Bill Text: FL S1714 | 2011 | Regular Session | Comm Sub


Bill Title: Citizens Property Insurance Corporation

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S1714 Detail]

Download: Florida-2011-S1714-Comm_Sub.html
       Florida Senate - 2011                             CS for SB 1714
       
       
       
       By the Committee on Banking and Insurance; and Senator Hays
       
       
       
       
       597-03336-11                                          20111714c1
    1                        A bill to be entitled                      
    2         An act relating to the Citizens Property Insurance
    3         Corporation; amending s. 627.0655, F.S.; discontinuing
    4         policy discounts relating to the Citizens Property
    5         Insurance Corporation after a certain date; amending
    6         s. 627.351, F.S.; revising legislative intent;
    7         deleting obsolete provisions relating to the
    8         corporation’s plan of operation; directing the
    9         corporation to provide coverage to certain excluded
   10         residential structures but at rates deemed appropriate
   11         by the corporation; providing that certain residential
   12         structures are not eligible for coverage by the
   13         corporation after a certain date; requiring policies
   14         issued by the corporation to include a provision that
   15         prohibits policyholders from engaging the services of
   16         a public adjuster until after the corporation has
   17         tendered an offer; limiting an adjuster’s fee for a
   18         claim against the corporation; specifying the
   19         percentage amount of emergency assessments; revising
   20         provisions relating to policyholder surcharges;
   21         prohibiting the corporation from levying certain
   22         assessments with respect to a year’s deficit until the
   23         corporation has first levied a specified surcharge;
   24         requiring the corporation to commission a consultant
   25         to prepare a report on outsourcing various functions
   26         and submit such report to the Financial Services
   27         Commission by a certain date; revising provisions
   28         relating to wind coverage; prohibiting the corporation
   29         from accepting applications for commercial
   30         nonresidential risks; requiring the policyholders to
   31         sign a statement acknowledging that they may be
   32         assessed surcharges to cover corporate deficits;
   33         providing that policies do not include coverage for
   34         screen enclosures or any structure detached from the
   35         house; providing that the corporation does not cover
   36         specified personal property; limiting coverage for
   37         damage from sinkholes after a certain date and
   38         providing that the corporation must require repair of
   39         the property as a condition of any payment; requiring
   40         members of the board of governors to abstain from
   41         voting on issues on which they have a personal
   42         interest; requiring such members to disclose the
   43         nature of their interest as a public record; providing
   44         that the corporation operates as a residual market
   45         mechanism; revising provisions relating to corporation
   46         rates; providing that eligible surplus lines insurers
   47         may participate in take-out programs under certain
   48         conditions; clarifying that the corporation is immune
   49         from certain liabilities; revising requirements
   50         relating to confidential records released by an
   51         insurer; deleting a requirement for an annual report
   52         to the Legislature on losses attributable to wind-only
   53         coverages; requiring owners of properties in Special
   54         Flood Hazard Areas to maintain a separate flood
   55         insurance policy after a certain date; providing
   56         exceptions; amending s. 627.3511, F.S.; conforming a
   57         cross-reference; providing an effective date.
   58  
   59  Be It Enacted by the Legislature of the State of Florida:
   60  
   61         Section 1. Section 627.0655, Florida Statutes, is amended
   62  to read:
   63         627.0655 Policyholder loss or expense-related premium
   64  discounts.—An insurer or person authorized to engage in the
   65  business of insurance in this state may include a discount, in
   66  the premium charged an insured for any policy, contract, or
   67  certificate of insurance if, a discount based on the fact that
   68  another policy, contract, or certificate of any type has been
   69  purchased by the insured:
   70         (1) From the same insurer or insurer group;,
   71         (2) For policies issued or renewed before January 1, 2013,
   72  from the Citizens Property Insurance Corporation created under
   73  s. 627.351(6) if the same insurance agent is servicing both
   74  policies;, or
   75         (3) For policies issued or renewed before January 1, 2013,
   76  from an insurer that has removed the policy from the Citizens
   77  Property Insurance Corporation if the same insurance agent is
   78  servicing both policies.
   79         Section 2. Paragraphs (a), (b), (c), (d), (n), (o), (q),
   80  (s), (w), (x), (y), (aa), and (ee) of subsection (6) of section
   81  627.351, Florida Statutes, are amended to read:
   82         627.351 Insurance risk apportionment plans.—
   83         (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
   84         (a)1.It is The public purpose of this subsection is to
   85  ensure that there is the existence of an orderly market for
   86  property insurance for residents Floridians and Florida
   87  businesses of this state.
   88         1. The Legislature finds that actual and threatened
   89  catastrophic losses to property from hurricanes in this state
   90  have caused insurers to be unwilling or unable to provide
   91  property insurance coverage to the extent sought and needed. The
   92  Legislature declares that it is in the public interest and
   93  serves a public purpose that property in this state be
   94  adequately insured in order to facilitate the remediation,
   95  reconstruction, and replacement of damaged or destroyed
   96  property. Such efforts are necessary in order to avoid or reduce
   97  negative effects to the public health, safety, and welfare; the
   98  economy of the state; and the revenues of state and local
   99  governments. It is necessary, therefore, to provide property
  100  insurance to applicants who are entitled to procure insurance
  101  through the voluntary market but who, in good faith, are unable
  102  to do so. The Legislature finds that private insurers are
  103  unwilling or unable to provide affordable property insurance
  104  coverage in this state to the extent sought and needed. The
  105  absence of affordable property insurance threatens the public
  106  health, safety, and welfare and likewise threatens the economic
  107  health of the state. The state therefore has a compelling public
  108  interest and a public purpose to assist in assuring that
  109  property in the state is insured and that it is insured at
  110  affordable rates so as to facilitate the remediation,
  111  reconstruction, and replacement of damaged or destroyed property
  112  in order to reduce or avoid the negative effects otherwise
  113  resulting to the public health, safety, and welfare, to the
  114  economy of the state, and to the revenues of the state and local
  115  governments which are needed to provide for the public welfare.
  116  It is necessary, therefore, to provide affordable property
  117  insurance to applicants who are in good faith entitled to
  118  procure insurance through the voluntary market but are unable to
  119  do so. The Legislature intends, therefore, by this subsection
  120  that affordable property insurance be provided and that it
  121  continue to be provided, as long as necessary, through Citizens
  122  Property Insurance Corporation, a government entity that is an
  123  integral part of the state, and that is not a private insurance
  124  company. To that end, Citizens Property Insurance Corporation
  125  shall strive to increase the availability of affordable property
  126  insurance in this state, while achieving efficiencies and
  127  economies, and while providing service to policyholders,
  128  applicants, and agents which is no less than the quality
  129  generally provided in the voluntary market, for the achievement
  130  of the foregoing public purposes. Because it is essential for
  131  this government entity to have the maximum financial resources
  132  to pay claims following a catastrophic hurricane, it is the
  133  intent of the Legislature that Citizens Property Insurance
  134  Corporation continue to be an integral part of the state and
  135  that the income of the corporation be exempt from federal income
  136  taxation and that interest on the debt obligations issued by the
  137  corporation be exempt from federal income taxation.
  138         a. It is also the intent of the Legislature that
  139  policyholders, applicants, and agents of the corporation receive
  140  service and treatment of the highest possible level and never
  141  less than that generally provided in the voluntary market. The
  142  corporation must be held to service standards no less than those
  143  applied to insurers in the voluntary market by the office with
  144  respect to responsiveness, timeliness, customer courtesy, and
  145  overall dealings with policyholders, applicants, or agents of
  146  the corporation. It is also the intent of the Legislature that
  147  the corporation operate efficiently and economically.
  148         b. Because it is essential that the corporation have the
  149  maximum financial resources necessary to pay claims following a
  150  catastrophic hurricane, the Legislature also intends that the
  151  income of the corporation and interest on the debt obligations
  152  issued by the corporation be exempt from federal income
  153  taxation.
  154         2. The Residential Property and Casualty Joint Underwriting
  155  Association originally created by this statute shall be known,
  156  as of July 1, 2002, as the Citizens Property Insurance
  157  Corporation. The corporation shall provide insurance for
  158  residential and commercial property, for applicants who are in
  159  good faith entitled, but, in good faith, are unable, to procure
  160  insurance through the voluntary market. The corporation shall
  161  operate pursuant to a plan of operation approved by order of the
  162  Financial Services Commission. The plan is subject to continuous
  163  review by the commission. The commission may, by order, withdraw
  164  approval of all or part of a plan if the commission determines
  165  that conditions have changed since approval was granted and that
  166  the purposes of the plan require changes in the plan. The
  167  corporation shall continue to operate pursuant to the plan of
  168  operation approved by the Office of Insurance Regulation until
  169  October 1, 2006. For the purposes of this subsection,
  170  residential coverage includes both personal lines residential
  171  coverage, which consists of the type of coverage provided by
  172  homeowner’s, mobile home owner’s, dwelling, tenant’s,
  173  condominium unit owner’s, and similar policies;, and commercial
  174  lines residential coverage, which consists of the type of
  175  coverage provided by condominium association, apartment
  176  building, and similar policies.
  177         3. With respect to coverage for personal lines residential
  178  structures:
  179         a. Effective January 1, 2009, a personal lines residential
  180  structure that has a dwelling replacement cost of $2 million or
  181  more, or a single condominium unit that has a combined dwelling
  182  and contents content replacement cost of $2 million or more is
  183  not eligible for coverage by the corporation. Such dwellings
  184  insured by the corporation on December 31, 2008, may continue to
  185  be covered by the corporation until the end of the policy term.
  186  However, such dwellings that are insured by the corporation and
  187  become ineligible for coverage due to the provisions of this
  188  subparagraph may reapply and obtain coverage if the property
  189  owner provides the corporation with a sworn affidavit from one
  190  or more insurance agents, on a form provided by the corporation,
  191  stating that the agents have made their best efforts to obtain
  192  coverage and that the property has been rejected for coverage by
  193  at least one authorized insurer and at least three surplus lines
  194  insurers. If such conditions are met, the dwelling may be
  195  insured by the corporation for up to 3 years, after which time
  196  the dwelling is ineligible for coverage. The office shall
  197  approve the method used by the corporation for valuing the
  198  dwelling replacement cost for the purposes of this subparagraph.
  199  If a policyholder is insured by the corporation prior to being
  200  determined to be ineligible pursuant to this subparagraph and
  201  such policyholder files a lawsuit challenging the determination,
  202  the policyholder may remain insured by the corporation until the
  203  conclusion of the litigation.
  204         b. Effective January 1, 2012, a structure that has a
  205  dwelling replacement cost of $1 million or more, or a single
  206  condominium unit that has a combined dwelling and contents
  207  replacement cost of $1 million or more is not eligible for
  208  coverage by the corporation. Such dwellings insured by the
  209  corporation on December 31, 2011, may continue to be covered by
  210  the corporation only until the end of the policy term.
  211         c. Effective January 1, 2014, a structure insured in the
  212  personal lines account of the corporation that has a dwelling
  213  replacement cost of $750,000 or more, or a single condominium
  214  unit that has a combined dwelling and contents replacement cost
  215  of $750,000 or more is not eligible for coverage by the
  216  corporation. Such dwellings insured by the corporation on
  217  December 31, 2013, may continue to be covered by the corporation
  218  until the end of the policy term.
  219         d. Effective January 1, 2016, a structure insured in the
  220  personal lines account of the corporation that has a dwelling
  221  replacement cost of $500,000 or more, or a single condominium
  222  unit that has a combined dwelling and contents replacement cost
  223  of $500,000 or more is not eligible for coverage by the
  224  corporation. Such dwellings insured by the corporation on
  225  December 31, 2015, may continue to be covered by the corporation
  226  until the end of the policy term.
  227         4. Any structure for which a permit for construction is
  228  obtained on or after June 1, 2011, seaward of the coastal
  229  construction control line established pursuant to s. 161.053, is
  230  not eligible for coverage by the corporation.
