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A bill to be entitled |
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An act relating to hurricane preparedness and insurance; |
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amending s. 163.01, F.S.; correcting a cross-reference; |
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amending s. 215.555, F.S.; revising certain reimbursement |
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contract requirements; revising criteria, requirements, |
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and limitations on temporary emergency options for |
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additional coverage under the Florida Hurricane |
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Catastrophe Fund; amending s. 215.5595, F.S.; providing |
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eligibility of certain insurers for a surplus note; |
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providing an aggregate requirement; amending s. 624.407, |
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F.S.; revising an insurer criterion for capital funds |
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requirements for new insurers; amending s. 624.408, F.S.; |
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specifying an additional surplus to policyholder amount |
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requirement for certain insurers; amending s. 627.0613, |
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F.S.; limiting application of certain annual report card |
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preparation powers of the consumer advocate to personal |
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residential property insurers; amending s. 627.062, F.S.; |
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specifying application of certain "file and use" |
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requirements to residential property insurance only; |
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amending s. 627.0629, F.S.; requiring property insurers to |
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periodically reevaluate certain discounts, credits, rate |
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differentials, and deductible reductions and make certain |
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adjustments relating to mitigation measures; requiring |
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insurers to make rate filings for certain purposes; |
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amending s. 627.0655, F.S.; revising criteria for certain |
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inclusion of discounts in certain premiums; amending s. |
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627.351, F.S.; revising a premium payment plan option |
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provision of the operating plan requirements of Citizens |
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Property Insurance Corporation; amending s. 627.3511, |
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F.S.; correcting a cross-reference; amending s. 627.3515, |
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F.S.; revising criteria for an electronic database for a |
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business plan; amending s. 627.3517, F.S.; deleting a |
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provision specifying nonapplication for a certain period; |
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amending s. 627.4035, F.S.; revising a premium payment |
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plan option provision for certain insurers; amending s. |
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627.4133, F.S.; specifying requirements for notices of |
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renewal premium of property insurance policies; |
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authorizing the Financial Services Commission to adopt |
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rules; amending s. 627.701, F.S.; revising requirements |
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for deductibles for certain personal lines residential |
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property insurance policies; amending s. 627.70131, F.S.; |
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revising certain payment or denial of claim requirements; |
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providing for application to residential property |
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insurance claims only; specifying regulatory action as an |
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exclusive remedy for certain violations; amending s. |
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627.712, F.S.; limiting application of certain residential |
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hurricane coverage requirements to personal lines |
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policies; specifying a period of application of certain |
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exclusions; providing for implementation of changes to |
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certain exclusions; amending s. 627.713, F.S.; limiting |
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application of certain reporting requirements to the |
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conclusion of the Atlantic hurricane season; amending s. |
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627.7277, F.S.; deleting certain notice of renewal premium |
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requirements; deleting authority of the commission to |
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adopt rules; amending s. 631.57, F.S.; revising certain |
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emergency assessment provisions relating to insurers |
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rendered insolvent by the effects of hurricanes; |
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preserving certain Florida Building Code internal design |
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options for certain building permits for a certain time; |
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providing for retroactive application; providing |
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severability; limiting application of certain rate filing |
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requirements relating to presumed factor savings to |
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certain catastrophe reinsurance contracts; excusing |
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certain insurers from being required to reflect certain |
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savings in presumed factor rate filings; providing |
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effective dates. |
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|
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Be It Enacted by the Legislature of the State of Florida: |
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|
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Section 1. Paragraph (h) of
subsection (7) of section |
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163.01, Florida Statutes, as amended by chapter 2007-1, Laws of |
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Florida, is amended to read: |
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163.01 Florida Interlocal
Cooperation Act of 1969.-- |
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(7) |
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(h)1. Notwithstanding the
provisions of paragraph (c), any |
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separate legal entity consisting of an alliance, as defined in |
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s. 395.106(2)(a), created pursuant to this paragraph and |
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controlled by and whose members consist of eligible entities |
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comprised of special districts created pursuant to a special act |
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and having the authority to own or operate one or more hospitals |
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licensed in this state or hospitals licensed in this state that |
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are owned, operated, or funded by a county or municipality, for |
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the purpose of providing property insurance coverage as defined |
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in s. 395.106(2)(b)(c), for such eligible entities,
may exercise |
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all powers under this subsection in connection with borrowing |
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funds for such purposes, including, without limitation, the |
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authorization, issuance, and sale of bonds, notes, or other |
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obligations of indebtedness. Borrowed funds, including, but not |
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limited to, bonds issued by such alliance shall be deemed issued |
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on behalf of such eligible entities that enter into loan |
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agreements with such separate legal entity as provided in this |
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paragraph. |
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2. Any such separate legal
entity shall have all the |
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powers that are provided by the interlocal agreement under which |
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the entity is created or that are necessary to finance, operate, |
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or manage the alliance's property insurance coverage program. |
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Proceeds of bonds, notes, or other obligations issued by such an |
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entity may be loaned to any one or more eligible entities. Such |
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eligible entities are authorized to enter into loan agreements |
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with any separate legal entity created pursuant to this |
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paragraph for the purpose of obtaining moneys with which to |
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finance property insurance coverage or claims. Obligations of |
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any eligible entity pursuant to a loan agreement as described in |
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this paragraph may be validated as provided in chapter 75. |
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3. Any bonds, notes, or
other obligations to be issued or |
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incurred by a separate legal entity created pursuant to this |
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paragraph shall be authorized by resolution of the governing |
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body of such entity and bear the date or dates; mature at the |
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time or times, not exceeding 30 years from their respective |
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dates; bear interest at the rate or rates, which may be fixed or |
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vary at such time or times and in accordance with a specified |
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formula or method of determination; be payable at the time or |
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times; be in the denomination; be in the form; carry the |
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registration privileges; be executed in the manner; be payable |
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from the sources and in the medium of payment and at the place; |
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and be subject to redemption, including redemption prior to |
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maturity, as the resolution may provide. The bonds, notes, or |
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other obligations may be sold at public or private sale for such |
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price as the governing body of the separate legal entity shall |
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determine. The bonds may be secured by such credit enhancement, |
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if any, as the governing body of the separate legal entity deems |
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appropriate. The bonds may be secured by an indenture of trust |
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or trust agreement. In addition, the governing body of the |
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separate legal entity may delegate, to such officer or official |
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of such entity as the governing body may select, the power to |
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determine the time; manner of sale, public or private; |
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maturities; rate or rates of interest, which may be fixed or may |
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vary at such time or times and in accordance with a specified |
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formula or method of determination; and other terms and |
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conditions as may be deemed appropriate by the officer or |
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official so designated by the governing body of such separate |
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legal entity. However, the amounts and maturities of such bonds, |
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the interest rate or rates, and the purchase price of such bonds |
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shall be within the limits prescribed by the governing body of |
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such separate legal entity in its resolution delegating to such |
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officer or official the power to authorize the issuance and sale |
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of such bonds. |
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4. Bonds issued pursuant to
this paragraph may be |
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validated as provided in chapter 75. The complaint in any action |
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to validate such bonds shall be filed only in the Circuit Court |
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for Leon County. The notice required to be published by s. 75.06 |
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shall be published in Leon County and in each county in which an |
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eligible entity that is a member of an alliance is located. The |
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complaint and order of the circuit court shall be served only on |
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the State Attorney of the Second Judicial Circuit and on the |
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state attorney of each circuit in each county in which an |
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eligible entity receiving bond proceeds is located. |
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5. The accomplishment of
the authorized purposes of a |
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separate legal entity created under this paragraph is deemed in |
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all respects for the benefit, increase of the commerce and |
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prosperity, and improvement of the health and living conditions |
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of the people of this state. Inasmuch as the separate legal |
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entity performs essential public functions in accomplishing its |
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purposes, the separate legal entity is not required to pay any |
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taxes or assessments of any kind upon any property acquired or |
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used by the entity for such purposes or upon any revenues at any |
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time received by the entity. The bonds, notes, and other |
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obligations of such separate legal entity, the transfer of and |
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income from such bonds, notes, and other obligations, including |
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any profits made on the sale of such bonds, notes, and other |
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obligations, are at all times free from taxation of any kind of |
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the state or by any political subdivision or other agency or |
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instrumentality of the state. The exemption granted in this |
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paragraph does not apply to any tax imposed by chapter 220 on |
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interest, income, or profits on debt obligations owned by |
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corporations. |
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6. The participation by any
eligible entity in an alliance |
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or a separate legal entity created pursuant to this paragraph |
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may not be deemed a waiver of immunity to the extent of |
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liability or any other coverage, and a contract entered |
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regarding such alliance is not required to contain any provision |
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for waiver. |
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Section 2. Paragraph (b) of
subsection (4) and subsection |
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(16) of section 215.555, Florida Statutes, as amended by chapter |
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2007-1, Laws of Florida, are amended to read: |
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215.555 Florida Hurricane
Catastrophe Fund.-- |
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(4) REIMBURSEMENT
CONTRACTS.-- |
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(b)1. The contract shall
contain a promise by the board to |
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reimburse the insurer for 45 percent, 75 percent, or 90 percent |
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of its losses from each covered event in excess of the insurer's |
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retention, plus 5 percent of the reimbursed losses to cover loss |
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adjustment expenses. |
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2. The insurer must elect
one of the percentage coverage |
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levels specified in this paragraph and may, upon renewal of a |
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reimbursement contract, elect a lower percentage coverage level |
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if no revenue bonds issued under subsection (6) after a covered |
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event are outstanding, or elect a higher percentage coverage |
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level, regardless of whether or not revenue bonds are |
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outstanding. All members of an insurer group must elect the same |
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percentage coverage level. Any joint underwriting association, |
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risk apportionment plan, or other entity created under s. |
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627.351 must elect the 90-percent coverage level. |
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3. The contract shall
provide that reimbursement amounts |
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shall not be reduced by reinsurance paid or payable to the |
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insurer from other sources. |
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4. Notwithstanding any
other provision contained in this |
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section, the board shall make available to insurers that |
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purchased coverage provided by this subparagraph participated
in |
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2006, insurers qualifying as limited apportionment companies |
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under s. 627.351(6)(c) which began writing property insurance in |
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2007, and insurers that were approved to participate in 2006
or |
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that are approved in 2007 for the Insurance Capital Build-Up |
