Bill Text: FL H0447 | 2010 | Regular Session | Engrossed

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Bill Title: Property Insurance

Spectrum: Strong Partisan Bill (Republican 37-3)

Status: (Introduced - Dead) 2010-04-30 - Died on Calendar, companion bill(s) passed, see CS/CS/CS/CS/HB 663 (Ch. 2010-176), HB 7217 (Ch. 2010-141) [H0447 Detail]

Download: Florida-2010-H0447-Engrossed.html

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CS/CS/HB 447

1	A bill to be entitled
2	An act relating to property insurance; amending s.
3	215.555, F.S.; extending a repeal date for an exemption of
4	medical malpractice insurance premiums from emergency
5	assessments; amending s. 624.407, F.S.; specifying an
6	additional surplus requirement for certain domestic
7	insurers; amending s. 624.408, F.S.; specifying an
8	additional surplus requirement for certain domestic
9	insurers; deleting obsolete surplus requirement
10	provisions; amending s. 626.7452, F.S.; deleting an
11	exception to a provision allowing examination of a
12	managing general agent; amending s. 627.0613, F.S.;
13	revising annual reporting requirements for the consumer
14	advocate; providing a definition; amending s. 627.062,
15	F.S.; requiring that the Office of Insurance Regulation
16	issue an approval rather than a notice of intent to
17	approve following its approval of a file and use filing;
18	prohibiting the office from, directly or indirectly,
19	prohibiting an insurer from paying acquisition costs based
20	on the full amount of the premium; prohibiting the office
21	from, directly or indirectly, impeding or compromising the
22	right of an insurer to acquire policyholders, advertise or
23	appoint agents, or regulate agent commissions; requiring
24	the office to publish an annual information memorandum
25	establishing certain inflation trend factors for certain
26	purposes; specifying factor criteria; authorizing an
27	insurer to make a rate filing limited to changes in the
28	cost of reinsurance, the costs of financing products used
29	as a replacement for reinsurance, or changes in an
30	inflation trend factor published annually by the office;
31	authorizing certain insurers to use a rate different from
32	otherwise applicable filed rates; requiring such rates to
33	be filed with the office as a separate filing; providing
34	requirements and limitations for such separate filings;
35	prohibiting the consideration of certain policies when
36	making a specified calculation; preserving the authority
37	of the office to disapprove rates as inadequate or
38	disapprove a rate filing for using certain rating factors;
39	authorizing the office to direct an insurer to make a
40	specified type of rate filing under certain circumstances;
41	providing construction relating to certifications;
42	prohibiting the requirement of a new certification upon an
43	insurer providing certain additional information;
44	specifying nonapplication to certain filings; amending s.
45	627.0621, F.S.; revising provisions relating to
46	transparency in rate regulation; amending s. 627.0629,
47	F.S.; revising legislative intent relating to residential
48	property insurance rate filings; deleting a requirement
49	that the office develop and make available a method for
50	insurers to establish discounts, credits, or rate
51	differentials for certain hurricane mitigation measures;
52	revising restrictions relating to including the cost of
53	reinsurance for certain purposes; requiring the office to
54	contract with a private entity to develop a comprehensive
55	consumer information program; specifying program criteria;
56	requiring the office to conduct a cost benefit analysis on
57	a program implementation plan; requiring review and
58	approval by the Financial Services Commission; amending s.
59	627.351, F.S.; providing requirements for attachment and
60	payment of the Citizens policyholder surcharge;
61	prohibiting the corporation from levying certain regular
62	assessments until after levying the full amount of a
63	Citizens policyholder surcharge; providing that certain
64	members of Citizens Property Insurance Corporation's board
65	of governors are within the scope of an exemption from
66	certain conflict of interest provisions for public
67	officers; requiring the corporation's plan of operation to
68	require agents to obtain an acknowledgement of potential
69	surcharge and assessment liability from applicants and
70	policyholders; requiring the corporation to permanently
71	retain a copy of such acknowledgments; specifying that the
72	acknowledgement creates a conclusive presumption of
73	understanding and acceptance by the policyholder;
74	prohibiting votes on certain measures by board members;
75	specifying vote criteria; providing disclosure
76	requirements; deleting an obsolete legislative intent
77	provision; requiring the Division of Statutory Revision to
78	prepare a reviser's bill for the next regular session of
79	the Legislature to revise certain terminology; amending s.
80	627.4133, F.S.; authorizing an insurer to cancel or
81	nonrenew property insurance policies under certain
82	circumstances; specifying duties of the office; requiring
83	certain notice; creating s. 627.41341, F.S.; specifying
84	requirements for a notice of change in policy terms;
85	providing definitions; authorizing policy renewals to
86	contain a change in policy terms; specifying notice
87	requirements; providing procedural requirements; providing
88	intent; amending s. 627.7011, F.S.; revising requirements
89	and procedures under homeowners' insurance policies for
90	replacement cost coverage of a dwelling and personal
91	property; providing criteria for initial and subsequent
92	replacement cost payments by an insurer; deleting obsolete
93	time references; amending s. 627.70131, F.S.; specifying
94	application of certain time periods to initial or
95	supplemental property insurance claim notices and
96	payments; creating s. 627.7031, F.S.; authorizing certain
97	insurers to offer or renew policies at rates established
98	under certain circumstances; prohibiting certain insurers
99	from purchasing TICL option coverage from the Florida
100	Hurricane Catastrophe Fund under certain circumstances;
101	requiring that certain policies contain a specified rate
102	notice; requiring insurers to offer applicants or insureds
103	an estimate of the premium for a policy from Citizens
104	Property Insurance Corporation reflecting similar
105	coverage, limits, and deductibles; requiring applicants or
106	insureds to provide a signed premium comparison
107	acknowledgement; specifying criteria for insurer
108	compliance with certain requirements; specifying
109	acknowledgement contents; requiring insurers and agents to
110	retain a copy of the acknowledgement for a specified time;
111	specifying a presumption created by a signed
112	acknowledgement; specifying types of residential property
113	insurance policies that are not eligible for certain rates
114	or subject to other requirements; requiring written notice
115	of certain nonrenewals; preserving insurer authority to
116	cancel policies; specifying a criterion for what
117	constitutes an offer to renew a policy; amending s.
118	627.707, F.S.; revising standards for investigation of
119	sinkhole claims by insurers; specifying requirements for
120	contracts for repairs to prevent additional damage to
121	buildings or structures; providing application; amending
122	s. 627.7072, F.S.; specifying requirements for tests
123	performed by professional engineers and professional
124	geologists for certain purposes; providing application;
125	amending s. 627.7073, F.S.; revising requirements for
126	sinkhole reports; providing application; amending s.
127	627.7074, F.S.; revising requirements and procedures for
128	an alternative procedure for resolution of disputed
129	sinkhole insurance claims; providing a definition;
130	providing criteria and procedures for disqualification of
131	neutral evaluators; providing requirements and procedures
132	for neutral evaluators to enlist assistance from other
133	professionals under certain circumstances; providing
134	application; amending s. 627.711, F.S.; deleting a
135	provision for a uniform mitigation verification form to be
136	certified by the Department of Financial Services;
137	revising persons authorized to sign a uniform mitigation
138	verification form; authorizing an insurer to accept a
139	mitigation verification form from certain other persons;
140	providing personal inspection requirements; prohibiting
141	misconduct in performing hurricane mitigation inspections
142	or completing mitigation verification forms; specifying
143	criteria for misconduct; authorizing certain licensing
144	boards to commence disciplinary proceedings and impose
145	administrative fines and sanctions for certain violations;
146	requiring insurers, persons, or other entities obtaining
147	evidence of fraud or making false statements to report to
148	the Division of Insurance Fraud; specifying immunity from
149	liability for making such a report; providing duties and
150	responsibilities of the division; specifying a required
151	notice for insurance policies issued or renewed in this
152	state; providing notice requirements; repealing s.
153	627.7065, F.S., relating to database of information
154	relating to sinkholes, the Department of Financial
155	Services, and the Department of Environmental Protection;
156	providing effective dates.
157
158	Be It Enacted by the Legislature of the State of Florida:
159
160	Section 1. Paragraph (b) of subsection (6) of section
161	215.555, Florida Statutes, is amended to read:
162	215.555 Florida Hurricane Catastrophe Fund.-
163	(6) REVENUE BONDS.-
164	(b) Emergency assessments.-
165	1. If the board determines that the amount of revenue
166	produced under subsection (5) is insufficient to fund the
167	obligations, costs, and expenses of the fund and the
168	corporation, including repayment of revenue bonds and that
169	portion of the debt service coverage not met by reimbursement
170	premiums, the board shall direct the Office of Insurance
171	Regulation to levy, by order, an emergency assessment on direct
172	premiums for all property and casualty lines of business in this
173	state, including property and casualty business of surplus lines
174	insurers regulated under part VIII of chapter 626, but not
175	including any workers' compensation premiums or medical
176	malpractice premiums. As used in this subsection, the term
177	"property and casualty business" includes all lines of business
178	identified on Form 2, Exhibit of Premiums and Losses, in the
179	annual statement required of authorized insurers by s. 624.424
180	and any rule adopted under this section, except for those lines
181	identified as accident and health insurance and except for
182	policies written under the National Flood Insurance Program. The
183	assessment shall be specified as a percentage of direct written
184	premium and is subject to annual adjustments by the board in
185	order to meet debt obligations. The same percentage shall apply
186	to all policies in lines of business subject to the assessment
187	issued or renewed during the 12-month period beginning on the
188	effective date of the assessment.
189	2. A premium is not subject to an annual assessment under
190	this paragraph in excess of 6 percent of premium with respect to
191	obligations arising out of losses attributable to any one
192	contract year, and a premium is not subject to an aggregate
193	annual assessment under this paragraph in excess of 10 percent
194	of premium. An annual assessment under this paragraph shall
195	continue as long as the revenue bonds issued with respect to
196	which the assessment was imposed are outstanding, including any
197	bonds the proceeds of which were used to refund the revenue
198	bonds, unless adequate provision has been made for the payment
199	of the bonds under the documents authorizing issuance of the
200	bonds.
201	3. Emergency assessments shall be collected from
202	policyholders. Emergency assessments shall be remitted by
203	insurers as a percentage of direct written premium for the
204	preceding calendar quarter as specified in the order from the
205	Office of Insurance Regulation. The office shall verify the
206	accurate and timely collection and remittance of emergency
207	assessments and shall report the information to the board in a
208	form and at a time specified by the board. Each insurer
209	collecting assessments shall provide the information with
210	respect to premiums and collections as may be required by the
211	office to enable the office to monitor and verify compliance
212	with this paragraph.
213	4. With respect to assessments of surplus lines premiums,
214	each surplus lines agent shall collect the assessment at the
215	same time as the agent collects the surplus lines tax required
216	by s. 626.932, and the surplus lines agent shall remit the
217	assessment to the Florida Surplus Lines Service Office created
218	by s. 626.921 at the same time as the agent remits the surplus
219	lines tax to the Florida Surplus Lines Service Office. The
220	emergency assessment on each insured procuring coverage and
221	filing under s. 626.938 shall be remitted by the insured to the
222	Florida Surplus Lines Service Office at the time the insured
223	pays the surplus lines tax to the Florida Surplus Lines Service
224	Office. The Florida Surplus Lines Service Office shall remit the
225	collected assessments to the fund or corporation as provided in
226	the order levied by the Office of Insurance Regulation. The
227	Florida Surplus Lines Service Office shall verify the proper
228	application of such emergency assessments and shall assist the
229	board in ensuring the accurate and timely collection and
230	remittance of assessments as required by the board. The Florida
231	Surplus Lines Service Office shall annually calculate the
232	aggregate written premium on property and casualty business,
233	other than workers' compensation and medical malpractice,
234	procured through surplus lines agents and insureds procuring
235	coverage and filing under s. 626.938 and shall report the
236	information to the board in a form and at a time specified by
237	the board.
238	5. Any assessment authority not used for a particular
239	contract year may be used for a subsequent contract year. If,
240	for a subsequent contract year, the board determines that the
241	amount of revenue produced under subsection (5) is insufficient
242	to fund the obligations, costs, and expenses of the fund and the
243	corporation, including repayment of revenue bonds and that
244	portion of the debt service coverage not met by reimbursement
245	premiums, the board shall direct the Office of Insurance
246	Regulation to levy an emergency assessment up to an amount not
247	exceeding the amount of unused assessment authority from a
248	previous contract year or years, plus an additional 4 percent
249	provided that the assessments in the aggregate do not exceed the
250	limits specified in subparagraph 2.
251	6. The assessments otherwise payable to the corporation
252	under this paragraph shall be paid to the fund unless and until
253	the Office of Insurance Regulation and the Florida Surplus Lines
254	Service Office have received from the corporation and the fund a
255	notice, which shall be conclusive and upon which they may rely
256	without further inquiry, that the corporation has issued bonds
257	and the fund has no agreements in effect with local governments
258	under paragraph (c). On or after the date of the notice and
259	until the date the corporation has no bonds outstanding, the
260	fund shall have no right, title, or interest in or to the
261	assessments, except as provided in the fund's agreement with the
262	corporation.
263	7. Emergency assessments are not premium and are not
264	subject to the premium tax, to the surplus lines tax, to any
265	fees, or to any commissions. An insurer is liable for all
266	assessments that it collects and must treat the failure of an
267	insured to pay an assessment as a failure to pay the premium. An
268	insurer is not liable for uncollectible assessments.
269	8. When an insurer is required to return an unearned
270	premium, it shall also return any collected assessment
271	attributable to the unearned premium. A credit adjustment to the
272	collected assessment may be made by the insurer with regard to
273	future remittances that are payable to the fund or corporation,
274	but the insurer is not entitled to a refund.
275	9. When a surplus lines insured or an insured who has
276	procured coverage and filed under s. 626.938 is entitled to the
277	return of an unearned premium, the Florida Surplus Lines Service
278	Office shall provide a credit or refund to the agent or such
279	insured for the collected assessment attributable to the
280	unearned premium prior to remitting the emergency assessment
281	collected to the fund or corporation.
282	10. The exemption of medical malpractice insurance
283	premiums from emergency assessments under this paragraph is
284	repealed May 31, 2013 2010, and medical malpractice insurance
285	premiums shall be subject to emergency assessments attributable
286	to loss events occurring in the contract years commencing on
287	June 1, 2013 2010.
288	Section 2. Subsection (1) of section 624.407, Florida
289	Statutes, is amended to read:
290	624.407 Capital funds required; new insurers.-
291	(1) To receive authority to transact any one kind or
292	combinations of kinds of insurance, as defined in part V of this
293	chapter, an insurer applying for its original certificate of
294	authority in this state after the effective date of this section
295	shall possess surplus as to policyholders not less than the
296	greater of:
297	(a) Except as otherwise provided in this subsection, $5
298	five million dollars for a property and casualty insurer, or
299	$2.5 million for any other insurer;
300	(b) For life insurers, 4 percent of the insurer's total
301	liabilities;
302	(c) For life and health insurers, 4 percent of the
303	insurer's total liabilities, plus 6 percent of the insurer's
304	liabilities relative to health insurance; or
305	(d) For all insurers other than life insurers and life and
306	health insurers, 10 percent of the insurer's total liabilities;
307	or
308	(e) For a domestic insurer initially licensed on or after
309	July 1, 2010, that transacts residential property insurance and
310	is not a wholly owned subsidiary of an insurer domiciled in any
311	other state, $15 million; however, this paragraph does not apply
312	to a domestic insurer that is a subsidiary or affiliate of a
313	domestic property insurer that was licensed before July 1, 2010;
314
315	however, a domestic insurer that transacts residential property
316	insurance and is a wholly owned subsidiary of an insurer
317	domiciled in any other state shall possess surplus as to
318	policyholders of at least $50 million, but no insurer shall be
319	required under this subsection to have surplus as to
320	policyholders greater than $100 million.
321	Section 3. Subsection (1) of section 624.408, Florida
322	Statutes, is amended to read:
323	624.408 Surplus as to policyholders required; new and
324	existing insurers.-
325	(1)(a) To maintain a certificate of authority to transact
326	any one kind or combinations of kinds of insurance, as defined
327	in part V of this chapter, an insurer in this state shall at all
328	times maintain surplus as to policyholders not less than the
329	greater of:
330	(a)1. Except as provided in paragraphs (e) and (f)
331	subparagraph 5. and paragraph (b), $1.5 million;
332	(b)2. For life insurers, 4 percent of the insurer's total
333	liabilities;
334	(c)3. For life and health insurers, 4 percent of the
335	insurer's total liabilities plus 6 percent of the insurer's
336	liabilities relative to health insurance; or
337	(d)4. For all insurers other than mortgage guaranty
338	insurers, life insurers, and life and health insurers, 10
339	percent of the insurer's total liabilities;.
340	(e)5. Except as provided in paragraph (f), for property
341	and casualty insurers, $4 million; or.
342	(f) For a domestic insurer initially licensed on or after
343	July 1, 2010, that transacts residential property insurance and
344	is not a wholly owned subsidiary of an insurer domiciled in any
345	other state, $12 million; however, this paragraph does not apply
346	to a domestic insurer that is a subsidiary or affiliate of a
347	domestic property insurer that was licensed before July 1, 2010.
