| 1 |
A bill to be entitled |
| 2 |
An act relating to property and casualty
insurance; |
| 3 |
transferring, renumbering, and amending ss.
350.061, |
| 4 |
350.0611, 350.0612, 350.0613, and 350.0614,
F.S.; |
| 5 |
authorizing the Public Counsel to represent
the general |
| 6 |
public before the Office of Insurance
Regulation; |
| 7 |
including certain proceedings related to
rules and rate |
| 8 |
filings for residential property insurance;
authorizing |
| 9 |
the Public Counsel to have access to files of
the office, |
| 10 |
to seek review of orders of the office, to
issue reports, |
| 11 |
recommendations, and proposed orders to the
office; |
| 12 |
specifying where the Public Counsel shall
maintain his or |
| 13 |
her office; authorizing the Joint Legislative
Auditing |
| 14 |
Committee to authorize the Public Counsel to
employ |
| 15 |
certain types of employees; requiring the
Office of |
| 16 |
Insurance Regulation to provide copies of
certain filings |
| 17 |
to the Public Counsel; amending s. 112.3145,
F.S.; |
| 18 |
conforming a cross-reference; amending s.
215.559, F.S.; |
| 19 |
revising the distribution of funds in the
Hurricane Loss |
| 20 |
Mitigation Program; providing for a
low-interest loan |
| 21 |
program; amending s. 408.40, F.S.; conforming
a cross |
| 22 |
reference; amending s. 624.319, F.S.;
authorizing the |
| 23 |
Public Counsel to have access to certain
confidential |
| 24 |
information held by the Department of
Financial Services |
| 25 |
or the Office of Insurance Regulation;
amending s. |
| 26 |
627.062, F.S.; deleting provisions that allow
an insurer |
| 27 |
to require arbitration of a rate filing for
property and |
| 28 |
casualty insurance; amending s. 627.0629, F.S.;
requiring |
| 29 |
underwriting rules for homeowners' insurance
to be filed |
| 30 |
with and approved by the Office of Insurance
Regulation; |
| 31 |
providing for filing and approval provisions;
amending s. |
| 32 |
627.0651, F.S.; deleting reference to the
filing of |
| 33 |
specified underwriting rules for homeowners'
insurance; |
| 34 |
amending s. 627.351, F.S.; deleting a cross
reference to |
| 35 |
conform; amending s. 627.4133, F.S.;
prohibiting an |
| 36 |
insurer from canceling or nonrenewing a
residential |
| 37 |
property insurance policy for certain
reasons; amending s. |
| 38 |
627.4145, F.S.; increasing the minimum score
on the |
| 39 |
reading ease test for insurance policies;
creating s. |
| 40 |
627.41494, F.S.; providing for consumer
participation in |
| 41 |
review of insurance rate changes; providing
for public |
| 42 |
inspection of rate filings; providing for
adoption of |
| 43 |
rules by the Financial Services Commission;
requiring |
| 44 |
insurers to pay costs of consumer advocacy
groups under |
| 45 |
certain circumstances; amending s. 627.701,
F.S.; revising |
| 46 |
the hurricane deductibles that insurers must
offer for |
| 47 |
personal lines residential property insurance
policies; |
| 48 |
providing an appropriation; providing
effective dates. |
| 49 |
|
| 50 |
Be It Enacted by the Legislature of the State
of Florida: |
| 51 |
|
| 52 |
Section 1. Section
350.061, Florida Statutes, is |
| 53 |
transferred, renumbered as section 11.402,
Florida Statutes, and |
| 54 |
amended to read: |
| 55 |
11.402
350.061 Public
Counsel; appointment; oath; |
| 56 |
restrictions on Public Counsel and his or her
employees.-- |
| 57 |
(1) The
Joint Legislative Auditing Committee shall appoint |
| 58 |
a Public Counsel by majority vote of the
members of the |
| 59 |
committee to represent the general public of
Florida before the |
| 60 |
Florida Public Service Commission and
the Office of Insurance |
| 61 |
Regulation.
The Public Counsel shall be an attorney admitted to |
| 62 |
practice before the Florida Supreme Court and
shall serve at the |
| 63 |
pleasure of the Joint Legislative Auditing
Committee, subject to |
| 64 |
annual reconfirmation by the committee.
Vacancies in the office |
| 65 |
shall be filled in the same manner as the
original appointment. |
| 66 |
(2) The
Public Counsel shall take and subscribe to the |
| 67 |
oath of office required of state officers by
the State |
| 68 |
Constitution. |
| 69 |
(3) No
officer or full-time employee of the Public Counsel |
| 70 |
shall actively engage in any other business
or profession; serve |
| 71 |
as the representative of any political party
or on any executive |
| 72 |
committee or other governing body thereof;
serve as an |
| 73 |
executive, officer, or employee of any
political party, |
| 74 |
committee, organization, or association;
receive remuneration |
| 75 |
for activities on behalf of any candidate for
public office; or |
| 76 |
engage on behalf of any candidate for public
office in the |
| 77 |
solicitation of votes or other activities in
behalf of such |
| 78 |
candidacy. Neither the Public Counsel nor any
employee of the |
| 79 |
Public Counsel shall become a candidate for
election to public |
| 80 |
office unless he or she shall first resign
from his or her |
| 81 |
office or employment. |
| 82 |
Section 2. Section
350.0611, Florida Statutes, is |
| 83 |
transferred, renumbered as section 11.403,
Florida Statutes, and |
| 84 |
amended to read: |
| 85 |
11.403
350.0611 Public
Counsel; duties and powers.--It |
| 86 |
shall be the duty of the Public Counsel to
provide legal |
| 87 |
representation for the people of the state in
proceedings before |
| 88 |
the Public Service
Commission and the Office of Insurance |
| 89 |
Regulation
and in proceedings before counties pursuant to s. |
| 90 |
367.171(8). The Public Counsel shall have
such powers as are |
| 91 |
necessary to carry out the duties of his or
her office, |
| 92 |
including, but not limited to, the following
specific powers: |
| 93 |
(1) To
recommend to the Public Service
Commission or the |
| 94 |
counties, by petition, the commencement of
any proceeding or |
| 95 |
action or to appear, in the name of the state
or its citizens, |
| 96 |
in any proceeding or action before the
commission or the |
| 97 |
counties. |
| 98 |
(2) To
recommend to the Office of Insurance Regulation, by |
| 99 |
petition, the commencement
of, and to appear in the name of the |
| 100 |
state or its citizens in,
any proceeding or action before the |
| 101 |
office relating to: |
| 102 |
(a) Rules
governing residential property insurance; or |
| 103 |
(b) Rate
filings for residential property insurance which, |
| 104 |
pursuant to standards
determined by the office, request an |
| 105 |
average statewide rate
increase of 10 percent or greater as |
| 106 |
compared to the current
rates in effect or the rates in effect |
| 107 |
12 months prior to the
proposed effective date. |
| 108 |
|
| 109 |
The Public Counsel may not
stay any final order of the Office of |
| 110 |
Insurance Regulation. |
| 111 |
(3) To
and urge in
any proceeding or action to which he or |
| 112 |
she is a party
therein any position that
which he or she deems |
| 113 |
to be in the public interest, whether
consistent or inconsistent |
| 114 |
with positions previously adopted by the
commission, or the |
| 115 |
counties, or the
office, and utilize therein all forms of |
| 116 |
discovery available to attorneys in civil
actions generally, |
| 117 |
subject to protective orders of the
commission, or the
counties, |
| 118 |
or the office,
which shall be reviewable by summary procedure in |
| 119 |
the circuit courts of this state.; |
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(4)(2) To
have access to and use of all files, records, |
| 121 |
and data of the commission, or
the counties, or the office |
| 122 |
available to any other attorney representing
parties in a |
| 123 |
proceeding before the commission, or
the counties, or the |
| 124 |
office.; |
| 125 |
(5)(3) In
any proceeding in which he or she has |
| 126 |
participated as a party, to seek review of
any determination, |
| 127 |
finding, or order of the commission, or
the counties, or the |
| 128 |
office,
or of any hearing examiner designated by the commission, |
| 129 |
or the counties, or
the office, in the name of the state or its |
| 130 |
citizens.; |
| 131 |
(6)(4) To
prepare and issue reports, recommendations, and |
| 132 |
proposed orders to the commission or
office, the Governor, and |
| 133 |
the Legislature on any matter or subject
within the jurisdiction |
| 134 |
of the commission or
office, and to make such recommendations as |
| 135 |
he or she deems appropriate for legislation
relative to |
| 136 |
commission or office
procedures, rules, jurisdiction, personnel, |
| 137 |
and functions.;
and |
| 138 |
(7)(5) To
appear before other state agencies, federal |
| 139 |
agencies, and state and federal courts in
connection with |
| 140 |
matters under the jurisdiction of the
commission or office, in |
| 141 |
the name of the state or its citizens. |
| 142 |
Section 3. Section
350.0612, Florida Statutes, is |
| 143 |
transferred, renumbered as section 11.404,
Florida Statutes, and |
| 144 |
amended to read: |
| 145 |
11.404
350.0612 Public
Counsel; location.--The Public |
| 146 |
Counsel shall maintain his or her office in
Leon County on the |
| 147 |
premises of the commission
or, if suitable space there cannot be |
| 148 |
provided,
at such other place convenient to the offices of the |
| 149 |
Public Services Commission
or the Office of Insurance Regulation |
| 150 |
commissioners
as will enable him or her to carry out |
| 151 |
expeditiously the duties and functions of his
or her office. |
| 152 |
Section 4. Section
350.0613, Florida Statutes, is |
| 153 |
transferred, renumbered as section 11.405,
Florida Statutes, and |
| 154 |
amended to read: |
| 155 |
11.405
350.0613 Public
Counsel; employees; receipt of |
| 156 |
pleadings.--The Joint
Legislative Auditing Committee may |
| 157 |
authorize the Public Counsel to employ
clerical and technical |
| 158 |
assistants whose qualifications, duties, and
responsibilities |
| 159 |
the committee shall from time to time
prescribe. The committee |
| 160 |
may from time to time authorize retention of
the services of |
| 161 |
additional attorneys,
actuaries, economists, or experts to the |
| 162 |
extent that the best interests of the people
of the state will |
| 163 |
be better served thereby, including the
retention of expert |
| 164 |
witnesses and other technical personnel for
participation in |
| 165 |
contested proceedings before the Public
Service Commission or |
| 166 |
Office of Insurance
Regulation. The commission shall furnish the |
| 167 |
Public Counsel with copies of the initial
pleadings in all |
| 168 |
proceedings before the commission.
