1 |
A bill to be entitled |
2 |
An act relating to the Citizens Property
Insurance |
3 |
Corporation; amending s. 627.351, F.S.; revising |
4 |
legislative findings to provide a finding that
the lack of |
5 |
affordable property insurance threatens the
public health, |
6 |
safety, and welfare and threatens the economic
health of |
7 |
the state; authorizing the corporation to offer
multiperil |
8 |
coverage, wind-only coverage, or both types of
coverage in |
9 |
the high-risk account; providing legislative
intent that |
10 |
such coverage not affect the creditworthiness of
or |
11 |
security for outstanding financing obligations of
the |
12 |
high-risk account, the personal lines account, or
the |
13 |
commercial lines account; authorizing a
policyholder to |
14 |
choose coverage from the corporation regardless
of the |
15 |
availability of other coverage under certain |
16 |
circumstances; deleting certain limitations on
eligibility |
17 |
for a policy issued by the corporation; revising |
18 |
requirements for the corporation in determining
whether an |
19 |
individual risk is eligible for coverage;
deleting |
20 |
provisions providing that a policyholder is no
longer |
21 |
eligible for coverage if an authorized insurer
offers |
22 |
coverage at an approved rate; prohibiting
issuance of new |
23 |
certificates of authority to certain insurers;
providing |
24 |
for expiration of existing certificates of
authority of |
25 |
certain insurers; prohibiting the Office of
Insurance |
26 |
Regulation and the Financial Services Commission
from |
27 |
renewing or reissuing existing certificates of
authority |
28 |
of certain insurers; requiring rate filings of
certain |
29 |
insurers to include certain parent company
profits |
30 |
information; providing effective dates. |
31 |
|
32 |
Be It Enacted by the Legislature of the State of
Florida: |
33 |
|
34 |
Section 1. Paragraphs
(a), (b), and (c) of subsection (6) |
35 |
of section 627.351, Florida Statutes, as amended
by section 21 |
36 |
of chapter 2007-1, Laws of Florida, are amended
to read: |
37 |
627.351 Insurance
risk apportionment plans.-- |
38 |
(6) CITIZENS
PROPERTY INSURANCE CORPORATION.-- |
39 |
(a)1. The
Legislature finds that private insurers are |
40 |
unwilling or unable to provide
affordable property insurance |
41 |
coverage in this state to the
extent sought and needed. The |
42 |
absence of affordable property
insurance threatens the public |
43 |
health, safety, and welfare
and likewise threatens the economic |
44 |
health of the state. The
Legislature finds therefore that it is |
45 |
a compelling public interest
and public purpose to assist in |
46 |
ensuring that property in the
state is insured and that it is |
47 |
insured at affordable rates so
as to facilitate the remediation, |
48 |
reconstruction, and
replacement of damaged or destroyed property |
49 |
in order to reduce or avoid
the negative effects otherwise |
50 |
resulting to the public
health, safety, and welfare; to the |
51 |
economy of the state; and to
the revenues of the state and local |
52 |
governments which are needed
to provide for the public welfare. |
53 |
It is necessary, therefore, to
provide affordable property |
54 |
insurance to applicants who
are in good faith entitled to |
55 |
procure insurance through the
voluntary market but are unable to |
56 |
do so. The Legislature intends
by this subsection that |
57 |
affordable property insurance
be provided and that it continue, |
58 |
as long as necessary, through
an entity that is not devoted to |
59 |
private profitmaking pursuits
and that is organized to achieve |
60 |
efficiencies and economies,
while providing service to |
61 |
policyholder, applicants, and
agents which equals or exceeds the |
62 |
quality generally provided in
the voluntary market, all toward |
63 |
the achievement of the
foregoing public purposes. To that end, |
64 |
such entity shall strive to
increase the availability of |
65 |
affordable property insurance
in this state and shall offer the |
66 |
lowest rates possible
consistent with sound business practices. |
67 |
Because it is essential for
the corporation to have the maximum |
68 |
financial resources to pay
claims following a catastrophic |
69 |
hurricane, it is the intent of
the Legislature that the income |
70 |
of the corporation be exempt
from federal income taxation and |
71 |
that interest on the debt
obligations issued by the corporation |
72 |
be exempt from federal
income taxation. The Legislature
finds |
73 |
that actual and threatened
catastrophic losses to property in |
74 |
this state from hurricanes
have caused insurers to be unwilling |
75 |
or unable to provide property
insurance coverage to the extent |
76 |
sought and needed. It is in
the public interest and a public |
77 |
purpose to assist in assuring
that property in the state is |
78 |
insured so as to facilitate
the remediation, reconstruction, and |
79 |
replacement of damaged or
destroyed property in order to reduce |
80 |
or avoid the negative effects
otherwise resulting to the public |
81 |
health, safety, and welfare;
to the economy of the state; and to |
82 |
the revenues of the state and
local governments needed to |
83 |
provide for the public
welfare. It is necessary, therefore, to |
84 |
provide property insurance to
applicants who are in good faith |
85 |
entitled to procure insurance
through the voluntary market but |
86 |
are unable to do so. The
Legislature intends by this subsection |
87 |
that property insurance be
provided and that it continues, as |
88 |
long as necessary, through an
entity organized to achieve |
89 |
efficiencies and economies,
while providing service to |
90 |
policyholders, applicants, and
agents that is no less than the |
91 |
quality generally provided in
the voluntary market, all toward |
92 |
the achievement of the
foregoing public purposes. Because it is |
93 |
essential for the corporation
to have the maximum financial |
94 |
resources to pay claims
following a catastrophic hurricane, it |
95 |
is the intent of the
Legislature that the income of the |
96 |
corporation be exempt from
federal income taxation and that |
97 |
interest on the debt
obligations issued by the corporation be |
98 |
exempt from federal income
taxation. |
99 |
2. The
Residential Property and Casualty Joint |
100 |
Underwriting Association originally created by
this statute |
101 |
shall be known, as of July 1, 2002, as the
Citizens Property |
102 |
Insurance Corporation. The corporation shall
provide insurance |
103 |
for residential and commercial property, for
applicants who are |
104 |
in good faith entitled, but are unable, to
procure insurance |
105 |
through the voluntary market. The corporation
shall operate |
106 |
pursuant to a plan of operation approved by order
of the |
107 |
Financial Services Commission. The plan is
subject to continuous |
108 |
review by the commission. The commission may, by
order, withdraw |
109 |
approval of all or part of a plan if the
commission determines |
110 |
that conditions have changed since approval was
granted and that |
111 |
the purposes of the plan require changes in the
plan. The |
112 |
corporation shall continue to operate pursuant to
the plan of |
113 |
operation approved by the Office of Insurance
Regulation until |
114 |
October 1, 2006. For the purposes of this
subsection, |
115 |
residential coverage includes both personal lines
residential |
116 |
coverage, which consists of the type of coverage
provided by |
117 |
homeowner's, mobile home owner's, dwelling,
tenant's, |
118 |
condominium unit owner's, and similar policies,
and commercial |
119 |
lines residential coverage, which consists of the
type of |
120 |
coverage provided by condominium association,
apartment |
121 |
building, and similar policies. |
122 |
3. For
the purposes of this subsection, the term |