348	(b) For any property and casualty insurer holding a
349	certificate of authority on December 1, 1993, the following
350	amounts apply instead of the $4 million required by subparagraph
351	(a)5.:
352	1. On December 31, 2001, and until December 30, 2002, $3
353	million.
354	2. On December 31, 2002, and until December 30, 2003,
355	$3.25 million.
356	3. On December 31, 2003, and until December 30, 2004, $3.6
357	million.
358	4. On December 31, 2004, and thereafter, $4 million.
359	Section 4. Section 626.7452, Florida Statutes, is amended
360	to read:
361	626.7452 Managing general agents; examination authority.-
362	The acts of the managing general agent are considered to be the
363	acts of the insurer on whose behalf it is acting. A managing
364	general agent may be examined as if it were the insurer except
365	in the case where the managing general agent solely represents a
366	single domestic insurer.
367	Section 5. Subsection (4) of section 627.0613, Florida
368	Statutes, is amended to read:
369	627.0613 Consumer advocate.-The Chief Financial Officer
370	must appoint a consumer advocate who must represent the general
371	public of the state before the department and the office. The
372	consumer advocate must report directly to the Chief Financial
373	Officer, but is not otherwise under the authority of the
374	department or of any employee of the department. The consumer
375	advocate has such powers as are necessary to carry out the
376	duties of the office of consumer advocate, including, but not
377	limited to, the powers to:
378	(4)(a) By June 1, 2012, and each June 1 thereafter,
379	prepare an annual report card for each authorized personal
380	residential property insurer, on a form and using a letter-grade
381	scale developed by the commission by rule, which objectively
382	grades each insurer based on the following factors:
383	1.(a) The number and nature of valid consumer complaints,
384	as a market share ratio, received by the department against the
385	insurer.
386	2.(b) The disposition of all valid consumer complaints
387	received by the department.
388	3.(c) The average length of time for payment of claims by
389	the insurer.
390	4.(d) Any other measurable and objective factors the
391	commission identifies as capable of assisting policyholders in
392	making informed choices about homeowner's insurance.
393	(b) For purposes of this subsection, the term "valid
394	consumer complaint" means a written communication, or an oral
395	communication that is subsequently converted to a written form,
396	from a consumer that expresses dissatisfaction involving a
397	personal residential insurance policy with a specific personal
398	residential property insurer. However, a valid complaint will
399	not arise when in the disposition thereof by the department the
400	insurer or agent position is upheld, the policy provision is
401	upheld, the coverage is explained, additional information is
402	provided, the complaint is withdrawn, the complaint is referred
403	outside the department, or when an inquiry has missing or
404	insufficient information, is not within the jurisdiction of the
405	department, or requests mediation of a claim that is not
406	eligible for mediation.
407	Section 6. Paragraphs (a), (i), and (k) of subsection (2)
408	of section 627.062, Florida Statutes, are amended, paragraph (l)
409	is added to subsection (2), and paragraph (d) of subsection (9)
410	of that section is redesignated as paragraph (g) and new
411	paragraphs (d), (e), and (f) are added to that subsection, to
412	read:
413	627.062 Rate standards.-
414	(2) As to all such classes of insurance:
415	(a) Insurers or rating organizations shall establish and
416	use rates, rating schedules, or rating manuals to allow the
417	insurer a reasonable rate of return on such classes of insurance
418	written in this state. A copy of rates, rating schedules, rating
419	manuals, premium credits or discount schedules, and surcharge
420	schedules, and changes thereto, shall be filed with the office
421	under one of the following procedures except as provided in
422	subparagraph 3.:
423	1. If the filing is made at least 90 days before the
424	proposed effective date and the filing is not implemented during
425	the office's review of the filing and any proceeding and
426	judicial review, then such filing shall be considered a "file
427	and use" filing. In such case, the office shall finalize its
428	review by issuance of an approval a notice of intent to approve
429	or a notice of intent to disapprove within 90 days after receipt
430	of the filing. The approval notice of intent to approve and the
431	notice of intent to disapprove constitute agency action for
432	purposes of the Administrative Procedure Act. Requests for
433	supporting information, requests for mathematical or mechanical
434	corrections, or notification to the insurer by the office of its
435	preliminary findings shall not toll the 90-day period during any
436	such proceedings and subsequent judicial review. The rate shall
437	be deemed approved if the office does not issue an approval a
438	notice of intent to approve or a notice of intent to disapprove
439	within 90 days after receipt of the filing.
440	2. If the filing is not made in accordance with the
441	provisions of subparagraph 1., such filing shall be made as soon
442	as practicable, but no later than 30 days after the effective
443	date, and shall be considered a "use and file" filing. An
444	insurer making a "use and file" filing is potentially subject to
445	an order by the office to return to policyholders portions of
446	rates found to be excessive, as provided in paragraph (h).
447	3. For all property insurance filings made or submitted
448	after January 25, 2007, but before December 31, 2010, an insurer
449	seeking a rate that is greater than the rate most recently
450	approved by the office shall make a "file and use" filing. For
451	purposes of this subparagraph, motor vehicle collision and
452	comprehensive coverages are not considered to be property
453	coverages.
454	(i)1. Except as otherwise specifically provided in this
455	chapter, the office may shall not, directly or indirectly,
456	prohibit any insurer, including any residual market plan or
457	joint underwriting association, from paying acquisition costs
458	based on the full amount of premium, as defined in s. 627.403,
459	applicable to any policy, or prohibit, directly or indirectly,
460	any such insurer from including the full amount of acquisition
461	costs in a rate filing.
462	2. The office may not, directly or indirectly, impede,
463	abridge, or otherwise compromise an insurer's right to acquire
464	policyholders or advertise, or appoint agents, including, but
465	not limited to, the calculation, manner, or amount of such
466	agents' commissions, if any.
467	(k)1.a. An insurer may make a separate filing limited
468	solely to an adjustment of its rates for reinsurance, financing
469	products to replace insurance, or financing costs incurred in
470	the purchase of reinsurance and may include an adjustment of its
471	rates based upon an inflation trend factor as set forth in
472	subparagraph 4. If an insurer chooses to make a separate filing
473	under this paragraph, the insurer shall implement the rate in
474	such a manner that all previously approved rate increases
475	implemented as a result of a separate filing, together with the
476	rate increase under a filing made under this paragraph or
477	financing products to replace or finance the payment of the
478	amount covered by the Temporary Increase in Coverage Limits
479	(TICL) portion of the Florida Hurricane Catastrophe Fund
480	including replacement reinsurance for the TICL reductions made
481	pursuant to s. 215.555(17)(e); the actual cost paid due to the
482	application of the TICL premium factor pursuant to s.
483	215.555(17)(f); and the actual cost paid due to the application
484	of the cash build-up factor pursuant to s. 215.555(5)(b) if the
485	insurer:
486	a. Elects to purchase financing products such as a
487	liquidity instrument or line of credit, in which case the cost
488	included in the filing for the liquidity instrument or line of
489	credit may not result in a premium increase exceeding 3 percent
490	for any individual policyholder. All costs contained in the
491	filing may not result in an overall rate premium increase of
492	more than 10 percent for any individual policyholder, excluding
493	coverage changes and surcharges.
494	b. An insurer shall include Includes in the filing a copy
495	of all of its reinsurance, liquidity instrument, or line of
496	credit contracts; proof of the billing or payment for the
497	contracts; and the calculation upon which the proposed rate
498	change is based demonstrating demonstrates that the costs meet
499	the criteria of this section and are not loaded for expenses or
500	profit for the insurer making the filing.
501	c. Any such filing may not include Includes no other
502	changes to the insurer's its rates in the filing.
503	d. Has not implemented a rate increase within the 6 months
504	immediately preceding the filing.
505	e. Does not file for a rate increase under any other
506	paragraph within 6 months after making a filing under this
507	paragraph.
508	d.f. An insurer that purchases reinsurance or financing
509	products from an affiliate may make a filing under affiliated
510	company in compliance with this paragraph does so only if the
511	costs for such reinsurance or financing products are charged at
512	or below charges made for comparable coverage by nonaffiliated
513	reinsurers or financial entities making such coverage or
514	financing products available in this state.
515	2. An insurer may only make one filing in any 12-month
516	period under this paragraph.
517	3. An insurer that elects to implement a rate change under
518	this paragraph must file its rate filing with the office at
519	least 45 days before the effective date of the rate change.
520	After an insurer submits a complete filing that meets all of the
521	requirements of this paragraph, the office has 45 days after the
522	date of the filing to review the rate filing and determine if
523	the rate is excessive, inadequate, or unfairly discriminatory.
524	4. Beginning January 1, 2011, the office shall publish an
525	annual informational memorandum to establish one or more inflation
526	trend factors which may be stated separately for personal and
527	residential property and for building coverage, contents
528	coverage, additional living expense coverage, and liability
529	coverage, if applicable. Such factors shall represent an estimate
530	of cost increases or decreases based on publicly available relevant
531	data and economic indices that are identified in the memorandum
532	including, but not limited to, overall claim cost data. Such
533	factors are exempt from the rulemaking requirements of chapter 120
534	and insurers may not be required to adopt the factors. The office
535	may publish factors for any line, but is required to annually
536	publish a factor only for residential property insurance by March 1
537	of each year.
538	(l)1. On or after January 1, 2011, an insurer complying
539	with the requirements of s. 627.7031 may use a rate for
540	residential property insurance, as defined in s. 627.4025,
541	different from the otherwise applicable filed rate as provided
542	in this paragraph.
543	2. Policies subject to this paragraph may not be counted
544	in the calculation under s. 627.171(2).
545	3. Such rates shall be filed with the office as a separate
546	filing. The filing must be accompanied by an actuary's
547	certification stating that the filing was prepared in accordance
548	with current actuarial standards of practice adopted by the
549	Actuarial Standards Board and that the statewide average rate
550	change is within a range consistent with applicable actuarial
551	principles or, if the percentage limitations of this paragraph
552	do not allow for a rate within a range consistent with
553	applicable actuarial principles, is below such range. The
554	initial rates used by an insurer under this paragraph may not
555	provide for rates that represent more than a 10-percent
556	statewide average rate increase over the most recently filed and
557	approved rate. A rate filing under this paragraph submitted in
558	any year following the implementation of such initial rates may
559	not provide for rates that represent more than a 10-percent
560	statewide average rate increase in any single year over the
561	rates in effect under this paragraph at the time of the filing.
562	A rate filing under this paragraph may not provide for a
563	percentage rate increase as to any single policyholder that
564	exceeds two times the statewide average rate increase provided
565	in the filing.
566	4. This paragraph does not affect the authority of the
567	office to disapprove a rate as inadequate or to disapprove a
568	rate filing for charging any insured or applicant a higher
569	premium solely because of the insured's or applicant's race,
570	color, creed, marital status, sex, or national origin. Upon
571	finding that an insurer has used any such factor in charging an
572	insured or applicant a higher premium, the office may direct the
573	insurer to make a new filing for a new rate that does not use
574	such factor.
575
576	The provisions of this subsection shall not apply to workers'
577	compensation and employer's liability insurance and to motor
578	vehicle insurance.
579	(9)
580	(d) A certification under this subsection is not rendered
581	false when, after making the subject rate filing, the insurer
582	provides the office with additional or supplementary information
583	pursuant to a formal or informal request from the office.
584	(e) If an insurer adds additional information to a pending
585	filing that has not yet been disapproved by the office, the
586	additional information may not be required to include a new
587	certification under this subsection.
588	(f) This subsection does not apply to a filing made
589	pursuant to paragraph (2)(k).
590	Section 7. Section 627.0621, Florida Statutes, is amended
591	to read:
592	627.0621 Transparency in rate regulation.-
593	(1) DEFINITIONS.-As used in this section, the term:
594	(a) "Rate filing" means any original or amended rate
595	residential property insurance filing.
596	(b) "Recommendation" means any proposed, preliminary, or
597	final recommendation from an office actuary reviewing a rate
598	filing with respect to the issue of approval or disapproval of
599	the rate filing or with respect to rate indications that the
600	office would consider acceptable.
601	(2) WEBSITE FOR PUBLIC ACCESS TO RATE FILING INFORMATION.-
602	(1)(a) With respect to any residential property rate
603	filing, the office shall provide the following information on a
604	publicly accessible Internet website:
605	(a)1. The overall rate change requested by the insurer.
606	(b)2. The rate change approved by the office along with
607	all of the actuary's assumptions and recommendations forming the
608	basis of the office's decision.
609	3. Certification by the office's actuary that, based on
610	the actuary's knowledge, his or her recommendations are
611	consistent with accepted actuarial principles.
612	(2)(b) For any rate filing, whether or not the filing is
613	subject to a public hearing, the office shall provide on its
614	website a means for any policyholder who may be affected by a
615	proposed rate change to send an e-mail regarding the proposed
616	rate change. Such e-mail must be accessible to the actuary
617	assigned to review the rate filing.
618	Section 8. Subsections (1) and (5) of section 627.0629,
619	Florida Statutes, are amended, and subsection (10) is added to
620	that section, to read:
621	627.0629 Residential property insurance; rate filings.-
622	(1)(a) It is the intent of the Legislature that insurers
623	must provide the most accurate pricing signals available savings
624	to encourage consumers who install or implement windstorm damage
625	mitigation techniques, alterations, or solutions to their
626	properties to prevent windstorm losses. It is also the intent of
627	the Legislature that implementation of mitigation discounts not
628	result in a loss of income to the insurers granting the
629	discounts, so that the aggregate of mitigation discounts should
630	not exceed the aggregate of the expected reduction in loss that
631	is attributable to the mitigation efforts for which discounts
632	are granted. A rate filing for residential property insurance
633	must include actuarially reasonable discounts, credits, debits,
634	or other rate differentials, or appropriate reductions in
635	deductibles, that provide the proper pricing for all properties.
636	The rate filing must take into account the presence or absence
637	of on which fixtures or construction techniques demonstrated to
638	reduce the amount of loss in a windstorm have been installed or
639	implemented. The fixtures or construction techniques shall
640	include, but not be limited to, fixtures or construction
641	techniques that which enhance roof strength, roof covering
642	performance, roof-to-wall strength, wall-to-floor-to-foundation
643	strength, opening protection, and window, door, and skylight
644	strength. Credits, debits, discounts, or other rate
645	differentials, or appropriate reductions or increases in
646	deductibles, that recognize the presence or absence of for
647	fixtures and construction techniques that which meet the minimum
648	requirements of the Florida Building Code must be included in
649	the rate filing. If an insurer demonstrates that the aggregate
650	of its mitigation discounts results in a reduction to revenue
651	that exceeds the reduction of the aggregate loss that is
652	expected to result from the mitigation, the insurer may recover
653	the lost revenue through an increase in its base rates. All
654	insurance companies must make a rate filing which includes the
655	credits, discounts, or other rate differentials or reductions in
656	deductibles by February 28, 2003. By July 1, 2007, the office
657	shall reevaluate the discounts, credits, other rate
658	differentials, and appropriate reductions in deductibles for
659	fixtures and construction techniques that meet the minimum
660	requirements of the Florida Building Code, based upon actual
661	experience or any other loss relativity studies available to the
662	office. The office shall determine the discounts, credits,
663	debits, other rate differentials, and appropriate reductions or
664	increases in deductibles that reflect the full actuarial value
665	of such revaluation, which may be used by insurers in rate
666	filings.
667	(b) By February 1, 2011, the Office of Insurance
668	Regulation, in consultation with the Department of Financial
669	Services and the Department of Community Affairs, shall develop
670	and make publicly available a proposed method for insurers to
671	establish discounts, credits, or other rate differentials for
672	hurricane mitigation measures which directly correlate to the
673	numerical rating assigned to a structure pursuant to the uniform
674	home grading scale adopted by the Financial Services Commission
675	pursuant to s. 215.55865, including any proposed changes to the
676	uniform home grading scale. By October 1, 2011, the commission
677	shall adopt rules requiring insurers to make rate filings for
678	residential property insurance which revise insurers' discounts,
679	credits, or other rate differentials for hurricane mitigation
680	measures so that such rate differentials correlate directly to
681	the uniform home grading scale. The rules may include such
682	changes to the uniform home grading scale as the commission
683	determines are necessary, and may specify the minimum required
684	discounts, credits, or other rate differentials. Such rate
685	differentials must be consistent with generally accepted
686	actuarial principles and wind-loss mitigation studies. The rules
687	shall allow a period of at least 2 years after the effective
688	date of the revised mitigation discounts, credits, or other rate
689	differentials for a property owner to obtain an inspection or
690	otherwise qualify for the revised credit, during which time the
691	insurer shall continue to apply the mitigation credit that was
692	applied immediately prior to the effective date of the revised
693	credit. Discounts, credits, and other rate differentials
694	established for rate filings under this paragraph shall
695	supersede, after adoption, the discounts, credits, and other
696	rate differentials included in rate filings under paragraph (a).