The office shall furnish the |
| 169 |
Public Counsel with copies
of all filings that relate to the |
| 170 |
jurisdiction of the
Public Counsel pursuant to s. 11.403(2)., |
| 171 |
and If
the Public Counsel intervenes as a party in any |
| 172 |
proceeding he or she shall be served with
copies of all |
| 173 |
subsequent pleadings, exhibits, and prepared
testimony, if used. |
| 174 |
Upon filing notice of intervention, the
Public Counsel shall |
| 175 |
serve all interested parties with copies of
such notice and all |
| 176 |
of his or her subsequent pleadings and
exhibits. |
| 177 |
Section 5. Section
350.0614, Florida Statutes, is |
| 178 |
transferred, renumbered as section 11.406,
Florida Statutes, and |
| 179 |
amended to read: |
| 180 |
11.406
350.0614 Public
Counsel; compensation and |
| 181 |
expenses.-- |
| 182 |
(1) The
salaries and expenses of the Public Counsel and |
| 183 |
his or her employees shall be allocated by
the committee only |
| 184 |
from moneys appropriated to the Public
Counsel by the |
| 185 |
Legislature. |
| 186 |
(2) The
Legislature hereby declares and determines that |
| 187 |
the Public Counsel is under the legislative
branch of government |
| 188 |
within the intention of the legislation as
expressed in chapter |
| 189 |
216, and no power shall be in the Executive
Office of the |
| 190 |
Governor or its successor to release or
withhold funds |
| 191 |
appropriated to it, but the same shall be
available for |
| 192 |
expenditure as provided by law and the rules
or decisions of the |
| 193 |
Joint Auditing Committee. |
| 194 |
(3) Neither
the Executive Office of the Governor nor the |
| 195 |
Department of Management Services or its
successor shall have |
| 196 |
power to determine the number, or fix the
compensation, of the |
| 197 |
employees of the Public Counsel or to
exercise any manner of |
| 198 |
control over them. |
| 199 |
Section 6. Paragraph
(b) of subsection (1) of section |
| 200 |
112.3145, Florida Statutes, is amended to
read: |
| 201 |
112.3145 Disclosure
of financial interests and clients |
| 202 |
represented before agencies.-- |
| 203 |
(1) For
purposes of this section, unless the context |
| 204 |
otherwise requires, the term: |
| 205 |
(b) "Specified
state employee" means: |
| 206 |
1. Public
counsel created by chapter 11 350,
an assistant |
| 207 |
state attorney, an assistant public defender,
a full-time state |
| 208 |
employee who serves as counsel or assistant
counsel to any state |
| 209 |
agency, the Deputy Chief Judge of
Compensation Claims, a judge |
| 210 |
of compensation claims, an administrative law
judge, or a |
| 211 |
hearing officer. |
| 212 |
2. Any
person employed in the office of the Governor or in |
| 213 |
the office of any member of the Cabinet if
that person is exempt |
| 214 |
from the Career Service System, except
persons employed in |
| 215 |
clerical, secretarial, or similar positions. |
| 216 |
3. Each
appointed secretary, assistant secretary, deputy |
| 217 |
secretary, executive director, assistant
executive director, or |
| 218 |
deputy executive director of each state
department, commission, |
| 219 |
board, or council; unless otherwise provided,
the division |
| 220 |
director, assistant division director, deputy
director, bureau |
| 221 |
chief, and assistant bureau chief of any
state department or |
| 222 |
division; or any person having the power
normally conferred upon |
| 223 |
such persons, by whatever title. |
| 224 |
4. The
superintendent or institute director of a state |
| 225 |
mental health institute established for
training and research in |
| 226 |
the mental health field or the warden or
director of any major |
| 227 |
state institution or facility established for
corrections, |
| 228 |
training, treatment, or rehabilitation. |
| 229 |
5. Business
managers, purchasing agents having the power |
| 230 |
to make any purchase exceeding the threshold
amount provided for |
| 231 |
in s. 287.017 for CATEGORY ONE, finance and
accounting |
| 232 |
directors, personnel officers, or grants
coordinators for any |
| 233 |
state agency. |
| 234 |
6. Any
person, other than a legislative assistant exempted |
| 235 |
by the presiding officer of the house by
which the legislative |
| 236 |
assistant is employed, who is employed in the
legislative branch |
| 237 |
of government, except persons employed in
maintenance, clerical, |
| 238 |
secretarial, or similar positions. |
| 239 |
7. Each
employee of the Commission on Ethics. |
| 240 |
Section 7. Section
215.559, Florida Statutes, is amended |
| 241 |
to read: |
| 242 |
215.559 Hurricane
Loss Mitigation Program.-- |
| 243 |
(1) There
is created a Hurricane Loss Mitigation Program. |
| 244 |
The Legislature shall annually appropriate
$10 million of the |
| 245 |
moneys authorized for appropriation under s.
215.555(7)(c) from |
| 246 |
the Florida Hurricane Catastrophe Fund to the
Department of |
| 247 |
Community Affairs for the purposes set forth
in this section. |
| 248 |
(2)(a) One
Seven million dollars in funds
provided in |
| 249 |
subsection (1) shall be used for programs to
improve the wind |
| 250 |
resistance of residences
and mobile homes,
including loans, |
| 251 |
subsidies, grants,
demonstration projects, and direct |
| 252 |
assistance; cooperative
programs with local governments and the |
| 253 |
Federal Government;
and other efforts to prevent or reduce |
| 254 |
losses or reduce the cost of rebuilding after
a disaster. |
| 255 |
(b) Six
million dollars in funds provided in subsection |
| 256 |
(1) shall be used for
programs to improve the wind resistance of |
| 257 |
residences to prevent or
reduce losses or reduce the cost of |
| 258 |
rebuilding after a
disaster. |
| 259 |
(c) The
department shall, with the funds authorized in |
| 260 |
paragraphs (a) and (b),
establish a program of low-interest |
| 261 |
loans to qualified owners
of residences and qualified owners of |
| 262 |
mobile homes. For the
purpose of this section, the term "low- |
| 263 |
interest loan" means
any direct loan or loan guarantee issued or |
| 264 |
backed by such authorized
funds to a qualified owner to finance |
| 265 |
efforts to prevent or
reduce losses or reduce the cost of |
| 266 |
rebuilding after a
disaster with a requirement for repayment by |
| 267 |
the owner. Loans provided
under this section shall be made at a |
| 268 |
rate of up to 2 percent
below the qualified loan rate as |
| 269 |
determined by the
department. The terms and conditions of the |
| 270 |
low-interest loan program,
including loan incentive provisions, |
| 271 |
and the qualifications
required of owners of residences and |
| 272 |
owners of mobile homes
shall be determined by the department. |
| 273 |
(d)(b) Three
million dollars in funds provided in |
| 274 |
subsection (1) shall be used to retrofit
existing facilities |
| 275 |
used as public hurricane shelters. The
department must |
| 276 |
prioritize the use of these funds for
projects included in the |
| 277 |
September 1, 2000, version of the Shelter
Retrofit Report |
| 278 |
prepared in accordance with s. 252.385(3),
and each annual |
| 279 |
report thereafter. The department must give
funding priority to |
| 280 |
projects in regional planning council regions
that have shelter |
| 281 |
deficits and to projects that maximize use of
state funds. |
| 282 |
(3) Forty
percent of the total appropriation in paragraph |
| 283 |
(2)(a) shall be used to inspect and improve
tie-downs for mobile |
| 284 |
homes. Within 30 days after the effective
date of that |
| 285 |
appropriation, the department shall contract
with a public |
| 286 |
higher educational institution in this state
which has previous |
| 287 |
experience in administering the programs set
forth in this |
| 288 |
subsection to serve as the administrative
entity and fiscal |
| 289 |
agent pursuant to s. 216.346 for the purpose
of administering |
| 290 |
the programs set forth in this subsection in
accordance with |
| 291 |
established policy and procedures. The
administrative entity |
| 292 |
working with the advisory council set up
under subsection (5) |
| 293 |
shall develop a list of mobile home parks and
counties that may |
| 294 |
be eligible to participate in the tie-down
program. |
| 295 |
(4) Of
moneys provided to the Department of Community |
| 296 |
Affairs in paragraphs
paragraph (2)(a) and
(b), 10 percent shall |
| 297 |
be allocated to a Type I Center within the
State University |
| 298 |
System dedicated to hurricane research. The
Type I Center shall |
| 299 |
develop a preliminary work plan approved by
the advisory council |
| 300 |
set forth in subsection (5) to eliminate the
state and local |
| 301 |
barriers to upgrading existing residences,
mobile homes, and |
| 302 |
communities;, research and
develop a program for the recycling |
| 303 |
of existing older mobile homes;,
and support programs of |
| 304 |
research and development relating to
hurricane loss reduction |
| 305 |
devices and techniques for site-built
residences. The State |
| 306 |
University System also shall consult with the
Department of |
| 307 |
Community Affairs and assist the department
with the report |
| 308 |
required under subsection (7). |
| 309 |
(5) Except
for the program set forth in subsection (3), |
| 310 |
the Department of Community Affairs shall
develop the programs |
| 311 |
set forth in this section in consultation
with an advisory |
| 312 |
council consisting of a representative