123 |
"homestead property" means: |
124 |
a. Property
that has been granted a homestead exemption |
125 |
under chapter 196; |
126 |
b. Property
for which the owner has a current, written |
127 |
lease with a renter for a term of at least 7
months and for |
128 |
which the dwelling is insured by the corporation
for $200,000 or |
129 |
less; |
130 |
c. An
owner-occupied mobile home or manufactured home, as |
131 |
defined in s. 320.01, which is permanently
affixed to real |
132 |
property, is owned by a Florida resident, and has
been granted a |
133 |
homestead exemption under chapter 196 or, if the
owner does not |
134 |
own the real property, the owner certifies that
the mobile home |
135 |
or manufactured home is his or her principal
place of residence; |
136 |
d. Tenant's
coverage; |
137 |
e. Commercial
lines residential property; or |
138 |
f. Any
county, district, or municipal hospital; a hospital |
139 |
licensed by any not-for-profit corporation
qualified under s. |
140 |
501(c)(3) of the United States Internal Revenue
Code; or a |
141 |
continuing care retirement community that is
certified under |
142 |
chapter 651 and that receives an exemption from
ad valorem taxes |
143 |
under chapter 196. |
144 |
4. For
the purposes of this subsection, the term |
145 |
"nonhomestead property" means property
that is not homestead |
146 |
property. |
147 |
5. Effective
July 1, 2008, a personal lines residential |
148 |
structure that has a dwelling replacement cost of
$1 million or |
149 |
more, or a single condominium unit that has a
combined dwelling |
150 |
and content replacement cost of $1 million or
more is not |
151 |
eligible for coverage by the corporation. Such
dwellings insured |
152 |
by the corporation on June 30, 2008, may continue
to be covered |
153 |
by the corporation until the end of the policy
term. However, |
154 |
such dwellings that are insured by the
corporation and become |
155 |
ineligible for coverage due to the provisions of
this |
156 |
subparagraph may reapply and obtain coverage in
the high-risk |
157 |
account and be considered "nonhomestead
property" if the |
158 |
property owner provides the corporation with a
sworn affidavit |
159 |
from one or more insurance agents, on a form
provided by the |
160 |
corporation, stating that the agents have made
their best |
161 |
efforts to obtain coverage and that the property
has been |
162 |
rejected for coverage by at least one authorized
insurer and at |
163 |
least three surplus lines insurers. If such
conditions are met, |
164 |
the dwelling may be insured by the corporation
for up to 3 |
165 |
years, after which time the dwelling is
ineligible for coverage. |
166 |
The office shall approve the method used by the
corporation for |
167 |
valuing the dwelling replacement cost for the
purposes of this |
168 |
subparagraph. If a policyholder is insured by the
corporation |
169 |
prior to being determined to be ineligible
pursuant to this |
170 |
subparagraph and such policyholder files a
lawsuit challenging |
171 |
the determination, the policyholder may remain
insured by the |
172 |
corporation until the conclusion of the
litigation. |
173 |
6. For
properties constructed on or after January 1, 2009, |
174 |
the corporation may not insure any property
located within 2,500 |
175 |
feet landward of the coastal construction control
line created |
176 |
pursuant to s. 161.053 unless the property meets
the |
177 |
requirements of the code-plus building standards
developed by |
178 |
the Florida Building Commission. |
179 |
7. It is
the intent of the Legislature that policyholders, |
180 |
applicants, and agents of the corporation receive
service and |
181 |
treatment of the highest possible level but never
less than that |
182 |
generally provided in the voluntary market. It
also is intended |
183 |
that the corporation be held to service standards
no less than |
184 |
those applied to insurers in the voluntary market
by the office |
185 |
with respect to responsiveness, timeliness,
customer courtesy, |
186 |
and overall dealings with policyholders,
applicants, or agents |
187 |
of the corporation. |
188 |
(b)1. All
insurers authorized to write one or more subject |
189 |
lines of business in this state are subject to
assessment by the |
190 |
corporation and, for the purposes of this
subsection, are |
191 |
referred to collectively as "assessable
insurers." Insurers |
192 |
writing one or more subject lines of business in
this state |
193 |
pursuant to part VIII of chapter 626 are not
assessable |
194 |
insurers, but insureds who procure one or more
subject lines of |
195 |
business in this state pursuant to part VIII of
chapter 626 are |
196 |
subject to assessment by the corporation and are
referred to |
197 |
collectively as "assessable insureds."
An authorized insurer's |
198 |
assessment liability shall begin on the first day
of the |
199 |
calendar year following the year in which the
insurer was issued |
200 |
a certificate of authority to transact insurance
for subject |
201 |
lines of business in this state and shall
terminate 1 year after |
202 |
the end of the first calendar year during which
the insurer no |
203 |
longer holds a certificate of authority to
transact insurance |
204 |
for subject lines of business in this state. |
205 |
2.a. All
revenues, assets, liabilities, losses, and |
206 |
expenses of the corporation shall be divided into
three separate |
207 |
accounts as follows: |
208 |
(I) A
personal lines account for personal residential |
209 |
policies issued by the corporation or issued by
the Residential |
210 |
Property and Casualty Joint Underwriting
Association and renewed |
211 |
by the corporation that provide comprehensive,
multiperil |
212 |
coverage on risks that are not located in areas
eligible for |
213 |
coverage in the Florida Windstorm Underwriting
Association as |
214 |
those areas were defined on January 1, 2002, and
for such |
215 |
policies that do not provide coverage for the
peril of wind on |
216 |
risks that are located in such areas; |
217 |
(II) A
commercial lines account for commercial residential |
218 |
and commercial nonresidential policies issued by
the corporation |
219 |
or issued by the Residential Property and
Casualty Joint |
220 |
Underwriting Association and renewed by the
corporation that |
221 |
provide coverage for basic property perils on
risks that are not |
222 |
located in areas eligible for coverage in the
Florida Windstorm |
223 |
Underwriting Association as those areas were
defined on January |
224 |
1, 2002, and for such policies that do not
provide coverage for |
225 |
the peril of wind on risks that are located in
such areas; and |
226 |
(III) A
high-risk account for personal residential |
227 |
policies and commercial residential and
commercial |
228 |
nonresidential property policies issued by the
corporation or |
229 |
transferred to the corporation that provide
coverage for the |
230 |
peril of wind on risks that are located in areas
eligible for |
231 |
coverage in the Florida Windstorm Underwriting
Association as |
232 |
those areas were defined on January 1, 2002. Beginning
July 1, |
233 |
2007, the corporation may
offer multiperil coverage, wind-only |
234 |
coverage, or both types of
coverage in the high-risk account. In |
235 |
issuing multiperil coverage,
the corporation may use its |
236 |
approved policy forms and
rates for personal lines accounts |
237 |
through December 31, 2007. It
is the intent of the Legislature |
238 |
that the offer of multiperil
coverage in the high-risk account |
239 |
be made and implemented in a
manner that does not adversely |
240 |
affect the creditworthiness of
or security for currently |
241 |
outstanding financing
obligations or credit facilities of the |
242 |
high-risk account, the
personal lines account, or the commercial |
243 |
lines account.