  231         4. It is the intent of the Legislature that policyholders,
  232  applicants, and agents of the corporation receive service and
  233  treatment of the highest possible level but never less than that
  234  generally provided in the voluntary market. It also is intended
  235  that the corporation be held to service standards no less than
  236  those applied to insurers in the voluntary market by the office
  237  with respect to responsiveness, timeliness, customer courtesy,
  238  and overall dealings with policyholders, applicants, or agents
  239  of the corporation.
  240         5. Effective October 1, 2011 January 1, 2009, a personal
  241  lines residential structure that is located in the “wind-borne
  242  debris region,” as defined in s. 1609.2, International Building
  243  Code (2006), and that has an insured value on the structure of
  244  $750,000 or more is not eligible for coverage by the
  245  corporation. However, unless the structure has opening
  246  protections as required under the Florida Building Code for a
  247  newly constructed residential structure in that area, the
  248  corporation may charge a surcharge that it deems appropriate for
  249  such structures, notwithstanding any restrictions on rates
  250  provided in this subsection or in s. 627.062. A residential
  251  structure shall be deemed to comply with the requirements of
  252  this subparagraph if it has shutters or opening protections on
  253  all openings and if such opening protections complied with the
  254  Florida Building Code at the time they were installed.
  255         6. In recognition of the corporation’s status as a
  256  government entity, policies issued by the corporation must
  257  include a provision stating that as a condition of coverage with
  258  the corporation, policyholders may not engage the services of a
  259  public adjuster to represent the policyholder with respect to
  260  any claim filed under a policy issued by the corporation until
  261  after the corporation has tendered an offer with respect to such
  262  claim. For any claim filed under any policy of the corporation,
  263  a public adjuster may not request payment or be paid, on a
  264  contingency basis or based in any way, directly or indirectly,
  265  on a percentage of the claim amount, and may be paid only a
  266  reasonable hourly fee based on the actual hours of work
  267  performed, subject to a maximum of 5 percent of the additional
  268  amount actually paid over the amount which was originally
  269  offered by the corporation for any one claim.
  270         (b)1. All insurers authorized to write one or more subject
  271  lines of business in this state are subject to assessment by the
  272  corporation and, for the purposes of this subsection, are
  273  referred to collectively as “assessable insurers.” Insurers
  274  writing one or more subject lines of business in this state
  275  pursuant to part VIII of chapter 626 are not assessable
  276  insurers, but insureds who procure one or more subject lines of
  277  business in this state pursuant to part VIII of chapter 626 are
  278  subject to assessment by the corporation and are referred to
  279  collectively as “assessable insureds.” An authorized insurer’s
  280  assessment liability begins shall begin on the first day of the
  281  calendar year following the year in which the insurer was issued
  282  a certificate of authority to transact insurance for subject
  283  lines of business in this state and terminates shall terminate 1
  284  year after the end of the first calendar year during which the
  285  insurer no longer holds a certificate of authority to transact
  286  insurance for subject lines of business in this state.
  287         2.a. All revenues, assets, liabilities, losses, and
  288  expenses of the corporation shall be divided into three separate
  289  accounts as follows:
  290         (I) A personal lines account for personal residential
  291  policies issued by the corporation, or issued by the Residential
  292  Property and Casualty Joint Underwriting Association and renewed
  293  by the corporation, which provides basic that provide
  294  comprehensive, multiperil coverage on risks that are not located
  295  in areas eligible for coverage by in the Florida Windstorm
  296  Underwriting Association as those areas were defined on January
  297  1, 2002, and for such policies that do not provide coverage for
  298  the peril of wind on risks that are located in such areas;
  299         (II) A commercial lines account for commercial residential
  300  and commercial nonresidential policies issued by the
  301  corporation, or issued by the Residential Property and Casualty
  302  Joint Underwriting Association and renewed by the corporation,
  303  which provides that provide coverage for basic property perils
  304  on risks that are not located in areas eligible for coverage by
  305  in the Florida Windstorm Underwriting Association as those areas
  306  were defined on January 1, 2002, and for such policies that do
  307  not provide coverage for the peril of wind on risks that are
  308  located in such areas; and
  309         (III) A high-risk account for personal residential policies
  310  and commercial residential and commercial nonresidential
  311  property policies issued by the corporation or transferred to
  312  the corporation, which provides that provide coverage for the
  313  peril of wind on risks that are located in areas eligible for
  314  coverage by in the Florida Windstorm Underwriting Association as
  315  those areas were defined on January 1, 2002. The corporation may
  316  offer policies that provide multiperil coverage and the
  317  corporation shall continue to offer policies that provide
  318  coverage only for the peril of wind for risks located in areas
  319  eligible for coverage in the high-risk account. In issuing
  320  multiperil coverage, the corporation may use its approved policy
  321  forms and rates for the personal lines account. An applicant or
  322  insured who is eligible to purchase a multiperil policy from the
  323  corporation may purchase a multiperil policy from an authorized
  324  insurer without prejudice to the applicant’s or insured’s
  325  eligibility to prospectively purchase a policy that provides
  326  coverage only for the peril of wind from the corporation. An
  327  applicant or insured who is eligible for a corporation policy
  328  that provides coverage only for the peril of wind may elect to
  329  purchase or retain such policy and also purchase or retain
  330  coverage excluding wind from an authorized insurer without
  331  prejudice to the applicant’s or insured’s eligibility to
  332  prospectively purchase a policy that provides multiperil
  333  coverage from the corporation. It is the goal of the Legislature
  334  that there would be an overall average savings of 10 percent or
  335  more for a policyholder who currently has a wind-only policy
  336  with the corporation, and an ex-wind policy with a voluntary
  337  insurer or the corporation, and who then obtains a multiperil
  338  policy from the corporation. It is the intent of the Legislature
  339  that the offer of multiperil coverage in the high-risk account
  340  be made and implemented in a manner that does not adversely
  341  affect the tax-exempt status of the corporation or
  342  creditworthiness of or security for currently outstanding
  343  financing obligations or credit facilities of the high-risk
  344  account, the personal lines account, or the commercial lines
  345  account. The high-risk account must also include quota share
  346  primary insurance under subparagraph (c)2. The area eligible for
  347  coverage under the high-risk account also includes the area
  348  within Port Canaveral, which is bordered on the south by the
  349  City of Cape Canaveral, bordered on the west by the Banana
  350  River, and bordered on the north by Federal Government property.
  351         b. The three separate accounts must be maintained as long
  352  as financing obligations entered into by the Florida Windstorm
  353  Underwriting Association or Residential Property and Casualty
  354  Joint Underwriting Association are outstanding, in accordance
  355  with the terms of the corresponding financing documents. If When
  356  the financing obligations are no longer outstanding, in
  357  accordance with the terms of the corresponding financing
  358  documents, the corporation may use a single account for all
  359  revenues, assets, liabilities, losses, and expenses of the
  360  corporation. Consistent with the requirement of this
  361  subparagraph and prudent investment policies that minimize the
  362  cost of carrying debt, the board shall exercise its best efforts
  363  to retire existing debt or to obtain the approval of necessary
  364  parties to amend the terms of existing debt, so as to structure
  365  the most efficient plan to consolidate the three separate
  366  accounts into a single account.
  367         c. Creditors of the Residential Property and Casualty Joint
  368  Underwriting Association and of the accounts specified in sub
  369  sub-subparagraphs a.(I) and (II) may have a claim against, and
  370  recourse to, those the accounts referred to in sub-sub
  371  subparagraphs a.(I) and (II) and shall have no claim against, or
  372  recourse to, the account referred to in sub-sub-subparagraph
  373  a.(III). Creditors of the Florida Windstorm Underwriting
  374  Association shall have a claim against, and recourse to, the
  375  account referred to in sub-sub-subparagraph a.(III) and shall
  376  have no claim against, or recourse to, the accounts referred to
  377  in sub-sub-subparagraphs a.(I) and (II).
  378         d. Revenues, assets, liabilities, losses, and expenses not
  379  attributable to particular accounts shall be prorated among the
  380  accounts.
  381         e. The Legislature finds that the revenues of the
  382  corporation are revenues that are necessary to meet the
  383  requirements set forth in documents authorizing the issuance of
  384  bonds under this subsection.
  385         f. No part of the income of the corporation may inure to
  386  the benefit of any private person.
  387         3. With respect to a deficit in an account:
  388         a. After accounting for the Citizens policyholder surcharge
  389  imposed under sub-subparagraph i., if when the remaining
  390  projected deficit incurred in a particular calendar year is not
  391  greater than 6 percent of the aggregate statewide direct written
  392  premium for the subject lines of business for the prior calendar
  393  year, the entire deficit shall be recovered through regular
  394  assessments of assessable insurers under paragraph (q) and
  395  assessable insureds.
  396         b. After accounting for the Citizens policyholder surcharge
  397  imposed under sub-subparagraph i., when the remaining projected
  398  deficit incurred in a particular calendar year exceeds 6 percent
  399  of the aggregate statewide direct written premium for the
  400  subject lines of business for the prior calendar year, the
  401  corporation shall levy regular assessments on assessable
  402  insurers under paragraph (q) and on assessable insureds in an
  403  amount equal to the greater of 6 percent of the deficit or 6
  404  percent of the aggregate statewide direct written premium for
  405  the subject lines of business for the prior calendar year. Any
  406  remaining deficit shall be recovered through emergency
  407  assessments under sub-subparagraph d.
  408         c. Each assessable insurer’s share of the amount being
  409  assessed under sub-subparagraph a. or sub-subparagraph b. must
  410  shall be in the proportion that the assessable insurer’s direct
  411  written premium for the subject lines of business for the year
  412  preceding the assessment bears to the aggregate statewide direct
  413  written premium for the subject lines of business for that year.
  414  The applicable assessment percentage applicable to each
  415  assessable insured is the ratio of the amount being assessed
  416  under sub-subparagraph a. or sub-subparagraph b. to the
  417  aggregate statewide direct written premium for the subject lines
  418  of business for the prior year. Assessments levied by the
  419  corporation on assessable insurers under sub-subparagraphs a.
  420  and b. must shall be paid as required by the corporation’s plan
  421  of operation and paragraph (q). Assessments levied by the
  422  corporation on assessable insureds under sub-subparagraphs a.
  423  and b. shall be collected by the surplus lines agent at the time
  424  the surplus lines agent collects the surplus lines tax required
  425  by s. 626.932, and shall be paid to the Florida Surplus Lines
  426  Service Office at the time the surplus lines agent pays the
  427  surplus lines tax to that the Florida Surplus Lines Service
  428  office. Upon receipt of regular assessments from surplus lines
  429  agents, the Florida Surplus Lines Service Office shall transfer
  430  the assessments directly to the corporation as determined by the
  431  corporation.
  432         d. Upon a determination by the board of governors that a
  433  deficit in an account exceeds the amount that will be recovered
  434  through regular assessments under sub-subparagraph a. or sub
  435  subparagraph b., plus the amount that is expected to be
  436  recovered through surcharges under sub-subparagraph i., as to
  437  the remaining projected deficit the board shall levy, after
  438  verification by the office, shall levy emergency assessments,
  439  for as many years as necessary to cover the deficits, to be
  440  collected by assessable insurers and the corporation and
  441  collected from assessable insureds upon issuance or renewal of
  442  policies for subject lines of business, excluding National Flood
  443  Insurance policies. The amount of the emergency assessment
  444  collected in a particular year must shall be a uniform
  445  percentage of that year’s direct written premium for subject
  446  lines of business and all accounts of the corporation, excluding
  447  National Flood Insurance Program policy premiums, as annually
  448  determined by the board and verified by the office. For all
  449  accounts of the corporation, the amount of the emergency
  450  assessment levied in a particular year must be a uniform
  451  percentage equal to 1 1/2 times the uniform percentage emergency
  452  assessment levied on subject lines of business. The office shall
  453  verify the arithmetic calculations involved in the board’s
  454  determination within 30 days after receipt of the information on
  455  which the determination was based. Notwithstanding any other
  456  provision of law, the corporation and each assessable insurer
  457  that writes subject lines of business shall collect emergency
  458  assessments from its policyholders without such obligation being
  459  affected by any credit, limitation, exemption, or deferment.
