PCS for CS/HB 1503 — Citizens Property Insurance Corporation (Commerce Committee, 2024)
Summary
Proposed committee substitute PCS for CS/HB 1503, marked ORIGINAL (2024), a bill to be entitled An act relating to Citizens Property Insurance Corporation. The title says it amends section 627.351 to revise circumstances for levying market equalization surcharges on policyholders, requires quota share primary insurance in certain policies, and revises eligibility for commercial lines residential risks coverage by the corporation. It also revises the corporation's plan of operation and the duties of its executive director. Except for one section effective upon becoming a law, the act takes effect July 1.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“PCS for CS/HB 1503 — Citizens Property Insurance Corporation (Commerce Committee, 2024).”
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for CS/HB 1503 ORIGINAL 2024
1 A bill to be entitled
2 An act relating to Citizens Property Insurance
3 Corporation; amending s. 627.351, F.S.; revising
4 circumstances under which certain insurers'
5 association shall levy market equalization surcharges
6 on policyholders; removing obsolete language;
7 providing that certain accounts for Citizens Property
8 Insurance Corporation revenues, assets, liability,
9 losses, and expenses are now maintained as the
10 Citizens account; revising the requirements for
11 certain coverages by the corporation; requiring the
12 inclusion of quota share primary insurance in certain
13 policies; removing provisions relating to legislat ive
14 goals; conforming provisions to changes made by the
15 act; revising the definition of the term
16 "assessments"; removing provisions relating to
17 surcharges and regular assessments upon determination
18 of certain accounts' projected deficits; removing
19 provisions relating to funds available to the
20 corporation as sources of revenue and bonds; removing
21 definitions; removing provisions relating to the
22 duties of the Florida Surplus Lines Service Office;
23 removing provisions relating to disposition of excess
24 amounts of assessments and surcharges; providing
25 definitions; providing nonapplicability of certain
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26 provisions relating to personal lines residential
27 risks coverage by the corporation; requiring insurers
28 to pay, under certain circumstances, producing agents
29 a certain amount or fee if the agents are unable to
30 accept appointment due to failure to be licensed as
31 surplus lines agents; providing nonapplicability of
32 certain payment requirement; revising eligibility for
33 commercial lines residential risks coverage by the
34 corporation; providing that commercial lines
35 residential risks are not eligible for coverage by the
36 corporation under certain circumstances; providing
37 that comparisons of comparable coverages under certain
38 personal lines residential risks and commercial lines
39 residential risks do not apply to policies that do not
40 cover primary residences; revising the corporation's
41 plan of operation; revising the required statements
42 from applicants for coverage; revising the duties of
43 the executive director of the corporation; authorizing
44 the executive director to assign and appoint
45 designees; removing a nonapplicability provision
46 relating to bond requirements; removing obsolete
47 language; requiring new insurers to pay, under certain
48 circumstances, producing agents a certain amount or
49 fee if the agents are unable to accept appointment due
50 to failure to be licensed as surplus lines agents;
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51 removing provisions relating to certain insurer
52 assessment deferments; removing provisions relating to
53 the intangibles of and coverage by the Florida
54 Windstorm Underwriting Association and the corporation
55 coastal account; authorizing the corporation and
56 certain persons to make specified information obtained
57 from underwriting files and confidential claims files
58 available to licensed surplus lines agents;
59 prohibiting such agents from using such information
60 for specified purposes; providing nonapplicability of
61 provisions relating to take-out offers that are part
62 of applications to participate in depopulation;
63 authorizing the corporation to share its claims data
64 with a specified entity; revising the flood coverage
65 requirements for personal lines residential
66 policyholders; amending s. 627.3511, F.S.; conforming
67 provisions to changes made by the act; conforming
68 cross-references; amending s. 627.3518, F.S.;
69 providing nonapplicability of provisions relating to
70 noneligibility for coverage by the corporation;
71 providing effective dates.
72
73 Be It Enacted by the Legislature of the State of Florida:
74
75 Section 1. Subsection (7) of section 627.351, Florida
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76 Statutes, is renumbered as subsection (8), paragraph (b) of
77 subsection (2) and subsection (6) are amended, and a new
78 subsection (7) is added to that section, to read:
79 627.351 Insurance risk apportionment plans.—
80 (2) WINDSTORM INSURANCE RISK APPORTIONMENT.—
81 (b) The department shall require all insurers holding a
82 certificate of authority to transact property insurance on a
83 direct basis in this state, other than joint underwriting
84 associations and other entities formed pursuant to this section,
85 to provide windstorm coverage to applicants from areas
86 determined to be eligible pursuant to paragraph (c) who in good
87 faith are entitled to, but are unable to procure, such coverage
88 through ordinary means; or it shall adopt a reasonable plan or
89 plans for the equitable apportionment or sharing among such
90 insurers of windstorm coverage, which may include formation of
91 an association for this purpose. As used in this subsection, the
92 term "property insurance" means insurance on real or personal
93 property, as defined in s. 624.604, including insurance for
94 fire, industrial fire, allied lines, farmowners multiperil,
95 homeowners multiperil, commercial multiperil, and mobile homes,
96 and including liability coverages on all such insurance, but
97 excluding inland marine as defined in s. 624.607(3) and
98 excluding vehicle insurance as defined in s. 624.605(1)(a) other
99 than insurance on mobile homes used as permanent dwellings. The
100 department shall adopt rules that provide a formula for the
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101 recovery and repayment of any deferred assessments.
102 1. For the purpose of this section, properties eligible
103 for such windstorm coverage are defined as dwellings, buildings,
104 and other structures, including mobile homes which are used as
105 dwellings and which are tied down in compliance with mobile home
106 tie-down requirements prescribed by the Department of Highway
107 Safety and Motor Vehicles pursuant to s. 320.8325, and the
108 contents of all such properties. An applicant or policyholder is
109 eligible for coverage only if an offer of coverage cannot be
110 obtained by or for the applicant or policyholder from an
111 admitted insurer at approved rates.
112 2.a.(I) All insurers required to be members of such
113 association shall participate in its writings, expenses, and
114 losses. Surplus of the association shall be retained for the
115 payment of claims and shall not be distributed to the member
116 insurers. Such participation by member insurers shall be in the
117 proportion that the net direct premiums of each member insurer
118 written for property insurance in this state during the
119 preceding calendar year bear to the aggregate net direct
120 premiums for property insurance of all member insurers, as
121 reduced by any credits for voluntary writings, in this state
122 during the preceding calendar year. For the purposes of this
123 subsection, the term "net direct premiums" means direct written
124 premiums for property insurance, reduced by premium for
125 liability coverage and for the following if included in allied
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126 lines: rain and hail on growing crops; livestock; association
127 direct premiums booked; National Flood Insurance Program direct
128 premiums; and similar deductions specifically authorized by the
129 plan of operation and approved by the department. A member's
130 participation shall begin on the first day of the calendar year
131 following the year in which it is issued a certificate of
132 authority to transact property insurance in the state and shall
133 terminate 1 year after the end of the calendar year during which
134 it no longer holds a certificate of authority to transact
135 property insurance in the state. The commissioner, af ter review
136 of annual statements, other reports, and any other statistics
137 that the commissioner deems necessary, shall certify to the
138 association the aggregate direct premiums written for property
139 insurance in this state by all member insurers.
140 (II) Effective July 1, 2002, the association shall operate
141 subject to the supervision and approval of a board of governors
142 who are the same individuals that have been appointed by the
143 Treasurer to serve on the board of governors of the Citizens
144 Property Insurance Corporation.
145 (III) The plan of operation shall provide a formula
146 whereby a company voluntarily providing windstorm coverage in
147 affected areas will be relieved wholly or partially from
148 apportionment of a regular assessment pursuant to sub -sub-
149 subparagraph d.(I) or sub-sub-subparagraph d.(II).
150 (IV) A company which is a member of a group of companies
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151 under common management may elect to have its credits applied on
152 a group basis, and any company or group may elect to have its
153 credits applied to any other company or group.
154 (V) There shall be no credits or relief from apportionment
155 to a company for emergency assessments collected from its
156 policyholders under sub-sub-subparagraph d.(III).
157 (VI) The plan of operation may also provide for the award
158 of credits, for a period not to exceed 3 years, from a regular
159 assessment pursuant to sub-sub-subparagraph d.(I) or sub-sub-
160 subparagraph d.(II) as an incentive for taking policies out of
161 the Residential Property and Casualty Joint Underwriting
162 Association. In order to qualify for the exemption under this
163 sub-sub-subparagraph, the take-out plan must provide that at
164 least 40 percent of the policies removed from the Residential
165 Property and Casualty Joint Underwriting Association cover risks
166 located in Miami-Dade, Broward, and Palm Beach Counties or at
167 least 30 percent of the policies so removed cover risks located
168 in Miami-Dade, Broward, and Palm Beach Counties and an
169 additional 50 percent of the policies so removed cover risks
170 located in other coastal counties, and must also provide that no
171 more than 15 percent of the policies so removed may exclude
172 windstorm coverage. With the approval of the department, the
173 association may waive these geographic criteria for a take -out
174 plan that removes at least the lesser of 100,000 Residential
175 Property and Casualty Joint Underwriting Association policies or
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176 15 percent of the total number of Residential Property and
177 Casualty Joint Underwriting Association policies, provided the
178 governing board of the Residential Property and Casualty Joi nt
179 Underwriting Association certifies that the take-out plan will
180 materially reduce the Residential Property and Casualty Joint
181 Underwriting Association's 100-year probable maximum loss from
182 hurricanes. With the approval of the department, the board may
183 extend such credits for an additional year if the insurer
184 guarantees an additional year of renewability for all policies
185 removed from the Residential Property and Casualty Joint
186 Underwriting Association, or for 2 additional years if the
187 insurer guarantees 2 additional years of renewability for all
188 policies removed from the Residential Property and Casualty
189 Joint Underwriting Association.
190 b. Assessments to pay deficits in the association under
191 this subparagraph shall be included as an appropriate factor in
192 the making of rates as provided in s. 627.3512.
193 c. The Legislature finds that the potential for unlimited
194 deficit assessments under this subparagraph may induce insurers
195 to attempt to reduce their writings in the voluntary market, and
196 that such actions would worsen the availability problems that
197 the association was created to remedy. It is the intent of the
198 Legislature that insurers remain fully responsible for paying
199 regular assessments and collecting emergency assessments for any
200 deficits of the association; however, it is also the intent of
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201 the Legislature to provide a means by which assessment
202 liabilities may be amortized over a period of years.
203 d.(I) When the deficit incurred in a particular calendar
204 year is 10 percent or less of the aggregate statewide direct
205 written premium for property insurance for the prior calendar
206 year for all member insurers, the association shall levy an
207 assessment on member insurers in an amount equal to the deficit.
208 (II) When the deficit incurred in a particular calenda r
209 year exceeds 10 percent of the aggregate statewide direct
210 written premium for property insurance for the prior calendar
211 year for all member insurers, the association shall levy an
212 assessment on member insurers in an amount equal to the greater
213 of 10 percent of the deficit or 10 percent of the aggregate
214 statewide direct written premium for property insurance for the
215 prior calendar year for member insurers. Any remaining deficit
216 shall be recovered through emergency assessments under sub -sub-
217 subparagraph (III).
218 (III) Upon a determination by the board of directors that
219 a deficit exceeds the amount that will be recovered through
220 regular assessments on member insurers, pursuant to sub -sub-
221 subparagraph (I) or sub-sub-subparagraph (II), the board shall
222 levy, after verification by the department, emergency
223 assessments to be collected by member insurers and by
224 underwriting associations created pursuant to this section which
225 write property insurance, upon issuance or renewal of property
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226 insurance policies other than National Flood Insurance policies
227 in the year or years following levy of the regular assessments.
228 The amount of the emergency assessment collected in a particular
229 year shall be a uniform percentage of that year's direct written
230 premium for property insurance for all member insurers and
231 underwriting associations, excluding National Flood Insurance
232 policy premiums, as annually determined by the board and
233 verified by the department. The department shall verify the
234 arithmetic calculations involved in the board's determination
235 within 30 days after receipt of the information on which the
236 determination was based. Notwithstanding any other provision of
237 law, each member insurer and each underwriting association
238 created pursuant to this section shall collect emergenc y
239 assessments from its policyholders without such obligation being
240 affected by any credit, limitation, exemption, or deferment. The
241 emergency assessments so collected shall be transferred directly
242 to the association on a periodic basis as determined by the
243 association. The aggregate amount of emergency assessments
244 levied under this sub-sub-subparagraph in any calendar year may
245 not exceed the greater of 10 percent of the amount needed to
246 cover the original deficit, plus interest, fees, commissions,
247 required reserves, and other costs associated with financing of
248 the original deficit, or 10 percent of the aggregate statewide
249 direct written premium for property insurance written by member
250 insurers and underwriting associations for the prior year, plus
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251 interest, fees, commissions, required reserves, and other costs
252 associated with financing the original deficit. The board may
253 pledge the proceeds of the emergency assessments under this sub -
254 sub-subparagraph as the source of revenue for bonds, to retire
255 any other debt incurred as a result of the deficit or events
256 giving rise to the deficit, or in any other way that the board
257 determines will efficiently recover the deficit. The emergency
258 assessments under this sub-sub-subparagraph shall continue as
259 long as any bonds issued or other indebtedness incurred with
260 respect to a deficit for which the assessment was imposed remain
261 outstanding, unless adequate provision has been made for the
262 payment of such bonds or other indebtedness pursuant to the
263 document governing such bonds or other indebtedness. Emergency
264 assessments collected under this sub-sub-subparagraph are not
265 part of an insurer's rates, are not premium, and are not subject
266 to premium tax, fees, or commissions; however, failure to pay
267 the emergency assessment shall be treated as failure to pay
268 premium.
269 (IV) Each member insurer's share of the total regular
270 assessments under sub-sub-subparagraph (I) or sub-sub-
271 subparagraph (II) shall be in the proportion that the insurer's
272 net direct premium for property insurance in this state, for the
273 year preceding the assessment bears to the aggregate statewide
274 net direct premium for property insurance of all member
275 insurers, as reduced by any credits for voluntary writings for
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276 that year.
277 (V) If regular deficit assessments are made under sub-sub-
278 subparagraph (I) or sub-sub-subparagraph (II), or by the
279 Residential Property and Casualty Joint Underwriting Association
280 under sub-subparagraph (6)(b)3.a., the association shall levy
281 upon the association's policyholders, as part of its nex t rate
282 filing, or by a separate rate filing solely for this purpose, a
283 market equalization surcharge in a percentage equal to the total
284 amount of such regular assessments divided by the aggregate
285 statewide direct written premium for property insurance for
286 member insurers for the prior calendar year. Market equalization
287 surcharges under this sub-sub-subparagraph are not considered
288 premium and are not subject to commissions, fees, or premium
289 taxes; however, failure to pay a market equalization surcharge
290 shall be treated as failure to pay premium.
291 e. The governing body of any unit of local government, any
292 residents of which are insured under the plan, may issue bonds
293 as defined in s. 125.013 or s. 166.101 to fund an assistance
294 program, in conjunction with the association, for the purpose of
295 defraying deficits of the association. In order to avoid
296 needless and indiscriminate proliferation, duplication, and
297 fragmentation of such assistance programs, any unit of local
298 government, any residents of which are insured by the
299 association, may provide for the payment of losses, regardless
300 of whether or not the losses occurred within or outside of the
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301 territorial jurisdiction of the local government. Revenue bonds
302 may not be issued until validated pursuant to chapter 75, unless
303 a state of emergency is declared by executive order or
304 proclamation of the Governor pursuant to s. 252.36 making such
305 findings as are necessary to determine that it is in the best
306 interests of, and necessary for, the protection of the public
307 health, safety, and general welfare of residents of this state
308 and the protection and preservation of the economic stability of
309 insurers operating in this state, and declaring it an essential
310 public purpose to permit certain municipalities or counties to
311 issue bonds as will provide relief to claimants and
312 policyholders of the association and insurers responsible for
313 apportionment of plan losses. Any such unit of local government
314 may enter into such contracts with the association and with any
315 other entity created pursuant to this subsection as are
316 necessary to carry out this paragraph. Any bonds issued under
317 this sub-subparagraph shall be payable from and secured by
318 moneys received by the association from assessments under this
319 subparagraph, and assigned and pledged to or on behalf of the
320 unit of local government for the benefit of the holders of such
321 bonds. The funds, credit, property, and taxing power of the
322 state or of the unit of local government shall not be pledged
323 for the payment of such bonds. If any of the bonds remain unsold
324 60 days after issuance, the department shall require all
325 insurers subject to assessment to purchase the bonds, which
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326 shall be treated as admitted assets; each insurer shall be
327 required to purchase that percentage of the unsold portion o f
328 the bond issue that equals the insurer's relative share of
329 assessment liability under this subsection. An insurer shall not
330 be required to purchase the bonds to the extent that the
331 department determines that the purchase would endanger or impair
332 the solvency of the insurer. The authority granted by this sub-
333 subparagraph is additional to any bonding authority granted by
334 subparagraph 6.
335 3. The plan shall also provide that any member with a
336 surplus as to policyholders of $25 million or less writing 25
337 percent or more of its total countrywide property insurance
338 premiums in this state may petition the department, within the
339 first 90 days of each calendar year, to qualify as a limited
340 apportionment company. The apportionment of such a member
341 company in any calendar year for which it is qualified shall not
342 exceed its gross participation, which shall not be affected by
343 the formula for voluntary writings. In no event shall a limited
344 apportionment company be required to participate in any
345 apportionment of losses pursuant to sub-sub-subparagraph 2.d.(I)
346 or sub-sub-subparagraph 2.d.(II) in the aggregate which exceeds
347 $50 million after payment of available plan funds in any
348 calendar year. However, a limited apportionment company shall
349 collect from its policyholders any emergency assessment imposed
350 under sub-sub-subparagraph 2.d.(III). The plan shall provide
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351 that, if the department determines that any regular assessment
352 will result in an impairment of the surplus of a limited
353 apportionment company, the department may direct that all or
354 part of such assessment be deferred. However, there shall be no
355 limitation or deferment of an emergency assessment to be
356 collected from policyholders under sub-sub-subparagraph
357 2.d.(III).
358 4. The plan shall provide for the deferment, in wh ole or
359 in part, of a regular assessment of a member insurer under sub-
360 sub-subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II), but
361 not for an emergency assessment collected from policyholders
362 under sub-sub-subparagraph 2.d.(III), if, in the opinion of the
363 commissioner, payment of such regular assessment would endanger
364 or impair the solvency of the member insurer. In the event a
365 regular assessment against a member insurer is deferred in whole
366 or in part, the amount by which such assessment is deferred may
367 be assessed against the other member insurers in a manner
368 consistent with the basis for assessments set forth in sub -sub-
369 subparagraph 2.d.(I) or sub-sub-subparagraph 2.d.(II).
370 5.a. The plan of operation may include deductibles and
371 rules for classification of risks and rate modifications
372 consistent with the objective of providing and maintaining funds
373 sufficient to pay catastrophe losses.
374 b. It is the intent of the Legislature that the rates for
375 coverage provided by the association be actuarially sound and
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376 not competitive with approved rates charged in the admitted
377 voluntary market such that the association functions as a
378 residual market mechanism to provide insurance only when the
379 insurance cannot be procured in the voluntary market. The plan
380 of operation shall provide a mechanism to assure that, beginning
381 no later than January 1, 1999, the rates charged by the
382 association for each line of business are reflective of approved
383 rates in the voluntary market for hurricane coverage for each
384 line of business in the various areas eligible for association
385 coverage.
386 c. The association shall provide for windstorm coverage on
387 residential properties in limits up to $10 million for
388 commercial lines residential risks and up to $1 million for
389 personal lines residential risks. If coverage with the
390 association is sought for a residential risk valued in excess of
391 these limits, coverage shall be available to the risk up to the
392 replacement cost or actual cash value of the property, at the
393 option of the insured, if coverage for the risk cannot be
394 located in the authorized market. The association must accept a
395 commercial lines residential risk with limits above $10 million
396 or a personal lines residential risk with limits above $1
397 million if coverage is not available in the authorized market.
398 The association may write coverage above the limits specified in
399 this subparagraph with or without facultative or other
400 reinsurance coverage, as the association determines appropriate.
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401 d. The plan of operation must provide objective criter ia
402 and procedures, approved by the department, to be uniformly
403 applied for all applicants in determining whether an individual
404 risk is so hazardous as to be uninsurable. In making this
405 determination and in establishing the criteria and procedures,
406 the following shall be considered:
407 (I) Whether the likelihood of a loss for the individual
408 risk is substantially higher than for other risks of the same
409 class; and
410 (II) Whether the uncertainty associated with the
411 individual risk is such that an appropriate premium cannot be
412 determined.
413
414 The acceptance or rejection of a risk by the association
415 pursuant to such criteria and procedures must be construed as
416 the private placement of insurance, and the provisions of
417 chapter 120 do not apply.
418 e. If the risk accepts an offer of coverage through the
419 market assistance program or through a mechanism established by
420 the association, either before the policy is issued by the
421 association or during the first 30 days of coverage by the
422 association, and the producing agent who submitted the
423 application to the association is not currently appointed by the
424 insurer, the insurer shall:
425 (I) Pay to the producing agent of record of the policy,
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426 for the first year, an amount that is the greater of the
427 insurer's usual and customary commission for the type of policy
428 written or a fee equal to the usual and customary commission of
429 the association; or
430 (II) Offer to allow the producing agent of record of the
431 policy to continue servicing the policy for a period of not less
432 than 1 year and offer to pay the agent the greater of the
433 insurer's or the association's usual and customary commission
434 for the type of policy written.
435
436 If the producing agent is unwilling or unable to accept
437 appointment, the new insurer shall pay the agent in accordance
438 with sub-sub-subparagraph (I). Subject to the provisions of s.
439 627.3517, the policies issued by the association must provide
440 that if the association obtains an offer from an authorized
441 insurer to cover the risk at its approved rates under either a
442 standard policy including wind coverage or, if consistent with
443 the insurer's underwriting rules as filed with the department, a
444 basic policy including wind coverage, the risk is no longer
445 eligible for coverage through the association. Upon termination
446 of eligibility, the association shall provide written notice to
447 the policyholder and agent of record stating that the
448 association policy must be canceled as of 60 days after the date
449 of the notice because of the offer of coverage from an
450 authorized insurer. Other provisions of the insurance code
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451 relating to cancellation and notice of cancellation do not apply
452 to actions under this sub-subparagraph.