Subject to the approval of a business plan by the |
244 |
Financial Services Commission and Legislative
Budget Commission |
245 |
as provided in this sub-sub-subparagraph, but no
earlier than |
246 |
March 31, 2007, the corporation may offer
policies that provide |
247 |
multiperil coverage and the corporation shall
continue to offer |
248 |
policies that provide coverage only for the peril
of wind for |
249 |
risks located in areas eligible for coverage in
the high-risk |
250 |
account. In issuing multiperil coverage, the
corporation may use |
251 |
its approved policy forms and rates for the
personal lines |
252 |
account. An applicant or insured who is eligible
to purchase a |
253 |
multiperil policy from the corporation may
purchase a multiperil |
254 |
policy from an authorized insurer without
prejudice to the |
255 |
applicant's or insured's eligibility to
prospectively purchase a |
256 |
policy that provides coverage only for the peril
of wind from |
257 |
the corporation. An applicant or insured who is
eligible for a |
258 |
corporation policy that provides coverage only
for the peril of |
259 |
wind may elect to purchase or retain such policy
and also |
260 |
purchase or retain coverage excluding wind from
an authorized |
261 |
insurer without prejudice to the applicant's or
insured's |
262 |
eligibility to prospectively purchase a policy
that provides |
263 |
multiperil coverage from the corporation. It is
the goal of the |
264 |
Legislature that there would be an overall
average savings of 10 |
265 |
percent or more for a policyholder who currently
has a wind-only |
266 |
policy with the corporation, and an ex-wind
policy with a |
267 |
voluntary insurer or the corporation, and who
then obtains a |
268 |
multiperil policy from the corporation. It is the
intent of the |
269 |
Legislature that the offer of multiperil coverage
in the high- |
270 |
risk account be made and implemented in a manner
that does not |
271 |
adversely affect the tax-exempt status of the
corporation or |
272 |
creditworthiness of or security for currently
outstanding |
273 |
financing obligations or credit facilities of the
high-risk |
274 |
account, the personal lines account, or the
commercial lines |
275 |
account. By March 1, 2007, the corporation shall
prepare and |
276 |
submit for approval by the Financial Services
Commission and |
277 |
Legislative Budget Commission a report detailing
the |
278 |
corporation's business plan for issuing
multiperil coverage in |
279 |
the high-risk account. The business plan shall be
approved or |
280 |
disapproved within 30 days after receipt, as
submitted or |
281 |
modified and resubmitted by the corporation. The
business plan |
282 |
must include: the impact of such multiperil
coverage on the |
283 |
corporation's financial resources, the impact of
such multiperil |
284 |
coverage on the corporation's tax-exempt status,
the manner in |
285 |
which the corporation plans to implement the
processing of |
286 |
applications and policy forms for new and
existing |
287 |
policyholders, the impact of such multiperil
coverage on the |
288 |
corporation's ability to deliver customer service
at the high |
289 |
level required by this subsection, the ability of
the |
290 |
corporation to process claims, the ability of the
corporation to |
291 |
quote and issue policies, the impact of such
multiperil coverage |
292 |
on the corporation's agents, the impact of such
multiperil |
293 |
coverage on the corporation's existing
policyholders, and the |
294 |
impact of such multiperil coverage on rates and
premium. The |
295 |
high-risk account must also include quota share
primary |
296 |
insurance under subparagraph (c)2. The area
eligible for |
297 |
coverage under the high-risk account also
includes the area |
298 |
within Port Canaveral, which is bordered on the
south by the |
299 |
City of Cape Canaveral, bordered on the west by
the Banana |
300 |
River, and bordered on the north by Federal
Government property. |
301 |
b. The
three separate accounts must be maintained as long |
302 |
as financing obligations entered into by the
Florida Windstorm |
303 |
Underwriting Association or Residential Property
and Casualty |
304 |
Joint Underwriting Association are outstanding,
in accordance |
305 |
with the terms of the corresponding financing
documents. When |
306 |
the financing obligations are no longer
outstanding, in |
307 |
accordance with the terms of the corresponding
financing |
308 |
documents, the corporation may use a single
account for all |
309 |
revenues, assets, liabilities, losses, and
expenses of the |
310 |
corporation. Consistent with the requirement of
this |
311 |
subparagraph and prudent investment policies that
minimize the |
312 |
cost of carrying debt, the board shall exercise
its best efforts |
313 |
to retire existing debt or to obtain approval of
necessary |
314 |
parties to amend the terms of existing debt, so
as to structure |
315 |
the most efficient plan to consolidate the three
separate |
316 |
accounts into a single account. By February 1,
2007, the board |
317 |
shall submit a report to the Financial Services
Commission, the |
318 |
President of the Senate, and the Speaker of the
House of |
319 |
Representatives which includes an analysis of
consolidating the |
320 |
accounts, the actions the board has taken to
minimize the cost |
321 |
of carrying debt, and its recommendations for
executing the most |
322 |
efficient plan. |
323 |
c. Creditors
of the Residential Property and Casualty |
324 |
Joint Underwriting Association shall have a claim
against, and |
325 |
recourse to, the accounts referred to in
sub-sub-subparagraphs |
326 |
a.(I) and (II) and shall have no claim against,
or recourse to, |
327 |
the account referred to in sub-sub-subparagraph
a.(III). |
328 |
Creditors of the Florida Windstorm Underwriting
Association |
329 |
shall have a claim against, and recourse to, the
account |
330 |
referred to in sub-sub-subparagraph a.(III) and
shall have no |
331 |
claim against, or recourse to, the accounts
referred to in sub- |
332 |
sub-subparagraphs a.(I) and (II). |
333 |
d. Revenues,
assets, liabilities, losses, and expenses not |
334 |
attributable to particular accounts shall be
prorated among the |
335 |
accounts. |
336 |
e. The
Legislature finds that the revenues of the |
337 |
corporation are revenues that are necessary to
meet the |
338 |
requirements set forth in documents authorizing
the issuance of |
339 |
bonds under this subsection. |
340 |
f. No
part of the income of the corporation may inure to |
341 |
the benefit of any private person. |
342 |
3. With
respect to a deficit in an account: |
343 |
a. When
the deficit incurred in a particular calendar year |
344 |
is not greater than 10 percent of the aggregate
statewide direct |
345 |
written premium for the subject lines of business
for the prior |
346 |
calendar year, the entire deficit shall be
recovered through |
347 |
regular assessments of assessable insurers under
paragraph (p) |
348 |
and assessable insureds. |
349 |
b. When
the deficit incurred in a particular calendar year |
350 |
exceeds 10 percent of the aggregate statewide
direct written |
351 |
premium for the subject lines of business for the
prior calendar |
352 |
year, the corporation shall levy regular
assessments on |
353 |
assessable insurers under paragraph (p) and on
assessable |
354 |
insureds in an amount equal to the greater of 10
percent of the |
355 |
deficit or 10 percent of the aggregate statewide
direct written |
356 |
premium for the subject lines of business for the
prior calendar |
357 |
year. Any remaining deficit shall be recovered
through emergency |
358 |
assessments under sub-subparagraph d. |
359 |
c. Each
assessable insurer's share of the amount being |
360 |
assessed under sub-subparagraph a. or
sub-subparagraph b. shall |
361 |
be in the proportion that the assessable
insurer's direct |
362 |
written premium for the subject lines of business
for the year |
363 |
preceding the assessment bears to the aggregate
statewide direct |
364 |
written premium for the subject lines of business
for that year. |
365 |
The assessment percentage applicable to each
assessable insured |
366 |
is the ratio of the amount being assessed under
sub-subparagraph |
367 |
a. or sub-subparagraph b. to the aggregate
statewide direct |
368 |
written premium for the subject lines of business
for the prior |
369 |
year. Assessments levied by the corporation on
assessable |
370 |
insurers under sub-subparagraphs a. and b. shall
be paid as |
371 |
required by the corporation's plan of operation
and paragraph |
372 |
(p). Notwithstanding any other provision of this
subsection, the |
373 |
aggregate amount of a regular assessment for a
deficit incurred |
374 |
in a particular calendar year shall be reduced by
the estimated |
375 |
amount to be received by the corporation from the
Citizens |
376 |
policyholder surcharge under subparagraph (c)11.