designated by the Chief |
| 313 |
Financial Officer, a representative
designated by the Florida |
| 314 |
Home Builders Association, a representative
designated by the |
| 315 |
Florida Insurance Council, a representative
designated by the |
| 316 |
Federation of Manufactured Home Owners, a
representative |
| 317 |
designated by the Florida Association of
Counties, and a |
| 318 |
representative designated by the Florida
Manufactured Housing |
| 319 |
Association. |
| 320 |
(6) Moneys
provided to the Department of Community Affairs |
| 321 |
under this section are intended to supplement
other funding |
| 322 |
sources of the Department of Community
Affairs and may not |
| 323 |
supplant other funding sources of the
Department of Community |
| 324 |
Affairs. |
| 325 |
(7) On
January 1st of each year, the Department of |
| 326 |
Community Affairs shall provide a full report
and accounting of |
| 327 |
activities under this section and an
evaluation of such |
| 328 |
activities to the Speaker of the House of
Representatives, the |
| 329 |
President of the Senate, and the Majority and
Minority Leaders |
| 330 |
of the House of Representatives and the
Senate. |
| 331 |
(8) This
section is repealed June 30, 2011. |
| 332 |
Section 8. Subsection
(1) of section 408.40, Florida |
| 333 |
Statutes, is amended to read: |
| 334 |
408.40 Public
Counsel.-- |
| 335 |
(1) Notwithstanding
any other provisions of this chapter, |
| 336 |
the Public Counsel shall represent the public
in any proceeding |
| 337 |
before the agency or its advisory panels in
any administrative |
| 338 |
hearing conducted pursuant to chapter 120 or
before any other |
| 339 |
state and federal agencies and courts in any
issue before the |
| 340 |
agency, any court, or any agency. With
respect to any such |
| 341 |
proceeding, the Public Counsel is subject to
the provisions of |
| 342 |
and may use the powers granted to him or her
by ss. 11.402- |
| 343 |
11.406 ss.
350.061-350.0614. |
| 344 |
Section 9. Paragraph
(b) of subsection (3) of section |
| 345 |
624.319, Florida Statutes, is amended to
read: |
| 346 |
624.319 Examination
and investigation reports.-- |
| 347 |
(3) |
| 348 |
(b) Workpapers
and other information held by the |
| 349 |
department or office, and workpapers and
other information |
| 350 |
received from another governmental entity or
the National |
| 351 |
Association of Insurance Commissioners, for
the department's or |
| 352 |
office's use in the performance of its
examination or |
| 353 |
investigation duties pursuant to this section
and ss. 624.316, |
| 354 |
624.3161, 624.317, and 624.318 are
confidential and exempt from |
| 355 |
the provisions of s. 119.07(1) and s. 24(a),
Art. I of the State |
| 356 |
Constitution. This exemption applies to
workpapers and other |
| 357 |
information held by the department or office
before, on, or |
| 358 |
after the effective date of this exemption.
Such confidential |
| 359 |
and exempt information may be disclosed to
another governmental |
| 360 |
entity, if disclosure is necessary for the
receiving entity to |
| 361 |
perform its duties and responsibilities, and
may be disclosed to |
| 362 |
the National Association of Insurance
Commissioners. The Public |
| 363 |
Counsel shall have access
to such confidential and exempt |
| 364 |
information pertaining to
residential property insurance at any |
| 365 |
time. The
receiving governmental entity or the association must |
| 366 |
maintain the confidential and exempt status
of the information. |
| 367 |
The information made confidential and exempt
by this paragraph |
| 368 |
may be used in a criminal, civil, or
administrative proceeding |
| 369 |
so long as the confidential and exempt status
of such |
| 370 |
information is maintained. This paragraph is
subject to the Open |
| 371 |
Government Sunset Review Act of 1995 in
accordance with s. |
| 372 |
119.15 and shall stand repealed on October 2,
2007, unless |
| 373 |
reviewed and saved from repeal through
reenactment by the |
| 374 |
Legislature. |
| 375 |
Section 10. Effective
upon this act becoming a law, |
| 376 |
subsection (6) of section 627.062, Florida
Statutes, is amended, |
| 377 |
and subsections (7) and (8) of said section
are renumbered as |
| 378 |
subsections (6) and (7), respectively, to
read: |
| 379 |
627.062 Rate
standards.-- |
| 380 |
(6)(a) After
any action with respect to a rate filing that |
| 381 |
constitutes agency action
for purposes of the Administrative |
| 382 |
Procedure Act, except for
a rate filing for medical malpractice, |
| 383 |
an insurer may, in lieu of
demanding a hearing under s. 120.57, |
| 384 |
require arbitration of the
rate filing. Arbitration shall be |
| 385 |
conducted by a board of
arbitrators consisting of an arbitrator |
| 386 |
selected by the office, an
arbitrator selected by the insurer, |
| 387 |
and an arbitrator selected
jointly by the other two arbitrators. |
| 388 |
Each arbitrator must be
certified by the American Arbitration |
| 389 |
Association. A decision is
valid only upon the affirmative vote |
| 390 |
of at least two of the
arbitrators. No arbitrator may be an |
| 391 |
employee of any insurance
regulator or regulatory body or of any |
| 392 |
insurer, regardless of
whether or not the employing insurer does |
| 393 |
business in this state.
The office and the insurer must treat |
| 394 |
the decision of the
arbitrators as the final approval of a rate |
| 395 |
filing. Costs of
arbitration shall be paid by the insurer. |
| 396 |
(b) Arbitration
under this subsection shall be conducted |
| 397 |
pursuant to the procedures
specified in ss. 682.06-682.10. |
| 398 |
Either party may apply to
the circuit court to vacate or modify |
| 399 |
the decision pursuant to
s. 682.13 or s. 682.14. The commission |
| 400 |
shall adopt rules for
arbitration under this subsection, which |
| 401 |
rules may not be
inconsistent with the arbitration rules of the |
| 402 |
American Arbitration
Association as of January 1, 1996. |
| 403 |
(c) Upon
initiation of the arbitration process, the |
| 404 |
insurer waives all rights
to challenge the action of the office |
| 405 |
under the Administrative
Procedure Act or any other provision of |
| 406 |
law; however, such rights
are restored to the insurer if the |
| 407 |
arbitrators fail to render
a decision within 90 days after |
| 408 |
initiation of the
arbitration process. |
| 409 |
Section 11. Subsection
(11) is added to section 627.0629, |
| 410 |
Florida Statutes, to read: |
| 411 |
627.0629 Residential
property insurance; rate filings; |
| 412 |
underwriting rules.-- |
| 413 |
(11) The
underwriting rules for homeowners' insurance not |
| 414 |
contained in rating
manuals shall be filed with the office. All |
| 415 |
underwriting rules for
homeowners' insurance must be approved by |
| 416 |
the office and be
reasonable and comply with applicable |
| 417 |
provisions of law. The
filing and form-approval provisions under |
| 418 |
s. 627.410 apply to the
filing and approval of underwriting |
| 419 |
rules for homeowners'
insurance. |
| 420 |
Section 12. Subsection
(13) of section 627.0651, Florida |
| 421 |
Statutes, is amended to read: |
| 422 |
627.0651 Making
and use of rates for motor vehicle |
| 423 |
insurance.-- |
| 424 |
(13)(a) Underwriting
rules not contained in rating manuals |
| 425 |
shall be filed for private passenger
automobile insurance and |
| 426 |
homeowners' insurance. |
| 427 |
(b) The
submission of rates, rating schedules, and rating |
| 428 |
manuals to the office by a licensed rating
organization of which |
| 429 |
an insurer is a member or subscriber will be
sufficient |
| 430 |
compliance with this subsection for any
insurer maintaining |
| 431 |
membership or subscribership in such
organization, to the extent |
| 432 |
that the insurer uses the rates, rating
schedules, and rating |
| 433 |
manuals of such organization. All such
information shall be |
| 434 |
available for public inspection, upon receipt
by the office, |
| 435 |
during usual business hours. |
| 436 |
Section 13. Paragraph
(b) of subsection (2) of section |
| 437 |
627.351, Florida Statutes, is amended to
read: |
| 438 |
627.351 Insurance
risk apportionment plans.-- |
| 439 |
(2) WINDSTORM
INSURANCE RISK APPORTIONMENT.-- |
| 440 |
(b) The
department shall require all insurers holding a |
| 441 |
certificate of authority to transact property
insurance on a |
| 442 |
direct basis in this state, other than joint
underwriting |
| 443 |
associations and other entities formed
pursuant to this section, |
| 444 |
to provide windstorm coverage to applicants
from areas |
| 445 |
determined to be eligible pursuant to
paragraph (c) who in good |
| 446 |
faith are entitled to, but are unable to
procure, such coverage |
| 447 |
through ordinary means; or it shall adopt a
reasonable plan or |
| 448 |
plans for the equitable apportionment or
sharing among such |
| 449 |
insurers of windstorm coverage, which may
include formation of |
| 450 |
an association for this purpose. As used in
this subsection, the |
| 451 |
term "property insurance" means
insurance on real or personal |
| 452 |
property, as defined in s. 624.604, including
insurance for |
| 453 |
fire, industrial fire, allied lines,
farmowners multiperil, |
| 454 |
homeowners' multiperil, commercial multiperil,
and mobile homes, |
| 455 |
and including liability coverages on all such
insurance, but |
| 456 |
excluding inland marine as defined in s.
