall impose and collect an 587 amount equal to the premium tax provided in s. 624.509 to 588 augment the financial resources of the corporation. 589 3. After the public hurricane loss-projection model under 590 s. 627.06281 has been found to be accurate and reliable by the 591 Florida Commission on Hurricane Loss Projection Methodology, the 592 model shall be considered when establishingserve as the minimum593benchmarkfor determiningthe windstorm portion of the 594 corporation’s rates. The corporation may use the public model 595 results in combination with the results of private models to 596 calculate rates for the windstorm portion of the corporation’s 597 rates. This subparagraph does not require or allow the 598 corporation to adopt rates lower than the rates otherwise 599 required or allowed by this paragraph. 600 4. The rate filings for the corporation which were approved 601 by the office and took effect January 1, 2007, are rescinded, 602 except for those rates that were lowered. As soon as possible, 603 the corporation shall begin using the lower rates that were in 604 effect on December 31, 2006, and provide refunds to 605 policyholders who paid higher rates as a result of that rate 606 filing. The rates in effect on December 31, 2006, remain in 607 effect for the 2007 and 2008 calendar years except for any rate 608 change that results in a lower rate. The next rate change that 609 may increase rates shall take effect pursuant to a new rate 610 filing recommended by the corporation and established by the 611 office, subject to this paragraph. 612 5. Beginning on July 15, 2009, and annually thereafter, the 613 corporation must make a recommended actuarially sound rate 614 filing for each personal and commercial line of business it 615 writes, to be effective no earlier than January 1, 2010. 616 6. Beginning on or after January 1, 2010, and 617 notwithstanding the board’s recommended rates and the office’s 618 final order regarding the corporation’s filed rates under 619 subparagraph 1., the corporation shall annually implement a rate 620 increase which, except for sinkhole coverage, does not exceed 10 621 percent for any single policy issued by the corporation, 622 excluding coverage changes and surcharges. 623 7. The corporation may also implement an increase to 624 reflect the effect on the corporation of the cash buildup factor 625 pursuant to s. 215.555(5)(b). 626 8. The corporation’s implementation of rates as prescribed 627 in subparagraph 6. shall cease for any line of business written 628 by the corporation upon the corporation’s implementation of 629 actuarially sound rates. Thereafter, the corporation shall 630 annually make a recommended actuarially sound rate filing for 631 each commercial and personal line of business the corporation 632 writes. 633 (x)1. The following records of the corporation are 634 confidential and exempt from the provisions of s. 119.07(1) and 635 s. 24(a), Art. I of the State Constitution: 636 a. Underwriting files, except that a policyholder or an 637 applicant shall have access to his or her own underwriting 638 files. Confidential and exempt underwriting file records may 639 also be released to other governmental agencies upon written 640 request and demonstration of need; such records held by the 641 receiving agency remain confidential and exempt as provided 642 herein. 643 b. Claims files, until termination of all litigation and 644 settlement of all claims arising out of the same incident, 645 although portions of the claims files may remain exempt, as 646 otherwise provided by law. Confidential and exempt claims file 647 records may be released to other governmental agencies upon 648 written request and demonstration of need; such records held by 649 the receiving agency remain confidential and exempt as provided 650 herein. 651 c. Records obtained or generated by an internal auditor 652 pursuant to a routine audit, until the audit is completed, or if 653 the audit is conducted as part of an investigation, until the 654 investigation is closed or ceases to be active. An investigation 655 is considered “active” while the investigation is being 656 conducted with a reasonable, good faith belief that it could 657 lead to the filing of administrative, civil, or criminal 658 proceedings. 659 d. Matters reasonably encompassed in privileged attorney 660 client communications. 661 e. Proprietary information licensed to the corporation 662 under contract and the contract provides for the confidentiality 663 of such proprietary information. 664 f. All information relating to the medical condition or 665 medical status of a corporation employee which is not relevant 666 to the employee’s capacity to perform his or her duties, except 667 as otherwise provided in this paragraph. Information that is 668 exempt shall include, but is not limited to, information 669 relating to workers’ compensation, insurance benefits, and 670 retirement or disability benefits. 