697	(5) In order to provide an appropriate transition period,
698	an insurer may, in its sole discretion, implement an approved
699	rate filing for residential property insurance over a period of
700	years. An insurer electing to phase in its rate filing must
701	provide an informational notice to the office setting out its
702	schedule for implementation of the phased-in rate filing. An
703	insurer may include in its rate the actual cost of private
704	market reinsurance that corresponds to available coverage of the
705	Temporary Increase in Coverage Limits, TICL, from the Florida
706	Hurricane Catastrophe Fund. The insurer may also include the
707	cost of reinsurance to replace the TICL reduction implemented
708	pursuant to s. 215.555(17)(d)9. However, this cost for
709	reinsurance may not include any expense or profit load or result
710	in a total annual base rate increase in excess of 10 percent.
711	(10)(a) Contingent upon specific appropriations made to
712	implement this subsection, in order to enhance the ability of
713	consumers to compare premiums and to increase the accuracy and
714	usefulness of rate and product comparison information for
715	homeowners' insurance, the office shall develop or contract with
716	a private entity to develop a comprehensive program for
717	providing the consumer with all available information necessary
718	to make an informed purchase of the insurance product that best
719	serves the needs of the individual.
720	(b) In developing the comprehensive program, the office
721	shall rely as much as is practical on information that is
722	currently available and shall consider:
723	1. The most efficient means for developing, hosting, and
724	operating a separate website that consolidates all consumer
725	information for price comparisons, filed complaints, financial
726	strength, underwriting, and receivership information and other
727	data useful to consumers.
728	2. Whether all admitted insurers should be required to
729	submit additional information to populate the composite website
730	and how often such submissions must be made.
731	3. Whether all admitted insurers should be required to
732	provide links from the website into each individual insurer's
733	website in order to enable consumers to access product rate
734	information and apply for quotations.
735	4. Developing a plan to publicize the existence,
736	availability, and value of the website.
737	5. Any other provision that would make relevant
738	homeowners' insurance information more readily available so that
739	consumers can make informed product comparisons and purchasing
740	decisions.
741	(c) Before establishing the program or website, the office
742	shall conduct a cost-benefit analysis to determine the most
743	effective approach for establishing and operating the program
744	and website. Based on the results of the analysis, the office
745	shall submit a proposed implementation plan for review and
746	approval by the Financial Services Commission. The
747	implementation plan shall include an estimated timeline for
748	establishing the program and website; a description of the data
749	and functionality to be provided by the site; a strategy for
750	publicizing the website to consumers; a recommended approach for
751	developing, hosting, and operating the website; and an estimate
752	of all major nonrecurring and recurring costs required to
753	establish and operate the website. Upon approval of the plan,
754	the office may initiate the establishment of the program.
755	Section 9. Paragraphs (b), (c), (d), (y), (z), (aa), (bb),
756	(cc), (dd), (ee), and (ff) of subsection (6) of section 627.351,
757	Florida Statutes, are amended to read:
758	627.351 Insurance risk apportionment plans.-
759	(6) CITIZENS PROPERTY INSURANCE CORPORATION.-
760	(b)1. All insurers authorized to write one or more subject
761	lines of business in this state are subject to assessment by the
762	corporation and, for the purposes of this subsection, are
763	referred to collectively as "assessable insurers." Insurers
764	writing one or more subject lines of business in this state
765	pursuant to part VIII of chapter 626 are not assessable
766	insurers, but insureds who procure one or more subject lines of
767	business in this state pursuant to part VIII of chapter 626 are
768	subject to assessment by the corporation and are referred to
769	collectively as "assessable insureds." An authorized insurer's
770	assessment liability shall begin on the first day of the
771	calendar year following the year in which the insurer was issued
772	a certificate of authority to transact insurance for subject
773	lines of business in this state and shall terminate 1 year after
774	the end of the first calendar year during which the insurer no
775	longer holds a certificate of authority to transact insurance
776	for subject lines of business in this state.
777	2.a. All revenues, assets, liabilities, losses, and
778	expenses of the corporation shall be divided into three separate
779	accounts as follows:
780	(I) A personal lines account for personal residential
781	policies issued by the corporation or issued by the Residential
782	Property and Casualty Joint Underwriting Association and renewed
783	by the corporation that provide comprehensive, multiperil
784	coverage on risks that are not located in areas eligible for
785	coverage in the Florida Windstorm Underwriting Association as
786	those areas were defined on January 1, 2002, and for such
787	policies that do not provide coverage for the peril of wind on
788	risks that are located in such areas;
789	(II) A commercial lines account for commercial residential
790	and commercial nonresidential policies issued by the corporation
791	or issued by the Residential Property and Casualty Joint
792	Underwriting Association and renewed by the corporation that
793	provide coverage for basic property perils on risks that are not
794	located in areas eligible for coverage in the Florida Windstorm
795	Underwriting Association as those areas were defined on January
796	1, 2002, and for such policies that do not provide coverage for
797	the peril of wind on risks that are located in such areas; and
798	(III) A high-risk account for personal residential
799	policies and commercial residential and commercial
800	nonresidential property policies issued by the corporation or
801	transferred to the corporation that provide coverage for the
802	peril of wind on risks that are located in areas eligible for
803	coverage in the Florida Windstorm Underwriting Association as
804	those areas were defined on January 1, 2002. The corporation may
805	offer policies that provide multiperil coverage and the
806	corporation shall continue to offer policies that provide
807	coverage only for the peril of wind for risks located in areas
808	eligible for coverage in the high-risk account. In issuing
809	multiperil coverage, the corporation may use its approved policy
810	forms and rates for the personal lines account. An applicant or
811	insured who is eligible to purchase a multiperil policy from the
812	corporation may purchase a multiperil policy from an authorized
813	insurer without prejudice to the applicant's or insured's
814	eligibility to prospectively purchase a policy that provides
815	coverage only for the peril of wind from the corporation. An
816	applicant or insured who is eligible for a corporation policy
817	that provides coverage only for the peril of wind may elect to
818	purchase or retain such policy and also purchase or retain
819	coverage excluding wind from an authorized insurer without
820	prejudice to the applicant's or insured's eligibility to
821	prospectively purchase a policy that provides multiperil
822	coverage from the corporation. It is the goal of the Legislature
823	that there would be an overall average savings of 10 percent or
824	more for a policyholder who currently has a wind-only policy
825	with the corporation, and an ex-wind policy with a voluntary
826	insurer or the corporation, and who then obtains a multiperil
827	policy from the corporation. It is the intent of the Legislature
828	that the offer of multiperil coverage in the high-risk account
829	be made and implemented in a manner that does not adversely
830	affect the tax-exempt status of the corporation or
831	creditworthiness of or security for currently outstanding
832	financing obligations or credit facilities of the high-risk
833	account, the personal lines account, or the commercial lines
834	account. The high-risk account must also include quota share
835	primary insurance under subparagraph (c)2. The area eligible for
836	coverage under the high-risk account also includes the area
837	within Port Canaveral, which is bordered on the south by the
838	City of Cape Canaveral, bordered on the west by the Banana
839	River, and bordered on the north by Federal Government property.
840	b. The three separate accounts must be maintained as long
841	as financing obligations entered into by the Florida Windstorm
842	Underwriting Association or Residential Property and Casualty
843	Joint Underwriting Association are outstanding, in accordance
844	with the terms of the corresponding financing documents. When
845	the financing obligations are no longer outstanding, in
846	accordance with the terms of the corresponding financing
847	documents, the corporation may use a single account for all
848	revenues, assets, liabilities, losses, and expenses of the
849	corporation. Consistent with the requirement of this
850	subparagraph and prudent investment policies that minimize the
851	cost of carrying debt, the board shall exercise its best efforts
852	to retire existing debt or to obtain approval of necessary
853	parties to amend the terms of existing debt, so as to structure
854	the most efficient plan to consolidate the three separate
855	accounts into a single account. By February 1, 2007, the board
856	shall submit a report to the Financial Services Commission, the
857	President of the Senate, and the Speaker of the House of
858	Representatives which includes an analysis of consolidating the
859	accounts, the actions the board has taken to minimize the cost
860	of carrying debt, and its recommendations for executing the most
861	efficient plan.
862	c. Creditors of the Residential Property and Casualty
863	Joint Underwriting Association and of the accounts specified in
864	sub-sub-subparagraphs a.(I) and (II) may have a claim against,
865	and recourse to, the accounts referred to in sub-sub-
866	subparagraphs a.(I) and (II) and shall have no claim against, or
867	recourse to, the account referred to in sub-sub-subparagraph
868	a.(III). Creditors of the Florida Windstorm Underwriting
869	Association shall have a claim against, and recourse to, the
870	account referred to in sub-sub-subparagraph a.(III) and shall
871	have no claim against, or recourse to, the accounts referred to
872	in sub-sub-subparagraphs a.(I) and (II).
873	d. Revenues, assets, liabilities, losses, and expenses not
874	attributable to particular accounts shall be prorated among the
875	accounts.
876	e. The Legislature finds that the revenues of the
877	corporation are revenues that are necessary to meet the
878	requirements set forth in documents authorizing the issuance of
879	bonds under this subsection.
880	f. No part of the income of the corporation may inure to
881	the benefit of any private person.
882	3. With respect to a deficit in an account:
883	a. After accounting for the Citizens policyholder
884	surcharge imposed under sub-subparagraph i., when the remaining
885	projected deficit incurred in a particular calendar year is not
886	greater than 6 percent of the aggregate statewide direct written
887	premium for the subject lines of business for the prior calendar
888	year, the entire deficit shall be recovered through regular
889	assessments of assessable insurers under paragraph (p) and
890	assessable insureds.
891	b. After accounting for the Citizens policyholder
892	surcharge imposed under sub-subparagraph i., when the remaining
893	projected deficit incurred in a particular calendar year exceeds
894	6 percent of the aggregate statewide direct written premium for
895	the subject lines of business for the prior calendar year, the
896	corporation shall levy regular assessments on assessable
897	insurers under paragraph (p) and on assessable insureds in an
898	amount equal to the greater of 6 percent of the deficit or 6
899	percent of the aggregate statewide direct written premium for
900	the subject lines of business for the prior calendar year. Any
901	remaining deficit shall be recovered through emergency
902	assessments under sub-subparagraph d.
903	c. Each assessable insurer's share of the amount being
904	assessed under sub-subparagraph a. or sub-subparagraph b. shall
905	be in the proportion that the assessable insurer's direct
906	written premium for the subject lines of business for the year
907	preceding the assessment bears to the aggregate statewide direct
908	written premium for the subject lines of business for that year.
909	The assessment percentage applicable to each assessable insured
910	is the ratio of the amount being assessed under sub-subparagraph
911	a. or sub-subparagraph b. to the aggregate statewide direct
912	written premium for the subject lines of business for the prior
913	year. Assessments levied by the corporation on assessable
914	insurers under sub-subparagraphs a. and b. shall be paid as
915	required by the corporation's plan of operation and paragraph
916	(p). Assessments levied by the corporation on assessable
917	insureds under sub-subparagraphs a. and b. shall be collected by
918	the surplus lines agent at the time the surplus lines agent
919	collects the surplus lines tax required by s. 626.932 and shall
920	be paid to the Florida Surplus Lines Service Office at the time
921	the surplus lines agent pays the surplus lines tax to the
922	Florida Surplus Lines Service Office. Upon receipt of regular
923	assessments from surplus lines agents, the Florida Surplus Lines
924	Service Office shall transfer the assessments directly to the
925	corporation as determined by the corporation.
926	d. Upon a determination by the board of governors that a
927	deficit in an account exceeds the amount that will be recovered
928	through regular assessments under sub-subparagraph a. or sub-
929	subparagraph b., plus the amount that is expected to be
930	recovered through surcharges under sub-subparagraph i., as to
931	the remaining projected deficit the board shall levy, after
932	verification by the office, emergency assessments, for as many
933	years as necessary to cover the deficits, to be collected by
934	assessable insurers and the corporation and collected from
935	assessable insureds upon issuance or renewal of policies for
936	subject lines of business, excluding National Flood Insurance
937	policies. The amount of the emergency assessment collected in a
938	particular year shall be a uniform percentage of that year's
939	direct written premium for subject lines of business and all
940	accounts of the corporation, excluding National Flood Insurance
941	Program policy premiums, as annually determined by the board and
942	verified by the office. The office shall verify the arithmetic
943	calculations involved in the board's determination within 30
944	days after receipt of the information on which the determination
945	was based. Notwithstanding any other provision of law, the
946	corporation and each assessable insurer that writes subject
947	lines of business shall collect emergency assessments from its
948	policyholders without such obligation being affected by any
949	credit, limitation, exemption, or deferment. Emergency
950	assessments levied by the corporation on assessable insureds
951	shall be collected by the surplus lines agent at the time the
952	surplus lines agent collects the surplus lines tax required by
953	s. 626.932 and shall be paid to the Florida Surplus Lines
954	Service Office at the time the surplus lines agent pays the
955	surplus lines tax to the Florida Surplus Lines Service Office.
956	The emergency assessments so collected shall be transferred
957	directly to the corporation on a periodic basis as determined by
958	the corporation and shall be held by the corporation solely in
959	the applicable account. The aggregate amount of emergency
960	assessments levied for an account under this sub-subparagraph in
961	any calendar year may, at the discretion of the board of
962	governors, be less than but may not exceed the greater of 10
963	percent of the amount needed to cover the deficit, plus
964	interest, fees, commissions, required reserves, and other costs
965	associated with financing of the original deficit, or 10 percent
966	of the aggregate statewide direct written premium for subject
967	lines of business and for all accounts of the corporation for
968	the prior year, plus interest, fees, commissions, required
969	reserves, and other costs associated with financing the deficit.
970	e. The corporation may pledge the proceeds of assessments,
971	projected recoveries from the Florida Hurricane Catastrophe
972	Fund, other insurance and reinsurance recoverables, policyholder
973	surcharges and other surcharges, and other funds available to
974	the corporation as the source of revenue for and to secure bonds
975	issued under paragraph (p), bonds or other indebtedness issued
976	under subparagraph (c)3., or lines of credit or other financing
977	mechanisms issued or created under this subsection, or to retire
978	any other debt incurred as a result of deficits or events giving
979	rise to deficits, or in any other way that the board determines
980	will efficiently recover such deficits. The purpose of the lines
981	of credit or other financing mechanisms is to provide additional
982	resources to assist the corporation in covering claims and
983	expenses attributable to a catastrophe. As used in this
984	subsection, the term "assessments" includes regular assessments
985	under sub-subparagraph a., sub-subparagraph b., or subparagraph
986	(p)1. and emergency assessments under sub-subparagraph d.
987	Emergency assessments collected under sub-subparagraph d. are
988	not part of an insurer's rates, are not premium, and are not
989	subject to premium tax, fees, or commissions; however, failure
990	to pay the emergency assessment shall be treated as failure to
991	pay premium. The emergency assessments under sub-subparagraph d.
992	shall continue as long as any bonds issued or other indebtedness
993	incurred with respect to a deficit for which the assessment was
994	imposed remain outstanding, unless adequate provision has been
995	made for the payment of such bonds or other indebtedness
996	pursuant to the documents governing such bonds or other
997	indebtedness.
998	f. As used in this subsection for purposes of any deficit
999	incurred on or after January 25, 2007, the term "subject lines
1000	of business" means insurance written by assessable insurers or
1001	procured by assessable insureds for all property and casualty
1002	lines of business in this state, but not including workers'
1003	compensation or medical malpractice. As used in the sub-
1004	subparagraph, the term "property and casualty lines of business"
1005	includes all lines of business identified on Form 2, Exhibit of
1006	Premiums and Losses, in the annual statement required of
1007	authorized insurers by s. 624.424 and any rule adopted under
1008	this section, except for those lines identified as accident and
1009	health insurance and except for policies written under the
1010	National Flood Insurance Program or the Federal Crop Insurance
1011	Program. For purposes of this sub-subparagraph, the term
1012	"workers' compensation" includes both workers' compensation
1013	insurance and excess workers' compensation insurance.
1014	g. The Florida Surplus Lines Service Office shall
1015	determine annually the aggregate statewide written premium in
1016	subject lines of business procured by assessable insureds and
1017	shall report that information to the corporation in a form and
1018	at a time the corporation specifies to ensure that the
1019	corporation can meet the requirements of this subsection and the
1020	corporation's financing obligations.
1021	h. The Florida Surplus Lines Service Office shall verify
1022	the proper application by surplus lines agents of assessment
1023	percentages for regular assessments and emergency assessments
1024	levied under this subparagraph on assessable insureds and shall
1025	assist the corporation in ensuring the accurate, timely
1026	collection and payment of assessments by surplus lines agents as
1027	required by the corporation.
1028	i.(I) If a deficit is incurred in any account in 2008 or
1029	thereafter, the board of governors shall levy a Citizens
1030	policyholder surcharge against all policyholders of the
1031	corporation.
1032	(II) The policyholder's liability for the Citizens
1033	policyholder surcharge attaches on the date of the event giving
1034	rise to an order levying the surcharge or the date of the order,
1035	whichever is earlier. The Citizens policyholder surcharge is
1036	payable upon cancellation or termination of the policy, upon
1037	renewal of the policy, or upon issuance of a new policy by
1038	Citizens within the first 12 months after the date of the levy
1039	or the period of time necessary to fully collect the Citizens
1040	policyholder surcharge amount.