453 f. When the association enters into a contractual
454 agreement for a take-out plan, the producing agent of record of
455 the association policy is entitled to retain any unearned
456 commission on the policy, and the insurer shall:
457 (I) Pay to the producing agent of record of the
458 association policy, for the first year, an amount that is the
459 greater of the insurer's usual and customary commission for the
460 type of policy written or a fee equal to the usual and customary
461 commission of the association; or
462 (II) Offer to allow the producing agent of record of the
463 association policy to continue servicing the policy for a period
464 of not less than 1 year and offer to pay the agent the greater
465 of the insurer's or the association's usual and customary
466 commission for the type of policy written.
467
468 If the producing agent is unwilling or unable to accept
469 appointment, the new insurer shall pay the agent in accordance
470 with sub-sub-subparagraph (I).
471 6.a. The plan of operation may authorize the formation of
472 a private nonprofit corporation, a private nonprofit
473 unincorporated association, a partnership, a trust, a limited
474 liability company, or a nonprofit mutual company which may be
475 empowered, among other things, to borrow money by issuing bonds
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476 or by incurring other indebtedness and to accumulate reserves or
477 funds to be used for the payment of insured catastrophe losses.
478 The plan may authorize all actions necessary to facilitate the
479 issuance of bonds, including the pledging of assessments or
480 other revenues.
481 b. Any entity created under this subsection, or any entity
482 formed for the purposes of this subsection, may sue and be sued,
483 may borrow money; issue bonds, notes, or debt instruments;
484 pledge or sell assessments, market equalization surcharges and
485 other surcharges, rights, premiums, contractual rights,
486 projected recoveries from the Florida Hurricane Catastrophe
487 Fund, other reinsurance recoverables, and other assets as
488 security for such bonds, notes, or debt instruments; enter into
489 any contracts or agreements necessary or proper to accomplish
490 such borrowings; and take other actions necessary to carry out
491 the purposes of this subsection. The association may is sue bonds
492 or incur other indebtedness, or have bonds issued on its behalf
493 by a unit of local government pursuant to subparagraph (6)(q)2.,
494 in the absence of a hurricane or other weather-related event,
495 upon a determination by the association subject to appr oval by
496 the department that such action would enable it to efficiently
497 meet the financial obligations of the association and that such
498 financings are reasonably necessary to effectuate the
499 requirements of this subsection. Any such entity may accumulate
500 reserves and retain surpluses as of the end of any association
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501 year to provide for the payment of losses incurred by the
502 association during that year or any future year. The association
503 shall incorporate and continue the plan of operation and
504 articles of agreement in effect on the effective date of chapter
505 76-96, Laws of Florida, to the extent that it is not
506 inconsistent with chapter 76-96, and as subsequently modified
507 consistent with chapter 76-96. The board of directors and
508 officers currently serving shall continue to serve until their
509 successors are duly qualified as provided under the plan. The
510 assets and obligations of the plan in effect immediately prior
511 to the effective date of chapter 76-96 shall be construed to be
512 the assets and obligations of the successor plan created herein.
513 c. In recognition of s. 10, Art. I of the State
514 Constitution, prohibiting the impairment of obligations of
515 contracts, it is the intent of the Legislature that no action be
516 taken whose purpose is to impair any bond indenture or financing
517 agreement or any revenue source committed by contract to such
518 bond or other indebtedness issued or incurred by the association
519 or any other entity created under this subsection.
520 7. On such coverage, an agent's remuneration shall be that
521 amount of money payable to the agent by the terms of his or her
522 contract with the company with which the business is placed.
523 However, no commission will be paid on that portion of the
524 premium which is in excess of the standard premium of that
525 company.
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526 8. Subject to approval by the department, the association
527 may establish different eligibility requirements and operational
528 procedures for any line or type of coverage for any specified
529 eligible area or portion of an eligible area if the board
530 determines that such changes to the eligibility requirements and
531 operational procedures are justified due to the voluntary market
532 being sufficiently stable and competitive in such area or for
533 such line or type of coverage and that consumers who, in good
534 faith, are unable to obtain insurance through the voluntary
535 market through ordinary methods would continue to have access to
536 coverage from the association. When coverage is sought in
537 connection with a real property transfer, such requirements and
538 procedures shall not provide for an effective date of coverage
539 later than the date of the closing of the transfer as
540 established by the transferor, the transferee, and, if
541 applicable, the lender.
542 9. Notwithstanding any other provision of law:
543 a. The pledge or sale of, the lien upon, and the security
544 interest in any rights, revenues, or other assets of the
545 association created or purported to be created pursuant to any
546 financing documents to secure any bonds or other indebtedness of
547 the association shall be and remain valid and enforceab le,
548 notwithstanding the commencement of and during the continuation
549 of, and after, any rehabilitation, insolvency, liquidation,
550 bankruptcy, receivership, conservatorship, reorganization, or
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551 similar proceeding against the association under the laws of
552 this state or any other applicable laws.
553 b. No such proceeding shall relieve the association of its
554 obligation, or otherwise affect its ability to perform its
555 obligation, to continue to collect, or levy and collect,
556 assessments, market equalization or other surcharges, projected
557 recoveries from the Florida Hurricane Catastrophe Fund,
558 reinsurance recoverables, or any other rights, revenues, or
559 other assets of the association pledged.
560 c. Each such pledge or sale of, lien upon, and security
561 interest in, including the priority of such pledge, lien, or
562 security interest, any such assessments, emergency assessments,
563 market equalization or renewal surcharges, projected recoveries
564 from the Florida Hurricane Catastrophe Fund, reinsurance
565 recoverables, or other rights, revenues, or other assets which
566 are collected, or levied and collected, after the commencement
567 of and during the pendency of or after any such proceeding shall
568 continue unaffected by such proceeding.
569 d. As used in this subsection, the term "financing
570 documents" means any agreement, instrument, or other document
571 now existing or hereafter created evidencing any bonds or other
572 indebtedness of the association or pursuant to which any such
573 bonds or other indebtedness has been or may be issued and
574 pursuant to which any rights, revenues, or other assets of the
575 association are pledged or sold to secure the repayment of such
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576 bonds or indebtedness, together with the payment of interest on
577 such bonds or such indebtedness, or the payment of any other
578 obligation of the association related to such bonds or
579 indebtedness.
580 e. Any such pledge or sale of assessments, revenues,
581 contract rights or other rights or assets of the association
582 shall constitute a lien and security interest, or sale, as the
583 case may be, that is immediately effective and attaches to such
584 assessments, revenues, contract, or other rights or assets,
585 whether or not imposed or collected at the time the pledge or
586 sale is made. Any such pledge or sale is effective, valid,
587 binding, and enforceable against the association or other entity
588 making such pledge or sale, and valid and binding against and
589 superior to any competing claims or obligations owed to any
590 other person or entity, including policyholders in this state,
591 asserting rights in any such assessments, revenues, contract, or
592 other rights or assets to the extent set forth in and in
593 accordance with the terms of the pledge or sale contained in the
594 applicable financing documents, whether or not any such person
595 or entity has notice of such pledge or sale and without the need
596 for any physical delivery, recordation, filing, or other action.
597 f. There shall be no liability on the part of, and no
598 cause of action of any nature shall arise against, any member
599 insurer or its agents or employees, agents or employees of the
600 association, members of the board of directors of the
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601 association, or the department or its representatives, for any
602 action taken by them in the performance of their duties or
603 responsibilities under this subsection. Such immunity does not
604 apply to actions for breach of any contract or agreement
605 pertaining to insurance, or any willful tort.
606 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
607 (a) The public purpose of this subsection is to ensure
608 that there is an orderly market for property insurance for
609 residents and businesses of this state.
610 1. The Legislature finds that private insurers are
611 unwilling or unable to provide affordable property insurance
612 coverage in this state to the extent sought and needed. The
613 absence of affordable property insurance threatens the public
614 health, safety, and welfare and likewise threatens the economic
615 health of the state. The state therefore has a compelling public
616 interest and a public purpose to assist in assuring that
617 property in the state is insured and that it is insured at
618 affordable rates so as to facilitate the remediation,
619 reconstruction, and replacement of damaged or destroyed property
620 in order to reduce or avoid the negative effects otherwise
621 resulting to the public health, safety, and welfare, to the
622 economy of the state, and to the revenues of the state and local
623 governments which are needed to provide for the public welfare.
624 It is necessary, therefore, to provide affordable property
625 insurance to applicants who are in good faith entitled to
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626 procure insurance through the voluntary market but are unable to
627 do so. The Legislature intends, therefore, that affordable
628 property insurance be provided and that it continue to be
629 provided, as long as necessary, through Citizens Property
630 Insurance Corporation, a government entity that is an integral
631 part of the state, and that is not a private insurance company.
632 To that end, the corporation shall strive to increase the
633 availability of affordable property insurance in this state,
634 while achieving efficiencies and economies, and while providing
635 service to policyholders, applicants, and agents which is no
636 less than the quality generally provided in the voluntary
637 market, for the achievement of the foregoing public purposes.
638 Because it is essential for this government entity to have the
639 maximum financial resources to pay claims following a
640 catastrophic hurricane, it is the intent of the Legislature that
641 the corporation continue to be an integral part of the state and
642 that the income of the corporation be exempt from federal incom e
643 taxation and that interest on the debt obligations issued by the
644 corporation be exempt from federal income taxation.
645 2. The Residential Property and Casualty Joint
646 Underwriting Association originally created by this statute
647 shall be known as the Citizens Property Insurance Corporation.
648 The corporation shall provide insurance for residential and
649 commercial property, for applicants who are entitled, but, in
650 good faith, are unable to procure insurance through the
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651 voluntary market. The corporation shall operate pursuant to a
652 plan of operation approved by order of the Financial Services
653 Commission. The plan is subject to continuous review by the
654 commission. The commission may, by order, withdraw approval of
655 all or part of a plan if the commission determines that
656 conditions have changed since approval was granted and that the
657 purposes of the plan require changes in the plan. For the
658 purposes of this subsection, residential coverage includes both
659 personal lines residential coverage, which consists of the type
660 of coverage provided by homeowner, mobile home owner, dwelling,
661 tenant, condominium unit owner, and similar policies; and
662 commercial lines residential coverage, which consists of the
663 type of coverage provided by condominium association, apartment
664 building, and similar policies.
665 3. With respect to coverage for personal lines residential
666 structures:
667 a. Effective January 1, 2014, a structure that has a
668 dwelling replacement cost of $1 million or more, or a single
669 condominium unit that has a combined dwelling and contents
670 replacement cost of $1 million or more, is not eligible for
671 coverage by the corporation. Such dwellings insured by the
672 corporation on December 31, 2013, may continue to be covered by
673 the corporation until the end of the policy term. The office
674 shall approve the method used by the corporation for valuing the
675 dwelling replacement cost for the purposes of this subparagraph.
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676 If a policyholder is insured by the corporation before being
677 determined to be ineligible pursuant to this subparagraph and
678 such policyholder files a lawsuit challenging the determination,
679 the policyholder may remain insured by the corporation until the
680 conclusion of the litigation.
681 b. Effective January 1, 2015, a structure that has a
682 dwelling replacement cost of $900,000 or more, or a single
683 condominium unit that has a combined dwelling and contents
684 replacement cost of $900,000 or more, is not eligible for
685 coverage by the corporation. Such dwellings insured by the
686 corporation on December 31, 2014, may continue to be covered by
687 the corporation only until the end of the policy term.
688 c. Effective January 1, 2016, a structure that has a
689 dwelling replacement cost of $800,000 or more, or a single
690 condominium unit that has a combined dwelling and contents
691 replacement cost of $800,000 or more, is not eligible for
692 coverage by the corporation. Such dwellings insured by the
693 corporation on December 31, 2015, may continue to be covered by
694 the corporation until the end of the policy term.
695 a.d. Effective January 1, 2017, a structure that has a
696 dwelling replacement cost of $700,000 or more, or a single
697 condominium unit that has a combined dwelling and contents
698 replacement cost of $700,000 or more, is not eligible for
699 coverage by the corporation. Such dwellings insured by the
700 corporation on December 31, 2016, may continue to be covered by
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701 the corporation until the end of the policy term.
702 b. The requirements of sub-subparagraph a. sub-
703 subparagraphs b.-d. do not apply in counties where the office
704 determines there is not a reasonable degree of competition. In
705 such counties a personal lines residential structure that has a
706 dwelling replacement cost of less than $1 million, or a single
707 condominium unit that has a combined dwelling and contents
708 replacement cost of less than $1 million, is eligible f or
709 coverage by the corporation.
710 4. It is the intent of the Legislature that policyholders,
711 applicants, and agents of the corporation receive service and
712 treatment of the highest possible level but never less than that
713 generally provided in the voluntary market. It is also intended
714 that the corporation be held to service standards no less than
715 those applied to insurers in the voluntary market by the office
716 with respect to responsiveness, timeliness, customer courtesy,
717 and overall dealings with policyholders, applicants, or agents
718 of the corporation.
719 5.a. Effective January 1, 2009, a personal lines
720 residential structure that is located in the "wind-borne debris
721 region," as defined in s. 1609.2, International Building Code
722 (2006), and that has an insured value on the structure of
723 $750,000 or more is not eligible for coverage by the corporation
724 unless the structure has opening protections as required under
725 the Florida Building Code for a newly constructed residential
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726 structure in that area. A residential structure is deemed to
727 comply with this sub-subparagraph if it has shutters or opening
728 protections on all openings and if such opening protections
729 complied with the Florida Building Code at the time they were
730 installed.
731 b. Any major structure, as defined in s. 161.54(6)(a),
732 that is newly constructed, or rebuilt, repaired, restored, or
733 remodeled to increase the total square footage of finished area
734 by more than 25 percent, pursuant to a permit applied for after
735 July 1, 2015, is not eligible for coverage by the corporation if
736 the structure is seaward of the coastal construction control
737 line established pursuant to s. 161.053 or is within the Coastal
738 Barrier Resources System as designated by 16 U.S.C. ss. 3501 -
739 3510.
740 6. With respect to wind-only coverage for commercial lines
741 residential condominiums, effective July 1, 2014, a condominium
742 shall be deemed ineligible for coverage if 50 percent or more of
743 the units are rented more than eight times in a calendar year
744 for a rental agreement period of less than 30 days.
745 (b)1. All insurers authorized to write one or more subject
746 lines of business in this state are subject to assessment by the
747 corporation and, for the purposes of this subsection, are
748 referred to collectively as "assessable insurers." Insurers
749 writing one or more subject lines of business in this state
750 pursuant to part VIII of chapter 626 are not assessable
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751 insurers; however, insureds who procure one or more subject
752 lines of business in this state pursuant to part VIII of chapter
753 626 are subject to assessment by the corporation and are
754 referred to collectively as "assessable insureds." An insurer's
755 assessment liability begins on the first day of the calendar
756 year following the year in which the insurer was issued a
757 certificate of authority to transact insurance for subject lines
758 of business in this state and terminates 1 year after the end of
759 the first calendar year during which the insurer no longer holds
760 a certificate of authority to transact insurance for subject
761 lines of business in this state.
762 2.a. All revenues, assets, liabilities, losses, and
763 expenses of the corporation shall be maintained in the Citizens
764 account. The Citizens account may provide divided into three
765 separate accounts as follows:
766 a.(I) A personal lines account for Personal residential
767 policies that provide issued by the corporation which provides
768 comprehensive, multiperil coverage on risks that are not located
769 in areas eligible for coverage by the Florida Windstorm
770 Underwriting Association as those areas were defined on January
771 1, 2002, and for policies that do not provide coverage for the
772 peril of wind on risks that are located in such areas;
773 b.(II) A commercial lines account for Commercial
774 residential and commercial nonresidential policies that provide
775 issued by the corporation which provides coverage for basic
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776 property perils on risks that are not located in areas eligible
777 for coverage by the Florida Windstorm Underwriting Association
778 as those areas were defined on January 1, 2002, and for policies
779 that do not provide coverage for the peril of wind on risks that
780 are located in such areas; and
781 c.(III) A Coastal account for Personal residential
782 policies and commercial residential and commercial
783 nonresidential property policies that provide issued by the
784 corporation which provides coverage for the peril of wind on
785 risks that are located in areas eligible for coverage by the
786 Florida Windstorm Underwriting Association, as those areas were
787 defined on January 1, 2002. The corporation may offer policies
788 that provide multiperil coverage and shall offer policies that
789 provide coverage only for the peril of wind for risks located in
790 areas eligible for coverage by the Florida Windstorm
791 Underwriting Association, as those areas were defined on January
792 1, 2002 in the coastal account. Effective July 1, 2014, The
793 corporation may not offer shall cease offering new commercial
794 residential policies providing multiperil coverage but and shall
795 instead continue to offer commercial residential wind-only
796 policies, and may offer commercial residential policies
797 excluding wind. However, the corporation may, however, continue
798 to renew a commercial residential multiperil policy on a
799 building that was is insured by the corporation on June 30,
800 2014, under a multiperil policy. In issuing multiperil coverage
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801 under this sub-subparagraph, the corporation may use its
802 approved policy forms and rates for risks located in areas not
803 eligible for coverage by the Florida Windstorm Underwriting
804 Association, as those areas were defined on January 1, 2002, and
805 for policies that do not provide coverage for the peril of wind
806 on risks that are located in such areas the personal lines
807 account. An applicant or insured who is eligible to purchase a
808 multiperil policy from the corporation may purchase a multiperil
809 policy from an authorized insurer without prejudice to the
810 applicant's or insured's eligibility to prospectively purchase a
811 policy that provides coverage only for the peril of wind from
812 the corporation. An applicant or insured who is eligible for a
813 corporation policy that provides coverage only for the peril of
814 wind may elect to purchase or retain such policy and also
815 purchase or retain coverage excluding wind from an authorize d
816 insurer without prejudice to the applicant's or insured's
817 eligibility to prospectively purchase a policy that provides
818 multiperil coverage from the corporation. The following
819 policies, which provide coverage only for the peril of wind,
820 must also include quota share primary insurance under
821 subparagraph (c)2.:
822 (I) Personal residential policies and commercial
823 residential and commercial nonresidential property policies that
824 provide coverage for the peril of wind on risks that are located
825 in areas eligible for coverage by the Florida Windstorm
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826 Underwriting Association, as those areas were defined on January
827 1, 2002;
828 (II) Policies that provide multiperil coverage, if offered
829 by the corporation, and policies that provide coverage only for
830 the peril of wind for risks located in areas eligible for
831 coverage by the Florida Windstorm Underwriting Association, as
832 those areas were defined on January 1, 2002;
833 (III) Commercial residential wind-only policies;
834 (IV) Commercial residential policies excluding wind, if
835 offered by the corporation; and
836 (V) Commercial residential multiperil policies on a
837 building that was insured by the corporation on June 30, 2014 It
838 is the goal of the Legislature that there be an overall average
839 savings of 10 percent or more for a policyholder who currently
840 has a wind-only policy with the corporation, and an ex-wind
841 policy with a voluntary insurer or the corporation, and who
842 obtains a multiperil policy from the corporation. It is the
843 intent of the Legislature that the offer of multiperil coverage
844 in the coastal account be made and implemented in a manner that
845 does not adversely affect the tax-exempt status of the
846 corporation or creditworthiness of or security for currently
847 outstanding financing obligations or credit facilities of the
848 coastal account, the personal lines account, or the commer cial
849 lines account. The coastal account must also include quota share
850 primary insurance under subparagraph (c)2.
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851
852 The area eligible for coverage with the corporation under this
853 sub-subparagraph under the coastal account also includes the
854 area within Port Canaveral, which is bordered on the south by
855 the City of Cape Canaveral, bordered on the west by the Banana
856 River, and bordered on the north by Federal Government property.
857 3. With respect to a deficit in the Citizens account:
858 a. Upon a determination by the board of governors that the
859 Citizens account has a projected deficit, the board shall levy a
860 Citizens policyholder surcharge against all policyholders of the
861 corporation.
862 (I) The surcharge shall be levied as a uniform percentage
863 of the premium for the policy of up to 15 percent of such
864 premium, which funds shall be used to offset the deficit.
865 (II) The surcharge is payable upon cancellation or
866 termination of the policy, upon renewal of the policy, or upon
867 issuance of a new policy by the corporation within the first 12
868 months after the date of the levy or the period of time
869 necessary to fully collect the surcharge amount.
870 (III) The surcharge is not considered premium and is not
871 subject to commissions, fees, or premium taxes. However, failure
872 to pay the surcharge shall be treated as failure to pay premium.
873 b. The three separate accounts must be maintained as long
874 as financing obligations entered into by the Florida Windstorm
875 Underwriting Association or Residential Property and Casualty
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876 Joint Underwriting Association are outstanding, in accordance
877 with the terms of the corresponding financing documents. If no
878 such financing obligations remain outstanding or if the
879 financing documents allow for combining of accounts, the
880 corporation may consolidate the three separate accounts into a
881 new account, to be known as the Citizens account, for all
882 revenues, assets, liabilities, losses, and expenses of the
883 corporation. The Citizens account, if established by the
884 corporation, is authorized to provide coverage to the same
885 extent as provided under each of the three separate accounts.
886 The authority to provide coverage under the Citizens account is
887 set forth in subparagraph 4. Consistent with this subparagraph
888 and prudent investment policies that minimize the cost of
889 carrying debt, the board shall exercise its best efforts to
890 retire existing debt or obtain the approval of necessary parties
891 to amend the terms of existing debt, so as to structure the most
892 efficient plan for consolidating the three separate accounts
893 into a single account. Once the accounts are combined into one
894 account, this subparagraph and subparagraph 3. shall be replaced
895 in their entirety by subparagraphs 4. and 5.