624.607(3) and |
| 457 |
excluding vehicle insurance as defined in s.
624.605(1)(a) other |
| 458 |
than insurance on mobile homes used as
permanent dwellings. The |
| 459 |
department shall adopt rules that provide a
formula for the |
| 460 |
recovery and repayment of any deferred
assessments. |
| 461 |
1. For
the purpose of this section, properties eligible |
| 462 |
for such windstorm coverage are defined as
dwellings, buildings, |
| 463 |
and other structures, including mobile homes
which are used as |
| 464 |
dwellings and which are tied down in
compliance with mobile home |
| 465 |
tie-down requirements prescribed by the
Department of Highway |
| 466 |
Safety and Motor Vehicles pursuant to s.
320.8325, and the |
| 467 |
contents of all such properties. An applicant
or policyholder is |
| 468 |
eligible for coverage only if an offer of
coverage cannot be |
| 469 |
obtained by or for the applicant or
policyholder from an |
| 470 |
admitted insurer at approved rates. |
| 471 |
2.a.(I) All
insurers required to be members of such |
| 472 |
association shall participate in its
writings, expenses, and |
| 473 |
losses. Surplus of the association shall be
retained for the |
| 474 |
payment of claims and shall not be
distributed to the member |
| 475 |
insurers. Such participation by member
insurers shall be in the |
| 476 |
proportion that the net direct premiums of
each member insurer |
| 477 |
written for property insurance in this state
during the |
| 478 |
preceding calendar year bear to the aggregate
net direct |
| 479 |
premiums for property insurance of all member
insurers, as |
| 480 |
reduced by any credits for voluntary
writings, in this state |
| 481 |
during the preceding calendar year. For the
purposes of this |
| 482 |
subsection, the term "net direct
premiums" means direct written |
| 483 |
premiums for property insurance, reduced by
premium for |
| 484 |
liability coverage and for the following if
included in allied |
| 485 |
lines: rain and hail on growing crops;
livestock; association |
| 486 |
direct premiums booked; National Flood
Insurance Program direct |
| 487 |
premiums; and similar deductions specifically
authorized by the |
| 488 |
plan of operation and approved by the
department. A member's |
| 489 |
participation shall begin on the first day of
the calendar year |
| 490 |
following the year in which it is issued a
certificate of |
| 491 |
authority to transact property insurance in
the state and shall |
| 492 |
terminate 1 year after the end of the
calendar year during which |
| 493 |
it no longer holds a certificate of authority
to transact |
| 494 |
property insurance in the state. The
commissioner, after review |
| 495 |
of annual statements, other reports, and any
other statistics |
| 496 |
that the commissioner deems necessary, shall
certify to the |
| 497 |
association the aggregate direct premiums
written for property |
| 498 |
insurance in this state by all member
insurers. |
| 499 |
(II) Effective
July 1, 2002, the association shall operate |
| 500 |
subject to the supervision and approval of a
board of governors |
| 501 |
who are the same individuals that have been
appointed by the |
| 502 |
Treasurer to serve on the board of governors
of the Citizens |
| 503 |
Property Insurance Corporation. |
| 504 |
(III) The
plan of operation shall provide a formula |
| 505 |
whereby a company voluntarily providing
windstorm coverage in |
| 506 |
affected areas will be relieved wholly or
partially from |
| 507 |
apportionment of a regular assessment
pursuant to sub-sub- |
| 508 |
subparagraph d.(I) or sub-sub-subparagraph
d.(II). |
| 509 |
(IV) A
company which is a member of a group of companies |
| 510 |
under common management may elect to have its
credits applied on |
| 511 |
a group basis, and any company or group may
elect to have its |
| 512 |
credits applied to any other company or
group. |
| 513 |
(V) There
shall be no credits or relief from apportionment |
| 514 |
to a company for emergency assessments
collected from its |
| 515 |
policyholders under sub-sub-subparagraph
d.(III). |
| 516 |
(VI) The
plan of operation may also provide for the award |
| 517 |
of credits, for a period not to exceed 3
years, from a regular |
| 518 |
assessment pursuant to sub-sub-subparagraph
d.(I) or sub-sub- |
| 519 |
subparagraph d.(II) as an incentive for
taking policies out of |
| 520 |
the Residential Property and Casualty Joint
Underwriting |
| 521 |
Association. In order to qualify for the
exemption under this |
| 522 |
sub-sub-subparagraph, the take-out plan must
provide that at |
| 523 |
least 40 percent of the policies removed from
the Residential |
| 524 |
Property and Casualty Joint Underwriting
Association cover risks |
| 525 |
located in Dade, Broward, and Palm Beach
Counties or at least 30 |
| 526 |
percent of the policies so removed cover
risks located in Dade, |
| 527 |
Broward, and Palm Beach Counties and an
additional 50 percent of |
| 528 |
the policies so removed cover risks located
in other coastal |
| 529 |
counties, and must also provide that no more
than 15 percent of |
| 530 |
the policies so removed may exclude windstorm
coverage. With the |
| 531 |
approval of the department, the association
may waive these |
| 532 |
geographic criteria for a take-out plan that
removes at least |
| 533 |
the lesser of 100,000 Residential Property
and Casualty Joint |
| 534 |
Underwriting Association policies or 15
percent of the total |
| 535 |
number of Residential Property and Casualty
Joint Underwriting |
| 536 |
Association policies, provided the governing
board of the |
| 537 |
Residential Property and Casualty Joint
Underwriting Association |
| 538 |
certifies that the take-out plan will
materially reduce the |
| 539 |
Residential Property and Casualty Joint
Underwriting |
| 540 |
Association's 100-year probable maximum loss
from hurricanes. |
| 541 |
With the approval of the department, the
board may extend such |
| 542 |
credits for an additional year if the insurer
guarantees an |
| 543 |
additional year of renewability for all
policies removed from |
| 544 |
the Residential Property and Casualty Joint
Underwriting |
| 545 |
Association, or for 2 additional years if the
insurer guarantees |
| 546 |
2 additional years of renewability for all
policies removed from |
| 547 |
the Residential Property and Casualty Joint
Underwriting |
| 548 |
Association. |
| 549 |
b. Assessments
to pay deficits in the association under |
| 550 |
this subparagraph shall be included as an
appropriate factor in |
| 551 |
the making of rates as provided in s.