1041	(III) The Citizens policyholder surcharge for a 12-month
1042	period, which shall be levied collected at the time of issuance
1043	or renewal of a policy, as a uniform percentage of the premium
1044	for the policy of up to 15 percent of such premium, which funds
1045	shall be used to offset the deficit.
1046	(IV) The corporation may not levy any regular assessments
1047	under sub-subparagraph a. or sub-subparagraph b. with respect to
1048	a particular year's deficit until the corporation has first
1049	levied a Citizens policyholder surcharge under this sub-
1050	subparagraph in the full amount authorized by this sub-
1051	subparagraph.
1052	(V) Citizens policyholder surcharges under this sub-
1053	subparagraph are not considered premium and are not subject to
1054	commissions, fees, or premium taxes. However, failure to pay
1055	such surcharges shall be treated as failure to pay premium.
1056	j. If the amount of any assessments or surcharges
1057	collected from corporation policyholders, assessable insurers or
1058	their policyholders, or assessable insureds exceeds the amount
1059	of the deficits, such excess amounts shall be remitted to and
1060	retained by the corporation in a reserve to be used by the
1061	corporation, as determined by the board of governors and
1062	approved by the office, to pay claims or reduce any past,
1063	present, or future plan-year deficits or to reduce outstanding
1064	debt.
1065	(c) The plan of operation of the corporation:
1066	1. Must provide for adoption of residential property and
1067	casualty insurance policy forms and commercial residential and
1068	nonresidential property insurance forms, which forms must be
1069	approved by the office prior to use. The corporation shall adopt
1070	the following policy forms:
1071	a. Standard personal lines policy forms that are
1072	comprehensive multiperil policies providing full coverage of a
1073	residential property equivalent to the coverage provided in the
1074	private insurance market under an HO-3, HO-4, or HO-6 policy.
1075	b. Basic personal lines policy forms that are policies
1076	similar to an HO-8 policy or a dwelling fire policy that provide
1077	coverage meeting the requirements of the secondary mortgage
1078	market, but which coverage is more limited than the coverage
1079	under a standard policy.
1080	c. Commercial lines residential and nonresidential policy
1081	forms that are generally similar to the basic perils of full
1082	coverage obtainable for commercial residential structures and
1083	commercial nonresidential structures in the admitted voluntary
1084	market.
1085	d. Personal lines and commercial lines residential
1086	property insurance forms that cover the peril of wind only. The
1087	forms are applicable only to residential properties located in
1088	areas eligible for coverage under the high-risk account referred
1089	to in sub-subparagraph (b)2.a.
1090	e. Commercial lines nonresidential property insurance
1091	forms that cover the peril of wind only. The forms are
1092	applicable only to nonresidential properties located in areas
1093	eligible for coverage under the high-risk account referred to in
1094	sub-subparagraph (b)2.a.
1095	f. The corporation may adopt variations of the policy
1096	forms listed in sub-subparagraphs a.-e. that contain more
1097	restrictive coverage.
1098	2.a. Must provide that the corporation adopt a program in
1099	which the corporation and authorized insurers enter into quota
1100	share primary insurance agreements for hurricane coverage, as
1101	defined in s. 627.4025(2)(a), for eligible risks, and adopt
1102	property insurance forms for eligible risks which cover the
1103	peril of wind only. As used in this subsection, the term:
1104	(I) "Quota share primary insurance" means an arrangement
1105	in which the primary hurricane coverage of an eligible risk is
1106	provided in specified percentages by the corporation and an
1107	authorized insurer. The corporation and authorized insurer are
1108	each solely responsible for a specified percentage of hurricane
1109	coverage of an eligible risk as set forth in a quota share
1110	primary insurance agreement between the corporation and an
1111	authorized insurer and the insurance contract. The
1112	responsibility of the corporation or authorized insurer to pay
1113	its specified percentage of hurricane losses of an eligible
1114	risk, as set forth in the quota share primary insurance
1115	agreement, may not be altered by the inability of the other
1116	party to the agreement to pay its specified percentage of
1117	hurricane losses. Eligible risks that are provided hurricane
1118	coverage through a quota share primary insurance arrangement
1119	must be provided policy forms that set forth the obligations of
1120	the corporation and authorized insurer under the arrangement,
1121	clearly specify the percentages of quota share primary insurance
1122	provided by the corporation and authorized insurer, and
1123	conspicuously and clearly state that neither the authorized
1124	insurer nor the corporation may be held responsible beyond its
1125	specified percentage of coverage of hurricane losses.
1126	(II) "Eligible risks" means personal lines residential and
1127	commercial lines residential risks that meet the underwriting
1128	criteria of the corporation and are located in areas that were
1129	eligible for coverage by the Florida Windstorm Underwriting
1130	Association on January 1, 2002.
1131	b. The corporation may enter into quota share primary
1132	insurance agreements with authorized insurers at corporation
1133	coverage levels of 90 percent and 50 percent.
1134	c. If the corporation determines that additional coverage
1135	levels are necessary to maximize participation in quota share
1136	primary insurance agreements by authorized insurers, the
1137	corporation may establish additional coverage levels. However,
1138	the corporation's quota share primary insurance coverage level
1139	may not exceed 90 percent.
1140	d. Any quota share primary insurance agreement entered
1141	into between an authorized insurer and the corporation must
1142	provide for a uniform specified percentage of coverage of
1143	hurricane losses, by county or territory as set forth by the
1144	corporation board, for all eligible risks of the authorized
1145	insurer covered under the quota share primary insurance
1146	agreement.
1147	e. Any quota share primary insurance agreement entered
1148	into between an authorized insurer and the corporation is
1149	subject to review and approval by the office. However, such
1150	agreement shall be authorized only as to insurance contracts
1151	entered into between an authorized insurer and an insured who is
1152	already insured by the corporation for wind coverage.
1153	f. For all eligible risks covered under quota share
1154	primary insurance agreements, the exposure and coverage levels
1155	for both the corporation and authorized insurers shall be
1156	reported by the corporation to the Florida Hurricane Catastrophe
1157	Fund. For all policies of eligible risks covered under quota
1158	share primary insurance agreements, the corporation and the
1159	authorized insurer shall maintain complete and accurate records
1160	for the purpose of exposure and loss reimbursement audits as
1161	required by Florida Hurricane Catastrophe Fund rules. The
1162	corporation and the authorized insurer shall each maintain
1163	duplicate copies of policy declaration pages and supporting
1164	claims documents.
1165	g. The corporation board shall establish in its plan of
1166	operation standards for quota share agreements which ensure that
1167	there is no discriminatory application among insurers as to the
1168	terms of quota share agreements, pricing of quota share
1169	agreements, incentive provisions if any, and consideration paid
1170	for servicing policies or adjusting claims.
1171	h. The quota share primary insurance agreement between the
1172	corporation and an authorized insurer must set forth the
1173	specific terms under which coverage is provided, including, but
1174	not limited to, the sale and servicing of policies issued under
1175	the agreement by the insurance agent of the authorized insurer
1176	producing the business, the reporting of information concerning
1177	eligible risks, the payment of premium to the corporation, and
1178	arrangements for the adjustment and payment of hurricane claims
1179	incurred on eligible risks by the claims adjuster and personnel
1180	of the authorized insurer. Entering into a quota sharing
1181	insurance agreement between the corporation and an authorized
1182	insurer shall be voluntary and at the discretion of the
1183	authorized insurer.
1184	3. May provide that the corporation may employ or
1185	otherwise contract with individuals or other entities to provide
1186	administrative or professional services that may be appropriate
1187	to effectuate the plan. The corporation shall have the power to
1188	borrow funds, by issuing bonds or by incurring other
1189	indebtedness, and shall have other powers reasonably necessary
1190	to effectuate the requirements of this subsection, including,
1191	without limitation, the power to issue bonds and incur other
1192	indebtedness in order to refinance outstanding bonds or other
1193	indebtedness. The corporation may, but is not required to, seek
1194	judicial validation of its bonds or other indebtedness under
1195	chapter 75. The corporation may issue bonds or incur other
1196	indebtedness, or have bonds issued on its behalf by a unit of
1197	local government pursuant to subparagraph (p)2., in the absence
1198	of a hurricane or other weather-related event, upon a
1199	determination by the corporation, subject to approval by the
1200	office, that such action would enable it to efficiently meet the
1201	financial obligations of the corporation and that such
1202	financings are reasonably necessary to effectuate the
1203	requirements of this subsection. The corporation is authorized
1204	to take all actions needed to facilitate tax-free status for any
1205	such bonds or indebtedness, including formation of trusts or
1206	other affiliated entities. The corporation shall have the
1207	authority to pledge assessments, projected recoveries from the
1208	Florida Hurricane Catastrophe Fund, other reinsurance
1209	recoverables, market equalization and other surcharges, and
1210	other funds available to the corporation as security for bonds
1211	or other indebtedness. In recognition of s. 10, Art. I of the
1212	State Constitution, prohibiting the impairment of obligations of
1213	contracts, it is the intent of the Legislature that no action be
1214	taken whose purpose is to impair any bond indenture or financing
1215	agreement or any revenue source committed by contract to such
1216	bond or other indebtedness.
1217	4.a. Must require that the corporation operate subject to
1218	the supervision and approval of a board of governors consisting
1219	of eight individuals who are residents of this state, from
1220	different geographical areas of this state. The Governor, the
1221	Chief Financial Officer, the President of the Senate, and the
1222	Speaker of the House of Representatives shall each appoint two
1223	members of the board. At least one of the two members appointed
1224	by each appointing officer must have demonstrated expertise in
1225	insurance. Members appointed for having a demonstrated expertise
1226	in insurance as provided in this subparagraph shall be deemed to
1227	be within the scope of the exemption set forth in s.
1228	112.313(7)(b). The Chief Financial Officer shall designate one
1229	of the appointees as chair. All board members serve at the
1230	pleasure of the appointing officer. All members of the board of
1231	governors are subject to removal at will by the officers who
1232	appointed them. All board members, including the chair, must be
1233	appointed to serve for 3-year terms beginning annually on a date
1234	designated by the plan. However, for the first term beginning on
1235	or after July 1, 2009, each appointing officer shall appoint one
1236	member of the board for a 2-year term and one member for a 3-
1237	year term. Any board vacancy shall be filled for the unexpired
1238	term by the appointing officer. The Chief Financial Officer
1239	shall appoint a technical advisory group to provide information
1240	and advice to the board of governors in connection with the
1241	board's duties under this subsection. The executive director and
1242	senior managers of the corporation shall be engaged by the board
1243	and serve at the pleasure of the board. Any executive director
1244	appointed on or after July 1, 2006, is subject to confirmation
1245	by the Senate. The executive director is responsible for
1246	employing other staff as the corporation may require, subject to
1247	review and concurrence by the board.
1248	b. The board shall create a Market Accountability Advisory
1249	Committee to assist the corporation in developing awareness of
1250	its rates and its customer and agent service levels in
1251	relationship to the voluntary market insurers writing similar
1252	coverage. The members of the advisory committee shall consist of
1253	the following 11 persons, one of whom must be elected chair by
1254	the members of the committee: four representatives, one
1255	appointed by the Florida Association of Insurance Agents, one by
1256	the Florida Association of Insurance and Financial Advisors, one
1257	by the Professional Insurance Agents of Florida, and one by the
1258	Latin American Association of Insurance Agencies; three
1259	representatives appointed by the insurers with the three highest
1260	voluntary market share of residential property insurance
1261	business in the state; one representative from the Office of
1262	Insurance Regulation; one consumer appointed by the board who is
1263	insured by the corporation at the time of appointment to the
1264	committee; one representative appointed by the Florida
1265	Association of Realtors; and one representative appointed by the
1266	Florida Bankers Association. All members must serve for 3-year
1267	terms and may serve for consecutive terms. The committee shall
1268	report to the corporation at each board meeting on insurance
1269	market issues which may include rates and rate competition with
1270	the voluntary market; service, including policy issuance, claims
1271	processing, and general responsiveness to policyholders,
1272	applicants, and agents; and matters relating to depopulation.
1273	5. Must provide a procedure for determining the
1274	eligibility of a risk for coverage, as follows:
1275	a. Subject to the provisions of s. 627.3517, with respect
1276	to personal lines residential risks, if the risk is offered
1277	coverage from an authorized insurer at the insurer's approved
1278	rate under either a standard policy including wind coverage or,
1279	if consistent with the insurer's underwriting rules as filed
1280	with the office, a basic policy including wind coverage, for a
1281	new application to the corporation for coverage, the risk is not
1282	eligible for any policy issued by the corporation unless the
1283	premium for coverage from the authorized insurer is more than 15
1284	percent greater than the premium for comparable coverage from
1285	the corporation. If the risk is not able to obtain any such
1286	offer, the risk is eligible for either a standard policy
1287	including wind coverage or a basic policy including wind
1288	coverage issued by the corporation; however, if the risk could
1289	not be insured under a standard policy including wind coverage
1290	regardless of market conditions, the risk shall be eligible for
1291	a basic policy including wind coverage unless rejected under
1292	subparagraph 8. However, with regard to a policyholder of the
1293	corporation or a policyholder removed from the corporation
1294	through an assumption agreement until the end of the assumption
1295	period, the policyholder remains eligible for coverage from the
1296	corporation regardless of any offer of coverage from an
1297	authorized insurer or surplus lines insurer. The corporation
1298	shall determine the type of policy to be provided on the basis
1299	of objective standards specified in the underwriting manual and
1300	based on generally accepted underwriting practices.
1301	(I) If the risk accepts an offer of coverage through the
1302	market assistance plan or an offer of coverage through a
1303	mechanism established by the corporation before a policy is
1304	issued to the risk by the corporation or during the first 30
1305	days of coverage by the corporation, and the producing agent who
1306	submitted the application to the plan or to the corporation is
1307	not currently appointed by the insurer, the insurer shall:
1308	(A) Pay to the producing agent of record of the policy,
1309	for the first year, an amount that is the greater of the
1310	insurer's usual and customary commission for the type of policy
1311	written or a fee equal to the usual and customary commission of
1312	the corporation; or
1313	(B) Offer to allow the producing agent of record of the
1314	policy to continue servicing the policy for a period of not less
1315	than 1 year and offer to pay the agent the greater of the
1316	insurer's or the corporation's usual and customary commission
1317	for the type of policy written.
1318
1319	If the producing agent is unwilling or unable to accept
1320	appointment, the new insurer shall pay the agent in accordance
1321	with sub-sub-sub-subparagraph (A).
1322	(II) When the corporation enters into a contractual
1323	agreement for a take-out plan, the producing agent of record of
1324	the corporation policy is entitled to retain any unearned
1325	commission on the policy, and the insurer shall:
1326	(A) Pay to the producing agent of record of the
1327	corporation policy, for the first year, an amount that is the
1328	greater of the insurer's usual and customary commission for the
1329	type of policy written or a fee equal to the usual and customary
1330	commission of the corporation; or
1331	(B) Offer to allow the producing agent of record of the
1332	corporation policy to continue servicing the policy for a period
1333	of not less than 1 year and offer to pay the agent the greater
1334	of the insurer's or the corporation's usual and customary
1335	commission for the type of policy written.
1336
1337	If the producing agent is unwilling or unable to accept
1338	appointment, the new insurer shall pay the agent in accordance
1339	with sub-sub-sub-subparagraph (A).
1340	b. With respect to commercial lines residential risks, for
1341	a new application to the corporation for coverage, if the risk
1342	is offered coverage under a policy including wind coverage from
1343	an authorized insurer at its approved rate, the risk is not
1344	eligible for any policy issued by the corporation unless the
1345	premium for coverage from the authorized insurer is more than 15
1346	percent greater than the premium for comparable coverage from
1347	the corporation. If the risk is not able to obtain any such
1348	offer, the risk is eligible for a policy including wind coverage
1349	issued by the corporation. However, with regard to a
1350	policyholder of the corporation or a policyholder removed from
1351	the corporation through an assumption agreement until the end of
1352	the assumption period, the policyholder remains eligible for
1353	coverage from the corporation regardless of any offer of
1354	coverage from an authorized insurer or surplus lines insurer.
1355	(I) If the risk accepts an offer of coverage through the
1356	market assistance plan or an offer of coverage through a
1357	mechanism established by the corporation before a policy is
1358	issued to the risk by the corporation or during the first 30
1359	days of coverage by the corporation, and the producing agent who
1360	submitted the application to the plan or the corporation is not
1361	currently appointed by the insurer, the insurer shall:
1362	(A) Pay to the producing agent of record of the policy,
1363	for the first year, an amount that is the greater of the
1364	insurer's usual and customary commission for the type of policy
1365	written or a fee equal to the usual and customary commission of
1366	the corporation; or
1367	(B) Offer to allow the producing agent of record of the
1368	policy to continue servicing the policy for a period of not less
1369	than 1 year and offer to pay the agent the greater of the
1370	insurer's or the corporation's usual and customary commission
1371	for the type of policy written.
1372
1373	If the producing agent is unwilling or unable to accept
1374	appointment, the new insurer shall pay the agent in accordance
1375	with sub-sub-sub-subparagraph (A).