and the amount |
377 |
collected or estimated to be collected from the
assessment on |
378 |
Citizens policyholders pursuant to
sub-subparagraph i. |
379 |
Assessments levied by the corporation on
assessable insureds |
380 |
under sub-subparagraphs a. and b. shall be
collected by the |
381 |
surplus lines agent at the time the surplus lines
agent collects |
382 |
the surplus lines tax required by s. 626.932 and
shall be paid |
383 |
to the Florida Surplus Lines Service Office at
the time the |
384 |
surplus lines agent pays the surplus lines tax to
the Florida |
385 |
Surplus Lines Service Office. Upon receipt of
regular |
386 |
assessments from surplus lines agents, the
Florida Surplus Lines |
387 |
Service Office shall transfer the assessments
directly to the |
388 |
corporation as determined by the corporation. |
389 |
d. Upon
a determination by the board of governors that a |
390 |
deficit in an account exceeds the amount that
will be recovered |
391 |
through regular assessments under
sub-subparagraph a. or sub- |
392 |
subparagraph b., the board shall levy, after
verification by the |
393 |
office, emergency assessments, for as many years
as necessary to |
394 |
cover the deficits, to be collected by assessable
insurers and |
395 |
the corporation and collected from assessable
insureds upon |
396 |
issuance or renewal of policies for subject lines
of business, |
397 |
excluding National Flood Insurance policies. The
amount of the |
398 |
emergency assessment collected in a particular
year shall be a |
399 |
uniform percentage of that year's direct written
premium for |
400 |
subject lines of business and all accounts of the
corporation, |
401 |
excluding National Flood Insurance Program policy
premiums, as |
402 |
annually determined by the board and verified by
the office. The |
403 |
office shall verify the arithmetic calculations
involved in the |
404 |
board's determination within 30 days after
receipt of the |
405 |
information on which the determination was based. |
406 |
Notwithstanding any other provision of law, the
corporation and |
407 |
each assessable insurer that writes subject lines
of business |
408 |
shall collect emergency assessments from its
policyholders |
409 |
without such obligation being affected by any
credit, |
410 |
limitation, exemption, or deferment. Emergency
assessments |
411 |
levied by the corporation on assessable insureds
shall be |
412 |
collected by the surplus lines agent at the time
the surplus |
413 |
lines agent collects the surplus lines tax
required by s. |
414 |
626.932 and shall be paid to the Florida Surplus
Lines Service |
415 |
Office at the time the surplus lines agent pays
the surplus |
416 |
lines tax to the Florida Surplus Lines Service
Office. The |
417 |
emergency assessments so collected shall be
transferred directly |
418 |
to the corporation on a periodic basis as
determined by the |
419 |
corporation and shall be held by the corporation
solely in the |
420 |
applicable account. The aggregate amount of
emergency |
421 |
assessments levied for an account under this
sub-subparagraph in |
422 |
any calendar year may not exceed the greater of
10 percent of |
423 |
the amount needed to cover the original deficit,
plus interest, |
424 |
fees, commissions, required reserves, and other
costs associated |
425 |
with financing of the original deficit, or 10
percent of the |
426 |
aggregate statewide direct written premium for
subject lines of |
427 |
business and for all accounts of the corporation
for the prior |
428 |
year, plus interest, fees, commissions, required
reserves, and |
429 |
other costs associated with financing the
original deficit. |
430 |
e. The
corporation may pledge the proceeds of assessments, |
431 |
projected recoveries from the Florida Hurricane
Catastrophe |
432 |
Fund, other insurance and reinsurance
recoverables, policyholder |
433 |
surcharges and other surcharges, and other funds
available to |
434 |
the corporation as the source of revenue for and
to secure bonds |
435 |
issued under paragraph (p), bonds or other
indebtedness issued |
436 |
under subparagraph (c)3., or lines of credit or
other financing |
437 |
mechanisms issued or created under this
subsection, or to retire |
438 |
any other debt incurred as a result of deficits
or events giving |
439 |
rise to deficits, or in any other way that the
board determines |
440 |
will efficiently recover such deficits. The
purpose of the lines |
441 |
of credit or other financing mechanisms is to
provide additional |
442 |
resources to assist the corporation in covering
claims and |
443 |
expenses attributable to a catastrophe. As used
in this |
444 |
subsection, the term "assessments"
includes regular assessments |
445 |
under sub-subparagraph a., sub-subparagraph b.,
or subparagraph |
446 |
(p)1. and emergency assessments under
sub-subparagraph d. |
447 |
Emergency assessments collected under
sub-subparagraph d. are |
448 |
not part of an insurer's rates, are not premium,
and are not |
449 |
subject to premium tax, fees, or commissions;
however, failure |
450 |
to pay the emergency assessment shall be treated
as failure to |
451 |
pay premium. The emergency assessments under
sub-subparagraph d. |
452 |
shall continue as long as any bonds issued or
other indebtedness |
453 |
incurred with respect to a deficit for which the
assessment was |
454 |
imposed remain outstanding, unless adequate
provision has been |
455 |
made for the payment of such bonds or other
indebtedness |
456 |
pursuant to the documents governing such bonds or
other |
457 |
indebtedness. |
458 |
f. As
used in this subsection, the term "subject lines of |
459 |
business" means insurance written by
assessable insurers or |
460 |
procured by assessable insureds for all property
and casualty |
461 |
lines of business in this state, but not
including workers' |
462 |
compensation or medical malpractice. As used in
the sub- |
463 |
subparagraph, the term "property and
casualty lines of business" |
464 |
includes all lines of business identified on Form
2, Exhibit of |
465 |
Premiums and Losses, in the annual statement
required of |
466 |
authorized insurers by s. 624.424 and any rule
adopted under |
467 |
this section, except for those lines identified
as accident and |
468 |
health insurance and except for policies written
under the |
469 |
National Flood Insurance Program or the Federal
Crop Insurance |
470 |
Program. For purposes of this sub-subparagraph,
the term |
471 |
"workers' compensation" includes both
workers' compensation |
472 |
insurance and excess workers' compensation
insurance. |
473 |
g. The
Florida Surplus Lines Service Office shall |
474 |
determine annually the aggregate statewide
written premium in |
475 |
subject lines of business procured by assessable
insureds and |
476 |
shall report that information to the corporation
in a form and |
477 |
at a time the corporation specifies to ensure
that the |
478 |
corporation can meet the requirements of this
subsection and the |
479 |
corporation's financing obligations. |