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Incentive Program pursuant to s. 215.5595, a contract or |
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contract addendum that provides an additional amount of |
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reimbursement coverage of up to $10 million. The premium to be |
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charged for this additional reimbursement coverage shall be 50 |
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percent of the additional reimbursement coverage provided, which |
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shall include one prepaid reinstatement. The minimum retention |
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level that an eligible participating insurer must retain |
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associated with this additional coverage layer is 30 percent of |
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the insurer's surplus as of December 31, 2006. This coverage |
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shall be in addition to all other coverage that may be provided |
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under this section. The coverage provided by the fund under this |
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subsection shall be in addition to the claims-paying capacity as |
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defined in subparagraph (c)1., but only with respect to those |
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insurers that select the additional coverage option and meet the |
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requirements of this subsection. The claims-paying capacity with |
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respect to all other participating insurers and limited |
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apportionment companies that do not select the additional |
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coverage option shall be limited to their reimbursement |
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premium's proportionate share of the actual claims-paying |
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capacity otherwise defined in subparagraph (c)1. and as provided |
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for under the terms of the reimbursement contract. Coverage |
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provided in the reimbursement contract will not be affected by |
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the additional premiums paid by participating insurers |
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exercising the additional coverage option allowed in this |
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subparagraph. This subparagraph expires on May 31, 2008. |
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(16) TEMPORARY EMERGENCY
OPTIONS FOR ADDITIONAL |
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COVERAGE.-- |
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(a) Findings and intent.-- |
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1. The Legislature finds
that: |
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a. Because of temporary
disruptions in the market for |
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catastrophic reinsurance, many property insurers were unable to |
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procure reinsurance for the 2006 hurricane season with an |
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attachment point below the insurers' respective Florida |
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Hurricane Catastrophe Fund attachment points, were unable to |
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procure sufficient amounts of such reinsurance, or were able to |
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procure such reinsurance only by incurring substantially higher |
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costs than in prior years. |
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b. The reinsurance market
problems were responsible, at |
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least in part, for substantial premium increases to many |
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consumers and increases in the number of policies issued by the |
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Citizens Property Insurance Corporation. |
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c. It is likely that the
reinsurance market disruptions |
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will not significantly abate prior to the 2007 hurricane season. |
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2. It is the intent of the
Legislature to create a |
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temporary emergency program, applicable to the 2007, 2008, and |
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2009 hurricane seasons, to address these market disruptions and |
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enable insurers, at their option, to procure additional coverage |
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from the Florida Hurricane Catastrophe Fund. |
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(b) Applicability of other
provisions of this |
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section.--All provisions of this section and the rules adopted |
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under this section apply to the program created by this |
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subsection unless specifically superseded by this subsection. |
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(c) Optional coverage.--For
the contract year commencing |
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June 1, 2007, and ending May 31, 2008, the contract year |
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commencing June 1, 2008, and ending May 31, 2009, and the |
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contract year commencing June 1, 2009, and ending May 31, 2010, |
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the board shall offer for each of such years the optional |
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coverage as provided in this subsection. |
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(d) Additional
definitions.--As used in this subsection, |
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the term: |
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1. "TEACO
options" means the temporary emergency |
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additional coverage options created under this subsection. |
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2. "TEACO
insurer" means an insurer that has opted to |
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obtain coverage under the TEACO options in addition to the |
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coverage provided to the insurer under its reimbursement |
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contract. |
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3. "TEACO
reimbursement premium" means the premium charged |
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by the fund for coverage provided under the TEACO options. |
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4. "TEACO
retention" means the amount of losses below |
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which a TEACO insurer is not entitled to reimbursement from the |
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fund under the TEACO option selected. A TEACO insurer's |
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retention options shall be calculated as follows: |
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a. The board shall
calculate and report to each TEACO |
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insurer the TEACO retention multiples. There shall be three |
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TEACO retention multiples for defining coverage. Each multiple |
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shall be calculated by dividing $3 billion, $4 billion, or $5 |
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billion by the total estimated mandatory FHCF TEACO |
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reimbursement premium assuming all insurers selected that |
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option. Total estimated TEACO reimbursement premium for purposes |
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of the calculation under this sub-subparagraph shall be |
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calculated using the assumption that all insurers have selected |
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a specific TEACO retention multiple option and have selected
the |
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90-percent coverage level. |
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b. The TEACO retention
multiples as determined under sub- |
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subparagraph a. shall be adjusted to reflect the coverage level |
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elected by the insurer. For insurers electing the 90-percent |
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coverage level, the adjusted retention multiple is 100 percent |
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of the amount determined under sub-subparagraph a. For insurers |
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electing the 75-percent coverage level, the retention multiple |
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is 120 percent of the amount determined under sub-subparagraph |
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a. For insurers electing the 45-percent coverage level, the |
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adjusted retention multiple is 200 percent of the amount |
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determined under sub-subparagraph a. |
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c. An insurer shall
determine its provisional TEACO |
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retention by multiplying its estimated mandatory FHCF |
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provisional TEACO reimbursement premium by the applicable |
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adjusted TEACO retention multiple and shall determine its actual |
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TEACO retention by multiplying its actual mandatory FHCF TEACO |
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reimbursement premium by the applicable adjusted TEACO retention |
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multiple. |
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d. For TEACO insurers who
experience multiple covered |
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events causing loss during the contract year, the insurer's full |
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TEACO retention shall be applied to each of the covered events |
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causing the two largest losses for that insurer. For other |
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covered events resulting in losses, the TEACO option does not |
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apply and the insurer's retention shall be one-third of the full |
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retention as calculated under paragraph (2)(e). |
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5. "TEACO
addendum" means an addendum to the reimbursement |
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contract reflecting the obligations of the fund and TEACO |
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insurers under the program created by this subsection. |
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(e) TEACO addendum.-- |
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1. The TEACO addendum shall
provide for reimbursement of |
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TEACO insurers for covered events occurring during the contract |
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year, in exchange for the TEACO reimbursement premium paid into |
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the fund under paragraph (f). Any insurer writing covered |
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policies has the option of choosing to accept the TEACO addendum |
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for any of the 3 contract years that the coverage is offered. |
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2. The TEACO addendum shall
contain a promise by the board |
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to reimburse the TEACO insurer for 45 percent, 75 percent, or 90 |
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percent of its losses from each covered event in excess of the |
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insurer's TEACO retention, plus 5 percent of the reimbursed |
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losses to cover loss adjustment expenses. The percentage shall |
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be the same as the coverage level selected by the insurer under |
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paragraph (4)(b). |
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3. The TEACO addendum shall
provide that reimbursement |
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amounts shall not be reduced by reinsurance paid or payable to |
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the insurer from other sources. |
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4. The TEACO addendum shall
also provide that the |
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obligation of the board with respect to all TEACO addenda shall |
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not exceed an amount equal to two times the difference between |
| 333 |
the industry retention level calculated under paragraph (2)(e) |
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and the $3 billion, $4 billion, or $5 billion industry TEACO |
| 335 |
retention level options actually selected, but in no event may |
| 336 |
the board's obligation exceed the actual claims-paying capacity |
| 337 |
of the fund plus the additional capacity created in paragraph |
| 338 |
(g). If the actual claims-paying capacity and the additional |
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capacity created under paragraph (g) fall short of the board's |
| 340 |
obligations under the reimbursement contract, each insurer's |
| 341 |
share of the fund's capacity shall be prorated based on the |
| 342 |
premium an insurer pays for its mandatory normal
reimbursement |
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coverage and the premium paid for its optional TEACO coverage as |
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each such premium bears to the total premiums paid to the fund |
| 345 |
times the available capacity. |
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5. The priorities,
schedule, and method of reimbursements |
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under the TEACO addendum shall be the same as provided under |
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subsection (4). |
| 349 |
6. A TEACO insurer's
maximum reimbursement for a single |
| 350 |
event shall be equal to the product of multiplying its mandatory |
| 351 |
FHCF premium by the difference between its FHCF retention |
| 352 |
multiple and its TEACO retention multiple under the TEACO option |
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selected and by the coverage selected under paragraph (4)(b), |
| 354 |
plus an additional 5 percent for loss adjustment expenses. A |
| 355 |
TEACO insurer's maximum reimbursement under the TEACO option |
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selected for a TEACO insurer's two largest events addendum
shall |
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be twice its maximum reimbursement for a single event calculated |
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by multiplying the insurer's share of the estimated total TEACO |
| 359 |
reimbursement premium as calculated under sub-subparagraph |
| 360 |
(d)4.a. by an amount equal to two times the difference between |
| 361 |
the industry retention level calculated under paragraph (2)(e) |
| 362 |
and the $3 billion, $4 billion, or $5 billion industry TEACO |
| 363 |
retention level specified in sub-subparagraph (d)4.a. as |
| 364 |
selected by the TEACO insurer. |
| 365 |
(f) TEACO reimbursement
premiums.-- |
| 366 |
1. Each TEACO insurer shall
pay to the fund, in the manner |
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and at the time provided in the reimbursement contract for |
| 368 |
payment of reimbursement premiums, a TEACO reimbursement premium |
| 369 |
calculated as specified in this paragraph. |
| 370 |
2. The TEACO
reimbursement premiums shall be calculated |
| 371 |
based on the assumption that, if all insurers entering into |
| 372 |
reimbursement contracts under subsection (4) also accepted the |
| 373 |
TEACO option: |
| 374 |
a. The insurer's
industry TEACO reimbursement premium |
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associated with the $3 billion retention option shall would
be |
| 376 |
equal to 85 percent of a TEACO insurer's maximum reimbursement |
| 377 |
for a single event as calculated under subparagraph (e)6. the |
| 378 |
difference between the industry retention level calculated under |
| 379 |
paragraph (2)(e) and the $3 billion industry TEACO retention |
| 380 |
level. |
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b. The TEACO
reimbursement premium associated with the $4 |
| 382 |
billion retention option shall would be equal to 80
percent of a |
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TEACO insurer's maximum reimbursement for a single event as |
| 384 |
calculated under subparagraph (e)6. the difference between
the |
| 385 |
industry retention level calculated under paragraph (2)(e) and |
| 386 |
the $4 billion industry TEACO retention level. |
| 387 |
c. The TEACO premium
associated with the $5 billion |
| 388 |
retention option shall would be equal to 75 percent of
a TEACO |
| 389 |
insurer's maximum reimbursement for a single event as calculated |
| 390 |
under subparagraph (e)6. the difference between the
industry |
| 391 |
retention level calculated under paragraph (2)(e) and the $5 |
| 392 |
billion industry TEACO retention level. |
| 393 |
3. Each insurer's TEACO
premium shall be calculated based |
| 394 |
on its share of the total TEACO reimbursement premiums based on |
| 395 |
its coverage selection under the TEACO addendum. |
| 396 |
(g) Effect on claims-paying
capacity of the fund.--For the |
| 397 |
contract term commencing June 1, 2007, the contract year |
| 398 |
commencing June 1, 2008, and the contract term beginning June 1, |
| 399 |
2009, the program created by this subsection shall increase the |
| 400 |
claims-paying capacity of the fund as provided in subparagraph |
| 401 |
(4)(c)1. by an amount equal to two times the difference between |
| 402 |
the industry retention level calculated under paragraph (2)(e) |
| 403 |
and the $3 billion industry TEACO retention level specified in |
| 404 |
sub-subparagraph (d)4.a. The additional capacity shall apply |
| 405 |
only to the additional coverage provided by the TEACO option and |
| 406 |
shall not otherwise affect any insurer's reimbursement from the |
| 407 |
fund. |
| 408 |
Section 3. Paragraph (b) of
subsection (2) of section |
| 409 |
215.5595, Florida Statutes, is amended to read: |
| 410 |
215.5595 Insurance Capital
Build-Up Incentive Program.-- |
| 411 |
(2) The purpose of this
section is to provide surplus |
| 412 |
notes to new or existing authorized residential property |
| 413 |
insurers under the Insurance Capital Build-Up Incentive Program |
| 414 |
administered by the State Board of Administration, under the |
| 415 |
following conditions: |
| 416 |
(b) The insurer must
contribute an amount of new capital |
| 417 |
to its surplus which is at least equal to the amount of the |
| 418 |
surplus note and must apply to the board by July 1, 2006. If an |
| 419 |
insurer applies after July 1, 2006, but before June 1, 2007, the |
| 420 |
amount of the surplus note is limited to one-half of the new |
| 421 |
capital that the insurer contributes to its surplus. For |
| 422 |
purposes of this section, new capital must be in the form of |
| 423 |
cash or cash equivalents as specified in s. 625.012(1). An |
| 424 |
insurer writing only manufactured housing policies that applies |
| 425 |
for funds under this section after July 1, 2006, but before June |
| 426 |
1, 2007, is eligible to receive a surplus note in the amount of |
| 427 |
$7 million. The insurer's surplus, new capital, and the surplus |
| 428 |
note must total at least $14 million. |
| 429 |
Section 4. Subsection (1)
of section 624.407, Florida |
| 430 |
Statutes, as amended by chapter 2007-1, Laws of Florida, is |
| 431 |
amended to read: |
| 432 |
624.407 Capital funds
required; new insurers.-- |
| 433 |
(1) To receive authority to
transact any one kind or |
| 434 |
combinations of kinds of insurance, as defined in part V of this |
| 435 |
chapter, an insurer applying for its original certificate of |
| 436 |
authority in this state after the effective date of this section |
| 437 |
shall possess surplus as to policyholders not less than the |
| 438 |
greater of: |
| 439 |
(a) Five million dollars
for a property and casualty |
| 440 |
insurer, or $2.5 million for any other insurer; |
| 441 |
(b) For life insurers, 4
percent of the insurer's total |
| 442 |
liabilities; |
| 443 |
(c) For life and health
insurers, 4 percent of the |
| 444 |
insurer's total liabilities, plus 6 percent of the insurer's |
| 445 |
liabilities relative to health insurance; or |
| 446 |