1376	(II) When the corporation enters into a contractual
1377	agreement for a take-out plan, the producing agent of record of
1378	the corporation policy is entitled to retain any unearned
1379	commission on the policy, and the insurer shall:
1380	(A) Pay to the producing agent of record of the
1381	corporation policy, for the first year, an amount that is the
1382	greater of the insurer's usual and customary commission for the
1383	type of policy written or a fee equal to the usual and customary
1384	commission of the corporation; or
1385	(B) Offer to allow the producing agent of record of the
1386	corporation policy to continue servicing the policy for a period
1387	of not less than 1 year and offer to pay the agent the greater
1388	of the insurer's or the corporation's usual and customary
1389	commission for the type of policy written.
1390
1391	If the producing agent is unwilling or unable to accept
1392	appointment, the new insurer shall pay the agent in accordance
1393	with sub-sub-sub-subparagraph (A).
1394	c. For purposes of determining comparable coverage under
1395	sub-subparagraphs a. and b., the comparison shall be based on
1396	those forms and coverages that are reasonably comparable. The
1397	corporation may rely on a determination of comparable coverage
1398	and premium made by the producing agent who submits the
1399	application to the corporation, made in the agent's capacity as
1400	the corporation's agent. A comparison may be made solely of the
1401	premium with respect to the main building or structure only on
1402	the following basis: the same coverage A or other building
1403	limits; the same percentage hurricane deductible that applies on
1404	an annual basis or that applies to each hurricane for commercial
1405	residential property; the same percentage of ordinance and law
1406	coverage, if the same limit is offered by both the corporation
1407	and the authorized insurer; the same mitigation credits, to the
1408	extent the same types of credits are offered both by the
1409	corporation and the authorized insurer; the same method for loss
1410	payment, such as replacement cost or actual cash value, if the
1411	same method is offered both by the corporation and the
1412	authorized insurer in accordance with underwriting rules; and
1413	any other form or coverage that is reasonably comparable as
1414	determined by the board. If an application is submitted to the
1415	corporation for wind-only coverage in the high-risk account, the
1416	premium for the corporation's wind-only policy plus the premium
1417	for the ex-wind policy that is offered by an authorized insurer
1418	to the applicant shall be compared to the premium for multiperil
1419	coverage offered by an authorized insurer, subject to the
1420	standards for comparison specified in this subparagraph. If the
1421	corporation or the applicant requests from the authorized
1422	insurer a breakdown of the premium of the offer by types of
1423	coverage so that a comparison may be made by the corporation or
1424	its agent and the authorized insurer refuses or is unable to
1425	provide such information, the corporation may treat the offer as
1426	not being an offer of coverage from an authorized insurer at the
1427	insurer's approved rate.
1428	6. Must include rules for classifications of risks and
1429	rates therefor.
1430	7. Must provide that if premium and investment income for
1431	an account attributable to a particular calendar year are in
1432	excess of projected losses and expenses for the account
1433	attributable to that year, such excess shall be held in surplus
1434	in the account. Such surplus shall be available to defray
1435	deficits in that account as to future years and shall be used
1436	for that purpose prior to assessing assessable insurers and
1437	assessable insureds as to any calendar year.
1438	8. Must provide objective criteria and procedures to be
1439	uniformly applied for all applicants in determining whether an
1440	individual risk is so hazardous as to be uninsurable. In making
1441	this determination and in establishing the criteria and
1442	procedures, the following shall be considered:
1443	a. Whether the likelihood of a loss for the individual
1444	risk is substantially higher than for other risks of the same
1445	class; and
1446	b. Whether the uncertainty associated with the individual
1447	risk is such that an appropriate premium cannot be determined.
1448
1449	The acceptance or rejection of a risk by the corporation shall
1450	be construed as the private placement of insurance, and the
1451	provisions of chapter 120 shall not apply.
1452	9. Must provide that the corporation shall make its best
1453	efforts to procure catastrophe reinsurance at reasonable rates,
1454	to cover its projected 100-year probable maximum loss as
1455	determined by the board of governors.
1456	10. The policies issued by the corporation must provide
1457	that, if the corporation or the market assistance plan obtains
1458	an offer from an authorized insurer to cover the risk at its
1459	approved rates, the risk is no longer eligible for renewal
1460	through the corporation, except as otherwise provided in this
1461	subsection.
1462	11. Corporation policies and applications must include a
1463	notice that the corporation policy could, under this section, be
1464	replaced with a policy issued by an authorized insurer that does
1465	not provide coverage identical to the coverage provided by the
1466	corporation. The notice shall also specify that acceptance of
1467	corporation coverage creates a conclusive presumption that the
1468	applicant or policyholder is aware of this potential.
1469	12. May establish, subject to approval by the office,
1470	different eligibility requirements and operational procedures
1471	for any line or type of coverage for any specified county or
1472	area if the board determines that such changes to the
1473	eligibility requirements and operational procedures are
1474	justified due to the voluntary market being sufficiently stable
1475	and competitive in such area or for such line or type of
1476	coverage and that consumers who, in good faith, are unable to
1477	obtain insurance through the voluntary market through ordinary
1478	methods would continue to have access to coverage from the
1479	corporation. When coverage is sought in connection with a real
1480	property transfer, such requirements and procedures shall not
1481	provide for an effective date of coverage later than the date of
1482	the closing of the transfer as established by the transferor,
1483	the transferee, and, if applicable, the lender.
1484	13. Must provide that, with respect to the high-risk
1485	account, any assessable insurer with a surplus as to
1486	policyholders of $25 million or less writing 25 percent or more
1487	of its total countrywide property insurance premiums in this
1488	state may petition the office, within the first 90 days of each
1489	calendar year, to qualify as a limited apportionment company. A
1490	regular assessment levied by the corporation on a limited
1491	apportionment company for a deficit incurred by the corporation
1492	for the high-risk account in 2006 or thereafter may be paid to
1493	the corporation on a monthly basis as the assessments are
1494	collected by the limited apportionment company from its insureds
1495	pursuant to s. 627.3512, but the regular assessment must be paid
1496	in full within 12 months after being levied by the corporation.
1497	A limited apportionment company shall collect from its
1498	policyholders any emergency assessment imposed under sub-
1499	subparagraph (b)3.d. The plan shall provide that, if the office
1500	determines that any regular assessment will result in an
1501	impairment of the surplus of a limited apportionment company,
1502	the office may direct that all or part of such assessment be
1503	deferred as provided in subparagraph (p)4. However, there shall
1504	be no limitation or deferment of an emergency assessment to be
1505	collected from policyholders under sub-subparagraph (b)3.d.
1506	14. Must provide that the corporation appoint as its
1507	licensed agents only those agents who also hold an appointment
1508	as defined in s. 626.015(3) with an insurer who at the time of
1509	the agent's initial appointment by the corporation is authorized
1510	to write and is actually writing personal lines residential
1511	property coverage, commercial residential property coverage, or
1512	commercial nonresidential property coverage within the state.
1513	15. Must provide, by July 1, 2007, a premium payment plan
1514	option to its policyholders which allows at a minimum for
1515	quarterly and semiannual payment of premiums. A monthly payment
1516	plan may, but is not required to, be offered.
1517	16. Must limit coverage on mobile homes or manufactured
1518	homes built prior to 1994 to actual cash value of the dwelling
1519	rather than replacement costs of the dwelling.
1520	17. May provide such limits of coverage as the board
1521	determines, consistent with the requirements of this subsection.
1522	18. May require commercial property to meet specified
1523	hurricane mitigation construction features as a condition of
1524	eligibility for coverage.
1525	19.a. Shall require the agent to obtain from any applicant
1526	for coverage the following acknowledgement, signed by the
1527	applicant, and shall require the agent of record to obtain the
1528	following acknowledgment from each corporation policyholder
1529	prior to the policy's first renewal after the effective date of
1530	this act:
1531
1532	ACKNOWLEDGEMENT OF POTENTIAL SURCHARGE AND ASSESSMENT
1533	LIABILITY:
1534	1. I UNDERSTAND, AS A CITIZENS PROPERTY
1535	INSURANCE CORPORATION POLICYHOLDER, THAT IF THE
1536	CORPORATION SUSTAINS A DEFICIT AS A RESULT OF
1537	HURRICANE LOSSES OR FOR ANY OTHER REASON, MY POLICY
1538	COULD BE SUBJECT TO CITIZENS POLICYHOLDER SURCHARGES,
1539	WHICH WOULD BE DUE AND PAYABLE UPON ISSUANCE, RENEWAL,
1540	CANCELLATION, OR TERMINATION OF THE POLICY, AND THAT
1541	THE SURCHARGES COULD BE AS HIGH AS 15 PERCENT OF MY
1542	PREMIUM FOR DEFICITS IN EACH OF THREE CITIZENS
1543	ACCOUNTS, OR A DIFFERENT AMOUNT AS ESTABLISHED BY THE
1544	FLORIDA LEGISLATURE.
1545	2. I ALSO UNDERSTAND THAT I MAY BE SUBJECT TO
1546	EMERGENCY ASSESSMENTS TO THE SAME EXTENT AS
1547	POLICYHOLDERS OF OTHER INSURANCE COMPANIES.
1548
1549	b. The corporation shall permanently maintain a signed
1550	copy of the signed acknowledgement required by this
1551	subparagraph, and the agent may also retain a copy.
1552	c. The signed acknowledgement form creates a conclusive
1553	presumption that the policyholder understood and accepted his or
1554	her potential surcharge and assessment liability as a Citizens
1555	policyholder.
1556	(d)1. All prospective employees for senior management
1557	positions, as defined by the plan of operation, are subject to
1558	background checks as a prerequisite for employment. The office
1559	shall conduct background checks on such prospective employees
1560	pursuant to ss. 624.34, 624.404(3), and 628.261.
1561	2. On or before July 1 of each year, employees of the
1562	corporation are required to sign and submit a statement
1563	attesting that they do not have a conflict of interest, as
1564	defined in part III of chapter 112. As a condition of
1565	employment, all prospective employees are required to sign and
1566	submit to the corporation a conflict-of-interest statement.
1567	3. Senior managers and members of the board of governors
1568	are subject to the provisions of part III of chapter 112,
1569	including, but not limited to, the code of ethics and public
1570	disclosure and reporting of financial interests, pursuant to s.
1571	112.3145. Notwithstanding s. 112.3143(2), a board member may not
1572	vote upon any measure that would inure to his or her special
1573	private gain or loss; that he or she knows would inure to the
1574	special private gain or loss of any principal by whom he or she
1575	is retained or to the parent organization or subsidiary of a
1576	corporate principal by which he or she is retained, other than
1577	an agency as defined in s. 112.312(2); or that he or she knows
1578	would inure to the special private gain or loss of a relative or
1579	business associate of the public officer. Such member shall,
1580	prior to the vote being taken, publicly state to the assembly
1581	the nature of his or her interest in the matter from which he or
1582	she is abstaining from voting and, within 15 days after the vote
1583	occurs, disclose the nature of his or her interest as a public
1584	record in a memorandum filed with the person responsible for
1585	recording the minutes of the meeting, who shall incorporate the
1586	memorandum in the minutes. Senior managers and board members are
1587	also required to file such disclosures with the Commission on
1588	Ethics and the Office of Insurance Regulation. The executive
1589	director of the corporation or his or her designee shall notify
1590	each newly appointed and existing appointed member of the board
1591	of governors and senior managers of their duty to comply with
1592	the reporting requirements of part III of chapter 112. At least
1593	quarterly, the executive director or his or her designee shall
1594	submit to the Commission on Ethics a list of names of the senior
1595	managers and members of the board of governors who are subject
1596	to the public disclosure requirements under s. 112.3145.
1597	4. Notwithstanding s. 112.3148 or s. 112.3149, or any
1598	other provision of law, an employee or board member may not
1599	knowingly accept, directly or indirectly, any gift or
1600	expenditure from a person or entity, or an employee or
1601	representative of such person or entity, that has a contractual
1602	relationship with the corporation or who is under consideration
1603	for a contract. An employee or board member who fails to comply
1604	with subparagraph 3. or this subparagraph is subject to
1605	penalties provided under ss. 112.317 and 112.3173.
1606	5. Any senior manager of the corporation who is employed
1607	on or after January 1, 2007, regardless of the date of hire, who
1608	subsequently retires or terminates employment is prohibited from
1609	representing another person or entity before the corporation for
1610	2 years after retirement or termination of employment from the
1611	corporation.
1612	6. Any senior manager of the corporation who is employed
1613	on or after January 1, 2007, regardless of the date of hire, who
1614	subsequently retires or terminates employment is prohibited from
1615	having any employment or contractual relationship for 2 years
1616	with an insurer that has entered into a take-out bonus agreement
1617	with the corporation.
1618	(y) It is the intent of the Legislature that the
1619	amendments to this subsection enacted in 2002 should, over time,
1620	reduce the probable maximum windstorm losses in the residual
1621	markets and should reduce the potential assessments to be levied
1622	on property insurers and policyholders statewide. In furtherance
1623	of this intent:
1624	1. The board shall, on or before February 1 of each year,
1625	provide a report to the President of the Senate and the Speaker
1626	of the House of Representatives showing the reduction or
1627	increase in the 100-year probable maximum loss attributable to
1628	wind-only coverages and the quota share program under this
1629	subsection combined, as compared to the benchmark 100-year
1630	probable maximum loss of the Florida Windstorm Underwriting
1631	Association. For purposes of this paragraph, the benchmark 100-
1632	year probable maximum loss of the Florida Windstorm Underwriting
1633	Association shall be the calculation dated February 2001 and
1634	based on November 30, 2000, exposures. In order to ensure
1635	comparability of data, the board shall use the same methods for
1636	calculating its probable maximum loss as were used to calculate
1637	the benchmark probable maximum loss.
1638	2. Beginning December 1, 2010, if the report under
1639	subparagraph 1. for any year indicates that the 100-year
1640	probable maximum loss attributable to wind-only coverages and
1641	the quota share program combined does not reflect a reduction of
1642	at least 25 percent from the benchmark, the board shall reduce
1643	the boundaries of the high-risk area eligible for wind-only
1644	coverages under this subsection in a manner calculated to reduce
1645	such probable maximum loss to an amount at least 25 percent
1646	below the benchmark.
1647	3. Beginning February 1, 2015, if the report under
1648	subparagraph 1. for any year indicates that the 100-year
1649	probable maximum loss attributable to wind-only coverages and
1650	the quota share program combined does not reflect a reduction of
1651	at least 50 percent from the benchmark, the boundaries of the
1652	high-risk area eligible for wind-only coverages under this
1653	subsection shall be reduced by the elimination of any area that
1654	is not seaward of a line 1,000 feet inland from the Intracoastal
1655	Waterway.
1656	(y)(z) In enacting the provisions of this section, the
1657	Legislature recognizes that both the Florida Windstorm
1658	Underwriting Association and the Residential Property and
1659	Casualty Joint Underwriting Association have entered into
1660	financing arrangements that obligate each entity to service its
1661	debts and maintain the capacity to repay funds secured under
1662	these financing arrangements. It is the intent of the
1663	Legislature that nothing in this section be construed to
1664	compromise, diminish, or interfere with the rights of creditors
1665	under such financing arrangements. It is further the intent of
1666	the Legislature to preserve the obligations of the Florida
1667	Windstorm Underwriting Association and Residential Property and
1668	Casualty Joint Underwriting Association with regard to
1669	outstanding financing arrangements, with such obligations
1670	passing entirely and unchanged to the corporation and,
1671	specifically, to the applicable account of the corporation. So
1672	long as any bonds, notes, indebtedness, or other financing
1673	obligations of the Florida Windstorm Underwriting Association or
1674	the Residential Property and Casualty Joint Underwriting
1675	Association are outstanding, under the terms of the financing
1676	documents pertaining to them, the governing board of the
1677	corporation shall have and shall exercise the authority to levy,
1678	charge, collect, and receive all premiums, assessments,
1679	surcharges, charges, revenues, and receipts that the
1680	associations had authority to levy, charge, collect, or receive
1681	under the provisions of subsection (2) and this subsection,
1682	respectively, as they existed on January 1, 2002, to provide
1683	moneys, without exercise of the authority provided by this
1684	subsection, in at least the amounts, and by the times, as would
1685	be provided under those former provisions of subsection (2) or
1686	this subsection, respectively, so that the value, amount, and
1687	collectability of any assets, revenues, or revenue source
1688	pledged or committed to, or any lien thereon securing such
1689	outstanding bonds, notes, indebtedness, or other financing
1690	obligations will not be diminished, impaired, or adversely
1691	affected by the amendments made by this act and to permit
1692	compliance with all provisions of financing documents pertaining
1693	to such bonds, notes, indebtedness, or other financing
1694	obligations, or the security or credit enhancement for them, and
1695	any reference in this subsection to bonds, notes, indebtedness,
1696	financing obligations, or similar obligations, of the
1697	corporation shall include like instruments or contracts of the
1698	Florida Windstorm Underwriting Association and the Residential
1699	Property and Casualty Joint Underwriting Association to the
1700	extent not inconsistent with the provisions of the financing
1701	documents pertaining to them.