  460  Emergency assessments levied by the corporation on assessable
  461  insureds shall be collected by the surplus lines agent at the
  462  time the surplus lines agent collects the surplus lines tax
  463  required by s. 626.932 and shall be paid to the Florida Surplus
  464  Lines Service Office at the time the surplus lines agent pays
  465  the surplus lines tax to that the Florida Surplus Lines Service
  466  office. The emergency assessments so collected shall be
  467  transferred directly to the corporation on a periodic basis as
  468  determined by the corporation and shall be held by the
  469  corporation solely in the applicable account. The aggregate
  470  amount of emergency assessments levied for an account under this
  471  sub-subparagraph in any calendar year may, at the discretion of
  472  the board of governors, be less than but may not exceed the
  473  greater of 10 percent of the amount needed to cover the deficit,
  474  plus interest, fees, commissions, required reserves, and other
  475  costs associated with financing of the original deficit, or 10
  476  percent of the aggregate statewide direct written premium for
  477  subject lines of business and 15 percent for all accounts of the
  478  corporation for the prior year, plus interest, fees,
  479  commissions, required reserves, and other costs associated with
  480  financing the deficit.
  481         e. The corporation may pledge the proceeds of assessments,
  482  projected recoveries from the Florida Hurricane Catastrophe
  483  Fund, other insurance and reinsurance recoverables, policyholder
  484  surcharges and other surcharges, and other funds available to
  485  the corporation as the source of revenue for and to secure bonds
  486  issued under paragraph (q), bonds or other indebtedness issued
  487  under subparagraph (c)2.3., or lines of credit or other
  488  financing mechanisms issued or created under this subsection, or
  489  to retire any other debt incurred as a result of deficits or
  490  events giving rise to deficits, or in any other way that the
  491  board determines will efficiently recover such deficits. The
  492  purpose of the lines of credit or other financing mechanisms is
  493  to provide additional resources to assist the corporation in
  494  covering claims and expenses attributable to a catastrophe. As
  495  used in this subsection, the term “assessments” includes regular
  496  assessments under sub-subparagraph a., sub-subparagraph b., or
  497  subparagraph (q)1. and emergency assessments under sub
  498  subparagraph d. Emergency assessments collected under sub
  499  subparagraph d. are not part of an insurer’s rates, are not
  500  premium, and are not subject to premium tax, fees, or
  501  commissions; however, failure to pay the emergency assessment
  502  shall be treated as failure to pay premium. The emergency
  503  assessments under sub-subparagraph d. shall continue as long as
  504  any bonds issued or other indebtedness incurred with respect to
  505  a deficit for which the assessment was imposed remain
  506  outstanding, unless adequate provision has been made for the
  507  payment of such bonds or other indebtedness pursuant to the
  508  documents governing such bonds or other indebtedness.
  509         f. As used in this subsection for purposes of any deficit
  510  incurred on or after January 25, 2007, the term “subject lines
  511  of business” means insurance written by assessable insurers or
  512  procured by assessable insureds for all property and casualty
  513  lines of business in this state, but not including workers’
  514  compensation or medical malpractice. As used in this the sub
  515  subparagraph, the term “property and casualty lines of business”
  516  includes all lines of business identified on Form 2, Exhibit of
  517  Premiums and Losses, in the annual statement required of
  518  authorized insurers under by s. 624.424 and any rule adopted
  519  under this section, except for those lines identified as
  520  accident and health insurance and except for policies written
  521  under the National Flood Insurance Program or the Federal Crop
  522  Insurance Program. For purposes of this sub-subparagraph, the
  523  term “workers’ compensation” includes both workers’ compensation
  524  insurance and excess workers’ compensation insurance.
  525         g. The Florida Surplus Lines Service Office shall determine
  526  annually the aggregate statewide written premium in subject
  527  lines of business procured by assessable insureds and shall
  528  report that information to the corporation in a form and at a
  529  time the corporation specifies to ensure that the corporation
  530  can meet the requirements of this subsection and the
  531  corporation’s financing obligations.
  532         h. The Florida Surplus Lines Service Office shall verify
  533  the proper application by surplus lines agents of assessment
  534  percentages for regular assessments and emergency assessments
  535  levied under this subparagraph on assessable insureds and shall
  536  assist the corporation in ensuring the accurate, timely
  537  collection and payment of assessments by surplus lines agents as
  538  required by the corporation.
  539         i. If a deficit is incurred in any account in 2011 2008 or
  540  thereafter, the board of governors shall levy a Citizens
  541  policyholder surcharge against all policyholders of the
  542  corporation. for a 12-month period, which
  543         (I) The surcharge shall be levied collected at the time of
  544  issuance or renewal of a policy, as a uniform percentage of the
  545  premium for the policy of up to 15 percent of such premium,
  546  which funds shall be used to offset the deficit.
  547         (II) It is the intent of the Legislature that the
  548  policyholder’s liability for the surcharge attach on the date of
  549  the order levying the surcharge. The surcharge is payable upon
  550  cancellation or termination of the policy, upon renewal of the
  551  policy, or upon issuance of a new policy by the corporation
  552  within the first 12 months after the date of the levy or the
  553  period of time necessary to fully collect the surcharge amount.
  554         (III) The corporation may not levy any regular assessments
  555  under paragraph (q) pursuant to sub-subparagraph a. or sub
  556  subparagraph b. with respect to a particular year’s deficit
  557  until the corporation has first levied a surcharge under this
  558  sub-subparagraph in the full amount authorized by this sub
  559  subparagraph.
  560         (IV) The surcharge is Citizens policyholder surcharges
  561  under this sub-subparagraph are not considered premium and is
  562  are not subject to commissions, fees, or premium taxes. However,
  563  failure to pay the surcharge such surcharges shall be treated as
  564  failure to pay premium.
  565         j. If the amount of any assessments or surcharges collected
  566  from corporation policyholders, assessable insurers or their
  567  policyholders, or assessable insureds exceeds the amount of the
  568  deficits, such excess amounts shall be remitted to and retained
  569  by the corporation in a reserve to be used by the corporation,
  570  as determined by the board of governors and approved by the
  571  office, to pay claims or reduce any past, present, or future
  572  plan-year deficits or to reduce outstanding debt.
  573         (c) The plan of operation of the corporation:
  574         1. Must provide for adoption of residential property and
  575  casualty insurance policy forms and commercial residential and
  576  nonresidential property insurance forms, which forms must be
  577  approved by the office before prior to use. The corporation
  578  shall adopt and offer only the following policy forms:
  579         a. Standard personal lines policy forms that are similar
  580  comprehensive multiperil policies providing full coverage of a
  581  residential property equivalent to the coverage provided in the
  582  private insurance market under an HO-3, HO-4, or HO-6 policy.
  583  The corporation shall cease to offer or renew HO-3 policy forms
  584  on December 31, 2012.
  585         b. Basic personal lines policy forms that are policies
  586  similar to an HO-8 policy or a dwelling fire policy that provide
  587  coverage meeting the requirements of the secondary mortgage
  588  market, but which coverage is more limited than the coverage
  589  under a standard policy.
  590         c. Commercial lines residential and nonresidential policy
  591  forms that are generally similar to the basic perils of full
  592  coverage obtainable for commercial residential structures and
  593  commercial nonresidential structures in the admitted voluntary
  594  market.
  595         d. Personal lines and commercial lines residential property
  596  insurance forms that cover the peril of wind only. The forms are
  597  applicable only to residential properties located in areas
  598  eligible for coverage under the high-risk account referred to in
  599  sub-subparagraph (b)2.a.
  600         e. Commercial lines nonresidential property insurance forms
  601  that cover the peril of wind only. The forms are applicable only
  602  to nonresidential properties located in areas eligible for
  603  coverage under the high-risk account referred to in sub
  604  subparagraph (b)2.a.
  605         f. The corporation may adopt variations of the policy forms
  606  listed in sub-subparagraphs a.-e. which that contain more
  607  restrictive coverage.
  608         2.a. Must provide that the corporation adopt a program in
  609  which the corporation and authorized insurers enter into quota
  610  share primary insurance agreements for hurricane coverage, as
  611  defined in s. 627.4025(2)(a), for eligible risks, and adopt
  612  property insurance forms for eligible risks which cover the
  613  peril of wind only. As used in this subsection, the term:
  614         (I) “Quota share primary insurance” means an arrangement in
  615  which the primary hurricane coverage of an eligible risk is
  616  provided in specified percentages by the corporation and an
  617  authorized insurer. The corporation and authorized insurer are
  618  each solely responsible for a specified percentage of hurricane
  619  coverage of an eligible risk as set forth in a quota share
  620  primary insurance agreement between the corporation and an
  621  authorized insurer and the insurance contract. The
  622  responsibility of the corporation or authorized insurer to pay
  623  its specified percentage of hurricane losses of an eligible
  624  risk, as set forth in the quota share primary insurance
  625  agreement, may not be altered by the inability of the other
  626  party to the agreement to pay its specified percentage of
  627  hurricane losses. Eligible risks that are provided hurricane
  628  coverage through a quota share primary insurance arrangement
  629  must be provided policy forms that set forth the obligations of
  630  the corporation and authorized insurer under the arrangement,
  631  clearly specify the percentages of quota share primary insurance
  632  provided by the corporation and authorized insurer, and
  633  conspicuously and clearly state that neither the authorized
  634  insurer nor the corporation may be held responsible beyond its
  635  specified percentage of coverage of hurricane losses.
  636         (II) “Eligible risks” means personal lines residential and
  637  commercial lines residential risks that meet the underwriting
  638  criteria of the corporation and are located in areas that were
  639  eligible for coverage by the Florida Windstorm Underwriting
  640  Association on January 1, 2002.
  641         b. The corporation may enter into quota share primary
  642  insurance agreements with authorized insurers at corporation
  643  coverage levels of 90 percent and 50 percent.
  644         c. If the corporation determines that additional coverage
  645  levels are necessary to maximize participation in quota share
  646  primary insurance agreements by authorized insurers, the
  647  corporation may establish additional coverage levels. However,
  648  the corporation’s quota share primary insurance coverage level
  649  may not exceed 90 percent.
  650         d. Any quota share primary insurance agreement entered into
  651  between an authorized insurer and the corporation must provide
  652  for a uniform specified percentage of coverage of hurricane
  653  losses, by county or territory as set forth by the corporation
  654  board, for all eligible risks of the authorized insurer covered
  655  under the quota share primary insurance agreement.
  656         e. Any quota share primary insurance agreement entered into
  657  between an authorized insurer and the corporation is subject to
  658  review and approval by the office. However, such agreement shall
  659  be authorized only as to insurance contracts entered into
  660  between an authorized insurer and an insured who is already
  661  insured by the corporation for wind coverage.
  662         f. For all eligible risks covered under quota share primary
  663  insurance agreements, the exposure and coverage levels for both
  664  the corporation and authorized insurers shall be reported by the
  665  corporation to the Florida Hurricane Catastrophe Fund. For all
  666  policies of eligible risks covered under quota share primary
  667  insurance agreements, the corporation and the authorized insurer
  668  shall maintain complete and accurate records for the purpose of
  669  exposure and loss reimbursement audits as required by Florida
  670  Hurricane Catastrophe Fund rules. The corporation and the
  671  authorized insurer shall each maintain duplicate copies of
  672  policy declaration pages and supporting claims documents.
  673         g. The corporation board shall establish in its plan of
  674  operation standards for quota share agreements which ensure that
  675  there is no discriminatory application among insurers as to the
  676  terms of quota share agreements, pricing of quota share
  677  agreements, incentive provisions if any, and consideration paid
  678  for servicing policies or adjusting claims.