(d) For all insurers other
than life insurers and life and |
| 447 |
health insurers, 10 percent of the insurer's total liabilities; |
| 448 |
|
| 449 |
however, a domestic insurer that transacts residential property |
| 450 |
insurance and is a wholly owned subsidiary of an insurer |
| 451 |
domiciled authorized to do business in any other state
shall |
| 452 |
possess surplus as to policyholders of at least $50 million, but |
| 453 |
no insurer shall be required under this subsection to have |
| 454 |
surplus as to policyholders greater than $100 million. |
| 455 |
Section 5. Paragraph (a) of
subsection (1) of section |
| 456 |
624.408, Florida Statutes, is amended to read: |
| 457 |
624.408 Surplus as to
policyholders required; new and |
| 458 |
existing insurers.-- |
| 459 |
(1)(a) To maintain a
certificate of authority to transact |
| 460 |
any one kind or combinations of kinds of insurance, as defined |
| 461 |
in part V of this chapter, an insurer in this state shall at all |
| 462 |
times maintain surplus as to policyholders not less than the |
| 463 |
greater of: |
| 464 |
1. Except as provided in
subparagraph 5. and paragraph |
| 465 |
(b), $1.5 million; |
| 466 |
2. For life insurers, 4
percent of the insurer's total |
| 467 |
liabilities; |
| 468 |
3. For life and health
insurers, 4 percent of the |
| 469 |
insurer's total liabilities plus 6 percent of the insurer's |
| 470 |
liabilities relative to health insurance; or |
| 471 |
4. For all insurers other
than mortgage guaranty insurers, |
| 472 |
life insurers, and life and health insurers, 10 percent of the |
| 473 |
insurer's total liabilities. |
| 474 |
5. For property and
casualty insurers, $4 million; |
| 475 |
however, a domestic insurer that transacts residential property |
| 476 |
insurance and is a wholly owned subsidiary of an insurer |
| 477 |
domiciled in any other state shall possess surplus as to |
| 478 |
policyholders of at least $50 million. |
| 479 |
Section 6. Subsection (4)
of section 627.0613, Florida |
| 480 |
Statutes, as amended by chapter 2007-1, Laws of Florida, is |
| 481 |
amended to read: |
| 482 |
627.0613 Consumer
advocate.--The Chief Financial Officer |
| 483 |
must appoint a consumer advocate who must represent the general |
| 484 |
public of the state before the department and the office. The |
| 485 |
consumer advocate must report directly to the Chief Financial |
| 486 |
Officer, but is not otherwise under the authority of the |
| 487 |
department or of any employee of the department. The consumer |
| 488 |
advocate has such powers as are necessary to carry out the |
| 489 |
duties of the office of consumer advocate, including, but not |
| 490 |
limited to, the powers to: |
| 491 |
(4) Prepare an annual
report card for each authorized |
| 492 |
personal residential property insurer, on a form and using a |
| 493 |
letter-grade scale developed by the commission by rule, which |
| 494 |
grades each insurer based on the following factors: |
| 495 |
(a) The number and nature
of consumer complaints received |
| 496 |
by the department against the insurer. |
| 497 |
(b) The disposition of all
complaints received by the |
| 498 |
department. |
| 499 |
(c) The average length of
time for payment of claims by |
| 500 |
the insurer. |
| 501 |
(d) Any other factors the
commission identifies as |
| 502 |
assisting policyholders in making informed choices about |
| 503 |
homeowner's insurance. |
| 504 |
Section 7. Paragraph (a) of
subsection (2) of section |
| 505 |
627.062, Florida Statutes, as amended by chapter 2007-1, Laws of |
| 506 |
Florida, is amended to read: |
| 507 |
627.062 Rate standards.-- |
| 508 |
(2) As to all such classes
of insurance: |
| 509 |
(a) Insurers or rating
organizations shall establish and |
| 510 |
use rates, rating schedules, or rating manuals to allow the |
| 511 |
insurer a reasonable rate of return on such classes of insurance |
| 512 |
written in this state. A copy of rates, rating schedules, rating |
| 513 |
manuals, premium credits or discount schedules, and surcharge |
| 514 |
schedules, and changes thereto, shall be filed with the office |
| 515 |
under one of the following procedures except as provided in |
| 516 |
subparagraph 3.: |
| 517 |
1. If the filing is made at
least 90 days before the |
| 518 |
proposed effective date and the filing is not implemented during |
| 519 |
the office's review of the filing and any proceeding and |
| 520 |
judicial review, then such filing shall be considered a "file |
| 521 |
and use" filing. In such case, the office shall finalize its |
| 522 |
review by issuance of a notice of intent to approve or a notice |
| 523 |
of intent to disapprove within 90 days after receipt of the |
| 524 |
filing. The notice of intent to approve and the notice of intent |
| 525 |
to disapprove constitute agency action for purposes of the |
| 526 |
Administrative Procedure Act. Requests for supporting |
| 527 |
information, requests for mathematical or mechanical |
| 528 |
corrections, or notification to the insurer by the office of its |
| 529 |
preliminary findings shall not toll the 90-day period during any |
| 530 |
such proceedings and subsequent judicial review. The rate shall |
| 531 |
be deemed approved if the office does not issue a notice of |
| 532 |
intent to approve or a notice of intent to disapprove within 90 |
| 533 |
days after receipt of the filing. |
| 534 |
2. If the filing is not
made in accordance with the |
| 535 |
provisions of subparagraph 1., such filing shall be made as soon |
| 536 |
as practicable, but no later than 30 days after the effective |
| 537 |
date, and shall be considered a "use and file" filing. An |
| 538 |
insurer making a "use and file" filing is potentially
subject to |
| 539 |
an order by the office to return to policyholders portions of |
| 540 |
rates found to be excessive, as provided in paragraph (h). |
| 541 |
3. For all filings made or
submitted after January 25, |
| 542 |
2007, but on or before December 31, 2008, an insurer
seeking a |
| 543 |
rate that is greater than the rate most recently approved by the |
| 544 |
office shall make a "file and use" filing. This
subparagraph |
| 545 |
applies solely to residential property insurance. |
| 546 |
|
| 547 |
The provisions of this subsection shall not apply to workers' |
| 548 |
compensation and employer's liability insurance and to motor |
| 549 |
vehicle insurance. |
| 550 |
Section 8. Subsection (1)
of section 627.0629, Florida |
| 551 |
Statutes, is amended to read: |
| 552 |
627.0629 Residential
property insurance; rate filings.-- |
| 553 |
(1) It is the intent of the
Legislature that insurers must |
| 554 |
provide savings to consumers who install or implement windstorm |
| 555 |
damage mitigation techniques, alterations, or solutions to their |
| 556 |
properties to prevent windstorm losses. A rate filing for |
| 557 |
residential property insurance must include actuarially |
| 558 |
reasonable discounts, credits, or other rate differentials, or |
| 559 |
appropriate reductions in deductibles, for properties on which |
| 560 |
fixtures or construction techniques demonstrated to reduce the |
| 561 |
amount of loss in a windstorm have been installed or |
| 562 |
implemented. The fixtures or construction techniques shall |
| 563 |
include, but not be limited to, fixtures or construction |
| 564 |
techniques which enhance roof strength, roof covering |
| 565 |
performance, roof-to-wall strength, wall-to-floor-to-foundation |
| 566 |
strength, opening protection, and window, door, and skylight |
| 567 |
strength. Credits, discounts, or other rate differentials, or |
| 568 |
appropriate reductions in deductibles, for fixtures and |
| 569 |
construction techniques which meet the minimum requirements of |
| 570 |
the Florida Building Code must be included in the rate filing. |
| 571 |
All insurance companies must make a rate filing which includes |
| 572 |
the credits, discounts, or other rate differentials or |
| 573 |
reductions in deductibles by February 28, 2003. By July 1, 2007, |
| 574 |
the office shall reevaluate the discounts, credits, other rate |
| 575 |
differentials, and appropriate reductions in deductibles for |
| 576 |
fixtures and construction techniques that meet the minimum |
| 577 |
requirements of the Florida Building Code, based upon actual |
| 578 |
experience or any other loss relativity studies available to the |
| 579 |
office. The office shall determine the discounts, credits, other |
| 580 |
rate differentials, and appropriate reductions in deductibles |
| 581 |
that reflect the full actuarial value of such revaluation, which |
| 582 |
may be used by insurers in rate filings. A property insurer |
| 583 |
shall reevaluate the discounts, credits, or other rate |
| 584 |
differentials or appropriate reductions in deductibles provided |
| 585 |
pursuant to this subsection at least every 5 years and shall |
| 586 |
submit a rate filing to the office for a reduction in the |
| 587 |
discount, credit, or rate differential or an increase in the |
| 588 |
applicable deductible to account for the effectiveness of the |
| 589 |
mitigation measure installed or implemented. |
| 590 |
Section 9. Section
627.0655, Florida Statutes, as created |
| 591 |
by chapter 2007-1, Laws of Florida, is amended, to read: |
| 592 |
627.0655 Policyholder loss
or expense-related premium |
| 593 |
discounts.--An insurer or person authorized to engage in the |
| 594 |
business of insurance in this state may include, in the premium |
| 595 |
charged an insured for any policy, contract, or certificate of |
| 596 |
insurance, a discount based on the fact that another policy, |
| 597 |
contract, or certificate of any type has been purchased by the |
| 598 |
insured from the same insurer or insurer group. |
| 599 |
Section 10. Paragraphs (b),
(c), (n), and (v) of |
| 600 |
subsection (6) of section 627.351, Florida Statutes, as amended |
| 601 |
by chapter 2007-1, Laws of Florida, are amended to read: |
| 602 |
627.351 Insurance risk
apportionment plans.-- |
| 603 |
(6) CITIZENS PROPERTY
INSURANCE CORPORATION.-- |
| 604 |
(b)1. All insurers
authorized to write one or more subject |
| 605 |
lines of business in this state are subject to assessment by the |
| 606 |
corporation and, for the purposes of this subsection, are |
| 607 |
referred to collectively as "assessable insurers."
Insurers |
| 608 |
writing one or more subject lines of business in this state |
| 609 |
pursuant to part VIII of chapter 626 are not assessable |
| 610 |
insurers, but insureds who procure one or more subject lines of |
| 611 |
business in this state pursuant to part VIII of chapter 626 are |
| 612 |
subject to assessment by the corporation and are referred to |
| 613 |
collectively as "assessable insureds." An authorized
insurer's |
| 614 |
assessment liability shall begin on the first day of the |
| 615 |
calendar year following the year in which the insurer was issued |
| 616 |
a certificate of authority to transact insurance for subject |
| 617 |
lines of business in this state and shall terminate 1 year after |
| 618 |
the end of the first calendar year during which the insurer no |
| 619 |
longer holds a certificate of authority to transact insurance |
| 620 |
for subject lines of business in this state. |
| 621 |
2.a. All revenues, assets,
liabilities, losses, and |
| 622 |
expenses of the corporation shall be divided into three separate |
| 623 |
accounts as follows: |
| 624 |
(I) A personal lines
account for personal residential |
| 625 |
policies issued by the corporation or issued by the Residential |
| 626 |
Property and Casualty Joint Underwriting Association and renewed |
| 627 |
by the corporation that provide comprehensive, multiperil |
| 628 |
coverage on risks that are not located in areas eligible for |
| 629 |
coverage in the Florida Windstorm Underwriting Association as |
| 630 |
those areas were defined on January 1, 2002, and for such |
| 631 |
policies that do not provide coverage for the peril of wind on |
| 632 |
risks that are located in such areas; |
| 633 |
(II) A commercial lines
account for commercial residential |
| 634 |
and commercial nonresidential policies issued by the corporation |
| 635 |
or issued by the Residential Property and Casualty Joint |
| 636 |
Underwriting Association and renewed by the corporation that |
| 637 |
provide coverage for basic property perils on risks that are not |
| 638 |
located in areas eligible for coverage in the Florida Windstorm |
| 639 |
Underwriting Association as those areas were defined on January |
| 640 |
1, 2002, and for such policies that do not provide coverage for |
| 641 |
the peril of wind on risks that are located in such areas; and |
| 642 |
(III) A high-risk account
for personal residential |
| 643 |
policies and commercial residential and commercial |
| 644 |
nonresidential property policies issued by the corporation or |
| 645 |
transferred to the corporation that provide coverage for the |
| 646 |
peril of wind on risks that are located in areas eligible for |
| 647 |
coverage in the Florida Windstorm Underwriting Association as |
| 648 |
those areas were defined on January 1, 2002. Subject to the |
| 649 |
approval of a business plan by the Financial Services Commission |
| 650 |
and Legislative Budget Commission as provided in this sub-sub- |
| 651 |
subparagraph, but no earlier than March 31, 2007, the |
| 652 |
corporation may offer policies that provide multiperil coverage |
| 653 |
and the corporation shall continue to offer policies that |
| 654 |
provide coverage only for the peril of wind for risks located in |
| 655 |
areas eligible for coverage in the high-risk account. In issuing |
| 656 |
multiperil coverage, the corporation may use its approved policy |
| 657 |
forms and rates for the personal lines account. An applicant or |
| 658 |
insured who is eligible to purchase a multiperil policy from the |
| 659 |
corporation may purchase a multiperil policy from an authorized |
| 660 |
insurer without prejudice to the applicant's or insured's |
| 661 |
eligibility to prospectively purchase a policy that provides |
| 662 |
coverage only for the peril of wind from the corporation. An |
| 663 |
applicant or insured who is eligible for a corporation policy |
| 664 |
that provides coverage only for the peril of wind may elect to |
| 665 |
purchase or retain such policy and also purchase or retain |
| 666 |
coverage excluding wind from an authorized insurer without |
| 667 |
prejudice to the applicant's or insured's eligibility to |
| 668 |
prospectively purchase a policy that provides multiperil |
| 669 |
coverage from the corporation. It is the goal of the Legislature |
| 670 |
that there would be an overall average savings of 10 percent or |
| 671 |
more for a policyholder who currently has a wind-only policy |
| 672 |
with the corporation, and an ex-wind policy with a voluntary |
| 673 |
insurer or the corporation, and who then obtains a multiperil |
| 674 |
policy from the corporation. It is the intent of the Legislature |
| 675 |
that the offer of multiperil coverage in the high-risk account |
| 676 |
be made and implemented in a manner that does not adversely |
| 677 |
affect the tax-exempt status of the corporation or |
| 678 |
creditworthiness of or security for currently outstanding |
| 679 |
financing obligations or credit facilities of the high-risk |
| 680 |
account, the personal lines account, or the commercial lines |
| 681 |
account. By March 1, 2007, the corporation shall prepare and |
| 682 |
submit for approval by the Financial Services Commission and |
| 683 |
Legislative Budget Commission a report detailing the |
| 684 |
corporation's business plan for issuing multiperil coverage in |
| 685 |
the high-risk account. The business plan shall be approved or |
| 686 |
disapproved within 30 days after receipt, as submitted or |
| 687 |
modified and resubmitted by the corporation. The business plan |
| 688 |
must include: the impact of such multiperil coverage on the |
| 689 |
corporation's financial resources, the impact of such multiperil |
| 690 |
coverage on the corporation's tax-exempt status, the manner in |
| 691 |
which the corporation plans to implement the processing of |
| 692 |
applications and policy forms for new and existing |
| 693 |
policyholders, the impact of such multiperil coverage on the |
| 694 |
corporation's ability to deliver customer service at the high |
| 695 |
level required by this subsection, the ability of the |
| 696 |
corporation to process claims, the ability of the corporation to |
| 697 |
quote and issue policies, the impact of such multiperil coverage |
| 698 |
on the corporation's agents, the impact of such multiperil |
| 699 |
coverage on the corporation's existing policyholders, and the |
| 700 |
impact of such multiperil coverage on rates and premium. The |
| 701 |
high-risk account must also include quota share primary |
| 702 |
insurance under subparagraph (c)2. The area eligible for |
| 703 |
coverage under the high-risk account also includes the area |
| 704 |
within Port Canaveral, which is bordered on the south by the |
| 705 |
City of Cape Canaveral, bordered on the west by the Banana |
| 706 |
River, and bordered on the north by Federal Government property. |
| 707 |
b. The three separate
accounts must be maintained as long |
| 708 |
as financing obligations entered into by the Florida Windstorm |
| 709 |
Underwriting Association or Residential Property and Casualty |
| 710 |
Joint Underwriting Association are outstanding, in accordance |
| 711 |
with the terms of the corresponding financing documents. When |
| 712 |
the financing obligations are no longer outstanding, in |
| 713 |
accordance with the terms of the corresponding financing |
| 714 |
documents, the corporation may use a single account for all |
| 715 |
revenues, assets, liabilities, losses, and expenses of the |
| 716 |
corporation. Consistent with the requirement of this |
| 717 |
subparagraph and prudent investment policies that minimize the |
| 718 |
cost of carrying debt, the board shall exercise its best efforts |
| 719 |
to retire existing debt or to obtain approval of necessary |
| 720 |
parties to amend the terms of existing debt, so as to structure |
| 721 |
the most efficient plan to consolidate the three separate |
| 722 |
accounts into a single account. By February 1, 2007, the board |
| 723 |
shall submit a report to the Financial Services Commission, the |
| 724 |
President of the Senate, and the Speaker of the House of |
| 725 |
Representatives which includes an analysis of consolidating the |
| 726 |
accounts, the actions the board has taken to minimize the cost |
| 727 |
of carrying debt, and its recommendations for executing the most |
| 728 |
efficient plan. |
| 729 |
c. Creditors of the
Residential Property and Casualty |
| 730 |
Joint Underwriting Association shall have a claim against, and |
| 731 |
recourse to, the accounts referred to in sub-sub-subparagraphs |
| 732 |
a.(I) and (II) and shall have no claim against, or recourse to, |
| 733 |
the account referred to in sub-sub-subparagraph a.(III). |
| 734 |
Creditors of the Florida Windstorm Underwriting Association |
| 735 |
shall have a claim against, and recourse to, the account |
| 736 |
referred to in sub-sub-subparagraph a.(III) and shall have no |
| 737 |
claim against, or recourse to, the accounts referred to in sub- |
| 738 |
sub-subparagraphs a.(I) and (II). |
| 739 |
d. Revenues, assets,
liabilities, losses, and expenses not |
| 740 |
attributable to particular accounts shall be prorated among the |
| 741 |
accounts. |
| 742 |
e. The Legislature finds
that the revenues of the |
| 743 |
corporation are revenues that are necessary to meet the |
| 744 |
requirements set forth in documents authorizing the issuance of |
| 745 |
bonds under this subsection. |
| 746 |
f. No part of the income of
the corporation may inure to |
| 747 |
the benefit of any private person. |
| 748 |
3. With respect to a
deficit in an account: |
| 749 |
a. When the deficit
incurred in a particular calendar year |
| 750 |
is not greater than 10 percent of the aggregate statewide direct |
| 751 |
written premium for the subject lines of business for the prior |
| 752 |
calendar year, the entire deficit shall be recovered through |
| 753 |
regular assessments of assessable insurers under paragraph (p) |
| 754 |
and assessable insureds. |
| 755 |
b. When the deficit
incurred in a particular calendar year |
| 756 |
exceeds 10 percent of the aggregate statewide direct written |
| 757 |
premium for the subject lines of business for the prior calendar |
| 758 |
year, the corporation shall levy regular assessments on |
| 759 |
assessable insurers under paragraph (p) and on assessable |
| 760 |
insureds in an amount equal to the greater of 10 percent of the |
| 761 |
deficit or 10 percent of the aggregate statewide direct written |
| 762 |
premium for the subject lines of business for the prior calendar |
| 763 |
year. Any remaining deficit shall be recovered through emergency |
| 764 |
assessments under sub-subparagraph d. |
| 765 |
c. Each assessable
insurer's share of the amount being |
| 766 |
assessed under sub-subparagraph a. or sub-subparagraph b. shall |
| 767 |
be in the proportion that the assessable insurer's direct |
| 768 |
written premium for the subject lines of business for the year |
| 769 |
preceding the assessment bears to the aggregate statewide direct |
| 770 |
written premium for the subject lines of business for that year. |
| 771 |
The assessment percentage applicable to each assessable insured |
| 772 |
is the ratio of the amount being assessed under sub-subparagraph |
| 773 |
a. or sub-subparagraph b. to the aggregate statewide direct |
| 774 |
written premium for the subject lines of business for the prior |
| 775 |
year. Assessments levied by the corporation on assessable |
| 776 |
insurers under sub-subparagraphs a. and b. shall be paid as |
| 777 |
required by the corporation's plan of operation and paragraph |
| 778 |
(p). Notwithstanding any other provision of this subsection, the |
| 779 |
aggregate amount of a regular assessment for a deficit incurred |
| 780 |
in a particular calendar year shall be reduced by the estimated |
| 781 |
amount to be received by the corporation from the Citizens |
| 782 |
policyholder surcharge under subparagraph (c)10.11.