896 c. Creditors of the Residential Property and Casualty
897 Joint Underwriting Association and the accounts specified in
898 sub-sub-subparagraphs a.(I) and (II) may have a claim against,
899 and recourse to, those accounts and no claim against, or
900 recourse to, the account referred to in sub-sub-subparagraph
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901 a.(III). Creditors of the Florida Windstorm Underwriting
902 Association have a claim against, and recourse to, the account
903 referred to in sub-sub-subparagraph a.(III) and no claim
904 against, or recourse to, the accounts referred to in sub -sub-
905 subparagraphs a.(I) and (II).
906 d. Revenues, assets, liabilities, losses, and expenses not
907 attributable to particular accounts shall be prorated among the
908 accounts.
909 e. The Legislature finds that the revenues of the
910 corporation are revenues that are necessary to meet the
911 requirements set forth in documents authorizing the issuance of
912 bonds under this subsection.
913 f. The income of the corporation may not inure to the
914 benefit of any private person.
915 3. With respect to a deficit in an account:
916 a. After accounting for the Citizens policyholder
917 surcharge imposed under sub-subparagraph j., if the remaining
918 projected deficit incurred in the coastal account in a
919 particular calendar year:
920 (I) Is not greater than 2 percent of the aggregate
921 statewide direct written premium for the subject lines of
922 business for the prior calendar year, the entire deficit shall
923 be recovered through regular assessments of assessable insurers
924 under paragraph (q) and assessable insureds.
925 (II) Exceeds 2 percent of the aggregate statewide direct
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926 written premium for the subject lines of business f or the prior
927 calendar year, the corporation shall levy regular assessments on
928 assessable insurers under paragraph (q) and on assessable
929 insureds in an amount equal to the greater of 2 percent of the
930 projected deficit or 2 percent of the aggregate statewide direct
931 written premium for the subject lines of business for the prior
932 calendar year. Any remaining projected deficit shall be
933 recovered through emergency assessments under sub-subparagraph
934 e.
935 b. Each assessable insurer's share of the amount being
936 assessed under sub-subparagraph a. must be in the proportion
937 that the assessable insurer's direct written premium for the
938 subject lines of business for the year preceding the assessment
939 bears to the aggregate statewide direct written premium for the
940 subject lines of business for that year. The assessment
941 percentage applicable to each assessable insured is the ratio of
942 the amount being assessed under sub-subparagraph a. to the
943 aggregate statewide direct written premium for the subject lines
944 of business for the prior year. Assessments levied by the
945 corporation on assessable insurers under sub-subparagraph a.
946 must be paid as required by the corporation's plan of operation
947 and paragraph (q). Assessments levied by the corporation on
948 assessable insureds under sub-subparagraph a. shall be collected
949 by the surplus lines agent at the time the surplus lines agent
950 collects the surplus lines tax required by s. 626.932, and paid
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951 to the Florida Surplus Lines Service Office at the time the
952 surplus lines agent pays the surplus lines tax to that office.
953 Upon receipt of regular assessments from surplus lines agents,
954 the Florida Surplus Lines Service Office shall transfer the
955 assessments directly to the corporation as determined by the
956 corporation.
957 c. The corporation may not levy regular assessments under
958 paragraph (q) pursuant to sub-subparagraph a. or sub-
959 subparagraph b. if the three separate accounts in sub -sub-
960 subparagraphs 2.a.(I)-(III) have been consolidated into the
961 Citizens account pursuant to sub-subparagraph 2.b. However, the
962 outstanding balance of any regular assessment levied by the
963 corporation before establishment of the Citizens account remains
964 payable to the corporation.
965 b.d. After accounting for the Citizens policyholder
966 surcharge imposed under sub-subparagraph a. j., the remaining
967 projected deficits in the Citizens personal lines account and in
968 the commercial lines account in a particular calendar year shall
969 be recovered through emergency assessments under sub-
970 subparagraph c. e.
971 c.e. Upon a determination by the board of governors that a
972 projected deficit in the Citizens an account exceeds the amount
973 that is expected to be recovered through surcharges regular
974 assessments under sub-subparagraph a., plus the amount that is
975 expected to be recovered through surcharges under sub-
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976 subparagraph j., the board, after verification by the office,
977 shall levy emergency assessments for as many years as necessary
978 to cover the deficits, to be collected by assessable insurers
979 and the corporation and collected from assessable insureds upon
980 issuance or renewal of policies for subject lines of business,
981 excluding National Flood Insurance Program policies. The amount
982 collected in a particular year must be a uniform percentage of
983 that year's direct written premium for subject lines of business
984 and the Citizens account all accounts of the corporation,
985 excluding National Flood Insurance Program policy premiums, as
986 annually determined by the board and verified by the office. The
987 office shall verify the arithmetic calculations involved in the
988 board's determination within 30 days after receipt of the
989 information on which the determination was based. The office
990 shall notify assessable insurers and the Florida Surplus Lines
991 Service Office of the date on which assessable insurers shall
992 begin to collect and assessable insureds shall begin to pay such
993 assessment. The date must be at least 90 days after the date the
994 corporation levies emergency assessments pursuant to this sub -
995 subparagraph. Notwithstanding any other provision of law, the
996 corporation and each assessable insurer that writes subject
997 lines of business shall collect emergency assessments from its
998 policyholders without such obligation being affected by any
999 credit, limitation, exemption, or deferment. Emergency
1000 assessments levied by the corporation on assessable insureds
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1001 shall be collected by the surplus lines agent at the time the
1002 surplus lines agent collects the surplus lines tax required by
1003 s. 626.932 and paid to the Florida Surplus Lines Service Office
1004 at the time the surplus lines agent pays the surplus lines tax
1005 to that office. The emergency assessments collected shall be
1006 transferred directly to the corporation on a periodic basis as
1007 determined by the corporation and held by the corporation solely
1008 in the Citizens applicable account. The aggregate amount of
1009 emergency assessments levied for the Citizens an account in any
1010 calendar year may be less than but may not exceed the greater of
1011 10 percent of the amount needed to cover the deficit, plus
1012 interest, fees, commissions, required reserves, and other costs
1013 associated with financing the original deficit, or 10 percent of
1014 the aggregate statewide direct written premium for subject lines
1015 of business and the Citizens account all accounts of the
1016 corporation for the prior year, plus interest, fees,
1017 commissions, required reserves, and other costs associated with
1018 financing the deficit.
1019 d.f. The corporation may pledge the proceeds of
1020 assessments, projected recoveries from the Florida Hurricane
1021 Catastrophe Fund, other insurance and reinsurance recoverables,
1022 policyholder surcharges and other surcharges, and other funds
1023 available to the corporation as the source of revenue for and to
1024 secure bonds issued under paragraph (q), bonds or other
1025 indebtedness issued under subparagraph (c)3., or lines of credit
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1026 or other financing mechanisms issued or created under this
1027 subsection, or to retire any other debt incurred as a result of
1028 deficits or events giving rise to deficits, or in any other way
1029 that the board determines will efficiently recover such
1030 deficits. The purpose of the lines of credit or other financing
1031 mechanisms is to provide additional resources to assist the
1032 corporation in covering claims and expenses attributable to a
1033 catastrophe. As used in this subsection, the term "assessments"
1034 includes emergency regular assessments under sub-subparagraph c.
1035 a. or subparagraph (q)1. and emergency assessments under sub -
1036 subparagraph e. Emergency assessments collected under sub-
1037 subparagraph c. e. are not part of an insurer's rates, are not
1038 premium, and are not subject to premium tax, fees, or
1039 commissions; however, failure to pay the emergency assessment
1040 shall be treated as failure to pay premium. The emergency
1041 assessments shall continue as long as any bonds issued or other
1042 indebtedness incurred with respect to a deficit for which the
1043 assessment was imposed remain outstanding, unless adequate
1044 provision has been made for the payment of such bonds or other
1045 indebtedness pursuant to the documents governing such bonds or
1046 indebtedness.
1047 e.g. As used in this subsection and for purposes of any
1048 deficit incurred on or after January 25, 2007, the term "subject
1049 lines of business" means insurance written by assessable
1050 insurers or procured by assessable insureds for all property and
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1051 casualty lines of business in this state, but not including
1052 workers' compensation or medical malpractice. As used in this
1053 sub-subparagraph, the term "property and casualty lines of
1054 business" includes all lines of business identified on Form 2,
1055 Exhibit of Premiums and Losses, in the annual statement required
1056 of authorized insurers under s. 624.424 and any rule adopted
1057 under this section, except for those lines identified as
1058 accident and health insurance and except for policies written
1059 under the National Flood Insurance Program or the Federal Crop
1060 Insurance Program. For purposes of this sub-subparagraph, the
1061 term "workers' compensation" includes both workers' compensation
1062 insurance and excess workers' compensation insurance.
1063 f.h. The Florida Surplus Lines Service Office shall
1064 annually determine annually the aggregate statewide written
1065 premium in subject lines of business procured by assessable
1066 insureds and report that information to the corporation in a
1067 form and at a time the corporation specifies to ensure that the
1068 corporation can meet the requirements of this subsection and the
1069 corporation's financing obligations.
1070 g.i. The Florida Surplus Lines Service Office shall verify
1071 the proper application by surplus lines agents of assessment
1072 percentages for regular assessments and emergency assessments
1073 levied under this subparagraph on assessable insureds and assist
1074 the corporation in ensuring the accurate, timely collection and
1075 payment of assessments by surplus lines agents as required by
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1076 the corporation.
1077 j. Upon determination by the board of governors that an
1078 account has a projected deficit, the board shall levy a Citizens
1079 policyholder surcharge against all policyholders of the
1080 corporation.
1081 (I) The surcharge shall be levied as a uniform percentage
1082 of the premium for the policy of up to 15 percent of such
1083 premium, which funds shall be used to offset the deficit.
1084 (II) The surcharge is payable upon cancellation or
1085 termination of the policy, upon renewal of the policy, or upon
1086 issuance of a new policy by the corporation within the first 12
1087 months after the date of the levy or the period of time
1088 necessary to fully collect the surcharge amount.
1089 (III) The corporation may not levy any regular assessments
1090 under paragraph (q) pursuant to sub-subparagraph a. or sub-
1091 subparagraph b. with respect to a particular year's deficit
1092 until the corporation has first levied the full amount of the
1093 surcharge authorized by this sub-subparagraph.
1094 (IV) The surcharge is not considered premium and is not
1095 subject to commissions, fees, or premium taxes. However, fai lure
1096 to pay the surcharge shall be treated as failure to pay premium.
1097 h.k. If the amount of any assessments or surcharges
1098 collected from corporation policyholders, assessable insurers or
1099 their policyholders, or assessable insureds exceeds the amount
1100 of the deficits, such excess amounts shall be remitted to and
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1101 retained by the corporation in a reserve to be used by the
1102 corporation, as determined by the board of governors and
1103 approved by the office, to pay claims or reduce any past,
1104 present, or future plan-year deficits or to reduce outstanding
1105 debt.
1106 4. The Citizens account, if established by the corporation
1107 pursuant to sub-subparagraph 2.b., is authorized to provide:
1108 a. Personal residential policies that provide
1109 comprehensive, multiperil coverage on risks that are not located
1110 in areas eligible for coverage by the Florida Windstorm
1111 Underwriting Association, as those areas were defined on January
1112 1, 2002, and for policies that do not provide coverage for the
1113 peril of wind on risks that are located in such areas;
1114 b. Commercial residential and commercial nonresidential
1115 policies that provide coverage for basic property perils on
1116 risks that are not located in areas eligible for coverage by the
1117 Florida Windstorm Underwriting Association, as those areas were
1118 defined on January 1, 2002, and for policies that do not provide
1119 coverage for the peril of wind on risks that are located in such
1120 areas; and
1121 c. Personal residential policies and commercial
1122 residential and commercial nonresidential property policies that
1123 provide coverage for the peril of wind on risks that are located
1124 in areas eligible for coverage by the Florida Windstorm
1125 Underwriting Association, as those areas were defined on January
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1126 1, 2002. The corporation may offer policies that provide
1127 multiperil coverage and shall offer policies that provide
1128 coverage only for the peril of wind for risks located in areas
1129 eligible for coverage by the Florida Windstorm Underwriting
1130 Association, as those areas were defined on January 1, 2002. The
1131 corporation may not offer new commercial residential policies
1132 providing multiperil coverage, but shall continue to offer
1133 commercial residential wind-only policies, and may offer
1134 commercial residential policies excluding wind. However, the
1135 corporation may continue to renew a commercial residential
1136 multiperil policy on a building that was insured by the
1137 corporation on June 30, 2014, under a multiperil policy. In
1138 issuing multiperil coverage under this sub-subparagraph, the
1139 corporation may use its approved policy forms and rates for
1140 risks located in areas not eligible for coverage by the Florida
1141 Windstorm Underwriting Association as those areas were defined
1142 on January 1, 2002, and for policies that do not provide
1143 coverage for the peril of wind on risks that are located in such
1144 areas. An applicant or insured who is eligible to purchase a
1145 multiperil policy from the corporation may purchase a multiperil
1146 policy from an authorized insurer without prejudice to the
1147 applicant's or insured's eligibility to prospectively purchase a
1148 policy that provides coverage only for the peril of wind from
1149 the corporation. An applicant or insured who is eligible for a
1150 corporation policy that provides coverage only for the peril of
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1151 wind may elect to purchase or retain such policy and also
1152 purchase or retain coverage excluding wind from an authorized
1153 insurer without prejudice to the applicant's or insured's
1154 eligibility to prospectively purchase a policy that provides
1155 multiperil coverage from the corporation. The following
1156 policies, which provide coverage only for the peril of wind,
1157 must also include quota share primary insurance under
1158 subparagraph (c)2.: Personal residential policies and commercial
1159 residential and commercial nonresidential property policies that
1160 provide coverage for the peril of wind on risks that are located
1161 in areas eligible for coverage by the Florida Windstorm
1162 Underwriting Association, as those areas were defined on January
1163 1, 2002; policies that provide multiperil coverage, if offered
1164 by the corporation, and policies that provide coverage only f or
1165 the peril of wind for risks located in areas eligible for
1166 coverage by the Florida Windstorm Underwriting Association, as
1167 those areas were defined on January 1, 2002; commercial
1168 residential wind-only policies; commercial residential policies
1169 excluding wind, if offered by the corporation; and commercial
1170 residential multiperil policies on a building that was insured
1171 by the corporation on June 30, 2014. The area eligible for
1172 coverage with the corporation under this sub-subparagraph
1173 includes the area within Port Canaveral, which is bordered on
1174 the south by the City of Cape Canaveral, bordered on the west by
1175 the Banana River, and bordered on the north by Federal
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1176 Government property.
1177 5. With respect to a deficit in the Citizens account:
1178 a. Upon a determination by the board of governors that the
1179 Citizens account has a projected deficit, the board shall levy a
1180 Citizens policyholder surcharge against all policyholders of the
1181 corporation.
1182 (I) The surcharge shall be levied as a uniform percentage
1183 of the premium for the policy of up to 15 percent of such
1184 premium, which funds shall be used to offset the deficit.
1185 (II) The surcharge is payable upon cancellation or
1186 termination of the policy, upon renewal of the policy, or upon
1187 issuance of a new policy by the corporation within the first 12
1188 months after the date of the levy or the period of time
1189 necessary to fully collect the surcharge amount.
1190 (III) The surcharge is not considered premium and is not
1191 subject to commissions, fees, or premium taxes. However, failure
1192 to pay the surcharge shall be treated as failure to pay premium.
1193 b. After accounting for the Citizens policyholder
1194 surcharge imposed under sub-subparagraph a., the remaining
1195 projected deficit incurred in the Citizens account in a
1196 particular calendar year shall be recovered through emergency
1197 assessments under sub-subparagraph c.
1198 c. Upon a determination by the board of governors that a
1199 projected deficit in the Citizens account exceeds the amount
1200 that is expected to be recovered through surcharges under sub -
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1201 subparagraph a., the board, after verification by the office,
1202 shall levy emergency assessments for as many years as necessary
1203 to cover the deficits, to be collected by assessable insurers
1204 and the corporation and collected from assessable insureds upon
1205 issuance or renewal of policies for subject lines of business,
1206 excluding National Flood Insurance Program policies. The amount
1207 collected in a particular year must be a uniform percentage of
1208 that year's direct written premium for subject lines of business
1209 and the Citizens account, National Flood Insurance Program
1210 policy premiums, as annually determined by the board and
1211 verified by the office. The office shall verify the arithmetic
1212 calculations involved in the board's determination within 30
1213 days after receipt of the information on which the determination
1214 was based. The office shall notify assessable insurers and the
1215 Florida Surplus Lines Service Office of the date on which
1216 assessable insurers shall begin to collect and assessable
1217 insureds shall begin to pay such assessment. The date must be at
1218 least 90 days after the date the corporation levies emergency
1219 assessments pursuant to this sub-subparagraph. Notwithstanding
1220 any other law, the corporation and each assessable insurer that
1221 writes subject lines of business shall collect emergency
1222 assessments from its policyholders without such obligation being
1223 affected by any credit, limitation, exemption, or deferment.
1224 Emergency assessments levied by the corporation on assessable
1225 insureds shall be collected by the surplus lines agent at the
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1226 time the surplus lines agent collects the surplus lines tax
1227 required by s. 626.932 and paid to the Florida Surplus Lines
1228 Service Office at the time the surplus lines agent pays the
1229 surplus lines tax to that office. The emergency assessments
1230 collected shall be transferred directly to the corporation on a
1231 periodic basis as determined by the corporation and held by the
1232 corporation solely in the Citizens account. The aggregate amount
1233 of emergency assessments levied for the Citizens account in any
1234 calendar year may be less than, but may not exceed the greater
1235 of, 10 percent of the amount needed to cover the deficit, plus
1236 interest, fees, commissions, required reserves, and other costs
1237 associated with financing the original deficit or 10 percent of
1238 the aggregate statewide direct written premium for subject lines
1239 of business and the Citizens accounts for the prior year, plus
1240 interest, fees, commissions, required reserves, and other costs
1241 associated with financing the deficit.
1242 d. The corporation may pledge the proceeds of assessments,
1243 projected recoveries from the Florida Hurricane Catastrophe
1244 Fund, other insurance and reinsurance recoverables, policyholder
1245 surcharges and other surcharges, and other funds available to
1246 the corporation as the source of revenue for and to secure bonds
1247 issued under paragraph (q), bonds or other indebtedness issued
1248 under subparagraph (c)3., or lines of credit or other financing
1249 mechanisms issued or created under this subsection; or to retire
1250 any other debt incurred as a result of deficits or events giving
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1251 rise to deficits, or in any other way that the board determines
1252 will efficiently recover such deficits. The purpose of the lines
1253 of credit or other financing mechanisms is to provide additional
1254 resources to assist the corporation in covering claims and
1255 expenses attributable to a catastrophe. As used in this
1256 subsection, the term "assessments" includes emergency
1257 assessments under sub-subparagraph c. Emergency assessments
1258 collected under sub-subparagraph c. are not part of an insurer's
1259 rates, are not premium, and are not subject to premium tax,
1260 fees, or commissions; however, failure to pay the emergency
1261 assessment shall be treated as failure to pay premium. The
1262 emergency assessments shall continue as long as any bonds issued
1263 or other indebtedness incurred with respect to a deficit for
1264 which the assessment was imposed remain outstanding, unless
1265 adequate provision has been made for the payment of such bonds
1266 or other indebtedness pursuant to the documents governing such
1267 bonds or indebtedness.
1268 e. As used in this subsection and for purposes of any
1269 deficit incurred on or after January 25, 2007, the term "subject
1270 lines of business" means insurance written by assessable
1271 insurers or procured by assessable insureds for all property and
1272 casualty lines of business in this state, but not including
1273 workers' compensation or medical malpractice. As used in this
1274 sub-subparagraph, the term "property and casualty lines of
1275 business" includes all lines of business identified on Form 2,
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1276 Exhibit of Premiums and Losses, in the annual statement required
1277 of authorized insurers under s. 624.424 and any rule adopted
1278 under this section, except for those lines identified as
1279 accident and health insurance and except for policies written
1280 under the National Flood Insurance Program or the Federal Crop
1281 Insurance Program. For purposes of this sub-subparagraph, the
1282 term "workers' compensation" includes both workers' compensation
1283 insurance and excess workers' compensation insurance.
1284 f. The Florida Surplus Lines Service Office shall annually
1285 determine the aggregate statewide written premium in subject
1286 lines of business procured by assessable insureds and report
1287 that information to the corporation in a form and at a time the
1288 corporation specifies to ensure that the corporation can meet
1289 the requirements of this subsection and the corporation's
1290 financing obligations.
1291 g. The Florida Surplus Lines Service Office shall verify
1292 the proper application by surplus lines agents of assessment
1293 percentages for emergency assessments levied under this
1294 subparagraph on assessable insureds and assist the corporation
1295 in ensuring the accurate, timely collection and payment of
1296 assessments by surplus lines agents as required by the
1297 corporation.
1298 h. If the amount of any assessments or surcharges
1299 collected from corporation policyholders, assessable insurers or
1300 their policyholders, or assessable insureds exceeds the amount
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1301 of the deficits, such excess amounts shall be remitted to and
1302 retained by the corporation in a reserve to be used by the
1303 corporation, as determined by the board of governors and
1304 approved by the office, to pay claims or reduce any past,
1305 present, or future plan-year deficits or to reduce outstanding
1306 debt.
1307 (c) The corporation's plan of operation:
1308 1. Must provide for adoption of residential property and
1309 casualty insurance policy forms and commercial residential and
1310 nonresidential property insurance forms, which must be approved
1311 by the office before use. The corporation shall adopt the
1312 following policy forms:
1313 a. Standard personal lines policy forms that are
1314 comprehensive multiperil policies providing full coverage of a
1315 residential property equivalent to the coverage provided in the
1316 private insurance market under an HO-3, HO-4, or HO-6 policy.
1317 b. Basic personal lines policy forms that are policies
1318 similar to an HO-8 policy or a dwelling fire policy that provide
1319 coverage meeting the requirements of the secondary mortgage
1320 market, but which is more limited than the coverage under a
1321 standard policy.
1322 c. Commercial lines residential and nonresidential policy
1323 forms that are generally similar to the basic perils of full
1324 coverage obtainable for commercial residential structures and
1325 commercial nonresidential structures in the admitted voluntary
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1326 market.