480 |
h. The
Florida Surplus Lines Service Office shall verify |
481 |
the proper application by surplus lines agents of
assessment |
482 |
percentages for regular assessments and emergency
assessments |
483 |
levied under this subparagraph on assessable
insureds and shall |
484 |
assist the corporation in ensuring the accurate,
timely |
485 |
collection and payment of assessments by surplus
lines agents as |
486 |
required by the corporation. |
487 |
i. If a
deficit is incurred in any account in 2008 or |
488 |
thereafter, the board of governors shall levy an
immediate |
489 |
assessment against the premium of each
nonhomestead property |
490 |
policyholder in all accounts of the corporation,
as a uniform |
491 |
percentage of the premium of the policy of up to
10 percent of |
492 |
such premium, which funds shall be used to offset
the deficit. |
493 |
If this assessment is insufficient to eliminate
the deficit, the |
494 |
board of governors shall levy an additional
assessment against |
495 |
all policyholders of the corporation, which shall
be collected |
496 |
at the time of issuance or renewal of a policy,
as a uniform |
497 |
percentage of the premium for the policy of up to
10 percent of |
498 |
such premium, which funds shall be used to
further offset the |
499 |
deficit. |
500 |
j. The
board of governors shall maintain separate |
501 |
accounting records that consolidate data for
nonhomestead |
502 |
properties, including, but not limited to, number
of policies, |
503 |
insured values, premiums written, and losses. The
board of |
504 |
governors shall annually report to the office and
the |
505 |
Legislature a summary of such data. |
506 |
(c) The
plan of operation of the corporation: |
507 |
1. Must
provide for adoption of residential property and |
508 |
casualty insurance policy forms and commercial
residential and |
509 |
nonresidential property insurance forms, which
forms must be |
510 |
approved by the office prior to use. The
corporation shall adopt |
511 |
the following policy forms: |
512 |
a. Standard
personal lines policy forms that are |
513 |
comprehensive multiperil policies providing full
coverage of a |
514 |
residential property equivalent to the coverage
provided in the |
515 |
private insurance market under an HO-3, HO-4, or
HO-6 policy. |
516 |
b. Basic
personal lines policy forms that are policies |
517 |
similar to an HO-8 policy or a dwelling fire
policy that provide |
518 |
coverage meeting the requirements of the
secondary mortgage |
519 |
market, but which coverage is more limited than
the coverage |
520 |
under a standard policy. |
521 |
c. Commercial
lines residential and nonresidential policy |
522 |
forms that are generally similar to the basic
perils of full |
523 |
coverage obtainable for commercial residential
structures and |
524 |
commercial nonresidential structures in the
admitted voluntary |
525 |
market. |
526 |
d. Personal
lines and commercial lines residential |
527 |
property insurance forms that cover the peril of
wind only. The |
528 |
forms are applicable only to residential
properties located in |
529 |
areas eligible for coverage under the high-risk
account referred |
530 |
to in sub-subparagraph (b)2.a. |
531 |
e. Commercial
lines nonresidential property insurance |
532 |
forms that cover the peril of wind only. The
forms are |
533 |
applicable only to nonresidential properties
located in areas |
534 |
eligible for coverage under the high-risk account
referred to in |
535 |
sub-subparagraph (b)2.a. |
536 |
f. The
corporation may adopt variations of the policy |
537 |
forms listed in sub-subparagraphs a.-e. that
contain more |
538 |
restrictive coverage. |
539 |
2.a. Must
provide that the corporation adopt a program in |
540 |
which the corporation and authorized insurers
enter into quota |
541 |
share primary insurance agreements for hurricane
coverage, as |
542 |
defined in s. 627.4025(2)(a), for eligible risks,
and adopt |
543 |
property insurance forms for eligible risks which
cover the |
544 |
peril of wind only. As used in this subsection,
the term: |
545 |
(I) "Quota
share primary insurance" means an arrangement |
546 |
in which the primary hurricane coverage of an
eligible risk is |
547 |
provided in specified percentages by the
corporation and an |
548 |
authorized insurer. The corporation and
authorized insurer are |
549 |
each solely responsible for a specified
percentage of hurricane |
550 |
coverage of an eligible risk as set forth in a
quota share |
551 |
primary insurance agreement between the
corporation and an |
552 |
authorized insurer and the insurance contract.
The |
553 |
responsibility of the corporation or authorized
insurer to pay |
554 |
its specified percentage of hurricane losses of
an eligible |
555 |
risk, as set forth in the quota share primary
insurance |
556 |
agreement, may not be altered by the inability of
the other |
557 |
party to the agreement to pay its specified
percentage of |
558 |
hurricane losses. Eligible risks that are
provided hurricane |
559 |
coverage through a quota share primary insurance
arrangement |
560 |
must be provided policy forms that set forth the
obligations of |
561 |
the corporation and authorized insurer under the
arrangement, |
562 |
clearly specify the percentages of quota share
primary insurance |
563 |
provided by the corporation and authorized
insurer, and |
564 |
conspicuously and clearly state that neither the
authorized |
565 |
insurer nor the corporation may be held
responsible beyond its |
566 |
specified percentage of coverage of hurricane
losses. |
567 |
(II) "Eligible
risks" means personal lines residential and |
568 |
commercial lines residential risks that meet the
underwriting |
569 |
criteria of the corporation and are located in
areas that were |
570 |
eligible for coverage by the Florida Windstorm
Underwriting |
571 |
Association on January 1, 2002. |
572 |
b. The
corporation may enter into quota share primary |
573 |
insurance agreements with authorized insurers at
corporation |
574 |
coverage levels of 90 percent and 50 percent. |
575 |
c. If
the corporation determines that additional coverage |
576 |
levels are necessary to maximize participation in
quota share |
577 |
primary insurance agreements by authorized
insurers, the |
578 |
corporation may establish additional coverage
levels. However, |
579 |
the corporation's quota share primary insurance
coverage level |
580 |
may not exceed 90 percent. |
581 |
d. Any
quota share primary insurance agreement entered |
582 |
into between an authorized insurer and the
corporation must |
583 |
provide for a uniform specified percentage of
coverage of |
584 |
hurricane losses, by county or territory as set
forth by the |
585 |
corporation board, for all eligible risks of the
authorized |
586 |
insurer covered under the quota share primary
insurance |
587 |
agreement. |
588 |
e. Any
quota share primary insurance agreement entered |
589 |
into between an authorized insurer and the
corporation is |
590 |
subject to review and approval by the office.