and the |
| 783 |
amount collected or estimated to be collected from the |
| 784 |
assessment on Citizens policyholders pursuant to sub- |
| 785 |
subparagraph i. Assessments levied by the corporation on |
| 786 |
assessable insureds under sub-subparagraphs a. and b. shall be |
| 787 |
collected by the surplus lines agent at the time the surplus |
| 788 |
lines agent collects the surplus lines tax required by s. |
| 789 |
626.932 and shall be paid to the Florida Surplus Lines Service |
| 790 |
Office at the time the surplus lines agent pays the surplus |
| 791 |
lines tax to the Florida Surplus Lines Service Office. Upon |
| 792 |
receipt of regular assessments from surplus lines agents, the |
| 793 |
Florida Surplus Lines Service Office shall transfer the |
| 794 |
assessments directly to the corporation as determined by the |
| 795 |
corporation. |
| 796 |
d. Upon a determination by
the board of governors that a |
| 797 |
deficit in an account exceeds the amount that will be recovered |
| 798 |
through regular assessments under sub-subparagraph a. or sub- |
| 799 |
subparagraph b., the board shall levy, after verification by the |
| 800 |
office, emergency assessments, for as many years as necessary to |
| 801 |
cover the deficits, to be collected by assessable insurers and |
| 802 |
the corporation and collected from assessable insureds upon |
| 803 |
issuance or renewal of policies for subject lines of business, |
| 804 |
excluding National Flood Insurance policies. The amount of the |
| 805 |
emergency assessment collected in a particular year shall be a |
| 806 |
uniform percentage of that year's direct written premium for |
| 807 |
subject lines of business and all accounts of the corporation, |
| 808 |
excluding National Flood Insurance Program policy premiums, as |
| 809 |
annually determined by the board and verified by the office. The |
| 810 |
office shall verify the arithmetic calculations involved in the |
| 811 |
board's determination within 30 days after receipt of the |
| 812 |
information on which the determination was based. |
| 813 |
Notwithstanding any other provision of law, the corporation and |
| 814 |
each assessable insurer that writes subject lines of business |
| 815 |
shall collect emergency assessments from its policyholders |
| 816 |
without such obligation being affected by any credit, |
| 817 |
limitation, exemption, or deferment. Emergency assessments |
| 818 |
levied by the corporation on assessable insureds shall be |
| 819 |
collected by the surplus lines agent at the time the surplus |
| 820 |
lines agent collects the surplus lines tax required by s. |
| 821 |
626.932 and shall be paid to the Florida Surplus Lines Service |
| 822 |
Office at the time the surplus lines agent pays the surplus |
| 823 |
lines tax to the Florida Surplus Lines Service Office. The |
| 824 |
emergency assessments so collected shall be transferred directly |
| 825 |
to the corporation on a periodic basis as determined by the |
| 826 |
corporation and shall be held by the corporation solely in the |
| 827 |
applicable account. The aggregate amount of emergency |
| 828 |
assessments levied for an account under this sub-subparagraph in |
| 829 |
any calendar year may not exceed the greater of 10 percent of |
| 830 |
the amount needed to cover the original deficit, plus interest, |
| 831 |
fees, commissions, required reserves, and other costs associated |
| 832 |
with financing of the original deficit, or 10 percent of the |
| 833 |
aggregate statewide direct written premium for subject lines of |
| 834 |
business and for all accounts of the corporation for the prior |
| 835 |
year, plus interest, fees, commissions, required reserves, and |
| 836 |
other costs associated with financing the original deficit. |
| 837 |
e. The corporation may
pledge the proceeds of assessments, |
| 838 |
projected recoveries from the Florida Hurricane Catastrophe |
| 839 |
Fund, other insurance and reinsurance recoverables, policyholder |
| 840 |
surcharges and other surcharges, and other funds available to |
| 841 |
the corporation as the source of revenue for and to secure bonds |
| 842 |
issued under paragraph (p), bonds or other indebtedness issued |
| 843 |
under subparagraph (c)3., or lines of credit or other financing |
| 844 |
mechanisms issued or created under this subsection, or to retire |
| 845 |
any other debt incurred as a result of deficits or events giving |
| 846 |
rise to deficits, or in any other way that the board determines |
| 847 |
will efficiently recover such deficits. The purpose of the lines |
| 848 |
of credit or other financing mechanisms is to provide additional |
| 849 |
resources to assist the corporation in covering claims and |
| 850 |
expenses attributable to a catastrophe. As used in this |
| 851 |
subsection, the term "assessments" includes regular
assessments |
| 852 |
under sub-subparagraph a., sub-subparagraph b., or subparagraph |
| 853 |
(p)1. and emergency assessments under sub-subparagraph d. |
| 854 |
Emergency assessments collected under sub-subparagraph d. are |
| 855 |
not part of an insurer's rates, are not premium, and are not |
| 856 |
subject to premium tax, fees, or commissions; however, failure |
| 857 |
to pay the emergency assessment shall be treated as failure to |
| 858 |
pay premium. The emergency assessments under sub-subparagraph d. |
| 859 |
shall continue as long as any bonds issued or other indebtedness |
| 860 |
incurred with respect to a deficit for which the assessment was |
| 861 |
imposed remain outstanding, unless adequate provision has been |
| 862 |
made for the payment of such bonds or other indebtedness |
| 863 |
pursuant to the documents governing such bonds or other |
| 864 |
indebtedness. |
| 865 |
f. As used in this
subsection, the term "subject lines of |
| 866 |
business" means insurance written by assessable insurers or |
| 867 |
procured by assessable insureds for all property and casualty |
| 868 |
lines of business in this state, but not including workers' |
| 869 |
compensation or medical malpractice. As used in the sub- |
| 870 |
subparagraph, the term "property and casualty lines of
business" |
| 871 |
includes all lines of business identified on Form 2, Exhibit of |
| 872 |
Premiums and Losses, in the annual statement required of |
| 873 |
authorized insurers by s. 624.424 and any rule adopted under |
| 874 |
this section, except for those lines identified as accident and |
| 875 |
health insurance and except for policies written under the |
| 876 |
National Flood Insurance Program or the Federal Crop Insurance |
| 877 |
Program. For purposes of this sub-subparagraph, the term |
| 878 |
"workers' compensation" includes both workers'
compensation |
| 879 |
insurance and excess workers' compensation insurance. |
| 880 |
g. The Florida Surplus
Lines Service Office shall |
| 881 |
determine annually the aggregate statewide written premium in |
| 882 |
subject lines of business procured by assessable insureds and |
| 883 |
shall report that information to the corporation in a form and |
| 884 |
at a time the corporation specifies to ensure that the |
| 885 |
corporation can meet the requirements of this subsection and the |
| 886 |
corporation's financing obligations. |
| 887 |
h. The Florida Surplus
Lines Service Office shall verify |
| 888 |
the proper application by surplus lines agents of assessment |
| 889 |
percentages for regular assessments and emergency assessments |
| 890 |
levied under this subparagraph on assessable insureds and shall |
| 891 |
assist the corporation in ensuring the accurate, timely |
| 892 |
collection and payment of assessments by surplus lines agents as |
| 893 |
required by the corporation. |
| 894 |
i. If a deficit is incurred
in any account in 2008 or |
| 895 |
thereafter, the board of governors shall levy an immediate |
| 896 |
assessment against the premium of each nonhomestead property |
| 897 |
policyholder in all accounts of the corporation, as a uniform |
| 898 |
percentage of the premium of the policy of up to 10 percent of |
| 899 |
such premium, which funds shall be used to offset the deficit. |
| 900 |
If this assessment is insufficient to eliminate the deficit, the |
| 901 |
board of governors shall levy an additional assessment against |
| 902 |
all policyholders of the corporation, which shall be collected |
| 903 |
at the time of issuance or renewal of a policy, as a uniform |
| 904 |
percentage of the premium for the policy of up to 10 percent of |
| 905 |
such premium, which funds shall be used to further offset the |
| 906 |
deficit. |
| 907 |
j. The board of governors
shall maintain separate |
| 908 |
accounting records that consolidate data for nonhomestead |
| 909 |
properties, including, but not limited to, number of policies, |
| 910 |
insured values, premiums written, and losses. The board of |
| 911 |
governors shall annually report to the office and the |
| 912 |
Legislature a summary of such data. |
| 913 |
(c) The plan of operation
of the corporation: |
| 914 |
1. Must provide for
adoption of residential property and |
| 915 |
casualty insurance policy forms and commercial residential and |
| 916 |
nonresidential property insurance forms, which forms must be |
| 917 |
approved by the office prior to use. The corporation shall adopt |
| 918 |
the following policy forms: |
| 919 |
a. Standard personal lines
policy forms that are |
| 920 |
comprehensive multiperil policies providing full coverage of a |
| 921 |
residential property equivalent to the coverage provided in the |
| 922 |
private insurance market under an HO-3, HO-4, or HO-6 policy. |
| 923 |
b. Basic personal lines
policy forms that are policies |
| 924 |
similar to an HO-8 policy or a dwelling fire policy that provide |
| 925 |
coverage meeting the requirements of the secondary mortgage |
| 926 |
market, but which coverage is more limited than the coverage |
| 927 |
under a standard policy. |
| 928 |
c. Commercial lines
residential and nonresidential policy |
| 929 |
forms that are generally similar to the basic perils of full |
| 930 |
coverage obtainable for commercial residential structures and |
| 931 |
commercial nonresidential structures in the admitted voluntary |
| 932 |
market. |
| 933 |
d. Personal lines and
commercial lines residential |
| 934 |
property insurance forms that cover the peril of wind only. The |
| 935 |
forms are applicable only to residential properties located in |
| 936 |
areas eligible for coverage under the high-risk account referred |
| 937 |
to in sub-subparagraph (b)2.a. |
| 938 |
e. Commercial lines
nonresidential property insurance |
| 939 |
forms that cover the peril of wind only. The forms are |
| 940 |
applicable only to nonresidential properties located in areas |
| 941 |
eligible for coverage under the high-risk account referred to in |
| 942 |
sub-subparagraph (b)2.a. |
| 943 |
f. The corporation may
adopt variations of the policy |
| 944 |
forms listed in sub-subparagraphs a.-e. that contain more |
| 945 |
restrictive coverage. |
| 946 |
2.a. Must provide that the
corporation adopt a program in |
| 947 |
which the corporation and authorized insurers enter into quota |
| 948 |
share primary insurance agreements for hurricane coverage, as |
| 949 |
defined in s. 627.4025(2)(a), for eligible risks, and adopt |
| 950 |
property insurance forms for eligible risks which cover the |
| 951 |
peril of wind only. As used in this subsection, the term: |
| 952 |
(I) "Quota share
primary insurance" means an arrangement |
| 953 |
in which the primary hurricane coverage of an eligible risk is |
| 954 |
provided in specified percentages by the corporation and an |
| 955 |
authorized insurer. The corporation and authorized insurer are |
| 956 |
each solely responsible for a specified percentage of hurricane |
| 957 |
coverage of an eligible risk as set forth in a quota share |
| 958 |
primary insurance agreement between the corporation and an |
| 959 |
authorized insurer and the insurance contract. The |
| 960 |
responsibility of the corporation or authorized insurer to pay |
| 961 |
its specified percentage of hurricane losses of an eligible |
| 962 |
risk, as set forth in the quota share primary insurance |
| 963 |
agreement, may not be altered by the inability of the other |
| 964 |
party to the agreement to pay its specified percentage of |
| 965 |
hurricane losses. Eligible risks that are provided hurricane |
| 966 |
coverage through a quota share primary insurance arrangement |
| 967 |
must be provided policy forms that set forth the obligations of |
| 968 |
the corporation and authorized insurer under the arrangement, |
| 969 |
clearly specify the percentages of quota share primary insurance |
| 970 |
provided by the corporation and authorized insurer, and |
| 971 |
conspicuously and clearly state that neither the authorized |
| 972 |
insurer nor the corporation may be held responsible beyond its |
| 973 |
specified percentage of coverage of hurricane losses. |
| 974 |
(II) "Eligible
risks" means personal lines residential and |
| 975 |
commercial lines residential risks that meet the underwriting |
| 976 |
criteria of the corporation and are located in areas that were |
| 977 |
eligible for coverage by the Florida Windstorm Underwriting |
| 978 |
Association on January 1, 2002. |
| 979 |
b. The corporation may
enter into quota share primary |
| 980 |
insurance agreements with authorized insurers at corporation |
| 981 |
coverage levels of 90 percent and 50 percent. |
| 982 |
c. If the corporation
determines that additional coverage |
| 983 |
levels are necessary to maximize participation in quota share |
| 984 |
primary insurance agreements by authorized insurers, the |
| 985 |
corporation may establish additional coverage levels. However, |
| 986 |
the corporation's quota share primary insurance coverage level |
| 987 |
may not exceed 90 percent. |
| 988 |
d. Any quota share primary
insurance agreement entered |
| 989 |
into between an authorized insurer and the corporation must |
| 990 |
provide for a uniform specified percentage of coverage of |
| 991 |
hurricane losses, by county or territory as set forth by the |
| 992 |
corporation board, for all eligible risks of the authorized |
| 993 |
insurer covered under the quota share primary insurance |
| 994 |
agreement. |
| 995 |
e. Any quota share primary
insurance agreement entered |
| 996 |
into between an authorized insurer and the corporation is |
| 997 |
subject to review and approval by the office. However, such |
| 998 |
agreement shall be authorized only as to insurance contracts |
| 999 |
entered into between an authorized insurer and an insured who is |
| 1000 |
already insured by the corporation for wind coverage. |
| 1001 |
f. For all eligible risks
covered under quota share |
| 1002 |
primary insurance agreements, the exposure and coverage levels |
| 1003 |
for both the corporation and authorized insurers shall be |
| 1004 |
reported by the corporation to the Florida Hurricane Catastrophe |
| 1005 |
Fund. For all policies of eligible risks covered under quota |
| 1006 |
share primary insurance agreements, the corporation and the |
| 1007 |
authorized insurer shall maintain complete and accurate records |
| 1008 |
for the purpose of exposure and loss reimbursement audits as |
| 1009 |
required by Florida Hurricane Catastrophe Fund rules. The |
| 1010 |