1327 d. Personal lines and commercial lines residential
1328 property insurance forms that cover the peril of wind only. The
1329 forms are applicable only to residential properties located in
1330 areas eligible for coverage by the Florida Windstorm
1331 Underwriting Association, as those areas were defined on January
1332 1, 2002.
1333 e. Commercial lines nonresidential property insurance
1334 forms that cover the peril of wind only. The forms are
1335 applicable only to nonresidential properties located in areas
1336 eligible for coverage by the Florida Windstorm Underwriting
1337 Association, as those areas were defined on January 1, 2002.
1338 f. The corporation may adopt variations of the policy
1339 forms listed in sub-subparagraphs a.-e. which contain more
1340 restrictive coverage.
1341 g. The corporation shall offer a basic personal lines
1342 policy similar to an HO-8 policy with dwelling repair based on
1343 common construction materials and methods.
1344 2. Must provide that the corporation adopt a program in
1345 which the corporation and authorized insurers enter into quota
1346 share primary insurance agreements for hurricane coverage, as
1347 defined in s. 627.4025(2)(a), for eligible risks, and adopt
1348 property insurance forms for eligible risks which cover the
1349 peril of wind only.
1350 a. As used in this subsection, the term:
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1351 (I) "Approved surplus lines insurer" means an eligible
1352 surplus lines insurer:
1353 (A) That has a financial strength rating of "A" or higher
1354 from A.M. Best Company;
1355 (B) That has a personal lines residential risk program
1356 that is managed by a Florida resident surplus lines broker; and
1357 (C) That offers coverage to applicants for new coverage
1358 from the corporation or current policyholders of the corporation
1359 through a take-out plan approved by the office.
1360 (III) "Primary residence" means the dwelling that is the
1361 policyholder's primary home or is a rental property that is the
1362 primary home of the tenant, and which the policyholder or tenant
1363 occupies for more than 9 months of each year.
1364 (IV)(I) "Quota share primary insurance" means an
1365 arrangement in which the primary hurricane coverage of an
1366 eligible risk is provided in specified percentages by the
1367 corporation and an authorized insurer. The corporation and
1368 authorized insurer are each solely responsible for a specified
1369 percentage of hurricane coverage of an eligible risk as set
1370 forth in a quota share primary insurance agreement between the
1371 corporation and an authorized insurer and the insurance
1372 contract. The responsibility of the corporation or authorized
1373 insurer to pay its specified percentage of hurricane losses of
1374 an eligible risk, as set forth in the agreement, may not be
1375 altered by the inability of the other party to pay its specified
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1376 percentage of losses. Eligible risks that are provided hurricane
1377 coverage through a quota share primary insurance arrangement
1378 must be provided policy forms that set forth the obligations of
1379 the corporation and authorized insurer under the arrangement,
1380 clearly specify the percentages of quota share primary insurance
1381 provided by the corporation and authorized insurer, and
1382 conspicuously and clearly state that the authorized insure r and
1383 the corporation may not be held responsible beyond their
1384 specified percentage of coverage of hurricane losses.
1385 (II) "Eligible risks" means personal lines residential and
1386 commercial lines residential risks that meet the underwriting
1387 criteria of the corporation and are located in areas that were
1388 eligible for coverage by the Florida Windstorm Underwriting
1389 Association on January 1, 2002.
1390 b. The corporation may enter into quota share primary
1391 insurance agreements with authorized insurers at corporation
1392 coverage levels of 90 percent and 50 percent.
1393 c. If the corporation determines that additional coverage
1394 levels are necessary to maximize participation in quota share
1395 primary insurance agreements by authorized insurers, the
1396 corporation may establish additional coverage levels. However,
1397 the corporation's quota share primary insurance coverage level
1398 may not exceed 90 percent.
1399 d. Any quota share primary insurance agreement entered
1400 into between an authorized insurer and the corporation must
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1401 provide for a uniform specified percentage of coverage of
1402 hurricane losses, by county or territory as set forth by the
1403 corporation board, for all eligible risks of the authorized
1404 insurer covered under the agreement.
1405 e. Any quota share primary insurance agreement entered
1406 into between an authorized insurer and the corporation is
1407 subject to review and approval by the office. However, such
1408 agreement shall be authorized only as to insurance contracts
1409 entered into between an authorized insurer and an insured who is
1410 already insured by the corporation for wind coverage.
1411 f. For all eligible risks covered under quota share
1412 primary insurance agreements, the exposure and coverage levels
1413 for both the corporation and authorized insurers shall be
1414 reported by the corporation to the Florida Hurricane Catastrophe
1415 Fund. For all policies of eligible risks covered under such
1416 agreements, the corporation and the authorized insurer must
1417 maintain complete and accurate records for the purpose of
1418 exposure and loss reimbursement audits as required by fund
1419 rules. The corporation and the authorized insurer shall each
1420 maintain duplicate copies of policy declaration pages and
1421 supporting claims documents.
1422 g. The corporation board shall establish in its plan of
1423 operation standards for quota share agreements which ensure that
1424 there is no discriminatory application among insurers as to the
1425 terms of the agreements, pricing of the agreements, incentive
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1426 provisions if any, and consideration paid for servicing policies
1427 or adjusting claims.
1428 h. The quota share primary insurance agreement between the
1429 corporation and an authorized insurer must set forth the
1430 specific terms under which coverage is provided, including, but
1431 not limited to, the sale and servicing of policies issued under
1432 the agreement by the insurance agent of the authorized insurer
1433 producing the business, the reporting of information concerning
1434 eligible risks, the payment of premium to the corporation, and
1435 arrangements for the adjustment and payment of hurricane claims
1436 incurred on eligible risks by the claims adjuster and personnel
1437 of the authorized insurer. Entering into a quota sharing
1438 insurance agreement between the corporation and an authorized
1439 insurer is voluntary and at the discretion of the authorized
1440 insurer.
1441 3. May provide that the corporation may employ or
1442 otherwise contract with individuals or other entities to provide
1443 administrative or professional services that may be appropriate
1444 to effectuate the plan. The corporation may borrow funds by
1445 issuing bonds or by incurring other indebtedness, and shall have
1446 other powers reasonably necessary to effectuate the requirements
1447 of this subsection, including, without limitation, the power to
1448 issue bonds and incur other indebtedness in order to refinance
1449 outstanding bonds or other indebtedness. The corporation may
1450 seek judicial validation of its bonds or other indebtedness
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1451 under chapter 75. The corporation may issue bonds or incur other
1452 indebtedness, or have bonds issued on its behalf by a unit of
1453 local government pursuant to subparagraph (q)2. in the absen ce
1454 of a hurricane or other weather-related event, upon a
1455 determination by the corporation, subject to approval by the
1456 office, that such action would enable it to efficiently meet the
1457 financial obligations of the corporation and that such
1458 financings are reasonably necessary to effectuate the
1459 requirements of this subsection. The corporation may take all
1460 actions needed to facilitate tax-free status for such bonds or
1461 indebtedness, including formation of trusts or other affiliated
1462 entities. The corporation may pledge assessments, projected
1463 recoveries from the Florida Hurricane Catastrophe Fund, other
1464 reinsurance recoverables, policyholder surcharges and other
1465 surcharges, and other funds available to the corporation as
1466 security for bonds or other indebtedness. In recognition of s.
1467 10, Art. I of the State Constitution, prohibiting the impairment
1468 of obligations of contracts, it is the intent of the Legislature
1469 that no action be taken whose purpose is to impair any bond
1470 indenture or financing agreement or any revenue source committed
1471 by contract to such bond or other indebtedness.
1472 4. Must require that the corporation operate subject to
1473 the supervision and approval of a board of governors consisting
1474 of nine individuals who are residents of this state and who are
1475 from different geographical areas of the state, one of whom is
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1476 appointed by the Governor and serves solely to advocate on
1477 behalf of the consumer. The appointment of a consumer
1478 representative by the Governor is deemed to be within the scope
1479 of the exemption provided in s. 112.313(7)(b) and is in addition
1480 to the appointments authorized under sub-subparagraph a.
1481 a. The Governor, the Chief Financial Officer, the
1482 President of the Senate, and the Speaker of the House of
1483 Representatives shall each appoint two members of the board. At
1484 least one of the two members appointed by each appointing
1485 officer must have demonstrated expertise in insurance and be
1486 deemed to be within the scope of the exemption provided in s.
1487 112.313(7)(b). The Chief Financial Officer shall designate one
1488 of the appointees as chair. All board members serve at the
1489 pleasure of the appointing officer. All members of the board are
1490 subject to removal at will by the officers who appointed them.
1491 All board members, including the chair, must be appointed to
1492 serve for 3-year terms beginning annually on a date designated
1493 by the plan. However, for the first term beginning on or after
1494 July 1, 2009, each appointing officer shall appoint one member
1495 of the board for a 2-year term and one member for a 3-year term.
1496 A board vacancy shall be filled for the unexpired term by the
1497 appointing officer. The Chief Financial Officer shall appoint a
1498 technical advisory group to provide information and advice to
1499 the board in connection with the board's duties under this
1500 subsection. The executive director and senior managers of the
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1501 corporation shall be engaged by the board and serve at the
1502 pleasure of the board. Any executive director appointed on or
1503 after July 1, 2006, is subject to confirmation by the Senate.
1504 The executive director is responsible for employing other staff
1505 as the corporation may require, subject to review and
1506 concurrence by the board.
1507 b. The board shall create a Market Accountability Advisory
1508 Committee to assist the corporation in developing awareness of
1509 its rates and its customer and agent service levels in
1510 relationship to the voluntary market insurers writing similar
1511 coverage.
1512 (I) The members of the advisory committee consist of the
1513 following 11 persons, one of whom must be elected chair by the
1514 members of the committee: four representatives, one appointed by
1515 the Florida Association of Insurance Agents, one by the Florida
1516 Association of Insurance and Financial Advisors, one by the
1517 Professional Insurance Agents of Florida, and one by the Latin
1518 American Association of Insurance Agencies; three
1519 representatives appointed by the insurers with the three highest
1520 voluntary market share of residential property insurance
1521 business in the state; one representative from the Office of
1522 Insurance Regulation; one consumer appointed by the board who is
1523 insured by the corporation at the time of appointment to the
1524 committee; one representative appointed by the Florida
1525 Association of Realtors; and one representative appointed by the
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1526 Florida Bankers Association. All members shall be appoin ted to
1527 3-year terms and may serve for consecutive terms.
1528 (II) The committee shall report to the corporation at each
1529 board meeting on insurance market issues which may include rates
1530 and rate competition with the voluntary market; service,
1531 including policy issuance, claims processing, and general
1532 responsiveness to policyholders, applicants, and agents; and
1533 matters relating to depopulation.
1534 5. Must provide a procedure for determining the
1535 eligibility of a risk for coverage, as follows:
1536 a. Subject to s. 627.3517, with respect to personal lines
1537 residential risks that are primary residences, if the risk is
1538 offered coverage from an authorized insurer at the insurer's
1539 approved rate under a standard policy including wind coverage
1540 or, if consistent with the insurer's underwriting rules as filed
1541 with the office, a basic policy including wind coverage, for a
1542 new application to the corporation for coverage, the risk is not
1543 eligible for any policy issued by the corporation unless the
1544 premium for coverage from the authorized insurer is more than 20
1545 percent greater than the premium for comparable coverage from
1546 the corporation. Whenever an offer of coverage for a personal
1547 lines residential risk that is a primary residence is received
1548 for a policyholder of the corporation at renewal from an
1549 authorized insurer, if the offer is equal to or less than the
1550 corporation's renewal premium for comparable coverage, the risk
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1551 is not eligible for coverage with the corporation for policies
1552 that renew before April 1, 2023; for policies that renew on or
1553 after that date, the risk is not eligible for coverage with the
1554 corporation unless the premium for coverage from the authorized
1555 insurer is more than 20 percent greater than the corporation's
1556 renewal premium for comparable coverage. If the risk is not able
1557 to obtain such offer, the risk is eligible for a standard policy
1558 including wind coverage or a basic policy including wind
1559 coverage issued by the corporation; however, if the risk could
1560 not be insured under a standard policy including wind co verage
1561 regardless of market conditions, the risk is eligible for a
1562 basic policy including wind coverage unless rejected under
1563 subparagraph 8. The corporation shall determine the type of
1564 policy to be provided on the basis of objective standards
1565 specified in the underwriting manual and based on generally
1566 accepted underwriting practices. A policyholder removed from the
1567 corporation through an assumption agreement does not remain
1568 eligible for coverage from the corporation after the end of the
1569 policy term. However, any policy removed from the corporation
1570 through an assumption agreement remains on the corporation's
1571 policy forms through the end of the policy term. This sub-
1572 subparagraph applies only to risks that are primary residences.
1573 (I) If the risk accepts an offer of coverage through the
1574 market assistance plan or through a mechanism established by the
1575 corporation other than a plan established by s. 627.3518, before
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1576 a policy is issued to the risk by the corporation or during the
1577 first 30 days of coverage by the corporation, and the producing
1578 agent who submitted the application to the plan or to the
1579 corporation is not currently appointed by the insurer, the
1580 insurer shall:
1581 (A) Pay to the producing agent of record of the policy for
1582 the first year, an amount that is the greater of the insurer's
1583 usual and customary commission for the type of policy written or
1584 a fee equal to the usual and customary commission of the
1585 corporation; or
1586 (B) Offer to allow the producing agent of record of the
1587 policy to continue servicing the policy for at least 1 year and
1588 offer to pay the agent the greater of the insurer's or the
1589 corporation's usual and customary commission for the type of
1590 policy written.
1591
1592 If the producing agent is unwilling or unable to accept
1593 appointment, the new insurer shall pay the agent in accordance
1594 with sub-sub-sub-subparagraph (A).
1595 (II) If the corporation enters into a contractual
1596 agreement for a take-out plan, the producing agent of record of
1597 the corporation policy is entitled to retain any unearned
1598 commission on the policy, and the insurer shall:
1599 (A) Pay to the producing agent of record, for the first
1600 year, an amount that is the greater of the insurer's usual and
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1601 customary commission for the type of policy written or a fee
1602 equal to the usual and customary commission of the corporation;
1603 or
1604 (B) Offer to allow the producing agent of record to
1605 continue servicing the policy for at least 1 year and offer to
1606 pay the agent the greater of the insurer's or the corporation's
1607 usual and customary commission for the type of policy written.
1608
1609 If the producing agent is unwilling or unable to accept
1610 appointment, the new insurer shall pay the agent in accordance
1611 with sub-sub-sub-subparagraph (A).
1612 b. With respect to commercial lines residential risks, for
1613 a new application to the corporation for coverage, if the risk
1614 is offered coverage under a policy including wind coverage from
1615 an authorized insurer at its approved rate, the risk is not
1616 eligible for a policy issued by the corporation unless the
1617 premium for coverage from the authorized insurer is more than 20
1618 percent greater than the premium for comparable coverage from
1619 the corporation. Whenever an offer of coverage for a commercial
1620 lines residential risk is received for a policyholder of the
1621 corporation at renewal from an authorized insurer, the risk is
1622 not eligible for coverage with the corporation unless the
1623 premium for coverage from the authorized insurer is more than 20
1624 percent greater than the corporation's renewal premium for
1625 comparable coverage. If the risk is not able to obtain any such
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1626 offer, the risk is eligible for a policy including wind coverage
1627 issued by the corporation. A policyholder removed from the
1628 corporation through an assumption agreement remains eligible for
1629 coverage from the corporation until the end of the policy term.
1630 However, any policy removed from the corporation through an
1631 assumption agreement remains on the corporation's policy forms
1632 through the end of the policy term.
1633 (I) If the risk accepts an offer of coverage through the
1634 market assistance plan or through a mechanism established by the
1635 corporation other than a plan established by s. 627.3518, before
1636 a policy is issued to the risk by the corporation or during the
1637 first 30 days of coverage by the corporation, and the producing
1638 agent who submitted the application to the plan or the
1639 corporation is not currently appointed by the insurer, the
1640 insurer shall:
1641 (A) Pay to the producing agent of record of the policy,
1642 for the first year, an amount that is the greater of the
1643 insurer's usual and customary commission for the type of policy
1644 written or a fee equal to the usual and customary commission of
1645 the corporation; or
1646 (B) Offer to allow the producing agent of record of the
1647 policy to continue servicing the policy for at least 1 year and
1648 offer to pay the agent the greater of the insurer's or the
1649 corporation's usual and customary commission for the type of
1650 policy written.
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1651
1652 If the producing agent is unwilling or unable to accept
1653 appointment, the new insurer shall pay the agent in accordance
1654 with sub-sub-sub-subparagraph (A).
1655 (II) If the corporation enters into a contractual
1656 agreement for a take-out plan, the producing agent of record of
1657 the corporation policy is entitled to retain any unearned
1658 commission on the policy, and the insurer shall:
1659 (A) Pay to the producing agent of record, for the first
1660 year, an amount that is the greater of the insurer's usual and
1661 customary commission for the type of policy written or a fee
1662 equal to the usual and customary commission of the corporation;
1663 or
1664 (B) Offer to allow the producing agent of record to
1665 continue servicing the policy for at least 1 year and offer to
1666 pay the agent the greater of the insurer's or the corporation's
1667 usual and customary commission for the type of policy written.
1668
1669 If the producing agent is unwilling or unable to accept
1670 appointment, the new insurer shall pay the agent in accordance
1671 with sub-sub-sub-subparagraph (A).
1672 c. For purposes of determining comparable coverage under
1673 sub-subparagraphs a. and b., the comparison must be based on
1674 those forms and coverages that are reasonably comparable. The
1675 corporation may rely on a determination of comparable coverage
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1676 and premium made by the producing agent who submits the
1677 application to the corporation, made in the agent's capacity as
1678 the corporation's agent. For purposes of comparing the premium
1679 for comparable coverage under sub-subparagraphs a. and b.,
1680 premium includes any surcharge or assessment that is actually
1681 applied to such policy. A comparison may be made solely of the
1682 premium with respect to the main building or structure only on
1683 the following basis: the same Coverage A or other building
1684 limits; the same percentage hurricane deductible that applies on
1685 an annual basis or that applies to each hurricane for commercial
1686 residential property; the same percentage of ordinance and law
1687 coverage, if the same limit is offered by both the corporation
1688 and the authorized insurer; the same mitigation credits, to the
1689 extent the same types of credits are offered both by the
1690 corporation and the authorized insurer; the same method for loss
1691 payment, such as replacement cost or actual cash value, if the
1692 same method is offered both by the corporation and the
1693 authorized insurer in accordance with underwriting rules; and
1694 any other form or coverage that is reasonably comparable a s
1695 determined by the board. If an application is submitted to the
1696 corporation for wind-only coverage on a risk that is located in
1697 an area eligible for coverage by the Florida Windstorm
1698 Underwriting Association, as that area was defined on January 1,
1699 2002, the premium for the corporation's wind-only policy plus
1700 the premium for the ex-wind policy that is offered by an
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1701 authorized insurer to the applicant must be compared to the
1702 premium for multiperil coverage offered by an authorized
1703 insurer, subject to the standards for comparison specified in
1704 this subparagraph. If the corporation or the applicant requests
1705 from the authorized insurer a breakdown of the premium of the
1706 offer by types of coverage so that a comparison may be made by
1707 the corporation or its agent and the authorized insurer refuses
1708 or is unable to provide such information, the corporation may
1709 treat the offer as not being an offer of coverage from an
1710 authorized insurer at the insurer's approved rate. However,
1711 notwithstanding any other provision of law, this sub-
1712 subparagraph does not apply to a policy that does not cover a
1713 primary residence.
1714 d. Subject to s. 627.3517, with respect to personal lines
1715 residential risks that are not primary residences, if the risk
1716 is offered coverage from an authorized insurer at the insurer's
1717 approved rate or from an approved surplus lines insurer at the
1718 rate approved by the office as part of such surplus lines
1719 insurer's take-out plan for a new application to the corporation
1720 for coverage, the risk is not eligible for any policy issued by
1721 the corporation for three years following such offer for
1722 coverage. For policies that renew on or after July 1, 2024,
1723 whenever an offer of coverage for a personal lines residential
1724 risk that is not a primary residence is received for a
1725 policyholder of the corporation at renewal from an authorized
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1726 insurer at the insurer's approved rate or an approved surplus
1727 lines insurer at the rate approved by the office as part of such
1728 insurer's take-out plan, the risk is not eligible for coverage
1729 with the corporation for a period of three years following such
1730 offer for coverage. If the risk is not able to obtain such
1731 offer, the risk is eligible for a standard policy including wind
1732 coverage or a basic policy including wind coverage issued by the
1733 corporation. If the risk could not be insured under a standard
1734 policy including wind coverage regardless of market conditions,
1735 the risk is eligible for a basic policy including wind coverage
1736 unless rejected under subparagraph 8. The corporation shall
1737 determine the type of policy to be provided on the basis of
1738 objective standards specified in the underwriting manual and
1739 based on generally accepted underwriting practices. A
1740 policyholder removed from the corporation through an assumption
1741 agreement does not remain eligible for coverage from the
1742 corporation after the end of the policy term for a period.
1743 However, any policy removed from the corporation through an
1744 assumption agreement remains on the corporation's policy forms
1745 through the end of the policy term.
1746 (I) If the risk accepts an offer of coverage through the
1747 market assistance plan or through a mechanism established by the
1748 corporation other than a plan established by s. 627.3518, before
1749 a policy is issued to the risk by the corporation or during the
1750 first 30 days of coverage by the corporation, and the producing
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1751 agent who submitted the application to the plan or to the
1752 corporation is not currently appointed by the insurer, the
1753 insurer shall:
1754 (A) Pay to the producing agent of record of the policy,
1755 for the first year, an amount that is the greater of the
1756 insurer's usual and customary commission for the type of policy
1757 written or a fee equal to the usual and customary commission of
1758 the corporation; or
1759 (B) Offer to allow the producing agent of record of the
1760 policy to continue servicing the policy for at least 1 year and
1761 offer to pay the agent the greater of the insurer's or the
1762 corporation's usual and customary commission for the type of
1763 policy written.
1764
1765 If the producing agent is unwilling or unable to accept
1766 appointment, the new insurer shall pay the agent in accordance
1767 with sub-sub-sub-subparagraph (A).