  679         h. The quota share primary insurance agreement between the
  680  corporation and an authorized insurer must set forth the
  681  specific terms under which coverage is provided, including, but
  682  not limited to, the sale and servicing of policies issued under
  683  the agreement by the insurance agent of the authorized insurer
  684  producing the business, the reporting of information concerning
  685  eligible risks, the payment of premium to the corporation, and
  686  arrangements for the adjustment and payment of hurricane claims
  687  incurred on eligible risks by the claims adjuster and personnel
  688  of the authorized insurer. Entering into a quota sharing
  689  insurance agreement between the corporation and an authorized
  690  insurer shall be voluntary and at the discretion of the
  691  authorized insurer.
  692         2.3. May provide that the corporation may employ or
  693  otherwise contract with individuals or other entities to provide
  694  administrative or professional services that may be appropriate
  695  to effectuate the plan.
  696         a. The corporation may shall have the power to borrow
  697  funds, by issuing bonds or by incurring other indebtedness, and
  698  shall have other powers reasonably necessary to effectuate the
  699  requirements of this subsection, including, without limitation,
  700  the power to issue bonds and incur other indebtedness in order
  701  to refinance outstanding bonds or other indebtedness. The
  702  corporation may, but is not required to, seek judicial
  703  validation of its bonds or other indebtedness under chapter 75.
  704  The corporation may issue bonds or incur other indebtedness, or
  705  have bonds issued on its behalf by a unit of local government
  706  pursuant to subparagraph (q)2., in the absence of a hurricane or
  707  other weather-related event, upon a determination by the
  708  corporation, subject to approval by the office, that such action
  709  would enable it to efficiently meet the financial obligations of
  710  the corporation and that such financings are reasonably
  711  necessary to effectuate the requirements of this subsection. The
  712  corporation may is authorized to take all actions needed to
  713  facilitate tax-free status for any such bonds or indebtedness,
  714  including formation of trusts or other affiliated entities. The
  715  corporation may shall have the authority to pledge assessments,
  716  projected recoveries from the Florida Hurricane Catastrophe
  717  Fund, other reinsurance recoverables, market equalization and
  718  other surcharges, and other funds available to the corporation
  719  as security for bonds or other indebtedness. In recognition of
  720  s. 10, Art. I of the State Constitution, prohibiting the
  721  impairment of obligations of contracts, it is the intent of the
  722  Legislature that no action be taken whose purpose is to impair
  723  any bond indenture or financing agreement or any revenue source
  724  committed by contract to such bond or other indebtedness.
  725         b. To ensure that the corporation is operating in an
  726  efficient and economic manner while providing quality service to
  727  policyholders, applicants, and agents, the board shall
  728  commission an independent third-party consultant having
  729  expertise in insurance company management or insurance company
  730  management consulting to prepare a report and make
  731  recommendations on the relative costs and benefits of
  732  outsourcing various policy issuance and service functions to
  733  private servicing carriers or entities performing similar
  734  functions in the private market for a fee, rather than
  735  performing such functions in-house. In making such
  736  recommendations, the consultant shall consider how other
  737  residual markets, both in this state and around the country,
  738  outsource appropriate functions or use servicing carriers to
  739  better match expenses with revenues that fluctuate based on a
  740  widely varying policy count. The report must be completed by
  741  February 1, 2012. Upon receiving the report, the board shall
  742  develop a plan to implement the report and submit the plan to
  743  the Financial Services Commission. The commission has 30 days
  744  after receiving the plan to review and make additions or
  745  corrections, if any. Upon the commission’s approval of the plan,
  746  the board shall begin implementing the plan by January 1, 2013.
  747         3.4.a. Must require that the corporation operate subject to
  748  the supervision and approval of a board of governors consisting
  749  of eight individuals who are residents of this state, from
  750  different geographical areas of this state.
  751         a. The Governor, the Chief Financial Officer, the President
  752  of the Senate, and the Speaker of the House of Representatives
  753  shall each appoint two members of the board. At least one of the
  754  two members appointed by each appointing officer must have
  755  demonstrated expertise in insurance, and be within the scope of
  756  the exemption provided in s. 112.313(7)(b). The Chief Financial
  757  Officer shall designate one of the appointees as chair. All
  758  board members serve at the pleasure of the appointing officer.
  759  All members of the board of governors are subject to removal at
  760  will by the officers who appointed them. All board members,
  761  including the chair, must be appointed to serve for 3-year terms
  762  beginning annually on a date designated by the plan. However,
  763  for the first term beginning on or after July 1, 2009, each
  764  appointing officer shall appoint one member of the board for a
  765  2-year term and one member for a 3-year term. A Any board
  766  vacancy shall be filled for the unexpired term by the appointing
  767  officer. The Chief Financial Officer shall appoint a technical
  768  advisory group to provide information and advice to the board of
  769  governors in connection with the board’s duties under this
  770  subsection. The executive director and senior managers of the
  771  corporation shall be engaged by the board and serve at the
  772  pleasure of the board. Any executive director appointed on or
  773  after July 1, 2006, is subject to confirmation by the Senate.
  774  The executive director is responsible for employing other staff
  775  as the corporation may require, subject to review and
  776  concurrence by the board.
  777         b. The board shall create a Market Accountability Advisory
  778  Committee to assist the corporation in developing awareness of
  779  its rates and its customer and agent service levels in
  780  relationship to the voluntary market insurers writing similar
  781  coverage, and to provide advice on issues regarding agent
  782  appointments and compensation.
  783         (I) The members of the advisory committee shall consist of
  784  the following 11 persons, one of whom must be elected chair by
  785  the members of the committee: four representatives, one
  786  appointed by the Florida Association of Insurance Agents, one by
  787  the National Florida Association of Insurance and Financial
  788  Advisors-Florida Advisors, one by the Professional Insurance
  789  Agents of Florida, and one by the Latin American Association of
  790  Insurance Agencies; three representatives appointed by the
  791  insurers with the three highest voluntary market share of
  792  residential property insurance business in the state; one
  793  representative from the Office of Insurance Regulation; one
  794  consumer appointed by the board who is insured by the
  795  corporation at the time of appointment to the committee; one
  796  representative appointed by the Florida Association of Realtors;
  797  and one representative appointed by the Florida Bankers
  798  Association. All members shall be appointed to must serve for 3
  799  year terms and may serve for consecutive terms.
  800         (II) The committee shall report to the corporation at each
  801  board meeting on insurance market issues which may include rates
  802  and rate competition with the voluntary market; service,
  803  including policy issuance, claims processing, and general
  804  responsiveness to policyholders, applicants, and agents; and
  805  matters relating to depopulation, producer compensation, or
  806  agency agreements.
  807         4.5. Must provide a procedure for determining the
  808  eligibility of a risk for coverage, as follows:
  809         a. Subject to the provisions of s. 627.3517, with respect
  810  to personal lines residential risks, if the risk is offered
  811  coverage from an authorized insurer at the insurer’s approved
  812  rate under either a standard policy including wind coverage or,
  813  if consistent with the insurer’s underwriting rules as filed
  814  with the office, a basic policy including wind coverage, for a
  815  new application to the corporation for coverage, the risk is not
  816  eligible for any policy issued by the corporation unless the
  817  premium for coverage from the authorized insurer is more than 15
  818  percent greater than the premium for comparable coverage from
  819  the corporation. If the risk is not able to obtain any such
  820  offer, the risk is eligible for either a standard policy
  821  including wind coverage or a basic policy including wind
  822  coverage issued by the corporation; however, if the risk could
  823  not be insured under a standard policy including wind coverage
  824  regardless of market conditions, the risk is shall be eligible
  825  for a basic policy including wind coverage unless rejected under
  826  subparagraph 9. 8. Notwithstanding these limitations, an
  827  application for coverage having an effective date before January
  828  1, 2015, is eligible for coverage by the corporation if the
  829  premium for coverage from an authorized insurer exceeds the
  830  premium from the corporation by more than 25 percent. However,
  831  with regard to a policyholder of the corporation or a
  832  policyholder removed from the corporation through an assumption
  833  agreement until the end of the assumption period, the
  834  policyholder remains eligible for coverage from the corporation
  835  regardless of any offer of coverage from an authorized insurer
  836  or surplus lines insurer. The corporation shall determine the
  837  type of policy to be provided on the basis of objective
  838  standards specified in the underwriting manual and based on
  839  generally accepted underwriting practices.
  840         (I) If the risk accepts an offer of coverage through the
  841  market assistance plan or an offer of coverage through a
  842  mechanism established by the corporation before a policy is
  843  issued to the risk by the corporation or during the first 30
  844  days of coverage by the corporation, and the producing agent who
  845  submitted the application to the plan or to the corporation is
  846  not currently appointed by the insurer, the insurer shall:
  847         (A) Pay to the producing agent of record of the policy, for
  848  the first year, an amount that is the greater of the insurer’s
  849  usual and customary commission for the type of policy written or
  850  a fee equal to the usual and customary commission of the
  851  corporation; or
  852         (B) Offer to allow the producing agent of record of the
  853  policy to continue servicing the policy for at least a period of
  854  not less than 1 year and offer to pay the agent the greater of
  855  the insurer’s or the corporation’s usual and customary
  856  commission for the type of policy written.
  857  
  858  If the producing agent is unwilling or unable to accept
  859  appointment, the new insurer shall pay the agent in accordance
  860  with sub-sub-sub-subparagraph (A).
  861         (II) If When the corporation enters into a contractual
  862  agreement for a take-out plan, the producing agent of record of
  863  the corporation policy is entitled to retain any unearned
  864  commission on the policy, and the insurer shall:
  865         (A) Pay to the producing agent of record of the corporation
  866  policy, for the first year, an amount that is the greater of the
  867  insurer’s usual and customary commission for the type of policy
  868  written or a fee equal to the usual and customary commission of
  869  the corporation; or
  870         (B) Offer to allow the producing agent of record of the
  871  corporation policy to continue servicing the policy for at least
  872  a period of not less than 1 year and offer to pay the agent the
  873  greater of the insurer’s or the corporation’s usual and
  874  customary commission for the type of policy written.
  875  
  876  If the producing agent is unwilling or unable to accept
  877  appointment, the new insurer shall pay the agent in accordance
  878  with sub-sub-sub-subparagraph (A).
  879         b. Subject to s. 627.3517, with respect to commercial lines
  880  residential risks, for a new application to the corporation for
  881  coverage, if the risk is offered coverage under a policy
  882  including wind coverage from an authorized insurer at its
  883  approved rate, the risk is not eligible for a any policy issued
  884  by the corporation unless the premium for coverage from the
  885  authorized insurer is more than 15 percent greater than the
  886  premium for comparable coverage from the corporation. If the
  887  risk is not able to obtain any such offer, the risk is eligible
  888  for a policy including wind coverage issued by the corporation.
  889  Notwithstanding these limitations, an application for coverage
  890  having an effective date before January 1, 2015, is eligible for
  891  coverage by the corporation if the premium for coverage from an
  892  authorized insurer exceeds the premium from the corporation by
  893  more than 25 percent. However, with regard to a policyholder of
  894  the corporation or a policyholder removed from the corporation
  895  through an assumption agreement until the end of the assumption
  896  period, the policyholder remains eligible for coverage from the
  897  corporation regardless of any offer of coverage from an
  898  authorized insurer or surplus lines insurer.
  899         (I) If the risk accepts an offer of coverage through the
  900  market assistance plan or an offer of coverage through a
  901  mechanism established by the corporation before a policy is
  902  issued to the risk by the corporation or during the first 30
  903  days of coverage by the corporation, and the producing agent who
  904  submitted the application to the plan or the corporation is not
  905  currently appointed by the insurer, the insurer shall:
  906         (A) Pay to the producing agent of record of the policy, for
  907  the first year, an amount that is the greater of the insurer’s
  908  usual and customary commission for the type of policy written or
  909  a fee equal to the usual and customary commission of the
  910  corporation; or
  911         (B) Offer to allow the producing agent of record of the
  912  policy to continue servicing the policy for at least a period of
  913  not less than 1 year and offer to pay the agent the greater of
  914  the insurer’s or the corporation’s usual and customary
  915  commission for the type of policy written.
  916  
  917  If the producing agent is unwilling or unable to accept
  918  appointment, the new insurer shall pay the agent in accordance
  919  with sub-sub-sub-subparagraph (A).