However, such |
591 |
agreement shall be authorized only as to
insurance contracts |
592 |
entered into between an authorized insurer and an
insured who is |
593 |
already insured by the corporation for wind
coverage. |
594 |
f. For
all eligible risks covered under quota share |
595 |
primary insurance agreements, the exposure and
coverage levels |
596 |
for both the corporation and authorized insurers
shall be |
597 |
reported by the corporation to the Florida
Hurricane Catastrophe |
598 |
Fund. For all policies of eligible risks covered
under quota |
599 |
share primary insurance agreements, the
corporation and the |
600 |
authorized insurer shall maintain complete and
accurate records |
601 |
for the purpose of exposure and loss
reimbursement audits as |
602 |
required by Florida Hurricane Catastrophe Fund
rules. The |
603 |
corporation and the authorized insurer shall each
maintain |
604 |
duplicate copies of policy declaration pages and
supporting |
605 |
claims documents. |
606 |
g. The
corporation board shall establish in its plan of |
607 |
operation standards for quota share agreements
which ensure that |
608 |
there is no discriminatory application among
insurers as to the |
609 |
terms of quota share agreements, pricing of quota
share |
610 |
agreements, incentive provisions if any, and
consideration paid |
611 |
for servicing policies or adjusting claims. |
612 |
h. The
quota share primary insurance agreement between the |
613 |
corporation and an authorized insurer must set
forth the |
614 |
specific terms under which coverage is provided,
including, but |
615 |
not limited to, the sale and servicing of
policies issued under |
616 |
the agreement by the insurance agent of the
authorized insurer |
617 |
producing the business, the reporting of
information concerning |
618 |
eligible risks, the payment of premium to the
corporation, and |
619 |
arrangements for the adjustment and payment of
hurricane claims |
620 |
incurred on eligible risks by the claims adjuster
and personnel |
621 |
of the authorized insurer. Entering into a quota
sharing |
622 |
insurance agreement between the corporation and
an authorized |
623 |
insurer shall be voluntary and at the discretion
of the |
624 |
authorized insurer. |
625 |
3. May
provide that the corporation may employ or |
626 |
otherwise contract with individuals or other
entities to provide |
627 |
administrative or professional services that may
be appropriate |
628 |
to effectuate the plan. The corporation shall
have the power to |
629 |
borrow funds, by issuing bonds or by incurring
other |
630 |
indebtedness, and shall have other powers
reasonably necessary |
631 |
to effectuate the requirements of this
subsection, including, |
632 |
without limitation, the power to issue bonds and
incur other |
633 |
indebtedness in order to refinance outstanding
bonds or other |
634 |
indebtedness. The corporation may, but is not
required to, seek |
635 |
judicial validation of its bonds or other
indebtedness under |
636 |
chapter 75. The corporation may issue bonds or
incur other |
637 |
indebtedness, or have bonds issued on its behalf
by a unit of |
638 |
local government pursuant to subparagraph (g)2.,
in the absence |
639 |
of a hurricane or other weather-related event,
upon a |
640 |
determination by the corporation, subject to
approval by the |
641 |
office, that such action would enable it to
efficiently meet the |
642 |
financial obligations of the corporation and that
such |
643 |
financings are reasonably necessary to effectuate
the |
644 |
requirements of this subsection. The corporation
is authorized |
645 |
to take all actions needed to facilitate tax-free
status for any |
646 |
such bonds or indebtedness, including formation
of trusts or |
647 |
other affiliated entities. The corporation shall
have the |
648 |
authority to pledge assessments, projected
recoveries from the |
649 |
Florida Hurricane Catastrophe Fund, other
reinsurance |
650 |
recoverables, market equalization and other
surcharges, and |
651 |
other funds available to the corporation as
security for bonds |
652 |
or other indebtedness. In recognition of s. 10,
Art. I of the |
653 |
State Constitution, prohibiting the impairment of
obligations of |
654 |
contracts, it is the intent of the Legislature
that no action be |
655 |
taken whose purpose is to impair any bond
indenture or financing |
656 |
agreement or any revenue source committed by
contract to such |
657 |
bond or other indebtedness. |
658 |
4.a. Must
require that the corporation operate subject to |
659 |
the supervision and approval of a board of
governors consisting |
660 |
of eight individuals who are residents of this
state, from |
661 |
different geographical areas of this state. The
Governor, the |
662 |
Chief Financial Officer, the President of the
Senate, and the |
663 |
Speaker of the House of Representatives shall
each appoint two |
664 |
members of the board. At least one of the two
members appointed |
665 |
by each appointing officer must have demonstrated
expertise in |
666 |
insurance. The Chief Financial Officer shall
designate one of |
667 |
the appointees as chair. All board members serve
at the pleasure |
668 |
of the appointing officer. All members of the
board of governors |
669 |
are subject to removal at will by the officers
who appointed |
670 |
them. All board members, including the chair,
must be appointed |
671 |
to serve for 3-year terms beginning annually on a
date |
672 |
designated by the plan. Any board vacancy shall
be filled for |
673 |
the unexpired term by the appointing officer. The
Chief |
674 |
Financial Officer shall appoint a technical
advisory group to |
675 |
provide information and advice to the board of
governors in |
676 |
connection with the board's duties under this
subsection. The |
677 |
executive director and senior managers of the
corporation shall |
678 |
be engaged by the board and serve at the pleasure
of the board. |
679 |
Any executive director appointed on or after July
1, 2006, is |
680 |
subject to confirmation by the Senate. The
executive director is |
681 |
responsible for employing other staff as the
corporation may |
682 |
require, subject to review and concurrence by the
board. |
683 |
b. The
board shall create a Market Accountability Advisory |
684 |
Committee to assist the corporation in developing
awareness of |
685 |
its rates and its customer and agent service
levels in |
686 |
relationship to the voluntary market insurers
writing similar |
687 |
coverage. The members of the advisory committee
shall consist of |
688 |
the following 11 persons, one of whom must be
elected chair by |
689 |
the members of the committee: four
representatives, one |
690 |
appointed by the Florida Association of Insurance
Agents, one by |
691 |
the Florida Association of Insurance and
Financial Advisors, one |
692 |
by the Professional Insurance Agents of Florida,
and one by the |
693 |
Latin American Association of Insurance Agencies;
three |
694 |
representatives appointed by the insurers with
the three highest |
695 |
voluntary market share of residential property
insurance |
696 |
business in the state; one representative from
the Office of |
697 |
Insurance Regulation; one consumer appointed by
the board who is |
698 |
insured by the corporation at the time of
appointment to the |
699 |
committee; one representative appointed by the
Florida |
700 |
Association of Realtors; and one representative
appointed by the |
701 |
Florida Bankers Association. All members must
serve for 3-year |
702 |
terms and may serve for consecutive terms. The
committee shall |
703 |
report to the corporation at each board meeting
on insurance |
704 |
market issues which may include rates and rate
competition with |
705 |
the voluntary market; service, including policy
issuance, claims |
706 |
processing, and general responsiveness to
policyholders, |
707 |
applicants, and agents; and matters relating to
depopulation. |
708 |
5. Must
provide procedures a
procedure for determining the |
709 |
eligibility of a risk
for coverage, as follows: |
710 |
a. Applicants
are not ineligible for coverage based on the |
711 |
availability of coverage from
the private insurance market or |
712 |
the surplus lines market. An
applicant or policyholder may |
713 |
choose to be insured by the
corporation even if the applicant or |
714 |
policyholder has another offer
of coverage if the risk otherwise |
715 |
meets the underwriting
guidelines of the corporation. Subject
to |
716 |
the provisions of s. 627.3517,
with respect to personal lines |
717 |
residential risks, if the risk
is offered coverage from an |
718 |
authorized insurer at the