627.3512. |
| 552 |
c. The
Legislature finds that the potential for unlimited |
| 553 |
deficit assessments under this subparagraph
may induce insurers |
| 554 |
to attempt to reduce their writings in the
voluntary market, and |
| 555 |
that such actions would worsen the
availability problems that |
| 556 |
the association was created to remedy. It is
the intent of the |
| 557 |
Legislature that insurers remain fully
responsible for paying |
| 558 |
regular assessments and collecting emergency
assessments for any |
| 559 |
deficits of the association; however, it is
also the intent of |
| 560 |
the Legislature to provide a means by which
assessment |
| 561 |
liabilities may be amortized over a period of
years. |
| 562 |
d.(I) When
the deficit incurred in a particular calendar |
| 563 |
year is 10 percent or less of the aggregate
statewide direct |
| 564 |
written premium for property insurance for
the prior calendar |
| 565 |
year for all member insurers, the association
shall levy an |
| 566 |
assessment on member insurers in an amount
equal to the deficit. |
| 567 |
(II) When
the deficit incurred in a particular calendar |
| 568 |
year exceeds 10 percent of the aggregate
statewide direct |
| 569 |
written premium for property insurance for
the prior calendar |
| 570 |
year for all member insurers, the association
shall levy an |
| 571 |
assessment on member insurers in an amount
equal to the greater |
| 572 |
of 10 percent of the deficit or 10 percent of
the aggregate |
| 573 |
statewide direct written premium for property
insurance for the |
| 574 |
prior calendar year for member insurers. Any
remaining deficit |
| 575 |
shall be recovered through emergency
assessments under sub-sub- |
| 576 |
subparagraph (III). |
| 577 |
(III) Upon
a determination by the board of directors that |
| 578 |
a deficit exceeds the amount that will be
recovered through |
| 579 |
regular assessments on member insurers,
pursuant to sub-sub- |
| 580 |
subparagraph (I) or sub-sub-subparagraph
(II), the board shall |
| 581 |
levy, after verification by the department,
emergency |
| 582 |
assessments to be collected by member
insurers and by |
| 583 |
underwriting associations created pursuant to
this section which |
| 584 |
write property insurance, upon issuance or
renewal of property |
| 585 |
insurance policies other than National Flood
Insurance policies |
| 586 |
in the year or years following levy of the
regular assessments. |
| 587 |
The amount of the emergency assessment
collected in a particular |
| 588 |
year shall be a uniform percentage of that
year's direct written |
| 589 |
premium for property insurance for all member
insurers and |
| 590 |
underwriting associations, excluding National
Flood Insurance |
| 591 |
policy premiums, as annually determined by
the board and |
| 592 |
verified by the department. The department
shall verify the |
| 593 |
arithmetic calculations involved in the
board's determination |
| 594 |
within 30 days after receipt of the
information on which the |
| 595 |
determination was based. Notwithstanding any
other provision of |
| 596 |
law, each member insurer and each
underwriting association |
| 597 |
created pursuant to this section shall
collect emergency |
| 598 |
assessments from its policyholders without
such obligation being |
| 599 |
affected by any credit, limitation,
exemption, or deferment. The |
| 600 |
emergency assessments so collected shall be
transferred directly |
| 601 |
to the association on a periodic basis as
determined by the |
| 602 |
association. The aggregate amount of
emergency assessments |
| 603 |
levied under this sub-sub-subparagraph in any
calendar year may |
| 604 |
not exceed the greater of 10 percent of the
amount needed to |
| 605 |
cover the original deficit, plus interest,
fees, commissions, |
| 606 |
required reserves, and other costs associated
with financing of |
| 607 |
the original deficit, or 10 percent of the
aggregate statewide |
| 608 |
direct written premium for property insurance
written by member |
| 609 |
insurers and underwriting associations for
the prior year, plus |
| 610 |
interest, fees, commissions, required
reserves, and other costs |
| 611 |
associated with financing the original
deficit. The board may |
| 612 |
pledge the proceeds of the emergency
assessments under this sub- |
| 613 |
sub-subparagraph as the source of revenue for
bonds, to retire |
| 614 |
any other debt incurred as a result of the
deficit or events |
| 615 |
giving rise to the deficit, or in any other
way that the board |
| 616 |
determines will efficiently recover the
deficit. The emergency |
| 617 |
assessments under this sub-sub-subparagraph
shall continue as |
| 618 |
long as any bonds issued or other
indebtedness incurred with |
| 619 |
respect to a deficit for which the assessment
was imposed remain |
| 620 |
outstanding, unless adequate provision has
been made for the |
| 621 |
payment of such bonds or other indebtedness
pursuant to the |
| 622 |
document governing such bonds or other
indebtedness. Emergency |
| 623 |
assessments collected under this
sub-sub-subparagraph are not |
| 624 |
part of an insurer's rates, are not premium,
and are not subject |
| 625 |
to premium tax, fees, or commissions;
however, failure to pay |
| 626 |
the emergency assessment shall be treated as
failure to pay |
| 627 |
premium. |
| 628 |
(IV) Each
member insurer's share of the total regular |
| 629 |
assessments under sub-sub-subparagraph (I) or
sub-sub- |
| 630 |
subparagraph (II) shall be in the proportion
that the insurer's |
| 631 |
net direct premium for property insurance in
this state, for the |
| 632 |
year preceding the assessment bears to the
aggregate statewide |
| 633 |
net direct premium for property insurance of
all member |
| 634 |
insurers, as reduced by any credits for
voluntary writings for |
| 635 |
that year. |
| 636 |
(V) If
regular deficit assessments are made under sub-sub- |
| 637 |
subparagraph (I) or sub-sub-subparagraph
(II), or by the |
| 638 |
Residential Property and Casualty Joint
Underwriting Association |
| 639 |
under sub-subparagraph (6)(b)3.a. or
sub-subparagraph |
| 640 |
(6)(b)3.b., the association shall levy upon
the association's |
| 641 |
policyholders, as part of its next rate
filing, or by a separate |
| 642 |
rate filing solely for this purpose, a market
equalization |
| 643 |
surcharge in a percentage equal to the total
amount of such |
| 644 |
regular assessments divided by the aggregate
statewide direct |
| 645 |
written premium for property insurance for
member insurers for |
| 646 |
the prior calendar year. Market equalization
surcharges under |
| 647 |
this sub-sub-subparagraph are not considered
premium and are not |
| 648 |
subject to commissions, fees, or premium
taxes; however, failure |
| 649 |
to pay a market equalization surcharge shall
be treated as |
| 650 |
failure to pay premium. |
| 651 |
e. The
governing body of any unit of local government, any |
| 652 |
residents of which are insured under the
plan, may issue bonds |
| 653 |
as defined in s. 125.013 or s. 166.101 to
fund an assistance |
| 654 |
program, in conjunction with the association,
for the purpose of |
| 655 |
defraying deficits of the association. In
order to avoid |
| 656 |
needless and indiscriminate proliferation,
duplication, and |
| 657 |
fragmentation of such assistance programs,
any unit of local |
| 658 |
government, any residents of which are
insured by the |
| 659 |
association, may provide for the payment of
losses, regardless |
| 660 |
of whether or not the losses occurred within
or outside of the |
| 661 |
territorial jurisdiction of the local
government. Revenue bonds |
| 662 |
may not be issued until validated pursuant to
chapter 75, unless |
| 663 |
a state of emergency is declared by executive
order or |
| 664 |
proclamation of the Governor pursuant to s.
252.36 making such |
| 665 |
findings as are necessary to determine that
it is in the best |
| 666 |
interests of, and necessary for, the
protection of the public |
| 667 |
health, safety, and general welfare of
residents of this state |
| 668 |
and the protection and preservation of the
economic stability of |
| 669 |
insurers operating in this state, and
declaring it an essential |
| 670 |
public purpose to permit certain
municipalities or counties to |
| 671 |
issue bonds as will provide relief to
claimants and |
| 672 |
policyholders of the association and insurers
responsible for |
| 673 |
apportionment of plan losses. Any such unit
of local government |
| 674 |
may enter into such contracts with the
association and with any |
| 675 |
other entity created pursuant to this
subsection as are |
| 676 |
necessary to carry out this paragraph. Any
bonds issued under |
| 677 |
this sub-subparagraph shall be payable from
and secured by |
| 678 |
moneys received by the association from
assessments under this |
| 679 |
subparagraph, and assigned and pledged to or
on behalf of the |
| 680 |
unit of local government for the benefit of
the holders of such |
| 681 |
bonds. The funds, credit, property, and
taxing power of the |
| 682 |
state or of the unit of local government
shall not be pledged |
| 683 |
for the payment of such bonds. If any of the
bonds remain unsold |
| 684 |
60 days after issuance, the department shall
require all |
| 685 |
insurers subject to assessment to purchase
the bonds, which |
| 686 |
shall be treated as admitted assets; each
insurer shall be |
| 687 |
required to purchase that percentage of the
unsold portion of |
| 688 |
the bond issue that equals the insurer's
relative share of |
| 689 |
assessment liability under this subsection.
An insurer shall not |
| 690 |
be required to purchase the bonds to the
extent that the |
| 691 |
department determines that the purchase would
endanger or impair |
| 692 |
the solvency of the insurer. The authority
granted by this sub- |
| 693 |
subparagraph is additional to any bonding
authority granted by |
| 694 |
subparagraph 6. |
| 695 |
3. The
plan shall also provide that any member with a |
| 696 |
surplus as to policyholders of $20 million or
less writing 25 |
| 697 |
percent or more of its total countrywide
property insurance |
| 698 |
premiums in this state may petition the
department, within the |
| 699 |
first 90 days of each calendar year, to
qualify as a limited |
| 700 |
apportionment company. The apportionment of
such a member |
| 701 |
company in any calendar year for which it is
qualified shall not |
| 702 |
exceed its gross participation, which shall
not be affected by |
| 703 |
the formula for voluntary writings. In no
event shall a limited |
| 704 |
apportionment company be required to
participate in any |
| 705 |
apportionment of losses pursuant to
sub-sub-subparagraph 2.d.(I) |
| 706 |
or sub-sub-subparagraph 2.d.(II) in the
aggregate which exceeds |
| 707 |
$50 million after payment of available plan
funds in any |
| 708 |
calendar year. However, a limited
apportionment company shall |
| 709 |
collect from its policyholders any emergency
assessment imposed |
| 710 |
under sub-sub-subparagraph 2.d.(III). The
plan shall provide |
| 711 |
that, if the department determines that any
regular assessment |
| 712 |
will result in an impairment of the surplus
of a limited |
| 713 |
apportionment company, the department may
direct that all or |
| 714 |
part of such assessment be deferred. However,
there shall be no |
| 715 |
limitation or deferment of an emergency
assessment to be |
| 716 |
collected from policyholders under
sub-sub-subparagraph |
| 717 |
2.d.(III). |
| 718 |
4. The
plan shall provide for the deferment, in whole or |
| 719 |
in part, of a regular assessment of a member
insurer under sub- |
| 720 |
sub-subparagraph 2.d.(I) or
sub-sub-subparagraph 2.d.(II), but |
| 721 |
not for an emergency assessment collected
from policyholders |
| 722 |
under sub-sub-subparagraph 2.d.(III), if, in
the opinion of the |
| 723 |
commissioner, payment of such regular
assessment would endanger |
| 724 |
or impair the solvency of the member insurer.