  920         (II) If When the corporation enters into a contractual
  921  agreement for a take-out plan, the producing agent of record of
  922  the corporation policy is entitled to retain any unearned
  923  commission on the policy, and the insurer shall:
  924         (A) Pay to the producing agent of record of the corporation
  925  policy, for the first year, an amount that is the greater of the
  926  insurer’s usual and customary commission for the type of policy
  927  written or a fee equal to the usual and customary commission of
  928  the corporation; or
  929         (B) Offer to allow the producing agent of record of the
  930  corporation policy to continue servicing the policy for at least
  931  a period of not less than 1 year and offer to pay the agent the
  932  greater of the insurer’s or the corporation’s usual and
  933  customary commission for the type of policy written.
  934  
  935  If the producing agent is unwilling or unable to accept
  936  appointment, the new insurer shall pay the agent in accordance
  937  with sub-sub-sub-subparagraph (A).
  938         c. Effective upon this act becoming a law, the corporation
  939  shall cease to accept applications for or issue new policies
  940  covering commercial nonresidential risks. For purposes of
  941  determining comparable coverage under sub-subparagraphs a. and
  942  b., the comparison shall be based on those forms and coverages
  943  that are reasonably comparable. The corporation may rely on a
  944  determination of comparable coverage and premium made by the
  945  producing agent who submits the application to the corporation,
  946  made in the agent’s capacity as the corporation’s agent. A
  947  comparison may be made solely of the premium with respect to the
  948  main building or structure only on the following basis: the same
  949  coverage A or other building limits; the same percentage
  950  hurricane deductible that applies on an annual basis or that
  951  applies to each hurricane for commercial residential property;
  952  the same percentage of ordinance and law coverage, if the same
  953  limit is offered by both the corporation and the authorized
  954  insurer; the same mitigation credits, to the extent the same
  955  types of credits are offered both by the corporation and the
  956  authorized insurer; the same method for loss payment, such as
  957  replacement cost or actual cash value, if the same method is
  958  offered both by the corporation and the authorized insurer in
  959  accordance with underwriting rules; and any other form or
  960  coverage that is reasonably comparable as determined by the
  961  board. If an application is submitted to the corporation for
  962  wind-only coverage in the high-risk account, the premium for the
  963  corporation’s wind-only policy plus the premium for the ex-wind
  964  policy that is offered by an authorized insurer to the applicant
  965  shall be compared to the premium for multiperil coverage offered
  966  by an authorized insurer, subject to the standards for
  967  comparison specified in this subparagraph. If the corporation or
  968  the applicant requests from the authorized insurer a breakdown
  969  of the premium of the offer by types of coverage so that a
  970  comparison may be made by the corporation or its agent and the
  971  authorized insurer refuses or is unable to provide such
  972  information, the corporation may treat the offer as not being an
  973  offer of coverage from an authorized insurer at the insurer’s
  974  approved rate.
  975         5.6. Must include rules for classifications of risks and
  976  rates therefor.
  977         6.7. Must provide that if premium and investment income for
  978  an account attributable to a particular calendar year are in
  979  excess of projected losses and expenses for the account
  980  attributable to that year, such excess shall be held in surplus
  981  in the account. Such surplus must shall be available to defray
  982  deficits in that account as to future years and shall be used
  983  for that purpose before prior to assessing assessable insurers
  984  and assessable insureds as to any calendar year.
  985         7.8.  Must provide objective criteria and procedures to be
  986  uniformly applied to for all applicants in determining whether
  987  an individual risk is so hazardous as to be uninsurable. In
  988  making this determination and in establishing the criteria and
  989  procedures, the following must shall be considered:
  990         a. Whether the likelihood of a loss for the individual risk
  991  is substantially higher than for other risks of the same class;
  992  and
  993         b. Whether the uncertainty associated with the individual
  994  risk is such that an appropriate premium cannot be determined.
  995  
  996  The acceptance or rejection of a risk by the corporation shall
  997  be construed as the private placement of insurance, and the
  998  provisions of chapter 120 do shall not apply.
  999         8.9.Must provide that the corporation Shall make its best
 1000  efforts to procure catastrophe reinsurance at reasonable rates,
 1001  to cover its projected 100-year probable maximum loss as
 1002  determined by the board of governors.
 1003         9.10.Must issue The policies that issued by the
 1004  corporation must provide that, if the corporation or the market
 1005  assistance plan obtains an offer from an authorized insurer to
 1006  cover the risk at its approved rates or from a surplus lines
 1007  insurer, the risk is no longer eligible for renewal through the
 1008  corporation, except as otherwise provided in this subsection.
 1009         10.11.Must Corporation Policies and applications must
 1010  include a notice in the corporation policies and applications
 1011  that the corporation policy could, under this section, be
 1012  replaced with a policy issued by an authorized insurer which
 1013  that does not provide coverage identical to the coverage
 1014  provided by the corporation. The notice must shall also specify
 1015  that acceptance of corporation coverage creates a conclusive
 1016  presumption that the applicant or policyholder is aware of this
 1017  potential.
 1018         11.12. May establish, subject to approval by the office,
 1019  different eligibility requirements and operational procedures
 1020  for any line or type of coverage for any specified county or
 1021  area if the board determines that such changes to the
 1022  eligibility requirements and operational procedures are
 1023  justified due to the voluntary market being sufficiently stable
 1024  and competitive in such area or for such line or type of
 1025  coverage and that consumers who, in good faith, are unable to
 1026  obtain insurance through the voluntary market through ordinary
 1027  methods would continue to have access to coverage from the
 1028  corporation. If When coverage is sought in connection with a
 1029  real property transfer, the such requirements and procedures may
 1030  shall not provide for an effective date of coverage later than
 1031  the date of the closing of the transfer as established by the
 1032  transferor, the transferee, and, if applicable, the lender.
 1033         12.13. Must provide that, with respect to the high-risk
 1034  account, any assessable insurer with a surplus as to
 1035  policyholders of $25 million or less writing 25 percent or more
 1036  of its total countrywide property insurance premiums in this
 1037  state may petition the office, within the first 90 days of each
 1038  calendar year, to qualify as a limited apportionment company. A
 1039  regular assessment levied by the corporation on a limited
 1040  apportionment company for a deficit incurred by the corporation
 1041  for the high-risk account in 2006 or thereafter may be paid to
 1042  the corporation on a monthly basis as the assessments are
 1043  collected by the limited apportionment company from its insureds
 1044  pursuant to s. 627.3512, but the regular assessment must be paid
 1045  in full within 12 months after being levied by the corporation.
 1046  A limited apportionment company shall collect from its
 1047  policyholders any emergency assessment imposed under sub
 1048  subparagraph (b)3.d. The plan shall provide that, If the office
 1049  determines that any regular assessment will result in an
 1050  impairment of the surplus of a limited apportionment company,
 1051  the office may direct that all or part of such assessment be
 1052  deferred as provided in subparagraph (q)4. However, there shall
 1053  be no limitation or deferment of an emergency assessment to be
 1054  collected from policyholders under sub-subparagraph (b)3.d. may
 1055  not be limited or deferred.
 1056         13.14.Effective January 1, 2012, must provide that the
 1057  corporation appoint as its licensed agents only those agents who
 1058  also hold an appointment as defined in s. 626.015(3) with an
 1059  insurer who at the time of the agent’s initial appointment by
 1060  the corporation is authorized to write and is actually writing
 1061  personal lines residential property coverage, commercial
 1062  residential property coverage, or commercial nonresidential
 1063  property coverage within the state.
 1064         14.15. Must provide, by July 1, 2007, a premium payment
 1065  plan option to its policyholders which, allows at a minimum,
 1066  allows for quarterly and semiannual payment of premiums. A
 1067  monthly payment plan may, but is not required to, be offered.
 1068         15.16. Must limit coverage on mobile homes or manufactured
 1069  homes built before prior to 1994 to actual cash value of the
 1070  dwelling rather than replacement costs of the dwelling.
 1071         16.17. May provide such limits of coverage as the board
 1072  determines, consistent with the requirements of this subsection.
 1073         17.18. May require commercial property to meet specified
 1074  hurricane mitigation construction features as a condition of
 1075  eligibility for coverage.
 1076         18. As of January 1, 2012, must require that the agent
 1077  obtain from an applicant for coverage from the corporation an
 1078  acknowledgement signed by the applicant, which includes, at a
 1079  minimum, the following statement:
 1080  
 1081         ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
 1082         LIABILITY:
 1083  
 1084         1. AS A POLICYHOLDER OF CITIZENS PROPERTY
 1085         INSURANCE CORPORATION, I UNDERSTAND THAT IF THE
 1086         CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
 1087         HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
 1088         COULD BE SUBJECT TO SURCHARGES, WHICH WILL BE DUE AND
 1089         PAYABLE UPON RENEWAL, CANCELLATION, OR TERMINATION OF
 1090         THE POLICY, AND THAT THE SURCHARGES COULD BE AS HIGH
 1091         AS 45 PERCENT OF MY PREMIUM, OR A DIFFERENT AMOUNT AS
 1092         IMPOSED BY THE FLORIDA LEGISLATURE.
 1093         2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
 1094         EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
 1095         POLICYHOLDERS OF OTHER INSURANCE COMPANIES, OR A
 1096         DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA
 1097         LEGISLATURE.
 1098         3. I ALSO UNDERSTAND THAT CITIZENS PROPERTY
 1099         INSURANCE CORPORATION IS NOT SUPPORTED BY THE FULL
 1100         FAITH AND CREDIT OF THE STATE OF FLORIDA.
 1101  
 1102         a. The corporation shall maintain, in electronic format or
 1103  otherwise, a copy of the applicant’s signed acknowledgement and
 1104  provide a copy of the statement to the policyholder as part of
 1105  the first renewal after the effective date of this sub
 1106  subparagraph.
 1107         b. The signed acknowledgement form creates a conclusive
 1108  presumption that the policyholder understood and accepted his or
 1109  her potential surcharge and assessment liability as a
 1110  policyholder of the corporation.
 1111         19. Upon notice and determination by the Department of
 1112  Financial Services that an agent appointed by the corporation
 1113  has violated s. 626.9541(1)(h), immediately terminate the
 1114  agent’s appointment to represent the corporation.
 1115         20. Must provide that new or renewal policies issued by the
 1116  corporation on or after February 1, 2012, do not include
 1117  coverage for attached or detached screen enclosures. The
 1118  corporation shall exclude such coverage using a notice of
 1119  coverage change, which may be included with the policy renewal,
 1120  and not by issuance of a notice of nonrenewal of the excluded
 1121  coverage upon renewal of the current policy.
 1122         21. Must provide that new or renewal personal residential
 1123  policies issued by the corporation on or after February 1, 2013,
 1124  do not provide coverage for detached structures on the residence
 1125  premises which are separated from the dwelling by clear space.
 1126  Structures connected to the dwelling by only a fence, utility
 1127  line, or similar connection are considered to be detached
 1128  structures.
 1129         22. Must provide that new or renewal personal residential
 1130  policies issued by the corporation on or after February 1, 2013,
 1131  do not provide coverage for watercraft, trailers, jewelry, furs,
 1132  firearms, silverware, business property on premises, business
 1133  property away from premises, or grave markers.
 1134         23. Must offer sinkhole coverage. However, effective
 1135  February 1, 2012, coverage is not included for losses to
 1136  appurtenant structures, driveways, sidewalks, decks, or patios
 1137  which are directly or indirectly caused by sinkhole activity.
 1138  The corporation shall exclude such coverage using a notice of
 1139  coverage change, which may be included with the policy renewal,
 1140  and not by issuance of a notice of nonrenewal of the excluded
 1141  coverage upon renewal of the current policy.
 1142         24. As a condition for making payment for damage caused by
 1143  the peril of sinkhole, regardless of whether such payment is
 1144  made pursuant to the contract, mediation, neutral evaluation,
 1145  appraisal, arbitration, settlement, or litigation, the payment
 1146  must be dedicated entirely to the costs of repairing the
 1147  structure or remediation of the land. Unless this condition is
 1148  met, the corporation is prohibited from making payment.