insurer's approved rate under either a |
719 |
standard policy including wind
coverage or, if consistent with |
720 |
the insurer's underwriting
rules as filed with the office, a |
721 |
basic policy including wind
coverage, for a new application to |
722 |
the corporation for coverage,
the risk is not eligible for any |
723 |
policy issued by the
corporation unless the premium for coverage |
724 |
from the authorized insurer is
more than 25 percent greater than |
725 |
the premium for comparable
coverage from the corporation. If the |
726 |
risk is not able to obtain any
such offer, the risk is eligible |
727 |
for either a standard policy
including wind coverage or a basic |
728 |
policy including wind coverage
issued by the corporation; |
729 |
however, if the risk could not
be insured under a standard |
730 |
policy including wind coverage
regardless of market conditions, |
731 |
the risk shall be eligible for
a basic policy including wind |
732 |
coverage unless rejected under
subparagraph 8. However, with |
733 |
regard to a policyholder of
the corporation, the policyholder |
734 |
remains eligible for coverage
from the corporation regardless of |
735 |
any offer of coverage from an
authorized insurer or surplus |
736 |
lines insurer. The corporation
shall determine the type of |
737 |
policy to be provided on the
basis of objective standards |
738 |
specified in the underwriting
manual and based on generally |
739 |
accepted underwriting
practices. |
740 |
(I) If
the risk accepts an offer of coverage through the |
741 |
market assistance plan or an offer of coverage
through a |
742 |
mechanism established by the corporation before a
policy is |
743 |
issued to the risk by the corporation or during
the first 30 |
744 |
days of coverage by the corporation, and the
producing agent who |
745 |
submitted the application to the plan or to the
corporation is |
746 |
not currently appointed by the insurer, the
insurer shall: |
747 |
(A) Pay
to the producing agent of record of the policy, |
748 |
for the first year, an amount that is the greater
of the |
749 |
insurer's usual and customary commission for the
type of policy |
750 |
written or a fee equal to the usual and customary
commission of |
751 |
the corporation; or |
752 |
(B) Offer
to allow the producing agent of record of the |
753 |
policy to continue servicing the policy for a
period of not less |
754 |
than 1 year and offer to pay the agent the
greater of the |
755 |
insurer's or the corporation's usual and
customary commission |
756 |
for the type of policy written. |
757 |
|
758 |
If the producing agent is unwilling or unable to
accept |
759 |
appointment, the new insurer shall pay the agent
in accordance |
760 |
with sub-sub-sub-subparagraph (A). |
761 |
(II) When
the corporation enters into a contractual |
762 |
agreement for a take-out plan, the producing
agent of record of |
763 |
the corporation policy is entitled to retain any
unearned |
764 |
commission on the policy, and the insurer shall: |
765 |
(A) Pay
to the producing agent of record of the |
766 |
corporation policy, for the first year, an amount
that is the |
767 |
greater of the insurer's usual and customary
commission for the |
768 |
type of policy written or a fee equal to the
usual and customary |
769 |
commission of the corporation; or |
770 |
(B) Offer
to allow the producing agent of record of the |
771 |
corporation policy to continue servicing the
policy for a period |
772 |
of not less than 1 year and offer to pay the
agent the greater |
773 |
of the insurer's or the corporation's usual and
customary |
774 |
commission for the type of policy written. |
775 |
|
776 |
If the producing agent is unwilling or unable to
accept |
777 |
appointment, the new insurer shall pay the agent
in accordance |
778 |
with sub-sub-sub-subparagraph (A). |
779 |
b. With
respect to commercial lines residential risks, for |
780 |
a new application to the
corporation for coverage, if the risk |
781 |
is offered coverage under a
policy including wind coverage from |
782 |
an authorized insurer at its
approved rate, the risk is not |
783 |
eligible for any policy issued
by the corporation unless the |
784 |
premium for coverage from the
authorized insurer is more than 25 |
785 |
percent greater than the
premium for comparable coverage from |
786 |
the corporation. If the risk
is not able to obtain any such |
787 |
offer, the risk is eligible
for a policy including wind coverage |
788 |
issued by the corporation.
However, with regard to a |
789 |
policyholder of the
corporation, the policyholder remains |
790 |
eligible for coverage from the
corporation regardless of any |
791 |
offer of coverage from an
authorized insurer or surplus lines |
792 |
insurer. |
793 |
b.(I) If
the risk accepts an offer of coverage through the |
794 |
market assistance plan or an offer of coverage
through a |
795 |
mechanism established by the corporation before a
policy is |
796 |
issued to the risk by the corporation or during
the first 30 |
797 |
days of coverage by the corporation, and the
producing agent who |
798 |
submitted the application to the plan or the
corporation is not |
799 |
currently appointed by the insurer, the insurer
shall: |
800 |
(I)(A) Pay
to the producing agent of record of the policy, |
801 |
for the first year, an amount that is the greater
of the |
802 |
insurer's usual and customary commission for the
type of policy |
803 |
written or a fee equal to the usual and customary
commission of |
804 |
the corporation; or |
805 |
(II)(B) Offer
to allow the producing agent of record of |
806 |
the policy to continue servicing the policy for a
period of not |
807 |
less than 1 year and offer to pay the agent the
greater of the |
808 |
insurer's or the corporation's usual and
customary commission |
809 |
for the type of policy written. |
810 |
|
811 |
If the producing agent is unwilling or unable to
accept |
812 |
appointment, the new insurer shall pay the agent
in accordance |
813 |
with sub-sub-subparagraph
(I) sub-sub-sub-subparagraph (A). |
814 |
c.(II) When
the corporation enters into a contractual |
815 |
agreement for a take-out plan, the producing
agent of record of |
816 |
the corporation policy is entitled to retain any
unearned |
817 |
commission on the policy, and the insurer shall: |
818 |
(I)(A) Pay
to the producing agent of record of the |
819 |
corporation policy, for the first year, an amount
that is the |
820 |
greater of the insurer's usual and customary
commission for the |
821 |
type of policy written or a fee equal to the
usual and customary |
822 |
commission of the corporation; or |
823 |
(II)(B) Offer
to allow the producing agent of record of |
824 |
the corporation policy to continue servicing the
policy for a |
825 |
period of not less than 1 year and offer to pay
the agent the |
826 |
greater of the insurer's or the corporation's
usual and |
827 |
customary commission for the type of policy
written. |
828 |
|
829 |
If the producing agent is unwilling or unable to
accept |
830 |
appointment, the new insurer shall pay the agent
in accordance |
831 |
with sub-sub-subparagraph
(I) sub-sub-sub-subparagraph (A). |
832 |
6. Must
provide by July 1, 2007, that an application for |
833 |
coverage for a new policy is subject to a waiting
period of 10 |
834 |
days before coverage is effective, during which
time the |
835 |
corporation shall make such application available
for review by |
836 |
general lines agents and authorized property and
casualty |
837 |
insurers. The board shall approve an exception
that allows for |
838 |
coverage to be effective before the end of the
10-day waiting |
839 |
period, for coverage issued in conjunction with a
real estate |
840 |
closing. The board may approve such other
exceptions as the |
841 |
board determines are necessary to prevent lapses
in coverage. |
842 |
7. Must
include rules for classifications of risks and |
843 |
rates therefor. |
844 |
8. Must
provide that if premium and investment income for |
845 |
an account attributable to a particular calendar
year are in |
846 |
excess of projected losses and expenses for the
account |
847 |
attributable to that year, such excess shall be
held in surplus |
848 |
in the account. Such surplus shall be available
to defray |
849 |
deficits in that account as to future years and
shall be used |
850 |
for that purpose prior to assessing assessable
insurers and |
851 |
assessable insureds as to any calendar year. |
852 |
9. Must
provide objective criteria and procedures to be |
853 |
uniformly applied for all applicants in
determining whether an |
854 |
individual risk is eligible
for coverage so hazardous as to be |
855 |
uninsurable.