In the event a |
| 725 |
regular assessment against a member insurer
is deferred in whole |
| 726 |
or in part, the amount by which such
assessment is deferred may |
| 727 |
be assessed against the other member insurers
in a manner |
| 728 |
consistent with the basis for assessments set
forth in sub-sub- |
| 729 |
subparagraph 2.d.(I) or sub-sub-subparagraph
2.d.(II). |
| 730 |
5.a. The
plan of operation may include deductibles and |
| 731 |
rules for classification of risks and rate
modifications |
| 732 |
consistent with the objective of providing
and maintaining funds |
| 733 |
sufficient to pay catastrophe losses. |
| 734 |
b. The
association may require arbitration of a rate |
| 735 |
filing under s.
627.062(6). It is the intent of the Legislature |
| 736 |
that the rates for coverage provided by the
association be |
| 737 |
actuarially sound and not competitive with
approved rates |
| 738 |
charged in the admitted voluntary market such
that the |
| 739 |
association functions as a residual market
mechanism to provide |
| 740 |
insurance only when the insurance cannot be
procured in the |
| 741 |
voluntary market. The plan of operation shall
provide a |
| 742 |
mechanism to assure that, beginning no later
than January 1, |
| 743 |
1999, the rates charged by the association
for each line of |
| 744 |
business are reflective of approved rates in
the voluntary |
| 745 |
market for hurricane coverage for each line
of business in the |
| 746 |
various areas eligible for association
coverage. |
| 747 |
c. The
association shall provide for windstorm coverage on |
| 748 |
residential properties in limits up to $10
million for |
| 749 |
commercial lines residential risks and up to
$1 million for |
| 750 |
personal lines residential risks. If coverage
with the |
| 751 |
association is sought for a residential risk
valued in excess of |
| 752 |
these limits, coverage shall be available to
the risk up to the |
| 753 |
replacement cost or actual cash value of the
property, at the |
| 754 |
option of the insured, if coverage for the
risk cannot be |
| 755 |
located in the authorized market. The
association must accept a |
| 756 |
commercial lines residential risk with limits
above $10 million |
| 757 |
or a personal lines residential risk with
limits above $1 |
| 758 |
million if coverage is not available in the
authorized market. |
| 759 |
The association may write coverage above the
limits specified in |
| 760 |
this subparagraph with or without facultative
or other |
| 761 |
reinsurance coverage, as the association
determines appropriate. |
| 762 |
d. The
plan of operation must provide objective criteria |
| 763 |
and procedures, approved by the department,
to be uniformly |
| 764 |
applied for all applicants in determining
whether an individual |
| 765 |
risk is so hazardous as to be uninsurable. In
making this |
| 766 |
determination and in establishing the
criteria and procedures, |
| 767 |
the following shall be considered: |
| 768 |
(I) Whether
the likelihood of a loss for the individual |
| 769 |
risk is substantially higher than for other
risks of the same |
| 770 |
class; and |
| 771 |
(II) Whether
the uncertainty associated with the |
| 772 |
individual risk is such that an appropriate
premium cannot be |
| 773 |
determined. |
| 774 |
|
| 775 |
The acceptance or rejection of a risk by the
association |
| 776 |
pursuant to such criteria and procedures must
be construed as |
| 777 |
the private placement of insurance, and the
provisions of |
| 778 |
chapter 120 do not apply. |
| 779 |
e. If
the risk accepts an offer of coverage through the |
| 780 |
market assistance program or through a
mechanism established by |
| 781 |
the association, either before the policy is
issued by the |
| 782 |
association or during the first 30 days of
coverage by the |
| 783 |
association, and the producing agent who
submitted the |
| 784 |
application to the association is not
currently appointed by the |
| 785 |
insurer, the insurer shall: |
| 786 |
(I) Pay
to the producing agent of record of the policy, |
| 787 |
for the first year, an amount that is the
greater of the |
| 788 |
insurer's usual and customary commission for
the type of policy |
| 789 |
written or a fee equal to the usual and
customary commission of |
| 790 |
the association; or |
| 791 |
(II) Offer
to allow the producing agent of record of the |
| 792 |
policy to continue servicing the policy for a
period of not less |
| 793 |
than 1 year and offer to pay the agent the
greater of the |
| 794 |
insurer's or the association's usual and
customary commission |
| 795 |
for the type of policy written. |
| 796 |
|
| 797 |
If the producing agent is unwilling or unable
to accept |
| 798 |
appointment, the new insurer shall pay the
agent in accordance |
| 799 |
with sub-sub-subparagraph (I). Subject to the
provisions of s. |
| 800 |
627.3517, the policies issued by the
association must provide |
| 801 |
that if the association obtains an offer from
an authorized |
| 802 |
insurer to cover the risk at its approved
rates under either a |
| 803 |
standard policy including wind coverage or,
if consistent with |
| 804 |
the insurer's underwriting rules as filed
with the department, a |
| 805 |
basic policy including wind coverage, the
risk is no longer |
| 806 |
eligible for coverage through the
association. Upon termination |
| 807 |
of eligibility, the association shall provide
written notice to |
| 808 |
the policyholder and agent of record stating
that the |
| 809 |
association policy must be canceled as of 60
days after the date |
| 810 |
of the notice because of the offer of
coverage from an |
| 811 |
authorized insurer. Other provisions of the
insurance code |
| 812 |
relating to cancellation and notice of
cancellation do not apply |
| 813 |
to actions under this sub-subparagraph. |
| 814 |
f. When
the association enters into a contractual |
| 815 |
agreement for a take-out plan, the producing
agent of record of |
| 816 |
the association policy is entitled to retain
any unearned |
| 817 |
commission on the policy, and the insurer
shall: |
| 818 |
(I) Pay
to the producing agent of record of the |
| 819 |
association policy, for the first year, an
amount that is the |
| 820 |
greater of the insurer's usual and customary
commission for the |
| 821 |
type of policy written or a fee equal to the
usual and customary |
| 822 |
commission of the association; or |
| 823 |
(II) Offer
to allow the producing agent of record of the |
| 824 |
association policy to continue servicing the
policy for a period |
| 825 |
of not less than 1 year and offer to pay the
agent the greater |
| 826 |
of the insurer's or the association's usual
and customary |
| 827 |
commission for the type of policy written. |
| 828 |
|
| 829 |
If the producing agent is unwilling or unable
to accept |
| 830 |
appointment, the new insurer shall pay the
agent in accordance |
| 831 |
with sub-sub-subparagraph (I). |
| 832 |
6.a. The
plan of operation may authorize the formation of |
| 833 |
a private nonprofit corporation, a private
nonprofit |
| 834 |
unincorporated association, a partnership, a
trust, a limited |
| 835 |
liability company, or a nonprofit mutual
company which may be |
| 836 |
empowered, among other things, to borrow
money by issuing bonds |
| 837 |
or by incurring other indebtedness and to
accumulate reserves or |
| 838 |
funds to be used for the payment of insured
catastrophe losses. |
| 839 |
The plan may authorize all actions necessary
to facilitate the |
| 840 |
issuance of bonds, including the pledging of
assessments or |
| 841 |
other revenues. |
| 842 |
b. Any
entity created under this subsection, or any entity |
| 843 |
formed for the purposes of this subsection,
may sue and be sued, |
| 844 |
may borrow money; issue bonds, notes, or debt
instruments; |
| 845 |
pledge or sell assessments, market
equalization surcharges and |
| 846 |
other surcharges, rights, premiums,
contractual rights, |
| 847 |
projected recoveries from the Florida
Hurricane Catastrophe |
| 848 |
Fund, other reinsurance recoverables, and
other assets as |
| 849 |
security for such bonds, notes, or debt
instruments; enter into |
| 850 |
any contracts or agreements necessary or
proper to accomplish |
| 851 |
such borrowings; and take other actions
necessary to carry out |
| 852 |
the purposes of this subsection. The
association may issue bonds |
| 853 |
or incur other indebtedness, or have bonds
issued on its behalf |
| 854 |
by a unit of local government pursuant to
subparagraph (6)(g)2., |
| 855 |
in the absence of a hurricane or other
weather-related event, |
| 856 |
upon a determination by the association
subject to approval by |
| 857 |
the department that such action would enable
it to efficiently |
| 858 |
meet the financial obligations of the
association and that such |
| 859 |
financings are reasonably necessary to
effectuate the |
| 860 |
requirements of this subsection. Any such
entity may accumulate |
| 861 |
reserves and retain surpluses as of the end
of any association |
| 862 |
year to provide for the payment of losses
incurred by the |
| 863 |
association during that year or any future
year. The association |
| 864 |
shall incorporate and continue the plan of
operation and |
| 865 |
articles of agreement in effect on the
effective date of chapter |
| 866 |
76-96, Laws of Florida, to the extent that it
is not |
| 867 |