 1149         (d)1. All prospective employees for senior management
 1150  positions, as defined by the plan of operation, are subject to
 1151  background checks as a prerequisite for employment. The office
 1152  shall conduct the background checks on such prospective
 1153  employees pursuant to ss. 624.34, 624.404(3), and 628.261.
 1154         2. On or before July 1 of each year, employees of the
 1155  corporation must are required to sign and submit a statement
 1156  attesting that they do not have a conflict of interest, as
 1157  defined in part III of chapter 112. As a condition of
 1158  employment, all prospective employees must are required to sign
 1159  and submit to the corporation a conflict-of-interest statement.
 1160         3. Senior managers and members of the board of governors
 1161  are subject to the provisions of part III of chapter 112,
 1162  including, but not limited to, the code of ethics and public
 1163  disclosure and reporting of financial interests, pursuant to s.
 1164  112.3145.
 1165         a. Senior managers and board members are also required to
 1166  file such disclosures with the Commission on Ethics and the
 1167  Office of Insurance Regulation. The executive director of the
 1168  corporation or his or her designee shall notify each existing
 1169  and newly appointed and existing appointed member of the board
 1170  of governors and senior managers of their duty to comply with
 1171  the reporting requirements of part III of chapter 112. At least
 1172  quarterly, the executive director or his or her designee shall
 1173  submit to the Commission on Ethics a list of names of the senior
 1174  managers and members of the board of governors who are subject
 1175  to the public disclosure requirements under s. 112.3145.
 1176         b. Notwithstanding s. 112.3143(2), a board member may not
 1177  vote on any measure that would inure to his or her special
 1178  private gain or loss; that he or she knows would inure to the
 1179  special private gain or loss of any principal by whom he or she
 1180  is retained or to the parent organization or subsidiary of a
 1181  corporate principal by which he or she is retained, other than
 1182  an agency as defined in s. 112.312; or that he or she knows
 1183  would inure to the special private gain or loss of a relative or
 1184  business associate of the public officer. Before the vote is
 1185  taken, such member must publicly state to the assembly the
 1186  nature of his or her interest in the matter from which he or she
 1187  is abstaining and, within 15 days after the vote occurs,
 1188  disclose the nature of his or her interest as a public record in
 1189  a memorandum filed with the person responsible for recording the
 1190  minutes of the meeting, who shall incorporate the memorandum in
 1191  the minutes.
 1192         4. Notwithstanding s. 112.3148 or s. 112.3149, or any other
 1193  provision of law, an employee or board member may not knowingly
 1194  accept, directly or indirectly, any gift or expenditure from a
 1195  person or entity, or an employee or representative of such
 1196  person or entity, which that has a contractual relationship with
 1197  the corporation or who is under consideration for a contract. An
 1198  employee or board member who fails to comply with subparagraph
 1199  3. or this subparagraph is subject to penalties provided under
 1200  ss. 112.317 and 112.3173.
 1201         5. Any senior manager of the corporation who is employed on
 1202  or after January 1, 2007, regardless of the date of hire, who
 1203  subsequently retires or terminates employment is prohibited from
 1204  representing another person or entity before the corporation for
 1205  2 years after retirement or termination of employment from the
 1206  corporation.
 1207         6. Any senior manager of the corporation who is employed on
 1208  or after January 1, 2007, regardless of the date of hire, who
 1209  subsequently retires or terminates employment is prohibited from
 1210  having any employment or contractual relationship for 2 years
 1211  with an insurer that has entered into a take-out bonus agreement
 1212  with the corporation.
 1213         (n)1.It is the intent of the Legislature that the rates
 1214  for coverage provided by the corporation be actuarially
 1215  determined and not be competitive with rates charged in the
 1216  admitted voluntary market such that the corporation functions as
 1217  a residual market mechanism that provides insurance only if such
 1218  insurance cannot be procured in the voluntary market. To achieve
 1219  this goal, for any rate filing made by the corporation on or
 1220  after July 1, 2011: Rates for coverage provided by the
 1221  corporation shall be actuarially sound and subject to the
 1222  requirements of s. 627.062, except as otherwise provided in this
 1223  paragraph. The corporation shall file its recommended rates with
 1224  the office at least annually. The corporation shall provide any
 1225  additional information regarding the rates which the office
 1226  requires. The office shall consider the recommendations of the
 1227  board and issue a final order establishing the rates for the
 1228  corporation within 45 days after the recommended rates are
 1229  filed. The corporation may not pursue an administrative
 1230  challenge or judicial review of the final order of the office.
 1231         1. The corporation shall file its recommended rates with
 1232  the office at least annually. The office shall consider the
 1233  recommended rates and issue a final order establishing the rates
 1234  within 45 days after the recommended rates are filed. The
 1235  corporation may not pursue an administrative challenge or
 1236  judicial review of the office’s final order.
 1237         2. In developing its rates, the corporation shall use an
 1238  appropriate industry expense equalization factor to ensure that
 1239  its rates include standard industry ratemaking expense
 1240  provisions. The industry expense equalization factor must
 1241  include a catastrophe risk load, a provision for taxes, a market
 1242  provision for reinsurance costs, and an industry expense
 1243  provision for general expenses, acquisition expenses, and
 1244  commissions.
 1245         3. The corporation shall implement a rate increase each
 1246  year for each residential line of business it writes, which may
 1247  not exceed 20 percent by territory and 25 percent for any single
 1248  policy, excluding coverage changes and surcharges. This
 1249  subparagraph expires January 1, 2015, and does not apply to
 1250  rates for sinkhole coverage or costs for the purchase of private
 1251  reinsurance, if any.
 1252         4.2. In addition to the rates otherwise determined pursuant
 1253  to this paragraph, the corporation shall impose and collect an
 1254  amount equal to the premium tax provided for in s. 624.509 to
 1255  augment the financial resources of the corporation.
 1256         3. After the public hurricane loss-projection model under
 1257  s. 627.06281 has been found to be accurate and reliable by the
 1258  Florida Commission on Hurricane Loss Projection Methodology,
 1259  that model shall serve as the minimum benchmark for determining
 1260  the windstorm portion of the corporation’s rates. This
 1261  subparagraph does not require or allow the corporation to adopt
 1262  rates lower than the rates otherwise required or allowed by this
 1263  paragraph.
 1264         4. The rate filings for the corporation which were approved
 1265  by the office and which took effect January 1, 2007, are
 1266  rescinded, except for those rates that were lowered. As soon as
 1267  possible, the corporation shall begin using the lower rates that
 1268  were in effect on December 31, 2006, and shall provide refunds
 1269  to policyholders who have paid higher rates as a result of that
 1270  rate filing. The rates in effect on December 31, 2006, shall
 1271  remain in effect for the 2007 and 2008 calendar years except for
 1272  any rate change that results in a lower rate. The next rate
 1273  change that may increase rates shall take effect pursuant to a
 1274  new rate filing recommended by the corporation and established
 1275  by the office, subject to the requirements of this paragraph.
 1276         5. Beginning on July 15, 2009, and each year thereafter,
 1277  the corporation must make a recommended actuarially sound rate
 1278  filing for each personal and commercial line of business it
 1279  writes, to be effective no earlier than January 1, 2010.
 1280         6. Beginning on or after January 1, 2010, and
 1281  notwithstanding the board’s recommended rates and the office’s
 1282  final order regarding the corporation’s filed rates under
 1283  subparagraph 1., the corporation shall implement a rate increase
 1284  each year which does not exceed 10 percent for any single policy
 1285  issued by the corporation, excluding coverage changes and
 1286  surcharges.
 1287         5.7. The corporation may also implement an increase to
 1288  reflect the effect on the corporation of the cash buildup factor
 1289  pursuant to s. 215.555(5)(b).
 1290         6. This paragraph does not require or allow the corporation
 1291  to reduce rates.
 1292         8. The corporation’s implementation of rates as prescribed
 1293  in subparagraph 6. shall cease for any line of business written
 1294  by the corporation upon the corporation’s implementation of
 1295  actuarially sound rates. Thereafter, the corporation shall
 1296  annually make a recommended actuarially sound rate filing for
 1297  each commercial and personal line of business the corporation
 1298  writes.
 1299         (o) If coverage in an account is deactivated pursuant to
 1300  paragraph (p), coverage through the corporation shall be
 1301  reactivated by order of the office only under one of the
 1302  following circumstances:
 1303         1. If the market assistance plan receives a minimum of 100
 1304  applications for coverage within a 3-month period, or 200
 1305  applications for coverage within a 1-year period or less for
 1306  residential coverage, unless the market assistance plan provides
 1307  a quotation from admitted carriers at their filed rates for at
 1308  least 90 percent of such applicants. A Any market assistance
 1309  plan application that is rejected because an individual risk is
 1310  so hazardous as to be uninsurable using the criteria specified
 1311  in subparagraph (c)7. may (c)8. shall not be included in the
 1312  minimum percentage calculation provided herein. If In the event
 1313  that there is a legal or administrative challenge to a
 1314  determination by the office that the conditions of this
 1315  subparagraph have been met for eligibility for coverage by in
 1316  the corporation, an any eligible risk may obtain coverage during
 1317  the pendency of such challenge.
 1318         2. In response to a state of emergency declared by the
 1319  Governor under s. 252.36, the office may activate coverage by
 1320  order during for the period of the emergency upon a finding by
 1321  the office that the emergency significantly affects the
 1322  availability of residential property insurance.
 1323         (q)1. The corporation shall certify to the office its needs
 1324  for annual assessments as to a particular calendar year, and for
 1325  any interim assessments that it deems to be necessary to sustain
 1326  operations as to a particular year pending the receipt of annual
 1327  assessments. Upon verification, the office shall approve such
 1328  certification, and the corporation shall levy such annual or
 1329  interim assessments. Such assessments must shall be prorated as
 1330  provided in paragraph (b). The corporation shall take all
 1331  reasonable and prudent steps necessary to collect the amount of
 1332  assessment due from each assessable insurer, including, if
 1333  prudent, filing suit to collect such assessment. If the
 1334  corporation is unable to collect an assessment from any
 1335  assessable insurer, the uncollected assessments shall be levied
 1336  as an additional assessment against the assessable insurers and
 1337  any assessable insurer required to pay an additional assessment
 1338  as a result of such failure to pay shall have a cause of action
 1339  against such nonpaying assessable insurer. Assessments shall be
 1340  included as an appropriate factor in the making of rates. The
 1341  failure of a surplus lines agent to collect and remit any
 1342  regular or emergency assessment levied by the corporation is
 1343  considered to be a violation of s. 626.936 and subjects the
 1344  surplus lines agent to the penalties provided in that section.
 1345         2. The governing body of any unit of local government, any
 1346  residents of which are insured by the corporation, may issue
 1347  bonds as defined in s. 125.013 or s. 166.101 from time to time
 1348  to fund an assistance program, in conjunction with the
 1349  corporation, for the purpose of defraying deficits of the
 1350  corporation. In order to avoid needless and indiscriminate
 1351  proliferation, duplication, and fragmentation of such assistance
 1352  programs, any unit of local government, any residents of which
 1353  are insured by the corporation, may provide for the payment of
 1354  losses, regardless of whether or not the losses occurred within
 1355  or outside of the territorial jurisdiction of the local
 1356  government. Revenue bonds under this subparagraph may not be
 1357  issued until validated pursuant to chapter 75, unless a state of
 1358  emergency is declared by executive order or proclamation of the
 1359  Governor pursuant to s. 252.36 making such findings as are
 1360  necessary to determine that it is in the best interests of, and
 1361  necessary for, the protection of the public health, safety, and
 1362  general welfare of residents of this state and declaring it an
 1363  essential public purpose to permit certain municipalities or
 1364  counties to issue such bonds to as will permit relief to
 1365  claimants and policyholders of the corporation. Any such unit of
 1366  local government may enter into such contracts with the
 1367  corporation and with any other entity created pursuant to this
 1368  subsection as are necessary to carry out this paragraph. Any
 1369  bonds issued under this subparagraph are shall be payable from
 1370  and secured by moneys received by the corporation from emergency
 1371  assessments under sub-subparagraph (b)3.d., and assigned and
 1372  pledged to or on behalf of the unit of local government for the
 1373  benefit of the holders of such bonds. The funds, credit,
 1374  property, and taxing power of the state or of the unit of local
 1375  government may shall not be pledged for the payment of such
 1376  bonds.