671 g. Upon an employee’s entrance into the employee assistance 672 program, a program to assist any employee who has a behavioral 673 or medical disorder, substance abuse problem, or emotional 674 difficulty thatwhichaffects the employee’s job performance, 675 all records relative to that participation shall be confidential 676 and exempt from the provisions of s. 119.07(1) and s. 24(a), 677 Art. I of the State Constitution, except as otherwise provided 678 in s. 112.0455(11). 679 h. Information relating to negotiations for financing, 680 reinsurance, depopulation, or contractual services, until the 681 conclusion of the negotiations. 682 i. Minutes of closed meetings regarding underwriting files, 683 and minutes of closed meetings regarding an open claims file 684 until termination of all litigation and settlement of all claims 685 with regard to that claim, except that information otherwise 686 confidential or exempt by law shall be redacted. 687 2. If an authorized insurer is considering underwriting a 688 risk insured by the corporation, relevant underwriting files and 689 confidential claims files may be released to the insurer 690 provided the insurer agrees in writing, notarized and under 691 oath, to maintain the confidentiality of such files. If a file 692 is transferred to an insurer, that file is no longer a public 693 record because it is not held by an agency subject to the 694 provisions of the public records law. Underwriting files and 695 confidential claims files may also be released to staff and the 696 board of governors of the market assistance plan established 697 pursuant to s. 627.3515, who must retain the confidentiality of 698 such files, except such files may be released to authorized 699 insurers that are considering assuming the risks to which the 700 files apply, provided the insurer agrees in writing, notarized 701 and under oath, to maintain the confidentiality of such files. 702 Finally, the corporation or the board or staff of the market 703 assistance plan may make the following information obtained from 704 underwriting files and confidential claims files available to an 705 entity that has obtained a permit to become an authorized 706 insurer, a reinsurer that may provide reinsurance under s. 707 624.610, a licensed reinsurance broker, or a modeling company 708licensed general lines insurance agents: name, address, and 709 telephone number of the residential property owner or insured; 710 location of the risk; rating information; loss history; and 711 policy type. The receiving entitylicensed general lines712insurance agentmust retain the confidentiality of the 713 information received and may use the information only for the 714 purposes of developing a take-out plan to be submitted to the 715 office for approval or otherwise analyzing the underwriting of a 716 risk or risks insured by the corporation on behalf of the 717 private insurance market. 718 3. A policyholder who has filed suit against the 719 corporation has the right to discover the contents of his or her 720 own claims file to the same extent that discovery of such 721 contents would be available from a private insurer in litigation 722 as provided by the Florida Rules of Civil Procedure, the Florida 723 Evidence Code, and other applicable law. Pursuant to subpoena, a 724 third party has the right to discover the contents of an 725 insured’s or applicant’s underwriting or claims file to the same 726 extent that discovery of such contents would be available from a 727 private insurer by subpoena as provided by the Florida Rules of 728 Civil Procedure, the Florida Evidence Code, and other applicable 729 law, and subject to any confidentiality protections requested by 730 the corporation and agreed to by the seeking party or ordered by 731 the court. The corporation may release confidential underwriting 732 and claims file contents and information as it deems necessary 733 and appropriate to underwrite or service insurance policies and 734 claims, subject to any confidentiality protections deemed 735 necessary and appropriate by the corporation. 736 4. Portions of meetings of the corporation are exempt from 737 the provisions of s. 286.011 and s. 24(b), Art. I of the State 738 Constitution wherein confidential underwriting files or 739 confidential open claims files are discussed. All portions of 740 corporation meetings which are closed to the public shall be 741 recorded by a court reporter. The court reporter shall record 742 the times of commencement and termination of the meeting, all 743 discussion and proceedings, the names of all persons present at 744 any time, and the names of all persons speaking. No portion of 745 any closed meeting shall be off the record. Subject to the 746 provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s 747 notes of any closed meeting shall be retained by the corporation 748 for a minimum of 5 years. A copy of the transcript, less any 749 exempt matters, of any closed meeting wherein claims are 750 discussed shall become public as to individual claims after 751 settlement of the claim. 