1702	(z)(aa) The corporation shall not require the securing of
1703	flood insurance as a condition of coverage if the insured or
1704	applicant executes a form approved by the office affirming that
1705	flood insurance is not provided by the corporation and that if
1706	flood insurance is not secured by the applicant or insured in
1707	addition to coverage by the corporation, the risk will not be
1708	covered for flood damage. A corporation policyholder electing
1709	not to secure flood insurance and executing a form as provided
1710	herein making a claim for water damage against the corporation
1711	shall have the burden of proving the damage was not caused by
1712	flooding. Notwithstanding other provisions of this subsection,
1713	the corporation may deny coverage to an applicant or insured who
1714	refuses to execute the form described herein.
1715	(aa)(bb) A salaried employee of the corporation who
1716	performs policy administration services subsequent to the
1717	effectuation of a corporation policy is not required to be
1718	licensed as an agent under the provisions of s. 626.112.
1719	(bb)(cc) By February 1, 2007, the corporation shall submit
1720	a report to the President of the Senate, the Speaker of the
1721	House of Representatives, the minority party leaders of the
1722	Senate and the House of Representatives, and the chairs of the
1723	standing committees of the Senate and the House of
1724	Representatives having jurisdiction over matters relating to
1725	property and casualty insurance. In preparing the report, the
1726	corporation shall consult with the Office of Insurance
1727	Regulation, the Department of Financial Services, and any other
1728	party the corporation determines appropriate. The report must
1729	include all findings and recommendations on the feasibility of
1730	requiring authorized insurers that issue and service personal
1731	and commercial residential policies and commercial
1732	nonresidential policies that provide coverage for basic property
1733	perils except for the peril of wind to issue and service for a
1734	fee personal and commercial residential policies and commercial
1735	nonresidential policies providing coverage for the peril of wind
1736	issued by the corporation. The report must include:
1737	1. The expense savings to the corporation of issuing and
1738	servicing such policies as determined by a cost-benefit
1739	analysis.
1740	2. The expenses and liability to authorized insurers
1741	associated with issuing and servicing such policies.
1742	3. The effect on service to policyholders of the
1743	corporation relating to issuing and servicing such policies.
1744	4. The effect on the producing agent of the corporation of
1745	issuing and servicing such policies.
1746	5. Recommendations as to the amount of the fee which
1747	should be paid to authorized insurers for issuing and servicing
1748	such policies.
1749	6. The effect that issuing and servicing such policies
1750	will have on the corporation's number of policies, total insured
1751	value, and probable maximum loss.
1752	(cc)(dd) There shall be no liability on the part of, and
1753	no cause of action of any nature shall arise against, producing
1754	agents of record of the corporation or employees of such agents
1755	for insolvency of any take-out insurer.
1756	(dd)(ee) The assets of the corporation may be invested and
1757	managed by the State Board of Administration.
1758	(ee)(ff) The office may establish a pilot program to offer
1759	optional sinkhole coverage in one or more counties or other
1760	territories of the corporation for the purpose of implementing
1761	s. 627.706, as amended by s. 30, chapter 2007-1, Laws of
1762	Florida. Under the pilot program, the corporation is not
1763	required to issue a notice of nonrenewal to exclude sinkhole
1764	coverage upon the renewal of existing policies, but may exclude
1765	such coverage using a notice of coverage change.
1766	Section 10. The Division of Statutory Revision shall
1767	prepare a reviser's bill for introduction at the next regular
1768	session of the Legislature to change the term "high-risk
1769	account" to "coastal account" in s. 627.351(6), Florida
1770	Statutes.
1771	Section 11. Paragraph (b) of subsection (2) of section
1772	627.4133, Florida Statutes, is amended to read:
1773	627.4133 Notice of cancellation, nonrenewal, or renewal
1774	premium.-
1775	(2) With respect to any personal lines or commercial
1776	residential property insurance policy, including, but not
1777	limited to, any homeowner's, mobile home owner's, farmowner's,
1778	condominium association, condominium unit owner's, apartment
1779	building, or other policy covering a residential structure or
1780	its contents:
1781	(b) The insurer shall give the named insured written
1782	notice of nonrenewal, cancellation, or termination at least 100
1783	days prior to the effective date of the nonrenewal,
1784	cancellation, or termination. However, the insurer shall give at
1785	least 100 days' written notice, or written notice by June 1,
1786	whichever is earlier, for any nonrenewal, cancellation, or
1787	termination that would be effective between June 1 and November
1788	30. The notice must include the reason or reasons for the
1789	nonrenewal, cancellation, or termination, except that:
1790	1. The insurer shall give the named insured written notice
1791	of nonrenewal, cancellation, or termination at least 180 days
1792	prior to the effective date of the nonrenewal, cancellation, or
1793	termination for a named insured whose residential structure has
1794	been insured by that insurer or an affiliated insurer for at
1795	least a 5-year period immediately prior to the date of the
1796	written notice.
1797	2. When cancellation is for nonpayment of premium, at
1798	least 10 days' written notice of cancellation accompanied by the
1799	reason therefor shall be given. As used in this subparagraph,
1800	the term "nonpayment of premium" means failure of the named
1801	insured to discharge when due any of her or his obligations in
1802	connection with the payment of premiums on a policy or any
1803	installment of such premium, whether the premium is payable
1804	directly to the insurer or its agent or indirectly under any
1805	premium finance plan or extension of credit, or failure to
1806	maintain membership in an organization if such membership is a
1807	condition precedent to insurance coverage. "Nonpayment of
1808	premium" also means the failure of a financial institution to
1809	honor an insurance applicant's check after delivery to a
1810	licensed agent for payment of a premium, even if the agent has
1811	previously delivered or transferred the premium to the insurer.
1812	If a dishonored check represents the initial premium payment,
1813	the contract and all contractual obligations shall be void ab
1814	initio unless the nonpayment is cured within the earlier of 5
1815	days after actual notice by certified mail is received by the
1816	applicant or 15 days after notice is sent to the applicant by
1817	certified mail or registered mail, and if the contract is void,
1818	any premium received by the insurer from a third party shall be
1819	refunded to that party in full.
1820	3. When such cancellation or termination occurs during the
1821	first 90 days during which the insurance is in force and the
1822	insurance is canceled or terminated for reasons other than
1823	nonpayment of premium, at least 20 days' written notice of
1824	cancellation or termination accompanied by the reason therefor
1825	shall be given except where there has been a material
1826	misstatement or misrepresentation or failure to comply with the
1827	underwriting requirements established by the insurer.
1828	4. The requirement for providing written notice of
1829	nonrenewal by June 1 of any nonrenewal that would be effective
1830	between June 1 and November 30 does not apply to the following
1831	situations, but the insurer remains subject to the requirement
1832	to provide such notice at least 100 days prior to the effective
1833	date of nonrenewal:
1834	a. A policy that is nonrenewed due to a revision in the
1835	coverage for sinkhole losses and catastrophic ground cover
1836	collapse pursuant to s. 627.706, as amended by s. 30, chapter
1837	2007-1, Laws of Florida.
1838	b. A policy that is nonrenewed by Citizens Property
1839	Insurance Corporation, pursuant to s. 627.351(6), for a policy
1840	that has been assumed by an authorized insurer offering
1841	replacement or renewal coverage to the policyholder.
1842	5. Notwithstanding any other provision of law, an insurer
1843	may cancel or nonrenew a property insurance policy upon a
1844	minimum of 45 days' notice if the office finds that the early
1845	cancellation of some or all of the insurer's policies is
1846	necessary to protect the best interests of the public or
1847	policyholders and the office approves the insurer's plan for
1848	early cancellation or nonrenewal of some or all of its policies.
1849	The office may base such a finding upon the financial condition
1850	of the insurer, lack of adequate reinsurance coverage for
1851	hurricane risk, or other relevant factors. The office may
1852	condition its finding on the consent of the insurer to be placed
1853	in administrative supervision pursuant to s. 624.81 or consent
1854	to the appointment of a receiver under chapter 631.
1855	6. Citizens Property Insurance Corporation shall give the
1856	named insured written notice of nonrenewal, cancellation, or
1857	termination at least 45 days before the effective date of the
1858	nonrenewal, cancellation, or termination if the policy being
1859	nonrenewed, canceled, or terminated has been assumed by an
1860	authorized insurer offering coverage to the policyholder.
1861
1862	After the policy has been in effect for 90 days, the policy
1863	shall not be canceled by the insurer except when there has been
1864	a material misstatement, a nonpayment of premium, a failure to
1865	comply with underwriting requirements established by the insurer
1866	within 90 days of the date of effectuation of coverage, or a
1867	substantial change in the risk covered by the policy or when the
1868	cancellation is for all insureds under such policies for a given
1869	class of insureds. This paragraph does not apply to individually
1870	rated risks having a policy term of less than 90 days.
1871	Section 12. Section 627.41341, Florida Statutes, is
1872	created to read:
1873	627.41341 Notice of change in policy terms.-
1874	(1) As used in this section, the term:
1875	(a) "Change in policy terms" means the modification,
1876	addition, or deletion of any term, coverage, duty, or condition
1877	from the prior policy. The correction of typographical or
1878	scrivener's errors or the application of mandated legislative
1879	changes is not a change in policy terms.
1880	(b) "Policy" means a written contract of personal lines
1881	insurance or a written agreement for or effecting insurance, or
1882	the certificate of such insurance, by whatever name called, and
1883	includes all clauses, riders, endorsements, and papers which are
1884	a part of such policy. The term "policy" does not include a
1885	binder as defined in s. 627.420 unless the duration of the
1886	binder period exceeds 60 days.
1887	(c) "Renewal" means the issuance and delivery by an
1888	insurer of a policy superseding at the end of the policy period
1889	a policy previously issued and delivered by the same insurer or
1890	the issuance and delivery of a certificate or notice extending
1891	the term of a policy beyond its policy period or term. Any
1892	policy with a policy period or term of less than 6 months or any
1893	policy with no fixed expiration date shall for the purpose of
1894	this section be considered as if written for successive policy
1895	periods or terms of 6 months.
1896	(2) A renewal policy may contain a change in policy terms.
1897	If a renewal policy contains a change in policy terms, the
1898	insurer shall give the named insured a written notice of change
1899	in policy terms that shall be enclosed with the written notice
1900	of renewal premium required by ss. 627.4133 and 627.728. The
1901	notice shall be entitled "Notice of Change in Policy Terms."
1902	(3) Although not required, United States Postal Service
1903	proof of mailing or registered mailing of the notice of change
1904	in policy terms to the named insured at the address shown in the
1905	policy shall be sufficient proof of notice.
1906	(4) Receipt of payment of the premium for the renewal
1907	policy by the insurer shall be deemed to be acceptance of the
1908	new policy terms by the named insured.
1909	(5) If an insurer fails to provide the notice of change in
1910	policy terms required under subsection (2), the original policy
1911	terms shall remain in effect until the next renewal and the
1912	proper service of the notice of change in policy terms or until
1913	the effective date of replacement coverage obtained by the named
1914	insured, whichever occurs first.
1915	(6) The intent of this section is to:
1916	(a) Allow an insurer to make a change in policy terms
1917	without nonrenewing policyholders that the insurer wishes to
1918	continue insuring.
1919	(b) Alleviate the concern and confusion to the
1920	policyholders caused by the required policy nonrenewal for the
1921	limited issue when an insurer intends to renew the insurance
1922	policy but the new policy contains a change in policy terms.
1923	(c) Encourage policyholders to discuss their coverages
1924	with their insurance agent.
1925	Section 13. Subsections (1), (3), (4), and (5) of section
1926	627.7011, Florida Statutes, are amended to read:
1927	627.7011 Homeowners' policies; offer of replacement cost
1928	coverage and law and ordinance coverage.-
1929	(1) Before Prior to issuing or renewing a homeowner's
1930	insurance policy on or after October 1, 2005, or prior to the
1931	first renewal of a homeowner's insurance policy on or after
1932	October 1, 2005, the insurer must offer each of the following:
1933	(a) A policy or endorsement providing that any loss which
1934	is repaired or replaced will be adjusted on the basis of
1935	replacement costs not exceeding policy limits as to the
1936	dwelling, rather than actual cash value, but not including costs
1937	necessary to meet applicable laws and ordinances regulating the
1938	construction, use, or repair of any property or requiring the
1939	tearing down of any property, including the costs of removing
1940	debris.
1941	(b) A policy or endorsement providing that, subject to
1942	other policy provisions, any loss which is repaired or replaced
1943	at any location will be adjusted on the basis of replacement
1944	costs not exceeding policy limits as to the dwelling, rather
1945	than actual cash value, and also including costs necessary to
1946	meet applicable laws and ordinances regulating the construction,
1947	use, or repair of any property or requiring the tearing down of
1948	any property, including the costs of removing debris; however,
1949	such additional costs necessary to meet applicable laws and
1950	ordinances may be limited to either 25 percent or 50 percent of
1951	the dwelling limit, as selected by the policyholder, and such
1952	coverage shall apply only to repairs of the damaged portion of
1953	the structure unless the total damage to the structure exceeds
1954	50 percent of the replacement cost of the structure.
1955
1956	An insurer is not required to make the offers required by this
1957	subsection with respect to the issuance or renewal of a
1958	homeowner's policy that contains the provisions specified in
1959	paragraph (b) for law and ordinance coverage limited to 25
1960	percent of the dwelling limit, except that the insurer must
1961	offer the law and ordinance coverage limited to 50 percent of
1962	the dwelling limit. This subsection does not prohibit the offer
1963	of a guaranteed replacement cost policy.
1964	(3)(a) If In the event of a loss occurs for which a
1965	dwelling or personal property is insured on the basis of
1966	replacement costs, the insurer shall initially pay at least the
1967	actual cash value of the loss and shall pay the actual cash
1968	value of the insured loss, less any applicable deductible. In
1969	order to receive payment from an insurer under this paragraph, a
1970	policyholder must enter into a contract for the performance of
1971	building and structural repairs. The insurer shall pay any
1972	remaining amounts necessary to perform such repairs as work is
1973	performed and expenses are incurred. Other than incidental
1974	expenses to mitigate further damage, the insurer or any
1975	contractor or subcontractor may not require the policyholder to
1976	advance payment for such repairs or expenses. The insurer may
1977	waive the requirement for a contract under this paragraph
1978	replacement cost without reservation or holdback of any
1979	depreciation in value, whether or not the insured replaces or
1980	repairs the dwelling or property.
1981	(b) If a loss occurs for which personal property is
1982	insured on the basis of replacement costs, the insurer may limit
1983	an initial payment to 50 percent of the replacement cost value
1984	of the personal property to be replaced, less any applicable
1985	deductible. An insurer may require an insured to provide the
1986	receipts for purchases of property financed by the initial 50-
1987	percent payment required by this paragraph, and the insurer
1988	shall use such receipts to make any remaining payments requested
1989	by the insured for the replacement of remaining insured personal
1990	property. If a total loss occurs, the insurer shall pay the
1991	replacement cost for content coverage without reservation or
1992	holdback of any depreciation in value. The insurer may not
1993	require the policyholder to advance payment for the replaced
1994	property.
1995	(4) A Any homeowner's insurance policy issued or renewed
1996	on or after October 1, 2005, must include in bold type no
1997	smaller than 18 points the following statement:
1998
1999	"LAW AND ORDINANCE COVERAGE IS AN IMPORTANT COVERAGE
2000	THAT YOU MAY WISH TO PURCHASE. YOU MAY ALSO NEED TO
2001	CONSIDER THE PURCHASE OF FLOOD INSURANCE FROM THE
2002	NATIONAL FLOOD INSURANCE PROGRAM. WITHOUT THIS
2003	COVERAGE, YOU MAY HAVE UNCOVERED LOSSES. PLEASE
2004	DISCUSS THESE COVERAGES WITH YOUR INSURANCE AGENT."
2005
2006	The intent of this subsection is to encourage policyholders to
2007	purchase sufficient coverage to protect them in case events
2008	excluded from the standard homeowners policy, such as law and
2009	ordinance enforcement and flood, combine with covered events to
2010	produce damage or loss to the insured property. The intent is
2011	also to encourage policyholders to discuss these issues with
2012	their insurance agent.
2013	(5) Nothing in This section does not shall be construed to
2014	apply to policies not considered to be "homeowners' policies,"
2015	as that term is commonly understood in the insurance industry.
2016	This section specifically does not apply to mobile home
2017	policies. Nothing in This section does not limit shall be
2018	construed as limiting the ability of any insurer to reject or
2019	nonrenew any insured or applicant on the grounds that the
2020	structure does not meet underwriting criteria applicable to
2021	replacement cost or law and ordinance policies or for other
2022	lawful reasons.