 1377         3.a. The corporation shall adopt one or more programs
 1378  subject to approval by the office for the reduction of both new
 1379  and renewal writings in the corporation. Beginning January 1,
 1380  2008,
 1381         a. Any program the corporation adopts for the payment of
 1382  bonuses to an insurer for each risk the insurer removes from the
 1383  corporation must shall comply with s. 627.3511(2) and may not
 1384  exceed the amount referenced in s. 627.3511(2) for each risk
 1385  removed. The corporation may consider any prudent and not
 1386  unfairly discriminatory approach to reducing corporation
 1387  writings, and may adopt a credit against assessment liability or
 1388  other liability that provides an incentive for insurers to take
 1389  risks out of the corporation and to keep risks out of the
 1390  corporation by maintaining or increasing voluntary writings in
 1391  counties or areas in which corporation risks are highly
 1392  concentrated and a program to provide a formula under which an
 1393  insurer voluntarily taking risks out of the corporation by
 1394  maintaining or increasing voluntary writings will be relieved
 1395  wholly or partially from assessments under sub-subparagraphs
 1396  (b)3.a. and b. However, any “take-out bonus” or payment to an
 1397  insurer must be conditioned on the property being insured for at
 1398  least 5 years by the insurer, unless canceled or nonrenewed by
 1399  the policyholder. If the policy is canceled or nonrenewed by the
 1400  policyholder before the end of the 5-year period, the amount of
 1401  the take-out bonus must be prorated for the time period the
 1402  policy was insured. If When the corporation enters into a
 1403  contractual agreement for a take-out plan, the producing agent
 1404  of record of the corporation policy is entitled to retain any
 1405  unearned commission on such policy, and the insurer shall
 1406  either:
 1407         (I) Pay to the producing agent of record of the policy, for
 1408  the first year, an amount that which is the greater of the
 1409  insurer’s usual and customary commission for the type of policy
 1410  written or a policy fee equal to the usual and customary
 1411  commission of the corporation; or
 1412         (II) Offer to allow the producing agent of record of the
 1413  policy to continue servicing the policy for at least a period of
 1414  not less than 1 year and offer to pay the agent the insurer’s
 1415  usual and customary commission for the type of policy written.
 1416  If the producing agent is unwilling or unable to accept
 1417  appointment by the new insurer, the new insurer shall pay the
 1418  agent in accordance with sub-sub-subparagraph (I).
 1419         b. Any credit or exemption from regular assessments adopted
 1420  under this subparagraph shall last no longer than the 3 years
 1421  following the cancellation or expiration of the policy by the
 1422  corporation. With the approval of the office, the board may
 1423  extend such credits for an additional year if the insurer
 1424  guarantees an additional year of renewability for all policies
 1425  removed from the corporation, or for 2 additional years if the
 1426  insurer guarantees 2 additional years of renewability for all
 1427  policies so removed.
 1428         c. There shall be No credit, limitation, exemption, or
 1429  deferment from emergency assessments may to be collected from
 1430  policyholders pursuant to sub-subparagraph (b)3.d.
 1431         4. The plan must shall provide for the deferment, in whole
 1432  or in part, of the assessment of an assessable insurer, other
 1433  than an emergency assessment collected from policyholders
 1434  pursuant to sub-subparagraph (b)3.d., if the office finds that
 1435  payment of the assessment would endanger or impair the solvency
 1436  of the insurer. If In the event an assessment against an
 1437  assessable insurer is deferred in whole or in part, the amount
 1438  by which such assessment is deferred may be assessed against the
 1439  other assessable insurers in a manner consistent with the basis
 1440  for assessments set forth in paragraph (b).
 1441         5. Effective July 1, 2007, In order to evaluate the costs
 1442  and benefits of approved take-out plans, if the corporation pays
 1443  a bonus or other payment to an insurer for an approved take-out
 1444  plan, it shall maintain a record of the address or such other
 1445  identifying information on the property or risk removed in order
 1446  to track if and when the property or risk is later insured by
 1447  the corporation.
 1448         6. Any policy taken out, assumed, or removed from the
 1449  corporation is, as of the effective date of the take-out,
 1450  assumption, or removal, direct insurance issued by the insurer
 1451  and not by the corporation, even if the corporation continues to
 1452  service the policies. This subparagraph applies to policies of
 1453  the corporation and not policies taken out, assumed, or removed
 1454  from any other entity.
 1455         d. Notwithstanding any other provision of law, for purposes
 1456  of a depopulation, take-out, or keep-out program adopted by the
 1457  corporation, including an initial or renewal offer of coverage
 1458  made to a policyholder removed from the corporation pursuant to
 1459  such program, an eligible surplus lines insurer may participate
 1460  in the program in the same manner and on the same terms as an
 1461  authorized insurer, except as provided under this subparagraph.
 1462  To qualify for participation, the surplus lines insurer must
 1463  first obtain approval from the office for its depopulation,
 1464  take-out, or keep-out plan and then comply with all of the
 1465  corporation’s requirements for such plan applicable to admitted
 1466  insurers and with all statutory provisions applicable to the
 1467  removal of policies from the corporation. In considering a
 1468  surplus lines insurer’s request for approval for its plan, the
 1469  office must determine that the surplus lines insurer meets the
 1470  following requirements:
 1471         (I) Maintains surplus of $50 million on a company or pooled
 1472  basis;
 1473         (II) Maintains an A.M. Best Financial Strength Rating of
 1474  “A-” or better;
 1475         (III) Maintains reserves, surplus, reinsurance, and
 1476  reinsurance equivalents sufficient to cover the insurer’s 100
 1477  year probable maximum hurricane loss at least twice in a single
 1478  hurricane season, and submits such reinsurance to the office to
 1479  review for purposes of the take-out;
 1480         (IV) Provides prominent notice to the policyholder before
 1481  the assumption of the policy that surplus lines policies are not
 1482  provided coverage by the Florida Insurance Guaranty Association,
 1483  and an outline of any substantial differences in coverage
 1484  between the existing policy and the policy being offered to the
 1485  insured; and
 1486         (V) Provides similar policy coverage.
 1487  
 1488  This sub-subparagraph does not subject any surplus lines insurer
 1489  to requirements in addition to part VIII of chapter 626. Surplus
 1490  lines brokers making an offer of coverage under this sub
 1491  subparagraph are not required to comply with s. 626.916(1)(a),
 1492  (b), (c), and (e).
 1493         (s)1. There is shall be no liability on the part of, and no
 1494  cause of action of any nature shall arise against, any
 1495  assessable insurer or its agents or employees, the corporation
 1496  or its agents or employees, members of the board of governors or
 1497  their respective designees at a board meeting, corporation
 1498  committee members, or the office or its representatives, for any
 1499  action taken by them in the performance of their duties or
 1500  responsibilities under this subsection.
 1501         a. As part of the immunity, the corporation, as a
 1502  governmental entity serving a public purpose, is not liable for
 1503  any claim for bad faith whether or not brought pursuant to s.
 1504  624.155, and this subsection or any other provision of law does
 1505  not create liability or a cause of action for bad faith or a
 1506  claim for extracontractual damages.
 1507         b. Such immunity does not apply to:
 1508         (I)a. Any of the foregoing persons or entities for any
 1509  willful tort;
 1510         (II)b. The corporation or its producing agents for breach
 1511  of any contract or agreement pertaining to insurance coverage;
 1512         (III)c. The corporation with respect to issuance or payment
 1513  of debt;
 1514         (IV)d.An Any assessable insurer with respect to any action
 1515  to enforce an assessable insurer’s obligations to the
 1516  corporation under this subsection; or
 1517         (V)e. The corporation in any pending or future action for
 1518  breach of contract or for benefits under a policy issued by the
 1519  corporation.; In any such action, the corporation is not shall
 1520  be liable to the policyholders and beneficiaries for attorney’s
 1521  fees under s. 627.428.
 1522         2. The corporation shall manage its claim employees,
 1523  independent adjusters, and others who handle claims to ensure
 1524  they carry out the corporation’s duty to its policyholders to
 1525  handle claims carefully, timely, diligently, and in good faith,
 1526  balanced against the corporation’s duty to the state to manage
 1527  its assets responsibly in order to minimize its assessment
 1528  potential.
 1529         (w) Notwithstanding any other provision of law:
 1530         1. The pledge or sale of, the lien upon, and the security
 1531  interest in any rights, revenues, or other assets of the
 1532  corporation created or purported to be created pursuant to any
 1533  financing documents to secure any bonds or other indebtedness of
 1534  the corporation shall be and remain valid and enforceable,
 1535  notwithstanding the commencement of and during the continuation
 1536  of, and after, any rehabilitation, insolvency, liquidation,
 1537  bankruptcy, receivership, conservatorship, reorganization, or
 1538  similar proceeding against the corporation under the laws of
 1539  this state.
 1540         2. No Such proceeding does not shall relieve the
 1541  corporation of its obligation, or otherwise affect its ability
 1542  to perform its obligation, to continue to collect, or levy and
 1543  collect, assessments, market equalization or other surcharges
 1544  under subparagraph (c)10., or any other rights, revenues, or
 1545  other assets of the corporation pledged pursuant to any
 1546  financing documents.
 1547         3. Each such pledge or sale of, lien upon, and security
 1548  interest in, including the priority of such pledge, lien, or
 1549  security interest, any such assessments, market equalization or
 1550  other surcharges, or other rights, revenues, or other assets
 1551  which are collected, or levied and collected, after the
 1552  commencement of and during the pendency of, or after, any such
 1553  proceeding continues shall continue unaffected by such
 1554  proceeding. As used in this subsection, the term “financing
 1555  documents” means any agreement or agreements, instrument or
 1556  instruments, or other document or documents now existing or
 1557  hereafter created evidencing any bonds or other indebtedness of
 1558  the corporation or pursuant to which any such bonds or other
 1559  indebtedness has been or may be issued and pursuant to which any
 1560  rights, revenues, or other assets of the corporation are pledged
 1561  or sold to secure the repayment of such bonds or indebtedness,
 1562  together with the payment of interest on such bonds or such
 1563  indebtedness, or the payment of any other obligation or
 1564  financial product, as defined in the plan of operation of the
 1565  corporation related to such bonds or indebtedness.
 1566         4. Any such pledge or sale of assessments, revenues,
 1567  contract rights, or other rights or assets of the corporation
 1568  constitutes shall constitute a lien and security interest, or
 1569  sale, as the case may be, that is immediately effective and
 1570  attaches to such assessments, revenues, or contract rights or
 1571  other rights or assets, whether or not imposed or collected at
 1572  the time the pledge or sale is made. Any Such pledge or sale is
 1573  effective, valid, binding, and enforceable against the
 1574  corporation or other entity making such pledge or sale, and
 1575  valid and binding against and superior to any competing claims
 1576  or obligations owed to any other person or entity, including
 1577  policyholders in this state, asserting rights in any such
 1578  assessments, revenues, or contract rights or other rights or
 1579  assets to the extent set forth in and in accordance with the
 1580  terms of the pledge or sale contained in the applicable
 1581  financing documents, whether or not any such person or entity
 1582  has notice of such pledge or sale and without the need for any
 1583  physical delivery, recordation, filing, or other action.
 1584         5. If As long as the corporation has any bonds outstanding,
 1585  the corporation may not file a voluntary petition under chapter
 1586  9 of the federal Bankruptcy Code or such corresponding chapter
 1587  or sections as may be in effect, from time to time, and a public
 1588  officer or any organization, entity, or other person may not
 1589  authorize the corporation to be or become a debtor under chapter
 1590  9 of the federal Bankruptcy Code or such corresponding chapter
 1591  or sections as may be in effect, from time to time, during any
 1592  such period.