752 (ii) The corporation shall revise the programs adopted 753 pursuant to sub-subparagraph (q)3.a. for personal lines 754 residential policies to maximize policyholder options and 755 encourage increased participation by insurers and agents. Such 756 revisions must comply with this paragraph no later than January 757 1, 2017. 758 1. The corporation must schedule no more than 6 cycles per 759 year during which insurers may identify policies they wish to 760 take out and may submit requests to take out such policies to 761 the corporation in a form and manner prescribed by the 762 corporation. An insurer’s take-out request must include a 763 description of the coverages offered and an estimated premium. 764 In submitting any take-out request, an insurer must agree to 765 offer comparable coverage to that offered by the corporation and 766 that the initial premium of the insurer after assumption will 767 not exceed its estimated premium by more than 10 percent, 768 excluding coverage changes, surcharges, and assessments. 769 2. For each policy of the corporation identified under 770 subparagraph 1., the corporation shall maintain and make 771 available to the agent of record a consolidated list of all 772 insurers requesting the policy. The list must contain the 773 information described in subparagraph 1. 774 3. The corporation shall provide written notice to its 775 policyholders and the agents of record informing them of their 776 option to accept one of the take-out offers presented or to 777 remain with the corporation. The notice must be in a format 778 prescribed by the corporation and include the amount of the 779 estimated premium for the coverage of each offering insurer, the 780 amount of the premium for the coverage provided by the 781 corporation, and a description of the coverage offered by each 782 insurer and the coverage provided by the corporation, which 783 includes an explanation of any differences among the coverage 784 offered by each insurer and the coverage provided by the 785 corporation. 786 Section 2. Subsection (5) of section 627.3518, Florida 787 Statutes, is amended to read: 788 627.3518 Citizens Property Insurance Corporation 789 policyholder eligibility clearinghouse program.—The purpose of 790 this section is to provide a framework for the corporation to 791 implement a clearinghouse program by January 1, 2014. 792 (5) Notwithstanding s. 627.3517, any applicant for new 793 coverage from the corporation is not eligible for coverage from 794 the corporation if provided an offer of coverage from an 795 authorized insurer through the program at a premium that is at 796 or below the eligibility threshold established in s. 797 627.351(6)(c)5.a. Whenever an offer of coverage for a personal 798 lines risk is received for a policyholder of the corporation at 799 renewal from an authorized insurer through the program, if the 800 offer is equal to or less than the corporation’s renewal premium 801 for comparable coverage, the risk is not eligible for coverage 802 with the corporation. In the event an offer of coverage for a 803 new applicant is received from an authorized insurer through the 804 program, and the premium offered exceeds the eligibility 805 threshold contained in s. 627.351(6)(c)5.a., the applicant or 806 insured may elect to accept such coverage, or may elect to 807 accept or continue coverage with the corporation. In the event 808 an offer of coverage for a personal lines risk is received from 809 an authorized insurer at renewal through the program, and the 810 premium offered is more than the corporation’s renewal premium 811 for comparable coverage, the insured may elect to accept such 812 coverage, or may elect to accept or continue coverage with the 813 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an 814 offer of coverage from an authorized insurer obtained through 815 the program. An applicant for coverage from the corporation who 816 in the previous 36 months has been assumed through a take-out 817 offer from an insurer or who was declared ineligible for 818 coverage at renewal by the corporation in the previous 36 months 819 due to an offer of coverage pursuant to this subsection shall be 820 considered a renewal under this section if the corporation 821 determines that the same authorized insurer making the offer of 822 coveragepursuant to this subsectioncontinues to insure the 823 applicant and increased the rate on the policy in excess of the 824 increase allowed for the corporation under s. 627.351(6)(n)6. 825 Section 3. This act shall take effect July 1, 2016.