In making this determination and in establishing |
856 |
the criteria and procedures, the following shall
be considered: |
857 |
a. Whether
the likelihood of a loss for the individual |
858 |
risk is substantially
higher than for other risks of the same |
859 |
class; and |
860 |
b. Whether
the applicant has taken such actions as are |
861 |
reasonably necessary, as
specified by the corporation, to reduce |
862 |
the risk of loss
uncertainty associated with the individual
risk |
863 |
is such that an appropriate
premium cannot be determined. |
864 |
|
865 |
The acceptance or rejection of a risk by the
corporation shall |
866 |
be construed as the private placement of
insurance, and the |
867 |
provisions of chapter 120 shall not apply. |
868 |
10. Must
provide that the corporation shall make its best |
869 |
efforts to procure catastrophe reinsurance at
reasonable rates, |
870 |
to cover its projected 100-year probable maximum
loss as |
871 |
determined by the board of governors. |
872 |
11. Must
provide that in the event of regular deficit |
873 |
assessments under sub-subparagraph (b)3.a. or
sub-subparagraph |
874 |
(b)3.b., in the personal lines account, the
commercial lines |
875 |
residential account, or the high-risk account,
the corporation |
876 |
shall levy upon corporation policyholders in its
next rate |
877 |
filing, or by a separate rate filing solely for
this purpose, a |
878 |
Citizens policyholder surcharge arising from a
regular |
879 |
assessment in such account in a percentage equal
to the total |
880 |
amount of such regular assessments divided by the
aggregate |
881 |
statewide direct written premium for subject
lines of business |
882 |
for the prior calendar year. For purposes of
calculating the |
883 |
Citizens policyholder surcharge to be levied
under this |
884 |
subparagraph, the total amount of the regular
assessment to |
885 |
which this surcharge is related shall be
determined as set forth |
886 |
in subparagraph (b)3., without deducting the
estimated Citizens |
887 |
policyholder surcharge. Citizens policyholder
surcharges under |
888 |
this subparagraph are not considered premium and
are not subject |
889 |
to commissions, fees, or premium taxes; however,
failure to pay |
890 |
a market equalization surcharge shall be treated
as failure to |
891 |
pay premium. |
892 |
12. The
policies issued by the corporation must provide |
893 |
that, if the corporation or
the market assistance plan obtains |
894 |
an offer from an authorized
insurer to cover the risk at its |
895 |
approved rates, the risk is no
longer eligible for renewal |
896 |
through the corporation,
except as otherwise provided in this |
897 |
subsection. |
898 |
13. Corporation
policies and applications must include a |
899 |
notice that the corporation
policy could, under this section, be |
900 |
replaced with a policy issued
by an authorized insurer that does |
901 |
not provide coverage identical
to the coverage provided by the |
902 |
corporation. The notice shall
also specify that acceptance of |
903 |
corporation coverage creates a
conclusive presumption that the |
904 |
applicant or policyholder is
aware of this potential. |
905 |
12.14. May
establish, subject to approval by the office, |
906 |
different eligibility requirements and
operational procedures |
907 |
for any line or type of coverage for any
specified county or |
908 |
area if the board determines that such changes to
the |
909 |
eligibility requirements and operational
procedures are |
910 |
justified due to the voluntary market being
sufficiently stable |
911 |
and competitive in such area or for such line or
type of |
912 |
coverage and that consumers who, in good faith,
are unable to |
913 |
obtain insurance through the voluntary market
through ordinary |
914 |
methods would continue to have access to coverage
from the |
915 |
corporation. When coverage is sought in
connection with a real |
916 |
property transfer, such requirements and
procedures shall not |
917 |
provide for an effective date of coverage later
than the date of |
918 |
the closing of the transfer as established by the
transferor, |
919 |
the transferee, and, if applicable, the lender. |
920 |
13.15. Must
provide that, with respect to the high-risk |
921 |
account, any assessable insurer with a surplus as
to |
922 |
policyholders of $25 million or less writing 25
percent or more |
923 |
of its total countrywide property insurance
premiums in this |
924 |
state may petition the office, within the first
90 days of each |
925 |
calendar year, to qualify as a limited
apportionment company. A |
926 |
regular assessment levied by the corporation on a
limited |
927 |
apportionment company for a deficit incurred by
the corporation |
928 |
for the high-risk account in 2006 or thereafter
may be paid to |
929 |
the corporation on a monthly basis as the
assessments are |
930 |
collected by the limited apportionment company
from its insureds |
931 |
pursuant to s. 627.3512, but the regular
assessment must be paid |
932 |
in full within 12 months after being levied by
the corporation. |
933 |
A limited apportionment company shall collect
from its |
934 |
policyholders any emergency assessment imposed
under sub- |
935 |
subparagraph (b)3.d. The plan shall provide that,
if the office |
936 |
determines that any regular assessment will
result in an |
937 |
impairment of the surplus of a limited
apportionment company, |
938 |
the office may direct that all or part of such
assessment be |
939 |
deferred as provided in subparagraph (g)4.
However, there shall |
940 |
be no limitation or deferment of an emergency
assessment to be |
941 |
collected from policyholders under
sub-subparagraph (b)3.d. |
942 |
14.16. Must
provide that the corporation appoint as its |
943 |
licensed agents only those agents who also hold
an appointment |
944 |
as defined in s. 626.015(3) with an insurer who
at the time of |
945 |
the agent's initial appointment by the
corporation is authorized |
946 |
to write and is actually writing personal lines
residential |
947 |
property coverage, commercial residential
property coverage, or |
948 |
commercial nonresidential property coverage
within the state. |
949 |
15.17. Must
provide, by July 1, 2007, a premium payment |
950 |
plan option to its policyholders which allows for
quarterly and |
951 |
semiannual payment of premiums. |
952 |
16.18. Must
provide, effective June 1, 2007, that the |
953 |
corporation contract with each insurer providing
the non-wind |
954 |
coverage for risks insured by the corporation in
the high-risk |
955 |
account, requiring that the insurer provide
claims adjusting |
956 |
services for the wind coverage provided by the
corporation for |
957 |
such risks. An insurer is required to enter into
this contract |
958 |
as a condition of providing non-wind coverage for
a risk that is |
959 |
insured by the corporation in the high-risk
account unless the |
960 |
board finds, after a hearing, that the insurer is
not capable of |
961 |
providing adjusting services at an acceptable
level of quality |
962 |
to corporation policyholders. The terms and
conditions of such |
963 |
contracts must be substantially the same as the
contracts that |
964 |
the corporation executed with insurers under the
"adjust-your- |
965 |
own" program in 2006, except as may be
mutually agreed to by the |
966 |
parties and except for such changes that the
board determines |
967 |
are necessary to ensure that claims are adjusted
appropriately. |
968 |
The corporation shall provide a process for
neutral arbitration |
969 |
of any dispute between the corporation and the
insurer regarding |
970 |
the terms of the contract. The corporation shall
review and |
971 |
monitor the performance of insurers under these
contracts. |
972 |
17.19. Must
limit coverage on mobile homes or manufactured |
973 |
homes built prior to 1994 to actual cash value of
the dwelling |
974 |
rather than replacement costs of the dwelling. |
975 |
18.20. May
provide such limits of coverage as the board |
976 |
determines, consistent with the requirements of
this subsection. |
977 |
19.21. May
require commercial property to meet specified |
978 |
hurricane mitigation construction features as a
condition of |
979 |
eligibility for coverage. |
980 |
Section 2. Effective
January 1, 2008, and notwithstanding |
981 |
any other provision of law: |
982 |
(1) A
new certificate of authority for the transaction of |
983 |
residential property insurance
may not be issued to any insurer |
984 |
domiciled in this state that
is a wholly owned subsidiary of an |
985 |
insurer authorized to do
business in any other state. |
986 |
(2)(a) The
existing certificate of authority for the |
987 |
transaction of residential
property insurance held by any |
988 |
insurer domiciled in this
state that is a wholly owned |
989 |
subsidiary of an insurer
authorized to do business in any other |
990 |
state shall expire at the end
of its period of validation and |
991 |
may not be renewed or reissued
by the Office of Insurance |
992 |
Regulation or the Financial
Services Commission. |
993 |
(b) The
rate filings of any insurer domiciled in this |
994 |
state that is a wholly owned
subsidiary of an insurer authorized |
995 |
to do business in any other
state shall include information |
996 |
relating to the profits of the
parent company of the insurer |
997 |
domiciled in this state. |
998 |
Section 3. Except
as otherwise expressly provided in this |
999 |
act, this act shall take effect upon becoming a
law. |