1768 (II) If the corporation enters into a contractual
1769 agreement for a take-out plan, the producing agent of record of
1770 the corporation policy is entitled to retain any un earned
1771 commission on the policy, and the insurer shall:
1772 (A) Pay to the producing agent of record, for the first
1773 year, an amount that is the greater of the insurer's usual and
1774 customary commission for the type of policy written or a fee
1775 equal to the usual and customary commission of the corporation;
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1776 or
1777 (B) Offer to allow the producing agent of record to
1778 continue servicing the policy for at least 1 year and offer to
1779 pay the agent the greater of the insurer's or the corporation's
1780 usual and customary commission for the type of policy written.
1781
1782 If the producing agent is unwilling or unable to accept
1783 appointment, the new insurer shall pay the agent in accordance
1784 with sub-sub-sub-subparagraph (A).
1785 6. Must include rules for classifications of risks and
1786 rates.
1787 7. Must provide that if premium and investment income:
1788 a. for the Citizens an account which are attributable to a
1789 particular calendar year are in excess of projected losses and
1790 expenses for the Citizens account attributable to that year,
1791 such excess shall be held in surplus in the Citizens account.
1792 Such surplus must be available to defray deficits in the
1793 Citizens that account as to future years and used for that
1794 purpose before assessing assessable insurers and assessable
1795 insureds as to any calendar year; or
1796 b. For the Citizens account, if established by the
1797 corporation, which are attributable to a particular calendar
1798 year are in excess of projected losses and expenses for the
1799 Citizens account attributable to that year, such excess shall be
1800 held in surplus in the Citizens account. Such surplus must be
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1801 available to defray deficits in the Citizens account as to
1802 future years and used for that purpose before assessing
1803 assessable insurers and assessable insureds as to any calendar
1804 year.
1805 8. Must provide objective criteria and procedures to be
1806 uniformly applied to all applicants in determining whether an
1807 individual risk is so hazardous as to be uninsurable. In making
1808 this determination and in establishing the criteria and
1809 procedures, the following must be considered:
1810 a. Whether the likelihood of a loss for the individual
1811 risk is substantially higher than for other risks of the same
1812 class; and
1813 b. Whether the uncertainty associated with the individual
1814 risk is such that an appropriate premium cannot be determined.
1815
1816 The acceptance or rejection of a risk by the corporation shall
1817 be construed as the private placement of insurance, and the
1818 provisions of chapter 120 do not apply.
1819 9. Must provide that the corporation make its best efforts
1820 to procure catastrophe reinsurance at reasonable rates, to cover
1821 its projected 100-year probable maximum loss as determined by
1822 the board of governors. If catastrophe reinsurance is not
1823 available at reasonable rates, the corporation need not purchase
1824 it, but the corporation shall include the costs of reinsurance
1825 to cover its projected 100-year probable maximum loss in its
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1826 rate calculations even if it does not purchase catastrophe
1827 reinsurance.
1828 10. The policies issued by the corporation Must provide in
1829 the policies issued by the corporation that if the corporation
1830 or the market assistance plan obtains an offer from an
1831 authorized insurer to cover the risk at its approved rates, the
1832 risk is no longer eligible for renewal through the corporation,
1833 except as otherwise provided in this subsection.
1834 11. Corporation policies and applications Must include in
1835 the corporation policies and applications a notice that the
1836 corporation policy could, under this section, be replaced with a
1837 policy issued by an authorized insurer which does not provide
1838 coverage identical to the coverage provided by the corporation.
1839 The notice must also specify that acceptance of corporation
1840 coverage creates a conclusive presumption that the applicant or
1841 policyholder is aware of this potential.
1842 12. May establish, subject to approval by the office,
1843 different eligibility requirements and operational procedures
1844 for any line or type of coverage for any specified county or
1845 area if the board determines that such changes are justified due
1846 to the voluntary market being sufficiently stable and
1847 competitive in such area or for such line or type of coverage
1848 and that consumers who, in good faith, are unable to obtain
1849 insurance through the voluntary market through ordinary methods
1850 continue to have access to coverage from the corporation. If
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1851 coverage is sought in connection with a real property transfer,
1852 the requirements and procedures may not provide an effective
1853 date of coverage later than the date of the closing of the
1854 transfer as established by the transferor, the transferee, an d,
1855 if applicable, the lender.
1856 13. Must provide that:
1857 a. With respect to the coastal account, any assessable
1858 insurer with a surplus as to policyholders of $25 million or
1859 less writing 25 percent or more of its total countrywide
1860 property insurance premiums in this state may petition the
1861 office, within the first 90 days of each calendar year, to
1862 qualify as a limited apportionment company. A regular assessment
1863 levied by the corporation on a limited apportionment company for
1864 a deficit incurred by the corporation for the coastal account
1865 may be paid to the corporation on a monthly basis as the
1866 assessments are collected by the limited apportionment company
1867 from its insureds, but a limited apportionment company must
1868 begin collecting the regular assessments not later than 90 days
1869 after the regular assessments are levied by the corporation, and
1870 the regular assessments must be paid in full within 15 months
1871 after being levied by the corporation. A limited apportionment
1872 company shall collect from its policyholders any emergency
1873 assessment imposed under sub-subparagraph (b)3.e. The plan must
1874 provide that, if the office determines that any regular
1875 assessment will result in an impairment of the surplus of a
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1876 limited apportionment company, the office may direct that all or
1877 part of such assessment be deferred as provided in subparagraph
1878 (q)4. However, an emergency assessment to be collected from
1879 policyholders under sub-subparagraph (b)3.e. may not be limited
1880 or deferred; or
1881 b. With respect to the Citizens account, if established by
1882 the corporation pursuant to sub-subparagraph (b)2.b., any
1883 assessable insurer with a surplus as to policyholders of $25
1884 million or less and writing 25 percent or more of its total
1885 countrywide property insurance premiums in this state may
1886 petition the office, within the first 90 days of each calendar
1887 year, to qualify as a limited apportionment company. A limited
1888 apportionment company shall collect from its policyholders any
1889 emergency assessment imposed under sub-subparagraph (b)5.c. An
1890 emergency assessment to be collected from policyholders under
1891 sub-subparagraph (b)5.c. may not be limited or deferred.
1892 13.14. Must provide that the corporation appoint as its
1893 licensed agents only those agents who throughout such
1894 appointments also hold an appointment as defined in s. 626.015
1895 by at least three insurers an insurer who are is authorized to
1896 write and are is actually writing or renewing personal lines
1897 residential property coverage, commercial residential property
1898 coverage, or commercial nonresidential property coverage within
1899 the state.
1900 14.15. Must provide a premium payment plan option to its
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1901 policyholders which, at a minimum, allows for quarterly and
1902 semiannual payment of premiums. A monthly payment plan may, but
1903 is not required to, be offered.
1904 15.16. Must limit coverage on mobile homes or manufactured
1905 homes built before 1994 to actual cash value of the dwelling
1906 rather than replacement costs of the dwelling.
1907 16.17. Must provide coverage for manufactured or mobile
1908 home dwellings. Such coverage must also include the following
1909 attached structures:
1910 a. Screened enclosures that are aluminum framed or
1911 screened enclosures that are not covered by the same or
1912 substantially the same materials as those of the primary
1913 dwelling;
1914 b. Carports that are aluminum or carports that are not
1915 covered by the same or substantially the same materials as those
1916 of the primary dwelling; and
1917 c. Patios that have a roof covering that is constructed of
1918 materials that are not the same or substantially the same
1919 materials as those of the primary dwelling.
1920
1921 The corporation shall make available a policy for mobile homes
1922 or manufactured homes for a minimum insured value of at least
1923 $3,000.
1924 17.18. May provide such limits of coverage as the board
1925 determines, consistent with the requirements of this subsection.
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1926 18.19. May require commercial property to meet specified
1927 hurricane mitigation construction features as a condition of
1928 eligibility for coverage.
1929 19.20. Must provide that new or renewal policies issued by
1930 the corporation on or after January 1, 2012, which cover
1931 sinkhole loss do not include coverage for any loss to
1932 appurtenant structures, driveways, sidewalks, decks, or patios
1933 that are directly or indirectly caused by sinkhole activity. The
1934 corporation shall exclude such coverage using a notice of
1935 coverage change, which may be included with the policy renewal,
1936 and not by issuance of a notice of nonrenewal of the excluded
1937 coverage upon renewal of the current policy.
1938 20.a.21.a. As of January 1, 2012, unless the Citizens
1939 account has been established pursuant to sub-subparagraph
1940 (b)2.b., Must require that the agent obtain from an applicant
1941 for coverage from the corporation the following an
1942 acknowledgment signed by the applicant, which includes, at a
1943 minimum, the following statement:
1944 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
1945 AND ASSESSMENT LIABILITY:
1946 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
1947 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
1948 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
1949 MY POLICY COULD BE SUBJECT TO SURCHARGES AND ASSESSMENTS, WHICH
1950 WILL BE DUE AND PAYABLE UPON RENEWAL, CANCELLATION, OR
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1951 TERMINATION OF THE POLICY, AND THAT THE SURCHARGES AND
1952 ASSESSMENTS COULD BE AS HIGH AS 25 45 PERCENT OF MY PREMIUM, OR
1953 A DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
1954 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
1955 SURCHARGE, WHICH COULD BE AS HIGH AS 15 45 PERCENT OF MY
1956 PREMIUM, BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND
1957 THAT TO BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY
1958 TO OBTAIN PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR
1959 RENEWING COVERAGE WITH CITIZENS. I UNDERSTAND THAT PRIVATE
1960 MARKET INSURANCE RATES ARE REGULATED AND APPROVED BY THE STATE.
1961 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
1962 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
1963 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
1964 FLORIDA LEGISLATURE.
1965 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
1966 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
1967 STATE OF FLORIDA.
1968 b. The corporation must require, if it has established the
1969 Citizens account pursuant to sub-subparagraph (b)2.b., that the
1970 agent obtain from an applicant for coverage from the corporation
1971 the following acknowledgment signed by the applicant, which
1972 includes, at a minimum, the following statement:
1973 ACKNOWLEDGMENT OF POTENTIAL SURCHARGE
1974 AND ASSESSMENT LIABILITY:
1975 1. AS A POLICYHOLDER OF CITIZENS PROPERTY INSURANCE
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1976 CORPORATION, I UNDERSTAND THAT IF THE CORPORATION SUSTAINS A
1977 DEFICIT AS A RESULT OF HURRICANE LOSSES OR FOR ANY OTHER REASON,
1978 MY POLICY COULD BE SUBJECT TO SURCHARGES AND ASSESSMENTS, WHICH
1979 WILL BE DUE AND PAYABLE UPON RENEWAL, CANCELLATION, OR
1980 TERMINATION OF THE POLICY, AND THAT THE SURCHARGES AND
1981 ASSESSMENTS COULD BE AS HIGH AS 25 PERCENT OF MY PREMIUM, OR A
1982 DIFFERENT AMOUNT AS IMPOSED BY THE FLORIDA LEGISLATURE.
1983 2. I UNDERSTAND THAT I CAN AVOID THE CITIZENS POLICYHOLDER
1984 SURCHARGE, WHICH COULD BE AS HIGH AS 15 PERCENT OF MY PREMIUM,
1985 BY OBTAINING COVERAGE FROM A PRIVATE MARKET INSURER AND THAT TO
1986 BE ELIGIBLE FOR COVERAGE BY CITIZENS, I MUST FIRST TRY TO OBTAIN
1987 PRIVATE MARKET COVERAGE BEFORE APPLYING FOR OR RENEWING COVERAGE
1988 WITH CITIZENS. I UNDERSTAND THAT PRIVATE MARKET INSURANCE RATES
1989 ARE REGULATED AND APPROVED BY THE STATE.
1990 3. I UNDERSTAND THAT I MAY BE SUBJECT TO EMERGENCY
1991 ASSESSMENTS TO THE SAME EXTENT AS POLICYHOLDERS OF OTHER
1992 INSURANCE COMPANIES, OR A DIFFERENT AMOUNT AS IMPOSED BY THE
1993 FLORIDA LEGISLATURE.
1994 4. I ALSO UNDERSTAND THAT CITIZENS PROPERTY INSURANCE
1995 CORPORATION IS NOT SUPPORTED BY THE FULL FAITH AND CREDIT OF THE
1996 STATE OF FLORIDA.
1997 b.c. The corporation shall maintain, in electronic format
1998 or otherwise, a copy of the applicant's signed acknowledgment
1999 and provide a copy of the statement to the policyholder as part
2000 of the first renewal after the effective date of sub-
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2001 subparagraph a. or sub-subparagraph b., as applicable.
2002 c.d. The signed acknowledgment form creates a conclusive
2003 presumption that the policyholder understood and accepted his or
2004 her potential surcharge and assessment liability as a
2005 policyholder of the corporation.
2006 (d)1. All prospective employees for senior management
2007 positions, as defined by the plan of operation, are subject to
2008 background checks as a prerequisite for employment. The office
2009 shall conduct the background checks pursuant to ss. 624.34,
2010 624.404(3), and 628.261.
2011 2. On or before July 1 of each year, employees of the
2012 corporation must sign and submit a statement attesting that they
2013 do not have a conflict of interest, as defined in part III of
2014 chapter 112. As a condition of employment, all prospective
2015 employees must sign and submit to the corporation a conflict -of-
2016 interest statement.
2017 3. The executive director, senior managers, and members of
2018 the board of governors are subject to part III of chapter 112,
2019 including, but not limited to, the code of ethics and public
2020 disclosure and reporting of financial interests, pursuant to s.
2021 112.3145. For purposes of applying part III of chapter 112 to
2022 activities of the executive director, senior managers, and
2023 members of the board of governors, those persons shall be
2024 considered public officers or employees and the corporation
2025 shall be considered their agency. Notwithstanding s.
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2026 112.3143(2), a board member may not vote on any measure that
2027 would inure to his or her special private gain or loss; that he
2028 or she knows would inure to the special private gain or loss of
2029 any principal by whom he or she is retained or to the parent
2030 organization or subsidiary of a corporate principal by which he
2031 or she is retained, other than an agency as defined in s.
2032 112.312; or that he or she knows would inure to the special
2033 private gain or loss of a relative or business associate of the
2034 public officer. Before the vote is taken, such member shall
2035 publicly state to the assembly the nature of his or her interest
2036 in the matter from which he or she is abstaining from voting
2037 and, within 15 days after the vote occurs, disclose the nature
2038 of his or her interest as a public record in a memorandum filed
2039 with the person responsible for recording the minutes of the
2040 meeting, who shall incorporate the memorandum in the minutes.
2041 Senior managers and board members are also required to file such
2042 disclosures with the Commission on Ethics and the Office of
2043 Insurance Regulation. The executive director of the corporation
2044 or his or her designee shall notify each existing and newly
2045 appointed member of the board of governors and senior managers
2046 of their duty to comply with the reporting requirements of part
2047 III of chapter 112. At least quarterly, the executive director
2048 or his or her designee shall submit to the Commission on Ethics
2049 a list of names of the senior managers and members of the board
2050 of governors who are subject to the public disclosure
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2051 requirements under s. 112.3145.
2052 4. Notwithstanding s. 112.3148, s. 112.3149, or any other
2053 provision of law, an employee or board member may not knowingly
2054 accept, directly or indirectly, any gift or expenditure from a
2055 person or entity, or an employee or representative of such
2056 person or entity, which has a contractual relationship with the
2057 corporation or who is under consideration for a contract. An
2058 employee or board member who fails to comply with subparagraph
2059 3. or this subparagraph is subject to penalties provided under
2060 ss. 112.317 and 112.3173.
2061 5. Any senior manager of the corporation who is employed
2062 on or after January 1, 2007, regardless of the date of hire, who
2063 subsequently retires or terminates employment is prohibited from
2064 representing another person or entity before the corporation for
2065 2 years after retirement or termination of employment from the
2066 corporation.
2067 6. The executive director, members of the board of
2068 governors, and senior managers of the corporation are prohibited
2069 from having any employment or contractual relationship for 2
2070 years after retirement from or termination of service to the
2071 corporation with an insurer that has entered into a take -out
2072 bonus agreement with the corporation.
2073 (e) The corporation is subject to s. 287.057 for the
2074 purchase of commodities and contractual services except as
2075 otherwise provided in this paragraph. Services provided by
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2076 tradepersons or technical experts to assist a licensed adjuster
2077 in the evaluation of individual claims are not subj ect to the
2078 procurement requirements of this section. Additionally, the
2079 procurement of financial services providers and underwriters
2080 must be made pursuant to s. 627.3513. Contracts for goods or
2081 services valued at or more than $100,000 are subject to approva l
2082 by the board.
2083 1. The corporation is an agency for purposes of s.
2084 287.057, except that, for purposes of s. 287.057(24), the
2085 corporation is an eligible user.
2086 a. The authority of the Department of Management Services
2087 and the Chief Financial Officer under s. 287.057 extends to the
2088 corporation as if the corporation were an agency.
2089 b. The executive director of the corporation is the agency
2090 head under s. 287.057, except for resolution of bid protests for
2091 which the board would serve as the agency head. The executive
2092 director may assign or appoint a designee to act on his or her
2093 behalf.
2094 2. The corporation must provide notice of a decision or
2095 intended decision concerning a solicitation, contract award, or
2096 exceptional purchase by electronic posting. Such noti ce must
2097 contain the following statement: "Failure to file a protest
2098 within the time prescribed in this section constitutes a waiver
2099 of proceedings."
2100 a. A person adversely affected by the corporation's
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2101 decision or intended decision to award a contract pursuant to s.
2102 287.057(1) or (3)(c) who elects to challenge the decision must
2103 file a written notice of protest with the executive director of
2104 the corporation within 72 hours after the corporation posts a
2105 notice of its decision or intended decision. For a protest of
2106 the terms, conditions, and specifications contained in a
2107 solicitation, including provisions governing the methods for
2108 ranking bids, proposals, replies, awarding contracts, reserving
2109 rights of further negotiation, or modifying or amending any
2110 contract, the notice of protest must be filed in writing within
2111 72 hours after posting the solicitation. Saturdays, Sundays, and
2112 state holidays are excluded in the computation of the 72 -hour
2113 time period.
2114 b. A formal written protest must be filed within 10 da ys
2115 after the date the notice of protest is filed. The formal
2116 written protest must state with particularity the facts and law
2117 upon which the protest is based. Upon receipt of a formal
2118 written protest that has been timely filed, the corporation must
2119 stop the solicitation or contract award process until the
2120 subject of the protest is resolved by final board action unless
2121 the executive director sets forth in writing particular facts
2122 and circumstances that require the continuance of the
2123 solicitation or contract award process without delay in order to
2124 avoid an immediate and serious danger to the public health,
2125 safety, or welfare.
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2126 (I) The corporation must provide an opportunity to resolve
2127 the protest by mutual agreement between the parties within 7
2128 business days after receipt of the formal written protest.
2129 (II) If the subject of a protest is not resolved by mutual
2130 agreement within 7 business days, the corporation's board must
2131 transmit the protest to the Division of Administrative Hearings
2132 and contract with the division to conduct a hearing to determine
2133 the merits of the protest and to issue a recommended order. The
2134 contract must provide for the corporation to reimburse the
2135 division for any costs incurred by the division for court
2136 reporters, transcript preparation, travel, facility rental, and
2137 other customary hearing costs in the manner set forth in s.
2138 120.65(9). The division has jurisdiction to determine the facts
2139 and law concerning the protest and to issue a recommended order.
2140 The division's rules and procedures apply to these proceedings;
2141 the division's applicable bond requirements do not apply . The
2142 protest must be heard by the division at a publicly noticed
2143 meeting in accordance with procedures established by the
2144 division.
2145 c. In a protest of an invitation-to-bid or request-for-
2146 proposals procurement, submissions made after the bid or
2147 proposal opening which amend or supplement the bid or proposal
2148 may not be considered. In protesting an invitation-to-negotiate
2149 procurement, submissions made after the corporation ann ounces
2150 its intent to award a contract, reject all replies, or withdraw
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2151 the solicitation that amends or supplements the reply may not be
2152 considered. Unless otherwise provided by law, the burden of
2153 proof rests with the party protesting the corporation's acti on.
2154 In a competitive-procurement protest, other than a rejection of
2155 all bids, proposals, or replies, the administrative law judge
2156 must conduct a de novo proceeding to determine whether the
2157 corporation's proposed action is contrary to the corporation's
2158 governing statutes, the corporation's rules or policies, or the
2159 solicitation specifications. The standard of proof for the
2160 proceeding is whether the corporation's action was clearly
2161 erroneous, contrary to competition, arbitrary, or capricious. In
2162 any bid-protest proceeding contesting an intended corporation
2163 action to reject all bids, proposals, or replies, the standard
2164 of review by the board is whether the corporation's intended
2165 action is illegal, arbitrary, dishonest, or fraudulent.
2166 d. Failure to file a notice of protest or failure to file
2167 a formal written protest constitutes a waiver of proceedings.
2168 3. The board, acting as agency head or his or her
2169 designee, shall consider the recommended order of an
2170 administrative law judge in a public meeting and take final
2171 action on the protest. Any further legal remedy lies with the
2172 First District Court of Appeal.
2173 (f) The corporation is subject to the provisions of
2174 chapter 255.
2175 (g) The board shall determine whether it is more cost-
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2176 effective and in the best interests of the corporation to use
2177 legal services provided by in-house attorneys employed by the
2178 corporation rather than contracting with outside counsel. In
2179 making such determination, the board shall document its findings
2180 and shall consider: the expertise needed; whether time
2181 commitments exceed in-house staff resources; whether local
2182 representation is needed; the travel, lodging and other costs
2183 associated with in-house representation; and such other factors
2184 that the board determines are relevant.
2185 (h) The corporation may not retain a lobbyist to represent
2186 it before the legislative branch or executive branch. However,
2187 full-time employees of the corporation may register as lobbyists
2188 and represent the corporation before the legislative branch or
2189 executive branch.
2190 (i)1. The Office of the Internal Auditor is established
2191 within the corporation to provide a central point for
2192 coordination of and responsibility for activities that promote
2193 accountability, integrity, and efficiency to the policyholders
2194 and to the taxpayers of this state. The internal auditor shall
2195 be appointed by the board of governors, shall report to and be
2196 under the general supervision of the board of governors, and is
2197 not subject to supervision by an employee of the corporation.