corporation and the authorized insurer shall each maintain |
| 1011 |
duplicate copies of policy declaration pages and supporting |
| 1012 |
claims documents. |
| 1013 |
g. The corporation board
shall establish in its plan of |
| 1014 |
operation standards for quota share agreements which ensure that |
| 1015 |
there is no discriminatory application among insurers as to the |
| 1016 |
terms of quota share agreements, pricing of quota share |
| 1017 |
agreements, incentive provisions if any, and consideration paid |
| 1018 |
for servicing policies or adjusting claims. |
| 1019 |
h. The quota share primary
insurance agreement between the |
| 1020 |
corporation and an authorized insurer must set forth the |
| 1021 |
specific terms under which coverage is provided, including, but |
| 1022 |
not limited to, the sale and servicing of policies issued under |
| 1023 |
the agreement by the insurance agent of the authorized insurer |
| 1024 |
producing the business, the reporting of information concerning |
| 1025 |
eligible risks, the payment of premium to the corporation, and |
| 1026 |
arrangements for the adjustment and payment of hurricane claims |
| 1027 |
incurred on eligible risks by the claims adjuster and personnel |
| 1028 |
of the authorized insurer. Entering into a quota sharing |
| 1029 |
insurance agreement between the corporation and an authorized |
| 1030 |
insurer shall be voluntary and at the discretion of the |
| 1031 |
authorized insurer. |
| 1032 |
3. May provide that the
corporation may employ or |
| 1033 |
otherwise contract with individuals or other entities to provide |
| 1034 |
administrative or professional services that may be appropriate |
| 1035 |
to effectuate the plan. The corporation shall have the power to |
| 1036 |
borrow funds, by issuing bonds or by incurring other |
| 1037 |
indebtedness, and shall have other powers reasonably necessary |
| 1038 |
to effectuate the requirements of this subsection, including, |
| 1039 |
without limitation, the power to issue bonds and incur other |
| 1040 |
indebtedness in order to refinance outstanding bonds or other |
| 1041 |
indebtedness. The corporation may, but is not required to, seek |
| 1042 |
judicial validation of its bonds or other indebtedness under |
| 1043 |
chapter 75. The corporation may issue bonds or incur other |
| 1044 |
indebtedness, or have bonds issued on its behalf by a unit of |
| 1045 |
local government pursuant to subparagraph (g)2., in the absence |
| 1046 |
of a hurricane or other weather-related event, upon a |
| 1047 |
determination by the corporation, subject to approval by the |
| 1048 |
office, that such action would enable it to efficiently meet the |
| 1049 |
financial obligations of the corporation and that such |
| 1050 |
financings are reasonably necessary to effectuate the |
| 1051 |
requirements of this subsection. The corporation is authorized |
| 1052 |
to take all actions needed to facilitate tax-free status for any |
| 1053 |
such bonds or indebtedness, including formation of trusts or |
| 1054 |
other affiliated entities. The corporation shall have the |
| 1055 |
authority to pledge assessments, projected recoveries from the |
| 1056 |
Florida Hurricane Catastrophe Fund, other reinsurance |
| 1057 |
recoverables, market equalization and other surcharges, and |
| 1058 |
other funds available to the corporation as security for bonds |
| 1059 |
or other indebtedness. In recognition of s. 10, Art. I of the |
| 1060 |
State Constitution, prohibiting the impairment of obligations of |
| 1061 |
contracts, it is the intent of the Legislature that no action be |
| 1062 |
taken whose purpose is to impair any bond indenture or financing |
| 1063 |
agreement or any revenue source committed by contract to such |
| 1064 |
bond or other indebtedness. |
| 1065 |
4.a. Must require that the
corporation operate subject to |
| 1066 |
the supervision and approval of a board of governors consisting |
| 1067 |
of eight individuals who are residents of this state, from |
| 1068 |
different geographical areas of this state. The Governor, the |
| 1069 |
Chief Financial Officer, the President of the Senate, and the |
| 1070 |
Speaker of the House of Representatives shall each appoint two |
| 1071 |
members of the board. At least one of the two members appointed |
| 1072 |
by each appointing officer must have demonstrated expertise in |
| 1073 |
insurance. The Chief Financial Officer shall designate one of |
| 1074 |
the appointees as chair. All board members serve at the pleasure |
| 1075 |
of the appointing officer. All members of the board of governors |
| 1076 |
are subject to removal at will by the officers who appointed |
| 1077 |
them. All board members, including the chair, must be appointed |
| 1078 |
to serve for 3-year terms beginning annually on a date |
| 1079 |
designated by the plan. Any board vacancy shall be filled for |
| 1080 |
the unexpired term by the appointing officer. The Chief |
| 1081 |
Financial Officer shall appoint a technical advisory group to |
| 1082 |
provide information and advice to the board of governors in |
| 1083 |
connection with the board's duties under this subsection. The |
| 1084 |
executive director and senior managers of the corporation shall |
| 1085 |
be engaged by the board and serve at the pleasure of the board. |
| 1086 |
Any executive director appointed on or after July 1, 2006, is |
| 1087 |
subject to confirmation by the Senate. The executive director is |
| 1088 |
responsible for employing other staff as the corporation may |
| 1089 |
require, subject to review and concurrence by the board. |
| 1090 |
b. The board shall create a
Market Accountability Advisory |
| 1091 |
Committee to assist the corporation in developing awareness of |
| 1092 |
its rates and its customer and agent service levels in |
| 1093 |
relationship to the voluntary market insurers writing similar |
| 1094 |
coverage. The members of the advisory committee shall consist of |
| 1095 |
the following 11 persons, one of whom must be elected chair by |
| 1096 |
the members of the committee: four representatives, one |
| 1097 |
appointed by the Florida Association of Insurance Agents, one by |
| 1098 |
the Florida Association of Insurance and Financial Advisors, one |
| 1099 |
by the Professional Insurance Agents of Florida, and one by the |
| 1100 |
Latin American Association of Insurance Agencies; three |
| 1101 |
representatives appointed by the insurers with the three highest |
| 1102 |
voluntary market share of residential property insurance |
| 1103 |
business in the state; one representative from the Office of |
| 1104 |
Insurance Regulation; one consumer appointed by the board who is |
| 1105 |
insured by the corporation at the time of appointment to the |
| 1106 |
committee; one representative appointed by the Florida |
| 1107 |
Association of Realtors; and one representative appointed by the |
| 1108 |
Florida Bankers Association. All members must serve for 3-year |
| 1109 |
terms and may serve for consecutive terms. The committee shall |
| 1110 |
report to the corporation at each board meeting on insurance |
| 1111 |
market issues which may include rates and rate competition with |
| 1112 |
the voluntary market; service, including policy issuance, claims |
| 1113 |
processing, and general responsiveness to policyholders, |
| 1114 |
applicants, and agents; and matters relating to depopulation. |
| 1115 |
5. Must provide a procedure
for determining the |
| 1116 |
eligibility of a risk for coverage, as follows: |
| 1117 |
a. Subject to the
provisions of s. 627.3517, with respect |
| 1118 |
to personal lines residential risks, if the risk is offered |
| 1119 |
coverage from an authorized insurer at the insurer's approved |
| 1120 |
rate under either a standard policy including wind coverage or, |
| 1121 |
if consistent with the insurer's underwriting rules as filed |
| 1122 |
with the office, a basic policy including wind coverage, for a |
| 1123 |
new application to the corporation for coverage, the risk is not |
| 1124 |
eligible for any policy issued by the corporation unless the |
| 1125 |
premium for coverage from the authorized insurer is more than 25 |
| 1126 |
percent greater than the premium for comparable coverage from |
| 1127 |
the corporation. Coverage is deemed comparable when, with |
| 1128 |
respect to the main building or structure only, the |
| 1129 |
corporation's coverage would be provided using the same contract |
| 1130 |
form and on the same basis, for either all risk or named perils; |
| 1131 |
loss payment is calculated using the same method, for either |
| 1132 |
replacement cost or actual cash value; and the percentage |
| 1133 |
deductible applicable to hurricane losses is identical to the |
| 1134 |
authorized insurer's offer. If the risk is not able to obtain |
| 1135 |
any such offer, the risk is eligible for either a standard |
| 1136 |
policy including wind coverage or a basic policy including wind |
| 1137 |
coverage issued by the corporation; however, if the risk could |
| 1138 |
not be insured under a standard policy including wind coverage |
| 1139 |
regardless of market conditions, the risk shall be eligible for |
| 1140 |
a basic policy including wind coverage unless rejected under |
| 1141 |
subparagraph 7. 8. However, with regard to a
policyholder of the |
| 1142 |
corporation, the policyholder remains eligible for coverage from |
| 1143 |
the corporation regardless of any offer of coverage from an |
| 1144 |
authorized insurer or surplus lines insurer. The corporation |
| 1145 |
shall determine the type of policy to be provided on the basis |
| 1146 |
of objective standards specified in the underwriting manual and |
| 1147 |
based on generally accepted underwriting practices. |
| 1148 |
(I) If the risk accepts an
offer of coverage through the |
| 1149 |
market assistance plan or an offer of coverage through a |
| 1150 |
mechanism established by the corporation before a policy is |
| 1151 |
issued to the risk by the corporation or during the first 30 |
| 1152 |
days of coverage by the corporation, and the producing agent who |
| 1153 |
submitted the application to the plan or to the corporation is |
| 1154 |
not currently appointed by the insurer, the insurer shall: |
| 1155 |
(A) Pay to the producing
agent of record of the policy, |
| 1156 |
for the first year, an amount that is the greater of the |
| 1157 |
insurer's usual and customary commission for the type of policy |
| 1158 |
written or a fee equal to the usual and customary commission of |
| 1159 |
the corporation; or |
| 1160 |
(B) Offer to allow the
producing agent of record of the |
| 1161 |
policy to continue servicing the policy for a period of not less |
| 1162 |
than 1 year and offer to pay the agent the greater of the |
| 1163 |
insurer's or the corporation's usual and customary commission |
| 1164 |
for the type of policy written. |
| 1165 |
|
| 1166 |
If the producing agent is unwilling or unable to accept |
| 1167 |
appointment, the new insurer shall pay the agent in accordance |
| 1168 |
with sub-sub-sub-subparagraph (A). |
| 1169 |
(II) When the corporation
enters into a contractual |
| 1170 |
agreement for a take-out plan, the producing agent of record of |
| 1171 |
the corporation policy is entitled to retain any unearned |
| 1172 |
commission on the policy, and the insurer shall: |
| 1173 |
(A) Pay to the producing
agent of record of the |
| 1174 |
corporation policy, for the first year, an amount that is the |
| 1175 |
greater of the insurer's usual and customary commission for the |
| 1176 |
type of policy written or a fee equal to the usual and customary |
| 1177 |
commission of the corporation; or |
| 1178 |
(B) Offer to allow the
producing agent of record of the |
| 1179 |
corporation policy to continue servicing the policy for a period |
| 1180 |
of not less than 1 year and offer to pay the agent the greater |
| 1181 |
of the insurer's or the corporation's usual and customary |
| 1182 |
commission for the type of policy written. |
| 1183 |
|
| 1184 |
If the producing agent is unwilling or unable to accept |
| 1185 |
appointment, the new insurer shall pay the agent in accordance |
| 1186 |
with sub-sub-sub-subparagraph (A). |
| 1187 |
b. With respect to
commercial lines residential risks, for |
| 1188 |
a new application to the corporation for coverage, if the risk |
| 1189 |
is offered coverage under a policy including wind coverage from |
| 1190 |
an authorized insurer at its approved rate, the risk is not |
| 1191 |
eligible for any policy issued by the corporation unless the |
| 1192 |
premium for coverage from the authorized insurer is more than 25 |
| 1193 |
percent greater than the premium for comparable coverage from |
| 1194 |
the corporation. Coverage is deemed comparable when, with |
| 1195 |
respect to the main building or structure only, the |
| 1196 |
corporation's coverage would be provided using the same contract |
| 1197 |
form and on the same basis, for either all risk or named perils; |
| 1198 |
loss payment is calculated using the same method, for either |
| 1199 |
replacement cost or actual cash value; and the percentage |
| 1200 |
deductible applicable to hurricane losses is identical to the |
| 1201 |
authorized insurer's offer. If the risk is not able to obtain |
| 1202 |
any such offer, the risk is eligible for a policy including wind |
| 1203 |
coverage issued by the corporation. However, with regard to a |
| 1204 |
policyholder of the corporation, the policyholder remains |
| 1205 |
eligible for coverage from the corporation regardless of any |
| 1206 |
offer of coverage from an authorized insurer or surplus lines |
| 1207 |
insurer. |
| 1208 |
(I) If the risk accepts an
offer of coverage through the |
| 1209 |
market assistance plan or an offer of coverage through a |
| 1210 |
mechanism established by the corporation before a policy is |
| 1211 |
issued to the risk by the corporation or during the first 30 |
| 1212 |
days of coverage by the corporation, and the producing agent who |
| 1213 |
submitted the application to the plan or the corporation is not |
| 1214 |
currently appointed by the insurer, the insurer shall: |
| 1215 |
(A) Pay to the producing
agent of record of the policy, |
| 1216 |
for the first year, an amount that is the greater of the |
| 1217 |
insurer's usual and customary commission for the type of policy |
| 1218 |
written or a fee equal to the usual and customary commission of |
| 1219 |
the corporation; or |
| 1220 |
(B) Offer to allow the
producing agent of record of the |
| 1221 |
policy to continue servicing the policy for a period of not less |
| 1222 |
than 1 year and offer to pay the agent the greater of the |
| 1223 |
insurer's or the corporation's usual and customary commission |
| 1224 |
for the type of policy written. |
| 1225 |
|
| 1226 |
If the producing agent is unwilling or unable to accept |
| 1227 |
appointment, the new insurer shall pay the agent in accordance |
| 1228 |
with sub-sub-sub-subparagraph (A). |
| 1229 |
(II) When the corporation
enters into a contractual |
| 1230 |
agreement for a take-out plan, the producing agent of record of |
| 1231 |
the corporation policy is entitled to retain any unearned |
| 1232 |
commission on the policy, and the insurer shall: |
| 1233 |
(A) Pay to the producing
agent of record of the |
| 1234 |
corporation policy, for the first year, an amount that is the |