inconsistent with chapter 76-96, and as
subsequently modified |
| 868 |
consistent with chapter 76-96. The board of
directors and |
| 869 |
officers currently serving shall continue to
serve until their |
| 870 |
successors are duly qualified as provided
under the plan. The |
| 871 |
assets and obligations of the plan in effect
immediately prior |
| 872 |
to the effective date of chapter 76-96 shall
be construed to be |
| 873 |
the assets and obligations of the successor
plan created herein. |
| 874 |
c. In
recognition of s. 10, Art. I of the State |
| 875 |
Constitution, prohibiting the impairment of
obligations of |
| 876 |
contracts, it is the intent of the
Legislature that no action be |
| 877 |
taken whose purpose is to impair any bond
indenture or financing |
| 878 |
agreement or any revenue source committed by
contract to such |
| 879 |
bond or other indebtedness issued or incurred
by the association |
| 880 |
or any other entity created under this
subsection. |
| 881 |
7. On
such coverage, an agent's remuneration shall be that |
| 882 |
amount of money payable to the agent by the
terms of his or her |
| 883 |
contract with the company with which the
business is placed. |
| 884 |
However, no commission will be paid on that
portion of the |
| 885 |
premium which is in excess of the standard
premium of that |
| 886 |
company. |
| 887 |
8. Subject
to approval by the department, the association |
| 888 |
may establish different eligibility
requirements and operational |
| 889 |
procedures for any line or type of coverage
for any specified |
| 890 |
eligible area or portion of an eligible area
if the board |
| 891 |
determines that such changes to the
eligibility requirements and |
| 892 |
operational procedures are justified due to
the voluntary market |
| 893 |
being sufficiently stable and competitive in
such area or for |
| 894 |
such line or type of coverage and that
consumers who, in good |
| 895 |
faith, are unable to obtain insurance through
the voluntary |
| 896 |
market through ordinary methods would
continue to have access to |
| 897 |
coverage from the association. When coverage
is sought in |
| 898 |
connection with a real property transfer,
such requirements and |
| 899 |
procedures shall not provide for an effective
date of coverage |
| 900 |
later than the date of the closing of the
transfer as |
| 901 |
established by the transferor, the
transferee, and, if |
| 902 |
applicable, the lender. |
| 903 |
9. Notwithstanding
any other provision of law: |
| 904 |
a. The
pledge or sale of, the lien upon, and the security |
| 905 |
interest in any rights, revenues, or other
assets of the |
| 906 |
association created or purported to be
created pursuant to any |
| 907 |
financing documents to secure any bonds or
other indebtedness of |
| 908 |
the association shall be and remain valid and
enforceable, |
| 909 |
notwithstanding the commencement of and
during the continuation |
| 910 |
of, and after, any rehabilitation,
insolvency, liquidation, |
| 911 |
bankruptcy, receivership, conservatorship,
reorganization, or |
| 912 |
similar proceeding against the association
under the laws of |
| 913 |
this state or any other applicable laws. |
| 914 |
b. No
such proceeding shall relieve the association of its |
| 915 |
obligation, or otherwise affect its ability
to perform its |
| 916 |
obligation, to continue to collect, or levy
and collect, |
| 917 |
assessments, market equalization or other
surcharges, projected |
| 918 |
recoveries from the Florida Hurricane
Catastrophe Fund, |
| 919 |
reinsurance recoverables, or any other
rights, revenues, or |
| 920 |
other assets of the association pledged. |
| 921 |
c. Each
such pledge or sale of, lien upon, and security |
| 922 |
interest in, including the priority of such
pledge, lien, or |
| 923 |
security interest, any such assessments,
emergency assessments, |
| 924 |
market equalization or renewal surcharges,
projected recoveries |
| 925 |
from the Florida Hurricane Catastrophe Fund,
reinsurance |
| 926 |
recoverables, or other rights, revenues, or
other assets which |
| 927 |
are collected, or levied and collected, after
the commencement |
| 928 |
of and during the pendency of or after any
such proceeding shall |
| 929 |
continue unaffected by such proceeding. |
| 930 |
d. As
used in this subsection, the term "financing |
| 931 |
documents" means any agreement,
instrument, or other document |
| 932 |
now existing or hereafter created evidencing
any bonds or other |
| 933 |
indebtedness of the association or pursuant
to which any such |
| 934 |
bonds or other indebtedness has been or may
be issued and |
| 935 |
pursuant to which any rights, revenues, or
other assets of the |
| 936 |
association are pledged or sold to secure the
repayment of such |
| 937 |
bonds or indebtedness, together with the
payment of interest on |
| 938 |
such bonds or such indebtedness, or the
payment of any other |
| 939 |
obligation of the association related to such
bonds or |
| 940 |
indebtedness. |
| 941 |
e. Any
such pledge or sale of assessments, revenues, |
| 942 |
contract rights or other rights or assets of
the association |
| 943 |
shall constitute a lien and security
interest, or sale, as the |
| 944 |
case may be, that is immediately effective
and attaches to such |
| 945 |
assessments, revenues, contract, or other
rights or assets, |
| 946 |
whether or not imposed or collected at the
time the pledge or |
| 947 |
sale is made. Any such pledge or sale is
effective, valid, |
| 948 |
binding, and enforceable against the
association or other entity |
| 949 |
making such pledge or sale, and valid and
binding against and |
| 950 |
superior to any competing claims or
obligations owed to any |
| 951 |
other person or entity, including
policyholders in this state, |
| 952 |
asserting rights in any such assessments,
revenues, contract, or |
| 953 |
other rights or assets to the extent set
forth in and in |
| 954 |
accordance with the terms of the pledge or
sale contained in the |
| 955 |
applicable financing documents, whether or
not any such person |
| 956 |
or entity has notice of such pledge or sale
and without the need |
| 957 |
for any physical delivery, recordation,
filing, or other action. |
| 958 |
f. There
shall be no liability on the part of, and no |
| 959 |
cause of action of any nature shall arise
against, any member |
| 960 |
insurer or its agents or employees, agents or
employees of the |
| 961 |
association, members of the board of
directors of the |
| 962 |
association, or the department or its
representatives, for any |
| 963 |
action taken by them in the performance of
their duties or |
| 964 |
responsibilities under this subsection. Such
immunity does not |
| 965 |
apply to actions for breach of any contract
or agreement |
| 966 |
pertaining to insurance, or any willful tort. |
| 967 |
Section 14. Effective
upon this act becoming a law, |
| 968 |
subsection (7) is added to section 627.4133,
Florida Statutes, |
| 969 |
to read: |
| 970 |
627.4133 Notice
of cancellation, nonrenewal, or renewal |
| 971 |
premium.-- |
| 972 |
(7) An
insurer may not cancel or nonrenew a residential |
| 973 |
property insurance policy,
based on only one claim under the |
| 974 |
policy, or for any other
reason other than a lawful underwriting |
| 975 |
reason as filed with the
office, for a policyholder who has been |
| 976 |
continuously insured with
that insurer or with an insurer within |
| 977 |
the same insurance group
for 10 years or longer. |
| 978 |
Section 15. Subsection
(1) of section 627.4145, Florida |
| 979 |
Statutes, is amended to read: |
| 980 |
627.4145 Readable
language in insurance policies.-- |
| 981 |
(1) Every
policy shall be readable as required by this |
| 982 |
section. For the purposes of this section,
the term "policy" |
| 983 |
means a policy form or endorsement. A policy
is deemed readable |
| 984 |
if: |
| 985 |
(a) The
text achieves a minimum score of 50
45 on the |
| 986 |
Flesch reading ease test as computed in
subsection (5) or an |
| 987 |
equivalent score on any other test comparable
in result and |
| 988 |
approved by the office.; |
| 989 |
(b) It
uses layout and spacing which separate the |
| 990 |
paragraphs from each other and from the
border of the paper.; |
| 991 |
(c) It
has section titles that are captioned in boldfaced |
| 992 |
type or that otherwise stand out
significantly from the text.; |
| 993 |
(d) It
avoids the use of unnecessarily long, complicated, |
| 994 |
or obscure words, sentences, paragraphs, or
constructions.; |
| 995 |
(e) The
style, arrangement, and overall appearance of the |
| 996 |
policy give no undue prominence to any
portion of the text of |
| 997 |
the policy or to any endorsements or riders.;
and |
| 998 |
(f) It
contains a table of contents or an index of the |
| 999 |
principal sections of the policy, if the
policy has more than |
| 1000 |
3,000 words or more than three pages. |
| 1001 |
Section 16. Section
627.41494, Florida Statutes, is |
| 1002 |
created to read: |
| 1003 |
627.41494 Consumer
participation in rate review.-- |
| 1004 |
(1) Upon
the filing of a proposed rate change for |
| 1005 |
residential property
insurance by an insurer under s. 627.062, |
| 1006 |
which filing would,
pursuant to standards determined by the |
| 1007 |
office, result in an
average statewide increase of 10 percent or |
| 1008 |
more as compared to the