2023	Section 14. Paragraph (a) of subsection (5) of section
2024	627.70131, Florida Statutes, is amended to read:
2025	627.70131 Insurer's duty to acknowledge communications
2026	regarding claims; investigation.-
2027	(5)(a) Within 90 days after an insurer receives notice of
2028	an initial or supplemental a property insurance claim from a
2029	policyholder, the insurer shall pay or deny such claim or a
2030	portion of the claim unless the failure to pay such claim or a
2031	portion of the claim is caused by factors beyond the control of
2032	the insurer which reasonably prevent such payment. Any payment
2033	of an initial or supplemental a claim or portion of such a claim
2034	made paid 90 days after the insurer receives notice of the
2035	claim, or made paid more than 15 days after there are no longer
2036	factors beyond the control of the insurer which reasonably
2037	prevented such payment, whichever is later, shall bear interest
2038	at the rate set forth in s. 55.03. Interest begins to accrue
2039	from the date the insurer receives notice of the claim. The
2040	provisions of this subsection may not be waived, voided, or
2041	nullified by the terms of the insurance policy. If there is a
2042	right to prejudgment interest, the insured shall select whether
2043	to receive prejudgment interest or interest under this
2044	subsection. Interest is payable when the claim or portion of the
2045	claim is paid. Failure to comply with this subsection
2046	constitutes a violation of this code. However, failure to comply
2047	with this subsection shall not form the sole basis for a private
2048	cause of action.
2049	Section 15. Effective January 1, 2011, section 627.7031,
2050	Florida Statutes, is created to read:
2051	627.7031 Residential property insurance option.-
2052	(1) An insurer holding a certificate of authority to write
2053	property insurance in this state may offer or renew policies at
2054	rates established in accordance with s. 627.062(2)(l), subject
2055	to all of the requirements and prohibitions of this section.
2056	(2) An insurer offering or renewing policies at rates
2057	established in accordance with s. 627.062(2)(l) may not purchase
2058	coverage from the Florida Hurricane Catastrophe Fund under the
2059	temporary increase in coverage limit option under s.
2060	215.555(17).
2061	(3)(a) Before the effective date of a newly issued policy
2062	at rates established in accordance with s. 627.062(2)(l) or
2063	before the effective date of a renewal policy at rates
2064	established in accordance with s. 627.062(2)(l), the applicant
2065	or insured must be given the following notice, printed in at
2066	least 12-point boldfaced type:
2067
2068	THE RATE FOR THIS POLICY IS NOT SUBJECT TO FULL RATE
2069	REGULATION BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY
2070	BE HIGHER THAN RATES APPROVED BY THAT OFFICE. A RESIDENTIAL
2071	PROPERTY POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY
2072	BE AVAILABLE FROM THIS INSURER, ANOTHER INSURER, OR CITIZENS
2073	PROPERTY INSURANCE CORPORATION. PLEASE DISCUSS YOUR POLICY
2074	OPTIONS WITH AN INSURANCE AGENT WHO CAN PROVIDE A CITIZENS
2075	QUOTE. YOU MAY WISH TO VIEW THE OFFICE OF INSURANCE REGULATION'S
2076	WEBSITE AT WWW.SHOPANDCOMPARERATES.COM FOR MORE INFORMATION
2077	ABOUT CHOICES AVAILABLE TO YOU.
2078
2079	(b) For policies renewed at a rate established in
2080	accordance with s. 627.062(2)(l), the notice described in
2081	paragraph (a) must be provided in writing at the same time as
2082	the renewal notice on a document separate from the renewal
2083	notice, but may be contained within the same mailing as the
2084	renewal notice.
2085	(4) Before the effective date of a newly issued policy at
2086	rates established in accordance with s. 627.062(2)(l), or before
2087	the effective date of the first renewal at rates established in
2088	accordance with s. 627.062(2)(l) of a policy originally issued
2089	before the effective date of this section, the applicant or
2090	insured must:
2091	(a) Be provided or offered, for comparison purposes, an
2092	estimate of the premium for a policy from Citizens Property
2093	Insurance Corporation reflecting substantially similar
2094	coverages, limits, and deductibles to the extent available.
2095	(b) Provide the insurer or agent with a signed copy of the
2096	following acknowledgement form, which must be retained by the
2097	insurer or agent for at least 3 years. If the acknowledgement
2098	form is signed by the insured or if the insured remits payment
2099	in the amount of the rate established in accordance with s.
2100	627.062(2)(l) after being mailed, otherwise provided, or offered
2101	the comparison specified in paragraph (a), an insurer renewing a
2102	policy at such rate shall be deemed to comply with this section,
2103	and it is presumed that the insured has been informed and
2104	understands the information contained in the comparison and
2105	acknowledgement forms:
2106
2107	ACKNOWLEDGEMENT
2108	1. I HAVE REVIEWED THE REQUIRED DISCLOSURES AND THE
2109	REQUIRED PREMIUM COMPARISON.
2110	2. I UNDERSTAND THAT THE RATE FOR THIS RESIDENTIAL
2111	PROPERTY INSURANCE POLICY IS NOT SUBJECT TO FULL RATE REGULATION
2112	BY THE FLORIDA OFFICE OF INSURANCE REGULATION AND MAY BE HIGHER
2113	THAN RATES APPROVED BY THAT OFFICE.
2114	3. I UNDERSTAND THAT A RESIDENTIAL PROPERTY INSURANCE
2115	POLICY SUBJECT TO FULL RATE REGULATION REQUIREMENTS MAY BE
2116	AVAILABLE FROM CITIZENS PROPERTY INSURANCE CORPORATION.
2117	4. I UNDERSTAND THAT THE FLORIDA OFFICE OF INSURANCE
2118	REGULATION'S WEBSITE WWW.SHOPANDCOMPARERATES.COM CONTAINS
2119	RESIDENTIAL PROPERTY INSURANCE RATE COMPARISON INFORMATION.
2120	5. I UNDERSTAND THAT IF CITIZENS PROPERTY INSURANCE
2121	CORPORATION INCURS A DEFICIT BECAUSE OF HURRICANE LOSSES OR
2122	OTHER LOSSES, I MAY BE REQUIRED TO PAY AN ASSESSMENT BASED UPON
2123	THE PREMIUM FOR THIS POLICY AND THAT A POLICYHOLDER OF CITIZENS
2124	PROPERTY INSURANCE CORPORATION MAY BE REQUIRED TO PAY A
2125	DIFFERENT ASSESSMENT.
2126
2127	(5) The following types of residential property insurance
2128	policies are not eligible for rates established in accordance
2129	with s. 627.062(2)(l) and are not subject to the other
2130	provisions of this section:
2131	(a) Residential property insurance policies that exclude
2132	coverage for the perils of windstorm or hurricane.
2133	(b) Residential property insurance policies that are
2134	subject to a consent decree, agreement, understanding, or other
2135	arrangement between the insurer and the office relating to rates
2136	or premiums for policies removed from Citizens Property
2137	Insurance Corporation.
2138	(6) Notwithstanding s. 627.4133, an insurer that has
2139	issued a policy under this section shall provide the named
2140	insured written notice of nonrenewal at least 180 days before
2141	the effective date of the nonrenewal as to subsequent
2142	nonrenewals. However, this subsection does not prohibit an
2143	insurer from canceling a policy as permitted under s. 627.4133.
2144	The offer of a policy at rates authorized by this section
2145	constitutes an offer to renew the policy at the rates specified
2146	in the offer and does not constitute a nonrenewal.
2147	Section 16. Effective June 1, 2010, and applying only to
2148	insurance claims made on or after that date, subsection (1),
2149	paragraph (b) of subsection (2), and subsections (5), (7), and
2150	(8) of section 627.707, Florida Statutes, are amended to read:
2151	627.707 Standards for investigation of sinkhole claims by
2152	insurers; nonrenewals.-Upon receipt of a claim for a sinkhole
2153	loss, an insurer must meet the following standards in
2154	investigating a claim:
2155	(1) The insurer must make an inspection of the insured's
2156	premises to determine if there has been physical damage to the
2157	structure which is consistent with may be the result of sinkhole
2158	loss activity.
2159	(2) Following the insurer's initial inspection, the
2160	insurer shall engage a professional engineer or a professional
2161	geologist to conduct testing as provided in s. 627.7072 to
2162	determine the cause of the loss within a reasonable professional
2163	probability and issue a report as provided in s. 627.7073, if:
2164	(b) The policyholder demands testing in accordance with
2165	this section or s. 627.7072 and coverage under the policy is
2166	available if sinkhole loss is verified.
2167	(5)(a) Subject to paragraph (b), if a sinkhole loss is
2168	verified, the insurer shall pay to stabilize the land and
2169	building and repair the foundation in accordance with the
2170	recommendations of the professional engineer as provided under
2171	s. 627.7073, with notice to and in consultation with the
2172	policyholder, subject to the coverage and terms of the policy.
2173	The insurer shall pay for other repairs to the structure and
2174	contents in accordance with the terms of the policy.
2175	(b)1. After a The insurer may limit its payment to the
2176	actual cash value of the sinkhole loss, not including
2177	underpinning or grouting or any other repair technique performed
2178	below the existing foundation of the building, until the
2179	policyholder enters into a contract for the performance of
2180	building stabilization or foundation repairs, the claim shall be
2181	paid up to the full cost of the stabilization or foundation
2182	repairs and up to full replacement cost for above-ground repairs
2183	as set forth in this paragraph, less the insured's deductible.
2184	After the policyholder enters into a contract for the
2185	performance of building stabilization or foundation repairs in
2186	accordance with the recommendations set forth in s. 627.7073,
2187	the insurer may:
2188	a. Limit its initial payment to 10 percent of the
2189	estimated costs to implement the building stabilization and
2190	foundation repairs.
2191	b. Limit its initial payment to the actual cash value of
2192	the sinkhole loss for above-ground repairs to the structure.
2193	2. However, after the policyholder enters into the
2194	contract for the performance of building stabilization or
2195	foundation repairs, the insurer shall pay the amounts necessary
2196	to begin and perform such stabilization and repairs as the work
2197	is performed and the expenses are incurred. Final payments for
2198	the structural or building stabilization and foundation repair
2199	work shall be remitted after such work is complete and finished
2200	in accordance with the terms of the policy and the report's
2201	recommendations and after final bills or receipts have been
2202	submitted to the insurer. The insurer may not require the
2203	policyholder to advance payment for such repairs. If repair
2204	covered by a personal lines residential property insurance
2205	policy has begun and the professional engineer selected or
2206	approved by the insurer determines that the repair cannot be
2207	completed within the policy limits, the insurer must either
2208	complete the professional engineer's recommended repair or
2209	tender the policy limits to the policyholder without a reduction
2210	for the repair expenses incurred.
2211	(c) The policyholder shall enter into such contract for
2212	repairs within 90 days after the insurance company approves
2213	coverage for a sinkhole loss to prevent additional damage to the
2214	building or structure. The 90-day time period may be extended
2215	for an additional reasonable time period if the policyholder is
2216	unable to find a qualified person or entity to contract for such
2217	repairs within the 90-day time period based upon factors beyond
2218	the policyholder's control or the policyholder is actively
2219	seeking to retain a professional engineer or geologist as
2220	provided in s. 627.7073(1)(c). This time period is tolled if
2221	either party invokes neutral evaluation.
2222	(d) The stabilization and all other repairs to the
2223	structure and contents must be completed within 12 months after
2224	entering into the contract for repairs as described in paragraph
2225	(c) unless:
2226	1. There is a mutual agreement between the insurer and the
2227	insured;
2228	2. The stabilization and all other repairs cannot be
2229	completed due to factors beyond the control of the insured which
2230	reasonably prevent completion;
2231	3. The claim is involved with the neutral evaluation
2232	process under s. 627.7074;
2233	4. The claim is in litigation; or
2234	5. The claim is under appraisal.
2235	(e)(c) Upon the insurer's obtaining the written approval
2236	of the policyholder and any lienholder, the insurer may make
2237	payment directly to the persons selected by the policyholder to
2238	perform the land and building stabilization and foundation
2239	repairs. The decision by the insurer to make payment to such
2240	persons does not hold the insurer liable for the work performed.
2241	(7) If the insurer obtains, pursuant to s. 627.7073,
2242	written certification that there is no sinkhole loss or that the
2243	cause of the damage was not sinkhole activity, and if the
2244	policyholder has submitted the sinkhole claim without good faith
2245	grounds for submitting such claim, the policyholder shall
2246	reimburse the insurer for 50 percent of the actual costs of the
2247	analyses and services provided under ss. 627.7072 and 627.7073;
2248	however, a policyholder is not required to reimburse an insurer
2249	more than $2,500 with respect to any claim. A policyholder is
2250	required to pay reimbursement under this subsection only if the
2251	insurer, prior to ordering the analysis under s. 627.7072,
2252	informs the policyholder in writing of the policyholder's
2253	potential liability for reimbursement and gives the policyholder
2254	the opportunity to withdraw the claim.
2255	(8) An No insurer may not shall nonrenew any policy of
2256	property insurance on the basis of filing of claims for partial
2257	loss caused by sinkhole damage or clay shrinkage as long as the
2258	total of such payments does not exceed the current policy limits
2259	of coverage for property damage for the policy in effect on the
2260	date of the loss, or and provided the insured has repaired the
2261	structure in accordance with the engineering recommendations
2262	upon which any payment or policy proceeds were based.
2263	Section 17. Effective June 1, 2010, and applying only to
2264	insurance claims made on or after that date, section 627.7072,
2265	Florida Statutes, is amended to read:
2266	627.7072 Testing standards for sinkholes.-
2267	(1) The professional engineer and professional geologist
2268	shall perform such tests as sufficient, in their professional
2269	opinion, to determine the presence or absence of sinkhole loss
2270	or other cause of damage within reasonable professional
2271	probability and for the professional engineer to make
2272	recommendations regarding necessary building stabilization and
2273	foundation repair.
2274	(2) The professional engineer and professional geologist
2275	shall perform tests under this section in accordance with
2276	Florida Geological Survey Special Publication 57 to determine
2277	the presence or absence of sinkhole loss or other cause of
2278	damage within a reasonable professional probability.
2279	Section 18. Effective June 1, 2010, and applying only to
2280	insurance claims made on or after that date, section 627.7073,
2281	Florida Statutes, is amended to read:
2282	627.7073 Sinkhole reports.-
2283	(1) Upon completion of testing as provided in s. 627.7072,
2284	the professional engineer or professional geologist shall issue
2285	a report and certification to the insurer, with an additional
2286	copy and certification for the insurer to forward to and the
2287	policyholder as provided in this section.
2288	(a) Sinkhole loss is verified if, based upon tests
2289	performed in accordance with s. 627.7072, a professional
2290	engineer or a professional geologist issues a written report and
2291	certification stating:
2292	1. That the cause of the actual physical and structural
2293	damage is sinkhole activity within a reasonable professional
2294	probability.
2295	2. That the analyses conducted were of sufficient scope to
2296	identify sinkhole activity as the cause of damage within a
2297	reasonable professional probability.
2298	3. A description of the tests performed.
2299	4. A recommendation by the professional engineer of
2300	methods for stabilizing the land and building and for making
2301	repairs to the foundation.
2302	(b) If sinkhole activity is eliminated as the cause of
2303	damage to the structure, the professional engineer or
2304	professional geologist shall issue a written report and
2305	certification to the policyholder and the insurer stating:
2306	1. That the cause of the damage is not sinkhole activity
2307	within a reasonable professional probability.
2308	2. That the analyses and tests conducted were of
2309	sufficient scope to eliminate sinkhole activity as the cause of
2310	damage within a reasonable professional probability.
2311	3. A statement of the cause of the damage within a
2312	reasonable professional probability.
2313	4. A description of the tests performed.
2314	(c) If the policyholder disagrees with the findings,
2315	opinions, or recommendations of the professional engineer or
2316	professional geologist engaged by the insurer, the policyholder
2317	may engage a professional engineer or professional geologist, at
2318	the policyholder's expense, to conduct testing under s. 627.7072
2319	and to render findings, opinions, and recommendations as to the
2320	cause of distress to the property and the appropriate method of
2321	land and building stabilization and foundation repair and
2322	certify such findings, opinions, and recommendations in a report
2323	that meets the requirements of this section and forward a copy
2324	of the report to the insurer. Unless the policyholder engages a
2325	professional engineer or professional geologist as described in
2326	this paragraph who disputes the findings of the insurer's
2327	engineer or geologist, the respective findings, opinions, and
2328	recommendations of the professional engineer or professional
2329	geologist as to the cause of distress to the property and the
2330	findings, opinions, and recommendations of the insurer's
2331	professional engineer as to land and building stabilization and
2332	foundation repair as required by s. 627.707(2), shall be
2333	presumed correct, which presumption shall shift the burden of
2334	proof under s. 90.304.
2335	(2)(a) Any insurer that has paid a claim for a sinkhole
2336	loss shall file a copy of the report and certification, prepared
2337	pursuant to subsection (1), including the legal description of
2338	the real property, and the name of the property owner, and the
2339	amount paid by the insurer, with the county clerk of court, who
2340	shall record the report and certification. The insurer shall
2341	also file a copy of any report prepared on behalf of the insured
2342	or the insured's representative that has been provided to the
2343	insurer that indicates that sinkhole loss caused the damage
2344	claimed. The insurer shall bear the cost of filing and recording
2345	of one or more reports the report and certifications
2346	certification. There shall be no cause of action or liability
2347	against an insurer for compliance with this section. The
2348	recording of the report and certification does not:
2349	1. Constitute a lien, encumbrance, or restriction on the
2350	title to the real property or constitute a defect in the title
2351	to the real property;
2352	2. Create any cause of action or liability against any
2353	grantor of the real property for breach of any warranty of good
2354	title or warranty against encumbrances; or
2355	3. Create any cause of action or liability against any
2356	title insurer that insures the title to the real property.