| 1235 |
greater of the insurer's usual and customary commission for the |
| 1236 |
type of policy written or a fee equal to the usual and customary |
| 1237 |
commission of the corporation; or |
| 1238 |
(B) Offer to allow the
producing agent of record of the |
| 1239 |
corporation policy to continue servicing the policy for a period |
| 1240 |
of not less than 1 year and offer to pay the agent the greater |
| 1241 |
of the insurer's or the corporation's usual and customary |
| 1242 |
commission for the type of policy written. |
| 1243 |
|
| 1244 |
If the producing agent is unwilling or unable to accept |
| 1245 |
appointment, the new insurer shall pay the agent in accordance |
| 1246 |
with sub-sub-sub-subparagraph (A). |
| 1247 |
6. Must provide by July
1, 2007, that an application for |
| 1248 |
coverage for a new policy is subject to a waiting period of 10 |
| 1249 |
days before coverage is effective, during which time the |
| 1250 |
corporation shall make such application available for review by |
| 1251 |
general lines agents and authorized property and casualty |
| 1252 |
insurers. The board shall approve an exception that allows for |
| 1253 |
coverage to be effective before the end of the 10-day waiting |
| 1254 |
period, for coverage issued in conjunction with a real estate |
| 1255 |
closing. The board may approve such other exceptions as the |
| 1256 |
board determines are necessary to prevent lapses in coverage. |
| 1257 |
6.7. Must
include rules for classifications of risks and |
| 1258 |
rates therefor. |
| 1259 |
7.8. Must
provide that if premium and investment income |
| 1260 |
for an account attributable to a particular calendar year are in |
| 1261 |
excess of projected losses and expenses for the account |
| 1262 |
attributable to that year, such excess shall be held in surplus |
| 1263 |
in the account. Such surplus shall be available to defray |
| 1264 |
deficits in that account as to future years and shall be used |
| 1265 |
for that purpose prior to assessing assessable insurers and |
| 1266 |
assessable insureds as to any calendar year. |
| 1267 |
8.9. Must
provide objective criteria and procedures to be |
| 1268 |
uniformly applied for all applicants in determining whether an |
| 1269 |
individual risk is so hazardous as to be uninsurable. In making |
| 1270 |
this determination and in establishing the criteria and |
| 1271 |
procedures, the following shall be considered: |
| 1272 |
a. Whether the likelihood
of a loss for the individual |
| 1273 |
risk is substantially higher than for other risks of the same |
| 1274 |
class; and |
| 1275 |
b. Whether the uncertainty
associated with the individual |
| 1276 |
risk is such that an appropriate premium cannot be determined. |
| 1277 |
|
| 1278 |
The acceptance or rejection of a risk by the corporation shall |
| 1279 |
be construed as the private placement of insurance, and the |
| 1280 |
provisions of chapter 120 shall not apply. |
| 1281 |
9.10. Must
provide that the corporation shall make its |
| 1282 |
best efforts to procure catastrophe reinsurance at reasonable |
| 1283 |
rates, to cover its projected 100-year probable maximum loss as |
| 1284 |
determined by the board of governors. |
| 1285 |
10.11. Must
provide that in the event of regular deficit |
| 1286 |
assessments under sub-subparagraph (b)3.a. or sub-subparagraph |
| 1287 |
(b)3.b., in the personal lines account, the commercial lines |
| 1288 |
residential account, or the high-risk account, the corporation |
| 1289 |
shall levy upon corporation policyholders in its next rate |
| 1290 |
filing, or by a separate rate filing solely for this purpose, a |
| 1291 |
Citizens policyholder surcharge arising from a regular |
| 1292 |
assessment in such account in a percentage equal to the total |
| 1293 |
amount of such regular assessments divided by the aggregate |
| 1294 |
statewide direct written premium for subject lines of business |
| 1295 |
for the prior calendar year. For purposes of calculating the |
| 1296 |
Citizens policyholder surcharge to be levied under this |
| 1297 |
subparagraph, the total amount of the regular assessment to |
| 1298 |
which this surcharge is related shall be determined as set forth |
| 1299 |
in subparagraph (b)3., without deducting the estimated Citizens |
| 1300 |
policyholder surcharge. Citizens policyholder surcharges under |
| 1301 |
this subparagraph are not considered premium and are not subject |
| 1302 |
to commissions, fees, or premium taxes; however, failure to pay |
| 1303 |
a market equalization surcharge shall be treated as failure to |
| 1304 |
pay premium. |
| 1305 |
11.12. The
policies issued by the corporation must provide |
| 1306 |
that, if the corporation or the market assistance plan obtains |
| 1307 |
an offer from an authorized insurer to cover the risk at its |
| 1308 |
approved rates, the risk is no longer eligible for renewal |
| 1309 |
through the corporation, except as otherwise provided in this |
| 1310 |
subsection. |
| 1311 |
12.13. Corporation
policies and applications must include |
| 1312 |
a notice that the corporation policy could, under this section, |
| 1313 |
be replaced with a policy issued by an authorized insurer that |
| 1314 |
does not provide coverage identical to the coverage provided by |
| 1315 |
the corporation. The notice shall also specify that acceptance |
| 1316 |
of corporation coverage creates a conclusive presumption that |
| 1317 |
the applicant or policyholder is aware of this potential. |
| 1318 |
13.14. May
establish, subject to approval by the office, |
| 1319 |
different eligibility requirements and operational procedures |
| 1320 |
for any line or type of coverage for any specified county or |
| 1321 |
area if the board determines that such changes to the |
| 1322 |
eligibility requirements and operational procedures are |
| 1323 |
justified due to the voluntary market being sufficiently stable |
| 1324 |
and competitive in such area or for such line or type of |
| 1325 |
coverage and that consumers who, in good faith, are unable to |
| 1326 |
obtain insurance through the voluntary market through ordinary |
| 1327 |
methods would continue to have access to coverage from the |
| 1328 |
corporation. When coverage is sought in connection with a real |
| 1329 |
property transfer, such requirements and procedures shall not |
| 1330 |
provide for an effective date of coverage later than the date of |
| 1331 |
the closing of the transfer as established by the transferor, |
| 1332 |
the transferee, and, if applicable, the lender. |
| 1333 |
14.15. Must
provide that, with respect to the high-risk |
| 1334 |
account, any assessable insurer with a surplus as to |
| 1335 |
policyholders of $25 million or less writing 25 percent or more |
| 1336 |
of its total countrywide property insurance premiums in this |
| 1337 |
state may petition the office, within the first 90 days of each |
| 1338 |
calendar year, to qualify as a limited apportionment company. A |
| 1339 |
regular assessment levied by the corporation on a limited |
| 1340 |
apportionment company for a deficit incurred by the corporation |
| 1341 |
for the high-risk account in 2006 or thereafter may be paid to |
| 1342 |
the corporation on a monthly basis as the assessments are |
| 1343 |
collected by the limited apportionment company from its insureds |
| 1344 |
pursuant to s. 627.3512, but the regular assessment must be paid |
| 1345 |
in full within 12 months after being levied by the corporation. |
| 1346 |
A limited apportionment company shall collect from its |
| 1347 |
policyholders any emergency assessment imposed under sub- |
| 1348 |
subparagraph (b)3.d. The plan shall provide that, if the office |
| 1349 |
determines that any regular assessment will result in an |
| 1350 |
impairment of the surplus of a limited apportionment company, |
| 1351 |
the office may direct that all or part of such assessment be |
| 1352 |
deferred as provided in subparagraph (g)4. However, there shall |
| 1353 |
be no limitation or deferment of an emergency assessment to be |
| 1354 |
collected from policyholders under sub-subparagraph (b)3.d. |
| 1355 |
15.16. Must
provide that the corporation appoint as its |
| 1356 |
licensed agents only those agents who also hold an appointment |
| 1357 |
as defined in s. 626.015(3) with an insurer who at the time of |
| 1358 |
the agent's initial appointment by the corporation is authorized |
| 1359 |
to write and is actually writing personal lines residential |
| 1360 |
property coverage, commercial residential property coverage, or |
| 1361 |
commercial nonresidential property coverage within the state. |
| 1362 |
16.17. Must
provide, by July 1, 2007, a premium payment |
| 1363 |
plan option to its policyholders which allows at a minimum
for |
| 1364 |
quarterly and semiannual payment of premiums. A monthly payment |
| 1365 |
plan may, but is not required to, be offered. |
| 1366 |
17.18. Must
provide, effective June 1, 2007, that the |
| 1367 |
corporation contract with each insurer providing the non-wind |
| 1368 |
coverage for risks insured by the corporation in the high-risk |
| 1369 |
account, requiring that the insurer provide claims adjusting |
| 1370 |
services for the wind coverage provided by the corporation for |
| 1371 |
such risks. An insurer is required to enter into this contract |
| 1372 |
as a condition of providing non-wind coverage for a risk that is |
| 1373 |
insured by the corporation in the high-risk account unless the |
| 1374 |
board finds, after a hearing, that the insurer is not capable of |
| 1375 |
providing adjusting services at an acceptable level of quality |
| 1376 |
to corporation policyholders. The terms and conditions of such |
| 1377 |
contracts must be substantially the same as the contracts that |
| 1378 |
the corporation executed with insurers under the "adjust-your- |
| 1379 |
own" program in 2006, except as may be mutually agreed to by
the |
| 1380 |
parties and except for such changes that the board determines |
| 1381 |
are necessary to ensure that claims are adjusted appropriately. |
| 1382 |
The corporation shall provide a process for neutral arbitration |
| 1383 |
of any dispute between the corporation and the insurer regarding |
| 1384 |
the terms of the contract. The corporation shall review and |
| 1385 |
monitor the performance of insurers under these contracts. |
| 1386 |
18.19. Must
limit coverage on mobile homes or manufactured |
| 1387 |
homes built prior to 1994 to actual cash value of the dwelling |
| 1388 |
rather than replacement costs of the dwelling. |
| 1389 |
19.20. May
provide such limits of coverage as the board |
| 1390 |
determines, consistent with the requirements of this subsection. |
| 1391 |
20.21. May
require commercial property to meet specified |
| 1392 |
hurricane mitigation construction features as a condition of |
| 1393 |
eligibility for coverage. |
| 1394 |
(n) If coverage in an
account is deactivated pursuant to |
| 1395 |
paragraph (f), coverage through the corporation shall be |
| 1396 |
reactivated by order of the office only under one of the |
| 1397 |
following circumstances: |
| 1398 |
1. If the market assistance
plan receives a minimum of 100 |
| 1399 |
applications for coverage within a 3-month period, or 200 |
| 1400 |
applications for coverage within a 1-year period or less for |
| 1401 |
residential coverage, unless the market assistance plan provides |
| 1402 |
a quotation from admitted carriers at their filed rates for at |
| 1403 |
least 90 percent of such applicants. Any market assistance plan |
| 1404 |
application that is rejected because an individual risk is so |
| 1405 |
hazardous as to be uninsurable using the criteria specified in |
| 1406 |
subparagraph (c)7.8. shall not be included in the
minimum |
| 1407 |
percentage calculation provided herein. In the event that there |
| 1408 |
is a legal or administrative challenge to a determination by the |
| 1409 |
office that the conditions of this subparagraph have been met |
| 1410 |
for eligibility for coverage in the corporation, any eligible |
| 1411 |
risk may obtain coverage during the pendency of such challenge. |
| 1412 |
2. In response to a state
of emergency declared by the |
| 1413 |
Governor under s. 252.36, the office may activate coverage by |
| 1414 |
order for the period of the emergency upon a finding by the |
| 1415 |
office that the emergency significantly affects the availability |
| 1416 |
of residential property insurance. |
| 1417 |
(v) Notwithstanding any
other provision of law: |
| 1418 |
1. The pledge or sale of,
the lien upon, and the security |
| 1419 |
interest in any rights, revenues, or other assets of the |
| 1420 |
corporation created or purported to be created pursuant to any |
| 1421 |
financing documents to secure any bonds or other indebtedness of |
| 1422 |
the corporation shall be and remain valid and enforceable, |
| 1423 |
notwithstanding the commencement of and during the continuation |
| 1424 |
of, and after, any rehabilitation, insolvency, liquidation, |
| 1425 |
bankruptcy, receivership, conservatorship, reorganization, or |
| 1426 |
similar proceeding against the corporation under the laws of |
| 1427 |
this state. |
| 1428 |
2. No such proceeding shall
relieve the corporation of its |
| 1429 |
obligation, or otherwise affect its ability to perform its |
| 1430 |
obligation, to continue to collect, or levy and collect, |
| 1431 |
assessments, market equalization or other surcharges under |
| 1432 |
subparagraph (c)9.10., or any other rights, revenues,
or other |
| 1433 |
assets of the corporation pledged pursuant to any financing |
| 1434 |
documents. |
| 1435 |
3. Each such pledge or sale
of, lien upon, and security |
| 1436 |
interest in, including the priority of such pledge, lien, or |
| 1437 |
security interest, any such assessments, market equalization or |
| 1438 |
other surcharges, or other rights, revenues, or other assets |
| 1439 |
which are collected, or levied and collected, after the |
| 1440 |
commencement of and during the pendency of, or after, any such |
| 1441 |
proceeding shall continue unaffected by such proceeding. As used |
| 1442 |
in this subsection, the term "financing documents" means
any |
| 1443 |
agreement or agreements, instrument or instruments, or other |
| 1444 |
document or documents now existing or hereafter created |
| 1445 |
evidencing any bonds or other indebtedness of the corporation or |
| 1446 |
pursuant to which any such bonds or other indebtedness has been |
| 1447 |
or may be issued and pursuant to which any rights, revenues, or |
| 1448 |
other assets of the corporation are pledged or sold to secure |
| 1449 |
the repayment of such bonds or indebtedness, together with the |
| 1450 |
payment of interest on such bonds or such indebtedness, or the |
| 1451 |
payment of any other obligation or financial product, as defined |
| 1452 |
in the plan of operation of the corporation related to such |
| 1453 |
bonds or indebtedness. |
| 1454 |
4. Any such pledge or sale
of assessments, revenues, |
| 1455 |
contract rights, or other rights or assets of the corporation |
| 1456 |
shall constitute a lien and security interest, or sale, as the |
| 1457 |
case may be, that is immediately effective and attaches to such |
| 1458 |
assessments, revenues, or contract rights or other rights or |
| 1459 |