 1593         6. If ordered by a court of competent jurisdiction, the
 1594  corporation may assume policies or otherwise provide coverage
 1595  for policyholders of an insurer placed in liquidation under
 1596  chapter 631, under such forms, rates, terms, and conditions as
 1597  the corporation deems appropriate, subject to approval by the
 1598  office.
 1599         (x)1. The following records of the corporation are
 1600  confidential and exempt from the provisions of s. 119.07(1) and
 1601  s. 24(a), Art. I of the State Constitution:
 1602         a. Underwriting files, except that a policyholder or an
 1603  applicant shall have access to his or her own underwriting
 1604  files. Confidential and exempt underwriting file records may
 1605  also be released to other governmental agencies upon written
 1606  request and demonstration of need; such records held by the
 1607  receiving agency remain confidential and exempt as provided
 1608  herein.
 1609         b. Claims files, until termination of all litigation and
 1610  settlement of all claims arising out of the same incident,
 1611  although portions of the claims files may remain exempt, as
 1612  otherwise provided by law. Confidential and exempt claims file
 1613  records may be released to other governmental agencies upon
 1614  written request and demonstration of need; such records held by
 1615  the receiving agency remain confidential and exempt as provided
 1616  herein.
 1617         c. Records obtained or generated by an internal auditor
 1618  pursuant to a routine audit, until the audit is completed, or if
 1619  the audit is conducted as part of an investigation, until the
 1620  investigation is closed or ceases to be active. An investigation
 1621  is considered “active” while the investigation is being
 1622  conducted with a reasonable, good faith belief that it could
 1623  lead to the filing of administrative, civil, or criminal
 1624  proceedings.
 1625         d. Matters reasonably encompassed in privileged attorney
 1626  client communications.
 1627         e. Proprietary information licensed to the corporation
 1628  under contract and the contract provides for the confidentiality
 1629  of such proprietary information.
 1630         f. All information relating to the medical condition or
 1631  medical status of a corporation employee which is not relevant
 1632  to the employee’s capacity to perform his or her duties, except
 1633  as otherwise provided in this paragraph. Information that is
 1634  exempt shall include, but is not limited to, information
 1635  relating to workers’ compensation, insurance benefits, and
 1636  retirement or disability benefits.
 1637         g. Upon an employee’s entrance into the employee assistance
 1638  program, a program to assist any employee who has a behavioral
 1639  or medical disorder, substance abuse problem, or emotional
 1640  difficulty which affects the employee’s job performance, all
 1641  records relative to that participation shall be confidential and
 1642  exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
 1643  of the State Constitution, except as otherwise provided in s.
 1644  112.0455(11).
 1645         h. Information relating to negotiations for financing,
 1646  reinsurance, depopulation, or contractual services, until the
 1647  conclusion of the negotiations.
 1648         i. Minutes of closed meetings regarding underwriting files,
 1649  and minutes of closed meetings regarding an open claims file
 1650  until termination of all litigation and settlement of all claims
 1651  with regard to that claim, except that information otherwise
 1652  confidential or exempt by law shall be redacted.
 1653         2. If an authorized insurer is considering underwriting a
 1654  risk insured by the corporation or has removed a risk from the
 1655  corporation, relevant underwriting files and confidential claims
 1656  files may be released to the insurer if provided the insurer
 1657  agrees in writing, notarized and under oath, to maintain the
 1658  confidentiality of such files. If a file is transferred to an
 1659  insurer, that file is no longer a public record because it is
 1660  not held by an agency subject to the provisions of the public
 1661  records law. Underwriting files and confidential claims files
 1662  may also be released to staff and the board of governors of the
 1663  market assistance plan established pursuant to s. 627.3515, who
 1664  must retain the confidentiality of such files, except such files
 1665  may be released to authorized insurers that are considering
 1666  assuming the risks to which the files apply if, provided the
 1667  insurer agrees in writing, notarized and under oath, to maintain
 1668  the confidentiality of such files. Finally, the corporation or
 1669  the board or staff of the market assistance plan may make the
 1670  following information obtained from underwriting files and
 1671  confidential claims files available to licensed general lines
 1672  insurance agents: name, address, and telephone number of the
 1673  residential property owner or insured; location of the risk;
 1674  rating information; loss history; and policy type. The receiving
 1675  licensed general lines insurance agent must retain the
 1676  confidentiality of the information received.
 1677         3. A policyholder who has filed suit against the
 1678  corporation has the right to discover the contents of his or her
 1679  own claims file to the same extent that discovery of such
 1680  contents would be available from a private insurer in litigation
 1681  as provided by the Florida Rules of Civil Procedure, the Florida
 1682  Evidence Code, and other applicable law. Pursuant to subpoena, a
 1683  third party has the right to discover the contents of an
 1684  insured’s or applicant’s underwriting or claims file to the same
 1685  extent that discovery of such contents would be available from a
 1686  private insurer by subpoena as provided by the Florida Rules of
 1687  Civil Procedure, the Florida Evidence Code, and other applicable
 1688  law, and subject to any confidentiality protections requested by
 1689  the corporation and agreed to by the seeking party or ordered by
 1690  the court. The corporation may release confidential underwriting
 1691  and claims file contents and information as it deems necessary
 1692  and appropriate to underwrite or service insurance policies and
 1693  claims, subject to any confidentiality protections deemed
 1694  necessary and appropriate by the corporation.
 1695         4. Portions of meetings of the corporation are exempt from
 1696  the provisions of s. 286.011 and s. 24(b), Art. I of the State
 1697  Constitution wherein confidential underwriting files or
 1698  confidential open claims files are discussed. All portions of
 1699  corporation meetings which are closed to the public shall be
 1700  recorded by a court reporter. The court reporter shall record
 1701  the times of commencement and termination of the meeting, all
 1702  discussion and proceedings, the names of all persons present at
 1703  any time, and the names of all persons speaking. No portion of
 1704  any closed meeting shall be off the record. Subject to the
 1705  provisions hereof and s. 119.07(1)(d)-(f), the court reporter’s
 1706  notes of any closed meeting shall be retained by the corporation
 1707  for a minimum of 5 years. A copy of the transcript, less any
 1708  exempt matters, of any closed meeting wherein claims are
 1709  discussed shall become public as to individual claims after
 1710  settlement of the claim.
 1711         (y) It is the intent of the Legislature that the amendments
 1712  to this subsection enacted in 2002 should, over time, reduce the
 1713  probable maximum windstorm losses in the residual markets and
 1714  should reduce the potential assessments to be levied on property
 1715  insurers and policyholders statewide. In furtherance of this
 1716  intent:
 1717         1. The board shall, on or before February 1 of each year,
 1718  provide a report to the President of the Senate and the Speaker
 1719  of the House of Representatives showing the reduction or
 1720  increase in the 100-year probable maximum loss attributable to
 1721  wind-only coverages and the quota share program under this
 1722  subsection combined, as compared to the benchmark 100-year
 1723  probable maximum loss of the Florida Windstorm Underwriting
 1724  Association. For purposes of this paragraph, the benchmark 100
 1725  year probable maximum loss of the Florida Windstorm Underwriting
 1726  Association shall be the calculation dated February 2001 and
 1727  based on November 30, 2000, exposures. In order to ensure
 1728  comparability of data, the board shall use the same methods for
 1729  calculating its probable maximum loss as were used to calculate
 1730  the benchmark probable maximum loss.
 1731         2. Beginning December 1, 2010, if the report under
 1732  subparagraph 1. for any year indicates that the 100-year
 1733  probable maximum loss attributable to wind-only coverages and
 1734  the quota share program combined does not reflect a reduction of
 1735  at least 25 percent from the benchmark, the board shall reduce
 1736  the boundaries of the high-risk area eligible for wind-only
 1737  coverages under this subsection in a manner calculated to reduce
 1738  such probable maximum loss to an amount at least 25 percent
 1739  below the benchmark.
 1740         3. Beginning February 1, 2015, if the report under
 1741  subparagraph 1. for any year indicates that the 100-year
 1742  probable maximum loss attributable to wind-only coverages and
 1743  the quota share program combined does not reflect a reduction of
 1744  at least 50 percent from the benchmark, the boundaries of the
 1745  high-risk area eligible for wind-only coverages under this
 1746  subsection shall be reduced by the elimination of any area that
 1747  is not seaward of a line 1,000 feet inland from the Intracoastal
 1748  Waterway.
 1749         (aa) As a condition of eligibility for coverage by the
 1750  corporation, an applicant or insured of a property located in
 1751  Special Flood Hazard Area, as defined by the National Flood
 1752  Insurance Program, must maintain in effect a separate flood
 1753  insurance policy having coverage limits for building and
 1754  contents at least equal to those provided under the
 1755  corporation’s policy, subject to the maximum limits available
 1756  under the National Flood Insurance Program policy. This
 1757  requirement does not apply to an insured who is a tenant or a
 1758  condominium unit owner above the ground floor; a policy issued
 1759  by the corporation which excludes wind and hail coverage; a risk
 1760  that is not eligible for flood coverage under the National Flood
 1761  Insurance Program; or a mobile home that is located more than 2
 1762  miles from open water, including the ocean, the gulf, a bay, a
 1763  river, or the intracoastal waterway. This paragraph applies to
 1764  new policies issued by the corporation on or after January 1,
 1765  2012, and to policies renewed by the corporation on or after
 1766  January 1, 2013. The corporation shall not require the securing
 1767  of flood insurance as a condition of coverage if the insured or
 1768  applicant executes a form approved by the office affirming that
 1769  flood insurance is not provided by the corporation and that if
 1770  flood insurance is not secured by the applicant or insured in
 1771  addition to coverage by the corporation, the risk will not be
 1772  covered for flood damage. A corporation policyholder electing
 1773  not to secure flood insurance and executing a form as provided
 1774  herein making a claim for water damage against the corporation
 1775  shall have the burden of proving the damage was not caused by
 1776  flooding. Notwithstanding other provisions of this subsection,
 1777  the corporation may deny coverage to an applicant or insured who
 1778  refuses to execute the form described herein.
 1779         (ee) The office may establish a pilot program to offer
 1780  optional sinkhole coverage in one or more counties or other
 1781  territories of the corporation for the purpose of implementing
 1782  s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
 1783  Florida. Under the pilot program, the corporation is not
 1784  required to issue a notice of nonrenewal to exclude sinkhole
 1785  coverage upon the renewal of existing policies, but may exclude
 1786  such coverage using a notice of coverage change.
 1787         Section 3. Subsection (4) of section 627.3511, Florida
 1788  Statutes, is amended to read:
 1789         627.3511 Depopulation of Citizens Property Insurance
 1790  Corporation.—
 1791         (4) AGENT BONUS.—If When the corporation enters into a
 1792  contractual agreement for a take-out plan that provides a bonus
 1793  to the insurer, the producing agent of record of the corporation
 1794  policy is entitled to retain any unearned commission on such
 1795  policy, and the insurer shall either:
 1796         (a) Pay to the producing agent of record of the association
 1797  policy, for the first year, an amount that is the greater of the
 1798  insurer’s usual and customary commission for the type of policy
 1799  written or a fee equal to the usual and customary commission of
 1800  the corporation; or
 1801         (b) Offer to allow the producing agent of record of the
 1802  corporation policy to continue servicing the policy for at least
 1803  a period of not less than 1 year and offer to pay the agent the
 1804  greater of the insurer’s or the corporation’s usual and
 1805  customary commission for the type of policy written.
 1806  
 1807  If the producing agent is unwilling or unable to accept
 1808  appointment, the new insurer shall pay the agent in accordance
 1809  with paragraph (a). The requirement of this subsection that the
 1810  producing agent of record is entitled to retain the unearned
 1811  commission on an association policy does not apply to a policy
 1812  for which coverage has been provided in the association for 30
 1813  days or less or for which a cancellation notice has been issued
 1814  pursuant to s. 627.351(6)(c)10. during the first 30 days of
 1815  coverage.
 1816         Section 4. This act shall take effect upon becoming a law.

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