Bill Text: FL H0447 | 2010 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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-Comm_Sub.html

---

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

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