assets, whether or not imposed or collected at the time the |
| 1460 |
pledge or sale is made. Any such pledge or sale is effective, |
| 1461 |
valid, binding, and enforceable against the corporation or other |
| 1462 |
entity making such pledge or sale, and valid and binding against |
| 1463 |
and superior to any competing claims or obligations owed to any |
| 1464 |
other person or entity, including policyholders in this state, |
| 1465 |
asserting rights in any such assessments, revenues, or contract |
| 1466 |
rights or other rights or assets to the extent set forth in and |
| 1467 |
in accordance with the terms of the pledge or sale contained in |
| 1468 |
the applicable financing documents, whether or not any such |
| 1469 |
person or entity has notice of such pledge or sale and without |
| 1470 |
the need for any physical delivery, recordation, filing, or |
| 1471 |
other action. |
| 1472 |
5. As long as the
corporation has any bonds outstanding, |
| 1473 |
the corporation may not file a voluntary petition under chapter |
| 1474 |
9 of the federal Bankruptcy Code or such corresponding chapter |
| 1475 |
or sections as may be in effect, from time to time, and a public |
| 1476 |
officer or any organization, entity, or other person may not |
| 1477 |
authorize the corporation to be or become a debtor under chapter |
| 1478 |
9 of the federal Bankruptcy Code or such corresponding chapter |
| 1479 |
or sections as may be in effect, from time to time, during any |
| 1480 |
such period. |
| 1481 |
6. If ordered by a court of
competent jurisdiction, the |
| 1482 |
corporation may assume policies or otherwise provide coverage |
| 1483 |
for policyholders of an insurer placed in liquidation under |
| 1484 |
chapter 631, under such forms, rates, terms, and conditions as |
| 1485 |
the corporation deems appropriate, subject to approval by the |
| 1486 |
office. |
| 1487 |
Section 11. Subsection (4)
of section 627.3511, Florida |
| 1488 |
Statutes, is amended to read: |
| 1489 |
627.3511 Depopulation of
Citizens Property Insurance |
| 1490 |
Corporation.-- |
| 1491 |
(4) AGENT BONUS.--When the
corporation enters into a |
| 1492 |
contractual agreement for a take-out plan that provides a bonus |
| 1493 |
to the insurer, the producing agent of record of the corporation |
| 1494 |
policy is entitled to retain any unearned commission on such |
| 1495 |
policy, and the insurer shall either: |
| 1496 |
(a) Pay to the producing
agent of record of the |
| 1497 |
association policy, for the first year, an amount that is the |
| 1498 |
greater of the insurer's usual and customary commission for the |
| 1499 |
type of policy written or a fee equal to the usual and customary |
| 1500 |
commission of the corporation; or |
| 1501 |
(b) Offer to allow the
producing agent of record of the |
| 1502 |
corporation policy to continue servicing the policy for a period |
| 1503 |
of not less than 1 year and offer to pay the agent the greater |
| 1504 |
of the insurer's or the corporation's usual and customary |
| 1505 |
commission for the type of policy written. |
| 1506 |
|
| 1507 |
If the producing agent is unwilling or unable to accept |
| 1508 |
appointment, the new insurer shall pay the agent in accordance |
| 1509 |
with paragraph (a). The requirement of this subsection that the |
| 1510 |
producing agent of record is entitled to retain the unearned |
| 1511 |
commission on an association policy does not apply to a policy |
| 1512 |
for which coverage has been provided in the association for 30 |
| 1513 |
days or less or for which a cancellation notice has been issued |
| 1514 |
pursuant to s. 627.351(6)(c)10.11. during the first 30
days of |
| 1515 |
coverage. |
| 1516 |
Section 12. Paragraph (a)
of subsection (3) of section |
| 1517 |
627.3515, Florida Statutes, as amended by chapter 2007-1, Laws |
| 1518 |
of Florida, is amended to read: |
| 1519 |
627.3515 Market assistance
plan; property and casualty |
| 1520 |
risks.-- |
| 1521 |
(3)(a) The plan and the
corporation shall develop a |
| 1522 |
business plan and present it to the Financial Services |
| 1523 |
Commission for approval by September 1, 2007, to provide for the |
| 1524 |
implementation of an electronic database for the purpose of |
| 1525 |
confirming eligibility pursuant to s. 627.351(6). The business |
| 1526 |
plan may provide that authorized insurers or agents of |
| 1527 |
authorized insurers may submit to the plan or the corporation in |
| 1528 |
electronic form, as determined by the plan or the corporation, |
| 1529 |
information determined necessary by the plan or the corporation |
| 1530 |
to deny coverage to risks ineligible for coverage by the |
| 1531 |
corporation. Any authorized insurer submitting such information |
| 1532 |
that results in a risk being denied coverage by the corporation |
| 1533 |
is required to provide coverage to the risk at its approved |
| 1534 |
rates, for the coverage and premium quoted, for at least 1 year. |
| 1535 |
Section 13. Section
627.3517, Florida Statutes, is amended |
| 1536 |
to read: |
| 1537 |
627.3517 Consumer choice.-- |
| 1538 |
(1) Except as provided
in subsection (2), No provision of |
| 1539 |
s. 627.351, s. 627.3511, or s. 627.3515 shall be construed to |
| 1540 |
impair the right of any insurance risk apportionment plan |
| 1541 |
policyholder, upon receipt of any keepout or take-out offer, to |
| 1542 |
retain his or her current agent, so long as that agent is duly |
| 1543 |
licensed and appointed by the insurance risk apportionment plan |
| 1544 |
or otherwise authorized to place business with the insurance |
| 1545 |
risk apportionment plan. This right shall not be canceled, |
| 1546 |
suspended, impeded, abridged, or otherwise compromised by any |
| 1547 |
rule, plan of operation, or depopulation plan, whether through |
| 1548 |
keepout, take-out, midterm assumption, or any other means, of |
| 1549 |
any insurance risk apportionment plan or depopulation plan, |
| 1550 |
including, but not limited to, those described in s. 627.351, s. |
| 1551 |
627.3511, or s. 627.3515. The commission shall adopt any rules |
| 1552 |
necessary to cause any insurance risk apportionment plan or |
| 1553 |
market assistance plan under such sections to demonstrate that |
| 1554 |
the operations of the plan do not interfere with, promote, or |
| 1555 |
allow interference with the rights created under this section. |
| 1556 |
If the policyholder's current agent is unable or unwilling to be |
| 1557 |
appointed with the insurer making the take-out or keepout offer, |
| 1558 |
the policyholder shall not be disqualified from participation in |
| 1559 |
the appropriate insurance risk apportionment plan because of an |
| 1560 |
offer of coverage in the voluntary market. An offer of full |
| 1561 |
property insurance coverage by the insurer currently insuring |
| 1562 |
either the ex-wind or wind-only coverage on the policy to which |
| 1563 |
the offer applies shall not be considered a take-out or keepout |
| 1564 |
offer. Any rule, plan of operation, or plan of depopulation, |
| 1565 |
through keepout, take-out, midterm assumption, or any other |
| 1566 |
means, of any property insurance risk apportionment plan under |
| 1567 |
s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and (6)(c) |
| 1568 |
and 627.3511(4). |
| 1569 |
(2) This section does
not apply during the first 10 days |
| 1570 |
after a new application for coverage has been submitted to |
| 1571 |
Citizens Property Insurance Corporation under s. 627.351(6), |
| 1572 |
whether or not coverage is bound during this period. |
| 1573 |
Section 14. Subsection (1)
of section 627.4035, Florida |
| 1574 |
Statutes, as amended by chapter 2007-1, Laws of Florida, is |
| 1575 |
amended to read: |
| 1576 |
627.4035 Cash payment of
premiums; claims.-- |
| 1577 |
(1) The premiums for
insurance contracts issued in this |
| 1578 |
state or covering risk located in this state shall be paid in |
| 1579 |
cash consisting of coins, currency, checks, or money orders or |
| 1580 |
by using a debit card, credit card, automatic electronic funds |
| 1581 |
transfer, or payroll deduction plan. By July 1, 2007, insurers |
| 1582 |
issuing personal lines residential and commercial property |
| 1583 |
policies shall provide a premium payment plan option to their |
| 1584 |
policyholders which allows for a minimum of quarterly and |
| 1585 |
semiannual payment of premiums. Insurers may, but are not |
| 1586 |
required to, offer monthly payment plans. Insurers issuing
such |
| 1587 |
policies must submit their premium payment plan option to the |
| 1588 |
office for approval before use. |
| 1589 |
Section 15. Subsection (7)
is added to section 627.4133, |
| 1590 |
Florida Statutes, to read: |
| 1591 |
627.4133 Notice of
cancellation, nonrenewal, or renewal |
| 1592 |
premium.-- |
| 1593 |
(7)(a) With respect to
any residential property insurance |
| 1594 |
policy, every notice of renewal premium must specify: |
| 1595 |
1. The dollar amounts
recouped for assessments by the |
| 1596 |
Florida Hurricane Catastrophe Fund, the Citizens Property |
| 1597 |
Insurance Corporation, and the Florida Insurance Guaranty |
| 1598 |
Association. The actual names of the entities must appear next |
| 1599 |
to the dollar amounts. |
| 1600 |
2. The dollar amount of
any premium increase that is due |
| 1601 |
to an approved rate increase and the dollar amounts that are due |
| 1602 |
to coverage changes. |
| 1603 |
(b) The Financial
Services Commission may adopt rules |
| 1604 |
pursuant to ss. 120.536(1) and 120.54 to implement this |
| 1605 |
subsection. |
| 1606 |
Section 16. Paragraphs (a)
and (c) of subsection (3) and |
| 1607 |
paragraph (d) of subsection (4) of section 627.701, Florida |
| 1608 |
Statutes, as amended by chapter 2007-1, Laws of Florida, are |
| 1609 |
amended, to read: |
| 1610 |
627.701 Liability of
insureds; coinsurance; deductibles.-- |
| 1611 |
(3)(a) Except as otherwise
provided in this subsection, |
| 1612 |
prior to issuing a personal lines residential property insurance |
| 1613 |
policy, the insurer must offer alternative deductible amounts |
| 1614 |
applicable to hurricane losses equal to $500, 2 percent, 5 |
| 1615 |
percent, and 10 percent of the policy dwelling limits, unless |
| 1616 |
the specific percentage deductible is less than $500. The |
| 1617 |
written notice of the offer shall specify the hurricane or wind |
| 1618 |
deductible to be applied in the event that the applicant or |
| 1619 |
policyholder fails to affirmatively choose a hurricane |
| 1620 |
deductible. The insurer must provide such policyholder with |
| 1621 |
notice of the availability of the deductible amounts specified |
| 1622 |
in this paragraph in a form approved by the office in |
| 1623 |
conjunction with each renewal of the policy. The failure to |
| 1624 |
provide such notice constitutes a violation of this code but |
| 1625 |
does not affect the coverage provided under the policy. |
| 1626 |
(c) With respect to a
policy covering a risk with dwelling |
| 1627 |
limits of at least $100,000, but less than $250,000, the insurer |
| 1628 |
may, in lieu of offering a policy with a $500 hurricane or wind |
| 1629 |
deductible as required by paragraph (a), offer a policy that the |
| 1630 |
insurer guarantees it will not nonrenew for reasons of reducing |
| 1631 |
hurricane loss for one renewal period and that contains up to a |
| 1632 |
2 percent hurricane or wind deductible as required by
paragraph |
| 1633 |
(a). |
| 1634 |
(4) |
| 1635 |
(d)1. A personal lines
residential property insurance |
| 1636 |
policy covering a risk valued at less than $500,000 may not have |
| 1637 |
a hurricane deductible in excess of 10 percent of the policy |
| 1638 |
dwelling limits, unless the following conditions are met: |
| 1639 |
a. The policyholder must
personally write and provide to |
| 1640 |
the insurer the following statement in his or her own |
| 1641 |
handwriting and sign his or her name, which must also be signed |
| 1642 |
by every other named insured on the policy, and dated: "I do
not |
| 1643 |
want the insurance on my home to pay for the first (specify |
| 1644 |
dollar value) of damage from hurricanes. I will pay those costs. |
| 1645 |
My insurance will not." |
| 1646 |
b. If the structure insured
by the policy is subject to a |
| 1647 |
mortgage or lien, the policyholder must provide the insurer with |
| 1648 |
a written statement from the mortgageholder or lienholder |
| 1649 |
indicating that the mortgageholder or lienholder approves the |
| 1650 |
policyholder electing to have the specified deductible. |
| 1651 |
2. A deductible subject to
the requirements of this |
| 1652 |
paragraph applies for the term of the policy and for each |
| 1653 |
renewal thereafter unless the policyholder elects
otherwise. |
| 1654 |
Changes to the deductible percentage may be implemented only as |
| 1655 |
of the date of renewal. |
| 1656 |
3. An insurer shall keep
the original copy of the signed |
| 1657 |
statement required by this paragraph, electronically or |
| 1658 |
otherwise, and provide a copy to the policyholder providing
the |
| 1659 |
signed statement. A signed statement meeting the requirements of |
| 1660 |
this paragraph creates a presumption that there was an informed, |
| 1661 |
knowing election of coverage. |
| 1662 |
4. The commission shall
adopt rules providing appropriate |
| 1663 |
alternative methods for providing the statements required by |
| 1664 |
this section for policyholders who have a handicapping or |
| 1665 |
disabling condition that prevents them from providing a |
| 1666 |
handwritten statement. |
| 1667 |
Section 17. Subsection (5)
of section 627.70131, Florida |
| 1668 |
Statutes, as amended by chapter 2007-1, Laws of Florida, is |
| 1669 |
amended to read: |
| 1670 |
627.70131 Insurer's duty to
acknowledge communications |
| 1671 |
regarding claims; investigation.-- |
| 1672 |
(5) Within 90 days after an
insurer receives notice of |
| 1673 |
loss of a residential property insurance claim from a |
| 1674 |
policyholder, the insurer shall pay or deny such claim unless |
| 1675 |
the failure to pay such claim is caused by factors beyond the |
| 1676 |
control of the insurer which reasonably prevent such payment. |
| 1677 |
The exclusive remedy for a violation of this subsection is a |
| 1678 |
regulatory action under this code. Failure to comply with
this |
| 1679 |
subsection constitutes a violation of this code. |
| 1680 |
Section 18. Subsections
(2), (4), and (5) of section |
| 1681 |
627.712, Florida Statutes, as created by chapter 2007-1, Laws of |
| 1682 |
Florida, are amended to read: |
| 1683 |
627.712 Residential
hurricane coverage required; |
| 1684 |
availability of exclusions for windstorm or contents.-- |
| 1685 |
(1) An insurer issuing a
residential property insurance |
| 1686 |
policy must provide hurricane or windstorm coverage as defined |
| 1687 |
in s. 627.4025. This subsection does not apply with respect to |
| 1688 |
risks that are eligible for wind-only coverage from Citizens |
| 1689 |
Property Insurance Corporation under s. 627.351(6). |
| 1690 |
(2) A personal lines
residential property An insurer that |
| 1691 |
is subject to subsection (1) must make available, at the option |
| 1692 |
of the policyholder, an exclusion of hurricane coverage or |
| 1693 |
windstorm coverage as provided within the applicable policy.