2357	(b) The seller of real property upon which a sinkhole
2358	claim has been made by the seller and paid by the insurer shall
2359	disclose to the buyer of such property that a claim has been
2360	paid, the amount of the payment, and whether or not the full
2361	amount of the proceeds were used to repair the sinkhole damage.
2362	The seller shall also provide to the buyer a copy of the report
2363	prepared pursuant to subsection (1) and any report prepared on
2364	behalf of the insured.
2365	Section 19. Effective June 1, 2010, and applying only to
2366	insurance claims made on or after that date, section 627.7074,
2367	Florida Statutes, is amended to read:
2368	627.7074 Alternative procedure for resolution of disputed
2369	sinkhole insurance claims.-
2370	(1) As used in this section, the term:
2371	(a) "Neutral evaluation" means the alternative dispute
2372	resolution provided for in this section.
2373	(b) "Neutral evaluator" means a professional engineer or a
2374	professional geologist who has completed a course of study in
2375	alternative dispute resolution designed or approved by the
2376	department for use in the neutral evaluation process, who is
2377	determined to be fair and impartial.
2378	(2)(a) The department shall certify and maintain a list of
2379	persons who are neutral evaluators.
2380	(b) The department shall prepare a consumer information
2381	pamphlet for distribution by insurers to policyholders which
2382	clearly describes the neutral evaluation process and includes
2383	information and forms necessary for the policyholder to request
2384	a neutral evaluation.
2385	(3) Neutral evaluation is available to either party if a
2386	sinkhole report has been issued pursuant to s. 627.7073.
2387	Following the receipt of the report provided under s. 627.7073
2388	or the denial of a claim for a sinkhole loss, the insurer shall
2389	notify the policyholder of his or her right to participate in
2390	the neutral evaluation program under this section. Neutral
2391	evaluation supersedes the alternative dispute resolution process
2392	under s. 627.7015 but does not supersede the appraisal clause if
2393	an appraisal clause is provided by the insurance policy. The
2394	insurer shall provide to the policyholder the consumer
2395	information pamphlet prepared by the department pursuant to
2396	paragraph (2)(b).
2397	(4) Neutral evaluation is nonbinding, but mandatory if
2398	requested by either party. A request for neutral evaluation may
2399	be filed with the department by the policyholder or the insurer
2400	on a form approved by the department. The request for neutral
2401	evaluation must state the reason for the request and must
2402	include an explanation of all the issues in dispute at the time
2403	of the request. Filing a request for neutral evaluation tolls
2404	the applicable time requirements for filing suit for a period of
2405	60 days following the conclusion of the neutral evaluation
2406	process or the time prescribed in s. 95.11, whichever is later.
2407	(5) Neutral evaluation shall be conducted as an informal
2408	process in which formal rules of evidence and procedure need not
2409	be observed. A party to neutral evaluation is not required to
2410	attend neutral evaluation if a representative of the party
2411	attends and has the authority to make a binding decision on
2412	behalf of the party. All parties shall participate in the
2413	evaluation in good faith.
2414	(6) The insurer shall pay the costs associated with the
2415	neutral evaluation.
2416	(7)(a) Upon receipt of a request for neutral evaluation,
2417	the department shall provide the parties a list of certified
2418	neutral evaluators. The parties shall mutually select a neutral
2419	evaluator from the list and promptly inform the department. If
2420	the parties cannot agree to a neutral evaluator within 10
2421	business days, the department allow the parties to submit
2422	requests to disqualify neutral evaluators on the list for cause.
2423	For purposes of this subsection, a ground for cause is required
2424	to be found by the department only if:
2425	1. A familial relationship exists between the neutral
2426	evaluator and either party or a representative of either party
2427	within the third degree;
2428	2. The proposed neutral evaluator has, in a professional
2429	capacity, previously represented either party or a
2430	representative of either party in the same or a substantially
2431	related matter;
2432	3. The proposed neutral evaluator has, in a professional
2433	capacity, represented another person in the same or a
2434	substantially related matter and that person's interests are
2435	materially adverse to the interests of the parties;
2436	4. The proposed neutral evaluator works in the same firm
2437	or corporation as a person who has, in a professional capacity,
2438	previously represented either party or a representative of
2439	either party in the same or a substantially related matter; or
2440	5. The proposed neutral evaluator has, within the
2441	preceding 5 years, worked as an employee of any party to the
2442	case.
2443	(b) The parties shall mutually appoint a neutral evaluator
2444	from the department list and promptly inform the department. If
2445	the parties cannot agree to a neutral evaluator within 10
2446	business days, the department shall appoint a neutral evaluator
2447	from the department's list of certified neutral evaluators. The
2448	department shall allow each party to disqualify one neutral
2449	evaluator without cause. Upon selection or appointment, the
2450	department shall promptly refer the request to the neutral
2451	evaluator.
2452	(c) Within 5 business days after the referral, the neutral
2453	evaluator shall notify the policyholder and the insurer of the
2454	date, time, and place of the neutral evaluation conference. The
2455	conference may be held by telephone, if feasible and desirable.
2456	The neutral evaluation conference shall be held within 90 45
2457	days after the receipt of the request by the department. If the
2458	neutral evaluator fails to hold a neutral evaluation conference
2459	in accordance with this paragraph, the neutral evaluator's fee
2460	shall be reduced by 10 percent unless the failure was due to
2461	factors beyond the control of the neutral evaluator.
2462	(d) As used in this subsection, the term "substantially
2463	related matter" means participation by the neutral evaluator on
2464	the same claim, property, or any adjacent property.
2465	(8) The department shall adopt rules of procedure for the
2466	neutral evaluation process.
2467	(9) For policyholders not represented by an attorney, a
2468	consumer affairs specialist of the department or an employee
2469	designated as the primary contact for consumers on issues
2470	relating to sinkholes under s. 20.121 shall be available for
2471	consultation to the extent that he or she may lawfully do so.
2472	(10) Evidence of an offer to settle a claim during the
2473	neutral evaluation process, as well as any relevant conduct or
2474	statements made in negotiations concerning the offer to settle a
2475	claim, is inadmissible to prove liability or absence of
2476	liability for the claim or its value, except as provided in
2477	subsection (14) (13).
2478	(11) Regardless of when invoked, any court proceeding
2479	related to the subject matter of the neutral evaluation shall be
2480	stayed pending completion of the neutral evaluation and for 5
2481	days after the filing of the neutral evaluator's report with the
2482	court.
2483	(12) If the neutral evaluator, based upon his or her
2484	professional training and credentials, is qualified only to
2485	determine the causation issue or the method of repair issue, the
2486	department shall allow the neutral evaluator to enlist the
2487	assistance of another professional from the qualified neutral
2488	evaluators list, not previously struck by parties with respect
2489	to the subject evaluation, who, based upon his or her
2490	professional training and credentials, is able to provide an
2491	opinion as to the other disputed issue. Any professional who, if
2492	appointed as the neutral evaluator, would be disqualified for
2493	any reason listed in subsection (7) must be disqualified. In
2494	addition, the neutral evaluator may use the service of other
2495	experts or professionals as necessary to ensure that all items
2496	in dispute are addressed in order to complete the neutral
2497	evaluation. The neutral evaluator may request that the entity
2498	that performed testing pursuant to s. 627.7072 perform such
2499	additional reasonable testing deemed necessary in the
2500	professional opinion of the neutral evaluator to complete the
2501	neutral evaluation.
2502	(13)(12) For all matters that are not resolved by the
2503	parties at the conclusion of the neutral evaluation, the neutral
2504	evaluator shall prepare a report stating that in his or her
2505	opinion the sinkhole loss has been verified or eliminated within
2506	a reasonable degree of professional probability and, if
2507	verified, whether the sinkhole loss has caused structural or
2508	cosmetic damage to the building and, if so, the need for and
2509	estimated costs of stabilizing the land and any covered
2510	structures or buildings and other appropriate remediation or
2511	structural repairs that are necessary due to the sinkhole loss.
2512	The evaluator's report shall be sent to all parties in
2513	attendance at the neutral evaluation and to the department.
2514	(14)(13) The recommendation of the neutral evaluator is
2515	not binding on any party, and the parties retain access to
2516	court. The neutral evaluator's written recommendation is
2517	admissible in any subsequent action or proceeding relating to
2518	the claim or to the cause of action giving rise to the claim.
2519	(15)(14) If the neutral evaluator first verifies the
2520	existence of a sinkhole and, second, recommends the need for and
2521	estimates costs of stabilizing the land and any covered
2522	structures or buildings and other appropriate remediation or
2523	structural repairs, which costs exceed the amount that the
2524	insurer has offered to pay the policyholder, the insurer is
2525	liable to the policyholder for up to $2,500 in attorney's fees
2526	for the attorney's participation in the neutral evaluation
2527	process. For purposes of this subsection, the term "offer to
2528	pay" means a written offer signed by the insurer or its legal
2529	representative and delivered to the policyholder within 10 days
2530	after the insurer receives notice that a request for neutral
2531	evaluation has been made under this section.
2532	(16)(15) If the insurer timely agrees in writing to comply
2533	and timely complies with the recommendation of the neutral
2534	evaluator, but the policyholder declines to resolve the matter
2535	in accordance with the recommendation of the neutral evaluator
2536	pursuant to this section:
2537	(a) The insurer is not liable for extracontractual damages
2538	related to a claim for a sinkhole loss but only as related to
2539	the issues determined by the neutral evaluation process. This
2540	section does not affect or impair claims for extracontractual
2541	damages unrelated to the issues determined by the neutral
2542	evaluation process contained in this section; and
2543	(b) The actions of the insurer are not a confession of
2544	judgment or an admission of liability, and the insurer may is
2545	not be liable for attorney's fees under s. 627.428 or other
2546	provisions of the insurance code unless the policyholder obtains
2547	a judgment that is more favorable than the recommendation of the
2548	neutral evaluator.
2549	(17) If the insurer agrees to comply with the neutral
2550	evaluator's report, payment for stabilizing the land and
2551	building and repairing the foundation shall be made in
2552	accordance with the terms and conditions of the applicable
2553	insurance policy.
2554	Section 20. Section 627.711, Florida Statutes, is amended
2555	to read:
2556	627.711 Notice of premium discounts for hurricane loss
2557	mitigation; uniform mitigation verification inspection form.-
2558	(1) Using a form prescribed by the Office of Insurance
2559	Regulation, the insurer shall clearly notify the applicant or
2560	policyholder of any personal lines residential property
2561	insurance policy, at the time of the issuance of the policy and
2562	at each renewal, of the availability and the range of each
2563	premium discount, credit, other rate differential, or reduction
2564	in deductibles, and combinations of discounts, credits, rate
2565	differentials, or reductions in deductibles, for properties on
2566	which fixtures or construction techniques demonstrated to reduce
2567	the amount of loss in a windstorm can be or have been installed
2568	or implemented. The prescribed form shall describe generally
2569	what actions the policyholders may be able to take to reduce
2570	their windstorm premium. The prescribed form and a list of such
2571	ranges approved by the office for each insurer licensed in the
2572	state and providing such discounts, credits, other rate
2573	differentials, or reductions in deductibles for properties
2574	described in this subsection shall be available for electronic
2575	viewing and download from the Department of Financial Services'
2576	or the Office of Insurance Regulation's Internet website. The
2577	Financial Services Commission may adopt rules to implement this
2578	subsection.
2579	(2)(a) By July 1, 2007, The Financial Services Commission
2580	shall develop by rule a uniform mitigation verification
2581	inspection form that shall be used by all insurers when
2582	submitted by policyholders for the purpose of factoring
2583	discounts for wind insurance. In developing the form, the
2584	commission shall seek input from insurance, construction, and
2585	building code representatives. Further, the commission shall
2586	provide guidance as to the length of time the inspection results
2587	are valid. An insurer shall accept as valid a uniform mitigation
2588	verification form certified by the Department of Financial
2589	Services or signed by:
2590	(a) A hurricane mitigation inspector certified by the My
2591	Safe Florida Home program;
2592	1.(b) A building code inspector certified under s.
2593	468.607;
2594	2.(c) A general, building, or residential contractor
2595	licensed under s. 489.111;
2596	3.(d) A professional engineer licensed under s. 471.015
2597	who has passed the appropriate equivalency test of the building
2598	code training program as required by s. 553.841; or
2599	4.(e) A professional architect licensed under s. 481.213;
2600	or
2601	(f) Any other individual or entity recognized by the
2602	insurer as possessing the necessary qualifications to properly
2603	complete a uniform mitigation verification form.
2604	(b) An insurer may, but is not required to, accept a
2605	mitigation verification form from any other person possessing
2606	qualifications and experience acceptable to the insurer.
2607	(3) A person who is authorized to sign a mitigation
2608	verification form must inspect the structures referenced by the
2609	form personally, not through employees or other persons, and
2610	must certify or attest to that person's personal inspection of
2611	the structures referenced by the form.
2612	(4) An individual or entity that signs a uniform
2613	mitigation form may not commit misconduct in performing
2614	hurricane mitigation inspections or in completing a uniform
2615	mitigation form that causes financial harm to a customer or the
2616	customer's insurer or that jeopardizes a customer's health and
2617	safety. Misconduct occurs when an authorized mitigation
2618	inspector signs a uniform mitigation verification form that:
2619	(a) Falsely indicates that he or she personally inspected
2620	the structures referenced by the form;
2621	(b) Falsely indicates the existence of a feature which
2622	entitles an insured to a mitigation discount that the inspector
2623	knows does not exist or did not personally inspect;
2624	(c) Contains erroneous information due to the gross
2625	negligence of the inspector; or
2626	(d) Contains demonstrably false information relating to
2627	the existence of mitigation features that may give an insured a
2628	false evaluation of the ability of the structure to withstand
2629	major damage from a hurricane endangering the safety of the
2630	insured's life and property.
2631	(5) The licensing board of an authorized mitigation
2632	inspector who violates subsection (4) may commence disciplinary
2633	proceedings and impose administrative fines and other sanctions
2634	authorized under the inspector's licensing act.
2635	(6) An insurer, person, or other entity that obtains
2636	evidence of fraud or evidence that an inspector has made false
2637	statements in the completion of a mitigation inspection form
2638	shall file a report with the Division of Insurance Fraud,
2639	together with all of the evidence in its possession that
2640	supports the allegation of fraud or falsity. An insurer, person,
2641	or other entity making the report is immune from liability in
2642	accordance with s. 626.989(4) for any statements made in the
2643	report, during the investigation, or in connection with the
2644	report. The Division of Insurance Fraud shall issue an
2645	investigative report if the division finds that probable cause
2646	exists to believe that the inspector made intentionally false or
2647	fraudulent statements in the inspection form. Upon conclusion of
2648	the investigation and a finding of probable cause that a
2649	violation has occurred, the Division of Insurance Fraud shall
2650	send a copy of the investigative report to the office and a copy
2651	to the agency responsible for the professional licensure of the
2652	inspector, whether or not a prosecutor takes action based upon
2653	the report.
2654	(7) The insurer may require the mitigation inspector or
2655	inspection company to provide evidence of the inspector's or
2656	inspection company's quality assurance program. At the insurer's
2657	expense, the insurer may require that any uniform mitigation
2658	verification form provided by a mitigation inspector or
2659	inspection company that does not possess or has not provided
2660	evidence to the insurer of a quality assurance program be
2661	independently verified by an inspector, inspection company, or
2662	independent third-party quality assurance provider that
2663	possesses a quality assurance program prior to accepting it as
2664	valid.
2665	(8)(3) An individual or entity who knowingly provides or
2666	utters a false or fraudulent mitigation verification form with
2667	the intent to obtain or receive a discount on an insurance
2668	premium to which the individual or entity is not entitled
2669	commits a misdemeanor of the first degree, punishable as
2670	provided in s. 775.082 or s. 775.083.
2671	Section 21. In the interest of full disclosure and
2672	transparency to insurance policy owners, and because most
2673	insurance policies sold in this state are subject to assessments
2674	to make up for the funding deficiencies of the Citizens Property
2675	Insurance Corporation, the Florida Insurance Guaranty
2676	Association, or the Florida Hurricane Catastrophe Fund, the
2677	following warning shall be printed in bold type of not less than
2678	16 points and shall be displayed on the declarations page or on
2679	the renewal notice of every insurance policy sold or issued in
2680	this state that is or may be subject to assessment by the
2681	Citizens Property Insurance Corporation, the Florida Insurance
2682	Guaranty Association, or the Florida Hurricane Catastrophe Fund:
2683
2684	WARNING
2685	The premium you are about to pay may NOT be the full cost
2686	of this insurance policy. If a hurricane strikes Florida,
2687	you may be forced to pay additional moneys to offset the
2688	inability of the state-owned Citizens Property Insurance
2689	Corporation, the Florida Insurance Guaranty Association,
2690	or the Florida Hurricane Catastrophe Fund to pay claims
2691	resulting from the losses due to the hurricane.
2692	Section 22. Section 627.7065, Florida Statutes, is
2693	repealed.
2694	Section 23. Except as otherwise expressly provided in this
2695	act, this act shall take effect July 1, 2010.

CODING: Words stricken are deletions; words underlined are additions.