2198 Administrative staff and support shall be provided by the
2199 corporation. The internal auditor shall be appointed without
2200 regard to political affiliation. It is the duty and
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2201 responsibility of the internal auditor to:
2202 a. Provide direction for, supervise, conduct, and
2203 coordinate audits, investigations, and management reviews
2204 relating to the programs and operations of the corporation.
2205 b. Conduct, supervise, or coordinate other activities
2206 carried out or financed by the corporation for the purpose of
2207 promoting efficiency in the administration of, or preventing and
2208 detecting fraud, abuse, and mismanagement in, its programs and
2209 operations.
2210 c. Submit final audit reports, reviews, or investigative
2211 reports to the board of governors, the executive director, the
2212 members of the Financial Services Commission, and the President
2213 of the Senate and the Speaker of the House of Representatives.
2214 d. Keep the board of governors informed concerning fraud,
2215 abuses, and internal control deficiencies relating to programs
2216 and operations administered or financed by the corporation,
2217 recommend corrective action, and report on the progress made in
2218 implementing corrective action.
2219 e. Cooperate and coordinate activities with the
2220 corporation's inspector general.
2221 2. On or before February 15, the internal auditor shall
2222 prepare an annual report evaluating the effectiveness of the
2223 internal controls of the corporation and providing
2224 recommendations for corrective action, if necessary, and
2225 summarizing the audits, reviews, and investigations conducted by
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2226 the office during the preceding fiscal year. The final report
2227 shall be furnished to the board of governors and the executive
2228 director, the President of the Senate, the Speaker of the House
2229 of Representatives, and the Financial Services Commission.
2230 (j) All records of the corporation, except as otherwise
2231 provided by law, are subject to the record retention
2232 requirements of s. 119.021.
2233 (k)1. The corporation shall establish and maintain a unit
2234 or division to investigate possible fraudulent claims by
2235 insureds or by persons making claims for services or repairs
2236 against policies held by insureds; or it may contract with
2237 others to investigate possible fraudulent claims for services or
2238 repairs against policies held by the corporation pursuant to s.
2239 626.9891. The corporation must comply with reporting
2240 requirements of s. 626.9891. An employee of the corporation
2241 shall notify the corporation's Office of the Inspector General
2242 and the Division of Investigative and Forensic Services within
2243 48 hours after having information that would lead a reasonable
2244 person to suspect that fraud may have been committed by any
2245 employee of the corporation.
2246 2. The corporation shall establish a unit or division
2247 responsible for receiving and responding to consumer complaints,
2248 which unit or division is the sole responsibility of a senior
2249 manager of the corporation.
2250 (l) The office shall conduct a comprehensive market
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2251 conduct examination of the corporation every 2 years to
2252 determine compliance with its plan of operation and internal
2253 operations procedures. The first market conduct examination
2254 report shall be submitted to the President of the Senate and the
2255 Speaker of the House of Representatives no later than February
2256 1, 2009. Subsequent reports shall be submitted on or before
2257 February 1 every 2 years thereafter.
2258 (m) The Auditor General shall conduct an operational audit
2259 of the corporation every 3 years to evaluate management's
2260 performance in administering laws, policies, and procedures
2261 governing the operations of the corporation in an efficient and
2262 effective manner. The scope of the review shall include, but is
2263 not limited to, evaluating claims handling, customer service,
2264 take-out programs and bonuses, financing arrangements,
2265 procurement of goods and services, internal controls, and the
2266 internal audit function. The initial audit must be completed by
2267 February 1, 2009.
2268 (n)1. Rates for coverage provided by the corporation must
2269 be actuarially sound pursuant to s. 627.062 and not competitive
2270 with approved rates charged in the admitted voluntary market so
2271 that the corporation functions as a residual market mechanism to
2272 provide insurance only when insurance cannot be procured in the
2273 voluntary market, except as otherwise provided in this
2274 paragraph. The office shall provide the corporation such
2275 information as would be necessary to determine whether rates are
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2276 competitive. The corporation shall file its recommended rates
2277 with the office at least annually. The corporation shall provide
2278 any additional information regarding the rates which the office
2279 requires. The office shall consider the recommendations of the
2280 board and issue a final order establishing the rates for the
2281 corporation within 45 days after the recommended rates are
2282 filed. The corporation may not pursue an administrative
2283 challenge or judicial review of the final order of the office.
2284 2. In addition to the rates otherwise determined pursuant
2285 to this paragraph, the corporation shall impose and collect an
2286 amount equal to the premium tax provided in s. 624.509 to
2287 augment the financial resources of the corporation.
2288 3. After the public hurricane loss-projection model under
2289 s. 627.06281 has been found to be accurate and reliable by the
2290 Florida Commission on Hurricane Loss Projection Methodology, the
2291 model shall be considered when establishing the windstorm
2292 portion of the corporation's rates. The corporation may use the
2293 public model results in combination with the results of private
2294 models to calculate rates for the windstorm portion of the
2295 corporation's rates. This subparagraph does not require or allow
2296 the corporation to adopt rates lower than the rates otherwise
2297 required or allowed by this paragraph.
2298 4. The corporation must make a recommended actuarially
2299 sound rate filing for each personal and commercial line of
2300 business it writes.
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2301 5. Notwithstanding the board's recommended rates and the
2302 office's final order regarding the corporation's filed rates
2303 under subparagraph 1., the corporation shall annually implement
2304 a rate increase which, except for sinkhole coverage, does not
2305 exceed the following for any single policy issued by the
2306 corporation, excluding coverage changes and surcharges:
2307 a. Twelve percent for 2023.
2308 a.b. Thirteen percent for 2024.
2309 b.c. Fourteen percent for 2025.
2310 c.d. Fifteen percent for 2026 and all subsequent years.
2311 6. The corporation may also implement an increase to
2312 reflect the effect on the corporation of the cash buildup factor
2313 pursuant to s. 215.555(5)(b).
2314 7. The corporation's implementation of rates as prescribed
2315 in subparagraphs 5. and 8. shall cease for any line of business
2316 written by the corporation upon the corporation's implementation
2317 of actuarially sound rates. Thereafter, the corporation shall
2318 annually make a recommended actuarially sound rate filing that
2319 is not competitive with approved rates in the admitted voluntary
2320 market for each commercial and personal line of business the
2321 corporation writes.
2322 8. The following new or renewal personal lines policies
2323 written on or after November 1, 2023, are not subject to the
2324 rate increase limitations in subparagraph 5., but may not be
2325 charged more than 50 percent above, and may not be charged nor
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2326 less than, the prior year's established rate for the
2327 corporation:
2328 a. Policies that do not cover a primary residence;
2329 b. New policies under which the coverage for the insured
2330 risk, before the date of application with the corporation, was
2331 last provided by an insurer determined by the office to be
2332 unsound or an insurer placed in receivership under chapter 631;
2333 or
2334 c. Subsequent renewals of those policies, including the
2335 new policies in sub-subparagraph b., under which the coverage
2336 for the insured risk, before the date of application with the
2337 corporation, was last provided by an insurer determined by the
2338 office to be unsound or an insurer placed in receivership under
2339 chapter 631.
2340 9. As used in this paragraph, the term "primary residence"
2341 means the dwelling that is the policyholder's primary home or is
2342 a rental property that is the primary home of the tenant, and
2343 which the policyholder or tenant occupies for more than 9 months
2344 of each year.
2345 (o) If coverage in an account, or the Citizens account if
2346 established by the corporation, is deactivated pursuant to
2347 paragraph (p), coverage through the corporation shall be
2348 reactivated by order of the office only under one of the
2349 following circumstances:
2350 1. If the market assistance plan receives a minimum of 100
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2351 applications for coverage within a 3-month period, or 200
2352 applications for coverage within a 1-year period or less for
2353 residential coverage, unless the market assistance plan provides
2354 a quotation from authorized admitted carriers at their approved
2355 filed rates for at least 90 percent of such applicants. Any
2356 market assistance plan application that is rejected because an
2357 individual risk is so hazardous as to be uninsurable using the
2358 criteria specified in subparagraph (c)8. shall not be included
2359 in the minimum percentage calculation provided herein. In the
2360 event that there is a legal or administrative challenge to a
2361 determination by the office that the conditions of this
2362 subparagraph have been met for eligibility for coverage in the
2363 corporation, any eligible risk may obtain coverage during the
2364 pendency of such challenge.
2365 2. In response to a state of emergency declared by the
2366 Governor under s. 252.36, the office may activate coverage by
2367 order for the period of the emergency upon a finding by the
2368 office that the emergency significantly affects the availability
2369 of residential property insurance.
2370 (p)1. The corporation shall file with the office quarterly
2371 statements of financial condition, an annual statement of
2372 financial condition, and audited financial statements in the
2373 manner prescribed by law. In addition, the corporation shall
2374 report to the office monthly on the types, premium, exposure,
2375 and distribution by county of its policies in force, and shall
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2376 submit other reports as the office requires to carry out its
2377 oversight of the corporation.
2378 2. The activities of the corporation shall be reviewed at
2379 least annually by the office to determine whether coverage shall
2380 be deactivated in an account, or in the Citizens account if
2381 established by the corporation, on the basis that the conditions
2382 giving rise to its activation no longer exist.
2383 (q)1. The corporation shall certify to the office its
2384 needs for annual assessments as to a particular calendar year,
2385 and for any interim assessments that it deems to be necessary to
2386 sustain operations as to a particular year pending the receipt
2387 of annual assessments. Upon verification, the office shall
2388 approve such certification, and the corporation shall levy such
2389 annual or interim assessments. Such assessments shall be
2390 prorated, if authority to levy exists, as provided in paragraph
2391 (b). The corporation shall take all reasonable and prudent steps
2392 necessary to collect the amount of assessments due from each
2393 assessable insurer, including, if prudent, filing suit to
2394 collect the assessments, and the office may provide such
2395 assistance to the corporation it deems appropriate. If the
2396 corporation is unable to collect an assessment from any
2397 assessable insurer, the uncollected assessments shall be levied
2398 as an additional assessment against the assessable insurers and
2399 any assessable insurer required to pay an additional assessment
2400 as a result of such failure to pay shall have a cause of action
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2401 against such nonpaying assessable insurer. Assessments s hall be
2402 included as an appropriate factor in the making of rates. The
2403 failure of a surplus lines agent to collect and remit any
2404 regular or emergency assessment levied by the corporation is
2405 considered to be a violation of s. 626.936 and subjects the
2406 surplus lines agent to the penalties provided in that section.
2407 2. The governing body of any unit of local government, any
2408 residents of which are insured by the corporation, may issue
2409 bonds as defined in s. 125.013 or s. 166.101 from time to time
2410 to fund an assistance program, in conjunction with the
2411 corporation, for the purpose of defraying deficits of the
2412 corporation. In order to avoid needless and indiscriminate
2413 proliferation, duplication, and fragmentation of such assistance
2414 programs, any unit of local government, any residents of which
2415 are insured by the corporation, may provide for the payment of
2416 losses, regardless of whether or not the losses occurred within
2417 or outside of the territorial jurisdiction of the local
2418 government. Revenue bonds under this subparagraph may not be
2419 issued until validated pursuant to chapter 75, unless a state of
2420 emergency is declared by executive order or proclamation of the
2421 Governor pursuant to s. 252.36 making such findings as are
2422 necessary to determine that it is in the best inter ests of, and
2423 necessary for, the protection of the public health, safety, and
2424 general welfare of residents of this state and declaring it an
2425 essential public purpose to permit certain municipalities or
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2426 counties to issue such bonds as will permit relief to c laimants
2427 and policyholders of the corporation. Any such unit of local
2428 government may enter into such contracts with the corporation
2429 and with any other entity created pursuant to this subsection as
2430 are necessary to carry out this paragraph. Any bonds issued
2431 under this subparagraph shall be payable from and secured by
2432 moneys received by the corporation from emergency assessments
2433 under sub-subparagraph (b)3.c. (b)3.e., and assigned and pledged
2434 to or on behalf of the unit of local government for the benefit
2435 of the holders of such bonds. The funds, credit, property, and
2436 taxing power of the state or of the unit of local government
2437 shall not be pledged for the payment of such bonds.
2438 3.a. The corporation shall adopt one or more programs
2439 subject to approval by the office for the reduction of both new
2440 and renewal writings in the corporation. Beginning January 1,
2441 2008, any program the corporation adopts for the payment of
2442 bonuses to an insurer for each risk the insurer removes from the
2443 corporation shall comply with s. 627.3511(2) and may not exceed
2444 the amount referenced in s. 627.3511(2) for each risk removed.
2445 The corporation may consider any prudent and not unfairly
2446 discriminatory approach to reducing corporation writings, and
2447 may adopt a credit against assessment liability or other
2448 liability that provides an incentive for insurers to take risks
2449 out of the corporation and to keep risks out of the corporation
2450 by maintaining or increasing voluntary writings in counties or
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2451 areas in which corporation risks are highly concentrated and a
2452 program to provide a formula under which an insurer voluntarily
2453 taking risks out of the corporation by maintaining or increasing
2454 voluntary writings will be relieved wholly or partially from
2455 assessments under sub-subparagraph (b)3.a. In addition, in the
2456 event policies are taken out by an approved surplus lines
2457 insurer, such insurer's assessable insureds may also be relieved
2458 wholly or partially from assessments. However, any "take-out
2459 bonus" or payment to an insurer must be conditioned on the
2460 property being insured for at least 5 years by the insurer,
2461 unless canceled or nonrenewed by the policyholder. If the policy
2462 is canceled or nonrenewed by the policyholder before the end of
2463 the 5-year period, the amount of the take-out bonus must be
2464 prorated for the time period the policy was insured. When the
2465 corporation enters into a contractual agreement for a take -out
2466 plan, the producing agent of record of the corporation policy is
2467 entitled to retain any unearned commission on such policy, and
2468 the insurer shall either:
2469 (I) Pay to the producing agent of record of the policy,
2470 for the first year, an amount which is the greater of the
2471 insurer's usual and customary commission for the type of policy
2472 written or a policy fee equal to the usual and customary
2473 commission of the corporation; or
2474 (II) Offer to allow the producing agent of record of the
2475 policy to continue servicing the policy for a period of not less
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2476 than 1 year and offer to pay the agent the insurer's usual and
2477 customary commission for the type of policy written. If the
2478 producing agent is unwilling or unable to accept appointment by
2479 the new insurer, the new insurer shall pay the agent in
2480 accordance with sub-sub-subparagraph (I).
2481 b. Any credit or exemption from regular assessments
2482 adopted under this subparagraph shall last no longer than the 3
2483 years following the cancellation or expiration of the policy by
2484 the corporation. With the approval of the office, the board may
2485 extend such credits for an additional year if the insurer
2486 guarantees an additional year of renewability for all policies
2487 removed from the corporation, or for 2 additional years if the
2488 insurer guarantees 2 additional years of renewability for all
2489 policies so removed.
2490 c. There shall be no credit, limitation, exemption, or
2491 deferment from emergency assessments to be collected from
2492 policyholders pursuant to sub-subparagraph (b)3.c. (b)3.e. or
2493 sub-subparagraph (b)5.c.
2494 4. The plan shall provide for the deferment, in whole or
2495 in part, of the assessment of an assessable insurer, other than
2496 an emergency assessment collected from policyholders pursuant to
2497 sub-subparagraph (b)3.e. or sub-subparagraph (b)5.c., if the
2498 office finds that payment of the assessment would endanger or
2499 impair the solvency of the insurer. In the event an assessment
2500 against an assessable insurer is deferred in whole or in part,
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2501 the amount by which such assessment is deferred may be assessed
2502 against the other assessable insurers in a manner consistent
2503 with the basis for assessments set forth in paragraph (b).
2504 4.5. Effective July 1, 2007, in order to evaluate the
2505 costs and benefits of approved take-out plans, if the
2506 corporation pays a bonus or other payment to an insurer for an
2507 approved take-out plan, it shall maintain a record of the
2508 address or such other identifying information on the property or
2509 risk removed in order to track if and when the property or risk
2510 is later insured by the corporation.
2511 5.6. Any policy taken out, assumed, or removed from the
2512 corporation is, as of the effective date of the take-out,
2513 assumption, or removal, direct insurance issued by the insurer
2514 and not by the corporation, even if the corporation continues to
2515 service the policies. This subparagraph applies to policies of
2516 the corporation and not policies taken out, assumed, or removed
2517 from any other entity.
2518 6.7. For a policy taken out, assumed, or removed from the
2519 corporation, the insurer may, for a period of no more than 3
2520 years, continue to use any of the corporation's policy forms or
2521 endorsements that apply to the policy taken out, removed, or
2522 assumed without obtaining approval from the office for use of
2523 such policy form or endorsement.
2524 (r) Nothing in this subsection shall be construed to
2525 preclude the issuance of residential property insurance coverage
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2526 pursuant to part VIII of chapter 626.
2527 (s)1. There shall be no liability on the part of, and no
2528 cause of action of any nature shall arise against, any
2529 assessable insurer or its agents or employees, the corporation
2530 or its agents or employees, members of the board of governors or
2531 their respective designees at a board meeting, corporation
2532 committee members, or the office or its representatives, for any
2533 action taken by them in the performance of their duties or
2534 responsibilities under this subsection. Such immunity does not
2535 apply to:
2536 a. Any of the foregoing persons or entities for any
2537 willful tort;
2538 b. The corporation or its producing agents for breach of
2539 any contract or agreement pertaining to insurance coverage;
2540 c. The corporation with respect to issuance or payment of
2541 debt;
2542 d. Any assessable insurer with respect to any action to
2543 enforce an assessable insurer's obligations to the corporation
2544 under this subsection; or
2545 e. The corporation in any pending or future action for
2546 breach of contract or for benefits under a policy issued by the
2547 corporation.
2548 2. The corporation shall manage its claim employees,
2549 independent adjusters, and others who handle claims to ensure
2550 they carry out the corporation's duty to its policyholders to
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2551 handle claims carefully, timely, diligently, and in good faith,
2552 balanced against the corporation's duty to the state to manage
2553 its assets responsibly to minimize its assessment potential.
2554 (t) For the purposes of s. 199.183(1), the corporation
2555 shall be considered a political subdivision of the state and
2556 shall be exempt from the corporate income tax. The premiums,
2557 assessments, investment income, and other revenue of the
2558 corporation are funds received for providing property insurance
2559 coverage as required by this subsection, paying claims for
2560 Florida citizens insured by the corporation, securing and
2561 repaying debt obligations issued by the corporation, and
2562 conducting all other activities of the corporation, and shall
2563 not be considered taxes, fees, licenses, or charges for services
2564 imposed by the Legislature on individuals, business es, or
2565 agencies outside state government. Bonds and other debt
2566 obligations issued by or on behalf of the corporation are not to
2567 be considered "state bonds" within the meaning of s. 215.58(8).
2568 The corporation is subject to the procurement provisions of
2569 chapter 287 as provided in paragraph (e), and policies and
2570 decisions of the corporation relating to incurring debt, levying
2571 of assessments and the sale, issuance, continuation, terms and
2572 claims under corporation policies, and all services relating
2573 thereto, are not subject to the provisions of chapter 120. The
2574 corporation is not required to obtain or to hold a certificate
2575 of authority issued by the office, nor is it required to
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2576 participate as a member insurer of the Florida Insurance
2577 Guaranty Association. However, the corporation is required to
2578 pay, in the same manner as an authorized insurer, assessments
2579 levied by the Florida Insurance Guaranty Association. It is the
2580 intent of the Legislature that the tax exemptions provided in
2581 this paragraph will augment the financial resources of the
2582 corporation to better enable the corporation to fulfill its
2583 public purposes. Any debt obligations issued by the corporation,
2584 their transfer, and the income therefrom, including any profit
2585 made on the sale thereof, shall at all times be free from
2586 taxation of every kind by the state and any political
2587 subdivision or local unit or other instrumentality thereof;
2588 however, this exemption does not apply to any tax imposed by
2589 chapter 220 on interest, income, or profits on debt obligations
2590 owned by corporations other than the corporation.
2591 (u) Upon a determination by the office that the conditions
2592 giving rise to the establishment and activation of the
2593 corporation no longer exist, the corporation is dissolved. Upon
2594 dissolution, the assets of the corporation shall be applied
2595 first to pay all debts, liabilities, and obligations of the
2596 corporation, including the establishment of reasonable reserves
2597 for any contingent liabilities or obligations, and all remaining
2598 assets of the corporation shall become property of the state and
2599 shall be deposited in the Florida Hurricane Catastrophe Fund.
2600 However, no dissolution shall take effect as long as the
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2601 corporation has bonds or other financial obligations outstanding
2602 unless adequate provision has been made for the payment of the
2603 bonds or other financial obligations pursuant to the documents
2604 authorizing the issuance of the bonds or other financial
2605 obligations.
2606 (v)1. Effective July 1, 2002, policies of the Residential
2607 Property and Casualty Joint Underwriting Association become
2608 policies of the corporation. All obligations, rights, assets and
2609 liabilities of the association, including bonds, note and debt
2610 obligations, and the financing documents pertaining to them
2611 become those of the corporation as of July 1, 2002. The
2612 corporation is not required to issue endorsements or
2613 certificates of assumption to insureds during the remaining term
2614 of in-force transferred policies.
2615 2. Effective July 1, 2002, policies of the Florida
2616 Windstorm Underwriting Association are transferred to the
2617 corporation and become policies of the corporation. All
2618 obligations, rights, assets, and liabilities of the association,
2619 including bonds, note and debt obligations, and the financing
2620 documents pertaining to them are transferred to and assumed by
2621 the corporation on July 1, 2002. The corporation is not required
2622 to issue endorsements or certificates of assumption to insureds
2623 during the remaining term of in-force transferred policies.
2624 3. The Florida Windstorm Underwriting Association and the
2625 Residential Property and Casualty Joint Underwriting Association
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2626 shall take all actions necessary to further evidence the
2627 transfers and provide the documents and instruments of further
2628 assurance as may reasonably be requested by the corporation for
2629 that purpose. The corporation shall execute assumptions and
2630 instruments as the trustees or other parties to the financing
2631 documents of the Florida Windstorm Underwriting Association or
2632 the Residential Property and Casualty Joint Underwriting
2633 Association may reasonably request to further evidence the
2634 transfers and assumptions, which transfers and assumptions,
2635 however, are effective on the date provided under this paragraph
2636 whether or not, and regardless of the date on which, the
2637 assumptions or instruments are executed by the corporation.