The |
| 1694 |
coverage may be excluded only if: |
| 1695 |
(a) The policyholder
personally writes and provides to the |
| 1696 |
insurer the following statement in his or her own handwriting |
| 1697 |
and signs his or her name, which must also be signed by every |
| 1698 |
other named insured on the policy, and dated: "I do not want
the |
| 1699 |
insurance on my (home/mobile home/condominium unit) to pay for |
| 1700 |
damage from windstorms or hurricanes. I will pay those costs. My |
| 1701 |
insurance will not." |
| 1702 |
(b) If the structure
insured by the policy is subject to a |
| 1703 |
mortgage or lien, the policyholder must provide the insurer with |
| 1704 |
a written statement from the mortgageholder or lienholder |
| 1705 |
indicating that the mortgageholder or lienholder approves the |
| 1706 |
policyholder electing to exclude windstorm coverage or hurricane |
| 1707 |
coverage from his or her residential property insurance policy. |
| 1708 |
(4) An insurer shall keep
the original copy of a signed |
| 1709 |
statement required by this section, electronically or otherwise, |
| 1710 |
and provide a copy to the policyholder providing the signed |
| 1711 |
statement. A signed statement meeting the requirements of this |
| 1712 |
section creates a presumption that there was an informed, |
| 1713 |
knowing rejection of coverage. |
| 1714 |
(5) The exclusions
authorized by this section apply for |
| 1715 |
the term of the policy and for each renewal thereafter. Changes |
| 1716 |
to the exclusions authorized by this section may be implemented |
| 1717 |
only as of the date of renewal. The exclusions authorized
by |
| 1718 |
this section are valid for the term of the contract and for each |
| 1719 |
renewal unless the policyholder elects otherwise. |
| 1720 |
Section 19. Section
627.713, Florida Statutes, as created |
| 1721 |
by chapter 2007-1, Laws of Florida, is amended to read: |
| 1722 |
627.713 Report of hurricane
loss data.--After the |
| 1723 |
conclusion of the Atlantic hurricane season each year, the |
| 1724 |
office may require property insurers to report data regarding |
| 1725 |
hurricane claims and underwriting costs, including, but not |
| 1726 |
limited to: |
| 1727 |
(1) Number of claims. |
| 1728 |
(2) Amount of claim
payments made. |
| 1729 |
(3) Number and amount of
total-loss claims. |
| 1730 |
(4) Amount and percentage
of losses covered by reinsurance |
| 1731 |
or other loss-transfer agreements. |
| 1732 |
(5) Amount of losses
covered under specified deductibles. |
| 1733 |
(6) Claims and payments for
specified insured values. |
| 1734 |
(7) Claims and payments for
specified dollar values. |
| 1735 |
(8) Claims and payments for
specified types of |
| 1736 |
construction or mitigation features. |
| 1737 |
(9) Claims and payments for
policies under specified |
| 1738 |
underwriting criteria. |
| 1739 |
(10) Claims and payments
for contents, additional living |
| 1740 |
expense, and other specified coverages. |
| 1741 |
(11) Claims and payments by
county for the information |
| 1742 |
specified in this section. |
| 1743 |
(12) Any other data that
the office requires. |
| 1744 |
Section 20. Subsections (4)
and (5) of section 627.7277, |
| 1745 |
Florida Statutes, as amended by chapter 2007-1, Laws of Florida, |
| 1746 |
are amended to read: |
| 1747 |
627.7277 Notice of renewal
premium.-- |
| 1748 |
(4) Every notice of
renewal premium must specify: |
| 1749 |
(a) The dollar amounts
recouped for assessments by the |
| 1750 |
Florida Hurricane Catastrophe Fund, the Citizens Property |
| 1751 |
Insurance Corporation, and the Florida Insurance Guaranty |
| 1752 |
Association. The actual names of the entities must appear next |
| 1753 |
to the dollar amounts. |
| 1754 |
(b) The dollar amount of
any premium increase that is due |
| 1755 |
to a rate increase and the dollar amounts that are due to |
| 1756 |
coverage changes. |
| 1757 |
(5) The Financial
Services Commission may adopt rules |
| 1758 |
pursuant to ss. 120.536(1) and 120.54 to implement this section. |
| 1759 |
Section 21. Paragraph (e)
of subsection (3) of section |
| 1760 |
631.57, Florida Statutes, as amended by chapter 2007-1, Laws of |
| 1761 |
Florida, is amended to read: |
| 1762 |
631.57 Powers and duties of
the association.-- |
| 1763 |
(3) |
| 1764 |
(e)1.a. In addition to
assessments otherwise authorized in |
| 1765 |
paragraph (a) and to the extent necessary to secure the funds |
| 1766 |
for the account specified in s. 631.55(2)(c) for the direct |
| 1767 |
payment of covered claims of insurers rendered insolvent by
the |
| 1768 |
effects of a hurricane homeowners' insurers and to pay
the |
| 1769 |
reasonable costs to administer such claims, or to retire |
| 1770 |
indebtedness, including, without limitation, the principal, |
| 1771 |
redemption premium, if any, and interest on, and related costs |
| 1772 |
of issuance of, bonds issued under s. 631.695 and the funding of |
| 1773 |
any reserves and other payments required under the bond |
| 1774 |
resolution or trust indenture pursuant to which such bonds have |
| 1775 |
been issued, the office, upon certification of the board of |
| 1776 |
directors, shall levy emergency assessments upon insurers |
| 1777 |
holding a certificate of authority. The emergency assessments |
| 1778 |
payable under this paragraph by any insurer shall not exceed in |
| 1779 |
any single year more than 2 percent of that insurer's direct |
| 1780 |
written premiums, net of refunds, in this state during the |
| 1781 |
preceding calendar year for the kinds of insurance within the |
| 1782 |
account specified in s. 631.55(2)(c). |
| 1783 |
b. Any emergency
assessments authorized under this |
| 1784 |
paragraph shall be levied by the office upon insurers referred |
| 1785 |
to in sub-subparagraph a., upon certification as to the need for |
| 1786 |
such assessments by the board of directors. In the event the |
| 1787 |
board of directors participates in the issuance of bonds in |
| 1788 |
accordance with s. 631.695, emergency assessments shall be |
| 1789 |
levied in each year that bonds issued under s. 631.695 and |
| 1790 |
secured by such emergency assessments are outstanding, in such |
| 1791 |
amounts up to such 2-percent limit as required in order to |
| 1792 |
provide for the full and timely payment of the principal of, |
| 1793 |
redemption premium, if any, and interest on, and related costs |
| 1794 |
of issuance of, such bonds. The emergency assessments provided |
| 1795 |
for in this paragraph are assigned and pledged to the |
| 1796 |
municipality, county, or legal entity issuing bonds under s. |
| 1797 |
631.695 for the benefit of the holders of such bonds, in order |
| 1798 |
to enable such municipality, county, or legal entity to provide |
| 1799 |
for the payment of the principal of, redemption premium, if any, |
| 1800 |
and interest on such bonds, the cost of issuance of such bonds, |
| 1801 |
and the funding of any reserves and other payments required |
| 1802 |
under the bond resolution or trust indenture pursuant to which |
| 1803 |
such bonds have been issued, without the necessity of any |
| 1804 |
further action by the association, the office, or any other |
| 1805 |
party. To the extent bonds are issued under s. 631.695 and the |
| 1806 |
association determines to secure such bonds by a pledge of |
| 1807 |
revenues received from the emergency assessments, such bonds, |
| 1808 |
upon such pledge of revenues, shall be secured by and payable |
| 1809 |
from the proceeds of such emergency assessments, and the |
| 1810 |
proceeds of emergency assessments levied under this paragraph |
| 1811 |
shall be remitted directly to and administered by the trustee or |
| 1812 |
custodian appointed for such bonds. |
| 1813 |
c. Emergency assessments
under this paragraph may be |
| 1814 |
payable in a single payment or, at the option of the |
| 1815 |
association, may be payable in 12 monthly installments with the |
| 1816 |
first installment being due and payable at the end of the month |
| 1817 |
after an emergency assessment is levied and subsequent |
| 1818 |
installments being due not later than the end of each succeeding |
| 1819 |
month. |
| 1820 |
d. If emergency assessments
are imposed, the report |
| 1821 |
required by s. 631.695(7) shall include an analysis of the |
| 1822 |
revenues generated from the emergency assessments imposed under |
| 1823 |
this paragraph. |
| 1824 |
e. If emergency assessments
are imposed, the references in |
| 1825 |
sub-subparagraph (1)(a)3.b. and s. 631.695(2) and (7) to |
| 1826 |
assessments levied under paragraph (a) shall include emergency |
| 1827 |
assessments imposed under this paragraph. |
| 1828 |
2. In order to ensure that
insurers paying emergency |
| 1829 |
assessments levied under this paragraph continue to charge rates |
| 1830 |
that are neither inadequate nor excessive, within 90 days after |
| 1831 |
being notified of such assessments, each insurer that is to be |
| 1832 |
assessed pursuant to this paragraph shall submit a rate filing |
| 1833 |
for coverage included within the account specified in s. |
| 1834 |
631.55(2)(c) and for which rates are required to be filed under |
| 1835 |
s. 627.062. If the filing reflects a rate change that, as a |
| 1836 |
percentage, is equal to the difference between the rate of such |
| 1837 |
assessment and the rate of the previous year's assessment under |
| 1838 |
this paragraph, the filing shall consist of a certification so |
| 1839 |
stating and shall be deemed approved when made. Any rate change |
| 1840 |
of a different percentage shall be subject to the standards and |
| 1841 |
procedures of s. 627.062. |
| 1842 |
3. In the event the board
of directors participates in the |
| 1843 |
issuance of bonds in accordance with s. 631.695, an annual |
| 1844 |
assessment under this paragraph shall continue while the bonds |
| 1845 |
issued with respect to which the assessment was imposed are |
| 1846 |
outstanding, including any bonds the proceeds of which were used |
| 1847 |
to refund bonds issued pursuant to s. 631.695, unless adequate |
| 1848 |
provision has been made for the payment of the bonds in the |
| 1849 |
documents authorizing the issuance of such bonds. |
| 1850 |
4. Emergency assessments
under this paragraph are not |
| 1851 |
premium and are not subject to the premium tax, to any fees, or |
| 1852 |
to any commissions. An insurer is liable for all emergency |
| 1853 |
assessments that the insurer collects and shall treat the |
| 1854 |
failure of an insured to pay an emergency assessment as a |
| 1855 |
failure to pay the premium. An insurer is not liable for |
| 1856 |
uncollectible emergency assessments. |
| 1857 |
Section 22. (1) Notwithstanding
section 9 of chapter |
| 1858 |
2007-1, Laws of Florida, the internal design option provided in |
| 1859 |
s. 1609.1.4.1. of the Florida Building Code shall remain in |
| 1860 |
effect until June 1, 2007, for a building permit application |
| 1861 |
made prior to that date. |
| 1862 |
(2) This section shall
take effect upon this act becoming |
| 1863 |
a law and shall apply retroactively to January 25, 2007. This |
| 1864 |
section shall apply to any actions taken on any building permit |
| 1865 |
affected by section 9 of chapter 2007-1, Laws of Florida, |
| 1866 |
including any actions, legal or ministerial, pertaining to the |
| 1867 |
issuance, revocation, or modifications of any building permit |
| 1868 |
initiated or issued prior to, on, after, or pending as of |
| 1869 |
January 25, 2007. If the retroactive application of any |
| 1870 |
provision of this section is held invalid, the invalidity shall |
| 1871 |
not affect the retroactive application of other provisions of |
| 1872 |
this section. |
| 1873 |
Section 23. The rate
filing requirement in section 3 of |
| 1874 |
chapter 2007-1, Laws of Florida, relating to savings to be |
| 1875 |
reflected due to the presumed factor set by the Office of |
| 1876 |
Insurance Regulation on March 15, 2007, shall apply solely to |
| 1877 |
catastrophe reinsurance contracts covering the 2007 hurricane |
| 1878 |
season entered into after January 25, 2007. If an insurer had |
| 1879 |
any catastrophe reinsurance contract covering the 2007 hurricane |
| 1880 |
season in place prior to January 25, 2007, such insurer shall |
| 1881 |
not be required to reflect a savings in its presumed factor rate |
| 1882 |
filing for that affected contract. |
| 1883 |
Section 24. Except as
otherwise expressly provided in this |
| 1884 |
act, this act shall take effect July 1, 2007. |