rates in effect at that time or the |
| 1009 |
rates in effect 12 months
prior to the proposed effective date, |
| 1010 |
the insurer shall mail
notice of such filing to each of its |
| 1011 |
policyholders or members. |
| 1012 |
(2) The
rate filing shall be available for public |
| 1013 |
inspection. If any
policyholder or member requests the office |
| 1014 |
within 30 days after the
mailing of such notification pursuant |
| 1015 |
to subsection (1) to hold
a hearing, the office shall hold a |
| 1016 |
hearing within 30 days
after such request. Any consumer advocacy |
| 1017 |
group or the Public
Counsel under chapter 11 may participate in |
| 1018 |
such hearing, and the
commission may adopt rules governing such |
| 1019 |
participation. |
| 1020 |
(3) For
purposes of this section, the term "consumer |
| 1021 |
advocacy group" means
an organization with a membership of at |
| 1022 |
least 1,000 individuals,
the purpose of which is to represent |
| 1023 |
the best interests of the
public in matters relating, but not |
| 1024 |
limited, to insurance rate
filings before the office. The |
| 1025 |
consumer advocacy group
may: |
| 1026 |
(a) Appear
in any proceeding or action before the |
| 1027 |
department or office or
appear in any proceeding before the |
| 1028 |
Division of Administrative
Hearings relating to rate filings |
| 1029 |
subject to subsection (1). |
| 1030 |
(b) Have
access to and use of all files, records, and data |
| 1031 |
of the office relating to
such rate filings. |
| 1032 |
(c) Examine
such rate and form filings submitted to the |
| 1033 |
office. |
| 1034 |
(d) Recommend
to the office any position deemed by the |
| 1035 |
group to be in the best
interest of the public in matters |
| 1036 |
relating to such rate
filings. |
| 1037 |
|
| 1038 |
This subsection does not
limit the rights of a consumer advocacy |
| 1039 |
group to have access to
records of the office as otherwise |
| 1040 |
available pursuant to law. |
| 1041 |
(4) The
office shall order the insurer to pay the |
| 1042 |
reasonable costs of the
consumer advocacy group if the office |
| 1043 |
determines that the
consumer advocacy group made a relevant and |
| 1044 |
substantial contribution
to the final order on the rate filing. |
| 1045 |
In determining the
reasonable costs the insurer shall pay the |
| 1046 |
consumer advocacy group,
the office shall consider, among other |
| 1047 |
things, the time, labor,
fees, and expenses incurred by the |
| 1048 |
advocacy group. |
| 1049 |
Section 17. Effective
upon this act becoming a law, |
| 1050 |
subsection (3) and paragraph (b) of
subsection (7) of section |
| 1051 |
627.701, Florida Statutes, are amended to
read: |
| 1052 |
627.701 Liability
of insureds; coinsurance; deductibles.-- |
| 1053 |
(3)(a) A
policy of residential property insurance shall |
| 1054 |
include a deductible amount applicable to
hurricane or wind |
| 1055 |
losses no lower than $500 and no higher than 5
2 percent of the |
| 1056 |
policy dwelling limits with respect to
personal lines |
| 1057 |
residential risks, and no higher than 3
percent of the policy |
| 1058 |
limits with respect to commercial lines
residential risks; |
| 1059 |
however, if a risk was covered on August 24,
1992, under a |
| 1060 |
policy having a higher deductible than the
deductibles allowed |
| 1061 |
by this paragraph, a policy covering such
risk may include a |
| 1062 |
deductible no higher than the deductible in
effect on August 24, |
| 1063 |
1992. Notwithstanding the other provisions of
this paragraph, a |
| 1064 |
personal lines residential policy covering a
risk valued at |
| 1065 |
$50,000 or less may include a deductible
amount attributable to |
| 1066 |
hurricane or wind
losses no lower than $250, and a personal |
| 1067 |
lines residential policy covering a risk
valued at $100,000 or |
| 1068 |
more may include a deductible amount
attributable to hurricane |
| 1069 |
or wind losses
no higher than 5 percent of the policy limits |
| 1070 |
unless subject to a higher deductible on
August 24, 1992; |
| 1071 |
however, no maximum deductible is required
with respect to a |
| 1072 |
personal lines residential policy covering a
risk valued at more |
| 1073 |
than $500,000. An insurer may require a
higher deductible, |
| 1074 |
provided such deductible is the same as or
similar to a |
| 1075 |
deductible program lawfully in effect on June
14, 1995. In |
| 1076 |
addition to the deductible amounts authorized
by this paragraph, |
| 1077 |
an insurer may also offer policies with a
copayment provision |
| 1078 |
under which, after exhaustion of the
deductible, the |
| 1079 |
policyholder is responsible for 10 percent of
the next $10,000 |
| 1080 |
of insured hurricane or
wind losses. |
| 1081 |
(b)1. Except
as otherwise provided in this paragraph, |
| 1082 |
prior to issuing a personal lines residential
property insurance |
| 1083 |
policy on or after March
1, 2005 April 1, 1996,
or prior to the |
| 1084 |
first renewal of a residential property
insurance policy on or |
| 1085 |
after March 1, 2005
April 1, 1996, the insurer
must offer |
| 1086 |
alternative deductible amounts applicable to
hurricane or wind |
| 1087 |
losses equal to $500,
1 percent, and 2
percent, and 5 percent of |
| 1088 |
the policy dwelling limits, but
it need not offer a deductible |
| 1089 |
expressed as a
percentage when that percentage unless
the 2 |
| 1090 |
percent deductible
is less than $500. The written notice of the |
| 1091 |
offer shall specify the hurricane or
wind deductible to be |
| 1092 |
applied in the event that the applicant or
policyholder fails to |
| 1093 |
affirmatively choose a hurricane deductible.
The insurer must |
| 1094 |
provide such policyholder with notice of the
availability of the |
| 1095 |
deductible amounts specified in this
paragraph in a form |
| 1096 |
approved by the office in conjunction with
each renewal of the |
| 1097 |
policy. The failure to provide such notice
constitutes a |
| 1098 |
violation of this code but does not affect
the coverage provided |
| 1099 |
under the policy. |
| 1100 |
2. This
paragraph does not apply with respect to a |
| 1101 |
deductible program lawfully in effect on June
14, 1995, or to |
| 1102 |
any similar deductible program, if the
deductible program |
| 1103 |
requires a minimum deductible amount of no
less than 1 2 percent |
| 1104 |
of the policy limits. |
| 1105 |
3. With
respect to a policy covering a risk with dwelling |
| 1106 |
limits of at least
$100,000, but less than $250,000, the insurer |
| 1107 |
may, in lieu of offering a
policy with a $500 hurricane or wind |
| 1108 |
deductible as required by
subparagraph 1., offer a policy that |
| 1109 |
the insurer guarantees it
will not nonrenew for reasons of |
| 1110 |
reducing hurricane loss
for one renewal period and that contains |
| 1111 |
up to a 2 percent
hurricane or wind deductible as required by |
| 1112 |
subparagraph 1. |
| 1113 |
3.4. With
respect to a policy covering a risk with |
| 1114 |
dwelling limits of $250,000 or more, the
insurer need not offer |
| 1115 |
the $500 hurricane or
wind deductible as required by |
| 1116 |
subparagraph 1., but must, except as
otherwise provided in this |
| 1117 |
subsection, offer the 1 percent, 2
percent, and 5 percent |
| 1118 |
hurricane deductibles
or wind deductible as
required by |
| 1119 |
subparagraph 1. |
| 1120 |
(c) In
order to provide for the transition from wind |
| 1121 |
deductibles to hurricane
deductibles as required by this |
| 1122 |
subsection, an insurer is
required to provide wind deductibles |
| 1123 |
meeting the requirements
of this subsection until the effective |
| 1124 |
date of the insurer's
first rate filing made after January 1, |
| 1125 |
1997, and is thereafter
required to provide hurricane |
| 1126 |
deductibles meeting the
requirements of this subsection. |
| 1127 |
(7) |
| 1128 |
(b) Notwithstanding
the provisions of subsection (3), with |
| 1129 |
respect to mobile home policies,: |
| 1130 |
1. the
deductible for hurricane coverage may not exceed 10 |
| 1131 |
percent of the property value if the property
is not subject to |
| 1132 |
any liens and may not exceed 5 percent of the
property value if |
| 1133 |
the property is subject to any liens. |
| 1134 |
2. The
insurer need not make the offers required by |
| 1135 |
paragraph (3)(b). |
| 1136 |
Section
18. The sum of $50 million is appropriated for |
| 1137 |
fiscal year 2005-2006 on a
nonrecurring basis from the General |
| 1138 |
Revenue Fund to the
Department of Community Affairs in the |
| 1139 |
special appropriation
category "Residential Hurricane Mitigation |
| 1140 |
Low-Interest Loan
Program" for low-interest loans to qualified |
| 1141 |
owners of residences and
qualified owners of mobile homes to |
| 1142 |
finance efforts to improve
the wind resistance of residences to |
| 1143 |
prevent or reduce losses
or reduce the cost of rebuilding after |
| 1144 |
a disaster with a
requirement of repayment by the owner, as |
| 1145 |
provided in section 7.
These funds shall be subject to the |
| 1146 |
release provisions of
chapter 216, Florida Statutes. Up to 0.5 |
| 1147 |
percent of this
appropriation may be used by the department for |
| 1148 |
administration of the loan
program. |
| 1149 |
Section 19. Except
as otherwise expressly provided in this |
| 1150 |
act, this act shall take effect July 1, 2005. |