2638 Subject to the relevant financing documents pertaining to their
2639 outstanding bonds, notes, indebtedness, or other financing
2640 obligations, the moneys, investments, receivables, choses in
2641 action, and other intangibles of the Florida Windstorm
2642 Underwriting Association shall be credited to the coastal
2643 account of the corporation, and those of the personal lines
2644 residential coverage account and the commercial lines
2645 residential coverage account of the Residential Property and
2646 Casualty Joint Underwriting Association shall be credited to the
2647 personal lines account and the commercial lines account,
2648 respectively, of the corporation.
2649 4. Effective July 1, 2002, a new applicant for property
2650 insurance coverage who would otherwise have been eligible for
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2651 coverage in the Florida Windstorm Underwriting Association is
2652 eligible for coverage from the corporation as provided in this
2653 subsection.
2654 5. The transfer of all policies, obligations, rights,
2655 assets, and liabilities from the Florida Windstorm Underwriting
2656 Association to the corporation and the renaming of the
2657 Residential Property and Casualty Joint Underwriting Association
2658 as the corporation does not affect the coverage with respect to
2659 covered policies as defined in s. 215.555(2)(c) provided to
2660 these entities by the Florida Hurricane Catastrophe Fund. The
2661 coverage provided by the fund to the Florida Windstorm
2662 Underwriting Association based on its exposures as of June 30,
2663 2002, and each June 30 thereafter, unless the corporation has
2664 established the Citizens account, shall be redesignated as
2665 coverage for the coastal account of the corporation.
2666 Notwithstanding any other provision of law, the coverage
2667 provided by the fund to the Residential Property and Casualty
2668 Joint Underwriting Association based on its exposures as of June
2669 30, 2002, and each June 30 thereafter, unless the corporation
2670 has established the Citizens account, shall be transferred to
2671 the personal lines account and the commercial lines account of
2672 the corporation. Notwithstanding any other provision of law, the
2673 coastal account, unless the corporation has established the
2674 Citizens account, shall be treated, for all Florida Hurricane
2675 Catastrophe Fund purposes, as if it were a separate
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2676 participating insurer with its own exposures, reimbursement
2677 premium, and loss reimbursement. Likewise, the personal lines
2678 and commercial lines accounts, unless the corporation has
2679 established the Citizens account, shall be viewed together, for
2680 all fund purposes, as if the two accounts were one and represent
2681 a single, separate participating insurer with its own exposures,
2682 reimbursement premium, and loss reimbursement. The coverage
2683 provided by the fund to the corporation shall constitute and
2684 operate as a full transfer of coverage from the Florida
2685 Windstorm Underwriting Association and Residential Property and
2686 Casualty Joint Underwriting Association to the corporation.
2687 (w) Notwithstanding any other provision of law:
2688 1. The pledge or sale of, the lien upon, and the security
2689 interest in any rights, revenues, or other assets of the
2690 corporation created or purported to be created pursuant to any
2691 financing documents to secure any bonds or other indebtedness of
2692 the corporation shall be and remain valid and enforceable,
2693 notwithstanding the commencement of and during the continuation
2694 of, and after, any rehabilitation, insolvency, liquidation,
2695 bankruptcy, receivership, conservatorship, reorganization, or
2696 similar proceeding against the corporation under the laws of
2697 this state.
2698 2. The proceeding does not relieve the corporation of its
2699 obligation, or otherwise affect its ability to perform its
2700 obligation, to continue to collect, or levy and collect,
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2701 assessments, policyholder surcharges or other surcharges under
2702 sub-subparagraph (b)3.j., or any other rights, revenues, or
2703 other assets of the corporation pledged pursuant to any
2704 financing documents.
2705 3. Each such pledge or sale of, lien upon, and security
2706 interest in, including the priority of such pledge, lien, or
2707 security interest, any such assessments, policyholder surcharges
2708 or other surcharges, or other rights, revenues, or other assets
2709 which are collected, or levied and collected, after the
2710 commencement of and during the pendency of, or after, any such
2711 proceeding shall continue unaffected by such proceeding. As used
2712 in this subsection, the term "financing documents" means any
2713 agreement or agreements, instrument or instruments, or other
2714 document or documents now existing or hereafter created
2715 evidencing any bonds or other indebtedness of the corporation or
2716 pursuant to which any such bonds or other indebtedness has been
2717 or may be issued and pursuant to which any rights, revenues, or
2718 other assets of the corporation are pledged or sold to secure
2719 the repayment of such bonds or indebtedness, together with the
2720 payment of interest on such bonds or such indebtedness, or the
2721 payment of any other obligation or financial product, as defined
2722 in the plan of operation of the corporation related to such
2723 bonds or indebtedness.
2724 4. Any such pledge or sale of assessments, revenues,
2725 contract rights, or other rights or assets of the corporation
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2726 shall constitute a lien and security interest, or sale, as the
2727 case may be, that is immediately effective and attaches to such
2728 assessments, revenues, or contract rights or other rights or
2729 assets, whether or not imposed or collected at the time the
2730 pledge or sale is made. Any such pledge or sale is effective,
2731 valid, binding, and enforceable against the corporation or other
2732 entity making such pledge or sale, and valid and binding against
2733 and superior to any competing claims or obligations owed to any
2734 other person or entity, including policyholders in this state,
2735 asserting rights in any such assessments, revenues, or contract
2736 rights or other rights or assets to the extent set forth in and
2737 in accordance with the terms of the pledge or sale contained in
2738 the applicable financing documents, whether or not any such
2739 person or entity has notice of such pledge or sale and without
2740 the need for any physical delivery, recordation, filing, or
2741 other action.
2742 5. As long as the corporation has any bonds outstanding,
2743 the corporation may not file a voluntary petition under chapter
2744 9 of the federal Bankruptcy Code or such corresponding chapter
2745 or sections as may be in effect, from time to time, and a public
2746 officer or any organization, entity, or other person may not
2747 authorize the corporation to be or become a debtor under chapter
2748 9 of the federal Bankruptcy Code or such corresponding chapter
2749 or sections as may be in effect, from time to time, during any
2750 such period.
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2751 6. If ordered by a court of competent jurisdiction, the
2752 corporation may assume policies or otherwise provide coverage
2753 for policyholders of an insurer placed in liquidation under
2754 chapter 631, under such forms, rates, terms, and conditions as
2755 the corporation deems appropriate, subject to approval by the
2756 office.
2757 (x)1. The following records of the corporation are
2758 confidential and exempt from the provisions of s. 119.07(1) and
2759 s. 24(a), Art. I of the State Constitution:
2760 a. Underwriting files, except that a policyholder or an
2761 applicant shall have access to his or her own underwriting
2762 files. Confidential and exempt underwriting file records may
2763 also be released to other governmental agencies upon written
2764 request and demonstration of need; such records held by the
2765 receiving agency remain confidential and exempt as provided
2766 herein.
2767 b. Claims files, until termination of all litigation and
2768 settlement of all claims arising out of the same incident,
2769 although portions of the claims files may remain exempt, as
2770 otherwise provided by law. Confidential and exempt claims file
2771 records may be released to other governmental agencies upon
2772 written request and demonstration of need; such records held by
2773 the receiving agency remain confidential and exempt as provided
2774 herein.
2775 c. Records obtained or generated by an internal auditor
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2776 pursuant to a routine audit, until the audit is completed, or if
2777 the audit is conducted as part of an investigation, until the
2778 investigation is closed or ceases to be active. An investigation
2779 is considered "active" while the investigation is being
2780 conducted with a reasonable, good faith belief that it could
2781 lead to the filing of administrative, civil, or criminal
2782 proceedings.
2783 d. Matters reasonably encompassed in privileged attorney-
2784 client communications.
2785 e. Proprietary information licensed to the corporation
2786 under contract and the contract provides for the confidentiality
2787 of such proprietary information.
2788 f. All information relating to the medical condition or
2789 medical status of a corporation employee which is not relevant
2790 to the employee's capacity to perform his or her duties, except
2791 as otherwise provided in this paragraph. Information that is
2792 exempt shall include, but is not limited to, information
2793 relating to workers' compensation, insurance benefits, and
2794 retirement or disability benefits.
2795 g. Upon an employee's entrance into the employee
2796 assistance program, a program to assist any employee who has a
2797 behavioral or medical disorder, substance abuse problem, or
2798 emotional difficulty that affects the employee's job
2799 performance, all records relative to that participation shall be
2800 confidential and exempt from the provisions of s. 119.07(1) and
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2801 s. 24(a), Art. I of the State Constitution, except as otherwise
2802 provided in s. 112.0455(11).
2803 h. Information relating to negotiations for financing,
2804 reinsurance, depopulation, or contractual services, until the
2805 conclusion of the negotiations.
2806 i. Minutes of closed meetings regarding underwriting
2807 files, and minutes of closed meetings regarding an open claims
2808 file until termination of all litigation and settlement of all
2809 claims with regard to that claim, except that information
2810 otherwise confidential or exempt by law shall be redacted.
2811 2. If an authorized insurer is considering underwriting a
2812 risk insured by the corporation, relevant underwriting files and
2813 confidential claims files may be released to the insurer
2814 provided the insurer agrees in writing, notarized and under
2815 oath, to maintain the confidentiality of such files. If a file
2816 is transferred to an insurer, that file is no longer a public
2817 record because it is not held by an agency subject to the
2818 provisions of the public records law. Underwriting files and
2819 confidential claims files may also be released to staff and the
2820 board of governors of the market assistance plan established
2821 pursuant to s. 627.3515, who must retain the confidentiality of
2822 such files, except such files may be released to authorized
2823 insurers that are considering assuming the risks to which the
2824 files apply, provided the insurer agrees in writing, notarized
2825 and under oath, to maintain the confidentiality of such files.
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2826 Finally, the corporation or the board or staff of the market
2827 assistance plan may make the following information obtained from
2828 underwriting files and confidential claims files available to an
2829 entity that has obtained a permit to become an authorized
2830 insurer, a reinsurer that may provide reinsurance under s.
2831 624.610, a licensed reinsurance broker, a licensed rating
2832 organization, a modeling company, a licensed surplus lines
2833 agent, or a licensed general lines insurance agent: name,
2834 address, and telephone number of the residential property owner
2835 or insured; location of the risk; rating information; loss
2836 history; and policy type. The receiving person must retain the
2837 confidentiality of the information received and may use the
2838 information only for the purposes of developing a take-out plan
2839 or a rating plan to be submitted to the office for approval or
2840 otherwise analyzing the underwriting of a risk or risks insured
2841 by the corporation on behalf of the private insurance market. A
2842 licensed surplus lines agent or a licensed general lines
2843 insurance agent may not use such information for the direct
2844 solicitation of policyholders.
2845 3. A policyholder who has filed suit against the
2846 corporation has the right to discover the contents of his or her
2847 own claims file to the same extent that discovery of such
2848 contents would be available from a private insurer in litigation
2849 as provided by the Florida Rules of Civil Procedure, the Florida
2850 Evidence Code, and other applicable law. Pursuant to subpoena, a
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2851 third party has the right to discover the contents of an
2852 insured's or applicant's underwriting or claims file to the same
2853 extent that discovery of such contents would be available from a
2854 private insurer by subpoena as provided by the Florida Rules of
2855 Civil Procedure, the Florida Evidence Code, and other applicable
2856 law, and subject to any confidentiality protections requested by
2857 the corporation and agreed to by the seeking party or ordered by
2858 the court. The corporation may release confidential underw riting
2859 and claims file contents and information as it deems necessary
2860 and appropriate to underwrite or service insurance policies and
2861 claims, subject to any confidentiality protections deemed
2862 necessary and appropriate by the corporation.
2863 4. Portions of meetings of the corporation are exempt from
2864 the provisions of s. 286.011 and s. 24(b), Art. I of the State
2865 Constitution wherein confidential underwriting files or
2866 confidential open claims files are discussed. All portions of
2867 corporation meetings which are closed to the public shall be
2868 recorded by a court reporter. The court reporter shall record
2869 the times of commencement and termination of the meeting, all
2870 discussion and proceedings, the names of all persons present at
2871 any time, and the names of all persons speaking. No portion of
2872 any closed meeting shall be off the record. Subject to the
2873 provisions hereof and s. 119.07(1)(d)-(f), the court reporter's
2874 notes of any closed meeting shall be retained by the corporation
2875 for a minimum of 5 years. A copy of the transcript, less any
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2876 exempt matters, of any closed meeting wherein claims are
2877 discussed shall become public as to individual claims after
2878 settlement of the claim.
2879 (y) It is the intent of the Legislature that the
2880 amendments to this subsection enacted in 2002 should, over time,
2881 reduce the probable maximum windstorm losses in the residual
2882 markets and the potential assessments to be levied on property
2883 insurers and policyholders statewide.
2884 (z) In enacting the provisions of this section, the
2885 Legislature recognizes that both the Florida Windstorm
2886 Underwriting Association and the Residential Property and
2887 Casualty Joint Underwriting Association have entered into
2888 financing arrangements that obligate each entity to service its
2889 debts and maintain the capacity to repay funds secured under
2890 these financing arrangements. It is the intent of the
2891 Legislature that nothing in this section be construed to
2892 compromise, diminish, or interfere with the rights of creditors
2893 under such financing arrangements. It is further the intent of
2894 the Legislature to preserve the obligations of the Florida
2895 Windstorm Underwriting Association and Residential Property and
2896 Casualty Joint Underwriting Association with regard to
2897 outstanding financing arrangements, with such obligations
2898 passing entirely and unchanged to the corporation and,
2899 specifically, to the Citizens applicable account of the
2900 corporation. So long as any bonds, notes, indebtedness, or other
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2901 financing obligations of the Florida Windstorm Underwriting
2902 Association or the Residential Property and Casualty Joint
2903 Underwriting Association are outstanding, under the terms of the
2904 financing documents pertaining to them, the governing board of
2905 the corporation shall have and shall exercise the authority to
2906 levy, charge, collect, and receive all premiums, assessments,
2907 surcharges, charges, revenues, and receipts that the
2908 associations had authority to levy, charge, collect, or receive
2909 under the provisions of subsection (2) and this subsection,
2910 respectively, as they existed on January 1, 2002, to provide
2911 moneys, without exercise of the authority provided by this
2912 subsection, in at least the amounts, and by the times, as would
2913 be provided under those former provisions of subsection (2) or
2914 this subsection, respectively, so that the value, amount, and
2915 collectability of any assets, revenues, or revenue source
2916 pledged or committed to, or any lien thereon securing such
2917 outstanding bonds, notes, indebtedness, or other financing
2918 obligations will not be diminished, impaired, or adversely
2919 affected by the amendments made by this act and to permit
2920 compliance with all provisions of financing documents pertaining
2921 to such bonds, notes, indebtedness, or other financing
2922 obligations, or the security or credit enhancement for them, and
2923 any reference in this subsection to bonds, notes, indebtedness,
2924 financing obligations, or similar obligations, of the
2925 corporation shall include like instruments or contracts of the
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2926 Florida Windstorm Underwriting Association and the Residential
2927 Property and Casualty Joint Underwriting Association to the
2928 extent not inconsistent with the provisions of the financing
2929 documents pertaining to them.
2930 (aa) Except as otherwise provided in this paragraph, the
2931 corporation shall require the securing and maintaining of flood
2932 insurance as a condition of coverage of a personal lines
2933 residential risk. The insured or applicant must execute a form
2934 approved by the office affirming that flood insurance is not
2935 provided by the corporation and that if flood insurance is not
2936 secured by the applicant or insured from an insurer other than
2937 the corporation and in addition to coverage by the corporation,
2938 the risk will not be eligible for coverage by the corporation.
2939 The corporation may deny coverage of a personal lines
2940 residential risk to an applicant or insured who refuses to
2941 secure and maintain flood insurance. The requirement to purchase
2942 flood insurance shall be implemented as follows:
2943 1. Except as provided in subparagraphs 2. and 3., all
2944 personal lines residential policyholders must have flood
2945 coverage in place for policies effective on or after:
2946 a. January 1, 2024, for a structure that has a dwelling
2947 replacement cost of $600,000 or more.
2948 b. January 1, 2025, for a structure that has a dwelling
2949 replacement cost of $500,000 or more.
2950 c. January 1, 2026, for a structure that has a dwelling
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2951 replacement cost of $400,000 or more.
2952 d. January 1, 2027, for all other personal lines
2953 residential property insured by the corporation.
2954 2. All personal lines residential policyholders whose
2955 property insured by the corporation is located within the
2956 special flood hazard area defined by the Federal Emergency
2957 Management Agency must have flood coverage in place:
2958 a. At the time of initial policy issuance for all new
2959 personal lines residential policies issued by the corporation on
2960 or after April 1, 2023.
2961 b. By the time of the policy renewal for all personal
2962 lines residential policies renewing on or after July 1, 2023.
2963 3. Policyholders are not required to purchase flood
2964 insurance as a condition for maintaining the following policies
2965 issued by the corporation:
2966 a. Policies that do not provide coverage for the peril of
2967 wind.
2968 b. Policies that provide coverage under a condominium unit
2969 owners form.
2970
2971 The flood insurance required under this paragraph must meet, at
2972 a minimum, the dwelling coverage available from the National
2973 Flood Insurance Program or the requirements of subparagraphs s.
2974 627.715(1)(a)1., 2., and 3.
2975 (bb) A salaried employee of the corporation who performs
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2976 policy administration services subsequent to the effectuation of
2977 a corporation policy is not required to be licensed as an agent
2978 under the provisions of s. 626.112.
2979 (cc) There shall be no liability on the part of, and no
2980 cause of action of any nature shall arise against, producing
2981 agents of record of the corporation or employees of such agents
2982 for insolvency of any take-out insurer.
2983 (dd) The assets of the corporation may be invested and
2984 managed by the State Board of Administration.
2985 (ee) The office may establish a pilot program to offer
2986 optional sinkhole coverage in one or more counties or other
2987 territories of the corporation for the purpose of implementing
2988 s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
2989 Florida. Under the pilot program, the corporation is not
2990 required to issue a notice of nonrenewal to exclude sinkhole
2991 coverage upon the renewal of existing policies, but may exclude
2992 such coverage using a notice of coverage change.
2993 (ff) In establishing replacement costs for coverage on a
2994 dwelling insured by the corporation, the corporation must accept
2995 a valuation from any of the following sources and must use the
2996 lowest valuation as the insured value of the dwelling, excluding
2997 land value, provided the valuation was completed within the 12
2998 months before the application or renewal date of coverage:
2999 1. A replacement cost valuation software that is
3000 specifically designed for use in establishing insurance
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3001 replacement costs and that includes an itemized calculation of
3002 the cost of reconstruction;
3003 2. A replacement cost valuation prepared by a certified or
3004 licensed real estate appraiser under part II of chapter 475 that
3005 is specifically formulated to establish insurance replacement
3006 cost, rather than market value, and which includes an itemized
3007 calculation of the cost of reconstruction; or
3008 3. A replacement cost valuation prepared by a general,
3009 building, or residential contractor licensed under s. 489.113,
3010 or a professional engineer licensed under s. 471.015, which
3011 includes an itemized calculation of the total price of
3012 reconstruction.
3013 (gg) The Office of Inspector General is established within
3014 the corporation to provide a central point for coordination of
3015 and responsibility for activities that promote accountability,
3016 integrity, and efficiency. The office shall be headed by an
3017 inspector general, which is a senior management position that
3018 involves planning, coordinating, and performing activities
3019 assigned to and assumed by the inspector general for the
3020 corporation.
3021 1. The inspector general shall be appointed by the
3022 Financial Services Commission and may only be removed from
3023 office by the commission. The inspector general shall be
3024 appointed without regard to political affiliation.
3025 a. At a minimum, the inspector general must possess a
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3026 bachelor's degree from an accredited college or university and 8
3027 years of professional experience related to the duties of an
3028 inspector general as described in this paragraph, of which 5
3029 years must have been at a supervisory level.
3030 b. The inspector general shall report to, and be under the
3031 supervision of, the chair of the board of governors. The
3032 executive director or corporation staff may not prevent or
3033 prohibit the inspector general from initiating, carrying out, or
3034 completing any audit, review, evaluation, study, or
3035 investigation.
3036 2. The inspector general shall initiate, direct,
3037 coordinate, participate in, and perform audits, reviews,
3038 evaluations, studies, and investigations designed to assess
3039 management practices; compliance with laws, rules, and policies;
3040 and program effectiveness and efficiency. This includes:
3041 a. Conducting internal examinations; investigating
3042 allegations of fraud, waste, abuse, malfeasance, mismanagement,
3043 employee misconduct, or violations of corporation policies; and
3044 conducting any other investigations as directed by the Financial
3045 Services Commission or as independently determined.
3046 b. Evaluating and recommending actions regarding security,
3047 the ethical behavior of personnel and vendors, and compliance
3048 with rules, laws, policies, and personnel matters; and rendering
3049 ethics opinions.
3050 c. Evaluating personnel and administrative policy
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3051 compliance, management and operational matters, and human
3052 resources-related matters.
3053 d. Evaluating the application of a corporation code of
3054 ethics, providing reviews and recommendations on the design and
3055 content of ethics-related policy training courses, educating
3056 employees on the code and on appropriate conduct, and checking
3057 for compliance.
3058 e. Evaluating the activities of the senior management team
3059 and management's compliance with recommended solutions.
3060 f. Cooperating and coordinating activities with the chief
3061 of internal audit.
3062 g. Maintaining records of investigations and discipline in
3063 accordance with established policies, or as otherwise required.
3064 h. Supervising and directing the tasks and assignments of
3065 the staff assigned to assist with the inspector general's
3066 projects, including regular review and feedback regarding work
3067 in progress and providing recommendations regarding relevant
3068 training and staff development activities.
3069 i. Directing, planning, preparing, and presenting interim
3070 and final reports and oral briefings which communicate the
3071 results of studies, reviews, and investigations.
3072 j. Providing the executive director with independent and
3073 objective assessments of programs and activities.
3074 k. Completing special projects, assignments, and other
3075 duties as requested by the Financial Services Commission.
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3076 l. Reporting expeditiously to the Department of Law
3077 Enforcement or other law enforcement agencies, as appropriate,
3078 whenever the inspector general has reasonable grounds to believ e
3079 there has been a violation of criminal law.
3080 (hh) The corporation shall prepare a report for each
3081 calendar year outlining both the statewide average and county -
3082 specific details of the loss ratio attributable to losses that
3083 are not catastrophic losses for residential coverage provided by
3084 the corporation, which information must be presented to the
3085 office and available for public inspection on the Internet
3086 website of the corporation by March 1 of the following calendar
3087 year.
3088 (ii) The corporation shall revise the programs adopted
3089 pursuant to sub-subparagraph (q)3.a. for personal lines
3090 residential policies to maximize policyholder options and
3091 encourage increased participation by insurers and agents. After
3092 January 1, 2017, a policy may not be taken out of the
3093 corporation unless the provisions of this paragraph are met.
3094 1. The corporation must publish a periodic schedule of
3095 cycles during which an insurer may identify, and notify the
3096 corporation of, policies that the insurer is requesting to take
3097 out. A request must include a description of the coverage
3098 offered and an estimated premium and must be submitted to the
3099 corporation in a form and manner prescribed by the corporation.
3100 2. The corporation must maintain and make available to the
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3101 agent of record a consolidated list of all insurers requesting
3102 to take out a policy. The list must include a description of the
3103 coverage offered and the estimated premium for each take -out
3104 request.
3105 3. If a policyholder receives a take-out offer from an
3106 authorized insurer, the risk is no longer eligible for coverage
3107 with the corporation unless the premium for coverage from the
3108 authorized insurer is more than 20 percent greater than the
3109 renewal premium for comparable coverage from the corporation
3110 pursuant to sub-subparagraph (c)5.c. This subparagraph applies
3111 to take-out offers that are part of an application to
3112 participate in depopulation submitted to the office on or after
3113 January 1, 2023. This subparagraph only applies to a policy that
3114 covers a primary residence.
3115 4. The corporation must provide written notice to the
3116 policyholder and the agent of record regarding all insurers
3117 requesting to take out the policy. The notice must be in a
3118 format prescribed by the corporation and include, for each take -
3119 out offer:
3120 a. The amount of the estimated premium;
3121 b. A description of the coverage; and
3122 c. A comparison of the estimated premium and coverage
3123 offered by the insurer to the estimated premium and coverage
3124 provided by the corporation.
3125 (jj) The corporation's budget allocations for the
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3126 compensation of all corporation employees and any proposed raise
3127 for an individual employee exceeding 10 percent of that
3128 employee's current salary must be approved by the board of
3129 governors. The corporation must have an overall employee
3130 compensation plan approved by the board of governors.
3131 (kk) A corporation policyholder making a claim for water
3132 damage against the corporation has the burden of proving that
3133 the damage was not caused by flooding.
3134 (ll) The corporation may share its claims data with the
3135 National Insurance Crime Bureau, provided that the National
3136 Insurance Crime Bureau agrees to maintain the confidentiality of
3137 such documents as otherwise provided for in paragraph (x).
3138 (mm)(ll)1. In addition to any other method of alternative
3139 dispute resolution authorized by state law, the corporation may
3140 adopt policy forms that provide for the resolution of disputes
3141 regarding its claim determinations, including disputes regarding
3142 coverage for, or the scope and value of, a claim, in a
3143 proceeding before the Division of Administrative Hearings. Any
3144 such policies are not subject to s. 627.70154. All proceedings
3145 in the Division of Administrative Hearings pursuant to such
3146 policies are subject to ss. 57.105 and 768.79 as if filed in the
3147 courts of this state and are not considered chapter 120
3148 administrative proceedings. Rule 1.442, Florida Rules of Civil
3149 Procedure, applies to any offer served pursuant to s. 768.79,
3150 except that, notwithstanding any provision in Rule 1.442,
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3151 Florida Rules of Civil Procedure, to the contrary, an offer
3152 shall not be served earlier than 10 days after filing the
3153 request for hearing with the Division of Administrative Hearings
3154 and shall not be served later than 10 days before the date set
3155 for the final hearing. The administrative law judge in such
3156 proceedings shall award attorney fees and other relief pursuant
3157 to ss. 57.105 and 768.79. The corporation may not seek, and the
3158 office may not approve, a maximum hourly rate for attorney fees.
3159 2. The corporation may contract with the division to
3160 conduct proceedings to resolve disputes regarding its claim
3161 determinations as may be provided for in the applicable policies
3162 of insurance.
3163 (nn)(mm) The corporation may not determine that a risk is
3164 ineligible for coverage with the corporation solely because such
3165 risk has unrepaired damage caused by a covered loss that is the
3166 subject of a claim that has been filed with the Florida
3167 Insurance Guaranty Association. This paragraph applies to a risk
3168 until the earlier of 24 months after the date the Florida
3169 Insurance Guaranty Association began servicing such claim or the
3170 Florida Insurance Guaranty Association closes the claim.
3171 (7) PATENTS, COPYRIGHTS, OR TRADEMARKS.—Notwithstanding
3172 any other provision of law to the contrary, the corporation may,
3173 in its own name:
3174 (a) Perform all things necessary to secure letters of
3175 patent, copyrights, or trademarks on any work products and
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3176 enforce its rights therein.
3177 (b) License, lease, assign, or otherwise give written
3178 consent to any person, firm, or other corporation for the
3179 manufacture or use of patents, copyrights, or trademarks on any
3180 work products and rights therein on a royalty basis or for such
3181 other consideration as the corporation deems proper.
3182 (c) Take any action necessary, including legal action, to
3183 protect the manufacture or use of patents, copyrights, or
3184 trademarks on any work products and rights therein against
3185 improper or unlawful use or infringement.
3186 (d) Enforce the collection of any sums due the corporation
3187 for the manufacture or use of patents, copyrights, or trademarks
3188 on any work products and rights therein by any other party.
3189 (e) Sell any of the manufacture or use of patents,
3190 copyrights, or trademarks on any work products and rights
3191 therein and execute all instruments necessary to consummate any
3192 such sale.
3193 (f) Do all other acts necessary and proper for the
3194 execution of powers and duties conferred upon the corporation in
3195 order to administer this subsection.
3196 Section 2. Effective upon becoming a law, paragraph (aa)
3197 of subsection (6) of section 627.351, Florida Statutes, is
3198 amended to read:
3199 627.351 Insurance risk apportionment plans.—
3200 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
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3201 (aa) Except as otherwise provided in this paragraph, the
3202 corporation shall require the securing and maintaining of flood
3203 insurance as a condition of coverage of a personal lines
3204 residential risk. The insured or applicant must execute a form
3205 approved by the office affirming that flood insurance is not
3206 provided by the corporation and that if flood insurance is not
3207 secured by the applicant or insured from an insurer other than
3208 the corporation and in addition to coverage by the corporation,
3209 the risk will not be eligible for coverage by the corporation.
3210 The corporation may deny coverage of a personal lines
3211 residential risk to an applicant or insured who refuses to
3212 secure and maintain flood insurance. The requirement to purchase
3213 flood insurance shall be implemented as follows:
3214 1. Except as provided in subparagraphs 2. and 3., all
3215 personal lines residential policyholders must have flood
3216 coverage in place for policies effective on or after:
3217 a. January 1, 2024, for a structure that has a dwelling
3218 replacement cost of $600,000 or more.
3219 b. January 1, 2025, for a structure that has a dwelling
3220 replacement cost of $500,000 or more.
3221 c. January 1, 2026, for a structure that has a dwelling
3222 replacement cost of $400,000 or more.
3223 d. January 1, 2027, for all other personal lines
3224 residential property insured by the corporation.
3225 2. All personal lines residential policyholders whose
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3226 property insured by the corporation is located within the
3227 special flood hazard area defined by the Federal Emergency
3228 Management Agency must have flood coverage in place:
3229 a. At the time of initial policy issuance for all new
3230 personal lines residential policies issued by the corporation on
3231 or after April 1, 2023.
3232 b. By the time of the policy renewal for all personal
3233 lines residential policies renewing on or after July 1, 2023.
3234 3. Policyholders are not required to purchase flood
3235 insurance as a condition for maintaining the following policies
3236 issued by the corporation:
3237 a. Policies that do not provide coverage for the peril of
3238 wind.
3239 b. Policies that provide coverage under a condominium unit
3240 owners form.
3241
3242 The flood insurance required under this paragraph must meet, at
3243 a minimum, the dwelling coverage available from the National
3244 Flood Insurance Program or the requirements of subparagraphs s.
3245 627.715(1)(a)1., 2., and 3.
3246 Section 3. Subsections (3) and (5) and paragraphs (d),
3247 (e), and (f) of subsection (6) of section 627.3511, Florida
3248 Statutes, are amended to read:
3249 627.3511 Depopulation of Citizens Property Insurance
3250 Corporation.—
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3251 (3) EXEMPTION FROM DEFICIT ASSESSMENTS.—
3252 (a) The calculation of an insurer's assessment liability
3253 under s. 627.351(6)(b)3.a. shall, for an insurer that in any
3254 calendar year removes 50,000 or more risks from the Citizens
3255 Property Insurance Corporation, either by issuance of a policy
3256 upon expiration or cancellation of the corporation policy or by
3257 assumption of the corporation's obligations with respect to in-
3258 force policies, exclude such removed policies for the succeeding
3259 3 years, as follows:
3260 1. In the first year following removal of the risks, the
3261 risks are excluded from the calculation to the extent of 100
3262 percent.
3263 2. In the second year following removal of the risks, the
3264 risks are excluded from the calculation to the extent of 75
3265 percent.
3266 3. In the third year following removal of the risks, the
3267 risks are excluded from the calculation to the extent of 50
3268 percent.
3269
3270 If the removal of risks is accomplished through assumption of
3271 obligations with respect to in-force policies, the corporation
3272 shall pay to the assuming insurer all unearned premium with
3273 respect to such policies less any policy acquisition costs
3274 agreed to by the corporation and assuming insurer. The term
3275 "policy acquisition costs" is defined as costs of issuance of
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3276 the policy by the corporation which includes agent commissions,
3277 servicing company fees, and premium tax. This paragraph does not
3278 apply to an insurer that, at any time within 5 years before
3279 removing the risks, had a market share in excess of 0.1 percent
3280 of the statewide aggregate gross direct written premium for any
3281 line of property insurance, or to an affiliate of such an
3282 insurer. This paragraph does not apply unless either at least 40
3283 percent of the risks removed from the corporation are located in
3284 Miami-Dade, Broward, and Palm Beach Counties, or at least 30
3285 percent of the risks removed from the corporation are located in
3286 such counties and an additional 50 percent of the risks removed
3287 from the corporation are located in other coastal counties.
3288 (b) An insurer that first wrote personal lines residential
3289 property coverage in this state on or after July 1, 1994, is
3290 exempt from regular deficit assessments imposed pursuant to s.
3291 627.351(6)(b)3.a., but not emergency assessments collected from
3292 policyholders pursuant to s. 627.351(6)(b)3.e., of the Citizens
3293 Property Insurance Corporation until the earlier of the
3294 following:
3295 1. The end of the calendar year in which it first wrote
3296 0.5 percent or more of the statewide aggregate direct written
3297 premium for any line of residential property coverage; or
3298 2. December 31, 1997, or December 31 of the third year in
3299 which it wrote such coverage in this state, whichever is later.
3300 (c) Other than an insurer that is exempt under paragraph
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3301 (b), an insurer that in any calendar year increases its total
3302 structure exposure subject to wind coverage by 25 percent or
3303 more over its exposure for the preceding calendar year is, with
3304 respect to that year, exempt from deficit assessments imposed
3305 pursuant to s. 627.351(6)(b)3.a., but not emergency assessments
3306 collected from policyholders pursuant to s. 627.351(6)(b)3.e.,
3307 of the Citizens Property Insurance Corporation attributable to
3308 such increase in exposure.
3309 (d) Any exemption or credit from regular assessments
3310 authorized by this section shall last no longer than 3 years
3311 following the cancellation or expiration of the policy by the
3312 corporation. With the approval of the office, the board may
3313 extend such credits for an additional year if the insurer
3314 guarantees an additional year of renewability for all policies
3315 removed from the corporation, or for 2 additional years if the
3316 insurer guarantees 2 additional years of renewability for all
3317 policies so removed.
3318 (5) APPLICABILITY.—
3319 (a) The take-out bonus provided by subsection (2) applies
3320 and the exemption from assessment provided by paragraph (3 )(a)
3321 apply only if the corporation policy is replaced by a standard
3322 policy including wind coverage or, if consistent with the
3323 insurer's underwriting rules filed with the office, a basic
3324 policy including wind coverage; however, for risks located in
3325 areas where coverage through the coastal account of the
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3326 corporation is available, the replacement policy need not
3327 provide wind coverage. The insurer must renew the replacement
3328 policy at approved rates on substantially similar terms for four
3329 additional 1-year terms, unless canceled or not renewed by the
3330 policyholder. If an insurer assumes the corporation's
3331 obligations for a policy, it must issue a replacement policy for
3332 a 1-year term upon expiration of the corporation policy and must
3333 renew the replacement policy at approved rates on substantially
3334 similar terms for four additional 1-year terms, unless canceled
3335 or not renewed by the policyholder. For each replacement policy
3336 canceled or nonrenewed by the insurer for any reason during the
3337 5-year coverage period, the insurer must remove from the
3338 corporation one additional policy covering a risk similar to the
3339 risk covered by the canceled or nonrenewed policy. In addition,
3340 the corporation must place the bonus moneys in escrow for 5
3341 years; such moneys may be released from escrow only to pay
3342 claims. If the policy is canceled or nonrenewed before the end
3343 of the 5-year period, the amount of the take-out bonus must be
3344 prorated for the time period the policy was insured. A take-out
3345 bonus provided by subsection (2) or subsection (6) is not
3346 premium income for purposes of taxes and assessments under the
3347 Florida Insurance Code and remains the property of the
3348 corporation, subject to the prior security interest of the
3349 insurer under the escrow agreement until it is released from
3350 escrow; after it is released from escrow it is considered an
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3351 asset of the insurer and credited to the insurer's capital and
3352 surplus.
3353 (b) It is the intent of the Legislature that an insurer
3354 eligible for the exemption under paragraph (3)(a) establish a
3355 preference in appointment of agents for those agents who lose a
3356 substantial amount of business as a result of risks being
3357 removed from the corporation.
3358 (6) COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.—
3359 (d) The calculation of an insurer's regular assessment
3360 liability under s. 627.351(6)(b)3.a., but not emergency
3361 assessments collected from policyholders pursuant to s.
3362 627.351(6)(b)3.e., shall, with respect to commercial residential
3363 policies removed from the corporation under an approved take -out
3364 plan, exclude such removed policies for the succeeding 3 years,
3365 as follows:
3366 1. In the first year following removal of the policies,
3367 the policies are excluded from the calculation to the extent of
3368 100 percent.
3369 2. In the second year following removal of the policies,
3370 the policies are excluded from the calculation to the extent of
3371 75 percent.
3372 3. In the third year following removal of the policies,
3373 the policies are excluded from the calculation to the extent of
3374 50 percent.
3375 (e) An insurer that first wrote commercial residential
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3376 property coverage in this state on or after June 1, 1996, is
3377 exempt from regular assessments under s. 627.351(6)(b)3.a., but
3378 not emergency assessments collected from policyholders pursuant
3379 to s. 627.351(6)(b)3.e., with respect to commercial residential
3380 policies until the earlier of:
3381 1. The end of the calendar year in which such insurer
3382 first wrote 0.5 percent or more of the statewide aggregate
3383 direct written premium for commercial residential property
3384 coverage; or
3385 2. December 31 of the third year in which such insurer
3386 wrote commercial residential property coverage in this state.
3387 (f) An insurer that is not otherwise exempt from regular
3388 assessments under s. 627.351(6)(b)3.a. with respect to
3389 commercial residential policies is, for any calendar year in
3390 which such insurer increased its total commercial residential
3391 hurricane exposure by 25 percent or more over its exposure for
3392 the preceding calendar year, exempt from regular assessments
3393 under s. 627.351(6)(b)3.a., but not emergency assessments
3394 collected from policyholders pursuant to s. 627.351(6)(b)3.e.,
3395 attributable to such increased exposure.
3396 Section 4. Subsections (5), (6), and (7) of section
3397 627.3518, Florida Statutes, are amended to read:
3398 627.3518 Citizens Property Insurance Corporation
3399 policyholder eligibility clearinghouse program.—The purpose of
3400 this section is to provide a framework for the corporation to
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3401 implement a clearinghouse program by January 1, 2014.
3402 (5) Notwithstanding s. 627.3517, any applicant for new
3403 coverage from the corporation is not eligible for coverage from
3404 the corporation if provided an offer of coverage from an
3405 authorized insurer through the program at a premium that is at
3406 or below the eligibility threshold for applicants for new
3407 coverage established in s. 627.351(6)(c)5.a. An applicant for
3408 new coverage from the corporation on a risk that is not a
3409 primary residence is not eligible for coverage from the
3410 corporation if provided an offer of coverage from an authorized
3411 insurer through the program if such offer would render the risk
3412 ineligible pursuant to s. 627.351(6)(c)5.d. Whenever an offer of
3413 coverage for a personal lines risk that is a primary residence
3414 is received for a policyholder of the corporation at renewal
3415 from an authorized insurer through the program which is at or
3416 below the eligibility threshold for policyholders of the
3417 corporation established in s. 627.351(6)(c)5.a., the risk is not
3418 eligible for coverage with the corporation. Whenever an offer of
3419 coverage for a personal lines risk that is not a primary
3420 residence is received for a policyholder of the corporation at
3421 renewal from an authorized insurer through the program, the risk
3422 is not eligible for coverage with the corporation if such offer
3423 would render the risk ineligible pursuant to s.
3424 627.351(6)(c)5.d. In the event an offer of coverage on a primary
3425 residence for a new applicant is received from an authorized
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3426 insurer through the program, and the premium offered exceeds the
3427 eligibility threshold for applicants for new coverage
3428 established in s. 627.351(6)(c)5.a., the applicant or insured
3429 may elect to accept such coverage, or may elect to accept or
3430 continue coverage with the corporation. In the event an offer of
3431 coverage for a personal lines risk that is a primary residence
3432 is received from an authorized insurer at renewal through the
3433 program, and the premium offered exceeds the eligibility
3434 threshold for policyholders of the corporation established in s.
3435 627.351(6)(c)5.a., the insured may elect to accept such
3436 coverage, or may elect to accept or continue coverage with the
3437 corporation. Section 627.351(6)(c)5.a.(I) does not apply to an
3438 offer of coverage from an authorized insurer obtained through
3439 the program. As used in this subsection, the term "primary
3440 residence" has the same meaning as in s. 627.351(6)(c)2.a.
3441 (6) Independent insurance agents submitting new
3442 applications for coverage or that are the agent of record on a
3443 renewal policy submitted to the program:
3444 (a) Are granted and must maintain ownership and the
3445 exclusive use of expirations, records, or other written or
3446 electronic information directly related to such applications or
3447 renewals written through the corporation or through an insurer
3448 participating in the program, notwithstanding s.
3449 627.351(6)(c)5.a.(I)(B) and (II)(B) or s.
3450 627.351(6)(c)5.d.(I)(B) and (II)(B). Such ownership is granted
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3451 for as long as the insured remains with the agency or until sold
3452 or surrendered in writing by the agent. Contracts with the
3453 corporation or required by the corporation must not amend,
3454 modify, interfere with, or limit such rights of ownership. Such
3455 expirations, records, or other written or electronic information
3456 may be used to review an application, issue a policy, or for any
3457 other purpose necessary for placing such business through the
3458 program.
3459 (b) May not be required to be appointed by any insurer
3460 participating in the program for policies written solely through
3461 the program, notwithstanding the provisions of s. 626.112.
3462 (c) May accept an appointment from any insurer
3463 participating in the program.
3464 (d) May enter into either a standard or limited agency
3465 agreement with the insurer, at the insurer's option.
3466
3467 Applicants ineligible for coverage in accordance with subsection
3468 (5) remain ineligible if their independent agent is unwilling or
3469 unable, to enter into a standard or limited agency agreement
3470 with an insurer participating in the program.
3471 (7) Exclusive agents submitting new applications for
3472 coverage or that are the agent of record on a renewal policy
3473 submitted to the program:
3474 (a) Must maintain ownership and the exclusive use of
3475 expirations, records, or other written or electronic information
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3476 directly related to such applications or renewals written
3477 through the corporation or through an insurer participating in
3478 the program, notwithstanding s. 627.351(6)(c)5.a.(I)(B) and
3479 (II)(B) or s. 627.351(6)(c)5.d.(I)(B) and (II)(B). Contracts
3480 with the corporation or required by the corporation must not
3481 amend, modify, interfere with, or limit such rights of
3482 ownership. Such expirations, records, or other written or
3483 electronic information may be used to review an application,
3484 issue a policy, or for any other purpose necessary for placing
3485 such business through the program.
3486 (b) May not be required to be appointed by any insurer
3487 participating in the program for policies written solely through
3488 the program, notwithstanding the provisions of s. 626.112.
3489 (c) Must only facilitate the placement of an offer of
3490 coverage from an insurer whose limited servicing agreement is
3491 approved by that exclusive agent's exclusive insurer.
3492 (d) May enter into a limited servicing agreement with the
3493 insurer making an offer of coverage, and only after the
3494 exclusive agent's insurer has approved the limited servicing
3495 agreement terms. The exclusive agent's insurer must approve a
3496 limited service agreement for the program for any insurer for
3497 which it has approved a service agreement for other purposes.
3498
3499 Applicants ineligible for coverage in accordance with subsection
3500 (5) remain ineligible if their exclusive agent is unwilling or
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3501 unable to enter into a standard or limited agency agreement with
3502 an insurer making an offer of coverage to that applicant.
3503 Section 5. Except as otherwise expressly provided in this
3504 act and except for this section, which shall take effect upon
3505 this act becoming a law, this act shall take effect July 1,
3506 2024.
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